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Gene Ellis

Taxing China's Assets | Foreign Affairs - 0 views

www.foreignaffairs.com/...taxing-chinas-assets

china assets affairs

shared by Gene Ellis on 05 Apr 12 - No Cached
  • Gene Ellis on 05 Apr 12
     
    HOW ARE CURRENCIES MANIPULATED?  WHY?
Gene Ellis

Can Oregon save American health care? - 0 views

www.washingtonpost.com/...egon-save-american-health-care

oregon american health health care

shared by Gene Ellis on 18 Jan 13 - No Cached
  • Medicaid enrollment shrank by 46 percent as patients affected by the changes left the program — likely relegated to the ranks of the uninsured — between February and December 2003, according to research published in the journal Health Affairs.
  • Separate research has found that when Medicaid premiums rise by 1 to 5 percent of an uninsured family’s income, their odds of participating drop from 57 to 18 percent.
  • “For the last 30 years, both the private and public sector have done the same things to manage health-care costs,” said Bruce Goldberg, the Oregon Health Authority director who oversees the Medicaid program. “They’ve cut people from coverage, cut payment rates or cut benefits
  • ...8 more annotations...
  • St. Charles noted that 144 patients tended to use the emergency room the most. Taken together, they averaged 14.25 trips each over 12 months. These patients drove much of the area’s Medicaid spending.
  • The majority had unmet mental health needs, even though most had Medicaid, which provides mental health coverage.
  • It stationed community health workers in emergency rooms, who could help assess why patients had turned up.
  • Of the 144 patients in the study, only 62 percent agreed to work with a community worker on a plan for their care. The others proved difficult to track down or did not want to participate.
  • Emergency department visits fell by 49 percent. On average, the program generated about $3,000 in savings per patient.
  • “I’m reassured by people talking about the role primary care providers need to play,” said Ern Teuber, the clinic’s executive director. “Still, when we start talking specific dollars, the perception is there isn’t enough money to go around and that somebody has to lose.”
  • It’s a huge issue, and there’s no doubt that hospital business models are going to have to change,”
  • “Medicaid by itself isn’t enough to change things,” he said. “For a lot of hospitals, it’s maybe 7 percent of their business. We have another 600,000 people the state covers.
Gene Ellis

The Eurozone's Delayed Reckoning by Nouriel Roubini - Project Syndicate - 0 views

www.project-syndicate.org/...pe-s-crisis-by-nouriel-roubini

shared by Gene Ellis on 19 Dec 12 - No Cached
  • 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.
  • The introduction of the European Stability Mechanism (ESM), which provides another €500 billion ($650 billion) to be used to backstop banks and sovereigns, has also helped, as has European leaders’ recognition that a monetary union alone is unstable and incomplete, requiring deeper banking, fiscal, economic, and political integration.
  • 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.
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  • GDP continues to shrink,
  • Moreover, balkanization of economic activity, banking systems, and public-debt markets continues, as foreign investors flee the eurozone periphery and seek safety in the core.
  • Likewise, competitiveness losses have been partly reversed as wages have lagged productivity growth, thus reducing unit labor costs, and some structural reforms are ongoing.
    • Gene Ellis
      Gene Ellis on 19 Dec 12
       
      This, indeed, is the crux of the matter.
  • either the eurozone moves toward fuller integration (capped by political union to provide democratic legitimacy to the loss of national sovereignty on banking, fiscal, and economic affairs), or it will undergo disunion, dis-integration, fragmentation, and eventual breakup.
  • but countries like Germany, which were over-saving and running external surpluses, have not been forced to adjust by increasing domestic demand, so their trade surpluses have remained large.
  • German leaders fear that the risk-sharing elements of deeper integration
  • imply a politically unacceptable transfer union whereby Germany and the core unilaterally and permanently subsidize the periphery.
  • Of course, Germany fails to recognize that successful monetary unions like the United States have a full banking union with significant risk-sharing elements, and a fiscal union whereby idiosyncratic shocks to specific states’ output are absorbed by the federal budget. The US is also a large transfer union, in which richer states permanently subsidize the poorer ones.
    • Gene Ellis
      Gene Ellis on 19 Dec 12
       
      These are key features, built into the over-representation of the poorer, smaller, more agricultural, states; as well as in the central institutions.
  • But the fundamental crisis of the eurozone has not been resolved, and another year of muddling through could revive these risks in a more virulent form in 2014 and beyond. Unfortunately, the eurozone crisis is likely to remain with us for years to come, sustaining the likelihood of coercive debt restructurings and eurozone exits.
  • Gene Ellis on 19 Dec 12
     
    Late 2012 reading
Gene Ellis

EMU and International Conflict | Foreign Affairs - 0 views

www.foreignaffairs.com/...emu-and-international-conflict

shared by Gene Ellis on 30 May 12 - No Cached
  • Indeed, the adverse economic effects of a single currency on unemployment and inflation would outweigh any gains from facilitating trade and capital flows among the EMU members.
  • There is no sizable country anywhere in the world that does not have its own currency. A national currency is both a symbol of sovereignty and the key to the pursuit of an independent monetary and budget policy.
Gene Ellis

TARGET2 as a scapegoat for German errors | vox - 0 views

www.voxeu.org/...arget2-scapegoat-german-errors

shared by Gene Ellis on 29 Oct 13 - No Cached
  • This coincided with the bubble years in peripheral Eurozone countries (2003-07). The effect of this is that Germany accumulated large net claims on Eurozone countries, which at the end of 2011 amounted to €634 billion.
  • Since 2009, when the TARGET2 balances started to take off, current account deficits of the peripheral countries as a whole declined from 9.1% of their GDP to 4.5%. These declines were mainly due to deep recessions in these countries.
  • the German banking system was lending the money to other Eurozone countries to allow them to buy surplus German products – a highly risky affair.
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  • This created the illusion that no risk was involved; in fact the risks were increasing every year.
  • It should have been obvious that the debtor countries could get into payment difficulties as they were piling up debt made possible by the loans of German banks.
  • If there is a breakup of the Eurozone, Germany will face the risk that some debtor countries default on their debt. But again this risk is not affected by the size of the TARGET2 claims of Germany.
  • The risk that Germany faces as a result of its net exposure to other Eurozone countries is therefore entirely of the country’s own making.
  • These current account surpluses did not lead to TARGET2 claims during the bubble years because the counterpart of these surpluses were increasing claims held by (mainly) German banks against the other Eurozone countries.
  • Sinn (2012) argues that these deficits would have had to decline even faster had there been no financing through the TARGET2 mechanism. This is certainly true. But this is the same as saying that these countries should have pushed their economies into even deeper recessions.
  • The main reason why German TARGET2 claims have increased so much since 2010 is capital flows. The flows have taken two forms.
  • The first one came about when German banks unloaded their loans made to peripheral countries into the balance sheet of the Bundesbank.
  • The second one was the result of non-residents shifting their deposits from their local banks into the German banking system out of fear of a breakup of the Eurozone.
  • This led German banks to stop their credit lines to southern banks (and other northern EZ banks followed)
  • Thus in the scenario of a breakup, with or without TARGET2 claims, the risk of large losses for the German taxpayer is very similar.
  • the Bundesbank can eliminate the risk of such last minute accumulations of TARGET2 balances by converting euros into new German marks only for German residents.
Gene Ellis

The euro crisis: Debtors' prison | The Economist - 0 views

www.economist.com/...n-more-government-debt-debtors

shared by Gene Ellis on 29 Oct 13 - No Cached
  • But the reforms often fail to work. The Spanish law is intended to promote restructuring of viable firms but in practice most insolvencies end in liquidation after lengthy court proceedings.
  • High household debt helps explain why the Netherlands, along with Italy and Spain, remained in recession in the second quarter of 2013 even as the euro area in general embarked on recovery. Dutch GDP this year will be 2% lower than in 2011 and more than 3% below its previous peak, in 2008.
  • it illustrates the malign effect of high debt when house prices fall
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  • One aim of the exercise is to identify the bad debts that are fouling up euro-zone banks and preventing the flow of new credit. This is important because parts of the single-currency area are crippled not just by public borrowing but by private debt, most of which is sitting on banking books.
  • High private debt is more detrimental to growth than high public debt, according to recent research by the IMF.
  • The malign effect of high private debt becomes apparent in the busts that follow credit-driven booms. Households that have borrowed too much in relation to their income trim their spending, the main component of GDP. Overleveraged firms avoid investing and concentrate on shrinking their balance-sheets by paying off loans. As bad debts erode their capital, banks become more reluctant to lend. These adverse trends reinforce each other, increasing the overall drag on growth.
  • Other balance-sheet indicators also suggest that Italian business is in a bad way. For example, 30% of corporate debt is owed by firms whose pre-tax earnings are less than the interest payments they have to make. That share of frail companies is even higher in Spain and Portugal (40% and nearly 50% respectively).
  • Little progress has been made to lighten the private-debt burden since the crisis began. Though it eased in Spain from 227% of GDP in 2009 to 215% in 2012, it rose over the same period in Cyprus, Ireland and Portugal. In Britain, by contrast, private debt fell from 207% of GDP in 2009 to 190% in 2012 thanks to improvements by both households and firms.
  • There is an inherent contradiction between the need for debtor countries in the euro zone to regain competitiveness through lower prices and at the same time to ease excessive debt with a dose of inflation.
  • Firms that have overborrowed are reluctant to embark on new ventures, and banks are in any case reluctant to lend because their balance-sheets are peppered with bad debts. This unhappy state of affairs prevails throughout southern Europe though its precise causes vary.
Gene Ellis

EUobserver.com / Economic Affairs / Eurozone fund chief dashes Greek hopes for debt deal - 0 views

euobserver.com/122639

shared by Gene Ellis on 07 Jan 14 - No Cached
  • Eurozone fund chief dashes Greek hopes for debt deal
Gene Ellis

There's only one cure for the eurozone's terminal disease | Business Spectator - 0 views

www.businessspectator.com.au/...ure-eurozones-terminal-disease

shared by Gene Ellis on 18 Feb 15 - No Cached
  • There is a plausible resolution to this dilemma but it is one that is politically unfeasible. The logical steps would be for these countries to either leave the eurozone and take control of their own affairs, or to declare a default on some or all of their public debt -- or indeed do both. Unfortunately, none of these options are allowed to happen.
Gene Ellis

Nouriel Roubini maps out the Kremlin's plan for a re-divided world. - Project Syndicate - 0 views

www.project-syndicate.org/...-s-plan-for-a-re-divided-world

shared by Gene Ellis on 05 Feb 15 - No Cached
  • Russia’s goal is not to create another North American Free Trade Agreement; it is to create another EU, with the Kremlin holding all of the real levers of power.
  • And, once members give up their sovereignty over fiscal, banking, and economic affairs, they may eventually need a partial political union to ensure democratic legitimacy.
  • But the first step is a customs union, and, in the case of the Eurasian Union, it had to include Ukraine, Russia’s largest neighbor to the west.
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  • There is even talk of Russia and China creating an alternative international payment system to replace the SWIFT system, which the US and Europe can use to impose financial sanctions against Russia.
  • But Putin is ambitious, and – like other autocrats in Central Asian nations – he may remain in power for decades to come. And, like it or not, even a Russia that lacks the dynamism needed to succeed in manufacturing and the industries of the future will remain a commodity-producing
  • superpower.
  • US President Barack Obama says that this is not the beginning of a new Cold War; current trends may soon suggest otherwise.
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