The G-20 summit last November in Cannes, France, was all about bailing out Greece, and it turned into a fiasco. Now at the G-20 summit in Los Cabos, Mexico, tiny Greece is still front and center, but the summit has been escalated: it would be about bailing out the entire Eurozone and its currency. And President Obama made his agenda clear: he wanted everybody else to do “what’s necessary to stabilize the world financial system.”
Monthly Archives: June 2012
White House Hypocrisy and Trade Sanctions Against China
by Wolf Richter • • 1 Comment
Every car sold in the US contains Chinese-made components. But suddenly, in the middle of a heated presidential campaign, the White House decided to show its dentures. “We’re certainly looking at that,” said Tim Reif, general counsel in the US Trade Representative’s office, though he insisted that the election had nothing to do with it. Yet, the culprits for the horrendous migration across the Pacific are everywhere.
Relying on Fake German Strength
by Wolf Richter • • 6 Comments
While we’re sitting on the edge of our chairs, waiting breathlessly for the Greek election, or for Fate to swallow Greece and send financial Armageddon over the Eurozone, stock markets rallied. Not because of a sudden plethora of good economic news, but in anticipation of how central banks might react to the Greek vote—that’s how far this farce has come! As if sheer artificial liquidity could wash away the putrid odor of decomposing debt.
Greece in Panic … um, Wait!
by Wolf Richter • • 2 Comments
“If Greece doesn’t get its next loan installment, the Eurozone will collapse the following day,” scowled Alexis Tsipras, leader of the left-wing SYRIZA. By threatening the entire Eurozone with its demise, if he won the election, he ratcheted up the bailout extortion racket a few more notches. So the run on the banks turned into panic, and Eurozone heads of state, who’re already on edge, threatened in return. Everything is coming to a head.
Italy Trembling on the Brink
by Wolf Richter • • 2 Comments
“I believe, no,” is how Italian Prime Minister Mario Monti answered the question if Italy would seek a bailout—lacking the bravado and vehemence with which Spanish Prime Minister Mariano Rajoy had claimed for the longest time that Spain wouldn’t need one. Until it needed one. The question was hot. It followed the kerfuffle that ensued when Austrian Finance Minister had let it slip that Italy might also need “support.” But Italy is too big to get bailed out.
Manna for Bankrupt Cyprus
by Wolf Richter • • Comments Off on Manna for Bankrupt Cyprus
In Greece’s chaotic wake bobs the listing Republic of Cyprus, soon to be the fifth Eurozone country, out of seventeen, to get a bailout. By June 30. Only last year’s €2.5 billion loan from Russia has kept it afloat. It’s economy is shrinking, unemployment is at a record, and real estate is collapsing after a phenomenal bubble and a nationwide title-deed scandal that has taken down the banks. But Cyprus has something—and it’s huge—that no other troubled Eurozone country has.
Greece’s Scams, Extortion, and “Suicidal” Possibility
by Wolf Richter • • Comments Off on Greece’s Scams, Extortion, and “Suicidal” Possibility
On June 17, when Greeks try again to choose a government, they’ll decide their country’s fate—or not. One thing is for sure, whichever parties are able to form a coalition government, they will push for more bailout billions, but this time, forget the conditions, the structural reforms, the austerity. Just give us the money. And however much we want. They’d watched Spanish Prime Minister Mariano Rajoy proclaim victory.
China: A Mixed Bag Turns Very Ugly
by Wolf Richter • • 2 Comments
2010 was a magical year in China. Among the world records: 18 million new vehicles sold. Due to unprecedented stimulus, sales had skyrocketed 33% that year and 54% in 2009—mind-boggling. It catapulted China to the number one new-vehicle market in the world, far ahead of the US which had never sold that many units in a single year. And it gave rise to a surge in production capacity. But now, the China auto bubble is emitting a sharp hiss.
“The Euro Is Like a Knife in the Hands of a Child”
by Wolf Richter • • Comments Off on “The Euro Is Like a Knife in the Hands of a Child”
While France is preoccupied with the legislative elections next weekend, Germany and Austria plunge into public soul searching about the euro, its meaning, its relevancy, the sheer and endlessly growing expense of maintaining it. To which are now added the $125 billion for bailing out Spain, the first in a series. Then there’s Italy. Like so many things that appear useful and sensible, the euro has become dangerous.
Bailout Rebellion Reawakens In Germany
by Wolf Richter • • Comments Off on Bailout Rebellion Reawakens In Germany
Josef Ackermann, Deutsche Bank’s CEO until a couple of weeks ago, who knows a thing or two about skeletons hidden in the bank’s vast closets, says that he is “grateful the US is pushing Europe to act faster.” Just like his US counterparts on Wall Street in 2008, he wants massive bailouts of the banks. He has “no doubt” that the German people would rescue the Eurozone, he says. But the German people aren’t so sure about that.