Death Star Economics



Friday, #40

The latest drama in the European community is this: the suggested treaty change imposes sanctions on countries that don’t meet their EU-set budget targets. This was particularly pushed for by Germany, and now Italy’s Mario Monti is complaining about it. He’s concerned that sanctions would send those countries that can’t meet their targets due to their debt burden into a downward spiral never to recover. Read about Italy here and about Germany here

Is the opposite of a bad sign a good sign? Or is it just a sign that is not bad. A ¬bad sign. Either way, the EFSF(European Financial Stability Facility) is launching a new financial instrument in the attempt to save the eurozone in January: the so-called Euro Sovereign Credit-Linked Certificates work as an insurance against the default of government bonds of troubled countries (sounds a bit like troubled teenagers…), much like credit default swaps. But the legal document behind these certificates said, or at least the draft of it did, that the collapse of the euro [in its current form] was a risk to be taken into consideration. Pretty bad, if the thing that is meant to [help] save the euro is built around the risk of it not working out… But today, the EFSF said their management had not approved the draft and the eurozone-as-risk-factor bit was taken out. read article

Also today, PricewaterhouseCoopers released tax figures for the City, London’s financial sector. Like in every city that got ‘occupied’ at any point in the recent past, the City is subject to much debate in the UK, the unemployment-ridden unhappy place that would like to be its own continent, but also the place I chose to call home. Today’s figures show that the City paid £63bn in taxes in 2011. That is 18% up from last year’s £53.4bn and also exceeding the £61.4bn of 2009, but not back on 2007 levels of £67.8bn. BUT, in 2007, financial institutions only paid about 15% of their total revenues in taxes, while it rose to 19% this year. The industrial and commercial sector bring in most tax receipts of the UK (about 15.5% on average over the past three years). read article

“Stress test” is the German word of the year, according to the Association of German Language. Personally, I think the word of the year should be austerity or eurozone-crisis or maybe just mess (or blame actually).

And finally, unrelated to everything above but really coolcomputational architecture. Michael Hansmeier, Swiss architect, uses algorithms to make awesome cardboard or plastic columns with 16 million unique facets.

So long, have a good weekend.


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