austerity

The Fiscal Cliff Hoax - Our Collapsing Economy and Currency

fiscal cliffOriginally published by Institute for Political Economy

Is the “fiscal cliff” real or just another hoax? The answer is that the fiscal cliff is real, but it is a result, not a cause. The hoax is the way the fiscal cliff is being used.

The fiscal cliff is the result of the inability to close the federal budget deficit. The budget deficit cannot be closed because large numbers of US middle class jobs and the GDP and tax base associated with them have been moved offshore, thus reducing federal revenues. The fiscal cliff cannot be closed because of the unfunded liabilities of eleven years of US-initiated wars against a half dozen Muslim countries–wars that have benefited only the profits of the military/security complex and the territorial ambitions of Israel. The budget deficit cannot be closed, because economic policy is focused only on saving banks that wrongful financial deregulation allowed to speculate, to merge, and to become too big to fail, thus requiring public subsidies that vastly dwarf the totality of US welfare spending.

The Never Ending European Implosion Update

eurozoneSpain today was suddenly imploding. We should say suddenly with a bit of sarcasm, after all, we've been watching Europe put their fingers in the never ending European financial dike for years now.

What happened was Germany has demanded Spain be liable for their loans, 100% from last month's Spanish bail out.

The German Bundestag voted Thursday to approve the $122 billion banking bailout, but only if the Spanish government accepted full liability for the loans. “There will be no direct bank financing,” said Volker Kauder, head of the Christian Democratic delegation in the Bundestag.

Truth be told this is just another day in the adventures of Eurozone financial crises. U.S. Treasury bonds are hitting record lows as a mass exodus from Europe seeks safe assets.

U.S. Treasuries yields fell to new record lows on Monday as concern that the euro zone's debt crisis is spiraling out of control led investors to seek out the relative safety of U.S. debt.

Germany and U.K. bonds yields are also hitting record lows as the flight to safe haven continues.

More Austerity and Bail Outs for Greece as Conservative Party Wins Election

greeceGreece is in turmoil. Austerity demands and debt have ravaged the nation. In spite of this, the pro bail-out and corresponding austerity political party just won the election:

The pro-bailout New Democracy party came in first Sunday in Greece's national election and could gather enough support to form a pro-bailout coalition to keep the country in the eurozone.

The world's eyes have been on Greece and their elections. The reason is one party wanted to default and leave the Eurozone. The two main parties are the New Democracy and the Syriza. The New Democracy party are the conservatives and support the European bail outs, austerity demands and want to stick with the EU and the Euro. The left Syriza wants to default, get out of those austerity demands and leave the Eurozone.

Most are reporting the New Democratic Party of Greece can form a parliamentary coalition.

The euro strengthened as official projections showed Greece’s two largest pro-bailout parties winning enough seats to forge a parliamentary majority, easing concern the country would be forced from the currency bloc.

Ay, Caramba! Spain Asks for a Whoppin' Bail Out

eurozoneWell, it's happened as we earlier said it would. Spain is getting a bail out, worth €100 billion. Guess where that money is going - directly to Spanish banks! The loan is purely to recapitalize the banking system and to be given to Spain's FROB, a financial restructuring fund. From the Eurozone press release:

The Eurogroup has been informed that the Spanish authorities will present a formal request shortly and is willing to respond favourably to such a request.

The financial assistance would be provided by the EFSF/ESM for recapitalisation of financial institutions. The loan will be scaled to provide an effective backstop covering for all possible capital requirements estimated by the diagnostic exercise which the Spanish authorities have commissioned to the external evaluators and the international auditors. The loan amount must cover estimated capital requirements with an additional safety margin, estimated as summing up to EUR 100 billion in total.

The Eurogroup considers that the Fund for Orderly Bank Restructuring (F.R.O.B.), acting as agent of the Spanish government, could receive the funds and channel them to the financial institutions concerned. The Spanish government will retain the full responsibility of the financial assistance and will sign the MoU.

Boo Hoo Wisconsin! Walker Wins and Unions Lose

wisconsin cheese landBoo Hoo Wisconsin! You did not remove one of the most inane, toxic governors out to destroy the middle class with nonsensical economic agendas. Regardless of party, Walker's attack on collective bargaining was simply an attack on working people. Yet somehow envy that some workers have managed to hang onto pensions and health care which won't send them into poverty enrages others who do not have wages, pensions and benefits. So angry Wisconsin, instead of demanding higher wages, pensions and better health care for themselves gave the very people was are out to destroy them, carte blanche, a mandate to continue to do just that!   Why not, let's destroy pensions, worker rights, wages and jobs, instead of being outraged that our financial livelihoods are under attack! Just today Republicans blocked a bill to address equal pay for women, yet will those Senators be recalled? Nope, and they probably won't lose their elections over it either.

How did this all happen? Back in March of last year, Wisconsin did the nasty against labor. Unions tried to stop it and literally Governor Walker sic'ed the state police on some state Democratic Senators who were trying to stop the railroading of workers.

Saturday Reads Around the Internets - Give Us Your Password for a Job

shocknews Welcome to the weekly roundup of great articles, facts and figures. These are the weekly finds that made our eyes pop.

 

Employers Demand Your Facebook Password

Surely this should be illegal, but for now it isn't. Potential employers, during an interview, are demanding applicants private passwords to personal online accounts.

When Justin Bassett interviewed for a new job, he expected the usual questions about experience and references. So he was astonished when the interviewer asked for something else: his Facebook user name and password.

Bassett, a New York City statistician, had just finished answering a few character questions when the interviewer turned to her computer to search for his Facebook page. But she couldn't see his private profile. She turned back and asked him to hand over his log-in information.

Delightful News Out of Greece This Morning (for bankers)

Traders in New York this morning were greeted with this happy headline from The Wall Street Journal:

US Stock Futures Higher; Buoyed by Greece

greece austerity protestYes indeed, the Dow Jones index is set to open at least 70 points higher because the Greek parliament approved the additional austerity measures demanded by the European Union, the European Central Bank, and the International Monetary Fund. In exchange for €130 million in a second bailout by the “Troika”, as the three lending institutions are called, Greece will have to cut its minimum wage by 22% and the government will have to lay off an additional 150,000 workers. This is in a country that is in its fifth year of recession, with an official unemployment rate of 21%. Business has virtually collapsed, with many private sector companies on the verge of bankruptcy. The health system is so starved for funds that a bacteria resistant to all medicines is raging through hospitals, forcing the chronically ill to decide whether to even risk seeking professional care. Poverty is reaching extreme levels and is well-entrenched among what used to be the middle class. Children are sent to school so hungry that they are fainting in the classrooms. As of last night, the crowds that were storming through Athens and other large cities no longer were content to throw rocks at the police; Molotov cocktails were used to set at least forty buildings in Athens on fire. The police in Athens, facing crowds estimated from 80,000 to 100,000 people, were forced off Syntagma Square, and appeared to have run out of tear gas. Journalists described the business center of Athens as a war zone. The country is slipping into social disorder, if not anarchy. But stock markets in Europe were up today on the happy news that the Greek parliament approved the additional austerity measures.

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