It appears the Portuguese PM’s threats last week that he would resign if the constitutional court rules against the various austerity measures in the proposed 2013 budget (subsequently recanted because he may have just sensed which way the winds are blowing), were not enough to pressure the court into voting the way the German rulers of the Eurozone demanded, because moments ago the high court said that some budget elements are unconstitutional.Specifically it said that:
Article 29 and
are not constitutional.
Of course, trampling the constitution in Europe’s insolvent vassal fiefdoms is nothing new. Recall that its the Central Bank of Cyprus that said deposit confiscation is just that: unconstitutional. Too bad that didn’t stop anyone from trampling all over the laws and rules of the land in the namd of what? Lots and lots of political capital of course, that nobody, NOBODY, should underestimate.
And remember: No Plan B..
updated: more than 1.320 billion euros of budget cuts declared unconstitutional
PM is in emergency reunion with president!
Gregor Peter‏@L0gg0l48 min
Portugal PM said he may resign if constitutional court rules against austerity measures
Gregor Peter‏@L0gg0l50 min
RT @djfxtrader: *Portuguese Court: Paycheck Cuts for Public Workers, Pensioners Illegal
Paulo Dias‏@1ens1 min
@portugal unconstitutional 600 million holiday subsidy state workers. 500 million pensions, 150 million unemployment subsidy + one unknown
More than 347 000 unemployed will no longer have a 6% cut in their unemployment benefits and summer also reset the amount withheld for Social Security since the beginning of the year. This is because the Constitutional Court chumbou the contribution of 6% that began to be implemented in January.
As this involved only cutting subsidies nature of welfare, the social unemployment, aimed at low-income households, was not affected.
According to the statistics of Social Security in January, nearly 346,000 unemployed were the main unemployment benefit, that number rose to 347,781 in February. March data are not yet available.
Also since January, sickness benefits were subject to a rate of 5%, which will now be returned to the beneficiaries. This leaves out low cutting under 30 days.
PORTUGAL GOVT DOES NOT AGREE WITH COURT’S INTERPRETATION, HIGH COURT DECISION HAS NEGATIVE EFFECTS
BRIDGEWATER: Italy Could Blow Up The Euro – The political situation in Italy is starting to get pretty chaotic
The possibility of a dangerous outcome is real and one we’re continuing to monitor.
Judging by the purchasing frenzy of Italian bonds today, most of it emanating out of Japan, which, after last night’s epic snafu involving JGBs and the double halt of bond trading, may have spooked the “New BOJ-frontrunning Normal” Mrs. Watanabe, not to mention Albert Edwards’ recent rekindled love affair with the Mediterranean country, one may have left with the impression that all is well, and Italy is “safe.” Not so fast: according to Bridgewater, the world’s biggest hedge fund (after the ECB and the NY Fed of course), whose daily letter today is titled “Could Italy Blow Up The Euro?” things in Italy are hardly as rosy as market conditions make them appear (although as the BOE itself admitted, any link the policy vehicle known as the “market” may have had with economic fundamentals is long gone), and in fact may be set to get far worse.
Some of the key highlights:
Economic conditions in Italy are as depressed as they’ve been since the end of WWII, the economy is still contracting, Italy’s banks are in terrible shape, private sector lending is very strained, and the ECB’s policy is not resolving the problems. As is typical in countries enduring this level of economic pain, the political situation is starting to get pretty chaotic.
Mark Hulbert: Investors should strongly consider cutting their stock exposure this coming May Day and parking the proceeds in cash until Halloween…. the historical evidence in favor of this one is surprisingly strong.
CHAPEL HILL, N.C. (MarketWatch) — Investors should strongly consider cutting their stock exposure this coming May Day and parking the proceeds in cash until Halloween.
That advice comes courtesy of a famous piece of Wall Street folklore that is known by the adage “sell in May and go away.”
Unlike most of the other stories investors tell, however, the historical evidence in favor of this one is surprisingly strong. And deeper drilling into the data suggests there are ways to tweak the approach so that you don’t have to dump stocks entirely to capture some of the benefit.
You might also know of the “sell in May” pattern by its other name, the “Halloween indicator.” Both refer to the pronounced tendency for the stock market, on average, to turn in its best returns between Halloween and May Day — referred to loosely as the “winter” months.
It’s Official: A Democratic president has officially proposed to cut the Democratic Party’s signature New Deal program, Social Security
Mark this day. For the first time in history, a Democratic president has officially proposed to cut the Democratic Party’s signature New Deal program, Social Security:
President Obama next week will take the political risk of formally proposing cuts to Social Security and Medicare in his annual budget in an effort to demonstrate his willingness to compromise with Republicans and revive prospects for a long-term deficit-reduction deal, administration officials say.
In a significant shift in fiscal strategy, Mr. Obama on Wednesday will send a budget plan to Capitol Hill that departs from the usual presidential wish list that Republicans typically declare dead on arrival. Instead it will embody the final compromise offer that he made to Speaker John A. Boehner late last year, before Mr. Boehner abandoned negotiations in opposition to the president’s demand for higher taxes from wealthy individuals and some corporations.
President Obama’s budget, to be released next week, will limit how much wealthy individuals – like Mitt Romney – can keep in IRAs and other retirement accounts.
The proposal would save around $9 billion over a decade, a senior administration official said, while also bringing more fairness to the tax code….
President Obama will propose a budget next week that embraces a risky strategy of courting Republicans for a grand bargain on the debt while angering Democratic allies with cuts to the nation’s entitlement programs.
White House officials said Friday that Obama’s budget would cut Medicare and Social Security and ask for less tax revenue than he has previously sought. The budget, to be released Wednesday, will fully incorporate the offer Obama made to House Speaker John A. Boehner (R-Ohio) during December’s “fiscal cliff” talks — which included $1.8 trillion in deficit reduction through spending cuts and tax increases….
The Scary Thing Is That This Bad Jobs Report Wasn’t Even About The Sequester – Its about the expiry of the Payroll Tax Holiday
The March jobs report has come in very mediocre.
It’d be nice to blame the sequester (the automatic spending cuts that started in March) but it doesn’t even appear to be about that.
A series of tweets from WaPo’s Zachary Goldfarb points out that this really more likely to be about the expiry of the Payroll Tax Holiday (as the job losses fell in the retail sector) rather than the sequester (seeing as there was not a big decline in professional services).
In reality, European Central Bank president Mario Draghi chose his words more cautiously following the first post-Cyprus meeting, leaving the shock and awe tactics to the Japanese, at least for now.
For sake of an argument, let’s say the ECB also saw the need to act, (rather than just “standing ready”) and took steps to further weaken the Euro to boost competitiveness in the ailing economies of southern Europe. Would this move not be countered by – and counter-productive to – the Japanese? You bet it would.
And who’s to say it would stop there?
The problem with devaluing your way to growth is that, to work, it’s implied that your partners on the other side will choose to ignore it. If not, then you simply find yourself in a trade and/or currency war of matching interventions.
As Macke points out about this new era of central bankism, it’s surprising it took Japan as long as it did to do it. After all, we’ve been at it here in the U.S. for over five years now.