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^ He was right in that no one actually paid the top tax rate of 90%, but the tax code was still highly progressive, especially at the very top. CC's lack of intellectual curiosity is dumbfounding. Lazy mf.
Most posters here want to hear an echo. Failing to give one generally draws abuse.
^ He was right in that no one actually paid the top tax rate of 90%, but the tax code was still highly progressive, especially at the very top. CC's lack of intellectual curiosity is dumbfounding. Lazy mf.
We'll take your word for it, it's always good as gold as are your supporting references.
Maybe there was also a thriving civic sense among the 1%, a sense long departed (Repugs say its patriotic for every citizen to cheat on his taxes) that dissuaded them evading paying their fair share to pay down the WWII debt.
They were certainly profiting from the huge govt stimulus, aka Marshall Plan, to get Europe, AS MARKET FOR US CORPS, able to buy again. Marshall Plan was US taxpayer money to Europe that Europe then transferred back to US corporations as purchaes. That's the kind of wealth distribution right-wingers love, lining their own pockets.
http://www.dailymail.co.uk/news/arti...-bailouts.htmlPortugal faces deep cuts to school and hospital funding after a court ruled it was unfair to cut perks enjoyed by protected civil servants.
The government must now scramble to find other areas to make savings as it tries to meet the terms of its international bailout programme.
The decision deepens the divide between a protected class of civil servants and other workers, whose lives have become far more precarious during the worst recession since the 1970s.
Although public sector pay has fallen faster than in the private sector during Portugal's economic crisis, state workers still earn on average double the wages of the private sector.
Meanwhile, all Portuguese have been hit since January by the largest tax hikes in living memory, and many economists believe more austerity measures will prolong and deepen the slump.
'This decision left me very worried. Civil servants benefit, but not the private sector. It's in the public sector where the government has to cut,' said Sonia Castro 39, an unemployed secretary.
Jose Manuel, a 56-year-old taxi driver from Lisbon, said the only outcome he sees is that 'our lives will get worse.'The European Commission and particularly Germany have urged Lisbon to waste no time in coming up with new savings in order to keep its bailout programme on track.
Troika Demands Another 6 Billion from Cyprus, Making Rescue Bigger Than GDP
Nothing like dramatic proof that austerity is a failure. Less than one month forcing Cyprus to take a bailout (which in reality was paid for entirely by the Cypriots) under the threat of effectively throwing them out of the Eurozone, a leaked Debt Sustainability Report shows that that the Troika will demand another 6 billion from Cyprus, increasing the total cost from 17 to 23 billion. From the Guardian:
Cypriot politicians have reacted with fury to news that the crisis-hit country will be forced to find an extra 6bn (£5bn) to contribute to its own bailout, much of which is expected to come from savers at its struggling banks.
A leaked draft of the updated rescue plan, which emerged late on Wednesday night, revealed that the total bill for the bailout has risen to 23bn, from an original estimate of 17bn, less than a month after the deal was agreed and the entire extra cost will be imposed on Nicosia.
The worst is, as Pawel Morski demonstrated in an impressive shred of the Debt Sustainability Report is that it is ludicrously optimistic in terms of how the economy will fare with Germany having decided to kill its international banking sector (this while the EU is funding advertising for Bulgaria, which is low tax jurisdiction, the very sin Cyprus was guilty of):http://www.nakedcapitalism.com/2013/...+capitalism%29
1) the economic forecasts are worse than literally laughable (table) . The drops in consumption and investment look dementedly optimistic given the events of the past month. Exports to drop a mere 5% with the destruction of the banking industry and the introduction of capital controls. The wealth effect wiping deposit worth 60% of GDP will apparently barely register on consumption the Troika must think the deposits are all Russian. Compare with Iceland (50% drop in investment) or Latvia (40%), the former boosted by devaluation the latter by an intact financial system. Public consumption drops 9% Iceland held the line here, and we have bitter experience from Greece on how big fiscal multipliers are. These projections cross the line from wild optimism into contemptuously half-hearted fable. This table is a bare-faced lie.
See what happens to an economy, Cyprus, Greece, when it has no control over its own currency. this would happen to USA if tea-bagger, hyper-inflation-mongering "gold bugs" ever peg the US $ to a "metallic" base.
Last summer you could barely find a soul who was bullish on Europe beyond maybe Jim Rickards and a few other contrarian commentators, including myself.
I have always taken a contrary view toward the so-called European debt crisis.
The problems with the so-called PIIGS -- Portugal, Ireland, Italy, Greece, and Spain -- has been blown out of proportion. Out of these countries, Italy is the only real player (Spain is large, but not gigantic) on a global scale. Few realize that if you actually take the eurozone as a whole, its deficit is half of that of the United States (about 3% of GDP as opposed to 6%) because of the strength of the northern nations.
In addition, Germany is forcing its model of austerity and productivity on the rest of Europe -- that is, a production model rather than one of consumption. Furthermore, as most of the PIIGS have seen domestic consumption decline, it has actually put many of their trade budgets into surplus.
Very quietly the euro broke its high for the year and hit a near two-year high of 1.37 against the US dollar. The funny thing is that no one is talking about this. In addition, Global X Funds (NYSARCA:GREK), the iShares MSCI Italy Index (NYSEARCA:EWI), the Spanish iShares (NYSEARCH:EWP), and the iShares MSCI Austria Investable Mkt ETF (NYSEARCA:EWO) have all had huge rallies since the summer, way outperforming the S&P 500 Index (INDEXSP:.INX).
So why is no one talking about these rallies? I think since the debt crises picked up steam in 2011, it was easy for the media to point fingers at Europe as some sort of dysfunctional socialist mess with an unfixable political situation. However, through austerity and some cleaning of its government structures, Europe is now about to recover. Don't get me wrong -- there are still many problems, such as negative demographic trends and an overleveraged banking . However, in the short term, Europe should outperform.
I think painting Europe as a mess politically, when the US is just as big as a mess politically, was an easy way to divert attention from the 18-trillion-pound gorilla in the room that is the US national debt (which at some point has to be dealt with).
Most of all, what the European situation of the past decade has taught us is that if something becomes cheap enough, you should buy it. In June 2012, Greek stocks had a 10-year trailing P/E of two. That is not a typo -- two . The stocks were down over 95% from their lows, which is more than the Dow Jones (INDEXDJX:.DJI) fell during the 1929 to 1932 crash (89%).
At their lows last year, markets in Spain and Italy were about 70% off their highs. At its bottom, Exxon (NYSE:XOM) had a larger market cap than the Italian market. Italy is a rich country which has car makers like Porsche (OTCMKTS:POAHY) and Fiat (OTCMKTS:FIATY), retailers such as Gucci (OTCMKTS:GUCG) and Dolce & Gabbana, plus many more industries.
So yes, European stocks will continue their rallies and the euro will continue to hit new multiyear highs -- and virtually everyone will continue to not notice.
Yeah everyone but Cyprus and Slovenia will be out of recession next year. Doesn't help us at all though, we're ed and un able as boutons would put it.
Italy Breaks Your Heart
http://www.nytimes.com/2013/10/27/opinion/sunday/bruni-italy-breaks-your-heart.html?src=me&ref=general
absolutely no limit, regulations on $Ts of liquidity, aka free movement of capital, sloshing between continents is the root problem. a country's bond rate is high, money flows in, rate lowers, flow out, stressing, crashing the economy
http://www.nakedcapitalism.com/2015/...-rentiers.htmlTo conclude, what we appear to have in play here is a game of Musical Chairs, but it may prove to be a game with remarkably high stakes. Once the music stops – or even the hint of the music stopping filters out across ins utional investors – everyone will race for a chair (i.e. try to sell NTYM bonds). The absence of a GF at that point in time means there will be no buyer, at least not until yields e sufficiently to warrant taking on the perceived risk, which will probably be quite high under those cir stances, as longer maturity bonds at low nominal yields have high durations – that is, bond prices react a lot to small changes in nominal yields.
The Draghi Doom Loops traced above are probably features of the ECB’s current QE and NDRP policy that either have not been recognized by investors, or have not been thought through by ECB, or both. Indeed, one could argue ins utional investors are quite happy to have government guaranteed returns (that is, government subsidies in the form of capital gains for wealthy bondholders as the ECB bids up bond prices in its PSPP operations) from the GF/ ECB all the way out to September 2016 termination of QE. But to mash up metaphors, these ins utional investors may be picking up pennies in front of a steamroller, and caught (unwittingly, and in part by the demands of the quarterly relative performance objectives that largely dictate their behavior) in a game of Musical Chairs that is likely to end sooner than they think – and end very badly, at that.
http://www.telegraph.co.uk/finance/e...territory.htmlBut analysts are warning the market for the government debt is now becoming dangerously mispriced.
German bonds are vulnerable to a "potentially poisonous tail of resurgent inflation and wage increases," according to David Roberts of Kames Capital.
“If you look at bunds in anything other than the shortest possible timescale, the risk becomes very clear,” said Mr Roberts.
Strategists at Bank of America Merril Lynch also warn that a "swift rise in German bund yields" would burn many investors.
"We think bund yields look mispriced given the strong German real estate market, strong economy and jump in inflation expectations," said BoAML.
Draghi signals more QE:
http://www.bloomberg.com/news/articl...onomic-outlookMario Draghi unveiled a revamp of quan ative easing and signaled officials might expand stimulus if the rout in financial markets continues to weigh on growth and inflation.
The European Central Bank president said in Frankfurt on Thursday that the Governing Council raised the share of bonds the ECB can buy to 33 percent of each issue from 25 percent, and that policy makers are ready to make more adjustments to ensure the full implementation of the 1.1 trillion-euro ($1.2 trillion) program. A weaker global outlook prompted an across-the-board reduction of the ins ution’s growth and consumer-price forecasts through 2017. The euro slid to a two-week low.
The reset of the ECB’s stimulus program after a six-month review gives officials more flexibility as they prepare to continue bond purchases until at least September 2016. Weaker commodity prices, slowing trade and volatility in global equities have fueled speculation that more stimulus is on the way.
“The issue limit by itself isn’t particularly significant, but the signal it sends is,” said James Nixon, head of forecasting for EMEA at Oxford Economics Ltd. in London. “It’s a clear signal to the market that they’re ready to do more. If the economy weakens further and inflation doesn’t come back as expected they’ll definitely extend the QE.”
the slow motion train wreck continues:
http://www.bloombergview.com/article...nks-can-t-waitThere's no longer any pretending that the issue is confined to smaller lenders, such as the four that Italy's government rescued last November. Complacency of that sort ended when the European Central Bank asked six banks for more information. One was Banca Monte dei Paschi di Siena, Italy's oldest and third-largest lender. Since the start of this year the bank's market value halved before recovering somewhat toward the end of last week.
If Monte dei Paschi is an extreme case, it isn't by much. Italy's ratio of nonperforming loans, at 17 percent, is more than four times the European average (and Europe's banks are in worse shape than America's).
how does Moody's take on US junk bonds relate to the EU?
the economic system is planetary now, infections spread instantaneously. There several US signs of an impending recession
this is glib bull , not an explanation. it allows you to connect anything to anything, because, global connectivity.the economic system is planetary now, infections spread instantaneously.
it's also false that economic conditions spread instantaneously from one country to others. the Panic of 2008-9 didn't shake out all at once -- we're still feeling the effects nearly eight years on.
The important thing (the hard thing) to keep in the back of one's head is that yield works opposite of demand.
The spread there indicates a collapse in demand for junk debt or a e of demand for safe treasuries, with a spread like that it is reasonable to assume both are at play.
A flight to safety is underway. Effects on EU will vary according to which economy you are talking about, I would guess. German government will get to issue more cheaply... Greece will be taken out to the cleaners again. Just my thinking it through, no data to support that.
http://www.economist.com/news/financ...-yet-out-woodsThe volatility in markets, meanwhile, is causing takeovers and issuance of shares and debt to atrophy. There is supposed to be a bright side to the turmoil, since volatility typically boosts trading revenues. But many investment banks have curtailed their trading operations under regulatory pressure. That has left them ill placed to capitalise on the turmoil. Banks have been beefing up wealth-management arms even as they curb trading, in the hope they will provide steadier profits at less risk. But falling markets also harm these, since costs are fixed but revenues come in the form of a percentage of the shrinking value of assets under management.
Bit on the banks. The flight to safety has made it a bit harder to finance things.
flight to safety?
a BlackRock poll last month suggests ins utional investors are lightening up on stocks and bonds, and plowing their money into illiquid assets instead:
http://wolfstreet.com/2016/01/25/thi...e-bailing-out/With reductions in equities and bonds, what are they going to buy?
“Long-dated illiquid strategies,” that’s where asset allocations are heading. In order of magnitude of the shift: private credit (“over half” plan to increase their portfolios), real assets (53% increase v. 4% decrease), real estate (47% increase v. 9% decrease), and private equity (39% increase v. 9% decrease).
The report offered two reasons why investors are fleeing into illiquid assets: to earn the higher return premia that illiquid assets offer, and most prominently, to escape the volatility of stocks and bonds.
Illiquid assets — because they aren’t regularly traded, there is no pricing data — have an advantage over stocks and bonds for ins utional investors in these trying times: their losses don’t have to be booked every time a statement goes out. Losses aren’t known, and certainly aren’t disclosed, until years down the road.
If the stock and bond markets crash, if junk bonds completely collapse, so be it. The values of these illiquid assets will remain stable, and the pension fund managers can sleep at night. This is not a strategy to reduce risk — some of these illiquid assets are very risky. It’s a strategy to reduce the requirement to book losses when asset prices head south.
Varoufakis with a very clear synopsis of how the EU monetary union essentially caused the debt crisis:
https://varoufakis.files.wordpress.c...ne-paradox.pdf
Good read. Thanks!
yep, lots of economics, and politics, in plain English by someone with ESL.
I've read before that "bailing out Greece" was really bailing out BigFinance. And Goldman Sacks showed Greece how to defraud lenders and get lower rates.
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