Föhrenbergkreis Finanzwirtschaft

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Archive for 23. Juni 2010

Ways Forward From the Eurozone Crisis

Posted by hkarner - 23. Juni 2010

Lesen Sie den ganzen (ausgezeichneten) Artikel auf Kurt Bayer’s Blog:

Faulty Eurozone Governance Structure

The architecture of the Eurozone suffers from a “birth defect”. It was clear from the start that the Eurozone did not correspond to the ideal of an “optimal currency union”, because it combined too many countries with very different inflation and economic policy differences. The (compromise) idea of the founding fathers was that by supplementing the common monetary policy with the strictures of the stability and growth pact (SGP) on the fiscal policy side, countries would eventually be guided towards becoming more like an optimal currency union (“coronation theory”). So we had a joint monetary regime, run by the ECB, setting equal conditions for all Eurozone members , combined with a rules-based fiscal policy coordination tool, the SGP, which was supposed to force individual members into “responsible” and sustainable fiscal policy. Two things were wrong with this thinking: a) from the macroeconomic policy point of view, there was no joint Eurozone fiscal stance aligned with the ECB’s monetary policy stance, only individual countries’ obligation to conform to the SGP, and b) the third element of an economic policy triangle was completely neglected, i.e. the growth component. GDP growth was – as the then mainstream predicated – to arise spontaneously, if only the monetary/fiscal policy mix was right (but even that lacked a mechanism, since ECB and some member states refused to agree to a regular policy dialogue between the fiscal and monetary authorities). The French demand for an “economic government” as policy partner to ECB was denied. Den Rest des Beitrags lesen »

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China, Day One

Posted by hkarner - 23. Juni 2010

Tim Duy

Jun 22, 2010 11:35AM

My skepticism was valid for at least a day.  Market participants quickly lost interest in the Chinese revaluation story, with stock ending down for the day:

“The announcement out of China elicited an emotional response from the market,” said Alan Gayle, senior investment strategist at RidgeWorth Investments in Richmond, Virginia, which oversees $63 billion. “A closer look at the announcement suggests China’s approach is very gradual and it is continuing at its own pace. It’s a less dramatic move when looked at more closely.” Den Rest des Beitrags lesen »

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Outlook Money on Crisis Economics

Posted by hkarner - 23. Juni 2010

Mittwoch, 16. Juni 2010, 20:22:00 | Nouriel Roubini

From Outlook Money:

By Rajesh Kumar

In September 2006, Nouriel Roubini, a professor of economics at New York University, speaking at the International Monetary Fund (IMF), warned that the US economy would suffer a once-in-a-lifetime housing bust and a deep recession. The warning was received by the audience with a fair amount of skepticism, as the US economy, though looking a little weak, was still growing, with low inflation and unemployment. But, as events unfolded afterwards, the prediction by Dr. Doom, as Roubini is famously—or infamously— known, started coming true. Den Rest des Beitrags lesen »

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Fiscal Fantasies

Posted by hkarner - 23. Juni 2010

June 18, 2010, 4:09 am, Paul Krugman

It’s really amazing to see how quickly the notion that contractionary fiscal policy is actually expansionary is spreading. As I noted yesterday, the Panglossian view has now become official doctrine at the ECB.

So what does this view rest on? Partly on vague ideas about credibility and confidence; but largely on the supposed lessons of experience, of countries that saw economic expansion after major austerity programs.

Yet if you look at these cases, every one turns out to involve key elements that make it useless as a precedent for our current situation. Den Rest des Beitrags lesen »

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Talking to a Dining Room Table

Posted by hkarner - 23. Juni 2010

June 20, 2010, 11:45 am, Paul Krigman’s Blog.

Gah. I’m still in Germany, and the event was lovely. The policy conversations, not so much.

We talk about the euro crisis. They say, “Clearly, this was about fiscal irresponsibility, and we need to enforce much stricter rules.” I say,

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No fiscal rule would have constrained the Spanish housing bubble and its consequences.

And they say, “Thank you for your contribution. Clearly, this was about fiscal irresponsibility, and we need to enforce much stricter rules.”

Oh, and on monetary policy — I find myself recalling how Rudi Dornbusch came down to breakfast one day and greeted a German central banker — I don’t remember who — with a cheery “And stable prices to you, sir!”

UPDATE: Oy. Somehow I lost the labels, destroying the whole point of the post. The blue line is Germany; the red line is Spain.

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Why China’s Currency Announcement is Hokum

Posted by hkarner - 23. Juni 2010

Montag, 21. Juni 2010, Robert Reich’s blog.

The stock market is euphoric over China’s apparent decision to allow its currency to rise against the dollar.

Watch your wallets.

China isn’t really changing anything. It’s only doing the minimum to prevent Congress from listing China as a currency manipulator, leading to a squeeze on Chinese imports.

Over time – and I’m talking about months if not years – China will raise its currency to where it was before the global meltdown in 2008. Big deal. Den Rest des Beitrags lesen »

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My Father and Alan Greenspan

Posted by hkarner - 23. Juni 2010

Sonntag, 20. Juni 2010, , Robert Reich’s Blog:

When I was a small boy at the start of the 1950s, my father gave me my first economics lesson. “Bobby,” he said with obvious concern, “you and your children and your children’s children will be repaying the national debt created by Franklin D. Roosevelt.”

I didn’t know what a national debt was, but I remember being scared out of my wits.

Dad was wrong, of course. Even though the national debt then was a much higher percentage of the national economy than it is today, it shrank as the economy boomed. My children have never mentioned FDR’s debt. My granddaughter (almost 2) will never pay a penny of it.

Dad, now 96 and still in good health, recognizes how wrong he was then. He admits FDR’s deficit spending not only won World War II but it also got America out of the Great Depression.

But now another gaggle of deficit hawks is warning us against more federal spending.  “The current federal debt explosion is being driven by an inability to stem new spending initiatives,” warns Alan Greenspan in Friday’s Wall Street Journal, calling for budget cuts and saying “the fears of budget contraction inducing a renewed decline of economic activity are misplaced.”

My dad learned from his mistakes. Alan Greenspan obviously didn’t. Den Rest des Beitrags lesen »

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Banken: EU zweifelt an Zukunft der Hypobank

Posted by hkarner - 23. Juni 2010

22.06.2010 | 18:50 |  (Die Presse)

Na, die EU Komission hat offensichtlich begabtere Beamte als das Finanzministerium, die FMA oder die Nationalbank. Und als der neubestellte HAAG Vorstand. Wie wir schon im Dezember 2009 vorausgesagt haben (hfk).

Die EU-Kommission hat ernste Bedenken, dass die Hypo Alpe Adria nachhaltig Gewinne schreiben wird. Die frühere BayernLB-Tochter wurde im Dezember 2009 mit der Verstaatlichung vor der Pleite gerettet.

Wien/Brüssel (höll). Die EU-Kommission ist skeptisch, dass die Hypo Alpe Adria trotz der vom Staat eingeleiteten Sanierung überlebensfähig ist. Daher haben die Brüsseler Behörden am Dienstag die Staatshilfe für das Kärntner Institut nur vorläufig genehmigt. Die EU befürchtet, dass es der Kärntner Bank mittlerweile so schlecht geht, dass sie nicht mehr in der Lage ist, ihre Probleme in den Griff zu bekommen. Erst vor zwei Wochen wurde bekannt, dass das Volumen der Problemkredite auf acht Mrd. Euro gestiegen ist. Damit sind schon 20 Prozent aller Darlehen ausfallsgefährdet.

Nach Ansicht der EU-Kommission sollte die österreichische Regierung auch die Möglichkeit einer geordneten Abwicklung des Instituts in Betracht ziehen. Die Wettbewerbshüter werden in den nächsten Monaten den Fall genau unter die Lupe nehmen. Erst dann wird feststehen, wie es mit der Hypo weitergehen wird. Den Rest des Beitrags lesen »

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