EUobserver.com / Economic Affairs / IMF: No money for Greece until Europe boosts its firewall

BRUSSELS - One of the many loose ends to the Greek bail-out agreed in the early hours of Tuesday (21 February) is the lack of a firm commitment from the International Monetary Fund, pending a decision by eurozone leaders next week to merge the firepower of two bail-out funds.

According to eurozone finance ministers, the IMF is expected to make a "significant" contribution to the €130bn bail-out. German finance minister Wolfgang Schauble on Tuesday spoke of €13bn plus another €10bn from the first Greek programme committed in 2010 that have not been paid out yet.

But IMF chief Christine Lagarde on Tuesday said "significant means lots of things" and that the contribution will be decided by the board of the institution mid-March. That means the final decision will be taken after an EU summit next week when eurozone leaders are to discuss raising the joint €500bn ceiling for the two bail-out funds - the temporary European Financial Stability Facility (EFSF) and the permanent European Stability Mechanism (ESM).

"The IMF board will have in mind the overall programme but also additional matters such as the proper setting up of a decent firewall comprising of EFSF and ESM as considered today, but not concluded today," Lagarde said.

Christie: Buffett Write a Check, 'Shut Up' - Bloomberg

New Jersey Governor Chris Christie said billionaire investor Warren Buffett, who called for the nation's wealthiest people to pay more taxes, should "just write a check and shut up."

"I'm tired of hearing about it," Christie told CNN's Piers Morgan in an interview that aired last night. "If he wants to give the government more money, he's got the ability to write a check. Go ahead and write it."

Christie, a 49-year-old first-term Republican known for a blunt and caustic style, has proposed a 10 percent income-tax cut for every New Jersey resident. Democrats who control the Legislature say his plan would favor the rich. A family with a $50,000 annual income would pay $80 less under his plan, while someone earning $1 million would save $7,200, Democrats say.

Stocks Return More With Dem in White House - Bloomberg

While Republicans promote themselves as the friendliest party for Wall Street, stock investors do better when Democrats occupy the White House. From a dollars- and-cents standpoint, it's not even close.

The BGOV Barometer shows that, over the five decades since John F. Kennedy was inaugurated, $1,000 invested in a hypothetical fund that tracks the Standard & Poor's 500 Index (SPX) only when Democrats are in the White House would have been worth $10,920 at the close of trading yesterday.

That's more than nine times the dollar return an investor would have realized from following a similar strategy during Republican administrations. A $1,000 stake invested in a fund that followed the S&P 500 under Republican presidents, starting with Richard Nixon, would have grown to $2,087 on the day George W. Bush left office.

China Manufacturing Data Show Risk of Deeper Slowdown on Exports: Economy - Bloomberg

China's manufacturing may shrink for a fourth month in February, indicating the world's second- biggest economy remains vulnerable to a deeper slowdown as Europe's crisis caps exports and the housing market cools.

The preliminary 49.7 reading of an index from HSBC Holdings Plc (HSBA) and Markit Economics today compared with a final 48.8 in January. A number below 50 points to a contraction. January and February economic data are distorted by a weeklong holiday.

China is cutting banks' reserve requirements from Feb. 24 to support an economic expansion that Nomura Holdings Inc. estimates may be 7.5 percent this quarter, the least since the global financial crisis.

Deutsche Bank Says ECB to Wind Down LTROs After Three-Year Loan - Bloomberg

The European Central Bank's second tranche of three-year loans next week may mark the end of its "generous" provision of long-term funding, according to Deutsche Bank AG. (DBK)

While markets are hoping for "a continuation of the program through the rest of the year," another large long-term refinancing operation, or LTRO, after this one "seems unlikely," London-based Deutsche Bank chief economist Thomas Mayer said in a note to clients today.

"We expect the more hawkish ECB council members, coming mainly from the AAA-rated countries, to oppose continuing generous LTROs on the grounds that these operations will reduce adjustment pressure on both governments and banks," Mayer wrote. "Unless the euro crisis deteriorates significantly further," Deutsche Bank expects the ECB "to wind down these operations" after the next three-year operation, he said.

Index.hr: Treća intervencija u nepuna dva mjeseca: HNB prodala 131 milijun eura da spasi kunu

To je već treća HNB-ova intervencija ove godine i to u nepuna dva mjeseca. Prva HNB-ova ovogodišnja intervencija bila je 4. siječnja, kada je središnja banka prodala 197 milijuna eura po prosječnom tečaju od 7,532527 kuna za jedan euro, čime je povukla 1,48 milijardi kuna.

Third intervention in less than two months: Croatian National Bank sells 131 million Euro to defend the kuna

This is the third intervention by the CNB this year in less than two months. The first was on January 4, when the central bank sold 197 million Euro at an average exchange rate of 7.53 kuna to a Euro, that is 1.48 billion kuna were withdrawn.

Croatia, as an accession country, is required to maintain a peg to the Euro. The recession has been hitting Croatia hard and the currency policy is suicidal. When the kuna is under downwards pressure it should be the ECB to defend the peg, and the HNB when the kuna is under upwards pressure.

Eventually the unsustainable defence of the kuna exchange rate will stop and the kuna will collapse. This will happen no later than when the HNB runs out of Euro reserves, which may be in the process of happening. And then the HNB will have no reserves to help the country access essential imports.

Let's at least hope that they don't do as in Russia in 1998: get an expensive IMF loan and squander it defending the exchange rate for a couple of weeks so that wealthy people in the know can get their money out before the final collapse.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker