Showing posts with label liberalism. Show all posts
Showing posts with label liberalism. Show all posts

Sunday, December 6, 2015

If the British public were to vote to leave the European Union it would be the modern equivalent of the toppling of the Berlin Wall and herald the beginning of the end for the bloc, says Marine Le Pen, the leader of France’s National Front. In a week when Denmark rejected “more Europe” in their latest EU referendum, and David Cameron was rebuffed in Brussels over his demands to cut welfare benefits to newly arrived EU workers, the new, softer face of France’s far-Right is clearly dreaming big. “Brexit would be marvelous - extraordinary - for all European peoples who long for freedom,” she told The Telegraph on Friday on a frantic last day of campaigning ahead of Sunday's regional elections in France where the polls put her party on the cusp of a new electoral breakthrough. “Objectively, it will be the beginning of the end of the European Union,” she adds, “I compare Brussels to the Berlin Wall. If Great Britain knocks down part of the wall, it’s finished, it’s over.”  And if Britain did knock a hole in the European project, then Ms Le Pen, with her hardline anti-immigrant, anti-Europe, anti-globalisation mantra wants to be there in 2017, leading France through the breach. For her, that real road to power begins on Sunday when, if polls are correct, Ms Le Pen’s party could emerge as the first-round winners in as many as six of France’s 13 new “super-regions”, a showing that she is already touting as a launch-pad for a serious run at the French presidency in 2017. In round two, she is widely expected to clinch control of the northern Nord-Pas de Calais-Picardie region. Down South, her niece, Marion Maréchal-Le Pen, 25, stands a high chance of clinching France’s second largest region, Provence-Alpes-Côte d’Azur. The FN could also triumph in Alsace-Lorraine-Champagne-Ardenne, Burgundy-Franche Comté and Normandy.

Wednesday, November 5, 2014

Global shadow banking assets rose to a record $75 trillion (£46.5 trillion) last year, new analysis shows.  The value of risky investment products, mortgage-backed securities and other non-bank entities increased by $5 trillion to $75 trillion in 2013, according to the Financial Stability Board (FSB).   Shadow banking, which is not constrained by bank regulation, now represents about 25pc of total financial assets - or roughly half of the global banking system. It is also equivalent to 120pc of global gross domestic product (GDP).   The FSB, which monitors and makes recommendations on financial stability issues, said that while non-bank lending complemented traditional channels by expanding access to credit, data inconsistencies together with the size of the system meant closer monitoring was warranted.   "Intermediating credit through non-bank channels can have important advantages and contributes to the financing of the real economy; but such channels can also become a source of systemic risk, especially when they are structured to perform bank-like functions and when their interconnectedness with the regular banking system is strong," the FSB said in its annual shadow banking report. 
Ultimately some of this money leaks into physical assets and we will see tremendous inflation and asset bubbles. The money creation is all being retained in the banking system whilst M2 money supply is crashing to record lows. All the economic meters are going into the red except GDP growth because that is funded by debt funded by money printing which is fueling the distortion in our financial system. Even the IMF is ringing the fire alarm.
Economically this is a fascinating experiment with FIAT money which has not been around that long compared to its predecessor (asset backed currency) invented by Sir Isaac Newton as Master of the Royal Mint. This shadow is 120% of Global GDP haha and `no systemic risk`. They just type figures into a computer and call it money.  No one understands this and no one can explain what it means... It`s like trying to regulate the Sun while flying like Icarus...Granular data from 23 countries which stripped out assets not related to credit intermediation - or taking money from savers and lending it to borrowers - showed the size of the shadow banking system stood at $34.9 trillion in 2013, compared with $34 trillion in 2012.  Under this measure, growth of shadow banking in China was even larger than under the headline measure, rising by 40pc in 2013 to $2.7 trillion.  The FSB data follows a report by the International Monetary Fund this month which urged regulators to do more to police activity in the non-bank sector.  The FSB and IMF said more data were needed to conduct in-depth healthchecks of the sector.


Tuesday, May 27, 2014

Each nation's economy is individually analyzed, then, says Stiglitz, The World Bank (WB) hands every minister the same exact four-step program. Step One is Privatization - which Stiglitz said could more accurately be called, 'Briberization.' Rather than object to the sell-offs of state industries, he said national leaders - using the WB's demands to silence local critics - happily flogged their electricity and water companies. "You could see their eyes widen" at the prospect of 10% commissions paid to Swiss bank accounts for simply shaving a few billion off the sale price of national assets.
And the US government knew it, charges Stiglitz, at least in the case of the biggest 'briberization' of all, the 1995 Russian sell-off. "The US Treasury view was this was great as we wanted Yeltsin re-elected. We don't care if it's a corrupt election. We want the money to go to Yeltzin" via kick-backs for his campaign.
Stiglitz is no conspiracy nutter ranting about Black Helicopters. The man was inside the game, a member of Bill Clinton's cabinet as Chairman of the President's council of economic advisors.
After briberization, Step Two of the IMF/World Bank one-size-fits-all rescue-your-economy plan is 'Capital Market Liberalization.' In theory, capital market deregulation allows investment capital to flow in and out. Unfortunately, as in Indonesia and Brazil, the money simply flowed out and out. Stiglitz calls this the "Hot Money" cycle. Cash comes in for speculation in real estate and currency, then flees at the first whiff of trouble. A nation's reserves can drain in days, hours. And when that happens, to seduce speculators into returning a nation's own capital funds, the IMF demands these nations raise interest rates to 30%, 50% and 80%.
"The result was predictable," said Stiglitz of the Hot Money tidal waves in Asia and Latin America. Higher interest rates demolished property values, savaged industrial production and drained national treasuries.
At this point, the IMF drags the gasping nation to Step Three: Market-Based Pricing, a fancy term for raising prices on food, water & cooking gas. This leads, predictably, to Step-Three-and-a-Half: what Stiglitz calls, "The IMF riot."
The IMF riot is painfully predictable. When a nation is, "down and out, [the IMF] takes advantage & squeezes the last pound of blood out of them. They turn up the heat until, finally, the whole cauldron blows up," as when the IMF eliminated food & fuel subsidies for the poor in Indonesia in 1998. Indonesia exploded into riots, but there are other examples - the Bolivian riots over water prices last year & this February, the riots in Ecuador over the rise in cooking gas prices imposed by the WB. You'd almost get the impression that the riot is written into the plan.
And it is. What Stiglitz did not know is that, while in the States, BBC and The Observer obtained several documents from inside the WB, stamped over with those pesky warnings, "confidential," "restricted," "not to be disclosed." Let's get back to one: the "Interim Country Assistance Strategy" for Ecuador, in it the Bank several times states - with cold accuracy - that they expected their plans to spark, "social unrest," to use their bureaucratic term for a nation in flames.
That's not surprising. The secret report notes that the plan to make the US dollar Ecuador's currency has pushed 51% of the population below the poverty line. The WB "Assistance" plan simply calls for facing down civil strife & suffering with, "political resolve" - & still higher prices. The IMF riots (& by riots I mean peaceful demonstrations dispersed by bullets, tanks & teargas) cause new panicked flights of capital and government bankruptcies. This economic arson has it's bright side - for foreign corporations, who can then pick off remaining assets, such as the odd mining concession or port, at fire sale prices. Stiglitz notes that the IMF and WB are not heartless adherents to market economics. At the same time the IMF stopped Indonesia 'subsidizing' food purchases, "when the banks need a bail-out, intervention (in the market) is welcome." The IMF scrounged up tens of billions of dollars to save Indonesia's financiers and, by extension, the US & European banks from which they had borrowed.
Now we arrive at Step Four of what the IMF and WB call their "poverty reduction strategy": Free Trade. This is free trade by the rules of the WTO and WB, Stiglitz the insider likens free trade WTO-style to the Opium Wars. "That too was about opening markets," he said. As in the 19th century, Europeans & Americans today are kicking down the barriers to sales in Asia, Latin American & Africa, while barricading our own markets against 3rd World agriculture.

Thursday, December 19, 2013

The German government has recently signaled willingness to compromise on the issue of which body would be responsible for deciding if a bank needs to be liquidated. Initially, a newly created committee with representatives of national authorities would assume this responsibility, but the formal decision could then be left to an EU body like the European Commission. In disputed cases, the European Council, the powerful body that includes the leaders of the 28 member states, would be brought in to arbitrate.
Berlin has also agreed in principle to calls for a liquidation fund for failing financial institutions that would have a capacity of €55 billion ($76 billion) within 10 years. But the EU member states are supposed to agree among themselves on how these funds can actually be used, with greater voting weight being given to more populous countries. This idea hasn't gone over well with some governments, because they fear that Berlin, working together with a few small countries, would be able to block decisions. In addition, the money in the fund would not be available for use until it is transformed into an official EU instrument in 10 years' time.
Under the "liability cascade" plan being promoted by Schäuble, however, bank shareholders will be required to pay part of the costs for liquidating a bank starting in January 2016. Owners and creditors would first be required to cover any liquidation costs before any taxpayer money could be brought in. Berlin has had success so far in negotiations on this point. The German government had wanted to introduce this rule as early as 2015. But other member states like Italy pleaded for it to start at the earliest in 2018. They fear the move to start in 2015 might frighten investors.
And there's one additional play to safety: Germany continues to oppose using the European Stability Mechanism, the permanent euro-zone rescue fund, as a backstop for fledgling banks. Other countries have suggested employing the fund's billions of euros as part of a future banking union resolution mechanism.

Sunday, December 1, 2013

Yes, let's be honest, the de facto leadership of all things in Europe is exercised by Germany. The problem is that unless or until we all accept and formalize that a German politician (former STASI officer - merkel) captains the European Union and that Germany calls all of the shots, then it's the same as if there was nobody in charge.
Everybody was sure that somebody would do it. Anybody could have done it, but nobody did it. Somebody got angry about that because it was everybody’s job. Everybody thought that anybody could do it, but nobody realized that everybody wouldn’t do it. It ended up that everybody blamed somebody when nobody did what anybody could have done.My dual military related and commercial career to date has led me to hold a few golden rules dear to my heart.
One of my golden rules is this. When one enters a situation where there is clearly a crisis playing out, the first question to be asked is, "Who is in charge here?" The answer can tell you a lot about why the crisis might have arisen in the first place, and can give some indication of the chances of the crisis being controlled and resolved.  If the person questioned can't answer straight away, confidently that "So-and-so is in charge", then you already have some understanding of why the organization is in a crisis. If the person questioned answers along the lines of "I think Blogs is in charge but, err, then again it could be Smith in charge. Err, or is it Jones in charge? Not sure really. One of them, is in charge anyway ... I think."...And there you have it. Nobody's quite sure who's really in charge at the ECB. Indeed, nobody's really sure who's in charge at the ECB; or in charge of the Euro Monetary Union; or in charge of the European Union. These are all just monstrous, dysfunctional European institutions which can neither jointly nor severally take 400 million European citizens to the economic and social paradise of a super state (which is what the European Union is supposed to be about). This is as much because the structures for governance of these organizations are a shambles, as it is because the underlying concept itself - of slamming sovereign nations together into a super state without democratic consent and without a single, clearly identified leader at the helm - is a monstrous deceit.  And now we have the particular situation explained by AEP above where the best the nascent European superstore's bank can do is to slam the continent into deflation. That's terrific, just terrific. A dysfunctional monetary union, tucked inside a dysfunctional economic and political union with, sitting behind it all, a dysfunctional central bank. An organization in crisis if ever there was one.

Wednesday, October 30, 2013

Czech's want out of the European Union - the desperation vote...

An election held to resolve months of uncertainty in the Czech Republic has failed to produce a clear winner.  With all the ballots counted, the Social Democrats have the most votes - just over 20% - but they do not have enough to form a government alone.  Analysts say the result could pave the way for another unstable coalition, with the second-placed ANO party in a powerful bargaining position.  The election has come after months of political turmoil.  The centre-right government of Petr Necas was brought down by a corruption scandal in June. If ever there was a textbook Pyrrhic victory, this was it. After seven years in opposition, after seven months of vertigo-inducing opinion poll results, the Social Democrats finished on just 20.45%. No wonder the mood at Social Democrat headquarters was subdued - you'd think they'd lost these elections, not won them, and in a sense, they have. Some believe party leader Bohuslav Sobotka will resign within days.   The real victor was the Slovak-born billionaire Andrej Babis, whose centrist ANO party campaigned against corruption and for change. His second place showing is simply astonishing, and can be read as the voters' resounding verdict on the established political parties. He is being coy about a possible coalition with the Social Democrats - as kingmaker, he can dictate the terms.   So what lies ahead for this Central European nation of 10 million? Almost certainly not a minority Social Democrat government propped up by the political pariahs, the Communists. That ship has sailed. Instead weeks - maybe months - of arduous coalition talks.   The country has been without a proper administration ever since - and is currently being governed by a caretaker cabinet of technocrats.
Tough talks ahead - Correspondents say that this election is likely be followed by weeks of difficult negotiations. The BBC's Rob Cameron, in Prague, says the Social Democrats had hoped to win enough to run the country if they were supported or at least tolerated by the Communists. But even together, they do not have enough votes to form a government, he says.  That opens the way for arduous talks on forming a coalition with some of the other parties in parliament.   Social Democrat leader Bohuslav Sobotka admitted the results of the election were "not what we expected,'' but he told reporters he was ready to start negotiations with all parties.  Our correspondent says the real winner in this election is second-placed ANO, a new centrist party which campaigns against corruption and is run by a food and agriculture billionaire.

Sunday, August 25, 2013

"There will have to be another programme in Greece," said Mr Schaeuble, addressing a campaign audience in northern Germany. However he maintained that, despite this, there would be no further debt haircut for Athens. Just hours before Mr Schaeuble spoke, German Chancellor Angela Merkel was quoted in a regional newspaper dismissing questions about further aid for Greece, saying there was no point in discussing the matter until its second package expires at the end of next year. However, economists have long predicted a third rescue package for Greece, which is struggling to control its mounting debt burden as the economy shrinks under tough austerity measures. Opposition leaders, who have relentlessly accused the government of hiding the truth about Greece, pounced on the finance minister's comments. Peer Steinbrueck, leader of Germany's Social Democrat Party, declared it was "time that Frau Merkel tells people the truth". Juergen Tritten, head of the country's Green party, also seized the opportunity to hit out at the Chancellor.While a third bail-out for Greece, paid for by eurozone taxpayers, will anger German voters, the sums involved are set to be much lower than the previous two rescue packages, which run to €210bn (£179bn).
Any new aid money would be funnelled towards an expected shortfall in Greece's public finances in the next two years, according to a Greek finance ministry official. Athens is also looking at using leftover funds from a bank bail-out programme to help plug the funding gap. In Frankfurt, the European Central Bank said Joerg Asmussen, one of its most senior officials, would visit Greece on Wednesday to discuss progress on reforms needed to ensure more bailout money.

Monday, July 8, 2013

...the German model is really a "beggar thy neighbor"

Schröder's economic "reforms" entailed gutting social security and unemployment benefits and eliminating the minimum wage in order to force young/unemployed Germans to go to work for one euro an hour (literally). Has this worked? Only sort of. True, the dramatic reduction of labor costs has been one of the keys to Germany's phenomenal export-oriented growth over the last decade. Combined with the artificial deprecation brought about by the adoption of the Euro, it's helped Germany maintain an extremely favorable balance of trade vis à vis other members of the Eurozone. What this means is that Germany's "success" has been built by selling more to their neighbors than their neighbors sell to them. (Internal demand on the other hand has flat lined; the German "model" is entirely predicated on exports.) Here's the thing though: it's impossible for all Eurozone members to maintain a trade surplus towards each-other; for one country to maintain such a surplus, another must have a deficit. Calls for the Mediterranean states to emulate the German model are thus deeply paradoxical; were the PIGS to run such a surplus, who would eat the deficit?
In other words, the German model is really a "beggar thy neighbor" policy, one which literally requires the impoverishment of the Mediterranean states. For ten years this kind of worked: Germany sold more to Spain et al than it purchased, then recycled those profits back to the periphery in the form of lines of credit, allowing those countries to purchase even more goods yielding greater profits, etc, etc. (Rinse and repeat.) Eventually the imbalance grew too deep for anyone to ignore and hey presto we had the start of the Eurozone crisis.
So, with shades of Plato's pharmakon, what the author is here calling for is to treat Europe with more of the poison that caused it's illness in the first place. What he identifies as Germany's "successful example" is actually the source of the crisis, not its resolution. A real solution would require the Germans to adopt a new policy based on internal demand, increasing domestic purchasing power by (for example) establishing a minimum wage and strengthening the working classes... Yes, the German mercantilist strategy cannot be maintained indefinitely and they do need to switch from an export driven economic strategy to one more balanced by domestic demand. And yes, the internal disparities and inconsistencies within the Eurozone make escape much more difficult (if not impossible) for the Southern periphery, including possibly France also.
But there are two further problems which are really at the genesis of the Eurozone's economic difficulties - one of which is shared with the UK. First, most of Europe (including the UK) has been running consistent deficits (trade and budget), and while one can argue about when and how and how fast these deficits are reversed, ultimately they will need to be for sustainability. It was not the economic disparities of the Eurozone per se which created their current difficulties, but the lack of flexibility to respond to the credit crisis. The other major problem is the sclerotic nature of a lot of Eurozone economies (eg France, Spain), with myriad obstacles and costs put in the way of enterprise and real job creation, and the disincentives to employment and inward investment.

Tuesday, June 25, 2013

The only hope for Italy is to leave the EuroZone now - otherwise = bankruptcy!

Thousands of workers and unemployed people marched in Rome on Saturday to protest against record unemployment and call on Enrico Letta's two-month-old government to deliver more than empty rhetoric on the issue.
The rally, organized by the country's three largest unions was the first major protest since Letta's broad, left-right coalition took office following an inconclusive election in February.
Italian unemployment rose to 12% in April, the highest level on record, and joblessness among people under 24 is at an all-time high above 40%.
Union chiefs, speaking before a flag-waving crowd estimated at more than 100,000 by the organizers, criticized Letta for what they called a lack of action on an urgent problem.
"We can't accept these continuous promises that aren't translated into decisions that give a change of direction," said Susanna Camusso, leader of the country's largest union CGIL.

Luigi Angeletti, head of the UIL, said the country could not afford the piecemeal approach to policy adopted so far, especially when the ruling coalition is so fragile...The unionists called on the government to intervene to prevent plans by white-goods manufacturer Indesit to lay off 1,400 workers in one of the most recent labor disputes....
Big deficits in time of recession are nothing new. They are not desirable, but calling them "dangerous" is ridiculous. The only way to reduce them is through growth, which isn't going to happen with taking so much money out of the economy. Growth has got its own problems, I don't think a society can run for ever on people/states buying stuff they don't really need with money they have really got, but the present "solution" isn't going to work. It is indiscriminate cutting, with no thought for the cost this "cutting" is storing up for the future. The present crew hasn't got the skills, imagination, intelligence to think out of their narrow ideology. They still think putting state services to tender to private businesses is going to solve all. It isn't....
Mediobanca, Italy’s second biggest bank, said its “index of solvency risk” for Italy was already flashing warning signs as the worldwide bond rout continued into a second week, pushing up borrowing costs.
“Time is running out fast,” said Mediobanca’s top analyst, Antonio Guglielmi, in a confidential client note. “The Italian macro situation has not improved over the last quarter, rather the contrary. Some 160 large corporates in Italy are now in special crisis administration.” The report warned that Italy will “inevitably end up in an EU bail-out request” over the next six months, unless it can count on low borrowing costs and a broader recovery. Emphasizing the gravity of the situation, it compared the crisis with when the country was blown out of the Exchange Rate Mechanism in 1992 despite drastic austerity measures.
Italy’s €2.1 trillion (£1.8 trillion) debt is the world’s third largest after the US and Japan. Any serious stress in its debt markets threatens to reignite the eurozone crisis. This may already have begun after the US Federal Reserve signaled last week that it will begin to drain dollar liquidity from the global system.

Monday, June 24, 2013

The Shibor overnight lending rate in Shanghai spiked violently to 29pc, with wild moves in seven-day and one-month money. The central bank refused to intervene to calm markets, apparently determined to purge excess from the credit system.
China Securities Journal, a voice of the regulators, said: “We cannot use a fast money supply growth as in the past, or even faster, to promote economic growth.”
“I am extremely concerned about China,” said Lars Christensen from Danske Bank. “They are overdoing it and are on the verge of making the same mistake as the Fed and the European Central Bank before the Lehman crisis in 2008, when they failed to see how much the economy was slowing.” Mr Christensen said the world now risks a “perfect storm” as the Fed prepares to taper its bond purchases (QE) at the same time as tightening the spigot of worldwide dollar liquidity.
The twin effects are cascading through emerging markets, pummelling commodity exporters such as Brazil, South Africa and Russia that sell to China, but also tripping up Turkey, Ukraine, Hungary and others that rely on external funding. “Everything is being hit indiscriminately,” said Neil Shearing from Capital Economics.  The Turkish lira and the Indian rupee both fell to record lows as investors pencilled in Fed tapering for September. “The party is over,” said Ceros Securities in Istanbul.
Fed chairman Ben Bernanke has brought forward his QE exit by lifting the unemployment target from 6.5pc to 7pc. He dismissed the looming threat of deflation as a “transitory” effect.
Brazil’s real weakened to a four-year low of 2.26 against the dollar, down 15pc since April, while the cost of credit default swaps gauging risk in Indonesia and Vietnam jumped more than 40 points. The Kremlin said Russian companies may have to delay bond issues, but denied immediate credit stress.
The latest country moving onto the radar screen is Poland, where construction crashed 28pc in May, “Poland is suddenly stalling, something we haven’t seen in almost two decades. The central bank has been way too hawkish,” said Bartosz Pawlowski from BNP Paribas.
Benoit Anne from Societe Generale said the “second leg” of the emerging market sell-off is just starting, warning that there is a “long way” to go before investors wake up to the full impact of Fed tightening. Latin America’s debt crisis of the early Eighties and East Asia’s crisis in the Nineties were both triggered by turns in the US credit cycle, though emerging markets have ample foreign reserves to defend themselves this time.
Mr Shearing said the BRICS quintet will be much weaker than assumed over the next two years for their own structural reasons, but there is now the risk of a “mutually reinforcing” effect as dollar stimulus drains away. The latest ructions in China came after premier Li Keqiang omitted mention of the liquidity strains in a speech this week, instead dwelling on rampant excess in the shadow banking system and overcapacity in obsolete areas of the economy. Though Deutsche Bank said the unwinding of hot money inflows disguised by over-invoicing may also be to blame.
Mr Li’s comments were a signal that the new leadership intends to prick the credit bubble, even though the hard line has already led to industrial recession. China’s HSBC manufacturing index fell sharply in June, dropping further below the “boom-bust line” to 48.3. Zhiwei Zhang from Nomura said Beijing aims to crack down on a plethora of trusts, wealth products and offshore vehicles intended to evade loan curbs. These have accounted for half China’s credit growth over the past year. It is willing to “tolerate short-term pain” to wean China off over-investment, and is less worried about social instability now that its workforce has begun to contract and the rate of migrants from rural areas is slowing.
The strategy is to tighten before the Fed winds down QE in order to “avoid two negative shocks occurring simultaneously”, but this may be hard to manage given the scale of the boom. “We expect a painful deleveraging process in the next few months. Some defaults will likely occur in manufacturing industry and in non-bank financial institutions,” he said. Fitch Ratings said total credit has jumped from $9 trillion to $23 trillion over the past five years, surging from 125pc to 200pc of GDP. This is a bigger rise than in any of the major bubbles worldwide over the past half century.
China has the firepower to cope with any crisis and will not let the state banking system collapse. Keeping growth on track now that credit has reached saturation point is a tougher challenge. Source

Friday, June 21, 2013

Christine Lagarde, one of the most powerful women in the world as head of the International Monetary Fund, is facing acute embarrassment after a letter in which she urged former French President Nicolas Sarkozy to "use me" was found during a police raid on her Paris flat. An undated copy of the letter was found at Mrs Lagarde’s flat in Paris during a raid by police investigating a spiraling financial scandal surrounding payments to businessman Bernard Tapie.
"I'm on your side to serve you and serve your projects for France," she said in the letter.
"Use me during the time that suits you best and fits your action and your cast....If you decide to use me, I need you as guide and supporter: without guide, I might be ineffective, without support I might be implausible."
She signed off: “With my immense admiration, Christine L.”
She also claimed that she does not have "personal political ambitions" and remarked she does not want to become "an ambitious servant", referring to some members of Sarkozy's entourage.
The letter was leaked to French newspaper Le Monde, and its publication has caused acute embarrassment for the head of the IMF.
Ms Lagarde was finance minister during Mr Sarkozy's term as President, before stepping down to become managing director of the Washington-based IMF in 2011.
Her Paris flat was raided as part of an investigation into her handling of a 2008 compensation payment to a businessman supporter of ex-president Nicolas Sarkozy, her lawyer said.
Police are investigating claims that Lagarde, when French Finance Minister under Sarkozy, acted illegally in approving the €285m arbitration payout to Bernard Tapie. Ms Lagarde denies any wrongdoing.

Tuesday, June 11, 2013

Earlier this year, the Pentagon publicly accused China for the first time of being behind attacks on the US. The Washington Post reported last month that Chinese hackers had gained access to the Pentagon's most advanced military programs. The director of national intelligence, James Clapper, identified cyber threats in general as the top national security threat. Obama officials have repeatedly cited the threat of cyber-attacks to advocate new legislation that would vest the US government with greater powers to monitor and control the internet as a means of guarding against such threats. One such bill currently pending in Congress, the Cyber Intelligence Sharing and Protection Act (Cispa), has prompted serious concerns from privacy groups, who say that it would further erode online privacy while doing little to enhance cyber security. In a statement, Caitlin Hayden, national security council spokeswoman, said: "We have not seen the document the Guardian has obtained, as they did not share it with us. However, as we have already publicly acknowledged, last year the president signed a classified presidential directive relating to cyber operations, updating a similar directive dating back to 2004. This step is part of the administration's focus on cybersecurity as a top priority. The cyber threat has evolved, and we have new experiences to take into account. "This directive establishes principles and processes for the use of cyber operations so that cyber tools are integrated with the full array of national security tools we have at our disposal. It provides a whole-of-government approach consistent with the values that we promote domestically and internationally as we have previously articulated in the International Strategy for Cyberspace. "This directive will establish principles and processes that can enable more effective planning, development, and use of our capabilities. It enables us to be flexible, while also exercising restraint in dealing with the threats we face. It continues to be our policy that we shall undertake the least action necessary to mitigate threats and that we will prioritize network defense and law enforcement as the preferred courses of action. The procedures outlined in this directive are consistent with the US Constitution, including the president's role as commander in chief, and other applicable law and policies."

Sunday, June 9, 2013

We're not living in a world where the one billion people inhabiting the 'developed world' control 80% of the world's wealth. We're living in a world in which 65% of the world's wealth is held by the 'developing world' (mostly in the BRIC countries).
This the underpinning global economic reality of where we are. The never-ending 'Euro crisis' blog and 'Japan crisis' articles that appears on this website on a daily basis is a consequence of this profound global shift in wealth and power... More info here...

What has helped mask these extraordinary transformations are cheap energy, cheap debt, and cheap imported goods. However, right now, all the chickens are coming home to roost - the west (and particularly Japan) does not have sustainable access to cheap debt and cheap energy to fuel consumption and our mobile lifestyles.
We're still in the mindset that 'we' control 80% of the world's wealth. The reality is much of our supposed wealth is entirely abstract - living in the imagination of bankers and the financial industry. Whilst much of the real economy (primary resources; secondary manufactured goods, and; increasingly the service industry) is to be found more so in the BRIC countries.
We seem unable to face up to the reality - socially, economically, or politically - and educationally, we do not want to learn from the BRIC countries. In sum total: The world has got a lot more diffuse, and multi-facetated, with its power, wealth and social relations increasingly spread. But most people would prefer to accept the social and political attitude and agenda of a dinosaur imperialist like Farage, rather than a modern internationalist voice from the BRIC countries.
In essence, every city is becoming more like Janeiro or Johannesburg and every country more like Brazil or South Africa. This is the effect of globalisation - it's unsteadying the safe and cosy world of white Europeans and Americans - who can no longer rely on cheap energy, cheap oil, cheap debt, and cheap imports.

Monday, May 6, 2013

If the E.U. Elite have their way they will not allow the EU Project to die or fail, not at least until they have stolen what they see and believe is justly theirs and as far as I can ascertain they are about ten years into the final stages of the grand plan, the Elite being the people behind the showmen at the forefront.
Mrs. Merkel is just such another Maggie a strong woman politician placed in her position by election where as Barosso, van Rumpuy, Drahgi etc. were mere placements and through general agreement cannot be removed other than by death or resignation, a most unsatisfactory arrangement; sooner or later the whole edifice will collapse for my part the sooner the better....
The euro is still stronger than the US dollar.  Europe went socialist with a medium to small sized economies and the US is trying to go socialist with a much larger economy but give us time we will also self destruct like the southern Europe is.  I include France in that group also. 
Of course this fall will be followed by the rest of Europe. Fortunately USA has a slim chance to correct our socialism issues. Europe does not  as they are to far ingrained in their economies.
Catastrophic though it certainly is there may yet still be more mileage in the troublesome euro and EU project but the end is nigh....Well..."The economic situation is worsening from month to month, and unemployment has reached a level that puts democratic structures ever more in doubt," Oskar Lafontaine the founder of Euro said !

Tuesday, April 23, 2013

The Eurozone is in recession because it is an exporting bloc and its' key markets (not least countries like Britain) are just not buying. You would hardly know it from reading the British press but the Eurozone as a whole still has a TRADE SURPLUS with the rest of the world. When was the last time that Britain ran a trade surplus? The 1980's? Yet this article (and hundreds like it) paint a picture of a frustrated UK economy, raring to go, just waiting for an enfeebled Eurozone to buck its ideas up. It’s back-to-front new-speak garbage - the Eurozone will be out of recession the moment its customer countries (like Britain) start buying again.
You can’t suddenly decide to have an export-led economy when a crisis hits and it’s clear that your financial and services sectors are a parasitic dud or that running an economy based on bumping house prices and buying from each other is a daft Ponzi scheme. Manufacturing reputations take decades to establish and Britain comprehensively trashed its reputation in the 60’s, 70’s and 80’s with crap products and poor leadership.
The entire world economy is in trouble right now and every country is hoping that ‘exporting’ will dig it out of a hole. That’s why Japan has just pledged to rubbish the value of its currency and invite inflation in through the front door. Britain trashed the value of the pound against the Euro as soon as the crisis hit, but as a net importer, it has only served to stoke the deficit.
There is a bigger picture here which has a lot to do with global energy availability (don't believe the recent 'revolutionary' shale hype, it's yet more PR garbage), landfill consumerism and environmental awareness. We can see that with even a relatively modest drop in demand, the world economy comes crashing to a halt. Yet for the sake of the environment, demand for all kinds of useless, pointless consumer crap needs to collapse still further…much, much further.
The ‘return to growth’ mantra is getting boring and showing up humanity as an uncreative, unimaginative race of lemmings. Actually, on second thoughts, I credit lemmings with more sense...
Dixon at Commerzbank says politicians will have to give up on the idea of a quick fix: "There's been a realization among policymakers that we're not going to get the typical V-shaped recovery, and the sooner we all get used to that, the better. You get seven fat years and then you get seven lean years, as the Bible says: it's not a new phenomenon."
Is that the Gideon's Bible?

Tuesday, February 5, 2013

Allegations of corruption against Spanish PM Rajoy and reports that former Italian PM Berlusconi is gaining ground in the country’s polls ahead of this month’s election took some of the shine off the euro on Monday.
Notwithstanding its latest wobble, we continue to forecast an appreciation of the euro to $1.40 by mid-year as sentiment towards the euro-zone slowly improves. But we are also sticking to our forecast that that the exchange rate will slip back to $1.25 by year-end – a view which is predicated on the assumption that the crisis will flare up again in the second half of the year.
That being said, Monday’s news underlines the fact that such a flare-up could happen at any time. 
Spain’s governing People’s Party (PP) has just said it will take legal action against whoever has leaked documents published last Thursday that purported to show Prime Minister Mariano Rajoy receiving €250,000 that had been hidden from tax authorities.
"All those who may have attributed, leaked and published,” the documents -- allegedly drawn up by two former PP treasurers -- may be subject to the action, third-ranking PP member Carlos Floriano told a news conference called before Rajoy is due to speak to the media alongside Angela Merkel after a summit in Berlin.
Rajoy denied the allegations in a televised speech on Saturday, but did not take questions. On Sunday, opposition Socialist leader Alfredo Pérez Rubalcaba called for Rajoy to resign, which the premier has ruled out.
Also on Sunday, opinion polls showed the PP’s popularity had tumbled from when they won power in November 2011 to within a whisker of the Socialists, although neither party would be able to command anything like a majority.
Fed up with record unemployment, an economic crisis with no signs of ending after five years and now fresh reports of corruption almost daily, Spanish voters have increasingly turned to small parties or the streets. Police helicopters buzzed central Madrid rooftops for three nights in a row after Thursday’s allegations as protestors rallied outside PP headquarters.

Saturday, January 5, 2013

French President François Hollande pledged to reverse the country’s surging unemployment rate as he gave his first New Year’s televised address at the Elysée Palace on Monday.
Speaking of the “serious and legitimate” concerns of the public, Hollande acknowledged the “fits and starts” of his first six months in office, but said France would emerge from the financial crisis “sooner and stronger” than expected because of the course he and his government had taken. “We’ve set the course – jobs, competitiveness and growth – and I will not deviate. It’s the future of France.”
With the number of jobless breaking the three-million barrier for the first time this year, Hollande said “all our efforts will be aimed at a single objective: reversing the unemployment trend within a year, whatever the cost”.
He also promised to tackle what he described as “useless spending” in government. “The French public’s money is hard earned and must be put to the service of a thrifty and exemplary state”.
“Those with more will have to contribute more”
But speaking of his controversial 75% income tax levy, which was overturned by France’s highest legal body on Saturday, the Socialist president said that while the law would be “redesigned” its objective would remain the same. “Those with more will have to contribute more,” he said.
Hollande also stressed the increase in teacher numbers he promised during his election manifesto and touted his delivery of promises to allow 60-year-olds the right to retire if they began working early, along with the return of French combat troops from Afghanistan.
Briefly mentioning the controversial issues of same-sex marriage and euthanasia, Hollande stressed the importance of civil rights. “We have all it takes to succeed,” he said, adding that France is most successful “when it moves forward on equal rights”.
Ending his address with a thought for the “sick, lonely, disabled and unassisted” people in France, the French president said social security was as important as a competitive economy and called for a “collective effort” to make that balance possible.

Friday, December 21, 2012

The European Central Bank has announced a shake-up of responsibilities among its executive board, putting new arrival Yves Mersch - formerly governor of Luxembourg's central bank - jointly in charge of heading up plans for the eurozone banking union alongside vice president Vitor Constancio.
Hungary's central bank has cut its interest rate - the highest in the EU - for the fifth time in as many months. The Magyar Nemzeti Bank lowered the two-week deposit rate to 5.75pc from 6pc, continuing a trend of lowering the rate by a quarter point every month. The bank's president is due to appear at a news conference this afternoon to explain the decision, which is perceived as risky in the face of high inflation of 5.2pc.
Bloomberg reports that central bank chiefs from across the world are set to meet as early as January 6 to revisit the terms of the Basel III rules drafted in 2010. At the heart of discussion will be requirements on how much liquid capital banks must hold as a proportion of their total balance sheet, which the regulations say should be enough to survive a 30-day credit squeeze. Central bankers, including ECB President Mario Draghi, say could drag down interbank lending, and slow economic recovery.
EU lawmakers have admitted they will fail to meet the globally-agreed January deadline for the implementation of tougher capital requirements on banks. A meeting planned for today to thrash out the final details of a deal after talks last week stopped short of full agreement has been postponed. The move sees the EU join the US in delaying the introduction of the regulation, known as the Basel III rules, which are widely expected to come into force one year later than planned, in January 2014.
Spanish economy minister Luis de Guindos has revealed plans to fully compensate those who lost investments by purchasing complex financial instruments they did not understand. His plans will give the hundreds of thousands of Spaniards misleadingly sold high-risk instruments a chance to claim compensation for the losses which followed the banks' €37bn bail-out.

Thursday, December 13, 2012

BRUSSELS - Greece is to get €49.1 billion worth of bailout funds after eurozone finance ministers in Brussels agreed the latest tranche of emergency funding on Thursday (13 December). Athens will receive €34.3 billion "in the following days", with the remaining funds, some of which will fund overcapitalization and resolution costs of Greek banks, to be paid out in the first three months of 2013. The money will be paid out by the European Financial Stability Facility (EFSF). The decision, which was taken after a meeting lasting under two hours, follows months of marathon talks between Greece and its creditors. It also comes at the end of a successful week for Athens after a debt buy-back which saw the government buy €31.9 billion of bonds at just over a third of their face value. Speaking with reporters following the meeting, Economic commissioner Olli Rehn said that the deal marked the end of an "odyssey" for Greece. He commented that the debt-laden country had confounded the "Cassandras" who had been "convinced that the game was up for Greece in the euro area."

BRUSSELS - The 2013 EU budget has been agreed after MEPs signed off on a deal worth €132.8 billion in Strasbourg on Wednesday (12 December). The agreement breaks months of deadlock between MEPs, the commission and national governments.  It increases EU spending next year by just €3.8 billion, over €5 billion less than the sums demanded by MEPs and the EU executive. It also includes a controversial deal providing just €6.1 billion of emergency funding to the European Commission to cover outstanding bills from 2012.  In October, the commission tabled an emergency budget worth €9 billion, with the EU's student exchange Erasmus programme and the European Social Fund among items facing a cash-flow crisis.  However, with member states refusing to stump up the extra cash in full, the EU executive will now roll over 2012 payments worth roughly €2.5 billion into 2013. Speaking in Strasbourg, Alain Lamassoure, the centre-right chair of the assembly's budget committee, complained that by rolling over payments the deal "respects the treaty but betrays its spirit."  Green budgetary spokesperson Helga Trupel said the agreement would "lead to a budget hole of at least €9 billion at the end of next year."  For his part, Italian conservative Giovanni La Via, who drafted the parliament's position on the budget, said that the funds would "guarantee investment in growth and job-creation."  Following the vote, the EU's budget commissioner warned that a repeat cash-shortfall would probably occur in 2013.
"The approved budget will in all likelihood not be sufficient to pay the incoming bills ... the pressure on the 2013 EU budget will be tremendous. There is a serious risk that we will run out of funds early in the course of next year," warned Janusz Lewandowski.
He added that "by systematically cutting the commission's estimates, the Council transforms the EU annual budget in a budget for nine to 10 months; last year we ran out of cash to pay all the claims in November, this year was in October and next year I expect this to happen even earlier."  The budget includes a 6.4 percent increase for EU research and development funding, alongside a 6.3 percent rise for the trans-European transport network.  The foreign aid budget also rises by 1.9 percent to cover extra funds to support Palestine. The EU's three main institutions will see a real terms cut.
The leader of Italy's anti-establishment Five Star Movement political party, the second most popular by opinion polls, has added his voice to the anti-austerity rhetoric that will likely dominate the country's upcoming election campaigns. Beppe Grillo, an Italian comic, echoed Silvio Berlusconi's scathing criticism of the current prime minister Mario Monti's policies as 'German-centric' when he told US broadcaster CNBC that Mr Monti is a mere "bankruptcy curator" who "needs to disappear". He said:
The ECB puts out money that is meant to help our banks,but they do not use it to finance our businesses, but they give it to them to buy back their debt, to help French and German banks. That was Monti's work. The CNBC interview came on the same day Mr Grillo expelled two prominent party members who had voiced criticisms over his leadership style, branding it dictatorial. His expulsion of the pair unleashed at outpouring of criticism from the party's young supporter base, who compared him to famous dictators including Benito Mussolini and Joseph Stalin.