Death Star Economics



773 Germans want Greece to leave the euro

The fun fact of the day is that only a quarter of Germans think Greece should stay in the eurozone. Outrage everywhere. Most papers have made this out to be yet another factor in Angela Merkel’s dilemma of domestic vs foreign affairs. But when you consider that the Financial Times/Harris Interactive poll of 5,134 people between the age of 16 and 64 only features 1,030 Germans, the results look much less drastic. read article

But yes, sure, there might be some truth to it. Why else would Bank of America consider to send trucks filled with drachmas Deutsche Mark euros into Greece to support their clients’ salary payments… read article

In France, lender Centrale du Credit Immobilier du France was bailed out by the government. The bailout of the real estate loan provider is rumored to be worth €20bn. France was involved in the two-times bailout of French-Belgian bank Dexia in 2008 and 2011; however, CCIF is the first ‘fully’ French bank to need state aid. Prime minister Jean-Marc Ayrault said in a statement that the bailout would not inhibit France’ plans to cut the budget deficit until the end of the year. Well, bon courage, because if all these crises have taught us anything, then it is that there’s a herd instinct among institutions which need bailing out. read article

In line with that: over the weekend, the Spanish government threw more money at Bankia, after the nationalized lender posted a €4.4bn loss for the first half of 2012.

International Airlines Group (IAG), the owner of British Airways and Iberia, is looking to become a cornerstone investor in a new humongous American airline. This could be composed of bankrupt American Airlines, currently owned by AMR, and the US Airways Group. After AA and US Airways shared their books with the other, IAG signed a confidentiality agreement, which allows it access to the balance sheets drenched in red.

In the US, Mitt Romney will have to deal with some more blast from the past very soon. Some of the largest US private equity firms have been subpoenaed to get to the bottom of a tax avoidance procedure, which helped hundreds of millions of dollars to slip through the system’s fingers. Besides Bain Capital, KKR, the ‘inventor’ of the leveraged buyout, and Silverlake Capital Partners, formerly invested in Skype. At issue are the taxes paid on fees collected from fund investors, which have to correspond to whether said fees count as income or capital for re-investment. read article

Otherwise, CICChina Investment Corporation, has sold its 3% stake in asset manager BlackRock, which is thought to be worth $1bn, in an effort to reduce its financial services holdings, and Markit’s manufacturing index shows that the eurozone was subject to yet another contraction in August, making a zone-wide recession more and more probably. Chinese manufacturing continued to slow over the same time period. read article

So long.


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