A growing roster of central bankers and politicians are opposed to the idea of an IMF bailout for Greece. They argue it would violate European Union law and that the bloc is big enough to solve the problem on its own. It is becoming increasingly unlikely that the European Union will allow the International Monetary Fund (IMF) to step in and provide ailing euro zone member state Greece with a bailout. A growing number of politicians and central bankers are opposed to any form of IMF intervention. "We don't need the IMF," Axel Weber, president of Germany's central bank, the Bundesbank, said, according to a report published in Monday's issue of SPIEGEL. Weber noted that it is illegal in Europe to finance budget deficits using the kind of central bank funds which are at the IMF's disposal. With his statement, Weber joins ranks with German Chancellor Angela Merkel, who believes IMF intervention would send the wrong political signal. The EU, she believes, is strong enough to handle Greece's problems on its own.
It is becoming increasingly unlikely that the European Union will allow the International Monetary Fund (IMF) to step in and provide ailing euro zone member state Greece with a bailout. A growing number of politicians and central bankers are opposed to any form of IMF intervention.
"We don't need the IMF," Axel Weber, president of Germany's central bank, the Bundesbank, said, according to a report published in Monday's issue of SPIEGEL. Weber noted that it is illegal in Europe to finance budget deficits using the kind of central bank funds which are at the IMF's disposal. With his statement, Weber joins ranks with German Chancellor Angela Merkel, who believes IMF intervention would send the wrong political signal. The EU, she believes, is strong enough to handle Greece's problems on its own.
A one-page proposal gaining traction in Congress could turn back the clock on Wall Street 10 years, forcing the breakup of banks, including Citigroup Inc. Lawmakers in both parties, seeking to prevent future financial crises while soothing public anger over bailouts and bonuses, are turning to an approach that's both simple and transformative: re-imposing sections of the 1933 Glass-Steagall Act that separated commercial and investment banking. Those walls came down with passage of the Gramm-Leach- Bliley Act of 1999. A proposal to reconstruct them, made by U.S. Senators John McCain and Maria Cantwell on Dec. 16, would prevent deposit-taking banks from underwriting securities, engaging in proprietary trading, selling insurance or owning retail brokerages. The bill could also force the unwinding of deals consummated during the financial crisis, including Bank of America Corp.'s acquisition of Merrill Lynch & Co.
Lawmakers in both parties, seeking to prevent future financial crises while soothing public anger over bailouts and bonuses, are turning to an approach that's both simple and transformative: re-imposing sections of the 1933 Glass-Steagall Act that separated commercial and investment banking.
Those walls came down with passage of the Gramm-Leach- Bliley Act of 1999. A proposal to reconstruct them, made by U.S. Senators John McCain and Maria Cantwell on Dec. 16, would prevent deposit-taking banks from underwriting securities, engaging in proprietary trading, selling insurance or owning retail brokerages. The bill could also force the unwinding of deals consummated during the financial crisis, including Bank of America Corp.'s acquisition of Merrill Lynch & Co.
A 26-mile-long line of idled oil tankers, enough to blockade the English Channel, may signal a 25 percent slump in freight rates next year. The ships will unload 26 percent of the crude and oil products they are storing in six months, adding to vessel supply and pushing rates for supertankers down to an average of $30,000 a day next year, compared with $40,212 now, according to the median estimate in a Bloomberg News survey of 15 analysts, traders and shipbrokers. That's below what Frontline Ltd., the biggest operator of the ships, says it needs to break even. Traders booked a record number of ships for storage this year, seeking to profit from longer-dated energy futures trading at a premium to contracts for immediate delivery, according to SSY Consultancy & Research Ltd., a unit of the world's second- largest shipbroker. Ships taken out of that trade would return to compete for cargoes just as deliveries from shipyards' largest-ever order book swell the global fleet.
The ships will unload 26 percent of the crude and oil products they are storing in six months, adding to vessel supply and pushing rates for supertankers down to an average of $30,000 a day next year, compared with $40,212 now, according to the median estimate in a Bloomberg News survey of 15 analysts, traders and shipbrokers. That's below what Frontline Ltd., the biggest operator of the ships, says it needs to break even.
Traders booked a record number of ships for storage this year, seeking to profit from longer-dated energy futures trading at a premium to contracts for immediate delivery, according to SSY Consultancy & Research Ltd., a unit of the world's second- largest shipbroker. Ships taken out of that trade would return to compete for cargoes just as deliveries from shipyards' largest-ever order book swell the global fleet.
A new global currency should replace the US dollar as the international reserve currency, as the long-term deterioration of America's economy and the greenback is fuelling a "currency-regime crisis", says Martin Wolf, associate editor and chief economics commentator of the Financial Times. Wolf, who has honorary doctorates from three universities, bases his argument in part on the Triffin dilemma, an economic paradox named after economist Robert Triffin. The paradox shows that the US dollar's role as a global reserve currency leads to a conflict between US national monetary policy and global monetary policy. It also points to fundamental imbalances in the balance of payments, particularly in the US current account. Account deficitSpeaking at an event organised by the Singapore Institute of International Affairs, Wolf said Triffin believed that the host nation of a global reserve currency will inevitably run up a huge current account deficit that would consequently undermine the credibility of its currency and adversely impact the global economy. "You can't have an open globalised economy that relies for its ultimate liquidity on the currency of one country. That was his [Triffin's] argument. And, therefore, he said the Bretton Woods system would break, which it did. And exactly the same thing happened with Bretton Woods II, which is the system of pegging. "So I agree with this. And I'm absolutely convinced now, in a way that I was not three or four years ago, that we cannot continue with a genuinely global economy which relies on national money, and that's not sold by just adding another couple (of currencies). It actually means having a global money."
The US Treasury and the Federal Home Finance Administration took a bad news dump on Christmas Eve. The tactic didn't seem to work for them, but perhaps it further buried the news released the day before, (See Gretchen Mortensen's fine article in the Dec. 24 NYT, posted late on the evening of the 23rd, if memory serves.) regarding how Goldman Sachs, Deutch Bank and others appear to have deliberately set out to trash the US residential real estate market for fun and profit.
If you are reading this you know the story. Treasury ponied up for another $200b for Fannie and Freddie and the management of these entities are getting serious paychecks. The former clearly establishes that Fannie and Freddie have been nationalized. I don't care what they say any longer. The numbers speak for themselves. The $400 billion the taxpayers have signed up for far exceeds any theoretical value for these two important institutions. Sadly, `the people' own these things at this point. The notion that the Agencies are private sector companies with influential shareholders is over. These entities are no longer big shot players on Wall Street. There is no earnings prospect for these behemoths. There is no upside. There is no justification for multimillion dollar salary packages. The Agencies fund themselves with lines of credit from Fed and Treasury. The Fed is buying 1.45 Trillion of their dodgy paper. Why in the world do we need to pay someone $6mm per year to run that mess? A question for Mr. Geithner; What are the salaries and bonuses being paid to the people who run FHA? These are government salaries. FHA is a part of HUD. Compensation for Fannie and Freddie Exec's should conform to those guidelines. Not the other way around. We need to end the myth that F/F are private sector entities. They are not. We are not stupid Mr. Geithner. We watch what you are doing very closely. There are a significant number of us who flat out do not trust you. You have given us good reason in the past and you have proven again that you are not trustworthy. You tried to `Sneaky Pete' some important information past us. In my view you owe us an apology and explanation, or better still, a letter of resignation. This Administration has promised a much higher standard than you have delivered.
The notion that the Agencies are private sector companies with influential shareholders is over. These entities are no longer big shot players on Wall Street. There is no earnings prospect for these behemoths. There is no upside. There is no justification for multimillion dollar salary packages.
The Agencies fund themselves with lines of credit from Fed and Treasury. The Fed is buying 1.45 Trillion of their dodgy paper. Why in the world do we need to pay someone $6mm per year to run that mess?
A question for Mr. Geithner; What are the salaries and bonuses being paid to the people who run FHA? These are government salaries. FHA is a part of HUD. Compensation for Fannie and Freddie Exec's should conform to those guidelines. Not the other way around. We need to end the myth that F/F are private sector entities. They are not.
We are not stupid Mr. Geithner. We watch what you are doing very closely. There are a significant number of us who flat out do not trust you. You have given us good reason in the past and you have proven again that you are not trustworthy. You tried to `Sneaky Pete' some important information past us. In my view you owe us an apology and explanation, or better still, a letter of resignation. This Administration has promised a much higher standard than you have delivered.
"What Are We? - Stupid?"
If the "WE" are US citizens, the answer in the words of our next President, are "You betcha!" In the end, might makes right. Nothing has changed since the caveman.
