Links: 2013-05-29
“The Commission has today recommended that the Council abrogate the Excessive Deficit Procedure (EDP) for five countries: Hungary, Italy, Latvia, Lithuania and Romania.
The Commission has also recommended that the Council open an EDP for Malta.
Moreover, the Commission has adopted Recommendations to the Council with a view to extend the deadlines for correcting the excessive deficit in six countries: Spain, France, the Netherlands, Poland, Portugal and Slovenia.
In addition, the Commission has recommended that the Council decides that no effective action has been taken by Belgium to put an end to the excessive deficit and that the Council gives notice to Belgium to take measures to correct the excessive deficit.”
“A stark rise in inequality has brought about unprecedented rioting in Stockholm. The omens for Britain are worrying”
News Corp says has no record of Fox News subpoena | Reuters
“”While we don’t take issue with the DOJ’s account that they sent a notice to News Corp, we do not have a record of ever having received it,” said News Corp spokesman Nathaniel Brown, who added the company is looking into the matter.”
Five myths of the Australian economy | Business | guardian.co.uk
This is a more nuanced but largely sanguine view of Australia.
“It’s far from smooth sailing ahead, but much of the gloomy talk is little more than scaremongering”
Investors Spread Their Housing Bets – WSJ.com
“Rising U.S. home prices have sparked a run-up in shares of Lennar Corp., KB Home and Toll Brothers Inc., and cleared the way for the first initial public offerings by home builders since 2004.
Now, some believers in the housing recovery are spreading their bets. They are buying shares in the makers of appliances, building materials and even pickup trucks, as well as real estate sales firms and home-improvement retailers. These investments will reap the rewards of an upsurge in residential construction and home renovation, proponents say, at lower prices than homebuilding shares.”
EU eases hard line on austerity – FT.com
“The European Commission will make these moves on the condition that national governments embark on stalled labour market reforms. Brussels believes the delay in implementing them has contributed to Europe’s unemployment crisis. “There are limits to what can be achieved with austerity,” said Maarten Verway, a senior European Commission economist.
Commission officials insist they are not abandoning “fiscal discipline” altogether, noting that even France and Spain, which will receive two-year extensions to their deficit deadlines, will still have to take stringent measures to get ballooning budgets back under control.”
These are the German jobs numbers using the German statistical methods. The EC-harmonised numbers are different. They showed 21,000 more unemployed versus 5,000 expected. Unemployment rate was unchanged.
“In April 2013, a total of 41.7 million persons resident in Germany were in employment according to provisional calculations of the Federal Statistical Office (Destatis). Compared with April 2012, this was an increase of 281,000 persons in employment or 0.7%, which was the same growth rate as in March 2013. The number of unemployed was about 2.3 million persons in April 2013, which was an increase of 41,000 on a year earlier.
According to provisional results of employment accounts, the number of persons in employment in April 2013 was up by 137,000 (+0.3%) on March 2013, which was due to the usual spring upturn. On an average of the last five years, the growth had amounted to 152,000 people. After seasonal adjustment, that is, after the elimination of the usual seasonal fluctuations, the number increased just slightly by 6,000 in April 2013 (March 2013: +27,000 people or +0.1%) compared with the previous month. “
IMF cuts China growth outlook, urges cap on social financing | Reuters
“The International Monetary Fund cut its growth forecast for China this year to 7.75 percent from 8 percent, citing a weak world economy and exports, adding to concerns that the world’s second-largest economy is losing momentum.”
Japan CPI decline expected to slow, BOJ price goal still in doubt | Reuters
“Japan’s deflation likely abated further in April and factory output picked up, but economists say the Bank of Japan is unlikely to achieve its 2 percent inflation target in two years as demand won’t catch up with oversupply quickly enough.”
Fitch: Short Sales Now the ‘Order of the Day’ for U.S. RMBS Servicers – Fitch Research
“The remedy of choice for underperforming residential mortgage loans has undergone a sea change of sorts over the last several months for U.S. RMBS servicers, according to the newest quarterly index from Fitch Ratings.
Once the norm, loan modifications have slowed notably while short sales have become the proverbial order of the day. For non-agency loans, short sales by bank servicers peaked at 51% in November 2012, an increase from 20% two years prior. Short sales among non-bank servicers have also increased, peaking at 16% in October 2012 from 11% two years prior. ‘Loan modifications have fallen due partly to overall declines in mortgage delinquencies,’ said Managing Director Diane Pendley. ‘However, they may also have fallen out of favor since many modified loans have already failed and do not qualify for another modification.'”
End of the road for Germany’s autobahn racers? | World news | Guardian Weekly
“Proposal to set a speed limit across the motorway system makes Germans think about speed versus sustainability”
Bankia shares tumbles 20pc after rescue – Telegraph
“Shares in state-owned Spanish lender Bankia tumbled 20pc at the open on Tuesday as the bank completed a multi-billion euro cash injection.”
“”Slovenians thought capitalism was the shops full of goods they saw in Trento [across the border in Italy]. They wanted that but without giving up the protection of the state,” says Bozidar Jezernik, professor of ethnology at Ljubljana University. “Depending less on the collective organisation, more on oneself, is not a popular idea here.”
Slovenia is still a place where family life, sport and general well-being are more important than material comforts. The “alternative capitalist” model fared quite well till 2008, when the badly managed publicly owned companies started to fail and bad debt rose. It emerged that banks had granted loans to those with good connections not business expertise. “A classic case of crony capitalism,” says Igor Masten, an economist at Ljubljana University.
The banks’ solution was to stop lending, even to companies in good health. “There’s no point in applying for a loan. It’s been like that for the past three years,” says entrepreneur Mitja Zagar.”
China Credit-Bubble Call Pits Fitch’s Chu Against S&P – Bloomberg
“Chinese banks are adding assets at the rate of an entire U.S. banking system in five years. To Charlene Chu of Fitch Ratings, that signals a crisis is brewing.
Total lending from banks and other financial institutions in China was 198 percent of gross domestic product last year, compared with 125 percent four years earlier, according to calculations by Chu, the company’s Beijing-based head of China financial institutions. Fitch cut the nation’s long-term local-currency debt rating last month, in the first downgrade by one of the top three rating companies in 14 years.”
Bad Debts Rise at Portugal’s Banks – WSJ.com
“Portuguese banks have strengthened their liquidity and capital levels since the country requested a bailout in 2011, but bad debts continue to rise amid a deep recession, the Bank of Portugal said in a report Tuesday.
Portugal’s main banks have been reporting an increase in bad debts since the government started implementing austerity under a €78 billion ($100 billion) bailout requested in early 2011. In exchange for the loan from European Union peers and the International Monetary Fund, the country has increased taxes, cut public-sector wages and reduced spending on infrastructure, health and education.
As a result, two of the country’s largest banks said earlier this year that over 10% of all loans were at risk of default.”
ekathimerini.com | Greeks work longest hours in eurozone
“Greeks work an average of 2,032 hours per year, against an average of 1,776 hours for the OECD member states. The Portuguese work 1,711 hours, the Spanish 1,690 hours, the Irish 1,534 hours, the French 1,476 hours and the Germans no more than an average of 1,413 hours, some 30 percent less than the Greeks.
In terms of employment, just 56 percent of Greeks aged between 15 and 64 years have a paid job, which is considerably below the OECD average of 66 percent. Two-thirds of men in Greece (66 percent) have a paid job, against just 45 percent of women, suggesting that women find it harder to balance career and family.”
Annals of the Security State: the Airplane Stories Continue – James Fallows – The Atlantic
“One point of context, which I’ll pick up at the end. Many of today’s security-state episodes arise from the open-ended “war on terror.” Many others arise from the even more open-ended “war on drugs.” Some appear to be caused by both at once, or a morphing of one into the other. Follow along with the cases, then a summary-for-now at the end”
Mexico’s red hot real estate market | beyondbrics
“Much of the excitement surrounding Mexico’s real estate industry comes on the back of President Enrique Peña Nieto, who has vowed to push through a series of sweeping structural economic reforms through Congress.
While Peña Nieto has so far succeeded in passing key reforms in the telecoms and education sectors, the two most important ones – on energy and taxes – will also face the most opposition.
But that hasn’t stopped investors from betting that these reforms – which could help boost Mexico’s growth rate to 6 per cent – will eventually be passed and fuel demand for office space, hotels and shopping malls.”
30-Year Fixed Mortgage Rates Rise to 12-Month Highs – Yahoo! Homes
“Mortgage rates for 30-year fixed mortgages rose this week, with the current rate borrowers were quoted on Zillow Mortgage Marketplace at 3.71 percent, up from 3.58 percent at this same time last week.
The 30-year fixed mortgage rate hovered between 3.65 and 3.68 percent for the majority of the week before rising to the current rate this morning.
“Rates spiked last week after meeting minutes revealed the Fed was contemplating scaling back economic stimulus plans much earlier than expected,” said Erin Lantz, director of Zillow Mortgage Marketplace. “Now at 12-month highs, we expect rates to remain stable in the near-term, but new direction from the Fed and employment figures could boost rates significantly.””
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