Tuesday, July 31, 2012

The hits just keep coming.

Soured Deal Another Blow for Chinese Solar Company
section B - page 2

Young people fall out of love with high street banks

Youngsters are angry with their high street providers and refuse to recommend them to their peers.
31 Jul 2012
| Comment

Eurozone collapse would trigger bank bail-outs, £1 trillion of QE

A euro break-up would plunge Britain into a deeper recession, force the Government to takeover banks, and trigger more money printing, top economic consultancy Fathom warned.
31 Jul 2012
| 176 Comments

Greece 'on the brink' as cash reserves dry up

Near-bankrupt Greece is fast running out of cash while it waits for its next installment of aid from international lenders, a deputy finance minister has said, sounding the alarm on the country's precarious financial position.
31 Jul 2012
| 7 Comments

Eurozone unemployment hits record high

Unemployment in recession-hit eurozone hit 11.2pc in June.
31 Jul 2012
| 78 Comments




http://krugman.blogs.nytimes.com/2012/07/31/fire-ed-demarco/


Fire Ed DeMarco

Do it now.
Who? you ask. DeMarco heads the Federal Housing Finance Agency, which oversees Fannie and Freddie. And he has just rejected a request from the Treasury Department that he offer debt relief to troubled homeowners — a request backed by an offer by Treasury to pay up to 63 cents to the FHFA for every dollar of debt forgiven.
DeMarco’s basis for the rejection was that this forgiveness would represent a net loss to taxpayers, even if his agency came out ahead.
That’s a very arguable point even on its own terms, because the paper he cited (pdf) in support of his stance took no account of the positive effects on the economy of debt relief — even though those effects are the main reason for offering such relief. Since a reduction in debt burdens would strengthen the economy, this would mean greater revenue — and this might well offset any losses from the debt forgiveness itself.
Furthermore, even if there’s a small net cost to taxpayers, debt relief is still worth doing if it yields large economic benefits.
In any case, however, deciding whether debt relief is a good policy for the nation as a whole is not DeMarco’s job. His job — as long as he keeps it, which I hope is a very short period of time — is to run his agency. If the Secretary of the Treasury, acting on behalf of the president, believes that it is in the national interest to spend some taxpayer funds on debt relief, in a way that actually improves the FHFA’s budget position, the agency’s director has no business deciding on his own that he prefers not to act.
I don’t know what DeMarco’s specific legal mandate is. But there is simply no way that it makes sense for an agency director to use his position to block implementation of the president’s economic policy, not because it would hurt his agency’s operations, but simply because he disagrees with that policy.
This guy needs to go."




I think we have seen the top of this European pop.
I expect a slow return to growing panic.
The inspectors will stay in Greece until the last moment.
I have no idea if they will return a positive or negative report on the negative situation they find there.
If positive Greek exit will take place in six months.  If negative it will be in about a month. 
My preference is to end the Republican party in November so we can fix the economy.
I doubt that will happen.  The politics of rationality are a puzzle.

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http://www.athensnews.gr/portal/11/57322

Troika staying until measures are finalised

29 Jul 2012

The initial itinerary would have delayed the release of the bailout payment to Greece, thus prompting the change (file photo)

The initial itinerary would have delayed the release of the bailout payment to Greece, thus prompting the change (file photo)
"The European Commission (EC), European Central Bank (ECB) and International Monetary Fund (IMF) troika will stay in Greece until a credible package of measures is drafted, in collaboration with the Greek government, IMF delegation chief Poul Thomsen told finance minister Yannis Stournaras.
 
Ministry sources said Thomsen informed the minister on this change of plans during a working dinner on Friday.
 
The same sources said that the atmosphere at the dinner was "exceptionally good" and marked a change in the attitude so far of the representatives of Greece's creditors', with Thomsen cited as telling Stournaras that "we want to help and will stay as long as needed for you to prepare the package".
 
According to the initial itinerary, the troika was to depart Greece at end of July and return at the end of August, to see the progress made in the package of measures to cut state spending by 11.5 billion euros over the next two years and in the execution of this year's budget.
 
However, such a timetable would have resulted in a large delay in the disbursement of the outstanding tranche of the bailout loan to Greece.
 
Stournaras will meet with the representatives of the three parties supporting Greece's new coalition government in order to finalize the measures still outstanding for the 11.5 euros package, which will be put to a meeting of the three party leaders on Monday afternoon.
 
Government spokesman Simos Kedikoglou said  the coalition government was making a new, earnest effort. Even in its short time in power it was regaining credibility, and the country's image abroad has changed. "Greece is being treated in a different way. We are still at a marginal point, however," he added. (AMNA)"

Debt crisis: ECB intervention hopes drive markets higher

European markets rose sharply amid mounting speculation of a dramatic intervention by the European Central Bank to arrest the crisis engulfing the region.
30 Jul 2012
| 33 Comments

Geithner, Schaeuble urge euro co-operation

The top finance officials from Germany and the United States urged co-operation in the fight against the debt crisis.
30 Jul 2012
| 116 Comments

Debt crisis: as it happened - July 30, 2012

US Treasury Secretary Timothy Geithner and German finance minister Wolfgang Schaeuble urge quick reforms to end a crisis of confidence in the euro, as markets rise on hopes of imminent ECB action to tackle the crisis.
30 Jul 2012
| 485 Comments

Austerity holidays: Euro leaders stay close to home

Germany's finance minister will hold a meeting on the German island of Sylt, where he is on vacation, mirroring a move by eurozone leaders to holiday close to home.
30 Jul 2012
| 82 Comments

ECB could take haircut on Greek bonds in 'last chance' plan

Central banks across Europe are facing more huge losses under the terms of last-ditch efforts being made by EU authorities to keep Greece in the eurozone by slashing the country’s debt exposure.
29 Jul 2012
| 240 Comments

A dose of inflation could start to look like a cure for our current ills

We all need some respite from the euro crisis – well I certainly do – but there is one issue which continues to reverberate throughout the euro debate and also lies at the heart of the British economic predicament, namely the inflation outlook.




I will see what happens next.



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