As King struggled with the crisis, he concluded that the biggest vulnerability was the solvency of the banking system itself. The crash wasn’t just a liquidity squeeze caused by toxic assets; the problem was that big banks around the world were undercapitalized and, in many cases, insolvent.
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in title, tags, annotations or urlDavid Ignatius: Mervyn King's hard lessons in Keynesian economics - The Washington Post - 0 views
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King pushed the banks to recapitalize and, later, to accept more regulation. This upset a financial elite that, as King says, was the only sector of the British economy that had escaped the market revolution of the Margaret Thatcher years.
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For King, the past decade reinforced the lessons Keynes drew from the 1930s: One is the psychological quirkiness of investors, which Keynes described as “animal spirits” on the upside and “extreme liquidity preference” on the down.
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Europe's work is far from over - The Washington Post - 0 views
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Perhaps it should not be surprising that Europe still looks to be in serious trouble. Growth has been dismal; the euro-zone gross domestic product has been below its 2007 level for six years, and little growth is forecast this year.
Sting operations reveal Mafia involvement in renewable energy - The Washington Post - 0 views
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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.
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“It’s not only the criminal infiltration but the corrupt bureaucracy that makes it difficult to do business here,” Moncada said.
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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.
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Robert Samuelson: Japan's self-defeating stimulus cycle - The Washington Post - 0 views
NASA: Asteroid flyby next week is the closest ever of its size - The Washington Post - 0 views
Rise of cheap U.S. coal in Europe - The Washington Post - 0 views
Euro Zone Interest Rate Remains Unchanged - NYTimes.com - 0 views
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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.
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“But the E.C.B. is not the sole actor and cannot save the euro on its own,” Ms. Diron said. “Ultimately the sustainability of the euro zone is down to structural changes at the country and European levels that are beyond the E.C.B.’s remit.”
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Banks in the euro zone can borrow unlimited funds from the E.C.B. at the benchmark rate, provided they post collateral. But banks are not obligated to pass that rate on to their customers and might not do so in countries like Spain where banks are already struggling with large numbers of bad loans.
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Five lessons from the Spanish cajas debacle for a new euro-wide supervisor | vox - 0 views
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just the three most problematic Spanish cajas (Bankia, CatalunyaCaixa and Novagalicia) have had capital deficits (to be covered partly or fully by the taxpayer) of €54 billion – over 5% of Spanish GDP, a larger amount than what Spain will have to request from the European rescue funds.
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Already the first entity that was intervened (CCM) as far back as March 2009, showed that the real NPL levels post intervention (17.6%) were more than twice as large as the reported ones. This should have been the point for the Banco de España to get ahead of the curve by ordering an audit of the whole sector
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There is no intimation by anyone of outright corruption in the Banco de España supervisory role, and given the professionalism of the institution it is unlikely that there was any.
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'Only resolution' to euro crisis is political union: Alan Greenspan | Diane Francis | Financial Post - 0 views
Eurozone fragmenting too rapidly - The China Post - 0 views
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Any event that makes a euro exit by Greece — the most heavily indebted member state, which is off track on its second bailout program and in the fifth year of a recession — seems bound to accelerate those flows, despite repeated statements by EU leaders that Greece is a unique case. “If it does occur, a crisis will propagate itself through the TARGET payments system of the European System of Central Banks,” U.S. economist Peter Garber, now a global strategist with Deutsche Bank, wrote in a prophetic 1999 research paper. Either member governments would always be willing to let their national central banks give unlimited credit to each other, in which case a collapse would be impossible, or they might be unwilling to provide boundless credit, “and this will set the parameters for the dynamics of collapse,” Garber warned.
Op-ed: Greece's Exit May Become the Euro's Envy - 0 views
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The immediate consequences of Greece leaving or being forced out of the euro area would certainly be devastating. Capital flight would intensify, fuelling depreciation and inflation. All existing contracts would need to be redenominated and renegotiated, creating financial chaos. Perhaps most politically devastating, fiscal austerity might actually need to intensify, since Greece still runs a primary deficit, which it would have to correct if EU and International Monetary Fund financing vanished.
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But this process would also produce a substantially depreciated exchange rate (50 drachmas to the euro, anyone?) And that would set in motion a process of adjustment that would soon reorient the economy and put it on a path of sustainable growth. In fact, Greek growth would probably surge, possibly for a prolonged period, if it adopted sensible policies to rapidly restore and sustain macroeconomic stability.
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Just look at what happened to the countries that defaulted and devalued during the financial crises of the 1990s. They all initially suffered severe contractions. But the recessions lasted only one or two years. Then came the rebound. South Korea posted nine years of growth averaging nearly 6 percent. Indonesia, which experienced a wave of defaults that toppled nearly every bank in the entire system, registered growth above 5 percent for a similar period; Argentina close to 8 percent; and Russia above 7 percent. The historical record shows clearly that there is life after financial crises.
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ECB Raises Pressure on Greece - WSJ.com - 0 views
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FRANKFURT—The European Central Bank said it would reject Greek government bonds as collateral for its normal lending operations beginning Wednesday,
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Government bonds and other debt securities backed by Greece "will become for the time being ineligible for use as collateral" in the ECB's monetary policy operations, the bank said in a statement.
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Greek banks, which are largely shut out of private markets for financing, depend critically on cheap ECB loans to meet their daily funding needs. In June, Greek banks tapped the ECB and Greece's central bank for a combined €136 billion ($166 billion) in loans through normal refinancing operations and emergency credit, an amount roughly equal to two-thirds of the country's gross domestic product.
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Tennessee Valley Authority to close 8 coal-fired power units - The Washington Post - 0 views
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The Tennessee Valley Authority, one of the nation’s five biggest users of coal for electricity generation, said Thursday it would close down eight coal-fired power units with 3,300 megawatts of capacity.
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Many of the plants were more than 50 years old, and under a consent decree between the TVA, four state governments and the Sierra Club, the authority was required to install additional pollution control equipment known as scrubbers or shut down the plants
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Johnson said that electricity demand has dropped nearly 10 percent over the past five years., half of that because one company, USEC, which produced and sold enriched uranium for commercial nuclear power plants, ceased its energy-intensive operations.
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Recasting high school, German firms transplant apprentice model to U.S. - The Washington Post - 0 views
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Recasting high school, German firms transplant apprentice model to U.S.
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The apprentices are grouped together for coursework that leads to an associate’s degree in mechatronics, a hybrid discipline pioneered in Japan and Germany that melds the basics of mechanical engineering, electronics and other areas.
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It produces workers that can program, operate and fix the machines common to the factories run by Siemens and other top companies. There used to be an elective among the 24 courses the students take. That was replaced with a logic class.
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U.S. adults lag most countries in literacy, math and computer skills - The Washington Post - 0 views
Ghana Flunks at Math and Science: Analysis (1) - 0 views
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Since Ghanaian students took the test in English (the so-called official language of Ghana), those whose first language is non-English are at great disadvantage.
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In some of the participating countries grade eight teachers have university education in mathematics, even some at the post- graduate level; while in others the teachers have an equivalent of two years university education in mathematics. In Ghana, a grade eight mathematics teachers may not have such a background in mathematics.
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