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.
Europe
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
‘The Old Europe’ Is ‘Not An Option For Germany’
by Wolf Richter • • Comments Off on ‘The Old Europe’ Is ‘Not An Option For Germany’
“The fact that we profit massively from the euro doesn’t mean we have to accept every political horse-trade to save the common currency,” said Anton Börner, president of Germany’s Association of Exporters—a swipe at the Italian prime minister who’d demanded that Germany dig deeper into its pockets to reduce the debt burden of other countries, such as, well, Italy. When the German industrial elite talks about exiting the Eurozone….
Crap, Sovereign Debt Downgrades Matter?
by Wolf Richter • • Comments Off on Crap, Sovereign Debt Downgrades Matter?
After they were downgraded in early August, US government bonds gained upward momentum and yields fell. Japan, which has danced the downgrade tango for years, is contemplating the next step, from AA- to A+, yet 10-year Japanese Government Bonds are yielding below 1%. Downgrades of sovereign bonds of developed countries make good headlines, but the impact on bond markets has been nil. With one exception: the Eurozone.
Greece: Disagreement Everywhere, Rift in the Troika
by Wolf Richter • • Comments Off on Greece: Disagreement Everywhere, Rift in the Troika
Austerity measures are taking their daily toll on Greece. Suicides and attempted suicides have jumped by 22.5%. Unemployment rose to 18.2%. Pharmacies are having difficulties obtaining medications. More cuts are coming. If there is no agreement with the bailout Troika, Greece will default in March. But now, even the Troika is in disarray.