Germany has banks that need protection.
Brittan and the US have banks at risk.
Greece has everything to lose.
No responsible entity will loan Greece the Euros to make the next payment.
Greece is bankrupt.
http://www.guardian.co.uk/business/debt-crisis
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15 Feb 2012: Greek finance minister says troika is shifting terms of €130bn bailout deal as part of move to force country out of eurozone 1 comment - 15 Feb 2012: Helena Smith: Hostility levels have reached maximum as savage austerity measures threaten to bring Greece to its knees
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15 Feb 2012: Britain's credit rating took a knock this week, when Moody's expressed a 'negative outlook' for the national economy. But who are the mysterious agencies who take it upon themselves to grade everything from countries to corporations – and how much power do they really wield?
2 comments - 15 Feb 2012: Nicolas Sarkozy finally confirms he is running again for French presidency and likens himself to the captain of a ship in a storm
- 15 Feb 2012: The European commission and UK authorities have been analysing the potential impact of Athens defaulting – while Brussels warns of 'devastating' consequences 10 comments
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15 Feb 2012: Struggle to save the single currency takes its toll on eurozone's economic growth - 15 Feb 2012: Bailout package in doubt as Athens refuses to give eurozone creditors the guarantees they demand
- 14 Feb 2012: Simon Jenkins: Like Dickens's Mr Dorrit, we are hamstrung by our debt, denied the means to earn our recovery. An alternative is needed 425 comments
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14 Feb 2012: Antonis Samaras, tipped to be Greece's next prime minister, has refused to commit to the cost-cutting reforms
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Elise
Duy on Bullard on Duy on Bullard on Tinker to Evers to Chance
OK, only the first half. Tim Duy offers the latest entry in the dispute over whether we should accept a permanently lower track for output in the aftermath of the housing bubble.
It seems to me that Bullard has shifted his position. In the first version, which I discussed here, Bullard seemed to be arguing that the wealth loss from the burst bubble represented a real destruction of economic capacity. Now he seems to be making a quite different case: that the economy in 2005-2007 was operating at an unsustainably high rate of capacity utilization, driven by the bubble.
I don’t buy this version either.
One reason not to buy it is the reason Duy cites: if the economy was so overheated in the mid-naughties, where was the inflation? Where were the labor shortages?
But there’s another reason I don’t believe it: demand in the mid-naughties was not, in fact, at fever pitch.
Yes, we had very residential construction and high consumer spending. But we also had record-high trade deficits, so that overall demand wasn’t that vigorous, after all. Here are residential investment and net exports as a percentage of GDP:
So the slide in the external balance was actually substantially bigger than the construction boom.
And there was a large restructuring of the economy associated with this shift. Here’s employment in construction and manufacturing:
So the decline in manufacturing employment was actually quite a lot bigger than the boom in construction employment.
This observation, by the way, also seems to me to be a decisive refutation of claims that we must have high structural unemployment because of the need to shift workers out of construction into something else. If that’s how it works, why was the US economy able to have unemployment below 5 percent in 2007 despite the need to absorb an even bigger number of workers shifted out of manufacturing?
So I like Bullard’s new version better than the old one, but it’s still wrong.
TimesPeople recommended a user:
- Feb 14, 2012
John Townsend
http://www.telegraph.co.uk/finance/financialcrisis/
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TimesCast | The Marc Jacobs Show
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