EUCOM Economic Analysis - Part I

[Surferbeetle]

At some point, perhaps sooner than later, the average user runs a cost estimate which examines the costs of a renewable set-up sufficient to power their needs versus the costs of continued purchases from the grid...cost effectiveness wins and perhaps the gird and all it's associated infrastructure & costs is downscoped in size and changes focus to primarily supporting heavy users.

Perhaps similar to the evolution of mainframes -> pc's -> smartphones

[Fuchs]

Germany has about 90% scattered light and 10% direct sun radiation on average. Only photovoltaic and direct solarthermal power works well, the reflection-requiring solar techs don't work well. The sun's radiation in Germany is overall unsatisfactory for a cost-efficient energy supply in all but single/two-family houses warm water supply and isolated installation electrical power supply. Northern Germany is even substantially worse than Southern in this regard.

Wind power is only available at some times, and only so in substantial amounts in the north.

Geothermal power is only available in probably practical quality in the very few former volcanic areas (Eifel, for example).

Water power has already been maxed out with known technologies. You really need to go for tidal or wave energy North Sea installations to find any major growth potential.

Waste burning (including waste from garbage and water filtration) is already being used, but its potential is limited to about one site per community.



This leaves energy efficiency stuff (further improved internal combustion engines, improved building insulation) and investment in solar power in more Southern countries (I'd look especially at Spain, since it has semi-arid regions) as the huge potentials for improvement.

I don't see how communities or households could seriously go down an energy autarky route.



By the way; the bio-energy wave that has hit the U.S. about a year ago; it's bullocks. We looked at that stuff long ago, and for a while.
In Germany, only the agrarian lobby still pretends to buy into this stuff, while environmentalists and the non-agrarian ministries are set against it. The pro arguments are largely con tricks.

[Surferbeetle]

Energy supply is half of the equation, the other half is energy draw...$/m2...efficiency being the holy grail on both sides.

As you point out the cost/benefit calculation is complex, will vary by location, includes such things as climate variations, seasonal variations, insulative properties of building materials, light source types, motor efficiencies, smart appliances, tax rates, property age, payback periods, cost of alternatives, etc, etc.

Anecdotal observations from my neck of the woods include friends (and companies) making good consulting fees from enacting cost savings/energy efficiency programs for a variety of organizations, as well as a sudden 'wave' of photovoltaic installations/retrofit's in my neighborhood.

The grid will not change tomorrow, however i do think about how we went from gaslight (~1524 in the West) to electrical light (~1880) over the course of three hundred some years and then made a jump from mainframes to smartphones in about fifty years...both were large conceptual jumps...when thinking about changes to the grid

[Surferbeetle]

Merkel se prpare une ventuelle victoire de Hollande
Le Monde.fr avec Reuters | 23.03.2012 20h08 Mis jour le 23.03.2012 20h12

Malgr son soutien explicite la rlection de Nicolas Sarkozy, Angela Merkel se prpare discrtement la possibilit de voir Franois Hollande accder la prsidence franaise le 6 mai. La chancelire allemande est intervenue de fait dans la campagne lectorale en France en apportant son soutien "sur tous les plans" au chef de l'Etat sortant le 6 fvrier et en refusant de rencontrer son adversaire socialiste.

Merkels Party Wins Saarland State in Show of Crisis Backing, by Brian Parkin and Tony Czuczka - Mar 25, 2012 1:37 PM MT, Bloomberg News

Merkels Christian Democratic Union took 35.2 percent in todays election to retain power in Saarland, a former coal-and- steel state that borders France and Luxembourg, preliminary results showed. The Social Democrats, the main opposition party nationally, had 30.6 percent, paving the way for a so-called grand coalition with the CDU as senior partner.

Saarland, which represented 1.2 percent of German gross domestic product in 2010, the smallest proportion of any state except the city of Bremen, held elections more than two years early after Annegret Kramp-Karrenbauer, the CDU state premier, dumped the Free Democratic Party in January out of a government that also comprised the Greens. The FDP, Merkels coalition partner at national level, got 1.2 percent in the election, well below the 5 percent threshold needed to win assembly seats.

The anti-capitalist Left Party led by Oskar Lafontaine took 16.1 percent and the Greens 5 percent. The Pirate Party, which campaigns for open internet access, had 7.4 percent, allowing it to enter a second regional parliament after winning seats last year in Berlins state assembly. While the projections showed the Social Democrats and Left with enough seats to form a coalition, Heiko Maas, the SPD state leader, ruled out such an alliance in favor of a coalition with Kramp-Karrenbauer.

Saarland sets the stage for two more state elections this year that offer the latest indication of voter sentiment in Europes largest economy. Next up is Schleswig-Holstein on May 6, then North Rhine-Westphalia, Germanys most populous state, which votes on May 13 after the government collapsed this month.

With almost a quarter of Germanys 82 million people, North Rhine-Westphalia is a bellwether for federal political fortunes. The SPD took the state from Merkels party in May 2010 in a result Merkel blamed on agreeing to a first bailout for Greece days earlier. The result deprived her of a majority in the national upper house, where states are represented, and presaged defeats or a loss of support for her coalition parties in all seven state votes in 2011.

Merkel set to allow firewall to rise, by Peter Spiegel in Saariskel, Finland, Ralph Atkins in Frankfurt and Quentin Peel in Berlin, March 25, 2012 6:47 pm, Financial Times, www.ft.com

Germany is poised to bow to international pressure and allow a temporary increase in the eurozones financial firewall this week, to prevent the crisis in the regions periphery spreading to other member states.
Officials in Berlin signalled on Sunday that the government would allow funds to be boosted as a way of calming financial market pressures.

Senior European officials said a consensus appeared to be building behind Mr Rehns mid-range option, which would allow the 440bn European Financial Stability Facility, the current temporary rescue fund, to keep running when a new permanent 500bn fund, called the European Stability Mechanism, starts up in the middle of this year.

That would boost the rescue systems overall firepower to 940bn, although with about 200bn committed to Greek, Irish and Portuguese bailouts, the total available would be 740bn.

Rumors of a LTRO for Danish Banks?

Danish Private Debt Burden Triggers Central Bank Warning, By Frances Schwartzkopff - Mar 22, 2012 8:31 AM MT, Bloomberg News

Denmarks central bank is stepping up its focus on the countrys record private debt load to ensure households dont suffer losses when interest rates start to rise, Governor Nils Bernstein said.

People who are highly indebted are more vulnerable to interest rates and can be hit hard by changes, Bernstein said in an interview in Copenhagen yesterday. The bank is now conducting a review of the risks, he said.

Households in the AAA rated nation increased their debt burdens to 310 percent of disposable incomes in 2010, the worlds highest ratio, according to Exane BNP Paribas. While the debt is backed by the worlds second-highest pension savings rate after the Netherlands, those assets are locked shut, Bernstein said. The central bank has argued that failure to address the risks may jeopardize the stability of Denmarks $470 billion mortgage bond market.

The goal is to analyze how vulnerable households are to changes in the interest rate, Bernstein said. There are certainly some who are vulnerable. What we want to know is how widespread it is and how vulnerable they are.

Denmarks central bank uses interest rates to maintain the krones peg to the euro. Bernstein lowered the benchmark lending rate to 0.7 percent in December after investors fleeing the euro regions debt crisis turned to the Nordic country, threatening to strengthen the Danish currency.

[Surferbeetle]

Piraten im Saarland, Kapern und ein wenig Kaspern, Von MARIE KATHARINA WAGNER, 25.03.2012, FAZ

Seit Anfang des Jahres befindet sich die Piratenpartei in einer von Umfragen befeuerten Vorwahleuphorie. So ging die Partei fest von ihrem Einzug in den saarlndischen Landtag aus manche glaubten noch am Sonntagnachmittag, der Landesverband werde sogar das Ergebnis der Berliner Piraten von 8,9 Prozent bertreffen. Bedenkt man die miserable Ausgangslage des Saar-Landesverbands, ist das Ergebnis von 7,4 Prozent allerdings mindestens so spektakulr wie das der Berliner vom September. Entsprechend respektvoll kommentierten die Berliner Abgeordneten die ersten Hochrechnungen: Willkommen im Fnf-Parteien-System, twitterte Fabio Reinhardt. Ein anderer Pirat schrieb: Take this, etablierte Parteienlandschaft!

Darum begann der Wahlkampf im Saarland auch mit einer Notlage. Noch Ende Januar bestand die Partei hier allenfalls aus Rudimenten: Damals gab es 200 Mitglieder, kein Programm und einen einzigen Kreisverband in sieben Landkreisen. Heute sind es knapp 400 Mitglieder und sechs Kreisverbnde, seit zwei Wochen gibt es auch ein Programm. Darin fordert die Partei ein Wahlrecht vom 16. Lebensjahr an ein Thema, das in der Bundespartei hoch umstritten ist , Transparenz im Staatswesen und fr die Wirtschaftspolitik das Motto: Erst der Mensch, dann der Markt. Dass sie die Whler allein mit ihrem Programm berzeugt hat, glaubt die Partei selbst nicht. An den Infostnden sei vor allem die Frustration mit den herrschenden Verhltnissen ein Thema gewesen, erzhlen die Piraten von denen viele aus ebendiesem Grund in die Partei eingetreten sind.

ELECCIONES ANDALUZAS 2012 La izquierda vence en Andaluca, JOS MANUEL ROMERO Madrid 25 MAR 2012 - 23:38 CET, EL PAS

El PSOE cosech este domingo dos premios maysculos para recuperar su autoestima: los resultados de Andaluca le permiten mantener el Gobierno con el apoyo de IU y la victoria en Asturias, aunque insuficiente, abre la puerta a que su candidato, Javier Fernndez, sea investido presidente si el partido de Francisco lvarez-Cascos (segundo ms votado) no logra el apoyo del Partido Popular.

Tres meses despus del triunfo incontestable del partido de Mariano Rajoy en las elecciones generales, las urnas le han sido esquivas en Andaluca, el gran objetivo del PP para consolidar su hegemona institucional en toda Espaa. La candidatura de Javier Arenas (50 diputados, 1.567.202 votos, el 40,66% del total) ha perdido cinco puntos de apoyo y casi medio milln de votos respecto a los resultados del pasado 20 de noviembre. El PSOE gan tres puntos porcentuales respecto a las elecciones generales y se mantuvo muy cerca del PP (47 escaos, 1.523.465 votos con el 39,52% de los sufragios) para mantener intacta su opcin de seguir en el poder.

Los socialistas se enfrentaban este domingo a una amenaza histrica: la prdida del Gobierno en Andaluca. Y superaron la prueba ms exigente con un resultado que les permitir mandar otros cuatro aos con el apoyo necesario de IU.

Overnight Asia-Pacific Indexes at Bloomberg

Los Lobos, The Giving Tree on YouTube

[Firn]

„Das Vertrauen in die EZB geht verloren“

Jürgen Stark war von Juni 2006 bis ende 2011 Chefvolkswirt der Europäischen Zentralbank (EZB).

Glauben Sie denn, dass diese Ausstiegsklausel eine Bank wahrnimmt?

Ich weiß es nicht. Die Europäische Zentralbank hat ja auch aktiv für die Teilnahme an dieser Operation geworben. Es sei kein Stigma für die Banken, sich mit dem günstigen Geld zu versorgen.

Ist das nicht eine Subventionierung des Finanzsektors?

Es ist die Ermöglichung sogenannter Carry Trades. Das bedeutet, die Banken erhalten Kredit zu einem Zins von einem Prozent und können in einigen Ländern Staatspapiere kaufen, die mit viereinhalb bis fünf Prozent verzinst werden.

Im Klartext: Das ist der todsichere Profit, eine Einladung an die Banken zum Geldverdienen.

Ja natürlich, sie könnten aber auch die Realwirtschaft finanzieren. Es schreibt ihnen keiner vor, wie sie das Geld verwenden.

Sind wir in eine Staatsfinanzierung eingestiegen?

Wir befinden uns in einem Teufelskreis.

I think it is highly unusual to hear such words from an European/German bureaucrat who served not long ago in such a key position of the ECB.

Wie versprochen, so gebrochen

As promised, broken.

Berlin Die Euro-Rettungspolitik von Bundeskanzlerin Angela Merkel (CDU) schürt Unmut in ihrer eigenen Koalition. Unter den Abgeordneten ist die Stimmung angesichts des Dauerzoffs zwischen Union und FDP über diverse Themen seit Monaten angekratzt. Da ist es umso problematischer, wenn wichtige Euro-Entscheidungen anstehen, die wieder einmal den Grundkonsens verletzen, einmal getroffene Beschlüsse nicht wieder in Frage zu stellen. Exakt das passiert an diesem Freitag, wenn die Euro-Finanzminister in Kopenhagen die Weichen für eine Ausdehnung des Euro-Rettungsschirms stellen werden.

The Handelsblatt clearly not being happy that Merkel agreed to raise the firewall with even more German money ( and of course much money from many other countries too).


Aktien sind viel günstiger als wichtige Staatsanleihen

26.03.2012 · Glaubt man der umstrittenen amerikanischen Investmentbank Goldman Sachs, so sind Aktien gegenüber Anleihen so attraktiv wie seit einer Generation nicht mehr.

I brought up this topic some time ago but timeo Danaos et dona ferentes so I might take another look at it

Btw I have now a lot of Greek gifts on my account with the nomial value not looking actually too bad but the true Gift in the German sense is of course the low yield.

Händel: Deh! fuggi un traditore

[Surferbeetle]

Jurgen Stark (who flew from the ECB nest with the departure of Jean Claude Trichet) and Jens Weidmann (he of the recent leaked letter disparaging recent ECB actions) can be characterized as monetary policy hawks neither of whom want to encourage economic bubbles due to easy liquidity as exemplified by the LTRO and the CBPP2. Mario Draghi meanwhile worries about the solvency of both the European Banking System and the Sovereigns. Shorthand this clash might be summarized along a continuum of fear: Depression vs. Hyperinflation or Recession vs. Zombie Banks?

Is Signore Monti correct in his assessment that the Euro crisis has transitioned from acute heart attack to chronic illness status (my analogy not his), or is John Authers correct in cautiously wondering if the bull bond market is in the process of transitioning to a bear bond market (barring an oil shock or significant geopolitical event) while the equity market transitions from bear to bull? If so interest rates are set to rise at some point...

Are the seeds of a future European war being sown by the choices made today? As is said, stay tuned and keep an eye out for both the gift and gifts

• Jurgen Stark's Resignation Is Setback for Merkel, By Peter Mller, Christoph Pauly and Christian Reiermann, 09/12/2011, Der Spiegel

• Bundesbank squares up to ECBs Draghi, By James Wilson in Frankfurt, March 1, 2012 7:19 pm, Financial Times, www.ft.com

• Monti Says Euro Area Sovereign Debt Crisis Is Almost Over, By Andy Sharp - Mar 27, 2012 8:33 PM MT, Bloomberg News

• Mario, put on your toga, Charlemagne, Mar 10th 2012 | from the print edition, The Economist

• Bonds and equities face a plate-shifting moment, By John Authers, March 24, 2012 3:27 am, Financial Times, www.ft.com

Yeasayer - 2080

[Fuchs]

A bit mroe about Germany, its politics and economy:


One of the leading (pretty) faces of the far left wing socialist party Die Linke has changed a bit her style.
She used to be part of the 'caucus' Kommunistische Platform which was extremely hard left wing, but now she's talking a lot about "Wohlstand fr Alle" of Ludwig Ehrhardt.
He was Germany's minister for economy during the economic miracle period from late 40s to mid 60s and a social conservative (social conservative as in European standards; someone who cares a lot about the well-being of workers and the weak - not someone who's defined by hatred of homos and anti-abortion obsession!).

The early economic miracle brought Germany back to pre-war standard of living by the turn from 40s to 50s. The early 50s were the period when consumption had caught up; people who hadn't bought any new shoes or furniture during the 40s did so in the early 50s, for example.

The 50s period saw a dispersion of the wealth; production gains were more than proportionally allocated to the working class while the rich were still allowed to become richer; "Wohlstand fr Alle" / prosperity for all.

The late 50s and early 60s saw a sudden turn towards mass introduction of luxury goods. Motorcycles were abandoned in favour of cars, TV sets and fridges were in almost every family by the mid-60s.
The mid 60s saw a period of almsot zero unemployment and Germany's economy reached its potential/natural output level. There was no catch-up effect any more, in Solow-Swan terms we had probably met the golden rule of steady state. A tiny bit of economic crisis was already perceived as a major problem back then.

The material wishes of the previous decades were met; by the late 60s, (young) people turned towards more liberty as their main interest (a lot of brownish #### was still in office as judges, policeme, politicians, CEOs), and the economic miracle period politicians did not meet this well. The social democrats and Brandt with his 'dare more democracy' agenda came to power.


It's extremely interesting that someone from the far left would become a disciple of Erhardt, a conservative.
It shows both
- incompetence in macroeconomics (an even longer story)
and
- that the conservatives have strayed too far away from their fomer expectations for income equality and the social democrats were ineffective if not even harmful in regard to income equality as well (no wonder their election results suck).


Indeed, the macro figures look well, but regional, age, ethnicity, upbringing and industrial sector distribution of those macro variables are unsatisfactory. There's furthermore always the demographic change, the energy outlook problem and a multitude of external shocks in the background.

------------

The favourite idea for addressing the demographic change (security of the retimrement incomes) of the last 15 years was bull####: People were supposed to buy a capital-based pension insurance. It was a gift for the insurance sector and entirely useless in regard to the problem.
The elderly of 2050 need to be supplied almost entirely with goods and services created in 2049/2050. To save now only helps if
- this increases our economic output in 2049/2050
or
- if the savings are invested abroad AND if the savings are not lost in the meantime.

Both is nonense, for our savings rate was already high enough and capital invested now would be depreciated almsot entirely by 2030.
The "savings abroad for retirement" idea helped to create the economic imbalances of todays' Europe. Obviously, investmenets abroad over a 30-50 years period are not really secure nor a macroeconomic solution.
In the end, we'll simply get used to the demographic change that occurs over a period of decades. People get used to almost everything.

-----------

The only openly and strongly pro-employer (pro-business) party of Germany, the FDP (European-style liberals, not U.S.-style liberals whom we'd call social conservatives) is dying, btw. They appear to be in the process of replacement by the Piraten, who basically do what the FDP save for one federal FDP minister only claim to do (it's interesting to see that teh Greens did not do this, as they had a reputaiton of being awkwardly similar tot eh FDP in civil liberties stuff).
The FDP also committed suicide by offering a blatant display of its corruption when it forced a value added tax deduction for hotels, a totally pointless and obviously paid-for measure.
A set of top FDP politicians who displayed more party infighting skill and show skill than any real enthusiasm for liberal ideology wasn't helpful either. They've got only two good politicians in my opinion; one very old man and aforementioned minister (who has stopped the slide towards more domestic spying).

In short; we might experience a turn towards more income equality and less influence of big business in this decade in Germany. The conditions are met.

[Surferbeetle]

Fuchs,

Appreciate your very interesting post (and links!), thanks.

Along these lines, here are some late night thoughts (and associated links)...with what level of fidelity are the pressures of economic crisis' historically quantifiable in terms of political fragmentation and a strengthening of the 'left' and 'right' at the expense of the 'middle'? You have provided some additional background on Germany, while Rajoy's trials & tribulations in imposing austerity across the regions as evidenced by the recent elections in Spain and La Pen's drawing power in France are modern day places/events to watch.

The Hanseatic League, Japan, America, and the costs of the restriction of oil on the world economy might also provide some insights:

The Hanseatic League by wikipedia

Most foreign cities confined the Hansa traders to certain trading areas and to their own trading posts. They seldom interacted with the local inhabitants, except when doing business. Many locals, merchant and noble alike, envied the power of the League and tried to diminish it. For example, in London the local merchants exerted continuing pressure for the revocation of the privileges of the League. The refusal of the Hansa to offer reciprocal arrangements to their English counterparts exacerbated the tension. King Edward IV of England reconfirmed the league's privileges in the Treaty of Utrecht (1474) despite this hostility, in part thanks to the significant financial contribution the League made to the Yorkist side during The Wars of the Roses. In 1597, Queen Elizabeth I of England expelled the League from London and the Steelyard closed the following year. Ivan III of Russia closed the Hanseatic Kontor at Novgorod in 1494. The very existence of the League and its privileges and monopolies created economic and social tensions that often crept over into rivalry between League members.[13]

The balance sheet recession, charted, Posted by Izabella Kaminska on Mar 28 16:38, Alphaville Blog at the FT, http://ftalphaville.ft.com/

Nomura’s Richard Koo has been banging on about the similarities between Japan’s balance sheet recession and the current financial malaise for a long while.

His main point has always been that the financial system won’t recover unless corporates and households complete their deleveraging journey.

On Wednesday he provides some charts to help illustrate the journey’s progress thus far.

Bitter Money Fights Shaped U.S History, By Simon Johnson and James Kwak Mar 25, 2012 5:01 PM MT, Bloomberg News

Abandoning Gold Helped Dollar Gain Preeminence (Part 2), By Simon Johnson and James Kwak Mar 26, 2012 5:01 PM MT, Bloomberg News

How the U.S. Became Banker to the Post-War World (Part 3), By Simon Johnson and James Kwak Mar 27, 2012 5:01 PM MT, Bloomberg News

Iran Oil Flow Slows, and Price Fears Rise, By BILL SPINDLE And BENOÎT FAUCON, Updated March 28, 2012, 7:03 p.m. ET, WSJ

By the end of March, with three months until a European Union embargo on Iranian oil takes effect, Iran's exports are expected to fall by about 300,000 barrels a day from last month, to 1.9 million barrels daily, a nearly 14% drop, according to Swiss oil-shipping specialist Petro-Logistics SA.

Global oil prices might climb between $5 and $14 per barrel, leaving oil consumers paying between $14.7 billion and $36 billion more, because of concerns that global spare capacity is shrinking, Mr. Houser says.

Saudi Arabia will act to lower soaring oil prices, By Ali Naimi, March 28, 2012 4:30 pm, FT, www.ft.com

The bottom line is that Saudi Arabia would like to see a lower price. It would like to see a fair and reasonable price that will not hurt the global economic recovery, especially in emerging and developing countries, that will generate a good return for producing nations, and that will attract greater investment in the oil industry.

It is clear that geopolitical tensions in the region, and concerns over supply, are helping to keep prices high.

Yet fundamentally the market remains balanced. It is the perceived potential shortage of oil keeping prices high – not the reality on the ground. There is no lack of supply. There is no demand which cannot be met. Total commercial stocks for OECD nations are within target, and there is at least 57 days forward cover, enough to handle almost any eventuality.

[Ulenspiegel]

Re: Influence of Saudi Arabia on price of crude:

http://www.econbrowser.com/archives/...onal_reas.html

Check the comments of J.J. Brown, who has good data covering this topic.

No chance that they are able to lower the price.

[Surferbeetle]

Ulenspiegel,

Nice catch, very interesting site and the ~$25/barrel figure cited by JJ Brown is quite the reference point in today's price world.

Los sindicatos reclaman un gesto del Gobierno o recrudecern el conflicto, MANUEL V. GMEZ / SOLEDAD ALCAIDE Madrid 29 MAR 2012 - 14:58 CET, El Pais

Los mensajes de los sindicatos

El lmite. "Sabemos que Espaa est al lmite. Pero tambin lo sabemos que es porque as lo provoca la poltica del Gobierno. Y si la poltica contina as, es probable que Espaa vaya a estar ms al lmite, algo que no se puede permitir en ningn caso", asegura Mndez.

La participacin.

Segn el ltimo dato disponible, la participacin en la huelga oscila entre un 97% de los trabajadores en industrua y construccin, y un 57% en las administraciones pblicas. El dato ponderado promedio es el 77%".

Un compromiso.

Mndez: "Hay que buscar un compromiso con el Gobierno para remar unidos en la misma direccin.
Bruselas. El lder de CC OO ha negado que sea la Unin Europea la que impone a Espaa las polticas de recorte, sino que el Gobierno tiene margen de maniobra. No cabe la excusa de Bruselas

Las consecuencias.

Toxo ha avisado al Gobierno de las consecuencias de continuar con su poltica: "El dilogo puede convertir esta huelga en una oportunidad. Si es as, se puede reconvertir la situacin. S no habr un conflicto social creciente, que se har bien patente el prximo 1 de mayo".

La esperanza.

Toxo se ha referido del nuevo escenario que se abre tras la huelga. "El Gobierno tiene maana una magnfica ocasin para cambiar de rumbo, en dilogo con las organizaciones sociales. El Gobierno habla mucho del dilogo social, pero no lo cumple".

Spagna in tilt per lo sciopero generale, 29 marzo 2012 | 15:45, Corriere della Sera

MILANO - Guerra di cifre sulle adesioni allo sciopero generale in Spagna, proclamato contro la riforma del mercato del lavoro: per i sindacati, l'adesione stata nelle prime ore della mattinata dell'85%, percentuale e dovrebbe scendere al 75% durante la giornata. Per l'esecutivo, invece, la protesta non ha avuto molto seguito, se si valutano i dati sui consumi elettrici, e sul funzionamento degli uffici pubblici, dei centri commerciali e degli sportelli bancari. Il direttore generale della Politica Interna Cristina Diaz ha segnalato che la normalit nei posti di lavoro molto elevata. Insomma, per il Governo l'adesione allo sciopero sicuramente inferiore a quella registrata nello sciopero di settembre 2010 contro la riforma Zapatero. I sindacati contestano le cifre del Governo: secondo i loro dati, la partecipazione nei turni notturni ha avuto picchi del 90% in alcuni settori. Nel settore scolastico, 70% dei lavoratori ha incrociato le braccia. E se i sindacati autonomi ritengono che l'adesione sia stata del 17%, nel settore aereo, alle 7 di mattina, erano operativi 246 voli in tutti gli aeroporti del paese. Un gruppo di circa 500 manifestanti ha marciato lentamente sulla Gran Via di Madrid, una delle principali strade commerciali della capitale, bloccando per un'ora circa il traffico. Chiusa anche l'Alhambra di Granada, il monumento pi visitato di Spagna.

Spanish Economy Disrupted as Unions Strike to Protest Rajoy Cuts, Emma Ross-Thomas, 2012 Bloomberg News, Thursday, March 29, 2012, San Francisco Chronicle

March 29 (Bloomberg) -- Spanish transport, power demand and manufacturing were disrupted today in the first general strike against labor reforms and austerity policies since Prime Minister Mariano Rajoy took office three months ago.

Iberia, the Spanish unit of International Consolidated Airlines Group SA, said it canceled 65 percent of flights, while national power demand was 16 percent below that of a typical day, grid operator Red Electrica Corp SA data showed. At Volkswagen AG and Renault SA factories, 100 percent of workers followed the strike during the nightshift, the Comisiones Obreras union said in a statement.

The People's Party government "will not cede" to union demands to retract changes to labor rules, Budget Minister Cristobal Montoro said yesterday. Thirty percent of workers planned to strike, according to a poll by El Pais.

While Rajoy's measures have angered unions and undermined support for the party in a regional election on March 25, the government is still struggling to convince investors its policies are enough to restore the public finances and reduce a 23 percent jobless rate. Spanish 10-year borrowing costs have surged almost 50 basis points since the start of March.

"He has no choice," said Antonio Barroso, a political analyst at Eurasia Group in London and a former government pollster. "If he gives in, the markets will punish Spain. Rajoy has his back against the wall."

The latest labor overhaul goes further than the attempt by the Socialists to reduce the European Union's highest jobless rate, which amounts to 50 percent among young people. The bill makes it easier to cut wages, reduces unions' negotiating power and allows for lower firing costs.

[Firn]

Football has a great emotional and financial impact on many Europeans. While I do not agree that it reflects the culture of a nation it is a rather interesting topic especially for a fan like me. In some ways from a financial point of view it looks like a smaller version of the Eurocrisis with a club Med and fiscally responsible Germany. (I will leave out the Premier, which is not on the continent and has sold out anyway ).

Top 20 European clubs by revenue

Revenue does of course not equal income. The Spanish clubs have 3,500,000,000 € of debt, with 750 millions of them being in unpaid taxes and roughly 600 millions due to social security (poor players). The spanish government reacted relative mildly, causing furor in at least one country competiting at the highest level against them.

When faced with the prospect of the Spanish government waiving the collective €752m debt the nation's football clubs owe to the country's tax authorities, the reaction in Europe last week was one of outrage. The German tabloid Bild even asked how long the German taxpayer would be obliged to subsidise the wages of Lionel Messi and Cristiano Ronaldo.

And the best part from one of the greatest football managers of all times:

Uli Hoeness, the outspoken president of Bayern Munich, got to the point rather more quickly when asked about the proposal to excuse Spanish clubs their tax debt. "This is unthinkable," he said. "We pay them hundreds of millions to get them out the #### and then the clubs don't pay their debts."

Anyway personally I very worried about the state of the Italian football. Lost the 4th place in the Champions League due to an increasing weakness over the last ten years and terrible performances in the less prominent European league the last Report Calcio 2012 is a dismal read. Pretty much performance indicator bar debt has been going down. We stand now at a debt of 2,6 billion thanks to losses 400 million €. Our % of equity stands at a grand 5%...

Financial fair play can hardly come early enough

While the Serie A and La Liga have a massive amount of debt the Bundesliga has a far smaller one of 600 millions (1/4th of the Serie A, 1/6th of la Liga) and has been also the most profitable. In this case almost all the good numbers are going up and bad ones down. Far from perfect but not comparable to our purgatorio.

Of course my club has also quite some financial problems not considering the poor performance in the campionato. And that only two years after the triplete. For excellent info go here.

Come Oriali - Una vita da mediano. (Mediano: central midfielder, box-to-box player with high stamina, intelligence and discipline)

[Firn]

Seems like the football - in the true European sense - topic did not cause much sparkle or perhaps you guys are still bussy reading the long papers.

Something more serious, I recently gave a look at Net international investment position and the Macro around it. It is not much talked about but reflects a bit like a balance sheet the flows of captial and goods over a considerable arc of time.

The situation of the USA is nicely explained by this paper (2010).

A nice German paper does have a good overview from the German point of view. More recent data comes from this paper.

It is interesting to note that the people of "Germanic" Europe (Austria, Belgium, Denmark, Germany, Liechtenstein, Luxenburg, Netherlands, Norways, Switzerland minus the UK) have bar "neutral" Austria in general terms the role of creditor while the people from the rest of Europe are (their) debitors. So not only has much national money flown through EU channels to said nations but and into the recent firewalls but obviously (considering the various accounts deficts over the years) much private money went into states who currently suffer.

The five biggest debitors of NIIP in % GDP are according to the Wiki entry:

Greece -83.1[74]
New Zealand -90.1
Spain -87.1[79]
Ireland -97.8
Portugal -108.

Warren Buffet has touched the situation of the U.S on many occasions, perhaps best read in this collected wisdom. Of course every intro. book about Macro has a good overview about the situation, be it the Mankiw or Krugman. Surprisingly those are much cheaper in Europe.

Anyway this is what a positive cahs flow of 50.000 € looks like - a "tragic error" indeed. Grazie Andrè for **** our dear calcio even more. Match-fixing Doni has ironically been able to get out of jail into house arrest in the village of his wife in the midst of the Dolomites. Not a shabby place at all.

[Firn]

Finanzspaehre sollte Realwirtschaft dienen

NZZ Online: Herr Chesney, Sie kritisieren, dass weltweit die Menge aller derivativen Finanzprodukte gefhrlich hoch ist.

Marc Chesney: Der Nennwert aller derivativen Finanzprodukte entspricht rund dem 12fachen des weltweiten Bruttoinlandproduktes (BIP). Das ist viel zu viel. Wenn diese Produkte nur als Absicherung dienen wrden, wie es in den Lehrbchern vorgesehen ist, dann sollten sie einen Anteil von vielleicht 10 bis 20 Prozent des BIP ausmachen. Aber sicher nicht 1200 Prozent.

Was fuer realwirtschaftliche Auswirkungen haben diese Derivate?

Angesichts der grossen Menge an Derivaten uebernimmt nur ein kleiner Teil davon seine ursprngliche Funktion der Absicherung. Der goersste Anteil erzeugt hingegen neue Risiken, was fuer die Realwirtschaft und die Gesellschaft letztlich problematisch ist. Diese Risiken entstehen aus dem Finanzsystem heraus. Dahinter steckt eine pyromanische Feuerwehrlogik. Die Investmentbanken verkaufen zu viele sogenannte Absicherungsprodukte und setzen damit falsche Anreize, die gefaehrlich sind fuer die Realwirtschaft und damit auch fuer die Gesellschaft.

Sadly the spirits called by the financial apprentice with all their liquid transactions have created many risks to the real economy.

To much 'securities' designed to reduce risk creating big risks, the irony. 1200% of the world wide GDP in derivatives instead of 10-20% is indeed quite gross, I didn't knew the figure was that large .

[Fuchs]

Finanzsphäre (~financial sector)

[Surferbeetle]

Euro econ themes of the last week or so have included questions regarding the costs of the role of the state & elites in society, if the hoi polloi will continue to fund poor choices made by the same, monitoring and curtailing the activities of the heuschrecken, reactions to the curtailment of heuschrecken activities, and finding the proper balance point between growth and austerity.

Des centaines de Grecs rendent un dernier hommage au retrait qui s'est suicid, Le Monde.fr avec AFP | 07.04.2012 18h36 Mis jour le 07.04.2012 18h40

Des centaines de personnes ont rendu un dernier hommage samedi 7 avril au septuagnaire qui s'est suicid mercredi dans le centre d'Athnes. En quelques jours, le geste du retrait est devenu le symbole du dsarroi provoqu par la crise conomique en Grce. Aprs les funrailles, un rassemblement a t organis sur la place centrale de Syntagma, o le dfunt s'tait tir une balle dans la tte.

Dimitris Chrisoula s'tait suicid mercredi matin sous les yeux des passants sur la place Syntagma, thtre de la contestation qui secoue le pays depuis le dbut de la crise en 2010, quelques mtres du Parlement. Malade du cancer, selon la police, et vivant seul, il a laiss une lettre manuscrite accusant le gouvernement de l'avoir priv de ressources par les coupes imposes aux pensions de retraites, et l'assimilant l'excutif mis en place par les occupants nazis en 1941. "Je ne trouve pas d'autre solution pour en finir dignement avant de devoir commencer faire les poubelles pour me nourrir", a-t-il crit.

458,615 register for household tax ahead of March 31 deadline, By Independent.ie reporters and Lyndsey Telford, Thursday March 29 2012

A total of 458,615 households had registered for the tax out of an estimated 1.6 million due to make the payment, according to figures released by the Department of the Environment this afternoon.

With registration deadline for the charge just two days away, nine TDs from the Technical Group made a last-ditch appeal to the two-thirds of the population who have not yet paid.

Socialist Party TD Joe Higgins urged them to maintain the boycott.

Spekulationen ber gezielten Computerangriff auf Bast, Von NORBERT KULS, NEW YORK, 29.03.2012, FAZ

Der geplatzte Brsengang der elektronischen Handelsplattform Bats Global Markets am vergangenen Freitag fhrt an der Wall Street zu Verschwrungstheorien. Nach einer Analyse des Datendienstleisters Nanex hat es sich bei dem raschen Kurssturz der Bats-Aktie zur Handelserffnung um einen gezielten Angriff eines Computerhandelsprogramms gehandelt.

Heuschreckendebatte, by wikipedia

Der Begriff Heuschreckendebatte wurde im April und Mai 2005 geprgt. Auslser war eine uerung des damaligen SPD-Vorsitzenden Franz Mntefering. Er verglich das Verhalten mancher anonymer Investoren mit Heuschreckenplagen. Heuschrecken gelten im deutschen politischen Sprachgebrauch seitdem als eine abwertende Tiermetapher fr Private-Equity-Gesellschaften sowie gegen andere Formen der Kapitalbeteiligung mit mutmalich zu kurzfristigen oder berzogenen Renditeerwartungen, wie Hedge-Fonds oder sogenannte Geierfonds.

Barnier hits out at lobbying rearguard, by Alex Barker in Brussels and Brooke Masters in London, April 2, 2012 6:48 pm, FT, www.ft.com

Europes most senior financial regulator has hit back at rearguard lobbying by the hedge fund and private equity industries, saying he will not be intimidated by an attempt to undermine a deal to regulate the industry for the first time.

The fightback from Michel Barnier, the European Union commissioner for the single market, comes after the industry publicly raised the alarm over technical standards proposed to implement the alternative investment fund managers directive (AIFMD).

Alternative Investment Fund Managers Directive by wikipedia

The Alternative Investment Fund Managers Directive COM (2009) 20 is a proposed European Union law which will put hedge funds and private equity funds under the supervision of an EU regulatory body. These kinds of business vehicle have not been subject to the same rules to protect the investing public as mutual and pension funds. Lack of financial regulation is widely seen to have contributed to the severity of the global financial crisis. The European Parliament voted through a final text of the Directive on 11 November 2010.[1] The proposals have to be written into national statute books by 2013, and only then will they really begin to bite.[2]

Wolfson Prize: Schoolboy plan to save euro commended, 3 April 2012 Last updated at 11:31 ET, BBC

The prize sought to find the best answer to the following question: "If member states leave the Economic and Monetary Union, what is the best way for the economic process to be managed to provide the soundest foundation for the future growth and prosperity of the current membership?"

An 11-year-old boy's plan to save the eurozone has been commended in a major competition that has attracted some of the world's top economists.

The Secret To Germany's Low Youth Unemployment, by ERIC WESTERVELT, April 4, 2012, NPR

Germany's dual system trains 1.5 million people annually. Across the board, from bakers and car mechanics to carpenters and violin-makers, about 90 percent of apprentices successfully complete their training, German government figures show. The apprenticeships vary in length, between two and three-and-a-half years. The average training "allowance" is 680 euros a month (approximately $900), and about half of the apprentices stay on in the company that trained them.

But Rolf von Luede, an economic sociologist at the University of Hamburg, isn't so sure the German system would translate well to other parts of Europe. He notes that German industry and its powerful trade unions have a unique relationship marked by what he calls "antagonistic cooperation," a far cry, he says, from the more confrontational policies pursued by unions in Spain and Britain.

"One of the crucial aspects of the German dual system is that it is created by a cooperation of the employers and the trade unions," von Luede says. "[It is] really a model that ensures that the qualifications that are needed within the industry are supported by this apprenticeship."

Draghi Scotches ECB Exit Talk as Spain Keeps Crisis Alive, By Jeff Black, April 05, 2012 3:45 AM EDT, Bloomberg News

Speaking just hours after Spanish Prime Minister Mariano Rajoy warned his country faces extreme difficulty, Draghi said yesterday that talk of the ECB starting to withdraw its support for euro-area banks is premature. At the same time, in a nod to growing inflation concerns in Germany, he said the ECB wont hesitate to counter price risks if needed. Policy makers left their benchmark rate at a record low of 1 percent.

The ECB has expanded its balance sheet by about 30 percent since Draghi took office in November, pumping more than 1 trillion euros ($1.3 trillion) into the banking system in a bid to stem the debt crisis. Pressure to unwind the emergency measures is rising in Germany, where workers are winning some of the biggest pay increases in two decades, threatening to stoke inflation.

Premature Bundesbank calls for an ECB exit strategy have now triggered a new round of market wobbles, with a focus on Spain, said Holger Schmieding, chief economist at Berenberg Bank in London. The risk of a new irrational market panic remains serious.

Sports investments....

FC-St.-Pauli-Anleihe: 6% fr echte Fans

Die FC-St.-Pauli-Anleihe bietet einen Zinssatz von 6 %. Die Laufzeit der Anleihe betrgt sechs Jahre und acht Monate und das Volumen ist auch sechs Mio. Euro festgelegt.

Bei der 6 % FC-St.-Pauli-Anleihe 2011/2018 handelt es sich um festverzinsliche Inhaber-Schuldverschreibungen, die von der Millerntorstadion Betriebs GmbH & Co. KG begeben werden.

Die Zinsen der FC-St.-Pauli-Anleihe werden jeweils nachtrglich zum 1. Juli eines jeden Jahres ausgezahlt.

[Surferbeetle]

The £250,000 (€286,000) Wolfson Prize, a shrewd approach that i suspect would find with Margaret Thatcher's approval

The Wolfson Economics Prize at the UK think tank Policy Exchange

The Wolfson Economics Prize, which challenges the world’s brightest economists to prepare a contingency plan for a break-up of the Eurozone, today unveiled a shortlist of five finalists. The shortlisted entries, though all very different from each other, provide valuable ideas about how best to manage a member state leaving the euro.

The finalists:

Catherine Dobbs

Catherine received a BA in engineering from Oxford University. She subsequently worked in quantitative research at NatWest Investment Management and Gartmore, developing investing and trading algorithms. She now divides her time between the UK and Asia, and is an active personal investor.

The NEWNEY approach to unscrambling the Euro

This document has been written as a contribution to the debate for what might be a “Plan B” in case one of more countries decided to leave the Economic and Monetary Union but also as a mechanism for the Union removing the risk of speculative attacks.

A Two-Euro Plan to Break Up the Euro Zone, By Peter Coy on April 05, 2012, Bloomberg Business Week

Jonathan Tepper

Jonathan Tepper is the co-author of the NY Times bestseller Endgame: The End of the Debt Supercycle, a book on the sovereign debt crisis. Jonathan is the Chief Editor of Variant Perception, a macroeconomic research group that caters to asset managers. He is also the portfolio manager of an equity long/short hedge fund at Hinde Capital. Jonathan is an American Rhodes Scholar. Since leaving Oxford, Jonathan has worked as an equity analyst at SAC Capital and as a Vice President in proprietary trading at Bank of America. He earned a BA with Highest Honors in Economics and History from the University of North Carolina at Chapel Hill, and a M.Litt in Modern History from Oxford University.

A Primer on the Euro Breakup: Default, Exit and Devaluation as the Optimal Solution

“Did you ever think that making a speech on economics is a lot like pissing down your leg? It seems hot to you, but it never does to anyone else.”
President Lyndon B. Johnson

Many economists expect catastrophic consequences if any country exits the euro. However, during the past century sixty-nine countries have exited currency areas with little downward economic volatility. The mechanics of currency breakups are complicated but feasible, and historical examples provide a roadmap for exit. The real problem in Europe is that EU peripheral countries face severe, unsustainable imbalances in real effective exchange rates and external debt levels that are higher than most previous emerging market crises. Orderly defaults and debt rescheduling coupled with devaluations are inevitable and even desirable. Exiting from the euro and devaluation would accelerate insolvencies, but would provide a powerful policy tool via flexible exchange rates. The European periphery could then grow again quickly with deleveraged balance sheets and more competitive exchange rates, much like many emerging markets after recent defaults and devaluations (Asia 1997, Russia 1998, and Argentina 2002).

Roger Bootle

Bio by wikipedia

Roger Bootle is an economist and a weekly columnist[1] for the Daily Telegraph. He is currently the Managing Director of Capital Economics, an independent macroeconomic research consultancy.

After studying at Merton and Nuffield Colleges, Oxford,[2] Bootle began his career in the academic world as a lecturer in Economics at St Anne’s College, Oxford.

Leaving the euro: A practical guide, A submission for the Wolfson Economics Prize MMXII by Capital Economics, Lead author: Roger Bootle

This report is a practical document designed to answer the question:

If member states leave the Economic and Monetary Union, what is the best way for the economic process to be managed to provide the soundest foundation for the future growth and prosperity of the current membership?

Accordingly, each of the main sections concludes with recommended actions, which are then brought together at the end of the paper in a step-by- step plan.

Jens Nordvig

Planning for an orderly break-up of the European Monetary Union, Jens Nordvig (Lead Author), Dr Nick Firoozye, Nomura Securities

Two types of break-up scenarios for the Eurozone are possible, from a practical perspective: A very limited break-up scenario, involving the exit of one or a few smaller countries, and „big bang‟ break-up scenario, which would see the Euro cease to exist. A sequential „onion peeling‟ type of break-up process, which would see only stronger core countries remain in the eurozone, is highly unlikely to be possible as the process would become uncontrollable around the exit of a larger Eurozone country. Policy makers should therefore plan primarily for the very limited break-up as well as the full-blown break-up scenario. The latter could be highly disruptive from a macroeconomic stand- point in the absence of any detailed and thoughtful advance planning.

Neil Record

If member states leave the Economic and Monetary Union, what is the best way for the economic process to be managed to provide the soundest foundation for the future growth and prosperity of the current membership?

In this essay, I have sought to design a route out of the Euro for one or more countries, which will minimise economic, financial and political damage, and allow growth and prosperity to replace crisis and austerity.

[Firn]

Some news from Spain:

La deuda externa de Espaa creci en 2011 hasta un rcord de 1,78 billones

El volumen de la deuda externa espaola representa ya el 165,4% del producto interior bruto (PIB), uno de los niveles ms altos de todo el mundo. La deuda externa comprende todos los pagos pendientes con el exterior de principal y de intereses. Incluye tanto la deuda pblica como la privada. De hecho, el grueso de la deuda externa es privada y solo un 16% pblica.

...

La deuda externa haba cado en 2010 por primera vez en una dcada por la reduccin del dficit corriente, las repatriaciones de capital y la venta de activos por parte del sector privado. Eso se interpretaba como un sntoma de que la economa estaba reaccionando y se empezaban a corregir los desequilibrios. En 2011, segn las cifras que acaba de hacer pblicas el Banco de Espaa, la deuda externa no solo volvi a crecer, sino que el aspecto ms preocupante es la creciente dependencia de la autoridad monetaria.

Compared to Italy the debt of Spain is mostly financed by 'foreign' creditors. That the external debt increased after the slight and unique reduction in 2010 and is financed to a greater degree by the ECB is bad news indeed.

El envo de dinero de emigrantes hacia Espaa bate su rcord

Money send home from abroad was very important for Spain and Italy in darker days and this latest record seems to fit almost too well with the crisis in Spain.

P.S: The forum software ignores pasted è,ä and so forth making the reading more difficult then it should be. Is it possible to fix that?

Thanks

[Firn]

I wanted to add that:

El envo de dinero de emigrantes hacia Espaa bate su rcord

Money send home from abroad was very important for Spain and Italy in darker days and this latest record seems to fit almost too well with the crisis in Spain. One of my ancestors was btw an Americano, working in gold mines before returning home. He was a tall strong man with very big hands who sent most of his hard earned money to his little, poor alpine village. His story has been repeated in recent times all over the developed world, where immigrants support their relatives living still in developing countries. Recently I read that the Chinese immigrants in Italy are sending per capita roughly 12.000 € home, quite a massive amount compared to all the other ethnic groups. Their saving rate might be even higher then back home.

Of course for a proud nation like Spain it must almost feel like the wheel of time has been turned back a bit.

[davidbfpo]

Firn you asked:

P.S: The forum software ignores pasted , and so forth making the reading more difficult then it should be. Is it possible to fix that?

This issue has appeared before, usually when JMM & Stan start an exchange in Finnish and my understanding is it cannot be changed.