Greece’s European creditors have underlined the temporary nature of the country’s surprise return to growth by warning that they have “serious concerns” about the spiraling debts of the eurozone’s weakest member.  The economic news came as Greece’s parliament met in emergency session on Thursday to ratify a new bailout deal, although it was unclear whether the multibillion-euro agreement had the vital backing of Germany.

The three European institutions negotiating a third bailout package with the government in Athens said that the Greek economy had plunged into a deep recession from which it would not emerge until 2017...According to an analysis completed by the European commission, the European Central Bank and the eurozone bailout fund, Greece’s debts will peak at 201% of its national output (GDP) in 2016.  The study says that Greece’s debt burden can be made more bearable by waiving payments until the economy has recovered and then giving Athens longer to pay. However, it opposes the idea of a so-called “haircut” – or reducing the size of the debt. It is a course of action the International Monetary Fund, which joined the three European institutions in negotiating the latest bailout, thinks may be necessary for Greece’s debts to become sustainable.  “The high debt to GDP and the gross financing needs resulting from this analysis point to serious concerns regarding the sustainability of Greece’s public debt,” said the analysis, adding that far-reaching reforms were needed to address the worries. It forecasts that the Greek economy will contract by 2.3% this year and a further 1.3% in 2016 before returning to 2.7% growth in 2017.

 

The Chinese government’s heavy handed efforts to contain recent stock market volatility – the latest move prohibits short-selling and sales by major shareholders – have seriously damaged its credibility. But China’s policy failures should come as no surprise. Policymakers there are far from the first to mismanage financial markets, currencies, and trade. Many European governments, for example, suffered humiliating losses defending currencies that were misaligned in the early 1990s.
Still, China’s economy remains a source of significant uncertainty. Indeed, although the performance of China’s stock market and that of its real economy has not been closely correlated, a major slowdown is under way. That is a serious concern, occupying finance ministries, central banks, trading desks, and importers and exporters worldwide. China’s government believed it could engineer a soft landing in the transition from torrid double-digit economic growth, fuelled by exports and investments, to steady and balanced growth underpinned by domestic consumption, especially of services. And, in fact, it enacted some sensible policies and reforms. But rapid growth obscured many problems. For example, officials, seeking to secure promotions by achieving short-term economic targets, misallocated resources; basic industries such as steel and cement built up vast excess capacity; and bad loans accumulated on the balance sheets of banks and local governments.

Greece's creditors have voiced "serious concerns" about the sustainability of the country's debt ahead of a vote on a third bail-out deal in Athens that is likely to cement a split within the government. Analysis prepared by the country's European lenders projected that Greece's debt share would rise to 201pc of gross domestic product (GDP) next year.   Debt is only expected to fall to 175pc by the end of the decade, even if Greece implements all the terms of its €85bn (£61bn) rescue package and raises €13.9bn from a privatisation drive.   This means the country would not get its debt pile down to 120pc of GDP - which has long been viewed by the International Monetary Fund (IMF) as the target to get Athens back to a sustainable debt level - until 2030, two decades after the country's first bail-out. Just another example of post democratic EU.  The Greek people vote in a referendum against an austerity package,this after they had voted in an anti austerity government.  Result, the same government accept an EU bailout based on austerity measures the Greek population voted overwhelmingly against.To cap it all these stringent measures will be enforced by Brussels bureaucrats,all very undemocrat but typical of EU control.  The flaw in 'democracy' is that you can vote yourself more than you can pay for. When that happens you lose your right to self government. Democracy ends at your borders. You cannot vote yourself access to other peoples money.

There has been no recovery in the west since 2007-8. Communism had to collapse and now its sister socialism will collapse too. Governments can not keep borrowing money with no intension of paying anything back. All western economies are collapsing because everyone has too much debt. We are about to go into a deflationary cycle which will see multiple sovereign defaults and wealth destruction like never before. We will all be looking for someone to blame. The laws of maths are universal and apply to everyone. You can not enjoy a life style you have not earned. The Fed has infected the world with all that cheap USD it has been printing and has inflated nearly every housing market in the world. When the flight to quality starts and the herd causes the dollar to rally, then those loans wont be looking so cheap. Emerging markets will get wiped out and the process has begun. Remember that Japanese real estate is still 60% down from its highs in the 90's. If you have not prepared by now its probably too late. If you have a medium to large mortgage get out now because when the panic starts the exit will get really busy. When the bond bubble bursts liquidity will dry up over night and interest rates will go sky which will really squeeze the housing market. These are only economic concerns but normally when an economic event so extreme happens there is usually lots of civil unrest or they take us to war.The French economy stagnated in the second quarter as household spending slowed and business investment contracted.

The Bruxelles delapidators need "new fresh meat" to rub and destroy...here comes the Danish comenwealth !!

EU Observe (source) - Danish PM, Lars Loekke Rasmussen, announced on Friday (21 August) a referendum on replacing Denmark's “opt-out” on EU justice and home affairs with an “opt-in” model, similar to the one used by Ireland and the UK.  The decision to hold the referendum - on 3 December 2015 - follows a political agreement between five parties in parliament - the Liberal Party, the Conservative Party, the Social Democrats, the Social Liberals, and the Socialist People's Party - from 10 December 2014.   Announced on a hot Friday afternoon, the public debate on the referendum is yet to start in earnest (Photo: quietdangst)  Under its opt-out, which dates back to 1993, Denmark automatically stays out of all supra-national EU justice and home affairs policy and doesn’t take part in EU Council votes in these areas.  The EU dossier was slim in the early 1990s.  But it has ballooned since then, including on EU police and judicial co-operation and on migration, with Denmark still on the outside.  A Yes vote in December will let Denmark, in future, choose which home affairs policies and laws it takes part in. It will also let Denmark agree specific legislation in the area without the need for further referendums. The Yes-parties have already identified 22 existing EU initiatives they want Denmark to opt into. They’ve also promised Denmark won’t take part in 10 other EU initiatives - including the hot-button issue of asylum and immigration.   Big shift -- The Yes would mark Denmark’s first important shift in EU relations since Danes, in a referendum, soundly rejected eurozone membership. In a less significant step, Danish voters, at the same time as the EU elections last May, agreed to join the EU's Unified Patent Court.  Announced on a hot Friday afternoon, the public debate on the referendum is yet to start in earnest.  But the last opinion polls, from June, show Yes on 53 percent, No on 24 percent, and 23 percent undecided.  For its part, the second largest party in the Folketinget, the Danish People's Party, is to campaign for a No.  It is critical of the EU and hostile to immigration. It sits with UK tories in the European Parliament and will be the major force in the No-side….It also has a trump card: Its European Parliament candidate in 2014, Morten Messerschmidt, won with an unprecedented 465,758 personal votes in a country of just 5.6 million people. The leftist Red-Green alliance will also campaign on the No-side, saying Denmark must have full sovereignty on divorce, child custody, and criminal sentencing, among other topics.  Its EU spokesperson, Pernille Skipper, noted that Denmark doesn’t share values with some other EU states.   "The European Union includes countries banning abortion or so-called homosexual propaganda. The vote is thus about much more than Europol, contrary to what the EU-rave parties claim”, she said. The Yes side has chosen Europol as the corner stone of its campaign…The pro-Yes parties’ compromise agreement says: “Currently, the Council is negotiating a revision of the regulation on Europol. Once adopted under the new rules of the Lisbon Treaty, Denmark can no longer participate in this co-operation”.   "The perspective of Denmark having to leave Europol is the main reason behind the agreement to hold a referendum”.  Norwegian model…But the No side says Denmark could continue Europol co-operation via a voluntary parallel agreement, on the Norwegian model.  Europol is the European Union’s joint police agency…Headquartered in The Hague, it works closely with law enforcement bodies in EU member states, as well as in Australia, Canada, Norway, and the US.  By choosing to have the Danish poll on 3 December, the PM, Loekke Rasmussen, will, for the most part, avoid getting the campaign mixed up with the UK’s referendum on EU membership.  An EU summit on 17 December is expected to discuss in greater details the UK prime minister, David Cameron's demands for EU reforms in the run-up to the British vote, due at the latest in 2017.

NEW YORK — The downdraft on Wall Street intensified Monday as the Dow Jones industrial average – which was briefly down more than 1,000 points -- suffered its second drop of more than 500 points in as many days and the broader Standard & Poor's 500-stock index tumbled into official correction mode for the first time since 2011.  Investors hoping for a market bounce after the Dow's worst week in four years got a vicious plunge instead after the opening bell when the Dow went into freefall and fell 1,089 points in a dive described as a "huge whoosh," by Bespoke Investment Group. The Dow's closing point loss of 588.40 points, or 3.6%, to 15,871.35, was its 8th worse one-day point loss in history and worse daily point decline since Aug 8, 2011.The freefall on Wall Street has now infected every corner of the stock market, with the blue-chip Dow, small-company Russell 2000, large-company S&P 500 and tech-dominated Nasdaq composite all now down more than 10% from their record peaks this year and into full-fledged corrections. In volatile trading, the Dow initially plunged as much as 1,089 points in early trading before almost clawing back to even, only to succumb to a late-day swoon. At its low point, the Dow was in danger of suffering its worst one-day point loss on record -- a 777.68 drop on Sept. 29, 2008.  The Standard & Poor's 500 index was down 77.68 points, or 3.9%, to 1893.21 as it dipped into correction territory — which is defined as a drop of 10% or more. The Nasdaq composite index fell 179.79 points, or 3.8%, to 4526.25. The Dow is now down 13.3% from its high. The S&P 500 is off 11.2%, the Nasdaq is 13.3% below its closing peak and the Russell 200 is down 14.2% from its record.

Think of some ships at sea and a storm is coming. The ships want to clear their decks so they aren't top heavy. For the SS Eurozone to take on 200 billion or so euros of defaulted Greek debt now would make it top heavy. Better to leave it 'off balance sheet' as a contingent liability and worry about it later. Let's say some big European banks are heading for trouble because of some Latin American loans ( Brazil is near collapse) or because they are short the dollar. The SS Eurozone is going to need all the financial ballast it has to keep the ship from capsizing. Greece won't matter if that happens...Bank doing predatory lending. It is all they can do now. These are not loans to Greece they are bailouts for the creditors. If you borrow money you can spend it how you choose. If the lender tells you how you must spend it, then it isn't a loan.  If you are responsible for spending the money you are responsible for paying it back. But here, it is the creditors who are making all the decisions. Nobody is forcing them to lend the Greeks money, so the question is WHY ARE THEY LENDING MONEY TO GREECE?..The Greek people were sacrificed. I have to wonder who made Tsipras make this 180 degree turn. Wouldn't it have been better if Tsipras didn't call for elections if this is the result? His closest allies are Nea Democratia now...It was reported this week that Germany stands to get 85bn out of Greece's misery and the change to the interest arrangements.
Should there be no write off of Greek debt, this crisis will be permanent, but the Eurofanatics cannot let the dream die, whatever the cost......Deutschland Uber Alles never had such resonance...

What should worry everyone is that, for some reason, all the parties are moving this new deal along without the usual haggling and complaints. This appears to be not so much an exercise in kicking the can as 'sweeping the whole mess under the rug'. So one might ask why the need for a quick resolution of an intractable problem?  My guess is a much bigger storm is about to hit. The turmoil in Forex started by the Chinese devaluation of the RMB and the collapse of commodity prices and the shrinking of trade, indicate a major financial crisis is imminent and Greece just does not matter anymore. Greece, if you will is yesterday's problem. A Northern Rock when RBS and Lehman Brothers are crumbling.