What To Wear With Red Skirt

healthy ... And above the threshold

Ma dimenticavamo l'altra parte.

Dalla parte sinistra della zona di carico la situazione era piacevolmente peggiore:

L'interno della soglia aveva imbarcato acqua, era marcito e si era portato dietro il fianco e il montante sinistro.In pratica abbiamo ricostruito la zona basandoci su una curvatura sana grande poco più di un dito.

...che non era questa.

L'idea era di recuperare arrivando a questo punto ma poi abbiam stabilito che non aveva senso...

...e abbia tagliato la zona marcia.


La parte interna si presenta così:
Esternamente abbiamo tagliato il fianco lasciando la parte di lamiera del montante della porta da una parte e l'inizio dell'arco della ruota posteriore (che grazie a Dio erano in buone condizioni) mentre all'interno abbiamo proseguito il taglio dell'ondulato del pianale (molto corroso e bucato) fino all'inizio del passaruota.
Doveste tagliare anche voi ricordate di segnare preventivamente la soglia in corrispondenza delle traverse del telaio e ricordate che la penultima è collegata a quella che sale al tetto e tiene le porte.


E questo è ciò che restava fuori...
Ovviamente lo scatolato era bucato e di conseguenza abbiam dovuto fare una piastra per risanare la zona...


Eccola in tutto il suo splendore.

Are Platypuses House Pets

mast

Tra le altre belle cose direi che tutti i bus imbarcano acqua dalla fessura che fissa le cerniere delle porte di carico (oltre a imbarcarla da circa un 70% di tutte other areas), and this comes across in the area between the threshold and the wheel because I suspect drain holes are filled within one week of purchase.
course in my bus it was worse and the floor was rotted, the sheet that corresponds to the back of the wheel, of course all the end of this area.
discard the other things like the gear door was missing for a third and a threshold as described above was a gutter.
For those who come to settle this area are mainly two problems: first, if you have no acquaintance with half like that, think about the existing parts, the material on line and adjacent parts to at least have a clue of how this area could be the second issue is related to the fact that this slim box there are between two parties and their welds are falling in almost inaccessible areas and is strictly necessary to maintain the three areas bounded by a non-welded sheet view.

In the first phase we have prepared a sheet


Which was welded to the left and right of the doorway arch.
it looks like ... before


During: After the plating area of \u200b\u200bthe part that was completely moth.



Then, to reinforce the area, since they raise the risk of tire the bus to fuck is always in sight, we inserted a 4 mm thick blade angle and welded in several places.



Then, use once prepared was inserted into the box that runs the entire width of the van (previously treated and cleaned) and welded at various points.

Mesosilver Sinus Flooding

Un altra settimana si apre all'insegna dell'incertezza sui mercati. La scorsa è stata teatro di una vera e propria carneficina nel settore bancario. Nulla di inatteso, almeno per quel che mi riguarda, trovo però preoccupante la rapidità con cui gli eventi stanno precipitando. Pritchard sul Telegraph prova a fare il punto della situazione : gli USA stanno perdendo mezzo milioni di posti di lavoro al mese, in Brasile solo a Dicembre ne sono evaporati 650000 mentre in Cina ammontano a 10 milioni le persone che hanno perso l'impiego dall'inizio dell'attuale crisi. Considerando i dati dell'ultimo quarto l'economia americana si è contratta del 6% l'anno, quella tedesca del 7%, Japanese 12%, and that koreana a frightening 22%.

Meanwhile the banking sectors across the world continue to turn over in an agony that seems to have no end. If Bank of America and Citigroup have proved to be the black hole that many suspected they were, personally, I am also waiting for the worms called Wells Fargo he gives us a few moments of suspense. Interviewed in December, before the recent banking disasters come to light, Meredith Whitney, one of the best analysts on the condition of banks, the question asked by a reporter on CNBC that the bank was made worse answered without hesitation: "Wells Fargo" .

Meanwhile, there is an ongoing debate about how to use i rimanenti 350 miliardi del TARP. L'ipotesi di creare una "bad bank" sembra aleggiare insistentemente tra gli scranni del parlamento americano. Paul Krugman neo premio nobel per l'economia, in una delle rare occasioni in cui ne condivido l'opinione, definisce la possibile istituzione di una "bad bank" come una forma di Wall Street voodo . La "bad bank" si occuperebbe di comprare tramite denaro prelevato dal TARP, tutti quegli assets andati a male che le banche si ritrovano in pancia. Si parla di almeno 100 miliardi che grazie ad un leverage di 10 volte garantito dalla Federal Reserve, fornirebbero 1000 miliardi complessivi alla "bad bank" per i suddetti acquisti. Il problema rimane, la valutazione di questi assets tossici. Lo stesso scoglio which broke up in October, the initial intentions of Paulson on how to use funds from TARP.

Soros summarizes the dilemma by saying the Obama :

is facing the difficult choice that the Obama administration is one of a partial nationalization of banks, or leave them in private hands and just nationalize the toxic assets. Choose the first option would inflict great suffering on a large segment of the population - not just the shareholders of the banks, but also the beneficiaries of pension funds. However, clean air and would start the economy.

The second option would ensure the recognition and come to terms with the painful reality economic, but would put the banking system in the same condition that led to the downfall of the Government Sponsored Enterprises (GSEs) - Fannie Mae and Freddie Mac The public interest would require banks to resume lending at attractive terms. However, these loans would end up having to be imposed through a government diktat as the personal interest of the lead banks to focus on preserving and rebuilding of its assets.

Given the record, I expect Obama and his embark on the second street, in the belief that it is better to suffer less and longer (provided that it is actually possible).

British banks for their part, continue flirting with nationalization. The rescue plan, drafted by Brown, would extend the program to guarantee loans granted by banks in addition to providing an additional warranty on new loans of 50 billion pounds, ensures that the nationalized Northern Rock will extend loans to customers who show and promises to be worth the purchase of toxic assets to the amount of 50 billion pounds. This is essentially the usual half-measures. An attempt to avoid at all costs nationalization.

Pritchard concludes his analysis on the current situation, pointing out that it closely resembles that of early 1931. For once, however, can also see a bright side: at least not è ancora il 1933" dice. Obama secondo lui, si troverebbe ad affrontare una realtà migliore di quella che toccò a Roosevelt nel 33 ed avrebbe quindi, ancora un certo spazio di manovra a disposizione prima che tutto rischi di diventare ingestibile. In questo senso le scelte che il neo presidente compirà in futuro saranno fondamentali. Dovrà agire con decisione e senza commettere errori perchè, con tutta probabilità, non avrà a disposizione una seconda chance per evitare il precipitare degli eventi.

A proposito di eventi che precipitano: un retroscena interessante riguardo agli avvenimenti che coinvolsero il settore finanziario ad Ottobre, emerge da un articolo del daily mail . All'epoca arrivai a suggerire the readers of this blog to stock up on food. Perhaps someone will have thought it was too alarmist. Paul Myners, minister for the City, Friday, Oct. 10 revealed that the British banking system was found to step away from complete collapse. He was about to set off a frantic race to the banks. The government went into a state of emergency and prepared to implement a total ban on banking transactions which included: the complete closure of establishments, suspension of withdrawals and money transfers and subsequent nationalization of the entire banking sector.

Only frantic communications behind the scenes were able to prevent the bank run and the outbreak of panic. Needless to say, as a result of these statements, have come from many attacks on Lord Myners, who is accused of encouraging a sense of insecurity in the market.

Other statements that have done much to discuss, are those uttered last week by Timothy Geithner. Remember this name well, because often you will hear it say in the future. Belongs to the U.S. Treasury minister-designate. Former chairman of the Federal Reserve Bank of New York, Geithner has held various positions during his career of some significance and is considered a man of establishment ( here is a diagram with its connections). He was one of the main architects of the rescue of Bear Stearns this past spring. Held the post of Secretary Treasure in the Clinton administration under the supervision of Minister Robert Rubin and his successor Lawrence Summers. Rubin

Now, after spending years on the board of directors of Citigroup without noticing any problems in the conduct of the institute, resigned "voluntarily" to go to fill the role of adviser to Obama. Summers in turn presides over the white house, always behind the nomination of Obama, the National Economic Council, a powerful agency whose task is to supervise and give advice on the economic policy of the American administration.

These characters can hardly be considered a big change. They are certainly better than the outgoing minister and Paulson suoi amici. Per trovare di peggio, del resto, Obama avrebbe dovuto, probabilmente, cercare nell'averno. Difficilmente però, questi nuovi protagonisti della politica economica USA potranno contrastare in maniera decisa l'establishment economico, essendone stati membri.

E tanto per cominciare con il piede giusto il neo ministro Geithner, la scorsa settimana, in una nota rivolta al comitato finanziario del senato ha attaccato pubblicamente la Cina :

"Il presidente Obama -- supportato dalle conclusioni di un vasta parte degli economisti -- ritiene che la Cina stia manipolando la sua valuta" ha scritto Geithner in risposta a dei quesiti avanzati da alcuni membri del Senate Finance Committee.

"Il presidente Obama si è impegnato come presidente ad usare in maniera aggressiva tutte le vie diplomatiche disponibili nel perseguimento di una modifica nella politica monetaria Cinese" ha detto Geithner.

Dopo aver letto queste dichiarazioni molti si sono messi le mani nei capelli. Willem Buiter in un recente articolo intitolato: " Quando tutto il resto fallisce, dai la colpa alla Cina ", critica pesantemente l'aggressività mostrata da Geithner e dall'amministrazione USA. Una delle ragioni per cui Buiter ritiene vi sia speranza che l'attuale recessione globale non si trasformi in una seconda Grande Depressione è l'assenza di quella diffusa politica di dazi e barriere commerciali che fece la sua comparsa during the 30 years. Encouraging conflicts with stupid statements, in the midst of the current crisis, it would be anything but constructive and could lead to clashes from unpleasant consequences.

Other entities other hand, have accepted the charges of Geithner with enthusiasm. It 's the case of a group that represents American manufacturing industry, the U.S. Business and Industry Council, led by Kevin Kearns. Kearns took the ball and has invited the new government to erect trade barriers to imports of Chinese goods. Actually, Obama had already announced its intention to introduce a clause for the use of materials produced in America in the law that the parliament will approve short and that should set the preannuciato stimulus package by $ 825 billion.

A Keynesian state that the effectiveness of an intervention depends on the stimulus: the propensity to consume, the level of taxation and the propensity to import. In this sense, one of the easiest ways to increase the effectiveness of a stimulus package is the adoption of trade barriers. One possibility that has sparked panic among U.S. exporters, worried about possible trade retaliation by other nations. A group of them that includes Boeing, General Electric and is running for cover Cateripillar exerting strong pressure to prevent approval of any such clause.

China, even annoyed by accusations of Geithner responded to the voice of Minister of Commerce, calling for "critical baseless" and reiterated that he had never manipulated its currency. According to Chinese analysts Reuters heard by the politicians of the Eastern country, they controlled their anger in the belief that Geithner and Obama are posing only for domestic issues. Some commentators, however, are beginning to express concern about a possible decrease in the purchase of U.S. Treasury bonds by China. an article on Nikkei read the opinion of Yu Yongding, a former member of the Chinese central bank, suggesting his government to sell part of U.S. treasury bonds in its possession and to diversify investments by increasing the purchase of assets denominated in euro and yen. Yu seem to care about a forthcoming decline in the value of U.S. treasury bonds and cash in on China losses in the event.

Even Federico Rampini on the republic, seems vent of a possible rift between China and USA:

The Obama administration begins attacking China, and in a flash markets are forced to ask themselves a terrible question: what would happen if Beijing reacted by ceasing to fund the U.S. public debt?

The specter of a fracture in the financial ties Sino-American - "chimera" as he called the economic historian Niall Ferguson - yesterday was the terminus on the most liquid market in the world, one where you exchange the bills issued in Washington. The risks of a US-China trade tensions have rocked the thirty-year Treasury Bonds, one of the titles traditionally considered more secure and a safe haven for investors. The thirty-year T-Bonds have suffered sales that led to a rise in yields, to almost 3.30% on Thursday night just as soon as the U.S. Senate released the text of the hearing of the new secretary to the Treasury Tim Geithner. There include the accusation to China of "manipulating their currency."

E 'strong accusation, no Treasury secretary of the Bush administration had never wanted to express openly. It can pave the way for trade retaliation against the "Made in China. What scared the markets, the possibility of an escalation in protectionist financial Beijing could use the weapon, reducing its purchases of American Treasury bonds. With two trillion dollars of official reserves, the People's Republic is one of the biggest investors in T-Bonds. The last decade of world economic growth is right on the complementarity between the United States and the Republic Popular: the high debt of American consumers was the high amount of savings of Chinese households, the U.S. trade deficit on their way to inflate the currency reserves of China were 'recycled' by Chinese bankers regularly with the signing of American government securities.

not really all'orizzante still seems to be an escape from the Chinese sovereign debt in the U.S. (and in part also went on Rampini the notes). How Brad Setser reports, in November, China has reduced the purchase of U.S. treasury bills in the long term for the amount of U.S. $ 9.2 billion. On the other hand, however, has increased its purchases of short-term debt for good 38.2 billion. In fact, China seems to prefer short-term debt, probably to defend against any fluctuations in the value of long-term bonds more vulnerable to sudden changes. In fact, good for 10 years, went from a minimum return of 2.06% December 30 2.68% last week, an event considered by some to be the first sign of deflation of the bubble on U.S. treasury bonds .

despite some frictions are appearing, I still believe it is still premature to consider a real clash between China and the U.S., although inevitably increase tensions between the two countries in the near future.

Some tensions could arise between Japan and the United States. Another statement issued by Geithner who did more than raise an eyebrow was warning against Japan not to intervene in the currency market to try to contain the appreciation of the yen. Japan is a country heavily dependent on exports. A strong currency is against their economic interests. In December, Japanese exports fell a frightening 35% after a decline of 26.7% the previous month. Several Japanese companies like Honda and Toyota, are threatening to move production abroad if the yen were to continue to appreciate. Sony has announced losses of $ 3 billion, 2 billion more than analysts' expectations and announced licenziamenti per 16000 unità di qui al 2010.

Nonostante gli appelli di Geithner se lo yen dovesse continuare a rivalutarsi il governo del paese del Sol Levante non potrà fare a meno di intervenire sul mercato valutario. La pensa in questa maniera Eisuke Sakakibara, ex vice ministro delle finanze giapponese conosciuto ai più con il soprannome di Mr Yen. In un intervista al Financial Times, Sakakibara ha detto di aspettarsi un intervento da parte del ministero del tesoro, nel caso lo yen dovesse superare quota 85 contro il dollaro. Sakakibara prevede che lo yen si apprezzerà ulteriormente nei confronti del biglietto verde una volta esauritasi "l'Obama euforia".

Non sembra ventilare una qualche reale rottura between Japan and the United States, but believes that the American authorities will be forced to meet the requirements of the Japanese and that the two countries will agree with an intervention aimed at limiting the increase in currency Eastern Europe. According to the Financial Times, Mr. Yen also seems to predict a "global depression" similar to that of the 30's, but as in the case of Pritchard and Buiter, Sakakibara finds comfort in the fact that unlike then, today, governments around the world seem to work together.

We hope that this forced collaboration lasts a long time and that some politicians think twice before opening your mouth.

Whats Moniques Sister Name

The death of hope

Barack Obama, the angel of change, man that through no one knows what mysterious super power should cure the ills of America and the world, has finally settled at the White House. The market has joyfully celebrated the event breaking apart.

While the herald of hope filled the rightful place behind the bench of the Oval Office was his hope to be cruelly slaughtered on the stock exchanges around the world.

A false hope mind you.

The illusion that the situation was resolved with half measures. Remedies that were not going to hit the problem at its root. The childish belief that it was possible to swim in a pool of manure and come out clean and fragrant.

Now, even this ridiculous hope seems to have broken. The bloodbath that has involved the titles of major British and U.S. banks has made it clear to everyone that the situation in the banking sector was not in any way improved. Attempts by states to save any body have only transferred the risk to them. Now in addition to banks, whole nations are to wobble, to flirt with an event called "default" that seems to reciprocate loving every demonstration of affection.

Standard & Poor 's recently cut the rating of Spain Port from AAA to AA +. France is planning an event. As I illustrated in the previous post, Spain is facing a worrying decline created by the combination of excessive borrowing, economic growth based on imitation of it and the gradual loss of competitiveness. Pritchard on Telegraph suggests Spain to abandon the European Union, to restore and devalued its currency in an attempt to compensate for the imbalances. I guess that would Pritchard delighted with such an event. It 's always been anti-European (or € skeptical if you like) and never bothered to hide it.

pity that the output for any member country of the euro (except maybe France and Germany) would be for it a one-way ticket to hell. It will not happen, how many threats in this regard some states might launch. Ireland has already started : "save us or leave Europe," said David McWilliams, a former member of the Central Bank of Ireland. The anger is directed McWilliams especially in France and Germany. The two big countries are accused of not wanting to support more members of the shabby € agreeing to pay its price.

Most economists seem to agree that Spain and Ireland would need a currency devaluation to boost the export sector, second only strategy McWilliams and Pritchard to mitigate the impact of economic crisis. A road is not viable in the context of the single currency. The alternative to a competitive devaluation would be a massive reduction in wages. A kind of politics that hardly would be accepted peacefully by the people. The risk of violent protests or riots would become too high.

No politician in their right mind would face similar risks, being able to avoid. Moreover, even taking limited action in this sense, Spain and Ireland would be met with similar measures taken by other major European countries. If Germany and France would reduce their earnings, any measure of this type undertaken by Spain and Ireland would be nullified.

weaker euro zone countries are literally between a rock and a hard place. If you leave the euro commit suicide. If they do not die little by little.

The strength of the single currency is also impacting on the tourism sector. Spain has lost in 2008 a million British tourists who have preferred destinations more affordable and the outlook for the current year are even worse. Tourism accounts for 10% of GDP in Spain, 11, 4% in Italy, 15% in Greece.

France and Germany will have to resign and accept a devaluation of the euro will come up or some form of direct support towards shaky countries.

we should not worry about the possible default of a state adopting the single currency, at least to hear Almunia :

"The default risk is always there, in private as in public, but I do not think in ' euro area risks are important and meaningful. " He said the European Commissioner Joaquin Almunia when asked by a journalist and explaining that "constitutes an element of market discipline, the spread now higher", ie the increase of the difference between interest rates States that are charged on new issues of their titles.

With discipline by the states, I presume che Almunia intenda: calo della spesa pubblica, diminuzione delle retribuzioni ed eventualmente, ma non necessariamente, un aumento delle tasse. Quasi tutti gli economisti invece, invocano in coro la necessità di interventi di riduzione fiscale, l'incremento della spesa pubblica come misura anti ciclica ed un aumento dei consumi da parte della popolazione. Come molti avevano previsto ci troviamo in piena fase schizofrenica.

Se molti paesi dell'euro zona se la passano male l'Europa dell'est sta semplicemente esplodendo . Lettonia e Bulgaria sono state teatro, la scorsa settimana, di proteste sfociante in scontri violenti con le forze dell'ordine. Nei due piccoli paesi si sta creando una saldatura tra la classe media and youth population. Both feel cheated and deceived by their own government accused of abandoning him in the midst of economic crisis and left them with no prospects for the future. In both countries, the taxes were increased and reduced government spending. To this we must add to a growing unemployment rate and the refusal by the banking system to extend credit to the people. An explosive combination of factors.

Hungary and Lithuania are in similar conditions, while the edge of Europe Ukraine has become a living dead . The local currency has lost 38% against the dollar last year, the stock has fallen 85% and the bonds must promise the highest performance in the world apart from those good Ecuador (a country that declared default in December). The only thing that still has life in Ukraine is the $ 16.5 billion loan granted to it by ' IMF. The country is likely to erupt as has happened to Iceland. In the small island in the north, the population is now exasperated increasingly frequent recourse to forms of violent protest.

The news of the moment, however, remains the worsening situation of English as a direct result of the terrible condition in which its banking system. An article of Iain Martin on Telegraph not mince words: "Gordon Brown brought Britain to the brink of bankruptcy" is the title. Martin says:

not know what they're doing, do not you think? Each new step taken by the government in the frantic attempt is supporting the British banking system, makes this truth more evident (...)

The rescue of the banks by the Government in October through the use of 37 billion pounds a load taxpayers should have the second prime minister "to save the world", but it is now clear that was not even able to save the banks. Our money did continue the show for only three months.

As requested by the spokesman for the Liberal Democrats Vince Cable : where did the 37 billion? The answer, as Cable know, is that they disappeared in the exhaust pipe.

is finally flashing in the mind of the notion that government obligations of the British banks have grown so massive that during the boom years to come to overshadow the whole economy. Unfortunately, the Treasury has pledged to honor these obligations by ensuring that no bank will be allowed to fail. RBS has obligations to 1.8 trillion pounds, three times the annual cost of the British government, up from 1.9 trillion of assets . But after the events of last year, I bet that many taxpayers believe that reality is even worse.

Martin concludes:

In this depressing situation, the Prime Minister is only a faint hope that somehow, by the force of his personality, the new president Obama will be able to strike up a quick recovery by restoring confidence in America global energizing markets and making them forget all this bad dream.

Obama is full of talent but not a magician. The nightmare of Gordon Brown , which we are all trapped in is destined to become much worse.

Brown and Darling go around telling that it is not for the government own or manage banks, as if to reassure the stock against any prospect of nationalization. Judging by the collapse of the securities of the largest banks essersela British investors do not seem drunk. All escape in case of nationalization since the value of the shares would be reset. An analyst at Nomura (a major Japanese bank) said: "We believe that if the latest measures should prove insufficient, then the authorities would find themselves, probably with no alternative than to full nationalization."

Pritchard says that the path taken by Iceland, to park elsewhere supervised by committees, the loss of its banking system is precluded from England. If it tried to escape from the 4.4 trillion dollars in total exposure of its banks, would unleash the mayhem on the entire planet and permanently undermine the position of the City of London.

Jim Rogers old investor and former classmate of raids Soros told Bloomberg to Television: "I invite you to sell every pound you have. It 's over. I hate to say, but not invest any money in England. "

Soros on the other hand seems more agitated: "The economies of the world are falling off a cliff. This situation is comparable to that of 30 years. And once you recognize it, we must also recognize that the scale of the problem is even higher."

The recognition of spoken Soros is exactly what the world needs. That politicians and economists were well aware that fish take a long time it was clear to those who wanted to see the reality. The central problem of all the current economic crisis has never been particularly difficult to understand. The system has grown too much debt compared to the wealth that the system itself is capable of producing. To overcome this problem the system has begun to pay existing debt contracting of new debt. This did not make the situation worse by increasing the debt itself and led us into a dead end. We got to the point where the system is saturated with debt and is no longer able to accept again.

The time in which debts must be paid for real or where you have to declare default.

And given that the wealth we produce is not enough to pay that part of the debt needed to prop up the cabin, the alternative is one.

We want four degrees to come to understand this simple reality. The debt grows as an exponential function and When a function like this comes up against the limits of the real world sooner or later collapse. It 's always been unrealistic to pretend that the economic growth of the various states could stay for a long time behind a similar function. From this point of view the graph that I published several times and that shows the trend of the ratio of debt to total U.S. GDP and their Tutt 'nothing but ambiguous

The dramatic increase in the ratio from the mid-90 forward was to trigger an alarm bell.

Now it seems that little by little, the problem is becoming a matter of debate. Surprisingly an article Massimo Mucchetti on the courier's website addresses the question:

Barack Obama's response is based on an increase in spending , which adds to the cost of rigging last Bush. We're talking about $ 800 billion economic stimulus than the similar figure in the Federal Reserve is already committed to spend in support of the banks. Elected president inherits a country that has a total debt (companies, families, financial sector and foreign) of 51.849 billion dollars, compared to gross domestic product of 14,412. A debt equal to 359.7% of the wealth produced each year. In 2009, the public component of this debt is set to grow the aim, if nothing else, to hold that allowing private firms and households to survive. And today, depending on how you make the count, the U.S. public debt close to or even exceeds the gross domestic product. As reported Reinhart and Rogoff Moreover, within three years of past banking crises, public debt increased by '86%, because it is not even with their necessary operations on interest rates, by central banks, which exceed these crises so serious, but inevitably the public expenditure financed by debt. But if you look at the experience of the Great Depression in the United States will have to go beyond the readings dei due economisti. Perché quando, nel 1941, il prodotto interno lordo espresso in moneta corrente tornò finalmente ai livelli pre -crisi del 1929, il debito totale americano si era dimezzato. E tutti sanno che esistono solo quattro modi per tagliare drasticamente un debito: l’insolvenza, la bancarotta, l’inflazione e la cancellazione del debito mediante un Giubileo di biblica memoria come ironicamente ricorda Niall Ferguson sul Financial Times o attraverso la conversione dei debiti in azioni, come suggeriva Guido Carli all’Italia degli anni Settanta.

L'utilità di interventi economici come quelli annunciati Obama is questionable, since they do not go to any influence on the heart of the problem. People and companies can no longer borrow money, thereby creating sufficient to ensure that the system is able to repay their debts? "What is undue status and whether to put money into circulation" is suggested by many.

not need to much. Meanwhile

intervention in the wrong direction, tending to settle the problem rather than solve it. Second, hardly a state will be able to borrow enough to compensate for the lack of private debt.

The only way to go is to let the debt decreases.

Seek inflation reduce the value of money and therefore the amount of debt actually downloading it on the shoulders of all people, on whom it was prudent and those who are indebted to the neck. If I have a debt of € 100 and suddenly someone print enough money to ensure that their purchasing power drop so much, not even enough to buy a box of candy, that someone has actually canceled my debt. This strategy worked very well in Germany during the 20s. Many paid off their debts. The entire German economy, however, came out destroyed. The people soon found themselves strangled by inflation to the store with the cart (used in place of the portfolio). In the chaos that followed Hitler came to power. The rest of the story we all know. A

article on 'Economics Times suggests the very approach inflationary. He says that it is politically and socially unacceptable to fail the people and that at most one may try to extend somehow pay the debt by increasing inflation in the meantime.

Karl Denninger Blog its raised what he always believed to be the only approach possible. An approach that closely resembles the solution put forward by Guido Carli : clarity on banks' balance sheets, reducing their exposure to the shareholders take losses, and those holding common shares of preferred stock and convert the bonds into shares. In this way the institutions' balance sheets are cleaned by allowing them to return to lend money at the same time would be made transparent to the actual conditions of the banking sector in order to restore investor confidence. As for private debt Denninger suggests simply letting people fail. Who should bear imprudently risked without discharging its responsibilities on the shoulders of all.

On a possible global Jubilee, many are ultimately a "joke" about. For the uninitiated, once took place during the remission of Jubilees debt. It was canceled, "who had had and who gave gave it." "Forgive us our trespasses as we forgive our debtors." The fact that such a concept is found in the sacred prayers, shows that in the past it was common knowledge that sooner or later the debt inevitably escapes and ends up in your face break out. In Leviticus (if not mistaken) the Bible prescribes debt relief every 50 years. The usual

Pritchard says :

Taken together, the rescue packages could make the difference between a global recession and a decline more pronounced that could cause mass unemployment and social unrest, perhaps destroying that order global openness that we take for granted. If this is so we can only suppose.

We have no guarantee that the measures will work. The large government debt under way, the reserves may run out of global capital. The markets are already beginning to question the solvency of sovereign states. The Fed may find more difficult than expected to withdraw its colossal market interventions obligazionario.

Ultimately, the only way out of this debt could be a global memory of the Biblical Jubilee.

the creditors will not like it.

the course of the Jubilee is not really a road viable. Can you imagine Obama going by the Chinese with a smile and says, "Surprise You worked 13 years for nothing. We should do it again one of these days."

Who reads this blog knows how I feel. A reduction of debt is inevitable and let it fail the people are the less painful way to do it. As far as the banks tend to share the solution Denninger and where not to apply for a Swedish approach . During the banking crisis of early 1990, triggered by the bursting of a housing bubble (the housing market fell by 50-60% in 18 months) that had generated a series of deregulation, Sweden and ineffective after several interventions had to resign nationalizing several banks. The Management of the institutions in question was fired and the value of the shares to zero. Losses on assets held by banks-written budget, making clear the conditions of the sector, and banks need recapitalized by the state. The Swedish government at some point came to own 20% of the entire banking system. Once the situation stabilized Sweden broke free of its shares on the market and selling them even managed to draw a profit.

The recent stock market carnage in the banking sector, reveals the confidence that investors have in the condition of the schools. They fear that losses will be far more substantial than suspected or reported and that a nationalization potrebbe essere prossima. Questo sta facendo crollare l'illusione che bastasse qualche assicurazione verbale o una semplice garanzia finanziaria da parte degli stati a calmare le acque e grazie al cielo sta portando alla ribalta uno dei fondamentali problemi: quella dell'effettiva condizione dei bilanci bancari. Finché non si fa chiarezza su questo punto non ci potrà essere una reale ripresa.

Quello sarebbe il primo passo da fare.

Seguito da una riduzione del debito, scaricando le perdite derivanti dai debiti non ripagabili sulle spalle di chi se lo merita. Un debito non ripagabile è una perdita. Per troppo tempo siamo andati avanti facendo finta che queste perdite non esistessero, forse nella speranza che se ci credevamo con tutte our forces, they would have magically disappeared. The losses, however, are still there and the market is once again clamoring to know how many you are and on the shoulders of those who imposed.

In this respect, Obama can not do anything. As long as he and his political equivalent of the other countries decide to act seriously addressing the roots of the problem does not emerge from this situation. Although the waters were calm down temporarily, in a few months we'll be back in the same situation as the last days.

I just hope that with the death of any illusions about the financial condition of banks and also the British and Americans die in a definitive way, hope you can solve this crisis and avoid directly addressing the cause.

What Is Worse, Bacterial Or Viral Pneumonia

Year of the Gun (part two)

These days are rained non-stop economic news of some significance, such as new moves designed by Citigroup to exit an agony that has dragged on for over a year, Bank of America could the same fate of Citi or the possible collapse of much of the American pension system. I would love to have four hands available and able to write something about it. Unfortunately I have to resign and limit myself to finish some items are still outstanding, including this drag behind me since last summer.


Europe

There a nice way to say it: the situation in Europe is a complete mess. The European Union comprises 27 countries of which only one side adopts the single currency. Some, such as Denmark and Britain maintain its currency for a specific choice, as other Eastern European countries are eagerly awaiting the moment you enter, for them, effect the euro. The economies of many union members are also focusing on specific sectors and each would require a monetary policy tailored. ECB policy essentially addresses the needs of an economy based on industrial production high level as that German and therefore inevitably ends up damaging i "pigs", come li chiamano gli inglesi, (anche se a quanto pare il termine venne coniato da un membro della deutsche bank) i paesi dell'area mediterranea caratterizzati da alti deficit pubblici e specializzati in produzioni di basso livello.

Prima però di lanciarmi in previsioni sul futuro dell'Europa vorrei che deste un occhiata alla tabella sotto compilata dalla Bespoke Investment Group :

Essa riporta l'aumento del "rischio paese" registrato dai cds a 5 anni tra il mese di Novembre e quello di Dicembre. Come si può notare i paesi ad aver peggiorato in misura maggiore la propria situazione sono tutti Europei. Ai primi posti infatti, si trovano alcune tra le nazioni più pericolanti dell'area euro: Irlanda, Austria, Grecia. Più in generale però è stata l'intera Europa ad essere percepita a Dicembre, come un luogo molto più rischioso dal punto di visto finanziario, di quanto non fosse il mese precedente.

Va precisato che i cds sul debito sovrano sono uno strumento volubile, soggetto ad improvvise fluttuazioni e dall'utilità discutibile. Quando un intera nazione fallisce chi ha rilasciato assicurazioni contro un simile evento di solito tende a non avere abbastanza denaro per soddisfare tutte le richieste di rimborso. In sostanza fallisce anch'esso. Come ha illustrato Bank of America in un suo studio, i cds sul sovereign debt are useless or the words used by Tracy Allowy FtAlphaville in an article: "It is useless to you prepare for Armageddon.'ll be dead anyway."

remain, however, a good indicator of the risk in the short term.

The following table shows the cost of the Bespoke cds to 5 years for individual countries:

According to this table, the eurozone, whose sovereign debt is more expensive to insure and thus are considered more risky in the order they are: Greece, Ireland, Italy, Austria, Spain and Portugal. If a failure happens, one of the countries currently adopting the euro concern in all likelihood, one of these nations. Which brings us back to the question I posed (to nothing) more than once: "What happens if a European country goes bankrupt?"

If you were dealing with a nation of limited size and with a GDP of about $ 250 billion as Ireland, the rest of Europe might try to intervene in some way, by providing loans or cash in other forms, but already with Austria, whose GDP is around $ 380 billion, the situation would be unmanageable, not to mention of course of what would happen in case of failure to English or Italian.

If one of the greatest nation in the EU were to come to failure, significant risk of being excluded by the euro with terrible consequences both for the single currency for the Union, whose own integrity would be questioned.

countries such as Ireland, Austria, Greece, Spain and England, in one way or another, have got shit to the root of the hair in a massive credit bubble that has affected economies around the world from 2003 onwards and now, after years of rapid growth, they are forced to deal with an equally rapid decline.

The case of Ireland can be summed up with a joke that circulates among economists: "The only difference between Ireland and Iceland is in the letter r". In fact, Ireland seems to have accurately followed the recipe Icelandic overexposing its banking sector to a huge housing bubble, making him play with little pieces of paper from dubious value and attracting substantial foreign capital due to favorable tax conditions. When the bubble burst Irish banks have found themselves one step away from bankruptcy and as always happens in these cases the state had to intervene to save them. The foreign capital but, given the internal condition of the country are taking off.

Ireland is now € 400 billion guarantee of its exposure to banking, a figure two times higher than its GDP. Unemployment in the country has soared to touch 10% while consumption fell. The only thing that prevented the little Ireland to the end of Iceland was the protective umbrella provided by the Euro. If Ireland had had a local currency value of the latter would precipitate a long time, dragging it into the abyss along with the entire economy. What

by the euro, however, can not defend and the Standard & Poor's. The famous credit rating agency has placed the ratings of Ireland, together with that of Spain and Portugal, in preparation for a possible downgrade.

Even in Spain in fact, is taking an economic carnage. Such as Ireland and England, Spain was launched by early 2000, in an insane real estate bubble con tutti gli annessi e connessi del caso. Una massa gigantesca di finanziamenti invase il paese grazie ai bassi tassi di interesse adottati dalla BCE. Nel grafico sotto si può notare come da metà del 2003 fin quasi all'inizio del 2007 il tasso di interesse reale sia stato pesantemente negativo (il tasso di interesse era inferiore al tasso d'inflazione). L'incentivo ad indebitarsi era troppo forte e gli Spagnoli vi risposero entusiasti.

Il denaro a basso costo che il settore bancario Spagnolo si trovò a disposizione venne riversato in parte sul mercato immobiliare e derivati connessi, ed in parte fu usato per finanziare i paesi emergenti in America Latina nei confronti dei quali le banche Spagnole sono exposed, according to the BIS (Bank for International Settlements) for more than 300 billion.

the country's external debt has almost doubled in four years increasing from 870 billion euro in the third quarter of 2004 to 1686 in the third quarter of 2008 (155% of GDP).

Now that the various bubbles have burst one after the other (or if you prefer the giant bubble that enveloped the entire planet) Spain is to face an internal situation which is gradually deteriorating. In December, the PMI (purchasing managers index) index of manufacturing activity came in at 32.1 share (under 50 points we are talking about contraction industrial production). The unemployment rate has fallen to 13.4% in November while industrial production fell by 15.1% year on year. The English economy, worried about rising unemployment scary, animated discussion, trying to predict the maximum level that it will touch before the crisis to complete its course. Some predict an unemployment rate of 20% and who is even talk of a 25%, a level from the Great Depression. Meanwhile, Latin America, against which the English banks are exposed, is declining very fast.

The situation in Austria is similar to that of Spain. Fortunately, the Austrians have not thrown in speculation comparable properties. On the other hand, however, the Austrian banks have seen fit to invest about 290 billion euro in the countries of Central and Eastern Europe - from Albania to Russia - countries that could boast during the boom years, very high growth rates thanks to the influx of foreign capital and easy access to credit, but who are now agonizing kept alive by infusions of a loan that the IMF and Europe has given them. The Austrian government has intervened in recent months, accompanied by the billion recapitalization, to support its banking sector. This is at least the facade. In reality everyone knows perfectly well that most of the money will go to support the Eastern European countries that without the support of the Austrian banks could not survive. The failure of even one of these countries would create a deeply destructive chain reaction that involves the whole of Austria from the EU.

the European states, however, which lately has been imposed with arrogance general attention is Greece. As revealed by a the Telegraph article, in recent years, industry shipments of goods by sea has replaced the tourism sector of the economy becoming the first Greek. The owners of the country controls a third of the market for bulk shipments by sea of \u200b\u200bthe planet and to fund its operations turned to the banking system, international banking, mainly British banks. Now the maritime trade has fallen to its lowest terms . The Baltic index has virtually wiped out, falling 96% from its peak last summer. Furthermore, Greek banks had given to shopping real estate in the Balkans (especially Serbia and Macedonia) and Turkey. Other countries with economic weaknesses have emerged following the economic crisis. It is not surprising that Greece is accused in a particular crisis. The country has a high debt ratio (94%) while the deficit is equal to 15% of GDP (the highest in the eurozone). Two days ago, Standard & Poor's cut its rating of the country bringing to A-, an event that will help ad aumentare la pressione nei confronti degli altri stati Europei sotto osservazione.

La situazione Italiana purtroppo, meriterebbe un post a se stante. L'Italia è un paese immobile: non è cresciuto particolarmente durante gli anni della follia creditizia, ma almeno adesso, non si trova a dover precipitare per ribilanciare passati eccessi. Nonostante ciò la borsa Italiana non si è difesa bene nell'ultimo anno, come si vede nella tabella sottostante.

Tra i paesi dei G7 siamo quello che ha riscontrato le perdite più marcate. Non siamo i peggiori in Europa, ma sotto di noi troviamo ancora una volta i soliti sospetti: Austria, Grecia, Irlanda ecc.

The problems of the Italian economy are different from a very high public debt that does not want to fall. Indeed, as was expected for another in a situation of economic crisis, the debt has increased reaching 1.6706 trillion euro. The public sector borrowing requirement is rising rapidly increased from 26.5 billion in 2007 to 52.9 in 2008. The bot redimenti of Italian at the same time have touched historic lows. It is not a good sign. It reflects the great fear of investors and small investors and their distrust of the stock market. About the bonds in the face of great demand by small entities, it should be noted that the scorso mese andarono deserte 3 aste per specialisti . Gli specialisti sono acquirenti all'ingrosso dei titoli di stato (se volete farvi tanto male qua trovate la definizione precisa), essenzialmente banche e grossi istituti finanziari. Non è rassicurante il pensiero che i grandi soggetti non si fidino particolarmente del debito sovrano dell'Italia. La risposta del tesoro a questo avvenimento è stata :

''Cio' che stupisce - prosegue il Tesoro - e' che MF confonda le aste, il cui esito e' quello sopra descritto, con i collocamenti supplementari riservati agli Specialisti in titoli di Stato, ai quali e' data facolta', fino alle ore 15,30 del giorno successivo all'asta, to sign - the hammer price - a percentage of the amount offered in the same (in this case 10%). It is therefore a placing at a fixed rate, which the specialists can use in their sole discretion, and the Treasury, in its programming does not rely on the cover emissions resulting potential (though taking into account what it 'obvious in gauging the amounts of subsequent releases).''

''If you do a retrospective of additional placements - concludes the note of the Ministry - the kind of''options''available to professionals is clear, it is not at all uncommon, even in favorable market conditions, that there are no requests at that stage. It is noted that the additional issuance, if legally in tranche 'of the bonds to be issued, there since 1994.''

The response of the ministry is only partly convincing. Considering the high demand from the private treasury bills, I do not see what bizarre calculus specialists should not make a similar option available to them if not for a lack of implicit trust. Italy is the European country that spends more on interest on its debt (about 5% of GDP) this year and will renew an approximate 20% of it (something like a figure of around 300 billion euro). Although current trends suggesting that will not be a problem for the country if the refinance is to keep your eyes open. Given our exposure would be enough a sharp pull on the international markets to precipitate the situation. Although

side of public funding should go all right, the crisis will be felt in all its brutality in other sectors. Our economy depends in large part from extremely sensitive to a global recession, such as tourism, the production of luxury goods or the manufacturing of low-level, from which we can not release when we should have.

Industrial production has fallen by a terrifying 12.3% in November compared with a year earlier. The bank d'Italia prevede che il PIL del paese scenderà di un 2% quest'anno e avverte che "la dinamica del prodotto potrebbe essere ancora più negativa se prendessero corpo i rischi di un ulteriore indebolimento dell'economia mondiale". Considerando che i rischi "prenderanno corpo", ci baceremo i gomiti se raggiungeremo un -2% di PIL.

Se sui "pigs" sta piovendo acido puro, anche la spocchiosa Inghilterra non si può certo dire all'asciutto. Dopo aver tagliato i tassi al minimo storico (ora sono all'1,5%) da quando è stata fondata nel lontano 1694, provocando il tracollo della sterlina, la banca centrale inglese ha deciso fosse il caso di tenere segreti i propri libri contabili . Essa potrà print all the money he wants and no one can know how much it puts into circulation or in the words of condemnation spoken by Lord James of Blackheath to the English Room:

"Remove this check and there is nothing that can stop an unmonitored flooded the money market through the use of unruly press.

If you travel along the way by a road from Weimar, through Harare and must not end in Westminster and London. "

Once again the attempt to re-inflate the market is rather evident. Why central bankers will always rely on this strategy becomes clear by reading a passage from the famous Bernanke speech that took place in 2002 and which earned him the nickname of "Helicopter Ben"

Despite widespread "inflationary pessimism" in the 80 and 90, most of the central banks of industrialized countries were in the degree of caging the inflation dragon, if not completely tame. Although a number of converging factors have made this achievement possible, an essential element was the high level of understanding by central banks, politicians and much of the public to the high cost that would allow the economy to move away from stability prices.

Translated: central bankers are convinced that they know how to keep inflation at bay e quindi non se ne preoccupano particolarmente. Questa è una delle ragioni principali (ce ne sono altre) per cui ricorreranno a tutte le forme di quantitative easing che riterranno necessarie. Chi dice che una banca centrale abbia il potere di creare inflazione in quantità illimitata ha ragione. Una banca centrale potrebbe effettivamente creare denaro e distribuirlo lanciandolo dagli elicotteri come ha minacciato di fare Bernanke o appenderlo ai rami degli alberi come suggerisce Pritchard o ancora infilarlo dentro a delle bottiglie, spargerle per la nazione ed indire poi una gigantesca caccia al tesoro come postulò (scherzando) Keynes.

Sarebbe più corretto dire che una banca centrale, non può creare inflazione in maniera illimitata sperando di conservare intatto un qualcosa che possa essere definito "economia", come dimostra la situazione dello Zimbawe che a 3 settimane dall'introduzione della banconata da 500 milioni ha dovuto introdurre quella da 50 miliardi. Adesso nel paese africano usano valuta straniera per vendere ed acquistare merci. In questo senso Bernanke e amici non hanno grosse speranze di rimettere in moto l'inflazione. Se cercassero seriamente di farlo, genererebbero uno shock tale da provocare un arresto cardiaco all'intero sistema.

Penso che in futuro l'Inghilterra, assieme alla Spagna, entrerà nei libri di storia come l'esempio di un paese, in cui l'espansione economica negli anni 2000 è stata quasi esclusivamente basata su bolle speculative. Vi ritroviamo all distortions of the U.S. economy, only on a higher scale. Britain, too, like the United States embarked headlong on speculation and U.S. citizens as the British were indebted to the tip of the hair to consume useless crap - in fact we are indebted to an even more marked from the Americans - while the banking system bundle the package and is also up to their necks in debt to invest in all those areas that the global financial bubble was inflating.

The British banking system has ended up exposing too. When you start to see banks with a leverage (the ratio between the money available and the total exposure) of 1:60, as in the case of Barclays, it should be evident that you have exceeded any reasonable limit. In comparison, U.S. banks have made worse the leverage of about 1:30. As soon as the various bubbles burst began the agony of the British banks. Zeroing in demand for complex financial instruments, the terrible conditions faced by hedge funds and private equity, have vaporized much of that financial market that for years had become the first industry in the country.

A banking system is exposed as the English could not survive independently in an event like that. To save the state has intervened effectively nationalizing many institutions (the Royal Bank of Scotland for example). The population also found itself forced to stop consuming with money that did not possess and increase the savings rate . The result was a contraction of the economy and money in circulation. To remedy this, the government has promised several public interventions in the form of investment and tax cuts, such as a reduction of VAT by two percentage points. The result will be a frightening increase in the deficit in the near future: it is estimated 6% of GDP in 2009, but many fear it could soon reach a level of 10% from Latin America (or Greece). Smagni Bisi Lawrence, head of international affairs at the ECB, says that the UK is not material for the euro because of budget deficit and instability in the exchange rate of sterling, which the recent weakening is considered by many as a form of "beggar thy neighour.

France and Germany still remain the major countries of Europe. Their economies are suffering amid many will be those that resist better at this time of crisis.

Germany from its accounts with respect to order, good facilities and good social safety nets, an industry trade balance and a high-level asset. Other hand, has the enormous exposure of its banking sector and a large dependence on the export sector in a time when global demand is almost zero.

Deutsche Bank, for example, although not reaching absurd levels of Barclays has come to have a leverage of 1:52. As with the British bank, the German government has intervened a couple of days ago, acquiring a majority share of the banking giant, in a complex deal for the sale of Postbank - owned by Deutsche Post - the Deutsche itself. Without government intervention the operation could never be completed.

The total exposure of Deutsche has 80% of German GDP. Nor is his failure to be taken into account. If Germany a few days ago has come to nationalize the Commerzbank acquiring a 25% plus one share and speculation on whether the same can be done against Hypo, the financial giant (comparable in size to the former Lehman) got shit completely in the housing market, it is natural that in case of future problems (and there will be) by the Government of the Deutsche will be obliged to intervene further.

The German industrial production data are from war report. In November, the decline was 7.7% compared to the same month last year. In 2008, the country's GDP grew by 1, 3% half since 2007 and exports increased by 3.9% versus 7.5%, again in 2007. The German statistics office estimated that the decline in GDP last quarter was tra l'1,5 e il 2%. Anche se i dati ufficiali saranno rilasciati solo il 13 Febbraio uno dei responsabili dell'ufficio ha detto: "la crescita economica nel 2008 è stata unicamente basata sulla domanda interna". Probabilmente un po' eccessiva come analisi, ma la dice lunga su quanto in fretta l'economia tedesca si stia raffreddando.

Joerg Kraemer capo economista alla Commerzbank ha affermato commentando le previsioni per l'ultimo quarto: " Questo significa che il punto di partenza per il 2009 è pessimo". "Ci aspettiamo che il PIL si contrarrà di un 2-3 percento nel 2009, il che rappresenterebbe il declino peggiore nella storia della Repubblica Federale". Esportazioni in calo e consumi interni stagnati nonostante un alto (per hour) level of employment, are corroding Germany. To answer the question the German Government has decided to act with a stimulus package of 50 billion euro.

usual stuff: tax cuts, expenditure on infrastructure (schools, roads, etc.), bonus for families. The government expects to save 250,000 jobs this way.

France for its part, has repeatedly called for the cooperation of Germany with a view of an economic stimulus plan coordinated at the European level and always receive a negative response. The Germans do not want to spend their money to keep the "pigs". They fear if they did, to lay the foundations for the future adoption of the common forms of debt, which is not absolutely in their interest.

France also going through a difficult time. The luxury market, one of the highlights of the French economy is in trouble : Channel has fired the 1% of its workforce (slightly, but enough to arouse dismay among commentators French), Louis Vuitton has annulled ' Opening in Tokyo I had to be its largest store ever, and champagne sales were down 16.5% in October. Industrial production in November fell by 2.4 over the previous month compared to an expected decline of 0.8%. The decrease year on year by 6.5%. The largest contribution to the collapse of industrial production has given him the car industry with a monthly drop of 8, 1% in November after having fallen by 22.2% in October. The situation is severe enough to push the President Sarkozy to announce measures of direct financial assistance from the government for the whole sector. In return, the automakers should commit to strengthening the production in France by limiting the practice of outsourcing. It is also rumored to the next state aid to Airbus. The aviation giant has said to expect a halving of orders in 2009 over the previous year.

From this quick overview of the situation of some major European countries should be clear why Many believe that the worst conditions in Europe to the United States.

is an entity without an economic policy or monetary policy. Although most of the countries that compose it (16 now) falls under the protection of the euro 11 others are left out. They are mostly small states in Eastern Europe still retain its own currency and on almost all the bad economic situation in serious condition. In the boom years of the investment are realized attracted by high growth rates that they could boast. When the crisis erupted in the capital have fled their heels leaving behind businesses, and individuals were heavily indebted to international currency: U.S. dollar, euro, Swiss francs Swiss and even yen. The result of this flight was the devaluations of local currencies, which consequently led to an increase in real terms of the stock.

The stability of these countries is important for nations in the euro area since they are among those who have invested the most in the region of Eastern Europe. So for right or wrong we will have to save them if necessary.

Another problem of Europe is not able to issue debt policy. Each state must finance themselves. This means that any difference in the stability of the economies is reflected by the difference in yields that every state has to promise to pay on its debt. In other words è molto più sicuro investire nel debito di in un economia "compatta" (pur con tutte le differenza tra i vari stati) come quella USA che non nella singola Italia o Inghilterra. In un momento a cui il mercato sembra comprensibilmente interessare solo la sicurezza, significa che gli stati visti come più pericolanti (Grecia, Irlanda ecc) potrebbero avere in futuro dei problemi a vendere il proprio debito.

Mentre stavo scrivendo questo post, Willem Buiter ha pubblicato un articolo che riflette bene alcune delle argomentazioni che avanzai in passato. Buiter afferma che sia assurdo, anche solo pensare che qualche paese dell'area euro possa decidere di abbandonare la moneta unica. L'effetto positivo che deriverebbe dalla svalutazione a competitive local currency runs out, leaving the country in question, at the mercy of a market ruled by giants in the economic policy it should adapt. A local currency would quickly be a burden. The example of Iceland stands still in the minds of politicians, as an enduring reminder of the consequences that may result from having a currency is too weak and insignificant at the international level.

No country voluntarily abandon the euro. Whatever you may say political parties such as the alloy. If for some reason Italy was driven by the euro, and Bossi would see the company go to Bruxless crawl and beg other countries to make us fall. They can scream that they want their supporters to Pontida, between sips of water while '(I hope the first depurino) and a slice of polenta, but they are not stupid. They know that abandoning the euro would be a disaster for Italy.

Buiter welcomes any European country having to issue his personal debt, a joy that frankly do not understand. The spread between yields on Treasury bonds of individual European countries is increasing continuously. The good of Greece promise to yield 2.12% more than in Germany, a catkin of 10 times in the last 2 years. John Authers in the Financial Times says that the market is considering the probability that one of the eurozone countries to abandon the single currency until the end of the year to 30%. Buiter does not care about the thing. He says that the increase in spreads on sovereign debt will force countries to adopt a worst form of stricter fiscal discipline and therefore will have a positive effect.

expect that we will, in default of sovereign debt by countries within and outside the euro area, forecast with which I agree, but does not bother to analyze the consequences. What they decide to make the other European countries facing the default of a state within the single currency?

An indication on the road that could take Europe in such a case, comes from the decision by the ECB to loosen the requirements on guarantees accettabili in cambio di prestiti. Il debito sovrano era eleggibile fino ad un rating di A-. Un altro abbassamento di rating avrebbe messo fuori gioco i buoni del tesoro Greci. La BCE ha quindi deciso in via transitoria (di questi tempi il transitorio ha il brutto vizio di diventare permanente) di accettare debito sovrano fino al rating BBB-, cioè fino al limite inferiore di quello che viene definito "investment grade" (livello da investimento).

Con tutta probabilità in caso di default su alcune tranche di debito pubblico, verrebbero semplicemente allentati i vincoli economici imposti dall'Unione e come ritiene Buiter il default verrebbe definito "ristrutturazione." In pratica l'Europa cercherà di nascondere la polvere sotto il tappeto as long as possible. Obviously there is a limit beyond which other countries do not agree to go because the cost of supporting countries to shoulder the failures would become excessive.

This economic crisis will stand the test of 9 for the compactness of the European Union. The year that has just started is the worst it has ever seen in his short life. Industrial production continues to decline. Factories, companies, small and medium-sized enterprises license by increasing the rate of unemployment. In 2008 in Italy was 6.7% for 2009 and economists are predicting that will touch the 8, 4%. In all probability exceed 9% and we get to double figures. Ireland and Spain are already in double figures. Greece is 7.4%, but unemployment among young people aged between 15 and 24 years is 22% (many say the real figure is closer to 30%). Greece has been replicated in the process of impoverishment and insecurity of the young generation that has affected much of the industrialized world and it seems clear that Greece did not know how to respond to the betrayal of that promise by implication, improvement of living conditions that exist between the previous generations and those that follow and the subsequent rebellion of young citizens.

The fuse has been triggered in Greece, but the fire of violent revolt threatens to take root in other countries. At year end, the people of Iceland said the assault , torches in hand, the seat of the second television channel where the prime minister, was discussing the prospects of the country for 2009, including an appetizer and a glass of champagne. The kind of idiotic behavior that I would expect from an Italian politician. Icelanders are generally reserved and a population not prone to violence. E 'to fail because the state saw similar actions. In some European countries, I doubt that you will need to wait that long. The

Eastern Europe is in danger of default again (they never really recovered) and will be re-saved the Union and the IMF, but we can expect very strong social tensions. Greece will not come if to declare default on certain installment of its debt, in danger of going there very close. Pay particular attention to the Mediterranean countries Spain, Portugal, Greece because their future is our future, but their fall will be faster than ours. In the first half of the year probably will not arise on the real problems of financing government bonds, but around September / October I expect a staple of suffering. Europe's response will, as always contradictory and not very timely and is expected to result in substantial suspension (or release if you like) the constraints of stability.

deflationary thrust will continue its course. Consumption will inevitably continue to shrink as the economy will get worse, dragging down the values \u200b\u200bof those assets that past bubbles were inflated. Mainly residential and commercial properties, but also small business or those whose business is based on real easy to cut as clothing or cosmetics will suffer a severe blow. Sales will decline less than discount stores, large supermarkets, large retailers in other words. Will suffer less the impact of the crisis, at least in Italy, electronic objects of desire, such as cell phones or mp3 players (in the first half then he Thin). Also in this area but we will see a heavy compaction. Here is the festival in Bologna the closure of UniEuro (there would actually be a lot to say about their business plans). For the computer will be a bad year and for the automotive market will be even worse.

isolated interventions of the various states will do little to change that.

positive, the Europe than in the U.S. (in most states) a debt the individual child, services that work (public transport to name just one) and a welfare state established, it will not be enough to make a difference. The revenue decline while the states will inevitably increase the deficit. Depending on how this crisis will last for the welfare of devices will be able to provide a cushion or you riveleranno insufficienti. In Italia si sente ripetere un giorno si ed uno no, che i fondi per la cassa integrazione non bastano (e questo senza considerare l'adozione di rigide misure fiscali come suggerisce Buiter).

Per combattere la deflazione la BCE si arrederà e ricorrerà a esplicite misure di quantitative easing, oltre a tagliare ulteriormente il tasso di interesse. Aspettatevi un futuro indebolimento dell'euro, derivante sia dalla politica che adotterà la banca centrale sia dal degradarsi delle economie dei paesi membri. Anche la sterlina continuerà a svalutarsi. La Gran Bretagna sembra non cercare neppure di dissimulare le proprie intenzioni in questo senso.

Le banche del vecchio continente, tranne some cases such as Italian, have higher levels of leverage than their U.S. counterparts. They are therefore highly exposed to the difficulties that the world economy is going through. Some have too much invested in emerging markets, others are unbalancing the first real estate bubble and then in the commodity and others have exposed too much about everything. There is no way that they come out unscathed. Continue to spit blood for all of 2009 and since her failure does not appear to be under discussion, will be saved at taxpayers' expense.

not come from price lists also particularly good news. In exchange, probably will see the replica of what happened this year. If the bag American will fall another 40%, not European ones will fare better, on average, their loss will be higher.

To conclude: if the U.S. did not laugh this year, Europe risks instead of bitter tears. Expect the situation to fester in the fall and keep a close eye on Spain, Greece, Ireland and Eastern Europe. Will be a great barometer to see what awaits us ahead.

New Grecian Formula Work

Year of the Gun (first part)

2008 has finally ended, leaving behind a pile of rubble financial and a growing number of corpses: various famous people unable to bear the weight of its economic failure, they chose to do it finished taking his life (the last case is that the former German billionaire Adolf Merckle ).

As the beginning of every year, two things are in order: the good intentions and forecasts for the year just begun.

In 2009, I promise, as well as trying to come alive in 2010, to update the blog more regularly. Recently, I had difficulty in doing so and although it is unrealistic for me to get to write an article a day, 3 per week are perfectly within my reach.

As for the weather however, this will be remembered as the year of terror.

2007 was the year of denial. People like me, who have watched in horror for years, the scientific construction of the current crisis, when in the summer of 2007 saw the two funds at Bear Stearns fail, and banks that had lent them billions, struggling helplessly, unable to resell the CDOs as collateral received, understood immediately it was over. The toy around which the economy had turned half the world for four years and became hopelessly dependent, it was broken.

Central bankers and mainstream economists take a long time before you become fully realize how serious the situation was. We have spent months hearing Bernanke, Paulson and friends, to repeat phrases like "do not worry, the problems are contained", "the subprime crisis non infetterà il resto dell'economia". Peccato che la crisi non riguardasse semplicemente i subprime, ma coinvolgesse l'intero spettro della finanza. I subprime erano solo l'anello più debole e pertanto furono i primi a cedere. Tutto il resto seguì a breve distanza.

Il 2008 è stato l'anno del riconoscimento.

Un periodo durante il quale, perfino gli economisti più ottusamente ottimisti hanno dovuto rassegnarsi, riconoscere che una crisi esisteva e che essa coinvolgeva l'intera economia. Ad inizio 2008 gli analisti ancora vaneggiavano di una probabile ripresa del mercato nella seconda metà dell'anno. Poi arrivò il fallimento della Bear Sterns a smorzare gli entusiasmi e la nazionalizzazione della Fannie Mae and Freddie Mac to freeze up to expectations. The final blow was struck by the bankruptcy of Lehman. On 10 October last year we were literally a few days away from collapse of the entire international financial system.

Terror enveloped the markets. Central bankers and governments intervened gradually coming to be guarantors of the financial system. The hardships of the awards, however, still had to pour on the real economy. The transfer began only a few months, but already the fear is gaining momentum as the manufacturing, public services and enter into suffering.

2009 is the Year of the Gun.

The full impact of the crisis hit the real economy. Large companies will slash investments and fire, while a large number of small and medium-sized businesses fail followed closely by department stores and retail chains. That which at present can be classified as a feeling of fear will turn into a serpentine wave of pure terror that wrap much of the population. Even the usual analysts hoping for a hint of recovery in the second half of the year (as usual) will resign and face facts in front of a background that seems never to arrive.

The 2010 will probably be the year of rabies. A

anger coming out of terror and the feeling dilagherà of helplessness that this year. Depending on how states decide to manage this anger and frustration of the population, the end of 2010 will either offer a glimmer of hope or a single ticket for a chaos whose ultimate consequences at the time, are difficult to predict.

is not the case, however, to go too far with the crystal ball. For now I'll just illustrate what might hold in 2009 with the main actors in the international economic scene, starting from the undisputed leader.

U.S.

Obama has pre announced spending spree in 2009. The level of economic intervention that the newly President will launch soon is pure Keynesian: involves huge costs in infrastructure, investments in the development of renewable energy, economic aid to the states, tax cuts of $ 500 for individuals and $ 1,000 per family. All for the modest sum of 775 billion dollars, with the hope expressed by the new administration to get to create 3 million jobs.

Nobody seems to question the correctness of this line of action. If people are no longer able to borrow to prop up the cabin that face the state, economists say. Almost all anyway. One of the few mainstream economists who openly criticized the strategy of Obama Willem Buiter. Former member of the British central bank, currently professor at the London School of Economics, Buiter in a recent article said that the U.S. can no longer allow certain expenses and that they should go easy on stimulus packages to the sound of funded debt .

Buiter states that the U.S. deficit in 2009 and 2010 will be close to 2 trillion dollars (per year) and says that what may seem like the only solution in the short term, it could have dire consequences in the long term. Along with means a maximum of 5 years, the time limit within which Buiter states that those states that have historically supported the America include the debt, it will give downloading spot dollar-denominated assets on the market.

Buiter describes the line of thought that seems to reign, saying

Many bad advice about the policy to be taken arising from lack of understanding of the impact in the short term and long-term events and policy choices. Too often I have heard variations of the following phrase: "The long term is only a short sequence of words, so if we make sure that things have always make sense in the short term, the long term will take care of himself alone." This fallacy, which I wrongly shall label as Keynesian fallacy, it combines three errors.

Buiter then rushes to illustrate three errors in question. The first should be obvious. We have no evidence that short-term fix things even the long-term systems. In fact, the opposite is almost certified (if to make things short-term means, "to borrow up to the root hair" in the long term the moment will come when this debt will be repaid with interest). The second error is the inability of existing economic models, which rely on politicians and economists, to accurately predict the future consequences of present actions that might produce. The third problem arises from the fact that many of those who operate and invest in the market do it based on personal assessments about future developments the market. For them, the term is now and who has to decide economic policy should take account of whole countries. The Japanese

more than ten years ago, they traveled the same path that the U.S. seems willing to take, without obtaining special benefits. The Japanese government filled the land of elephants, cementing the cement, while at the same time the central bank lowered the interest rate to zero and they threw in measures of quantitative easing. To no avail. The Land of the Rising Sun found itself mired in a decade of deflation is worse to become, within a few years, been one of the creditors for excellence in one of the states with the most elevato rapporto debito/pil al mondo (quasi il 180%).

Un articolo del Wall Street Journal riassume per tappe gli infruttuosi tentativi giapponesi di rimettere in moto un economia dal motore rotto, durante tutti gli anni 90. Chiunque provasse a mostrare agli economisti mainstream il caso giapponese come dimostrazione della natura fallimentare di un certo tipo di interventi si sentirebbe rispondere: "I giapponesi non sono intervenuti tempestivamente e quando finalmente si sono decisi non lo hanno fatto in maniera sufficientemente massiccia". Non fu quindi la medicina ad essere sbagliata, bensì la dose somministrata. Un argomentazione che non mai trovato convincente.

Ciò che salvò il paese del Sol Levante da a fate far worse was the high rate of savings of its citizens, which allowed them to continue to maintain an acceptable level of consumption. The U.S. unfortunately do not have the same luck. American citizens are in their underwear and are required to limit their costs. The emblem of this situation is the car market one of the areas most affected by the drop in consumption.

The video below even if you do not understand English, shows how brutally increased unsold in the automotive industry. There is talk of Mercedes, BMW and Toyota. High-end cars or technologically advanced.



not relying on domestic savings by the state or by private persons and not on a trade balance in surplus to those who will address the U.S. in search of money? The

says Brad Setser in a recent article : the United States to finance their operations should contact the central banks of other countries, particularly the Chinese, Japanese and those of the Gulf States.

you ask where is the novelty.

The novelty lies in the conclusion which Setser after analyzing the trend of capital inflows and outflows from the U.S.. In the chart below you can see that they have an almost identical pattern.

Setser says:

Notice how the total of inflows and outflows move together in the chart - apart from the revenues that were attracted by high U.S. interest rates in the eighties and during the late nineties when Foreign investors flocked to buy U.S. stocks. Most of the increase of the total flow reflects an increase in short-term flows and short-term bank flows between different countries, often seem to cancel each other. Or to put it another way, the U.S. deficit was not financed by short-term indebtedness in respect of private banks in the world.

Imagine the process in this way. Suppose a U.S. bank pay a billion dollars to a bank in London and that this in turn lend that money to a hedge fund domiciled in the Caribbean which it then uses to buy a billion in American securities. This chain involves an outflow and an input, but the output has funded the input - it does not help to finance the current account deficit. As a contrast, the purchase by China of Treasury securities (Treasury Bills ed) or Agencies (GSEs titles ed) largely reflect the financial surplus of China - it is not Chinese banks that get into debt with American banks . This certainly helps to finance the U.S. current debt.

Setser concludes his analysis (which I recommend reading interamente) dicendo:

Le banche centrali sono state per tutto il tempo, la principale fonte di finanziamento per il deficit USA. Mettendo da parte il Giappone, le nazioni con grandi surplus finanziari stavano costruendo le proprie riserve ufficiali ed i propri fondi sovrani - ed entrambi sono stati il vettore chiave nel fornire finanziamenti alle nazioni con dei deficit.

E quando la domanda (netta) da parte dei privati per assets USA è crollata essa è stata rimpiazzata da quella delle entità ufficiali (banche centrali ndr).

In sostanza il finanziamento che le banche centrali del mondo concedono agli USA acquistando buoni del tesoro non sarebbe semplicemente fondamentale. Sarebbe TUTTO.

Questo rende qualsiasi previsione sul futuro imprescindibilmente dipendente da considerazioni di natura politica. Fino a quando Cina, Giappone e stati del Golfo decideranno di continuare a sostenere gli Stati Uniti la baracca starà in piedi. Se anche uno dei maggiori finanziatori del deficit USA dovesse dileguarsi non esisterebbe nessun capitale privato in grado di prenderne il posto.

Giappone e stati del Golfo sono legati con il cordone ombelicale alle sorti degli Stati Uniti e difficilmente cambieranno la propria politica economica. Per la Cina si tratta invece di un matrimonio di puro interesse. Non appena le si dovesse presentare un occasione vantaggiosa per dileguarsi lo farà.

La Cina e gli Stati Uniti, sono i due paesi che reggono in their hands the destiny of the world economy.

The title of an interview Gao Xiqing, a man who manages 200 of the 2000 billion dollars in the hands of the Chinese government sums up the Chinese position: "Be nice with countries that have lent money." Gao said Chinese citizens as they hate the fact that their government invests a huge amount of money in U.S. securities and assets instead of using it internally for the benefit of the population.

Gao says:

But I think ultimately, the U.S. government should talk to people and say, "Why do not we gather together and not think about the situation? If China has 2 trillion, Japan has almost 2 trillion, and Russia has different (ed currency reserves), and all the others, then - we throw away the ideological differences and think about what is best for everyone. "We can bring together all the relevant people and think about a system , what people call a second Bretton Woods do what he did the first Bretton Woods.

I've always been skeptical on the possibility of a second Bretton Woods. To those who invoke such an event seems to me to escape the context in which the agreements Bretton Woods was signed. The Second World War was ending. Europe was a heap of rubble. The old imperial power, Britain, despite not having lost its relevance could not claim any primacy and found himself with una sfera di influenza ridotta all'osso. Gli Stati Uniti invece uscivano dal conflitto come la nuova super potenza, sia dal punto di vista militare che economico. Questo realtà non era in discussione e non era contrattabile, come dimostrò il fatto che tra i due piani presentati a Bretton Woods: quello inglese di Keynes teso ad avvantaggiare le nazioni debitrici e quello di Barry White che avvantaggiava principalmente gli USA, allora il maggiore creditore mondiale, venne "imposto" quest'ultimo.

Oggi è tutto più torbido e confuso. Gli USA non sono ancora ridotti così male da dovere accettare di scendere a patti sottoscrivendo pesanti concessioni, tra cui la più ovvia, sarebbe l'istituzione di un paniere di valute di riferimento world, removing the dollar to its position of privilege. As on the other hand, China can boast that position of unparalleled power in which they found the U.S. in 1944. Although it is the world's largest creditor, is overly dependent on exports at a time when global demand for commodities is resetting.

A second Bretton Woods is credible and can only occur when the major countries of the world will gather with their backs to the wall or following a traumatic event (a world war for example). Now it is still early.

This year, I believe that China will continue to bear the costs of continuous purchase U.S. debt. At the same time will experience alternatives to escape the crisis, such as the creation of an Asian exchange area and will try diplomatically to curb the economic interventions of Obama (as they do not translate into increased demand for Chinese goods).

The U.S. could then finance its deficit in 2009. The economic stimulus package by almost $ 800 billion but will not get the desired results. The U.S. economy will continue to deteriorate. The commercial property market will collapse by replicating the pattern held last year by the residential sector. The latter condition will continue to worsen, will the wave of resets between the option arms (exotic mortgages) leading to the stars monthly installments.

consumption will not recover. The people increase their savings rate and will continue to reduce costs. Even those who could obtain credit after having witnessed the consequences that can lead to over-indebtedness will be very prudent in their financial choices. Continue the process of generational change in the attitude with which people approach the consumption / savings. A change that will stay with us a long time. The operations of the Federal Reserve to inject liquidity into the system will fail miserably. This is because once the problem is not liquidity but insolvency. Default at both the financial system both at the individual level, caused by the weight indebtedness. The Fed is fighting the wrong battle.

We will see a frightening increase in defaults in the market for corporate bonds, while providing very little yield stellar run the risk of buying them. Of the three major American car companies will most likely remain one. The unemployment rate will rise to reach double figures. Increasingly the demands for the creation of trade barriers against major exporting countries and the protests against outsourcing and the relocation of the entry of foreigners in the U.S. with work permits. The U.S. GDP will continue to decline for the entire year.

The bag after a short ride upward during the first months of the year will plummet into the abyss. Supports new indices will be tested and away, away broken. The volatility will reign supreme and will be relied upon by many direct government intervention in support of the scales. At year end, the S & P and the Dow could easily get to claim a 40 to 50% less than the value today. The Hedge Fund will continue to pursue the path of collective suicide by preventing their participants to withdraw the money invested. The funds in December can boast positive results can be counted on the fingers of the hands (even those still in circulation could end up counted on the fingers of one hand).

Several states and cities face bankruptcy. The Center on Budget and Policy Priorities has shown in a report as of 44 U.S. states have serious financing problems. They will close the fiscal year 2009 (ends July 1 of 2009) with a heavy deficit, which will drag defict worsened in 2010-2011, exceeding the $ 350 billion in total. The emblem of this situation is that California in a desperate attempt to reduce its deficit, as well as studying the cutting of various services, forcing state employees to stay home a few days per month (unpaid of course), to think of decrease of 5 school days (to save 1.1 billion dollars) is considering pay tax refunds with the bills .

In the end, as always, the federal government must intervene to save individual states.

care is to what happens in California, because in my humble opinion, what is happening in that state which incidentally is also what contributes most to the U.S. GDP, will give us a vision of the future that awaits Member United in their entirety.

The dollar probably will not collapse in 2009. Despite the dire situation in the U.S., the world is certainly in better health. In recent years the economies of other major countries are all gone tipping the scales in a given sector: who in the export of industrial products such as China and Japan, some in that of raw materials such as Russia and several emerging countries like England and who in the financial sector. All depended on the continuous consumption of U.S. citizens that it was the consumption of goods or credit and all through a terrible year.

On the currency market then, I think the dollar and the yen will stand, while the pound and the euro will decline further.

Ultimately, even if some balance between the different actors in the global economy will be maintained, it will be a precarious balance dictated by fear and uncertainty. A "balance of terror" if that vogliamo dire. Di questo terrore si avvantaggeranno ancora una volta gli Stati Uniti, sebbene anch'essi vadano incontro ad anno terribile.

PS:
Nei prossimi articoli proverò a fare qualche previsione per i paesi del BRIC (Brasile,Russia,India,Cina), per l'Europa e per l'Asia.