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Gene Ellis

German and French banks call the shots - European, Business - Independent.ie - 0 views

www.independent.ie/...ks-call-the-shots-2607577.html

german french banks ireland debt

shared by Gene Ellis on 11 Jul 12 - No Cached
  • German and French banks call the shots Print Email  NormalLargeExtra Large ShareNew  0  0   Also in European Debt crisis: European shares edge lower and growth worries persist Bank of England's Tucker 'wasn't encouraged to lean on Barclays' Draghi keeps door open to further interest rate cuts Marks and Spencers sales hit by summer deluge Spain's debt tops 7pc danger level as Madrid gets more time European Home "Shocking" 2012 HoroscopeWhat Does 2012 Have In Store For You? Shockingly Accurate. See Free!www.PremiumAstrology.comExpat Health InsuranceQuick, Compare, Trusted Website Expatriate Health Insurance Quoteswww.ExpatFinder.com/Instant-Quoteshttp://www.googleadservices.com/pagead/aclk?sa=L&ai=BMEejVeb8T8fDKoSG_QaAhrTCB-q_1OYBmoqphxvAjbcB0NkREAMYAyDgw6kIKAU4AFD4gumFAmCpsL6AzAGgAairsfEDsgESd3d3LmluZGVwZW5kZW50LmllyAEB2gFfaHR0cDovL3d3dy5pbmRlcGVuZGVudC5pZS9idXNpbmVzcy9ldXJvcGVhbi9nZX
  • d, for reasons best
  • known to itself, the ECB -- in clear contravention of both previous market precedent and financial logic -- has insisted that the senior bondholders be repaid in full and has lent the Irish banks, institutions which it must have known were hopelessly insolvent, €70bn to do so.
  • ...1 more annotation...
  • Top of the list are German banks, to whom we owe €92bn with a further €38bn of other exposures. Does the fact that Irish banks potentially owe their counterparts up to €146bn explain the German government's implacable opposition to any write-down of the Irish banks' debts? After the British and the Germans, it is the French banks -- with total Irish bank loans of almost €32bn and a further €23bn of other exposures -- who have the biggest exposure to Ireland. Does this provide at least a partial explanation for French president Nicolas Sarkozy's truculence when faced with Irish requests that senior bondholders be forced to accept a haircut?
Gene Ellis

Our Schumpeter columnist: What exactly is an entrepreneur? | The Economist - 0 views

www.economist.com/...our-schumpeter-columnist

shared by Gene Ellis on 07 Mar 14 - No Cached
  • What exactly is an entrepreneur?
  • Schumpeterians distinguish between “replicative” entrepreneurs (who set up small businesses much like other small businesses) and “innovative” entrepreneurs (who upset and disorganise the existing way of doing things). They also distinguish between “small businesses” and “high-growth businesses” (most small businesses stay small). Both sorts have an important role in a successful economy
  • In a new paper Magnus Henrekson and Tino Sanandaji argue that the number of self-made billionaires a country produces provides a much better measure of its entrepreneurial vigour than the number of small businesses.
  • ...4 more annotations...
  • Countries with a lot of small companies are often stagnant
  • Who are the Schumpeterian entrepreneurs who dominate the modern economy? And how do you create more of them?
  • The bulk of American entrepreneurs come from just three clusters: Boston, New York and Silicon Valley.
  • Schumpeterian entrepreneurship is all about innovation and ambition to turn small businesses into big ones.
Gene Ellis

Mastering business management studies online - 0 views

www.deccanherald.com/...management-studies-online.html

shared by Gene Ellis on 10 Jan 13 - No Cached
  • The free online mini MBA is a condensed version of a full fledged MBA & is aimed at providing a solid foundation in current business theory and practices.
  • Online video lectures and case studies by top management faculty will cover subjects like Fundamentals of Accounting, Principles of Marketing, Managing Human Resource, Essentials of Business Communication and Business Strategy.
  • “The pedagogy involves pre-recorded video learning modules with fully interactive and collaborative features like the discussion forums, online chats, quizzes and live virtual classrooms. The entire course content will be made available on an anytime, anywhere learning mode using the “portable classroom” model.
Gene Ellis

Why China will not buy the world - FT.com - 0 views

www.ft.com/...ba-11e2-babb-00144feabdc0.html

China will not buy the world

shared by Gene Ellis on 10 Jan 14 - No Cached
  • At the heart of the new global economy are what Prof Nolan calls “systems integrator” companies – businesses with dominant brands and superior technologies, which are at the apex of value chains that serve the global middle classes. These global businesses, in turn, exert enormous pressure on their supply chains, creating ever-rising consolidation there, as well.
  • Using data from 2006-09, Prof Nolan concludes that the number of globally dominant businesses in the manufacture of large commercial aircraft and carbonated drinks was two; of mobile telecommunications infrastructure and smart phones, just three; of beer, elevators, heavy-duty trucks and personal computers, four; of digital cameras, six; and of motor vehicles and pharmaceuticals, 10. In these cases, dominant businesses supplied between half and all of the world market. Similar degrees of concentration have emerged, after consolidation, in many industries
  • Much the same concentration can be seen among component suppliers.
  • ...3 more annotations...
  • Such a business “typically possesses some combination of a number of key attributes, among them the capability to raise finance for large new projects and the resources necessary to fund a high level of research and development spending to sustain technological leadership, to develop a global brand, to invest in state-of-the-art information technology and to attract the best human resources”.
  • Moreover, “one hundred giant firms, all from the high-income countries, account for over three-fifths of the total R&D expenditure among the world’s top 1,400 companies. They are the foundation of the world’s technical progress in the era of capitalist globalisation”.
  • This creates growing tension, as governments find “their” companies ever harder to tax or regulate.
Gene Ellis

Oversize Expectations for the Airbus A380 - NYTimes.com - 0 views

www.nytimes.com/...tions-for-the-airbus-a380.html

shared by Gene Ellis on 18 Feb 15 - No Cached
  • this aircraft, which can hold more than 500 passengers. The plane dwarfs every commercial jet in the skies.
  • Its two full-length decks total 6,000 square feet, 50 percent more than the original jumbo jet, the Boeing 747.
  • The A380 was also Airbus’s answer to a problematic trend: More and more passengers meant more flights and increasingly congested tarmacs. Airbus figured that the future of air travel belonged to big planes flying between major hubs.
  • ...17 more annotations...
  • Airbus has struggled to sell the planes. Orders have been slow, and not a single buyer has been found in the United States, South America, Africa or India.
  • While the A380 program has been a boon for the European aerospace industry, Airbus is unlikely to recover its research and development costs. The best it can now expect is to break even on production costs, according to analysts, provided that it can keep orders going.
  • Airbus made the wrong prediction about travel preferences. People would rather take direct flights on smaller airplanes, he said, than get on big airplanes — no matter their feats of engineering — that make connections through huge hubs.
  • “It’s a commercial disaster,” Mr. Aboulafia says. “Every conceivably bad idea that anyone’s ever had about the aviation industry is embodied in this airplane.”
  • Airline executives were wary of expanding their fleets aggressively, especially for a costly, four-engine fuel hog.
  • And there are a fair number of those routes. Around 15 of the 20 largest long-haul routes by passenger volume in the world today are slot-constrained,
  • “The A380 is not made for every route, but it is ideal for high-traffic routes, high-volume routes that are congested, or where there are flying constraints,”
  • A little more than a decade ago, the two dominant airplane makers, Boeing and Airbus, looked at where their businesses were headed and saw similar facts: air traffic doubling every 15 years, estimates that the number of travelers would hit four billion by 2030 — and came to radically different conclusions about what those numbers meant for their future.
  • Boeing, too, is facing lukewarm demand for its latest jumbo jet upgrade, known as the 747-8. The company has received just 51 orders for this big plane, which can seat about 460 passengers and lists at $357 million. By contrast, it has sold more than 1,200 twin-engine 777s, which sell for as much as $320 million.
  • Richard H. Anderson, Delta’s chief executive, has said the A380 is “by definition an uneconomic airplane unless you’re a state-owned enterprise with subsidies.”
  • Bruno Delile, Air France’s senior vice president for fleet management, says that there are a limited number of routes in its network with enough daily traffic to justify the expense of such a big plane. “The forecasts about traffic growth and market saturation haven’t exactly panned out,” he says.
  • Not only do airlines take a big risk on the size and cost of the A380, but they also have to gain the cooperation of airports to modify gates and widen taxiways to make room for the plane.
  • With versions that seat 210 to 330 passengers, and with a range of about 9,000 miles, the 787 allows airlines to fly pretty much anywhere in the world and connect smaller airports without going through a hub.
  • And passengers are willing to pay more to avoid a connection
  • f most airlines appear skeptical of the A380, Emirates is a true believer. It stunned the industry in December when it ordered 50 more of the planes, beyond the 90 it already had on order, throwing Airbus a much needed lifeline
  • The airport handled 66 million passengers last year, rivaling Heathrow as the busiest international hub.
  • for Emirates, the biggest selling point of the A380 is its ability to pack in more business-class seats and create an environment that appeals to big-spending passengers.
Gene Ellis

Busy, but Wary, in Europe's Steel Industry - NYTimes.com - 0 views

www.nytimes.com/...in-europes-steel-industry.html

shared by Gene Ellis on 19 Feb 15 - No Cached
  • Busy, but Wary, in Europe’s Steel Industry
Gene Ellis

Tomato Imports Deal Reached by U.S. and Mexico - NYTimes.com - 0 views

www.nytimes.com/...ch-deal-on-tomato-imports.html

tomato imports deal u s mexico

shared by Gene Ellis on 04 Feb 13 - No Cached
  • The agreement, reached late Saturday, raises the minimum sales price for Mexican tomatoes in the United States, aims to strengthen compliance and enforcement, and increases the types of tomatoes governed by the bilateral pact to four from one.
  • “The draft agreement raises reference prices substantially, in some cases more than double the current reference price for certain products,
  • Florida growers contended it set the minimum price of Mexican tomatoes so low that the Florida growers could not compete.
  • ...5 more annotations...
  • “Even though no dumping or injury to the U.S. industry was demonstrated by our competitors,
  • The new agreement covers all fresh and chilled tomatoes, excluding those intended for use in processing like canning and dehydrating, and in juices, sauces and purées.
  • It raises the basic floor price for winter tomatoes to 31 cents a pound from 21.69 cents — higher than the price the Mexicans were proposing in October — and establishes even higher prices for specialty tomatoes and tomatoes grown in controlled environments. The Mexicans have invested billions in greenhouses to grow tomatoes, while Florida tomatoes are largely picked green and treated with a gas to change their color.
  • The dispute unfolded in the heated politics surrounding the presidential election, with Mexican growers charging that the Commerce Department was courting voters in the important swing state of Florida. Instead, the timing of the negotiations ensured that the government could win those votes and bring the controversy to a conclusion satisfactory to the Mexicans after the election was over.
  • The Mexicans enlisted roughly 370 American businesses, including Wal-Mart Stores and meat and vegetable producers, to argue their cause.
Gene Ellis

Eurozone crisis: can the centre hold? | Nouriel Roubini | Business | theguardian.com - 0 views

www.theguardian.com/...eurozone-crisis-euro-european

shared by Gene Ellis on 29 Oct 13 - No Cached
  • Several developments helped to restore calm. The European Central Bank (ECB) president, Mario Draghi, vowed to do "whatever it takes" to save the euro, and quickly institutionalised that pledge by establishing the ECB's "outright monetary transactions" programme to buy distressed eurozone members' sovereign bonds.
  • And, even if such adjustment is not occurring as fast as Germany and other core eurozone countries would like, they remain willing to provide financing, and governments committed to adjustment are still in power.
  • For starters, potential growth is still too low in most of the periphery, given ageing populations and low productivity growth, while actual growth – even once the periphery exits the recession, in 2014 – will remain below 1% for the next few years, implying that unemployment rates will remain very high.
  • ...10 more annotations...
  • levels of private and public debt, domestic and foreign, are still too high, and continue to rise as a share of GDP, owing to slow or negative output growth. This means that the issue of medium-term sustainability remains unresolved.
  • At the same time, the loss of competitiveness has been only partly reversed, with most of the improvement in external balances being cyclical rather than structural.
  • The euro is still too strong, severely limiting the improvement in competitiveness that is needed to boost net exports in the face of weak domestic demand.
  • a continuing credit crunch, as undercapitalised banks deleverage by selling assets and shrinking their loan portfolios.
  • The larger problem, of course, is that progress toward banking, fiscal, economic and political union, all of which are essential to the eurozone's long-term viability, has been too slow.
  • all imply that banks will have to focus on raising capital at the expense of providing the financing needed for economic growth.
  • Moreover the ECB, in contrast to the Bank of England, is unwilling to be creative in pursuing policies that would ameliorate the credit crunch.
  • Meanwhile, austerity fatigue is rising in the eurozone periphery.
  • And bailout fatigue is emerging in the eurozone's core.
  • But the eurozone's political strains may soon reach a breaking point,
Gene Ellis

Silicon Valley Tries to Remake the Idea Machine - NYTimes.com - 0 views

www.nytimes.com/...-re-make-the-idea-machine.html

shared by Gene Ellis on 05 Feb 15 - No Cached
  • Silicon Valley Tries to Remake the Idea Machine
  • The federal government now spends $126 billion a year on R. and D., according to the National Science Foundation. (It’s pocket change compared with the $267 billion that the private sector spends.) Asian economies now account for 34 percent of global spending; America’s share is 30 percent.
  • Perhaps more crucial, the invention of much of the stuff that really created jobs and energized the economy — the Internet, the mouse, smartphones, among countless other ideas — was institutionalized. Old-fashioned innovation factories, like Xerox PARC and Bell Labs, were financed by large companies and operated under the premise that scientists should be given large budgets, a supercomputer or two and plenty of time to make discoveries and work out the kinks of their quixotic creations.
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  • “It’s the unique ingredient of the U.S. business model — not just smart scientists in universities, but a critical mass of very smart scientists working in the neighborhood of commercial businesses,
  • Start-ups became so cheap to create — founders can just rent space in the cloud from Amazon instead of buying servers and buildings to house them — that it became easier and more efficient for big companies to simply buy new ideas rather than coming up with the framework for inventing them. Some of Google’s largest businesses, like Android and Maps, were acquired.
  • Microsoft Research just announced the opening of a skunk-works group called Special Projects.
  • All of their parent companies, however, are determined to learn from the mistakes that Xerox and AT&T made, namely failing to capitalize on their own research. It’s Valley lore, after all, that companies like Apple and Fairchild Semiconductor built their fame and fortune on research done at Xerox and Bell.
  • Astro Teller
  • Google X does the inverse: It picks products to make, then hires people specifically to build them: artists and philosophers and designers, many of whom don’t even know what they’ll be working on until they join.
  • The word ‘basic’ implies ‘unguided,’ and ‘unguided’ is probably best put in government-funded universities rather than industry.”
Gene Ellis

Weaning Europe From Russian Gas - NYTimes.com - 1 views

www.nytimes.com/...g-europe-from-russian-gas.html

shared by Gene Ellis on 25 Apr 14 - No Cached
  • Weaning Europe From Russian Gas
  • European Union leaders at a summit meeting last week made a commitment to cut their dependence on Russian gas.
  • Russia gets about 14 percent of its entire export earnings from the gas it sells to other European countries.
  • ...9 more annotations...
  • Some countries in Central Europe — such as Austria and the Czech Republic — and the Balkans would run out of gas they import through Ukraine.
  • that Russia cuts supplies of gas through Ukraine but continues pumping it through its other two pipelines to the West — one through the Baltic and the other through Poland.
  • In such a scenario,
  • The European Union also responded to the 2009 shutdown by building “interconnectors” between different countries. As a result, it is easier to shunt gas and electricity from countries that have excess energy to those that face a shortage — though these connections are still patchy and need to be built up.
  • n the short run, European Union countries can use more coal and less gas in their electricity generation.
  • The European Union can also increase imports of liquefied natural gas, mainly from Qatar. But there are problems. First, most of the Union’s L.N.G. terminals are in Western Europe, whereas it is the eastern part of the Union that is most vulnerable to a cutoff of Russian gas. So more terminals need to be built, which takes time. What’s more, L.N.G. is expensive — partly because Japan is buying lots of it after closing its nuclear plants in the wake of the Fukushima disaster.
  • Longer term, European Union nations should embrace shale gas. It is cheap and local. Britain and Poland have the most potential.
  • Meanwhile, countries such as Germany should abandon their knee-jerk aversion to nuclear energy.
  • The problem is not the carbon goal, said Raoul Ruparel of Open Europe, a research institute. Rather it is the renewable target, which results in uneconomic wind and solar power being built across the Union.
Gene Ellis

With Restructuring Done, EADS Faces New Challenges - NYTimes.com - 0 views

www.nytimes.com/...eads-faces-new-challenges.html

shared by Gene Ellis on 29 Mar 13 - No Cached
  • One of the big arguments being made by the economic ministry is, ‘We give you lots of defense business, so you have got to provide a lot of high-tech jobs in Germany.’
  • EADS’s future in the United States, meanwhile, poses different challenges.
  • Those attempts have included an ultimately unsuccessful bid for a $35 billion aerial refueling tanker contract with the U.S. Air Force as well as the failed attempt last year to merge with BAE, one of the Pentagon’s top 10 contractors.
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  • But with major U.S. players like Lockheed Martin and Northrop Grumman almost certainly out of reach for national security reasons,
  • “I have no illusions about how difficult it is to sell non-American products on the American market,” Mr. Enders said. “We should not even dream about trying to sell a product to a U.S. defense customer if it is not really superior to what our American peers are offering.” Analysts tended to agree.
Gene Ellis

Car Factories Offer Hope for Spanish Industry and Workers - NYTimes.com - 0 views

www.nytimes.com/...nish-industry-and-workers.html

car offer hope spanish industry workers

shared by Gene Ellis on 28 Dec 12 - No Cached
  • Four years of economic turmoil and the euro zone’s highest jobless rate have made the Spanish labor market so inviting — an estimated 40 percent less expensive than those of Europe’s other biggest car-making countries, Germany and France — that Ford and Renault recently announced plans to expand their production in Spain.
  • Some experts say such gains in competitiveness and investment are exactly what Spain needs for its economy to recover and to remove any doubts about whether the country can remain in the euro union.
  • Because Spain no longer has its own currency to devalue as a way to lower the price of its exports, it is having to find its competitive advantage in lower labor costs. Many economists have argued that societies cannot survive such painful downward adjustments.
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  • That is the lowest level since 1972.
  • Its trade deficit has been shrinking — down 28 percent for the first 10 months of this year,
  • “From 2008, we suddenly realized that we had lost a lot of competitiveness and needed to work very hard to improve things, particularly in terms of labor issues and logistics,
  • Over all, Spain’s unit labor costs — a measure of productivity — are down 4 percent since 2008, according to Eurostat, the European statistics agency.
  • In a related measurement, the most recent Eurostat data put Spain’s average hourly labor cost at 20.60 euros which was well below Germany’s 30.10 euros and France’s 34.20 euros.
  • Unlike most other Spanish industries, car manufacturing has no sectorwide collective bargaining agreement with unions. As a result, each carmaker has been able to adjust working hours with its own employees, in response to changing demand.
  • In return, the companies have promised workers that they will not be subjected to the huge layoffs made in other parts of the economy,
  • I don’t want to give lessons to anybody. But at such a delicate moment for Spain, showing that we believe in flexibility and consensus has certainly been highly valued by the carmakers.”
  • The car sector employs 280,000 people in Spain, including parts suppliers, and accounts for a tenth of the country’s economic output. About 85 percent of the industry’s workers are on long-term contracts.
Gene Ellis

George Soros: how to save the EU from the euro crisis - the speech in full | Business |... - 0 views

www.guardian.co.uk/...ave-eu-from-euro-crisis-speech

shared by Gene Ellis on 09 Apr 13 - No Cached
  • The crisis has also transformed the European Union into something radically different from what was originally intended. The EU was meant to be a voluntary association of equal states but the crisis has turned it into a hierarchy with Germany and other creditors in charge and the heavily indebted countries relegated to second-class status. While in theory Germany cannot dictate policy, in practice no policy can be proposed without obtaining Germany's permission first.
  • Italy now has a majority opposed to the euro and the trend is likely to grow. There is now a real danger that the euro crisis may end up destroying the European Union.
  • The answer to the first question is extremely complicated because the euro crisis is extremely complex. It has both a political and a financial dimension. And the financial dimension can be divided into at least three components: a sovereign debt crisis and a banking crisis, as well as divergences in competitiveness
  • ...37 more annotations...
  • The crisis is almost entirely self-inflicted. It has the quality of a nightmare.
  • My interpretation of the euro crisis is very different from the views prevailing in Germany. I hope that by offering you a different perspective I may get you to reconsider your position before more damage is done. That is my goal in coming here.
  • I regarded the European Union as the embodiment of an open society – a voluntary association of equal states who surrendered part of their sovereignty for the common good.
  • The process of integration was spearheaded by a small group of far sighted statesmen who recognised that perfection was unattainable and practiced what Karl Popper called piecemeal social engineering. They set themselves limited objectives and firm timelines and then mobilised the political will for a small step forward, knowing full well that when they achieved it, its inadequacy would become apparent and require a further step.
    • Gene Ellis
      Gene Ellis on 09 Apr 13
       
      Excellent point!
  • Unfortunately, the Maastricht treaty was fundamentally flawed. The architects of the euro recognised that it was an incomplete construct: a currency union without a political union. The architects had reason to believe, however, that when the need arose, the political will to take the next step forward could be mobilized. After all, that was how the process of integration had worked until then.
  • For instance, the Maastricht Treaty took it for granted that only the public sector could produce chronic deficits because the private sector would always correct its own excesses. The financial crisis of 2007-8 proved that wrong.
  • When the Soviet empire started to disintegrate, Germany's leaders realized that reunification was possible only in the context of a more united Europe and they were prepared to make considerable sacrifices to achieve it. When it came to bargaining, they were willing to contribute a little more and take a little less than the others, thereby facilitating agreement.
  • The financial crisis also revealed a near fatal defect in the construction of the euro: by creating an independent central bank, member countries became indebted in a currency they did not control. This exposed them to the risk of default.
  • Developed countries have no reason to default; they can always print money. Their currency may depreciate in value, but the risk of default is practically nonexistent. By contrast, less developed countries that have to borrow in a foreign currency run the risk of default. To make matters worse, financial markets can actually drive such countries into default through bear raids. The risk of default relegated some member countries to the status of a third world country that became over-indebted in a foreign currency. 
    • Gene Ellis
      Gene Ellis on 09 Apr 13
       
      Again, another excellent point!
    • Gene Ellis
      Gene Ellis on 09 Apr 13
       
      Not quite... Maggie Thatcher, a Conservative; and Gordon Brown, of Labour, both recognized this possible loss of sovereignty (and economic policy weapons they might use to keep the UK afloat), and refused to join the euro.
  • The emphasis placed on sovereign credit revealed the hitherto ignored feature of the euro, namely that by creating an independent central bank the euro member countries signed away part of their sovereign status.
  • Only at the end of 2009, when the extent of the Greek deficit was revealed, did the financial markets realize that a member country could actually default. But then the markets raised the risk premiums on the weaker countries with a vengeance.
  • Then the IMF and the international banking authorities saved the international banking system by lending just enough money to the heavily indebted countries to enable them to avoid default but at the cost of pushing them into a lasting depression. Latin America suffered a lost decade.
  • In effect, however, the euro had turned their government bonds into bonds of third world countries that carry the risk of default.
  • In retrospect, that was the root cause of the euro crisis.
  • The burden of responsibility falls mainly on Germany. The Bundesbank helped design the blueprint for the euro whose defects put Germany into the driver's seat.
  • he fact that Greece blatantly broke the rules has helped to support this attitude. But other countries like Spain and Ireland had played by the rules;
  • the misfortunes of the heavily indebted countries are largely caused by the rules that govern the euro.
    • Gene Ellis
      Gene Ellis on 09 Apr 13
       
      Well, yes, but this is an extremely big point.  If, instead of convergence, we continue to see growth patterns growing apart, what then?
  • Germany did not seek the dominant position into which it has been thrust and it is unwilling to accept the obligations and liabilities that go with it.
  • Austerity doesn't work.
  • As soon as the pressure from the financial markets abated, Germany started to whittle down the promises it had made at the height of the crisis.
  • What happened in Cyprus undermined the business model of European banks, which relies heavily on deposits. Until now the authorities went out of their way to protect depositors
  • Banks will have to pay risk premiums that will fall more heavily on weaker banks and the banks of weaker countries. The insidious link between the cost of sovereign debt and bank debt will be reinforced.
  • In this context the German word "Schuld" plays a key role. As you know it means both debt and responsibility or guilt.
  • If countries that abide by the fiscal compact were allowed to convert their entire existing stock of government debt into eurobonds, the positive impact would be little short of the miraculous.
  • Only the divergences in competitiveness would remain unresolved.
  • Germany is opposed to eurobonds on the grounds that once they are introduced there can be no assurance that the so-called periphery countries would not break the rules once again. I believe these fears are misplaced.
  • Losing the privilege of issuing eurobonds and having to pay stiff risk premiums would be a powerful inducement to stay in compliance.
  • There are also widespread fears that eurobonds would ruin Germany's credit rating. eurobonds are often compared with the Marshall Plan.
  • It is up to Germany to decide whether it is willing to authorise eurobonds or not. But it has no right to prevent the heavily indebted countries from escaping their misery by banding together and issuing eurobonds. In other words, if Germany is opposed to eurobonds it should consider leaving the euro and letting the others introduce them.
  • Individual countries would still need to undertake structural reforms. Those that fail to do so would turn into permanent pockets of poverty and dependency similar to the ones that persist in many rich countries.
  • They would survive on limited support from European Structural Funds and remittances
  • Second, the European Union also needs a banking union and eventually a political union.
  • If Germany left, the euro would depreciate. The debtor countries would regain their competitiveness. Their debt would diminish in real terms and, if they issued eurobonds, the threat of default would disappear. 
Gene Ellis

Sting operations reveal Mafia involvement in renewable energy - The Washington Post - 0 views

www.washingtonpost.com/...9dc9-bca76dd777b8_story_2.html

shared by Gene Ellis on 28 Jan 13 - No Cached
  • But as he attempted to sidestep a push by organized crime to control the renewables sector — eschewing efforts to use mob-connected developers and refusing to make a customary payments of 2 percent of profits — his business came under attack.
  • “It’s not only the criminal infiltration but the corrupt bureaucracy that makes it difficult to do business here,” Moncada said.
  • Indeed, the mafia has targeted legitimate businesses in Sicily beyond renewable energy, with a 2008 probe revealing the island’s largest supermarket chain to be a front for mafia cash.
  • ...1 more annotation...
  • Citing its poor finances and a mountain of debt, the Italian government is now curbing new subsidies for renewable energies.
Gene Ellis

Worried Banks Pose Obstacle to Forming Financial Union - NYTimes.com - 0 views

www.nytimes.com/...-push-for-financial-union.html

banks pose obstacle union nytimes nytimes com com

shared by Gene Ellis on 18 Jun 12 - No Cached
  • French loans to Spanish banks plunged 34 percent in the fourth quarter of 2011 compared with the previous quarter, according to the latest data from the Bank for International Settlements.
  • For Italian banks, French bankers cut their exposure by 16 percent. German banks have also been increasingly wary of their Italian and Spanish peers, reducing lending to them by about 19 percent last year
  • In the last six months, as fears about Spain and Greece have intensified, Spanish and Italian banks have been by far the biggest users of the European Central Bank’s program of cut-rate, three-year loans to banks that cannot find money elsewhere.
  • ...4 more annotations...
  • But instead of funneling that money back into the Spanish and Greek economies as loans to cash-starved businesses and individuals, these banks have become the primary buyers of their governments’ bonds.
  • Most delicate will be whether the Spanish banks receiving the largest cash injections, like the nationalized mortgage giant Bankia, will be forced to impose losses on holders of their subordinated bonds. Those are the investors whose bonds are not backed by collateral and are thus considered more risky.
  • In Spain, though, the problem is that 62 percent of the holders of Bankia’s subordinated debt are Spanish individual investors, not overseas hedge funds and investment banks. It is not likely that Madrid will be willing to hit those citizens with a 65 percent loss — the loans are currently priced at about 35 cents on the dollar — at a time of 25 percent unemployment in the country.
  • “There are compelling reasons for the euro zone to insist on losses for subordinated and even senior bondholders, the least of which is a reduction in moral hazard,” said Adam Lerrick, an expert on banking and sovereign debt at the American Enterprise Institute. “Losses for bondholders is now euro zone policy, so Europe’s credibility is also at stake.”
  • Gene Ellis on 18 Jun 12
     
    Good article on bank behavior
Gene Ellis

German Judges Refer E.C.B. Bond-Buying Plan to European Court - NYTimes.com - 0 views

www.nytimes.com/...ng-plan-to-european-court.html

shared by Gene Ellis on 07 Feb 14 - No Cached
  • German Judges Refer E.C.B. Bond-Buying Plan to European Court
Gene Ellis

As Prime Russian Trading Partner, Germany Appears Crucial to Ending Crisis - NYTimes.com - 0 views

www.nytimes.com/...-crucial-to-ending-crisis.html

shared by Gene Ellis on 04 Mar 14 - No Cached
  • As Prime Russian Trading Partner, Germany Appears Crucial to Ending Crisis
  • Germany is now heavily reliant on Russia for its energy needs, importing more natural gas from Russia than any other country in Europe
  • the German chancellor has called for a more diplomatic solution, preferring more limited actions like many of her European counterparts.
  • ...3 more annotations...
  • Germany is the second-largest foreign investor in Ukraine behind Cyprus, which is a transit point for Russian money.
  • About three-quarters of the gas and oil that Germany imported in 2013 came from Russia. The country also acts as a major gas transit hub for countries like France.
  • “Germany in particular is dependent on Russian gas,”
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