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The decision by the International Swaps and Derivatives Association ends months of speculation that a Greek default might not set off the swaps, a result that could have undermined their role as insurance against debt defaults.

Still, doubts about the instruments’ effectiveness may linger. European officials initially shaped the Greek debt restructuring to avoid activating them. The concern is that future restructurings could be arranged to stop swaps from paying out.

Since then, banks and regulators have taken steps to strengthen the market, mostly by making sure that investors can pay out the money they owe on swaps.

Productivity and ULC by main economic activity (ISIC Rev.4) : ULC, hourly labour compensation and productivity

principle

So the need for an agreement between the euro zone and the IMF is paramount. The IMF as a senior creditor can't accept losses of its own in the Greek program and it has to convince unhappy members from the emerging world that lent it money to continue financing Greece that the country's debt is sustainable. For this to happen, about 50 billion euros ($65 billion) must be forgiven from Greece's giant debt and the decision for such action including the political backlash is squarely in Europe's court.

For starters, the European Central Bank’s “outright monetary transactions” program has been incredibly effective: interest-rate spreads for Spain and Italy have fallen by about 250 basis points, even before a single euro has been spent to purchase government bonds.

But, perhaps most important, Germany’s attitude toward the eurozone in general, and Greece in particular, has changed. German officials now understand that, given extensive trade and financial links, a disorderly eurozone hurts not just the periphery but the core.

The strategic technologies that have repeatedly transformed the market economy – from railroads to the Internet – required the construction of networks whose value in use could not be known when they were first deployed.

Consequently, innovation at the frontier depends on funding sources that are decoupled from concern for economic value;

Financial speculation has been, and remains, one required source of funding. Financial bubbles emerge wherever liquid asset markets exist. Indeed, the objects of such speculation astound the imagination: tulip bulbs, gold and silver mines, real estate, the debt of new nations, corporate securities.

In this world, financial bubbles matter, capital flows are of dubious merit, low interest rates fail to stimulate growth and government spending becomes the only tool with real traction to spur economic activity.

With total government debt in the rich world stuck at around 100 percent of its combined economic output, there is a legitimate fear that a rise in interest rates could tip off a financial death spiral. Moreover, if countries with debt levels well under 50 percent of G.D.P. were so devastated by the crisis, it is hard to imagine what might happen to them if another were to hit them.

If so, the urgent task is what kind of limits should be imposed on banking and the rest of finance to temper its propensity to careen toward disaster.

But some analysts warn that the calm could prove temporary because the underlying causes of the crisis remain: too much debt and poorly performing national economies. “The E.C.B. has been very active since Mr. Draghi has been president, and this has been a major factor contributing to stabilize financial markets and thereby avoid much worse outcomes for the euro zone,” Marie Diron, an economist who advises the consulting firm Ernst & Young, said in a note.

There is no question that, when it was introduced, inflation targeting represented progress. But we have learnt that it has serious limitations. You can have an economy in which inflation is stable and low, but behind the scenes the composition of the output is wrong, and the financial system accumulates risks. It’s very clear that, to deal with all these issues, just using the policy rate is not enough.

Africa losing billions from fraud and tax avoidance

In total, the continent lost about $850bn between 1970 and 2008, the report said. An estimated $217.7bn was illegally transferred out of Nigeria over that period, while Egypt lost $105.2bn and South Africa more than $81.8bn.

African Union’s (AU) high-level panel on illicit financial flows and the UN economic commission for Africa (Uneca).

Nigeria’s real GDP is based on 1990 prices. It plans to update them to ones from 2008. Ghana did the same in 2010, revising its base year from 1996 to 2006. Its GDP shot up by 60%, propelling it overnight from being a poor to middle-income country, defined by the IMF as having a GDP per person of at least $1,026 a year.

Sixty-four percent of the population lives on less than $1 per day, 14 percent have HIV, 40 percent don’t have access to clean drinking water. Almost 90 percent of women in rural areas cannot read or write. Name a category—schools, health care, environment—and I’ll give you statistics that will depress the shit out of you.

For more than 150 years, the only reason to come to Kitwe—to Zambia, really—was the copper.

Most of the buildings in Kitwe, the roads, the health clinics, the schools, were built by the national mining company

They had taken to the streets to demand an end to a lecturers' strike that had grounded academic activities in all but two of Nigeria's 78 public universities. The strike was in its third week when the protest took place.

The lecturers' strike, the third in four years, pitted the academics against the owners of Nigeria's public universities - the country's central and state governments.

In the last three years the government of President Goodluck Jonathan, a former university lecturer, has established nine new universities.

Instead of basking in the reflected glory of a prize winner funded by European grants, she said she had to listen to a speech attacking the red-tape and bureaucracy - and "generally embarrassing the hell out of me".

Jan Muehlfeit, chairman of Microsoft Europe, explained what was profoundly different about these new digital industries - that they expand at a speed and scale that would have been impossible in the traditional manufacturing industries. Governments trying to respond to such quicksilver businesses needed to ensure that young people were well-educated, creative and adaptable, he said.

The big difference in the EZ is that nations cannot go off the euro as they went off the gold standard

A major part of Lenin’s analysis, for instance, was devoted to the demonstration that Russia had become a quasi-colony as a result of the large scale capital imports, and that the foreign creditors in effect controlled Russia’s foreign policy.

The linkages of these issues can be summarized as a series of impossible trinities or trilemmas.

Nato defence spending falls despite promises to reverse cuts

Europe's failure to pay its way in Nato is seriously worrying the US, which already provides 75% of all Nato defence expenditure (the US spends 3.8% of its GDP on defence).

Without any of its own maritime patrol aircraft, the UK recently had to request the help of Nato allies to search for suspected Russian submarines off the west coast of Scotland. In Germany there have been reports of serious malfunctions in military equipment.

Why Do Americans Stink at Math?

The Americans might have invented the world’s best methods for teaching math to children, but it was difficult to find anyone actually using them.

In fact, efforts to introduce a better way of teaching math stretch back to the 1800s. The story is the same every time: a big, excited push, followed by mass confusion and then a return to conventional practices.

Europe has to do whatever it takes By Martin Wolf

Astonishingly, yields on Italian and Spanish 10-year debt have fallen from 6.3 per cent and 7.0 per cent, respectively, at the beginning of August 2012, to a mere 2.3 and 2.1 per cent early this month. That is below the yield on UK gilts.

Fiscal policy also continues to tighten, even though interest rates are at the zero bound: the OECD has forecast that the cyclically adjusted fiscal deficit of the eurozone would shrink from a mere 1.4 per cent in 2013 to an even more austere 0.9 per cent in 2014.

Hewlett-Packard, which turns out over 50 million computers a year through its own plants and subcontractors, makes many of its larger desktop personal computers in such higher-cost areas as Indianapolis and Tokyo to save on fuel costs and to serve business buyers rapidly.