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josh mower

BBC News - Could Greece be Europe's Lehman Brothers? - 0 views

www.bbc.co.uk/...business-14818439

bbc.co.uk_mews

shared by josh mower on 16 Sep 11 - No Cached
  • Could Greece be Europe's Lehman Brothers?
  • Three years ago today, US Treasury Secretary Hank Paulson made a momentous decision - to let the investment bank Lehman Brothers fail. The US government had helped to rescue a string of financial institutions, but markets kept pushing more to the wall. Mr Paulson was running out of time and options. There was no political support in Washington to keep throwing money at the problem. Wall Street would just have to learn to bear the consequences of its own folly. Today, many say that it was the wrong decision. The resulting financial meltdown (the stock market plummeted 43%) forced the authorities to do exactly what they had been trying to avoid - commit trillions of dollars to rescue the financial system.
  • Now fast-forward to the present. The "troika" of lenders to Greece - the European Union, International Monetary Fund (IMF) and European Central Bank (ECB) - may soon face a similar moment of reckoning.
  • ...5 more annotations...
  • The government in Athens has consistently failed to cut its overspending as much as promised, and keeps coming back for more money. The Greeks complain that spending cuts demanded by the troika are killing their economy, which in turn pushes their tax revenues down, stoking the need to borrow yet more.
  • Would they really pull the plug on Greece to make an example of it? Or, with daily protests on the streets of Athens, could Greece itself walk away from the table? And if so, would it trigger another global meltdown?
  • Certainly it would be irrational for Greece to stop playing ball. Cut off from the troika's bailouts, the country cannot borrow. But even if it stopped paying its debts, Greece would still face enormous pain. Last year the government borrowed the equivalent of 10.5% of annual economic output, just to fund general government spending.
  • That overspend would have to stop immediately - far worse austerity than the troika demands. The Greek banks would also collapse, bereft of outside support. Having crossed the Rubicon of unilateral default, many economists believe the Greeks would leave the euro altogether. One reason is the need to devalue its currency to restore competitiveness. "Greece needs to move its exchange rate by at least 30% to have any chance of getting jobs back," says Mr Booth. Another is that the Greek central bank could then fund the government's continued borrowing with freshly-printed drachmas. But inflation would soar, and imports especially would become very expensive
  • That threatened a chain reaction of bankruptcies, which in turn caused a collapse of confidence throughout the financial system.
  • josh mower on 16 Sep 11
     
    If Greece defaults would it lead to another recession?
Duncan Innes

BBC News - Q&A: Irish bond crisis - 0 views

www.bbc.co.uk/...business-11743952

bbc Ireland bonds government deficit bond yield global economy

shared by Duncan Innes on 13 Nov 10 - No Cached
  • What is a government bond?
  • Duncan Innes on 13 Nov 10
     
    Government bonds explained, in relation to the irish crisis.
Duncan Innes

BBC News - Government debt and deficit explained with coloured sweets - 0 views

www.bbc.co.uk/...business-26289940

bbc news government debt deficit

shared by Duncan Innes on 27 Feb 14 - No Cached
  • Duncan Innes on 27 Feb 14
     
    Deficit explained with sweets - video
Duncan Innes

Public-sector workers: (Government) workers of the world unite! | The Economist - 0 views

www.economist.com/...17849199

public government workers strikes unions economist performance related pay pay benefits deficit

shared by Duncan Innes on 09 Jan 11 - No Cached
  • Unions have suppressed wage differentials in the public sector. They have extracted excellent benefits for their members. And they have protected underperforming workers from being sacked.
  • Duncan Innes on 09 Jan 11
     
    Interesting article proclaiming that the public sector unions have made the state inefficient
Duncan Innes

FT.com / Comment / Analysis - Africa: Treasure amid turmoil - 1 views

www.ft.com/...81-11e0-80d9-00144feabdc0.html

congo corruption ft africa aid natural resources war minerals

shared by Duncan Innes on 08 May 11 - No Cached
  • Duncan Innes on 08 May 11
     
    A great case study on how corruption and lack of governance has ruined the infrastructure and economy of Africa's most naturally rich nation.
Duncan Innes

Why some economists fear Osborne's upper cuts will leave Britain out for the count | Bu... - 0 views

www.guardian.co.uk/...-elliott-osborne-spending-cuts

Guardian Macro Economic Policy Interest rates Bulls Bears Growth Quantitative Easing QE2 Economics Monetary policy

shared by Duncan Innes on 18 Oct 10 - No Cached
  • It is this gloomy backdrop which exercises the minds of the third and final group of experts, the bears. For them, the risk is both of a double-dip recession and a long, painful work out from the excesses of the past. Looking at the four main components of demand they would say that consumption is going to be weak so investment will disappoint. Government spending is going to be slashed, leaving a massive burden on exports at a time of slower growth and currency wars. The bears are currently the smallest group. Their numbers are likely to be swelled as winter progresses.
Duncan Innes

Economics - Economics Q&A: Will the rise in VAT harm the UK's economic performance? - 0 views

www.tutor2u.net/...m-the-uks-economic-performance

economics VAT Growth demand inflation Interest rates deficit

shared by Duncan Innes on 18 Jan 11 - No Cached
  • Overall the rise in VAT is likely to cause higher inflation, reduced GDP growth and some job losses in 2011 and into 2012 - so some deterioration in three microeconomic indicators at the expense of improved government finances. But in the long term a 20% VAT rate is unlikely to have any noticeable effect on UK competitiveness and growth. The long-term trend GDP is driven by supply side factors such as technological progress, working age population growth, improved work and enterprise incentives and the scale and quality of capital investment spending).
  • Duncan Innes on 18 Jan 11
     
    A summary of the likely impact of VAT on Economic Growth
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