Bharat Rakshak

Neshant wrote:Since the bond sold at below par and was offering a yield of 4.95% at par, effectively its an interest rate over 10+%.

And that was the rate in early 2014 when their troubles seemed so far away.
Now it looks as though they're here to stay.
Oh I believe
in yesterday.

Neshant wrote:Since the bond sold at below par and was offering a yield of 4.95% at par, effectively its an interest rate over 10+%.

A billion here, a billion there, pretty soon it starts adding up to some real money!

Austin wrote:China-Led Bank Will "Keep America Honest," Provide Alternative To IMF, Nomura Says

It reads like a dry, 1,184-word memorandum about fiscal projections. But the International Monetary Fund’s memo on Greek debt sustainability, explaining why the I.M.F. cannot participate in a new bailout program unless other European countries agree to huge debt relief for Greece, has provided the “Emperor Has No Clothes” moment of the Greek crisis, one that may finally force eurozone members to either move closer to fiscal union or break up.

The I.M.F. memo amounts to an admission that the eurozone cannot work in its current form. It lays out three options for achieving Greek debt sustainability, all of which are tantamount to a fiscal union, an arrangement through which wealthier countries would make payments to support the Greek economy. Not coincidentally, this is the solution many economists have been telling European officials is the only way to save the euro — and which northern European countries have been resisting because it is so costly.

The three options laid out by the I.M.F. would have different operations, but they share an important feature: They involve other European countries giving Greece money without expecting to get it back. These transfers would be additional to the approximately 86 billion euros in new loans contemplated in Monday’s deal.

“Wait a minute,” you might say. “The I.M.F. isn’t calling for a fiscal union; it’s calling for debt relief.” But once a debt relief program becomes big enough, this becomes a distinction without a difference; they’re both about other eurozone countries giving Greece money.

Indeed, one of the debt relief options proposed by the I.M.F. is “explicit annual transfers to the Greek budget,” that is, direct payments from other governments to Greece, which it could use to make its debt payments. This, obviously, is a fiscal union.

A second option is extending the grace period, during which Greece would be relieved of the obligation to make interest or principal payments on its debt to European countries, through the year 2053. That’s not a typo. Under this plan, Greece would make no more debt payments until Justin Bieber is 59 years old. This is a fiscal union by another name, since those lengthy and favorable credit terms would save the Greeks money at the expense of Greece’s creditors, most of which now are other European governments or the I.M.F.

The third option floated by the I.M.F., a cancellation of a portion of Greece’s debts, has been fiercely resisted by the German government, even though this is the option that least obviously constitutes a continuing fiscal union. Debt cancellation is a one-time fiscal transfer (if I lend you $100 and then forgive the debt, that’s much like me simply giving you $100), but at least in theory it would be done only once, with Greece expected to stand on its own otherwise. The important exception is that Greece would still need to rely on European governments to lend it money at favorable rates, though not quite as favorable as under the Old Bieber scenario.

Unfortunately, however, this is not Greece’s first bailout rodeo. Previous bailouts have had to be revised and enlarged, and as the I.M.F. notes in the section of its memo about “considerable downside risk,” that could happen again. The plans for Greece to regain solvency rely on fast economic growth and sharp rises in labor productivity that outperform the rest of Europe — something that cannot be guaranteed. They also rely on the country’s running a large primary surplus for an extended period — that is, collecting much more in taxes than it spends on government services, which typically does not prove popular with the voting public.

The memo makes clear what the real cost to Europe of continued eurozone membership for Greece is: If European governments want to keep Greece in, they’re going to have to put up a lot of money in one non-loan form or another, money they will give Greece that they never get back.

But the I.M.F. officials are saying they cannot pretend that a bailout deal will lead to an eventual payment in full from Greece. If Greece stays in the euro, it will need much more financial support from the rest of Europe than was admitted in Monday’s deal, and the I.M.F. is asking European governments to put that admission on paper.

Neshant wrote:

Austin wrote:The U.S. is facing a $1 trillion pension shortfall

http://money.cnn.com/2015/07/14/retirem ... -pensions/

Muppalla wrote:

Austin wrote:The U.S. is facing a $1 trillion pension shortfall

http://money.cnn.com/2015/07/14/retirem ... -pensions/

Big deal. There are several printing machines and they can do all that they are doing since last decade. "Obamaonimics"

A $4 Trillion Force From China That Helped the Euro Now Hurts It

http://www.bloomberg.com/news/articles/ ... cmpid=yhoo

China's tumbling reserves.........amazing how fast all of this has happened.

where are the 50 centers? I want to discuss!

udaym wrote:

A $4 Trillion Force From China That Helped the Euro Now Hurts It

http://www.bloomberg.com/news/articles/ ... cmpid=yhoo

China's tumbling reserves.........amazing how fast all of this has happened.

where are the 50 centers? I want to discuss!

Out of curiosity, who are the "50 centers" and what is it that you "want to discuss"??

TSJones wrote:fifty centers are Chinese posters who are allegedly paid by their government to post on foreign forums such as this one.

Theo_Fidel wrote:

TSJones wrote:fifty centers are Chinese posters who are allegedly paid by their government to post on foreign forums such as this one.

There is nothing allegedly about this Sir.

BRF members including myself have tried to access BRF from within China from all manner of places. It is uniformly blocked. So if a poster is posting from China he has official CPC permission to do so. Whether he/she gets paid or not in short hand we call them 50 centers.
-------------------

Amit,

That image does not make sense. Why would CPC try to strengthen the yuan. Ideally China should just let the value of the Yuan collapse and export its way out of the problem, rest of the world be damned.

On other fronts, however, the MIT gang's good advice has been ignored. The IMF's research department, under Blanchard's leadership, has done authoritative work on the effects of fiscal policy, demonstrating beyond any reasonable doubt that slashing spending in a depressed economy is a terrible mistake, and that attempts to reduce high levels of debt via austerity are self-defeating. But European politicians have slashed spending and demanded crippling austerity from debtors anyway

Prabhu also said the company felt that the money being conserved at the pump was being funneled into savings accounts, a trend that has been backed up in various economic data reports.

"We continue to see the largest share of these savings going to debt repayment and stronger consumer balance sheet," said Prabhu.

Theo_Fidel wrote:Amit,

That image does not make sense. Why would CPC try to strengthen the yuan. Ideally China should just let the value of the Yuan collapse and export its way out of the problem, rest of the world be damned.

Neshant wrote:GDP itself is a bogus measure of economic output.

Just about anything can be thrown into GDP calculations to create big numbers.

Banking & financing is mostly con artistry yet that is 25% of the US economy now.

Do you really think Greece which produces nothing is a 300 billion dollar economy? These numbers are made up out of whole cloth.

Suraj wrote:And surprisingly, gas prices in Southern California are above $4, according to friends there. They were above $4 when it Brent/WTI were above $100 a barrel too.