The Eurozone debt crisis has frayed a lot of nerves, particularly among Greek politicians, whose country is on the verge of bankruptcy, and German politicians, who no longer trust Greek politicians—they’d willfully misrepresented deficits and debt in order to accede to the Eurozone and had continued to do so up to insolvency. But now a far bigger confrontation at the very core of the Eurozone is shaping up. And it may bring epic changes.
Firewalls In Place, Markets ready: Greece Can Go To Heck
by Wolf Richter • • Comments Off on Firewalls In Place, Markets ready: Greece Can Go To Heck
Luxembourg’s Finance Minister said it out loud: “If the Greek people or the Greek political elite do not apply all of these conditions, they exclude themselves from the Eurozone.” All of these conditions. And there are a lot of them. Then he added crucial words: “The impact on other countries now will be less important than a year ago.”
The White House & the Most Disparaged Profession, Again
by Wolf Richter • • Comments Off on The White House & the Most Disparaged Profession, Again
Even the Soviets with their iron-fisted approach couldn’t come up with a reliable five-year plan. In the US, one-year forecasts are accurate only by accident. And ten-year forecasts, whether by the White House or Congress, are the ugly sisters of BS—hilarious gimmickry during the dreariness of politics. So President Obama unveiled his budget for fiscal 2013 through 2022.
Stewing At Ikebukuru Station
by Wolf Richter • • Comments Off on Stewing At Ikebukuru Station
Greece at the Point of no Return
by Wolf Richter • • Comments Off on Greece at the Point of no Return
“The European Union is suffering under Germany,” said Georgios Karatzaferis, president of the right-wing LAOS party. He accused German Chancellor Angela Merkel of trying to “impose her will on Southern Europeans.” He called the Netherlands, Austria, Finland, and Luxembourg “satellite states” of Germany. And then, with a few words, he pushed Greece a step closer to bankruptcy.
Bait And Switch: California High-Speed Rail to Nowhere
by Wolf Richter • • Comments Off on Bait And Switch: California High-Speed Rail to Nowhere
High-speed rail works if it links big urban areas and has lots of riders. The most successful is the Tokyo-Osaka Shinkansen: 150 million passengers per year. Even Amtrak’s slower route between New York City and Washington DC is profitable, though the rest of Amtrak is not. In theory, California’s High-Speed Rail Project falls into that category. In Reality, it has turned into a scandal before construction has even started.
Merkel’s Desperate And Risky Gamble
by Wolf Richter • • Comments Off on Merkel’s Desperate And Risky Gamble
After the German-French council of ministers in Paris, Chancellor Angela Merkel and President Nicolas Sarkozy gave a joint TV interview at the Elysée Palace, the official residence of the French president. Merkel berated François Hollande, Sarkozy’s top challenger in the upcoming presidential election. Then Sarkozy lashed out against him. Never before had a German chancellor campaigned so hard for a French president.
The Endgame: Japan Inc. Seeks Salvation Overseas
by Wolf Richter • • Comments Off on The Endgame: Japan Inc. Seeks Salvation Overseas
Japanese companies spent $70 billion on acquisitions overseas in 2011—a record. Armed with a ferociously strong yen, they’re going overseas to escape the pressures at home where electricity rationing has become part of corporate life, along with a stagnant economy and a dwindling working-age population. But they’re doing it just when Japan can least afford it.
Burnt-Rice Tea
by Wolf Richter • • Comments Off on Burnt-Rice Tea
Tokyo, April 1996. Cacophonous cawing of crows weaves itself disconcertingly into my dreams until it wakes me up altogether. It’s 5:45 a.m. Even the dual building walls of the love hotel fail to deaden the racket, and when you’re half asleep, it’s almost scary. But in front of my eyes is a tuft of black hair. She sleeps without sound, without movement, her arms contorted underneath her. I inhale her chemistry as if it were a controlled substance.
Now Even Greek Politicians Are Taking Cover
by Wolf Richter • • Comments Off on Now Even Greek Politicians Are Taking Cover
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.”