Readable - 04/12/11

Finance/Economics:


Countries don't go broke - Walter Wriston, early 1980s


We just may be in the midst of the biggest bubble in history. The complacency that the accumulation of all the ills of the many and massive bubbles that have ripped through the global economy in the past twenty years can simply be resolved by quantitative easing, monetization, printing money or whatever you wish to call it is simply stunning to us. The loss of confidence takes longer to happen than you think it should and happens faster than you thought it could. Governments can finance themselves until they can’t. Risk free is risk free until it isn’t. - Global Macro Monitor


The early founders acknowledged that a tighter fiscal union would eventually be necessary if the euro experiment were to survive. And eventually is now. As in this month. - John Mauldin


Not every stupid economic idea has to be defended to the bitter end. - Hans Joachim Voth

Mrs. Merkel has been speaking in Berlin this morning, and she seems to be ruling out everything. But what the markets want to know is, what IS the solution? - The Telegraph

In the immediate term, honoring the spirit of the treaty as originally conceived risks tearing down the very thing the treaty was intended to build: Europe’s single currency. If the price of preserving the ECB’s credibility is to destroy the monetary union over which the ECB presides, what’s the point? Merkel may be ready to burn the village to save it. Europe’s other leaders should tell her firmly, no thanks. - Bloomberg

Germany and the ECB have so far hoped that their view of the crisis is correct: The periphery is in trouble because of a lack of fiscal discipline and structural reforms. So, fiscal discipline and structural reforms are the necessary solutions even if they imply painful adjustment and sacrifices for the periphery for a number of years. Germany and the ECB may turn out to be right, but we suggest that the painful medicine will be—however necessary over the medium term—too painful and recessionary in the short run and for long enough that it will not be viable. Also, the EZ periphery’s fundamental loss of competitiveness—manifesting itself in now unsustainably large current account deficits—requires a real depreciation that will not be achieved quickly enough with reforms and deflation that depress output for too long before they restore growth. Thus, debt reductions and real depreciation via an EZ exit and a return to national currencies will become—however costly—unavoidable and less painful than the alternative of recessionary deflation. - Nouriel Roubini

If countries like Belgium lack a national consensus, while others like Italy and Spain have minorities (who pay more than their numerical share) who are not really convinced they want to be in the country, then how can a fiscal union which would be based on some countries permanently paying (the so called transfer union) while others continually receive hope to hold itself together politically? - Edward Hugh

With continued Target2 credit access, Greece could theoretically continue to issue unrestricted amounts of euro banknotes — which could, logically, be used to settle cross-border payments, allowing it to continue running up eurosystems debts. Thus, in that scenario identification markers for Greek issued euronotes might suddenly become a good idea. But, of course, that would be nothing more than the unofficial reinstatement of the drachma itself. A fact which in itself means that Greek default inevitably equals eurozone breakup. As Whittaker concludes, it is this fact, above all, that persuades Germany and others to keep lending, whether this is via EFSF loans, levered EFSF loans, ECB-backed loans, Eurobonds or the eurosystem itself. - Izabella Kaminska

Two years ago I suggested that if a young and unknown politician in Europe wanted to become an important player, there were two things he should do: criticize Germany, and attack the euro. These are both likely to be enormous vote getters over the next two years, and they are the reason why, in my opinion, the extremist parties of the right and left will do so well in the next few elections. - Michael Pettis

Since the Italian and Greek governments lack democratic legitimacy, any decisions they make are suspect/can be reversed after elections. - Edward Harrison

In a 3-year study, EU concluded there is no evidence that drinking water can cure dehydration and has banned bottles from stating that claim. Previously, EU officials banned the selling of overly bent bananas and curved cucumbers but backed off after international ridicule. - Mish

It is easy for other European governments to complain about Germany being stubborn, but Germany's concerns are well placed. The desire to use the ECB to print money is nothing more than a veiled desire to steal fiscal resources disproportionately from the German people. - John Hussman

This phrase 'lender of last resort' has been bandied around by people who, it seems to me, have no idea what lender of last resort actually means, to be perfectly honest. It is very clear from its origin that lender of last resort by a central bank is intended to be lending to individual banking institutions and to institutions that are clearly regarded as solvent. And it is done against good collateral, and at a penalty rate. That's what lender of last resort means. That is a million miles away from the ECB buying sovereign debt of national countries, which is used and seen as a mechanism for financing the current-account deficit of those countries, which inevitably, if things go wrong, will create liabilities for the surplus countries. In other words, it would be a mechanism of transfers from the surplus to the deficit countries. - Mervyn King

The bottom line is this, the call for massive ECB purchases of distressed European sovereign debt is not simply a call for a liquidity-providing intervention, but is an attempt to address a solvency issue. Liquidity issues can often be addressed through temporary increases in the stock of money, but to address solvency issues, you have to print permanent money. A memorable instance of permanent money creation as a means of financing budget deficits was in 1922, when Germany began printing money in order to keep paying striking workers in the Ruhr even though they were not producing goods and services. The shift to printing money triggered an immediate flight away from the German mark. The resulting hyperinflation is well-remembered by the German people even if the rest of the world has forgotten. - John Hussman

As the ECB prints and the Euro declines and inflation rises, then what? Will Italy and Greece really cut back pensions when inflation is rising? Will Germany be forced to raise their social benefits to catch up to Greece and Italy? Printing takes off the pressure, and inflation ensures that the higher levels of benefits are necessary.  Will this actually become self fulfilling inflation as the austere countries race to provide benefits similar to those frivolous countries? - Peter Tchir

At this point most investors would dump their entire holdings of Italian debt to any sucker – the ECB, European Financial Stability Facility, IMF or whoever – willing to buy it at current yields. If a lender of last resort appears, Italy’s entire debt stock of €1,900bn will be soon supplied. - Nouriel Roubini

The IMF can be refunded by its 186 members. One of which, the US, is required to pay 17.72% of all funding. While the Eurozone countries combined pay -only?!- around 30%. The idea is clear: get the whole world to pay, since if they don't, they too will suffer the consequences. And the Eurozone doesn't have the means to do it by itself. Go through the IMF and Europe saves two thirds of the cost. - The Automatic Earth

I think to pursue competitiveness policies by manipulating or steering down the nominal values of the exchange rate is a loser's game. In the limit, it gets you to Zimbabwe, which didn't exactly become a hub of competiveness - Willem Buiter

These are strange times, and strange arguments abound. Some argue that the Japanese government, for example, can go on printing debt indefinitely and there is no risk. Others say a central bank shouldn't worry about losses, although to my ears there is something strange about an ultimate financial backstop itself being insolvent. Banking is all about trust, whatever type of banking it is. I remember sitting in my office in London when queues formed outside Northern Rock just around the corner. This brought home to me the role of faith and trust. The deposits of this bank were backed by the UK government. This was made clear on TV and also directly to the queues outside this commercial bank. However nobody left the queue and we had the first bank run since the introduction of deposit guarantees. However the simple fact is that nobody knows what happens to faith in the paper currency of a developed world currency when the headline ‘Central Bank Goes Bust’ is on the front page of the papers. I don’t know either but the Northern Rock example suggests that it would be dangerous to run the experiment to find out! Who at any central bank really wants to take this risk?

European purchases of bars and coins more than doubled to 118.1 tonnes in the third quarter, accounting for 30% of total coin and bar demand and making it the single largest source of demand for bullion in this form. - Reuters

Over the next decade, the US government expects to spend more than $40 trillion. Even if the $1.2 trillion in automatic cuts are allowed to go through, the amount totals just 3% of the expected outlays. In a masterstroke of hypocritical accounting, $216 billion of these proposed “cuts” merely represent the expected reductions in interest payments that would result from $984 billion of actual cuts - Peter Schiff

Based on Congressional Budget Office projections, this year’s U.S. fiscal gap is $211 trillion, or about 14 times gross domestic product. By comparison, Greece’s is 12 times GDP. Germany's is three times GDP. - Laurence Kotlikoff

Credit default swaps on banks are blowing out even in the U.S., despite leverage ratios that are substantially lower (in the 10-12 range, versus 30-40 in Europe). As of last week, CDS spreads on U.S. financials were approaching and in some cases exceeding 2009 levels. Bank stocks are also plumbing their 2009 depths, but with a striking degree of calm about it, and a definite tendency for scorching rallies on short-covering and "buy-the-dip" sentiment. There is a strong mood on Wall Street that we should take these developments in stride. I'm not convinced. - John Hussman

China's local government debt may be almost 3 trillion yuan ($473 billion) higher than the figure given by the nation’s audit office, if loans taken out by township governments are included, the Economic Observer reported. Duyang, a township in Yunfu city in the southern province of Guangdong, has more than 200 million yuan worth of debt while its annual fiscal revenue is only 500,000 yuan, the Beijing- based Economic Observer said - Bloomberg

Larry Lang, chair professor of Finance at the Chinese University of Hong Kong, said in a lecture that he didn’t think was being recorded that the Chinese regime is in a serious economic crisis—on the brink of bankruptcy. In his memorable formulation: every province in China is Greece.

Everything appears normal in Wenzhou. The streets leading from the city center to the surrounding factory districts are jammed as usual with trucks and delivery vans, new Range Rovers and dilapidated Citroen taxis. Beneath the surface, however, a mad race to collect debts is under way. For much of October, the Kid says he slept only two or three hours a night as he pondered how to claw back outstanding loans. "If people could get their money back just by holding other people at gunpoint, there would have been a riot in Wenzhou," he says. "It seems calm on the surface, but the chaos is underneath." - Austin Ramzy

Property sales  in Mumbai’s overheated market have dropped by a jaw-dropping 70 percent from  2007 peak levels while overall prices have risen 20 percent. - Knight Frank report

Here are the options, now choose - Nouriel Roubini

Someone please send this chart to the Germans - Joe Weisenthal/Business Insider

Unicredit Bombshell shouldn't be the last one - Jonathan Weil/Bloomberg

Deutsche bank could transfer contagion - Simon Johnson/Bloomberg

Video: Congressional insider trading - Credit Writedowns

China's economy on the brink of collapse? - The Epoch Times

Is Manmohan taking us back to 1991? - R. Jagannathan/Firstpost

Now, inclusive non-growth - Business Standard

Budget in tatters, fiscal deficit set to soar - S. Gangadharan/DNA

FDI in retail: Why the politicians are wrong - Firstpost

Business tycoons tweet frustration amid political instability - Firstpost

The RBI should forget forex rates and focus on inflation - Ajay Shah/Firstpost

Make it easier for millions to start a business - Swaminathan Aiyer/Times of India

Political/Social:

War, plague, famine, heart disease, cigarettes, road trauma: six very effective killers of human beings. But they're all amateurs when their records are compared to the number one mass murderer of all time. The humble mosquito, and the deadly diseases it carries, is estimated to have been responsible for as many as 46 billion deaths over the history of our species. That staggering number is even more frightening in context - it means that mosquitoes are alleged to have killed more than half the humans that ever lived. - Loz Blain

The irony is that there are plenty of grounds on which the opposition parties can hold the Indian government to account, given the past two-plus years of wholesale misgovernance. Their failure to do that, except by contributing to high-decibel hysterics, only reflects a colossal lack of political imagination. - Venky Vembu

Genetic Genocide: Wiping out humanity's biggest killer - Loz Blain/Gizmag

No country for young children - Sandip Roy/Firstpost

Readable - 12/11/11

Finance/Economics:


Almost all the developed nations have so much debt they can’t think about paying it back. They only worry about keeping up with the interest and refinancing costs. - Bill Bonner


Europe is already in a double dip recession and the sovereign debt crisis has already moved from Greece to Portugal to Ireland to Spain and now to Italy. Belgium, with its lack of a permanent government and 100% sovereign debt to GDP is next on this list. They would be followed by France and its implicit guarantee for a poorly capitalised banking system and Austria and its implicit guarantee for a banking system highly leveraged to central and eastern European debtors. Eventually, every country will feel the impact because a fixed exchange rate system with no lender of last resort is inherently unstable unless you have fiscal integration and/or compatibility. - Edward Harrison


The European project is failing at precisely the point that it had been attempting to solve — nationalism ..... Far from emerging as a unified force, the question will be how divided Europe will become. - Stratfor


Papandreou did not step down to “make way for the rescue package.” He stepped down to get out of the middle of a firefight. ..  No one wants to be the “austerity candidate.” Politics is about dispensing goodies, not about taking them away. Papandreou clearly understands this reality and wants nothing to do with it. - Eric Fry


Only two countries have had lower growth then Italy since 2000 - Haiti and Zimbabwe! - Tyler Cowen


A 2007 PwC/World Bank report tried to estimate the total net tax burden on companies in different countries. Italy has a total net, real corporate tax rate of 68.6 percent, including constituent taxes such as stamp duties, chamber of commerce duties, real estate taxes, fuel taxes, and regional taxes, as well as the more traditional corporate taxes and taxes on the employment of labor.  (NB: not all those taxes are enforced, or borne by the corporation, still it is a grim picture.) That’s the worst in all of Europe. - Tyler Cowen

The root of Italy's problems is that the country financed generous entitlements with high taxes and towering piles of debt, and now finds the money running out as the economy sputters. Indeed, Italy has more pensioners than workers and currently spends about 14 percent of GDP on pensions -- more than any other country in the Organization for Economic Cooperation and Development (OECD). - Foreign Policy

My suspicion is that the 120% debt target for Greece is largely a function of not wanting to suggest that Italy’s debt levels are too high. - Edward Harrison

Ever since the writings of Bagehot in the 19th century, it has usually been accepted that “last resort” market support should only occur when two key criteria are met. First, the borrower should face a liquidity problem, not a solvency problem, because otherwise the central bank would be propping up insolvent entities, and exposing itself to balance sheet losses. Second, to protect itself further against these possibilities, the central bank should only provide this emergency support in exchange for valid collateral. It is hard to argue that ECB purchases of Italian and Spanish sovereign bonds clearly meet these criteria. If this is a liquidity crisis, it is certainly one which could last for several years, and could all too easily morph into a solvency crisis. And, as Finland found when it asked for collateral from Greece, the provision of collateral is not an easy requirement to impose on an independent nation state. What could the ECB ask for in collateral? The Colosseum? - Gavyn Davies

The Germans have, twice in the last century, seen how this sort of monetary policy can end in hyperinflation and national bankruptcy. But how long can the Germans resist the pressure from other members? - Spiegel

And now another breach of confidence is on the horizon, with the Germans being expected to accept the notion that the ECB will be available to ailing euro countries as an almost unlimited reserve fund...The question the German government now faces is whether to preserve the monetary union or have a stable currency. - Spiegel

Is this kind of monetisation sustainable over the medium-term? 100%. If a central bank guarantees investors credibly that they can invest in certain debt instruments and not suffer principal or interest repayment risk, but only currency and inflation risk, some investors are almost definitely going to buy the debt instruments with the greatest yield pick up. Put another way, the only reason not to buy Italian debt at 2 or 300 basis points over Bunds, or Greek debt at 3 or 400 basis points over Bunds is because those governments are not credibly backstopped by the ECB. I should add that that is exactly why investors were in these bonds in the first place. It was only when the solvency issue came to a head that yields began to climb. - Edward Harrison

Here’s another interesting thing: in the 1990s, a number of countries, including Italy, engaged deliberately in transactions which had no economic justification, other than to mask their public debt levels in order to secure entry into the euro. Italy actively exploited ambiguity in accounting rules for swap transactions in order to mislead EU institutions, other EU national governments, and its own public as to the true size of its budget deficit. And Eurostat signed off on these transactions. And who worked at the Italian Treasury at that time? That’s right: “Super Mario” Draghi, who was director general of the Italian Treasury from 1991-2001 when all this was going on, and then joined Goldman Sachs (2002-2005), when the privatisations came up. Interesting that he is now the guy who has to deal with the ultimate fall-out. Karmic justice. - Marshall Auerback

Germany exiting the Eurozone would be less disruptive, than massive inflation scenarios in Greece, Portugal, and Spain. If France wants to stay in the Euro, let them. They can have the ECB as well. Then the ECB will print money to bail out the French banks - Mish

By openly acknowledging that Greece could abandon the Euro, Europe's leaders may have set in motion events that will automatically force Greece to leave - Michael Pettis

The significance of Ms. Merkel and Mr. Sarkozy's Cannes declaration is immense. At a stroke, they have introduced foreign-exchange risk into a sovereign-debt market still grappling with the realization that euro-zone government bonds contain unexpected credit risk. - Simon Nixon

The sell-off suggests Europe’s crisis is spiraling into a new stage as investors bet on which countries are most likely to quit the euro, starting with Greece. - Bloomberg

BNP Paribas SA and Commerzbank AG (CBK) are unloading sovereign bonds at a loss, leading European lenders in a government-debt flight that threatens to exacerbate the region’s crisis. BNP Paribas, France’s biggest bank, booked a loss of 812 million euros ($1 billion) in the past four months from reducing its holdings of European sovereign debt, while Commerzbank took losses as it cut its Greek, Irish, Italian, Portuguese and Spanish bonds by 22 percent to 13 billion euros this year. Banks are selling debt of southern European nations as investors punish companies with large holdings and regulators demand higher reserves to shoulder possible losses. The European Banking Authority is requiring lenders to boost capital by 106 billion euros after marking their government debt to market values. The trend may undermine European leaders’ efforts to lower borrowing costs for countries such as Greece and Italy, while generating larger writedowns and capital shortfalls. “European regulators and leaders are shooting themselves in the foot because a big investor group for sovereign bonds has been taken out of the market,” said Otto Dichtl, a London-based credit analyst for financial companies at Knight Capital Europe Ltd. “The downward spiral will continue until policy makers find a back-up solution for the sovereigns.” - Bloomberg

On US totals, if you figure average house prices use conforming loan balances, then a repeat buyer has to have roughly 10 percent down to buy in addition to the 6 percent Realtor fee to sell. Thus, the effective negative equity target would be 85%. You also have to factor in secondary financing, which most measures leave out. Based on that, over 50 percent of all mortgaged households in the US are effectively underwater — unable to sell for enough to pay a Realtor and put a down payment on a new purchase without coming out of pocket. Because repeat buyers have always carried the market as the foundation, this is why demand has not come back. It's as if half the potential buyers in America died over a two-year period of time. - Mark Hanson

Analysts’ forecasts show real-estate stocks will rally more than any other industry in China during the next year, even as wagers on declines climb to the highest level since at least 2008. Developers in the MSCI China Index will surge 46 percent on average by November 2012, the most among 21 groups in the equity gauge, based on analysts’ estimates compiled by Bloomberg. At the same time, bearish bets on property companies have doubled to 12 percent of shares available for trading this year, according to Data Explorers, a London-based research firm. Bulls say speculation about the bursting of an asset bubble in China’s property market is overblown and the shares are cheap after the average price-earnings ratio for the group fell 44 percent from an April peak to 5.77. Bears say real-estate stocks will extend this year’s slump after housing transactions in October fell for the first time in three months and government officials pledged to maintain real-estate curbs. - Bloomberg

The value of housing transactions in Hong Kong plunged 50 percent in October from the same month last year to HK$22.5 billion - Bloomberg

65% chance of banking crisis this month: Researchers - CNBC

Depression or great inflation in Europe? - Simon Johnson/New York Times

Contagion will overwhelm without policy response - Marc Chandler/Credit Writedowns

Why we will eventually see monetisation - Credit Writedowns

Does the ECB really have a silver bullet? - Gavyn Davies/Financial Times

Why the ECB might want to back Spain - The Economist

Will the PIIGS exit the Euro? - Mish

Italy's structural problems - Nick Squires/The Telegraph

If you thought Italy was bad... - Nils Pratley/The Guardian

Financial alchemy foils capital rules as banks redefine risk - Liam Vaughan/Bloomberg

Euro banks retreat into mini-crunch - The Guardian

Distortions in baffling bank financial statements - Floyd Norris/New York Times

US economy deeper in debt than before crisis - USA Today

Deja Vu all over again - Patrick Chovanec

China's gold imports surge sixfold - CNBC

Interactive guide to government debt - The Economist

Ray Dalio on how the economic machine works - Zero Hedge

UPA's perverse strategy - Niranjan Rajadhyaksha/Live Mint



Political/Social:

Only four countries (Afghanistan, Cambodia, Haiti, Myanmar and Pakistan) do worse than India in child mortality rate; only three have lower levels of “access to improved sanitation” (Bolivia, Cambodia and Haiti); and none (anywhere—not even in Africa) have a higher proportion of underweight children. Almost any composite index of these and related indicators of health, education and nutrition would place India very close to the bottom in a ranking of all countries outside Africa...There is probably no other example in the history of world development of an economy growing so fast for so long with such limited results in terms of broad-based social progress. - Jene Dreeze and Amartya Sen

Mobile phones could be health time bomb - Firstpost

By March 2012, UPA's options, electoral fortunes will shrink - Firstpost

Readable - 07/11/11

Finance/Economics:


"Unless the European Central Bank steps in very soon and on a massive scale to shore up Italy, the game is up. We will have a spectacular smash-up. If handled badly, the disorderly insolvency of the world’s third largest debtor with €1.9 trillion in public debt and nearer €3.5 trillion in total debt would be a much greater event than the fall of Credit Anstalt in 1931. (Let me add that Italy is not fundamentally insolvent. It is only in these straits because it does not have a lender of last resort, a sovereign central bank, or a sovereign currency. The euro structure itself has turned a solvent state into an insolvent state. It is reverse alchemy.) The Anstalt debacle triggered the European banking collapse, set off tremors in London and New York, and turned recession into depression. Within four months the global financial order had essentially disintegrated." - Ambrose Evans-Pritchard


"Italy is borrowing at 6.4% to lend to Greece at 3.5%. This will end well." - Unknown


"Absent a clear path to a much tighter fiscal and political union, which can lead only through constitutional change, the current halfway house of the euro system appears increasingly untenable. It seems clear that the European Central Bank will be forced to buy far greater quantities of eurozone sovereign (junk) bonds. That may work in the short term, but if sovereign default risks materialize – as my research with Carmen Reinhart suggests is likely – the ECB will in turn have to be recapitalized. And, if the stronger northern eurozone countries are unwilling to digest this transfer – and political resistance runs high – the ECB may be forced to recapitalize itself through money creation. Either way, the threat of a profound financial crisis is high. - Kenneth Rogoff


"BERLUSCONI SAYS ITALIAN DEBT HELD MOSTLY HELD BY ITALIANS - like Mario Draghi" - Zero Hedge


"Europe has enough resources to solve it's problem. It is a money distribution problem within. In terms of fiscal deficits, by Asian standard, the cuttings required are relatively small. What Asian economies did after the Asia Financial Crisis were several times as big. It just doesn't make sense for others to help Europeans when they could help themselves." - Andy Xie


"Former Bundesbank President Axel Weber said the plan to leverage the European Financial Stability Facility increases the likelihood that tax payers have to step in, Sueddeutsche Zeitung reported. Germany’s public debt would rise to 135 percent of gross domestic product if Italy and Spain were to tap the EFSF financial backstop, the newspaper cited Weber as saying in a speech in Frankfurt. As the sole guarantor to the EFSF, Germany could end up with a debt of 314 percent of GDP in an extreme case, Weber said." - Bloomberg


"I always thought that a AAA rated government guaranteed vehicle was supposed to benefit from volatile market conditions as there was a natural flight to quality….the frightening thing is that the EFSF might just have become a credit….and that’s not good….put another way, the vehicle that is supposed to borrow on behalf of countries that can’t borrow…cannot borrow…." - Gary Jenkins


"Berlusconi's latest assurance over his majority may be bad news for Italian bonds, which sold off again on Friday to push their yield to a record euro-era high above 6.4 percent. The spread over German bunds, reflecting the higher risk premium investors place on Italy, also hit a record above 4.6 percentage points.
Bond prices would recover and the yield spread would fall by a full percentage point if the government should fall, according to a Reuters survey of 10 fund managers, market analysts and strategists last week." - Reuters


"China should be thanking Greece everyday, for keeping the world's financial gaze away from East Asia." - Jim Chanos



The denials that trapped Greece - New York Times

Subprime moment looms for 'risk-free' sovereign debt - Gillian Tett/Financial Times

World pressures Germany on ECB - Reuters

60 Billion Euros the Greeks believe the Germans owe them - David Thomas/Daily Mail

Selling more CDS on Europe debt raises risk for U.S. banks - Bloomberg

Credibility is not everything - Paolo Manasse/Vox EU

Italy's future - The Street Light

Euro banksters' threat largely empty? - Naked Capitalism

Fast cars and loose morals - Ian Cowie/The Telegraph

Corzine forgot lessons of Long Term Capital - Roger Lowenstein/Bloomberg

6 things no one will tell you about MF Global - Brett Arends/Marketwatch

China credit squeeze spurs suicides, violence - Bloomberg

H.K. home prices may fall 45% - Bloomberg

The market is not rigged, your brain is - Interloper

The big list of behavioral biases - The Psy-fi Blog

India's folly: Borrowing abroad to create a sovereign wealth fund - Firstpost


Political/Social:

The ally from hell - The Atlantic

Is self-knowledge overrated? - The New Yorker

Manmohan Singh shows his true colours - Firstpost

Seven reasons why Rahul Gandhi is not fit to lead - Firstpost

Readable - 31/10/11

Finance/Economics:

The Euro deal: No big bazooka - The Economist

So many bailout questions - Financial Times

Europe looks to China - Patrick Chovanec

The creeping Eurozone credit crunch - Credit Writedowns

Europe just eviscerated the sovereign CDS market - Credit Writedowns

Mandatory Greek CDS post - Matt Levine/Dealbreaker

Europe's dying bank model - Gene Frieda/Naked Capitalism

We are all Greeks - Zero Hedge

More than 80% of hedge funds underwater - Stephen Taub/Institutional Investor

Watch out for China's 'freak' economy - Brett Arends/Marketwatch

Shanghai bans large property price discounts - Also Sprach Analyst

Soaring Indian realty ambitions belie rocky foundations - Henry Foy/Reuters

Political/Social:

Seven billion - Joel E. Cohen/New York Times

Indian government fueling further inflation - R. Jagannathan/Firstpost

Indian government planning to mug cash-rich PSUs? - R. Jagannathan/Firstpost

Readable - 26/10/11

Finance/Economics:

It's all connected: A spectator's guide to the Euro crisis - New York Times

Eurozone summit - despair and backbiting in the corridors of power - The Telegraph

Penny wise and Euro foolish - John Hussman

Winding up the Euro in an orderly fashion impossible - Tim Harford

Is the Euro driving the S&P500? - Credit Writedowns

Greek haircuts and Greek myths - the details - Financial Times

Greece in a state of shock as Troika reforms take effect - Patrick Cockburn/The Independent

Run on Greek banks underway? - Mish

Argentina's post-default economic success - Naked Capitalism

The Irish lesson - It's the competitiveness, stupid - Henry Kaspar/Kantoos Economics

Cash crash for Wenzhou's private loan network - Caixin

Pure hilarity: A chef built a railway bridge in China - Also Sprach Analyst

Japanese stocks and the generational struggle - Blogvesting

Felix Zulauf: The die is cast - The Big Picture

The Epileptic Economy - Max Roeder/Big Think

Video - Meltdown: Part 4 of 4 of an investigation of the 2008 financial crisis - Al-Jazeera


Political/Social:

India's shame: Over 2000 children died of malnutrition in Raichur district over 3 years - IBN

Readable - 22/10/11

Finance/Economics:

Italians leave fear of debt crisis to others - Spiegel

Is Germany to blame for the European mess? - Kantoos Economics

'Chaos' is a Greek word - The Guardian

Eurozone rescue going off the rails - Naked Capitalism

'Six-day marathon of lies, deceit underway - Mish

Humor - The EFSF as a hedge fund - Peter Tchir/Zero Hedge

Debt panic in China's Wenzhou - New York Times

Student loan bubble to exceed $1 trillion - Zero Hedge

The Rupee hits 50 to the dollar, here's why - Firstpost (they forgot to include the larger-than-budgeted fiscal deficit among the reasons)

India tightens purse strings - Firstpost


Political/Social:

The science of irrationality - Jonah Lehrer/Wired

This is how Indians pay more for fuel - Tehelka (ignore the last two paragraphs)

Indian population rising more than food production fueling inflation - Firstpost

Hunger kills 500 kids yearly in Melghat, Maharashtra - IBN

Readable - 19/10/11

Finance/Economics:

Europe's other bank problem - Credit Writedowns

Why a 50% haircut on Greek bonds won't work - Zero Hedge

The math behind the latest rumored European plan - Zero Hedge

Leveraged EFSF doomed to fail - Louise Bowman/Euromoney

Europe - Just getting warmed up - John Hussman

When No. 1 financial-strength ranking spells doom - Jonathan Weil/Bloomberg

Germany backing Italy seen as key to Europe's bank crisis - Bloomberg

Europe's lost decade as $7 trillion loan crunch looms - Ambrose Evans-Pritchard

The student loan bubble in the US - Zero Hedge

Chinese banks deteriorate, Loan sharks come knocking - Mish

Interactive global debt clock - The Economist

Cash is king - even in a bull market - Mark Hulbert/Marketwatch

Video- Meltdown: Part 3 of 4 of an investigation of the 2008 financial crisis - Al-Jazeera




Political/Social:


Heart-wrenching video of moral deterioration in China - Mish  (not for the faint of heart)

Why coal, power and oil prices have nowhere to go but up in India - Firstpost

Readable - 12/10/11

Finance/Economics:

Mechanics of a Euro breakdown - Izabella Kaminska/Finacial Times (Leaving the Euro is easier said than done)

"The greatest threat to the Euro is the bailout fund itself" - Zero Hedge (One of the best interviews in recent times by a Eurocrat)

The end of the fake recovery - Credit Writedowns

China's local debt pileup raising risk of hard landing - Reuters

China's trust loans are new lending valve - Patrick Chovanec

A skeptical view of China's latest bank bailout - Patrick Chovanec (The first in what should be a series of bailouts)

Chinese realty goes BOGOF - Macro Business

Wall Street, heal thyself - Devin Leonard and Romesh Ratnesar/Bloomberg (The end of the great financial bubble should bring Wall Street down to earth again, one way or the other)


Political/Social:

US foreign policy gone wrong, again: Haqqani network edition - Dan Froomkin/Huffington Post (At this point, I doubt anyone will be really surprised)

Scam money finding it's way back to India? - Firstpost

A self-targeting nutrition plan for India - Swaminathan Aiyar/Times of India (But what will happen to the  price of soybeans if India suddenly starts buying in large quantities? Maybe this calls for a slow and gradual change in procurement)

Readable - 08/10/11

Finance/Economics:

Last chance to save the Euro - John H. Cochrane

Recession, Restructuring, and the Ring Fence - John Hussman

How Greece could escape the Euro - Floyd Norris/New York Times

Dexia's collapse - Stratfor

Bank defense fail - Zero Hedge

Banking's self-inflicted wounds - Barry Ritholtz

Strange connections, Unintended consequences - Barry Rithotlz

Chinese economy on the edge of a nervous breakdown - Patrick Chovanec

Chinese crash-landing scenarios - Zero Hedge

One-third of Americans one paycheck away from default - Naked Capitalism

India's balance of payments: Bumpy road ahead - Live Mint

Video- Meltdown: Part 2 of 4 of an investigation of the 2008 financial crisis - Al-Jazeera


Political/Social:

UPA policies are leading to a scorched earth syndrome - Firstpost

Team Anna campaigns against Congress - IBN