Posts Tagged ‘Eurozone’

I See Hungary, I See France

Tuesday, April 12th, 2022

Let’s clear some tabs on recent European elections of note. First up: Hungary reelects Viktor Orban.

Viktor Orbán, who has served as prime minister of Hungary since 2010 — and spent a stint in the same office from 1998-2002 — won yet again in Sunday’s much-anticipated elections. His party, Fidesz, won two-thirds of the seats in parliament. Fidesz’s closest competitor was United for Hungary, an amalgamation of parties which included socialists, greens, and Jobbik, which was recognized as an antisemitic, neo-Nazi outfit until recently. Now, it presents itself as a moderate, “modern,” alternative to Fidesz.

Orbán’s triumph, we are meant to believe, represents a near-fatal blow to Hungarian democracy, and a painful one to the capital L, capital W, capital O, Liberal World Order.

Snip.

Now, Orbán is no saint, and yes, that is an understatement. He enjoys close relationships with both Vladimir Putin’s Russia (although he has denounced the invasion of Ukraine) and Xi Jinping’s China. As Jimmy Quinn detailed here, Orbán has helped China carry out its post-pandemic propaganda program, and pursued deeper financial ties between his country and the genocidal one to the east. This is not the behavior of a man keen on being what Rod Dreher calls “the leader of the West now — the West that still remembers what the West is.”

Moreover, Orbán’s domestic behavior can fairly be called authoritarian. He has championed what he calls “illiberal democracy,” and enacted reforms to the country’s judicial system that undermine its independence. Evidence points to significant financial corruption on his watch as well.

But the failure of many of Orbán’s critics to accurately report on his regime points to the weakness of many of their arguments. Take this piece from The Atlantic, which, as National Review alum Daniel Foster notes, doesn’t exactly describe Orbán as an autocrat. Its author argues that the formation of a private, pro-Orbán media conglomerate that receives government funding is damning evidence of the corrosion of democracy in the country at the hands of its leader. That’s not exactly convincing to those of us who have watched NPR hold a pillow to the face of the Hunter Biden-laptop story and erroneously smear Supreme Court justices.

Orbán is not a U.S.-style conservative fusionist or anything especially close to it, and that’s a bad thing, in this writer’s opinion. But he is, quite obviously, the kind of conservative who appeals to Hungarians, and despite his many warts, that might just be okay. People in other countries are allowed to hold different opinions on LGBT issues, European integration, etc. than your average undergrad at Middlebury. Indeed, the implementation of those policies at the public’s will represents democracy in action, not its antithesis.

Orbán, the prime minister of a nation with a population only slightly larger than New York City’s and something approximating a friend of the Chinese Communist Party, is no more the savior of Western Civilization than Joe Biden is. But he’s also no threat to self-government across the world, and his critics’ flubbing of basic terms they proclaim to love leaves the rest of us wondering if they even know what it is that they value.

Orban’s victory has generated much consternation among the Euroelite:

Viktor Orbán and his brand of conservatism faced a crucial popularity test in Sunday’s general elections, a test he passed with flying colors. The Hungarian premier and his Fidesz party thumped the opposition’s unity coalition—composed of liberals, greens, Communists, and the neo-Nazi Jobbik—by a humiliating margin of nearly 20 points; opposition leader Péter Márki-Zay was defeated even in his own district.

Orbán also struck a painful blow against his critics in Brussels. Ever since he returned to power in Budapest in 2010, and especially in recent years, Orbán has played lightning rod for seemingly the entire EU establishment, even as he has galvanized populist and national-conservative forces on the Continent. Reviled, denounced, sanctioned, and banished from the European Parliament’s center-right bloc, he has gone from internal critic of Brussels to an outright dissident.

In this, Orbán hasn’t been alone. For the past five years, the European Union has also locked horns with the national-conservative Law and Justice party, or PiS, in neighboring Poland. Both countries allegedly fail to uphold “rule of law,” as defined by Brussels. The European Commission charges Hungary and Poland with threatening media freedom and judicial independence, with not doing enough to tackle (or actively engaging in) systemic corruption, and with violating LGBT and minority rights—charges denied by political leaders in Budapest and Warsaw.

Some paragraphs on Hungary’s largely neutral stance on the Russo-Ukrainian War snipped.

Still, once the Russo-Ukrainian dust settles, it is likely that the older dynamic—Budapest and Warsaw together in the anti-EU trenches—will resume. PiS might have won some temporary favor with Western hawks by toeing a hawkish line on Russia, but the underlying tensions haven’t eased. Indeed, the issue that has received the most attention in recent years is the Polish government’s decision to establish, in 2017, a new judicial disciplinary body, composed of jurists appointed by the lower house of Parliament, to hear complaints against judges facing misconduct allegations. European officials claim, not entirely without reason, that this exposes the Polish judges to political control.

This clash is often framed by both camps in stark culture-war terms. “Pro-European” liberals and EU officials themselves present it as a conflict between the liberal-democratic values of the union and the illiberal and undemocratic practices of the two countries’ nationalist governments. Partisans of Hungary and Poland, meanwhile, frame the contest as one between two traditional and religious nations and an imperialistic Brussels bent on pushing a left-wing, globalist, and anti-Christian agenda.

Things are a little more complex. For starters, the crimes Hungary and Poland are accused of aren’t unique to those two countries, not by EU standards, at least. The high courts of EU states, where they exist, are all highly politicized, which usually means they hardly ever dare challenge the wisdom of EU legislation.

As for corruption, it’s notoriously hard to measure. To the extent that some institutions try to gauge it, on the basis of people’s perception of the levels of corruption in their country, Poland’s and Hungary’s governments come out as significantly less corrupt than those of other Eastern nations, such as Romania, Slovakia, Slovenia, and Bulgaria; they also come out better than governments in Spain, Portugal, and Italy.

Paragraphs on press freedom and “LGBT” issues snipped.

In light of all of the above, the real question isn’t whether what’s happening in these two countries is indeed worrying, or whether an a-democratic, supranational body like the European Union has any right to lecture the governments of two democratic member states and the people who elected them. The more interesting question is why Brussels has singled out Hungary and Poland for problems common to the bloc as a whole.

The answer has relatively little to do with the charges brought against the two countries, though of course they play a role. In the eyes of the European gatekeepers, the pair has committed a much more heinous crime: Hungary and Poland have openly challenged the authority and legitimacy of the European Union itself. More specifically, they have dared to reject what is arguably the most important article of faith of EU doctrine: the primacy of EU law over national law.

Thus, when Brussels claimed that Poland’s judicial disciplinary body, created in 2017, violated EU law and should be revoked “in accordance with the principle of the primacy of EU law,” the Polish government refused to comply, contending that the demand represented an unacceptable infringement on the country’s national sovereignty. In an attempt to resolve the dispute, Polish premier Mateusz Morawiecki asked the Polish Constitutional Tribunal in Warsaw this question: If push came to shove, and EU law were ever to clash with the Polish constitution, which should prevail?

The tribunal delivered its verdict in 2021: It voted 12 to 2 for the national constitution, holding that “the attempt by the [European Court of Justice] to involve itself with Polish legal mechanisms violates … the rules that give priority to the [Polish] constitution and rules that respect sovereignty amid the process of European integration.”

The Polish tribunal, in other words, insisted that national law enjoys primacy over EU law—a principle without which “the Republic of Poland cannot function as a democratic and sovereign state.” More than that, the tribunal accused the European Union and the ECJ of violating EU treaties themselves by claiming otherwise. Quite the bombshell.

Suffice to say, EU officials and pro-EU elites didn’t take it well. Luxembourg’s foreign minister, Jean Asselborn, claimed that the tribunal’s ruling put the very existence of the European Union in jeopardy. “The primacy of European law is essential for the integration of Europe and living together in Europe”, he said. “If this principle is broken, Europe as we know it, as it has been built with the Rome treaties, will cease to exist.”

To understand why the ruling represents such an existential threat to the EU, one must comprehend the fundamental role of EU law in the bloc’s superstate-building project. Legal scholars have contested the supposed primacy of EU law for half a century. In practice, however, national courts and governments, which tend to have an engrained pro-EU bias, have hardly ever contested the primacy principle. This has allowed the ever-expanding body of EU legislation, the so-called acquis communautaire, to become the main engine for so-called integration by law—the hollowing out from above and within of national constitutional and legal systems.

EU legal primacy has also bestowed huge powers upon the ECJ: Despite lacking the democratic legitimacy and accountability of national courts, the European court, by constantly creating new “laws” through its rulings, almost always in favor of “more Europe,” has effectively become the bloc’s most important legislative and, indeed, constitution-writing body. Alec Stone Sweet, an international-law expert, has termed this a “juridical coup d’état.”

By going against this principle—and by asserting the primacy of national sovereignty over EU law—Hungary and Poland have thus dealt a potentially deadly blow to one of the bloc’s main empire-building tools. This is ultimately what the two countries are being punished for. And to do so, the European Union is resorting to the most powerful tool at its disposal: money. Last year, in a move clearly aimed at Hungary and Poland, Brussels adopted for the first time ever a Rule of Law Conditionality Regulation, which allows the European Commission to withhold the payment of EU funds to member states that are found to be in breach of the rule of law—as defined by the EU/ECJ itself, of course.

The commission has already used the new rule to refuse to approve the Next Generation EU Covid-19 recovery funds for the two countries—€7 billion for Hungary and €36 billion for Poland. And more funds may be withheld in the future. Budapest and Warsaw challenged the new rule at the ECJ, which predictably dismissed the two governments’ complaints.

Thou Shalt Have No Other Gods Before The EU.

How this will pan out remains to be seen. The European Union isn’t new to this kind of blackmail. The European Central Bank has repeatedly choked member states, to bring recalcitrant eurozone governments to heel or even to force regime change (the removal of Silvio Berlusconi in 2011, the shutdown of Greece’s banks in 2015). EU leaders seek a similar coup in Hungary and Poland. Only, Hungary and Poland aren’t in the eurozone; they control their own currencies. The money the pair receives from the European Union is significant, but it isn’t a lifeblood: Between 2010 and 2016, annual net transfers from Brussels—the difference between the total expenditure received and contributions to the EU budget—amounted to 2.7 percent of GDP in Poland and 4 percent in Hungary. This puts the two countries in a very different position than, say, Greece.

Meanwhile, over in France, incumbent Emmanuel Marcon and right-wing challenger Marine Le Pen head to a runoff. (Naturally, French antifa reacted to Le Pen making the runoff by rioting. If you’re a moron and all you have is a hammer…)

Remember how self-described “Bonapartist” Eric Zemmour was supposed to be the new hotness? Yeah, he finished a distant fourth. Le Monde describes his failure thus:

Eric Zemmour gathered 7.07% of the votes cast in the first round of the presidential election on April 10, according to official results. This defeat can probably be explained by several factors, which the far-right candidate saw creeping up on him over the past few weeks, leading him to seek supporters in all segments of the electorate.

Eric Zemmour failed to unite “the patriotic bourgeoisie,” apart from some who voted for François Fillon in 2017 and the Catholics in the “Manif Pour Tous” organization [a group opposing same-sex marriage] and “the working classes,” who have remained for the most part loyal to Marine Le Pen (23.15% of the vote). His Reconquête ! party was already showing these weaknesses: Eric Zemmour has in fact built a new Rassemblement National (RN) party to the right of the RN, where support from Les Républicains (LR) is rare. The only people to join him from the traditional right-wing party Les Républicains are the obscure senator Sébastien Meurant, an unknown former MP, Nicolas Dhuicq, and Guillaume Peltier, the former number two of LR, who is known for switching parties a lot (he is a former member of the Front National, of Bruno Mégret’s Mouvement National Républicain (MNR), of Philippe de Villiers’ Mouvement pour le France (MPF), and also of the UMP).

Yeah, for the most part I don’t know who those people and parties are either.

Eric Zemmour had reason to believe in victory: With barely 7% of intended votes in September 2021, he rose to 17% and 18% in polls in mid-October, before plunging down the rankings. He has obviously succeeded in forcing his campaign issues to the forefront, including on the traditional right, building a movement from scratch that now gathers more than 100,000 supporters who are extremely active on social media and drawing crowds to rallies like no other candidate.

“Extremely active on social media.” That should be a big ole red flag. Twitter is not the territory.

But the excitement that he generates among his supporters has not translated into votes. “I believe that the momentum is on my side,” he repeated on April 6 on France Inter public radio. “All the objective elements: the full rooms, the excitement, the television ratings, the number of supporters; all of that is me.” His sycophants around him have greatly elevated the hubris of a man who had no shortage of it, and who didn’t mind becoming a kind of a guru whose mere presence electrified the crowds.

Snip.

In the end, it is the war in Ukraine that led the candidate to plummet in the polls. Due in part to his admiration for Vladimir Putin (“I dream of a French Putin,” he had said in 2018), his inability to call him a “war criminal,” and finally his reluctance to welcome Ukrainian refugees – unlike Marine Le Pen.

Yeah, I’m not sure how much that had to do with it, since Le Pen is hardly tough on Putin herself.

Is Le Pen a nasty piece of work? Well, she’s certainly not my cup of tea, and I doubt she has a translated copy of The Federalist Papers on her bookshelf. (Though thankfully, she seems to have abandoned her father’s antisemitism.) Macron is arguably more “free market,” though that phrase has very little meaning in the matrix of current French politics. Yellow Vest voters seem to favor Le Pen, and she wants to lower VAT taxes. She opposes Flu Manchu passports. She’s still a Euroskeptic, wants to reform the European Commission, wants a referendum on immigration restriction, and opposes jihad. She wants to abolish the International Monetary Fund. She’s a Russo-phile who wants to remove France from NATO. Like Orban, she would be a big thorn in the side of the EU. Unlike Ortban, she would also be a big thorn in the side of the US as well.

Damned if you do and damned if you don’t.

Those in the chattering classes proclaiming Orban a grave threat to democracy are wrong. Those proclaiming Le Pen a threat to democracy (and American interests) are slightly less wrong, but Le Pen is less a long-term threat to democracy than the EU’s own transnational globalist elite. NATO survived over 40 years of France’s withdrawal from NATO’s command structure under de Gualle, and (to the extent the alliance is relevant to the 21st century) could survive France’s withdrawal once again.

As National Review once said of Jean Le Pen, “we have no frog in this fight.”

The Silence of the PIIGS

Sunday, February 6th, 2022

Let’s talk about the European Debt Crisis.

[The sound you hear is the countless multitudes clicking off to another blog.]

Way back last decade, dispatches on the ongoing crisis were a regular staple of the blog. To summarize the crisis for those who weren’t paying attention back then:

  • A bunch of countries joined the Eurozone without following the requirements outlined for membership, including limiting budget deficits to 3% of less of their GDP, and overall debt-to-GDP ratio of 60% or less. How were they able to join? Simple: They lied and the Eurocrats turned a blind eye, because EU.
  • Foremost among those running into trouble were the PIIGS (Portugal, Italy, Ireland, Greece and Spain). (Cyprus and Malta also had serious issues, but their tiny size meant they presented no systematic risk for other nations, and Cyprus relieved its problems by becoming the dirty Russian money laundering capital of Europe.)
  • Ireland was probably the most incongruous of the five, since their debt only spiked when the Irish government nationalized Anglo Irish Bank to prevent it from collapsing.
  • In all other cases, the cause of of the problem was obvious: Each ran huge budget deficits to underwrite generous welfare state programs for countries with below replacement birth rates, and they were allowed to get away with it for a while because they used Germany’s credit rating in lieu of their own thanks to the Euro.
  • The problem finally came to a head after the SubPrime Meltdown in 2008 made various banks and regulatory agencies actually scrutinize balance sheets and realize just how broke the PIIGS were.
  • Greece was the worst, being the most dysfunctional, and absolutely refusing to slow down spending on their own. There followed a reoccurring farce where various Euro regulatory agencies (including the International Monetary Fund, the European Commission, and the European Central Bank, collectively known as “the Troika”) demanded Greece end their ridiculous high levels of deficit spending, Greece refused, the Troika threatened to cut off the tap entirely, Greece promised to be better, the Troika reluctantly extended them another loan, and then Greece continued to spend recklessly, setting up the next round of the farce.
  • A bunch of Eurozone countries then implemented “austerity,” which involved not cutting spending to balance their budgets, but merely reducing the deficits slightly.

    None of these “austerity” measures eliminated deficit spending, and none addressed the issue that’s driving all of Europe (and us) bankrupt, namely unwillingness to carry out structural reforms of the welfare state. The few tiny reforms that have been undertaken have been, as NRO’s Michael Tanner notes, ridiculously timid, and even those have been heavily weighted in future years. “So far, European governments haven’t even been willing to take a penknife to the welfare state, let alone an axe.” Plus a huge round of tax hikes…

    Actual austerity would mean (at a minimum) reducing spending to the amount of money actually taken in. As best I can tell, none of the PIIGS, or France, or the UK has undertaken such real austerity. That “severe” Greek austerity that just caused a change in government? It reduced Greece’s official deficit spending from 9.0% of GDP to 7.5% of GDP. They didn’t even want Greece to stop digging a hole, they just wanted them to dig more slowly.

    Austerity did not fail, it was declared difficult and left untried.

  • Eventually growth in the Eurozone picked up just enough, and the Troika managed to install enough of their own functionaries in various PIIGS positions to ensure that their half-assed, anemic austerity programs were actually followed that, along with Brexit and the Rise of Trump, it got Eurozone debt crisis off the front page and back under the rug.
  • So fast forward to today. Has the European debt crisis been solved?

    Hah! Of course not. Does the EU ever really solve anything? European debt grew during the pandemic, but this time they get to blame Flu Manchu rather than slow growth, high taxes, declining births and a bloated welfare state.

    Spain, Italy and Greece have all continued their PIIGS-ish ways. The UK, under ostensibly conservative Tory governments for the entire pandemic and constant attack for “austerity,” and they’re still piling up debt like one of the PIIGS, though the double-whammy of Brexit dislocations and idiotic lockdowns are more to blame than increased spending per se.

    Ireland, with the lowest deficit for the period, seems to have proved that their membership among the PIIGS was transitory.

    What then of Portugal? Have they improved? It turns out only slightly and relatively. Their debt increased by 13.9% for the period, making them better not only than Spain, Italy, Greece and the UK, but also France, Cyprus, Malta, Hungary and Slovenia. They evidently managed a balanced budget in 2019 (at least on paper). Their Flu Manchu deficit spending is still unsustainable, just slightly less unsustainable than many of their fellow Eurozone grave-diggers.

    Ireland seems to have escaped PIIGSdom, but the others as are still very much in trouble, with debt-to-GDP rations at or above 100%:

  • Greece: 174.15%
  • Italy: 133.43%
  • Portugal: 119.46%
  • Spain: 95.96%
  • Ireland is down at 62.42%.

    We don’t have much standing to condemn others, as the United States ratio stands at 106.70%. Donald Trump had numerous virtues as President, but he was no deficit hawk, and Biden would crank up deficits even higher if the Senate let him.

    We can see the fruits of this orgy of deficit spending in the worldwide inflation we’re seeing. (Feel free to argue whether government budget deficits or central bank quantitative easing is more at fault.) Inflation may ruin nations, but it’s the deficit-spender’s friend, letting him pay off debt on the cheap with now devalued currency. And it’s the working poor whose lives are most impoverished by it.

    Robbing Peter to pay Paul has always been a popular proposition to get Paul’s vote, but we’re now robbing Peter and Paul’s unborn grandchildren to delay financial reckonings until after the next election cycle.

    It will not end well.

    Eurocrats 1, Italian Voters 0

    Tuesday, May 29th, 2018

    Remember the Eurozone crisis? It’s back!

    Or, to be more accurate, it never went away.

    Today’s locus of instability is Italy, where two Euroskeptic parties, one left (Five Star Movement) and one right (the League, AKA the Northern League), were prevented from forming a coalition government by the country’s Europhilic President Sergio Mattarella, who vetoed their pick of Paolo Savona for finance minister because he advocates leaving the Euro. Like Spain, Italy found out that if they went too strongly against the EU’s wishes, they’d simply be required to keep voting until they got it “right.”

    The current reckoning has been a long time coming:

    Accepting Italy as one of the eurozone’s founding members was a decision only made possible by ignoring common sense, by twisting statistics, and by making a mockery of the rules. But it was a Pyrrhic victory: Italy was allowed to trick its way onto a voyage that damned it. The euro simply did not fit the realities of Italy’s economy or its politics. By dramatically cutting the country’s financing costs (borrowing lire would have carried a significantly higher nominal cost) adopting the single currency allowed Rome to avoid tackling the country’s high debt load, a debt load that was made all the more dangerous now that it was all denominated in a ‘foreign’ currency. Italy could no longer print lire to pay off its creditors.

    When the eurozone crisis hit, Italy was one of the victims, and so, in some respects was its democracy. In something that came uncomfortably close to a coup, the eurozone leadership essentially used Italy’s financial fragility as a lever to secure the replacement in 2011 of Prime Minister Berlusconi by a Brussels man, Mario Monti, a pliable, unelected proconsul. Next time you hear Brussels lecturing Eastern Europeans on democracy remember that.

    Italy weathered the crisis in a ‘just a flesh wound’ sort of way. Its problems became chronic, rather than acute, if that’s the correct adjective to describe the consequences of staying stuck in the euro’s deflationary trap: High rates of unemployment and anemic economic growth.

    The Independent:

    Per capita GDP in Italy is still more than 8 per cent lower than it was when Lehman Brothers went bust in 2008. Quite incredibly, it is even lower than it was when the country joined the eurozone back at the turn of the millennium. Unemployment stands at 11 per cent, down from a peak of 13.1 per cent in 2014, but still double the 5.8 per cent low seen in 2007.

    As the largest of the PIIGS and the third largest economy in the Eurozone, Italy’s participation in the Euro is a lot more vital than Greece’s, which is why the EU has actively been trying to crush any hint of (pick your neologism) Quitaly or Italeave.

    Never mind the fact that, as in Spain, Italian voters want to have their cake and eat it too, advocating polices (in the form of “rolling back pension reforms and government subsidies to the unemployed”) that would only pile on further debt in a country that already has a national debt running at over 130% of GDP, secondly only to Greece in the Eurozone. That doesn’t change the fact that Italy has “ceded its sovereignty to the European Union and international financial markets.”

    Naturally, traders have responded to the crisis by selling off Italian stocks and bonds.

    Stay tuned…

    LinkSwarm for October 24, 2016

    Monday, October 24th, 2016

    The latest Clinton Corruption update pushed the LinkSwarm to Monday:

  • National Review published Victor Davis Hanson’s endorsement of Donald Trump. And the moon became as blood…
  • Trump leading in poll that has best track record over last three elections.”

    The poll with the best track record over the last three presidential elections gave Donald Trump a 2-percentage-point edge over Hillary Clinton on Saturday.

    The Investor’s Business Daily/TIPP tracking poll has Trump with 42.1 percent and Clinton at 39.7 percent.

  • Thoughts on #NeverTrump: “They are putting a great volume of energy into bringing about a disaster, for which they will not take any ownership.”
  • No one trusts the media anymore. “Only one in nine Americans believes that Hillary Clinton is ‘honest and trustworthy.’ They don’t trust the media’s cover-up of her misdeeds, and the cover-up of the cover-up of the cover-up.” (Hat tip: Director Blue.)
  • Why I Now Feel Compelled To Vote For Trump“:

    More than anything, I can’t sit idly by and allow these perpetrators of fraud to celebrate and leak tears of joy like they did when they helped elect Barack Obama in 2008. I have to know I weighed in not only in writing but in the voting booth. The media needs to be destroyed. And although voting for Trump won’t do it, it’s something. Essentially, I am voting for Trump because of the people who don’t want me to, and I believe I must register my disgust with Hillary Clinton.

    (Hat tip: Director Blue.)

  • And speaking of media bias, the Rolling Stone campus rape hoax case goes to trial. (Hat tip: Ace of Spades HQ.)
  • Here’s a New Yorker piece on the failure of the Euro. It provides a good, but incomplete, overview of the Euro’s failure (nowhere does it note that Europe’s cradle-to-grave welfare state is unsustainable, and it fails to note that none of the nations practicing “austerity” in southern Europe have cut outlays to match receipts). And the myopic policy prescription offered is, of course, more central planning. But there are some good bits. Like this:

    The U.S. unemployment rate hit ten per cent for a single month in 2009 and is now below five per cent; the eurozone unemployment rate hit ten per cent around the same time, and is still in double digits. In some European countries, youth unemployment is more than forty per cent. America’s economy is bigger than it was when the crisis hit. The eurozone’s is smaller. To take just one example, Italy, the third-largest economy in the eurozone, has a per-capita G.D.P. that’s lower than it was at the end of the last century.

    Also this:

    Stiglitz observes that if the countries that committed to the single currency in 1992 had known what they know now, and if people had had the chance to vote on the proposal, “it is hard to see how they could have supported it.” That’s a hell of an indictment.

  • Hey, remember how we were told California’s assisted suicide law would only apply to terminally ill people who wanted to die? Now insurance companies are enouraging suicide rather than pay for life-extending drug treatments.
  • Even The New York Times figures out that new gun laws wouldn’t prevent most mass shootings.
  • Russia is conducting nuclear survival drills. (WSJ hoops apply.) Good thing we have Nobel Peace Prize winner Obama running things rather than that warmonger Bush… (Hat tip: Stephen Green at Instapundit.)
  • College isn’t for everyone:

    But if you’re not sure yet what you want to do, then take time to decide before you spend $30,000, $50,000, or $100,000 you don’t have for something you don’t need. In the meantime, start working. You’ll probably only find low-paying, hard-working jobs at first, but guess what? If you go to college, you’ll be working those same jobs when you get out, only you’ll be four years older and fifty grand poorer.

  • Scientists at the Oak Ridge National Laboratory in Tennessee have discovered a chemical reaction to turn CO2 into ethanol. Better idea than corn subsidies…
  • The Large Hadron Collider “nightmare scenario has come true:

    For the last ten years you’ve been told that the LHC must see some new physics besides the Higgs because otherwise nature isn’t “natural” – a technical term invented to describe the degree of numerical coincidence of a theory. I’ve been laughed at when I explained that I don’t buy into naturalness because it’s a philosophical criterion, not a scientific one. But on that matter I got the last laugh: Nature, it turns out, doesn’t like to be told what’s presumably natural.

  • Hamilton County, Tennessee doesn’t monitor parole tracking devices outside business hours. A good thing people never commit parole violations nights and weekends… (Hat tip: Fark.)
  • This just in: Democratic Representative Shelia Jackson Lee is still an idiot.
  • AT&T trying to buy Time Warner. I’ve got a bad feeling about this…
  • Internet-connected CCTV cameras made by Chinese firm Hangzhou Xiongmai Technology seemed to make up the heart of the botnet used in Friday’s DDoS attack.
  • Yuan hits all time low against the dollar.
  • Microsoft Surface sucks.
  • Texas is goat country.
  • What’s Happening to Italy’s Banking System?

    Wednesday, July 6th, 2016

    Yesterday’s Brexit roundup mentioned that Italian banks account for nearly half the bad loans for the entire Eurozone.

    Italy is now the heads-on favorite as the most likely instigator of the next global economic crisis. Some analysts are calling it a perfect storm:

    Italy’s bank bailout fund might not be enough to beat back the Brexit. More key Italian financial services firms are under pressure and face the potential need to raise capital, leaving Italian government officials and its banking system trying to steer clear of a crisis.

    As Italian bank bonds and share prices are seeing their value slammed in the face of rising uncertainty, banks with substantial bad loans are facing greater pressure, with rates around the world slipping into negative territory.

    And, of course, they’re blaming Brexit rather than all the myriad problems with the EU that caused the Brexit.

    Italy’s bank bailout fund might not be enough to beat back the Brexit. More key Italian financial services firms are under pressure and face the potential need to raise capital, leaving Italian government officials and its banking system trying to steer clear of a crisis.

    As Italian bank bonds and share prices are seeing their value slammed in the face of rising uncertainty, banks with substantial bad loans are facing greater pressure, with rates around the world slipping into negative territory. It’s an anxiety some in Italy and throughout the European Union may have been hoping would be eased by the Brexit vote last month — but then the U.K. referendum delivered the opposite outcome from the one they had sought.

    “Market volatility following the U.K.’s EU referendum result hit the Italian bank sector particularly hard because it is one of Europe’s weakest,” Fitch Ratings analysts said in a July 4 report. “Asset quality pressure is a main driver for the negative outlooks on several large and medium-sized Italian banks.”

    The Brexit vote, which calls for the United Kingdom to abandon a European Union that has careened for years from one crisis to another, could hasten weak Italian banks’ downfall. It was widely expected that European and U.K. banks will suffer the brunt of the vote in late June, and while British banks have been hard hit by the news — which brings with it tremendous regulatory uncertainty — EU banks have suffered as well.

    Many banks in Italy, including its largest, UniCredit SpA, have seen share prices pounded; its stock is down more than 60 percent so far this year. A staffer at UniCredit could not provide comment when contacted.

    Already, Italian officials and executives appear to be pulling out all the stops to stave off banking sector contagion. The lingering question for banks is whether they can continue to support lending operations at a time when creditors face potential losses and as some of the country’s leading financial services firms could be subject to shotgun M&A marriages by regulators.

    Italian financial services firms earlier this year established a multi-billion dollar fund called Atlante to buy non-performing bank loans. But the fund, which is in the 4-billion euro to 6-billion euro range ($4.43 billion to $6.65 billion), one analyst said, is far too small to cover all the non-performing loans held by major Italian banks. However, the fund could still be leveraged in order to support loan purchases.

    “The authorities need to get banks to remove a large portion of soured loans from their books so they can loan more,” said Julien Jarmoszko, senior research manager at S&P Global Market Intelligence. “If investors fear more Italian banks, this will raise their cost of capital and reduce lending as a result.”

    Look for some sort of holding action for temporary recapitalization (including a “bail in” or some sort of ECB scheme) to let all the insiders dump their bad debts onto the European taxpayer, which was the real point of prolonging the Greek farce.

    More news on that front:

  • Atlante already took control of Veneto Banca after “a €1bn capital increase demanded by EU bank regulators attracted zero interest.” And Atlante may have to tap pension funs for further recapitalization.
  • Italy has also banned short-selling of imploding Banca Monte dei Paschi di Siena SpA. That’s never a good sign, and it never works for long.
  • “It’s bad – non-performing bank loans have risen to 18%. At 10%, most banks are technically bankrupt. That’s the percentage of capital and pledged deposits they have against bad loans. Our pledged deposits, not theirs. At 18%, they’re no longer “technically” bankrupt. They ARE bankrupt! Greece still has bad or non-performing bank loans of 34%, Ireland 19% and Portugal 12%. And we haven’t seen the next serious financial crisis yet.”
  • And bank bailouts could hit Italian sovereign debt right in the bond ratings. “Italian ratings are already at BBB- for S&P, though we must also add that DBRS still ranks the country at AL. Still, if these ratings start to come under pressure from the agencies, this could lead to speculation that Italy may eventually fall out of the investment grade bucket. This would have a major impact – in the first place in terms of the eligibility of Italian bonds for the PSPP.” That’s the European Central Bank’s public sector purchase program.
  • Of course, when push comes to shove, we’re likely to see all sorts of banking rules get thrown out the window…

    LinkSwarm for December 28, 2015

    Monday, December 28th, 2015

    I hope everyone had a merrier Christmas than I did. (My father recently went on hospice care after a two year fight with cancer, so I was back home helping my mother care for him.) Here’s a LinkSwarm to start your week with.

  • Inside Obama’s pity party.
  • Remember, Obama’s policies never fail, and all opposition to him is because his opponents are bitter clinging racists.
  • We live in a nation founded by geniuses but run by idiots.
  • “Many Obamacare customers pay more than 10 percent of their incomes toward coverage (and some paying considerably more).”
  • What would Democrats do to defeat the Islamic State? Not a damn thing.
  • Iraqi government forces retake Ramadi, the Anbar province city the Islamic State took in May.
  • “Two weather occurrences – the Arctic Oscillation and El Niño – are combining to shake up temperatures from coast to coast in the U.S., bringing springlike conditions to the Northeast for much of this month and leaving parts of the West colder and wetter than usual.”
  • 2015: The year Europe reached the breaking point:

    Adjusting for inflation, the gross domestic product of the 19 countries now sharing Europe’s common currency, the euro, was less in 2014 than it was in 2007. Widespread joblessness and diminishing opportunities confront an entire generation of young Europeans, especially in Spain, Italy, France and Greece. The economic malaise tinges everything: Young people resist marriage for lack of economic opportunity. Poorer European countries are experiencing brain drains as many of their best young professionals and college graduates move abroad. Numerous Greek doctors, for instance, now work in more prosperous Germany while Greece’s health system is in crisis.

  • Sweden tries to force a cash-free society on its citizens. Wait, did I say “citizens?” I meant “vassals.”
  • Spain continues to be screwed.
  • Democrat Jim Webb contemplating an independent run for President.
  • Pennsylvania’s insane, disgraced Democratic Attorney General Kathleen Kane accused of suborning perjury.
  • Democrats in congress have proposed a sweeping gun control bill. Because that’s always such a big electoral winner. It just kills liberals that free citizens are allowed to remain armed…
  • The left eat their own.
  • Black teenagers riot, shut down mall in Kentucky.
  • Another entry in the annals of criminal SUPERgenius. (Hat tip: Moe Lane.)
  • Database Leak Exposes 3.3 Million Hello Kitty Fans.” This is a real headline from the real world we live in…
  • Here’s a swell Christmas story from Dwight.
  • Fragments of a Greek State

    Tuesday, July 14th, 2015

    The self-inflicted destruction of Greece has been accomplished, but they’re still going to be picking up the pieces for years, if not decades. And there’s no guarantee the heavy manners Germany and the troika are imposing will actually be enough to rescue it.

    So, enjoy a random collection of Greek headlines, since I don’t quite have time to pen a piece on The Greater Meaning Of It All:

  • So Greece is going to get bailed out (again), but the actual mechanisms, and who will do the bailing, are far from clear.
  • And Greece needs $25 billion just to get through August.
  • “In the End, Greece’s War on Debt Is A Morality Problem. A majority of Greeks simply do not believe debt must always be repaid.” And how did that idea work out for them? (Hat tip: Ed Driscoll at Instapundit.)
  • Stratfor says that the Greek referendum backed Germany into a corner, and forced them to come down twice as hard. “The leading power of Europe will not underwrite defaulting debtors. It will demand political submission for what help is given. This is not a message that will be lost in Europe, whatever the anti-Greek feeling is now.”
  • Former Greek finance minister Yanis Varoufakis is not at all happy, saying the agreement makes Greece a “vassal of the Eurogroup.” Hey Yanis: You and the rest of the Greek ruling class are the one who baked the gypsy pie with your reckless spending to prop up your bloated welfare state. You’re just upset that Greeks, not Germans, are the ones having to eat it…
  • Greece may even have to sell some islands and ruins.
  • How Germany Beat Greece In Liar’s Poker.” By having all the cards and not being hopelessly in debt, perhaps? More:

    Many observers are wondering how the left-populist renegades of Greece’s Syriza party, which rose to power in January on the promise of delivering relief from austerity and renewed its mandate with a massive victory in the July 5 referendum, managed to negotiate a bailout deal on Monday that is substantially worse than what was available to Greece before Syriza took office.

    That would be because they were idiots who lied to voters about what they could accomplish.

  • Actual Time headline: “Why European Leaders Don’t Believe Greece’s Promises to Change.” Uh, because they’re not morons?
  • Greece Surrenders to Troika

    Monday, July 13th, 2015

    After six months of jerking around European negotiators, Greece’s far left Prime Minister Alexis Tsipras finally reaped the fruits of his labors: caving in to austerity measures far worse than the ones Greek voters rejected a week ago in exchange for more loans.

    The EU demanded real, demonstrable, non-fake, under-heavy-manners austerity from Greece, rather than the fake kind they were used to pretending to follow:

    For those who missed today’s festivities in Brussels, here is the 30,000 foot summary: Europe has given Greece a “choice”: hand over sovereignty to Germany Europe or undergo a 5 year Grexit “time out”, which is a polite euphemism for get the hell out.

    As noted earlier, here are the 12 conditions laid out as a result of the latest Eurogroup meeting, which are far more draconian than anything presented to Greece yet and which effectively require that Greece cede sovereignty to Europe, this time even without the implementation of a technocratic government.

    1. Streamlining VAT
    2. Broadening the tax base
    3. Sustainability of pension system
    4. Adopt a code of civil procedure
    5. Safeguarding of legal independence for Greece ELSTAT – the statistics office
    6. Full implementation of automatic spending cuts
    7. Meet bank recovery and resolution directive
    8. Privatize electricity transmission grid
    9. Take decisive action on non-performing loans
    10. Ensure independence of privatization body TAIPED
    11. De-Politicize the Greek administration
    12. Return of the Troika to Athens (the paper calls them the institutions… for now)

    Greece must also hand over €50 billion in assets to an escrow fund it can’t control.

    Just think: If Tsipras hadn’t been such an ass, Greece could have reached a far-less onerous deal to continue the farce another year or so, and probably before their banks started running out of money.

    It seems that Yanis Varoufakis’ ideas about game theory don’t work when one side holds all the cards and the other is dead broke. Who knew?

    Greek Voters to Europe: Screw Your Objective Reality!

    Monday, July 6th, 2015

    Greek voters have voted no on agreeing to austerity measures for additional bailouts. Since Greece is broke without additional bailouts, times in Greece are about to get very interesting indeed.

    Also, Greece’s finance minister Yanis Varoufakis has resigned.

    Germany says they’re done talking, and the European Commission says that the previous bailout offer is now off the table.

    A member of the European Central Bank’s governing council says “Greek debt held by the European Central Bank can’t be restructured as doing so would contravene the eurozone’s founding treaties.”

    And if Greece won’t be forced to pay its debts, voters in Spain, Portugal and Italy will start to wonder why they should pay theirs.

    But without additional loans, things in Greece are going to get very bad indeed. How bad? Greek banks are drafting plans to confiscate 30% of bank deposits over €8,000. Greece’s middle class has spent they last decade enjoying spending other people’s money, only to wake up and find that they are now Other People.

    Judgment Day for Greece

    Tuesday, June 30th, 2015

    Today is the day Greece defaults: “Greek Finance Minister Yanis Varoufakis confirms Greece will not pay the International Monetary Fund debt due today. The European part of Greece’s international bailout expires Tuesday and with it any possible access to the remaining rescue loans that it needs to pay its debts of about $1.9 billion to the IMF.”

    And what happens after Greece defaults to the IMF? That’s when things get interesting. First, on Sunday, July 5, the Greek people vote on a badly worded referendum. If they agree to Europe’s terms, they’ll impose additional budget-cutting measures and pension reform, and presumably get a new loan to pay their IMF arrears.

    And if they vote no? Then they’ll have no euros to keep paying for their welfare state, and presumably start printing drachmas. But their debt stays denominated in euros, and there’s no guarantee foreign companies will be willing to deal in drachmas instead of euros, or that European foreign exchanges will even allow drachmas to be traded until Greece comes to some sort of agreement with the European Central Bank and other creditors. (I am largely ignorant of European foreign exchange regulations.) Either way, expect a nice dose of hyperinflation to add to Greece’s myriad coming economic woes.

    The Eurozone is far more likely to survive Greece’s exit than Greece is. Then again, Greece now has so much debt that it’s screwed no matter what happens. Deficit financing to prop up your bloated welfare state is a horrific idea that destroys economies, and Greece looks to follow Venezuela in providing this generation’s example.

    Other Greek tidbits:

  • Tsipras “thinks Greek voters, by making delusional promises to themselves, obligate other European taxpayers to fund them.” More: “Since joining the Eurozone in 2001, Greece has borrowed a sum 1.7 times its 2013 GDP. Its 25 percent unemployment (50 percent among young workers) results from a 25 percent shrinkage of GDP.” Gee, you can’t borrow your way to prosperity? Who knew?
  • Greece actually needs €275 billion to pay its debts between now and 2057.
  • Argentina went through economic hell after defaulting, then recovered. Greece would likely go through the same cycle…minus the recovery part.
  • Europe suspends Greek bond trading.