Greeks yanked €65 billion out of their bank accounts since 2009, the Finance Minister told parliament. “Of that, €16 billion was legally taken abroad,” he said. The rest? Stashed under mattresses or hauled to Switzerland via the land route. A whopping 20% of GDP! Capital flight of massive proportions. They see a forced conversion of their euros to drachmas. And politicians are planning for the “afterwards.”
California is broke again. The “balanced” budget last summer turned into a pile of overoptimistic assumptions. Out-of-money date is March 8. $3.3 billion must be dug up, pronto. Last fall, California had to borrow $21 billion to make it to April. Now all eyes are on Facebook. Its IPO will singlehandedly solve all budget problems forever—just like Google’s IPO had done.
Tokyo, April 1996. Mr. Song has already left. Mr. Kim is watching a garish talk show on TV. The kitchen sink is full of dirty bowls, utensils, pots, and pans. Vapors of grease and kimchi hang in the air.
“I’m going to walk to school,” I tell Mr. Kim.
Now he has what he has been looking for: incontrovertible proof that I’m crazy.
With IPO hype blowing like a maxed-out hairdryer into my face, I Googled … Friendster—the shining star of social networking that everyone had drooled over. Turns out, in 2009, Friendster was bought for a pittance by MOL Global, a Malaysian company. In 2011, it discontinued social networking activities and rebranded itself as a gaming site. But there is one valuable asset it still has: user information.
Unemployment is a staggering problem in Eurozone countries that are at the core of the debt crisis. Spain’s jobless rate jumped to 22.8%. Among 16-24 year-olds, it’s an unimaginable 51.4%. In Greece, youth unemployment reached 46.6%. In Portugal, it’s 30.7%, in Italy 30.1%. But highly educated young people are leaving in massive numbers—with harsh long-term consequences for their heavily indebted countries.
Apparently, Charles Plosser, president of the Philadelphia Fed, failed to check with his handlers when he said that the Fed might have to raise interest rates later this year—from practically zero to almost zero, I guess—though just last Thursday, the Fed had announced the extension of its zero-interest-rate policy through late 2014. The umpteenth extension since 2009. Now, the economy is addicted to free money, and the damage is severe.
Tokyo, April 1996. I sit on my tatami, Japanese textbook in my lap. Mr. Song is starting his morning routine—cooking rice, chopping veggies, and frying meat. Mr. Kim emerges from the toilet and turns on the TV. But before he sits down to watch it, which he does every morning to improve his listening comprehension, he makes one step toward my tatami and stops at the edge.
Hope is pervading the media that an agreement might be reached between Greece and private sector investors on a debt swap, maybe even this weekend, though everyone is hobnobbing at the World Economic Forum in Davos where all sorts of things have already been said and leaked between drinks. But now a horrible sign has appeared: German individual investors are gobbling up Greek sovereign bonds.
In her speech at the World Economic Forum, Chancellor Angela Merkel warned that Germany might be overwhelmed by its efforts to bail out the Eurozone. Germany must not make promises that it can’t keep, she said. It doesn’t make sense to demand a doubling or tripling of Germany’s contribution. “How long will that remain credible?” she asked. That reluctance has made Germany a favorite punching bag. And yet the numbers are staggering.
We finally have statistical proof that CEOs are … a confusing bunch. PWC’s survey shows that CEOs in 60 countries are exhibiting signs of gloom about the economy but not their own companies. German CEOs, facing the Eurozone debt crisis on a daily basis, aren’t feeling the pain, according to Ifo’s indices. The Empire State Manufacturing Survey points at spiking optimism. And all three show patterns of false hope.