Must-Know News - Feb. 07

• 1) Greece’s financial crisis puts the future of the euro in question

“Nouriel Roubini, economics professor at the Stern School of Business at New York university, said in Davos last month: “If Greece goes under, that’s a problem for the eurozone. If Spain goes under, it’s a disaster.”"

“Gerard Lyons, chief economist at Standard Chartered, says there have been several examples of monetary unions that have collapsed because they were not accompanied by fiscal union: “For monetary union to survive, it has to become a political union. If it doesn’t there is likely to be some sort of implosion and a move towards a two-speed Europe.”

Roubini agrees: “The eurozone could drift … with a strong centre and a weaker periphery, and eventually some countries might exit the monetary union.”"

• 2) Olive: Will Greece set off ‘global debt bomb’?

“Ostensibly, the epicentre of the crisis is Greece, in danger of defaulting on its debt payments to worldwide holders of its government bonds, or sovereign debt.

But the fear about state defaults quickly spread to Spain, Portugal and Ireland, fiscal train wrecks that together with Greece now go by the unfortunate acronym PIGS.

Even then, the scope of a potential second global financial crisis so soon after the credit crisis of 2008-09 goes far beyond the euro zone, the 16 nations sharing a common currency, the euro. ”

“Greece’s debt-to-GDP ratio is an eye-popping 95 per cent. But then, the U.S. isn’t far behind at 84 per cent. (The Canadian ratio is estimated at 35.5 per cent in the current fiscal year.) Greece’s deficit-to-GDP ratio is an alarming 13 per cent. But then, Britain isn’t far behind at 12.6 per cent.

Just last month, California-based PIMCO, the world’s biggest bond investor, warned that Britain’s bonds ware “resting on a bed of nitroglycerine.” And last week, Moody’s, the U.S. bond-rating agency, warned the U.S. of a looming downgrade that would strip America of its coveted Triple-A bond rating, which would push up borrowing costs.

The world is awash in potentially unsustainable debt.”

• 3) Budgit deficit concerns in European economies dominated the G7 meeting

“However, during the press conference, the question of what are the procedures that the seven countries will undertake to resolve the debt problems, the Italian, German, and French finance ministers were reluctant to answer and did not mention any specific measures that will be adopted, while the Canadian Finance Minister stated that this issue will be addressed by the European Union and not by the G7. ”

• 4) Toledo considers property sales to fight deficit

“Toledo’s massive budget deficit has city leaders thinking outside of the box to find a solution.

The mayor and city council are looking at every possible option to balance the budget, and dozens of ideas have been put on the table to balance the city’s $44 million budget deficit.

One idea is selling Toledo-owned properties like The Docks, The Erie Street Market, and land in Monclova. Councilman George Sarantou believes those properties could raise millions of dollars.”

• 5) Group of 7 Vows to Keep Cash Flowing

“Finance ministers from seven of the world’s biggest economies concluded a meeting in the Canadian Arctic on Saturday with pledges to maintain their fiscal stimulus programs, despite rising worries among investors about the mounting debts of some European governments.

“We are all absolutely committed to maintaining the support for our economies until we make sure that we have recovery established,” Alistair Darling, Britain’s chancellor of the Exchequer, said in Iqaluit, Nunavut, where finance ministers and central bankers from the Group of 7 nations were meeting.

The European debt crisis, and its spread from Greece to other countries in the euro zone like Portugal, Spain and Italy, were a focus of the two-day talks. ”

• 6) Americans Should Be Billed Their Share of the Federal Deficit – Columnist

“Denver (PRWEB) February 7, 2010 — A Colorado business columnist has proposed a simple, but effective solution to the Federal government’s out-of-control deficits: invoice each and every American monthly for his or her share of the spiraling tab.

The U.S. government’s current $12.3 trillion deficit balance amounts to about $40,000 per citizen. Layer in the Obama Administration’s latest proposed budget for the coming year, and that obligation ratchets up to $45,000 per person. For a family of four, the proposed debt burden, before interest, equals $180,000.”

• 7) Frustrated Job Seekers Deciding to Call It Quits

“Many jobless people have reached a conclusion that captures the depth of the unemployment crisis: Looking for a job is a waste of time.

(AP)The economy is growing. Yet it’s creating few jobs. That’s why in the past eight months, 1.8 million people without jobs left the labor market. Many had grown so frustrated by their failure to find a job that they threw up their hands and quit looking for one.”

• In UK bankruptcies reached a new record high and accelerating in Q4 2009

The number of people who were declared insolvent in England and Wales hit a record high in the last quarter of 2009 and during the year in full.

• 9) Testy Conflict With Goldman Helped Push A.I.G. to Edge

“Well before the federal government bailed out A.I.G. in September 2008, Goldman’s demands for billions of dollars from the insurer helped put it in a precarious financial position by bleeding much-needed cash. …”

• 10) BBC UK report s on the ’hidden’ jobless’ in America, suggesting that real unemployment is not the official figures, which are bad enough, but it’s much worse and soup kitchens are back:

An official US unemployment rate that hit 10% last year, and seems set to stay there or thereabouts for months yet, already makes grim reading.

Yet there’s growing concern that even that large and unpleasant number doesn’t do justice to the size and severity of America’s problem with jobs, or the lack thereof.

- Saxplayer00o1