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by In Wales (inwales aaat eurotrib.com) on Thu Feb 7th, 2013 at 11:30:44 AM EST
EUobserver.com / Justice & Home Affairs / Moldova takes action on EU-Russia money laundering

BRUSSELS - Moldova has launched criminal proceedings in a money laundering case involving its biggest bank, the Russian mafia and six EU countries.

The move comes after UK-based investment firm, Hermitage Capital, filed a complaint with the Moldovan prosecutor in June.

by In Wales (inwales aaat eurotrib.com) on Thu Feb 7th, 2013 at 01:58:27 PM EST
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EUobserver.com / Opinion / The monetary masquerade
BRUSSELS - Since the great global recession, all major advanced economies have resorted to series of liquidity injections to alleviate fiscal challenges.
by In Wales (inwales aaat eurotrib.com) on Thu Feb 7th, 2013 at 01:58:48 PM EST
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EUobserver.com / Political Affairs / EU leaders gather for budget horse-trading
BRUSSELS - EU leaders are gathering in Brussels on Thursday (7 February) for more horse-trading on the EU's long term budget, with any agreement having to satisfy penny-counting member states while not completely antagonising the European Parliament.
by In Wales (inwales aaat eurotrib.com) on Thu Feb 7th, 2013 at 02:00:11 PM EST
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Long-term European Union budget proposal divides leaders | News | DW.DE | 07.02.2013

European Union leaders were prepared for a late night, as talks on a long-term budget for the bloc got underway in Brussels. Britain and France are among the countries at loggerheads over the financial way forward.

German Chancellor Angela Merkel warned that success was far from certain ahead of talks aimed at reaching agreement on the European Union's (EU) 2014 to 2020 budget, but she also pledged to do her best to help get a deal done.

by In Wales (inwales aaat eurotrib.com) on Thu Feb 7th, 2013 at 02:01:19 PM EST
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ECB financing rate on hold despite business pressures | Business | DW.DE | 07.02.2013

The European Central Bank has said its keeping its benchmark financing rate on hold at a record-low 0.75 percent. The ECB has refused to enact any changes despite pressures created by the rise of the euro.

Hope that the worst might be over for the eurozone prompted the European Central Bank (ECB) on Tuesday to decide against a lowering of its key interest rate already standing at a record-low 0.75 percent.

by In Wales (inwales aaat eurotrib.com) on Thu Feb 7th, 2013 at 02:03:25 PM EST
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Daimler group profits up in "mixed" 2012 | Business News | DW.DE | 07.02.2013

German automaker Daimler posted record sales and revenues in all of its units in 2012. However, despite selling more busses, trucks and cars, growth in group profit was primarily achieved through an asset sale.

The net profit of German automaker Daimler rose by 8 percent to 6.5 billion euros ($8.8 billion) in 2012, as the group sold a total of 2.198 million vehicles worldwide, up 4 percent from the previous year.

However, the rise in net profit only came about through Daimler's sale of its stake in European aerospace giant EADS which netted the group 709 million euros, according to Daimler's annual earnings report released Thursday.

by In Wales (inwales aaat eurotrib.com) on Thu Feb 7th, 2013 at 02:03:51 PM EST
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In Wales:
However, the rise in net profit only came about through Daimler's sale of its stake in European aerospace giant EADS

Actually, it was only half it's stake.

And look who they sold it to:

Daimler Sells Half Its Stake in EADS for $2.2 Billion - NYTimes.com

LONDON - The German carmaker Daimler sold half of its stake in the aerospace giant European Aeronautic Defense and Space on Thursday in deal worth 1.7 billion euros ($2.2 billion).

The move is part of an overhaul of the ownership structure of EADS, the parent company of Airbus, which failed to complete a multibillion-dollar merger with the British aerospace company BAE Systems in October. The deal was aborted because of political divisions involving Britain, France and Germany.

Daimler said on Thursday that it had sold half of its 15 percent holding in EADS to a number of investors, including the German state-owned bank KfW. The automaker added that it had sold the stake at 27.23 euros a share, the closing price of EADS on Wednesday.

Also, IIRC Daimler will continue to exercise the voting rights for the entire KfW block.

The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman

by dvx (dvx.clt št gmail dotcom) on Fri Feb 8th, 2013 at 06:13:56 AM EST
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Brazilians heading home from Portugal | Europe | DW.DE | 07.02.2013

The European financial crisis is reversing old migration paths. Many Brazilians are now moving out of Portugal and back to their home country.

Seventeen years ago, Gabriela Nogueira moved from her home country of Brazil to Portugal. Back then, in the mid '90s, the Brazilian economy was struggling with very high inflation rates and the introduction of a new, revalued currency. Only a few Brazilians saw any perspective for the future in their own country.

by In Wales (inwales aaat eurotrib.com) on Thu Feb 7th, 2013 at 02:08:04 PM EST
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Eurointelligence: At last, a deal on the Irish promissory notes (08.02.2013)
Wolf and Kaletsky on the monetary financing of deficits

Martin Wolf and Anatol Kaletsky both picked up on a speech by Adair Turner, in which he openly advocated monetary financing of debt. QE and other forms of non-conventional policies had not brought the desired benefits, and it was now time for the biggest of all bazookas.

Martin Wolf picks up on the debate about nominal GDP targeting, and calls for an official re-assessment of the current inflation targeting regime, which he says is failing in the current environment.

I agree with Lord Turner that the even more important question is how to make any policy effective. This, inevitably, raises questions about how monetary policy works in an environment of ultra-low interest rates. Lord Turner thinks the unthinkable: namely, monetary financing of the fiscal deficit. So should policy makers. They have to think afresh. If not now, when?
Anatole Kaletsky recalls that Keynes and the Monetarist agreed on the notion that in dire circumstance the central bank should create money. Keynes advocated money to be deposit in coal mines, for workers to extract it. The monetarists chose the then high-tech variety of a helicopter drop. This is how Kaletsky would do it:
Consider the U.S. Federal Reserve. At present the Fed prints $85 billion of new money monthly and distributes it to banks and Wall Street investors by buying government bonds. And the Fed has promised to continue this monthly "quantitative easing" until such time as unemployment drops and is clearly and sustainably declining to more normal levels. Now suppose instead that the Fed divided its $85 billion monthly money production into 300 million checks of $283 each and sent these to every man, woman and child in America. Suppose, moreover, that the Fed promised to keep sending out these checks, worth more than $1,000 a month for a four-person household, until the United States reached its unemployment target - and the Fed chairman added that he would increase the checks to $1,500 or $2,000 a month for that household if $1,000 monthly proved insufficient. There can be little doubt that this deluge of free money would stimulate consumer spending and revive employment - and no doubt that it would be infinitely more effective than distributing money to bond investors and banks through QE.


I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Fri Feb 8th, 2013 at 04:12:11 AM EST
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Anatole Kaletsky: A breakthrough speech on monetary policy (Reuters, February 7, 2013)
Wednesday night may have marked the "emperor's new clothes" moment of the Great Recession, in which the world suddenly realizes its rulers are suffering from a delusion that doesn't have to be humored. That delusion today is economic fatalism: the idea that nothing can be done to break the paralysis in the global economy and therefore that a "new normal" of mass unemployment and declining living standards is inevitable for years or decades to come.

That such economic fatalism is nonsensical is the key message of a truly historic speech delivered on Wednesday by Adair Turner, chairman of Britain's Financial Services Authority and one of the most influential financial policymakers in the world. Turner argues that a virtually surefire method of stimulating economic activity exists today and that politicians and central bankers can no longer treat it as taboo: Newly created money should be handed out to the citizens or governments of countries that are mired in stagnation and such monetary financing of tax cuts or government spending should continue until economic activity revives.

The idea of distributing free money to end deep recessions has been promoted theoretically by serious economists since the 1930s, when it was one of the few practical policies that Keynesians and monetarists agreed on. John Maynard Keynes proposed burying money in disused coal mines to be dug up by unemployed workers, while Milton Friedman suggested dropping money out of helicopters for citizens to pick up. Friedman also argued in a 1948 paper that governments should rely solely on printed money to finance their regular cyclical deficits. More recently, as conventional policies to revive growth have faltered, with widespread disappointment about the impact of zero interest rates and quantitative easing, proposals for distributing money directly to citizens have been quietly gaining traction among critics of orthodox central banks. I discussed this trend, sometimes described as "quantitative easing for the people," in several columns last year.



I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Fri Feb 8th, 2013 at 04:15:36 AM EST
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The first comment predictably says "OMG Weimar".
I believe the answer to this is "Zero Lower Bound"?
(Or "Liquidity Trap".)

Here's Krugman

From the very beginning of the Lesser Depression, the central principle for understanding macroeconomic policy has been that everything is different when you're in a liquidity trap. In particular, the whole case for fiscal stimulus and against austerity rests on the proposition that with interest rates up against the zero lower bound, the central bank can neither achieve full employment on its own nor offset the contractionary effect of spending cuts or tax hikes.
[...] clearly, there's something about the notion that the rules for policy depend on the situation that some economists just don't want to understand.

by Number 6 on Fri Feb 8th, 2013 at 06:38:05 AM EST
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Much of that is good but...

"John Maynard Keynes proposed burying money in disused coal mines to be dug up by unemployed workers"

... I wish he did not help propagate that meme. Keynes was sarcastic there, showing how the goldbugs made no sense. He certainly proposed infrastructure spending as a better way to give newly created money to the unemployed.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Sat Feb 9th, 2013 at 04:13:13 AM EST
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Lord Turner thinks the unthinkable: namely, monetary financing of the fiscal deficit. So should policy makers. They have to think afresh. If not now, when?
We really are in a dark age of macroeconomics when we have to rediscovered what we knew 80 years ago.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Fri Feb 8th, 2013 at 06:05:03 AM EST
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"Lord Turner thinks the unthinkable: namely, monetary financing of the fiscal deficit. So should policy makers."

Indeed that should be olds, not news, but this is big. Because it's written in the FT.

It will be long before that becomes a reality, however after 40 years of right-wing propaganda, it's a welcome change to see some sense beginning to appear where it's likely to be read.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Sat Feb 9th, 2013 at 04:16:34 AM EST
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