Ailing Infrastructure: Scrimping Threatens Germany’s Future

Der Spiegel:

The chancellor and her main challenger are painting a reassuring but misleading image of the country, however. For quite some time now, Germans have suspected there is little reason for complacency. Anyone who travels through the country will notice roads full of potholes, disused railway tracks and dilapidated schools. And anyone who works for one of the country’s large industrial companies also knows that most new production plants are built abroad, not in Germany.

Now, economists have translated Germany’s deficiencies into hard numbers. The German Institute of Economic Research (DIW) is presenting a study this week that proves Germany is not Europe’s economic hegemon, as British weekly The Economist recently suggested on its cover. Instead, the DIW paints the picture of an ailing economy that has been seriously out of balance for years.

Germans save more money than most living in the industrialized world, but they invest very little in their future, making them much weaker economically than leading politicians realize. According to the study, Germany is saving itself to death.

Yep. And let’s also not forget Germany’s age pyramid.

In the more immediate term, that said, they have the bigger problem of being the EU’s main creditor. If you owe $100 to the bank, it is your problem; if you owe $100M, it is the bank’s problem. Especially if you can’t and won’t pay the money back.

I wouldn’t be surprised if Germany (or China, for that matter) eventually turns out to be the hardest hit by the (still ongoing) 2007 economic crisis. Its exports depend on its banks issuing loans to importers, and its savers depend on these loans getting paid back. Tough times will lie ahead.


EU Reaches Deal on Failed Banks

The Financial Times, on the Eurozone news of the day:

Rules to force losses on creditors in failed banks were agreed by EU finance ministers early on Thursday, putting in place another piece of a eurozone banking union that could eventually share the costs of future bank bailouts. […]

The European Central Bank is to be given responsibility for supervising eurozone banks next year, but other targets have been missed that would allow risks to be pooled between countries.

From 2018, the so-called “bail-in” regime can force shareholders, bondholders and some depositors to contribute to the costs of bank failure. Insured deposits under €100,000 are exempt and uninsured deposits of individuals and small companies are given preferential status in the bail-in pecking order.

From 2018. And it still needs to pass through EU parliament.

In other news Croatia will become the 28th member of the EU next Monday. And it might quickly be in need of… wait for it… a bailout.


The Strange Case of Barrett Brown

The Nation:

While the media and much of the world have been understandably outraged by the revelation of the NSA’s spying programs, Barrett Brown’s work was pointing to a much deeper problem. It isn’t the sort of problem that can be fixed by trying to tweak a few laws or by removing a few prosecutors. […] It is a systemic problem. It is the failure of the rule of law.

There’s also a related story on Glenn Greenwald’s murky case in the Washington Post.


Pandora Paid Over $1,300 for 1 Million Plays, Not $16.89

Michael Degusta, setting the record straight:

  • Pandora paid a total of about $1,370.
  • The band received a total of about $585.
  • If Lowery received 40% of the performance royalty, “all he got” for the 1 million plays was in fact around $234.

He adds a nice chart:


Question: who profits from any of this?

Update: don’t miss the follow-up by Pandora (and the comments).


Italy Faces Restructured Derivatives Hit

Reuters sums it up in an all-too-short report:

The Financial Times and Italian daily La Repubblica quoted a report by the treasury detailing the country’s debt transactions and exposure in the first half of 2012, including the restructuring of eight derivatives contracts with foreign banks with a total notional value of 31.7 billion euros.

The derivative contracts date from when Italy magically reduced its deficit from 7.7% in 1995 to 2.8% in 1998. Its Treasury faces a potential loss of about €8bn according to the experts consulted by the Financial Times. The precise details are scant, so we can’t say if Italy cooked its books to secure Eurozone entry. In the meanwhile, there’s this embarrassing tidbit:

An ECB spokesman declined to comment on the bank’s knowledge of Italy’s potential exposure to derivatives losses or on Mr Draghi’s role in approving derivatives contracts in the 1990s before he joined Goldman Sachs International in 2002.

In case you’re wondering, a separate report suggests that Italy might need cash within six months.


How to NOT collect end-user feedback:

Uh-oh! Cookies are disabled. Access the feedback forum directly at [phpdotnet.uservoice.com url here] or enable cookies in your browser settings and refresh this page.

If you ever want end-user feedback on a site’s design, make it as friction-free as possible…


US Seemingly Unaware of Irony of Accusing Snowden of Spying

“These charges send a clear message,” the [NSA] spokesman said. “In the United States, you can’t spy on people.” […]

“Only by bringing Mr. Snowden to justice can we safeguard the most precious of American rights: privacy,” added the spokesman, apparently serious.


Chinese Students and Families Fight for the Right to Cheat Their Exams

By late afternoon, the invigilators were trapped as students pelted the windows with rocks. Outside, more than 2000 people had gathered, smashing cars and chanting: ”We want fairness. There is no fairness if you do not let us cheat.”


‘Hell Is Other People’: An Experiment in Anti-Social Media

Hell is Other People is an experiment in anti-social media. Using FourSquare, this site will track your “friends” and calculate optimally distanced locations for avoiding them.

Via The Times.


EU to Decide Who Pays When Banks Fail

A 300-page draft EU law that forms the basis of discussions recommends a pecking order in which first bank shareholders would take losses, then bondholders and finally depositors with more than 100,000 euros ($132,000) in their accounts.

EU countries would be required to follow these rules when closing banks.

The regime to impose losses on savers, whether wealthier individuals or companies, could be made stricter within the euro zone, in particular for banks seeking help from the single currency’s rescue fund.

This had been on their radar for several months. I can’t make up my mind on whether the move is sane or not: the entire point of saying, in 2008, that bank depositors would be made whole was to avoid bank runs.

Update: it looks like they failed to agree on the topic.

← Previous    1       15    16    17    18    19    20    Next →