German MPs voted to back a third bail-out for Greece on Wednesday as Dutch prime minister Mark Rutte faced the threat of a no confidence vote over his decision to support the €86bn rescue plan. After a three-hour debate, the Bundestag approved a new rescue package for Greece with a majority of 454 votes to 13. Eighteen MPs abstained.  Within Angela Merkel's ruling Christian CDU-CSU coalition, 228 MPs voted in favour of the deal, with 63 voting against and three abstentions. In an earlier vote in July, 60 coalition MPs voted "no" to new aid for Greece. Wolfgang Schaeuble, Germany’s finance minister, told policymakers … there was “no guarantee of success” … “If Greece stands by its obligations and the programme is completely and resolutely implemented” … An immediate payment of around €13bn is expected to be handed to Greece shortly so the country can make a €3.2bn loan repayment to the European Central Bank on Thursday.’ Right, let me hand you a bucket of money so you can pay me back a bit of what you already owe me that you can’t pay back. Please. As Einstein (or Mark Twain or Ben Franklin, depending on where you look) is reputed to have said, the definition of insanity is doing the same thing over and over again and expecting a different result. Surely a collective insanity is at work here, convincing otherwise sentient adults that giving a bankrupt money to discharge his debts, which he will then pay back, is insane...The total that is actually going to Greece itself will be around €3bn per year, peanuts in a €12.2trill annual GDP economy.

The U.S. banking sector may have very little revenue exposure to China — but they still have reason to be scared.  The fear building on Wall Street is that a worsening economy in China will delay the Federal Reserve from raising U.S. interest rates indefinitely. That would be bad for the banks because the sector has been waiting for a rate hike to turbocharge earnings on mortgages and other loans...China's woes — highlighted by its currency manipulation moves — threatens to dampen the sector's earnings expectations going into 2016, analysts warned.  "A significant slowdown in China could push the Fed to delay liftoff, leading to negative consensus revisions of 2016 earnings estimates," Bank of America research analysts Erika Najarian and Ebrahim Poonawala said in a recent research report.  Najarian and Poonawala see bank earnings per share hurt by 10% to 15% if the Fed delays raising rates until the end of 2016. A rate hike "is by far the single biggest positive catalyst remaining for bank stocks," the BofA analysts said.  A delay "would change our bullish outlook for the sector," they said in the report.   "Every single U.S. bank is affected by this," agreed Erik Oja, banking analyst with S&P Capital IQ. Citigroup also has indirect exposure to China in that it does business with countries, like Brazil, that sell raw materials to China, Oja warned.  In terms of direct revenue exposure, the danger is minuscule, analysts said. Citigroup has the greatest direct exposure at 1.2%, followed by JPMorgan Chase with just 0.7%.  This week, China weakened its currency in a bid to boost exports by making them cheaper. The central's banks' move to manipulate the currency has sparked fears that China's economic slowdown is worse than expected. That could push the Fed to move more cautiously when it comes to raising U.S. interest rates, which would signal a stronger U.S. economy.

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.