A new government for Greece could be formed by midday (09:00 GMT) on Wednesday, Pasok (Socialist) leader Evangelos Venizelos has said.

He spoke after Pasok and two other parties held talks on forming a coalition amid intense pressure from world powers and financial markets.

New Democracy, the conservative winner of Sunday's election, is expected to lead the new government.

It is unclear if Pasok will actually join or will offer support instead

Spanish borrowing costs on 12 and 18-month bonds jumped to 5.1% at its first debt auction since securing a 100bn-euro ($126bn; £81bn) bank bailout.

Madrid raised the intended 3.04bn euros but the interest rate payable rose from 3% at a similar debt sale on 14 May.

Independent auditors will also delay giving details of Spanish bank debts while they gather more information.

The total bank debt figure will determine the size of bailout needed and is due to be published this week.

The UK has made moves to stop a cargo vessel allegedly carrying refurbished Russian-made attack helicopters from completing its journey to Syria.

The MV Alaed had its insurance withdrawn by The Standard Club in London while it was about 50 miles (80.4km) off Scotland's north coast.

Withdrawal of insurance had prevented the MV Alaed from sailing until its owner could secure new cover.

UK Foreign Secretary William Hague said the ship was returning to Russia.

A French architect with ties to the family of the disgraced Chinese politician Bo Xilai is under arrest in Cambodia and could be extradited to China, police have said.

Patrick Devillers knew the ousted leader and had business links with his wife, Gu Kailai - now detained on suspicion of murdering another member of her circle, the British businessman Neil Heywood.

"There was an arrest of this French man in relation to a crime in China," Touch Narouth, the Cambodian capital's police chief, told Reuters.

Alex Salmond's plans to form a new currency union with the rest of the UK after an independence referendum could be blocked by voters in the rest of Britain, Alistair Darling has warned.

The former chancellor, who will launch a campaign opposing Scottish independence next week, said voters might ask for a fresh referendum across the UK to vote on such a deal, which would involve the rest of Britain in effect sharing economic and monetary policy, and the Bank of England, with a foreign country.

He said it was "surreal" that the Scottish government had not yet asked whether voters or MPs in England, Wales and Northern Ireland would agree to a sterling currency union after the referendum.

Spanish miners will begin a march on Madrid this week as they escalate their ongoing protests against moves by Mariano Rajoy's austerity government to slash subsidies to the coal industry.

Unions have claimed the entire industry is in danger, and miners have engaged in violent encounters with police in pit towns in the northern region of Asturias over the past three weeks.

On Monday a general strike hit mining communities in Asturias, Leon, Galicia and Aragon. The miners have been on strike for three weeks in an attempt to force the government to negotiate.

Clashes have taken place almost daily, with miners saying they have nothing left to lose. They have shot firework rockets at police lines, and plumes of thick black smoke have become commonplace where tyres have been set alight to block roads.

The EU's foreign policy chief, Lady Ashton, is caught on camera panicking moments before she is to greet Serbia's newly inaugurated president, Tomislav Nikolic, because she doesn't know what he looks like. Ashton's envoy to the Balkans Robert Cooper, also in the clip, cannot help her out. The panicking diplomats are rescued by another official who brought a photograph

Wikileaks founder Julian Assange is seeking political asylum in Ecuador and is in its London embassy, the country's foreign minister has said.

"Ecuador is studying and analysing the request," Foreign Minister Ricardo Patino told reporters in Quito.

On 30 May, Britain's Supreme Court dismissed Mr Assange's bid appeal against extradition to Sweden over alleged sex crimes.

It has given him until 28 June before extradition proceedings can start.

With more women and members of foreign descent than any previous National Assembly, France's newly-elected parliament has moved a step closer to mirroring French society, even as ethnic-minority groups demand more diversity in politics.

Long a bastion of white male power, France's National Assembly now counts more women and members of visible minorities than any previous French legislature.

Among the 577 members of parliament elected in the country's last general election in June,155 (27%) are women while nine belong to ethnic minorities.

By comparison, only 107 seats went to female candidates, and only one to a black candidate in Metropolitan France, in the previous election in 2007.

At the G20, Mario Monti got support from Francois Hollande and Mariano Rajoy over a proposal to get the ESM/EFSF to purchase bonds on the secondary market; proposal will be discussed at this week's summit in Rome of the leaders of the largest eurozone countries; Barrack Obama said the Europeans have finally got the message that they have to do more; German papers reports that there is much opposition to further EFSF/ESM bond purchases in Germany; Merkel reiterated her opposition to a common bank deposit insurance scheme; a US official is quoted as saying the eurozone had agreed to relax austerity and stimulate the economy right away; Oxfam complains that the eurozone agenda has hijacked the summit, and precluded concrete action on issues such food security; more economic analysts are concluding that only a massive extension of the ECB's balance sheet can avoid disaster; Spain had a bad bond auction, with yields on a 12-month treasury bond of over 5%; Spain will test the market again tomorrow with several bond auctions; El Pais reports that the external consultants will present a recapitalisation requirement of €75bn in their adverse scenario; Spanish bankers already complained that the requirements are too onerous as they overestimate the degree of property-related write-offs; hedge fund managers are betting against German bunds; the German constitutional court strengthens the right of the Bundestag in all future government negotiations of the EU and inter-governmental treaties; there was no agreement on a coalition in Greece as Pasok and the Democratic Left are uncertain whether to dispatch senior members to government posts; Antonis Samaras favours Vassilis Rapanos, the president of National Bank, as finance minister; Evangelos Venizelos wants to replace the troika with a quarterly dispatch of a Greek delegation to Brussels; the European Parliament relaxes its position on rating agencies; we have an example of an extraordinary illiterate comment that reflects the status of the German debate; Martin Wolf, meanwhile, says the eurozone crisis will either end in tragedy or descend into a soap opera.

News Corp. (NWSA)'s board turned a blind eye to illegal conduct including phone hacking by employees and sanctioned founder Rupert Murdoch's misuse of company resources to gain political clout, investors said in a court filing.

News Corp.'s directors knew in 2009 that some of the media company's reporters routinely hacked into phones and bribed British police officers for stories, a New York bank and an Illinois pension fund said in an amended complaint filed yesterday in Delaware Chancery Court. Board members refused to properly probe these acts for fear of angering Murdoch and his children who serve as company executives, according to the complaint in a lawsuit against the directors.

Germany's top court has ruled that its parliament was not given a proper say in Chancellor Angela Merkel's decisions on EU bailouts and budgetary rules.

The Constitutional Court found MPs had not been involved early enough when the permanent EU bailout fund was set up.

Mrs Merkel drove through her plan for tighter eurozone budget rules without informing MPs sufficiently, it added.

A BBC correspondent says the German chancellor may now find it harder to respond quickly to the euro crisis.

he seventh G20 summit opened at Los Cabos in Mexico on Monday. The importance of the G20 is evident from the fact that the members of the group account for more than 80 percent of the world's output and trade, and more than 60 percent of the global population.

The composition of the G20 is unique: economies with high per capita incomes and high levels of social development co-existing with the fastest-growing economies that are still developing. The economies referred to as the developed "North" include the G8 group - the United States, the United Kingdom, Canada, Italy, Germany, Japan, France and Russia - and Australia. The countries representing the high-growth developing countries of the "South" include China, India, Brazil, South Africa, South Korea, Indonesia, Mexico, Argentina, Saudi Arabia and Turkey. During the last decade there has been a gradual change within the G20 in the balance of economic power between the developed "North" and the developing "South".

The financial crisis of 2008 and the debt crisis in Europe have resulted in major problems for several G8 countries. Most of the emerging market economies have been able to maintain a steady rate of economic growth. Led by China, the other economies from this group that are performing well are India, Brazil, Argentina, Indonesia and Mexico. As a result of their better economic performances, the ability of the emerging market and developing economy members of the G20 to influence the group's decisions has increased.

Carlos Slim goes global:

WSJ: Mexican billionaire Carlos Slim, the world's richest man, is increasing his global reach with two significant acquisitions in European telecommunications and a stake in Argentine oil company YPF SA.

MercoPress: Last week it was announced that one of Slim's companies bought 8.4% of YPF shares, according to the information provided by the oil company, 51% of whose shares was seized by the Argentine state from the Spanish company Repsol last April.  The Mexican businessman stated it is "a long-term investment in one of the most relevant companies of the hydrocarbon sector in Latin America" and he pointed out that the company has a "big potential." The price tag was 343.9 million dollars.

Brazil vs. Mexico:

MEXICO CITY -- Mexicans looked on with envy in recent years as Brazilians won a reputation as Latin America's chosen people. With a surging economy and a prominent place on the world stage, Brazil was the country poised for greatness while Mexico remained mired in bloodshed and destitution. (...) Last year, Mexico's economy grew faster than Brazil's, and it looks set to outpace its larger Latin rival again in 2012.

CEPR: It is worth noting that Brazil grew considerably more rapidly since 2000, so Mexico would have a long way to go to make up lost ground, although its initial GDP was considerably higher than Brazil's.

MercoPress: The Peruvian government has approved private mining projects worth 28 billion dollars out of 52 billion dollars of projects planned over the next five years, Peru's Energy and Mines Minister Jorge Merino said.

MercoPress: Brazil and Argentina agreed on Monday "to oppose any financial adjustment plan" and sponsor development and growth policies to face the world crisis, in the framework of the two-day G20 summit taking place in Mexico.

MercoPress: The technical teams of Argentine nationalized hydrocarbon companies YPF and Russia's Gazprom will begin to do joint work in the area, said Foreign Minister Héctor Timerman.

MercoPress: Chinese Premier Wen Jiabao is to attend the upcoming UN Conference on Sustainable Development (Rio+20) in Rio De Janeiro, and pay official visits to Brazil, Uruguay, Argentina and Chile from June 20 to 26, it was announced in Beijing the Foreign Ministry

Read more: http://feedproxy.google.com/~r/AlsosprachAnalyst/full/~3/jK23EDlC3Rg/chart-that-balance-sheet-recess ion-in-germany.html#ixzz1yL0Y5hSU
Business Insider

Richard Koo wrote yesterday that basically you really can't blame countries like Greece for their own competitiveness problem.  It was all ECB's fault.

The idea was that Germany was suffering a balance sheet recession in early 2000s after the IT bubble while the south of Europe did not.  Maastricht Treaty prohibits euro area member state to run budget deficits of more than 3% of GDP, so fiscal stimulus was not available for Germany (note that Germany did breached the 3% deficit target though for a few years after the bubble).  Thus, according to Richard Koo, the only way to stimulate the German economy is for the ECB to ease monetary policy, which was appropriate for Germany, but inflationary for the rest of Europe.  And that was why there were bubbles in the periphery.

In short, the ECB's ultra-low policy rate had little impact in Germany, which was suffering from a balance sheet recession, but it was too low for other countries in the eurozone, resulting in widely divergent rates of inflation. As Germany became increasingly competitive relative to the strong economies of southern Europe, exports grew sharply and pulled the nation out of recession. Germany's trade surplus quickly overtook those of Japan and China to become the world's largest, with much of the growth fueled by exports to other European markets.

The chart below shows the outstanding loans in euro area by country.  As you can see, the lack of loan growth in Germany appears to be consistent with the idea that there was a balance sheet recession (or debt deflation, if you like) in Germany.  On the other side, you have what we now call the PIIGS countries which loans continued to grow.  Most notably here, of course, is Spain, with rapid loan growth fuelling its real estate bubble.

UK PM David Cameron has refused to accept a letter from Argentina's president about her country's claim to the Falklands Islands.

He spoke to President Cristina Fernandez before the first session of the G20 summit, No 10 said.

The prime minister told Ms Fernandez she should "respect the views" of islanders who are taking part in a referendum on the issue of control.

The islands are marking 30 years since the end of the war with Argentina.

Thousands of people are gathering in Cairo's Tahrir Square to protest against a decision by the ruling military council to assume new powers.

The protests have been called by the Muslim Brotherhood, as it claims its candidate Mohammed Mursi won last weekend's presidential election.

His rival, former PM Ahmed Shafiq, also says he has won.

As Egyptians voted, the generals dissolved parliament and claimed all legislative power for themselves.

Pakistan's top court has disqualified Prime Minister Yousuf Raza Gilani from holding office, two months after convicting him of contempt of court.

The Supreme Court ruled he had "ceased to be the prime minister of Pakistan".

In April, the Supreme Court convicted Mr Gilani of failing to pursue corruption charges against President Asif Ali Zardari.

The legal case is part of a bitter feud between Pakistan's civilian government and the judiciary.

Hamas has launched a barrage of rockets toward southern Israel on Tuesday afternoon, after months of restraint on behalf of the Gaza rulers.

Seven rockets exploded in open areas in Eshkol Regional Council on Tuesday afternoon, after four rockets were fired at Hof Ashkelon and Sha'ar Hanegev regional councils overnight Monday. More rockets were subsequently fired, but caused no casualties or damage.

There were no reported casualties or damage.

Shimon Peres: Hello there, I hope I'm not disturbing you on this pleasant evening.

Anastasia Michaeli: How are you Shimon? Thank you very much. It's not every day that that the President calls my cell phone. It's a very great honor.

Not every day, and not this time either. The voice is Peres' voice, but the person behind the voice turned out to be comedian Yossi Vider, who prank-called Michaeli (Yisrael Beitenu) to ask her to apologize for accusing Channel 10 of encouraging people to become homosexual during a meeting of the Knesset Committee for the Advancement of Women last week.

Iran and world powers have failed to resolve differences over the country's nuclear programme and agreed only to hold a technical follow-up meeting in Istanbul on July 3, according to the European Union foreign policy chief .

 Catherine Ashton, who led the delegation representing the US, China, Russia, France, Britain and Germany at two days of talks in Moscow, said in Moscow on Tuesday that significant differences remained between the two sides.

"The choice is Iran's. We expect Iran to decide whether it is willing to make diplomacy work to focus on concrete confidence-building steps and to address the concerns of the international community," Ashton said after the close of the talks on Tuesday.

"But there's a very, very long way to go."

Officials in northern Nigeria's Kaduna state have imposed a ban on movements following fresh rioting in two cities after a weekend of violence left at least 70 people dead.

The unrest broke out in the cities of Kaduna and Damaturu on Tuesday, adding to fears of rising violence in the country's north, where the Islamist group Boko Haram's campaign has been concentrated.

The Nigerian Red Cross said that at least 25 people were killed in the new attacks in Damaturu.

Twenty civilians were killed in the violence while five security officials reportedly died following attacks on military targets, police said.

Campaigning for Libya's first national election in a generation has kicked off ahead of July 7 polls to choose an national assembly which will re-draw the autocratic system of rule put in place by ousted leader Muammar Gaddafi.

In a statement published on its website on Monday, Libya's electoral commission said that candidates will have 18 days to campaign, from June 18 until July 5, with 2,501 independents and 1,206 political association candidates eligible to stand.

Candidates are being fielded from 142 political associations, the commission said, in polls due to be held 18 days later than originally planned because of the logistical challenges in a country still recovering from last year's revolt.

Eighty of the assembly's 200 seats will go to political parties and the rest to independent candidates.

The Indian police have arrested a French diplomat for allegedly raping his three-year-old daughter in the southern state of Karnataka's capital Bangalore, a senior police official said Tuesday.

American Civil Liberties Union: Island of Impunity, Puerto Rico's Outlaw Police Force; June 2012: After a comprehensive six-month investigation of policing practices in Puerto rico, building on eight years of work by the aclu of Puerto rico documenting cases of police brutality, the ACLU has concluded that the PrPD commits serious and rampant abuses in violation of the United States constitution, the Puerto Rico constitution, and the united states' human rights commitments. the PRPD routinely commits abuses including the unjustified use of lethal force against unresisting, restrained, or unarmed civilians; beatings and other violence against unarmed Black, poor, and Dominican {from the Dominican Republic} men that left some near death and others paralyzed or with traumatic brain injury; and excessive force against peaceful protesters including the indiscriminate use of tear gas, pepper spray, batons, rubber bullets and sting ball grenades, bean bag bullets, tasers, carotid holds, and pressure point techniques. The PRPD also fails to police crimes of domestic violence and rape and to protect women from violence by their intimate partners.

Colombia Reports: Former Colombian President Alvaro Uribe asked Mauricio Santoyo, his retired chief of security, to explain drug trafficking charges of drug trafficking made against him in the United States, local media reported Sunday.

Panama:

Bananama Republic: There was major upheaval at the National Assembly and in the city Monday, because of politics and money. The government plans to sell shares Panama owns in companies like Cable & Wireless and the electrical companies and steal the money spend the money on projects. And they are appointing new magistrates for an illegal Fifth Chamber for constitutional affairs, which would come in a kind of handy should Martinelli decide to steal the next elections to protect the constitution.

UPDATE 14:00: With riots in the streets, Martinelli gave in and withdrew the law proposals. The sale of shares and the Fifth Chamber will now be discussed in some dialog setting. Tomorrow there is yet another march. And then Martinelli will look for another opportunity to get what he wants, or give his opponents a piece of the cake.

More HERE.

PORT-AU-PRINCE, Haiti (AP) -- The government of Haiti says at least 40 people have drowned when a bus overturned in a rain-swollen river east of the southern city of Jeremie.

Phil Peters comments about Fidel Castro: I think he's getting in shape for Twitter and will open his account in time to cover the summer Olympics.

The recent Federal Reserve analysis of the effects of the Great Recession on household wealth and income was a doozy, showing that median income dropped 7.7% and median net worth fell by 38.8% from 2007-2010.  But that may not be the whole truth - the Fed might actually be leaving a very significant group of people out of the sample - the top 400 wealthiest people, or the 0.0000035%.  

Someone brought this part of the the Fed study to my attention (note to self, always read the section on methodology).

   Second, a supplemental sample is selected to disproportionately include wealthy families, which hold a relatively large share of such thinly held assets as noncorporate businesses and tax-exempt bonds. Called the "list sample," this group is drawn from a list of statistical records derived from tax returns. These records are used under strict rules governing confidentiality, the rights of potential respondents to refuse participation in the survey, and the types of information that can be made available. Persons listed by Forbes magazine as being among the wealthiest 400 people in the United States are excluded from sampling.

This passage describes how the Fed got the information on wealth and income., and I've bolded the relevant sentence.  The Fed can easily get data on the non-wealthy, because the non-wealthy don't have very much.  Most people, to the extent they own anything, have some home equity, a bank account and perhaps a few mutual funds, with most wealth concentrated in housing.  So the Fed researchers can essentially look at homeownership rates and figure out how much the non-wealthy people own, and how much they've lost or gained.  But the wealthy are different, and here's where it gets tricky.  The wealthy own lots of illiquid assets, everything from priceless paintings to private multi-billion dollar companies.  So the Fed does a separate survey just on the wealthy.  Only, as the researchers say, "analysis of the data confirms that the tendency to refuse participation is highly correlated with net worth."  The rich aren't just rich, they are secretive.  And apparently the super-rich are super-secretive.  And for some reason, these researchers just didn't include the Forbes 400, the very richest of the rich.

You might say that the exclusion of 400 people isn't significant; after all, it's just 400 people.  How big a difference could that really make?  Well, it turns out, as of 2011, that the top 400 people in America own more than the entire bottom 60% of Americans.  So this is not a trivial exclusion.  The Fed claims in the report that it has a method for adjusting for rich people who don't respond to their survey.  Why the Fed has just not included the Forbes 400 is not clear, and I'm curious how they adjust for leaving out Mr. Gates and Mr. Buffett and company.  I'll send an email to the Fed to find out.

The head of Greenpeace International said the NGO is moving to a "war footing" after negotiators at the Rio+20 sustainable development conference watered down proposals to protect the world's oceans.

Kumi Naidoo, Greenpeace International's executive director, said there were so many fudges in the draft agreement that Greenpeace now had no other option but to change its strategy and start planning waves of civil disobedience.

"We have to ask ourselves what history teaches us in terms of how change happens when humanity has faced a big challenge, such as civil rights, apartheid or slavery," he told the Guardian.

The government must set a clear "twilight" on gas-fired power generation in its forthcoming energy bill, or face a dearth of much-needed investment into the power sector, according to a top Tory MP.

Tim Yeo, the chairman of the influential energy and climate change select committee, said the bill should provide "confidence, certainty and long-term stability", and that this could only be done through setting a clear target for "decarbonising" the electricity sector. Without such a framework, he warned, the required investment in the energy sector - estimated at more than £200bn in the next ten years - would be doubtful.

Providing a clear end to the use of "unabated" gas - that is, gas-fired electricity generation operating without the technology to capture and store the resulting carbon emissions - would ensure a clear limit on how long gas-fired power stations would continue to spew out carbon dioxide at their current rate, Yeo said. This issue is key to whether gas-fired power generation can have a long-term future in the UK, because energy utilities are being encouraged by the government to build new gas-fired power stations today, without a long-term view as to their future.

Google has embarked on a project to map towpaths in England and Wales, as part of a plan to get more people on to rivers and canals.

Later this year, Google Maps will be updated to enable users to plan journeys that include bridges, locks and the 2,000 miles of canal and river paths across England and Wales.

The project is being launched today with the Canal and River Trust, which begins its stewardship of the nation's waterways next month. It takes over from British Waterways and the Waterways Trust in England and Wales to become responsible for the nation's third largest collection of listed structures, as well hundreds of important wildlife habitats.

A Chinese spacecraft has carried out a manned docking with an experimental space module, the latest milestone in the country's ambitious effort to build a space station.

The Shenzhou-9 and its three-person crew, which includes China's first woman in space, linked with the Tiangong-1 module on Monday in a manoeuvre carried live by state television.

Two of the taikonauts then successfully entered the module; the first time China has been able to transfer crew between two orbiting craft.

During the 13-day mission, the taikonauts will work and sleep aboard Tiangong-1, a trial module that includes an exercise bike and a video telephone booth, according to media.

China's manned deep-sea submersible, the Jiaolong, reached a depth of 6,965 meters below sea level on Tuesday during its second dive into the Mariana Trench, surpassing a fresh national record set earlier in the day.

The vessel sat on the sea bed and started working at that depth.

This was the second sit-on-bottom for Tuesday's dive. The previous one reached a depth of 6,908 meters below sea level, where sea drivers collected water samples and placed markers.

The dive, which began at 7 a.m. local time (2100 GMT Monday) after the leaking oil pipe of its hydraulic system had been repaired, is expected to re-check the hydraulic system and test various functions and the security of the submersible at great depths.

The Dutch national football team returned home on Monday after their inglorious exit at Euro 2012 and were treated with applause and boos when they returned to Amsterdam Schiphol Airport.

Fences were placed to hold back possible fans, but there turned out to be more journalists than supporters waiting for the arrival. Most people who stood by the railings had come to Schiphol for another reason.

When they made their first film, A Hard Day's Night (1964), the Beatles (with no previous acting experience) were still comparatively impressionable, and not a little star-struck to find themselves working with the likes of Spinetti. With his dark eyes, turned-up nose, short receding hair, Italian looks and slightly pained expression, the extrovert Spinetti, who liked to style himself "the Welsh wop", was already a familiar face on television and in the cinema, and knew or had worked with Noël Coward, Tennessee Williams, Laurence Olivier and many Hollywood stars.

Cast as a camp, nervy and irritable television director recording a "live" Beatles concert in front of an audience of screaming girls, Spinetti immediately hit it off with the group, and found them unpretentious, despite being in the eye of a media maelstrom.

"You've got to be in all our films," George Harrison told Spinetti, explaining that otherwise "me mum won't come and see them because she fancies you." Spinetti was duly cast in the group's follow-up film Help! (1965), as a surgeon employed to cut a ring off Ringo Starr's finger.

Otis Grandville Clark was born on a homestead near Guthrie, Oklahoma, on February 13 1903, four years before Oklahoma became a state, and grew up in the Greenwood neighbourhood of Tulsa. His father was a former slave who had moved to Oklahoma after emancipation, though Otis was brought up by his mother and stepfather . By the early 20th century Tulsa was an oil boom town, and Greenwood, known as "Black Wall Street", was home to one of America's most prosperous African-American communities. "We had hotels, restaurants, pool halls, skating rinks," Clark recalled. "Everything they had downtown, we had here."