Death Star Economics



The advantage of debt in the family

As mentioned yesterday, Greece is going to avoid bankruptcy AGAIN on Monday, when a little over €3bn fall due in debt repayments. Much to Greece’ advantage, the money belongs to the ECB, so the whole thing is a lot more like borrowing money from your parents. Greece sold €4bn worth of 13-week notes yesterday, raising enough money to meet the deadline. On to the next! read article

UK unemployment, including the number of jobless claims, have fallen. At 8%, unemployment rose almost 1.5% since the onset of the 2007 financial crisis. The current ease is considered to be related to job creation through the Olympics. But even though the date is better than expected, it’s not going to lift European markets. see graph

In the US, the picture looks similar. Retail sales and jobless claims, released yesterday and last week respectively, have been better than forecasted. But in the typical fashion of overweighting positive factors, many say there won’t be any government action any time soon, which may be a mistake.

At least, both American and German 10-year bond yields are rising to 1.73% and 1.47% respectively. That is, if you believe Ken Rogoff’s analysis in last Friday’s News Brief, a good thing.

Banking scandal round-up:

After the US Department of Justice dropped its criminal investigation of Goldman Sachs, which could have been turned into a civil fraud case on the coattails of Goldman’s sales of mortgage-backed securitiesNYTimes Dealbook declared the end of financial crisis law suits, almost five years after it erupted.

The new trend, as we’ve learned in the past weeks, is money laundering and rate fixingStandard Chartered has now been fined $340m for the former by the New York State Department of Financial Services. Oh yeah, and then there were transactions worth around $250m with sanctioned Iran. Oops. read article

Otherwise, Australian courts have granted the display of ‘discouraging packaging’ for cigarettes in the scope of its new anti-tobacco marketing laws and India is celebrating 65 years of independence today.

So long.

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