Yves here. Note the comment at the end, that Sarkozy’s sales pitch to China on the levered up EFSF did not go so well. If the Chinese don’t relent, this greatly reduces of this scheme working, even in the short term. And further note that the flagging European growth is the result of the austerity hairshirt being imposed on highly indebted economies. Ambrose Evans-Pritchard has a pointed article on the consequences of the beggar-thy-neighbor German stance.
By Delusional Economics, who is horrified at the state of economic commentary in Australia and is determined to cleanse the daily flow of vested interests propaganda to produce a balanced counterpoint. Cross posted from MacroBusiness
Angela Merkel has been warning for quite some time that Europe’s economic woes will take up to a decade to fix and that it is time for Europe to rethink its economic strategy after years of living “beyond its means”. It seems fairly obvious from those statements that the rest of the world is going to have to get use to Europe moving into a slow growth phase while it attempts to adjust away from what it considers to be unsustainable debt.
In an attempt support the transition while keeping Europe together the European leaders have put together 3 part package to save Greece, re-capitalise the banks and provide a stability mechanism for countries that run into trouble. The problem is that once you understand the technicalities behind what they have come up with you come to realise that real economic growth is the only thing that actually matters. The latest news out of Europe for many of the 17 member nations is not good at all in that regard.
It became obvious that Belgium was in trouble when it was forced to nationalise Dexia, and over the weekend the Belgium central bank reported that economy is now stalling:
Belgium’s economy stalled in the third quarter as European leaders struggled to contain a worsening debt crisis and signs increased that the euro region is heading toward a recession.
Gross domestic product in Belgium, the sixth-largest economy in the euro area, was unchanged from the second quarter, when it grew a revised 0.4 percent, the National Bank of Belgium said today in a statement. That’s the worst performance since the country emerged from a recession in 2009.
Cyprus is looking far worse and as usual the IMF is calling for austerity:
The stagnant Cypriot economy — weakened by falling revenues, credit ratings and banks exposed to Greek debt woes — is in need of immediate measures, the IMF warned following an 11-day visit this month.
IMF’s Europe Department Assistant Director Erik Jan de Vrijer said the Fund considers the situation concerning.
“The fact that the government can not access capital markets is very serious and the risks to the banking sector compound that,” he said.
Amid fears that Cyprus may eventually need a bailout, de Vrijer said the first priority must be containing problems, chief among them, excessive public spending.
On top of that property prices continue to fall and the real estate industry is reported to be in meltdown as construction activity has fallen by over 40% this year.
Economic news from Portugal continues to be poor which is expected under the circumstances:
Portugal’s government said austerity measures contained in its 2012 budget, submitted to parliament Monday, will cause the economy to contract by a more than previously forecast 2.8 percent.
Finance Minister Vitor Gaspar told a press conference that the floundering world economy “will lead to a contraction of gross domestic product of 2.8 percent, following 1.9 percent this year,” in Portugal.
The government had previously envisaged the economy would shrink by 2.3 percent in 2012 and 1.8 percent this year. The Bank of Portugal had put the estimates at 2.2 percent and 1.9 percent, respectively.
And Spain‘s economy continues to deteriorate in the worst possible way:
The number of unemployed in Spain swelled to a record high of nearly 5 million in the third quarter, as a sputtering economy failed to create jobs amid mounting global financial uncertainty, according to government numbers released Friday.
The 4,978,300 unemployed amounted to a jobless rate of 21.5 percent, the highest since 1996 and up from 20.9 percent in the previous quarter. It remains the highest rate in the 17-nation eurozone.
Spain is struggling to recover economic growth after crawling out of nearly two years of recession prompted to a large extent by the collapse of a real estate bubble.
It now seems that France has little choice but to join the austerity budgeting brigade with Sarkozy warning his country of the coming budget cuts in a recent television broadcast:
“We will have to revise and adapt our budget plan to the new reality,” Mr. Sarkozy told an estimated 12 million viewers as he revealed that his government had lowered its forecast for next year’s gross domestic product growth to 1 percent from 1.75 percent. To compensate for an anticipated decline in 2012 tax revenues, he said that by mid-November he would announce a program of budget cuts of about $8.5 billion to $11.3 billion.
“It’s because of this debt crisis that we find ourselves in a situation of having to defend France’s triple-A” credit rating, Mr. Sarkozy said, noting that a rating downgrade would only increase the interest burden on the country’s public debt, already at more than $70 billion a year.
And then there is Europe’s economic engine, Germany, which on the back of the latest European PMI is now predicted to stall into the new year:
The German economy, Europe’s biggest, will fail to grow in the current quarter after expanding 0.4 percent in the previous three-month period, the DIW economic institute said.
With new reports suggesting that Sarkozy and Regling’s visits to China didn’t go as well as planned it would seem that Europe still has a long way to go before the end of this crisis and the rest of the world is going to have to get used to Europe in the slow-lane for a lot longer.
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RE. German economy
The vaunted job creation! 20% work in low-paying jobs that are topped by social subsidies.
Cars are sold with up to 30% rebates.
Machine industry orders absolutely flat.
French and Italian cars are sold with up to 30% rebate… certainly not Volkswagen, BMW or Mercedes.
The Chinese have decided that buying out Saab Automobile was a better investment than Sarkozy’s EFSF.
Yes, the Chinese believed the Saab story more than they did Sarkozy’s sob story.
Germany just had a failed bond auction:
http://www.fxtraders.eu/article.php?id=22037
If Germany can’t sell its bonds, who is going to buy all the upcoming crud from Italy and Spain?
http://www.reuters.com/article/2011/10/29/us-eurozone-g20-portugal-idUSTRE79S1SS20111029
The unnamed “source” in the above article makes clear that American consumers are once again expected to be buyers of last resort. Apparently we should allow our trade imbalance to deteriorate even further.
Are Euros really tight all around, do people have alternative investments, or are they just binding their time?
I think the basics of the German labor market are sound: education and qualification required and made available virtually free of charge to all who want them. This allows German industry to walk the walk, not just talk the talk about quality. It has nothing to do with Leitkultur and everything to do with substantial public investment in education. I wonder if PIIGS have the same model and if so does it work. If it works in the PIIGS then Germany’s main advantage is geographical.
Car subsidies are I believe associated with Germany’s most perniscious form of corruption: the corporate car racket. 7 of 10 new cars sold in Germany are corporate cars, i.e. sold to leasing agents at discounts and leased under conditions that ultimately end up in German tax rates – minus the modest selbstbeteiligung of the users.
Reports I read say that the machine industry is robust.
Actually,
Ireland has a great education system and if not the highest education rate in the EU then they are certainly in the top 2 or 3.
I believe this corporate-leasing scheme must be popular in Italy as well. While “la crisi” is on everybody’s lips, I keep seeing plenty of brand-new Audis and Porche Cayennes clogging the roads.
To say nothing of the 630,000 or more “auto blu”: cars with drivers, given to politicians and state officials. This alone costs Italy €21 billion per year. A number for similar cars in the US is given as 72,000 here:
http://blog.panorama.it/italia/2010/05/12/620-mila-auto-blu-in-italia-e-continuano-ad-aumentare/
In a nod to propping up the local economy, “auto blu” have usually been Alfa Romeos or upper-end Lancias, but I recently saw a sparkling new Mercedes S-Class in my town, with two black-suited goons attending. List price on those here, anywhere from $108,289 to $240,757. You can tell the auto blu by the blue emergency light mounted on top, which they employ in an effort to intimidate the riff-raff out of the high-speed lane.
Car subsidies are I believe associated with Germany’s most perniscious form of corruption: the corporate car racket. 7 of 10 new cars sold in Germany are corporate cars, i.e. sold to leasing agents at discounts and leased under conditions that ultimately end up in German tax rates – minus the modest selbstbeteiligung of the users.
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End up in German tax rates?
I don’t get that part.
lease payments expensed for taxes
Here’s something on leasing schemes and the EIB (in English, tho’ page link is in Italian):
http://www.eib.org/projects/press/2011/2011-118-italia-200-milioni-a-selmabipiemme-gruppo-mediobanca-per-il-leasing-delle-pmi.htm
Having lived in Berlin several years, (and intending to retire there) Germany’s primary “advantage” is not “geographical”…
..it is SOCIAL..though Americans may not comprehend..
Writers who note full education of workforce, intracacies of
paybacks for said education, leading to government based upon taxable income generated by fully-educated workforce,
are closer to reality.
U.S. featured goal is “cheap labor force”…Germany’s is “fully educated workforce” PAYING TAXES..
Sorry folks but there is a part of the crisis that no one is willing to discuss –
There has been for many years a system of givebacks from the German economy – it works like this – a non german compmany agrees to buy gernman manufactured machinery ( say weaving machines – looms) and agrees to “give back” part of the purchase price.
The purchaser bo which borrows the money – in the US often through a lease purchase agreement to avoid taxes – buys the machinery and is given a cash give back to use as they wish.
So the end result is that a perverse incentive is arranged to purchase german machinery which is not driven by actual market demand. This leads to bubbles and crashes.
And this is why the emphasis is to prop up the banking system for without the banks perverse incentives would be more difficult to work.
Square this up for me:
“a non german compmany agrees to buy gernman manufactured machinery… and agrees to “give back” part of the purchase price”
“purchaser bo which borrows the money… buys the machinery and is given a cash give back to use as they wish
Who pays back to whom? In the first quotation, the purchaser pays the manufacturer. In the second, the purchaser gets a rebate. Which is it?
{It now seems that France has little choice but to join the austerity budgeting brigade with Sarkozy warning his country of the coming budget cuts in a recent television broadcast}
Sarkozy had attempted to convince Angela Merkel that the EU Euro Rescue Fund being established should be employed to implement Quantitative Easing as the Fed has done in the US. That is, be a “lender of last resort”, which is typically the role of a Central Bank.
The Germans will have none of it, because it sounds too much like Printing Money. In fact, that is what it does mean. But the Germans have long memories unfortunately. It was such a maneuver during the Wiemar Republic that brought about German hyperinflation and helped usher in Adolph Hitler.
Still, it is a bit idiotic to think that such would happen again in 2011, where the situation is anything but like that of the Weimar Republic (established in 1919, just after Germany surrendered in WW1) – but the Germans are … being German. They evidently have long memories.
As the ex-economist for the British Central Bank has said, “Yes, one can drown in water. But having a glass of water when one is thirsty is not dangerous” (Or some such, since I am paraphrasing.)
In summation, the EU context at present is a dichotomy. The solution almost certainly resides in Germany’s economic resilience (nonexistent elsewhere in Europe), but the problem also lies in that they’re being politically adamant.
This is especially so as regards inflation during a period of relatively low occupation of productive capacity. Price inflation is stimulated when production capacity is high, so prices tend to inflate. Such is not the present case.
Unless the printed money passes through the hands of banks that are now hedge funds which immediately go mad on commodities, currencies and every other sort of gross speculation in an essentially lawless global financial system.
“It was such a maneuver during the Wiemar Republic that brought about German hyperinflation and helped usher in Adolph Hitler.”
Um, the hyperinflation was over and done with for nine years before Hitler came to power. The real economic culprit here was depression, 30% unemployment, and the–ahem–austerity policies of the “hunger chancellor” Heinrich Brüning.
{It seems fairly obvious from those statements that the rest of the world is going to have to get use to Europe moving into a slow growth phase while it attempts to adjust away from what it considers to be unsustainable debt.}
Yes, for the growth-at-any-price crowd, Europe seems like a bummer. Fortunately, Europeans are not fixated on equity values that tend to be far too dependent upon economic growth for their valuations.
Let’s remember, that in terms of national governance, these facts:
* There was no SubPrime Loan in Europe, except those purchased from the US. Europe does not dabble in such foolish Financial Engineering. Besides, one should understand the first principle of engineering, which is called “fail safe”. Any mechanism, financial or physical, should be designed to not cause harm in case of failure. Shame on American bankers who never learned that rule.
* Taxation in Europe is very high because of a keen sense of Social Democracy – that is, a careful mix of both capitalism and social investments that further the well-being of citizens. That notion is not (yet) a prevailing political belief in the US, which gobbled hook, line and sinker the nonsense of a Trickle-down Economy supposedly brought about by low-taxation (as implemented by the Reagan Administration).
* Finance may have an inordinate influence on policy-making in the US, but that is not as significant a factor in Europe. Politicians here (I am writing from France) certainly do have a keen eye for political donations. But Europeans remain fairly impervious to the sort of usage of campaign funding (in the form of Media Messaging) that promotes defamation and scurrilous character assassination – which is, in fact, a crime in many countries. Evidently, in the US, this tactic seems to work.
* The general level of education, particularly at the tertiary level, makes of Europeans a more cerebral people. They don’t get easily hoodwinked by the sort of palaver that ultra-conservative Americans employ. The “separation of church and state”, I submit, is far greater in Europe than in the home country of that notion.
I could go on. But the point is made: the EU does not pretend to be the US. It is an economic reality that is larger than the US (in numbers and therefore economic potential) with great promise – but it clearly remains “Work In Progress”. After all, it must still assimilate fully its extent over 26 very different cultures.
Let me guess: you come from one of those core countries that haven’t seen its unemployment rocket up, its salaries shrink, its deficit balloon, its welfare state thin, and its membership of the euro area in jeopardy.
OK. Whatever. You know nothing about what’s happening to Europe and you absolutely ignore that your country will be in a similar position to Greece in a couple of years’ time.
Finance is in complete control of policy, which is why the EMU is going to break up. Every action taken by the eurobosses has been to keep the looting going on as long as possible through repeated rounds of extend and pretend. Sorry, but the EMU is nowhere near as financially stable as the United States which has a fiscal transfer system in place.
Per your claim of European mental superiority: maybe you should simply drop the pretense and call yourselves the ubermensch.
Lafayette,
perhaps you misunderstood the article?
The problem with Europe, as the article succicntly states, is that Eurozone banks are severely LEVERED. This major leverage means only one thing: They (the banks) depend on growth at any cost (despite your claims to the contrary).
Europe doesn’t need to have a “subprime” situation because of the foolish leverage employed by EU banks. Any nonperforming loan will do, subprime or not. We know this well in America, because we in America DID NOT have “a subprime problem”, we had a leverage problem across many loan products including subprime, Alt-A, and even prime… not to mention student loans, commercial real estate, and almost anything else you can imagine. in other words, we had a credit bubble.
The EU has the same.
also: despite your claims to the contrary, clearly EU political leaders are slave to the financial oligarchs… at least it seems like it from this side of the pond. Your leaders can’t run to austerity fast enough… austerity here, austerity there… dismantle social programs here and dismantle social programs there… guarantee banks here and guarantee banks there.
where exactly are the EU leaders sticking up vs the banks? Are they sticking up to the banks when they dance around trying to bail out Greece without triggering a CDS event? Or was it when they smashed Ireland into near depression? Or will it be when the French citizen is forced to enjoy austerity to cover SocGen?
===
Perhaps we should stop fighting about which citizen is mentally superior and instead look at how our world leaders are fleecing all of us in concert with Financial Oligarchs?
{We know this well in America, because we in America DID NOT have “a subprime problem”}
Naive nonsense, that.
The SubPrime problem derived from the fact that there were insufficient creditworthiness checks (in fact, most often, none) of the mortgagor prospect. If fact, there was fraudulence involved in the application paperwork – meaning no checks on the veracity of the numbers, no analysis of the prospect’s actual indebtedness, no nothing.
The mortgages were then “securitized” (abracadabra) by means of a fraudulent Credit Rating Agency note of Triple-A and sold to gullible Global Investors. There was connivance between the Main Street creditors, the Wall Street Investment Banks, the CRAs and other Debt Instrument resellers.
If that is not a SubPrime Mess, then I cannot possibly imagine how one might qualify it. (Perhaps, a “fly in the ointment”? ;^)
{We know this well in America, because we in America DID NOT have “a subprime problem”}
Naive nonsense, that.
[snip]
If that is not a SubPrime Mess, then I cannot possibly imagine how one might qualify it. (Perhaps, a “fly in the ointment”? ;^)
Subprime was only the tip of the iceberg. Had we ONLY had “a subprime problem” we wouldn’t be where we are today.
Instead, America had a major credit bubble that affected the underwriting and quality of almost ALL loan types, including subprime, Alt-A, A, student loans, leveraged buyouts, commercial real estate, and the list goes on.
it’s like saying a person has “a cough problem” when they have terminal lung cancer and emphysema from smoking. they don’t have a “cough problem”, the issue is far more serious.
In America, the first signs of stress did show up in the Subprime Space… but that was only the canary in the cold mine… and the subprime problem was really just one small manifestation of the global credit bubble.
This is why I say we in America did not have “a subprime problem” we had a much larger credit bubble problem.
Europe may not have America’s subprime problem, but the lack of a subprime problem does not save Europe because it had its own, albeit slightly different, manifestations of the worldwide credit bubble including such things as a bubble in Spanish Real Estate and a bubble in periphery Sovereign Debt (e.g. Greece).
This is why it does not matter that Europe lacks America’s “subprime problem”. because America’s problem was really a credit bubble… and Europe shared that.
EU banks lent foolishly to peripheral nations and also non-EU nations (like Austrian banks to the Baltic States).
Regards
“The SubPrime problem derived from the fact that there were insufficient creditworthiness checks (in fact, most often, none) of the mortgagor prospect. If fact, there was fraudulence involved in the application paperwork – meaning no checks on the veracity of the numbers, no analysis of the prospect’s actual indebtedness, no nothing.”
You’re still missing the point. Subprime didn’t blow up America, chicanery disguised as “innovation” did. The overly lax and frequently intentionally criminal loan origination practices were merely a symptom of the real underlying disease. When the masters of finance on Wall Street discovered a way to decouple credit risk from lending in order to create virtually unlimited wealth for themselves the future was written. There would be a massive credit bubble unlike anything the world had ever seen. Structured credit products (cdo’s , clo’s, cds, etc.) unleashed a wave of ridiculously cheap and easy credit. These products turned consumer debt into tangible wealth for those on Wall Street but the only catch was they needed a constant stream of new debt and willing debtors to keep the money spigots open. This is where the option arm, Subprime and no money, no job ninja loans came in. When risk is decoupled from lending through financial engineering and a lender’s ability to make money depends on their ability to originate a loan instead of being paid back principle plus interest, it’s safe to say shoddy paperwork is an intentional trademark of a corrupt and unsustainable model (ponzi) not an aberration.
Europe is a victim of the same credit bubble unleashed by the same “innovators” as the US. What the banksters used as fuel for their debt bombs matters little, what does matter is Europe is as over leveraged (probably more) and indebted as the US and it happened the same way. Structured credit, derivatives, financial “innovation”.
Folks,
The U.S. “problem” is based in deregulatory legislation written largely by “investment bank” shills..some during Clinton, but by Senator Phil Gramm, on steroids under Bush-
Paulson, who went to SEC to deregulate “leverage” in 2003..
amount of collateral needed to BORROW against..
Mortgages becoming “securitized” was first step..because then said “investment banks” could USE mortgages to BORROW
against..reading Geisst’s, “Wall Street-A History”, we see
COLLUSION by said banks circa 1890’s, of the same sort experienced today..the question noone is answering is, “why
did banks WANT what they arranged, rated, knowing they were
bad $$$$?? It was to BORROW AGAINST..to then go monopolize
commodities and drive derivatives, which valued $880 Billion
2001 (Kevin Phillips) and $600 Trillion by 2007 (Robert Johnson-Senate Banking Committee).
The 6 U.S. “investment banks” who control 95% of derivatives
today were COLLUDING, selling commodities back and forth to one another to drive prices as Geisst documents historically
-this is before we get to “emerging markets” manipulations..
Yves has written the definitive book on CDS manipulations-derivatives, which is where the $$$$ reside if we follow it..but computer millisecond trades by “investment banks” and hedge funds colluding=monopoly is reality..”SPECULATION”
While excuses involve banks unawarenesses, reality is nothing was left to chance..
Europe features a much more controlled economic structure, but this does not mean it is structured to withstand attack
by rapacious capitalists attempting to undermine old school
economies, with “disaster capitalism”=chaos…
Jerry:
You are forgetting the influx of foreign currency in 2003 which made it possible for the creation of CDOs insured by CDS and rated AAA by Moodys and countered by naked CDS. This went along with people being able to draw down their mortgages after 2 years and taking the equity. Greenspan announced no increase in Fed Rates and they went to Wall Street to the next best thing . . . MBS/CDO. The rest is history.
With the greater influx of investors looking to invest, the greater the risk taken as rules and regulations were disregarded.
“…the EU does not pretend to be the US. It is an economic reality that is larger than the US (in numbers and therefore economic potential) with great promise – but it clearly remains “Work In Progress”. After all, it must still assimilate fully its extent over 26 very different cultures.”
Does it ever occur to you that many in the 26 cultures don’t want to be assimilated?
The EEC was a grand idea on integrating trade. The EU is just becoming another homogenising and lethal combination of elitism and total lack of vision.
Assimilation – What are you? A Borg?
So…you believe that not all people are created equal.
That they ought to be discriminated one from the other on some characteristic based on ethnicity, or religion, or state.
You ought to “think” again, or maybe it’s your heart is not in the right place….
Here’s some remedial reading for you:
http://www.usconstitution.net/const.html
A self-evident truth: that all people are created equal.
As with all “truths” denoted as “self-evident”, I think we can be fairly certain that it is not, in fact, actually true.
Makes for nice copy, though, don’t it? Euphemisms and delusions, two of the four basic food groups. What are the two others? God and evil. Although we could basically argue that the latter two follow naturally from the first two.
[It is preposterous, right? You see that? No one, anywhere, believes we are “equal” even if we could, anywhere, agree on a definition of what “equal” even means.]
You’re using US fedgov as evidence that not only does assimilation work, but that it means all people go into the meat grinder as equals?
Really?
On that note, I just have one thing to say to France. Please keep Bernard Henri Levy over there.
Also, to Britain. Please Niall Ferguson back.
Thanks!
Even if we’re all equal as human beings, doesn’t mean we all want to live under the same laws, or under the same government.
It doesn’t mean we all share the same history or the same identity.
Many of us in many different countries are willing to forego some of the utility of economic integration (even granting such supposed utility on its own terms), in order to preserve our particular sovereignty.
Globalist neoliberals can all go to hell as far as I’m concerned. I’d cheerfully give up a third of my potential lifetime earnings just to see their entire globalist project go to hell with them.
When the dust settles, are we going to end up with more or less countries worldwide?
“Assimilation – What are you? A Borg?”
I think the homogenizing influence here was always what you are calling “trade,” ie., being assimilated to the neoliberal economic creed. It was was baked in from the start.
Whereas, I think we can still get Chinese food in Chinatown.
Europe is more “cerebral” by virtue of “tertiary education”?
That’s a very telling conceit:
http://www.tonybates.ca/wp-content/uploads/International-degree-comparisons.jpg
Banks have never NOT been a part of politics in Italy. In my region, Monte dei Paschi has been an economic, political, and cultural force here since the 1400s. Political parties in Italy have “their” banks, which fund them (there is no visible system for private donations) and which discount retail interest rates for party members and favor party-supported projects.
In the modern era, Italian banks were key instruments of fascist colonialization, industrialization, armaments development and especially energy production which continues to this day (think ENI). After WWII, not only state entities but new privately-formed banks like Mediobanca gorged on the massive amount of aid money coming from the US.
Romano Prodi (ex-Goldman Sachs; another Italian GS alum, Mario Draghi, is now to be head of the ECB) was not only 2x prime minister (fiddling the books to bring Italy into the euro), but headed the European Commission for five years after that. Previously, however, he had directed IRI (Institute for Industrial Reconstruction), a state entity formed by Mussolini and charged at that time with depression-era TARP-type activities versus insolvent banks and factories, effectively nationalizing them; only Russia had a greater degree of state ownership than did Italy come to have. The IRI board was composed of representatives of various political parties, but at the helm was always a member of the DC (Democrazia Cristiana). Bank directors and other corporate boards would then be appointed by the IRI governing committee.
In the 1980s, however, Prodi’s IRI (which in 1980 had over half-a-million employees) took to selling-off the massive public patrimony of apartment buildings, pension schemes, energy companies, hotels, telephone companies, ironworks, factories, boatworks, supermarkets, toll highways, AND… banks!
So, yeah, finance really has quite little to do with politics and social structure here in Europe… ;-)))
Another on-again/off-again PM, Silvio Berlusconi had been Prodi’s rival since at least back in the day B. wanted to make a bid for SME, originally an energy group which had morphed into, among other things, the largest food-sector conglomerate in the country, coming up on the block for privatization. Prodi’s IRI was accused of offering the concern to a favored buyer (Carlo de Benedetti) at too low a price, rejecting the higher offer of a group including B.’s Fininvest; there followed many lawsuits, in the course of which, subsequently, Berlusconi was accused of bribing a judge. That trial began in 2000, and only wrapped up in 2008 with an absolvement in B’s case.
In the middle of this, too, was the extremely powerful Mediobanca, acting as a “consultant” to IRI, but with proprietary interests in the outcome. State-run/public and private banks and industries are all very heavily cross-invested, to the extent that, for practical purposes they form one TBTF vampire squid organism. Politicians, too, never seem to ‘fail’ but keep coming back at us in different rôles and un-elected positions (here one does not vote for an individual, but for a party, so it’s the parties who establish who actually gets the parliamentary seats, hence concomitant jobs, investments and patronage).
Later in the 1990s, SME finally did get broken up and parceled out to other larger, established firms, including Barilla, Nestlé, Unilever and the Benetton family.
Prodi’s legacy continued with criminal investigations regarding the sale of Cirio (another quondam part of SME), and Telecom Italia’s purchase of Telekom Serbia at an insanely elevated price (kickbacks to Prodi were alleged).
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The privatization of IMI [Istituto Mobiliare Italiano], another fascist-era public financing and industrial credit entity, was the subject of its own series of trials… involving ex-defense minister and B. pal Cesare Previti, who got an 11-year sentence (reduced to 7 after a first appeal, 6 after a second appeal) for corruption. IMI is now part of the San Paolo Group of banks.
Previti was also found guilty of corruption and sentenced to 18 months for involvement in a judicial proceeding which handed over majority control of the Mondadori publishing group over to Berlusconi (when the time came to investigate Berlusca, the statute of limitations had conveniently fallen).
—
The web of political and financial connections here is so dense and tangled, I don’t believe it’s possible for even the players concerned to truly understand the depth and breadth of them, and where their moves might lead. Then figure in the Mafia, the KGB, the Masons, the Vatican, international arms traffickers and the CIA, and you’ve really got some entertainment on your hands!
So there’s a difference between the bankers in Europe & the U.S.A.? They both loot, they both use smoke & mirrors, they both want their own brand of “a pound of flesh” for the privilege of allowing them to fleece the commoners, as well as control their respective governments, as well as insisting that the only way out is by using the “A” word in practice. Of course, the “A” word only pertains to the little people, not to the plutocracy. I say: “off with their collective heads”.
or in the words of my Favorite Roman Emperor,Caligula, “if they had but one neck”
yeah, right, kill then ma all.
You are singing that same old song of hatred of other people again, really? Bloody tedious, and useless. Got your blood lust up? And you s dare to call it “justice”. You creepy creepy person.
Did any such violent course of action a like what you so helpfully suggest ever work out well before? Please give some examples from history.
And if you say it went “well”, for precisely whom? Soldiers and killers, right? Might makes right? Once again, yet again….so you would have it.
Whose your progrom gonna be against this time?
“Banksters”, you say…yeah, right, we’ve heard that bloody & tedious song too often before, to begin to march to it now.
No surprise here.
The levered EFSF sputtering out is just the first domino to fall.
Next we’ll see banks refusing to go along with the “negotiated” 50% haircut on Greek debt.
Once that happens, the recapitalization plan becomes moot, and we’re right back to square one with no solution.
Rue,
This is likely true…but let’s be more aware of “how”, so we can legitimately call for “transparency, oversight, accountability”, rather than “disaster capitalism”=chaos..
..and yes, it is likely too late for that also..which means
the end of U.S., not Europe..
Knowing France quite well, I can confirm that Lafayette has it all wrong. Sarkozy is completely in the hands of the banksters, believe it or not. In fact most of the banks bosses come from the same special school called the ENA, which produces high level civil servants. So you have class mates on both side: political and banking. If you think that calls for much independence, I have a bridge I’d like to sell you (as Yves is wont to say at times).
Now, possibly, in the 19th century, there was more intellectuals in Europe than in the US, but that is not anymore the case. When I wanted to find a good biography of Beethoven, the best book I found was not by any contemporary German but by Maynard Solomon,an American academic. And for economy, who wrote like Tocqueville or Bastiat in the last 50 years in France? No one. One exception is Charles Gave, who writes in French but lives in Hong Kong.
Europe has it all wrong with its austerity programs. The only way is for the ECB to print “en masse”. Germans are foolish to refuse the only sensible way out of this mess.
“The only way is for the ECB to print “en masse”. Germans are foolish to refuse the only sensible way out of this mess.”
You don’t say! They’re not only foolish but delusional to the hilt. They act like this passenger flying in 1st class who hear the captain warn everyone there is a bomb in the coach section. The passenger think: “Pfeew! I’m good; I’m in 1st class!”
With the arrival of Declining Oil, where is Future Growth supposed to come from?
Sheer insanity rules the day.
My Mum often said ‘Greed is the root of all evil in this world’.
How right she was.
“Declining oil”?
Not “collusion amongst suppliers to restrict supply and thereby increase profit margins?”
Oh, right…how would YOU know?
Why the desperation, then, to frack everywhere and to suck on oil sands? Why are the Saudis spending multi-billions on wells two miles under the ocean?
Would you contend these are elaborate red herrings financed by George Soros?
To say nothing (to IGNORE) of Global Warming.
Declining oil is a GOOD thing, on the whole, as it can force a reduction in CO2 emissions whether greedy, short-sighted people want to or not.
I got as far as:
‘Angela Merkel has been warning for quite some time that Europe’s economic woes will take up to a decade to fix and that it is time for Europe to rethink its economic strategy after years of living “beyond its means”.’
What does that mean? What will take ten years to fix? WTF is gonna change in ten years from now? Architects can tell you how long it will take to build a bridge, surgeons can tell you how long it will take to remove your kidney and mountaineers will give you a fair indication of when they are likely to reach the summit, fair weather permitting. But how does any politician know what will happen, economically speaking, in TEN FECKING YEARS TIME!!!!! Early on in this crisis the number was 5 years; ‘It’s gonna be very tough for 5 years,’ they all said. Even then I read that as ‘we don’t really know what’s going to happen’! So what does ten years translate to?
Why oh why are we still having this conversation? It was funny for a while, now it’s just plain stupid. I’ve been away from this blog for a few weeks; I needed a break. I came back (and I wished I hadn’t) in the vain hope that someone, in all their wisdom, might have changed the record. It was fun watching you rearranging the sun loungers on the poop deck but I’m bored of you now.
GravelTongue: Here is the debt servicing numbers from the BIS:
http://www.bis.org/publ/work300.pdf?noframes=1
And here are cross-posting reference charts.
http://ragingdebate.com/groups/the-case-for-natural-money/discussions/december-2009-4-years-of-calling-the-global-financial-crisis
Ten years is correct based on these plans that neither yourself or I made but whether social unrest changes the outcomes are unknown.
Ten years is NOTHING, Junior.
Europe’s got all the time in the world.
I’ll say it again, so’s we’re clear.
Ten years ain’t no time, Junior: they got boys down in Angola, doin’ nine and ninety-nine.
Looking over real estate in Europe, it appears to me that a big part of the economy has been rocketing real estate prices. Living in West LA I am well versed in over priced real estate, but practically anyplace I look in Europe makes California look reasonable. Europe has the biggest real estate bubble I have ever seen and I am sure that is what has driven the economy there for the last 20 years. Where is all the bank leverage buried — my bet is real estate. This will be very painful to unwind.
If by “Europe” you mean Ireland, England (along with parts of Spain and Cyprus… basically anyplace touched by Anglo credit attitudes and Anglo vacation-home buyers), maybe. I don’t think Germany, France or Italy have experienced the same sort of bubble this time around.
I will say that RE prices are generally very high, but I might chalk that up to the general desirability of investing in something that is -literally- concrete. That is a huge cultural factor in Italy, along with parents’ outright purchasing of homes for offspring. That along with high down-payments for those who do take out loans and generally low mobility (most people change house very infrequently) hasn’t granted much space to bubbly home financing.
I do think CRE could be a problem here… I see quite enough empty retail shops, warehouses and factory spaces, but in recent years I’ve also been seeing a lot of cranes building new, un-needed space.
Funny how we thought we were so 21st century and civilized until we had to take a hard look at our financial institutions and discovered it was the wild wild west. There are no mechanisms in our modern world to either enforce responsible banking or review and adjust “business models.” And every good comment is vacuous when anyone else can take the stand and claim that deregulation leads to job creation. One false claim can be a devastating thing to a loosely connected set of institutions without a sense of moral direction. We need some serious talk about achieving and maintaining universal well-being, leading, in turn, to serious laws with sharp teeth to enforce banking and finance to achieve it. Whether or not we print up money or just go all carnival and take on bizarre levels of leveraged debt will not make the necessary difference. The biggest question we now face is what do we use to replace the old growth model. Which is the same as asking how we will pay off the big debt. Which is getting close to realizing that debt has become an illogical concept. So the next question is how to we balance the books? I think well-being itself balances the books. All we need are laws to make money circulate equitably. Gee, that should be easy.
We need some serious talk about achieving and maintaining universal well-being
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It starts from early childhood, preschool, kindergarten, if not earlier when kids are not taught to pool all their lunches together and share them. They just eat the lunches they bring.
We don’t share the grades we get. Instead, my grades are mine and your grades are yours. Those who receive better grades are singled out to make others look bad. It’s always individual grades, not much group grades. The feeling of well being is not universal nor universally shared. Eventually, the whole thing generates into a few chosen guys/gals being selected to receive this or that award for achievements that should properly be credited universally among several genenations of humanity.
Everywhere you turn, you are subtly being brainwashed into not sharing anything at all, not creating any universal well-being. There is no non-discriminating, as they would say in Zen.
Hey, I wrote this comment. It’s my opinion. I am not sharing.
“I’m not sharing”..
TOO LATE..some of us, who have lived (and taught) in multiple cultures, already have come to similar conclusion.
I think you skipped the part about the nut allergies.
Hey MLTPB,
You are sharing your comment so what is this not sharing. And my sharing in return is to repeat a postulate that I have made in comments here before about sharing.
One should not be able to leave grade school until you have become one with the concept of sharing.
susan,
while I agree with you, I believe we are in revolutionary
financial sector (disaster capitalism) reality..there are no longer “rules” to apply..
law, the basis of U.S. society, has already been usurped by
“investment banks”, by destruction of real property value..
Property being the basis of U.S. legal system..”individual rights” notwithstanding..
You mean notwithstanding the individual’s right to property?
I think you’re being incoherent: the right to property IS ITSELF an “individual right”, and IS NOT in conflict with them.
An “individual’s right to property” is still a man-made concept, subject to change. Look into the origin of the term “indian giver”.
The umpteenth solution to the eurocrisis bites the dust. Who could have predicted? I mean just because none of the core problems was addressed: lack of a debt and fiscal union, mercantilist trade policies, an ineffective ECB, bankster finance, and a corrupt kleptocratic political class. Nor were any of the elements present that must come with any real plan: money, not promises, not schemes, but money on the table, lots of it, and disbursed immediately. Instead we got more smoke and mirrors and handfulls of pixie dust. It goosed markets for a week or two, about the only thing I can see as a reason for this exercise. Then the reality of the deteriorating fundamentals begins to shine through all the obfuscating mists and the con becomes visible to everyone, again.
People seem pretty prosperous in Europe, nonetheless.
The Titanic was a pretty good ship before it sank. What’s your point?
“it appears to me that a big part of the economy has been rocketing real estate prices.”
“Living in West LA I am well versed in over priced real estate, but practically anyplace I look in Europe makes California look reasonable. ”
Price are normally jigher in Europe because of the lack of psace in USA the price of land is very cheap, except maybe in NYC and HAwaii.
It’s quite normal to have real estate price in Western Europe at least like in Hawaii.
Ohhh, it is they do not make anymore of that type of real estate argument. How many times do we hear that. First they do not make any more real estate in Japan. Then they are not making any more beach property or property in California and now it is justification for property in Europe. Ahhh, what I am talking about is even properties in the middle of no where in France, Spain or etc where they want an outrageous price. Like Ireland had over 8 million people before the potato famine and now it has less than 6 million so should property be below the 1860’s price. This is what it comes down to — math. If you require a sane down payment and certain debt to income ratios you would not be this out of whack. That is why European banks are 40 to 1 debt to equity ratios and quaranteed to blow up.
Location, location, location. As ever, with real estate, is the key value.
In the USA, in most cities the fanciest mansions, the best neighborhoods, are usually found on the outskirts – for NYC, isn’t that Connecticut or the Hamptons? – and the relatively poorer zones are found in the “inner cities”.
Whilst in Europe, the best properties and neighborhoods seem to be always always always at the heart of the old town, with the new tower blocks housing the relatively poor on the outskirts.
Perhaps Europeans are just more “social” than Americans. They can seem to be more cultured, sometimes. Stuffier than most Americans, too, at least in my experience of them.
Or maybe it’s all the wars that have recently rolled through European lands, in marked contrast to the lands of the USA, which causes the differences which exist between their real estate markets.
aet — really I can not understand a word you said. Having lived in NYC and LA as well as Australia, Canada and Europe several times I believe I an understanding of people in Europe. What I am saying it has nothing to do with location. Just like California, every place you look people want a high price for their real estate in Europe. It is a matter of mathematics on price. Price is driven by wealth and income or it is a bubble. Either you are saying that the average European is either (1) at least as twice as wealthy as a US citizen or (2) makes twice the income of a US citizen or Europe is in twice the property bubble of the US. Now seeing that European banks are far more leveraged than US banks and they have to lend the money to someone I lean towards a much bigger property bubble in Europe than here. But hey what do I know.
The household (thus mortgage)credit bubble was far bigger in the Anglosphere than in Europe. Canada is still in a bubble. Australia’s is under heavy pressure:
http://www.finfacts.ie/irishfinancenews/article_1019787.shtml
“Like Ireland had over 8 million people before the potato famine and now it has less than 6 million so should property be below the 1860′s price.”
It wasn’t a famine, the English exported the grains etc. that Ireland produced starving the Irish. The native Irish were not allowed to own land.
Your basic point about property values is valid, but your example is completely wrong. Who knows, when Goldman Sucks and their fellow banks own the world maybe they will starve countries that do not convert to their customs and religion (St Milton the Friedmanite).
éirígí
That’s already the case: ‘wayward’ countries are continually punished by externally-imposed debts via the IMF and World Bank. See Argentina, Haiti, etc.
The first thing any colonizer does to an indigenous population is impose a virtually-unpayable debt in a foreign coin.
In the case of Ireland, the “foreign coin” was wheat, a tradeable commodity with long-term stocking value extracted by the English, leaving the indigenous and disenfranchised population to rely, solely, tragically, on the more perishable (non-transferrable) potato crop.
Word missing?
Should be “reduces the chances” or something similar?
you start to believe the propaganda from the telegraph too much. Please realize they have a political agenda: UK out of the EU. So any negative news about the EU and eurozone gets recycled endlessly, until the British people start to believe they really are better off outside the EU.
That’s all their free choice ofcourse. But I find it sad to see that other English speaking sites simply copy and paste the anti EU propaganda from euroskeptic sites.
Also note that the eurozone is an internal market, with many similarities to the USA. So claims about beggar they neighbour policies from Germany are as weird as claims about beggar they neighbour policies from California. Following the logic of the EU haters, applied to the USA, California should leave the USA because they are too strong for the USA! Can’t you see how ridiculous these claims are? Again, you are falling into the trap of the nationalist propaganda of the telegraph. Please stop singling out individual countries, or otherwise please do the same with the USA. I am sure there are plenty of states in the US who are in deep trouble. And one more thing about countries like Spain: the euroskeptics like to show unemployment figures of Spain as evidence of the supposed failure ot the euro. Let me tell you this: unemployment before the euro was equally high, in 1995 Spain had unemployment of 25%. So this had nothing to do with the euro. I would say the only exception is Greece: Greece incl Cyprus is such a dysfunctional country, that lied it’s way into the eurozone, they should never have been allowed to the eurozone. They bankrupted themselves abusing cheap euro money and have no way whatsoever to outgrow their debts. But as they represent 2% of EU GDP, just forget about Greece, they are irrelevant for the larger picture.
And if all is so bad in the eurozone, please answer this question for me: the eurozone does not have an external trade deficit, the UK and USA have, the most clear indication that the eurozone as a whole is on a sustainable path, but the the UK and USA are not. How are the UK and USA going to solve this?
Your comparison between the US and the EU is incorrect. No one would talk about CA that way because it is not a sovereign nation. The US has a strong central government with political representation and a fiscal union. The EU has neither of these. This makes all the difference in our varying economic systems.
BTW I don’t think anyone in the UK needs any propaganda to think “UK out of EU” is a good idea. The leaders of the nations in the EU are doing a bang up job of convincing people themselves.
your view of the EU is incorrect. The EU is a supranational body with institutions like the European parliament or European court.
The EU nations lost sovereignty on many policies a long time ago. Admittedly, the EU is not as integrated as the USA but I have no doubt they will continue on the path of further integration.
The only country that seems to have a majority that wants to leave the EU is the UK.
What you read on the English speaking web about the EU and eurozone is mostly the Anglosaxon euroskeptic vision, if you could read media in other European languages you would get a different view.
As an American still learning “proper” English from my UK colleagues, that is an interesting perspective and one that I hadn’t considered.
I can recommend the English section of derspiegel:
http://www.spiegel.de/international/
They have good reporting on the euro crisis, without the hysteria you read on English speaking blogs.
Der Spiegel!?
It’s about one of the worst newspapers when it comes to reporting the euro mess.
No wonder your understanding of the situation is completely lacking.
The Europeans have it more together than many North American commentators know. Since many such may have never been to Europe, much less speak more than one of their languages, they must necessarily rely on second-hand sources to gain their impressions of the place.
In light of that, I much prefer to read “European” commentators, that is, from the fully-committed Euro member States – I also suppose the Brits to have always been rather too wishy-washy, stand-offish and reluctant, about Europe and the Euro – although they are much much less so now than at times past – for me to be fully comfortable with treating their comments on the Euro and its implications as being worthwhile at all to consider.
I’d rather hear the report of a party from somebody actually at the party and in the thick of it, than from somebody from outside the venue, looking in on it through a perhaps dusty or distorted window-glass.
What the situation the West is experiencing reminds me the prelude of Great Depression and it’s post child of WWII. One commentator stated that “The real economic culprit here was depression, 30% unemployment, and the–ahem–austerity policies of the “hunger chancellor” Heinrich Brüning.” That refreshes my mind about the history of US and President Hebert Hoover’s tied fiscal policy in the beginning of Great Depression. Is Washington DC going to that direction soon? Will the next US president do what Hoover did 80 years ago again? What’s the role of BRICs, particularly the fast rising great power of China? I sincerely hope my comparisons are completely wrong this time. Between war and peace, I choose the late.
Apart from a total social blow out and revolt, what will force this crisis to be resolved in less than 20 years?
What I don’t understand is how every nation can be an insolvent debtor. Someone has to be the creditor or it just don’t make sense. I suspect the amorphous “future” is the creditor.
From what I understand the creditors are mostly German and French banks who are supposed to take the “voluntary” haircut. Though of course if they do none of those bankers are going to have to suffer from the austerity measure that result.
Yes, indeed, the creditor is “the future”.
“The future” however, has twice as many mouths to feed as does the present.
That sad fact notwithstanding, virtually all money is a claim on future real extraction of concrete resources.
Interest-based money systems intrinsically compel the nominal amount of money to increase exponentially. The claims on future physical resources approach infinity, from all quarters.
Previous incarnations of interest-based money systems appeared successful only to the extent that they could cheat by exerting claims on resources previously not “owned” or accounted for in the system: land conquests, enslavement, oil extraction, etc. brought new realms of resources and energy into existing systems; now the integrated global system has no longer any external inputs with which to cheat… China has been the last frontier on that score.
EU with common fiat currency EURO is another ponzi scheme. It grows on debt creation and counting on the continued growth path. Once the growth stalls it is over for the obvious reason it can’t issue more debt. US dollar is already the world reserve currency derived from the same scheme but US has the credibility as the world police in military matters. US still has the military bases in Europe and UK. EURO will fail because European Union is simply not America. Say if similar East/South East Asian union was created, the new currency ASIA will fare better and has a chance of survival because it will be not be a debt creation scheme but practical and real. All the world’s money end up in East Asia, they best create new currency out of it.
Who play “the beggar-thy-neighbor” is clearly the USA vs EU(*) ..finance is the ‘weapon of mass destruction’ that the government of the USA (and his “friend”) use to take down Euro. Euro is born with evident and suitable flaws and for what reason? the goal is just what we can see (only) today. It’s simple and evident, just connect the dots.
(*)= and France and Germany try that VS Italy, ATM. They (finance at) all want to buy Italy for bargain prices.
I’m sorry no one seem to notice my previous post..
I want to go on: no one seem to calculate the possibility that this great crisis is part of a strategy…
Goal? Euro. Euro need to go down..
Reason? I find two possibility:
1) USA are in BIG crisis (just for simplified) and (one of) the last chance is that the petrodollar (nearly THE reason behind the USA’s wealth) remain the only one “reasonable” world’s reserve (in this point of view, UE is an enemy, and not only for the Euro, clearly).
2) Aside to take away (rob!) Italy from is “third place” economy in EU and disabling his strong geo-politic position (and so, to steal his remain semi-public and strategic industry, the FIRST GOAL of this mess VS Italy) is to reach a point that Euro politics can “try” to push (over people) for an “United States of Europe” (and what are the last words of Trichet?) and so any state in EU need to give away the last piece of sovranity (and people need to accept this, period). Why this reason can be good for USA that normally play with a “divide et impera” strategy? Hmm, one reason can be: is more simply to play with only one big partner in “NATO” than too many other nations.. especially if this is leaded by OUR friends.. And so: we can have USA-USE VS rest of the World.
In any case, for me both reasons made me homeless in few months..
Just in case anyone thinks otherwise the US is not going to be the buyer of last resort unless either the rich go on a massive spending spree or barring a few small bailouts here the USG does.
The American consumer is over-leveraged and unemployed as has no money.
Really everyone needs to de-leverage, write off or default but to do that, the era of tolerating net exporters must end and I can’t see any of the countries whose entire economic foundation depends one someone buying their surplus production going along with it.
With the number of affluent Western Consumers in decline and the lack of good institutions in developing nations, doubling down on what they are doing is about all they can think to do. After all who is going to go before the board and say “well exporting jobs cut wages at home and between that and the birth dearth and such no one has extra cash, we need to shrink”
Not gonna happen.
“The problem is that once you understand the technicalities behind what they have come up with you come to realise that real economic growth is the only thing that actually matters.”
I have a problem with this. Growth is *not* the “only thing that matters”. Distribution matters. I would argue that distribution matters even more than growth. It pains me that people do not see that redistribution could ameliorate many of the problems discussed. How about creditors taking losses? How about putting more money in the hands of the impoverished (because they will spend it and increase ag demand)?
One word — you must be a communist!
Netherlands: my sources tell me the overall economy is good to very good, unemployment is 4.3% (Nos nieuws) exports and tourism are robust and the coffee-shops doing great.
Proost!
No surprise that the author continues to propagate the LIE that the Euro-countries are undertaking austerity, when in fact they continue to increase spending merely at a lower rate while doing nothing to alleviate growth-killing regulations. The only country to even come close to austerity was Ireland and it is now posting decent growth.
Increasing aggregate demand is not good for the economy and is downright idiotic when the Euro-inflation rate is stuck above target as it has been for about 50 of the last 60 months.
Are European sovereigns any more “crazy” than the GSE’s levered 80:1? Why so many people disparaging European leaders now when powerful private interests were able to so completely subvert simple prudence and clear thinking that there was widespread, enthusiastic agreement amongst the “experts” in and out of government everywhere that all this was safe? We might want to keep that in mind when contemplating any new system. How did anyone come to believe in essentially “permanent stability” when just looking around said the opposite?
Seems to me we need to identify which people who are owed money can do without and match them with people who owe money but can’t pay. Some mechanism that extinguishes debt up the chain in a manner similar to a progressive tax – you take the hit based on ability to take the hit. It’s the people with money who are going to have to cough up for this or it doesn’t get fixed. That means not just the top 2% or 5%. But at least the top 30%.
That was a 30-year blowout. Time to pay some of it back, no?
“By Delusional Economics, who is horrified at the state of economic commentary in Australia and is determined to cleanse the daily flow of vested interests propaganda to produce a balanced counterpoint. Cross posted from MacroBusiness”
—
hahas! … good luck with that! … other than comments and reports of Stephen Long:
http://www.abc.net.au/profiles/content/s1889083.htm?site=news
And the occasional flash of quasi-honest insight from James Shugg:
http://topics.bloomberg.com/james-shugg/
And the occasional comment segment from Steve Keene (if they even dare to have someone on who actually knows what they’re talking about, on the MSM lie-stream), you can pretty much forget about any sensible, informed, realistic, or non-BS based econ/fin reporting in the MSM in Australia.
ABC’s Lateline Business is phoney outrageous shilling and untruth plus rank utter BS.
ABC’s Business Today, same crap, slightly different flavour, and graphics, and faces.
The only ones consistently doing any serious MSM reporting on the global financial catastrophe is probably the ABC 730 Report (a current affairs show), and mostly because of the Leight Sales and Stephen Long combination.
http://www.abc.net.au/7.30/
The rest of the MSM Financial and economics ‘media’ in Australia ought to be told to get a real job, or at least do something they are good at.
Oh yeah, these guys are on the 730 Report as well:
http://www.abc.net.au/7.30/content/2011/s3344698.htm
Brilliant!