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Highlights
US – Personal income fell for the first time in nearly two years
EU – Italy downgraded
JN – Data improves but remains weak
UK – Q2 GDP close to stalling
CA – Second positive GDP in a row
AU – Will RBA cut rates?
NZ – Double downgraded
*DJ UK Cameron: Economic Threat As Serious As It Was In 2008
*DJ UK Cameron: “We Need To Tell Truth About Econ Situation”
*DJ UK Cameron: This Was Debt Crisis, Not Normal Recession
*DJ UK Cameron: Crisis Caused By Too Much Borrowing
*DJ UK Cameron: More Govt Borrowing Would Make Crisis Worse
???
*DJ UK Cameron: More Borrowing Risks Higher Rates, Less Confidence
???
So much for his legacy
The modern day saga of the Trojan Horse continues.
as the euro debt crisis gives Japan the cover to do something
otherwise highly problematic.
Japan buying euro zone debt is a way to bolster the euro vs the yen
and thereby support Japan’s exporters.
Fujimura Says Japan May Boost Europe Bailout Bond Purchases
October 5 (Bloomberg) — Japan may increase its purchases of bonds to finance Europe’s debt crisis rescue fund, Chief Cabinet Secretary Osamu Fujimura said.
Fujimura told reporters today in Tokyo the government “would like to consider” buying more bonds from the European Financial Stability Facility to help stabilize the region. Japan bought more than 20 percent of the fund’s initial five-year, 5 billion euro ($6.6 billion) bonds in January, and purchased another 1.1 billion euros of 10-year EFSF bonds issued in June.
“Europe’s fiscal problem is also very important for Japan in terms of restoring market confidence, and the Europeans are grappling with this,” Fujimura said.
To my point,
Merkel’s view is now that allowing Greece to default is a gift to the Greek govt. that
rewards bad behavior, introduces moral hazard, etc.
The trick is to support Greece and not permit default without using German taxpayer funds and without weakening the credit capacity of Germany.
Hence, the current policy of ECB bond buying,
which accomplished all of the above,
is not inflationary,
carries austerity as it’s prime term and condition,
holds Greece to it’s obligations,
enhances ECB earnings and capital,
and is operationally sustainable,
is likely to continue.
Merkel said that her “entire council” of economic advisers says Greek debt should be restructured, advice that she is not prepared to take. “If we tell a country ‘We cancel half of your debt,’ that’s a great deal,” she said. “Then the next guy will immediately show up and say he wants the same.”