Death Star Economics



The unexpected: A deal for Greece, a Canadian for the BoE

The Eurogroup has completed its first successful Greece-related meeting measured by the measurability of its results. In short: we got a deal. It’s not a haircut (go Germany!), but it’s not far from it. The deal finally releases the delayed €34.4bn bailout tranche. Before the money is wired down south however, Greece has to buy some of its debt back [i.e. buying outstanding bonds at a massive discount price]. The deadline is mid-December. Other changes in T&Cs are cuts of interest rates on debt from the first bailout and a €7bn payment of profits from Greek debt held by international creditors. Two that are especially hurt by these measures are Spain and Italy, whose interest on Greek bonds held is getting cut as well, while their own borrowing costs are much higher. Although the Eurogroup agreed to lift Greece’ debt:GDP target from 120% to 124% in 2020, it is meant to be below 110% by 2022. So maybe that’s when the world economy will be fully revived. The IMF refuses to free up new funds until the debt buyback is finalizedread article

Yesterday afternoon, the Bank of England appointed Mervyn King’s replacement. The bank’s new governor is Mark Carney, Harvard PhD and governor of the Bank of Canada and ex-Goldman Sachs (consult map below). I’m pretty sure William Cohan is about to write another book as you read this. A summary from Twitter.


– Peter Spiegel: Do I have this right? The British government just appointed a Canadian to head its central bank? #StillAColony?

– Matina Stevis: #eurogroup reporters gasp at #carney #boe announcement partly because there’s nothing to report on from here yet. #Greece

– [again] ZeroHedge: Oh, and dear Germans… Completing The Circle: Meet The US Ambassador To Germany

Carney, who previously also headed the Financial Stability Board, was approached about the job in April, as the FT reported then.

More detail on ZeroHedge’s comment including a map of how Goldman Sachs runs Europeread article

Next thing you know Jamie Dimon is in the run up as Treasury Secretaryread article

In the US, Mary Schapiro, head of the Securities and Exchange Commission, has been replaced by Elise Walter, who previously heading Finra, the Financial Industry Regulatory Authority. read article

In other news, ING repaid another €1.125bn to the Dutch government, including €375m interest, which saved the bank with a €10bn bailout. Following the latest repayment, ING stills owes €1.2bn plus interest.

Otherwise, the OECD slashed its 2013 growth forecast for developed economies. Back in May, the estimate was still at 2.2%. The revised forecast sees only 1.4% growthSouth Africa’s GDP grew at the slowest pace since the hight of the financial crisis in 2009, reducing to 1.2% on the back of decreasing mining output following massive strikes and lack of reformread article

So long.


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One Response

  1. princess1960 says:

    hello to day you have to much think’s about the GOLDMAN&SACHS.institution .
    i wanted to make one comment for all the” Apories you have ”
    dear writer to this blog IAM agree 100% IF G&S TAKE ALL THE BANK’S because just like this we will go out from crisis ..(you like or not )this is true .
    about the NEW GV B UK is the best choice they do too. we need people smart worke’s hart and more important doesn’t like corruption and scandal’s (is up to CAMERON) TO PROTECT HIM.
    S AFRICA is my prefere place this contry have to high ”anapticsy) in agroculture ..and miner gold is top in world..

    about the comment in twitter ZERO-HEDGE every one is free to say what think (he look like les freedoom )in economy
    I see very important for the economy ..
    can you imagination what go to happening if all we are agree for some thing ?
    and this is G&S DOESN’T DO (they don’t needed)

    thank you
    ah will be very long..

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