Despite a month of trying, there has been no success in papering over the cracks in the Euro.
Europe’s rescue plan for Greece appears to be crumbling after the country
threatened to call in the International Monetary Fund unless Brussels comes
up with real money on acceptable terms within a week.
|
| The inability of the eurozone to put together a viable package after a month
of talks has dismayed markets, which thought the terms of a deal had already
been agreed. |
| The euro fell two cents against the dollar to below $1.36. |
| Greek Premier George Papandreou told the European Parliament that his country |
| is in effect already subject to the full
rigours of an IMF-style austerity plan but without enjoying any of the
benefits. |
| savings from cost-cutting measures were vanishing into
the pockets of bond-holders through higher interest rates.
|
| a German-led bloc of states is also warming to the IMF |
| IMF route is fraught with danger |
| completely undermines the credibility of
monetary union. |
Imagine your community in sync with its own sustainable creative commerce.
Imagine feeling reconnected to your labor and your surrounding neighbors.
Many residents of Philadelphia have imagined, and now, they’re implementing.
Could your city be next? If so let me know, and please RT generously.
Paul Glover, author of “Hometown Money”, is helping spread the vision. Look at our wasted talent: thousands of eager youths and experienced neighbors. With money enough, we could be busy insulating homes, manufacturing useful goods, growing food, healing, cleaning, playing. And look at our idle wealth: vacant factories and land, empty stores and offices. |
| When a large city depends on one kind of money, it’s like depending on one kind of vehicle - cars only or one bridge. Community currencies aren’t Monopoly money - they’re anti-monopoly money. |
| Printing our own cash is all-American. During the Great Depression, 400 U.S. cities and towns issued scrip. More recently, in Ithaca, N.Y., thousands of residents and 500 businesses have traded millions of dollars of colorful local paper money featuring children, waterfalls and animals. |
| These currencies are real money - backed by real people, real goods and real services. By contrast, dollars are funny money - no longer backed by gold, silver or commodities but by less than nothingRead more at www.philly.com |
Will the desperate situation in Greece be repaired by equally desperate measures from the eurozone? — closing my eyes and shaking my head. | Finance ministers from euro-zone countries have agreed on a rescue plan for Greece. |
| “The instrument would not consist of loan guarantees from euro-area countries to Greece but probably of a coordinated action at European level, which would make bilateral aid available,” |
| Greece is struggling with a 300-billion-euro ($410 billion) budget deficit and needs to raise 54 billion euros this year purely to finance its debts. |
| aid for Greece would “follow the same methodology” as that provided by global crisis lender the International Monetary Fund. Such conditions would mean the imposition of drastic reforms and budget cuts. |
| As Europe’s biggest economy, Germany is reluctant to bail out Greece and is demanding to see an effort from the country to repair its own finances. |
| Details of the plan, to be enacted only if Athens cannot solve its own problems, remain vague. |
In fact, ever since the bursting of Japan’s 1980s bubble, there has been an inverse relationship between the debt to GDP ratio and bond yields – the more bonds the Japanese government sells, the easier the terms it gets. |
The buyers of these bonds – deleveraging corporates, de-risking financial institutions, individuals turning their backs on equities and real estate – are hardly speculators. They have sound reasons for the choices they made. Not least is the fact that deflation – which is understated by Japan’s outmoded CPI calculations - generates an invisible tax-free gain to holders of cash and bonds. |
| Japan’s cellar-dwelling bond yields are a product of the deflationary disease that has been gnawing away at the economy’s vital organs. While deflation, persists the debt to GDP ratio is destined to go ever higher. Read more at www.ft.com |
| When I read the whole proposal in detail, the fog lifted – or maybe my confusion just reached a higher level. I realised that the EMF is just a smokescreen. The real bullet in his proposal is that countries could leave the eurozone without leaving the European Union. This is not about helping countries in trouble. This is about helping them to get out. |
| So the entire adjustment burden will fall on the private sector. If life in the eurozone becomes intolerable, exit will become the default resolution mechanism. And when you include the legal possibility of an exit, the whole political and economic dynamic changes, and the threat of an exit might turn into a self-fulfilling prophecy. |
| I had previously assumed that Germany had a national interest in preserving the eurozone, as its exporters benefit more than anyone else from a stable exchange rate. |
| Some of his suggestions are unbelievably extreme, for example depriving countries with excessive deficits of their democratic voting rights,Read more at www.ft.com |
The number of mortgages issued in January slumped by nearly half, as UK homebuyers deserted the market after stamp duty relief ended. |
The lack of confidence in the market was further laid bare by the level of people remortgaging falling by 15 per cent to 24,000 in January – the lowest level for eight years. |
| The Council of Mortgage Lenders said that house purchase loans plummeted by 49 per cent to 32,000, worth £4.7bn, in January compared to the previous month. |
The data will reinforce concerns that the UK housing market may be set to suffer its own double-dip recession, following the Halifax last week reporting a 1.5 per cent fall in house prices between January and February. Nationwide also reported a 1 per cent fall in house prices in January. |
Remember Rowen and Martin’s, Laugh-in? For people with pounds, it’s no laughing matter, though.
UniCredit has alerted investors in a client note that Britain is at serious
risk of a bond market and sterling debacle and faces even more intractable
budget woes than Greece.
|
The Italian-German group, Europe’s second largest bank, said Britain’s tax
structure will make it hard to raise fresh revenue quickly enough to restore
confidence in UK public finances.
|
| Paribas expects sterling to drop to $1.31 |
| and
reach parity against the euro |
| markets are fretting
over how the UK will cover its deficit following the pause in quantitative
easing by the Bank of England. The Bank has absorbed £200bn of debt, |
| Britain’s
trump card is an average debt maturity of 14.1 years, nearly three times US
maturities and double those of France. This greatly reduces the risk of a “roll-over”
crisis.
|
| “Britain’s AAA-rating is highly at risk. The budget deficit is huge at
13pc of GDP and investors are not happy |
The FTSE All-World index rose 0.4 per cent, commodities jumped and the dollar slid as hopes for global growth convinced traders to bolster riskier bets. |
Investors started the global session cheered by the ability of New York’s benchmark, the S&P 500, to finally reach a new closing high for the cycle above the 1,150 level. Many analysts had suggested that once that mark was breached it would send a signal of the market’s fortitude, and thereby reinvigorate traders and help push stocks onwards to higher ground. Risk appetite would increase. |
The signs of economic improvement in Europe, coupled with an easing of fears surrounding the region’s fiscal problems, added to this optimistic mood. |
| Emerging markets like Brazil are in danger of overheating, potentially leaving millions of investors’ savings at risk, experts are warning. |
Emerging markets like Brazil are in danger of overheating, potentially leaving millions of investors’ savings at risk, experts are warning.
Top financial advisers are concerned that a rash of fund launches in the BRIC economies - Brazil, Russia, India and China - might be attracting investors unused to risky funds.
And they also question whether these volatile markets are heading for a fall. |
a key measure of value for investors (and a measure of over-exuberance) known as the price-earnings ratio is huge.
The higher the PE, the more a company must increase its earnings to justify its share price.
Based on one way of measuring, the average PE on the Chinese stock market is about 50. In comparison, in Britain it’s about 14. Read more at www.dailymail.co.uk |
| At the end of this month, the US Federal Reserve is due to freeze its programme to purchase Fannie and Freddie agency MBS that it implemented in the wake of the financial crisis. Logic might suggest that could potentially deliver a jolt to the market. |
| he degree of assistance that the Fed has provided has been eye-poppingly large: right now it is holding some $1,200bn of MBS |
| in the past couple of years, the Fed (and others) have poured so much money into the system, that this has made it painfully hard for mainstream fixed income investors to get returns, without taking very wild risks. |
| During the past two years, the full impact of the collapse of the securitisation market has been largely concealed from most investors – let alone American politicians – because of the sheer scale of government assistance on offer. |
| investors have been lulled into something of a false sense of security |
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Crisis 2.5 in the air - Markets spooked as Greek rescue plan crumbles
