Showing posts with label parliamentUE. Show all posts
Showing posts with label parliamentUE. Show all posts

Friday, December 4, 2015

Sixteen Romanian energy projects are included by the European Commission on the list of projects of common interest (PCI) to achieve the objectives of the Energy Union, according to the first annual report on this initiative. By including them on the list, projects are eligible for funding via Connecting Europe financing facility.  European Commissioner for Climate and Energy, Arias Cañete, said at the launch of the report: “A modern and reliable energy infrastructure is an essential element for the energy to circulate freely in Europe. All these projects will support the integration of energy markets, will diversify sources and supply routes and will end the isolation of some Member States. Our funds, invested in these projects, will serve the goal of providing to all Europeans clean energy at affordable prices.” Maroš Šefčovič, Vice-President responsible for energy union, said: “After nine months, we can say with confidence that we did not strayed from the path to realize the Energy Union. My messages for 2016 are clear. First, the EU should continue to play a leading role in the transition to a low carbon economy. Second, this transition should be socially equitable and focused on the consumer. Third, geopolitical challenges that we faced this year will not disappear. Also, 2016 will be the year when we will establish a robust system of governance, ensuring predictability and transparency, the environment that investors need. In conclusion, 2016 will be a year of accomplishments!”

Monday, November 9, 2015

Many years ago when Alan Greenspan first proposed using monetary policy to control economies, the critics said this was far too broad a brush.  After the crash Alan Greenspan loosened monetary policy to get the economy going again. The broad brush effect stoked a housing boom.
When he tightened interest rates, to cool down the economy, the broad brush effect burst the housing bubble. The teaser rate mortgages unfortunately introduced enough of a delay so that cause and effect were too far apart to see the consequences of interest rate rises as they were occurring.
The end result 2008.  With this total failure of monetary policy to control an economy and a clear demonstration of the broad brush effect behind us, everyone decided to use the same idea after 2008.
Interest rates are at rock bottom around the globe, with trillions of QE pumped into the global economy.  The broad brush effect has blown bubbles everywhere. 
The underlying problem is that the global monetary system has failed with too much debt in existence.
The current monetary system has the following characteristics:
1) It is debt based, new money can only be created from new debt
2) It uses compound interest
Compound interest is an exponential function that, without prudent lending, will run away to infinity at some point.  When money creation lies with banks, there is always the over-whelming desire to increase profits by lending out more than would be prudent (their profit comes from the interest received).  The temptation of jam today, makes borrowers forget about the penury tomorrow.
The system relies on prudent lending by bankers who are purveyors of the debt products, e.g. loans, mortgages, etc ...

Tuesday, October 27, 2015

OOHHH - YESSS - Another step in the collapse of the euro....

Poland consolidated its rightwing shift on Sunday as exit polls showed voters had handed an absolute majority in its parliamentary election to Law and Justice, a Eurosceptic party that is against immigration, wants family-focused welfare spending and has threatened to ban abortion and in-vitro fertilisation.  The current ruling party, Civic Platform, conceded defeat following the first exit poll, published by Ipsos moments after polling stations closed at 9pm (8pm GMT), which gave the national conservative Prawo i Sprawiedliwość (Law and Justice party) 39.1% of the vote, putting it far ahead of Civic Platform on 23.4%.  Jarosław Kaczyński, Law and Justice’s chairman and the twin brother of Poland’s late president Lech, immediately declared victory...the result would give Law and Justice 242 seats in the 460-member lower house of parliament, meaning the party could govern alone and that its lead candidate, 52-year-old Beata Szydło, is likely to be appointed prime minister...“If Law and Justice end up governing alone with an allied president, Poland will become another Hungary,” said Prof Radosław Markowski of the Polish Academy of Sciences, a reference to the extremist rightwing views of the Hungarian prime minister, Viktor Orbán...Most of Europe is moving to the Right. Euroscepticism and anti-immigration feelings are running at an all-time high.  Even in liberal nations like Sweden where the politicians are grimly trying to maintain open door policies, the ordinary citizens are heading in another direction entirely, and showing their distaste for such policies by burning down refugee camps and (regrettably) going into schools and killing immigrants.  Merkel is becoming increasingly isolated and reviled - even by many German citizens.  If ever proof was needed that multiculturalism is a failed social experiment - we now have it writ large. I feel a BREXIT coming on. And it feels good....HAHAHA...Merkel should threaten Poland with Pexit until they learn to vote in the correct party.

Wednesday, September 16, 2015

A great part of the European project is tainted with the fact that the Dutch, Belgians Luxembourgers do not like the Germans, the French do not like the Brits, nobody likes the Spanish etc.and so it goes on all over Europe. Suppose the big plan is to merge all the debt into one big pile and as one the then union explodes dissolving all monetary ties as no one will be able to untangle the debt pile. The result is a complete mess almost parity with one big nuclear bomb over the entire EU. Except the working man and woman wake up not to radiation sickness but to an empty bank account and little or no coherent government structure or judiciary to collect fresh debts such as utilities, etc. Begin day one...Germany is set on a collision course with Brussels' visions for deeper eurozone integration, by setting out its objections to greater financial risk-sharing in the single currency. Berlin is determined to break the toxic link between distressed banks and indebted governments, and will insist on new "bail-in" procedures to impose losses on private sector creditors in the event of another financial crisis. The eurozone has been thrown into turmoil since 2009, after the banking systems of Ireland, Spain, and Greece were rescued by taxpayer money, loading debt on to government balance sheets. As Europe's largest creditor nation, Germany wants senior bank bondholders and private sector depositors to take the hit when banking or government solvency is threatened.   The red lines have been laid out in a Germany finance ministry "non-paper" seen by the Financial Times. It will be presented by Wolfang Schaeuble at an informal gathering of European finance ministers in Luxembourg today. "The restructuring of banks without taxpayers’ money will function only if sufficient resources are available for a bail-in and if member states ensure that the bail-in is legally enforceable," said the paper.

Saturday, August 15, 2015

The faceless money men invent billions of Euros at the press of a button to lend the the Greeks - when (not if) they default, real Greek assets - gold, mortgage books, land, will have to be handed over as "repayment" - good business if you can get it. The Greeks will not be allowed to default until the country is stripped bare of all assets. This is the monitory system we now operate - money as debt...Please note that the Germans have "tabled the idea of a second €5bn bridging loan in order to extend talks with Athens. " The idea being to show the German taxpayer that all non-EZ countries will be forced to subsidise what is a solely EZ problem in order to save the blushes of Frau Merkel, by once again using the EFSM. As per usual we will hear all sorts of nonsense about how they are protecting the UK taxpayers' money by... giving more of it to the EU. At what point will they realise that this is all they want the UK in the EU for, money and nothing else. All of the nonsense that Cameron et alia spout about the UK being at the heart of the EU is worthless, it is time to leave this fatally flawed institution.  How the supposedly left wing anti-Capitalist Greek government cannot see this I do not know. Defaulting is the Greeks' only hope - but they will not be allowed to.  The biggest victim of a cut in Greek defense spending wil be the German armaments industry who foisted their goods on the country in the first place. In fact the whole of German manufacturing will be affected by guts in Greek spending. Why don't the German banks just cut out the middle man and just buy German goods directly rather that go to the bother of lending the Greek government money which ot just gives to the population to buy German cars and then take a hair cut on the loans! It's a pretty old trick. Disguise the real problem by burying it inside a pile of bullshit.  It's fraud and if any euro country accepts the terms of this fairy story, they are guilty of financial deception.  This is such a shameless distortion of monetary discipline that the perpetrators can have no possible creditworthiness in the governance of the European Union, and if the Chinese wish to waste their currency on the Greek problem, more fool them  And they are no fools, so I don't believe the scaremongering put about by the Americans....The Greeks are playing another blinder here. The EU and their stupid qualified majority mechanism are poised to repeat their earlier blunders - again. Do they really think that Greece is ever going to be a successful eurozone member? Of course they don't, they just can't stomach the thought of the euro being reversible. Whatever they are doing for Greece it certainly isn't out of any sense of goodwill towards them.

Thursday, August 13, 2015

FOCUS ON  PORTUGAL - The imbalance of the Euro between rich and poor countries has acerbated and wrecked the Portugese industries of tourism, and of clothes and shoes from cheap Chinese imports into Europe. The debt is unsustainable and to add any more austerity simply makes it worse. It will, along with Greece, need a massive debt forgiveness to solve its problems, and this will happen as sure as night follows day, and Merkel and Germany will have to swallow it whole.  I should mention the accelerating decline in the population, and particularly the working age population who actually pay most of the taxes (when they can find jobs that is). Since population size is a significant indicator of GDP ( eg less people equals less demand for all sorts of goods and services from food to haircuts, housing and furniture to put in it etc) this is going to be perhaps the major long term issue for Portugal.  This is driven by two factors. The first is that birthrate has been barely half that required to maintain a steady population level for the whole of this century and the second is substantial emigration, especially of graduate level young people who also happen to be just in the age range that provides the majority of children. For a short while the increasing longevity the large number born born from the 1940's to the 1970's is masking what is already certain to happen. But we already know the number of people aged 0-20 years old is barely half that of a generation ago and its thus inevitable that there will be a totally unavoidable drop in the working population for at least the next generation and also because there will be far fewer 20-40 year olds in this period there will also be yet again even fewer children born to them. When you add in the high level of immigration to this the numbers are truly frightening- well they should be if any politician cared to take notice!  Demographics is a much ignored and yet very hard to reverse adverse trend that is going to have an unavoidable impact on many European countries. Portugal is probably the most critical but Italy, Germany and to a lesser extent Spain are all going to have a chronic problem emanating from this for decades to come...THE FACT that the IMF is still working with Portugal is a good sign. I just wonder if Portugal could get the same interest rates and terms that Greece is being offered if its debt situation would be so dire. For example, the Portugese government could, much as China is trying to do, consolidate debt and rationalize industry through debt exchanges with the Central government offering low cost loans to solid Portugese companies to take over the zombie firms or refinancing consumer and business loans.

Monday, July 27, 2015

European Union officials are bracing themselves for the possibility that Greece’s negotiations with its lenders will not be concluded in time for Athens to receive funding to pay a 3.5-billion-euro bond held by the European Central Bank on August 20, meaning a second bridge loan could be needed.
Greece received an initial loan of 7.16 billion euros last week to meet another maturing bond held by the ECB and repay some 2 billion euros to the International Monetary Fund. It had been hoped that a third bailout could be agreed in time for Greece to receive funding before the next ECB-held bond is due on August 20 but some officials believe that talks may not be completed before the beginning of December. Greece’s total funding needs for August stand at around 5 billion euros as another payment to the IMF is also due next month. A European official who wished to remain anonymous told Kathimerini that the European Financial Stability Mechanism (EFSM) may be tapped again next month – as it was last week – to provide bridge financing to the government until a third bailout has been agreed and approved by Greece’s Parliament, as well as others in the eurozone.
In Brussels, European Affairs Commissioner Pierre Moscovici said on Wednesday he is hoping the bailout deal can be signed by mid-August, while accepting that Greece has to meet a “punishing” schedule. “After months of deadlock, we are now making swift progress on the implementation of the euro summit agreement,” said the commissioner.

Wednesday, July 15, 2015

European Commission will use €7bn from an EU bail-out fund for Greece, as Tsipras says banks might not reopen for months

What is legal basis to use EFSM? The treaties establishing the new rescue fund ruled out the use of the previous EFSM to rescue a eurozone member. Mr Dombrovskis is asked on what the legal basis is for using the moribund fund. "Given the very difficult situation, and given the urgency, and given the way we are addressing the real concern, I think it is still possible," he says. "There are technical interpretations of this decision. There is a political problem that needs to be addressed. At the end of the day, the decision is to be made by the Council. Currently, we don't have better solutions on the table." He adds that by just helping one eurozone country, and not the bloc as a whole, the Commission can get round its own prohibition.

Tuesday, July 7, 2015

The EU however is an unelected septic tank.The Common Market (that we were given a vote on but deliberately and criminally lied- to by our own politicians who saw nothing but a huge trough to get their fat faces in) was actually a good idea. What we have actually got is a Fourth Reich....The EU "owns" about 200 billion in EFSF bonds it sold to finance Greece the past few years. The member states will have to pay the principal and interest as it comes due. Fortunately, were Greece to leave the EU, the money to do so is available since Greece is a net drag on the EU budget and the money the EU now sends to Greece through its various programs and agencies would be more than enough to cover the EFSF bonds. That the loss of these revenues would further crush the Greek economy is unfortunate but that is Greece's problem not Europe's!...That the Euro and the EU are a horrible construct is beyond doubt. Roger Bootle made a compelling case a couple of days ago that the EU, even if there were full political and fiscal union, has become a drag on economic growth with its regulatory apparatus and fixation on 'harmonizing' everything. However, the Euro and the EU do exist and they have to be managed as best as can be done. Greece is incompatible with either institution and, if it does not withdraw voluntarily from both the EZ and the EU, it must be expelled.  Greece is going to have revolving door governments for as far as the eye can see simply because the mess it is in is intractable. It is also the case that the EU cannot be ALL Greece ALL the time as it lurches from crisis to crisis and sends an increasingly bizarre cast of characters to EU summits and meetings. Europe needs to turn its back on Greece and deal with its own internal problems....The structural weakness of the EU has been exposed. An even "closer union" will not fix the Problem and a Stalin like strong man will be required to keep the corrupt mess from falling apart. A bloc is a bloc is a bloc.

Saturday, May 30, 2015

Europe faces the risk of a second revolt by Left-wing forces in the South after Spain's, Portugal’s Socialist Party vowed to defy austerity demands from the country’s creditors and block any further sackings of public officials. "We will carry out a reverse policy,” said Antonio Costa, the Socialist leader.  Mr Costa said a clear majority of his party wants to halt the “obsession with austerity”. Speaking to journalists in Lisbon as his country prepares for elections - expected in October - he insisted that. Portugal must start rebuilding key parts of the public sector following the drastic cuts under the previous EU-IMF Troika regime. The Socialists hold a narrow lead over the ruling conservative coalition in the opinion polls and may team up with far-Left parties, possibly even with the old Communist Party.  “There must be an alternative that allows us to turn the page on austerity, revive the economy, create jobs, and – while complying with euro area rules – restore hope to this county,” he said. The plan would appear entirely incompatible with the EU’s Fiscal Compact, which requires Portugal to run massive primary surpluses to cut its public debt from 130pc to 60pc of GDP over 20 years under pain of sanctions. The increasingly fierce attacks on austerity in Lisbon are likely to heighten fears in Berlin that fiscal and reform discipline will break down altogether in southern Europe if Greece’s rebels win concessions. Worry about political "moral hazard" is vastly complicating the search for a solution in Greece. “Greece is the testing ground and everybody is watching very carefully. That is why the Spanish and Portuguese prime ministers have been so hawkish,” said Vincenzo Scarpetta, from Open Europe.

Sunday, April 19, 2015

The IMF's World Economic Outlook forecast that rich economies will clock up respectable growth of 2.4pc this year after 1.8pc in 2014 as fiscal austerity fades and quantitative easing lifts the eurozone off the reefs, but there will be no return to the glory days of the pre-Lehman era.  "Potential growth in advanced economies was already declining before the crisis. Ageing, together with a slowdown in total productivity, were at work. The crisis made it worse," said Olivier Blanchard, the IMF's chief economist.  "Legacies of both the financial and the euro area crises — weak banks and high levels of public, corporate and household debt — are still weighing on growth. Low growth in turn makes deleveraging a slow process."   The world will remain stuck in a low-growth trap until 2020, and perhaps beyond. The Fund called for a blast of infrastructure spending by Germany and others with fiscal leeway to help break out of the impasse.   The report said markets may have been lulled into a complacency by the lowest bond yields in history and a strange lack of volatility, seemingly based on trust that central banks will always come to the rescue. Any evidence that the fault lines of the global financial system are about to be tested could "trigger turmoil", it warned....The Fund said yields on 10-year US Treasuries had fallen 80 basis points from October to January due to spillover effects from QE in Europe and Japan, but this sets up the potential for an even sharper spring-back once the Fed tightens in earnest.   The big worry is what will happen to Russia, Brazil and developing economies in Asia that borrowed most heavily in dollars when the Fed was still flooding the world with cheap liquidity. Emerging markets account to roughly half of the $9 trillion of offshore dollar debt outside US jurisdiction.  The IMF warned that a big chunk of the debt owed by companies is in the non-tradeable sector. These firms lack "natural revenue hedges" that can shield them against a double blow from rising borrowing costs and a further surge in the dollar. There has already been a trial run of what can go wrong with the much smaller scale of borrowing in Swiss francs.   "The balance sheet shock generated by the sudden large appreciation of the Swiss franc on some countries in central and eastern Europe with sizable domestic mortgage lending in that currency highlights the nature of these risks," it said.  The BRICS club is no longer in a fit state to handle the full consequences of a dollar shock, with the exception of India, the lone star with 7.5pc growth this year and next. India will overtake China in 2015 for the first time in modern memory.   Russia's economy will contract by 3.8pc this year as the full impact of the oil price crash and Western sanctions both bite deeper. Brazil faces a long slump, shrinking by 1pc in 2015, with barely a flicker of recovery in 2016.   While China is expected to avoid a hard-landing, its growth will slow yet further to 6.3pc next year. The Fund hinted that the much-trumpeted reforms so far add up to little and have yet to put the country on a viable course. 

Monday, March 23, 2015

OECD - In its latest interim economic assessment the thinktank warns that against a backdrop of better growth prospects for big economies, including in the eurozone, there is a growing risk of financial instability.  Its prime concern is that low borrowing costs and inflation mean activity is driven by easy money rather than fundamentals. The OECD highlights an over-reliance on central bank policy and warns that more needs to be done by governments in terms of tax and spending policy as well as structural changes.   Lower oil prices and widespread monetary easing have brought the world economy to a turning point, with the potential for the acceleration of growth that has been needed in many countries,” said OECD chief economist Catherine Mann.    “There is no room for complacency, however, as excessive reliance on monetary policy alone is building up financial risks, while not yet reviving business investment. A more balanced policy approach is needed, making full use of fiscal and structural reforms, as well as monetary policy, to ensure sustainable growth and public finances over the longer term.”   The OECD used its latest in-depth report into the UK to warn that more needs to be done to fix the country’s poor record on productivity, which it sees as key to raising living standards. The thinktank also had some encouraging words for George Osborne as he heads towards the election – it praised his economic policies and renewed backing for the chancellor’s austerity drive.   The group’s latest outlook highlighted a boost to the US economy from strong domestic demand, which, combined with a strengthening dollar, was adding to demand in the rest of the world. The euro area should benefit from low oil prices, monetary stimulus and euro depreciation, which “combine to offer the chance to escape from stagnation”, the OECD added.
Summarising the outlook for other big economies, the thinktank says:  In Japan, monetary and fiscal stimulus provide the impetus for faster near-term growth, but longer-term challenges remain. A gradual slowdown in China, towards the new official growth target, is expected to continue. India is expected to be the fastest-growing major economy over the coming two years, while the outlook is likely to worsen for many commodity exporting nations, with Brazil falling into recession.”

Wednesday, March 4, 2015

The termite-eaten timbers under the rotten edifice of the EU are crumbling.

The Alpine region of Carinthia faces probable bankruptcy after Austria’s central government refused to vouch for debts left by a disastrous banking expansion in eastern Europe and the Balkans.
It would be the first sub-sovereign default in Europe since the Lehman Brothers crisis, comparable in some respects to the bankruptcy of California's Orange County in 1994 or the city of Detroit in 2013. Austria’s finance minister, Jörg Schelling, said Vienna would not cover €10.2bn (£7.4bn) in bond guarantees issued by the Carinthian authorities for the failed lender Hypo Alpe Adria, or for the "Heta" resolution fund that succeeded it. This leaves the 550,000-strong province on the Slovene border to fend for itself as losses spin out of control.  “The government won’t waste another euro of taxpayer money on Heta,” he said, insisting that there must be an end to moral hazard. The Hypo affair has alredy cost taxpayers €5.5bn. The Austrian state has said it will cover €1bn of its own guarantees “on the nail” but nothing more. 
Sources in Vienna suggested that even senior bondholders are likely to face a 50pc writedown, becoming the first victims of the eurozone’s tough new “bail-in” rules for creditors. These rules are already in force in Germany and Austria, and will be mandatory everywhere next year.
The cracks are widening - and just a few days ago we heard Austria telling us to treat Greece like lepers.  The euro falls like a brick - with a lot further to go.  It will be interesting to see who dumps this toxic currency first....Germany? France or Italy - a race to the bottom.


Tuesday, December 16, 2014

Euro Zone QE will be the last nail in the coffin for the Euro, the single currency will fail. The moment the ECB pulls the QE trigger they will find themselves in a difficult position. The ECB will struggle to unleash the amount of QE required to drag the Euro Zone out of the economic mire and at the same time QE will silently destroy huge amounts of productive capacity.
The net outcome will have a huge impact on the UK economy. We will import deflation, we will be infected by the Euro Zone disaster. Ramping up the valuations of old houses and importing huge numbers of immigrants is not going to save us.  The time has come for the UK to negotiate a gradual exit from the EU. We do not need to be full members, we only need a customs union and harmonisation of laws. As long as we maintain our place at the Council of Europe we will maintain our legal basis to trade with our European neighbors.  The immediate danger for the UK is an economic stall as a result of Euro Zone QE and the rampant super-USD. Take care , don't take on more debt than is absolutely necessary, look at what has happened to the Japanese economy.... Swapping government bonds for reserves actually *removes* money from the economy because the interest normally paid to bondholders would instead go to the ECB and be returned to the states via the ECB bank dividend.
That's why other asset prices go up. There is less income around in general from assets in the currency.  At best QE relieves pressure to cut spending or raise taxes on the governments, and it is actually simple fiscal policy that increases the level of spending and therefore real activity in the economy.  I think ongoing indicative trends in energy sector , particularly oil and gas seem to be corresponding to predictions made by this writer on 2 June 2014 in article - " Stressful times ahead for world economy in 2015 and 2016" - published online at Briefly speaking, the following were mentioned :
(1). The trends are likely to commence from November 2014 and onwards ;comment(2). The commodities likely to be impacted by the trends include " minerals and metals" and " oil and gas".
(3). Regions or countries which could be possibly be impacted by the likely trends have also been mentioned though this is only artistic interpretation and may not be construed as conclusive.
(4). Readers may like to know that such likely trends are suggestive or indicative and not deterministic. There is always a room for reform and improvement through a still better strategic planning and prudence.
(5) I think a further period of one and a half month covering January to mid February next year 2015 could perhaps be a bit disturbing for, among other things, minerals and metals and oil and gas.

Friday, December 5, 2014

Auditors have identified a black hole in European Union budgets that could lead to extra demands for cash from the British taxpayer of up to £34billion over the next six years.
David Cameron will be legally obliged to make up a share of a shortfall of £259billion by 2020 with liabilities for the Treasury estimated at £33.7bn, calculated at the usual rate of Britain’s EU contributions.  The hole in EU spending has been identified by the European Court of Auditors and represents a political disaster for the Prime Minister who has made after repeated pledges to bring down the amount Britain pays into Brussels budgets.  In a special report earlier this week, EU auditors identified the sum in outstanding bills for legally binding spending commitments made by the European Commission over the last four years. “Assuming that commitments will not be de-committed, and we don’t see how most of them could, it might be problematic to get this money from member states to finance the expenditure foreseen,” Igor Ludborzs, an EU auditor, told the Euractiv website. The shortfall is known in Brussels jargon as “reste à liquider”, or “outstanding amount” and, while Britain has a veto on going above the maximum payment cap, national contributions are still expected to reach record highs.  Hitting the ceiling would push British EU contributions to above £13billion a year over the next six years, higher that the previous record high £11.3bn paid into Brussels coffers last year.
“If the EU spends right up to the payment ceiling, as now seems to be likely, that means that national contributions will go up,” said an official. Implicitly conceding that contributions could increase, British officials said that the “bottom line” would be ensuring that spending did not go above the payment ceiling, negotiated at a historically low level by Mr Cameron last year. “We’re making sure that the EU sticks to the budget limit that the Prime Minister successfully negotiated last year, and which is crucial to controlling the cost of the EU to Britain,” said a diplomat. “The figure from the European Court of Auditors does not affect the ceiling in the current long term EU budget.”

Sunday, October 26, 2014

Two mafia bosses - incompetent and corrupt - leaving the EU stage - thank's god !!!

BRUSSELS (EUObserver) - Herman Van Rompuy and Jose Manuel Barroso said goodbye to EU leaders on Friday (24 October) after attending their final summit as presidents of the EU council and commission.  For the Belgian Van Rompuy it marks almost the end of an almost 5-year term in which he worked behind the scenes to keep the EU united as it went through its deepest-ever economic crisis and tried to find solutions from preventing it ever happening again.  He was the first ever permanent president of the European Council, meaning the poetry-writing politician got to define the parameters of the job, making it a chairman rather than presidential post and preferring to be low-key.  "Politics is a rough trade" he noted but said he had been given loyalty and respect by colleagues. "I am leaving with the feeling that I have done all that I could." He recalled the bitter negotiations on the EU's longterm budget as requiring the most political skill and, like Barroso, remembered the pride of collecting the EU's Nobel peace prize. "Not only is my mandate coming to a close but so is my political and public life which has filled a large part of my life," said Van Rompuy, who formally steps down on 30 November.  He added, in his typical style, "in my life I have never had the feeling of being irreplaceable. There was a European Council before me. There will be a European Council without me." Barroso, whose term finishes next Friday (31 October), noted that he had attended 75 EU leader summits since he became commission president ten years ago. He said that how the EU had evolved over the years made him optimistic about its future, and spoke of "great" and "very difficult" moments over the past decade.  The Portuguese politician, who was generally regarded as reactive rather than visionary president, spoke for longer at the final press conference than Van Rompuy and mentioned that he had gathered his "testimonies" which could be downloaded "for free". An earlier ceremony among leaders saw the two leaders given porcelain plates as gifts a long with a signed 'family photo' of all the leaders.  Van Rompuy's plate was inscribed with one of his Haikus (Japanese poetry form) about Europe, written in his native Dutch; Barroso a plate with his motto "Let's build Europe together".  German Chancellor Angela Merkel gave a little speech on behalf of everyone. She was chosen, she said, because she was now the longest-serving EU leader.  She said Barroso worked as a lynchpin between the EU main institutions and reminded member states of the rules "whether we liked it or not" and said leaders would "miss" having Van Rompuy at the helm. While it was the two politicians' last summit, the meeting is most likely to be remembered for a row with Britain over it having to pay an extra €2bn towards the EU.  Prime Minister David Cameron, in a podium-banging press conference, said he would not pay it by the 1 December deadline.  The dispute escalated because it was initially unclear how the figures were arrived at. Barroso spent much of his final press conference as EU commission president going through the finer details of EU budget calculations for member states.

Saturday, October 25, 2014

Clearly, the IMF and the World Bank have begun to realize that the system is broken. Unfortunately, no-one seems to have a clue what to do - apart from yet more QE and praying that the Banks will start lending. Have they not realized that the real problem lies in the way money is created in the system? As Positive Money have been arguing very coherently for some years, 97% of the money in the economy is currently created out of thin air when Commercial Banks make loans in the form of interest bearing debts. Even the Bank of England has now come clean on this mind boggling fact. Yes, Mr Cameron, there is a magic money tree. There's one in every Bank in the world. That's how our current money system works.
The interest payments generated by this insane debt-based money system are absolutely crippling the entire world economy. 3% of all GDP is currently being used to pay the interest payments on government debt, and in the 28 EU countries, those unjustifiable interest payments have cost taxpayers a total of over €6.2 trillion since 1996 - 54.8% of all government debt. And that is despite the fact that the banks who lend their "money" to governments don't even have the money they lend. What's even more stupid is that since the Basel regulations say that lending to AAA to AA- rating sovereigns has a risk weighting of zero - they don't even need any capital to make the loans. The result is that commercial banks can have thousands of times more assets than capital.
And 3% of GDP is just what tax payers end up paying to the banking system to cover government debt. Add in the interest payments on all the household and business debt and you can see that the entire system is currently set up to transfer the maximum amount of wealth from the people and businesses that do the work, to the people who control the money creation process - namely, commercial banks.
The overall consquence of this insanity is that there is currently about twice as much debt in the world economy as there is money. In other words, there is simply no way to pay of the debt. Osborne's austerity and more bank generated debt can only make things even worse. The system has to change. One simple option is for Central Banks to impose a modest financial transaction tax on all electronic transactions denominated in their currency - wherever they occur in the world. The revenue generated should be reinjected into the real economy as debt free money, either by simply giving the money to governments debt free, or by making direct payments to citizens in the form of an unconditional basic income.
Within a few years, this mechanism would allow the current mountain of debt to be converted progressively into debt free money that can circulate freely within the economy. Taxing financial transactions would also be a very intelligent alternative to the current totally obsolete tax system. With global financial transactions in 2013 running at at least $10 quadrillion a year, even a tax rate of less than 0.1% would easily allow taxes like VAT, Income Tax, or Corporation tax to be scrapped, providing a massive boost to the real economy. There is really no excuse for the IMF and the World Bank to do nothing.

Saturday, October 18, 2014

Greece’s finance minister, Gikas Hardouvelis, argued in talks with the IMF boss, Christine Lagarde, that Athens can do without further loans from the Washington-based lender of last resort. Emergency bailout funds have propped up the Greek economy since it came close to crashing on a mountain of deficit and debt in 2010.
“Not only do we not need a new memorandum [loan agreement],” said prime minister Antonis Samaras, addressing parliament hours before his government survived a crucial vote of confidence early on Saturday. “We don’t need the rest of the money that from the start of next year we were on course to get from the current memorandum. We can leave it one and a half years earlier … that is our goal.”
Funding from the IMF had been due to expire in March 2016, while funds from the eurozone end this year. At €240bn (£188bn), the lifeline was the largest rescue programme in global financial history and was aimed at preventing the debt crisis that affected Athens from spreading to the rest of the eurozone.
Samaras denies that Greece wants an acrimonious break from the IMF. The organisation, perhaps more than the EU, has insisted on tough reforms and austerity measures in return for the rescue funds. These have exacerbated a six-year recession, the worst on record, left a quarter of the workforce unemployed, and seen support for Samaras’s fragile coalition plummet.
Hardouvelis, who met Lagarde with his predecessor, the governor of the Bank of Greece, Yannis Stournaras, is thought to have presented a plan detailing the country’s ability to cover its financing needs from bond markets. But the IMF chief has already signalled that she does not share such confidence. Although the IMF is also keen to disengage from the programme – and is under pressure from member states to focus on countries in the developing world – Greece is faced with a financing gap of about €15bn next year.

Wednesday, August 6, 2014

We are 5-6 years into our jobless recovery. And even this tepid recovery shows signs of stalling.
Today's GDP numbers ARE a positive sign, but unfortunately are just not very relevant to the typical American these days.
The combination of Outsourcing, Automation, and Illegal Immigration have decimated the working class and working poor, with no end in sight. Wages can't rise with these headwinds... and if they did then the Fed would immediately raise interest rates to ward off the "wage price spiral" crushing wages again. They think it's ok for Stocks to jump out of control... but wage raises for the plebes is unacceptable. For example - One was laid off in 2010 shortly after the start of the recession. He highly skilled in my field, yet have been bouncing around from job to job all making starting salary numbers, despite being 40 years old. Paying my mortgage is a struggle. Paying his health insurance is worse ($375/month from Freelancer’s Union). He is forced to buy cheap bare minimum car insurance ($18/month from Insurance Panda). His daughter is forced to attend a public school that is in increasingly worse condition thanks to illegal children and welfare leeches moving in. Yet here I am, unable to afford a quality education for her....
Federal Reserve monetary policy moves (although necessary) have mainly benefitted Big Business (especially Finance) and speculators, to the detriment of savers. Zero Interest Rate policy and Fed Purchases in the Open Market simply don't help the Average American much. Thus we see a booming Stock Market (which is clearly an echo bubble based on Fed policy and not on macroeconomic data) and we saw a mini echo RE bubble (especially the "luxury rental" segment)
People ask why the Stock Market isn't jumping with today's news. The answer is obvious. It likes the increase in GDP, but it doesn't like the idea that the Fed may need to stop goosing the market. The Fed is trapped with no exit strategy.
There is no Fiscal Policy these days due to Republican intransigence.
We need a drop in REAL unemployment and increased WAGES, and should focus on those.

Saturday, July 19, 2014

The war is waged by each ruling group against its own subjects, and the object of the war is not to make or prevent conquests of territory, but to keep the structure of society intact."  Passengers using airports that offer direct flights to the US may be forced to switch on their mobile phones and other electronic devices to prove to security officials that they do not contain explosives, it was announced on Sunday.
“During the security examination, officers may also ask that owners power up some devices, including cell phones,” the US Transportation Security Administration (TSA) said in a post on its website. It warned: “Powerless devices will not be permitted onboard the aircraft. The traveller may also undergo additional screening.”
The TSA did not disclose which airports would be conducting the additional screening. It was reported last week that passengers at British airports travelling to the US were facing extra checks on phones. Belgian officials said passengers there would also have devices checked.
Britain's Department for Transport (DfT) advised that the new restriction meant any electronic device with a flat battery would not be allowed on flights, the Press Association reported.
Last week the DfT said undisclosed extra measures at British airports were not expected to cause "significant disruption" to passengers and noted that the official UK threat status remained unchanged.
The chairman of the UK parliament's intelligence and security committee, Sir Malcolm Rifkind, said the increased airport security measures were "unavoidable".
Writing in the Sunday Telegraph, he said jihadi extremists were deploying "devilish technical skill" to create ever more sophisticated devices to evade existing security measures. And he warned of the dangers of "complacency" among the public in the face of the failure of the terrorists to mount any successful mass casualty attack in the UK since the 7/7 bombings in London in 2005.
The new airport measure is the first to be confirmed since Jeh Johnson, the US Homeland Security secretary, warned last week that enhanced security checks would be implemented imminently at "certain overseas airports with direct flights into the United States".
“The war, therefore if we judge it by the standards of previous wars, is merely an imposture. It is like the battles between certain ruminant animals whose horns are incapable of hurting one another. But though it is unreal it is not meaningless. It eats up the surplus of consumable goods, and it helps to preserve the special mental atmosphere that the hierarchical society needs. War, it will be seen, is now a purely internal affair. In the past, the ruling groups of all countries, although they might recognize their common interest and therefore limit the destructiveness of war, did fight against one another, and the victor always plundered the vanquished. In our own day they are not fighting against one another at all.