Global Economic Crisis

Official statistics reveal that in November 2012 Eurozone unemployment levels reached  11.8 percent, compared with 10.6 percent in November 2011. This record level of joblessness in the 17 nation monetary union clearly shows that the massive, repetitive efforts at solving the Eurozone’s intractable sovereign debt crisis has worsened economic vitality, contributing directly to a worsening employment picture within the monetary union.

The unemployment rate revealed in official figures obfuscates the very uneven economic performance within the Eurozone, especially with respect to employment statistics. In Austria is found the lowest level of unemployment within the Eurozone, at 4.5 percent. In contrast, Spain now has the highest level of unemployment in the Eurozone, a staggering  26.6 percent, surpassing even insolvent Greece, which  had an unemployment rate of 26 percent.

It appears clear that the Eurozone is not a unified monolith, but a tale of two economic orders. There is the debt ridden, increasingly jobless periphery, and the still relatively prosperous core countries, such as Germany. The question is, how long can the core of the Eurozone remain immune to the depression-level economics within the PIIGS nations? My guess; if the insolvent Eurozone countries remain mired with high unemployment by mid-year, it is hard to see how jobless rates will not start to rise dramatically in the core of the Eurozone.

WALL STREET KILLS--A CHILLING NOVEL ABOUT WALL STREET GREED GONE MAD

 To view the official trailer YouTube video for “Wall Street Kills,” click image below:

Wall Street Kills-Official Trailer

In a world dominated by high finance, how far would Wall Street go in search of profits? In Sheldon Filger’s terrifying novel about money, sex and murder, Wall Street has no limits. “Wall Street Kills” is the ultimate thriller about greed gone mad. Read “Wall Street Kills” and blow your mind.

 

First there was Greece, then Ireland and Portugal, and now Spain. The last of the PIIGS nations afflicted with massive sovereign debt is Italy. Massive public debts and annual deficits, its bonds periodically hovering at the seven percent dangerous  yield level on long term sovereign debt, the Italian economy is a basket case. As with the other  PIIGS countries, it is kept fiscally alive only due to massive Eurozone intervention, including the European Central Bank (ECB) and the disenfranchised German taxpayer. But with Rome, there is one other big reason for Italy’s economic woes. It’s judicial system is a joke.

An Italian court has just ruled that six geological scientists ( and an ex-official of the government) are legally culpable for failing to predict the deadly  2009 earthquake in L’Aquila, and sentenced each of them to serve six years in prison for manslaughter. Scientists going to jail for failing to predict an earthquake? What about astrologers and soothsayers? No, the Italian system is OK with magicians and wizards being unable to predict seismic phenomena, but if you happen to be a geologically trained scientist who fails to ascertain with exact precision future earthquakes, then you are going straight to jail. By comparison, Russia’s Putin sending Pussy Riot to a penal colony comes across as less ridiculous than this disgraceful display of warped humor by the Italian justice system.

The imprisonment of scientists harkens back to a time when magicians would be burned alive for failing to stop the Black Death during Europe’s Dark Ages. This issue, however, goes beyond ethics and scientific freedom, including the freedom to make mistakes in analyzing natural phenomena that unfolds independently of man’s will. Science and technology is about all that is left in a European economy which, like America’s has undergone thorough deindustrialization. In a Europe and America where bankers and financial speculators can destroy the global economy without any risk of criminal sanction ( though with the assurance of a taxpayer bailout) but where those working in scientific research can be imprisoned for failing to be infallible, the inexplicable decision by an Italian court will not encourage talented Italians to enter the scientific field.

How ironic it is that financial oligarchs and their enablers in public office, such as central bankers, can escape accountability for their role in creating the greatest economic and financial catastrophe since the Great Depression of the 1930s ( though many experts have demonstrated that the crisis now afflicting the global economy was eminently predictable) while seismologists and scientific researchers are sent to prison for lacking divine prescience. The Italian court’s judgment is supposedly based on the scientists failing to adequately assess the risk factors in engaging in the inexact science of earthquake forecasting. If the same court had applied the identical  verdict and sentence towards economists and financial advisors with similar faults in weighing risk factors in formulating their forecasts, perhaps it would not come across as so bizarre. However, by placing the blame for a natural disaster’s tragic outcome on scientists, Italy’s courts have offered an unexpected but very eloquent explanation for why the third largest economy in the Eurozone has become so dysfunctional. Quite simply, the power structure in Italy has gone completely mad.

WALL STREET KILLS--A CHILLING NOVEL ABOUT WALL STREET GREED GONE MAD

 To view the official trailer YouTube video for “Wall Street Kills,” click image below:

Wall Street Kills-Official Trailer

In a world dominated by high finance, how far would Wall Street go in search of profits? In Sheldon Filger’s terrifying novel about money, sex and murder, Wall Street has no limits. “Wall Street Kills” is the ultimate thriller about greed gone mad. Read “Wall Street Kills” and blow your mind.

 

After days of largely contrived drama, the nearly dysfunctional emergency coalition government in Athens announced a deal among ruling political parties for another austerity package, in the expectation that this will lead to the Eurozone going forward with the second bailout of Greece, involving another 130 billion euros. As everyone knows by now, this is a game. The political actors in Greece continue to come up with new, punishing austerity measures, while the politicos in Brussels assure the world, and especially the bond markets, that this time at last the Greek debt crisis has been permanently resolved.

It is unlikely that investors in sovereign debt will be impressed with the latest deal being offered by the government in Greece. They are aware that even Eurozone politicians, especially in Germany, are voicing skepticism over the sufficiency of the Greek measures to address their debt crisis. They are even more cognizant of the fact that the austerity measures create a fiscal drag on the Greek economy, leading to even further deficit problems despite cuts in government spending. The political turmoil in Greece, with another general strike being planned by the nation’s labor unions, is likely not to reassure the bond vigilantes.

Meanwhile, as the Greek debt and economic crisis boils over, the other PIIGS nations (Portugal, Italy, Ireland and Spain) are waiting in the wings with their own acute crises.

The debt crisis contagion in the Eurozone continues to metastasize. With Italy’s ten year government bonds above the red line of 7 percent yields despite a new government, Spain is now approaching that same zone of danger. Spanish government bonds with ten year maturities are very near the toxic level of 7 percent. With the two largest PIIGS nations in the Eurozone on the verge of insolvency, it is quite clear that the attempts to a avoid a contagion from the Greek debt crisis have been a monumental failure.

The politicians in Europe are so desperate that they have actually ditched democracy in a last ditch effort to avert a catastrophic implosion of the Eurozone.  Appointing  unelected governments and forbidding popular votes on economic and fiscal policy , not to mention eroding national sovereignty are the last refuge of the bumbling European politicians. The latest developments in the Spanish debt crisis show that these desperate measures are likely to be as dysfunctional as all other previous efforts to forestall an inevitable disaster from occurring.

WALL STREET POLICE: GLOBAL ECONOMIC CRISIS

Officer Larry of the NYPD is on his way to Zuccotti Park in lower Manhattan to arrest peaceful protesters involved with the Occupy Wall Street movement. Being a public spirited member of the New York Police Department, Officer Larry does remind us that there is a global economic crisis underway that rivals the Great Depression of the 1930s.

Any doubt that the Eurozone debt crisis is no longer contained, but has now metastasized into a full-blown global calamity, is rapidly being erased by fast-moving events.   With the second bailout of insolvent Greece in the works, followed by a ratings downgrade to junk by Standard & Poor’s, Moody’s has now weighed in with a double whammy. Ireland’s sovereign debt has been downgraded to junk status, with a clear signal that the marketplace expects the Irish Republic to require a second bailout package, as was the case with Greece.  Moody’s has now followed up on its action regarding Ireland with a warning that for the first time in its history, the AAA rating on U.S. government debt is under review for a possible downgrade. This inauspicious development is in connection with the political dysfunctionality that has afflicted Washington policymakers in both the executive and legislative branches over extending the national debt limit.

With ratings collapsing and bond spreads widening throughout the developed world, it now appears that another member of the infamous PIIGS nations (Portugal, Ireland, Italy, Greece and Spain) is descending into fiscal anarchy. Italy is on the verge of requiring a  bailout of its own, one which would exceed what has already been allocated to Greece, Ireland and Portugal. In desperation, the Italian senate has voted in favor of austerity measures. Based on the failure of the austerity measures in Greece to prevent a second bailout being required, the desperate action by Italian decision makers is unlikely to work, and has the look of panic rather than thoughtfulness.

Like a tsunami wave that can travel thousands of miles from the epicenter of a major seismic event,  the cascading sovereign debt crisis, which had its origins in policy responses to the global financial implosion of 2008 and Greek debt crisis of 2010, is now ravaging public finances on both sides of the Atlantic. A point may soon be reached where private investors, Eurozone taxpayers and the IMF can no longer cobble together ever-larger “rescue packages,” all of which, with perverse logic, require even larger levels of public debt to construct. A dark truth may soon permeate this ballooning crisis; the policymakers have no real solutions, and have just about run out of gimmicks and short-term fixes. The global economic crisis that began with the financial collapse of 2008, far from being resolved or a clear path to recovery being underway, is entering a more dangerous phase, in which sovereign debt reaches the level of unsustainability. The result could very well be paralyzing insolvency among the advanced economies, which could destroy the economic future of an entire generation.