Category Archives: Globalization

Will Slovenia Be the Next Victim of German Politics?

The IMF says that Slovenia will need to issue €3 billion in bonds this year. The country may be forced to seek painful assistance from the Troika. Will Germany be the heavy as it was with Cyprus?

Barack Obama’s Economic Legacy: The Billionaire-Boosting Big Four on His Wish List

By Gaius Publius. Follow him on Twitter @Gaius_Publius. Cross posted from AmericaBlog

I’ve been writing about Obama’s Legacy Tour (sorry, his second term) from time to time without focusing on the legacy itself. So this post will lay down a marker — in brief, what’s on Obama’s economic legacy list, and what will he get if he succeeds?

Wolf Richter: The Stunning Differences In European Costs Of Labor – Or Why “Competitiveness” Is A Beggar-Thy-Neighbor Strategy

By Wolf Richter, San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience. Cross posted from Testosterone Pit.

The ominous term, “competitiveness” has been bandied about as the real issue, the one that causes European countries, in particular some of those stuck in the Eurozone, to sink ever deeper into their fiasco. To fix that issue, “structural reforms,” or austerity, have been invoked regardless of how much blood might stain the streets. And a core element of these structural reforms is bringing down the cost of labor. But productivity, infrastructure, transportation costs, corruption, training and education, etc. all figure prominently into this equation. Cost of labor is not the only factor.

Free Trade and Unrestricted Capital Flow: How Billionaires Get Rich and Destroy the Rest of Us

Yves here. This post highlights an issue that gets far too little attention: how the “free trade” agenda has been used to promote a capital mobility agenda, and why that works to the detriment of ordinary citizens. It focuses on the real economy side of the free-flowing capital experiment; we’ll discuss next week how the Trans-Pacific Partnership is an alarming advance in this process of grinding down what is left of the middle class to benefit of the rich.

Will Cyprus Be Contained? (Updated)

In March 2007, Fed chairman Ben Bernanke said that he thought the impact of losses on subprime mortgages was likely to be contained. It took five months for events to start proving him wrong. August 2007 marked the onset of the first acute phase of the global financial crisis, when the asset backed commercial paper market seized up.

Last week, in a press conference, Bernanke indicated that he thought the likelihood of the crisis in Cyprus having larger ramifications was limited, and avoided using the “c” word. But the message was similar to that of March 2007.

So are we likely to see the sort of delay between the assessment and the onset of trouble, as we did in 2007, or is Cyprus a nothingburger, as the Troika and many investors contend?

While Cyprus Sinks, France and Slovenia Start to Founder

The official sick man list of Europe has long been the PIIGS, or if you prefer, the GIPSI: Greece, Ireland, Spain, Italy, Portugal. As the Cyprus restructuring drama has moved into high gear, it’s obscured news of a serious deterioration in the French economy and the weakened condition of Slovenia, which has a population and GDP roughly 1.5 times as large as that of Cyprus.

Pettis: China and the History of US Growth Models

Yves here. This is an important piece, in that it bucks conventional wisdom about growth and economic development in several ways.

Wolf Richter: A Revolt Against Corporate Welfare Programs For Multinationals In France

“Paradox” is what the New York Times called France’s ability to attract more foreign investment than any country other than China and the US. A paradox because it shouldn’t. Investors should be scared off by labor laws, tax rates, the cost of labor, and mud-wrestling bouts over nationalizing some industrial plants. But turns out, multinational corporations pay practically no income taxes in France. And it has reached the boiling point.

An Open Letter to David Cameron, the Prime Minister of the United Kingdom of Great Britain and Northern Ireland, from Mrs N Turner

NC readers can find some of the background on Nikki Turner’s story here. 18 months later, five years after her own business was destroyed, and a full decade after the very beginning of the HBOS fraud story, she is still waiting for the police investigation to lead to a prosecution. Mrs Turner’s open letter was […]

NC’s Guess About a Sean Quinn-GT Group Connection Just Got a Bit More Solid (But a Bit More Ho-Hum, Too)

More about a possible link between bankrupt Irish ex-billionaire Sean Quinn’s asset hiding activities and the Taylor family’s company registration businesses (GT Group and successors)

At Least Half of the 21,500 Companies Revealed by the Guardian/ICIJ Offshore Investigation Have Connections With Rogue Agent GT Group

The GT Global sham company network may be far bigger than you ever imagined.

Hugh Hendry: ‘We’re in the death spiral of mercantilism’

You have to give a fund manager points for admitting to having a “history of contentious posturing.” Hugh You have to give a fund manager points for admitting to having a “history of contentious posturing.” Hugh Hendry’s also a reformed gold bug, which shows an unusual flexibility of thinking (once people join the gold cult, they seldom leave). Even if you don’t necessarily agree, his talk will serve as a useful grist for thought (hat tip Ian Fraser). Hendry discusses the end of an broadly adopted national strategy, mercantilism, and what he sees as the implications.

The Greek Resistance

This Aljazeera video seeks to understand how Germans and Greeks view each other in light of the way the Trokia is breaking Greece as an example to other periphery countries (yes, Greece would have had adjustment problems regardless, but they are being made far worse by the measures taken to avoid exposing the insolvency of French and German banks). It covers how the crisis has rekindled lingering hostilities. It also sheds new light on the pre-crisis economic relationship between Germany and Greece, including corrupt deals between the Greek government and German arms-makers. It also treats austerian thinking with more dignity than it deserves, but that is a secondary theme of this show.