Former US treasury secretary says Beijing needs to step up reform of state-owned enterprises
With Tsipras’ delegation in Brussels desperate to work out a last minute deal and preserve Greek pension cut “red lines”, not to mention Greece in the Eurozone, it is the IMF which has become the biggest hurdle to getting a deal done because while even the European Commission is ready defer €400 million of cuts in small pensions if Greece reduced military spending by same amount, the IMF promptly scuttled this suggestion according to FAZ.
So as we enter Sunday and what may well be the last possibility to get deal done before the “accidental” Grexit scenario is put in play, we thought our Greek readers would be interested to learn that while Lagarde’s “apolitical” IMF is digging in tooth and nail against giving Greece even the smallest amount of breathing room, the equivalent of half an our of a typical daily Fed POMO notional amount, yesterday the same Lagarde said that the IMF “could lend to Ukraine even if Ukraine determines it cannot service its debt.“
This is the same Ukraine whose bonds last week tumbled by 9% after the country’s American finance minister Natalie Jaresko said Ukraine will default on its debt unless creditors (among which both Russia and the US taxpayer via the IMF in addition to various hedge and mutual funds all used to getting a last minute bailout on their terrible investments) acquiesce to their demands for more aid (i.e., more debt).
Lagarde’s statement also indicates that the Hermes and tanning bad connoisseur does not know the difference between a loan and an equity investment, which is what “lending” to an insolvent Ukraine would be equivalent to.
But more to the point, the very reason why the IMF has kept such a hard line position with Greece is precisely because the IMF alleges that unless Greece takes steps to solvency, the DC-based IMF will no longer give the country funds sourced primarily courtesy of US taxpayers.
In other words, under pressure by someone (and ZH readers know who), what for the IMF is a deal killer in Greece, is not even a small stumbling block when it comes to Kiev.
From Deutsche Welle:
IMF chief Christine Lagarde has reassured Ukraine that funds can still be made available even if the country fails to repay its private creditors. She ruled out resorting to national reserves to avoid defaulting.
Submitted by Charles Hugh-Smith of OfTwoMinds blog,
While the benefits to banks and governments of banning physical cash are self-evident, there are downsides to the real economy and to household resilience.
You've probably read that there is a
Just two weeks after California's farmers – with the most senior water rights – offered to cut their own water use by 25% (in an attempt to front-run more draconian government-imposed measures), AP reports that the California government has – just as we predicted – ignored any efforts at self-preservation and ordered the largest cuts on record to farmers holding some of the state's strongest water rights. While frackers and big energy remain exempt from the restrictions, Caren Trgovcich, chief deputy director of the water board, explains, “we are now at the point where demand in our system is outstripping supply for even the most senior water rights holders.”
Submitted by Mark St.Cyr,
I must make one statement before I go on any further, for I believe it needs to be said as to clarify my intentions in writing the above headline. Let me first express my sincere apologies to weather-rock weathermen everywhere. At least you understand why the rock may, or may not, show signs for contemplation. The others have demonstrated far too many times by their own proclamations of analysis – they have no clue.
Let me put out another premise that should not be lost on anyone trying to figure out what they’ll both do in their business, as well as – with it. Because, unlike those of us that live and die by the decisions we need to make when it comes to pricing, inventories, labor, location, etc., etc. An economist not only is usually not on the same page as you or I. In most cases one can argue: they may not even be on the same planet.
“You know what the difference is between an Economist/Analyst and a Business-owner? When a Business-owner makes a prediction on his or her business and predicts wrong: The business as well as they could wind up in bankruptcy. When the Economist/Analyst makes a wrong prediction: They just make another prediction.”
So why the use of the proverbial “weather-rock” analogy you may be asking as it pertains to something so complex as the economy. Well, in many cases the economy is just as complex with just as many unknowns and misunderstood relationships as the weather. (Please, for the sake of this discussion refrain from interjecting any “climate change” arguments . Please! I’m begging you!!)
What was once a joke (e.g. the weather-rock) now seems to symbolize what today stands for “serious analysis” or “markers” as to base monetary policy decisions on. Today, forecasts of nearly any sort are adjusted more times as well as their initial direction of strength or lack of it making TV weatherman everywhere ask – “Dang! And they say we’re not reliable?”
Far worse, these predictions are made using data in every way that resembles the known use for proper analysis of the weather-rock. i.e., If it’s wet – it’s raining. If it’s cold – it’s cold outside. And as ridiculously obvious as the aforementioned example is. What seems lost on most economists (as well as the financial media as a whole) is that their version of a weather-rock is being manipulated as to be wet not from rain – but from someone dousing it with a garden hose or other source whenever needed.
Nevertheless – their resulting analysis would be the same: The rock (or data) is wet, therefore it must be raining.
It’s one thing for those who want to express their “brilliance” in professing this style of insight and/or analysis. We can pay attention, or not. It’s a far different thing when monetary policy that will affect not only your business or personal finances – but quite possibly the sovereignty of the monetary system as a whole I’ll argue – is quite another.
Today, the world of Ivory Towered Economists (ITE) and their prognostications have taken on an aire in quite the opposite direction as well as tone of what we’ve now come to expect when watching a local or even national weather broadcast. If a typhoon, monsoon, hurricane, you name it, is somewhere visible on the planet, whether it’s reached land or is 2000 miles out at sea. A diagnosis and analysis of the impending potential havoc will be strewn across your preferred media consumption device in a never-ending cycle of breaking news alerts with more force and rapidity; than the actual wind speeds of the rotating storm front itself.
As much as we may laud or laugh at the coverage, the fact is – at least there is a case to be made for the potential of such predictions coming to fruition. i.e., there is an actual visible storm. On the other hand, the ITE acknowledge more often than advisable prudence would allow for, that there is no need for concern. For after all – the “rock” is not wet. All in a reticent tone implying: No need to worry – “They’ve got your back.”
Then it’s up to you as to infer exactly “who’s” back do they indeed have? Yours? Or the banks and insurance companies? And if it’s the latter – does that translate into help for you after any such storm clears? If you want any clues on how much help the latter may provide – just ask anyone still trying to put their lives and homes together since Hurricane Sandy in 2012. Same goes for anyone trying to prudently protect their savings after the 2008 financial crisis.
The issue at hand is: far more people have discovered whether by chance or direct analysis of their own, both the Fed., as well as their gaggle of cohorts throughout academia, as well as in the financial media, are all watching and gaining their clues – from the same “rock.” Furthermore: It’s now self-evident to anyone willing to look. It’s not to see if the rock is wet, dry, or anything else. It’s to make the rock wet, dry, or anything else needed for the narrative. Because today; narrative trumps reality in today’s economic disciplines. For “Fake it till you make it” seems to have become the most dangerous expression of monetary policy group think the world has ever known.
GDP numbers not what you would like? (i.e., the rock is dry) Simply allow for some “double seasonally adjusted” garden hose operator to make it so. “Jobs” numbers showing too much, or too little, conflicting the narrative of why, or why not, raise rates? No problem. Put a hairdryer on it today, and the garden hose tomorrow. After all, wet is wet, and dry is dry, regardless of how, right? Caught in a quagmire of trying to fend off accusations that the rock is clearly visible? Again, no problem. Order up a fog machine and take to the podiums and pronounce: The data is a little murky. We’ll have to just wait and see. After all, who could argue with holding off any policy adjustments without clear visibility, correct?
As ludicrous as the above sounds. If one truly looks at just how the articulated views from both the Fed. as well as most other economists. I would venture to say it’s not that far removed as they would like one to think. And there’s also one other small truth that looms quite large in the annuls of their predicting prowess. Just like the weather-rock, the damaging effects as well as the outright disastrous implications are unseen by this crowd until the actual catastrophe is upon them.
One would have thought being in an Ivory Tower might have supplied a better advantage or viewpoint. Oh well!
Presented with no comment…
World’s aerospace and defence industry flies into Paris
Submitted by David Stockman via Contra Corner blog,
As documented previously (Part 1, Part 2, Part 3), the Fed has generated a $50 trillion financial bubble since Alan Greenspan took the helm in August 1987. After 27 years, honest price discovery has been destroyed, thereby
If the foundation of the financial system is debt… and that debt is backstopped by assets that the Big Banks can value well above their true values (remember, the banks want their collateral to maintain or increase in value)… then the “pricing” of the financial system will be elevated significantly above reality.