Death Star Economics



Thursday, #48: say (feta) cheese

Drama in Spain today, where banks will have to raise an additional €50bn (4% of Spanish GDP) to service “bad” real estate-related loans. 52% (€176bn) of a total of €338bn of property-related assets in Spain are toxic. Banks have taken care of of about a third of them (approximately €58bn) so far and were expecting to service another 20%. But the required €50bn chuck is more than 28%. Hence the outrage, and hence the decline in Spanish banking stocksread article

Kodak is having a bad time: it’s trying to sell some of its patent portfolio to raise money, and will file for Chapter 11 bankruptcy protection (entails restructuring, NOT liquidation) in the event that plan A doesn’t work. The money needed to keep the 131-year-old company alive could amount to $1bn. And really, there is a third alternative of the company being bought out by someone else. read article

Among all the euro skeptics who (still) demand Greece to leave the eurozone, Bloomberg View argues against a secession and for internal devaluation. Internal devaluation would push Greek wages down, making the country more competitive in terms of labor costs. The article says lowering wages could be achieved by increasing VAT and decreasing payroll tax. This way, Greece could have the benefits of a currency devaluation (what would happen if they went back to the drachma), without actually leaving the euro. It all sounds very simple. It sounds like a no-brainer. It sounds like the Greek are just not very… good at things. read article

Business Insider reminds us that the eurozone-crisis-measures are about the 2013 German federal electionsread article

We know that we stand in our own way from time to time… This calls for a rationality-inducing algorithm: lean back and let data make you more efficient. read article

So long.


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One Response

  1. […] failed in raising money from selling off some of its 1,100 patents [as announced in earlier this month], andhas filed for Chapter 11 bankruptcy protection additional to a $950m loan from Citigroup. […]

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