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28 Nov 2011 – Economic lessons for the politicians

(28 Nov 2011, The Age, BusinessDay, p6 “Opinion & Analysis”, Robert Skidelsky) [The following is from the Opinion & Analysis section of the paper, so is not a direct report of fact – nonetheless it is interesting reading.] “The euro zone must be regarded as a failed experiment.” “POLITICIANS are masters at ”passing the buck”. … Continue reading

29 Nov 2011 – Euro crisis coins new problems

(29 Nov 2011, The Age, BusinessDay, p5, Landon Thomas, London) “EIGHTEEN months into a sovereign debt crisis – and after many futile efforts to resolve it – the endgame appears to be fast approaching for Europe.” “While its leaders may well hold to the path of offering piecemeal solutions, nervous investors are fleeing Europe and … Continue reading

29 Nov 2011 – Moody’s blue on European sovereign ratings

(29 Nov 2011, The Age, BusinessDay, p1, Gareth Hutchens) “EUROPE’S debt crisis entered a perilous new phase after Moody’s Investors Service warned yesterday that events in the region had ”rapidly escalated”, putting the ratings of all European sovereigns under threat.” “The warning comes in a desperate week for a euro zone still reeling from last … Continue reading

28 Nov 2011 – Pent-up retail urge set free

(28 Nov 2011, AFR, p15, from Bloomberg) [Comment – The US shopping-day on the day following the Thanksgiving Day holiday is known as “Black Friday” because the US retailers hope that it will put their store back into the black. See a discussion on Wikipedia. The following is from Bloomberg.] Black Friday Sales Increase 6.6% … Continue reading

28 Nov 2011 – Economic lessons for the politicians

(28 Nov 2011, The Age, BusinessDay, p6, Robert Skidelsky) “The euro zone must be regarded as a failed experiment.” “POLITICIANS are masters at ”passing the buck”. Everything good that happens reflects their exceptional talents and efforts; everything bad is caused by someone or something else. The economy is a classic field for this strategy. Three … Continue reading

26 Nov 2011 – Why the supercommittee failed – The last best hope

(26 Nov 2011, The Economist – Nov 26th 2011 | WASHINGTON, DC | from the print edition) With the deficit-reduction committee’s failure, American fiscal policy is drifting in a dangerous direction “THE failure by Congress’s joint select committee to produce a deficit plan was greeted with widespread disappointment, but little shock. Voters had long expected … Continue reading

24 Nov 2011 – Fear sweeps markets as Germany rules out ECB intervention

(24 Nov 2011, The Guardian) “Angela Merkel faces down French demands for action from eurozone’s central bank” “Global investors headed for the eurozone exit on Thursday after leaders of the area’s three biggest economies squashed residual market hopes for a huge intervention by the European Central Bank (ECB) to solve the sovereign debt crisis.” “Fears … Continue reading

25 Nov 2011 – Cash is king as nervous hordes squirrel away their hoards

(25 Nov 2011, TheAge, BusinessDay, p2, Malcolm Maiden) “AFTER announcing an 11 per cent slide in first-quarter sales yesterday, David Jones chief executive Paul Zahra painted a picture that has become distressingly familiar for general retailers. It is part of the big trend of 2011, one also highlighted yesterday by outgoing CBA boss Ralph Norris: … Continue reading

25 Nov 2011 – GFC II on its way: Norris

(25 Nov 2011, The Age, BusinessDay, p1,Liz Knight and Eric Johnston) “OUTGOING Commonwealth Bank chief executive Ralph Norris has warned that the European debt crisis has entered a dangerous phase, likening the current turmoil to the global financial crisis of three years ago.” “Mr Norris said global money markets ”effectively froze” this week as Germany … Continue reading

24 Nov 2011 – Jitters over Dexia rumour a sign that market is truly spooked

(24 Nov 2011, The Age, BusinessDay, p2, Malcolm Maiden) “REPORTS that a €90 billion rescue of the Belgian-French bank Dexia was in trouble were being denied by the French government late yesterday, but the way the rumour went viral speaks volumes about how nervous the markets are about the European financial crisis and its potential … Continue reading

24 Nov 2011 -Banks brace for big squeeze

(24 Nov 2011, The Age, BusinessDay, p1, Eric Johnston, Gareth Hutchens) “AUSTRALIAN banks are preparing for a potential freeze in global funding markets heading into the new year, as Europe’s worsening stresses threaten to send the world’s financial markets into a tailspin.” “Renewed funding pressures for the big banks, which need to raise $16.3 billion … Continue reading

23 Nov 2011 – Germany picks the wrong war

(23 Nov 2011, The Age, BusinessDay, p14, Saul Eslake) “THE most recent attempt at a comprehensive solution to the European sovereign debt crisis – the package of measures announced on October 27 after a week of summitry – appears, like others before it, to have failed. Secondary market yields on Italian and Spanish government 10-year … Continue reading

23 Nov 2011 – Hungary turns tail, goes begging to IMF

(23 Nov 2011, The Age, Businessday, p12, Ambrose Evans-Pritchard, London) “HUNGARY has returned cap in hand to the International Monetary Fund after kicking out inspectors last year, becoming the first country in eastern Europe to succumb to contagion from euro-zone debt stress.” “Rising bond yields and a weakening forint have forced the country’s Fidesz government … Continue reading

23 Nov 2011 – Euro debt heat rises on France

(23 Nov 2011, The Age, BusinessDay, p11, Brussels, The New York Times) “SHARPLY divided leaders in Europe are facing mounting signs that the debt crisis is striking at the heart of the euro zone.” “A major credit agency warning of a cut in the top-grade rating of France was one factor in a slide of … Continue reading

23 Nov 2011 – Euro zone debt hit to Australia

(23 Nov 2011, The Age, BusinessDay, p3, Clancy Yeates) “THE euro zone debt crisis threatens to spill over into Australia by pushing up bank funding costs and causing European banks to cut their exposure to Asia, economists have warned.” “The latest bout of market turmoil deepened yesterday, as investors grew more pessimistic about the efforts … Continue reading

23 Nov 2011 – Panel’s failure raises questions over US recovery

(23 Nov 2011, Business Day, HEIDI PRZYBYLA) “The implosion of the congressional supercommittee was likely to delay any major deficit-reduction agreement until after the next presidential election.” “THE implosion of the congressional supercommittee was likely to delay any major deficit-reduction agreement until after the next presidential election, and may pose a threat to the struggling … Continue reading

23 Nov 2011 – Deadlock threatens stimulus

(23 Nov 2011, AFR, p15, Ben Potter, Washington) “US President Barack Obama and the US Congress will have to act fast to avoid a massive stimuls withdrawal from the struggling economy on January 1, after a congressional super-committee failed to agree on $US1.2 trillion of deficit cuts over the next decade.” Read more at AFR.com.au

23 Nov 2011 – Hungary turns to IMF as troubles move east

(23 Nov 2011, AFR, p14, Ambrose Evans-Pritchard, London, from The Telegraph, 21 Nov 2011) Hungary turns to IMF as stress mounts in Eastern Europe “Hungary has returned cap in hand to the International Monetary Fund after kicking out inspectors last year, becoming the first country in Eastern Europe to succumb to contagion from eurozone debt … Continue reading

23 Nov 2011 – France’s top notch rating under threat

(23 Nov 2011, AFR, p14, Stephen Castle, Brussels, from New York Times, 21 Nov) Debt Crisis Lurches Toward Heart of Euro Zone as Rifts Grow “BRUSSELS — Sharply divided European leaders faced mounting signs on Monday that the debt crisis was striking at the heart of the euro zone.” “A major credit agency warned of … Continue reading

23 Nov 2011 – Election fails to halt Spanish slide

(23 Nov 2011, AFR, p14, from The Guardian, 21 Nov 2011) “A landslide victory by Mariano Rajoy’s People’s party (PP) in Sunday’s general election did nothing to stop Spain‘s debt problems worsening on Monday as the prime minister elect remained powerless to calm the markets.” “Spaniards were proud of having avoided an Italian-style government of … Continue reading

23 Nov 2011 – Spain election: People’s party sweeps to crushing victory over Socialists

(23 Nov 2011, AFR from The Guardian, 20 Nov 2011) “The conservative People’s party (PP) of Mariano Rajoy has swept to a landslide victory in Spain‘s general election, inheriting sky-high unemployment and one of the shakiest economies in Europe.” “Rajoy’s PP gained an absolute parliamentary majority with a crushing 16 percentage point win over the … Continue reading

22 Nov 2011 – Not so super committee faces deadlock on debt

(22 Nov 2011, The Age, BusinessDay, p6, Toby Harnden, Washington – also from The Telegraph) “Members of the congressional ‘super committee’ with the job of finding $US1.2 trillion in spending cuts admits they are heading for a failure that will plunge the US into economic crisis.” “Although the 12 members of the committee said they  … Continue reading

22 Nov 2011 – World Bank Sees Soft Landing for China as Asia Withstands Europe: Economy

(22 Nov 2011, Bloomberg) “The World Bank said China is heading for a soft landing of growth in excess of 8 percent next year, and with most Asian nations has fiscal scope to cushion its economy from an escalation in Europe’s debt crisis.” “Developing East Asia, which excludes Japan, Hong Kong, Taiwan, South Korea, Singapore … Continue reading

22 Nov 2011 – Lawmakers Trade Blame as Deficit Talks Crumble

(22 Nov 2011 AFR, from Eric Lipton, New York Times, 20 Nov 2011) “WASHINGTON — With the hours ticking away toward a self-imposed deadline, Congressional leaders conceded Sunday that talks on a sweeping deficit agreement were near failure and braced for recriminations over their inability to reach a deal. ” “The stalemate was the latest … Continue reading

22 Nov 2011 – Rajoy has little time to savour election victory

(22 Nov 2011) “MARIANO Rajoy has won the biggest parliamentary majority in a Spanish election in almost 30 years and told Spaniards to brace for hard times as the nation fights to avoid being crushed by the debt crisis.” “Mr Rajoy’s People’s Party swept the ruling Socialists from power after eight years, winning 186 of … Continue reading

22 Nov 2011 – European banks shrink local loan books

(22 Nov 2011, AFR, p1, Paulina Duran) “European banks have put large part of their Australian loan books up for sale as they face escalating funding pressures in their home markets, a move that could reduce the supply of credit to Australian companies and increase borrowing costs.” “More than $1 billion of corporate and infrastructure … Continue reading

21 Nov 2011 – Big banks race towards covered bonds

(21 Nov 2011, The Age, BusinessDay, p5, Clancy Yeates) “AUSTRALIA’S biggest banks are expected to draw heavily on ”covered bonds” as they face the challenge of raising more than $80 billion in long-term funds from jittery credit markets in the new year.” “With the euro zone crisis showing few signs of abating, banks are grappling … Continue reading

21 Nov 2011 – Investors pull out of Europe

(21 Nov 2011, The Age, BusinessDay, p1, New York) “NERVOUS investors around the world are accelerating their exit from the debt of European governments and banks, increasing the risk of a credit squeeze that could set off a downward spiral.” “Financial institutions are dumping their vast holdings of European government debt and spurning new bond … Continue reading

19 Nov 2011 – Alarm bells well ahead of MF Global collapse

(19 Nov 2011, AFR, p3, John Kehoe and Patrick Durkin) “The federal government was warned by the corporate regulator and experts two years ago that laws designed to safeguard retail investors’ money, including the missing $167 million owed to local clients of the collapsed broker MF Global, were not working properly.” “MF Global Australia, the … Continue reading

18 Nov 2011 – Monti faces big task in his baptism of fire

(18 Nov 2011, TheAge, p11, Karen Kissane) “IT’S hard to find someone with a bad word to say about Mario Monti, the bureaucrat catapulted to the prime ministership of Italy this week in the hope he can rescue the country from its financial mire. But then, everything is relative, and it’s easy to look good … Continue reading