Bailout Fail

Renewed fear of global recession as companies rein in spending plans

"Growth in spending on machinery and investment by the world’s 2,000 biggest companies has begun to contract for the first time since the Lehman crisis, led by sharp falls in China and a near collapse in Latin America. Company spending plans are watched as an early warning gauge for the economy. The drastic falls in large parts of the world doom hopes for strong recovery later this year, and even point to a recession risk.The International Monetary Fund has cut its global forecast for this year to 3.1pc, sharply downgrading Russia, Brazil, South Africa, India and Mexico, as well as Italy and Germany." Continue reading →

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Constitutional crisis pushes Portugal closer to the brink

"Yields on 10-year Portuguese bonds jumped to 7.85pc in a day of turmoil, kicked off by a government request to delay the next review of the country’s EU-IMF Troika bail-out until August. President Anibal Cavaco Silva set off a constitutional crisis when he vetoed a reshuffle by the two conservative coalition parties, insisting on a red-blue national unity government with greater legitimacy to see through austerity cuts until mid-2014. Socialist leader Antonio José Seguro has so far refused to take part, demanding fresh elections to clear the air. Some Socialist leaders have threatened debt repudiation as a way of fighting back at Germany and the creditor powers." Continue reading →

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The situation on the ground in Athens

"The total number of unemployed is roughly 57% of the entire Greek work force. And as you probably know, the situation for young people is even worse. Only 1 in 3 people aged 25 and under has a job. This phenomenon, sustained for several years now, has cut deeply into the psyche of an entire generation that is growing up without productive work experience or the prospect of improving their lives. The middle class here has been completely gutted. Aside from a few pockets of wealth, the country is either unemployed or working poor, hamstrung by debilitating debt. The suicide rate here has skyrocketed, crime is noticeably higher, and prostitution is rampant." Continue reading →

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The Case of the Missing $700 Billion

"1. Banks took $700 billion in bailout money and paid off their high-interest debt. That included FDIC-insured CDs, which they called in, leaving seniors and savers without many viable alternatives for safe investing. 2. Banks stopped lending to the public because they found a better deal. If you could take billions of dollars from the government and lend it back to them by buying US bonds, wouldn't you do the same thing? 3. Banks turned a big profit and paid out handsome bonuses to their higher-ups. 4. By reducing interest rates in the public sector, the Treasury reduced the cost of its own massive debt.[...]" Continue reading →

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The wheels are coming off the whole of southern Europe

"A leaked report from the European Commission confirms that Greece will miss its austerity targets yet again by a wide margin. Italy’s slow crisis is again flaring up. Its debt trajectory has punched through the danger line over the past two years. Spain’s crisis has a new twist. The ruling Partido Popular is caught in a slush-fund scandal of such gravity that it cannot plausibly brazen out the allegations any longer, let alone rally the nation behind another year of scorched-earth cuts. Portugal is slipping away. Professor João Ferreira do Amaral’s book -Why We Should Leave The Euro – has been a bestseller for months." Continue reading →

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Euro Zone Grants Multibillion Euro Lifeline for Greece

"Greece secured a 6.8 billion euro ($8.7 billion) lifeline from the euro zone but was told it must keep its promises on cutting public sector jobs and other reforms in order to get all the cash, officials said Monday. The deal, which spares Greece defaulting on debt that falls due in August, will see Athens drip-fed support under close watch from its international creditors to drive through unpopular reforms. Central banks in the Eurosystem will contribute 1.5 billion euros in July and 500 million euros in October, the officials said. The International Monetary Fund will give 1.8 billion euros in August." Continue reading →

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Currency Controls in Cyprus Increase Worry About Euro System

"On a visit to Athens this year, Marios Loucaides, a Cypriot businessman, saw an apartment he liked in the heart of the Greek capital and decided to buy it. However, Mr. Loucaides discovered that the euros he had on deposit here in Nicosia, the capital, could not be moved to Greece, even though the two countries share the same currency and, in theory at least, the same free movement of capital.The apartment deal collapsed. And so, too, did Mr. Loucaides’s belief that Europe has a common currency. Tangled in restrictions imposed in March as part of a bailout for the country’s ailing banks, a euro in Cyprus is no longer the same as one in France, Germany or Greece." Continue reading →

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Irish ‘rage’ after bank cheated on multi-billion bailout

"The taped conversations, obtained by the Irish Independent newspaper, between John Bowe and Peter Fitzgerald, who led Anglo-Irish's capital markets and retail banking arms, respectively, indicate the Irish government was duped into pumping €7 billion of emergency cash into the bank on the assumption that it would plug the lender's funding crisis. But the €7 billion figure was just a ruse to get the government to put 'some skin in the game,' with the bankers assuming that politicians would have no choice but to provide further emergency funding once they had been 'pulled in'." Continue reading →

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Italy Confronts Germany, Adding Additional Euro Pressure

"Greece has been relegated to the status of a Third World country, the complicity of German leaders with the ever-inflating ECB is due for a judicial hearing, British leaders are committed to a referendum on whether Britain should pull out of the EU entirely, Spain is broke, Portugal is busted ... and Italian leaders are getting ready to square off with German bankers over 'austerity.' That the euro has not always suffered some breakdown is testimony to the power of its globalist backers. It has, however, bankrupted half of Europe and even the healthier northern half is not happy with what Europe has become and is continuing to become." Continue reading →

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Greek Stocks Fall After Failed Gas Company Sale

"Greek stocks fell sharply after the country failed to attract a single bid for Depa, a natural-gas company it is selling, a significant setback to its effort to raise billions of euros from the sale of state assets this year. A failure by Greece to meet its privatization targets would limit Athens's ability to meet its debt targets and could require the government to take additional austerity measures that would hurt the economy. Greece's bailout agreement requires the government to use additional spending cuts to cover 50% of any shortfall in raising funds via privatizations." Continue reading →

Continue ReadingGreek Stocks Fall After Failed Gas Company Sale