September 6th, 2012
04:01 PM GMT
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London (CNN) - Get used to a new acronym in the euro alphabet soup.

OMT – Outright Monetary Transactions. That's what the European Central Bank is calling its upcoming plan to buy sovereign bonds on the secondary market (the ECB is allowed to buy bonds on the open market, after they have been sold to investors by the governments).

The details are truly central bank-speak: conditionality, sterilization, enhanced conditions. Forget all that for now.

Just remember the bottom line for the ECB: Draghi said the euro is "irreversible" and that is his story and he is sticking to it. FULL POST



July 9th, 2012
06:39 PM GMT
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London (CNN) – When the Deputy Governor of Bank of England, Paul Tucker, said in parliament Monday that the Bank (pictured above) has "no manual for Libor" I immediately thought its days are numbered.

Tucker was asked by a number of parliamentarians when the Bank did not know that private banks were manipulating what rate they were able to borrow money from each other from 2005-2008. Tucker made it clear the rate is set between banks and overseen by the British Banker's Association, not regulators.

Tucker said regulators want banks to announce interest rates based on actual transactions, not the rates 'offered' to each other (offered is the 'o' in Libor).

Then Tucker admitted, when the BoE pumped unprecedented amounts of money into the banks, in April of 2008, those involved would "not have dreamt" of using Libor as the base rate, if anyone involved knew Libor was a "cesspit."

Tucker says he did not know of the "cesspit" until a few weeks ago.  He is another of  the top bankers in London saying he did not know.

I am not questioning his honesty. In fact, he gave very direct answers to very direct questions.

The big questions were: Did politicians put pressure on the Bank of England to put pressure on Barclays to manipulate the quoted interest rate in Libor? No. Did Tucker tell Barclays it was best to lower its rates so the markets don't think Barclays was having troubled funding itself in the height of the economic crisis? No.

Bottom line: The government did not know. The Bank of England did not know. Former Barclays CEO Bob Diamond did not know. That is what parliamentarians are being told.

Now, on Tuesday the Chairman of Barclays, Marcus Agius, will give testimony. Lets see if he knew.

Someone had to know.

It is clear that part of the UK's attempt at cleaning up the banks will mean that one of the old fashioned self-regulated systems, like Libor, will go. It has to.

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June 15th, 2012
02:00 PM GMT
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What recession? With BSkyB vastly increasing the price it’s willing to pay to show England's Premier League football matches, the 20 teams that make up the league have ever more money to attract top talent.

But are people like me, who pay near $100 a month for Sky, going to have pay more to watch the matches?

Sky says no. It’s believed the satellite channel, partly owned and controlled by Rubert Murdoch's News Corp., will instead cut costs and services elsewhere in order to keep its overall costs from skyrocketing just to air football.

I say ‘just’, but really Sky has been all about football - it helped create the Premier League 20 years ago, and pubs and many people (like me) pay a subscription to be able to watch sports which have moved from free-to-air to pay TV in that period. FULL POST

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May 14th, 2012
07:35 PM GMT
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It's not often you witness a valuable commodity become even more valuable, live on television.

But that's what happened on Sunday afternoon when the English Premier League title was decided in the 94th minute of extra time in Manchester.

The league itself was also the big winner when the title went to Manchester's blue side.

It's come a long way since 22 teams formed the Premier League in the summer of 1992, with the backing of the fledgling satellite channel, BSkyB, controlled by Rupert Murdoch.

The first TV contracts were modest, but now the league gets more then $3bn over three years, just in the UK for both live and taped rights.

It's not an exaggeration to say many people, and pubs, pay for the Sky satellite package in order to watch top-flight football (I personally pay just over $100 a month when you add in ESPN to get the remaining Premier League matches, and baseball of course). Equally, if Sky were to lose the rights to the football league it helped make the most watched in the world, many people would drop Sky. And Sky knows it.

But it did take a decade for the world to wake up to the value of the Premier League. That all changed with a certain Russian billionaire.

Critics and disgruntled fans were up in arms when Roman Abramovich bought Chelsea in 2003 and pumped it full of stars (and reportedly spent more than $100 million JUST on numerous managers). And they won the league. Needless to say few Chelsea supporters could stay angry for long, if they ever were, with silverware coming in the door.

Then there was the take-over of Manchester United from the American Glazer family in 2005. Many United fans still haven't gotten over that, even though the growing debt has not stopped the side from competing more years for the title, and in Europe.

Not long after Manchester City was taken over in 2007 by controversial former Thai Prime Minister Thaksin Shinawatra. His troubles opened the door to a new bid from the Gulf.

Since its purchase in 2008, the Abu Dhabi group has pumped more than $1 billion into Manchester City, so its not a surprise they were battling for the top. City has surpassed the Russian-fueled Chelsea side, already showing its age, and the American-debt ladened Manchester United side who continue to impress, whomsoever they buy or sell. Its other rival, Liverpool, has had a number of American owners in the past five years and only continues to slide down the table. Liverpool spent more money on a failed stadium plan than it did on quality players.

But you can't underestimate where City has come from in the past decade and you can't dismiss this win as a one-off title, like Blackburn Rovers.

In 1999, Manchester City was playing the mighty Gillingham in the play-offs for promotion from England's old third division (now called League One).

City was an also-ran club that slowly climbed back up the table, but it had one thing that could be nearly priceless: the name Manchester. When the Abu Dhabi group was looking to buy a club, and City became embroiled in the scandal surrounding its then owner, former Thai Prime Minister Thaksin Shinawatra, the name Manchester was surely a draw. It would be recognized around the world, thanks to its Red neighbors (the less noisy neighbors).

Manchester sounds better then say, Scunthorpe or Hull or Blackpool or even Port Vale, a team named for a non-existent place.

Now, the Premier League is ready to tender a new contract to air live matches in the UK from 2013-2016. The current deal for live rights in the UK is worth about $2.8bn to the league and the 20 teams that now make up the top tier. Sky is not allowed to gobble up all the rights, thanks to a European Commission competition ruling. While Sky and ESPN will certainly bid for the rights, but so could the likes of Qatari-based Al Jazeera, if you believe the rumors. I'm not sure Sky is going to be outbid, but it could mean the world's most valuable football league will only get more valuable. Manchester City has seen to that.

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December 9th, 2011
09:50 PM GMT
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Brussels (CNN) - On late Thursday evening, there was an unusual loud cheer and round of clapping in the massive press atrium in the European Commission building.

The reporters were not clapping in the response to saving the euro.

FULL POST



December 9th, 2011
10:24 AM GMT
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Editor's note: The European Council has since sent out a revised release, and added this line to the bottom: “The Heads of State or Government of Bulgaria, Czech  Republic, Denmark, Hungary,  Latvia, Lithuania, Poland, Romania  and Sweden indicated the possibility to take part in this process after consulting their Parliaments where appropriate.”

According to CNN's Jim Boulden: The line is weak and a bit of "eurospeak," but it does look like the continental leaders have decided to start to circle the wagons a little bit after some much needed sleep.

Brussels (CNN) – In this era of clumping countries together with catchy acronyms, we now have the chance to coin a phrase for the EU countries not participating in the new fiscal compact.

It’s no surprise that Hungary, Sweden and the UK are out. Add to that the Czech Republic and we have a mishmash of possibilities.

I present to you the CzHuUKS.

FULL POST



November 5th, 2011
03:37 PM GMT
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Athens, Greece - What a difference a day can make. It's saturday and Greek Prime Minister George Papandreou has survived the midnight confidence vote, seen President Karolos Papoulias and is now going about forming a coalition government with a few smaller parties.

Does it matter who forms a coalition government?  Not really. The bottom line is that whoever is the next Prime Minister - and my money is on Finance Minister Evangelos Venizelos – s/he will still have to cobble together a majority of the 300-member parliament to do one thing and one thing only: pass the massive austerity package agreed in Brussels on 27 October. It’s that simple.

The Greeks don’t like the pain and austerity that has been imposed on them by their own government in return for massive loans from the IMF and the European Union. But there is really no choice. Sure, the opposition party, New Democracy, has promised less pain - but don’t parties out of power always promise that? Anyway, the word on the street in Athens is that New Democracy will not be a part of any coalition government.

FULL POST



November 4th, 2011
03:31 PM GMT
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Athens (CNN) – Relax. The Greeks have it sorted and the euro will live to fight another day.
 
With just hours to go before we know if George Papandreou will survive as Greek prime minister, it's becoming likely deals are being hashed out behind the scenes amongst parliamentarians, the government and the opposition party.
 
What's not clear is if he will survive the confidence vote, but I don't
think it matters. Some sort of government will be cobbled together and it will have to push the latest austerity package through the parliament in the coming weeks. Greece has no choice.
 
People I have talked on the streets tell me they want the euro. The younger the person the more adamant they are - they say they deserve to be in the euro and this debacle is the fault of the politicians.
 
The Greek people aren't "lazy" one woman asked me to pass on to viewers. But what is also clear is that Athenians feel humiliated about all that has happened over the past 18 months.
 
So, now, vote for him or vote against him, it appears the Papandreou
government is on its last legs. Surely, the same is not the case for Greece
and the euro.

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July 5th, 2011
11:31 PM GMT
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(CNN) – When is a 'selective default' a default?

Seems like a silly question but it's giving a lot of banks, euro officials, European Central Bank governors, ratings agencies and yes, us mere journalists, a real headache. I'm still trying to figure this all out, but I will give it a go.

We all know Greece can't pay its bills. Giving it more loans and a longer time to pay it all back might give Greece some breathing room, but it means Greece will only have to pay even more money in the long run.

You still have to pick up the can, even if you "kick it" further down the road.

To avoid that, Greece could default, becoming the first Western country in decades to do so, and therefore start again.

FULL POST



March 22nd, 2011
07:33 PM GMT
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One of the best bits of theater that plays out in the British parliament every year is when the Chancellor of the Exchequer (Finance Minister) stands before the House of Commons and announces the following year's Budget.

George Osborne will do this on Wednesday afternoon, less than a year after his Conservative Party came to power promising a massive five-year deficit reduction plan.

But this is not Osborne's first Budget speech. He fronted the new government's "Emergency Budget" in June last year. Following that speech and last October's spending review, the British public now know what's in store until2015: Austerity.

You would hardly know it, yet.

FULL POST



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