According to Reuters, amid the disputes between the European and Italian authorities, concerning the initiation of a new bail-out program for Italian banks, but without the prior application of the bail-in procedure, Mario Draghi, the president of the ECB, has expressed his support for the governmental aid offered to Italian banks, because "such a program will allow them to sell some of their non-performing loans, which reduce their lending ability". But is such a "release" of Italian banks' lending capability rational and prudent, when the current volume of non-performing loans shows that they are incapable of correctly evaluating risks?  In the recent meeting of finance ministers of the G20 countries, Pier Carlo Padoan, Italy's finance minister said that "we are going in the right direction and there are no risks when it comes to systemic stability", according to an article in Financial Times. Padoan also rejected the possibility of a bail-in, as he said that such a measure would not be necessary. Shortly after Padoan's statements, shares of the Monte dei Paschi bank saw a new massive drop in Milan, according to Bloomberg, over "concerns over the need for a capital increase". Other information on the web indicates that the Italian authorities already know the results of the stress tests, and that has allowed the finance minister to express his faith in the stability of the banking system in the country.  A completely opposed opinion on the financial stability of the Italian financial system comes from the statements several Italian professors gave Financial Times.   Marcello Messori, a professor at the LUISS University of Rome said that "banks have allocated funds in a distorted and not at all selective manner", while Lorenzo Gai, a finance professor at the University of Florence, estimates that the loan portfolio of the Monte dei Paschi bank represents a "a paradigmatic history of value destruction", as "the management of the loan granting process did not work, and that is an euphemism".  This explains the concerns of the Italian authorities rather well, but 50 billion Euros, the amount of the bail-out program "negotiated" with Brussels, will not be enough.

Don't forget Target2! Germany is going to take a cold shower of 70-80 billion Euros if there is a Grexit. More worrying Italy and France are up for 10's of billions as well. So it's not exactly a picnic!... Bundesbank's TARGET2 exposure
Amount: EUR 513,365,579,273.88
(As at: 28 February 2015)

I think this whole charade may well simply be about buying time for the "made men" of the Brussels Mafia to settle THEIR creditors and bankers down enough to accept a Greek default and exit and to come up with a creditable excuse that claims the EU is intact and the euro is under no threat ... I've just read Varoufakis's six proposals for negotiation in Brussels next week, and they can be summarised as bla-de-bla-de-bla. In any serious discussion they'd get short shrift. With Juncker there trying to be Greeker than the Greeks, all moral hazard will be blown to bits. So Juncker needs to be told his business is to stay away, shut up, and stop meddling - otherwise his own past 'activities' in Luxemburg will be brought to light...I really don't think the EZ should allow Greek pension funds to be raided, or the ECB or EZ to provide cash for Greece to pay the IMF - the money would never be returned, and it would be an added burden for future taxpayers.  Let us help Greece into an orderly default, grexit from the euro, and the care of the IMF, with vaguely benign promises of rehabilitation 'as and when' ... This could be the final meltdown of the global ponzi scheme that's being going on for over a century. Then all these people who think they are rich will realise that the money they thought they were owed will never be repaid.  The UK and the US didn't avert the collapse of the world's financial systems in 2008, they just postponed it and the imbalances have only got much bigger. If creditors and saver think they're having it tough right now, they ain't seen nothin' yet !

IQUIQUE, Chile (AP) — A powerful 7.6-magnitude aftershock hit Chile's far-northern coast late Wednesday night, shaking the same area where a magnitude-8.2 earthquake hit just a day before causing some damage and six deaths.   Chile's Emergency Office and navy issued a tsunami alert and ordered a precautionary evacuation of low-lying areas on the northern coast, meaning many people could be spending another sleepless night away from their homes.   The aftershock caused buildings to shake and people to run out into the streets in the port of Iquique, which was one of the cities that saw some damage from Tuesday night's big quake. But there were no immediate reports of new damage or injuries from the latest tremor, which was one of dozens that have followed the 8.2 quake.   "I was evacuated like all citizens. One can see that the people are prepared," tweeted President Michelle Bachelet, who was in the nearby city of Arica to assess the damage.   The aftershock was centered 12 miles (19 kilometers) south of Iquique at a depth of 25 miles (40 kilometers), the U.S Geological Survey said. The USGS initially reported the tremor's magnitude at 7.8, but downgraded it to 7.6.  It was felt across the border in southern Peru, where people in the cities of Tacna and Arequipa reportedly fled buildings in fear.   On Tuesday, authorities reported just six deaths from the initial quake, but said it was possible others could have been killed in older structures made of adobe in remote communities that weren't immediately accessible.   About 2,500 homes were damaged in Alto Hospicio, a poor neighborhood in the hills above Iquique, a city of nearly 200,000 people whose coastal residents joined a mandatory evacuation ahead of a tsunami that rose to only 8 feet (2.5 meters). Iquique's fishermen poked through the aftermath: sunken and damaged boats that could cost millions of dollars to repair and replace. Still, as President Michelle Bachelet deployed hundreds of anti-riot police and soldiers to prevent looting and round up escaped prisoners, it was clear that the loss of life and property could have been much worse. The mandatory evacuation lasted for 10 hours in Iquique and Arica, the cities closest to the epicenter, and kept 900,000 people out of their homes along Chile's 2,500-mile (4,000 kilometer) coastline. The order to leave was spread through cellphone text messages and Twitter, and reinforced by blaring sirens in neighborhoods where people regularly practice earthquake drills.   But the system has its shortcomings: the government has yet to install tsunami warning sirens in parts of Arica, leaving authorities to shout orders by megaphone. And fewer than 15 percent of Chileans have downloaded the smartphone application that can alert them to evacuation orders.  Chile is one of the world's most seismic countries and is particularly prone to tsunamis, because of the way the Nazca tectonic plate plunges beneath the South American plate, pushing the towering Andes cordillera ever higher.

The European Central Bank has launched a push to strengthen the eurozone's banking system and keep troubled financial institutions from holding back the region's economy.

The bank announced Wednesday that a year-long review of 130 of Europe's biggest banks will begin next month. The asset review is an effort to check for hidden bank losses such as loans that are unlikely to be repaid. That will be followed by a stress test conducted along with the European Banking Authority that would simulate bank losses in a crisis. At the end, banks could be pushed to repair their finances by raising more capital.

Troubled finances at some banks have held back the economy of the 17 EU countries that use the euro by making it harder for them to lend to businesses. Banks that have shaky assets - such as bad loans - may be unable to find cash to lend to businesses that need credit to expand their operations. The review is also aimed at restoring confidence in bank finances so they can borrow money more cheaply themselves - and rely less on the ECB's emergency credit offerings.

The asset review is a test of the ECB's credibility. Previous stress tests carried out by the European Banking Authority clcomplicated because Europe does not have a single resolution authority that could carry out the restructuring of troubled banks. European leaders are still debating how to set up such an authority. For now that job remains in the hands of national authorities who have been seen as too reluctant to take tough measures against their home banks ...German banks were "already intensively preparing for the comprehensive assessment"Haha, or in real words, walls of bluff and bluster are hurriedly being erected to hide the massive black holes of the overleveraged biggest german banks. Hopefully the proximity of the ECB in Frankfurt will provide assistance with the fraud.

At least they have money coming in from the Irish and Greek Taxpayer to pay for the credit scams they inflicted on those countries though.eared many banks - only to see some of them rescuing soon after.

Economists say Europe's delay in dealing with bank troubles has held back the eurozone economy. Officials in the United States, by contrast, moved far quicker in the wake of the 2008 collapse of investment bank Lehman Brothers.

The asset review and stress test are preliminary to the ECB taking over as the European Union's banking supervisor next year. The single supervisor is part of a broader effort to strengthen the banking system and prevent a repeat of the debt problems afflicting countries such as Greece and Portugal.

THE "ISLANDERS" - The Prime Minister was warned by Jose Manuel Barroso that his attempts to negotiate a new relationship with the EU would be vetoed by other member states.

As a war of words raged, Downing Street insisted the Prime Minister will go ahead with his plans to get a better deal.

A Number 10 spokesman said: “As the Prime Minister made clear in January, he will negotiate a new deal in the EU and then put the choice of staying in or leaving the EU to the British people in a referendum by the end of 2017.”

Mr Barroso, an unelected Portuguese politician who comes to the end of his presidency next year, had dismissed claims by Mr Cameron that there is wider European support for his agenda to “repatriate” powers on social, employment and environmental legislation back to Westminster....

He said in an interview “there will be others, many, who oppose” Mr Cameron’s call for treaty changes which must be agreed unanimously by all 28 member states.

He said: “Britain wants to again consider the option of opting out. Fine, let’s discuss it. What is difficult, or even impossible, is if we go for the exercise of repatriation of competences because that means revising the treaties and revision means unanimity. I don’t believe it will work.”

He added: “I am for a stronger EU not a weaker EU.”

The row will add to calls for Britain to quit the EU, as championed by the Daily Express.

Last night Ukip leader Nigel Farage said: “Barroso describes Cameron’s plans as ‘doomed to failure’. So they are. It is about time the pro- European establishment of this country was honest with us. There will be no change in our relationship with the EU before, during or after Cameron’s futile renegotiations.

“The EU knows this, Cameron knows this and the people of this country need to know this, too. This country needs a choice now.”

Another global economic crash?

"Was jittery Thursday a foretaste of another global economic crash?

The sharp slide in share prices was either a blip in the road to recovery or a sign that the unwinding of quantitative easing will lead to disaster. Our writers argue it out" - the Telegraph on Sunday. The banking system, sovereign debt, equity markets are all FUBAR and bare no relation to the underlining fundamentals from where price discovery should come from. That is the problem and much of it has to do with ZIRP/QE, Draghi mouthing off, which although stops any immediate crash it is still just blowing bubbles and 'can kicking' where at any point to try to unwind from that position still leaves a gap between there and real growth coming back to stop the shortfall when ZIRP/QE Draghi on a buying spree taper away from their positions. Five years on from the WFC they are no nearer to fixing the problem, or the disaster of the euro. My guess is that eventually in the coming years governments will choose from the inflation poison chalice, rather than the default poison chalice, they nearly always do. Fiat money will become very devalued, and to my mind they have already set off on this path with orchestrated currency wars, and the printing presses a rolling If another big financial crash occurs I wonder what all those experts in the astrology like subject known has economics will be citing has the cause, let alone the required solutions. Not that the accountants, politicians, top business people, and goodness knows who else have demonstrated any more competence, except to ensure that the people that are made to pay for the disaster are those least responsible for it, and least able to afford to pay. Am I the only one who is coming to the conclusion that much of the human world is being run by self serving ego maniacs?

But more importantly the facts behind Thursdays ''market blip'' relates to leverage and debt. After the 2008 crash we have failed to de-leverage, the losses have been largely hidden by accounting tricks or taken over by the taxpayer. Instead of de-leveraging and re-capitalizing the banks QE and ZIRP have resulted in a massive leveraged derivative bubble now waiting to burst.

Thursdays blip might be the realization that.

1. That despite 5 years of recession endless money printing we are still seeing no real growth, outside of that provided via stimulus then it may be that these policies of QE and ZIRP are in fact failed policies, when the markets realize this investors will start to control interest rates not Bernanke and other central bankers.

2. Despite Abe's shock and awe policies Japanese rates doubled on Wednesday, Thursday. If markets suspect (and I think they do) that Japanese monetary policies are failing as indicated by rising rates, then we maybe witnessing the beginning of the end for Japan and the rest of the world! why?

3. When investors realize QE and ZIRP have failed we will see the 1.5 quadrillion dollar derivative market melt down and it wont be an ordinary unwinding. Chaos is not a word that will describe the result as counter parties evaporate and the world banking system collapses....

Funny how words change their meaning. I remember watching a Fred Astaire Ginger Rogers film on Channel 4 one Saturday afternoon called 'The Gay Divorce'. Of course the word 'Gay' has changed completely since the 1930s and it was all very comic.

In contemporary mainstream economics the word 'recovery' seems also to have undergone a transmutation. Once upon a time it meant falling unemployment, increasing investment, rising wages and prices, all based upon official statistics you could actually believe.

Today recovery means asset price bubbles, wage repression, pension repression, grinding down the poor the sick and the old, stubborn levels of unemployment/underemployment, a massive liquidity trap, counterfeit statistics from the Bureau of Labor Statistics, and the Office Of National Statistics - but hey, stock markets are booming, companies are sitting on piles of cash, share buybacks are all the rage, the financial elite is raking it in again, the tax avoidance industry has never been healthier or more ubiquitous. Yes this is some Central Bank engineered 'recovery'.

What really amazes me is the degree to which financial commentators are taken in by such blatantly crude propaganda. Which reminds me of the old saying: ‘You cannot hope to bribe or twist (thank God!) the British journalist. But, seeing what the man will do un-bribed, there's no occasion to.'Of course there are exceptions, but the majority of commentators and opinion formers seem satisfied to simply spew out the 'official' Pollyanna rubbish. The reason for this is that they actually believe it themselves.

Hey Mario: what part of "FUCK OFF" don't you undestand.

EUROSMOKE AND LIES - “The answer to the crisis has not been less Europe but more Europe... The EU and the [euro] are no exceptions. The choice is between adapting them to the new conditions or do nothing and risk their dissolution.” The EU is a body primarily driven by pure politics without any ameliorating rational input from experts in economics markets science etc. Both the creation of the Eurozone and the FTT were political projects making extensive use of confirmation bias and totally ignoring expert advice. The Eurozone is a failure and the FTT will kill off the City as well as destroy markets inside the EU which both sovereign states and EU companies rely on. Politicians and bureaucrats taking the decision have never even heard of the repo market but they are about to find out how important it was once they destroy it. Rational thought would mean taking account of the views of experts on the FTT but the FTT is a political dream where there is no room for reality. If there was there would be no FTT. Any organization run by purely political decisions is going to lose out against a more rational response elsewhere in the world. I doubt the EU will ever base its decisions on rational thought processes rather than politics as there is no mechanism in place to force elite politicians to take note of experts. In their conceit they only see their own narcissistic beliefs as relevant to decision taking. Confirmation bias means that politicians start by already knowing the answers and see the job as putting their irrational policies in place. When policies do not work in the real world confirmation bias is called upon again to warp data to explain failure without ever seeing any need to change policy. Failure followed by more failure is guaranteed by the political approach. Pressure from the UK public to leave will increase noticeably once the FTT is in place and the City goes down the tubes. This will be extensively reported by the media. How often have we heard this before? You will never convince the average Brit that having more decisions taken by the unelected elite in Brussels is going to deliver anything for us. The nearer you get to a EUSSR the less the Brits will like it and the more we will want to leave. We have a totally different mentality to the majority of the EU who think that taking all decisions centrally will lead to economic success. That idea is seen as rubbish here and unworldly. To work in the real world the people taking the decisions would have to real experts in many fields and driven by rationality instead of politics. That can never happen in the EU as it is a political construct. Instead decisions are from over-conceited politicians and bureaucrats whose knowledge and understanding of the real world is minimal. Whatever Draghi says about banking reform will be politically based and not based on research by experts. The starting point always has to be 'more EU' whereas it is unlikely in the real world that all answers would come out to be simply as case of more EU solving the problem. That is illogical. Draghi : "If we are successful in establishing (a federal Europe) as I am sure we will be..." "Europe is much more stable today (thanks to me)..." There you have it. Breathtaking arrogance combined with delusion. The only option we have is to gtf away from pr!cks like this.

ZeroHedge reports a story in the Cyprus press that the president of the national legislature has called for an exit from the Eurozone too. Also that the president of Cyprus may have moved his families money out of Cyprus in the week before the deposits were frozen. If true, then I can't see Cyprus honoring the Troika terms and a Euro exit is inevitable....

Archbishop Chrysostomos II, who had urged for eurozone exit over an onerous bail-out, declared on Sunday that finance minister Michalis Sarris and central bank governor Panicos Demetriades should step down after allowing the EU-IMF lenders to devastate the island’s banking sector in return for a €10bn (£8.4bn) loan. The missive is the latest public criticism to come from the island’s religious leader since his failed bid to avert a raid on Cypriot savings by offering the church’s entire wealth to shore up the struggling economy. His call emerged a day after the central bank unveiled much worse than feared measures on uninsured deposits - those over €100,000 - in the island’s largest lender, Bank of Cyprus. In an arrangement which will see more than €100m wiped off the Cypriot Orthodox Church’s assets, up to 60pc could be slashed from uninsured savings in the Bank of Cyprus, while large depositors in the island’s other major lender Laiki Bank stand to lose 80pc of anything over €100,000 as it is broken up and wound down.

“If I was satisfied, I would not have called on them the other day to resign and leave, because they have the same views as the troika [of international lenders],” said the archbishop.
The Cypriot Central Bank Governer & Finance Minister were called on to resign "because they have the same views as the troika [of international lenders],” said the archbishop".
Therein lies the issue. These two, in their actions are not looking after Cypriots.. they, along with their EU chums, are acting outside the law, acting with impunity like typical EU emperialists following the "Project" line.. They should go.

There you go ...no dice ma'man...hihihihi

The Eu Parliament is refusing the budget as is.   Le Point:

"Le Parlement européen ne peut accepter en l'état l'accord trouvé aujourd'hui (vendredi) au Conseil européen. Nous regrettons que M. Van Rompuy n'ait pas parlé, ni négocié avec nous au cours des derniers mois", ont indiqué les parlementaires. Les chefs d'État et de gouvernement européens se sont mis d'accord vendredi, à l'issue d'un sommet marathon, sur un budget d'austérité pour les sept prochaines années, en baisse pour la première fois dans l'histoire de l'Union européenne. "C'est maintenant que les véritables négociations vont commencer, avec le Parlement européen", ont prévenu les parlementaires. True negotiations are starting... 

 

Joint Statement to the Press by Joseph Daul, on behalf of the EPP Group, Hannes Swoboda, on behalf of the S&D Group, and Guy Verhofstadt, on behalf of the ALDE Group and on behalf of the Greens/EFA Group Rebecca Harms and Daniel Cohn-Bendit.

"...This agreement will not strengthen the competitiveness of the European economy. It is not in the prime interest of our European citizens. The European Parliament cannot accept today's deal in the European Council as it is. We regret that Mr Van Rompuy did not talk and negotiate with us in the last months.

.....We see with astonishment that EU leaders agree to a budget that could lead to a structural deficit. Large gaps between payments and commitments will only store up trouble for the future and not solve existing problems. We remain firm on the respect of Article 310 of the Treaty which requires a balanced budget.
In addition to this there are four important points that we will not abandon:

First, we are calling for increased flexibility using Qualified Majority Voting: between years and between categories of spending. It is a sensible approach which will allow us to make the best use of our financial resources.
Second, we are also standing firm on a compulsory revision clause with a Qualified Majority Vote in the Council, which should allow us to revise the financial framework in two or three years. We don't accept an austerity budget for seven years.
Third, with this same sense of responsibility we are calling for new, genuine own resources for the European budget to progressively replace the current system based heavily on national GNI contributions.  Fourth, we cannot accept a budget based solely on priorities of the past. We must maintain support for future-oriented policies, strengthening European competitiveness and research.
The outcome of the final budget will determine whether the second decade of the 21st century will be remembered as the time of further integration for the benefit of all Europeans or the time of a standstill for Europe, or even falling behind in a globalised world.

France is another PIG. In fact, France is the "F in PIG". It's just a matter of time until the Euro does to France what it has done for Italy.
Michel Sapin made the gaffe in a radio interview, which left French President Francois Hollande battling to undo the potential reputational damage.

“There is a state but it is a totally bankrupt state,” Mr Sapin said. “That is why we had to put a deficit reduction plan in place, and nothing should make us turn away from that objective.”

The comments came as President Hollande attempts to improve the image of the French economy after pledging to reduce the country’s deficit by cutting spending by €60bn (£51.5bn) over the next five years and increasing taxes by €20bn.

Data from Banque de France showed earlier this month that a flight of capital has already left the country amid concerns that France’s Socialist leader intends to soak the rich and businesses. The actor Gérard Depardieu has renounced his French citizenship and decamped to Russia in protest, while David Cameron said Britain will “roll out the red carpet” to attract wealthy individuals.

Pierre Moscovici, the finance minister, said the comments by Mr Sapin were “inappropriate”. France has declared war on business.
This country has been told for decades it could ignore globalisation, and that the Brits and Americans are more-or-less contemptible.Their businesses close and capital leaves as fast as it can.They described Sarkozy as Mr Bling because he had one expensive inauguration dinner.They have been lied to about reality and there are vast numbers of unreconstructed communists and super-socialists, with a bureaucracy that defies belief. For Germany, France now is THE problem - not Britain, which is similar to Germany in many ways.Hollande is loathed by many in France and now feared by most for the insanity and naivety of what he is doing.There is no budget correction here, just rapid decline, illusion and mounting irrelevance.This place is becoming very frightening...

Well ....There is a common theme here...Someone has nicked all the money, from virtually every country in the world. And we are all sat here twiddling our thumbs worrying about all the debt.   ...  Now think about debt.... How can nearly all the countries in the world, legitimately be in debt?..Who is the debt owed to?...  Whoever these people are, must live in some of these countries, and I am almost certain, that they have - or they think they have - complete power and control over what is going on in these countries...

They are not as some people try and make out - the likes of pensions and insurance companies - otherwise pensioners wouldn't themselves be in the process of being totally screwed. All these problems should be resolvable. Money, no matter what it is based on, does not simply evaporate into thin air and completely disappear.

So the people of all the countries in the world must take this one step at a time, and identify whose hands are actually on the levers of power.  What are the fat controllers planning to do with all their power, if we do not take back control from them?..They are going to try and kill us all. That is what always happens with such enormous power. Ask any old German or Russian who actually survived and witnessed it...We helped come to their rescue. No one's going to come to ours except ourselves.

Switzerland's oldest bank is to close permanently after pleading guilty in a New York court to helping Americans evade their taxes. Wegelin, which was established in 1741, has also agreed to pay $57.8m (£36m; 44m euros) in fines to US authorities. It said that once this was completed, it "will cease to operate as a bank". The bank had admitted to allowing more than 100 American citizens to hide $1.2bn from the Internal Revenue Service for almost 10 years. Wegelin, based in the small Swiss town of St Gallen, started in business 35 years before the US declaration of independence. It becomes the first foreign bank to plead guilty to tax evasion charges in the US. Other Swiss banks have in recent years moved to prevent US citizens from opening offshore accounts. US Attorney Preet Bharara said: "The bank wilfully and aggressively jumped in to fill a void that was left when other Swiss banks abandoned the practice due to pressure from US law enforcement." The closure of Wegelin is a watershed moment that has huge implications for the Swiss banking industry - and for Switzerland's famed banking secrecy. Wegelin's guilty plea included the admission that it intentionally opened accounts for US citizens to help them avoid tax. In court Wegelin's managers said they knew it was wrong, but thought they would not be prosecuted because it was legal in Switzerland, and common practice in Swiss banking - words which are causing something close to panic among other Swiss banks, including Credit Suisse, who are also being investigated by the US authorities. Until now everyone expected Wegelin to fight the charges - instead Switzerland's oldest bank will cease to exist. The message to the Swiss financial sector is clear - the US will not give up this fight over tax. The Swiss government has been trying for months to negotiate a deal with the US which would protect Switzerland's banking secrecy. The Wegelin case makes that look virtually impossible.

Obama originally proposed a 'grand bargain' to deal with all the remaining issues in the hope that he would avoid these regular and debilitating stand-offs with Congress.Mitch McConnell, the Republican leader in the Senate, within minutes of Tuesday's vote, flagged up the coming battles ahead over spending and the debt ceiling. So too did the Republican House Speaker John Boehner, who said: "Now the focus turns to spending. The American people re-elected a Republican majority in the House, and we will use it in 2013 to hold the president accountable." But Obama insisted he had enough of such confrontation. If Congress decides to make an issue of raising the debt ceiling, it would be responsible for the "catastrophic" consequences. The fiscal cliff crisis has been runnning since Obama won the election in early November. Attempts by Obama and the Republican House Speaker John Boehner to do a deal before Christmas collapsed. So too did negotations between the Democratic Senate leader Harry Reid and his Republican counterpart McConnell. In the end, the deal was brokered over the weekend by McConnell and vice-president Joe Biden. The bill was passed by the Senate, with 89 senators in favour and eight against, at 2am on Tuesday, too late to prevent the country breaching the midnight fiscal cliff deadline. The bill restricts tax rises to individuals earning $400,000 or more a year and households earning $450,000 or more. Estate tax also rises, to 40% from 35%, but inheritances below $5m are exempted from the increase. Benefits for the unemployed are extended for another year.

Poor countries with loans from the IMF can continue to pay no interest until the end of 2014, the Fund's board said on Friday, as their economies are still recovering from the global economic crisis. The IMF's zero-interest loan program for low-income countries had been set to expire at the end of this year. "The executive board decision to keep interest rates at zero ... is testament to the Fund's continued support for low-income countries since the global economic crisis hit in 2009," IMF Managing Director Christine Lagarde said in a statement. The IMF decided in 2009 to allow countries eligible for its anti-poverty loan program to pay zero interest on loans in light of the financial crisis.
The Fund also set a target to raise $17 billion to lend to the poorest countries, which are threatened by the risk of euro-zone contagion and by a drop-off in foreign aid after the global recession. IMF's Lagarde has pushed to meet that goal, seeking to ease concerns that the IMF and donor nations may turn a blind eye to the world's poor as they focus on containing the euro zone crisis.
In September, the IMF said it would distribute a $3.8 billion windfall from gold sales to its 188 member countries if they agreed to commit most of the money to the anti-poverty loan program.

In a statement issued just after the London markets closed, S&P warned there was a one-in-three chance that it would strip the UK of its cherished AAA status within the next two years. "We believe this could occur in particular as a result of a delayed and uneven economic recovery, or a weakening of political commitment to consolidation," it said. S&P did not call for the government to abandon its austerity plans, but it warned that the deficit-cutting strategy will continue to undermine growth. "We continue to believe that government's efforts over the next few years to engineer the planned correction in the UK's fiscal accounts will likely drag on economic growth." It added that belt-tightening by debt-burdened consumers and weak investment by anxious firms were likely to continue to depress demand. Ministers, including chief secretary to the Treasury Danny Alexander, have played down the significance of a ratings cut in recent days; but the chancellor has pinned his political reputation on maintaining Britain's reputation as a "safe haven" for foreign investors. S&P's announcement came after Osborne was forced to announce in last week's autumn statement that economic growth has been far weaker than he hoped even in his March budget; and he now expects to flunk his self-imposed rule of cutting the public debt burden by 2015-16. S&P said its own calculations suggested the debt-to-GDP ratio, forecast by the independent Office for Budget Responsibility to peak just below 80% of GDP, could actually hit 100% of GDP - on its own definition - if the economic recovery continues to disappoint. Standard & Poor's rating agency announced it is downgrading Britain's economic outlook from stable to negative, hours after the chancellor defended his Autumn Statement before MPs. The ratings agency said it placed a negative outlook on the British economy to reflect its view that it could lower the country's rating within two years if fiscal performance weakens beyond current expectations. It cited "a delayed and uneven economic recovery, or a weakening of political commitment to consolidation" as possible causes for a future downgrade. S&P warned "if economic growth recovers more slowly than we currently forecast, due to domestic factors or waning economic performance by the UK's main trading partners, such slow recovery could result in net general government debt approaching 100pc of GDP, by our calculations, from its current estimated level of 85pc of GDP in 2012". The downward revision came just hours after chancellor George Osborne, speaking before the House of Commons Treasury Select Committee, downplayed the importance of the UK's treasured top credit rating, describing it as just "one test" and not the key symbol of an economy's strength. “It’s one test alongside others and the ultimate test is what you can borrow money at,” said Mr Osborne.

Big credit bubble?! Big surprise!!

So the markets are overvalued? Big credit bubble?! Big surprise!! I've had the feeling the markets have been overvalued for years (about 12 years to be precise), and the same applies to almost all major currencies as well (most obviously, and most ludicrously, the Euro). There WILL be a crash. What really concerns me is how the aftermath of a crash will be dealt with. My guess is governments and banks will go looking for new income streams to replace the old, dead ones and we will all be conned even more than we are already. And on and on it will go until something big stops it (like an asteroid impact!)....Well : Anyone with a grain of financial acumen knows exactly why markets have risen - it is due almost entirely to the money printing and pathetic Interest rates arranged by almost ALL the westernised economies. Savers and Investors previously had countries like Australia, with rates giving a return on term deposits of 5-6%, risk free.....these rates have now gone due to pressure from the Oz Govt among others, on the RBA to lower rates for the benefit of borrowers and mortgagees in order that they might get re-elected next year....Now that these bolt holes are unavailable, people have no alternative but to put money back into low-risk, high dividend yielding shares. Bank shares in Australia, for example, bring a net return of around 7% and retirees etc have seen their standard of living continually falling in the Western world ever since the GFC began. Many are now at the stage where, even though they still don't trust the stock market and the smarter ones can still see the risks in the Eurozone , they have to act or see their nest eggs whittled away by ever-rising prices on utilities etc. The worry is that, as the BIS implies, this is NOT a sound rally and if another credit bubble recurs, investors risk another large slice of their pension funds etc being lost in the resultant crash... The elites' plan of denuding the middle class of their wealth is ALL going to plan....“Some asset prices appeared highly valued in a historical context relative to indicators of their riskiness,” said the bank in its quarterly report. Yields on mortgage bonds have fallen to the lowest level ever recorded. Spreads on corporate debt have narrowed to the wafer thin margins of 2007, even though default rates are currently three times higher than they were then for junk bonds and twice as high for investment-grade companies. The venerable Swiss-based institution – almost alone in warning of a global debt crisis in the build-up to the Great Recession – said it is rare for markets to gather steam at a time when the major forecasters are turning gloomy. The International Monetary Fund and the OECD have downgraded their outlooks for 2012 and 2013, with sharp cuts for much of Europe as well as for Brazil, China, and India. “Unusually, equity and fixed income gains coincided with a weakening of the global economic outlook. In the past, falling growth forecasts have usually been associated with rising expected default rates and higher bond yields,” it said....Money printing and flooding the banks with cheap cash is keeping the stock market and property bubbles inflated, keeping interest rates suppressed and removing any incentive for people to save for their own future. Supporting zombie companies is technically keeping bad debts of the Bank's books but is stifling real growth in the economy. Remember how politicians sold your and your children's future down the river for just one more election win, well they're still doing it.