2nd Great Depression

Fiscal cliff: US urged to tackle budget deficit

Fiscal cliff: US urged to tackle budget deficit

BBC – US politicians have been urged to do more to sort out the budget by the two largest credit rating agencies. The warning comes despite the US narrowly agreeing a deal to stave off the US “fiscal cliff” of spending cuts and tax rises worth $600bn (£370bn). Rating agency Moody’s said lawmakers would need to take additional steps to lower the ballooning budget deficit. Rival agency Standard and Poor’s added: “Washington’s governance and policymaking had become less stable.” Read article

Eurozone industry still locked in recession

DW – Manufacturing activity in the eurozone has continued to slide amid falling production and exports, the PMI index has shown. But there’s hope the continent’s industries may arise from signs of revival in Asia. At the end of 2012, the eurozone remained locked in recession, which was reflected by the 17th consecutive monthly drop in the purchasing managers’ index (PMI) released by British research group Markit on Wednesday. The London-based group said the closely-watched barometer of factory activity declined to 46.1 points in December from 46.2 points in November for the 17-nation currency area. Any reading below 50 points signals declining manufacturing activity. Read Article

President Obama praises US ‘fiscal cliff’ deal

BBC – After the House of Representatives passed the bill by 257 votes to 167, Mr Obama said the measures were “just one step in the broader effort to strengthen the economy”. It raises taxes for the wealthy and delays spending cuts for two months. Read article

Egypt’s currency hits seven-year low

DW – Egypt’s pound has continued to tumble, dropping to its lowest level in the last seven years. President Muhammad Morsi said the fall does not worry him, and he expects a return to stability soon. The pound fell to its lowest level since 2004 Monday, dropping to 6.42 against the dollar in trading compared to 6.36 Sunday, state news agency MENA said. The drop “does not worry us and we are not afraid,” said Morsi late Sunday. “In a few days things will balance out.” “The market will return to stability,” the president added. Read Article

Fiscal cliff deal will add $4 trillion to US deficit, says CBO

Daily Telegraph -The Congressional Budget Office has revealed that the Senate-passed legislation to avert the “fiscal cliff” will add nearly $4 trillion to federal deficits over a decade, largely because it extends low tax rates for nearly every American. Read Article

France’s 75% ‘supertax’ thrown out as unfair and unconstitutional

Guardian – The so-called “supertax” rate of 75% on individual incomes over €1m a year had provoked anger and angst in recent weeks after French national hero Gérard Depardieu announced he was moving just over the border into Belgium, reportedly for tax reasons. After the French prime minister, Jean-Marc Ayrault, described the actor’s move into tax exile as “shabby”, Depardieu wrote a furious open letter in which he accused the Socialist government of seeking to “punish… success, creation and talent”. Read article

Revealed: how the FBI coordinated the crackdown on Occupy

Guardian – It was more sophisticated than we had imagined: new documents show that the violent crackdown on Occupy last fall – so mystifying at the time – was not just coordinated at the level of the FBI, the Department of Homeland Security, and local police. The crackdown, which involved, as you may recall, violent arrests, group disruption, canister missiles to the skulls of protesters, people held in handcuffs so tight they were injured, people held in bondage till they were forced to wet or soil themselves –was coordinated with the big banks themselves. Read article

Fiscal cliff deal in peril as Senate negotiations enter standstill

The Guardian – Brinkmanship in Washington took America into a final day scramble to avert the fiscal cliff, after talks between Senate leaders broke up with no deal in sight. Harry Reid, the Democratic Senate majority leader, and Mitch McConnell, who heads the chamber’s Republican minority, ended more than a day of on-off talks on Capitol Hill without an agreement and with nothing for lawmakers to vote on. It brings closer the prospect that America could plunge off the so-called fiscal cliff at midnight on Monday, triggering swingeing spending cuts and across-the-board tax increases. Talks were expected to resume on Monday, but with the clock ticking inexorably towards the new year deadline, few in Washington were optimistic about a deal. Read Article

Unemployment at highest since 1998

Connexion – The number of people looking for work in France has reached its highest level in nearly 15 years. Unemployment rose by 0.9 percent in November to 3.13 million, the highest since January 1998. It represents an increase of 10.8% year on year and is the 18th consecutive month that unemployment has risen. Including those who are working a reduced number of hours, the number of people seeking work in France stands at 4.61 million – up 9.2% on last year. Read Article

Greek central bank says top 4 banks need 27.5 billion euros

Reuters – Greece’s central bank said the country’s four biggest banks needed 27.5 billion euros ($36.3 billion) of fresh capital to restore their solvency ratios, confirming disclosures by the lenders last week. Battered by the country’s debt crisis and a protracted recession, banks suffered heavy losses from a sovereign debt swap in March while their loan portfolios continue to be pounded by rising credit impairments. At stake is whether National Bank (NBGr.AT), Eurobank (EFGr.AT), Alpha (ACBr.AT) and Piraeus (BOPr.AT) will remain privately run or end up nationalized. Read Article

U.S. Stock-Index Futures Drop on Concern Over Budget Deal

Bloomberg – U.S. stock futures fell, indicating the Standard & Poor’s 500 Index will drop for a fifth day, amid concern talks between President Barack Obama and Republican lawmakers may not yield a budget deal by the year-end deadline. Hewlett-Packard Co. retreated 1.1 percent in German trading after the Justice Department opened an investigation relating to Autonomy Corp. Home Depot Inc. slid 1.2 percent in Germany. Apple Inc. (AAPL) slipped 0.6 percent in early New York trading. RIM rose after Synchronoss Technologies Inc. bought RIM’s NewBay Software Ltd. Read Article

European shares steady, euro climbs as “fiscal cliff” push awaited

Reuters – European shares were steady and the euro edged higher on Thursday, as U.S. lawmakers prepared to resume negotiations to avoid a fiscal crunch, while the yen hit a 21-month low on the prospect of drastic monetary easing. Read article

Washington stirs for “fiscal cliff” talks as Obama heads home

Reuters – Efforts to prevent the U.S. economy from going over a “fiscal cliff” stirred back to life on Wednesday with less than a week to go before potentially disastrous tax hikes and spending cuts kick in at the New Year. Read article

UN wants 5% budget increase

BreitBart – Late yesterday, the United Nations General Assembly approved a 5% budget increase for 2012-2013–with half of the additional spending going towards the UN’s “political missions,” which typically handle peacemaking and conflict resolution. In a time of global austerity, the UN’s career diplomats have decided they deserve more cash. Read article

Egypt’s contentious Islamist constitution becomes law

Reuters – President Mohamed Mursi admitted on Wednesday that Egypt’s economy faces serious problems after he enacted a new, bitterly contested constitution that is supposed to help end political unrest and allow him to focus on the financial crisis. Read article

U.S. retailers see holiday sales weakest since 2008

Industry Leaders – Despite huge lines recorded on Black Friday, the U.S. retailers understood that Americans were not so keen on opening their wallets during the 2012 holiday shopping season. Cautiousness of American customers resulted in the worst holiday shopping season since 2008 when the country entered a recession. Analysts note that weather conditions and concerns over the economy including the fiscal cliff were the main factors of unsatisfactory results of U.S. holiday sales. Read Article

Macedonia budget sparks clashes

Aljazeera – Clashes have broken out in front of Macedonia’s parliament between opposition and ruling legislators over next year’s budget, as rival supporters pelted each other with stones and bottles. Six people, including two politicians, briefly needed hospital treatment for injuries from Monday’s clashes. “We are calling for civil disobedience… Macedonia will see a popular uprising,” Brank Crvenkovski, leftist opposition party SDSM’s leader, told his supporters outside parliament. Read article

Iraq boosts gold reserves for first time in years

Arabian Business News – Iraq made its first major move in years to boost its gold reserves in recent months, joining central banks from emerging market economies such as Brazil and Russia in diversifying its foreign reserves. Central bank purchases have been one of the biggest drivers of gold’s rally since 2010 – a year which saw central banks turning net buyers of the precious metal for the first time in two decades amid growing doubts about the stability of the dollar as the world’s top reserve currency. Over the course of three months between August and October this year, Iraq’s gold holdings quadrupled to 31.07 tonnes, the International Monetary Fund’s monthly statistics report showed on Thursday. Read Article

Preparation For The US Dollar Collapse? Brazil Doubles Gold Reserves as Central Banks Buy Bullion

Bloomberg – Brazil boosted gold reserves for a third month in November to double the country’s holdings since August as central banks from Russia to Belarus and South Korea add the metal to diversify their assets. Brazilian holdings expanded 14.7 metric tons in November to 67.2 tons, the most since November 2000, according to data on the International Monetary Fund’s website. The country bought 17.2 tons in October after adding 1.7 tons in September, the first increase since 2008. Russia’s holdings increased 2.9 tons last month and Belarus’s reserves expanded 1.4 tons, the data show. Turkey pared holdings 5.9 tons and Mexico sold 0.1 ton. Read Article

Fresh doubt over US ‘fiscal cliff’ deal

Al Jazerra – Hopes for avoiding the “fiscal cliff” that threatens the US economy have fallen, after fighting among congressional Republicans cast doubt on whether any deal could be reached with President Barack Obama. Obama on Friday urged lawmakers to reach agreement on averting tax hikes on the middle class, saying he was ready and willing to do what it takes to get a deal by January 1. The US president said he had spoken with Republican House Speaker John Boehner and met with Senate Democratic leader Harry Reid about the fiscal cliff. The president said he was an optimist and believed a deal could be hammered out. Obama had been expected to leave as early as Friday to spend the Christmas holidays in Hawaii, but he gave no indications of his travel plans except to tell reporters “see you next week.” Read Article

S&P raises Greece’s credit rating

BBC – Ratings agency Standard and Poor’s has raised the credit rating of Greece’s sovereign debt by six levels, praising the “strong determination” of fellow eurozone countries to help it stay as a member state. S&P has increased Greece’s rating from “selective default” to “B-minus”. The agency also praised the continuing efforts by Greece’s government to cut its spending. Read article

News Archive In Focus -2nd Great Depression (2,321 articles)

The official view, as articulated by the Federal Reserve, is that both the first Great Depression and the current GFC were caused by a lack of base money. Base money, or M0, is money that the central bank creates. It forms the reserves held by private banks, on the strength of which they issue loans to their clients. This practice is called fractional reserve banking: by issuing amounts of debt several times greater than their reserves, the private banks create money that didn’t exist before. Professor Steve Keen was one of the few economists to predict the financial crisis and he warns that the same factors that caused the crash show that what we’ve heard so far is merely the first rumble of the storm. Without a radical change of policy, another Great Depression is all but inevitable. To read our 2nd Great Depression news archive of 2,321 articlesCLICK HERE