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Global Economic Collapse, nation by nation

Hungary 'Junked' By Moody's
24 November 2011 Zero Hedge

Citing uncertainty over the country's ability to meet 'austerity' targets and its rising susceptibility to external shocks - given its heavy reliance on external investors -
Moody's just downgraded Hungary to Junk Ba1 (with a negative outlook).

LIBOR SCANDAL on page 22

ZionsCRY DAILY NEWS with prophetic analysis


ILLUMINATI behind global government, globalism is the 666 Beast System
Many FACTS are conspiracy, but not theory.
WHAT is the driving force behind the new world order?
Its the same as satan long ago - "I" want to be God

February 7, 2012  Paul McGuire,
When we talk about the NWO, that is the 666 New World Order, globalism, illuminati, UN, and pretty much ALL organizations today including most churches.
The destruction of the American economy and the USdollar did not happen by accident.
It was a planned event, like the demise of the euro etc.
There is [color=darkred]no energy crisis
and there are vast oil reserves in the United States and around the world.
There is NO real food shortage, only the manipulation of crops through genetically altered seeds and artificial shortages for the purpose of population control.
Everything we see around us is manufactured crisis, created to bring about a one world government.
Every major crisis for 100 years has been the work of globalists guided by occult forces like the Illuminati.

Nations are collapsing fast.   Shocked

November  25,  2011  Friday
World Stock markets are DOWN  on a lot of bad financial news
Spain, Ireland, Portugal, Greece and Italy ditched their government this year
Hungary junked by Moodys due to its rising susceptibility to external shocks.
Fitch downgraded Portugal rating to junk status.
Egypt downgraded
Japan in jeopardy

These threads are multiple pages

Financial Collapse and War
Maurice Sklar prophecy

Eurozone government, Euro-Collapse

WATCH GREECE -  Nov 22   Bank Run in Greece

WATCH FRANCE  -  Fitch reports French rating at risk



Germany Gets The Debt Blues As Euro Bonds Loom

Portugal's Rating Cut To 'Junk' By China's Dagong

23 November 2011
Arguably the least biased (or perhaps least cognitively dissonant) of the major ratings agencies,
China's Dagong has just moved Portugal's rating to junk (BB+) from comfortably investment grade (BBB+) - a 3 notch drop.

The rating agency also left the peripheral nation on negative watch.
This action follows Monday's Greek downgrade from C to CCC.
Is this a ploy for better entry levels when they save the world with their EFSF-buying bazooka?
Or more likely a more honest reflection of a debt-laden, slow-growing, austerity-facing nation burdened with inadequate leadership and an inability to control its own fate?

Germany faces Eurogeddon
Death of a currency as eurogeddon approaches
It's time to think what hitherto markets have regarded as unthinkable – that the euro really is on its last legs

24 Nov 2011
They need to wake up fast; it's happening before their very eyes. In its current form, the single currency may always have been doomed, but it has been greatly helped on its way by an extraordinarily inept series of policy errors.
The defining moment was the fiasco over Wednesday's bund auction, reinforced on Thursday by the spectacle of German sovereign bond yields rising above those of the UK.

If you are tempted to think this another vote of confidence by international investors in the UK, don't. It's actually got virtually nothing to do with us. Nor in truth does it have much to do with the idea that Germany will eventually get saddled with liability for periphery nation debts, thereby undermining its own creditworthiness.

No, what this is about is the markets starting to bet on what was previously a minority view - a complete collapse, or break-up, of the euro.
Up until the past few days, it has remained just about possible to go along with the idea that ultimately Germany would bow to pressure and do whatever might be required to save the single currency.

The prevailing view was that the German Chancellor didn't really mean what she was saying, or was only saying it to placate German voters.
When finally she came to peer over the precipice, she would retreat from her hard line position and compromise.
Self interest alone would force Germany to act.
But there comes a point in every crisis where the consensus suddenly shatters. That's what has just occurred, and with good reason.
In recent days, it has become plain as a pike staff that the lady's not for turning.

This has caused remaining international confidence in the euro to evaporate, and even German bunds to lose their "risk free" status. The crisis is no longer confined to the sinners of the south. Suddenly, no-one wants to hold euro denominated assets of any variety, and that includes what had previously been thought the eurozone safe haven of German bunds.

Belgium credit rating downgraded by S&P
25 November 2011  Belgium has had its credit rating downgraded by ratings agency Standard & Poor's.
The country's downgrade could make it more expensive for Belgium to borrow in future.
Belgium's rating was cut by one notch, to AA from AA+, with S&P expressing concerns about funding and market pressures.
The move comes as the eurozone crisis threatens to keep growing, and with continued concerns over Italian debt.
S&P said the outlook was "negative", meaning Belgium's rating could possibly be cut further in future.

France, Spain, Belgium 5-year CDS widen to record
25 November 2011   MarketWatch
The cost of insuring European sovereign debt against default rose to record highs for France, Spain and Belgium in early trading Friday amid concerns that politicians are still a long way from resolving the euro-zone debt crisis.
Around 0800 GMT, five-year credit default swaps spreads on France, Belgium and Spain all pushed to fresh records, according to data-provider Markit.

France's five-year CDS spread widened two basis points to 250 basis points, while Spain's five-year CDS widened 16 basis points to 495 basis points.
Belgium's CDS widened one basis point to 395 basis points. It has now widened 69 basis points since last Friday.
Italy saw its five-year CDS jump 30 basis points to 583 basis points, closing in on its record high 587 basis points set Nov. 15.
Germany's CDS widened four basis points to 113 basis points. It is now just three basis points from its record high set Oct. 4.
Portugal's widened 10 basis points to 1,110 basis points after Fitch Thursday downgraded its credit rating to junk status.
Greece's CDS spread was one basis point wider at 63 basis points upfront, which means sellers of default protection are demanding a deposit at the inception of a trade to cover the country's deteriorating credit risk.

The worst week for the stock market in two months ended with a whimper in thin trading Friday.

11/25/11   The Dow Jones industrial average lost 4.8 percent this week, while the broader Standard & Poor's 500 index fell 4.7 percent.
Both had their worst weeks since Sept. 23.
The Dow fell 25.77 points, or 0.2 percent, to close at 11,231.78. Of the Dow's 30 stocks, Chevron Corp. lost 1.6 percent Friday, the biggest drop. Travelers Cos. Inc. added 1.2 percent, the largest gain.

Major indexes wavered throughout Friday's session, which was shortened because it's the day after Thanksgiving. Worries about Europe's debt crisis flared up again after Italy had to pay 7.8 percent to borrow for two years at a debt auction. It's another sign that investors are increasingly hesitant to lend to European countries.
The euro slipped to $1.32, losing 2 percent this week against the dollar. The drop puts the euro at its lowest level since Oct. 4.

Higher interest rates on government debt of Italy, Spain and other European countries have rattled stock markets in recent weeks. When borrowing costs climb above the 7 percent threshold, it deepens investor fears about a government's ability to manage its debts. Greece, Ireland and Portugal had to seek financial lifelines when their interest rates crossed the same mark.

Euro zone may drop bondholder losses from ESM bailout

11/25/11   BRUSSELS (Reuters) - Euro zone states may ditch plans to impose losses on private bondholders
should countries need to restructure their debt under a new bailout fund due to launch in mid-2013, four EU officials told Reuters on Friday.

Discussions are taking place against a backdrop of flagging market confidence in the region's debt and as part of wider negotiations over introducing stricter fiscal rules to the EU treaty.
Euro zone powerhouse Germany is insisting on tighter budgets and private sector involvement (NYSEArca:PSI) in bailouts as a precondition for deeper economic integration among euro zone countries.

Commercial banks and insurance companies are still expected to take a hit on their holdings of Greek sovereign bonds as part of the second bailout package being finalized for Athens.
But clauses relating to PSI in the statutes of the European Stability Mechanism (ESM) - the permanent facility scheduled to start operating from July 2013 - could be withdrawn, with the majority of euro zone states now opposed to them.

November  26,  2011  Saturday
Single currency collapse unless Germany and the ECB move quickly
Euro zone hurtles towards a crash.
The chances of the euro zone being smashed apart have risen alarmingly.
A euro break-up would cause the worlds most financially integrated region to be ripped apart by defaults, bank failures and the imposition of capital controls.
The euro zone could shatter into different pieces, or a large block in the north and a fragmented south.
Amid the recriminations and broken treaties after the failure of the euro, wild currency swings between
those in the core and those in the periphery would almost certainly bring the single market to a shuddering halt. The survival of the EU itself would be in doubt.

Britain will join the Euro says Lord Heseltine

November 20th, 2011   Jeff Taylor
The staunch Europhile ex deputy prime minister and long term supporter of the Euro, Lord Heseltine, said on the BBC’s Politics Show that “I think we will join the Euro”.
This declaration by the Tory Grandee comes straight after the German finance minister, Wolfgang Schauble, said last week that the UK would join the single currency “faster than people think”.
Lord Heseltine said that, even though it had problems, the ‘chances are’ that the Euro would survive due to the sheer determination of the Germans and the French to maintain its ‘cohesiveness’.

The UKIP leader, Nigel Farage, also speaking on the Politics Show, responded by saying that the Mediterranean countries should leave the Euro.
‘The whole thing is failing.’ He said ‘It is going to break up’.
But actually both may well be right.
The Euro in its current form will almost certainly fail, but out of the ashes the French and Germans would create a new ‘Super-Euro’,
a more powerful Eurozone that does not have the weaker countries’ economies holding it back.
And that is the real danger for the UK.

Banks Build Contingency for Breakup of the Euro     11/26/11
For the growing chorus of observers who fear that a breakup of the euro zone might be at hand, Chancellor Angela Merkel of Germany has a pointed rebuke: It’s never going to happen.
But some banks are no longer so sure, especially as the sovereign debt crisis threatened to ensnare Germany itself this week, when investors began to question the nation’s stature as Europe’s main pillar of stability.

On Friday, Standard & Poor’s downgraded Belgium’s credit standing to AA from AA+, saying it might not be able to cut its towering debt load any time soon. Ratings agencies this week cautioned that France could lose its AAA rating if the crisis grew. On Thursday, agencies lowered the ratings of Portugal and Hungary to junk.

While European leaders still say there is no need to draw up a Plan B, some of the world’s biggest banks, and their supervisors, are doing just that.
“We cannot be, and are not, complacent on this front,” Andrew Bailey, a regulator at Britain’s Financial Services Authority, said this week. “We must not ignore the prospect of a disorderly departure of some countries from the euro zone,” he said.

Prepare for riots in euro collapse, Foreign Office warns
British embassies in the eurozone have been told to draw up plans to help British expats through the collapse of the single currency, amid new fears for Italy and Spain.

South Korea repeats warning on slowing economy
5 December 2011  - Seoul MarketWatch
South Korean Finance Minister Bahk Jae-wan on Tuesday repeated a warning about slowing growth for Asia's fourth-largest economy and
called for a decisive plan from the European summit later this week to quell the current global crisis.

New Zealand treasury cuts growth forecasts
4 December 2011  MarketWatch
New Zealand's Treasury cut its growth forecasts for the year ending March 2013 due to the European crisis.

Mexican GDP outlook deteriorates, survey shows
5 December 2011  - Mexico City MarketWatch
The outlook for Mexican economic growth next year is worsening, while inflation expectations are ticking up for this year and 2012,
according to the results of a survey among private economists published Monday by Citigroup Inc. unit Banamex.

Exclamation     David Wilkerson WARNED when Mexico goes, we're next     Exclamation

*BA  I moved this here.  I want to keep the topic all together


Latvia Bank Run     December 12,  2011
Latvia largest bank is scrambling to contain a run among depositors fearing imminent collapse.
False rumors behind it that ATMs in Sweden were shut down, Swedbank operations in Estonia closed, and the bank Latvian chief executive has been arrested.
Swedbank said the bank is functioning normally and all depositors will have access to their funds via bank machines.
One large Latvia bank is being liquidated after regulators uncovered massive fraud.

Euro falls to lowest level since January - Investors await Federal Reserve statement on rates, monetary policy
12 December 2011  The dollar turned up against the euro on Tuesday following reports that German Chancellor Angela Merkel frowned upon the notion of increasing the size of Europe’s permanent bailout fund.
“Any toxic euro rhetoric continues to bring a slew of sellers off the sidelines,” said Dean Popplewell, chief currency strategist at Oanda Corp.
The dollar index , which measures the performance of the greenback against a basket of six currencies, turned up to 79.975 from 79.533 in late North American trading.
The euro fell to $1.3087, down from around $1.32 earlier and versus $1.3188 on Monday.
Merkel rejected raising the lending limit for the European Stability Mechanism, according to Dow Jones Newswires.
The ESM “currently stands at 500 billion euros, which is unlikely to be enough to cover Spain and Italy if they need to retreat from the bond markets,”
said Kathleen Brooks, research director at

Euro falls to 11-month low amid debt worries
Dec. 14/11  Stock markets in Europe tumbled again Wednesday as the common currency, saddled by the continent's debt crisis, fell to an 11-month low against the U.S. dollar.
The euro sagged 0.5 per cent to $1.2975 US by mid-afternoon, the first time it has traded under $1.30 since January, in a fresh sign that Europe's deal last week to enforce more budgetary disciplines on the 17 eurozone countries is meeting with skepticism in the markets.
The major continental stock markets fared poorly. Germany's DAX index closed down 1.7 per cent, while the CAC-40 in Paris dropped 3.3 per cent. London's FTSE 100 was off 1.1 per cent.

Meanwhile, Europe's unresolved debt crisis kept the pressure on its indebted governments, with Italian borrowing costs rising again. The Italian government paid 6.47 per cent interest to borrow €3 billion ($4 billion Cdn) for five years at a bond auction, up from 6.30 per cent just a month ago.
"It was no secret to anyone that the currency union would run into these problems sooner or later. It’s amazing it took so long to rupture," Bank of Montreal chief economist Sherry Cooper wrote in a note.

ECB cut growth view on debt-crisis uncertainty
15 December 2011  The euro-zone debt crisis poses a substantial threat to the region's economic prospects, the European Central Bank said Thursday, elaborating on its decision to lower its growth forecasts.
Financial market tensions could intensify and may spill over to the real economy, the ECB said Thursday in its monthly report.
Slower-than-expected global growth poses a further risk to economic growth, it added.
The ECB expects inflation in the coming months to remain above its target of just under 2%.
But inflation will slow below 2% in the course of next year on weaker growth, while cost and wage pressures will remain modest.

Risks to that price development outlook are broadly balanced, with an upside risk lying further tax increases needed for fiscal consolidation and the downside risk related to weaker-than-expected growth, the ECB said.
The report mostly reiterated the growth and inflation projections and comments made by ECB President Mario Draghi after the ECB cut its benchmark rate last week.

Fitch downgrades issuer default ratings at 6 banks
15 December 2011  Fitch Ratings on Thursday downgraded the issuer default ratings and viability ratings at six banks and just the viability ratings at two others.
Fitch downgraded the long-term issuer default ratings and viability ratings of:

- Bank of America Corp.
- Barclays PLC
- BNP Paribas
- Credit Suisse AG
- Deutsche Bank AG
- Goldman Sachs Group Inc.
The ratings agency also downgraded the viability ratings at Morgan Stanley and Societe Generale while affirming their IDRs.

Disaster Losses Hit Record Levels in 2011
December  16,  2011
 The disasters that plagued the globe this year will send 2011 into the record books as the most costly year for catastrophes on record.
Japan's powerful tsunami, earthquakes in New Zealand, floods in Thailand and a series of severe tornadoes in the U.S. all contributed to $350 billion in disaster losses, according to a new estimate from reinsurance company Swiss Re AG.
The long list of calamities crippled factories and cut supply chains, rippling through the world's economies. In Christchurch, New Zealand, entire city blocks remain uninhabitable; in Alabama and Missouri, neighborhoods have been wiped off the map.
Insurance and reinsurance companies are likely to shoulder about $108 billion of the losses, though the tally could creep higher, Swiss Re said.
The insurance industry's burden would have been greater except for the relatively low uptake for earthquake and tsunami coverage in Japan, where the government, businesses and individual homeowners are footing the bulk of the bill. To a lesser degree, the same was true in August's Hurricane Irene, where wind damage in the U.S. was covered—but flooding, in many places, was not.

Comprehensive euro zone deal beyond reach - Fitch
A comprehensive solution to the euro zone debt crisis is beyond the region's reach, rating agency Fitch said, warning that six of its economies including Italy and Spain could be hit with credit downgrades in the near future.
The warning late Friday, the second time in two weeks that the bloc has been threatened with multiple ratings markdowns, heightened pressure on leaders to get to grips with the turmoil.
Fitch also said it might also cut AAA-rated France within two years and urged the European Central Bank to take a more active firefighting role.

One ECB policymaker said Saturday that time was running out to come up with solutions to a crisis that could spark a global slump. Another said the bank would not expand the bond buying program it launched to keep a lid on vulnerable states' debt costs.
Underscoring tensions within the bloc, a week after a key EU summit failed to reassure financial markets the crisis was being tackled, Italy's Prime Minister Mario Monti urged EU policymakers Friday to beware of dividing the continent.

Moody's Turns to Canada, Ontario Outlook Revised To Negative, "Softening Economic Outlook" Cited
15 December 2011
 And so the focus shifts to the quietest neighborhood on the block:
"The negative [Moody's] outlook on the province [of Ontario] reflects the softening economic outlook, Ontario's growing debt burden, and the extended timeframe to achieving a balanced budget."
What's next: someone dares to question the stability of Canadian banks which as we it turns out may have a few hundred billion in hyper-rehypo assets (Canadian Imperial Bank of Commerce (re-pledged $72 billion in client assets),
Royal Bank of Canada (re-pledged $53.8 billion of $126.7 billion available for re-pledging)) pledged there... and there... and there... and so, ad inf.

Belgium cut by Moody's
December  17,  2011   BRUSSELS
The downgrade of Belgium's credit rating by agency Moody's underlines the need to cut the budget deficit next year to 2.8 percent of GDP as agreed by the ruling coalition, Belgian Finance Minister Steven Vanackere said on Saturday.
While the deficit target and measures to reach it have been agreed by Belgium's six-party ruling coalition, economists expect more austerity steps may be necessary given a weakening economic outlook for the country and the euro zone as a whole.

Vanackere told Reuters in an interview that if periodic checks during 2012 showed Belgium was off course to achieve the target, new measures would be implemented.
"The 2.8 percent will be achieved. If growth estimates are downgraded in March, that will of course imply new measures to guarantee the result of 2.8 percent," he said.
Moody's cut Belgium's rating by two notches late on Friday to Aa3 from Aa1, citing deteriorating financing conditions in the euro zone, risks to economic growth and the costs of bailouts of banks such as Dexia (DEXI.BR).

5 Hungarian banks downgraded by Moodys
16 December 2011
 Moody's Investors Services lowered the deposit and debt ratings on five Hungarian banks, citing the quicker-than-expected deterioration of asset quality, increasing pressure on profitability and capital as well as a risk of weakening in the parent banks' commitment to Hungarian operations.
The ratings firm lowered the standalone ratings on K&H Bank, FHB Mortgage Bank, Erste Bank Hungary and MKB Bank. It also lowered the parental support uplift in the deposit ratings of K&H and Budapest Bank by one notch. All the banks carry a negative outlook.
Moody's said the level of non-performing loans in the banks' portfolios will continue to rise throughout 2012 due to turbulent economic conditions and the significant loan restructuring in the system.

Eurozone to pursue crisis action, Fitch doubts outcome

December  18,  2011  BRUSSELS (Reuters) - The euro zone will tackle its debt crisis this week by offering more cash to the IMF and long-term liquidity to banks, while moving toward tighter fiscal rules, after ratings agency Fitch cast doubt on its capacity to respond decisively.

"We all know that Europe has not been able to convince markets that its governance set-up and its measures against the crisis were enough,"
Italian Deputy Economy Minister Vittorio Grilli said in a newspaper interview published Sunday.
"More integration and more effective instruments are needed. We are not yet there," he told Il Sole 24 Ore.

Euro zone leaders agreed on December 9 to write into national constitutions a rule that budgets have to be balanced or in surplus in structural terms. If they are not, automatic corrective measures would follow.

No Christmas let-up as EU battles to save euro
December 19, 2011
 BRUSSELS (Reuters) - For Brussels' bureaucrats, the run-up to Christmas used to involve a flurry of cocktail parties, relaxed liquid lunches and a chance to knock off early to escape the glass and steel office blocks of the city's European quarter.
But two years into a debilitating debt crisis, the routine has shifted dramatically. High- and low-level meetings are scheduled right up until Christmas Eve and members of the European Parliament, often derided for their lesser workload, are holding critical negotiations up until Wednesday.
Coffee and sandwich shops around the European Commission and European Council, often shuttered by this time of year, are still open for business as office printers continue to churn out updated working papers and copies of a new "fiscal compact" designed to tighten euro zone budget controls.
"There's been absolutely no let-up since the summer break," said one drained official involved in debt crisis resolution. "I'm on stand-by over Christmas and you just don't know the surprises that might be sprung on us."

Europe  ECB funding boost short-lived, SAP down after disappointing results from Oracle
21 December 2011
European stock markets fell Wednesday as debt worries resurfaced after the European Central Bank’s first three-year funding operation for the region’s banks drew more interest than expected. Losses for software company SAP AG and drug stocks also weighed.

HUNGARY  S&P Downgrads Hungary to Junk, Outlook Negative [/size]

21 December 2011
On November 25, Moody's cut Hungary to junk. Now it is S&P's turn: "The downgrade reflects our opinion that the predictability and credibility of Hungary's policy framework continues to weaken.
We believe this weakening is due, in part, to official actions that, in our opinion, raise questions about the independence of oversight institutions and complicate the operating environment for investors.

In our view, this is likely to have a negative impact on investment and fiscal planning, which we believe will continue to weigh on Hungary's medium-term growth prospects.
Moreover, in our opinion, the downside risks to Hungary's creditworthiness have also increased as the global and domestic economic environments have weakened."

German yields under U.S
22 December 2011
Expectations for further easing measures from the European Central Bank and investors continued demand for safer assets has pushed yields on 2-year German debt under U.S. yields for the first time since mid-2010.

Germany’s 2-year yields fell to 0.23% on Thursday, 4 basis points below U.S. 2-year yields.
That’s down from as much as 132 basis points, or 1.32 percentage point, which was above U.S. yields back in May, noted Andrew Wilkinson, chief economic strategist at Miller Tabak.

Read more about U.S. bonds

ECB's FX Swap Line With Fed Soars To $85 Billion Total
21 December 2011  The dollar scramble continues. In addition to the Flop Ex Machina which is the LTRO, now confirmed to be a failure courtesy of the ECB's relentless buying Italian and Spanish bonds, something the bank were supposed to be doing,
the ECB has reported that European banks have pulled another $33 billion in 14 day funds with the ECB, which in turn means that the cumulative total now, net of the expiring 7 day operation which runs out on December 22 and holds $5.122 billion,
is a whopping $85 billion, and is above the level of swap line usage before the Lehman collapse which peaked at $67 billion, then exploded to a peak of $583 billion following the Lehman failure.
Below is a chart showing what the Fed's swap line usage will look like when the FRBNY updates its facility usage next Thursday.
This explains why both the 1 month and 3 month basis swaps (last at -130 bps, -13 bps on the day) have been leaking wider all day once again.
We, for one, can't wait for tomorrow's H.4.1 update to see just how high the Discount Window usage jumped to in the past week.

Slovenia’s Debt Rating Cut by Moody’s on Banking Industry Risk

23 December 2011  Bloomberg - Slovenia had its credit rating lowered one step to A1 by Moody’s Investors Service on the potential need for the government to support its banking system amid Europe’s debt crisis.

ECB lends $641 billion to European banks - 523 bidders across Europe seek 3-year loans from central bank
21 December 2011  The European Central Bank attempted to send a strong signal to financial markets by offering to loan $641 billion to 523 euro-area banks in a massive three-year funding operation.

Croatia's centre-left government sworn in, EU referendum set
December 2011
Croatia's new centre-left government led by Prime Minister Zoran Milanovic was sworn in Friday, facing the difficult tasks of leading the country out of an economic crisis and into the European Union. Shortly after the swearing in, the parliament voted to hold a referendum on Croatia's entry into the EU on January 22, a move enabling Zagreb to eventually join the bloc in mid-2013.

It was the first major decision by the new parliament, dominated by the centre-left coalition, which had overwhelmingly approved the new cabinet.
Milanovic warned in a speech that the country's economy was "in a dangerous situation" and needed austerity measures.
"Croatia is not in chaos ... but in a dangerous situation and at a turning point," Milanovic said, referring to its serious economic malaise.

Presenting his cabinet's programme before the vote, the Social Democrat leader told the deputies that an austerity budget would be the first big challenge for his government.
"Public finances are overstrained... Croatia has to limit public spending (and) consolidate the budget," the 45-year-old Milanovic insisted.
The new parliament was inaugurated on Thursday after a centre-left coalition led by Milanovic's SDP had ousted the scandal-plagued ruling conservatives.

To stay or to go? Britons mull future outside EU
December 2011  LONDON (Reuters) - Long dismissed as "Little Englanders" living on the fringe of politics, Britain's vocal band of EU-haters sense that their moment may have come.
Prime Minister David Cameron's decision to veto a new European Union treaty during a December 8-9 summit has emboldened Britain's so-called eurosceptics, who are now pressing him to loosen ties with the bloc or even leave.
Cameron insists that Britain must remain part of the 27-nation Union, with which the island nation does around half of its trade and which supports an estimated 3.5 million jobs.
"Our membership of the EU is vital to our national interest," Cameron told parliament last week. "We are a trading nation and we need the single market for trade, investment and jobs."

IMF's Lagarde warns global economy threatened
PARIS (Reuters) - The head of the International Monetary Fund said the world economy was in danger and urged Europeans to speak with one voice on a debt crisis that has rattled the global financial system.
In Nigeria last week, IMF Christine Lagarde said the IMF's 4 percent growth forecast for the world economy in 2012 could be revised downward, but gave no new figure.
"The world economy is in a dangerous situation," she told France's Journal du Dimanche.
The debt crisis, which continues into 2012 after a European Union summit on December 9 only temporarily calmed markets, "is a crisis of confidence in public debt and in the solidity of the financial system," she said.

European markets await more turbulence in 2012
Dec 26, 2011  European stocks and the euro will face fresh turbulence in 2012 after a year in which equity markets slumped and the single currency lost ground against the dollar mainly due to the eurozone crisis.
Europe's main stock markets have tumbled between 6.5 and 25 percent since the start of 2011, as traders looked past positive economic data and earnings, while the euro has fallen 2.5 percent versus the dollar in volatile trading.
Yields on eurozone sovereign debt meanwhile rocketed in late 2011 as investors demanded top returns for lending money to the bloc's indebted countries such as Greece and Italy.
"Attempting to forecast where the dollar, euro, gold, oil or any western stock market might end next year is no less a mugs game than it was this time last year," said Howard Wheeldon, a senior strategist at BGC Partners.

Obama to ask for debt limit hike: Treasury official
12/27/11  WASHINGTON (Reuters) - The White House plans to ask Congress by the end of the week for an increase in the government's debt ceiling to allow the United States to pay its bills on time, according to a senior Treasury Department official on Tuesday.
The approval is expected to go through without a challenge, given that Congress is in recess until later in January and the request is in line with an agreement to keep the U.S. government funded into 2013.

The debt is projected to fall within $100 billion of the current cap by December 30, when the United States has $82 billion in interest on its debt and payments such as Social Security coming due. President Barack Obama is expected to ask for authority to increase the borrowing limit by $1.2 trillion, part of the spending authority that was negotiated between Congress and the White House this summer.

Japan-China currency pact underline need for euro: Germany
 A surprise currency agreement between China and Japan highlights the importance of a united Europe and a common currency, German Finance Minister Wolfgang Schaeuble said.
"Over the Christmas break, Japan and China surprised us with the news of a currency pact," Schaeuble told rbb info radio in an interview.
"These are developments that show it's good that we have a unified Europe. United, Europe is the strongest economic area in the world. We have good chances to pursue our interests and then the opportunity to implement them in the world," he said.

Schaeuble's comments come after China and Japan reached agreements that will make it easier for Chinese and Japanese companies to trade in each other's currencies, rather than using the dollar, as Beijing seeks to increase the use of the yuan in global trade.
Schaeuble also reiterated his call for eurozone countries to tackle the root of the current crisis and bring down their debt.
"The countries must solve the causes that led to the crises, there is no way around it," he said.
"We can help them by providing them the necessary time, which we do with the bailout funds and other things, but there is no way around solving the debt crisis in those countries which have them."

European stocks mixed, euro under pressure    December  30,  2011
The European single currency slumped Friday underneath 100 yen for the first time in ten years, on the back of eurozone debt fears in volatile pre-holiday trading.
At about 1050 GMT, the euro tumbled to 99.97 yen -- the lowest level since December 2000 and the first time it has breached the key 100-yen barrier since June 2001.

The US Has $100 Trillion in Debts & Obligations
With so many questions surrounding the stability of the financial system, John Williams of Shadowstats issued this warning in his latest commentary: “Annual Deficits of $5 Trillion Are Not Sustainable.   Significant space was taken up in the government’s latest financial statements to assess the sustainability of the current system.  Most of the material covered was overly misleading nonsense.”

John Williams continues:
“Those looking at the current $80 trillion of government debt and obligations, who think such is stable, need to consider that the circumstance is getting worse each year by at least $5 trillion.  Taxes cannot be raised enough to bring the system into balance for one year, let alone for the ongoing future.  

Every penny of government spending—except for Social Security and Medicare—could be cut and the system still would be in annual deficit.  Massive cuts have to be put in place (an absolute necessity with the social insurance), if there is to be any hope of restoring long-term solvency for the United States government.

Retirement-plan changes coming in 2012 - What to watch for in your 401(k) in the year ahead
Even though lawmakers may shy away from passing major laws in an election year, 2012 will bring changes to 401(k)s and other retirement plans.

Stanford researchers find that pension funds for California state workers are still in peril – action needed now

Next In Line For Implosion: Pension Plans

UK: Government reveals ‘alarming’ pension shortfall

China pension funds wrestle with large deficits – Officials urge allowing investment in stocks

France Telecom may need to review pension funding


New Asian Union Means The Fall Of The Dollar
30 December 2011  One of the most frustrating issues to haunt the halls of alternative economic analysis is the threat of misrepresentative terminology. For instance, when the U.S. government decided to back the private Federal Reserve in lowering the interest rates on lending windows to European banks last month, they did not call this a bailout, even though that’s exactly what it was. They did not call it quantitative easing, or fiat printing, or a hyperinflationary landmine; rarely does bureaucracy ever apply honest terminology to their subversive activities. False terminology is the bane of every honest analyst, because in order for them to educate and awaken those who are unaware of the truth, they must first battle through the daunting muck of the general public’s horrifically improper perceptions and vocabulary.

The chain of financial events taking place over the past decade in Asia have been correspondingly mislabeled and misunderstood. What some economists see as total collapse is actually a new and decidedly prophetic (or engineered) transition. What some naively see as the “natural” progression of globalism, is actually a distinctly deliberate program of centralization meant to further the goals of world economic and political totalitarianism. Asia, and most especially China, is a Petri dish for elitist psychopaths. What we see as suffocating collectivism in this region of the world today is the exact social schematic intended for the West tomorrow. Call it whatever you will, but on the other side of the Pacific, like the eerie smile of a sinister clown, sits fabricated fate.

White House delaying debt ceiling request
12/30/11  HONOLULU (Reuters) - President Barack Obama has agreed to delay submitting a debt ceiling increase request until next month to allow lawmakers time to consider it while they are in session, the White House said on Friday.
Under an August deal between Obama's Democrats and the Republicans, Congress is unlikely to block the expected $1.2 trillion increase request, ensuring that the debt limit will not be reached again until after November's presidential election.

"We have been asked by the bicameral leadership of Congress to delay certification in order to give both houses time to consider when the votes may occur, given the current congressional schedule," said White House spokesman Josh Earnest.
"The president has agreed to Congress' request to delay submission of the certification," Earnest told reporters in Hawaii, where Obama is vacationing with his family. The House of Representatives is out of session until January 17.

Merkel says Europe must cooperate more for euro to succeed
December  30,  2011   BERLIN (Reuters)
Europe must cooperate more closely if it wants the euro to succeed as its shared currency, and it still has a long way to go to overcome its sovereign debt crisis, German Chancellor Angela Merkel said in her New Year's Eve address.
She said that she would do everything in her power to strengthen the euro, but that this would only work if Europe learned from its mistakes.

"A common currency can only really be successful if we in Europe cooperate more than we have done," Merkel said in a pre-recorded televised address to be broadcast on Saturday.
"Europe is growing together in the crisis," she said, according to an official copy of her speech.

Have the youth given up on Obama?
Editor's Note: Brad Chase is a partner with Capitol Media Partners, a Los Angeles-based communications and public affairs consultancy.

In 2008, the youth vote helped sweep Barack Obama into office.  Americans 18-29 spread the word on social media, energized fundraising and went to the polls.
In 2012, the youth vote is moving on and throwing those omnipresent “Hope” bumper stickers and t-shirts in garbage bins.

Not because of apathy.  Not because another candidate generates more enthusiasm.  Not because of his character.  Not because they think voting is pointless.  The 18-29 vote is up for grabs in 2012 because youth can’t afford cars to put bumper stickers on and those t-shirts are worn out from too many days sitting on the couch unemployed.
The sobering reality:  just 55.3 percent of Americans between 16 and 29 have jobs. And earlier this year, Americans’ student loan debt surpassed credit card debt for the first time ever.

Rather than develop a lasting initiative to help young unemployed Americans, the President launched “Greater Together” – a campaign tool that offers community forums rather than jobs.  Rather than provide a bailout to those crushed by the burden of educational loans, his student debt relief program was pathetic – only reducing interest rates by a measly 0.5 percent.

]Euro could become world's leading currency
Dec 31, 2011
PARIS (Reuters) - The euro could become the world's leading currency in the next decade if leaders of the single-currency bloc succeed in tightening fiscal integration, European Central Bank policymaker Christian Noyer said in an article to be published in the Journal du Dimanche.
European leaders struck a historic deal at an emergency summit in Brussels on December 9 to draft a new treaty for deeper economic union, in an attempt to stem the debt crisis that is threatening to cause the collapse of the single currency.
The news temporarily calmed markets. But concerns quickly resurfaced as the final details of the agreement have yet to be determined and a new treaty could take up to three months to negotiate.
Ratings agency Fitch has said it doubts a comprehensive solution to the crisis can be found and urged more decisive action from the ECB.

'Euro could become world's leading currency'
I DOUBT IT  Exclamation

Total Collapse of The Dollar and Skyrocketing Oil Prices in 2012: Lindsey Williams Reports 1/3

Total Collapse of The Dollar and Skyrocketing Oil Prices in 2012: Lindsey Williams Reports 2/3

Total Collapse of The Dollar and Skyrocketing Oil Prices in 2012: Lindsey Williams Reports 3/3

Pastor Lindsey Williams: End of The Middle East and American Sovereignty 1/3

Pastor Lindsey Williams: End of The Middle East and American Sovereignty 2/3

Pastor Lindsey Williams: End of The Middle East and American Sovereignty 3/3

Euro-zone manufacturing PMI signals contraction
2 January 2012, by William L. Watts - Frankfurt (MarketWatch)

The purchasing managers index for the 17-nation euro zone's manufacturing sector rose in December from a 28-month low the previous month but still signaled a further contraction in activity, data showed Monday.

The Markit euro-zone manufacturing PMI rose to 46.9 in December from 46.4 in November, confirming an earlier, preliminary estimate.

A reading of less than 50 indicates a contraction in activity, while a figure of more than 50 signals expansion.

"Euro-zone manufacturing is clearly undergoing another recession.

Despite the rate of decline easing slightly in December, production appears to have been collapsing across the single currency area at a quarterly rate of approximately 1.5% in the final quarter of 2011," said Chris Williamson, chief economist at Markit.

ECB settled bond purchases totaling 462 bln euros
2 January 2012, by William L. Watts - Frankfurt (MarketWatch)

The European Central Bank quickened the pace of its government bond buying program somewhat last week, settling purchases totaling €462 million ($598 million) after settling just €19 million worth of transactions the previous week, data showed Monday.

In the week ending Dec. 16, the ECB settled purchases of €3.4 billion of bonds.

The ECB is thought to have focused purchases under its Securities Market Program on Italian and Spanish government debt after ramping up activity beginning in August in an effort to hold down borrowing costs for the euro zone's third- and fourth-largest economies, respectively.

The ECB "sterilizes" its bond purchases by draining an amount equivalent to its total bond purchases under the program, which now stands at €211.5 billion, in a weekly money market operation.

Hungary debt hits 16-yr high: central bank
2 January 2012, Budapest (AFP)

Struggling Hungary, looking for EU and IMF help, has seen its total public debt hit is highest level since 1995 due to the sharp fall of the forint against the euro, official data showed Monday.

According to the central bank, Hungary's accumulated public debt stood at 82.6% of gross domestic product (GDP), or 22.9 trillion forints (72 billion euros, $94 billion) at the end of September, up 76.7% at end-June.

Half of the public debt is in foreign currencies, making the problem even worse as the forint has fallen sharply -- more than 20% -- against the euro since October, analysts say.

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Global Bond Issuance To Top A Staggering $8 Trillion In 2012
3 January 2012, by Tyler Durden (Zero Hedge)

So in the next four years , amid a slowing demand picture thanks to European worries, global corporate debt combined with G-7 sovereign debt maturing is an incredible $18.48 Trillion that will need to be rolled, rehypothecated, and have capital allocated to it (or not).

Eurozone crisis: German unemployment hits record low as Greece warns over euro exit

3 January 2012, (The Guardian)
• Greece spokesman: agree 2nd bailout or leave euro
• Shares rise sharply in London - FTSE opens 1.9% higher
Spanish unemployment hits record high....
• ....As German jobless rate falls to lowest level since reunification
• What are your predictions for the next 12 months?

9.10am: Unemployment in Germany has just hit a new record low.
The number of people out of work in Germany fell by 22,000 in December to 2.888m, sending the seasonally adjusted jobless rate down to 6.8%.
That, according to Reuters, is the lowest level since reunification.

This is in stark contrast to the situation in Spain – where the jobless level rose to a new record high this morning.
The data reflects the difference between the two economies. Spain contracted in the last three months of 2011 (according to the Bank of Spain last week) as its tourism and exports sectors weakened.

Germany has its own problems -- the Bundesbank expects growth of just 0.6% in 2012 following a tumble in exports in October -- but it remains the strongest of Europe's large economies.

Summary Box: Greece could nix euro without bailout

WARNING: A spokesman for the Greek government said it might have to ditch the euro and push more austerity on its people if it can't get a second major international bailout.

PACKAGE ON HOLD: Greece is being kept afloat by a May 2010 bailout. An additional rescue package was set in October, after it became clear the first one wouldn't suffice.

PRIVATE CREDITORS WARY: Banks and insurance funds that hold a lot of Greece's debt agreed then to cut the value of their holdings by 50 percent, which would in effect slash Greece's borrowing. But the talks have snagged on crucial details.

The Government Accountability Office (GAO) has announced it is unable to render an opinion on the consolidated 2011 financial statements of the federal government, citing concerns such as material internal control weaknesses. GAO did note that most of the Chief Financial Officers Act agencies received unqualified individual audit opinions this year, but auditors encountered a number of obstacles regarding the consolidated financial statements, including unauditable statements from the Department of Defense; inadequate accounting for, and reconciliation of, financial activity between federal agencies; and the government's ineffective overall process for preparing the consolidated financial statements. "The comprehensive fiscal projections presented in the 2011 Financial Report show that—absent policy changes—the federal government continues to face an unsustainable long-term fiscal path," comptroller general Gene Dodaro noted in a statement. Dodaro also pointed to an estimated $115.3 billion in improper payments, concerns with the government's information security and tax collection activities, and uncertainties over the effects of Medicare cost growth on the 2011 Statement of Social Insurance and 2011 Statement of Changes in Social Insurance Amounts.

Source Articles:   Significant Financial Management and Fiscal Challenges Reflected in the U.S. Government's 2011 Financial Report(Government Accountability Office, 12/23/2011)
GAO cannot give opinion on federal government's finances (Federal News Radio, 12/23/2011)

Gulf airlines' growth may be damped in 2012
4 January 2012, by Alex Delmar-Morgan - Doha (Zawya Dow Jones - MarketWatch)


-- Aircraft deliveries could be delayed

-- Worldwide air travel growth slowed in October

-- Gulf carriers seen gaining market share

Gulf carriers could see their aggressive growth checked this year by weaker air traffic due to the slowdown in the global economy, making route expansion more difficult and prompting some airlines to delay aircraft deliveries, analysts say.

High oil prices and conflict in the Middle East this year led to soaring fuel bills and plunging profits among Gulf airlines.

FYI, this is from the CFR...

The Failure of the Euro

The euro should now be recognized as an experiment that failed. This failure, which has come after just over a dozen years since the euro was introduced, in 1999, was not an accident or the result of bureaucratic mismanagement but rather the inevitable consequence of imposing a single currency on a very heterogeneous group of countries. The adverse economic consequences of the euro include the sovereign debt crises in several European countries, the fragile condition of major European banks, high levels of unemployment across the eurozone, and the large trade deficits that now plague most eurozone countries.

Euro hit as investors fret over Europe's banks


LONDON (AP) — Renewed fears over Europe's shaky banking sector sent the euro skidding to a 15-month low against the dollar Thursday, while stock markets failed to get much of a boost from another round of upbeat U.S. economic data

For a second day running, market concern has centered on the state of the banks following UniCredit's announcement Wednesday that it was selling new shares at a 69 percent discount to Tuesday's closing price.

UniCredit, Italy's biggest bank, is trying to raise euro7.5 billion ($9.7 billion) to meet new European requirements for banks to thicken their financial cushions against possible losses. UniCredit's share price was down another 16 percent Thursday, following an equivalent decline the day before.

Italy, the recent focus of the debt crisis, must borrow to cover euro53 billion ($69 billion) in expiring debt in the first quarter alone in debt auctions beginning Jan. 13. That will test whether the government of new Prime Minister Mario Monti is making progress in regaining market confidence through budget cuts and efforts to improve weak economic growth.

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EFSF: Orders for 3-year bond near 4.5 bln euros
5 January 2012, by William L. Watts - Frankfurt (MarketWatch)

The European Financial Stability Facility, the euro zone's temporary rescue fund, said its placement Thursday of a €3 billion ($3.9 billion), three-year bond issue attracted bids totaling close to €4.5 billion.

The EFSF set the price for the issue at mid-swap plus 40 basis points.

Mid-swap is the midpoint between bid and offer prices on swap transactions.

The pricing implied a reoffer yield for investors of 1.77%.

The proceeds of the sale will be used to support the European Union's portion of the bailout programs put in place for Ireland and Portugal.

Fed seen unveiling QE3 bond plans by summer - Mortgage-bond purchases could begin this spring, analysts say

6 January 2012, by Deborah Levine - New York (MarketWatch)
A growing number of economists, analysts and bond investors think the Federal Reserve will announce another massive bond-purchase plan by the middle of the year, if forecasts for persistently high unemployment and slowing inflation come to fruition.

Eurozone unemployment at record 10.3%   January 6,  2012, (AFP)
Eurozone unemployment remained at an all-time record high of 10.3% for the second month running in November, official figures showed on Friday.

ECB policymaker wants banks off Greece bailout hook
January 7, 2012   FRANKFURT (Reuters)
European Central Bank policymaker Athanasios Orphanides called for euro zone leaders to abandon plans to make private sector investors help reduce Greece's debts, but his push showed no sign of gaining any traction in Europe's capitals on Friday.

Orphanides, who is also the central bank governor of Cyprus, said in a newspaper column that dropping plans to force losses on private sector holders of Greek debt would "help restore trust" in the euro zone and lower the borrowing costs of other governments in the currency union.

The involvement of the private sector in the Greek bailout has eroded investor confidence in euro zone sovereign debt and raised pressure on borrowing costs, despite policymakers' efforts to reassure markets that Greece is an isolated case.

"Reversing the Greek private sector involvement decision would also raise the financing costs on the Greek government, but by restoring trust in the euro zone it would reduce the financing costs of other euro zone governments," Orphanides wrote in the Financial Times.


Global Economy Could Endure Disaster For a Week

The global economy could withstand widespread disruption from a natural disaster or attack by militants for only a week as governments and businesses are not sufficiently prepared to deal with unexpected events, a report by a respected think-tank said.

Events such as the 2010 volcanic ash cloud, which grounded flights in Europe, Japan's earthquake and tsunami and Thailand's floods last year, have showed that key sectors and businesses can be severely affected if disruption to production or transport goes on for more than a week.

"One week seems to be the maximum tolerance of the 'just-in-time' global economy," said the report by Chatham House, the London-based policy institute for international affairs.

The current fragile state of the world's economy leaves it particularly vulnerable to unforeseen shocks. Up to 30 percent of developed countries' gross domestic product could be directly threatened by crises, especially in the manufacturing and tourism sectors, according to the think-tank.

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Analysis: For euro zone, the heat is on again


BERLIN (Reuters) - The euro zone crisis seemed to vanish from the headlines for a brief moment as 2011 ticked over into 2012, but it is about to return with a vengeance.

The coming months will be decisive in determining whether European leaders can hold their increasingly fragile currency bloc together or will stumble in the face of a daunting set of political, economic and financial obstacles lined up in their path at the start of the new year.

In Greece, where the crisis started over two years ago, the government is in a race against time to agree a bond-swap deal with banks that is crucial to a new 130 billion euro bailout package from European partners and the International Monetary Fund (IMF).

Without that package, Athens faces the threat of a debt default in March.

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ECB overnight deposit level hits new all-time high
9 January 2012 MarketWatch
Use of the European Central Bank's overnight deposit facility reached a new, all-time high Friday, reflecting ongoing tension in interbank lending markets and a surfeit of liquidity in the financial system.
Euro-zone banks parked €463.565 billion in the overnight deposit facility Friday, compared with €455.299 billion parked overnight Thursday, ECB data showed Monday.

The overnight deposit level has been elevated since August 2011, as banks favor using the ECB as a safe haven for excess cash rather than lend it out to other banks.
In past weeks, use of the facility has repeatedly reached new all-time highs, after the ECB in December flooded the market with liquidity in the form of nearly half a trillion euros in long-term loans.

Banks are increasingly reluctant to lend to other financial institutions due to concerns about their counterparties' exposure to risky euro-zone sovereign debt.
Meanwhile, banks borrowed €1.391 billion from the ECB's overnight lending facility Friday, compared to €1.861 billion borrowed Thursday.

When the interbank market works properly, banks use the lending facility to borrow just a few hundred million euros overnight.
But many banks are at present forced to turn to the ECB for their short-term funding needs as the debt and banking crisis continues to erode banks' confidence in one another.

EU problems more serious than 2008 crisis
9 January 2012   (MarketWatch)
Billionaire U.S. investor George Soros said Monday the ongoing sovereign-debt crisis in the euro zone is more serious than the global financial meltdown of 2008.
The consequences of a collapse of a large European bank would be felt across the globe, Soros said in a speech at the Azim Premji University in Bangalore.
Soros is famous for his 1992 bet against the British pound that earned $1 billion for his Quantum hedge fund.


Merkel warns on second Greek aid package

BERLIN (Reuters) - German Chancellor Angela Merkel said on Monday it would not be possible to pay out the next aid tranche to Greece without rapid progress on its second rescue package, including the voluntary restructuring of Greek debt held by its private creditors.

"We must see progress on the voluntary restructuring of Greek debt," Merkel told a joint news conference with French President Nicolas Sarkozy in Berlin.

"From our point of view, the second Greek aid package including this restructuring, must be in place quickly. Otherwise it won't be possible to pay out the next tranche for Greece."

Merkel added that she would talk about Greece with International Monetary Fund chief Christine Lagarde in Berlin on Tuesday.

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Fitch warns of 'cataclysmic' euro collapse


The European Central Bank should ramp up its buying of troubled euro zone debt to support Italy and prevent a "cataclysmic" collapse of the euro, David Riley, the head of sovereign ratings for Fitch, has warned.

Speaking to investors as part of a European roadshow, Mr Riley said a collapse of the euro would be disastrous for the global economy, and while it is not Fitch's baseline scenario, it could happen if Italy did not find a way out of its debt problems.

"The end of the euro would be cataclysmic. The euro is a reserve currency," Mr Riley said overnight. "What would that do in terms of financial and political stability?"

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"It is hard to believe the euro will survive if Italy does not make it through," he said, adding that while many saw Italy as too politically and economically important to be allowed to fail, "one might also argue that it is too big to rescue."

The warning pushed the euro down towards a 16-month low versus the US dollar.

Read more:

Eurozone nations set for S&P downgrade

January 13, 2012
France and Austria downgraded
Eurozone governments are bracing for new debt-crisis turbulence after ratings agency Standard & Poor’s told them it would downgrade two of the eurozone’s six triple A nations.
This leaves Germany as the only large triple-A country.
The move comes after S&P warned the six triple A nations and nine others in the eurozone that it had put their creditworthiness on review as a result of the debt crisis and the worsening economic outlook.

Standard & Poor's will cut the credit ratings of Italy, Spain and Portugal by two notches and downgrade France and Austria by one notch


Mass S&P downgrade as Greek debt impasse hit euro zone
January 13, 2012   BERLIN/ATHENS (Reuters)
Standard & Poor's downgraded the credit ratings of nine euro zone countries, stripping France and Austria of their coveted triple-A status but not EU paymaster Germany, in a Black Friday 13th for the troubled single currency area.

"Today's rating actions are primarily driven by our assessment that the policy initiatives that have been taken by European policymakers in recent weeks may be insufficient to fully address ongoing systemic stresses in the eurozone," the U.S.-based ratings agency said in a statement.

In a potentially more ominous setback, negotiations on a debt swap by private creditors seen as crucial to avert a Greek default that would rock Europe and the world economy broke up without agreement in Athens, although officials said more talks are likely next week.

If Greece cannot persuade banks and insurers to accept voluntary losses on their bond holdings, a second international rescue package for the euro zone's most heavily indebted state will unravel, raising the prospect of bankruptcy in late March, when it has to redeem 14.4 billion euros in maturing debt.

S&P cut the ratings of Italy, Spain, Portugal and Cyprus by two notches and the standings of France, Austria, Malta, Slovakia and Slovenia by one notch each.
The move puts highly indebted Italy on the same BBB+ level as Kazakhstan and pushes Portugal into junk status.

It put 14 euro zone states on negative outlook for a possible further downgrade, including France, Austria, and still triple-A rated Finland, the Netherlands and Luxembourg.
Germany was the only country to emerge totally unscathed with its triple-A rating and a stable outlook.


Europe must move quickly after downgrades: Merkel
BERLIN (Reuters) - Ratings downgrades in the euro zone by S&P underline why Europe must seal a pact to tighten fiscal rules quickly and get its permanent bailout fund up and running as soon as possible, German Chancellor Angela Merkel said on Saturday.

"We are now challenged to implement the fiscal compact even quicker ... and to do it resolutely, not to try to soften it," she said at a meeting of conservatives in the northern city of Kiel.

"We will also work particularly to implement the permanent stability mechanism, the ESM, so soon as possible -- this is important regarding investor trust."

Standard & Poor's on Friday downgraded the credit ratings of nine out of 17 euro zone countries. Germany kept its AAA rating, while France and Austria lost theirs.

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Everyone Hates The Euro - EUR Shorts Hit New Record High
13 January 2012
, by Tyler Durden (Zero Hedge)


ACK!  Exclamation  Shocked  WHAT a MESS YOU GOT!  HAHA

9 eurozone nations downgraded by S&P
Standard & Poors downgraded the credit ratings of 9 euro area governments, including AAA-rated France and Austria.
S&P lowered its rating for Italy, Spain, Portugal and Cyprus by 2 notches.
Italian bonds are now rated BBB+, dangerously close to the junk bond level.

France and Austria both had their top-tier credit rating lowered by one notch to AA+

Germany, Finland, the Netherlands and Luxembourg all maintained their AAA ratings.
S&P cut the ratings of Malta, Slovakia and Slovenia by one notch.


Romania austerity protests escalate
15 January 2012
Romania's government has called an emergency meeting after growing violent protests against austerity cuts.
It comes as dozens of people were injured for the second day running in clashes between demonstrators and riot police in the capital Bucharest.

The rallies in Romania began four days ago to support an official who had quit in protest against health care reforms.
But the protests have since widened to include general discontent with the government's policies.
The alliance of opposition parties has called for early elections.

On Sunday, at least 13 people were injured in Bucharest near University Square - the venue of Saturday's violence.
Demonstrators threw stones at riot police, who again responded by firing tear gas.
A number of people were arrested, with officials saying that most of the trouble makers were young football fans.

Europe Sliding toward financial crisis


S&P Downgrades EFSF From AAA To AA+, May Cut More If Sovereign Downgrades Continue
16 January 2012, Tyler Durden (Zero Hedge)


And so the latest inevitable outcome of the French downgrade from AAA has arrived, after the S&P just downgraded the EFSF, that pillar of European stability, from AAA to AA+. S&P adds:

"if we were to conclude that sufficient offsetting credit enhancements are, in our opinion, not likely to be forthcoming, we would likely change the outlook to negative to mirror the negative outlooks of France and Austria.

Under those circumstances we would expect to lower the ratings on the EFSF if we lowered the long-term sovereign credit ratings on the EFSF's 'AAA' or 'AA+' rated members to below 'AA+'."

In other words, as everyone but Europe apparently knew, the EFSF is only as strong as the rating of its weakest member.

And now the rhetoric on how AAA is not really necessary for the EFSF, begins, to be followed by AA, next A, then BBB and finally how as long as the EFSF is not D-rated all is well.

S&P Says Greek Default Imminent
16 January 2012  Zero Hedge
Time for the dominos to fall where they may: head of sovereign ratings at S&P Kraemer spoke on Bloomberg TV, and said the following:

And the punchline:
The only thing he did not add is that the default will be Coercive.
What happens next is anyone's guess, but whatever it is it is certainly priced in.
Also, let's not forget that the inability of the market to react to any news ever again is most certainly priced in.

Has The ECB Given Up On Portugal?
16 January 2012  Zero Hedge
Portuguese 10Y bond spreads to bunds just broke 1250bps, +180bps on the day and at record wides.
So it appears that Portugal (admittedly illiquid) has been left to its own devices.
Given the subordination concerns as ESM is accelerated, it is perhaps no surprise that the ECB’s SMP has seemingly decided that Portugal has crossed the Rubicon into Greece territory.

S&P downgrades euro zone rescue fund, Greece pressured
BRUSSELS (Reuters) - U.S. rating agency Standard & Poor's cut its credit rating of the euro zone's EFSF rescue fund on Monday, and Greece was under pressure to break a deadlock in debt swap talks if it is to avoid an unruly default.
French Finance Minister Francois Baroin said there was no need to shore up the European Financial Stability Facility after S&P downgraded it by one notch to AA+ from triple-A, echoing the view of Germany, the only major euro zone member to retain a top-notch credit rating.

S&P said in a statement the decision was all but inevitable following identical cuts three days earlier to the creditworthiness of France and Austria, two of the EFSF's guarantors.
"We consider that credit enhancements that would offset what we view as the now-reduced creditworthiness of the EFSF's guarantors and securities backing the EFSF's issues are currently not in place," the agency said in a statement.

Euro Rescue Fund Sells Bills ‘Smoothly’ After S&P Credit Rating Downgrade
17 January 2012  Bloomberg
The European Financial Stability Facility issued six-month debt for the first time, selling €1.5 billion ($1.9 billion) of securities a day after the euro region’s temporary bailout fund lost its top credit rating.

The EFSF sold the 182-day bills at an average yield of 0.2664%, it said in a statement. Investors bid for 3.1 times the amount of bills sold, little changed from the 3.2 bid- to-cover ratio at a Dec. 13 offering of three-month bills.

The facility’s longer-dated bonds underperformed their euro-area peers after the Standard & Poor’s downgrade to AA+ from AAA.
“The fact that the bill auction has gone so smoothly is encouraging,” said John Davies, a fixed-income strategist at WestLB AG in London.



Treasury dips into pension funds to avoid debt

WASHINGTON (Reuters) - The Treasury on Tuesday started dipping into federal pension funds in order to give the Obama administration more credit to pay government bills.

"I will be unable to invest fully" the federal employees retirement system fund beginning Tuesday, Treasury Secretary Timothy Geithner said in a letter to Democratic and Republican leaders in Congress.

The House of Representatives is expected to vote on Wednesday on the Obama administration's request to raise the country's legal debt limit to $16.394 trillion.

However, unless the lower chamber and the Senate are able to shore up enough votes to block the White House request, the debt limit will be increased by $1.2 trillion next Friday and a repeat of last year's debt ceiling debacle will be averted.

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Time to bailout the bailouter? IMF seeks $600 billion in new funding to cope with crisis



January 18, 2012 – EUROPE – The International Monetary Fund is seeking to boost its war chest by $600 billion to help countries reeling from the euro zone debt crisis, but some nations insist Europe must first do more to support its ailing members, international financial sources said on Wednesday. Group of 20 officials will discuss increasing IMF resources at a meeting in Mexico City on Thursday and Friday, the first under Mexico’s 2012 presidency of the group of developed and emerging economies. The IMF said it will need $500 billion to lend to member countries in need and IMF sources who were present at an IMF board meeting on the issue on Tuesday told Reuters that another $100 billion is needed as a “protection buffer.” The IMF also estimated there would be a $1 trillion global financing gap over the next two years if global economic conditions worsened considerably, the sources added. On foreign exchange markets, the reports of plans for increased IMF lending capacity helped boost the euro. Euro zone nations have already promised to inject an extra 150 billion euros ($200 billion) into the IMF, which is included in the total estimate. G20 officials in Mexico for the meeting of deputy finance ministers and central bank officials said there was still resistance in some quarters to increase funding. “Many countries want the Europeans to move ahead with tougher and clearer measures, which at this moment translates to more resources to its stability fund,” said a senior Brazilian government source attending the meeting. Bank of Canada Governor Mark Carney said it was not clear European governments had done everything necessary to make sure they could fund themselves at sustainable interest rates over the next few years. “If it makes sense to enhance the resources of the IMF the principal focus, it would seem, should be on dealing with fallout of the European crisis for innocent bystanders,” he told a news briefing in Ottawa. The IMF currently has a lending capacity of about $380 billion and estimates demand could be about $ 1 trillion in the medium-term.”Based on staff’s estimate of global potential financing needs of about $1 trillion in the coming years, the fund would aim to raise up to $500 billion in additional lending resources. This total includes the recent European commitment of about $200 billion in increased fund resources,” an IMF spokesman said. “At this preliminary stage, we are exploring options on funding and will have no further comment until the necessary consultations,’ he added. -Reuters


Second global financial crisis 'looming'

THE world's leading economists have warned of a new financial crisis that will cause even more damage than the GFC in 2008.
The World Bank has slashed its global economic forecasts because of the high levels of debt in rich nations.

The Washington-based lender had previously projected a 3.6 per cent annual global growth for the next two years.

But this has been drastically reduced to 2.5 per cent in 2012 and 3.1 per cent in 2013.

"The world economy has entered a very difficult phase characterised by significant downside risks and fragility," the twice-yearly Global Economic Prospects report said.

Read more:

France, Germany planning EU tax push: report
19 January 2012, by Steve Goldstein - Washington (MarketWatch)

The financial transactions tax urged by France and Germany is the first step toward further European Union joint taxation, according to a report in London's Daily Telegraph, citing a confidential paper.

The report quoted the memo as saying European proposals on an energy tax, a common corporate tax base and a common financial transaction tax should be accelerated.

Britain is against the proposed financial transactions tax over fears that financial services firms may move out of London were it to be imposed.

Hungary PM backs down
Krisztina Than And Jan Strupczewski
January 20, 2012

BUDAPEST/BRUSSELS (Reuters) - Prime Minister Viktor Orban abandoned plans on Friday to merge Hungary's central bank and markets regulator, the first concrete evidence that he is backing down in a dispute with the European Union that threatens to block a deal on financial aid.

Orban's conservative Fidesz party has been criticized by the international community for introducing a swathe of measures that threaten the independence of the media, the judiciary and the central bank since sweeping to power in 2010.

Hungary's financial markets have taken a hammering in recent weeks as a result, and while some analysts remain suspicious that Orban may try to hold out to impress his domestic political audience, they say the government now looks ready to give in.

Friday's move was the first specific commitment since Orban made a broad pledge to the European Parliament earlier this week to compromise.

He said he expected to secure a political agreement with European Commission President Jose Manuel Barroso on the disputed laws next week and said he was ready to modify nearly all contested legislation to meet the EU's demands.

"If we take stock of the issues that have emerged, I do not see any particularly difficult issues," Orban told Hungarian Kossuth radio. "Naturally, several laws may have to be modified, but the government cannot do it, this can be done only by parliament, and we will make proposals to this end."

The planed merger of the central bank and financial regulator had been a key point of contention. Orban later added that Budapest also no longer insisted on a government member being present at Monetary Council meetings as an observer.



Greece's creditors leave Athens

LONDON/ATHENS (Reuters) - The representatives of Greece's private creditors left Athens unexpectedly on Saturday without a deal on a debt swap plan that is vital to avert a disorderly default, sources close to the negotiations told Reuters.

Negotiations will continue over the phone during the weekend but it is unlikely that an agreement can be clinched before next week, the sources said, as Athens races against the clock to strike a deal.

A lot of progress has been made on the details of the plan during talks between Athens and Institute of International Finance chief Charles Dallara, sources say, but any deal needs the approval of the IMF and euro zone countries, who insist on a substantial cut in the debt load.

The IMF and EU countries, and in particular the bloc's paymaster Germany, want to make sure the deal puts Greece's derailed finances back on a sustainable track before they agree to a new, 130-billion euro bailout, which is also crucial to avoid a messy default.

The IMF insists the debt swap deal must ensure Greece's debt burden will be cut to 120 percent of GDP by 2020 from 160 percent now, as agreed at an EU summit in October, and has warned that this is made more difficult by the fact that Athens' economic prospects have deteriorated since.

read more

Gas pump prices at record high on supply concerns


Retail gasoline prices stay high on concerns about the Middle East and Europe

Americans aren't likely to find much relief from high prices at the gas pump as they go about paying their post-holiday bills.

Retail gas prices are at their highest levels ever for this time of year despite ample supplies and declining demand. That's because tension in the Persian Gulf has kept crude oil prices around $100 per barrel for most of the month.

Analysts say oil prices are likely to remain at those levels until there is more clarity about what will happen in the Gulf, where Iran has threatened to close the Strait of Hormuz if the U.S. and other countries impose more sanctions on its nuclear program.

Iranian imports are banned in the U.S., but Iran supplies 2.2 million barrels per day to the rest of the world, mainly Asia and Europe.


European rating agency could launch in 2012
21 January 2012  Milan (Reuters)
Plans to launch a European ratings agency to compete with S&P, Moody's and Fitch are at an advanced stage and a new private institution could start business as soon as the first half of this year, German businessman Roland Berger told an Italian newspaper.

Iran currency tumbles to new record low
The Iranian currency, the rial, tumbled Monday in blackmarket trading to a new record low against the dollar, news agencies said, as the EU moved to impose an oil embargo and fresh sanctions on Tehran.
The unofficial rate in central Tehran was around 20,500 rials for the greenback, the official IRNA news agency reported.

The rate showed a 12-percent rise for the US currency since last Wednesday when it was changing hands at 18,000 rials on the blackmarket.
The Tehran government has tried to shore up the rial by imposing a lower rate in banks and currency exchange bureaux, while also banning transactions outside of such outlets, leading to the blackmarket operations.;_ylv=3

IMF warns that Europe poses global recession threat
24 January 2012   WASHINGTON (Reuters)
The euro zone debt crisis is escalating and could derail the global economic recovery, the International Monetary Fund warned on Tuesday as it called for urgent action to restore confidence.

The IMF chopped its 2012 forecast for global growth to 3.3 percent from 4 percent just three months ago, saying the outlook had deteriorated in most regions. It projected world growth would strengthen to 3.9 percent in 2013.
However, it warned that growth this year would come in about 2 percentage points lower if Europe let the crisis fester.

"The world recovery, which was weak in the first place, is in danger of stalling," IMF chief economist Olivier Blanchard said at a news conference. "The world could be plunged into another recession" if the European crisis intensifies, he added.

U.S. gasoline use up 1.3% in latest week
24 January 2012, by David Bird - New York (MarketWatch)

--Year-on-year demand down for 21st straight week

--Four-week demand hasn't topped year-ago level since mid-March 2011

--Retail gasoline price holds at two-month high of $3.39/gal

U.S. weekly gasoline demand rose 1.3% from a week earlier to 8.477 million barrels a day in the week ended Jan. 20, according to a SpendingPulse report released Tuesday by MasterCard Advisors LLC, a division of MasterCard Inc..

But demand dropped by 5.2%, or 463,000 barrels a day, from a year ago.

That is the biggest year-on-year fall in weekly demand since July 24, 2009.

Gasoline demand has lagged the year-ago level for 21 straight weeks.

Four-week demand fell 3.9% from a year earlier to an average of 8.263 million barrels a day, the lowest four-week level on records in SpendingPulse data starting in July 2004.


British debt hits £1 trillion mark in December - Public sector borrowing falls 14%
24 January 2012, by Clare Hutchison - London (MarketWatch)


British debt in December reached the highest level since records began in 1993, according to figures released Tuesday.

Britain’s Office for National Statistics said net public debt excluding the effects of any financial interventions now stands at 1 trillion pounds ($1.6 trillion), or about 64.2% of gross domestic product.

The figure represents a 13.7% increase on December 2010, when net debt was £883 billion, and comes ahead of British fourth-quarter GDP due to be released Wednesday.


Then, Osborne said the debt to GDP ratio would likely stand at 67% in 2011 and added that debt reduction was “not happening as quickly as we had wished because of the damage done to our economy by the ongoing financial crisis.”

CEOs pessimistic about global economy: survey - But 40% of CEOs polled very confident of revenue growth for their firms
24 January 2012, by Polya Lesova - Davos, Switzerland (MarketWatch)

With Europe’s sovereign-debt crisis still unresolved, few chief executive officers are optimistic about the global economic outlook for this year, according to a survey released Tuesday by PricewaterhouseCoopers International on the eve of the World Economic Forum’s annual meeting in the Swiss Alps.

Merkel to open Davos forum in Switzerland

updated 1/18/2012 2:04:13 PM ET
GENEVA — German Chancellor Angela Merkel will headline the annual elite gathering in Davos, Switzerland this month, underscoring the world's focus on the European debt crisis that for over two years has wreaked havoc on financial markets.

Organizers of the World Economic Forum said Wednesday that close to 40 heads of state and 18 of the world's central bankers will be among the expected 2,600 participants from nearly 100 countries, making it the biggest such gathering in four decades at the Swiss Alpine resort.

The exclusive, invitation-only meeting of government and business leaders and VIPs from all walks of life is held to foster debate on the world's most pressing problems. Participants' expertise ranges from technology to arts and sciences, from NGOs to media organizations.

"We are looking desperately around the world for people who can offer solutions," said the forum's founder Klaus Schwab.

Other public figures expected at the Swiss Alpine resort include British Prime Minister David Cameron, Israeli President Shimon Peres, Palestinian Prime Minister Salam Fayyad, U.N. Secretary-General Ban Ki-moon, International Monetary Fund managing director Christine Lagarde, U.S. Treasury Secretary Timothy Geithner and Arab League Secretary-General Nabil Elaraby.


German Klaus Schwab, founder and president of the World Economic Forum, WEF, gestures during a press conference, in Cologny near Geneva, Switzerland, Wednesday, Jan. 18, 2012. The World Economic Forum today unveiled the program for its Annual Meeting in Davos, Switzerland, including the key participants, themes and goals. The overarching theme of the meeting, which will take place from Jan. 25 to 29, is "The Great Transformation: Shaping New World". (AP Photo/Keystone, Laurent Gillieron)

US Airways profit falls 36% on fuel costs
25 January 2012, by Mia Lamar (MarketWatch)

US Airways Group Inc.'s fourth-quarter earnings dropped 36% as the airline struggled under a sizable jump in fuel costs that masked stronger revenue.

Shares were up 4.8% to $6.72 in premarket trade as core earnings far exceeded analyst estimates.

US Airways, long one of the most confident carriers in the industry on the strength of domestic demand, had expected another solid quarter for air travel.

Still, fuel costs remained a nagging concern for the mostly-domestic operator, which reported its consolidated fuel expense jumped $232 million from a year earlier.


Update: America Has A $16.4 Trillion Debt Ceiling In 52-44 Senate Vote
26 January 2012, by Tyler Durden (Zero Hedge)


Update: the Senate has failed to reject a bid to stop the debt ceiling hike with a simple 52 vote majority all of it along party lines. The US now has $16.4 trillion in debt capacity as of Friday.

Since roughly $100 billion was plundered from Pension Funds in the past month, The US will have about $15.4 trillion in debt with the Monday DTS.

The question then is how long will the $1 trillion in debt capacity last: at $125 billion/month it won't be enough to carry the US past the election without another massive debt ceiling spectacle.

While Congress recently voted down the increase in the US debt ceiling, that vote was largely irrelevant. And all that matters is how the Senate will vote.

It is virtually unlikely that the process of debt ceiling increase will be overturned so within minutes the US should have a brand spaking new debt ceiling of $16.4 trillion.

Fitch cuts Italy, Spain, other euro zone ratings

1/27/12   NEW YORK (Reuters) - Fitch downgraded the sovereign credit ratings of Belgium, Cyprus, Italy, Slovenia and Spain on Friday, indicating there was a 1-in-2 chance of further cuts in the next two years.
In a statement, the ratings agency said the affected countries were vulnerable in the near-term to monetary and financial shocks.
"Consequently, these sovereigns do not, in Fitch's view, accrue the full benefits of the euro's reserve currency status," it said.

Fitch cut Italy's rating to A-minus from A-plus; Spain to A from AA-minus; Belgium to AA from AA-plus; Slovenia to A from AA-minus and Cyprus to BBB-minus from BBB, leaving the small island nation just one notch above junk status.

Ireland's rating of BBB-plus was affirmed.
All of the ratings were given negative outlooks.

With nearly half a trillion euros of ECB liquidity coursing through the financial system, some of which has apparently gone into euro zone government bonds, and with hopes of a deal to write down a slab of Greece's mountainous debt, even that sweeping ratings action had little market impact.

The euro briefly pared gains against the dollar after Fitch cut the five euro zone sovereigns but soon jumped to a session high of $1.3208, according to Reuters data, its highest since December 13.
Italy is widely seen as the tipping point for the euro zone. If it slid towards default, the whole currency project would be threatened.
Italian Prime Minister Mario Monti, a technocrat who has won plaudits for his economic reform drive, said he reacted to Fitch's downgrade of Italy with "detached serenity."


IMF chief presses for more cash to fight crisis

January 28, 2012 — DAVOS, Switzerland (AP) — The head of the International Monetary Fund appeared to be making headway Saturday in her drive to boost the institution's financial firepower so that it can help Europe prevent its crippling debt crisis from further damaging the global economy.

Christine Lagarde, who replaced Dominique Strauss-Kahn as managing director of the fund six months ago, is trying to ramp up the IMF's resources by $500 billion so it can help if more lending is needed in Europe or elsewhere. The IMF is the world's traditional lender-of-last-resort and has been involved in the bailouts of Greece, Ireland and Portugal.

Insisting that the IMF is a "safe bet" and that no country had ever lost money by lending to the IMF, Lagarde argued that increasing the size of the IMF's resources would help improve confidence in the global financial system. If enough money is in the fund the markets will be reassured and it won't be used, she said, using arguments similar to those that France has made about increasing Europe's own rescue fund.

"It's for that reason that I am here, with my little bag, to collect a bit of money," she said at the World Economic Forum in the Swiss Alps town of Davos. Her plea appeared to find a measure of support from ministers of Britain and Japan, sizable IMF shareholders that would be expected to contribute to any money-raising exercise.


Brussels takes control of taxation and spending in eurozone


The European Union is to gain dramatic powers to control tax and spending in crisis-hit eurozone countries under a deal to save the currency.

The EU will have to agree the national budgets of heavily indebted countries under a deal to be signed tomorrow at a summit in Brussels attended by David Cameron.

The move will mean Greece losing control over its own budget, after Germany and the International Monetary Fund laid down increasingly harsh conditions for the indebted nation to receive its second £100 billion eurozone bail-out.

With the country on the brink of default, Christine Lagarde, the managing director of the IMF, yesterday revealed that a “fiscal compact” was set to be signed by European Union leaders at their summit tomorrow.

The move to closer integration between the eurozone economies comes just days before Tory Euro-sceptics launch a campaign to repatriate powers over policing and justice already handed to the European Union.


EU leaders to agree on permanent bailout fund, balanced budg

EU leaders to agree on permanent bailout fund, balanced budget
January 29, 2012    BRUSSELS (Reuters) - EU leaders will sign off on a permanent rescue fund for the euro zone at a summit on Monday and are expected to agree on a balanced budget rule in national legislation, with unresolved problems in Greece casting a shadow on the discussions.

The summit - the 17th in two years as the EU battles to resolve its sovereign debt problems - is supposed to focus on creating jobs and growth, with leaders looking to shift the narrative away from politically unpopular budget austerity.

The summit is expected to announce that up to 20 billion euros ($26.4 billion) of unused funds from the EU's 2007-2013 budget will be redirected toward job creation, especially among the young, and will commit to freeing up bank lending to small- and medium-sized companies.
But discussions over the permanent rescue fund, a new 'fiscal treaty' and Greece will dominate the talks.

Negotiations between the Greek government and private bondholders over the restructuring of 200 billion euros of Greek debt made progress over the weekend, but are not expected to conclude before the summit begins at 9:00 a.m. EST.
Until there is a deal between Greece and its private bondholders, EU leaders cannot move forward with a second, 130 billion euro rescue program for Athens, which they originally agreed to at a summit last October.

Instead, they will sign a treaty creating the European Stability Mechanism (ESM), a 500-billion-euro permanent bailout fund that is due to become operational in July, a year earlier than first planned. And they are likely to agree the terms of a 'fiscal treaty' tightening budget rules for those that sign up.


The following are 20 signs that Europe is plunging into a full-blown economic depression....

#1 The unemployment rate for those between the ages of 16 and 24 is 28 percent in Italy, 43 percent in Greece and 51 percent in Spain.

#2 Overall, the unemployment rate for those under the age of 25 in the EU is 22.7 percent.

#3 Citigroup is projecting that the economy of Portugal will shrink by 5.7 percent this year.

#4 The total of all forms of debt in Portugal (government, business and consumer) is equivalent to 360 percent of GDP.

#5 The Greek "recession" is now entering a fifth year.

#6 The Greek economy shrank by 6 percent during 2011.

#7 It is being projected that the Greek economy will shrink by another 5 percent during 2012.

#8 The overall unemployment rate in Greece is now 18.5 percent.

#9 In Greece, 20 percent of all retail stores have been permanently shut down.

#10 The number of suicides in Greece rose by 40 percent in just one recent 12 month time period.

#11 According to the IMF, the amount of debt accumulated by the Greek government is equal to approximately 160 percent of GDP.

#12 In total, there are now more than 5 million unemployed workers in Spain.

#13 Bad loans in Spain recently reached a 17-year high.

#14 The overall unemployment rate in Spain is now a whopping 22.8 percent.

#15 The number of property repossessions in Spain has risen by 32 percent over the past year.

#16 When the maturing debt that the Italian government must roll over in 2012 is added to their projected budget deficit, the total comes to approximately 23.1 percent of Italy's GDP.

#17 Manufacturing activity in the euro zone has fallen for five months in a row.

#18 The UK economy actually contracted during the 4th quarter of 2011.

#19 The German economy actually contracted during the 4th quarter of 2011.

#20 The Baltic Dry Index, often used as a gauge for the health of the world economy, has fallen a staggering 61 percent since October.

CBO: Taxes Will ‘Shoot Up by More Than 30 Percent’ Over Next 2 Years

January 31, 2012

( - The amount of money the federal government takes out of the U.S. economy in taxes will increase by more than 30 percent between 2012 and 2014, according to the Budget and Economic Outlook published today by the CBO.

At the same time, according to CBO, the economy will remain sluggish, partly because of higher taxes.

“In particular, between 2012 and 2014, revenues in CBO’s baseline shoot up by more than 30 percent,” said CBO, “mostly because of the recent or scheduled expirations of tax provisions, such as those that lower income tax rates and limit the reach of the alternative minimum tax (AMT), and the imposition of new taxes, fees, and penalties that are scheduled to go into effect.”

The U.S. economy, CBO projects, will perform “below its potential” for another six years and unemployment will remain above 7 percent for another three.


California To Run Out Of Cash In One Month, Controller Warns
31 January 2012, by Tyler Durden (Zero Hedge)

E.U. leaders sign stricter fiscal pact
30 January 2012, by Sue Chang, - San Francisco (MarketWatch)


European Union leaders on Monday endorsed a treaty aimed at strengthening accountability and keeping a closer eye on member nations’ efforts to rein in overspending and resolve the region’s debt crisis.

“The treaty is all about more responsibility and better surveillance.

Every country that signs it commits to bringing in a ‘debt brake’ or ‘golden rule’ into its own legislation, and will do so at constitutional or equivalent level,” European Council President Herman Van Rompuy said in a statement following the meeting.

“New voting rules and an automatic correction mechanism will enforce compliance more effectively,” he added.


The €500 billion ($661 billion) ESM could be put in place as early as July pending its approval by the group’s respective finance ministers when they gather at the next Eurogroup meeting.

US Adds $120 Billion In Debt Since Debt Ceiling Hike On Friday, $310 Billion More On Deck In Next Two Months
1 February 2012, by Tyler Durden (Zero Hedge)

ECB Dollar Swaps With New York Fed Jump To Highest Since 2009, Surpass Recent Liquidity Crisis Highs
2 February 2012, by Tyler Durden (Zero Hedge)


So perhaps someone can explain to us why the ECB’s FX swaps with the New York Fed (reported by the European central bank 9 days in advance of confirmation by the Fed)

just rose to a post-crisis flare up high of $89.3 billion, up from last week’s $84.5 billion (the increase a function of new 7 and 84 Day swaps, each getting 10 and 17 participating banks, respectively),

more than any other time in 2011, 2011, when the liquidity crisis was rampaging, and in fact the highest since July 2009.

So: what is fixed again?

Hedge funds brace for euro zone break-up


LONDON (Reuters) - Nervous hedge funds managers are stress-testing their portfolios and searching for ways of protecting themselves against their worst nightmare -- a potential break-up of the euro zone.

With talks on restructuring Greece's debt mountain still deadlocked, and the exit of one of more countries from the euro seen as a small but definite possibility, funds are modeling scenarios ranging from a 50 percent slump in European stocks or a 45 percent fall in the oil price to a 30 percent rise in gold.

Managers are also trying to dig out old computer programs they once used to model the behavior of currencies such as the drachma or the deutschmark as they prepare for an event for which -- even after the 2008 collapse of Lehman Brothers -- they effectively have no precedent.

Many, having already trimmed risk, are piling into credit default swaps or deeply out-of-the-money options, hoping they pick a counterparty that can withstand the shock of a break-up.


The United Nations Wants To Crash The World Economy In Order To Save The Environment

Friday, February 3, 2012

The United Nations says that the earth is in great danger and that the way you and I are living is the problem.  In a shocking new report entitled, “Resilient People, Resilient Planet: A Future Worth Choosing” the UN declares that the entire way that we currently approach economics needs to be changed.  Instead of focusing on things like “economic growth”, the UN is encouraging nations all over the world to start basing measurements of economic success on the goal of achieving “sustainable development”.  But there is a huge problem with that.  The UN says that what we are doing right now is “unsustainable” by definition, and the major industrialized nations of the western world are the biggest culprits.  According to the UN, since we are the ones that create the most carbon emissions and the most pollution, we are the ones that should make the biggest sacrifices.  In addition, since we have the most money, we should also be willing to finance the transition of the developing world to a “sustainable development” economy as well.  As you will see detailed in the rest of this article, the United Nations basically wants to crash the world economy in order to save the environment.  Considering the fact that the U.S. and Europe are in the midst of a horrible economic crisis and are already drowning in debt, this is something that we simply cannot afford.

There is certainly nothing wrong with taking care of the environment.  But what the United Nations wants is a fundamental restructuring of the global economy based on flawed science.

In this new UN report, we find the following statement….

Achieving sustainability requires us to transform the global economy. Tinkering on the margins will not do the job.

read more

Record 1.2 Million People Fall Out Of Labor Force In One Month, Labor Force Participation Rate Tumbles To Fresh 30 Year Low
3 February 2012, by Tyler Durden (Zero Hedge)


A month ago, we joked when we said that for Obama to get the unemployment rate to negative by election time, all he has to do is to crush the labor force participation rate to about 55%.

Looks like the good folks at the BLS heard us: it appears that the people not in the labor force exploded by an unprecedented record 1.2 million.

No, that's not a typo: 1.2 million people dropped out of the labor force in one month!

So as the labor force increased from 153.9 million to 154.4 million, the non institutional population increased by 242.3 million meaning, those not in the labor force surged from 86.7 million to 87.9 million.

Which means that the civilian labor force tumbled to a fresh 30 year low of 63.7% as the BLS is seriously planning on eliminating nearly half of the available labor pool from the unemployment calculation.

As for the quality of jobs, as withholding taxes roll over Year over year, it can only mean that the US is replacing high paying FIRE jobs with low paying construction and manufacturing.

So much for the improvement.

TrimTabs Explains Why Today's "Very, Very Suspicious" NFP Number Is Really Down 2.9 Million In Past 2 Months
3 February 2012, by Tyler Durden (Zero Hedge)


A comparison of TrimTabs’ real-time withholding tax based employment results versus the BLS’ preliminary and revised results from January 2011 through January 2012 are summarized in the following table:


Hungary seeks 15-20 billion euro IMF/EU credit line: official

BUDAPEST (Reuters) - Hungary is seeking an international credit line of 15 to 20 billion ($20 to $26.3 billion) euros, the secretary of state heading the prime minister's office, Mihaly Varga, was quoted on Saturday as saying.

Hungary is seeking backup from the International Monetary Fund and the European Union to reassure investors it has financing even if it gets cut off from debt markets later this year.

The country's currency, the forint, sank to a record low against the euro a month ago, and its government bond yields rose above 11 percent on concerns that amid the euro zone crisis it may not be able to finance central Europe's highest debt burden compared to its economic output.

Varga reiterated that the government expected to reach a deal soon on a credit line that it could tap if the European debt crisis deepened further.

Goodbye, Middle Class

Fri, Feb 3, 2012 1:28 PM EST

Nearly one in two Americans is now living on the lower end of the income scale, according to the Census Bureau. For a family of four that's less than $45,000 a year. These are three families who are falling out of the middle class.

One bedroom for a family of five

Previous pay: $110,000
Current pay: None
Where they live: Staying as guests in a friend's home

Talia Mobley and her husband Adam have been out of work for more than two years. Adam was a lead technician for Comcast and says, "I had it made." Talia worked in customer service.

Collectively, they have sent out 500 resumes but have not gotten one job offer.

Talia went back to school to retrain as a Certified Medical Assistant because she heard health care is where the jobs are. But she still hasn't been able to find work.

Fifty percent of the unemployed in New Jersey have been out of work for more than six months, and it's a similar story in Florida, Illinois and Nevada, according to the Brookings Institute.

From six figures to the poverty line

Previous pay: $130,000
Current pay: $15,000
Where they live: Their foreclosed home, awaiting eviction

This family of 5 represents what it can look like when the bottom falls out of the middle class.

They live in Morris County, N.J., where the median household income is $91,403.

Unwilling to show their faces, they still wanted to share their story. The father used to make over $100,000. But then his 6-figure, telecom job of 20 years went to India.

They haven't paid their mortgage since 2009 and wake up each morning wondering if today will be the day they are evicted.

Not living in poverty but not making it

Previous pay: $40,000 to $50,000
Current pay: $12/hour
Where they live: Family shelter

A mother and her three children in Bergen County, N.J., now call a shelter home. Too ashamed to show their faces, the mother says, "I never thought in a million years I'd be at this point."

But when she lost her customer service job, she could no longer pay the rent in a county where the median household income is $77,000.

The manager of the shelter sees more and more families like this -- stuck in the middle. Not living in poverty but not making it either.

Since we first met her, the mother has been re-hired by her previous employer working in customer service, but only part time.

Greece on "knife edge" in last hours to agree bailout

ATHENS (Reuters) - Greece's prime minister scrambled on Sunday to convince lenders and politicians to sign off on a 130 billion euro ($171 billion) rescue, after his finance minister said just hours remain before the euro zone abandons the country to its fate.

A technocrat appointed in November, Prime Minister Lucas Papademos is trying to ensure cash-strapped Greece avoids sinking into a chaotic default when big bond redemptions come due next month.

His finance minister said Athens had only until Sunday night to clinch a second financing package from lenders, after euro zone ministers bluntly told him they were ready to abandon Greece without proof it could push through painful cuts.

"We are on a knife edge," Finance Minister Evangelos Venizelos said on Saturday after what he called a "very difficult" conference call with euro zone counterparts.



Most Germans want Greece to quit euro: poll

BERLIN (Reuters) - The majority of Germans feel the euro currency bloc would be better off if debt-crippled Greece left it, a poll published in mass-selling newspaper Bild am Sonntag showed on Sunday.

The Emnid poll said 53 percent of Germans surveyed thought Greece should return to its former currency, the drachma, while only 34 percent felt it should keep the euro.

Euro zone ministers had hoped to meet this coming Monday to finalize the second Greek bailout, which must be in place by mid-March to prevent a chaotic default, but the meeting was postponed because of reluctance in Athens to commit to reforms.

Without the austerity measures, which include cutting holiday bonuses and lowering the minimum wage in a country reeling from its fifth year of recession, the ministers say they cannot approve the 130 billion euro ($171 billion) rescue plan.

The Emnid poll said 80 percent of Germans surveyed opposes releasing the rescue package unless Greece implements the reforms.

(Writing by Brian Rohan; Editing by Will Waterman)
A look at debt levels in the 17-nation eurozone


The EU's statistics office estimates that the debt level across the 17-nation eurozone fell to 87.4 percent of gross domestic product at the end of the third quarter of 2011 from 87.7 percent at the end of the previous quarter.

Here are the figures for each country.

Greece 159.1 percent, up from 154.7 percent

Italy 119.6 percent, down from 121.2 percent

Portugal 110.1 percent, up from 106.5 percent

Ireland 104.9 percent, up from 102.3 percent

Belgium 98.5 percent, up from 98.0 percent

France 85.2 percent, down from 86.0 percent

Germany 81.8 percent, down from 82.0 percent

Austria 71.6 percent, down from 72.2 percent

Malta 70.3 percent, down from 71.9 percent

Cyprus 67.5 percent, unchanged

Spain 66.0 percent, unchanged

Netherlands 64.5 percent, up from 63.8 percent

Finland 47.2 percent, up from 45.6 percent

Slovenia 44.4 percent, down from 44.5 percent

Slovakia 42.2 percent, down from 42.7 percent

Luxembourg 18.5 percent, down from 18.8 percent

Estonia 6.1 percent, down from 6.3 percent

Source: Eurostat

Romania's government collapses after protests

Romania's government collapses after protests


BUCHAREST, Romania (AP) — Romania's government has collapsed following weeks of protests against austerity measures, the latest debt-stricken government in Europe to fall in the face of raising public anger over biting cuts.

Emil Boc, who had been prime minister since 2008, said Monday he was resigning "to defuse political and social tension" and to make way for a new government. Thousands of Romanians took to the streets in January to protest salary cuts, higher taxes and the widespread perception that the government was not interested in the public's hardships in this nation of 22 million.

President Traian Basescu quickly appointed Justice Minister Catalin Predoiu, the only Cabinet member unaffiliated with a political party, as interim prime minister to serve until a new government is approved.

Basescu also nominated Mihai Razvan Ungureanu, the head of Romania's foreign intelligence service, as the country's new prime minister and asked him to form a Cabinet. Parliament must approve Ungureanu and his ministers in 60 days, or the legislature will be dissolved and new elections held.

Boc's party and his allies still have a majority in Parliament, but opposition parties late Monday called for Basescu to resign and for early parliamentary elections to be scheduled now.


^^^ cont'd

Boc's resignation came as Romania is starting to feel the effects of the widespread cuts that the government put in place in exchange for a euro20 billion ($26 billion) loan from the International Monetary Fund, the European Union and the World Bank in 2009, to help pay salaries and pensions after its economy shrank by more than 7 percent.

CME group cut by S&P as MF Global fallout spreads
8 February 2012, by Jacob Bunge (MarketWatch)

--Long-term rating cut  from AA, outlook negative

--Agency cites higher financial and credit risk from MF Global fallout

--CME says exchange group remains happy with its rating

--Moody's maintains AA3 rating, with stable outlook

CME Group Inc. saw its credit rating cut by Standard & Poor's and could face further downgrades because of reputational damage linked to the exchange operator's role in the collapse of MF Global.

Standard & Poor's Ratings Services cut CME's long-term rating by a notch to AA-, citing the potential cost of a financial safety net established for clients in the wake of the unfolding controversy surrounding the bankruptcy of MF Global Holdings' (MFGLQ).

The agency also cited the potential risks from CME's expanded role in clearing over-the-counter derivatives, a big growth area for the industry CME has been pursuing for several years.

"We could lower the rating on CME Group if legal and reputational issues take a long-term toll on its franchise and financial position," said the agency in a statement.


We Need a Global Minimum Tax, said White House Economic Adviser   13 February 2012
He supports corporate tax reform that would reduce expenditures and loopholes, lower rates for people investing and creating jobs in the U.S., due so further for manufacturing, and that we need to, as we have the Buffett Rule and the individual tax reform, we need a global minimum tax so that people have the assurance that nobody is escaping doing their fair share as part of a race to the bottom or having our tax code actually subsidized and facilitate people moving their funds to tax havens," Sperling said.
The White House adviser then said that more details would be forthcoming, though "not in gory detail."    VIDEO

Moody's Downgrades Italy, Spain, Portugal And Other, Puts UK, France On Outlook Negative - Full Statement
13 February 2012, by Tyler Durden (Zero Hedge)

[] = emphasis mine
You know there is a reason why Europe just came crawling with an advance handout looking for US assistance: Moody's jsut went [bleep] on Europe. In other news, we wouldn't want to be the company that insured Moody's Milan offices.

Moody's adjusts ratings of 9 European sovereigns to capture downside risks
As anticipated in November 2011, Moody's Investors Service has today adjusted the sovereign debt ratings of selected EU countries in order to reflect their susceptibility to the growing financial and macroeconomic risks emanating from the euro area crisis and how these risks exacerbate the affected countries' own specific challenges.

Moody's actions can be summarised as follows:
- Austria: outlook on Aaa rating changed to negative
- France: outlook on Aaa rating changed to negative
- Italy: downgraded to A3 from A2, negative outlook
- Malta: downgraded to A3 from A2, negative outlook
- Portugal: downgraded to Ba3 from Ba2, negative outlook
- Slovakia: downgraded to A2 from A1, negative outlook
- Slovenia: downgraded to A2 from A1, negative outlook
- Spain: downgraded to A3 from A1, negative outlook
- United Kingdom: outlook on Aaa rating changed to negative


Obama Pushes Global Minimum Tax in Milwaukee


Earlier this week, White House economic adviser Gene Sperling announced his support for changes in the tax structure. “[W]e need a global minimum tax so that people have the assurance that nobody is escaping doing their fair share as part of a race to the bottom or having our tax code actually subsidized and facilitate people moving their funds to tax havens,” Sperling said at an official White House meeting. He even indicated that President Obama “supports” this change.

But the White House pushed back the next day, telling Politico through an unnamed “official” that “[Sperling] was referring to our proposal in the Blueprint for an American Built to Last that removes tax incentives for companies that ship jobs overseas.” The Politico article was titled, “No 'global tax,' W.H. says,” though the article never actually quoted anyone—named or unnamed—denying the substance of Sperling’s proposal (or even that it would in effect be a “global minimum tax”).

Well today, in a speech the president is delivering in Milwaukee, Wisconsin, Obama announced the thrust of what amounts to a “global minimum tax”—even if he avoided using the controversial phrase.

“[N]o American company should be able to avoid paying its fair share of taxes by moving jobs and profits overseas,” Obama said, according to his remarks as prepared for deliver. “From now on, every multinational company should have to pay a basic minimum tax.  And every penny should go towards lowering taxes for companies that choose to stay and hire in the United States of America.”

So while President Obama calls it “a basic minimum tax,” his adviser, Sperling, calls it a “global minimum tax.” Either way, it’s the same thing regardless of how the White House wants to message it.

The U.S. foreclosure crisis, Beverly Hills-style


BEVERLY HILLS (Reuters) - The careworn house not far from Santa Monica Boulevard resembles millions of other homes that have been foreclosed on since the calamitous U.S. housing crash four years ago.

Garbage spews from trash bags behind the property. A smashed television leans against broken furniture. A filthy toy dog lies on its side, an ear draped across its face. The garden is overgrown. The house needs a paint job.

Yet the property on North Rexford Drive, Beverly Hills, California, is no ordinary foreclosure.

A sprawling, Spanish-style estate, fringed by majestic pine trees and located near the boutiques of Santa Monica Boulevard, its former owners were served with a default notice in 2010; they were $205,000 behind in their payments on mortgages totaling $6.9 million.


Bank Heads Resignations Exclamation

World Bank President Zoellick Resigns

CFO of ANZ Bank Resigns Amid Turmoil

Dhanlaxmi Bank CEO Amitabh Chaturvedi quits

Slovenia’s Two Biggest Banks’ CEOs Step Down as Woes Mount
Feb 15, 2012 5:14 AM CT

Kuwait central bank chief resigns amid political tensions

Andrew Chick to lead Royal Bank of Scotland's Australian arm

Credit Suisse’s Private Bank Chief Asian Economist Tan Resigns
February 20, 2012, 1:17 AM EST

Nicaragua Central Bank Head Quits Amid Row
By Adam Williams and Blake Schmidt - Feb 14, 2012 1:25 PM CT


Price Shock: Watch Cost of Gas Jump 10 Cents During ABC's 'World News' Broadcast

The headlines of major newspapers and TV networks this week have been dominated by rising gas prices.  

Drivers across the country have shared their stories on the cost - with many already paying more than $4 a gallon at the pump.  There have even been reports of gas prices rising at a rate of 10 to 15 cents in a matter of hours.    

Read:  How high will gas prices go?

The swiftness at which those gas prices continue to climb was crystal clear Wednesday night during the broadcast of ABC News' "World News with Diane Sawyer."

As ABC News' Cecilia Vega introduced her piece on high gas prices, the sign at the downtown Los Angeles gas station behind her showed the price of regular gas at $4.99 a gallon. However when the piece concluded nearly two minutes later the price of regular gas had jumped 10 cents to $5.09 a gallon.  



Even Vega seemed truly surprised to see such a drastic change in such a short period of time, telling Sawyer that "it is almost too unbelievable to believe."

"It went up 10 cents?" asked Sawyer, herself shocked at what just had occurred.

"Ten cents during that two minutes while we were on the air," confirmed Vega.


UPDATE 2/21/12

G20 moves to line up huge rescue deal for April


MEXICO CITY (Reuters) - The world's leading economies worked on Sunday to line up a deal in April on a second global rescue package worth nearly $2 trillion to stop the euro-zone sovereign debt crisis from spreading and putting at risk the tentative recovery.

Germany said it would make a decision some time in March on strengthening Europe's bailout fund, a move other Group of 20 countries say is essential to clear the way for throwing extra funds into the International Monetary Fund.

The two actions are part of the G20's efforts to build up massive international resources by the end of April - when the group next meets - and convince financial markets they can stem the euro-zone's deep problems.


Cost of gas rises 18 cents in the past 2 weeks

Though supplies remain plentiful, Mideast worries affecting market, analyst says

The average U.S. price of gasoline jumped 18 cents a gallon in the past two weeks due to rising costs of crude oil and related concerns about tensions in the Middle East, although supplies of fuel remained plentiful in most of the country, according to the nationwide Lundberg Survey.

The national average cost for a gallon of regular gasoline rose to $3.69 on February 24, according to the nationwide survey of gasoline stations in the continental United States.

The sting to drivers' pocketbooks follows a rise of almost 12 cents per gallon seen in the previous survey, which covered the two weeks that ended February 10.

"Fears about a possible hit to oil supplies from the Middle East are causing turmoil and confusion," survey editor Trilby Lundberg said in an interview.



British Chancellor says the ‘government has run out of money’- pain from austerity cuts are yet to bite

February 27, 2012 – UNITED KINGDOM - In a stark warning ahead of next month’s Budget, the Chancellor said there was little the Coalition could do to stimulate the economy. Mr. Osborne made it clear that due to the parlous state of the public finances the best hope for economic growth was to encourage businesses to flourish and hire more workers. “The British Government has run out of money because all the money was spent in the good years,” the Chancellor said. “The money and the investment and the jobs need to come from the private sector.” Mr. Osborne’s bleak assessment echoes that of Liam Byrne, the former chief secretary to the Treasury, who bluntly joked that Labour had left Britain broke when he exited the Government in 2010. He left David Laws, his successor, a one-line note saying: “Dear Chief Secretary, I’m afraid to tell you there’s no money left.” Mr. Osborne is under severe pressure to boost growth, amid signs the economy is slipping back into a recession. The Institute of Fiscal Studies has urged him to consider emergency tax cuts in the Budget to reduce the risk of a prolonged economic slump.  But the Chancellor yesterday said he would stand firm on his effort to balance the books by refusing to borrow money. “Any tax cut would have to be paid for,” Mr. Osborne told Sky News. “In other words there would have to be a tax rise somewhere else or a spending reduction. “In other words what we are not going to do in this Budget is borrow more money to either increase spending or cut taxes.” –Telegraph Forum Index -> World NEWS Page 1, 2, 3, 4  Next
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