Angela Merkel remains as clueless as ever about austerity

No matter how bad the economy looks in austerity-hit Europe, Merkel does not and probably never will understand economics. She's played to the pro-austerity crowd - fanning the flames with expertise - and there's almost no way she can work herself out of that position.

In Merkel's eyes, austerity worked well for Germany and now it's working well in places such as Spain. Except it's not. Yesterday the NY Times ran a depressing article about Spaniards now searching for food in trash bins. (And remember, Spain's budget had a surplus before the crisis.) In Greece, the plan to pay back the impossible loans is far off track but again, we all knew it would be that way at the start.

Even in the non-eurozone UK, austerity is now costing the country billions due to families quitting work to help sick family members. This means no more tax revenue and more stress on the system. It's not working and it won't work. There are countless examples of austerity failing miserably in a shrinking economy. Austerity has only worked during a growing economy and that does not exist in Spain, Greece, Portugal or the UK.

With this attitude, things will only get worse in Europe. Let's not forget who keeps insisting on driving the EU economy into the ground. The bankers caused the crisis, but it's Merkel who is making a bad situation worse.

How could anyone think this is the picture of success?

The Chancellor made her remarks in a speech to the Federation of German Industries on another day of turmoil in the currency bloc. The Spanish government faced mass anti-austerity protests in Madrid, while Greece was reported to be billions of euro off-track in meeting the terms of its bailout. Meanwhile, the ratings agency Standard and Poor's once again highlighted the grim state of the EU economy, forecasting that the eurozone would not return to growth until at least 2014.

Against such a gloomy backdrop, Ms Merkel insisted: "We need to take a deep breath to overcome this crisis. We must make the efforts that will allow Europe to emerge from the crisis stronger than it went in."

The German leader conceded that hard-won reforms in southern Europe had helped, but said there was still work to do. The markets, she added, had doubts about their ability pay back their debts. Her comments were overshadowed by the continuing crises in Spain and Greece. The government in Athens conceded yesterday that it would need between €13bn to €15bn more in funding if it were given the two-year extension to the bailout plan it has been requesting.

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Romney victory would destroy US relations with Europe

While meaning to bash Obama, the Romney team has repeatedly slammed Europe as if it's a tainted region. Though Romney lived in a mansion in a posh neighborhood of Paris while sitting out the Vietnam war, that was yesterday and today it's bash Europe day.

What's especially interesting about this new poll is that even with our strongest traditional friend, Brits are turned off by Romney. His clumsy European vacation was a classic example of the ugly American, offending everyone at every opportunity. Even Bush had more common sense than the deep-pocketed Romney.

Does the US really need another round of bad relations with our allies?

But the most striking finding was the level of antipathy towards the Republican in Europe. Although he is still largely an unknown quantity outside the US, he alienated many during an ill-fated overseas trip in the summer, particularly in Britain, where he appeared to publicly criticise Olympic planning and the level of enthusiasm for the London games.

Forty-seven percent of UK respondents said a Romney victory would make them feel less favourable towards the US, and only 3% would make them feel more favourable.

That sentiment was mirrored in Germany and France, where only 4% and 5% respectively said that he would make them feel more favourable towards the US. In Germany, 48% said it would make them feel less favourable and in France 38%.

Anyone else remember the silly story that the Romney campaign floated during his trip to the UK about the Churchill bust? Besides being an odd point to make - what other country puts the bust of a foreign leader in the office of their president? - it also shows how little he understands about the world around him. He's keen to provide the symbolism of an old friend yet his actions show something else. Romney is viewed as a blundering, offensive fool, even in the UK. Read the rest of this post...

Brain and money drain taking its toll on Spain

In predictable and understandable fashion, money and brainpower is leaving Spain. Just as we've been seeing in Greece (and the same for younger Italians), those who can leave, are leaving Spain. The bank withdrawals are large, but not large enough to disrupt the banking system. Long term the larger problem is losing the people who are needed to rebuild the economy.

Whether you're a young student, young graduate or even mid level manager who has the option to leave for a more stable environment, wouldn't you? The youth hardly even have any option considering the 50% unemployment rate but the same can be said of the mid level managers who have families. Why would you want to educate your children only to throw them to the wolves when they graduate from university?

The EU may be dumping $125 billion into the Spanish banking system, but that won't change the ugly economic dynamics.

Is staying really even an option for those who have the skills to work elsewhere?

More disturbing for Spain is that the flight is starting to include members of its educated and entrepreneurial elite who are fed up with the lack of job opportunities in a country where the unemployment rate touches 25 percent.

According to official statistics, 30,000 Spaniards registered to work in Britain in the last year, and analysts say that this figure would be many multiples higher if workers without documents were counted. That is a 25 percent increase from a year earlier.

“No doubt there is a little bit of panic,” said José García Montalvo, an economist at Pompeu Fabra University in Barcelona. “The wealthy people have already taken their money out. Now it’s the professionals and midrange people who are moving their money to Germany and London. The mood is very, very bad.”

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Creditors propose 6 day work week for Greece

Maybe the creditors would be even happier if first born children will be signed over to the creditors or would they prefer a country of indentured servants? Shameful.

Greeks should operate a six-day working week for all sectors, international creditors said in a letter to the Greek government, a measure which forms part of a wider set of demands in return for aid to the country.

In the leaked letter, reported in the Guardian newspaper, the European Commission, European Central Bank and International Monetary Fund call for Athens to implement the measure as part of the bailout agreement with lenders.

According to the paper, the letter states that more flexibility must be implemented to work schedules, including working into the weekend by increasing the number of maximum working days to six.

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US companies preparing for Grexit

It may still be possible for Greece to remain in the eurozone, but that is increasingly unlikely. If Greece stays, the financial terms are going to be more of the same, which means misery for Greece and favorable terms for the lenders who helped create the problem.

In the meantime, companies are preparing for a Grexit. More from the NY Times:

Bank of America Merrill Lynch has looked into filling trucks with cash and sending them over the Greek border so clients can continue to pay local employees and suppliers in the event money is unavailable. Ford has configured its computer systems so they will be able to immediately handle a new Greek currency.

No one knows just how broad the shock waves from a Greek exit would be, but big American banks and consulting firms have also been doing a brisk business advising their corporate clients on how to prepare for a splintering of the euro zone. That is a striking contrast to the assurances from European politicians that the crisis is manageable and that the currency union can be held together. On Thursday, the European Central Bank will consider measures that would ease pressure on Europe’s cash-starved countries.

JPMorgan Chase, though, is taking no chances. It has already created new accounts for a handful of American giants that are reserved for a new drachma in Greece or whatever currency might succeed the euro in other countries.

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Eurozone eyes second recession in two years

For those who are eager to see how austerity plays out, pay attention. Cutting spending and services will not help an economy grow as we're seeing in the UK and Europe. What will hurt the most in Europe is the slipping economy in Germany.

The euro zone now looks destined for its second recession in three years, according to business surveys that showed the economic rot is even spreading through Germany, the region's largest and strongest economy.

The 17-nation bloc's economy will contract 0.5-0.6 percent in the current quarter as orders for new business decline again, Markit's Purchasing Mangers' Index (PMI) suggested — far worse than the consensus in the latest Reuters poll.

A debt crisis which began in the euro zone's smaller economies is now hammering business and consumer confidence across the bloc, putting pressure on policymakers to take radical steps to help vulnerable countries such as Spain and Italy.

After spending the last four weeks in Southern France, my circumstantial evidence also pointed towards recession. Besides those from Northern France, people from Northern Europe love spending summer vacation in France but business owners were all concerned with lower numbers this year. More Americans are traveling (thanks to better exchange rates and stronger economy) but those numbers will always be small compared to home grown tourists.

Even upon my return to Paris, the usual empty streets of August were suddenly full. Europeans see the slowing economy and are putting the breaks on spending. It's possible that EU governments have learned a few lessons from the failed austerity programs, but not likely. With a fragmented political system in the EU, it won't be easy to climb back out of recession any time soon. Read the rest of this post...

Social justice in the classroom? That's crazy talk

It's no secret that American education is in crisis.

So you'd think people would welcome any creative way to give our kids a break, as budgets get squeezed, teachers are laid off, class sizes grow and critical thinking skills give way to rote learning by textbook and standardized test. In fact, creativity is actually flourishing against the odds.

In Chicago, Mayor Rahm Emanuel has embraced the prestigious International Baccalaureate program in high schools as a way of expanding the educational horizons of the city's best and brightest. And rightly so: U.S. high schools offering the IB program often find themselves on lists of the best schools in the country.

Something else that's no secret, though, is that certain conservatives love a good culture war and rarely miss an opportunity to trumpet ignorance over learning -- on the basis, presumably, that being dumb as dirt is more authentically American than actually knowing anything.  And so, the Republican Party of Minnesota recently decided that it opposes any state or federal funding for IB. And in Idaho, the Coeur d’Alene School District has decided to pull the IB program altogether.

Why? A leading opponent, lawyer Duncan Koler, told the school board last week that the IB is full of “concepts that are politically charged, such as social justice, sustainability. These are code terms." Code for what? Social justice, that is some crazy talk.

What's really going on is a backlash against creativity in education. The International Baccalaureate, we are told, is some sinister UN-backed plot that promotes totalitarian concepts and seeks, in the words of one anti-IB activist, to “program our children’s minds with new loyalties.” Nicky Kram Rosen, the principal of PS 368 in Hamilton Heights in New York City who is putting Arabic on the curriculum next year, is -- according to one scathing local critic -- part of "a cesspool for panderers and anarchists with an international agenda".

The mindset here is so 2003, that miserable year when Arabs were all terrorists, the French -- originators of the Baccalaureate -- were surrender monkeys, and congressmen preferred freedom fries for their lunch. You could even say it's so 1856, when nativists and Know-Nothings fought against the immigrant melting pot in America's growing cities because they thought that foreigners had nothing to contribute but disease, corruption and suspect ideas. They were wrong then and they are wrong now.

The fact is, the IB program has won wide international recognition for its exacting standards and the breadth of knowledge and critical thinking it demands of its students. High-schoolers who participate are taught a second language -- really taught a second language. They are encouraged to engage in community service and develop understanding and respect for other cultures, not as an alternative to national identity, but as an essential part of life in the 21st century.

A recent University of Chicago study showed that students in the IB program were 40 percent more likely to go to college. Tell that to the New Hampshire legislature, which made a short-lived attempt earlier this year to introduce an anti-IB bill banning any public school curriculum "subject to the governance of a foreign body or organization". The bill passed the New Hampshire State House but died, thankfully, in the Senate.

To be against the International Baccalaureate is to be against learning itself, because that's the beginning and the end of what it offers. More than 1000 universities -- including the US Air Force Academy, the US Naval Academy, and institutions like Brown University, Columbia University, and Stanford University -- recognize the IB Diploma as a mark of academic excellence.

Last time I checked, these were pretty highly regarded national institutions. The Republican party, less so. Read the rest of this post...

Pain continues for Spanish banks

Though Spain has not yet formally requested their €100 billion bailout ($125 billion), that formality appears to be set for next week. The initial review, based on six month old data, suggested the banks had plenty of room under the bailout amount. A new review suggests that they still have room, though new questions are being asked about the calculations of potential defaults.

The Big 4 accounting firms will also be doing their own review, but let's remember that the Big 4 has been at the heart of so many scandals (or shall we say, fraud) including Enron and Parmalat to name a few. Asking the accounting industry to confirm numbers is generally a useless exercise due to their special ability to combine corruption with incompetence.

Also under discussion is whether or not the top three Spanish banks are in the clear or not. The latest report suggests they're all doing well despite their recent downgrades as well as the reality that everyone around them is falling apart. How believable does that sound to anyone else? It's like JPMorgan insisting that they didn't need the 2008 bailout when in fact they really did. When your entire industry is collapsing, everyone goes down whether you like it or not.

Drip, drip, drip...

Publication of these broad assessments has cleared the way for Luis de Guindos, economy minister, to make a formal request on Monday to his euro zone partners for a credit line of as much as 100 billion euros.

This money—a partial bailout for the crisis-stricken Spanish state—will be used to recapitalize needy banks, including Bankia, the merged group of seven savings banks that has called for 19 billion euros of emergency capital support and is being nationalized.

From Madrid to London, however, skeptical analysts say much more needs to be done, and done more quickly, to restore confidence in Spanish banks so they can revive lending to businesses and help to end a crippling economic recession.

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Steve Martin demonstrates the Euro-crisis

Why is it that the leaders of Europe find it so hard to get the fact that the Euro is not working, and their attempts to rescue it are only making matters worse?

This Steve Martin clip from The Man with Two Brains is the best illustration of their approach I can imagine:



The Germans of all people should remember what happens when a country is forced into penury to repay a foreign debt. (A lot of us remember when Greece and Spain were both ruled by military dictators.)

European leaders have a choice: Either they let the Euro zone print money on a vast scale or they admit the Euro project is a failure and work out an exit strategy.

Fear of a return to more authoritarian ways is of course one of the reasons that Greek politicians have been so desperate to stay in the Euro club, and thus they ignore the obvious fact that you can't 'bailout' a bankrupt state by lending it more money. Even more so when the conditions attached to the 'bailout' have crippled the Greek economy. Every future general election in Greece is going to be a referendum on the question of whether Greece should stay in the Euro. At some point the voters are going to say 'no'.

The rest of Europe is likewise ignoring the fact that even if the Euro survives the current crises in Greece, Spain, France and Italy, it is a matter of "when," not "if," the whole house of cards comes crashing down.

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Cyprus requests EU bailout as Greek losses take their toll

Considering the close relationship with the Greek economy, it's not a surprise. The German response continues to be all over the place and the fractured leadership of Europe isn't helping.

The German response is not dramatically different from the response of many homeowners in the US who aren't enthusiastic about solving the problem of underwater houses. Plenty of US homeowners hate the idea of rescuing people that they think gambled and acted irresponsibly. Fixing that problem in the US or bailing out countries is painful, but to delay the process in an attempt to make a point is only going to cost more in the long run.

Another?

Cyprus has become the fifth eurozone country to seek outside financial help to shore up its ailing economy after a day of heavy selling on financial markets prompted by fear that this week's European summit will end without a blueprint to rescue the single currency.

The government in Nicosia admitted that it had been caught in the backwash from the crisis in neighbouring Greece as it formally applied to Brussels for assistance.

On a day when Fitch cut Cyprus's credit rating to junk, a statement said: "The purpose of the required assistance is to contain the risks to the Cypriot economy, notably those arising from the negative spill-over effects through its financial section, due to its large exposure in the Greek economy."

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EU court ruling: If you get sick during vacation, those days don't count against vacation

Compared to the US where there aren't even minimum vacation days on the books, this is amazing. NY Times:

For most Europeans, almost nothing is more prized than their four to six weeks of guaranteed annual vacation leave. But it was not clear just how sacrosanct that time off was until Thursday, when Europe’s highest court ruled that workers who happened to get sick on vacation were legally entitled to take another vacation.

“The purpose of entitlement to paid annual leave is to enable the worker to rest and enjoy a period of relaxation and leisure,” the Court of Justice of the European Union, based in Luxembourg, ruled in a case involving department store workers in Spain. “The purpose of entitlement to sick leave is different, since it enables a worker to recover from an illness that has caused him to be unfit for work.”

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Video: Damien Saez' rousing political anthem to Resistance: "Sons of France"

"Fils de France" (Sons of France) is one of the most powerful political anthems I've heard, and it's modern. Its composer, Damien Saez, is a man to watch. He's one of the best of this generation's singer-songwriters, and a powerful political voice.

I'll have more of his work in future posts.

"Fils de France" was written during the French 2002 presidential election, when Jean-Marie Le Pen (the far-far-right candidate) defeated the center-left candidate, Lionel Jospin, in the first round to enter the final round against Jacques Chirac, who won.

The victory by the racist Le Pen in reaching the second round shocked France and the world.

Couple that with the fact that 40% of French youth didn't vote — 40% — and you can see why Saez is upset. Saez is one of them, of that generation. The song opens with a reference to that lack of engagement by youth (a constant Saez theme).

Saez is always trying to engage the youth politically — something we should be doing here as well. In my own personal and most humble opinion, of course.

Notice please the emphasis on la Resistance (resistance!), with the raised fist. If you come here often, you know I'm a big fan of raising a ruckus, exerting your will, getting in the way of the machine — being effective, in other words.

But maybe that's just me and my "playing to win" fetish.

Listen and watch as Damien Saez performs "Fils de France" live at the Zenith in Paris in 2002. After that, a taste of the lyrics, to get you started.

Enjoy the music. Every time I listen, I can't get the song out of my head.



A taste of the lyrics:

Fils De France
Sons of France

Announcer: "40% of 18–25-year-olds didn't vote. Unimaginable!"

J'ai lu, les larmes aux yeux,
les nouvelles ce matin
    I read, with tears in my eyes,
    the news this morning.

20% pour l'horreur,
20% pour la peur.
    20% voted for horror
    20% voted for fear

Ivre d'inconscience,
tous, Fils de France.
    Drunk with unawareness,
    all of them, Sons of France.

Au pays des lumières,
amnésie suicidaire.
    In the land of the Enlightenment
    suicidal forgetfulness.

Non Non Non Non.

Nous sommes, nous sommes la Nation des Droits de l'Homme.
    We are the Nation of the Rights of Man [a document]
Nous sommes, nous sommes la Nation de la Tolérance.
    We are the nation of Tolerance.
Nous sommes, nous sommes la Nation des Lumières.
    We are the nation of the Enlightenment.
Nous sommes, nous sommes à l'heure de la Résistance.
    We are at the hour of Resistance.

Pour les rêves qu'on a fait, et pour ceux qu'on fera.
    For the dreams that we have done,
    and the dreaming we will do.
Pour le poing qu'on a levé, pour celui qu'on lèvera.
    For the fist that we have lifted,
    and the fist we're going to raise.
Pour un idéal, pour une utopie.
    For an ideal, for utopia.
Allons marchons ensemble enfants de la Patrie,
Fils de France.
    Let us march together, children of the country,
    Sons of France.

[The last is a quote from La Marseillaise, the French national anthem: "Allons enfants de la Patrie..."]

...

Y a ces ombres derrière nous, y a ces idées vendues,
    Behind us there are shadows,
    the traitors and their plots,
y a ces drapeaux qui flottent et des hymnes dessus,
    the banners that they fly,
    their anthems and their shouts,
et puis y a toi mon frère, oui toi qui n'y croit plus
    and then there is you, my brother,
    yes, you who have lost your faith
et puis y a nos prières et nos causes perdues.
    and then there are all our prayers
    and all lost causes too.

Honte a notre pays, honte à notre Patrie,
    Shame on our country, shame on us,
Honte à nous la jeunesse, honte à la tyrannie,
    Shame on us the young, shame on the tyranny,
Honte à notre pays, revoilà l'ennemi,
    Shame on our country; look, the old enemy,
Allons marchons ensemble enfants de la Patrie,
Fils de France.
    Let us march together, children of the country,
    Sons of France.

"The old enemy" is a revolutionary France–era reference to being surrounded by kings who wanted the French Republic to go away — threat as it was to their "divine right" doctrine. They put armies in the field to say so.

We know how that ended (they lost to the Republican army), but it always comes back, that battle. The "old enemy" is rule by elites, as Saez obviously knows. He's quite the rebel, one I really like.

Nous sommes à l'heure de la Resistance. We're at the hour of Resistance.

If you think, as I do, that we're at a global tipping point — true that in spades.

À la Resistance, fils du Monde — Resist, children of the world. It really will be your world soon enough.

Remembering Saez' words: "You who have lost your faith" — do not lose your faith yet.

GP

To follow or send links: @Gaius_Publius
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EU economy softens as German numbers decline

If the German economy slips, there's going to be even more misery in Europe than exists today. Unfortunately there are signs of a GDP drop there which should not be a surprise for the export driven economy. If your export markets are all suffering, who is going to be buying?

Meanwhile Italian PM Mario Monti is telling everyone that the Eurozone has one week to save itself. Dramatic, but maybe he's not too far off either.

On top of this, the ratings agency Moody's just downgraded 15 of the largest global banks. Not that the ratings agencies have much of a respected track record, but the report does suggest things are not going as well as the banks suggest. Keep in mind too that the report is based on six month old data, so the situation is likely worse off for many of the banks.

While some of the banks on the list were hit harder than others, a few of the big name Spanish banks failed to make the bad list. In light of the deteriorating economy there, their claims of good health sound as unbelievable as JPMorgan's previous claim that no, they didn't need the TARP money. So the banking system all around is crumbling and they think it's not going to be a problem? Does anyone honestly believe that line anymore?

So lots of problems and very few answers right now for Europe. Germany has enjoyed the luxury of a growing economy but those days may be ending soon. A troubled German economy won't be helpful, though it may help wake up the hard liners who have been unproductive to date with repairing the eurozone. Read the rest of this post...

EU & IMF to renegotiate Greek bailout for 3rd time

Why would anyone think the third attempt will be any better or fair to Greece than the previous two attempts? Outside of their echo chamber, few believed the previous bailouts would solve the problem and just as many have concerns with any new plan that doesn't include at least a partial default.

The earlier bailouts were mostly about the banks and unless there's a radical change within the EU and IMF, it will be the same story this time. What does it say about previous negotiations if they are now saying that the February 2012 bailout is now outdated?

International lenders and Greece will renegotiate the program on which the second financial bailout for Athens is based because the original has become outdated, a senior euro zone official said on Tuesday.

Greece secured a second, 130-billion-euro bailout package in February from Europe and the International Monetary Fund, but two general elections in May and June delayed the implementation of the conditions attached to the bailout.

The United States, the largest IMF member, said it supports discussions to review the Greek bailout program, but German Chancellor Angela Merkel has said that any loosening of Greece's reform promises would be unacceptable.

If the EU and IMF are serious, they will forget about what is good for the banks and think more about the people of Greece this time. But don't hold your breath. Read the rest of this post...

Greece votes, keeps Nazis, kicks problems down the road again

Despite the excitement of electing a new government yesterday, Greece is no closer to resolving the financial problems than they were the day before. The anti-bailout parties won many seats, but they eventually lost to the pro-bailout forces.

Once again the mainstream voices are talking about renegotiating the bailout terms, as if we haven't been there before. Many of the EU powers have been dreaming of this day so that all of the problems could be postponed to another day. The financial markets are also celebrating as this means the big financials will get an extension to the free ride granted by Merkel and company. Hooray!

Much like the election results in Egypt yesterday, one result was determined but many more questions were opened up during the process. Greece now has a new government that is eager to work with the powers of the EU to make minor changes to the bailout terms, but the fundamental problems will remain unsolved for another day.

In addition, the new coalition in Greece will be stressed from the start as it consists of the center-right New Democracy and their chief rival for decades, the socialist party PASOK. More on the new partnership at CNBC. Read the rest of this post...

The "lazy" Greek workers who aren't so lazy

Northern Europe has a tendency to talk about lazy workers in Southern Europe though I've always attributed that to jealousy. Who really doesn't want to live along the Mediterranean where you have the beautiful sun and sea?

Northern Europeans flock to these places for vacation so naturally, that's what they think of when they think of that area. Since it's highly unusual for any European to work during vacation, they somehow assume that because it's a vacation area, that's all people do is act like they are on vacation.

The Greeks should be asking the Germans why they work so little. The stereotype of lazy Greek workers is false according to this research.

And this cliché has permeated public opinion elsewhere. Greece is perceived as the least hard-working country in Europe by the British, the Germans, the Spanish, Poles and Czechs, according to a recent survey by Pew. Greeks who were surveyed pointed the finger at Italy as the laziest country.

Yet the picture is far from clear-cut. Greeks have less vacation time, and their retirement age is rising from the current average of 61 under the terms of the bailout.

The average Greek worker puts in 2,017 hours per year, more than any other European country. This is partly because there are more self-employed people, who tend to work longer hours, and fewer part-time employees to drag down the average.

Read the rest of this post...

Ratings agency: Spain to ask for more cash, Italy bailout coming

The European Union did an effective job of kicking the can down the road for a few years but now it appears as though the road is coming to an end. The recent Spanish bailout never sounded like it would be enough considering the depth of the employment and real estate problems in Spain. The poorly implemented Spanish bailout is once again being pinned on Merkel, who has a knack for making a bad situation worse. It's also hardly a surprise that Italy is yet again the topic of bailout rumors but this time, the bailout looks much closer to reality.

CNBC has more on the crisis from Sean Egan of Egan-Jones.

Poor credit quality of banks usually goes hand-in-hand with poor government finances as the two institutions are “joined at the hip”, Egan told CNBC Asia’s “Squawk Box” on Wednesday. That’s the case for most countries such as the U.S., the U.K., Switzerland and Ireland; Spain and Italy are no exceptions, he said.

“It makes little sense to separate the banks’ credit quality from the governments’ credit quality because quite often, they support each other and that’s certainly the case in Italy and Spain,” he said. “We think that Spain will be back at the table, asking for more than the 100 billion euros ($125 billion) that they just asked for, and we think that Italy will also come to the table within the next 6 months.”

Read the rest of this post...

$1 billion per day leaving Greek banks

Angela Merkel can take a bow for creating such confusion in the market. Rather than be serious about addressing the problem a few years ago, she chose to try and make a point that doesn't apply and then made sure to give the bankers a sweet deal during negotiations. Look at all of the money she saved Germany and the EU with that strategy. Brilliant job, huh?

Greeks pulled their cash out of the banks and stocked up with food ahead of a cliffhanger election on Sunday that many fear will result in the country being forced out of the euro.

Bankers said up to 800 million euros ($1 billion) were leaving major banks daily and retailers said some of the money was being used to buy pasta and canned goods, as fears of returning to the drachma were fanned by rumors that a radical leftist leader may win the election.

The last published opinion polls showed the conservative New Democracy party, which backs the 130 billion euro ($160 billion) bailout that is keeping Greece afloat, running neck and neck with the leftist Syriza party, which wants to cancel the rescue deal.

Read the rest of this post...

Spanish bailout leaves market nervous

When many wonder if the latest bailout will actually work, there's a problem. When the bailout of one country leads everyone to start looking at the next state bailout, there's a really big problem. Guess where we are now?

A bailout of up to €100bn for Spain's ailing banks failed to calm nerves about the future of the euro on Monday amid confusion over the plan's details and worries that Greek voters might choose to abandon the single currency.

The hurried bailout announcement after an emergency video conference of eurozone finance ministers at the weekend was meant to ease pressure on Spain and other troubled European economies ahead of Sunday's elections in Greece.

But Spain's borrowing costs rose on Monday, nudging closer to levels that are considered unsustainable and dragging Italy towards the danger zone. Europe's stock markets fell slightly, despite an early bounce, the FTSE 100 in London finishing down 0.05%.

The banks continue to drag down the global economy and not so surprisingly, they continue to get away with financial weapons of mass destruction.

Spanish banks went on global expansion missions in recent years including in the US. Santander and BBVA are based in Spain so US regulators need to confirm what the impact will be with this crisis. Maybe they're fine, but there's a strong possibility that this crisis could impact US banks. Read the rest of this post...

Violent Neo-Nazi Greek spokesman sues victims for defamation

Milliseconds before clocking his female victim.

"Only in America" has come to Greece.

How is it that the man who hit a woman repeatedly in the face, and threw water on a second woman - all on national TV - can then sue his victims for defamation, after the police had to launch a nationwide man-hunt to find the guy?

Once again, why is he not in jail?

A Greek far-right politician who hit a left-wing politician in the face and threw water at another during a live television talk show sued his victims for defamation on Monday.

Ilias Kasidiaris, spokesman of the far-right Golden Dawn party, said he would also sue private TV station Antenna for wrongful detention after he was locked in a room in the studio following the attack until he broke down the door and escaped.

NOTE FROM JOHN: Wrongful detention? He's lucky someone didn't shoot him after he started beating up a woman on national TV.

It is funny how thin-skinned those neo-Nazis are. Read the rest of this post...