Death Star Economics



‘Fremdschämen’ for Barclays, China’s imports lower and the mess that is oil

Marcus Agius, resigned chairman of Barclays, is sitting where Paul Tucker sat yesterday: in front of the Treasury Select Committee. Tucker yesterday denied having intervened on Libor. Watching the hearing was an exercise in what the Germans call ‘Fremdschämen‘, feeling embarrassed FOR someone else[‘s actions]. The most asked question by the Treasury was “don’t you think that’s rather odd?” Full summary of the awkwardness here.

In terms of the Chinese data marathon that is this week, the country’s imports and exports both slowed down in June from May, with import growth almost halving to around 6% in June. Not only does that show the slowing domestic demand, but it is also hitting China’s trade partners and gives a reason for last week’s rate cuts by the People’s Bank. Its main import partners are Japan, South Korea, the US and Germany, most of which could really do with some growth right now, there are bailouts to be paid for…

After yesterday’s 10-hour Eurogroup meeting that led to nothing (statement here) we didn’t already know before, a blueprint for Spain‘s additional €100bn aid package was agreed upon, leading to the first tranche of €30bn being deployed by the end of the month, sourced from the ESM, which is not fully ratified yet. The German Constitutional Court is hearing arguments in favor and against the ratification of the fund today. A decision won’t be made until later in the day, but a positive response would give the bailout mechanism the ‘okay’ from its largest contributor. read article

The effect of Francois Hollande‘s introduction of the 75% maximum tax rate, a higher wealth tax for those with an annual income above €1.3m and taxation of foreign-owned French property is mostly felt by London’s real estate market, it seems. While housing prices in the rest of the country are falling at their fastest pace since Q4 2011, London, which is usually immune to price drops, sees a changing buyer profile: Les French. They’re buying fast and they’re buying big. The FT reports that luxury property sales to French buyers have picked up by 40% in the last three months, with the average price increasing from £1.1m to £3.9m.

Otherwise, Norway has reached an agreement over pensions claims with its oilworkers, preventing the country’s resource industry to shut down. Important fact in this regard, the government can actually force these worker, who count as the country’s top earners back to work. Norway is the world’s eight largest exporter of oil and the 16-day strike over lowering the retirement age from 65 to 62 cost the country more than $500m. Meanwhile in Iran, which ranks number four in terms of oil global reserves, oil production has fallen to a 20-year low in response to international sanctions. It’s all a bit messy.

So much for today, let’s hope tomorrow has more new news…

So long.


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One Response

  1. princess1960 says:

    hello ..thank you first for the information is all intristing
    Barclays is one scandal more in system bankare ..nothing differnt from others (for me)..about the letter ..i think is one fact with not fact..(what i mean) the letter i read is something more private not political-economical..(we speak about person is very normal one person with highe post to have diffrent conversation or letter (privileges) from others(what you think)?the not intristing of the case is they don’t say the true.
    CHine we know have one potentiol economic not with health basic but untill now she try to survive with inflation highe and lobur force very low paymant..i don’t think chine will stay long time ..power..even India.
    Summit EU GRUP please tell me how long time have to take action (just right papers) ..
    FR have really very serios problem like IT AND SP
    for this reason try to push GER about the EUROBONDS
    IF GER make mistake she lose
    GER doesn’t neede to pay (finnancial) for others countrys europe (just political ) yes
    i think word NO have one reason in” lexico”
    Housing market i think is very good time for buying (why)
    prices is low …ok it was very high much more needed but now his come in standart normal
    ..and even tax is higher is very good investiment to buy house)

    Norway is one contry very intristing and with very high education about work i think is tuch from crisis in Eu
    OIL from the day i remember my self i know oil problem (Iran)
    will continue …….
    so long looked me but one by one will pass..

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