"People are  quite nervous about the Chinese economic outlook. China is certainly slowing on a very gradual path down. A lot of people are fearing a hard landing is in play."  Craig Erlam, of online currency broker OANDA, said: "The fact that we’ve still seen significant declines in equity markets suggests that sentiment remains very weak despite this stabilization in the yuan and more may need to be done to bring about a similar response. "The removal of the circuit breakers – which were ironically installed to shield against rapid market sell-offs but instead encouraged them – does appear to have brought some calm back but as we’ve seen over night, investors still clearly have no confidence in the markets and remain bearish." On Saturday official figures showed Chinese consumer prices picked up slightly in December but inflation remained about half the government's target. Prices paid at the factory gate, a guide to future inflation, also sank for a 46th consecutive month. The figures are the latest highlighting the weakness in China, which is expected to have grown in 2015 at its slowest rate in a quarter of a century. Investors extended losses from last week, which was one of the worst starts to a year on record with dealers rattled after trade was suspended twice in four days in Chinese markets. Shanghai ended the week about 10pc lower, in echoes of a sell-off that fuelled global turmoil in the summer. London lost 5.3pc over the week, Paris shed 6.5pc and Frankfurt dropped 8.3pc. And on Wall Street, the Dow and S&P 500 lost about 6pc, marking the worst opening week of a year in the history of either index. A series of cuts in the yuan currency's value to a five-year low against the dollar added to the sense of nervousness as Beijing stood accused of bungling its handling of the crisis. On Friday the central People's Bank of China sought to soothe nerves by pledging to carry out "prudent" monetary policy and work to ensure "reasonably abundant liquidity" in the banking system this year. Chinese equities have had a tough start to the year. This has flowed around the globe, kneecapping equities, where valuations were already deemed to be stretched," Mark Smith, a senior economist in Auckland at ANZ Bank New Zealand, said.

"A weaker inflation outlook and heightened market volatility has also swung the pendulum back to more policy support." The Chinese stock market is essentially valueless. If the Chinese Government wasn't propping it up behind the scenes the people who'd lost all their money would be out on the streets burning down CCP offices and lynching party members.

We all live in a fiat money regime. So what is to stop the Greeks adding €377bn to their Bank of Greece accounts and repaying everyone?  Alternatively create the New Drachma. Valued (by sovereign decree) at par with the euro. And repay with that. I know that the secondary market wouldn't accept that it's valued at par but that's not the point. A sovereign state says their drachma is worth a euro. They give their creditors (except the IMF) lots of them. Lots of red faces and indignation but so what?  Alternatively Greece still has the mandate to print small denomination euro notes. So, provided that they have the paper, print loads and repay in cash. Super Mario would huff and puff and say that they were counterfeit but that would have the whole of Europe worried about their cash....The effect of a default would be extremely serious. Nobody lends money to a government that has just defaulted on existing debts. Rich Greeks have removed their Euros from Greek banks and cannot be forced to bring them back. Greeks in general simply do not pay their taxes. Where can they go now? When they have stripped the pension funds, there will be no pensions. When they leave the Euro, they will print Drachmas which will be devalued continuously until they are worthless. Greeks have mortgages denominated in Euros. The Drachma will be worth a few centimes, if that. I think life will get a lot harder for Greeks before it gets better. = This is false - did anybody hear about Brazil and/or Argentina ??? - these countries periodically file for bankruptcy !!!...Of course the great Europeans especially the "unionists" didn't today's Europeans are just as ill informed as the Americans ! - Well ...We are where we are. Hindsight is invariably quoted by opponents of how things have panned out. There is no doubt that matters could have been better planned from the start or the early days. In which case the whole movement might well never have got off the ground.

I see the EU and Euro as, say, 25% positive. It is a job in progress, not made easier by the ongoing crisis which did NOT started in the US, but in the "world". For whatever reason, there are 28 democratically elected (more or less) national governments who want their countries to stay in the EU with another half-dozen applying for membership (stupid). To date no-one has left. Can they all be wrong?

THE BENEFITS ??? - EU should leave us alone !!!!

Greece has endured deep budget cuts tied to its massive bailout from the so-called troika - the EU, International Monetary Fund (IMF) and European Central Bank (ECB).
The possibility of a Syriza victory in Sunday's vote has sparked fears that Greece could default on its debt and exit from the euro.
THE BENEFITS OF E.U. AND THE EURO

Average wage is €600 (£450: $690) a month

Unemployment is at 25%, with youth unemployment almost 50%

Economy has shrunk by 25% since the start of the eurozone crisis

Country's debt is 175% of GDP

Borrowed €240bn (£188bn) from the EU, the ECB and the IMF

 

After more than four years of harsh restrictions imposed by the so-called "troika" of the EU, the European Central Bank, and the International Monetary Fund, elections here come just as Greece actually begins to see small signs of recovery. But it is macroeconomic growth that has yet to reach the pockets of ordinary Greeks, who have seen their companies shuttered and their pensions slashed... if Europe is forced to respond to new demands from Greece, it will test cohesion already strained by tensions over NATO and Britain's flirtation with an exit from the EU, says Ian Kearns, director of the policy group European Leadership Network in London. “In that reaction we will see the definition of the European project,” Mr. Kearns says. “It will be the movement of Europe into a new era, one that will lock in austerity or [take] a new path.”   It could also challenge a Greece that has in some ways felt on the mend.  Antonis Birbilis, a volunteer at the electoral stand for New Democracy in Syntagma Square, which was the site of near daily violent protests against austerity, says he fears the election could bring Greece back to darker days.

 

Indeed...

Indeed ... A form of  dictatorship is the only way that the EU CAN work. Fascism - where the state comes before the individual - same with the EU - the EU project comes before EVERYTHING and EVERYBODY else. It must not fail !!!! People eating out of bins in Athens....50% youth unemployment.....convicted murderers roming Europe at will.....who cares, so long as the Eurocrats get their fat pension - all in the name of 'a democratic Europe' - apparently. Let's hope the EU gradually disappears up its own backside. Is it really such a big deal for Greece to leave the Eurozone? Yes, they will default on their debts, but this is only virtual money and the debtors (ie Germany) were not going to see very much of it back in any case. There will be some months of turbulance whilst they create a new currency and agree on an exchange rate ....the average person will be better off as he will suddenly have a load of New Drachma's in his pocket ...the rich will keep their Euros in their various non-Greek accounts...but then the country can start to benefit from an influx of holiday makers and increased competitiveness for their industry, which is responsible for 60% of their exports. They will still be in the European Union and benefit from the open market....as will the rest of the Union....That's the worse case scenario for the EU. Other countries would see that life is better outside euro. Some countries would also want to exit and some countries that are meant to join would refuse to do so.   I want to think that Berlin and Paris will not cause any more pain on Greece, but on the other hand, if Greece exits and it is a success, the Francogerman monetary union can seriously collapse. So, I suspect that Berlin and Paris would still try to make life difficult for Greece outside the euro.

Europe was alight with speculation on Friday about verdicts on the financial health of the region’s 130 largest lenders.

The big question was - and, well 25 failed -  which banks might fail the central bank’s review and how much new capital might be needed for the banks to survive. Estimates of the capital shortfall varied widely, from about 10 billion euros, or about $12.6 billion, to as much as €50 billion. The central bank’s review was based on figures at the end of 2013. Banks that have not passed muster and have not taken steps to shore up their finances will have nine months to top up their reserves. Otherwise, they risk being shut down. The central bank noted the results would not be final until approved by its governing council Sunday morning. “Until that time, any media reports on the outcome of the tests are by their nature highly speculative,” it said. Banks were informed of the preliminary results of the review and stress tests on Thursday. They will not know for sure whether they passed or failed until Sunday, shortly before the public disclosure. Most analysts expected the shortfall to be relatively modest, in part because bankers have known for a year that the test was coming and have sold risky assets and raised more capital, money that is available to absorb losses and is crucial to a bank’s survival in a crisis. “The number of banks that would need to raise additional capital will be limited,” analysts at Barclays said in a note to clients on Friday. “This is due to the substantial pre-emptive measures that the banks have already undertaken.” Betting on which banks would do better or worse than expected was rampant on Friday. Trading was suspended on Friday in shares of the Italian bank Monte dei Paschi di Siena after they jumped more than 10 percent on the strength of speculation that it would fare better than expected under European Central Bank scrutiny. The larger question is whether the review, which included an audit of bank holdings followed by so-called stress tests of their ability to withstand a crisis, will remove doubts about the underlying health of eurozone lenders and make it easier for them to raise money that they can lend to customers.

Jörg Krämer, chief economist at Commerzbank in Frankfurt, was pessimistic about the effect that the review would have on the eurozone economy. The reason for declining credit in the eurozone is not that banks cannot lend, he said on Friday, but that businesses do not want to borrow. “The stress tests will help certain countries like Italy and Spain,” Mr. Krämer said in a meeting with a small group of journalists. “But it won’t be a breakthrough for the whole eurozone.” There could be a sell-off in financial markets on Monday if the central bank uncovers a bigger capital gap than expected. But there is also a risk of a negative market reaction if the review appears to be too lax. Previous stress tests by other regulators gave stamps of approval to banks that later failed, undermining trust in the whole banking system. The European Central Bank has a strong incentive to be tough. It will become the overall supervisor of eurozone banks on Nov. 4, and needs to show it has the skills and backbone to do the job. “If convincing enough, the assessment can support sentiment, the eurozone economy and the banks,” Suvi Kosonen, an analyst at ING Bank, said in a note on Friday.

The central bank conducted the stress tests with the European Banking Authority, which will simultaneously release results on Sunday that include lenders in European Union countries that are not in the eurozone, like Britain and Sweden. Banks found short of capital will have two weeks to submit a plan to the central bank on how they will shore up their finances. Even banks that pass could find themselves under pressure to raise more capital, if they pass only narrowly. The audit will expose that banks may have been overvaluing their assets or failing to set aside enough money to cover bad loans.(source NYT)

The global insurance industry covered $21bn (£12.7bn) of losses from disasters in the first half of 2014 as fewer natural catastrophes kept claims below their long-term average. The total economic cost of disasters in the first six months was $44bn of which natural events made up $41bn, figures from Swiss Re, the world's second-biggest reinsurer, showed. More than 4,700 people were killed by natural disasters during the period. The figure for overall economic costs was down from $59bn a year ago and was less than half the first-half average of $94bn in the last decade. The $21bn total bill for insurance companies fell from $25bn in the first half of last year and a 10-year average of $27bn. Natural disasters made up $19bn of costs in the first six months of 2014 with manmade events accounting for another $2bn. Insurance losses hit a record of $116bn in 2011 with most of the losses in the first half when the Japanese earthquake cost the industry $35bn. The most costly insured events in the first half of this year were the $2.6bn bill for May's thunderstorms and hail in the US and $2.5bn each for storm Ela, which hit France, Germany and Belgium in June, and a Japanese snow storm in February. The freezing winter that slowed the US economy in January also hit the insurance industry with insured losses of $1.7bn out of total losses of $2.5bn. Heavy flooding caused $4.5bn of losses in Serbia, Bosnia, Croatia and other east European countries but the cost to insurers was "moderate" because of low takeup of insurance, Swiss Re said.

This whole mes was a creation of the EU's imperialist ambitions , they financed the opposition to the democratically elected President with at least a billion Euros , succeeded in overthrowing him and in putting their placemen in power and then sat back. However as the West has discovered in Iraq, Afganistan ,Libya, and Syria it is extremely easy to interfere in the affairs of another country but very difficult to control events thereafter . However even the most stupid western politician should have understood Russia would not just stand by. Unfortunately our leaders have shown they are totally stupid as far as intervention in foreign countries is concerned.
Putin is in the right to defend what he cosnsiders to be his sphere of influence. As this mess continues the economic consequences for everyone but particularly the average EU citizen goes from bad to worse...

If I understand it correctly the latest false Kiev claim goes like this:

1. A mighty Russian force attacked Ukraine through the border.
2. A heroic Ukrainian army destroyed at least 50% of this menacing force.
3. The Russians put their tail between their legs and retreated before the mighty Ukrainian army could wipe out the rest of them.
4. Apparently the terrified Russians had the good sense in them to take back to Russia all their destroyed equipment for reasons of protecting the Ukrainian environment.

In all of this excitement, no soldier or journalist was able to use their iphone and capture some evidence. No aerial satellite photography either. Other than these minor details (of no evidence existing anywhere) this is a decisive victory for Kiev's unstoppable forces... Lies, upon lies, upon lies. Such is the natural environment for the beast called EUSSR. It has to feed on lies otherwise it dies. And since it refuses to die it has to constantly fabricate new lies just to keep up with its corrosive self-indulgence.

We,(the whle world economy in fact)are sliding towards another debt-ridden disaster, with the eurozone and China one shock away from a fresh crisis, according to a leading economics consultancy.

Fathom Consulting, which is run by former Bank of England economists, said current levels of low volatility masked systemic risks in the global financial system.

Danny Gabay, director of Fathom, said an oil price shock would be enough to trigger a "hard landing" in China as growth slowed, house prices plummeted and the country's already huge amount of non-performing loans soared.  Mr Gabay drew parallels between China today and America in 2006, when a number of households began to default on their sub-prime mortgages but authorities played down the potential impact on the rest of the global economy. Fathom also said high levels of non-performing loans in the eurozone posed a threat to the 18-nation bloc, while a strong euro and contracting private sector credit would push the eurozone into deflation within the next 12 months.  Charles Goodhart, senior economic consultant at Morgan Stanley and a former Bank of England rate setter, compared Fathom's assessment of global risks to the ideas of Hyman Minsky, who believed that "stability is destabilising" and the global financial system itself could generate shocks because of investor complacency.  "When you have so much stability, particularly at very low yields, what everyone does is they reach for yield, and they take on riskier and riskier positions. When something causes the balloon to blow up, then you're in real trouble," said Mr Goodhart. Mr Goodhart said Beijing's "remarkable track record" of "managing success" led him to believe that China would be able to contain another crisis.  However, Mr Gabay argued that the Chinese authorities might be reluctant to prop up the whole banking system in the event of a crisis, as this could send out a signal that the state was prepared to shoulder all losses.  "A lot of people say that the authorities can afford to bail the system out, and there's nothing to worry about. But I think you'd be very silly to think that Lehman Brothers happened because the Americans couldnt afford to stop it. Of course they could afford it. They just didn't.  "We see a soft landing in China, but there's a very significant risk that they will be unable to contain the "inevitable" banking crisis, because they're not superhuman, and there's a lot of money sloshing around out there that's non-performing." Fathom expects eurozone inflation to fall "below zero within a year", with core inflation, which strips out volatile items such as food and energy, "way below that".  "A substantial proportion of the eurozone is expected to be in deflation," said Mr Gabay. "And that's what ultimately we think will force the European Central Bank's hand [to launch quantitative easing]"... There will be a "shock" that will plunge the global economy into another recession. However, the cause will have nothing to do with China and will be much closer to home.

Being "European", the only thing you have to be aware of is the inevitable rise in interest rates. It is the inevitable delay in the rise of interest rates that has allowed the Europe's even Germany's an UK's economy's faint heart beat to continue for the past 8-9 years! More so, "nothing lasts forever" and the BoE as well as ECB ( and the other "sheisters" ) and other central banks raising their interest rates (and you've heard it here first!), will actually be the go-ahead for the beginning of the end of all major (and dare I say now worthless and useless ) indebted currencies (this financial crisis & QE was the finial nail in the coffin for individual currencies as we once knew ) and the creation of just 3 or 4 new currencies to be used globally.

Don't worry about China. Worry about that Canadian (and others.) who are firmly in the pockets of some extremely undesirable characters.

When German Finance Minister Wolfgang Schäuble, a trained lawyer, announced an agreement on Wednesday night in Brussels on the long negotiated EU banking union, observers might have been left thinking that he is precisely this type of lawyer.

On paper, Schäuble and his negotiators are right about very many points. They succeeded in ensuring that in 2016, the Single Resolution Mechanism will go into effect alongside the European Union banking supervisory authority. The provision will mean that failing banks inside the euro zone can be liquidated in the future without requiring German taxpayers to cover the costs of mountains of debt built up by Italian or Spanish institutes.

They also backed the European Commission, which wanted to become the top decision-maker when it comes to liquidating banks. The Commission will now be allowed to make formal decisions, but only in close coordination with national ministers from the member states.

But it goes even farther. Negotiators from Berlin have also created an intergovernmental treaty, to be negotiated by the start of 2014, that they believe will protect Germany from any challenges at its Constitutional Court that might arise out of the banking union.

They also established a very strict "liability cascade" that will require bank shareholders, bond holders and depositors with assets of over €100,000 ($137,000) to cover the costs of a bank's liquidation before any other aid kicks in. The banks are also required to pay around €55 billion into an emergency fund over the next 10 years. Until that fund has been filled, in addition to national safeguards, the permanent euro bailout fund, the European Stability Mechanism, will also be available for aid. However, any funds would have to be borrowed by a national government on behalf of banks, and that country would also be liable for the loan. This provision is expected to be in place at least until 2026.

The government in Berlin put a strong emphasis on preventing the ESM, with its billions in funding, from being used to recapitalize debt-ridden European banks. Schäuble was alone with this position during negotiations, completely isolating himself from the other 16 finance ministers from euro-zone countries. Brussels insiders report that it was "extremely unusual because normally at least a few countries share Germany's position."

Ukrainian President Viktor Yanukovych has defended his move to put on hold a historic deal with the EU, amid continuing mass protest rallies.  He said he was forced by economic necessity and the desire to protect those "most vulnerable".  The EU has accused Russia of exerting heavy economic pressure on Ukraine. Clashes between protesters and police continued on Monday. Meanwhile, jailed opposition leader Yulia Tymoshenko announced an indefinite hunger strike.  'No alternative'  Mr Yanukovych was speaking publicly for the first time since the announcement on Thursday that his government was halting preparations to sign the association and free trade agreements with the EU.  More confrontations between protesters and police early Monday morning in front of Ukraine's government building indicate that the situation remains very volatile.  In an echo of the Orange Revolution nine years ago, protesters set up a tent camp in front of the main demonstration's stage.  Ukrainian opposition leaders say political actions will continue through the week until the Vilnius summit, where Ukrainian officials were supposed to sign the free trade agreement with the EU. Many demonstrators say that they believe President Yanukovych will succumb to the pressure of the rallies and complete another about-turn - and sign the agreement.   This of course depends on whether the protesters can maintain their own momentum over the coming days.  The decision triggered mass protests in Kiev and a number of other cities across Ukraine.  "I want peace and calm in our big Ukrainian family," Mr Yanukovych said in a video statement, describing himself as a "father".  He stressed that his government had not given up attempts to bring closer ties between Ukraine and the EU.  "I would like to underline this: there is no alternative to the creation of a society of European standards in Ukraine and my policies on this path always have been, and will continue to be, consistent.  "But I would be dishonest and unfair if I had not taken care of the most disadvantaged and vulnerable, who may carry the brunt during a transitional period."  Mr Yanukovych's government last week said it was halting preparations for signing the treaties, amid concern for possible mass job losses in the short-run.  Opponents are accusing the president of keeping talks with the EU alive while never intending to sign the deal at an EU summit in Vilnius, Lithuania, on 28-29 November. They also say he has bowed to growing pressure from Russian President Vladimir Putin, who wants Kiev to join the Moscow-led Customs Union. The grouping also includes Belarus and Kazakhstan.  Mr Putin denies the claims, instead accusing the EU of trying to force Kiev into singing the agreements. European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso said on Monday the door was still open for Ukraine to sign the agreements at the summit in Vilnius.

FRANKFURT—A top European Central Bank official said the ECB could make asset purchases if needed, as euro-zone policy makers increasingly float the prospect of deploying a tool that is commonly used by other major central banks but stirs deep divisions in Europe. The comments, by ECB Vice President Vitor Constâncio, are the latest in a string of assurances by top officials at the central bank that it still has an array of policy options in its arsenal, even after reducing interest rates to record lows earlier this month. Recent ECB references to the idea of asset purchases, known as quantitative easing, are "only as a possibility and nothing else. Everything is possible. That was what Peter Praet said," Mr. Constâncio told reporters on the sidelines of the 16th annual Euro Finance Week in Frankfurt."If our mandate is at risk we are going to take all the measures that we think we should take to fulfill that mandate," Mr. Praet, who also heads the ECB's powerful economics division, said in the interview last week. "The balance-sheet capacity of the central bank can also be used," he added. "This includes outright purchases that any central bank can do."The officials gave no indication that such a policy is under serious consideration now. Mr. Praet said in the interview that inflation risks are balanced after the ECB's rate cut, which brought its main policy rate to 0.25%. Mr. Constâncio on Tuesday said the ECB hasn't discussed how it would conduct quantitative easing technically. The euro largely shrugged off his comments.Still, simply raising the idea of quantitative easing marks a significant shift in rhetoric from the central bank. ECB President Mario Draghi sidestepped a question about the policy at his monthly news conference on Nov. 7, saying only that the ECB had "a whole range of instruments" that could be activated before hitting the floor on interest rates. It is "remarkable how the attitude of some ECB Governing Council members toward [quantitative easing] has changed," BNP Paribas BNP.FR +0.41%BNP Paribas S.A.France: Paris ^€54.01 +0.22+0.41% Nov. 20, 2013 10:29 am Volume : 575,621 P/E Ratio 12.83Market Cap€68.13 Billion Dividend Yield 2.78% Rev. per Employee €155,68211/13/13 BNP Paribas SA Buys Belgium's ...10/31/13 BNP Paribas's Interesting Lack...10/31/13 BNP Paribas Profit Rises Despi...More quote details and news »BNP.FR inYour ValueYour Change Short position economist Ken Wattret said in a research note. "What was once a taboo, then a last resort is now an option under consideration."

Central bank governors and senior regulators are set to ordain that banks must have a minimum core tier one capital ratio, including a new so-called "buffer" to protect against extreme economic conditions, of 7%, I can reveal.

This is considerably lower than was wanted by the "hawks", the US, UK and Switzerland. They wanted a core tier one capital ratio of 8 to 9% including buffer, which is what British banks currently have to maintain. In fact most British banks currently have a core tier one ratio of around 10%.

But the new 7% minimum has been agreed in the face of stiff resistance from a number of countries, led by Germany, many of whose banks typically have much lower stocks of core capital in the form of equity and retained earnings - and will have great difficulty meeting the new standard.

This new international minimum was negotiated by regulatory and central banking officials in a meeting of the Basel Committee on Banking Supervision earlier this week. It is expected to be approved by the governors and senior regulators when they meet in Basle on Sunday. It will then be ratified in a final, supposedly irrevocable way by the heads of the G20 governments, at their summit in November. The 7% minimum represents a dramatic increase on the current minimum of 2%. That 2% minimum is widely seen as far too low: banks' low levels of capital relative to their assets was a major contributor to the severity of the 2008 banking crisis, as investors lost confidence in their ability to survive losses.

As they approached collapse, the capital ratios of Northern Rock and Royal Bank of Scotland fell to dangerously low levels - which is why Northern Rock was nationalized and RBS was semi-nationalized.

The point of capital is to absorb losses when loans and investments turn bad.

Although this new 7% minimum ratio of core capital (in the form of equity and retained earnings) to assets (loans and investments) as measured on a risk-weighted basis represents a significant increase, some will argue that the ratio is still too low.

One reason for this is that the absolute minimum capital ratio, without buffer, will be around 4%, or double the previous minimum.

Under the new system, if a bank's capital ratio falls below 7% or would fall below 7% when the bank is tested for financial stresses, the bank will be forced by regulators to raise new capital. And if the ratio falls below 4%, the bank will be put into "resolution" - which means that it will be taken over by regulators and wound up.

It means that banks' core capital ratios must always be above 7% in normal economic and financial conditions. But regulators would tolerate those ratios falling below 7% for short periods during economic downturns.

A senior regulator has told me that many of the biggest banks - those "too-big-to-fail" banks whose collapse would cause ruptures to the financial system - will in practice be forced to hold more than the 7% minimum.

"There will be some kind of add-on for systemically important banks," he said. So the likes of Barclays, JP Morgan, Royal Bank of Scotland, UBS and so on will in practice have to maintain core capital ratios greater than 7%.

The major concern of banks about the imposition of the higher capital ratios is that it will constrain their ability to lend in the transition period, as they build up stocks of capital - and that could undermine the global economic recovery.

The point is that there are two ways for banks to raise capital ratios: they can persuade investors to buy new shares; or they can shrink their balance sheets relative to their existing stock of capital by lending and investing less.

Because of the threat to economic growth of rapid implementation of the new capital ratios, the regulators and central bank governors are expected to give banks several years to meet the new standards.

The Basel Committee on Banking Supervision softened some of its proposed capital and liquidity rules while introducing new restrictions on how much lenders can borrow in order to rein in their risk-taking.

The panel agreed yesterday to allow certain assets, including minority stakes in other financial firms, to count as capital, according to a statement. The committee set a leverage ratio to apply to banks globally for the first time, which could become binding by 2018, pending further adjustments to the method of calculating banks’ assets.

“Even after all the compromises, the banks aren’t off the hook from tighter capital and liquidity rules,” said Frederick Cannon, chief equity strategist at New York-based Keefe, Bruyette & Woods.

France and Germany have led efforts to weaken rules proposed by the committee in December, concerned that their banks and economies won’t be able to bear the burden of tougher capital requirements until a recovery takes hold, according to bankers, regulators and lobbyists involved in the talks. The U.S., Switzerland and the U.K. have resisted those efforts. The announcement reflects the give and take between the two sides, said Barbara Matthews, managing director of BCM International Regulatory Analytics LLC in Washington.

German Concerns

Germany hasn’t signed yesterday’s preliminary agreement, said Sabine Reimer, a spokeswoman for BaFin, the country’s financial regulator.

“One country still has concerns and has reserved its position until the decisions on calibration and phase-in arrangements are finalized in September,” the committee said in a footnote to its statement.

Sumitomo Mitsui Financial Group Inc., Japan’s second- largest bank by market value, led banks higher in Tokyo after the committee agreed to allow some deferred tax assets to be counted as capital. The nation’s banks and regulators had fought against excluding deferred tax assets.

“The Basel Committee’s easing of restrictions gives investors a reason to take another look at Japanese banks, which have been cheap recently,” said Mitsushige Akino, who oversees about $450 million in assets in Tokyo at Ichiyoshi Investment Management Co.

Sumitomo Mitsui rose 2.8 percent to 2,587 yen at the 3 p.m. close of trading in Tokyo. Mitsubishi UFJ Financial Group Inc., the country’s largest bank, gained 2.5 percent and Mizuho Financial Group Inc. climbed 2.2 percent.

‘Making Concessions’

“They’re definitely making concessions on the definition of capital and the liquidity ratios,” said BCM International’s Matthews, who used to lobby the committee on behalf of banks. “Those were necessary to convince the Germans to accept the leverage ratio. But even though we see a lot of concessions, there are also limits to the concessions. So this isn’t fully caving in.”

The Basel committee, which represents central banks and regulators in 27 nations and sets capital standards for banks worldwide, was asked by Group of 20 leaders to draft rules after the worst financial crisis in 70 years.

Yesterday’s agreements were announced after a meeting of the group of governors and heads of supervision, which oversees the committee’s work. While the committee narrowed differences when it met two weeks ago in Basel, it left most of the final decisions to its board, members said.

The board said some of its proposals might not be completed by the end of this year, the deadline set by the G-20. Liquidity requirements for how much cash and cashable securities banks need to hold against their longer-term liabilities and counter- cyclical buffers, which would raise minimum capital requirements in times of faster economic growth, have to be worked on longer, the board said.

Lobby Efforts

European banks lobbied against the proposed exclusion of minority interests that banks hold in other financial institutions. Japan fought the hardest against the elimination of deferred tax assets, past losses that lenders use to offset tax charges in future years. The U.S. has opposed removing mortgage-servicing rights, contracts to collect payments, which are unique to U.S. banks.

The compromise announced yesterday would allow a bank to count part of a stake it owns in another financial firm in relation to the risk the capital is supposed to cover at the entity in which it invested. Deferred tax assets and mortgage- servicing rights would be included in capital up to a limit. The total for all three could not exceed 15 percent of a lender’s common equity.

While the capital ratios allow banks to assign weights to assets based on their risks, the new leverage figure considers all assets without a risk assessment. The committee initially set it at 3 percent -- meaning a bank’s total assets cannot be more than 33 times its Tier 1 capital, which includes securities that could help a lender cover unexpected losses.

Level Playing Field

The new rule also defines how assets are tallied, so as to level the playing field between different accounting standards and bring off-balance-sheet items into the calculation. The ratio will be tested from 2013 until 2017, and banks would be required to start publishing their individual leverage figures starting in 2015.

Bankers including Deutsche Bank AG Chief Executive Officer Josef Ackermann and HSBC Holdings Plc Chairman Stephen Green have said that the new rules may force banks to reduce lending, potentially limiting economic growth.

While yesterday’s announcement resolved several issues, many areas of contention, such as the actual minimum capital ratios that will be set, remain outstanding, said KBW’s Cannon.

“The definition of capital had to be finalized before the numbers can be put on, but there are still many moving parts,” said Cannon, whose research firm specializes in financial companies. The committee is planning to present a final package of reforms to the G-20 leaders meeting in Seoul in November.

Risk-Weighted Assets

Banks currently need to hold capital equal to a minimum of 8 percent of risk-weighted assets. Half of that must be Tier 1, and half of the Tier 1 needs to be common stock. Both Tier 1 and common-equity ratios will be increased, Cannon and other analysts expect. The Basel committee is also revising how the risk weighting will be done.

Like the leverage ratio, the liquidity rules are new to the Basel standards. The liquidity coverage ratio sets the amount of cash that needs to be held by a lender against any payment coming due within a month, while the net stable funding ratio considers liabilities up to 12 months.

The committee announced several modifications to the definition of liquid assets and of how to measure the safety of different types of funding. Government deposits will now be considered the same as corporate cash put in a bank, instead of treated as other banks’ money as originally proposed. Bank deposits are seen as less stable.

The changes should please banks, said Cannon.

“They compromised more on the short-term ratio than we were expecting,” he said.

Regling was more optimistic about Portugal. He said that, despite market speculation, it was not yet a foregone conclusion that the country would need more aid. International donor countries recently evaluated Portugal's reform efforts and determined that they were sufficient, he added, and the country continues to meet its goals according to plan.

So far, the ESM has only extended €46 billion to Spain and Cyprus to help prop up their banking systems. Regling likewise told the Handelsblatt that he has "no indication so far" that there would be new programs for other euro-zone countries.

Regling is reportedly even more confident when it comes to the stability of the European banking system. "I see no indications that we will experience larger bank problems in Europe in the near future," he said, according to Reuters. He also noted that overall market confidence in the economies of the EU's crisis-plagued countries, as well as in the euro itself, had risen.

Germany, for its part, could do something to increase political stability in Europe, Regling added. "Of course it would be good for Europe and the markets if the new government in Germany could be formed soon," he told Reuters.

9 trillion dollars goes "missing" - how much of it is in The Budesbank???

There is one major flaw in the money system that I have never heard a single person mention, don't know why, maybe only I can see it, maybe it is the tin foil hat I wear that gave me it, but I am watching the most powerful man in the world clueless on how this happened, well the way I see it is that other countries like china created wealth, but did they really create it or did they borrow it.  If china created its wealth then that would have meant that it built its infrastructure and businesses internally, then it would have added wealth to the worlds circuit of money and been stable.  But if its infrastructure and businesses were borrowed from somewhere else then that is a transfer of wealth from one area to another and if the market of each depend on each other then its life is limited to the point when so much has been transferred so that it reverses in direction so starts an harmonic cycle decreasing in height until both end up even or at war, so very unstable.  This also means that's china's development was not natural as was the development in the west, now if china was many years ago about to start natural development and the west wanted to stop it or control it then this would have been a good plan. but that would have meant a Kissinger type person was about when the US and china first talked.  Anyway as china's development is not natural then it will collapse when who ever borrowed them the stuff wants it back.  And that's why I think it is all a Hollywood script, all written years ago by the likes of Kissinger. they are playing global power games using us poor mugs as pawns.   My simple high school / secondary school dropout understadning is that the United States government ( specifically the Obama adminstration) is operating one of the biggest PONZI schemes in history. OK, I have no law training or degree and I ain't no bean counter. However, this particular administration blackmails the house ( read Republicans) to constantly increase the debt limit. My understanding is that the main buyers of US Treasuries (China and the UK) are farely well maxed out on purchasing US Treasuries and there are no new substantial buyers, so, as the US $ is the main reserve currency it somehow has the right to print more money without having actual physical reserves (gold) to backup all the money it has spread aropund the world. Thus when they increase the debt limit they print more money in order for the Fed (Federal Reserve) to buy (although I understand not directly) their own older treasuries and even newly printed treasuries. His Obamaship and his sycophantic Democratic poodles are intent on going ahead with the Demoncare (the Demoncrats own it as no Republicans voted for it and the majority of the US public do not want it) despite the fact that it is going to need 1.8 trillion dollars to set it in motion. They cannot raise taxes to pay for that so they will increase the debt limit next year, print some more money. Prince Harry over at the Senate meanwhile want to increase next years budget by 1 trillion 5 billion (strange figure). Today the Whitewash House announced that it was going to bail out the forever profligate Democratically controlled bankrupt city of Detroit. Another 17 billion dollars. Has the US taxpayer agreed to that and do they have the money to even do it? Perhaps, they will print more money and also shaft the Detroit debtholders just as they did with Chrysler and GM and favoured banks and financial institutions.    I wonder what the true value of the US $ is today compared to when the investors in US Treasuries bought them. To me it's like when I bought my house for 220,000. I sold it 17 years later for 405,000 and everyone said what a great profit I made on my "real eastate investment". Except, that when I tallied up that I had paid about 370,000 in interest to the kind and gentle banks and the value of the CDN $ had declined I do not think I made anything.  If the house (which i understand is supposed to control the purse strings - although the Emperor Obama (O.K. he has some nice clothes except for nasty golfing shorts and grandpa jeans says he will not negotiate on Demoncare, the debt ceiling, the public debt, any move to cut spending, any move to reduce taxes any attempt to prevent tax increases) allows the Administration to increase the debt ceiling and stop the profligate spending the the rating agencies need to downgrade the US credit rating  (that will help exports from the US anyway and increase the cost of imports (which may provoke the use of every available US sourced  enernergy resource instead of the trillions that it costs to import from countries that hate the US anyway). The mandarins should also stop giving further credit to the US (cut up it's credit card and force it to use a current account debit card). And while they are at it maybe they should devalue the greenback.  The US currency has the motto "In God We Trust". I have news for the big spenders, that was not put on the currency to indicate that they trusted God to be the lender of last resort when they had spent their money on idols. Plus, if there is a deity I doubt that he has much trust left in the three equal but separate parts of the US government or any level of US government. OK, you can now tell me I do not know what I am talking about and how everything I said is wrong (no abusive language please, it just reflects on you, not me). However, when you are telling me how wrong I am then tell me how wonderfully brilliant and correct the US governance is.
 

....So 9 trillion dollars goes "missing" and I'm sitting here poor, eating GMO foods because I can't afford anything better... my cat has problems breathing and I don't know if I'll have the money to take her into the veterinarian but hey! at least they all the money they could ever need, they probably wipe their ass with money they are so rich.

"I am sure the euro will oblige us to introduce a new set of economic policy instruments. It is politically impossible to propose that now. But some day there will be a crisis and new instruments will be created."Romano Prodi, EU Commission President, 2001. The quote comes from a interview Prodi had with Martin Wolf of the Financial Times which was published on December 4th, 2001

Create a rainy day fund?

Look outside, its pouring down!

In a move that puts it on a collision course with Germany, the IMF discussion note said that at a minimum, deeper fiscal integration required increased policing of member states and the swift completion of a banking union with a "common backstop" for eurozone lenders.

The report, titled: Toward a fiscal union for the euro area, said forcing countries to endure repeated rounds of austerity to resolve future crises would plunge weaker countries into a deflation spiral and drag the whole region into a "prolonged period of stagnation."

It suggested that policymakers create a "rainy day fund", where governments contributed up to €200bn (£168bn) a year to help weaker countries "ex-ante", and avoid a systemic crisis.

The IMF economists also backed European Commission plans for a Single Resolution Mechanism (SRM), which would hand a powerful central executioner the power to wind down failing banks.

Germany has questioned the legality of the plans, which would hand sweeping powers to Brussels, while none of the 28 EU member states have explicitly backed them.

Merkel does put German interest above European interest. But that's not the whole story. She also puts German corporate interest above German public interest. And most of all, her own interest above anything else.

I understand people in Germany being upset about everyone in Europe wanting their tax money. But that's only half the truth. The other half is, Germany profits from investors taking back their money from other European countries, and now investing it in the much safer and quite profitable Germany. Our interest rates in Germany have reached an all-time low in the crisis, so German economy profits from this crisis. And we still live from exports, and so from the EU. German economic interest is: try to keep up the status quo as long as possible, and that is what Merkel does.

Problem is, in my opinion, that will be disastrous for Europe. Polemics aside, the south europeans have a point. There's need for reforms, there's need for savings, but there also needs to be a perspective. You can't just close schools, hospitals, stop investments in infrastructure and deny people their healthcare for nothing in return but a lack of perspective. Just fire everyone from public service and don't offer any alternative for them. You can't just sacrifice the future of countries and societies for nothing but the need to save money.

It almost seems like Britain was right in its Euro-scepticicm. And everyone who was afraid of a too strong Germany after its reunion. That doesn't mean we should split up. In present and future, we simply have no choice but to work together in Europe. We're all in the same boat. If Britain wasn't in the European boat, few would care about it anymore. UKIP is wrong, British interest has to be in a strong Europe, not in a lone Britain.

Our unpopular former chancellor Gerhard Schröder made the reforms that led to present German economic strength. He risked his chancellorship, against his own party, to put through inevitable reforms. He turned the inert giant into an economic powerhouse. Merkel hardly does anything, the economic success she rests on was caused by her predecessor who took great risks. Risks that Merkel would never take. She's not the risky type. Schröder made reforms that were in parts flawed, but his own party, the SPD, is willing to work with and against the flaws today. Merkel is nothing like that. Her own influence is everything, and everything else plays second role, be it Germany, be it Europe.

Chancellor Schröder would have forced similar reforms on those countries, but he would have tried to convince them. Something like "it's going to be hard, but we're in the same boat, and we need to work together to get out of the crisis with greater strength". Even if it would damage his reputation in Germany. Merkel doesn't care about that. She simply says: "it's inevitable, deal with it. German savings are secure, I don't care a lot about the rest of Europe". She only cares about her position. And her position doesn't depend on Greece, Italy, Spain, or Britain. It only depends on Germans wanting to keep their money, and German economy, which is, again, profiting from the Euro crisis.

I am convinced that will destroy Europe, and I will vote for her adversary this month, but I have very little hope in a regime change. My hope is for a large coalition in which the SPD will have a little bit of influence on her Europe policy. A Europe policy, that is, contrary to her claims, careless and heartless.I find the idea that a German chancellor is responsible for solving the European economic crisis quite ridiculous. It is not in her powers to do so as she is no monarch but the democratically elected head of the German government. To all those moaning about her putting Germany's interest first - well that's actually her job description. That means, that she will, quite free of any ideological leaning decide hand in hand with the German industry what should be pursued for Eurozone. Be the next chancellor Steinbrueck or Merkel, nothing will change that.

GREECE - During the first seven months of 2013, the surplus reached €1.1bn (£921m), he said, adding this would enable the country to negotiate with its creditors, the European Union (EU) and the International Monetary Fund (IMF).

Greece has received massive rescue funding, tied to tough conditions, from the EU and the IMF to help it overcome a debt crisis which threatened the eurozone.

However, the a resulting structural reforms, including an overhaul of its public sector and its tax system, have proved unpopular.

On Saturday Samaras promised no further austerity measures would be introduced, saying the economy "cannot take" them any more.

"Debt levels will be manageable, Greece has respected its commitments... now, the creditors must also respect what was agreed," he added.

Protests in Thessaloniki, the country's second largest city, were organised by the private and public sector trade unions, GSEE and Adedy, who called for "fighting austerity and poverty".

Police said about 4,500 extra officers had been sent to the city to avert rioting during the four-hour demonstration.

The EU and the IMF recently praised the Greek government's progress in turning the economy around, but bemoaned delays to a programme of privatisation and reform, and the fact that the country will likely need further aid in 2014 and 2015 amounting to around €10bn.

Europe’s largest gold mine project following protests against technology that made the country home to one of the continent’s worst environmental disasters.

Romania’s President proposed a vote on allowing development of Europe’s largest gold mine project following protests against technology that made the country home to one of the continent’s worst environmental disasters.

A day after thousands of demonstrators rallied against the use of cyanide in gold mining, President Traian Basescu said he may call a referendum next year on the Rosia Montana mine. That may delay the project, for which Canada-based Gabriel Resources Ltd. (GBU) said it could “hopefully” receive approval by November.

The rallies followed the government’s unveiling last week of a draft law to raise the state’s stake in the project, rekindling anger over the 2000 Baia Mare spill. Listed by the United Nations Environment Programme alongside Chernobyl as one of Europe’s major human-caused disasters, the spill happened when a dam holding back mine debris burst, flooding the Somes, Tiza and Danube rivers with tens of thousands of tons of cubic meters of cyanide-contaminated water.

“The biggest scare about the Rosia Montana mine is the cyanide process, which should have been discussed with experts,” Basescu said on newspaper Adevarul’s website. He said “society is rightfully reacting to this” because Romania had suffered from the Baia Mare spill.

Prime Minister Victor Ponta showed similar support, saying in a televised speech today from Bucharest that a referendum was “a good idea,” after the government had finished the “technical negotiations” on the project. The project is subject to a final decision by parliament, Ponta said.

Gold Reserves

Last month, Gabriel Resources said if parliament adopted the bill -- which increases the state’s stake in the mine to 25 percent and raises its royalties by half to 6 percent -- in a session that begins today, it would be able to accelerate its development of Rosia Montana and other mining projects.

Gabriel expects to get parliamentary approval as soon as November, Chief Executive Officer Jonathan Henry said today in a telephone interview with Bloomberg.

“Hopefully it could be a two- to three-month process,” Chief Executive Officer Jonathan Henry said today in a telephone interview. “It’s a little bit undefined.”

“We are hopeful that it will be smooth process to approval and it will be a fast process to approval. We’ve been waiting a long time and need to get on with things.”

Basescu said a referendum may take place during European Parliament elections next year. Such a vote would need a minimum turnout of 50 percent to be valid, a difficult prospect in a country where voter participation is historically low.

Opposition Rising

With proven reserves, estimated by Gabriel, of 10.1 million ounces of gold and 47.6 million ounces of silver, Rosia Montana is worth about $15 billion, or a 10th of Romania’s annual output, according to today’s spot price of the metals and World Bank data on the size of Romania’s economy.

The company, which has spent about $400 million and more than a decade trying to develop the gold mine, says it will be Europe’s biggest when it is operational.

The draft law has stoked opposition. About 2,000 people took to the streets in Bucharest yesterday and hundreds protested in big cities across the country against the project, Mediafax news service reported today.

Non-profit organization Alburnus Maior, one of the protests’ organizers, said in an e-mailed statement they had filed a request to the government today, asking for the “immediate rejection of the draft law by parliament” and “the immediate ban of the use of cyanide in mining.”

The mine may produce an average of 375,000 ounces of gold a year and cost $1.5 billion, Stephen Walker, a Toronto-based analyst at Royal Bank of Canada, said on Aug. 28.

Japan's government is to spend almost $500m (£320m) in an attempt to contain leaks and decontaminate highly toxic water at the Fukushima Daiichi nuclear power plant. The measures, announced on Tuesday, come as the plant's operator, Tokyo Electric Power (Tepco), struggles to prevent leaks into the Pacific Ocean and to find a way to contain and treat the huge volume of water that has accumulated at the site since it was hit by a tsunami in March 2011. The decision is widely seen as a safety appeal just days before the International Olympic Committee chooses between Tokyo, Istanbul and Madrid on which city will host the 2020 Olympics. The prime minister, Shinzo Abe, said the government would take a more active role in the biggest nuclear cleanup in history, amid mounting concern that Tepco is no longer able to cope alone. "The world is watching to see if we can carry out the decommissioning of the Fukushima nuclear power plant, including addressing the contaminated water issues," Abe reportedly told cabinet ministers. Reports said that about 32bn yen of the 47bn yen in new funding would be spent on constructing a 1.4km-long underground frozen wall around four damaged reactors – an untested and expensive technique. The wall would prevent groundwater from mixing with coolant water that becomes contaminated after it comes into contact with melted nuclear fuel. A further 15bn yen will be spent on improving technology to remove all radioactive particles – except tritium – from the water, or to least reduce them to legally accepted levels. The head of Japan's nuclear watchdog, Shunichi Tanaka, confirmed on Monday that discharging treated water into the ocean is one option under consideration. Given the large volumes involved, experts say that Tepco will soon run out of storage space and will have no choice than to discharge or evaporate the contaminated water....
These are the facts :
1. TEPCO has "no idea" where the melted reactor cores from reactors 1,3 and 4 have gone. They know that they are somewhere under the remains of the shattered and sinking reactor buildings but where remains a mystery
2. Radiation on site will kill an unprotected man in just 4 hours. Something is extremely hot (which is why they keep having to spray thousands of gallons every day) and extremely radioactive. See point 1 for a clue what
3. Heat + Radioactivity = bonkers ice wall not working, that is assuming that they are able to successfully build it
4. Reactor 4's shattered building is sinking diagonally. The entire site is built on aquifers, its extremely soft thanks to the earthquake + tsunami + water spray. TEPCO need to manually remove the 1,300 fuel rods from the pool above what's left of reactor 4 (never been done before)
5. Ground water is now just over a foot away from the surface and rising. Its extremely radioactive (see points 1 and 2) and if it does reach the surface would force the evacuation of personnel. Remove them and that removes both the bonkers ice wall project and the ability to (a) cool and (b) remove the 1,300 fuel rods. That means an uncontrolled nuclear fire.
All of that is just reactor 4. 1 and 3 are also shattered though in a slightly less precarious state, 5 + 6 are shut down with the fuel extant. With the greatest of respect, an untested ice wall is not the solution. Fukushima is an ongoing disaster so great that it literally threatens the continuation of Japan as a nation, and a much larger area should another earthquake topple reactor 4's building and expose the fuel rods. And they are bidding for the Olympics? FFS

When a politician is planning a campaign lie, he has to be able to rely on one thing: No one in his own party must come out with the truth prematurely. The Social Democrats adhered to this rule in the 1976 election, when then Chancellor Helmut Schmidt promised higher pensions and then announced sharp cuts after the election. And the center-right Christian Democratic Union (CDU) also closed ranks in 1990, the year of German reunification, when then Chancellor Helmut Kohl appeared on market squares throughout the country to announce that taxes would not be raised. It was a promise that, as we now know, was followed by the strongest postwar increase in taxes and other charges. Current Chancellor Angela Merkel was still an up-and-coming member of the eastern German CDU and Kohl's eager pupil, so it came as no surprise that she urged her party's executive committee to stay the course on Greece at all costs last week. "There is too much talk in Europe about debt haircuts," the chancellor told her party's executive committee at a meeting last Monday.  But after SPIEGEL had reported two weeks ago that the Bundesbank, Germany's central bank, had new doubts about Greece's bailout program, the debate over additional aid packages or debt forgiveness was reignited. This would be extremely dangerous, the chancellor told CDU MPs, as it would create "uncertainty in the markets." In other words, she was saying, it was critical to maintain discipline in the debate.

Less than 24 hours later, Finance Minister Wolfgang Schäuble appeared on a campaign stage in Ahrensburg, a town in the northern state of Schleswig-Holstein, and said: "There will have to be another (bailout) program in Greece."...So there it was.