A recent report released by U.S. computer security firm FireEye revealed that Chinese hackers had accessed computers at the foreign ministries of five European countries. The report concluded that these “seemingly unrelated cyberattacks” could actually be “part of a broader offensive fueled by shared development and logistics infrastructure.” The laundry list of hacking targets mirrors the recent avalanche of accusations leveled at the U.S. National Security Agency (NSA). As we move further into the 21st century, the U.S. and China will be the major rule-makers for the new global order. As such, the U.S. and China will together help define what is acceptable behavior in the cyberspace. There have already been calls for the U.S. and China to discuss limits on hacking activities and to define clear “rules of the road” for cyberspace. Unfortunately, it seems that (though neither would admit it) the U.S. and China have very similar ideas on cyberspace — anything goes.
Every country is Number One when it comes to something, relatively speaking - so Ricardo's theory of competitive advantage teaches - and this atlas from Bulgaria's Yanko Tsvetkov, author of the infamous and politically incorrect "stereotype maps", tells us just what these somethings are.
There are very few people that actually give even one hoot and even fewer that could give two of them when it comes to poverty of people that are living in society alongside us.
For the last few days we have been bombarded with words that appear 'peaceful' and problem-solving from Russia with love. Of course, 'no change' benefits mother Russia the most as his government's gas revenues (and political power) will continue to flow from Europe (a quarter of Russian government income comes from being Europe's gas supplier). So it will come as no surprise that amid the Mother Theresa acts, The Telegraph reports that Putin is readying delivery of more S-300 air-defense missile systems to Iran and will continue to discuss "working together in the nuclear energy spehere." Combine that with experts' views that Russia's plan to dismantle Syria's stockpiles of mustard gas, sarin, VX nerve agents is a long shot; initially "sounding attractive, but very quickly, operational problems could derail obtaining international control, much less actually destroying the arsenal." It would appear, despite all the chatter, that Putin is increasing his power-base in the region.
The proud Q1 debt-to-GDP outliers, where the local economies are expected to continue plunging and thus send the stock markets (if mostly that in the US) surging, are the following:
- Euroarea: 92.2%, up from 88.2% a year ago
- Greece: 160.5%, up from 136.5% a year ago
- Italy: 130.3%; up from 123.8% a year ago
- Portugal: 127.2%, up from 112.3% a year ago
- Ireland: 125.1%, up from 106.8% a year ago
- Spain: 88.2%, up from 73.0% a year ago
- Netherlands: 72.0%, up from 66.7% a year ago
As the nations of Europe argue over and over that France is not Greece, Portugal is not Ireland, and reality is not fantasy, Bloomberg has in fact quantified just where each of these troubled nations stands for the next five years. The bad news for the Spanish - facing demands for Rajoy's resignation over the graft - is that they have the worst five-year outlook of all European nations. Worse than Portugal, notably worse than Greece, and dismally worse than Bulgaria. On the bright side, Norway - with the best outlook by far over the next five years - looks attractive (or closer still Luxembourg.)
As everyone knows, the only reason to become a banker, and be subject to constant derision, abuse, scorn and hatred by the "99%", and potentially to a fate comparable to that of the aristocracy in France circa 1789, is a simple one: money. Specifically, get as much of in as short a time period as possible, be rewarded with a taxpayer bailout or two when massive bets go epically wrong, then convert all your cash into "hard assets" and escape to a non-extradition country before the latest credit bubble pops. In other words, a simple opportunity cost analysis. Which then begs the question: why are there bankers in the following European countries: Slovenia, Romania, Malta, Lithuania, Estonia, Czech Republic and Bulgaria. The one thing in common these countries have is that according to a just released European Banking Authority study, in the year ended 2011 not a single domiciled banker made over €1 million! In other words: bankers working for feudal peasant salaries. What a scam.
It has all gone belly up if we look at the EU and we are honest. Yes, they might be trying to paper of the cracks and yes they might be shoving some super strong glue in their to stop everyone pulling in different directions, but if they are really truthful about it, the EU28 (now that Croatia has become a member since July 1st 2013)
As southern Europe buckles under the weight of unserviceable debt and 60%+ youth unemployment rates, Germany is coasting along with an almost historically low unemployment rate; the disparity between Germany and its southern neighbors could not be more obvious. So it is ironic that Angela Merkel is leading the public pledge to ‘tackle’ the continent’s job crisis. Of course, European policy to deal with the jobs crisis is quite simple: print more money. Their latest initiative, a few billion more to fight the youth unemployment rate, was mercilessly eviscerated yesterday in the European Parliament by Nigel Farage... one of the few voices of reason left on the continent.
The "XXXXX is not YYYYY" jokes aside, Europe's union of nations is beginning to separate increasingly between the haves and the have-nots. The sad truth, as Bloomberg's Niraj Shah notes, is that recession/depression has pushed Spanish and Italian GDP-per-capita below the EU average in purchasing power terms - just like Cyprus, Slovenia, and Greece. Irish GDP per capita was 29% above the average, while Greek and Portuguese per capita output were 25% below. Output per head for the EU ranged between 47% (Bulgaria) and 271% (Luxembourg) of the average. With today's news that retroactive ESM recaps are unlikely, the banking-sovereign symbiosis of Spain and Italy will increasingly come under pressure and with productivity so dismal, there is little hope for now.
- PBOC Says China Shouldn’t Be ’Blindly Optimistic’ on Inflation (BBG)
- Foreigners Buying Half of London New Homes Prop Up Building (BBG) - first they come for the foreign deposits, then for the real assets...
- Investors Rediscovering Margin Debt (WSJ) - well, yes: it is at record highs
- China issues new rules targeting wealth management fund pools (RTRS)
- Navy $37 Billion Ships Seen Unsuitable Have 2-Year Window (BBG)
- New York may have to drop claims against BofA over Merrill (RTRS)
- FBI Rejects Boston Police Stance in Spat Over Terror Data (BBG)
- In eastern Syria oil smugglers benefit from chaos (RTRS)
On an unweighted average basis, European shadow economies are 22.1% of total economic activity or around $3.55 trillion (as large as Germany's whole economy). A report by Tax Research, suggests that Austria and Luxemburg have the smallest shadow economies in the euro area at 9.7% of GDP, while Bulgaria at 35.3% and Romania at 32.6% top the list. Of the major economies, Germany clocks in at 16%, France at 15%, Italy at 27% and Spain 22.5%. Stunningly, in terms of tax revenues lost, the shadow economy translates into an estimated €864bn or just over 7% of euro area GDP and, in context, accounts for 105.8% of the enture healthcare spending of the EU. It appears that more and more Europeans have no choice but to shift to a shadow economy (as taxes rise among other things), and this is the biggest threat to the entire economy. This is likely one reason the 'austerity' actions have not been successful since far less taxes are being paid via the conventional channels.
The Stunning Differences in European Costs of Labor: Or Why “Competitiveness” Is A Beggar-Thy-Neighbor StrategySubmitted by testosteronepit on 03/27/2013 20:20 -0500
So, relocate all manufacturing plants from Sweden to Bulgaria?
The Troika has run roughshod over the rule of law. By calling for a universal bail-in of depositors (the securest part of bank capital ladder) before extracting money from shareholders, junior and subordinated bondholders, the EU bureaucrats and IMF have unilaterally ripped up the legal framework for property rights. This is a truly worrying and frightening progression – actually regression – in economic freedom. Unfortunately bank depositors (savers) have long been under the misguided impression that they are potentially immune from a bank collapse, with the State providing a safety net in the form of deposit guarantees up to a declared sum. I would argue that individuals, partly due to government propaganda in the good times, have long since forgotten – or indeed have never understood – that once you deposit your money into a bank, you give up your right to ownership, ie, It’s a LOAN! An asset which is lent out multiple times as is the agreed practice under fractional reserve banking, clearly has a risk of no return, albeit a seemingly a low risk when confidence and trust is high in the economic system... The bail-in announcement for the Cypriot banks late Friday night was one of those events when we all look back and think that was the beginning of the end of the real global financial crisis. This should leave any individual in Europe under no illusion that the political elite will enact whatever it deems fit to protect their positions in the name of the euro and their own positions of power.
- Kuroda to Hit ‘Wall of Reality’ at BOJ, Ex-Board Member Says (BBG)
- Venezuelans mourn Chavez as focus turns to election (Reuters)
- South Korea says to strike back at North if attacked (Reuters)
- Milk Powder Surges Most in 2 1/2 Years on New Zealand Drought (BBG)
- As Confetti Settles, Strategists Wonder: Will Dow's Rally Last? (WSJ)
- Pollution, Risk Are Downside of China's 'Blind Expansion' (BBG)
- Obama Calls Republicans in Latest Round of Spending Talks (BBG)
- Ryan Budget Plan Draws GOP Flak (WSJ)
- Samsung buys stake in Apple-supplier Sharp (FT)
- China Joining U.S. Shale Renaissance With $40 Billion (BBG)
- Say Goodbye to the 4% Rule (WSJ)
- Traders Flee Asia Hedge Funds as Job Haven Turns Dead End (BBG)
- Power rustlers turn the screw in Bulgaria, EU's poorest country (Reuters)