London (CNN) – The bail-out is a done deal, the International Monetary Fund has agreed its share and the Europeans have started to hand over the money. One of the ratings agencies has even upgraded the new Greek bonds.
So it is incredibly dispiriting to be reading more and more notes from economists and analysts suggesting that this is not over yet.
Paul Donovan, in his note from UBS, noted that the markets were not that impressed by the state of play. The markets, he said, were pricing in “the debate about when the next restructuring will take place.”
London (CNN) – The letter from the seven airlines complaining about the European Emissions Trading system made me smile. Not that there is anything funny about the prospect of a full-blown trade war between Europe and inter alia, China, the fastest-growing super economy in the world.
Rather because it smacked of too little, too late. Where were these airlines writing their letters when the scheme was being initiated, promulgated and ultimately brought into force?
No doubt they made protests behind the scenes and lobbied like fury - which got them precisely nowhere! The Commission was impervious to the threats of trade wars. They barrelled on regardless of the damage that was being threatened.
I know this because the EU commissioner responsible, Connie Hedegaard, was on Quest Means Business defending the scheme. To her credit, she hasn't wavered. The view in Brussels was, if the ICAO process was going to be delayed and drawn out then the EU would go its own way - and that is exactly what they have done.
London (CNN) – It is official. The Greek economy has gone into meltdown.
The numbers released Tuesday show that during 2011 the economy contracted by 7%. Barclays estimates that much of that loss came in the last three months – when the economy dropped a whopping 5.1%.
A look at the IMF's World Economic Outlook puts it into context. In the darkest days of the recession no other developed country came close to suffering such a large loss (U.S. -2.4%; UK -4.9%; Eurozone -4.1).
It is now clear Greece's economy has fallen off a cliff. It has endured five years of grueling recession and every prospect of much more to come, as even the Greek prime minister warned that things would be tough for years to come.
London (CNN) – The news this week that a young couple in northern England won £45 million ($70 million) on the eurolottery set me thinking. And thinking. In fact anyone who heard of the story has surely spent more than a few moments thinking - what would I do with that money?
To start with, I worked out what I would get if I just left it on deposit in the bank. Offshore, of course. Assuming I tied it up for five years. Since it is a sterling win, I could get around 2% on deposit which would give me an income of £900,000 (£450,000 after tax at 50%) Not shabby, but probably not enough!!
New York (CNN) – I love a New York breakfast. Eggs over easy, hash browns, whole wheat toast – and diner coffee, which seemingly may never have actually seen a coffee bean. Now I add to that mix a robust discussion about the Greece crises.
When I came to New York I had thought I might escape from the woes of Greece and the eurozone, if only for a weekend. I had not reckoned with the owner and manager of the local hotel diner, where I was staying – part of the large and ever-present Greek population in New York.
Some of them, like the manager, were born in Greece, and even though they haven't lived there for decades still have family there and visit once or twice a year. Others, like their sons and daughters, have an interest in the place, as if they had just got off the boat.
Forget the U.S. election – every one of them was obsessed with talking to me about what was going to happen to Greece and the battle of austerity over growth. FULL POST
Davos, Switzerland (CNN) - It is perhaps not surprising that in a gathering of the elites at Davos, the issue of bankers’ bonuses is never far from the delegates’ minds.
But unlike in recent years - a time when bankers showed remorse over their high pay packets - there seem to be noises of a fight back.
Because with profits strong, the banking bonus culture is back - to the annoyance of many including the British Prime Minister David Cameron and the Governor of the Bank of England, Sir Mervyn King. FULL POST
Davos, Switzerland (CNN) – With the world still shaking from the global economic earthquake, and suffering daily aftershocks from Europe, it is not surprising that the topic at Davos is whether capitalism is dead.
On the opening day, the main debate focused on the question: "Is 20th century capitalism failing 21st century society?"
It’s not hard to see why. Former White House economist Nouriel Roubini reminded us that today we are "back to the inequality of 1929 and the Great Depression." High unemployment and the failure of wages to keep pace with living costs are resulting in widespread unrest against elites. FULL POST
Davos, Switzerland (CNN) – I have arrived in Davos, a few days ahead of the World Economic Forum. Getting here early before the hot air starts rising from the WEF gives me a chance to witness this elite mountain resort without the fuss and to think about what might happen at this year's junket. Writing this I can see the last straggler skiers enjoying this year's superb snow - the best in a decade - which frankly is more than can be said for the prospects for this year's forum. I think this will be one of the most complicated and will produce relatively little by way of initiative and solutions.
It will be "Davos do little."
London (CNN) – The World Bank is not an organization noted for hyperbole and exaggeration. Certainly the sober-suited Washington bankers don't usually go around the world forecasting calamity, unless it is to drum up more support for the disadvantaged and poor.
And that's why their comments surrounding the Global Economic Prospects for 2012 were so unusual. The bank has just downgraded growth estimates for this year, by the biggest amount in three years.
It forecasts the euro area will be in recession (-0.3 %) and developing nations will see growth at 5.4%, down from earlier forecasts of more than 6 percent.
(CNN) – The ratings downgrade of France by Standard & Poor's is embarrassing, but its economic impact will be limited – and the country will embark on a full court press to pretend it doesn't matter.
Let's not forget the U.S. lost its triple A rating; the dollar is still being printed and economy is doing better. But this will pile pressure on the eurozone: S&P has a history of jumping first, and other agencies could follow.
The risk is in its downstream hit on Europe's bailout fund, the European Financial Stability Facility [Editor's note: The fund has now been downgraded ]. The fund only holds its top rating by virtue of the countries whose cash it is backed by, and France is one of the major players.
The French downgrade could hit the bailout fund's triple A rating, which will make it harder to raise sufficient funds from investors to feed the bloc's needs for cash. That could cause hiccups for the bailout programs already in place.
But of far more importance Friday was news that creditors have failed to reach a deal with the Greek government on haircuts to the country's debt.
According to a statement from Greece's creditors, plans to slash the value of the debt in half, as part of the country's negotiations to get its second bailout, have stumbled. This could prove a ticking time bomb if it is not defused. The news means Greece is once again the big crisis.
The eurozone rescue plan is falling to bits but it's Greece we need to watch, not France.
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