Posts Tagged ‘IMF’
Friday, June 28th, 2024
Half a year gone already. This week: The debate confirmed that pretty much everything Republican said about Biden being old and out of it was true, people can’t afford housing anymore, the Supreme Court reigns in the administrative state, a whole bunch of layoffs come down the pike, two sorta, kinda coups, fake meat doesn’t pay, and we say farewell to a Texas original. It’s the Friday LinkSwarm!
I didn’t watch the debate, because I had Things To Do, but evidently Biden looked every bit as old and out of it as we all expected.
President Joe Biden looked old and disoriented during Thursday’s CNN debate with Donald Trump. He spoke in a quiet and hoarse voice, made some incoherent answers, and often stumbled over his own words.
It was a lackluster performance that played directly into Republican depictions of the 81-year-old president – the oldest president in American history — as too old and frail to serve another four years in office. Trump said as much during the debate.
“He’s not equipped to be president,” Trump said. “You know it and I know it.”
The debate was a highly personal affair between two men who made little effort during their nearly two hours on stage to contain their disdain for one another.
Biden called Donald Trump a “loser,” and a “whiner” with the “morals of an alley cat.” Trump accused Biden of turning the United States into a “third-world nation” and of being the “worst president in history by far, and everybody knows it.”
Trump turned in a spirited performance, hammering Biden on inflation and the immigration crisis under his watch. But Biden’s struggles seemed to be the major takeaway for CNN’s post-debate panel, which reported that senior Democrats are in an “aggressive panic” over their party leader’s apparent frailty.
Speaking about improvements he’s claiming at the border, Biden at one point seemed lost, saying: “I’m going to continue to move until we get the total ban on, the total initiative relative what we’re going to do with more border patrol and more asylum officers.”
“I don’t really know what he said at the end of that sentence,” Trump replied. “I don’t think he knows what he said either.”
At another point, Biden got visibly lost when talking about his plan to raise taxes on the wealthy to wipe out the debt, saying he wanted to make sure “that we’re able to make every single solitary person eligible for what I’ve been able to do with, with, with the Covid, excuse me, with dealing with everything we had to do with, look, we finally beat Medicare.”
“Well, he’s right,” Trump said, “he did beat Medicare. He beat it to death.”
Some lowlights:
Democratic reaction to Biden’s performance included words like “freakout” and “panic.”
He stammered. He stumbled. And, with fewer than five months to November, he played straight into Democrats’ worst fears — that he’s fumbling away this election to Donald Trump.
The alarm bells for Democrats started ringing the second Biden started speaking in a haltingly hoarse voice. Minutes into the debate, he struggled to mount an effective defense of the economy on his watch and flubbed the description of key health initiatives he’s made central to his reelection bid, saying “we finally beat Medicare” and incorrectly stating how much his administration lowered the price of insulin. He talked himself into a corner on Afghanistan, bringing up his administration’s botched withdrawal unprompted. He repeatedly mixed up “billion” and “million,” and found himself stuck for long stretches of the 90-minute debate playing defense.
And when he wasn’t speaking, he stood frozen behind his podium, mouth agape, his eyes wide and unblinking for long stretches of time.
“Biden is toast — calling it now,” said Jay Surdukowski, an attorney and Democratic activist from New Hampshire who co-chaired former Maryland Gov. Martin O’Malley’s 2016 presidential campaign in the state.
In text messages with POLITICO, Democrats expressed confusion and concern as they watched the first minutes of the event. One former Biden White House and campaign aide, granted anonymity to discuss the matter, called it “terrible,” adding that they have had to ask themselves over and over: “What did he just say? This is crazy.”
“Not good,” Rep. Jared Huffman (D-Calif.) wrote.
Still, Biden’s people swear he’s not dropping out. So there’s a 50/50 chance he drops out.
A short roundup of all the Democrats who lied about how “sharp” Biden was.
It’s an insoluble mystery: “Home prices are at an all-time high; meanwhile, pre-owned home sales are at a 30-year low.”
Sales of previously owned homes are sitting at a 30-year low and didn’t move much in May as prices hit a new record and mortgage rates remain high.
So-called existing home sales in May were essentially flat, down 0.7% from April to a seasonally adjusted, annualized rate of 4.11 million units, according to the National Association of Realtors, or NAR. Sales fell 2.8% from May of last year …
The median price of an existing home sold in May was $419,300, a record-high price in the Realtors’ recording and up 5.8% year over year. The gain was the strongest since October 2022. Prices gained in all regions.
The Realtors noted in a release that the mortgage payment for a typical home today is more than double what it was five years ago.
It’s almost as though the Biden Recession, constrained supply (a great deal from blue locale regulation that prevent housing from being built), and high interest rates mean that no one wants to buy or sell.
You know who else is screwed? Apartment renters.
According to a new report, the average renter can’t afford a typical U.S. apartment.
According to Redfin, the typical U.S. renter household earns about $54,712 per year, which is 17.3% less than the $66,120 needed to afford the median-priced apartment at $1,653 per month. This means that 61% of renters can’t afford their housing without significant financial stress.
Snip.
Inflation, which has surged during Biden’s presidency, certainly exacerbates this issue. Rising costs for essentials like food, gas, and utilities leave renters with even less disposable income to cover their housing costs. Despite promises to address affordability and economic inequality, the Biden administration has doubled down with claims that inflation is going down and that wage growth has outpaced it — which isn’t true. Biden has made it more difficult for Americans to achieve financial stability.
(Hat tip: Stephen Green at Instapundit.)
More Biden Recession layoffs, including cuts from:
- Nike
- Google
- Discord (170)
- CitiGroup (20,000)
- Twitch, owned by Amazon (500)
- BlackRock (600)
- Rent the Runway
- Unity (1,800, 25% of the company)
- eBay (1,000)
- Microsoft (1,900, plus more from Xbox)
- Salesforce (700)
- Flexport (1,400, 15% of the company)
- iRobot (350)
- UPS (12,000)
- PayPal (2,500, 9% of the company)
- Okta (400, 7% of the company)
- Snap (19% of the company)
- Estée Lauder (3,100)
- DocuSign (6% of the company)
- Zoom (150)
- Paramount (800)
- Morgan Stanley
- Cisco (4,000, 5% of the company)
- Expedia Group (1,500, 8% of the company)
- Sony (900)
- Bumble (350, 30% of the company)
- Electronic Arts (670 workers, 5% of the company)
- IBM
- Stellantis (400)
- Amazon
- Apple (600)
- Tesla (10% of the company)
- Take Two Interactive (5% of the company)
- Peloton (400, 15% of the company)
- Indeed (1,000)
- Walmart
- Under Armor
- Pixar (part of Disney) (175 people, 14% of the company, who must have been thrilled to get a pink slip and then see unwoke Inside Out 2 go on to be Disney’s biggest movie of the year)
- Lucid Motors (400)
- Walgreens
Some of these have been previously announced.
Big Supreme Court news: They struck down the Chevron decision.
The Supreme Court on Friday issued a ruling overturning the 1984 Chevron v. National Resources Defense Council case, striking down a previous decision that granted federal agencies immensely broad power to draw up regulations without congressional approval.
The Court ruled in both Loper Bright Enterprises v. Raimondo and Relentless v. Department of Commerce — two nearly identical cases — that regulatory agencies will no longer be able to fill in the blanks of vague legislation in 6-2 and 6-3 decisions, respectively. Justice Ketanji Brown Jackson recused herself from the first case because she sat on the federal appeals court that had previously heard the case.
In his majority opinion, Chief Justice John Roberts wrote that it is not the place of agencies to clarify ambiguous legislation.
“Perhaps most fundamentally, Chevron’s presumption is misguided because agencies have no special competence in resolving statutory ambiguities,” he wrote. “Courts do. The Framers, as noted, anticipated that courts would often confront statutory ambiguities and expected that courts would resolve them by exercising independent legal judgment.”
Writing a concurrence, Justice Neil Gorsuch argued that the concept of Chevron deference “undermines” many of the principles on which the United States was founded.
“It precludes courts from exercising the judicial power vested in them by Article III to say what the law is,” he wrote. “It forces judges to abandon the best reading of the law in favor of views of those presently holding the reins of the Executive Branch. It requires judges to change, and change again, their interpretations of the law as and when the government demands.”
This is a huge blow to the unchecked administrative state and a key decision in helping reign in untrammeled executive regulatory power.
This looks like it will put a crimp in Biden’s amnesty plans: “SCOTUS rules 6-3 that there’s no constitutional guarantee for non-citizen spouses to be admitted to the US.”
Supreme Court also rules that it is constitutional to ban drug-addicted transients from camping on city streets.
Has Russia’s Black Sea fleet abandoned Sevastopol?
Russia’s newest S-500 air defense system has been deployed to Crimea to defend against ATACMS strike. Result? It was destroyed by an ATACMS strike. “This is a big embarrassment for Russia, that its newest and best missile system has had its clock clean by 30-year-old missiles.”
“Russian Ammo Storage Site with 3,000 Artillery Shells Hit by Drones in Voronezh, Russia.”
“War crimes arrest warrants issued for top Russian officials. The International Criminal Court (ICC) has issued an arrest warrant for Russia’s former defence minister, Sergei Shoigu, and the chief of general staff, Valery Gerasimov.” It would make one hell of a Dog The Bounty Hunter episode…
Evidently it is possible to be too radically antisemitic to be an elected Democratic official, as Squad member Jamaal Bowman of New York “lost his third-term primary bid to Westchester County executive George Latimer.”
Andrew Cuomo (D-isgrace) admits that the bogus Trump hush money kangaroo trial should never have been held. “If his name was not Donald Trump and if he wasn’t running for president. I’m the former AG in New York. I’m telling you, that case would have never been brought. And that’s what is offensive to people. And it should be!” Broken clock, twice a day.
Judge Judy says prosecutors twisted themselves into a pretzel to indict Trump.
Turns out that Biden loan forgiveness scheme is just as unconstitutional as we thought it was.
Federal judges in Missouri and Kansas issued separate rulings on June 24 blocking key sections of the Biden administration’s Saving on a Valuable Education (SAVE) program, which is designed to lower student loan payments and forgive debts.
A new version of the program that would reduce payments and shorten maximum repayment periods was set to take effect in July.
U.S. District Judge Michael Crabtree for the District of Kansas ruled that the Republican states were likely to succeed in their claim that the department lacked explicit congressional authority to enact this portion of the program.
“Defendants have offered colorable, plausible interpretations of the Higher Education Act that could authorize the SAVE Plan, but those interpretations fall short of clear congressional authorization,” Judge Crabtree, who was appointed under President Barack Obama, wrote on Monday.
However, he declined to block the program entirely, expressing concerns about the practicality of reversing parts of the plan that had already been implemented. He also said that Republicans’ delay in filing their lawsuits undermined their arguments that there was an immediate need to halt the entire program.
In a separate decision on the same day, U.S. District Judge Judge John Ross for the Eastern District of Missouri, also a President Obama appointee, blocked the department from forgiving “any further loan[s]” under SAVE until he decides the full case. His order said that such actions would likely strip state loan operators of revenue.
Judge Ross also suggested that the SAVE program might have exceeded the authority of Education Secretary Miguel Cardona and that Missouri would likely be harmed by the program.
Just imagine if a Republican judge got a chance to rule on it…
“Kenya Protesters Storm Parliament, Police Fire Live Rounds, After Lawmakers Unleash Eco-Austerity.” Seems like $2.7 billion in taxes to serve nebulous “green” goals is unpopular in a country where the per capita GDP is $2,099. Thanks, IMF…
And an attempted coup in Bolivia evidently failed. President Luis Arce is a bit of a socialist scumbag, so it remains to be seen if he intends to follow in Venezuela’s footsteps to economic ruin.
Over a thousand dead in this year’s Hajj. Islam has a lunar calendar, and this year’s Hajj fell during a period of extreme heat.
Not only are the massive crowds a problem, but this year the Saudi city is under an excessive heat warning, with highs at times having reached between 110 and 115°F during the day, and 100°F even at night. This has resulted in what could be a record amount of heat injuries and deaths by the pilgrimage season’s end. On Monday the Saudi weather service recorded a temperature of 125 degrees Fahrenheit at Mecca’s Grand Mosque.
Many of the dead were “unauthorized pilgrims” who hadn’t paid their Hajj fee. “This group was more vulnerable to the heat because, without official permits, they could not access air-conditioned spaces provided by Saudi authorities for the 1.8 million authorized pilgrims to cool down after hours of walking and praying outside.”
More accused perverts in classrooms. “Former Denton ISD Coach Arrested for Online Solicitation of a Minor. A mother from another school district says she tried to warn Denton ISD of an inappropriate encounter her daughter had with district employee Justin Wallace Carter.”
Guy buys four books filled with Chinese military secrets for $1. Good to know we’re not the only nation that suffers from lax security…
Missed this for yesterday’s roundup: “Michigan judge charged after gun was found in her purse at Detroit Metro Airport. Wayne County Judge Cylenthia LaToye Miller was cited earlier this month on a charge of possessing a dangerous weapon after she allegedly tried to pass through airport security with a handgun in her purse.” She is, of course, a Democrat.
“A Uvalde County grand jury has indicted former school district police Chief Pete Arredondo and another former district officer on charges of child endangerment, the first criminal charges brought against law enforcement for the botched response to the deadliest school shooting in Texas history, the San Antonio Express-News reported. Arredondo and Adrian Gonzales face felony charges of abandoning or endangering a child.” (Hat tip: Dwight.)
Insert your own Aggie joke here: “Texas A&M to Co-Manage Nation’s Nuclear Arsenal Facility in Amarillo.”
“NFL Ordered to Pay $4.7B After Losing ‘Sunday Ticket’ Trial.” Even for the NFL, that’s a lot of cheddar…
McDonald’s learns what the rest of us already knew: There’s no money in fake meat. (Hat tip: Dwight.)
Everyone is leaving the big car YouTube channels because corporations bought, added layers of management, ignored what made them successful, and made them unprofitable.
A fun edition of What’s My Line featuring America’s most decorated war hero.
Kinky Friedman, RIP. He was a Texas original, an entertaining musician, a successful author, and the last interesting Democrat in Texas. Dwight already posted “The Ballad of Charlie Whitman,” so I direct you over there. I have an inscribed (not to me) first of A Case of Lone Star, and I should probably read that next.
“Trump Preps For Debate Against Biden By Going to Nursing Home And Arguing With Dementia Patients.”
“Trump Indicted For Murdering Elderly Man On CNN.”
“Hamas Loses House Seat To Democrats.”
“White House Asks Migrants To Hold Off On Raping And Murdering Any More Americans Until After Election.”
“Canada Officially Loses Recognized Country Status After Failing To Win Stanley Cup Again.”
I’m always up for skateboarding dogs.
(Hat tip: Ace of Spades HQ.)
Still between jobs, so hit the tip jar if you’re so inclined.
Tags:2024 Presidential Race, Amazon, amnesty, Andrew Cuomo, Apple, ATACMS, Audie Murphy, Babylon Bee, Biden Recession, Bill Maher, Black Sea, BlackRock, Bolivia, Border Controls, Chevron v. National Resources Defense Council, China, Citibank, Crime, Crimea, Cylenthia LaToye Miller, debate, Democrats, Discord, Donald Trump, eBay, Elections, Google, Guns, Hajj, housing, IBM, Illegal Aliens, IMF, Indeed, International Criminal Court, Islam, Joe Biden, John Ross, Judge Judy, Justin Wallace Carter, Kinky Friedman, layoffs, LinkSwarm, Loper Bright Enterprises V. Raimondo, Mecca, Michael Crabtree, Michigan, Microsoft, Morgan Stanley, NFL, nuclear weapons, Obituary, PayPal, Russia, Russo-Ukrainian War, Salesforce, Saudi Arabia, Sergei Shoigu, Sevastopol, Sony, Suchomimus, Supreme Court, Tesla Motors, Texas, Texas A&M, Twitch, Ukraine, unemployment, UPS, Uvalde, Valery Gerasimov, Voronezh, Walgreens, Walmart, World War II
Posted in Border Control, Crime, Democrats, Economics, Elections, Foreign Policy, Guns, Media Watch, Military, Regulation, Republicans, Social Justice Warriors, Supreme Court, Texas | 10 Comments »
Sunday, July 31st, 2022
A small story with possibly big implications:
Lebanon has seized a ship loaded with barley and wheat flour while it determines whether the cargo may have been stolen from Ukraine, said Public Prosecutor Ghassan Oueidat.
The Ukrainian Embassy in Beirut said the vessel was loaded at Feodosia in the Russian-occupied peninsula of Crimea, and that the commodities originated from Zaporizhzhia, Mykolaiv and Kherson in southeastern Ukraine.
The embassy accused Russia of stealing more than 500,000 tons during its occupation of the three regions. While Russia denies stealing grain, it has publicly touted the resumption of grain shipments from occupied ports.
Grain shipments from Crimea have surged since Russia’s invasion of Ukraine in February, which analysts say indicates Ukrainian grain is being exported. Exports from Crimea are sanctioned by the European Union and the U.S..
The cargo ship Laodicea arrived at Tripoli in northern Lebanon on July 27, according to ship-tracking data monitored by Bloomberg. It will be held while Lebanon carries out an investigation into the cargo’s origin, Oueidat told Bloomberg.
Supposedly the seizure is limited to 72 hours. We’ll see.
The ship’s registered owner is Syria Mar Shipping Ltd., according to European database Equasis. Syria Mar Shipping Ltd. wasn’t immediately available to comment. Both the company and the ship were sanctioned by the U.S. in 2015 for their association with the Syrian government of President Bashar Assad.
Syria, of course, is a neighbor that has repeatedly interfered with Lebanon through its terrorist proxy/political party Hezbollah, though current Lebanese President Michel Aoun usually counts Hezbollah as a parliamentary ally. (Summarizing the weird twists and turns of Lebanon’s ever-shifting multi-confessional political landscape is way beyond the scope of this article, though if you’re really interested, reading Michael Totten’s The Road to Fatima Gate might help.) The fact that Lebanon, a small and broke country, is willing to defy both Russia and Syria, speaks to how unified much of the world is against Russia’s invasion of Ukraine, and how little such countries fear Russia’s wrath these days.
Indeed, the “broke” part may be the deciding factor here, as Lebanon is seeking a $3 billion bailout from the IMF (which is demanding enactment of serious reforms before handing the money over), and the big backers of the IMF are all firmly on Ukraine’s side.
Russia was already having trouble shipping oil and other commodities due to refusal of insurance companies to underwrite marine policies on Russian ships, an issue that locks them out of most ports.
If counties like Lebanon (somewhere around the 100th largest economy in the world) are willing to seize illicit Russian cargo, then the opportunities for Russia to financial benefit from its illegal occupation of Ukraine would seem to be thin.
Tags:Beirut, Feodosia, food, IMF, Lebanon, Russia, Russo-Ukrainian War, Syria, Ukraine
Posted in Foreign Policy, Military | 6 Comments »
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.
Tags:austerity, Brexit, Budget, coronavirus, Economics, EU, Europe, European Central Bank, European Debt Crisis, Eurozone, Foreign Policy, Germany, Greece, IMF, Ireland, Italy, PIIGS, Portugal, Spain, UK, Welfare State
Posted in Budget, Economics, Foreign Policy, Welfare State | No Comments »
Monday, April 25th, 2016
That’s an actual headline today. I throw in “today” because that same headline could have been run just about any time over the past five years, because Greece is endlessly willing to talk as long as they keep getting bailout money.
The one thing they have proven absolutely unwilling to do is actually implement reforms, at least any reforms that would involve the government spending less money than it takes in. Instead they’ll ask for more debt write-downs, write-offs and haircuts for lenders rather than stop spending other people’s money.
And I could have written the preceding paragraph any time over the last five years or so as well…
Tags:EU, European Debt Crisis, Greece, IMF, PIIGS, Welfare State
Posted in Budget, Welfare State | No Comments »
Tuesday, June 30th, 2015
And verily it came to pass.
Greece lost its financial lifelines Tuesday, as the country missed a crucial payment to the International Monetary Fund amid growing questions about whether it would be able to remain in the euro zone.
Greek leaders had made a last-ditch attempt to come up with the necessary cash, asking European countries for a new bailout hours before its last ones were set to expire, but E.U. finance ministers rejected the request as unrealistic. The missed payment, confirmed by the IMF, was a landmark moment in Europe’s five-year battle to preserve its common currency.
A few more Greek tidbits:
Greek banks are about to enjoy some ECB-mandated haircuts. He who pays the piper calls the tune…
Dear PIIGS citizens: Don’t blame austerity, blame your corrupt politicians.
Europe’s Democracy Deficit:
The bureaucrats in Brussels and their counterparts in Europe’s national governments are furious with the Greeks for daring to consult their own people. Daniel Hannan, a British member of the European parliament, sarcastically tweeted, “Calling a referendum is, to Eurocrats, the most offensive thing a politician can do.” Stripped of their veneer, Eucrocrats’ arguments against all referendums amount to saying that referendums are a bad idea because they shift power from small cliques of unelected but wise rulers to an unsophisticated, nationalistic mob that might fall prey to populism
Via the People’s Cube: Greece declares victory.
Tags:Budget, default, European Central Bank, European Debt Crisis, Foreign Policy, Greece, IMF, Welfare State
Posted in Budget, Foreign Policy, Welfare State | No Comments »
Monday, June 29th, 2015
Looks like that optimism over Greece caving in to reality was a bit premature, since Alexis Tsipras is back to his old tricks again, proclaiming loudly that he won’t be “blackmailed.” Because we all know that agreeing to cuts in your bloated welfare state to pay for the loans you already agreed to is “blackmail.”
He’s called for a national referendum on bailout agreement terms. The problem is, that vote is July 5 while $1.7 billion payment Greece owes the IMF is due June 30, and the IMF can’t offer extensions, and Greece is too broke to make its debt payment.
Greek banks are closed until July 7, and the “European Central Bank (ECB) said it was not increasing emergency funding to Greek banks.” ATMs are running dry and withdrawals are bveing limited to 60 euros.”
Stocks in Europe and China are in freefall, with bank stocks in Europe particularly hard hit. Greek stocks are off 17% despite their stock market being closed.
A few more Greek crisis tidbits:
Holy fark: 70% of Greek mortgages are in default.
Nothing says “vibrant economy” like adults forced to live with their parents.
“The strange thing is that neither Tsipras nor a large majority of the Greek people want to leave the euro (more than 70 per cent support keeping euro polls show). But despite the country being united on this, the government is still unwilling to make the compromises that would keep Greece in the euro zone.”
The bill for Greece’s profligate spending and fake austerity was always going to come due sooner or later. Tsipras’s disasterous term in office merely ensured that it would come sooner and with a maximum of economic pain for the Greek people…
Tags:Alexis Tsipras, Budget, European Central Bank, European Debt Crisis, Foreign Policy, Greece, IMF, Welfare State
Posted in Budget, Foreign Policy, Welfare State | No Comments »
Thursday, June 11th, 2015
The IMF just said to Greece “Screw you guys, I’m going home.” (Note: For the full effect, you have to say the preceding in the voice of Eric Cartman.)
The International Monetary Fund said it was halting bailout talks with Greece in a stark signal of its exasperation about a lack of progress toward a deal needed to avert a Greek default, as European leaders suggested the negotiations were nearing their endgame without an agreement in sight.
And keep in mind that these are transnational bureaucrats whose entire job description is long, drawn-out economic negotiations. And they’ve finally had enough of talking to Greece.
That’s not the fat lady warming up, that’s the fat lady striding boldly on stage and waiting for the cue to open her mouth.
The Greek debt crisis was always going to come to a bad end. The least bad alternative was introducing real austerity when the crisis hit, paring back their welfare state, reforming their economy, and living within their means for several years until their economy started growing again.
But by electing the far-left Syriza party, Greece has ended up opting for a far worse fate: They’re going to end up absolutely broke, absolutely in debt, and they won’t even be able to fund the day-to-day operations of their bloated welfare state. Unless the Greek parliament can somehow force a snap election and replace Alexis Tsipras’s lying, farcical government with one actually capable of recognizing reality, Greece is in for a level of economic pain that’s going to make the Great Depression look like a picnic…
(Hat tip: Zero Hedge.)
Tags:Budget, European Debt Crisis, Greece, IMF, Syriza, Welfare State
Posted in Budget, Welfare State | No Comments »
Thursday, May 14th, 2015
Greece managed to make its scheduled IMF loan repayment of around €750 million ($837 million) which “buys the country a few more weeks to reach a deal with creditors on fresh financing.”
Greek finance minister Yanis Varoufakis said “Greece must escape the ‘strictness trap’ of budget measures that might hurt the economy and so prevent the country from reducing its debt mountain to manageable levels.” In other words: “We absolutely refuse to stop spending other people’s money to prop up our welfare state.”
So the farce will continue on a little longer, at least.
In other Greek debt news:
Greece is “back” in recession. Assuming you believe it ever actually left it.
Europe wants €3 billion in budget cuts from Greece.
“The German Finance Ministry is supporting the idea of a vote by Greek citizens to either accept the economic reforms being sought by creditors to receive a payout from the country’s bailout program or ultimately opt to leave the euro.” Hmm, recognize economic reality or exit the Euro. Decisions…
And if you thought Greece had abandoned their stupid “German war reparations” idea, think again: “Archival video footage highlighting Nazi atrocities in Greece is being shown to commuters on the Athens subway as part of a campaign demanding war reparations from Germany.” I’m sure that will get them on Angela Merkel’s good side.
The Two Greeces: “Official Greece is dysfunctional; unofficial Greece works quite well. The official, theoretical Greece has checks and balances. The unofficial, reality-based Greece turns a blind eye when people break rules and dodge taxes.” I’m not nearly as positive as the author that the corrupt one can be swept away, or that Syriza wants to.
The Ghost Factories of Greece.
Tags:Angela Merkel, Budget, European Debt Crisis, fraud, Greece, IMF, Syriza, Welfare State, Yanis Varoufakis
Posted in Budget, Foreign Policy, Waste and Fraud, Welfare State | No Comments »
Friday, April 17th, 2015
It’s appropriate that Zeno (the paradox Zeno) was Greek, since Greece appears to have entered Zeno’s Endgame. The country edges ever closer to default, without actually defaulting. Or without the Greek government actually ceasing to spend radically more money than it takes in, because the ruling left-wing Syriza Party would rather destroy the Greek economy than give up their bloated welfare state. Their latest plan is to raid pension funds to keep that welfare state going just a little longer. “This is the last bit of cash that the Greek state has.” “Honey, let’s cash in our 401K so we can buy some heroin!”
Sorry if this sounds like every other update on the Greek debt crisis over the last six years. It’s a vitally important story, which is why I keep covering it, but it’s also the story of a host of people making the same stupid, easily avoidable mistake again and again rather than making the hard choices necessary to deal with the problem.
A few other links of interest on the Greek debt endgame:
So Greece went hat-in-hand to the IMF: Can we put off making some debt repayments? IMF: (Laughs) Oh wait, you’re serious! Let me laugh harder!
Speaking of the IMF, this should be good for a laugh.
Greece’s phony baloney budget surplus disappears.
Looks like Greece’s creditors have finally reached the depression phase of the Kubler Ross grief cycle. “Greece’s international creditors signaled they are losing hope that Athens will do what is needed to unlock bailout funds before it runs out of money.” Do tell.
A timeline of Greece’s bills coming due. “Debt interest payments are piling up. It has to pay off an €80m interest bill to the European Central Bank (ECB) on 20 April and €200m to the International Monetary Fund (IMF) on 1 May. But the one that is stirring jitters around Europe is a €760m (£550m; $810m) interest payment to the IMF that is due on 12 May.”
Gameplanning a Grexit.
Tune in next week! Same bankrupt time! Same bankrupt channel!
Tags:Budget, Europe, European Debt Crisis, Foreign Policy, Greece, grexit, IMF, Syriza, Welfare State
Posted in Budget, Foreign Policy, Welfare State | No Comments »
Wednesday, April 8th, 2015
Although Greece was slated to run out of cash on April 9, they seem to have “scraped together enough cash to meet the I.M.F. payment, in part by extracting liquidity from quasi state entities.”
One of the ways they did that was raising 1.1 billion Euros from bonds, all sold to domestic investors. And who would some of those “domestic investors” be? Would you believe Greek banks?
These short-term bonds, which have been issued by the country’s largest banks and carry the guarantee of the Greek government, are not being sold to foreign investors. They are being issued to the only entity that would dare buy them: themselves.
In the last four months, some of Greece’s largest banks, including Piraeus, Alpha and Eurobank — have self-issued more than 13 billion euros’ worth, or $14.3 billion, of these government-guaranteed bonds.
Wounded by vanishing deposits and bad loans, Greek bank bonds are about as toxic an investment as can be found. The banks are on life support via an emergency lending program overseen by the European Central Bank, via which they have access to short-term loans from their own central bank.
But to secure this credit line, about €71 billion (more than half the deposits outstanding in Greece), these banks need to provide collateral to the Greek central bank.
In essence, what Syrizia has done is carried out a similar maneuver to that the EU insiders have been carrying out since the European Debt Crisis broke: Dumping their bad bonds onto taxpayer-funded entities. But the problem for Greece is that their maneuver is like a Ponzi scheme that depends on getting more funds from people already in the Ponzi scheme.
That doesn’t strike me as a sustainable model.
No wonder Greece is drawing up plans to nationalize banks (rather than, of course, stop spending money they don’t have). That’s rather like selling your seed corn to buy heroin. (That piece also notes that “Greece spends a larger portion of its GDP — 17.5 percent — on pensions than any other country in Europe.”)
Hell, even recently bankrupt Cyprus is saying that Greece is screwed unless they implement actual reform. As opposed to Syriza’s current “reform” proposals, which include “no wage or pension cuts.”
Oh, and they’re flogging reparations from Germany yet again. Because it worked so well the last five times they floated the idea.
But Greek Prime Minister Alexis Tsipras seems to have only the faintest grasp of reality as it is:
Consider the case of a household whose members chronically live beyond their means. They have no savings and their bank account is constantly in overdraft. Rather than cutting back, they obtain multiple credit cards by hiding their true financial situation, but those credit cards are soon maxed out. In desperation, they turn to financially responsible cousins to help them through, again hiding the true scale of their spendthrift ways. Finally, the family defaults on its loans, triggering loss of home, car and other possessions. But instead of recognizing that they were the architects of their own misfortune, they consider themselves victims of the mortgage, car loan and credit card companies. And they even vilify their generous relatives for refusing to lend more money.
Greece’s problems have not been caused by austerity, but by decades of irresponsible spending and corrupt behaviour. Expecting that a debt problem will be solved by more debt simply defies common sense and reality. Believing this myth will only make the debt hole that Greeks have dug themselves even deeper, and the challenges of climbing back out ever more unlikely.
Tags:Alexis Tsipras, Budget, European Debt Crisis, Foreign Policy, Greece, IMF, Syriza
Posted in Budget, Foreign Policy | No Comments »