“Default is not necessarily destructive,” said Panayiotis Lafazanis, a Greek politician. “It is a weapon of the weak when they reach the point of not being able to pay their debts.” Closer to the truth than anything else emanating from Greek politics. “Not necessarily destructive” for the Greeks, but highly destructive for the European Central Bank that ended up with the Greek bonds; and for banks with derivative exposure to them. Hence the bailouts. To keep the bondholders afloat, not the Greeks—no one wants to recapitalize the ECB.
Natural Gas And The Brutal Dethroning of King Coal
by Wolf Richter • • Comments Off on Natural Gas And The Brutal Dethroning of King Coal
It’s been tough for natural gas drillers. Prices crashed. Drilling activity collapsed. Producers are writing down their natural gas assets by the billions. And the bloodletting continues. On the other side, power generators have switched from coal to natural gas, pushing their consumption of it to new highs. A trend started two decades ago with a new technology and the usual suspect, Congress. A toxic brew for coal.
German Bailout Rebellion: “We Have Euro-Anarchy”
by Wolf Richter • • 4 Comments
For German Chancellor Angela Merkel and her ilk, it’s going to be a steamy August and an even steamier September and October with political battles left and right, to be fought mano a mano, as the Eurozone debt crisis and the growing bailout rebellion in Germany are migrating from parliamentary discussions, closed-door meetings, and shaky EU summits—21 of them so far—to electoral politics. Voters may finally have a say. And it doesn’t look good for the euro.
The Political Euro Revolt Spreads To Austria: “Europe Can Only Function If Every Country Has Its Own Currency”
by Wolf Richter • • 1 Comment
Germany and Austria may have their differences, and their love for each other may not always be palpable, but when it comes to money, they’re joined at the hip. And have been for decades. The peg of the Austrian schilling to the Deutsche mark that was put in place in the early 1970s survived even external shocks, for example when Italy devalued the lira on January 6, 1990, or again on September 14, 1992. Now the euro debate took on sharp tones in Austria. With a new theme: “Insolvency Procrastination.”
The Empire State Vixen Index And Other Befuddled Ironies
by Wolf Richter • • Comments Off on The Empire State Vixen Index And Other Befuddled Ironies
We’ve all heard about Wall Street employees who lost their jobs and ended up doing something unrelated, chasing after a dream, starting up a software company, working on a crab boat, teaching English to immigrants, run a taco truck, become a pole dancer…. So there should be indices that measure the number of people undergoing sudden and unlikely career changes—to give us a better gauge of the real job market.
Is The Greek Calamity Economy Headed For Revolt?
by Wolf Richter • • Comments Off on Is The Greek Calamity Economy Headed For Revolt?
“Dire” is no longer the right word to describe the situation in Greece. Unemployment hit 23.1% in May, according to ELSTAT, the Greek statistical agency, which released the report on August 9. That it takes over two months to do a job—producing unemployment numbers—that other countries accomplish in a couple of weeks may be symptomatic of Greece’s calamity economy. And a calamity it is.
Ron Paul’s Legacy: A Complete Audit Of The Secretive Banking Cartel?
by Wolf Richter • • Comments Off on Ron Paul’s Legacy: A Complete Audit Of The Secretive Banking Cartel?
They only bubble up rarely, these scandals at the Federal Reserve System, but when they do, they’re doozies, involving huge amounts of money, massive conflicts of interest, all-out manipulation, collusion, favoritism, dizzying cronyism…. Over the 100 years the Fed has existed, it has done an excellent job in one of its other functions, maintaining the dollar, which has lost only 96% of its value—instead of 100%. Yet, it just doesn’t want to be audited.
Greece Prints Euros To Stay Afloat, The ECB Approves, The Bundesbank Nods, No One Wants To Get Blamed For Kicking Greece Out
by Wolf Richter • • 7 Comments
A lot of politicians in Germany and elsewhere issue zingers about a Greek exit from the Eurozone. Yet those with decision-making power play for time. They want someone else to do the job. Suddenly Greece is out of money again. Default date: August 20. A €3.2 billion bond matures. Europe is on vacation. It will be mayhem. And somebody will get blamed. But there’s one solution….
Top Euro Honcho Juncker: “Europeans are dwarfs”
by Wolf Richter • • 5 Comments
At first, Jean-Claude Juncker was just jabbering about Greece. No, he couldn’t categorically exclude its exit from the Eurozone, but it wouldn’t happen “before the end of autumn.” These words might have thrown the markets into vertigo-inducing tailspins a year ago. But now, the President of the Eurogroup wasn’t ruffling any feathers; and markets went up. That’s how far the debt crisis has advanced. But suddenly the dark floodgates opened, and deep pessimism flooded the airwaves.
The German Economy Caves, And Eurozone Bailouts Take On New Dimensions
by Wolf Richter • • 1 Comment
Last year, German exports rode to a new record, jobs were being created in massive numbers, real wages rose, housing and real estate boomed, the federal budget was nearly balanced, and consumers felt good and spent money. There were moments in 2012 that made people dream of a repeat performance—despite the havoc that the Eurozone debt crisis has been wreaking. But now, the German export machinery is shifting down with an ear-piercing screech.