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.”
Europe
Exodus from the Eurozone Debt Crisis
by Wolf Richter • • 1 Comment
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.
Abysmal news for Greek Bonds and Debt Swap Negotiations
by Wolf Richter • • Comments Off on Abysmal news for Greek Bonds and Debt Swap Negotiations
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.
Germany Frets As Bailouts And Risks Balloon
by Wolf Richter • • Comments Off on Germany Frets As Bailouts And Risks Balloon
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.
Surveys: CEOs Are Binging on False Hope
by Wolf Richter • • Comments Off on Surveys: CEOs Are Binging on False Hope
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.
Paying Lip Service To Saving The Eurozone
by Wolf Richter • • Comments Off on Paying Lip Service To Saving The Eurozone
“The case of Greece is hopeless,” Otmar Issing said today. He should know. He was a member of the Executive Board of the Bundesbank and of the Governing Council of the ECB. Another substantive voice in an increasingly loud chorus. But it’s legally impossible to kick Greece out of the Eurozone. So he suggested a procedure—a procedure that has been happening all along.
The Art Of Extortion: Now At The IMF
by Wolf Richter • • Comments Off on The Art Of Extortion: Now At The IMF
Treasury Secretary “Hank” Paulson was the trailblazer with his proposal for TARP in September 2008. He went to the Congress with a list of demands—unlimited powers to hand unlimited amounts of taxpayer money to whomever—and threatened that the whole world would collapse if his demands weren’t met. It worked. So Greek prime ministers imitated him. And now Christine Lagarde, managing director at the IMF, tried it too.
Friday Night Economic Indices
by Wolf Richter • • Comments Off on Friday Night Economic Indices
There still are some economic numbers that aren’t seasonally adjusted or manipulated with fancy statistical footwork by governmental, quasi-governmental, or non-governmental number mongers. And they give us the true picture of the worldwide economy: beer, wine, mood, and San Francisco real estate—with more predictive power than is allowed by law.
Austrian Central Bank: Bribery, Kickbacks, Money Laundering
by Wolf Richter • • Comments Off on Austrian Central Bank: Bribery, Kickbacks, Money Laundering
Two central bank governors in Europe have gotten into hot water recently: Philipp Hildebrand, as chairman of the Swiss National Bank; and Ewald Nowotny, governor of the Austrian National Bank and member of the ECB’s governing council. Hildebrand resigned after he tried to brush off an insider-trading scandal that is still making headlines; Nowotny is clinging to his jobs though he is tangled up in a bribery, kickback, and money-laundering scandal. But finally a major politician called for his resignation.
The Costa Concordia Tragedy with Satellite Images
by Wolf Richter • • Comments Off on The Costa Concordia Tragedy with Satellite Images
The Costa Concordia was launched on September 2, 2005, with a mishap that back then didn’t mean anything: the champagne bottle thrown against its hull didn’t break. But on January 13, at 10 pm, the mega cruise ship hit a reef near the small island of Giglio, off the coast of the Tuscany. So far, 11 bodies have been found and 23 people are still missing.
Satellite image by Digital Globe