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Gene Ellis

Hello, Young Workers: One Way to Reach the Top Is to Start There - New York Times - 0 views

www.nytimes.com/...25scene.html

long-term effects of crisis

shared by Gene Ellis on 09 Jan 14 - No Cached
  • is the mounting evidence produced by labor economists of just how important it is for current graduates to ignore the old-school advice of trying to get ahead by working one's way up the ladder. Instead, it seems, graduates should try to do exactly the thing the older generation bemoans — aim for the top.
  • starting at the bottom is a recipe for being underpaid for a long time to come.
  • A recent study, by the economists Philip Oreopoulos, Till Von Wachter and Andrew Heisz, "The Short- and Long-Term Career Effects of Graduating in a Recession" (National Bureau of Economic Research Working Paper 12159, April 2006. http://www.columbia.edu/~vw2112/papers/nber_draft_1.pdf), finds that the setback in earnings for college students who graduate in a recession stays with them for the next 10 years.
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  • These data confirm that people essentially cannot close the wage gap by working their way up the company hierarchy.
Gene Ellis

The Insourcing Boom - Charles Fishman - The Atlantic - 1 views

www.theatlantic.com/...3

shared by Gene Ellis on 26 Jan 14 - No Cached
  • Both Bowman and Calvaruso knew something about “lean” manufacturing techniques—the style of factory management invented by Toyota whereby everyone has a say in critiquing and improving the way work gets done, with a focus on eliminating waste. Lean management is not a new concept, but outside of car making, it hasn’t caught on widely in the United States. It requires an open, collegial, and relentlessly self-critical mind-set among workers and bosses alike—a mind-set that is hard to create and sustain.
  • Levi Strauss used to have more than 60 domestic blue-jeans plants; today it contracts out work to 16 and owns none, and it’s hard to imagine mass-market clothing factories ever coming back in significant numbers—the work is too basic.
  • If the people who design dishwashers sit at their desks in one building, and the people who sell them to retailers and consumers sit at their desks in another building, and the people who make the dishwashers are in a different country and speak a different language—you never realize that the four screws should disappear, let alone come up with a way they can.
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  • All that said, big factories have a way of creating larger economies around them—they have a “multiplier effect,” in economic parlance
Gene Ellis

Greek Euro Exit Unavoidable if IMF, Euro Zone Can't Agree- IMF Stream - WSJ.com - 0 views

online.wsj.com/...4799904578053992740095654.html

greek euro imf zone

shared by Gene Ellis on 14 Oct 12 - No Cached
  • 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.
  • There are ways that the Europeans can make it happen. One would involve the European Stability Mechanism, a newly activated bailout mechanism that would take over the recapitalization of Greek banks, which is set to cost €50 billion, instead of the amount being added to the country's debt.
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  • Another way would be the European Central Bank accepting losses to the Greek bonds it holds.
  • In typical fashion the creditors are demanding from Athens another set of painful austerity cuts which the country can't afford and the IMF is openly saying that it won't sign off on the loan payment before a haircut takes place.
    • Gene Ellis
      Gene Ellis on 14 Oct 12
       
      Meaning:  that the IMF sees that austerity will kill Greece off, and wants to provide some breathing room...
Gene Ellis

Myanmar Faces Stumbling Blocks on Way to Growth - NYTimes.com - 0 views

www.nytimes.com/...ocks-in-a-booming-economy.html

myanmar faces blocks way growth

shared by Gene Ellis on 13 Apr 12 - No Cached
  • Gene Ellis on 13 Apr 12
     
    THE DIFFICULTIES OF AUTARCHIC GROWTH.
Gene Ellis

"A Centerless Euro Cannot Hold" by Kenneth Rogoff | Project Syndicate - 0 views

www.project-syndicate.org/...a-centerless-euro-cannot-hold

euro hold kenneth project syndicate GDP

shared by Gene Ellis on 05 Apr 12 - No Cached
  • The bad news is that it has become increasingly clear that, at least for large countries, currency areas will be highly unstable unless they follow national borders.
  • With youth unemployment touching 50% in eurozone countries such as Spain and Greece, is a generation being sacrificed for the sake of a single currency that encompasses too diverse a group of countries to be sustainable?
  • What of Nobel Prize winner Robert Mundell’s famous 1961 conjecture that national and currency borders need not significantly overlap? In his provocative American Economic Review paper “A Theory of Optimum Currency Areas,” Mundell argued that as long as workers could move within a currency region to where the jobs were, the region could afford to forgo the equilibrating mechanism of exchange-rate adjustment.
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  • if intra-eurozone mobility were anything like Mundell’s ideal, today we would not be seeing 25% unemployment in Spain while Germany’s unemployment rate is below 7%.CommentsView/Create comment on this paragraph
  • Peter Kenen argued in the late 1960’s that without exchange-rate movements as a shock absorber, a currency union requires fiscal transfers as a way to share risk.
  • Europe, of course, has no significant centralized tax authority, so this key automatic stabilizer is essentially absent.
  • Many Germans today rightly feel that any system of fiscal transfers will morph into a permanent feeding tube, much the way that northern Italy has been propping up southern Italy for the last century. Indeed, more than 20 years on, Western Germans still see no end in sight for the bills from German unification.
  • Later, Maurice Obstfeld pointed out that, in addition to fiscal transfers, a currency union needs clearly defined rules for the lender of last resort. Otherwise, bank runs and debt panics will be rampant. Obstfeld had in mind a bailout mechanism for banks, but it is now abundantly clear that one also needs a lender of last resort and a bankruptcy mechanism for states and municipalities.
  • A logical corollary of the criteria set forth by Kenen and Obstfeld, and even of Mundell’s labor-mobility criterion, is that currency unions cannot survive without political legitimacy,
  • European policymakers today often complain that, were it not for the US financial crisis, the eurozone would be doing just fine. Perhaps they are right. But any financial system must be able to withstand shocks, including big ones.
Gene Ellis

Ways to accelerate private-sector deleveraging | Martin Wolf's Exchange - 0 views

blogs.ft.com/...ng-private-sector-deleveraging

ways martin wolf exchange

shared by Gene Ellis on 27 Aug 12 - No Cached
  • Gene Ellis on 27 Aug 12
     
    The difficulties in financial de-leveraging.  Excellent piece.
Gene Ellis

IMF's Blanchard: Global Economy Gripped By Meta-Uncertainty - WSJ.com - 0 views

stream.wsj.com/...SS-2-33475

shared by Gene Ellis on 17 Jul 12 - No Cached
  • In 2008-09, there was a collapse of global trade. We were all very surprised. Output was not doing well, but the collapse in global trade was enormous. We realized at the time that the elasticity of trade with respect to global output was not 1, as you might think, but more like 3 to 4. So this explained it. And then it recovered like crazy.
  • This is still true. If global output goes down by 1%, global trade goes down by 3% to 4%.
  • What Europe needs to do:
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  • These countries have to do what they need to do. There’s no question there has to be fiscal consolidation. We can discuss the pace, but it has to happen. The other is competitiveness, which I see as much tougher of the two.
  • It has to be through a combination of structural reforms, hoping they will work, and nominal wage adjustments, although one cannot be incredibly optimistic about the scope there. We know that that’s going to take a while.
  • Take the big two, Italy and Spain. You can always dream of more, but I think they’re serious about doing it, both on the fiscal front and the structural-reforms front. I think it may well be that even if they do everything they can, and do it right, it’s still not enough. They have to have help — I would say when needed rather than if needed.
  • The banks have to be recapped, and they have to be recapped not using sovereign money. I think that is really very, very high on the agenda. I don’t think they can make it without help to the banks.
  • If the banks were healthier, I think they would lend at lower rates
  • And the sovereigns have to be able to borrow at reasonable rates. As long as they behave and they do all the things they’re asked to do, they have to be able to borrow at lower rates than they currently do. Some way has to be found to do it.
  • It’s not that I don’t care about the way it’s done. But I care about the result. These countries, if they’re doing the right things, they have to be able to finance themselves.
  • Some people say a euro depreciation would help Europe a lot. I think there is an argument for it, even in a multilateral context. You have to depreciate vis-a-vis somebody, so somebody has to appreciate. My sense is we would like most of the depreciation to be vis-a-vis emerging-market countries. Even if there was a depreciation vis-a-vis the dollar, I still think it would be a good thing.
  • We’ve done simulations. Other people have done simulations as well. 10% real depreciation would lead to a 1.4% increase in growth for a year — which at this stage, given the numbers, would be nice. The footnote, and it’s a very big footnote, is that … how much you benefit depends on how big your exports are related to your GDP and where you export — whether you export in the euro zone or outside. Unfortunately the countries that benefit the most are the countries that really don’t need it — Germany, the Netherlands. The countries that benefit the least are Greece, Portugal, Italy, Spain
  • There’s no question, the periphery countries have to improve their competitiveness. That’s not something even monetary policy at the level of the euro or fiscal policy can do. This they have to do through productivity improvements or nominal wage adjustments.
  • It is no secret that they have tended to respond to crises rather than be much more proactive.
  • And now there’s a sense in which they’re thinking about the full architecture.
  • At this stage I think there is a genuine commitment to thinking about the whole beast. That’s why these words — fiscal union, banking union — have come in.
  • Where I think there is still a problem is that all these things will take a lot of time. And some of these things may not happen because they’re unpopular. And meanwhile, there is a fire in the house. So they have to be willing to do more in the short term.
Gene Ellis

Greek Credit-Default Swaps Are Activated - NYTimes.com - 0 views

dealbook.nytimes.com/...it-default-swaps-are-activated

greek

shared by Gene Ellis on 17 Jun 12 - No Cached
  • 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.
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  • The Greek government chose to apply so-called collective action clauses, which it had earlier inserted into its bonds registered under Greek law. The deal maximized total debt relief for the country,
  • but it also forced losses on bondholders — a credit event, and therefore a trigger, for the swaps.
  • the restructuring activated the swaps only after the country made a legal move on Friday.
  • Nearly $70 billion of swaps are currently outstanding on Greek debt. But after both sides settle their accounts, the amount that will need to be paid out should be no more than $3.2 billion.
  • Some investors entered swaps on Greece as a way of effectively insuring themselves against losses on their Greek bonds, while others used them as a way to bet on a default happening.
  • Before investors doubted Greece’s solvency, the swaps offered insurance at what turned out to be an extremely cheap price. At the start of 2008, an investor buying protection on Greek debt had to pay only $22,000 annually to insure against default on $10 million of Greek bonds over five years, according to Markit, a data provider. Now, the protection would cost about $7.6 million.
  • Investors will most likely continue to want default swaps to protect against losses on Greece’s new bonds. These bonds, to be issued Monday, are expected to have yields of well over 15 percent, according to advance pricing. This suggests investors have strong doubts about Greece’s creditworthiness even after its restructuring. Fitch Ratings said on Friday that it would probably give Greece’s new bonds a low, junk-bond rating.
  • Gene Ellis on 17 Jun 12
     
    Global
Gene Ellis

Trade: In my backyard | The Economist - 0 views

www.economist.com/...-way-regional-ones-my-backyard

multilateral trade regional

shared by Gene Ellis on 09 Jan 14 - No Cached
  • Multilateral trade pacts are increasingly giving way to regional ones
Gene Ellis

What if the Secret to Success Is Failure? - NYTimes.com - 0 views

www.nytimes.com/...ret-to-success-is-failure.html

Duckworth

shared by Gene Ellis on 15 Jan 14 - No Cached
  • In the winter of 2005, Randolph read “Learned Optimism,” a book by Martin Seligman, a psychology professor at the University of Pennsylvania who helped establish the Positive Psychology movement.
  • Seligman and Peterson consulted works from Aristotle to Confucius, from the Upanishads to the Torah, from the Boy Scout Handbook to profiles of Pokémon characters, and they settled on 24 character strengths common to all cultures and eras. The list included some we think of as traditional noble traits, like bravery, citizenship, fairness, wisdom and integrity; others that veer into the emotional realm, like love, humor, zest and appreciation of beauty; and still others that are more concerned with day-to-day human interactions: social intelligence (the ability to recognize interpersonal dynamics and adapt quickly to different social situations), kindness, self-regulation, gratitude.
  • Six years after that first meeting, Levin and Randolph are trying to put this conception of character into action in their schools. In the process, they have found themselves wrestling with questions that have long confounded not just educators but anyone trying to nurture a thriving child or simply live a good life. What is good character? Is it really something that can be taught in a formal way, in the classroom, or is it the responsibility of the family, something that is inculcated gradually over years of experience? Which qualities matter most for a child trying to negotiate his way to a successful and autonomous adulthood? And are the answers to those questions the same in Harlem and in Riverdale?
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  • According to a report that KIPP issued last spring, only 33 percent of students who graduated from a KIPP middle school 10 or more years ago have graduated from a four-year college.
  • As Levin watched the progress of those KIPP alumni, he noticed something curious: the students who persisted in college were not necessarily the ones who had excelled academically at KIPP; they were the ones with exceptional character strengths, like optimism and persistence and social intelligence. They were the ones who were able to recover from a bad grade and resolve to do better next time; to bounce back from a fight with their parents; to resist the urge to go out to the movies and stay home and study instead; to persuade professors to give them extra help after class.
  • “The thing that I think is great about the character-strength approach,” he told me, “is it is fundamentally devoid of value judgment.”
  • Duckworth’s early research showed that measures of self-control can be a more reliable predictor of students’ grade-point averages than their I.Q.’s.
  • People who accomplished great things, she noticed, often combined a passion for a single mission with an unswerving dedication to achieve that mission, whatever the obstacles and however long it might take. She decided she needed to name this quality, and she chose the word “grit.”
  • Last winter, Riverdale students in the fifth and sixth grades took the 24-indicator survey, and their teachers rated them as well. The results were discussed by teachers and administrators, but they weren’t shared with students or parents, and they certainly weren’t labeled a “report card.”
  • Back at Riverdale, though, the idea of a character report card made Randolph nervous. “I have a philosophical issue with quantifying character,” he explained to me one afternoon. “With my school’s specific population, at least, as soon as you set up something like a report card, you’re going to have a bunch of people doing test prep for it. I don’t want to come up with a metric around character that could then be gamed. I would hate it if that’s where we ended up.”
  • She and her team of researchers gave middle-school students at Riverdale and KIPP a variety of psychological and I.Q. tests. They found that at both schools, I.Q. was the better predictor of scores on statewide achievement tests, but measures of self-control were more reliable indicators of report-card grades.
  • The CARE program falls firmly on the “moral character” side of the divide, while the seven strengths that Randolph and Levin have chosen for their schools lean much more heavily toward performance character: while they do have a moral component, strengths like zest, optimism, social intelligence and curiosity aren’t particularly heroic; they make you think of Steve Jobs or Bill Clinton more than the Rev. Martin Luther King Jr. or Gandhi.
  • The topic for the assembly was heroes, and a half-dozen students stood up in front of their classmates — about 350 kids, in all — and each made a brief presentation about a particular hero he or she had chosen:
  • I came to Witter’s class to observe something that Levin was calling “dual-purpose instruction,” the practice of deliberately working explicit talk about character strengths into every lesson.
  • It is a central paradox of contemporary parenting, in fact: we have an acute, almost biological impulse to provide for our children, to give them everything they want and need, to protect them from dangers and discomforts both large and small. And yet we all know — on some level, at least — that what kids need more than anything is a little hardship: some challenge, some deprivation that they can overcome, even if just to prove to themselves that they can.
  • The idea of building grit and building self-control is that you get that through failure,” Randolph explained. “And in most highly academic environments in the United States, no one fails anything.”
Gene Ellis

Q&A: a third way for Greece in the form of a parallel currency - FT.com - 0 views

www.ft.com/...4e-11e5-b4dc-00144feabdc0.html

shared by Gene Ellis on 16 Jun 15 - No Cached
  • June 15, 2015 2:00 pm DownloadQ&A: a third way for Greece in the form of a parallel currency
Gene Ellis

Christopher R. Hill asks why sectarian and tribal allegiances have replaced civic conce... - 0 views

www.project-syndicate.org/...nceptions-of-national-identity

shared by Gene Ellis on 18 Feb 15 - No Cached
  • As such examples suggest, political identity has shifted to something less civil and more primordial.
  • When sectarian or ethnic minorities have ruled countries – for example, the Sunnis of Iraq – they typically have a strong interest in downplaying sectarianism or ethnicity. They often become the chief proponents of a broader, civic concept of national belonging, in theory embracing all peoples. In Iraq, that concept was Ba’athism. And while it was more identified with the Sunni minority than with the Shia majority, it endured for decades as a vehicle for national unity, albeit a cruel and cynical one.
  • Sectarianism thus came to frame Iraqi politics, making it impossible to organize non-sectarian parties on the basis of, say, shared socioeconomic interests. In Iraqi politics today (leaving aside the Kurds), seldom does a Sunni Arab vote for a Shia Arab, or a Shia for a Sunni. There is competition among Shia parties and among Sunni parties; but few voters cross the sectarian line –
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  • But those initial demonstrations, often lacking identifiable leaders and programs, soon gave way to old habits.
  • Egypt retains the strongest sense of nation-statehood in the region; nonetheless, it has become a shattered and divided society, and it will take many years to recover.
  • Other states are even less fortunate. Muammar el-Qaddafi’s evil buffoonery in Libya has given way to Bedouin tribalism that will be hard to meld into a functioning nation-state, if Libya ever was such an entity.
  • And Syria, a fragile amalgam of Sunni, Alawite, Kurdish, Christian, and other sects, is unlikely ever to be reconstructed as the state it once was.
Gene Ellis

The Economist explains: How countries calculate their GDP | The Economist - 0 views

www.economist.com/...economist-explains-26

shared by Gene Ellis on 25 Apr 14 - No Cached
  • How countries calculate their GDP
  • Simon Kuznets, a Russian emigrant to America, is credited with creating the first true GDP estimate, for delivery to America’s Congress in 1934
  • Output can be measured in three (theoretically equivalent) ways: by adding up all the money spent each year, by adding up all the money earned each year, or by adding up all the value added each year. Some economies, including Britain, combine all three methods into a single GDP figure, whereas others, like America, produce different statistics for each.
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  • merica’s Bureau of Economic Analysis draws data from surveys of manufacturers, builders and retailers, as well as from trade and financial flows, among other sources. These data are used to estimate the components of GDP, such as total investment and net exports
  • Real, or inflation-adjusted, GDP is needed to compare figures across time periods, while GDP per person is best for understanding how individual incomes are evolving.
Gene Ellis

France and Europe: More special pleading | The Economist - 0 views

www.economist.com/...be-italy-more-special-pleading

shared by Gene Ellis on 26 Apr 14 - No Cached
  • Bureaucratic France has 90 public-sector staff per 1,000 people compared to 50 in Germany. Most enjoy almost total job security.
  • France’s serial requests are treated as duplicitous by those who ask why big countries break rules that smaller ones have to obey (a game that first began when France and Germany bust the stability pact in 2002). The Hollande government has already been given one delay
  • Another would mark the third time in seven years that France has missed targets.
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  • The best guess is that France will yet again get its way,
  • France and Europe More special pleading
Gene Ellis

Learning about global value chains by looking beyond official trade data: Part 1 | vox - 0 views

www.voxeu.org/...ond-official-trade-data-part-1

shared by Gene Ellis on 25 Apr 14 - No Cached
  • Gross trade accounting: A transparent method to discover global value chain-related information behind official trade data: Part 1
  • With the rapid increase in intermediate trade flows, trade economists and policymakers have reached a near consensus that official trade statistics based on gross terms are deficient, often hiding the extent of global value chains. There is also widespread recognition among the official international statistics agencies that fragmentation of global production requires a new approach to measure trade, in particular the need to measure trade in value-added. This led the WTO and the OECD to launch a joint “Measuring Trade in Value-Added” initiative on 15 March 2012, which is designed to mainstream the production of trade in value-added statistics and make them a permanent part of the statistical landscape.
  • All the estimation methods used in recent efforts to measure trade in value-added are rooted in Leontief (1936). His work demonstrated that the amount and type of intermediate inputs needed in the production of one unit of output can be estimated based on the input-output structures across countries and industries.
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  • If one is only interested in estimating the domestic value-added embedded in a country’s or sector’s gross exports, applying Leontief’s insight is sufficient. However, for many economic and policy applications, one also needs to quantify other components in gross exports and their structures. In such circumstances Leontief’s original insight is not sufficient, as it does not provide a way to decompose intermediate trade flows across countries into various value-added terms according to their final absorption,
  • Our gross trade accounting framework in fact allows one to further decompose each of the four major parts of gross exports above into finer components with economic interpretations
  • By the gross statistics, presented in column 1 of Table 1, the trade is highly imbalanced – Chinese exports to the US ($176.9 billion in 2011) are five times that of US exports to China ($35.1 billion in 2011). If we separate exports of final goods and of intermediate goods (reported in columns 2a and 2b of Table 1), we see that most of the Chinese exports consist of final goods, whereas most of the US exports consist of intermediate goods.
  • In other words, the US exports rely overwhelmingly on its own value-added (only 2.1% from China and 5.8% from other countries in 2011), whereas the Chinese exports use more foreign value-added, especially value-added from third countries (with 3.2% from the US and 23.1% from Japan, Korea, and all other countries).
  • As a consequence of these differences in the structure of value-added composition, the China–US trade balance in this sector looks much smaller when computed in terms of domestic value-added than in terms of gross exports.
  • By identifying which parts of the official data are double counted and the sources of the double counting, our gross trade accounting method provides a transparent way to bridge official trade statistics (in gross terms) and national accounts (in value-added terms) consistent with the System of National Accounts standard.
Gene Ellis

Profits Vanish in Venezuela After Currency Devaluation - NYTimes.com - 0 views

www.nytimes.com/...fter-currency-devaluation.html

shared by Gene Ellis on 18 Feb 15 - No Cached
  • Profits Vanish in Venezuela After Currency Devaluation
  • The country’s high inflation — currently around 60 percent a year — has also meant that the prices in bolívares that companies charge for many goods and services have risen sharply.
  • Now companies are feeling the pain from a series of currency devaluations over the last year and a half. Photo
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  • But the rosy outlook changed in late March, when Brink’s started calculating its sales using the recently created exchange rate of about 50 bolívares to the dollar
  • Further complicating the picture, the Venezuelan government has not allowed companies to repatriate profits for the last five years.
  • Companies have ways of chipping away at the locked-up profits, including charging higher fees to Venezuelan subsidiaries for goods and services provided by the parent corporation. But many foreign companies are stuck holding vast troves of bolívares that shrink in value each time there is a devaluation.
  • Procter & Gamble said in April that it had the equivalent of about $900 million in cash in this country and that it was taking a $275 million write-down as a result of applying the government’s intermediate exchange rate to its Venezuelan balance sheet. Colgate-Palmolive wrote down $174 million, while Ford wrote down about $316 million.
  • “All the companies knew there would be a loss because everyone knew there wouldn’t be dollars” available at the fixed exchange rate, said an executive with an American company in Venezuela who spoke on the condition of anonymity. “We were trapped because the law here did not give you a way out.”
  • The government has also failed to pay companies the hard currency it had promised them for imports bought on credit from suppliers, and in many cases suppliers are now refusing to ship more goods to Venezuela until they receive payment.
  • Stores are often out of basic products such as dish soap or corn flour. DirecTV has stopped taking on new customers because it cannot get the dollars to import more dish antennas.
  • Without dollars, car companies cannot import the parts needed to assemble vehicles; Ford and Toyota were forced to temporarily close their factories.
  • In yet another reflection of the currency restrictions, the government has refused to let airlines operating in Venezuela trade the bolívares they receive for ticket sales and other services here for dollars. The International Air Transport Association says that the airlines have more than $4 billion in revenues held up in the country, based on the government’s base exchange rate at the time the tickets were sold.
  • American Airlines says that it is owed $750 million by the country’s government.
Gene Ellis

Some thoughts on German politics and the saver's tax in Cyprus | Credit Writedowns - 0 views

www.creditwritedowns.com/...-the-savers-tax-in-cyprus.html

shared by Gene Ellis on 18 Mar 13 - No Cached
  • Now, the large 82.8% German government debt to GDP ratio is a source of shame for many because Germany was a driving force in enshrining the 60% government debt to GDP hurdle into the Maastricht Treaty that set out terms for the euro zone.
  • Moreover, the interest rate policy of the ECB, geared as it was to the slow growth core, produced negative real interest rates and credit bubbles in Spain and Ireland during the last decade. German banks piled in to those countries as prospects domestically stagnated.
  • “The average German worker feels like a cash cow being sucked dry by a quick succession of reforms and bailouts that take money out of her pocket. First it was for reunification, then for European integration, then to right the economy, then to bail out German banks, and finally to bail out the European periphery. Fatigue has set in.”
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  • The bottom line is that none of the major political parties in Germany are going to vote for bailouts for other euro zone countries unless massive strings are attached, since these bailouts are political losers.
  • The anti-bailout part of the FDP platform is the one part of their rhetoric which could successfully take them over the 5% hurdle. The FDP’s complicity in using German taxpayer money to bail out the so-called profligate periphery is a one-way ticket out of Parliament.
  • “First, the Greek reports come via statements made by Michael Fuchs, CDU deputy Bundestag head and a senior member of German Chancellor Angela Merkel’s party. Fuchs warned earlier today that Germany would veto further aid to Greece if the country has not met the conditions of its previous bailouts.
  • “Second, all along Germany has indicated that it is resistant to increasing funding of the ESM and EFSF bailout facilities. This presents a problem in the case of Spain and Italy because of the size of those economies.
  • Willem Buiter, Chief Economist at Citigroup, has been most vocal in predicting that these facilities will be inadequate when Spain and Italy hit the wall and that more extreme measures will have to be taken.
  • The basic dilemma here is that almost all of the eurozone governments including Germany carry high debt burdens in excess of the Maastricht Treaty. For example, Germany has been in breach of Maastricht Treaty in 8 of 10 years since 2002, has been over the Maastricht 60% hurdle in each of those ten years, and now carries a debt to GDP burden above 80%.
  • The long and short of it was that the Germans had reached the end of their ability to support bailouts.
  • All evidence is that this levy has created panic in Cyprus. After all, what is the use of having a deposit guarantee if government can arbitrarily circumvent it to impose losses on your deposits anyway?
  • One can't just blame Cyprus for this fiasco. The ECB, EC and European Union finance ministers signed off on the insured deposit grab too]
  • My view? It was inevitable that we would be in crisis again. The austerity world view of crisis resolution is completely at odds with the capacity of the euro zone’s institutional architecture to handle a crisis.
Gene Ellis

Canada Aims to Woo International Students - NYTimes.com - 0 views

www.nytimes.com/...25iht-educlede25.html

shared by Gene Ellis on 25 Mar 13 - No Cached
  • International students are allowed to seek part-time employment off campus after six months of full-time study, as a way to help them defray costs. They can also obtain foreign work credentials: After earning a four-year undergraduate degree, they can apply to work in Canada for up to three years.
  • Other nations are not as generous: In the United States, international students are eligible to work only on campus, and many struggle to stay in the country after graduation. Tough visa rules have led to a foreign student “brain drain,”
  • In Britain, international students can work no more than 10 hours a week and need an endorsement from their school to work after graduation.
  • Gene Ellis on 25 Mar 13
     
    "choose"
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