In Cyprus, it’s panic time. €1.8 billion is needed by June 30. That’s just the beginning. Its banks have been eviscerated by Greek government bonds, Greek corporate debt, a real estate bubble that collapsed, and a title-deed scandal that they colluded in. It has a communist president and vast deposits of natural gas. Russia and China hover nearby. And it points out, unwittingly, why no country should ever do what the EU Summit will focus on: transfer even more sovereignty to the EU.
The EU Summit To Save the Euro Has Already Collapsed
by Wolf Richter • • Comments Off on The EU Summit To Save the Euro Has Already Collapsed
During the two-day EU summit on June 28 and 29, all eyes will be breathlessly riveted on German Chancellor Angela Merkel—with one question on all lips: will she blink? Because nothing less than the future of the Eurozone and the euro is at stake. And by extension, the world economy. Only she can save it. And she’d have only 48 hours!
The Worldwide QE Quagmire
by Wolf Richter • • Comments Off on The Worldwide QE Quagmire
Certain central bankers are coming out of the closet admitting that their favorite shenanigans—ultralow interest rates and printing money with utter abandon—can’t solve the very problems they were designed to solve, which has been obvious for a long time. What they’re not yet admitting massively, though some are starting to hand out hints, is just how much havoc these policies are wreaking.
Fishy Economic Data and the China Crash
by Wolf Richter • • 4 Comments
An unrelenting, horrid wave of scandals about toxic ingredients in foods and medicines in China shows that regulators are unwilling and incapable of controlling it. It also shows a penchant—some evil tongues say it’s cultural—for pandemic cheating in order to get ahead in some way. And Chinese economic data falls into that category.
The Extortion Racket Shifts To Italy
by Wolf Richter • • 2 Comments
One thing Greek politicians have taught other European leaders: fear mongering for the purpose of extortion is the way to go. It might not work, and it might be counterproductive, and it might destroy confidence in the economy and give investors goose bumps and blow up markets, and it might cause spooked consumers to hold back on purchases and worried businesses to freeze hiring plans, thus exacerbating the situation, but it’s nevertheless the way to go.
“You Can Lose Freedom Only Once”
by Wolf Richter • • 6 Comments
Poor Angela Merkel. The beleaguered German Chancellor just can’t catch a break. She has already committed hundreds of billions of taxpayer euros to bailing out collapsing countries. In return, she wants them to live within their means and restructure their economies so that the bailouts wouldn’t have to continue ad inifinitum. For that, she joins the Axis of Evil. And then the Swiss Minister of Defense speaks up.
Natural Gas: Where Endless Money Went to Die
by Wolf Richter • • Comments Off on Natural Gas: Where Endless Money Went to Die
The fiasco playing out in the natural gas industry doesn’t happen often in a free market, and when it does happen, it’s usually short: namely, prices below production costs. In the shakeout, less efficient or poorly capitalized producers get wiped out. Part of capitalism that weeds out weaker elements through sweeps of creative destruction. But in natural gas, the price has been below production costs for years, and the damage is huge.
François Hollande on Collision Course with … France
by Wolf Richter • • 3 Comments
During the French presidential election, it became clear that François Hollande would try to align other Eurozone countries, particularly Italy and Spain, into a southern front against German Chancellor Angela Merkel—to fix the problems of the Eurozone à la française. Now that he has won the election, he has set out on his pre-charted collision course with Germany. And yet, a revolt is brewing at home: “We fear a programmed strangling.”
The G-20 Farce to Save The Eurozone From Collapse
by Wolf Richter • • Comments Off on The G-20 Farce to Save The Eurozone From Collapse
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.”
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.