Hard hitting global and local news
I just finished reading The Smith/Klein/Kalecki Theory of Austerity by Paul Krugman and I believe it is the most disingenuous piece he has ever written. Krugman comes out blazing with the statement ” Noah Smith recently offered an interesting take on the real reasons austerity garners so much support from elites, no matter how badly it fails in practice.
The exchange got quite interesting when Merkel Allies Bashed Hollande Over Needed Reforms Leading members of Angela Merkel’s ruling Christian Democratic Union in Germany have fiercely criticised François Hollande, accusing the French president of “shaking the foundations of the European Unionâ€, only hours before the two leaders met in Paris in a bid to repair their troubled relations. Deep German concern about the French government’s resistance to economic reform and hostility to EU pressure emerged after Mr Hollande said it was not for the European Commission “to dictate†reforms to Paris.“There is no need for European recommendations; what’s needed is obvious. It’s not for the commission to dictate what we have to do,†Mr Hollande said in response to the commission, whose call was part of its annual assessment of budget plans for all 27 EU members
The last thing a country in recession should do is raise taxes. Well, Spain is in a depression, not a recession yet the EU requires Spain to raise the VAT and lower pension benefits within a year . One year.
In an interesting development in the battle to see which country is bright enough to exit the euro first, a book urging a return to the Escudo (the prior Portuguese currency) became an instant a bestseller in Portugal. The Wall Street Journal reports Idea of Euro Exit Finds Currency in Portugal . A book by a Portuguese economist achieved a small feat on its release last month: It instantly topped Portugal’s bestseller list, overtaking several diet books and even the popular erotic novel “Fifty Shades of Grey.” The book, “Why We Should Leave the Euro” by João Ferreira do Amaral, has helped ignite a public debate in Portugal about the real cause of the country’s economic pain: Is it only the hated austerity needed to secure European bailout loans, or is the euro?
The correct interpretation of course is "the risk of instability is huge". Please consider Haruhiko Kuroda says rates must stay low until economy improves . Haruhiko Kuroda, Japan’s central bank governor, said the country’s financial system could cope with rising interest rates only once the economy improved, as he laid out the stakes in his attempt to tame the volatile bond market.
Factset Buyback Quarterly has an interesting series of charts and facts on corporate share buybacks. Here is my favorite chart in the series.
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Continued here: Another Warning Call for Depositors! Bank of Spain Says Spanish Banks Need €10bn More Loan Loss Provisions; Mish…
Reuters reports IMF’s Lagarde in court for French arbitration case . IMF chief Christine Lagarde was questioned in court by French magistrates on Thursday over her role in a 285-million-euro ($366 million) arbitration payment made to a supporter of former president Nicolas Sarkozy.
NewsDay reports Bank of Japan vows market steps to curb bond turbulence The Bank of Japan vowed yesterday to take necessary steps to reduce volatility in bond markets that has threatened to jeopardise the government’s fight to end deflation and revive growth. BOJ Governor Haruhiko Kuroda vowed to take steps needed to reduce volatility in the JGB market, but he disappointed some bond investors by sticking with the strategy of leaving it to BOJ bureaucrats to address the problem by tweaking the bank’s market operations.