Daily Mail
*Downgrade may send shockwaves locally AND globally
*Borrowing costs for consumers and government to rise
*S&P cuts long-term credit rating from AAA to AA+
*Comes after Obama signed bill to reduce fiscal deficit
Saturday, 6 August 2011
Capitalism in crisis, a warning from history: Eighty years ago, a banking collapse devastated Europe, triggering war. Today, faith in the free markets is faltering again
Daily Mail
"But in the summer of 2011, with the eurozone in chaos, the British economy stagnant and the U.S. crippled by debt, with social mobility at a standstill and millions of ordinary families squeezed until they can barely breathe, it feels disturbingly familiar. In the past two days alone, stock markets have been in free-fall across the capitalist world. With investors manifestly losing confidence in Spain and Italy, two of Europe’s biggest economies, a second devastating world recession cannot be ruled out. Although the share-price plunge does not yet come close to the infamous Wall Street Crash of 1929, this week’s market mayhem is a chilling reminder of the sheer fragility of the capitalist system. If the worst happens, if Spain and Italy go down and the euro crumbles, then the world economy really will be in trouble."
"But in the summer of 2011, with the eurozone in chaos, the British economy stagnant and the U.S. crippled by debt, with social mobility at a standstill and millions of ordinary families squeezed until they can barely breathe, it feels disturbingly familiar. In the past two days alone, stock markets have been in free-fall across the capitalist world. With investors manifestly losing confidence in Spain and Italy, two of Europe’s biggest economies, a second devastating world recession cannot be ruled out. Although the share-price plunge does not yet come close to the infamous Wall Street Crash of 1929, this week’s market mayhem is a chilling reminder of the sheer fragility of the capitalist system. If the worst happens, if Spain and Italy go down and the euro crumbles, then the world economy really will be in trouble."
$3trillion wiped off value of shares in 'week from hell' for world economy
Daily Mail
"One analyst described the past seven days as the week from hell. London has seen hundreds of billions of pounds wiped off in share prices. In the US, Wall Street was experiencing losses of $2tn or more after a fortnight of frantic selling. The problems started at the start of the credit crunch four years ago - the unofficial anniversary is this coming Thursday August 9, and it has never gone away despite billions of taxpayers money being channelled into repairing the damage."
"One analyst described the past seven days as the week from hell. London has seen hundreds of billions of pounds wiped off in share prices. In the US, Wall Street was experiencing losses of $2tn or more after a fortnight of frantic selling. The problems started at the start of the credit crunch four years ago - the unofficial anniversary is this coming Thursday August 9, and it has never gone away despite billions of taxpayers money being channelled into repairing the damage."
Friday, 5 August 2011
Euro crisis is spreading, says EU chief Barroso, as Britain could be forced to pay more to stave off collapse
Daily Mail
*FTSE falls by £45billion as debt crisis mounts
*Spanish and Italian markets both drop 3 per cent
*Letter from EU Commission president warns of 'growing scepticism of euro zone's capacity to respond'
*8440billion euro bail out fund will not have enough to successfully help Italy or Spain Raises fears that Britain could have to pay more to prevent crisis spreading
*FTSE falls by £45billion as debt crisis mounts
*Spanish and Italian markets both drop 3 per cent
*Letter from EU Commission president warns of 'growing scepticism of euro zone's capacity to respond'
*8440billion euro bail out fund will not have enough to successfully help Italy or Spain Raises fears that Britain could have to pay more to prevent crisis spreading
An alarming echo of the 1930s slump
Daily Mail
"Britain, however, has one of the most open economies in the Western world and is unable to shield itself from the volatility in euroland or the fears about debt and a double dip recession in the United States. In Europe, matters are going from bad to worse. Belgium is the latest country to join the PIIGS – Portugal, Ireland, Italy, Greece and Spain – on the injury list. Italy, which accounts for nearly 17 per cent of the euro area’s output and is increasingly seen as a financial pariah, could yet prove the biggest worry."
"Britain, however, has one of the most open economies in the Western world and is unable to shield itself from the volatility in euroland or the fears about debt and a double dip recession in the United States. In Europe, matters are going from bad to worse. Belgium is the latest country to join the PIIGS – Portugal, Ireland, Italy, Greece and Spain – on the injury list. Italy, which accounts for nearly 17 per cent of the euro area’s output and is increasingly seen as a financial pariah, could yet prove the biggest worry."
Thursday, 4 August 2011
Does Labour need its own tea party movement?
LabourList
"Labour says the reason it created this fiscal mess was to save the country from a collapse of the banking system. But let's get real – the reason there's a deficit is because tax income didn't cover the high public spending before the credit crunch/banking crash. Had the Labour government had a spending review mid 2000s, and reduced public spending, the deficit today would have been smaller. We must begin to admit that we were fiscally irresponsible for years, in order to gain the trust of the public again, at least on the economy. .....It's clear we can't leave this job to the shadow chancellor – he's made hardly any effort (nor has Ed Miliband for that matter) to take responsibility for the economic mess we're in, or to develop the policies required to re-gain fiscal credibility. We need a more vocal group of 'fiscal realists' within the Labour Party, pushing forward the view I've outlined above more forcefully. In a way, we need our own kind of Tea Party."
"Labour says the reason it created this fiscal mess was to save the country from a collapse of the banking system. But let's get real – the reason there's a deficit is because tax income didn't cover the high public spending before the credit crunch/banking crash. Had the Labour government had a spending review mid 2000s, and reduced public spending, the deficit today would have been smaller. We must begin to admit that we were fiscally irresponsible for years, in order to gain the trust of the public again, at least on the economy. .....It's clear we can't leave this job to the shadow chancellor – he's made hardly any effort (nor has Ed Miliband for that matter) to take responsibility for the economic mess we're in, or to develop the policies required to re-gain fiscal credibility. We need a more vocal group of 'fiscal realists' within the Labour Party, pushing forward the view I've outlined above more forcefully. In a way, we need our own kind of Tea Party."
'There ARE too many immigrants in the UK', say seven in 10 Britons
Daily Mail
"Seven in 10 Britons believe there are too many immigrants in the country, an Ipsos Mori poll showed. Three in four agreed that immigration has placed too much pressure on public services while three in five agreed that it had made it harder for Britons to get jobs."
"Seven in 10 Britons believe there are too many immigrants in the country, an Ipsos Mori poll showed. Three in four agreed that immigration has placed too much pressure on public services while three in five agreed that it had made it harder for Britons to get jobs."
Meltdown: £125bn wiped off FTSE 100 in five days as markets around the world go into freefall
Daily Mail
*FTSE closes down 191 points or 3.03%
*Dow Jones also falls by 2% in morning trading
*Spanish and Italian markets drop 3%
*BoE holds interest rates at 0.5% for 29th month in row
*FTSE closes down 191 points or 3.03%
*Dow Jones also falls by 2% in morning trading
*Spanish and Italian markets drop 3%
*BoE holds interest rates at 0.5% for 29th month in row
Wednesday, 3 August 2011
The West's horrible fiscal choice
Telegraph
"Former US Treasury Secretary Larry Summers said there is now a one-third chance of a full-blown recession next year in the US. Nobel leaureate Paul Krugman said obscurantists had run amok. "What we're witnessing here is a catastrophe on multiple levels. We are doing a terrible thing. We are repeating all the mistakes of the 1930s, doing our best shot at recreating the Great Depression," he said. "
"Former US Treasury Secretary Larry Summers said there is now a one-third chance of a full-blown recession next year in the US. Nobel leaureate Paul Krugman said obscurantists had run amok. "What we're witnessing here is a catastrophe on multiple levels. We are doing a terrible thing. We are repeating all the mistakes of the 1930s, doing our best shot at recreating the Great Depression," he said. "
Monday, 1 August 2011
To Escape Chaos, a Terrible Deal
NYT Editorial
"There is little to like about the tentative agreement between Congressional leaders and the White House except that it happened at all. The deal would avert a catastrophic government default, immediately and probably through the end of 2012. The rest of it is a nearly complete capitulation to the hostage-taking demands of Republican extremists. It will hurt programs for the middle class and poor, and hinder an economic recovery. "
The Diminished President
The President Surrenders (PAUL KRUGMAN)
"There is little to like about the tentative agreement between Congressional leaders and the White House except that it happened at all. The deal would avert a catastrophic government default, immediately and probably through the end of 2012. The rest of it is a nearly complete capitulation to the hostage-taking demands of Republican extremists. It will hurt programs for the middle class and poor, and hinder an economic recovery. "
The Diminished President
The President Surrenders (PAUL KRUGMAN)
US debt crisis: angry Democrats turn their fire on Obama
Telegraph
"Liberals who once lionized Mr Obama were enraged that the White House failed to twist Republicans' arms in Congress and include revenue increases in the deal, through closing tax loopholes for oil companies and removing various tax deductions that benefit the wealthy. The savings are made up entirely of spending cuts, though conservatives have had to swallow unwanted savings on the military.
The left-leaning grassroots organisation MoveOn described the deal as "grotesquely immoral".
"Our members are wondering, 'What in God's name is going on in D.C.?'" said Justin Ruben, executive director of the group, which claims five million members. "The country needs jobs, and Washington is debating what vital programme needs to be cut."" Michael Tomasky, a leading liberal commentator, wrote: "This is the lowest moment of Obama's presidency."
"Liberals who once lionized Mr Obama were enraged that the White House failed to twist Republicans' arms in Congress and include revenue increases in the deal, through closing tax loopholes for oil companies and removing various tax deductions that benefit the wealthy. The savings are made up entirely of spending cuts, though conservatives have had to swallow unwanted savings on the military.
The left-leaning grassroots organisation MoveOn described the deal as "grotesquely immoral".
"Our members are wondering, 'What in God's name is going on in D.C.?'" said Justin Ruben, executive director of the group, which claims five million members. "The country needs jobs, and Washington is debating what vital programme needs to be cut."" Michael Tomasky, a leading liberal commentator, wrote: "This is the lowest moment of Obama's presidency."
FTSE plunges after Obama's last-minute deal to avoid debt is soured by poor U.S. manufacturing figures
Daily Mail
*FTSE was up more than 82 points this morning - but then tumbled
*By mid-afternoon index was 22 points DOWN on the day's starting point
*Obama hoped deal would 'end crisis and remove cloud over the economy'
*Agreement will cut about $1trillion in U.S. spending over 10 years
*Another $1.2trillion would be cut automatically if a joint committee fails to find at least that much in budget savings
*Frantic behind the scenes lobbying expected on Monday to get deal ratified
*FTSE was up more than 82 points this morning - but then tumbled
*By mid-afternoon index was 22 points DOWN on the day's starting point
*Obama hoped deal would 'end crisis and remove cloud over the economy'
*Agreement will cut about $1trillion in U.S. spending over 10 years
*Another $1.2trillion would be cut automatically if a joint committee fails to find at least that much in budget savings
*Frantic behind the scenes lobbying expected on Monday to get deal ratified
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