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The bailout crisis: Germany's view of how Greece fell from grace | World news | The Gua... - 0 views

www.theguardian.com/...bsession-greece-bailout-crisis
shared by Gene Ellis on 22 Mar 15 - No Cached
  • The bailout crisis: Germany’s view of how Greece fell from grace
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The World According to China - The New York Times - 0 views

www.nytimes.com/...-to-china-investment-maps.html
shared by Gene Ellis on 31 Mar 16 - No Cached
  • Gene Ellis on 31 Mar 16
     
    China's share of foreign investment, 2005-2013
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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.
  • ...3 more annotations...
  • 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.
  • Another way would be the European Central Bank accepting losses to the Greek bonds it holds.
    • 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...
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South Africa Corruption Fuels Battle for Political Spoils - NYTimes.com - 0 views

www.nytimes.com/...ttle-for-political-spoils.html south africa corruption fuels battle
shared by Gene Ellis on 01 Dec 12 - No Cached
  • Gene Ellis on 01 Dec 12
     
    Global Ec. Relations - difficulties of rent-seeking in many societies
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Treat debt with caution: SARB - Times LIVE - 0 views

www.timeslive.co.za/...treat-debt-with-caution-sarb
shared by Gene Ellis on 05 Nov 12 - No Cached
  • "Be extremely cautious that you don't take more than you can service. Try to issue liabilities that involve an element of risk sharing between the creditor and the debtor," he said.
  • "As for international contracts, be very careful that you treat the business cycle symmetrically. If you stimulate and borrow when the economy goes down then you must tighten... when the economy grows."
  • He said governments of developing nations needed to be innovative in borrowing contracts they devised to grow their infrastructure.
  • ...3 more annotations...
  • "Give, for instance, a 50 percent equity stake in some infrastructure project so that you share the risks as well as the returns. There you don't have the bankruptcy threats and the default threats which come with debt contracts."
  • Buiter urged South Africans and the rest of the continent to "wear helmets for the rest of the decade". "The world is going to be a very dangerous place for the next 10 years, with advanced economies still needing about a decade, if you count the US and Japan, to get out of the debt problem that they got into," he said.
  • "So there is going to be a fallout for developing economies like South Africa."
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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.”
  • ...10 more annotations...
  • 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.
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Kerry promotes U.S.-European trade deal - The Washington Post - 0 views

www.washingtonpost.com/...2-814b-063623d80a60_story.html
shared by Gene Ellis on 27 Mar 13 - No Cached
  • France wants to slow down consideration of the proposed transatlantic free-trade zone encompassing about 40 percent of the world’s trade. Germany and Britain are in favor of the plan and want to move fast.
  • The Obama administration says a comprehensive deal would further open European markets and expand exports to the euro zone of U.S. goods and services, currently worth $459 billion a year. Backers say the deal would add more than 13 million jobs in the United States and Europe.
  • But supporters also fear that trade talks will bog down or collapse over parochial concerns, and must be streamlined to succeed.
  • ...1 more annotation...
  • one of the objections that France is expected to raise over what it calls cultural exceptions to free trade on products with a specific geographic or national significance, such as Champagne wine.
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Hot Money Blues - NYTimes.com - 0 views

www.nytimes.com/...krugman-hot-money-blues.html
shared by Gene Ellis on 25 Mar 13 - No Cached
  • for the time being, and probably for years to come, the island nation will have to maintain fairly draconian controls on the movement of capital in and out of the country.
  • It will mark the end of an era for Cyprus, which has in effect spent the past decade advertising itself as a place where wealthy individuals who want to avoid taxes and scrutiny can safely park their money, no questions asked.
  • To some extent this reflected the fact that capital controls have potential costs: they impose extra burdens of paperwork, they make business operations more difficult, and conventional economic analysis says that they should have a negative impact on growth (although this effect is hard to find in the numbers). But it also reflected the rise of free-market ideology,
  • ...2 more annotations...
  • It’s hard to imagine now, but for more than three decades after World War II financial crises of the kind we’ve lately become so familiar with hardly ever happened.
  • But the best predictor of crisis is large inflows of foreign money: in all but a couple of the cases I just mentioned, the foundation for crisis was laid by a rush of foreign investors into a country, followed by a sudden rush out.
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Ceiling Collapse at Shoe Factory in Cambodia Kills 2 - NYTimes.com - 0 views

www.nytimes.com/...ctory-in-cambodia-kills-2.html
shared by Gene Ellis on 16 May 13 - No Cached
    • Gene Ellis
      Gene Ellis on 16 May 13
       
      Why do you think this is a Hong Kong-based company?
  • “We visually always inspected them, but you need true engineers,” he said.
    • Gene Ellis
      Gene Ellis on 16 May 13
       
      Noe that he says that they always visually inspected the sites... are they the owners?  the managers?  To what degree are they responsible?  And to whom?
  • ...2 more annotations...
  • Multinationals have been looking to Cambodia as one of several countries that could be alternatives to Bangladesh. Cambodia has some of the lowest pay in Asia, with workers earning $120 a month in salary and benefits before overtime. That compares with just $37 in Bangladesh.
  • Bruce Rockowitz, the group president and chief executive at Hong Kong-based Li & Fung, one of the world’s largest sourcing companies,
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Reinventing the European Dream by Anne-Marie Slaughter - Project Syndicate - 0 views

www.project-syndicate.org/...reinventing-the-european-dream
shared by Gene Ellis on 19 Dec 12 - No Cached
  • Natural-gas fields in the Eastern Mediterranean are estimated to hold up to 122 trillion cubic feet, enough to supply the entire world for a year. More gas and large oil fields lie off the Greek coast in the Aegean and Ionian Seas, enough to transform the finances of Greece and the entire region. Israel and Cyprus are planning joint exploration; Israel and Greece are discussing a pipeline; Turkey and Lebanon are prospecting; and Egypt is planning to license exploration.
  • But politics, as always, intervenes. All countries involved have maritime disputes and political disagreements. The Turks are working with Northern Cyprus, whose independence only they recognize, and regularly make threatening noises about Israel’s drilling with the Greek Cypriot government of the Republic of Cyprus. The Greek Cypriots regularly hold the EU hostage over any dealings with Turkey, as has Greece. The Turks will not let Cypriot ships into their harbors and have not been on speaking terms with the Israelis since nine Turkish citizens were killed on a ship that sought to breach Israel’s blockade of Gaza. Lebanon and Israel do not have diplomatic relations.
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