Saturday, November 26, 2011

Paul de Grauwe: Dogmatismus treibt die Eurozone an den Rand des Abgrunds

Dogmatismus treibt die Eurozone an den Rand des Abgrunds.
Die gefährliche Verweigerung der EZB

In einer Währungsunion verliert ein Land zwei wichtige Waffen, schreibt Paul de Grauwe:
Die Abwertung und die eigene Zentralbank die Geld drucken kann. Wenn die Zentralbank von so einer Union sich dann weigert um zu einer kollektiven Verfahrensweise überzugehen, geht es schief.

Die Errichter der Eurozone dachten, daß eine Union wo jeder die gleiche Währung gebraucht und ansonsten sein eigenes Ding machen kann, funktionieren kann. Viele Ökonomen die aus ihrem akademischen Elfenbeinturm auf die Welt schauten, warnten, daß dies nicht funktionieren wird und daß auf die Dauer eine Krise ausbrechen wird. Die Warnungen sind nun Realität geworden. Was darauf hindeutet , daß man aus einem Elfenbeinturm doch besser sehen kann was in der Welt passiert als vom Boden aus.

Die Krise hat deutlich gemacht , daß die Eurozone nicht Summe individueller Teilnehmerstaaten ist, sondern eine gemeinsame Unternehmung. Laßt uns eben untersuchen was dies bedeutet.

The vantage point of the ivory tower (pieces of professors of economics)

Prof.Paul de Grauwe (Belgium)
personal / research webpage
twitter: @pdgrauwe

Paul De Grauwe pieces on

Nov 26th dut: Dogmatisme drijft eurozone naar afgrond 
Nov 26th ger: Dogmatismus treibt die Eurozone an den Rand des Abgrunds
Nov 27th dut: 'Belgisch begrotingsakkoord niet voldoende' 
Nov 28th eng: Why the ECB refuses to be a Lender of Last Resort

Prof.Paul Krugman (USA)
personal webpage
twitter: @NYTimeskrugman

eng: The conscience of a Liberal (blog)

Dec 23rd eng: New Frontiers in Economic Barbarism
Dec 2nd   eng: Killing the Euro
Dec 14th  eng: Interest Rates, Inflation, and the Way the World Works (Slightly Wonkish)

Ernst Fehr (Austria)

ger: Österreichischer Star-Ökonom Ernst Fehr für EZB-Intervention zur Euro-Stabilisierung

Eurozone summit results & calendar , official positions of EZ governments

Eurozoneremarks - Eurozone summit results & calendar , official positions of EZ governments

In this section you will find outcomes of summits effecting the eurozone and next events to take place. Also added with significant position changes of EZ leaders if there any to report.

Apr 2nd 2012

DJFXTrader: EU CRISIS ROAD MAP: Key Milestones Ahead
Feb 20th 2012

Timeline: Second financing package for Greece

Jan 9th 2012

Get ready for another rollercoaster ride
Jan 8th 2012

Merkel, Sarkozy Begin Work on Euro Rescue Plan
Jan 5th 2012

EU summit of March 1-2 will discuss size of ESM (permanent rescue fund) financing - French PM Filllon (RTR) (via @ChrisAdamsMKTS)
Jan 2nd 2012

Sarkozy, Merkel to meet as Europe seeks crisis exit

Dec 28th 2011

DJ EU CRISIS ROAD MAP: Key Milestones Ahead (Dow Jones)

Nov 26th 2011

common statement of Finmin of Germany, The Netherlands and Finland , Berlin Nov 25th
Nov 26th 2011 *
Jan Kees de Jager: Overleg in Berlijn met mijn Duitse en Finse collega
Nov 26th 2011
pdf EU-US Summit in Washington 28 Nov - the main issues A Transatlantic          

partnership #useusummit
Nov 26th 2011

3 translated articles on "mini summit Berlin" of dutch, german, finnish finmins: 1 2 3
Nov 24th 2011

Following are coming events linked to the debt crisis in the euro zone: (reuters)

additional blogpost:Events after the big Eurozone rescue summit Dec. 9th

***************      Positions of EZ governments & institutions :      ********************

Austria :
Nov 26th 2011 #
Faymann für größere Rolle der EZB
Nov 25th 2011

Nov 25th 2011 #
Fekter:Drittel mehr Zinsen durch Eurobonds
Sep 27th 2011 #
Fekter: Am Montag Beratungen ob EFSF reicht

The Netherlands:
Nov 27th 2011

Dutch lukewarm on eurobond
Nov 25th 2011 *
Nederland staat open voor ingrijpen ECB
Nov 24th 2011 *
Algemene Financiële Beschouwingen in teken van eurocrisis
Nov 24th 2011 *
'Liever sterker noodfonds dan grote rol ECB'
Nov 18th 2011 *
De Jager: Op dit moment geen actievere rol ECB

Nov 27th 2011 #
EFSF-Hebel-Details: Garantierahmen noch in Diskussion 
Nov 27th 2011 #
Geheimverhandlungen: Merkel und Sarkozy wollen Klub der Super-Europäer
Nov 25th 2011 #
Kulissen-Kampf um den Euro und die letzte rote Linie
Nov 22nd 2011 #
Schäuble: EZB steht nicht als Staatsfinanzierer zur Verfügung

Nov 26th 2011 #
Jutta Urpilainen: „Euro-Bonds sind ausgeschlossen“

Nov 24th 2011 #
Frankreich: EZB-Intervention in Krise dringend nötig

Nov 29th 2011 #
Luxemburg lehnt Euro-Bonds zum jetzigen Zeitpunkt ab

Dec 1st 2011

Poland Backs EU Treaty Changes to Improve Euro-Zone Discipline
Dec 2nd 2011

Poland to Brussels: don’t leave us out

Dec 17th 2011

Portugal PM Backs Deficit Limit In Constitution,Current ECB Role

Dec 14th 2011 #
Italien befürwortet EU-Finanztransaktionssteuer

Dec 10th 2011

‘Golden rule’ to be enshrined in Constitution

Dec 10th 2011

ECB limits bond buying, euro zone looks to banks
Dec 2nd 2011

Jürgen Stark: Economic situation and fiscal challenges
Dec 26th 2011 #
Chefvolkswirt Jürgen Stark im Gespräch „Der politische Druck auf die EZB ist enorm“
Dec 26th 2011 #
EZB fürchtet um Unabhängigkeit - Streit um Wege aus der Krise
Dec 25th 2011

European Central Bank, Germany Should Define the Rules of Their Game: View
Dec 25th 2011 *
‘ECB denkt aan langere leningen aan banken’

****       possible actions by ECB: (suggestions)
Nov 28th 2011

Factbox: What the ECB could do short of all-out bond buying (Reuters)

DNB: (dutch central bank)
Oct 31st 2011 *
DNB ziet heil in eurobonds, onder stricte voorwaarden

Bundesbank (german central bank)
Dec 31st 2011 #
Bundesbank pocht auf britischen Beitrag bei Euro-Hilfen
Nov 26th 2011 #
Weidmann schließt Euro-Bonds nicht grundsätzlich aus

European Parliament
Nov 15th 2011 *
Europees Parlement blijft hameren op economisch bestuur
Dec 2nd 2011

Viewpoints on EU treaty change and eurozone

European Commission 
Dec 1st 2011

Commission welcomes the top up of co financing rates for Europe's struggling economies

# = German, * = Dutch language

Friday, November 25, 2011

Would todays politicians still debate if the Russians were to invade Europe ?

Dear reader,

the author came along a joke yesterday on Twitter which was about the recognition (or rather the lack of it) of the big elephant in the room. He also came along a somewhat frustrated very prominent and highly esteemed professor of economics who choose some wording expressing his inability to change course of events very much influenced by inaction of the leading politicians.

So the question is if todays politicians are qualified to act decisively and much faster in order to stay in front of developments instead of running miles behind those deteriorating circumstances. As a someone who still knows the "old days" and the looming danger for western Europe which was known back then just as "the Russians, the reds" the question arises if todays politicians are still able to detect a catastrophe in the making as it was when the eastern block would have gotten their marching orders to invade the west.

Of course I apologize to any Russian citizen living in the present time which have no intention of invading us anymore but i wanted to use the example of a known danger of the PAST and the readiness of politicians and other responsible people to react swiftly in order to contain a situation. The had worked out plans, scenarios but also the necessary "guts" to open their eyes to focus on the advancing danger and to act swiftly if there was a need to.

Thursday, November 24, 2011

Advice to politicians: Be Superman not Clark Kent ! (eng)

(german version click here)
Dear reader,
as the author encountered some remarks by politicians and also read some blogs of other politicians which expressed some kind helplessness facing the current dramatic events which made him to put a document on the net which

a.) should help explain the "market thinking" to politicians
b.) resulting from those insights to find some practical ways out of the crisis

Were are experiencing dramatic times as also Chancellor Merkel has expressed already. The most most dramatic times since the end of WW 2 as she put it. The fundamental problem is less to be searched in the quite restrictive monetary policy of central banks or the ECB but more in the lack of understanding of politics or politicians what are the real reasons for the fact that many market participants are refusing to purchase bonds of southern European states (periphery) but also increasingly from more northern countries considered to be the core at acceptable (for state budgets) yield levels. Like at a bazaar there is a sell off of hardly to sell items going on and instead of ever decreasing prices for those shelf warmers on the money markets ever higher yields must be offered to lure buyers of state debt no matter of what lifespan into purchasing those. The refinancing of states to date depending on at least partial co-financing by such debts is now threatened of drying out and also the intervention of the ECB can only cloak this fact. Currently there are reports of auctions at which only the ECB is buying the offered bonds and other auctions have been reported to be called off because of a lack of actual buyers. (no ECB involvement either)

What is the reason for this ? In the judgment of the author who doesn't wear any pink specs of ideology but who perceives all facts cool and without any prejudice and only afterwards comes to an conclusion.

Thursday, November 17, 2011

Advice to politicians: Be Superman not Clark Kent ! (ger)

(english version click here)

Sehr geehrter Leser,

anläßlich einiger Kurzbemerkungen von Politikern neulich wie auch etwas länger gehaltener Referate von anderen Politikern welche allesamt die Hilflosigkeit angesichts der augenblicklichen dramatischen Ereignisse ausdrücken hat der Autor sich entschlossen ein Dokument ins Netz zu stellen , welches

a.) helfen soll Politikern die Denkweise der Märkte zu erläutern
b.) daraus resultierend gangbare Wege zur Überwindung dieser Krise zu finden.

Es sind dramatische Zeiten und wie selbst Frau Merkel erkannt hat durchlebt Europa z.Z. seine schwersten Tage und die Grundproblematik liegt m.E. weniger in der (restriktiven) Geldpolitik der Zentralbanken bzw. der EZB sondern vielmehr im fehlenden Verständnis der Politik bzw. der Politiker was eigentlich die Gründe dafür sind, daß sich sehr viele bisherige Marktteilnehmer weigern Staatsanleihen aus südlichen Euroländern (Peripherie) aber auch zunehmend auch aus nördlicheren (Kernzone) zu gewohnt "akzeptablen" (für die Staatshaushalte) Konditionen zu erwerben. Wie auf einem Basar findet derzeit ein Ausverkauf ziemlich unverkäuflicher Ware statt und statt stets sinkender Preise um die "Restposten" an den Mann zu bringen, müssen an den Finanzmärkten stets höhere Zinsen aufgeboten werden um noch jemanden zu finden der bereit ist gegen diesen Risikoaufschlag die Papiere egal welcher Laufzeit zu erwerben. Die Refinanzierung bislang stets auf Defiziten ausgelegter Staaten droht daher gänzlich auszutrocknen und auch die Aufkäufe der EZB können diese Tatsache nur kaschieren. Derzeit wird von bestimmten Auktionen berichtet , daß nur noch die EZB sich als Käufer beteiligt, diejenigen von anderen Staaten laufen teilweise völlig ins Leere und müssen daher verschoben werden.

Was ist der Grund dafür ? Nach der Einschätzung des Autors, welcher über keinerlei "Scheuklappen" verfügt, sondern nüchtern und möglichst sachlich alle Umstände zur Kenntnis nimmt und DANACH erst seine Schlüsse zieht, hat

some translations of various articles found on the net

Dear reader,

here you can find some articles translated into English:

from now on this blog entry will be split into individual articles and future translations to be published there also.

Dec 22nd De poets van Knot (via @mootzcom)
The coup of Knot (president dutch central bank)

Klas Knot the president of the (dutch central bank) Nederlandsche Bank delivered the cabinet a unpleasant Christmas surprise. De Nederlandsche Bank usually good for a vast transfer of profit to the treasury has decided not to give an interim-dividend to the state this year. Big bad luck for the governments finances: minister De Jager had to declare a bad news of 575 million € less close to the years ending.

The profit warning which was issued by DNB has to do with all the misery of the eurozone. DNB recons seriously with a lower profit or even a loss due to the crisis. DNB is part of the structure of European Central Banks and the ECB has put big risks on itself by purchasing sovereign bonds of the Euro area and by providing credit lines to struggling banks. Already a year ago the ECB warned European finance ministers that losses can be suffered by those actions. DNB chooses for not taking risks and does not transfer any dividend to its only shareholder the dutch state.

Bad luck for De Jager, not alone because of the effect on the budget deficit which is going to be higher than estimated. If DNB is definitely dismissing the dividend for 2011 De Jager cannot longer hold up the story that the dutch involvement in credit providing for problem countries in the Euro area is providing loads of money to the treasury.
And there is something else. De relationship between the former president of DNB, Nout Wellink, and minister De Jager has cooled off the last cuple of years. Nevertheless the dividends of the DNB under Wellink were steady „nice suprises“ for the treasury. Once Wellink held back a part of the profit: in 1998 in order to purchase the painting „Victory Boogie Woogie“ of Piet Mondriaan for the dutch public at the event of the farewell to the dutch guilder.

On Juli 1st Klaas Knot took office as new president of DNB. Knot came „from outside“ the cabinet assured and he was supposedly enhancing the relationship between the central bank and the ministry. Knot would be closer to the ministry and in the press he was referred to as „trustee“ of De Jager.
If De Jager and Rutte counted on that: within half a year Knot has made clear twice that he is cut from the same cloth as every central banker. First he brought an unpleasant surprise to the cabinet by warning of the risks for banking stability connected with the huge mortgage debt in the Netherlands at the beginning of November. Knot has chosen intentionally for the hypersensitive subject of mortgage rate deduct ability (>from IRS obligations) to demonstrate his independence from politics.

Now De Jager has miscalculated a second time. Knot is following the line of Wellink and the ECB concerning the debt crisis of the Eurozone. The governments should not think that they can put the costs of it on the central banks. And if the dutch government won't provide more cash for the EFSF the DNB will send a profit warning to The Hague. Via a U-turn of a possible loss of the central bank the financial misery will finally arrive at the treasury.
Only relief for the cabinet: the expected dividend of the DNB is a technicality which will produce less fuzz than the announcement of direct support to Greece. But it still is 575 million Euro.


'ECB en IMF onderzoeken crisismaatregelen' (by @mathijsbouman /twitter)
ECB and IMF looking for crisis solutions
The European Central Bank (ECB) and the international monetary fund (IMF) are doing research concerning possibilities to combat the debt crisis mutually. That was reported by press agency Reuters today.

According to sources both institutions talked about possibilities of the ECB to lend money to the IMF. This to ensure that the fund has enough resources to keep  also of larger European economies out of the fire. With that construction the restriction  of financing the sovereign debts of countries by the ECB can be circumvented. According to those sources the plans haven not left the drawing board. "For the time being it is just a idea" one of them stated.

Wednesday, November 16, 2011

Dossier: Hungary

Dear reader,

it came to the authors attention that currently news agencies seem to have a competition ongoing of who is first on single news headlines and what to conclusions to draw out of a few headlines. Hectic seems to be the result of latest Zeitgeist thing which make or break countries not by their fundamentals or longer term prospects and also its recent history or the path chosen by its current leaders. Well if one call a few month before current date "history" at all. The author was also quite shocked to see some articles this week which took one single chart of industrial production in two countries to back up claims for a full scale ECB action in unleashing its "big bazooka" onto the eurozone members by unlimited bailout of debt stricken countries and therefore also lowering their cost of borrowing > calming markets. Almost as in the the good old days where apples and oranges were getting mixed. And it's not only a habit of our American friends.

As a member of the "old school" (survivor of the cold war) of gathering as much data as possible BEFORE drawing any conclusions and also not to get sucked into the quagmires of whatever propaganda but keep it strictly to facts it seems to be a good idea to start a series of dossiers on countries , their economies, leaders and politics in order to get to know the fundamentals and perhaps then be able to put to propaganda/gossip into a perspective.  So what you will find here will be much more comprehensive than some cheering remarks of the HUF taking a dive against the EUR or default is looming for Hungary. So we start here with some articles about Mr Orban and his much hated government from the perspective of many other European politicians. Lately also accompanied by some bank of some countries (not all EU members) which had realistic fears of someone who "threatened" to pay back their loans immediately.

to be continued

PM says Hungary’s dependence on euro zone disadvantage, wants new banking rules
Despite threats ‘I won’t let myself be intimidated’
Hungarian Leader Takes On Foreign Critics
Orban greift Österreich-Banken an
2011, Nov 16th  BayernLB verzweifelt an Ungarn: "Tut uns enorm weh"
2011, Nov 11th  Hungary's economy: Hat in hand again
2011, Nov 22nd Hungary’s Banks Expect a Difficult Year Ahead 
2011, Nov 23rd Ungarn wittert Kartellabsprachen bei Töchtern der Austro-Banken
2011, Nov 24th ECB And Banks Furious At Hungarian Solution To Swiss Franc Mortgage Problem
2011, Nov 25th Ungarn auf Ramschniveau
2011, Nov 26th The euro trigger (text & video) Al Jazeera
2011, Nov 26th Ungarn will mit EU, IWF und Banken kooperieren
2011, Dec 1st   Hungary Omits Top Economic Policy Maker From IMF Delegation
2011, Dec 1st   Ungarn bekommt nur zu hohen Zinsen frisches Geld
2011, Dec 2nd  Hungary and the IMF: not so fast
2011, Dec 7th   Morning Briefing: Polish Rate Decision, Hungary 2012 Growth Plans 
2011, Dec 8th   Insight: Credit noose tightens slowly in central Europe
2011, Dec 10th Hungary aiming for 10-15 billion euro IMF/EU deal: analysts
2011, Dec 16th IWF zeigt Ungarn die rote Karte
2011, Dec 20th Hungary Hikes Base Rate To 7.00% From 6.50%, As Expected [Dow Jones] (via @djfxtrader)
2011, Dec 20th Paul Krugman: More Hungary

2011, Dec 21st Hungary’s Orban and his central banker
2011, Dec 21st Hungary Downgraded to BB+ by S&P
2011, Dec 29th Hungary Financing May Be Precarious as Hopes Dim for IMF Support
2011, Dec 31st EU-Kommission prüft Ungarns Notenbank-Gesetze 
2012, Jan  3rd  EU checking whether to challenge Hungary bank law
2012, Jan  5th   AUSTRIA: The Real Reason Anyone Gives Two Cents About Hungary
2012, Jan  7th   Hungary: "We are open to discussions" (ger)
2012, Jan  8th   From Here To Eternity, Hungarian Style
2012, Jan  9th   Viktor Orbán gives his side of story
2012, Jan  9th   Hungary Bonds Gain as Orban’s IMF Pledge Props Up Debt Auction
2012, Jan  9th   Erste Bank and Raiffeisen bank int.: 19bn Hungary loans (ger)
2012, Jan  9th   Slovaks Storm Hungarian Shops as Forint Hits Record Lows
2012, Jan 10th  Hungary sells HUF56bln of 3-month bills at yield of 7.98% with good demand: bid-to-cover 2.74, yields rising from Jan 3rd auction: 7.67%. (via @lindayueh)
2012, Jan 11th  EU to Recommend Hungary Sanctions
2012, Jan 12th  Hungary Accuses U.S. of Meddling in Domestic Politics 
2012, Jan 14th  Hungary far right demands exit from EU, burns flag at rally 
2012, Jan 18th  Forint Advances Second Day as Bonds Rise on Hungary Aid Prospect Optimism 
2012, Jan 18th  Poland’s Kaczynski to Hungarian Leader’s Rescue 
2012, Mar 4th   Victor Orban Interview: "There is a hidden Europe" (FAZ) (ger)
2012, Mar 16th EU: Those Who Compare EU To Soviet Union Don't Understand Democracy 
2012, Mar 16th The EU Soviet? Barroso takes on Hungary’s Orban 

Saturday, November 12, 2011

A static #ff (courtesy of google)

Dear reader,

yesterday it was Friday and it was brought to the authors attention who is just using Twitter for some weeks that there seems to be a habit/ a tradition to bring most valued Twitter accounts to the attention of ones own followers. Without speculating over the rather philosophical question why Friday is the chosen day for thanksgiving .. religious motives or because in Christian workweek Friday evening marks the possible beginning of the free weekend I think nevertheless it is a good idea of mentioning those people who contribute foremost to reporting on interesting subjects or discussing days/times events or just exchanging a few not so fact focussed thoughts ...

For the reasons of
a.) being lazy
b.) messages are perhaps overlooked
c.) forgot about c *ooops*

but nevertheless the author is thankful to all my sources on different subjects/regions for their efforts and their spirits.

So here is it the compilation of lasting & special gratitude to fellow users of Twitter and a recommendation for getting followed:

@SimoneFoxman (of @businessinsider)
@Katie_martin_FX (of @djfxtrader)
@fgeerdink (reporting on Turkey)
@ClaireBerlinski (reporting on Turkey)

@PatrickBernau (of @FAZ sunday edition)
@NickMalkoutsis (of Kathimerini english edition)
@ewaldeng (for his views as a Professor of financial geography)
@nouriel (for his views , disputed (by politicians) but realistic >almost an oracle)
@mathijsbouman (to whom my deep felt apologies goes out for being a pain in the butt lately!) 
@AlbertoNardelli (reporting on Italy)
@FGoria (reporting on Italy& markets)
@YanniKouts (reporting on Greece)
@Skytwitius (for his rather ironic view on the world events)
@NYTimeskrugman (Leading Professor of economics and blessed with outstanding humor)
@MarkKnoller (White House reporter for CBS & great fun to read)... 

by regions (see also my lists)

Friday, November 11, 2011

The need for a new Mefo change*

Dear reader,

as provocative this sounds it is important to see that the situation is dramatic within the eurozone and in order to not spiral rapidly downwards from austerity measures to decline in economic activity to less tax income for the states involved to more austerity etc etc some are calling to open the „flood gates“ in order to transform thee ECB to a lender of last resort for all member states needing help with unlimited resources but with the risk of inflation. Inflation is indeed compared to the other alternatives we face right now to be almost neglected.

But this transforming process of the ECB to some kind of FED is prohibited by current constraints in European laws such as the Maastricht treaty and the Lisbon treaty. It is also most problematic in regard of the incentives it gives to states not to perform the necessary steps to bring their out of control budgets at least to a reasonable, sustainable level. Most if not all economist agree that is sheer impossible to achieve better debt to GDP ratios without growth of their economies and therefore reduction in spending for benefits and higher tax income from good performing companies.

As we could experience much to our displeasure that politicians if they move at all in the right direction they need tremendous amount of time for almost as if they were to compete with snails who can crawl slower. That is IF they want to change the way of things are being handled in their countries for decades now which mostly comes down to blow up public „services“ (=bureaucrats) and not only putting tremendous expenses on the current workforce of state employees (as if that alone weren't bad enough) but also to put tremendous obligations for future budgets to pay a large chunk of the federal budget to future pensions (A fact that according to human nature nobody wants to see right now) Italy had a gigantic problem in the past and only partially did something about it (see reference section below) and also states currently not under everyones microscope such as Germany have a hidden „time bomb“ under their rug which is pensions which build up for the next 20 years somewhere in the region of 1.2 Tn (yes trillion) € (* put in reference section*)

Thursday, November 10, 2011

General data

Here you will find a list of useful data of the more static kind:
(Attention ! This blog entry is discontinued here .. You will find updated new list on homepage section: "Data, charts, fundamentals (long + short term)"

Dec. 9. European deficit/surplus to GDP ratios 2011 and 10 years (by Scott Barber/reuters)

Dec. 5. EU industrial structure 2011 (pdf)

Dec. 2.   Deutsche Exporte knacken Billionenmarke

Nov. 28. Italian business confidence & GDP 1994 - 2011 (by Scott Barber/Reuters)

Nov. 28. Eurozone money supply & loans 2000 - 2011 (by Scott Barber/Reuters)

Nov. 24. World steel production 2007 - 2011 & 2011 (Reuters)

Nov. 24. German IFO charts 1998 - 2011 (by Scott Barber /Reuters)

Nov. 23. German 10 year real bond yield 1960 - 2011 (by Scott Barber/Reuters)

Nov. 23. Dexia assets as percent of GDP 1996 - 2011 (by Scott Barber/Reuters)

Nov. 23. Global manufacturing PMIs 2007 - 2011 (by Scottt Barber/Reuters)

Nov. 23. The Difference Between Northern and Southern Europe

Nov. 22. Italy bond yield above nominal GDP growth 1987 - 2011 (by Scott Barber/Reuters)

Nov. 22. Portugal economic overview 2006-2011 (by Scott Barber/Reuters)

Nov. 22. Eurozone inflation & commodities 1995 -2011 (by Scott Barber/Reuters)

Nov 22. Euribor EONIA spread 2006 - 2011 (by Scott Barber/Reuters)

Nov.21. France vs Germany GDP, debt, PMI etc 2006 -2011 (by Scott Barber/Reuters)

Nov.21. ECB bond buying 2010 & 2011 (by Scott Barber/Reuters)

The relevant articles of the Lisbon Treaty for the sovereign debt crisis

Eurozone Debt Crisis Visualized

Capital subscription of ECB (Euro area)

Spanish unemployment and inflation (by Scott Barber/Reuters)

Eurozone unit labour costs 2000-2012 (by Scott Barber/Reuters)
OECD definition unit labour cost

Italian industrial orders and PMI 2004-2011 (by Scott Barber/Reuters)

Spain vs Germany 2007 -- 2011 (by Scott Barber/Reuters)

Eurozone debt web: Who owes what to whom ? (BBC)

Eurozone bond spreads 1994 - 1999 (by Scott Barber /Reuters)

Spain economic overview 2006 - 2011 (by Scott Barber / Reuters)

Italy vs Spain: debt , deficit & yield 2000 - 2010 (by Scottt Barber / Reuters)

Inflation ex food & energy, US, UK, EZ, Jap 1997 -2011 (by Scott Barber / Reuters)

Netherlands / German govt. bond spread 1960 - 2010 (by Scott Barber / Reuters)

Eurozone government debt 2011 (by Scott Barber /Reuters)

France GDP growth & consumption 2001 - 2011 (by Scott Barber / reuters)

It's the economy stupid !

Dear reader,

don't start to worry I will not start to comment on the everlasting struggle for the White House between Democrats and Republicans.

The point i am referring to is that the current dramatic events on the financial markets in Europe expose a lack in understanding of the importance of the economy to our society. So due to lack of this understanding it might be explained why the possible default for Italy was not first topic on German TV on Nov 8th. In fact it was not topic at all that the yield of Italian bonds reached and surpassed 7%. After markets demanded the resignation of Mr. Berlusconi it was widely expected that things will start to ease for Italy after this „demand“ was met not only from the markets but also from some if not most of his European colleagues that were simply fed up with his empty promises.
So far so good and while Mr. Berlusconi was focus of attention also by news media while being the key word to the now famous exchange of grins of Mr. Sarkozy and Mrs. Merkel at the last summit supposedly successful in rescuing the future of Greece and the Euro zone it is now where simple market data are ruling the fate of Italy and of the whole Euro zone where those media abstain from proper reporting.

Immediately it shoots to my head what an economist said or better asked the last days on Twitter: Where did we (economists) fail. How could things deteriorate the way they did ? Well as with this expert on economics ONLY is it a bit with modern day journalism where

a.) most stories are based on reports delivered by news agencies such as Reuters, AP, DPA, ANP etc etc

b.) many journalists are used to report on political developments and perhaps those of „human interest“ but so far the economy was just for some specialists who had the opportunity to speak for a few moments on the days winner/losers on the stock market or got a similar column for the newspaper where they could fulfill the needs for the few who formed a group of special interest (e.g. business people, investors, „rich“)

Monday, November 7, 2011

When a tweeting bird suddenly dies

Dear reader,

a word of caution about the use of twitter:

In general twitter is a good thing so the author after an initial trial period started to like the usefulness of putting out at least some shorter headlines combined with a link to the article. He also liked the opportunity to subscribe to some news channels who put out quite some constant stream of news. So by following some channels a constant flow of news came in but soon he discovered that not all really important side-stories were tweeted by the news outlets or they were "just" out of timeline (too "old") in order to get detected by the not that sharp eyes of the follower in question.

So in order to fill the gaps he used again thee good old Google news service and searched there for some stories which were at the time quite "hot" and put those to twitter by copy & paste of headline and link to the full article only added with some date stamp, short indicator what language and subject hashtag (such as #euro, #efsf etc.).  This was done just manually and not by any tools and besides that it seems be common practice of all those news channels who still haven't programmed an api software for putting out there latest articles automatically. So for some weeks it worked pretty well and i have to admit the output of articles reached boiling points on the events of Eurozone summit to solve the big Greek debt crisis while there were reports on latest developments on the net. This evening where the 50% haircut deal for Greece was hammered out was also the evening where my little FD news channel suddenly was muted. So timeline was suddenly frozen and all followers  were gone (=>0) also all following (=> 0 after some 240 before) and most shocking all the 1400+ tweets which have been put on the twitter channel before.

Benchmarks for public sector performance of memberstates

Dear reader,

-draft to be continued -

the EU is well known for making some progress on comparable numbers for member-states when it comes to all kinds of statistics. Some of them quite useful some less and some even not all. So far so good. A short list of known facts about EU: import/export of goods & services, water usage per capita, alcohol usage per capita, Performance of schools and pupils (PISA), GDP and other economic indices etc etc ...
The goal is to make things transparent and also more comparable between those member-states or by setting standards to enhance chances for students, workers by standardization of working skills , exchange of goods when they cross borders fulfilling same standards etc. It is also intended to improve those ratings of member-states on the very rear end of such comparisons and therefore in the long run to improve situations by setting examples of best performance and exposing the worst performance. Using the ancient principle of carrot and stick if  you will order to be beneficiary for the common good.

Looking to the current mess we are in attributed to seemingly unlimited public spending of some (?) member-states of our beloved Euro zone i asked myself the question: What about data on public sector performance e.g. per capita ? So far i didn't come across such data on the net (maybe if someone has a clue or a hint... let's have it ..and it will linked !) which makes it more transparent what countries have best performance in different parts of their public services. Maybe in general measured in € per department and then per capita.

... Departments and known individual figures... (to be inserted)

... Balance sheets like in Hessen ... (to be inserted)

... Search for optimum like Slovenia ...

... Examples of lean states ...

... Principle of unlimited growth from within ...

The endgame should be clear to everyone: By  exposing the "black holes" of public spending it should force governments to first expose their quagmire of public spending habits and then also make those states performing worst to be forced to make changes to come closer the role models of individual categories.

Miljarden pompen we in zorg, onderwijs, politie. Zonder resultaat.
SCP: alles kan goedkoper

Thursday, November 3, 2011

When everyones darling runs a company

- draft – to be continued

Dear readers,

when you are familiar with how companies are being run successfully (stay within the market for years) you know the essentials of what is being needed in order to do so. Basically it is all about revenues vs costs where the former has to be a chunk bigger than the latter. Without such a balance at least a bit to the revenue side a company is doomed because the costs will eat up its potential reserves and no bank will grant a company loans after loans in order to pay running costs such as paying the wages for the employees. And even better .. try to get banks to accept down payments to their loans by taking up new loans each and every month or quarter or year even when you guarantee them a good yield. Banks would be interested in the balance sheets in order to see the assets+debts, revenues and costs therefore if the company is able to pay back the loans on new production assets producing extra revenues or at least promising to so in the future. Don't hope to go to your bank without those key figures in your suitcase if you don't want to exchange more than just friendly greetings with your bank folks and immediately afterwards receive some good advice such as „good luck“ and a lukewarm „Have a nice day !“ Let me assure you they won't fall for promises that in order to pay back the loans you ask them to give to you will be payed by making your debtors (clients, customers) just pay more whatever is needed once there is too little cash in the end of the day and they will be more than willing to pay a little extra so that you can further pay back your rates and even get new loans.

Of course there are neither such companies (I know of) nor such banks because in rel economy things are very tough and complex structures like organizations or bunch of people must be coordinated as well as other important things like keeping track eve planning ahead of finances. Well just to point out the basics of it it can be reduced to peoples households where there has to be a strict rule of income vs expenses in order to sustain the private household and a company involves just some people but basically must fulfill same strict balance with a little overshoot of the income side.

Tuesday, November 1, 2011

The split of the eurozone in north and south by markets

Dear reader, 

it was concluded by me weeks ago when the markets got more and more nervous about the lack of leadership of Merkozy when it came clear that the markets will achieve what European politicians desperately try to avoid: The split of the Eurozone in half !

Two zones with different character, different mentality , different strength but most important inner balance and stability.

As suggested before by German economist and retired businessman Hans Olaf Henkel (and myself with not such a well known name ;-)) 
Others had this idea of two zones instead of one with many tensions even potential for total collapse been published this year. 

So now markets are seeking already the safety of the core of the Eurozone and capital is being deducted from the periphery of it. The ever bigger yield spreads between "good" and "bad" states are becoming more and more extreme again after Greek PM Papandreou announced a referendum and therefore put the fear factor back into the global financial markets. Tensions were lifted before by Merkozy when markets calmed down after the "big bazooka" was announced only 1 week ago on the historic Brussels summit where the Greek problem was supposedly solved.

The good old times (1990s) The way to the monetary union

Interviews and opinions of major players before the Eurozone became reality. The "fathers" of the Euro..

Finance ministers, prime ministers, central bankers

Hans Tietmeyer: Der Termin steht im Vertrag (Der Spiegel)

Auslaufmodell D-Mark (Der Spiegel 5/1997)

[update Nov 19th]

 Italy's Debt Woes,30 Years in Making

The Technocratic Nightmare


Dec.09th 2011 Vor 20 Jahren wurde der Grundstein zum Euro gelegt
Dec 25th 2011 Euro inventor: Theo Waigel gives the euro some 400 more years (Die Welt)
Jan  07th 2012 With this EMU Europe chooses the wrong way (dut)
Mar 01st 2012 Stability or more inflation (Der Spiegel 15/1992)

The final Greek default and exit

Dear reader,

well everyone including me was caught by surprise when Giorgos Papandreou made his announcement of a desired referendum to be held in Greece within a few months. (January 2012 was speculated on). Well actually I was taken by surprise by THIS particular move but was already prepared for a "surprising backpedaling first indicated by Greek finance minister Venizelos when a broader parliamentary majority was suddenly seen as desired by him (and possibly Papandreou also) 

So in a comment from mid of last week i indicated in another (political) blog already that this whole process of "haircuts", "summits" lengthy negotiations etc could have been a well thought PLOY in order to get enough time for some influential (and as a matter of fact super rich) Greeks to pack up their loot and do a runner (to safe haven) before everything and everyone is being in danger of getting in the focus of increasingly effective tax collectors with sharpened teeth by European task force. Also the privileges of the Greek political class would be on the line once the very strict rules of austerity and control of public spending would also effect their freedom of doing just what they seem of advantage for their own interests. Let's not forget that the Papandreou family ruled the country for years if not decades with the current offspring of that "ruling family" now being in danger to loose this "throne" for good. Same applies for the so called opposition where also political party was used foremost to promote individual political careers not to make fundamentally different politics. So these "dynasties" along with their oligarch friends in the background are now in danger to loose their grip on the country when the EU or better Eurozone partners attach too many strings for the shipment of every little package of their relief funds for Greece. As it happened last time when the official report of the so called "Troika" was awaited first before Greece got the last chunk of 8 bn € released. Although it was clear all along for political analysts that they won't actually stop the release of aid, it was delayed to point that Greece had in the end to admit that they still got more reserves to pay public sector from than they initially admitted. Also they were fully aware of the newly transparency which came along with the "visits" of the troika when employees of Greek ministries tried to block access of monitors from outside in order to keep things under the carpet where they think they belong to remain.