NÃO SE EXCITEM!

Angela Merkel avisou hoje que nem amanhã nem depois de amanhã haverá avanço espectacular sobre a crise grega. Mais ou menos ao mesmo tempo o FMI avisava os líderes europeus de que devem agir de imediato para limitar os efeitos da crise da zona euro e para limitar o contágio das economias mais frágeis ao resto da moeda única. 

Do outro lado, a Moody´s baixou o rating dos EUA e a S&P ameaça fazer o mesmo. Os Republicanos continuam a esticar a corda.

Por trás do fantasma do default da Grécia está o risco sistémico que pode abalar irremediavelmente  o sistema financeiro global. O default dos EUA, ainda que momentâneo, teria um efeito ainda mais desvastador sobre o sistema. Por que razão não são chamados a resolver o imbróglio em que o mundo se encontra os principais engendradores dele, os banqueiros?

Merkel, talvez por razões políticas mais pessoais que outras, continua a insisitir na corresponsabilização dos bancos na reestruturação das dívidas dos países que não se poderão safar de outro modo. Tem sido, e está ser depois das declarações de hoje, muito criticada. Mas a sua teimosia pode ter o mérito de vir a criar um precedente salutar para o futuro: o de estipular a responsabilização contratual dos bancos nos riscos dos créditos que concedem aos governos.
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Cor. - Eurozone: An elusive debt resolution

AUSTERIDADE E CRESCIMENTO NÃO COLAM?

Cut or loose

History suggests that austerity and growth just do not mix

TO LISTEN to Barack Obama, there is no trade-off between supporting a weak economy and tackling America’s strained public finances. “We have to cut the spending we can’t afford so we can put the economy on sounder footing,” the president said on July 2nd. Big spending cuts are necessary, he added, to “give our businesses the confidence they need to grow and create jobs”. Perhaps. A successful outcome to talks between Congress and the White House over a multi-trillion-dollar package of budget cuts is clearly preferable to a chaotic debt default. Then again, public-sector job losses helped drive the unemployment rate up to 9.2% in June, which didn’t obviously do a lot for confidence.

Mr Obama is not alone in arguing that austerity can boost growth: Britain’s deficit-slashing coalition government and the European Central Bank (ECB) also make the case. A decline in interest rates due to a lower probability of default should support investment and asset prices. Expectations of lower future taxes and higher lifetime earnings may encourage investment and spending. A new ECB working paper argues that “a fiscal contraction may turn out to be expansionary if the expectation channel becomes sufficiently strong.” In practice, however, it rarely works out that way. In a recent study of 173 fiscal-policy changes in rich countries from 1978 to 2009, economists from the IMF found that cutting a country’s budget deficit by 1% of GDP typically reduces real output by about two-thirds of a percentage point and raises the unemployment rate by one-third of a percentage point.

Occasionally, an economy will buck the trend. In a new paper, Roberto Perotti of Bocconi University presents a series of case studies of “expansionary austerity”, in which cuts in spending coincide with GDP growth. Support for the confidence theory is scarce. In only one of the cases considered—a period of Danish fiscal consolidation from 1983 to 1986—did rising domestic demand lead an expansion. And Denmark in 1983 could scarcely be more different from America today. Its economy was stronger, growing at 4% per year when austerity began (compared with 1.9% in the first quarter for America). More important, Denmark had stratospheric interest rates. Consolidation succeeded in bringing long-term rates down from a peak of 23%. Durable-goods consumption and investment boomed. House prices rose by 60% from 1982 to 1986, raising household wealth and buoying confidence. In America the long-term interest rate is already on the floor, at under 4%, yet consumption remains anaemic. Housing markets are stuck in a post-crash funk. With interest rates low, an austerity-induced fall in inflation would increase real rates and weaken an already listless economy.

Rising domestic confidence is not the only route to growth amid austerity. Foreign demand is typically more important. From 1987 to 1989 Ireland’s fiscal balances improved and debt declined even as growth accelerated. Once again, falling interest rates mattered: long-term rates stood at around 13% when cuts kicked in. But exchange rates mattered more. In the year immediately before Ireland tightened its belt, its currency appreciated by 20% against that of Britain, its largest trading partner. The trend reversed in early 1987 and sterling subsequently rose by 17% against the punt. Irish exports surged by 10% a year from 1987 to 1990, accounting for most of the economy’s impressive growth.

Italy’s 1990s austerity programme, often cited by European policymakers as proof that a country like Greece can wrestle down its huge debt burden, tells a similar story. From 1991 to 1998 Italy moved its budget to surplus and stabilised its debt, only briefly dipping into recession in 1993. Here, too, a plunging currency proved essential. In September 1992 Italy was forced out of the European Exchange Rate Mechanism, a pre-euro system of semi-pegged currencies. Over the next few years the lira fell by roughly 40% against the D-mark. Italy’s current-account balance swung to surplus and growth leapt. There is a lesson in this for Greece, but not the one euro-zone leaders wish to impart.

America will struggle to duplicate these successes. The scope for increasing exports is limited by the process of debt reduction in other rich economies. Exports account for a relatively small share of activity in America’s economy in any case, leaving less room for a trade-led boom. Its second-largest trading partner, China, manages its currency against the dollar and would resist a dollar depreciation. Whenever investors seek shelter, even from an American slowdown, they choose Treasuries, and thus the dollar. In an economy constrained by low interest rates, a stubborn trade deficit and natural demand for the world’s reserve currency, there is little to cushion the blow of austerity.

Spending down, Fed up

A last lifeline for the president is the hope of support from the Federal Reserve. Central banks can partially offset the negative effect of budget cuts with looser monetary policy. The IMF economists find that spending cuts are more expansionary than tax increases precisely because central banks are more willing to compensate for the former. A Fed that is less concerned about public debt may more be prepared to act. But with interest rates near zero, the Fed’s choices are limited to unconventional policy options, where the threshold for action seems to be higher. External factors, like high commodity prices, may also tie the Fed’s hands. The ECB is already tightening policy because of the effect of high commodity prices on euro-zone inflation.

America cannot wait for ever to rein in its debt. It needs to lay out credible plans for medium-term deficit reduction. But it has more leeway to delay cuts than most other countries, thanks to continued demand for its debt. Another year of recovery would help confidence more than a premature swing of the fiscal axe.

E, AGORA, ANGELA?

As declarações dos dirigentes do SPD alemão de hoje (notícia de que coloquei link no apontamento anterior) vieram colocar à Chanceler Merkel um desafio irrecusavelmente motivador: a unidade europeia depende do sucesso do euro e Merkel pode contar com o apoio da oposição para a tomada de medidas, mesmo as mais impopulares, para a solução dos graves problemas com que a União Europeia actualmente se confronta.

E, agora, Angela? A política de arrastar os pés para não perder o equilíbrio em terreno escorregadio que caracteriza o comportamento dos líderes europeus, com particular ( e inevitável) destaque para a chanceler alemã, já não é solução porque os dados se alteraram radicalmente e as alternativas para empurrar os problemas para a frente estão a esgotar-se aceleradamente.

Com reestruturação ( a que Trichet se opõe porque o regimento do BCE não lhe permite aceitar colaterais de títulos de dívidas em default) ou eurobonds ( a que também Trichet se opõe) ou com hair cuts (que Trichet não quer nem ouvir falar) ou a conjugação dos três, a situação exige soluções de emergência porque os tratados da UE, incluindo, espantosamente, o último, não preveniram a possibilidade de insolvência de um ou mais dos seus membros e as medidas adequadas em tempo útil.

Agora, qualquer solução será de digestão difícil.

E, no entanto, a crise era inevitável desde o primeiro momento, porque desde o primeiro momento os bancos assumiram que, quaisquer que sejam as suas decisões, se delas resultarem perdas os contribuintes serão chamados a pagar. Enquanto esse pressuposto for convalidado pelo receio do risco sistémico, em parte alguma, e não só na zona euro, os desastres financeiros estarão sempre à espera dos pagadores de impostos.

OPOSIÇÃO APOIA MERKEL SE

Os deputados sociais democratas alemães , do SPD, vão apoiar a decisão do governo de centro direita de Angela Merkel em relação às medidas de austeridade que a chanceler pretende aplicar. A oposição explica que está em causa a moeda única e a integração europeia. A oposição justifica assim o facto de não levantar obstáculos à aprovação das medidas que, embora impopulares na Alemanha, são necessárias para superar a crise. As declarações foram feitas na semana em que se realiza a Cimeira Extraordinária da Zona Euro, como relata o correspondente da Antena 1 em Berlim, Francisco Assunção.

mais aqui 

AS COMPLICAÇÕES DO EURO

The euro´s real trouble

The crisis of the single currency is political as much as financial

ANYONE struggling to understand why Europe has proved incapable of putting an end to the euro’s crisis might find answers in a bad-tempered dinner at a summit on October 28th 2010. The argument was over a demand by the leaders of Germany and France, made days earlier at Deauville, for a treaty change to create a permanent system to rescue countries unable to pay their debts. Everyone groaned. It had taken years of tribulation to agree on the European Union’s Lisbon treaty, which had only recently come into effect. But they bowed to Angela Merkel, the German chancellor, who wanted to prevent any challenge to the new system by Germany’s constitutional court.

However, Jean-Claude Trichet, president of the European Central Bank (ECB), worried about something else: her demand that future bail-outs must include “adequate participation of private creditors”, meaning losses for bondholders. That could only alarm the markets, he thought, still jittery after the Greek crisis in the spring. “You don’t realise the gravity of the situation…” began Mr Trichet. But he was cut off by the French president, Nicolas Sarkozy, who interjected, one Frenchman to another: “Perhaps you speak to bankers. We, we are answerable to our citizens.” Mrs Merkel chimed in: taxpayers could not be asked to foot the whole bill, not when they had just paid to save the banks.

The politicians won the day. But Mr Trichet’s worries have also been vindicated, as contagion has spread and is now engulfing Italy. The dinner-table row illustrates how, throughout the sovereign-debt crisis, the requirements of financial crisis-management have collided with political, legal and emotional priorities. Indeed, the euro’s woes are as much about politics as about finance. European officials such as Mr Trichet parrot that the euro zone’s overall debt and deficit are sounder than America’s. Yet Europe lacks the big federal budgets and financial institutions to redistribute income and absorb economic shocks. And it has no single polity to mediate tensions within and between member countries. It is hard enough to get Californians to save Wall Street bankers; no wonder Germans bristle when they are asked to rescue Greek bureaucrats.

But Europe’s politicians cannot blame everything on their lack of tools. Their inconsistency, even incoherence, over getting creditors to pay has done much to spread contagion. Their first emergency loans imposed tough conditions on Greece, but none on the bankers. Indeed, the creation of a big bail-out fund was meant to make default unthinkable. At Deauville, though, Mrs Merkel and Mr Sarkozy wanted default to become a possibility: current debt would be safe, they said, but leaders later agreed that from 2013 countries should issue new types of bonds that could be more easily forced to take a hit if a country ran into trouble. Now Greece needs another rescue, default is nearer and the Germans and Dutch, threatening to stand in the way, want private creditors to contribute right away. This has led to an open dispute with Mr Trichet, who says even the mildest of debt rescheduling risks an upheaval comparable to the collapse of Lehman Brothers; he has threatened, if there is any sort of default, to cut off credit to Greek banks—pushing many into bankruptcy. Is it any surprise that investors are fleeing vulnerable euro-zone bonds?

To cap it all, in talks with Greece’s creditors euro-zone countries have spent the past few weeks pursuing contradictory aims. At the behest of Berlin and The Hague, they sought a “substantial” contribution by bondholders, but to satisfy the ECB in Frankfurt, this would have to be “voluntary”—as if someone would willingly take a large loss when a smaller one is on offer. Finance ministers in Brussels this week more or less accepted a “selective default”, so long as it is short-lived (no longer than a few days) and does not trigger a payout on credit-default swaps (a form of insurance against default). To ease the burden on Greece, ministers seem ready to lend it money to buy back existing bonds, and to lower the interest rate they charge on loans.

This deal may not come cheap. Depending on the degree of coercion, private creditors will give up at most €30 billion ($43 billion) for Greece’s financing needs to 2014. But officials say that merely to lower Greece’s debt-to-GDP ratio to that of heavily indebted Italy, the unofficial goal, would require a sum several times bigger. Ireland and Portugal may need similar treatment.*

Think bigger and bolder

There are good reasons to make the private sector pay. Taxpayers should not bear the whole cost of bondholders’ losses—after all, investors received higher returns for their risk-taking (if not high enough). But the present policy brings the worst of both worlds: too little money from creditors to make a big difference to Greece, too much turmoil to make the effort worthwhile.

Explore our interactive guide to Europe's troubled economies.It is time to think differently. If there is to be a default, then it might as well be a big one, with a large haircut on creditors that gives Greece relief and a greater chance of recovery. Even then, Greece will need help for years to come. And some banks will have to be recapitalised. One useful means of allaying the panic might be for euro-zone countries to issue part of their debt as joint bonds. Jointly guaranteed bonds sold to raise money for the current bail-out funds are being eagerly snapped up by investors.

This may make financial sense. But the near-insurmountable obstacle is, as always, political: there is huge resistance to what would become a more overt “transfer union”. In a group of democracies, where big decisions are taken by unanimity, consensus is hard to come by and takes time. Hence, leaders have acted only in the face of impending disaster, and then with half-measures. Markets operate on a faster timetable. They will not wait for Europe’s leaders, like Churchill’s Americans, to do the right thing after having exhausted all the alternatives.

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* Interactive guide

D DAY

Plan D stands for default . . . and the death of the euro

By Wolfgang Münchau

The biggest single danger in the eurozone crisis now is that events are moving too fast for Europe’s complacent political leadership. Last week, the crisis reached Italy. And the European Union looked the other way.

It was a huge mistake to postpone an emergency EU summit until Thursday this week. The European Council should by now have doubled or trebled the size of the European financial stability facility, the rescue umbrella. It should have made the facility more flexible, allowing it to buy bonds in the secondary markets. The council should have forced a closure of the debate on how to handle private investors, who bought Greek sovereign bonds.

Instead, the council allowed its finance ministers to get stuck in tedious technical details, unable to take a decision. Angela Merkel said there was no need for a summit right now. The German chancellor did what she has been doing throughout the crisis: hiding behind procedure. And since last Friday’s stress tests for banks was another cynical exercise in obfuscation, the council will need to take the first steps to sort out the banking mess at eurozone level. It will not. The crisis is moving too fast. Within a few weeks, the necessity moved from plan A to plan B to plan C. Plan A was austerity. Plan B acknowledges the need for debt relief, through some combination of a fiscal transfer and a contribution by bondholders. Plan C would widen the EFSF umbrella, to make it big enough to shelter Spain and Italy.

The EU is still fussing over plan B, and Germany rules out plan C. The hope among officials is that plan B will obviate the need for a plan C. That might have been the case four weeks ago. But why should a decision to inflict losses on banks help market sentiment on Italy now?

It is hard to comprehend why markets decided to panic over Italy at this particular time. There was a trigger, for sure, but Italy’s problems are not new. The country needs to grow by 2-3 per cent a year in the long run to be able to remain in the eurozone. Or it needs lower interest rates. The markets understand that Italian politics makes the first difficult, and German politics makes the second tough. If you accept the constraints of eurozone membership, low productivity growth, and high interest rates as given, Italy is insolvent. One of those constraints will have to give.

Five years ago, I was among those who argued that the probability of a collapse of the eurozone was close to zero. Last year, I wrote it was no longer trivial, but small. The odds have risen steadily since, not because of the crisis itself, but the political response. I now would put the odds of a break-up of the eurozone at 50:50. This is not because I doubt the pledge by the European Council to do whatever it takes to save the euro but because I fear it has left things too late. The council may be willing but it will not be able to deliver. As I argued last week, a eurozone bond is the only solution to the crisis. But this gets progressively more expensive, and politically less realistic, once bond spreads of large countries widen.

Europe’s political leadership has been, and still is, committing a category error in its approach. This is not a crisis of a small country at the edge of the eurozone. Nor is this a crisis brought on by rating agencies or speculators. This is a systemic crisis of a monetary union that refuses to be a fiscal union.

I often hear that Ms Merkel in particular has moved a long way from her original position 18 months ago, when she ruled out any money for Greece. This is true. But the crisis now moves at a rate that exceeds her political speed limit.

Giulio Tremonti, Italian finance minister, last week compared her with a first-class passenger on the Titanic. His anger is understandable. Her phlegmatic response itself is now a driver in this financial crisis, and people will rightly blame her for any serious accident.

My advice to Mr Tremonti is to confront Ms Merkel. His government should now adopt a two-pronged strategy. The first part is what I would call “plan D”. This is an emergency plan, the one to pull out of the drawer if Ms Merkel, like Martin Luther, continues to say she “can do no other”.

“D” stands for devaluation or default. To be clear, I am not saying that Italy should exit the eurozone. I am saying that Italy should prepare for that eventuality. In particular, Italy should signal to Ms Merkel that it can only remain a member of the eurozone if its interest rates are reduced. And I struggle to see that anything other than a eurozone bond can manage to achieve this.

No matter what happens, Italy will also need a credible programme to raise productivity growth in the long run.

Plan D would probably mark the end of the EU as we know it. I suspect that even Ms Merkel might not wish to go that far. Procrastination means collapse.

The EU has important choices to make in the next few days.

PIOR A EMENDA

O PR defendeu ontem a desvalorização do euro em relação ao dólar. Passos Coelho concorda, o PCP e o BE aplaudem. Uma quase unanimidade. Por agora, e enquanto não elege nova liderança, o PS não se pronuncia. Mas é uma quase unanimidade que não fará, só por si, bulir uma palha. O euro continua firme frente ao dólar e só as enormes perturbações que têm vindo a afectar a sua zona impedem que ganhe muito mais destacada posição nas reservas mundiais de divisas e se imponha como moeda de transacção corrente em mercados onde o dólar ainda é rei e senhor.

O dólar é uma moeda enfraquecida pelos caudais de liquidez injectados para reanimar a economia mas que comprometem a solvabilidade dos EUA e só não arrastam os juros para níveis asfixiantes enquanto a confiança dos investidores não for subitamente abalada por um qualquer acidente de percurso, uma hipótese que o actual braço de ferro entre Obama e os Republicanos mostra que não é liminarmente descartável.

Assim sendo, a desvalorização do euro relativamente ao dólar só poderá ocorrer se as ameaças sobre a moeda única no seio da  sua zona forem de uma dimensão mais dramática que aquelas que impedem sobre a moeda norte-americana.

Se outra razão não existir, e outra razão é dificilmente descortinável, a desvalorização do euro seria consequência de um abalo de tal magnitude na União Europeia que, acredito, o PR não desejaria.

CARLOS, PREMONITÓRIO

Genebra, 7 de Outubro de 1994

Excelentíssimo Senhor Gerente do Banco …., Agência de … - Sou com os meus respeitosos cumprimentos, Carlos A., e mais uma vez a escrever-vos de Genebra, Suíça.

Como Vossa Excelência sabe a crise é mundial – e o tempo das bacas gordas – isso agora é só para drogados e traficantes de droga - dos países das superpotências mundiais, e dos países imperialistas, a mim nunca me enganaram, dizem-se muito amigos dos pobres só para os destruírem. E aí começa a crise. Cá está a esquerda a descarregar – os resíduos nucleares e a Etiópia, Moçambique, Somália – esquerda e também a direita. Já há pouco países sem centrais nucleares e armas nucleares.

Pois esses países estão a ficar sem governo nacional …

Estão a ver: os senhores do Banco …e os dos países da CEE enganaram Portugal ao dizerem que emprestavam dinheiro a fundo perdido. Todos nos enganaram. As superpotências, é igual, todos nos enganam. Bacas gordas, agora só para as superpotências, tráficos de droga, cocaína, e outras coisas que já enganaram centenas de portuguesas e portugueses .

Mas isso é lá com eles, Senhor gerente do Banco …, Agência de …. , como Vossa Excelência sabe bem eu continuo na Suíça, preciso todos os meses de enviar dinheiro para a vossa agência. Preciso de fazer uso de cheques, muito embora a crise seja mundial e eu tenha de mandar muito menos dinheiro que mandava

Sempre assim foi – dinheiro há, mas está mal dividido. Uns com tudo e outros sem nada. Em Portugal só devo …contos ao Banco …, e nunca falhei. Aos bancos imperialistas na Suíça devo qualquer coisa, ao Banco …, mas estou cá na Suíça e não estou todos os meses a pagar.

A mim nada me pode obrigar a fazer uso de cheques. Junto lhe envio um cheque de requisição. Preciso de um livro de cheques.

Com os meus respeitosos cumprimentos,

Carlos A.

DIFERENÇA, PRECISA-SE

A fuga de informação até pode ter servido a estratégia do Governo justificando o imposto extraordinário (será?) mas é lamentável porque repete um cenário já gasto de tanto uso.

Nenhuma informação oficial é conhecida para além da referência feita em registo quase humoristíco do Ministro das Finanças. Se há desvio, informe-se o País de forma clara e a direito. Até porque a este Governo assiste suficiente capital de razão,  uma vez que foram, insistantemente, solicitadas informações ao Governo anterior  por Eduardo Catroga, a quem o líder do PSD incumbira de coordenar a elaboração do programa eleitoral, solicitações que, no entanto, sem justificações plausíveis, ficaram geralmente sem resposta.

Percebe-se e aplaude-se a poupança da despesa com ar condicionado, dispensando-se a gravata e casaco durante as horas de serviço.

Diferença, precisa-se. Mas que não fique pela dispensa da gravata.

O JOGO DA CABRA CEGA

Onde se prova, uma vez mais, que o Estado é um animal manso.

E também que há juízes ridículos.
E que somos nós quem paga o preço do ridículo judicial.
.

Há mais de quatro anos um funcionário da Direcção Regional do Norte (DREN) foi dispensado deste organismo por, alegadamente, na altura, ter comentado de modo jocoso acerca da licenciatura do primeiro-ministro na presença de um colega, amigo de longos anos, à hora do almoço, que o terá denunciado à directora.

Soube-se hoje que o Tribunal Administrativo e Fiscal (TAF) do Porto condenou o Estado a indemnizar em 12 mil euros, por danos morais,  o dispensado e cómico funcionário mas não deu como provado que o seu afastamento da DREN se tenha devido a alegados comentários jocosos sobre o anterior primeiro-ministro nem por retaliação pelo facto de ser militante do PSD.

O Tribunal entendeu ainda não condenar mais ninguém. A advogada do indemnizado funcionário afirmou lamentar "ter de ser o Estado, ou seja, todos nós e não os actores da situação, como requerido, a pagar a indemnização". O Tribunal justifica a condenação considerando que o Estado proferiu um ato ilícito ao afastar o funcionário sem qualquer fundamentação.

"Nenhum motivo é aduzido, quer do ato quer na solicitação da directora regional, que permita saber qual a conveniência de serviço que esteve na base do ato impugnado", lê-se na decisão. O Estado terá agora 30 dias para recorrer da decisão, contudo, uma vez que as férias judiciais se iniciam no sábado, o recurso poderá dar entrada até finais de Setembro. Em meados de maio de 2007, a DREN reafirmou que o inquérito instaurado a um professor foi originado por "um insulto ao primeiro-ministro", feito dentro das instalações daquele organismo. Em comunicado, na ocasião, a DREN afirmou que "o insulto em causa não tinha absolutamente nada a ver com anedotas ou a licenciatura do primeiro-ministro", mas não esclareceu o teor do que entendia ter sido um insulto ao anterior primeiro-ministro. O funcionário, professor de inglês, acabou por regressar à Escola Secundária Carolina Michaelis, no Porto, onde exercia a actividade docente antes de ser requisitado pela DREN, para assumir funções na biblioteca daquele estabelecimento de ensino.

aqui

MARILYN

Escultura gigante de Marilyn na famosa pose em que se delicia com a brisa está a partir de hoje em Chicago, Magnificent Mile.

TEMOS UM PAÍS DE FUNCIONÁRIOS PÚBLICOS

Essa é a verdadeira tragédia portuguesa

Maria José Morgado

A IMPROVADA TEORIA DO COMPROMISSO INEVITÁVEL NOS EUA *

Dicing with debt and the future

The Theory of Inevitable Compromise, and why it is probably wrong

“WE HAVE a system of government in which everybody has to give a little bit.” So said Barack Obama at the start of this week. But parse that sentence. Does the president mean that America already has a system in which everybody has to give a little bit? Or does he mean only that it ought to have such a system? It is not too much to say that the country’s economic well-being hangs on the answer.

As the whole world knows, America’s government is in danger of defaulting after August 2nd unless Congress raises the federal debt ceiling so that it can keep borrowing enough to pay its bills. For a while the markets assumed that because a default would be so scary, Republicans and Democrats would have in the end to agree on the spending cuts the Republican-controlled House demanded as its price for raising the ceiling. The Theory of Inevitable Compromise was that each party would have to give a bit because voters will punish whichever proves too stubborn. But here are eight reasons to wonder whether the theory is true.

First, for the theory to work, both parties need to believe that failing to raise the ceiling will trigger a default and the “huge financial calamity” Ben Bernanke, the chairman of the Fed, gave warning of this week. Not all Republicans do believe that. John Boehner, the House speaker, is a believer, but the freshmen who bobbed into Congress last November on a tidal wave of tea are not. Some say that the government could keep paying foreign creditors by slashing domestic spending, and that this would be just fine—even though Mr Obama refuses to guarantee even that Social Security (pension) cheques would go out without a deal.

Second, the Republicans are divided among themselves. The party’s leader in the Senate, Mitch McConnell, has aired a convoluted last-ditch plan that would avert a default by letting Mr Obama increase the ceiling even without a spending agreement between the parties, provided he makes cuts of the same size. Senior Democrats have welcomed the idea, but Eric Cantor, the Republican majority leader in the House, has not. Mr Cantor had already rejected Mr Boehner’s secretive attempt to negotiate what could have been an historic bargain with Mr Obama embracing a higher tax take (anathema to Republicans) as well as vast reductions in entitlement spending (music to their ears).

Noises off are the third problem. Outside Congress, the Republicans’ presidential wannabes are taking up their starting positions for 2012. Craving power but not yet possessing it, these hopefuls are not constrained by responsibility. Indeed, further economic trouble on Mr Obama’s watch might suit them nicely. Whether for this reason or from conviction, most profess themselves unfazed by the prospect of a failure to raise the debt ceiling. Newt Gingrich called Mr McConnell’s last resort “an irresponsible surrender to big government”. Michele Bachmann says she is proud never to have voted for raising the debt ceiling in the past.

Fourth, the Theory of Inevitable Compromise holds that fear of the voters will push the parties together. But which voters? Candidates in the general election of November 2012 would not want to be thought reckless. That election, however, is an age away. Republican candidates and the new House members are now fixated not on voters in general, who want the parties to co-operate, but on the more ideological ones who will vote in the primaries. Many of these do not want the debt ceiling to rise.

Why not? In part because, fifth, the theory assumes that voters understand what the debt ceiling is. This assumption is almost certainly false. Many are under the misapprehension that it is a vote to authorise new spending, not permission to pay the bills that this and earlier Congresses have already run up. According to Gallup, 60% of Republicans, 46% of independents and 21% of Democrats oppose increasing the debt ceiling at all.

Just crying wolf

Couldn’t politicians explain things better? Dream on. The sixth argument against the Theory of Inevitable Compromise is the virtual impossibility in today’s polarised America of shaping a consensus. In the 1930s Franklin Roosevelt delivered soothing chats explaining the theory of banking. But the president’s bully pulpit is not what it was before the rise of partisan cable television and the cacophony of the blogosphere empowered the obfuscators. For every commentator wringing his hands over the danger of default, another accuses the “liberals” of crying wolf.

Seventh, the listless state of the economy makes it hard for politicians of both parties to do the hard things that are needed to reduce the deficit. The Republicans say rightly that increasing the tax burden would damage jobs and growth. Democrats are right to retort that so would the spending cuts the Republicans want.

Last, and most important, both sides have made a stand on principles that will be hard to abandon without losing face. The Republicans’ is that there can be no increase in tax revenues, because that is how public spending ratchets ever higher. The Democrats’ is that a deal that reduces the deficit by spending cuts alone would fall too heavily on the most vulnerable Americans.

Over the past few weeks, however, Mr Obama has at least shown himself open to compromise, by proposing a mix of spending cuts and tax increases, tilted heavily towards the former. By midweek, a few anxious Republican voices were beginning to argue that their side had held firm long enough, and had better bend too if it did not want to be blamed for the approaching calamity. Senator McConnell said that a default could “destroy” the Republican brand. But the zealots in the House were continuing to stand firm as the clock ticked down. On July 13th Moody’s put the United States on review for a downgrade. This is a season of dangerous brinkmanship in America. Compromise may still be possible, but there is nothing inevitable about it.
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* Outro, diferente, ponto de vista aqui
** Outro, aqui

REAPARECE SALVADOR DO MUNDO

Salvator Mundi (Leonardo da Vinci)

Valerá 200 milhões de dólares, mas não está à venda.
Esteve guardado em parte incerta, vai fazer parte da exposição da Vinci na National Gallery, em Londres.
Metaforicamente, reaparece na melhor altura.
O mundo bem precisado está de um salvador.
aqui

O JOGO DA CABRA CEGA

não é caro. É caríssimo. É exorbitantemente caro.

O Ministério da Justiça tem 27 000 funcionários e 15 000 viaturas, mais do que uma viatura por cada dois funcionários. Tem 30 000 computadores, dois computadores por cada funcionário. Tem 1100 edifícios, um edifício por cada 25 funcionários e ainda paga 38 milhões de rendas.

Percebe-se, agora, outra razão para a lentidão da justiça: tanto equipamento só pode complicar o caminho de quem tem de se movimentar entre ele.    

O secretário de Estado Fernando Santo revelou hoje que o Ministério da Justiça tem 15 mil viaturas e 1.100 imóveis. E paga anualmente 38 milhões de euros de rendas, defendendo maior racionalidade financeira e "boa gestão".... aquele ministério tem 27 mil funcionários, 30 mil computadores e um orçamento que ronda os 1.400 milhões de euros.

"Tudo isto tem de ser gerido de outra forma", enfatizou Fernando Santo, antigo bastonário da Ordem dos Engenheiros, sublinhando que está a ser feito um "levantamento da situação" e o "diagnóstico" do MJ, para a partir daí se fazer a gestão "mais correta".

Fernando Santo explicou que o ministério, ao contrário de muitos outros, vive sobretudo de receitas próprias, pois o Orçamento de Estado assegura apenas 37 por cento das verbas totais necessárias para as despesas. Assim, uma "parte significativa" - ou seja, 900 milhões de euros -, são "receitas próprias" que o MJ tem de encontrar.

A agravar a situação, reconheceu no seu discurso, está o facto de "as receitas estarem muito abaixo das previsões que foram feitas", pelo que a gestão futura impõe que se "eliminem desperdícios" e se reduza a "contratação externa" de serviços.

Maior racionalidade financeira e melhor gestão foram os objectivos traçados por Fernando Santo, que garantiu que o MJ irá "procurar centralizar a gestão, impondo racionalidade e economia de custas" nas áreas em que isso for possível.

aqui

TAMBÉM TU, ITÁLIA?

clicar para aumentar 

c/p aqui

Government debt

Why Italy ought to be okay*

Italy is in a better position to manage its debt than several other big countries

FEARS over the safety of Italy's government debt would take the euro-zone crisis to a new phase: for its members a choice between breaking up the project and sanctioning big transfers from healthy economies to struggling ones; for banks a question of how to manage exposure to the world's third-largest bond market. When Italian spreads over German bunds ballooned at the end of last week and kept moving in the same direction on July 11th and the morning of July 12th, it looked like that moment of panic had arrived. Markets have since calmed down a little and rightly so, according to this chart, which ranks countries by their debt burdens. But until markets get a clear signal from European governments that they are willing to do whatever it takes to stand behind the euro, the gyrations will continue.

*probably. The Daily chart should not be read as investment advice. Bond spreads can go up, down, sideways or even resemble a bowl of spaghetti

ACERCA DE UM CÍRCULO VICIOSO

Money Supply: A vicious circle?

Regulation and sovereign debt: a vicious circle?

by Claire Jones (FT)

Regulators’ fondness for sovereign debt is looking odder by the day.

The eurozone crisis and the Congressional impasse over the US debt ceiling have put paid to any notion of government bonds as risk free. What’s more, a Committee on the Global Financial System paper suggests that encouraging banks to up their holdings might in fact do more to endanger stability than promote it.

The paper, published Monday, identifies a “vicious circle between the conditions of public finances and those of banks”. As banks’ funding costs worsen, so does the creditworthiness of the sovereign, which in turn heightens funding costs. If such a vicious circle does indeed exist, then incentivising banks to hold more sovereign debt in order to fulfil regulatory requirements would only compound the problem.

And, as the charts below show, the case for its existence is compelling.

ATLANTIS´ LAST APPROACH

Atlantis´ Last Approach

OS DONOS DISTO

são estes senhores

para além de outras figuras menores da mesma associação.

Os donos do mundo são uns senhores parecidos mas em tamanho muito maior. 

Donos do mundo porque foram eles que decidiram que economia temos, que consumismo fazemos, em  que dívida nos afogamos. Confiamos-lhes as nossas poupanças e são eles que as encaminham para onde os seus interesses imediatos lhes indicam. São eles que, por serem geralmente inimputáveis, atiram as nossas poupanças para a roleta do casino em que transformaram os seus negócios. São eles que congeminam e vendem abstracções a que chamam produtos financeiros sem indicação da composição, do grau de toxidade, dos riscos de efeitos secundários. 

Exagero? Se os banqueiros têm responsabilidades pelo desastre, estamos nós, consumidores, privados ou públicos isentos de culpas? Claro que não, salvo os imbecis. A diferença, a grande diferença, contudo, entre as culpas deles e as nossas está no facto da factura total nos ser apresentada para pagamento a nós e, muito rara e muito parcialmente, a eles.

Aproxima-se o dia em que, para cumprimento de um dos pontos impostos pela troica, o BPN ou é vendido ou encerra as portas. A factura não será inferior a dois mil milhões de euros mas pode ser mais, e até muito mais, elevada. Do BPP não se tem ouvido falar. Mas a factura não será paga pelos que se banquetearam. O Banif anda à procura de comprador mas o candidato mais provável é esse animal manso que dá pelo nome de estado. Perguntar-se-á: Que têm a ver com estes e outros casos semelhantes os senhores da fotografia?

Estes senhores têm uma associação, a APB, que reclama reunir "actualmente a quase totalidade dos bancos nacionais, bem como dos bancos estrangeiros que exercem a actividade bancária em Portugal. Os seus associados representam cerca de 94% do activo do sistema bancário. A APB representa 26 de um total dos 38 Bancos que estão registados no Banco de Portugal. ... A sua actuação decorre exclusivamente dos poderes que lhe são confiados pelos Associados". Entre os associados conta-se ainda o BPN, que, segundo as regras, já há muito tempo deveria ter sido impedido de operar.

Se a APB não é um cartel, o que é? Se a Associação não existe para se auto regulamentar e participar na sustentação saudável da economia e das finanças públicas, de que também dependem os seus membros, para que serve? Se, bem pelo contrário, os seus membros promoveram o consumismo desenfreado, as importações excessivas, o investimento não reprodutivo, o descalabro das finanças públicas, se não concertaram práticas perversas como se comportaram em rebanho, incluindo o banco do estado? Se a Associação assiste impávida à degradação da imagem do sector porque alguns dos seus membros actuam fora das regras da prudência que devem balizar as decisões dos banqueiros, para que se reunem os seus membros? Com que finalidade se juntam à volta da mesa se não acordam margens e tabelas mas também não estabelecem regras que prestigiem o sector e o tornem um agente promotor fundamental do crescimento e não o principal factor perturbador?

AFIRMA MÜNCHAU

Don’t blame Moody’s for a messy euro crisis

By Wolfgang Münchau

You can always gauge the temperature of the eurozone crisis by the blame game. Last week, the cacophony briefly subsided when everybody who mattered accused the rating agencies of engaging in an anti-European conspiracy. This was the day after Moody’s downgraded Portugal to junk. The fury of the reaction tells me that the process is in real trouble, once again.

The most interesting aspect of Moody’s rating was not the downgrade itself, but the reasoning. Moody’s expects that Portugal, like Greece, will need another loan. Moody’s also expects that the politics will be just as messy. Will not the Germans again seek private-sector participation as a condition? Of course they will. Moody’s concluded, rightly in my view, that the messy European Union politics constitutes a reason for concern. Having observed this crisis from the start, I agree. This is as much a crisis of policy co-ordination as it is a debt crisis.

Shortly before Moody’s downgrade, Standard & Poor’s pronounced that the French proposal for a debt rollover would, if implemented, constitute a selective default. If you add together S&P and Moody’s comments, you get a sense of the disturbing dynamic that lies ahead. Say, the eurozone governments decided to force Greece to default on part of its debt, and the rating agencies were to attach a selective default rating to Greek government bonds. If you expect, as Moody’s does, that Portugal will end up in the same position as Greece – having to request a follow-up loan – then the same private-sector participation rules would also apply to Portugal. Portugal would also receive a selective default rating at some point. Ireland will probably also need a second programme. I am not surprised at all that bond markets have been revaluing Spanish and Italian bonds. Neither country is in danger of defaulting, but their ratings will be dragged down to junk level if the periphery defaults.

Everybody hates the rating agencies and no one hates them more than the Europeans. The rating agencies were, without a doubt, an important contributing factor to the credit bubble. But last week, they did us a favour. They showed that populism will not work. The European Central Bank is absolutely right on this. A Greek default will unleash a dynamic process that will threaten the eurozone’s financial stability, even its very survival.

The impasse leaves us with a single solution in the short run – and a single solution in the long run. The two are, in fact, the same. In the short run, the only way to bring the private sector into a voluntary scheme is a debt swap, to be organised by the European financial stability facility. That is currently not possible because the EFSF is not allowed to purchase bonds in secondary markets. Germany, in particular would have to change its position on this issue. But the Germans are among those who are pushing the hardest for private-sector participation. I would not be surprised if they changed their mind again – as they have been doing time and again in the past 18 months.

If the rules on the EFSF were relaxed, it could offer to buy up Greek debt at a discount, say 20 per cent, in exchange for its own AAA-rated bonds. The sellers would have to register a loss, but at least they end up with good securities. There would be no reason for the rating agencies to act.

In the long run, the only solution is a eurozone bond, which you can think of as an extended secondary-market purchase programme by the EFSF. This is why the short-term and long-term solutions are identical. Of course, it will not be called a eurozone bond. The Germans had a wonderful euphemism to describe the debt they raised to pay for unification: Sondervermögen, or “special wealth”. The EU will come up with a similarly misleading name. let us not kid ourselves however: a eurozone bond it will be.

Last week, a group of former European prime ministers proposed in the Financial Times the use of the European Investment Bank to issue eurozone bonds. This is an intriguing idea. It would have the major advantage that it would not require any changes to the European Treaties, at least not for now. The most important technical point is that the eurozone bond, or whatever it is called, would be issued on a “joint and several” basis. This means that everybody is responsible for the whole amount – similar to an overdraft in a joint bank account.

Do not think of it as something utopian, something that electorates have to approve in a referendum. On the contrary. The eurozone bond is – literally – the default option in this crisis. It is what will happen when nothing happens. If governments face the choice between the eurozone bond or an intrastate fiscal transfer, they will choose the former. Germany will not only accept it. Germany will propose it.

We have to thank the rating agencies for giving the eurozone’s policymakers a clearer vision of which strategies are feasible, and which are not. It is now time to get serious.