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News Links: The only way to save the eurozone is to destroy the EU

  • Alea * The Liquidation of Government Debt

    Low nominal interest rates help reduce debt servicing costs while a high incidence of negative real interest rates liquidates or erodes the real value of government debt.

  • The only way to save the eurozone is to destroy the EU | The A-List | FT.com

    So we have two crises now. A still-unresolved eurozone crisis and a crisis of the European Union. Of the two, the latter is potentially the more serious one. The eurozone may, or may not, break up. The EU almost certainly will. The decision by the eurozone countries to go outside the legal framework of the EU and to set up the core of a fiscal union in a multilateral treaty will eventually produce this split.

  • EU Divisions: Questioning the Legality of a Separate Euro Treaty – SPIEGEL ONLINE – News – International

    With the United Kingdom opposed to Chancellor Merkel’s plan for amending EU treaties to increase fiscal integration, Germany and France are seeking a separate agreement among the 17 euro-zone members. That, though, may be illegal say many.

  • Why President Gingrich Would Fail at Every Reform He Attempted – Conor Friedersdorf – Politics – The Atlantic

    His governing style has a glaring flaw: before trying to improve anything, he insists that it must be ‘fundamentally’ transformed

  • Zendesk upgrades help desk app for Android phones, tablets | VentureBeat

    Zendesk made our recent list of "Top 10 disruptive cloud companies we’re excited about" because it is enabling small and medium-size companies to create on-demand help desks and cloud-based call centers. The company’s smart and simple web apps and its mobile apps for iPhone, iPad, Android and BlackBerry are helping businesses compete with much bigger players in the area of communications.

  • Pourquoi la décision de Standard & Poor’s est très politique – Libération

    Maladroit, le moment choisi par l’agence de notation pour mettre la zone euro sous surveillance négative ? En réalité, «S&P» assume désormais le caractère politique de ses annonces. Explication de texte.

  • Corzine’s Loss May Be Soros’s Gain – WSJ.com

    Investor George Soros’s family fund bought about $2 billion of European bonds formerly owned by MF Global Holdings Ltd., the very debt that helped force the securities firm to file for bankruptcy protection Oct. 31, according to people close to the matter.

  • Soros: World Financial System on Brink of Collapse – Real Time Economics – WSJ

    Despite their assorted problems, including corruption, weak infrastructure and shaky government, developing countries are relatively unscathed by the "deflationary debt trap that the developed world is falling into," Mr. Soros said at a New York gathering to mark the 10th anniversary of the International Senior Lawyers Project, a group that provides pro bono legal services around the world. Mr. Soros was among those honored by ISLP, for his work as founder and chairman of the Open Society Foundations, which supports democracy and human rights. The current global financial system is in a "self-reinforcing process of disintegration," Mr. Soros warned, and "the consequences could be quite disastrous. You have to do what you can to stop it developing in that direction."

  • Ireland’s Austerity Hailed as Example of Financial Survival – NYTimes.com

    Ireland is showing glimmers of a turnaround. A year after it received a 67.5 billion euro bailout, or about $90 billion at current exchange rates, modest growth has returned and the budget deficit is shrinking. But the effects of austerity have pummeled Ireland’s fragile economy, leaving scars that are likely to take years to heal. Nearly 40,000 Irish have fled the country this year alone in search of a brighter future elsewhere; the trend is expected to continue.

  • Buying A Kindle Fire Might Make You More Likely To Own An iPad Eventually – The Consumerist

    The attractive lower price tag of Amazon’s Kindle Fire might be luring in plenty of customers, but according to some analysts, owning the Fire is akin to a "soap box derby" car and eventually, customers will upgrade to an iPad. Burn!

  • PayPal Rains On Regretsy’s Secret Santa Campaign Over Use Of Wrong Button – The Consumerist

    So now Regretsy must manually refund hundreds of $2 donations. It would have been much worse had PayPal not made this demand until after thousands of dollars had already cleared. This means that most of the children who would be receiving the gifts from Regretsy’s Secret Santa campaign will not be affected. And of course, the PayPal policy is that even though Regretsy must return the money that was being held up, PayPal keeps the fixed fee. And if people whose money is refunded choose to donate again, that means PayPal gets paid twice. Not a bad gig.

  • Market rout as ECB dashes bond hopes – Telegraph

    The European Central Bank has dashed hopes for a blitz of bond purchases to stem the debt crisis in southern Europe, setting off a sharp fall on European stock markets and a flight from risk across the world.

  • Bruce Krasting: On Corzine – MFG in the fog of war

    Bob voted with his feet. He closed off all open positions. He got back to cash. Then he requested a wire transfer for the balance(s). According to Bob, the wires went out on Wednesday, October 26 (four days before BK). All three wire transfers were received on Thursday October 27. But on Friday, October 28, the bank that had received the funds reversed the wire transfer for the larger amount. The transfers for the two smaller amounts were not reversed.

  • Jesse’s Café Américain: CFTC Issues A Clear Statement: MF Global Customers Have Priority In This Bankruptcy

    commodity customers have, pursuant to Section 766(h) of the Bankruptcy Code, priority in customer property. This includes, without limitation, segregated property, property that was illegally removed from segregation and is still within the debtor’s estate, and property that was illegally removed from segregation and is no longer within in the debtor’s estate, but is clawed-back into the debtor’s estate by the Trustee. If the customer property as I just described is insufficient to satisfy in full all the claims of customers, Part 190 of the Commission’s regulations allow other property of the debtor’s estate to be classified as customer property to make up any shortfall.

  • Europe moves ahead with fiscal union, UK isolated | Reuters

    Europe divided on Friday in a historic rift over building a closer fiscal union to preserve the euro, with an overwhelming majority of countries led by Germany and France agreeing to forge ahead with a separate treaty, leaving the EU’s third biggest economy Britain isolated.

  • Corzine’s Know-Nothing MF Global Defense « naked capitalism

    There were some other oddities in the Corzine testimony. Remarkably, he insists the firm got to be less risky on his watch because its gearing fell from over 37 to one to 30 to one. Immediately after that, however, he describes the repo to maturity trades in some detail, and points out, as others have, that they were treated as off balance sheet for accounting purposes. Since these trades were clearly NOT off balance sheet from an economic standpoint, any discussion of the firm’s true economic risk should include the repo to maturity transactions. It would clearly lead to a higher level of leverage than Corzine presented in his testimony, and likely higher than under the predecessor regime.

  • Europe’s disastrous summit | Felix Salmon

    I thought disasters were all meant to happen over the weekend? Somehow, in Brussels, EU leaders have contrived to pull defeat out of the jaws of victory on Thursday night, leaving Friday for finger-pointing and recriminations and wondering whether anybody who signed on to this deal has any chance at all of even getting re-elected, let alone being remembered as one of the leaders who saved the euro.

  • After The Regretsy and Diaspora Account Freezes, We’ve Lost Confidence In PayPal | TechCrunch

    PayPal, you’re the incumbent, and people are slow to switch to an unproven smaller payment service. But considering WePay dumped a 600 lb chunk of frozen money in front of your conference, startups are gunning for you. That first-mover advantage won’t hold up forever. As more commerce moves online, you’re going to have to uphold the trust of mainstream users that are highly influenced by bad press. And right now, you’re on thin ice.

  • The Best Antivirus App for Windows

    Windows has more antivirus programs than we can count, but we keep coming back to Microsoft’s own offering, Security Essentials. It’s easy to use, lightweight, and does everything in the background, so you rarely need to interact with it.

  • ‘This is not going to be a treaty that Britain signs up to’: Cameron blocks EU deal to hand more economic power to Brussels | Mail Online

    David Cameron this morning blocked an EU deal for a crucial treaty change after holding out for concessions to take back to Tory Eurosceptics in Parliament. In a press conference given just after 5am, the Prime Minister insisted that any new treaty to hand economic powers to Brussels was ‘not going to be a treaty that Britain is signed up to.’

  • Thorning: Det vigtigste var at skabe ro

    Statsminister Helle Thorning-Schmidt (S) siger efter det mislykkede forsøg på at få alle 27 EU-lande til at være med til at redde euroen, at det trods alt var vigtigst at finde en løsning.

  • The Gingrich Tragedy – NYTimes.com

    In the two main Republican contenders, we have one man, Romney, who seems to have walked straight out of the 1950s, and another, Gingrich, who seems to have walked straight out of the 1960s. He has every negative character trait that conservatives associate with ’60s excess: narcissism, self-righteousness, self-indulgence and intemperance. He just has those traits in Republican form.

  • Gingrich 37%, Romney 22% Among GOP Voters Nationwide

    Newt Gingrich leads Mitt Romney 37% to 22% among Republican registered voters in Gallup’s inaugural Daily tracking of the party’s 2012 presidential nomination race; all other candidates are in single digits. Gingrich’s support has increased 15 points compared with Gallup polling conducted in mid-November.

  • Official: New euro accord to include 23 countries – Associated Press

    The president of the European Council said Friday that a new intergovernmental treaty meant to save the euro currency will include the 17 eurozone states plus six other European Union countries – but not all 27 EU members.

  • Stop Online Piracy Act and Protect IP Act, a pair of bills that threaten Internet freedom. – Slate Magazine

    The interconnected nature of the Internet fostered the growth of online communities such as Tumblr, Twitter, and Facebook. These sites host our humdrum daily interactions and serve as a public soapbox for our political voice. Both the PROTECT IP Act and SOPA would create a national firewall by censoring the domain names of websites accused of hosting infringing copyrighted materials. This legislation would enable law enforcement to take down the entire tumblr.com domain due to something posted on a single blog. Yes, an entire, largely innocent online community could be punished for the actions of a tiny minority.

  • Hitler Hears About The Collapse Of The Eurozone | ZeroHedge

    It was only a matter of time… Needless to say, this is obviously so wrong on so many levels, but what can you do. At this point the endgame is in play so at least we can all laugh about it.

  • You Will Never Guess The European Country With The Longest Working Week

    Interestingly, while the UK comes high in full time working, it doesn’t feature so at all when we look at the top 20 longest working weeks for all of those employed – presumably because the country employs a larger proportion of part time workers. (In fact, the difference between the two lists seems to suggest that part time labour could be a rich country problem – or that part time workers in poorer countries work longer hours.) However there is one country that comes 1st and 2nd on both lists – and it’s not a country renowned for hard work at the moment. Take a look at the list of longest work weeks (compared to their full time only working weeks) below.

  • Quelle Surprise! EBA Raises Eurobank Capital Targets, Finds They Need to Raise €115 Billion « naked capitalism

    As we’ve discussed repeatedly, bank stress tests have been a confidence building exercise, an effort to talk bank CDS spreads down and bank stock prices up. That was clearly the intent of the first effort by the US Treasury in 2009 and it succeeded so well as a PR exercise that the Eurozone copied it last year, incredibly finding that obviously undercapitalized Eurobanks needed a mere €3.5 billion euros more in equity. Mere months after the release of the results, lenders were being much more stringent and shunning banks who had been given an official clean bill of health.

  • Why European Banks Deserve A Massive Bailout At 100 Cents On The Euro

    If Europe wants to have a robust economy, it needs to have robust public finances, and that can only happen when a system is put in place that ensures that sovereign debt is risk free. If banks have any reason to fear that they won’t get paid 100-cents on the euro for their sovereign debt holdings, that’s basically an impossible prospect.

  • What’s next after Russia’s elections? – Finance Addict

    Delegations of official observers from the EU "stopped short of saying that it failed to meet international standards," according to the Moscow Times. Yet despite all of this the results for Putin’s United Russia party were quite bad. With a poll win of less than 50%, it will suffer a 24% decrease in the number of seats held, dropping from 315 to 238.

About 

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty years of business experience. He is also a regular economic and financial commentator on BBC World News, CNBC Television, Business News Network, CBC, Fox Television and RT Television. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College. Edward also writes a premium financial newsletter. Sign up here for a free trial.

2 Comments

  1. Dave Holden says:

    Stephen Kinsella – Irish Crisis Demands New Economic Thinking
    http://ineteconomics.org/video/30-ways-be-economist/stephen-kinsella-irish-crisis-demands-new-economic-thinking

    ” Stephen Kinsella sets out to provide a remedy: starting from a web of
    balance sheets, stock-flow-consistent models make it possible to trace
    the financial flows connecting firms and banks, households and
    government.”

    • Anonymous says:

      This crisis will run on for years unless there is a change in policy. Though most economists were and are still oblivious to the problems of debt. Until there are solutions that involve a reduction in debt economists will destroy the economy trying out new policies that simply do not work.