Economy Articles.

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Sep 24, 2015

Major United States's Banks Rule Ukrainian Default is Inevitable

The International Swaps and Derivatives Association (ISDA) announced that its Determination Committee has ruled that a moratorium was instituted on Ukraine’s debt, triggering payouts on default insurance.

The panel comprises 15 major banks and financial companies, including Bank of America, Citibank, Goldman Sachs, and JP Morgan.
 The decision was made unanimously at a committee meeting on September 23.
"EMEA Credit Derivatives Determinations Committee resolved that a Potential Repudiation/Moratorium had occurred with respect to the Republic of Ukraine," according to the press-release.

The decision is the first step toward a so-called credit event that would allow the settlement of nearly $396 million of derivatives contracts, ISDA reported.

The ruling means holders of credit default swaps (CDS) now have a wait-and-see period to see if Ukraine will pay out its debts. On Wednesday, Ukraine froze redemption of a $500 million bond maturing September 23. The expected credit event will occur after the 10-day grace period and trigger the payout of the CDS.
 The payout of CDS is an event of repudiation/moratorium having two parts, according to ISDA’s rules. The first is an evaluation of the potential for default, and the second includes a failure to pay.

Source: SputnikNews

Sep 23, 2015

United States : Los Angeles Experiencing Homelessness 'Emergency'

The city has announced a US$100 million plan to address the problem but critics say much more is needed.
Officials in Los Angeles labeled homelessness an "emergency" and announced plans to offer permanent housing and shelters for more than 20,000 homeless people in the city.

“These are our fellow Angelinos,” Mayor Eric Garcetti said Tuesday as he announced the plan outside City Hall. “They are those who have no other place to go, and they are literally here where we work, a symbol of our city’s intense crisis.”

Over the past two years, the number of people living in the streets increased from 23,000 to 26,000 according to official figures from Los Angeles Homeless Services Authority.

Nearly 18,000 people of the total live on the streets as opposed to shelters. The city, the second largest in the country, currently spends over US$13 million of its general funding on homeless programs, such as winter shelters, housing vouchers and outreach to homeless veterans, said Assistant City Administrative Officer Ben Ceja.

Other major cities in the U.S. have been battling with homelessness as well. In New York city, official figures show that there are more than 67,000 homeless people – almost double the number in Los Angeles.

While the mayor announced a US$100 million budget for the anti-homelessness plan, critics say that it would not be enough to fix the growing problem. “A hundred million dollars won’t even buy all the homeless (people) pillows,” Alice Callaghan, a longtime advocate for the homeless in city, told the Associated Press Wednesday. “A hundred million certainly won’t build much housing – and what we really have here is a housing crisis.”

In a recent report in April, the U.S.-based National Alliance to End Homelessness said that 578,424 people were experiencing homelessness in the U.S. in 2014, meaning they were sleeping outside or in an emergency shelter or transitional housing program.

While the report said the recent economic recovery in the U.S. has slightly reduced homelessness, it also warned that many were still at risk of not being able to afford housing.

“Longitudinal trends and changes from 2012 to 2013 indicate populations at risk of homelessness may not be experiencing the benefits of the economic recovery,” the report said.

Source : Telesur

Sep 21, 2015

Anonymous Launches ‘Black October’ Campaign Against United States Banking System

Right on the heels of the Occupy Wall Street movement’s four year anniversary, activist group Anonymous has launched a new campaign which they say outlines an “easy” way for the 99% to demonstrate their strength and overcome the richest 1%.

The statement was released on Anonymous’ website, with a video inviting people to join the peaceful revolution, under the name "Black October." The group calls on "ordinary people" to demonstrate their strength and independence from wealthy banks by simply using cash instead of debit and credit cards.

"US branches of Germany’s Deutsche Bank and Spain’s Banco Santander have failed US Fed stress tests, while America’s largest bank, Bank of America, is put on 'warning,'" the statement reads. "How far can the ordinary people shoulder responsibility of a failed private bank?"

A stress test, officially known as the Comprehensive Capital and Analysis Review, is an annual assessment conducted by the US Federal Reserve of a bank’s ability to “lend to households and businesses even in times of stress.” It was introduced in the wake of the 2008 financial crisis.



This year’s review found that both Deutsche Bank and Banco Santander would fail to deal with "doomsday" scenarios such as rising unemployment and plummeting house prices, while Bank of America also has "certain weaknesses."
With "Black October," Anonymous asks people to demonstrate their independence from such big banks.

The month-long campaign is outlined in Anonymous’ video and statement, inviting people to take their money out of bank accounts and not to use their debit or credit cards.

"Show the Big Bankers that we don’t need their debit cards, we don’t need their credit cards, we don’t need their loans, and we don’t need them," Anonymous said. "Let’s show them that we are the 99% and we can beat them. It is that easy."

Driven by social and economic inequality, the Occupy movement began on September 17, 2011 in Zuccotti Park in New York’s Wall Street financial district. The movement was inspired by anti-austerity protests in Spain, and saw thousands of activists in hundreds of US cities coming together and calling for policy reforms favoring 99% of Americans over the richest and most powerful 1%.

Source : SputnikNews

Aug 25, 2015

International Creditors Plan to Forgive 20 Percent of Ukraine's Debt

Kiev has long campaigned for a group of international creditors to write off as much as 40 percent of Ukraine's sovereign debt but investors are reported to have agreed to a 20-percent haircut in a bid to fulfill the conditions of a $40 billion IMF bailout.

The sides are allegedly close to signing a restructuring agreement, although a formal announcement has yet to be made. The deal will mark a breakthrough for the talks that have been deadlocked for months.
 The agreement between the Ukrainian government and its private lenders could be inked by the end of this week, Elaine Moore, an expert on global debt, reported, citing a source close to the negotiations.

However, other sources familiar with the situation told the Wall Street Journal that the deal could fall through since it has not been finalized. Ukraine's Finance Ministry maintains that talks are far from being over and "all options remain on the table."

Hole Lot Of Trouble
"There is no agreement yet, negotiations are still going on to meet the IMF targets. The government of Ukraine has taken no decision and all options remain on the table," the agency said in a statement.

The investors were initially strongly opposed to the deal saying the Ukraine government could repair the country's depressed economy without a major debt relief.

Ukraine has been edging economic collapse since the US-sponsored coup brought the current Kiev authorities to power. The country relies heavily on external financial assistance to breathe life into its stagnant economy, plagued by an ongoing civil war, mismanagement and corruption.

The Bank of America named Ukraine the world's third riskiest sovereign borrower, meaning the country could default on its debt.

Source : SputnikNews

Aug 16, 2015

Away From Dollar: Russia, China to Create Entirely Different Gold Market

While key Western banks are artificially restraining gold prices to breathe life into the diluted and devalued dollar system, Russia, China and other emerging economies are involved in "the genial move" to establish an entirely different gold market, F. William Engdahl underscores.

Key central banks, particularly the Federal Reserve and Bank of England, and Western market players have long been accused of clandestine gold price manipulating aimed at preserving the dollar's role "as world reserve currency primus," American-German economic researcher and historian F. William Engdahl writes.

"The COMEX gold futures market in New York and the Over-the-Counter (OTC) trades cleared through the London Bullion Market Association do set prices which are followed most widely in the world. They are also markets dominated by a handful of huge players, the six London Bullion Market Association gold clearing banks — the corrupt JP MorganChase bank; the scandal-ridden UBS bank of Zurich; The Bank of Nova Scotia — ScotiaMocatta, the world's oldest bullion bank which began as banker to the British East India Company, the group that ran the China Opium Wars; the scandal-ridden Deutsche Bank; the scandal-ridden Barclays Bank of London; HSBC of London, the house bank of the Mexican drug cartels; and the scandal and fraud-ridden Societe Generale of Paris," Engdahl narrated.

Gold bars and a Swiss Franc coin are seen in this illustration picture taken at the Austrian Gold and Silver Separating Plant 'Oegussa' in Vienna November 7, 2014
Furthermore, Western banks are issuing numerous paper "gold-futures" and other speculative contracts which are in fact disconnected from real physical gold.
 In a word, operations with the precious metal in London and New York are in questionable hands, the economic researcher noted.

The West's ultimate goal is to preserve the dollar's monopoly in the market thus breathing life into the US-led global financial system. But no one likes monopolists.

Predictably, the current state of affairs cannot satisfy rising economies, such as China, Russia and other emerging powers.

However, "[r]ather than scream and cry 'fraud' at the owners of the COMEX/CME or the London Bullion Market Association Big Six clearing banks, these countries are involved in the genial move to create an entirely different gold market, one that not JP MorganChase or HSBC or Deutsche Bank control, but one that China, Russia and others of a like mind control," Engdahl stressed.

This new approach is connected closely with the China-led New Silk Road project and the Shanghai-based Asian Infrastructure Investment Bank (AIIB).
 In May 2015 Beijing announced it had established a state-run gold investment fund, aiming to bolster China's role in global gold trade. The new initiative is a part of China's ambitious One Belt and One Road plan. The "Silk Road Gold Fund" will invest in mining projects in the regions along the New Silk Road encouraging central banks of its members to increase their holdings in the precious metal.

"As China has expressed it, the aim is to enable the Eurasian countries along the Silk Road to increase the gold backing of their currencies. That sounds very much like some clear-thinking and far-sighted governments are thinking of creating a stable group of gold backed currencies that would facilitate orderly trade free from Washington currency wars," the economic researcher elaborated.

Bullion bar in sea of coin
And Russia is actively cooperating with China in this field, he underscored, adding that just before the creation of China's new gold fund the countries inked a deal to explore the gold reserves in Russia's Magadan region.
 Over the past several years Russia has been rapidly replenishing its vaults with golden bullions. In accordance with official data, Russian physical gold reserves currently amounted to 1250.9 tons in June 2015.

Today Russia is considered the world's third largest gold producer with 245 metric tons produced in 2014, while China produces over 450 tons a year.

"South Africa, also a member of the BRICS along with China and Russia, stands to add to the new energy surrounding a renaissance in gold as a support of solid, well-based currencies to replace the diluted and devalued dollar system," the researcher stressed.

According to Engdahl, the New Economic Silk Road, integrated with Russia's new Eurasian Economic Union, are more than just energy and railroad infrastructure: they are the central nervous system of the future largest and fastest-growing economic space on Earth.
 Interestingly enough, according to the ANZ Research report "East to El Dorado: Asia and the Future of Gold" the gold price may soar as high as $2,000 a troy ounce by 2025. ANZ Research underscored that gold, despite its current slump, remains both an investment and a defensive asset. The rise of emerging economies, such as China and India will facilitate the demand for gold investments.

"While most eyes are fixed on COMEX or the London Bullion Market Association listed daily gold price fix, the real worth of gold as a currency reserve and a standard of monetary soundness is growing in worth by the day," Engdahl concluded adding that this trend is a real pain in the neck of the US Treasury, Federal Reserve and Wall Street. 

Source : SputnikNews

Aug 14, 2015

Low Oil Prices Destroy Financial Power of Saudi Arabia

Oil barrels
A sharp decline in global oil prices has seriously damaged the financial power of Saudi Arabia. According to different estimates, the deficit of the country’s budget may reach up to 20 percent of GDP.

The decrease in oil revenues forced Saudi Arabia to issue government bonds worth 20 billion riyals ($5.3 billion) for the second time over this summer. In June, the country issued bonds worth 15 billion riyals ($4 billion).
 According to Bloomberg, this year Saud Arabia sold its first bonds since 2007.
The kingdom may raise a total of $27 billion by the end of the year, Dmitry Postolenko, a portfolio manager for asset management company Kapital, pointed out.

Saudi Arabia is in need of money after oil prices halved, the analyst said.
"In 2015 the country needs oil prices of around $105 per barrel to balance its budget. The country relies on oil sales for 90 percent of its budget revenue," Postolenko explained as quoted by Gazeta.ru.

Tim Callen, who led an International Monetary Fund (IMF) mission to Saudi Arabia in May, said in 2015 "the decline in oil prices is resulting in substantially lower export and fiscal revenues."

"Government spending in 2015 is expected to remain strong, partly due to a number of one-off factors, while oil revenues have declined. As a result, IMF staff projects that the government will run a fiscal deficit of around 20% of GDP [nearly $140 billion] in 2015," Callen was quoted as saying by International Business Time.

Until recently, Saudi Arabia compensated the loss with money from the government reserves. Since August 2014, the country withdrew $65 billion from its general monetary reserve which currently is around $672 billion.
Bond selling would help slow down the decline of the country’s monetary reserve, analyst at Promsvyazbank Alexander Polyudov explained.

The point is that the current fiscal problems of Saudi Arabia resulted from its own policy in the oil market. The country has maintained an oversupply of oil as well as low prices to preserve its market share and obstruct the production of shale oil in the US.

Nevertheless, Grigory Kosach, an expert at the Institute for the Middle East of the Russian Academy of Sciences, opposes a theory that Saudi Arabia in cooperation with the US deliberately dropped oil prices to damage the Russian economy.

"I can’t see any evidence to assume that Saudi Arabia is coordinating its actions [in the oil market] with the US. As I can say, there is a struggle for market underway. American companies as well as Saudi Arabia’s Aramco are acting on their own interests," he was quoted as saying by Gazeta.ru.
 He also noted that according to Saudi officials the country plans to stick to its strategy in the future.

Despite the sharp decrease in oil revenue, Saudi Arabia would not cut down government spending and continue to unveil money for healthcare and educational programs, the analyst concluded.

"The country will overcome its budget problems. I’m absolutely sure that stability will be preserved in the near future," he added.

Tim Callen also said the effect of the oil prices decline on the rest of the economy has so far been limited. The IMF projects growth to slow to 2.7 percent in 2016, and over the medium-term, growth is expected to be around 3 percent.
To achieve this goal the country will have to maintain a high level of government expenditures, including taking money from the reserve. Despite the fact that $672 billion seems to be enough for now, the experience of other countries shows that reserves easily dry out, especially without any austerity measures. In the current situation, Saudi Arabia is likely to continue selling bonds, Gazeta.ru pointed out.

Source : SputnikNews

Aug 10, 2015

The United States Economy Continues Its Collapse

Do you remember when real reporters existed? Those were the days before the Clinton regime concentrated the media into a few hands and turned the media into a Ministry of Propaganda, a tool of Big Brother. The false reality in which Americans live extends into economic life. Last Friday’s employment report was a continuation of a long string of bad news spun into good news. The media repeats two numbers as if they mean something—the monthly payroll jobs gains and the unemployment rate—and ignores the numbers that show the continuing multi-year decline in employment opportunities while the economy is allegedly recovering.

The so-called recovery is based on the U.3 measure of the unemployment rate. This measure does not include any unemployed person who has become discouraged from the inability to find a job and has not looked for a job in four weeks. The U.3 measure of unemployment only includes the still hopeful who think they will find a job.

The government has a second official measure of unemployment, U.6. This measure, seldom reported, includes among the unemployed those who have been discouraged for less than one year. This official measure is double the 5.3% U.3 measure. What does it mean that the unemployment rate is over 10% after six years of alleged economic recovery?

In 1994 the Clinton regime stopped counting long-term discouraged workers as unemployed. Clinton wanted his economy to look better than Reagan’s, so he ceased counting the long-term discouraged workers that were part of Reagan’s unemployment rate. John Williams (shadowstats.com) continues to measure the long-term discouraged with the official methodology of that time, and when these unemployed are included, the US rate of unemployment as of July 2015 is 23%, several times higher than during the recession with which Fed chairman Paul Volcker greeted the Reagan presidency.

An unemployment rate of 23% gives economic recovery a new meaning. It has been eighty-five years since the Great Depression, and the US economy is in economic recovery with an unemployment rate close to that of the Great Depression.

The labor force participation rate has declined over the “recovery” that allegedly began in June 2009 and continues today. This is highly unusual. Normally, as an economy recovers jobs rebound, and people flock into the labor force. Based on what he was told by his economic advisors, President Obama attributed the decline in the participation rate to baby boomers taking retirement. In actual fact, over the so-called recovery, job growth has been primarily among those 55 years of age and older. For example, all of the July payroll jobs gains were accounted for by those 55 and older. Those Americans of prime working age (25 to 54 years old) lost 131,000 jobs in July.

Over the previous year (July 2014 — July 2015), those in the age group 55 and older gained 1,554,000 jobs. Youth, 16-18 and 20-24, lost 887,000 and 489,000 jobs.

Today there are 4,000,000 fewer jobs for Americans aged 25 to 54 than in December 2007. From 2009 to 2013, Americans in this age group were down 6,000,000 jobs. Those years of alleged economic recovery apparently bypassed Americans of prime working age.

As of July 2015, the US has 27,265,000 people with part-time jobs, of whom 6,300,000 or 23% are working part-time because they cannot find full time jobs. There are 7,124,000 Americans who hold multiple part-time jobs in order to make ends meet, an increase of 337,000 from a year ago.

The young cannot form households on the basis of part-time jobs, but retirees take these jobs in order to provide the missing income on their savings from the Federal Reserve’s zero interest rate policy, which is keyed toward supporting the balance sheets of a handful of giant banks, whose executives control the US Treasury and Federal Reserve. With so many manufacturing and tradable professional skill jobs, such as software engineering, offshored to China and India, professional careers are disappearing in the US.

The most lucrative jobs in America involve running Wall Street scams, lobbying for private interest groups, for which former members of the House, Senate, and executive branch are preferred, and producing schemes for the enrichment of think-tank donors, which, masquerading as public policy, can become law.

The claimed payroll jobs for July are in the usual categories familiar to us month after month year after year. They are domestic service jobs—waitresses and bartenders, retail clerks, transportation, warehousing, finance and insurance, health care and social assistance. Nothing to export in order to pay for massive imports. With scant growth in real median family incomes, as savings are drawn down and credit used up, even the sales part of the economy will falter.

Clearly, this is not an economy that has a future.
But you would never know that from listening to the financial media or reading the New York Times business section or the Wall Street Journal.

When I was a Wall Street Journal editor, the deplorable condition of the US economy would have been front page news.  

Source : GlobalResearch

Aug 7, 2015

Iran to Have ‘Golden’ Future Due to Discovery of New Gold Reserves

Iran might literally be a hidden goldmine, after the government recently discovered over 1,200 potential gold reserves across the country, Press TV reported.

Prospectors have struck gold in the Yazd Province of Iran. It's still unknown how many tons of gold could potentially be lying underground in the province, a senior mining official said.

"After tracing possible gold-bearing zones in 21 provinces across the country, gold mines have been marked in 10 provinces," deputy head of the Geology and Mineral Discoveries Organization Behrouz Borna said, as cited by Press TV.

It's proven that Iran currently has an estimated 340 metric tons of gold reserves in 24 mines. Fifteen gold mines are currently operational, one is being equipped, and the remaining eight are not working.
 With the new found gold reserves, Iran can now increase its gold production to 10 metric tons per year.

Iran's Minister of Industry, Mine and Trade Mohammadreza Nematzadeh said gold is a top priority mineral for exploration and in the future Iran can further boost its gold reserves by discovering new mines.

Source : SputnikNews

Aug 3, 2015

America's Greece? Puerto Rico Goes Into Default For First Time in History

Due to its failure to repay a $58 million to creditors on Monday, Puerto Rico has defaulted for the first time in its history.

Sending the Puerto Rican government into a "death spiral," according to Governor Alejandro Garcia Padilla, the island has defaulted after paying only $628,000 of a $58 million debt repayment which was due on Monday.

"This was a decision that reflects the serious concerns about the Commonwealth's liquidity in combination with the balance of obligations to our creditors and the equally important obligations to the people of Puerto Rico," Puerto Rico's Government Development Bank president Mela Acosta Febo said in a statement.

A US territory, the island's monthly debt payment of $483 million was due Monday. $58 million due to Public Finance Corporation, went unpaid.

The government chose to prioritize other creditors over PFC because that institution is largely owned by local credit unions and will affect poor Puerto Rican citizens with little legal recourse. Much of the debt that was repaid was held by Wall Street hedge funds.

Overspending over the last few years despite the island's shrinking economy, Puerto Rico owes roughly $70 billion dollars to creditors. The island also saw high unemployment, and a large number of islanders searching for employment on the US mainland.
Unemployment currently rests at 12%.

The Obama administration has repeatedly said it would not provide a bailout for the island should it default. The US Congress could alter existing legislation to provide Puerto Rico with Chapter 9 bankruptcy rights, but that is unlikely to pass.

Some have suggested that even if the island were granted Chapter 9 status, it would do little to improve the economy.

"Since Chapter 9 is unlikely to be a viable way to achieve a consolidated restructuring of all the commonwealth's debt, bankruptcy authorization would not be sufficient by itself to manage Puerto Rico's current pressures," Moody's Investor Service wrote in a report late last month.

While Monday's default will largely affect Puerto Rican citizens, any future defaults could have a stronger effect on the American economy, since over 20% of bond funds in the US have at least partial involvement in Puerto Rican bonds.

Source : SputnikNews

Greek Shares Collapse as Exchange Market Reopens

Greece's four major banks, Piraeus Bank, National Bank, Alpha Bank, and Eurobank, suffered the biggest losses after the Athens Stock Exchange opened for the first time in five weeks.

The Athens Stock Exchange lost 22.87 percent after the market opened for the first time in five weeks, the BBC said on Monday.

Greece's four major banks, Piraeus Bank, National Bank, Alpha Bank, and Eurobank, suffered the biggest losses, falling on average by 30 percent each, according to the news outlet.

The five-week suspension was instituted to prevent the Greek banking system from collapsing.
 Greece's total state debt currently stands at $350 billion, of which some $270 billion is owed to its main international creditors, the European Central Bank, the International Monetary Fund and some eurozone countries.

Greece is currently negotiating a third bailout package, worth $95-billion, to be granted to the country by its international creditors over the next three years in exchange for economic reforms. The talks are expected to last until August 12.

Source : SputnikNews

Jul 28, 2015

United States : Puerto Rico Unable to Make August Debt Payback

The Caribbean island owes US$73 billion to creditors. Analysts warn the crisis in Puerto Rico could be worse than Greece’s.

Puerto Rico will not pay off its US$93.7 million debt installment due
Aug. 1 to the Puerto Rico Public Financing Corporation (CFP), the
Caribbean island’s chief of staff announced Monday.

Victor Suarez told journalists in San Juan that the Puerto Rican
government was looking into the possibility of obtaining some US$400
million through raising gasoline prices, in order to pay back the US$73
billion debt owed to creditors.

"We are trying to achieve a smaller transaction with reasonable terms of
 some $400 to $500 million," Suarez said, according to Reuters.

Suarez added that the island would do everything possible to guarantee
the debt due to be paid to the CFP, a subsidiary of the U.S. territory's
 Government Development Bank

The small island nation, a U.S. commonwealth territory, began
negotiations with U.S. creditors earlier this month to renegotiate its
massive debt, after it has been struggling to make payments – a
situation analysts are comparing to Greece's current struggles with the
European Union.

In light of the financial crisis gripping the island, the resident
commissioner in Washington, Pedro Pierluisi, asked whether Puerto Rico’s
 debt might be unpayable and asked the administration of Governor
Alejandro Garcia Padilla to change the discourse of the financial state
of the country and to instigate economic development projects.

“Instead of talking about a general extension for the total payment of
the debt by the government of Puerto Rico, we should focus on
negotiating solutions for the particular entities that are having
financial problems,” he said.

For years, economic turmoil has rocked the island, produced by
historical issues, as well as recent financial shakes affecting the
United States, especially the 2007-2010 recession and housing crisis.

With an unemployment rate of double that of the U.S. at 13 percent and
the highest inequality rates when compared with the U.S.’ 50 states and
around 40 percent of the government budget invested in pensions,
analysts are warning that the crisis on the island could be worse than
the situation in Greece.

Source : Telesur

Jul 15, 2015

Violent Riot Outside Greek Parliament as Leaders Vote on EU Bailout

As the Greek parliament considers the controversial EU bailout plan, violent protests have erupted in the capital.

Greek MPs are expected to approve an 86 billion euro bailout deal which would come with an increased retirement age for Greek citizens and increased tax rates.

Nearly 12,500 people are believed to be participating in the anti-austerity rally in Syntagma Square. Journalists on the scene reported pepper spray and tear gas being released by riot police against protesters who were throwing Molotov cocktails and rocks.

Over 50 people have been detained, Mega TV reported.

Protests began as a general strike with at least 10 separate protests occurring across Athens, largely expressing their frustrations with the new bailout terms approved by eurozone leaders earlier this week. Demonstrators are calling for Greek leaders to reject the bailout and negotiate for better terms from creditors.

According to Greece's Skai TV, a journalist who was covering the riots in Syntagma Square was wounded, sustaining an injury to his leg.

"It may pass through parliament," Greek energy minister Panagiotis Lafazanis said in a statement, referring to the bailout proposal. "But the people will never accept it and they will be united in their fight against it."

Anti-austerity protesters clash with riot police during a rally in Athens, Wednesday, July 15, 2015
Anti-austerity protesters clash with riot police during a rally in Athens, Wednesday, July 15, 2015
 
Riot police is on fire as anti-austerity protesters throw petrol bombs during clashes in Athens, Wednesday, July 15, 2015.
Riot police is on fire as anti-austerity protesters throw petrol bombs during clashes in Athens, Wednesday, July 15, 2015.
 
On Tuesday, Greek Prime Minister Alexis Tsipras called the bailout package "irrational," but has nevertheless been lobbying parliament to approve the proposal to prevent Greece's exit from the eurozone.
 
Austerity measures would include a top VAT rate of 23% to take in processed foods, 13% rate to cover fresh food, energy bills, and water, and a 6% rate for medicines and books. It would also raise the corporate tax rate from 26% to 29% and implement a luxury tax on cars, boats, and swimming pools.

Over half of the members of the central committee of the ruling Syriza party signed a statement condemning the bailout, saying it amounted to a coup against Greece by European leaders.

Source : SputnikNews

Jul 12, 2015

Eurozone Demand Greece Implement Austerity Before Bailout Talks

Some eurozone countries are demanding Greece implement even tougher austerity measures or be expelled from the eurozone.

Eurozone finance ministers, displaying open mistrust of the Syriza
government in Greece, are calling on Greeks to immediately implement
neoliberal reforms and commit to even more austerity down the road in
order to open negotiations on a third bailout.

"The main obstacle to moving forward is a lack of trust," Italian
Economy Minister Pier Carlo Padoan told reporters ahead of a meeting
Sunday in Brussels. "I would like to see the Greek government take
concrete actions starting tomorrow in parliament to implement measures
that are needed for Greece in the first place."

The Eurogroup, as the group of eurozone finance ministers is known, is
meeting to continue discussions ahead of a gathering of the heads of
state and government of the 19-nation eurozone, who are to decide on
Greece's fate in the eurozone.

“The view of (Greece's creditors) is that if Greece commits to more
reforms, to implement them now in the short term, there is the basis for
 a possible opening of negotiations,” said European Commissioner for
Economic and Financial Affairs Pierre Moscovici before entering the
meeting.

Faced with a rapidly deteriorating economic situation, Greek Prime
Minister Alexis Tsipras asked lawmakers Friday to back an
austerity-minded reform package.

Hopes that a deal would be reached were raised when creditors responded
positively to the Greek government's capitulation to demands for more
austerity measures. Those hopes were dashed, however, when even those
steps proved to be insufficient for the some eurozone finance ministers.

“These proposals cannot build the basis for a completely new, three-year
 program, as requested by Greece,” read a document presented by German
Finance Minister Wolfgang Schaeuble.

Saturday's meeting of eurozone finance ministers ended after nine hours
of debate without reaching an agreement on whether to reopen talks on a
third bailout for Greece.

"The issue of credibility and trust was discussed and also, of course,
the financial issues," said Eurogroup chairman Jeroen Dijsselbloem
regarding Saturday's inconclusive meeting.

Some eurozone countries, led by Germany, are demanding Greece implement
even tougher austerity measures or otherwise be expelled from the
eurozone. German newspaper FAS reported that Greece's creditors are
insisting that they have the right to co-author the reform bills that
the Greek government will be required to present to parliament.

Media reports indicated that Finland’s parliament would not accept any
new bailout deal for Greece.

Other European leaders, such as Italian Prime Minister Matteo Renzi, are
 pushing hard to keep Greece in the eurozone.

"Now common sense must prevail and an agreement must be reached. Italy
does not want Greece to exit the euro and to Germany I say: enough is
enough," Renzi was quoted as saying by Rome-based daily Il Messaggero on
 Sunday.

Reactions to the hardline positions taken by some European leaders from
members of the ruling Syriza party in Greece has been sharp.

"What is at play here is an attempt to humiliate Greece and Greeks, or
to overthrow the Tsipras government," Dimitrios Papadimoulis, a Syriza
member of the European Parliament, told Mega TV.

Donald Tusk, president of the European Council, canceled a planned
summit of the heads of state and government of the European Union,
opting instead to let discussions continue at the Eurogroup and at a
summit of leaders from the eurozone.

Source : Telesur

Jul 11, 2015

China asserts that the fall of its markets was caused by Western Zionist banks.

Suspected hostile short-selling behind sell-off in China markets

A recent sell-off in China's stock markets is the first major challenge facing the country since the introduction of margin trading, and is believed to have been caused by hostile short-sellers.

In a report on the Chinese news site ifeng.com, an analyst said the sell-off was similar to what took place in Hong Kong in 1997, when the territory's benchmark Hang Seng Index plunged 60% after peaking at 16,673 points.

The steep drop in share prices in Hong Kong in 1997 was caused by financier George Soros, who shorted both the Hong Kong dollar and the Hang Seng Index futures, the analyst said, adding that similar practices were observed in the last two trading sessions in China.

According to the analyst, massive funds entered the futures market, building a short position and leading to declines in the stock markets. The size of the funds and the sophisticated trading methods are beyond the ability of Chinese institutional investors, the analyst said.

In fact, Bill Gross of Janus Capital, a co-founder of global investment firm PIMCO, said in early June that the Shenzhen Stock Exchange's Component Index presented perfect short-selling opportunities.

At the time, the index was at a seven-year high but plummeted 30% on Gross's comments. Morgan Stanley and Credit Suisse have also been bearish on Chinese shares recently.

Several measures introduced or announced by the Chinese government, such as lower interest rates, required reserve ratio cuts, and a plan to allow the investment of pension funds in equities, have failed to prop up the Chinese stock markets.

The Chinese government is expected to introduce new policies to rescue the market, since further a decline will hurt companies' ability to borrow money and will put pressure on the economy.

The China Securities Regulatory Commission reportedly was soliciting proposals from institutions to rescue the market.

There have also been reports of brokerages promising not to force liquidation of shares held by investors facing margin calls.

Source : WantChineTimes

Jul 9, 2015

Belgium Leaves Transatlantic Trade and Investment Partnership (TTIP) ... One Town at a Time

One Belgian town has decided to "opt out" of the Transatlantic Trade and Investment Partnership (TTIP), viewing it as threatening to its way of life.

The Belgian town of St. Gilles, right next to where the tenth round of TTIP talks is scheduled to begin on July 13, has declared itself a TTIP-free zone.

According to town council member Alain Maron, Europeans have begun a movement against TTIP, which they see as threatening to their environment, social programs and ultimately, their political independence. While the resolution has no legal force, the town considers it to be a symbolic gesture to  protest against the agreement currently being negotiated between the United States and the European Union.

"In Belgium and other European countries, citizens, NGOs and political parties have begun mobilizing against the idea of a trans-Atlantic pact between Europe and the US, which would increase free trade for two reasons: first, the fear that social and environmental regulations in Europe would get hit, and second because of problems of a democratic character. Parliaments, as well as national, regional and local authorities would lose their autonomy," Maron told Sputnik.


According to Maron, the town will not physically close itself off from the rest of the EU, and neither should Europe close itself off from the rest of the world.
 "The idea is not to be self-sufficient. Europe has to trade with Russia, the US and other world regions, there are no reasons to build a trade fortress around Europe," Maron added.

Maron considers part of the problem to be a new transnational jurisdiction which would be imposed by the agreement, allowing companies to sue governments.

"There is another problem of a democratic nature; the private arbitration courts which could ignore national regulations which contradict the interests of corporations. A company would be able to sue a national, regional or local government in a private arbitration court if it decides that some regulation contradicts its interests," Maron said.

Source : SputnikNews

Jul 7, 2015

After 'No' Vote, EU gives Greece Sunday ultimatum for debt deal

Members of the Eurozone handed Greece a tight five-day deadline on Tuesday, saying the “No” vote constrains their ability to offer aid.

Greek Prime Minister Alexis Tsipras has until the end of the week to
present a proposal for reforms and reach a deal with creditors or it
will face bankruptcy, Euro zone members announced Tuesday.

Representatives of the 19-country Eurozone met on Tuesday at an
emergency summit in Brussels, just days after Greeks voted in a
referendum last Sunday against a bailout deal that included harsh
austerity policies.

The representatives announced that all 28 European Union leaders would
meet on Sunday to decide Greece's future.

"The stark reality is that we have only five days left,” European
Council President Donald Tusk told a news conference. “Until now I have
avoided talking about deadlines, but tonight I have to say loud and
clear that the final deadline ends this week." 

European Union leaders said the “No” vote in last Sunday’s referendum
prevented them from making Greece new aid offers, warning that any new
bailout deal would likely include harsher terms.

“I am strongly against Grexit (a Greek exit from the eurozone) but I
can’t prevent it if the Greek government is not doing what we expected,”
 said the European Commission president, Jean-Claude Juncker. “We have a
 Grexit scenario prepared in detail: we have a scenario as far as
humanitarian aid is concerned.”

Source : Telesur

Hillary Clinton Says Bankruptcy not Bailout for Puerto Rico

"We're not talking about a bailout, we're talking about a fair shot at success," Clinton said.

U.S. presidential hopeful Hillary Clinton said Tuesday that Puerto Rico
should have access to U.S. bankruptcy rules in order to restructure the
country's debt load.

The statement comes a week after Puerto Rico made a successful payment
on its debt amid widespread expectations of a default. Ahead of the
payment, Puerto Rican authorities said they see bankruptcy as a viable
option for restructuring the country's burdensome US$72 billion in debt,
 as years of economic struggle are coming to a head in a dire fiscal
situation.

"Congress and the Obama administration need to partner with Puerto Rico
by providing real support and tools so that Puerto Rico can do the hard
work it will take to get on a path toward stability and prosperity,"
Clinton said in a statement.

Although Puerto Rico is a U.S. territory, it is not eligible to file for
 bankruptcy; legally that option is only open to U.S. municipalities and
 cities.

Much of Puerto Rico’s debt is held by individual investors on the United
 States mainland, in mutual funds or other investment accounts.

"As a first step, Congress should provide Puerto Rico the same authority
 that states already have to enable severely distressed government
entities, including municipalities and public corporations, to
restructure their debts under Chapter 9 of the Bankruptcy Code,” Clinton
 said.

The White House said last week that Congress could “take a look at”
Puerto Rico's calls for the U.S. to allow it to file for bankruptcy, but
 U.S. officials said they would not be willing to bailout the
cash-strapped Caribbean island.

Clinton also stressed that a bailout is not an option.

"We're not talking about a bailout, we're talking about a fair shot at
success," Clinton said.

Puerto Rico's fiscal crisis comes amid an ongoing independence movement
seeking to break with the U.S. and transform the island’s political
system.

Talk of bankruptcy in the face of a crippling debt load also comes as
Greece re-enters negotiations with the eurozone, prioritizing debt
relief in the wake of a loan default and a “no” vote in the referendum
indicating the Greek people reject another austerity.

Puerto Ricans can vote in presidential primaries, which are run by
parties, but cannot vote in presidential elections.

Source : Telesur

Jul 6, 2015

United Nations Debt Expert Says Greece Can't Take More Austerity

The U.N. debt expert calls on the European financial institutions to include the principles of human rights into financial lending practices.

Further austerity measures will jeopardize Greece’s chances of an
economic recovery, the United Nations International Debt Expert, Juan
Pablo Bohoslavsky, warned Monday.     

“It's very clear the message from the Greek population - no more
austerity measures. Actually if you look at the figures, austerity
measures didn't really help the country to recover," Bohoslavsky stated.

His comments came after Greek citizens voted in historic referendum
Sunday, in which they elected to reject debt austerity proposals by
their European creditors.

Bohoslavsky called on Greece’s European creditors to incorporate the
principles of human rights into debt cancellation and financial lending
practices.

Greece owes billions to the IMF, the European Central Bank and the
European Union, after the financial institutions lent the country
massive bailout funds in 2010 and 2012, over 90 percent of which bailed
out banking institutions.


Several of the debt cancellation measures demanded by Greece's
international creditors – including pension cuts and new laws that make
it easier to lay off workers – clash with the promises made by Greece’s
new left-wing government to voters in January.

"The message here is that if the parties involved in the Greek tragedy
paid more serious attention to what human rights law has to say,
everything would be easier, for the Greek population
particularly,"involved in the Greek tragedy paid more serious attention
to what human rights law has to say, everything would be easier, for the
 Greek population particularly," Bohoslavsky concluded.

Source : Telesur

Jun 30, 2015

Puerto Rico May Declare Bankruptcy as United States Rejects Bail Out

While Puerto Rico calls for debt restructuring and economists call for austerity, the U.S. says it will not offer a bail out.

Puerto Rico signaled Monday that bankruptcy would be a way to
restructure its burdensome debt, even while U.S. official say there will
 be no bail out for the Caribbean island.

Puerto Rican governor Alejandro Garcia Padilla called for a moratorium
that would postpone debt payments for years, allowing the country to
catch up on payments while also investing at home in key areas like job
creation. He also called for the U.S. to allow the country to file for
bankruptcy to enabled debt restructuring. 

​"Puerto Rico needs a complete restructuring and development plan,
comprehensive and inclusive, that takes care of the immense problem we
face today, not on a short but on a long-term and definitive basis,"
said Garcia Padilla.

Although Puerto Rico is a U.S. territory, it is not eligible to file for
 bankruptcy, an option only open to U.S. municipalities.

Puerto Rico faces a Wednesday deadline to make a payment on its US$73
billion debt load, but the cash-strapped country will not be able to
make the payment to creditors. Much of Puerto Rico’s debt is held by
individual investors on the United States mainland, in mutual funds or
other investment accounts.

“[Puerto Rico] can no longer pay its debts, it will soon run out of cash
 to operate, its residents and businesses will suffer," said prominent
former U.S. bankruptcy judge Steven Rhodes in an assessment, adding that
 Puerto Rico “urgently needs” U.S. assistance.

Puerto Rico’s debt crisis is coming to the fore not only after years of
fiscal struggle, but also an ongoing independence movement seeking to
break with U.S. and transform the island’s political system.

A report released Sunday on the debt situation commissioned by Puerto
Rico and co-authored by a former International Monetary Fund economist
recommends austerity measures including spending cuts and tax hikes, as
well as debt restructuring, to address to fiscal situation. The report
also revealed that the country's debt crunch is worse than previously
thought.

In response to the recommendations, Garcia Padilla has said he refuses
to support minimum wage cuts.

The news comes as Greece also faces dire debt woes, denied an extension
by creditors on its debt payment and forced to close banks as it faces a
 potential exit from the Eurozone.

U.S. officials have said they will not support a bail out for Puerto
Rico.

Source : Telesur

Jun 29, 2015

Greece Closes Banks for One Week

Analysts say that this decision suggests Greece’s imminent exit from the eurozone.

Greece announced late Sunday that banks are going to be closed for a
week, as the government has decided to impose capital controls, that
include limited cash machine withdrawals of 60 euros, or US$66.

According to officials the move was taken to check if there has been
economic growth in the country's crippled financial system, however
analysts say this decision means an imminent exit from the eurozone.  

In a televised message Greece’s left-wing Prime Minister Alexis Tsipras
called on people to stay calm and blame the eurozone leaders, who
literally forced him to take this decision after the creditors’ patience
 reached its limit  Saturday when they decided to freeze the liquidity
that has kept the country afloat during six months of bailout deposits.

Meanwhile, Tsipras also said the country will hold a referendum so that
Greek citizens can decide whether to accept the latest bailout terms
offered by the country’s creditors. The leader of the rulling Syriza
Party has also tried to keep his anti-austerity pledges that helped him
win in  the country’s January general elections. 

Local press report that thousands of people are creating huge lines at
the ATMs in the capital Athens, while others have expressed on social
media their outrage by the decision that will literally freeze their
savings for a week starting Monday morning.


This is the latest chapter in Greece's long-running battle with
international creditors. Last week the European Commission, the
International Monetary Fund and the European Central Bank, also known as
 the troika, decided to extend into the weekend the talks on how Athens
is going to pay its debt installment of US$1.8 billion by the end of the
 month.

Source : Telesur

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