The European Central Bank (ECB) pushed for a quick fire sale of Irish bank assets as Ireland entered the bail-out programme in late 2010, putting the protection of its own balance sheet ahead of the interest of Irish taxpayers, former IMF deputy director Ajai Chopra has said.   Mr Chopra, who was one of the senior IMF officials responsible for the design and monitoring of the bailout programme, wrote in a report for the European Parliament that the ECB’s advice on fiscal policy and structural reforms - which he said were outside its mandate - were wrong for Ireland. The report was requested by the parliament’s committee on economic and monetary affairs.  In the report, which analyses the ECB’s role in the design and implementation of the programme, Mr Chropra writes that several missteps were made which tainted the bank’s legitimacy in Ireland. Identifying the letters sent by then ECB president Jean Claude Trichet to then finance minister Brian Lenihan, pressing Ireland to enter the bailout or risk losing bank funding, Mr Chopra said their “imperious tone is unbecoming of the way in which EU institutions and nations should conduct business.”   He said that as the central bank and bank supervisor of each euro zone member, the ECB should not be a part of the troika where it sits across the table from country authorities and negotiates and monitors fiscal assistance.  “The ECB belongs on the country’s side of the table,” he said.  I think the last sentence is critical.

BUCHAREST ROMANIA - Dacian Cioloş Cabinet was sworn by the two joint Chambers of Parliament, after the hearing of proposed ministers and debating the government’s program. The new government has kept the structure of ministries from the tenure of Victor Ponta and aims to find short-term solutions to Romania’s problems, but also to “lay the foundations of structural developments in the future.” In the government program is clear that this government is taking responsibility to introduce “a set of concrete measures, limited in number, but with systemic impact and relevance.” The first task is to organize local and parliamentary elections scheduled during the year of 2016. Then Cioloş office “will seek to create optimal mechanisms for informing the political environment about executive or legislative measures that will be adopted. The same logic will be applied to all social partners, to which this government will show transparency and openness by providing innovative systems for consultation and exchange of ideas.” Finally, the Government aims to test and apply “new working methods regarding the internal operation of the central apparatus (government and ministries), trying to create until the end of the mandate a number of viable alternatives for proper functioning of administration.” As regards the economic policies and priority areas, the major goal announced by Government is “strengthening the macro-economic parameters, the prospects for sustainable development of the country”, with separate entries for absorption of European funds and infrastructure investments. Here is the list of ministers:

• Dacian Cioloş, Prime Minister
• Victor Grigorescu – Minister of Energy, SMEs and Business Community
• Costin Borc – Minister of Economy, Trade and Tourism
• Cristina Paşca Palmer – Minister of Environment, Water and Forest
• Anca Dragu Paliu – Minister of Public Finances
• Vasile Dâncu – Minister of Regional Development and Public Administration
• Lazăr Comănescu – Minister of Foreign Affairs
• Petre Tobă – Minister of Interior
• Mihnea Motoc – National Defense Minister
• Achim Irimescu – Minister of Agriculture and Rural Development
• Adrian Curaj – Minister of Education and Scientific Research
• Vlad Alexandrescu – Minister of Culture
• Aura Răducu – Minister of EU funds
• Raluca Prună – Minister of Justice
• Claudia Ana Costea – Minister of Labor, Family, Social Protection and Senior Citizens
• Marius-Raul Bostan – Minister of Information Society
• Patriciu Achimaş-Cadariu – Minister of Health
• Elisabeta Lipă – Minister of Sports
• Marian Dan Costescu – Minister of Transportation
• Victoria-Violeta Alexandru – Delegated Minister for Social Dialog
• Dan Stoenescu – Delegated Minister for Romanians Abroad
• Ciprian Bucur – Delegated Minister for Parliamentary Relations
• Ioan Dragoş Tudorache – Prime Minister Chief of Staff

INTEREST RATES SOAR TO 8.3% ON CORPORATE BONDS - Credit Investors Bolt Party as Economy Fears Trump Low Rates.  Debt investors are a nervous lot these days, and new signs that global turmoil is weighing on the U.S. economic outlook are only adding to their angst.  Measures of corporate credit risk spiked immediately after a Labor Department report showed that payrolls rose less than projected last month, wages stagnated and the jobless rate was unchanged. Investors are now demanding more than they have in three years to own junk bonds, which are on track to cap off their worst week this year.  Frustration is growing that even after seven years of easy-money policies, economic growth remains sluggish. While the Federal Reserve is signaling that it’s in no hurry to normalize interest rates, investors are increasingly worried about what the data will mean for earnings at companies that have sold $9.3 trillion of corporate bonds since the start of 2009.

Average borrowing costs for junk-rated companies have surged by 0.4 percentage point this week, to 8.3 percent, Bank of America Merrill Lynch Index data show... There is a RISK OF UP TO 100% LOSS on all stocks and every single stock prospectus out there clearly tells you exactly that.  Anyone who has any funds in stocks who can't afford to lose it all has no business having any funds in stocks.  The party on Wall Street is just about over - The rise in stocks that began in March 2009 is one of the longest stretches without a bear market in quite a few years.  Not only that, but October was the best month for stocks in four years. As you might have expected, this has driven the market’s price-earnings ratio well above average. The current ratio for the Standard & Poor’s 500 stocks is a tad over 22; the average P/E ratio for these stocks since the 1870s is 16.6.  Investors should enjoy the good times while they are still around, for there are increasing signs that the party may soon be over.

 

In speeches and interviews, Juncker has always claimed that Luxembourg has in no way enriched itself "at the expense of its neighboring countries," and especially not by encouraging tax avoidance. In everyday political life, however, Juncker's people fought for precisely the kinds of corporate advantages their boss used such rich language to denounce. In order to attract as much corporate money as possible into the country, his officials played around with tax models like "hybrid financial instruments" and, especially, so-called "patent boxes." Introduced in order to spur technological advancement, finance policy experts in Belgium, the Netherlands and Luxembourg led the pack in transforming tax advantages into an instrument allowing corporations to steer proceeds from patents or licenses to their Benelux subsidiaries in order to pay lower taxes there. Under the system, national subsidiaries of large corporations in countries with higher corporate tax rates would pay large patent and licensing fees to subsidiaries in lower tax countries. The system ensured that money got pumped into the government coffers of the Benelux countries, but it also put other EU countries at a disadvantage, in addition to the majority of small- and middle-sized businesses for whom such preferential treatment wouldn't even be considered.  Representatives of the other EU member states knew very well what was going on. The German representative in the Working Group on Tax Questions, for example, filed a cable to Berlin in March 2013 in which he noted there had been repeated "doubts about the harmlessness" of a few of the tax models, "mostly having to do with the license box rules of LUX and NDL," the abbreviations being references to Luxembourg and the Netherlands.  But nothing was done about it for years. Each time the Working Group on Tax Questions proposed changes, Luxembourg, Belgium and the Netherlands warded them off successfully. It's no wonder, either, given that representatives of the Benelux countries regularly coordinated their decisions in advance at their own meetings... It's not just European Commission President Juncker whose past as the leader of the tax-haven Luxembourg is catching up to him. Another important man at the top of an EU institution also now has some uncomfortable questions to answer: Dutch Finance Minister Jeroen Dijsselbloem. Even after ascending to his current position as head of the Euro Group, his country continued to block every call for change.  Sven Giegold, 45, has spent years trying to shed light on the darkness of EU corporate taxation arrangements. A member of the European Parliament with the Green Party, he's used to resistance. But what he experienced when he requested access to meeting transcripts from the secretive tax groups was an altogether new experience.  First, the European Council stonewalled and then the European Commission delivered documents in which important sections had been redacted. Despite all the blacked out passages, Giegold was forbidden from bringing his mobile phone into the room in one of the Commission's buildings in Brussels where he was allowed to view a few of the documents. Officials allowed him to take notes using a pencil and paper, but they didn't let him take his notes with him when he left the building.   The documents seen by SPIEGEL reveal that what EU agencies have long been denying, is in fact mass-scale cheating with the help of the tax law. Internal EU documents show how companies took advantage of patent boxes to simply sign their licenses, copyrights, patents or marketing rights over to their subsidiaries in Luxembourg or The Hague, allowing them to cash in on sweetheart corporate tax deals in those countries. It didn't matter whether the research had actually taken place in those nations, either. 

The successor of Traian Băsescu in the presidential seat has nominated Dacian Cioloş, as the former president had repeatedly announced over the last few days.  That can mean several things: first of all, that Traian Băsescu and Klaus Iohannis think alike (at least in that regard); the second, that Traian Băsescu continues to be very well informed, and third, that president Klaus Iohannis obeys Traian Băsescu.  You can pick any option you want or you can combine all three.  "Tim Budget", like the press nicknamed Liviu Voinea, has been saved from being sacrificed. Meaning that, instead of having the ephemeral glory of serving as prime-minister for two months, he has stayed to share his wisdom with the National Bank of Romania, as deputy governor.   Dacian Cioloş was a European Commissioner for Agriculture between 2010 and 2014, achieving the first reform of the Common Agricultural Policy.  Dacian Cioloş was the minister of Agriculture in Romania between October 2007 and December 2008, in the Tăriceanu government, and has maintained a technocrat reputation. Between 2005 and 2007, Cioloş was an advisor to the Minister of Agriculture, while also representing Romania on the special commission of the Council of the European Union on the issue of agriculture. Previously, between 2002 and 2003, Dacian Cioloş worked for the Delegation of the European Commission in Romania, preparing the SAPARD implementation in Romania. At the time of his appointment as prime-minister of Romania, Dacian Cioloş was one of the personal advisors of the president of the European Commission, Jean Claude Juncker, a position which he was awarded this year. Juncker is considered a grey eminence of the Euro currency system. THE PROPOSED  ROMANIAN GOVERNMENT IS : (note : please  use the translation button on the right side of this page)

 Premierul desemnat Dacian Cioloş a anunţat, astăzi, echipa de miniştri, într-o conferință de presă, la Camera Deputaților.
     Astfel, lista membrilor Guvernului propusă de Dacian Cioloş este:
     Vicepremier şi Ministrul Economiei: Costin Grigore Borc
     Vicepremier şi Ministrul Dezvoltării: Vasile Dâncu
     Ministrul Afacerilor Externe: Lazăr Comănescu
     Ministrul Afacerilor Interne: Petre Tobă
     Ministrul Agriculturii: Achim Irimescu
     Ministrul Apărării Naţionale: Mihnea Motoc
     Ministrul Culturii: Vlad Alexandrescu
     Ministrul Energiei: Victor Vlad Grigorescu
     Ministrul Educaţiei: Adrian Curaj
     Ministrul Finanţelor Publice: Anca Paliu Dragu
     Ministrul Fondurilor Europene: Aura Carmen Răducu
     Ministrul Justiţiei: Cristina Guseth
     Ministrul Mediului, Apelor și Pădurilor: Cristiana Paşca Palmer
     Ministrul Muncii: Claudia Anca Moarcăş
     Ministrul pentru Societatea Informaţională: Marius Raul Bostan
     Ministrul Sănătăţii: Andrei Baciu
     Ministrul Tineretului și Sportului: Elisabeta Lipă
     Ministrul Transporturilor: Marian Costescu
     Ministrul pentru Dialog Social: Violeta Alexandru
     Şeful Cancelariei Primului Ministru: Ioan Dragoş Tudorache
     Ministrul delegat pentru Relaţiile cu Românii de Preturindeni: Dan Stoenescu
     Ministrul delegat pentru Relaţia cu Parlamentul şi Societatea Civilă: Cristian Ciprian Bucur.

The Bureau of Labor Statistics announced today that the US economy created 271,000 jobs in October, a number substantially in excess of the expected 175,000 to 190,000 jobs. The unexpected job gain has dropped the unemployment rate to 5 percent. These two numbers will be the focus of the financial media prostitutes.  What is wrong with these numbers? Just about everything. First of all, 145,000 of the jobs, or 54%, are jobs arbitrarily added to the number by the birth-death model. The birth-death model provides an estimate of the net amount of unreported jobs lost to business closings and the unreported jobs created by new business openings. The model is based on a normally functioning economy unlike the one of the past seven years and thus overestimates the number of jobs from new business and underestimates the losses from closures. If we eliminate the birth-death model’s contribution, new jobs were 126,000.  Next, consider who got the 271,000 reported jobs. According to the Bureau of Labor Statistics, all of the new jobs plus some—378,000—went to those 55 years of age and older. However, males in the prime working age, 25 to 54 years of age, lost 119,000 jobs. What seems to have happened is that full time jobs were replaced with part time jobs for retirees. Multiple job holders increased by 109,000 in October, an indication that people who lost full time jobs had to take two or more part time jobs in order to make ends meet.  Now assume the 271,000 reported jobs in October is the real number, and not 126,000 or less, where are those jobs? According to the BLS not a single one is in manufacturing. The jobs are in personal services, mainly lowly paid jobs such as retail clerks, ambulatory health care service jobs, temporary help, and waitresses and bartenders.