Economy News March 2012
Archives February 2012 →
In the power shift the world is experiencing today, both the rich nations and the supposed emerging economies are making sure they appear as cohesive groups with common goals. While the Anglo-Saxon bloc has governed over the world for well over a century, the emerging new powers in the underdeveloped regions of the planet are betting on public unity to exercise pressure over the current rulers.
Is there any truth in the allegations that informed circles made substantial profits in the financial markets in connection to the terror attacks of September 11, 2001, on the United States?
The meltdown explanation that melts away … Although our understanding of what instigated the 2008 global financial crisis remains at best incomplete, there are a few widely agreed upon contributing factors. One of them is a 2004 rule change by the U.S. Securities and Exchange Commission that allowed investment banks to load up on leverage.
On Thursday (March 15), CNNMoney reports, “the long-awaited free-trade agreement between the United States and South Korea … went into effect,” representing “the biggest U.S. trade deal since the North American Free Trade Agreement began in 1994.” One might assume that a libertarian, promoting individual rights and free markets, would (or should) favor such a deal as the practical implementation of libertarian principles.
Both the war danger and peak oil explanations are off base. As in the astronomic price run-up in the Summer of 2008 when oil in futures markets briefly hit $147 a barrel, oil today is rising because of the speculative pressure on oil futures markets from hedge funds and major banks such as Citigroup, JP Morgan Chase and most notably, Goldman Sachs, the bank always present when there are big bucks to be won for little effort betting on a sure thing.
As more and more young people graduate from college with mounds of unresolved loan debt, financial experts and bankruptcy attorneys are calling the progressively worsening dilemma the “next debt bomb.” According to a new survey conducted by the National Association of Consumer Bankruptcy Attorneys (NACBA), 81 percent of bankruptcy lawyers report that the number of prospective clients with student loan debt has increased “significantly” or “somewhat” in the past few years.
Citigroup was one of four large US banks that flunked stress tests aimed at seeing how they would hold up in a new economic crisis, Federal Reserve data showed Tuesday.
For a long time, most analysts have believed that if someone was going to leave the euro, it would be a weak nation such as Greece or Portugal. But the truth is that financially troubled nations such as Greece and Portugal don’t want to leave the euro.
The continuous rise in public spending in Spain is deeply braking the back of the country’s capacity to keep up with one of the most dire economic situations in the Euro zone. In the last 4 years, Spain has not been able to cope with one of the highest unemployment rates in the developed world. The outcome of the worldwide financial crisis that began in 2006 was not helped by the Spanish government’s socialist policies that are limited to increasing government spending in order to meet its obligations.
Europe has ring-fenced Greece’s debt crisis for now but its escalating recourse to legal legerdemain has shattered the trust of global bond markets and may ultimately expose Portugal, Spain, and Italy to greater danger.
The discovery in late 2010 of the huge natural gas bonanza off Israel’s Mediterranean shores triggered other neighboring countries to look more closely at their own waters. The results revealed that the entire eastern Mediterranean is swimming in huge untapped oil and gas reserves. That discovery is having enormous political, geopolitical as well as economic consequences. It well may have potential military consequences too.
A German minister has broken with the official government line by saying Greece should be encouraged to quit the euro. The comment, made to SPIEGEL, comes ahead of Monday’s parliamentary vote on the second bailout. Some newspapers, including the tabloid Bild, agree that it’s time for Greece to leave.