Early Headlines: Bill Black Rips BBC, US Banks Living Wills, TB in India, Rift in EU, New Greek Finance Minister and More
Early Bird Headlines 07 July 2015
Econintersect: Here are some of the headlines we found to help you start your day. For more headlines see our afternoon feature for GEI members, What We Read Today, which has many more headlines and a number of article discussions to keep you abreast of what we have found interesting.
- U.S. banks post detailed crisis plans to avoid breakup threat (Reuters) A dozen of the largest Wall Street banks on Monday published detailed plans to show how they would shut down their business during a crisis without the help of taxpayer money, a crucial step to prevent being broken up by regulators. This is the second year of such filings. Last year both the Federal Reserve and the Federal Deposit Insurance Corporation said they were unhappy with the quality of the plans and urged banks to improve them by giving more details and using more realistic assumptions, or face tough sanctions including being broken up.
- Rift Emerges as Europe Gears Up for New Talks on Greece Bailout (The New York Times) Germany continued to maintain a hard line with Athens on Monday. But some European countries showed a willingness to soften the push for austerity that has proved so contentious. This a complicating new dimension in the negotiations with Greece.
- Leftist parties in troubled EU states may find their fates tied to Syriza (Al Jazeera) Success or failure for Greek leaders could alter political trends in Spain, Portugal and Italy and that is why the rightist parties in control of Europe will not negotiate with Greece.
- Greece votes, Germany decides (Politico) Greeks not only rejected further austerity, but also delivered what amounts to a condemnation of a European policy that many here blame for leaving the country on the verge of collapse. The final tally - more than 60% voted No - will resonate far beyond Greece's borders, especially in Europe's other vulnerable economies. Will EU leaders follow through on threat to force Greek out of the euro and risk furthering doubts about the currency's viability or will some concessions be made to reach a sustainable plan? Ultimately German Chancellor Angela Merkel holds the keys.
- Greece Crisis 101: No way out (CNN) Good general background article using basic language.
- Euclid Tsakalotos: Greece's new finance minister (BBC News) New Greek Finance Minister Euclid Tsakalotos, 55, will be less bombastic than Yanis Varoufakis in his dealings with international creditors, but some argue that his negotiating stance could even be more hardline. Mr Tsakalotos is a Dutch-born, Oxford University-educated economics professor who served as minister for international economic affairs before taking over from Mr Varoufakis as Greece's lead negotiator in its debt talks in April.
- Greece news live: Banks to remain shut for another two days as Greeks told 'reform or it's over' (The Telegraph) The European Central Bank takes unprecedented move to squeeze the Greek banking system as northern Europeans tell Athens to reform or go bust.
- BBC Propaganda War v. Greece Reaches New Low After “No” Vote (William K. Black, New Economic Perspectives) WKB contributes to GEI. Prof. Black accuses the BBC of failing to recognize basic facts. Some examples of what he says:
- The ECB is the EU's central bank. A key role of a central bank is to provide liquidity to its banks - which include the Greek banks. The ECB, in response to the Greeks daring to vote democratically on whether to succumb to the ECB's blackmail, pulled the provision of liquidity to Greek banks. So, the principal starting point of any analysis of the ECB's role is to know that they deliberately refused to meet their responsibility to provide liquidity to the banks in order to extort the Greeks to exacerbate policies that ensure that the troika will increase the harm to the Greek people and economy rather than "rescue the finances of the ailing Greek state."
- ... the ECB does not want to execute the Greek people - it wants them as low-wage laborers that can raise the profits of large EU corporations. The ECB wants to extort them to adopt three neoliberal policies that would greatly reward wealthy foreigners. The ECB wants the Greeks to continue to lower their wages, continue to gut their increasingly oxymoronic "safety net," and sell Greek assets such as its islands and infrastructure at fire sale prices to wealthy foreigners.
- the Greek people are not vicious criminals leading a reign of terror worthy of execution. Indeed, the ordinary Greek citizen has committed no crimes or even done anything "immoral." The only moral content to the Greek disaster is the indefensibly immoral treatment of the peoples of the EU by the troika's leadership. (Ok, there is also a question of journalistic ethics, but no one is holding their breath waiting for that to reemerge.)
- ... loans from foreign EU banks to Greek banks rarely took the form of insured deposits. (When we make a deposit in a bank we are making a loan to the bank.) Instead, the CEOs overwhelmingly chose to make uninsured and unsecured loans to Greek banks and companies. The CEOs made this decision for the reason they invariably make this decision - the quest to be made wealthier through higher yield. The riskier and the larger the loans they made to the Greek banks and companies, the higher interest rate the foreign EU banks charged, the higher the (fictional) "profits" they reported, and the higher the compensation the CEOs and officers of the foreign EU banks received.
- ... the issue isn't economics, but the political survival of European heads of state who have inflicted the catastrophically harmful policies of austerity and refusal to do TDRs on the peoples of Europe. The new Greek government must not succeed in showing the eurozone a more humane and economically literate way forward, for if it does so the politicians in other nations who gratuitously caused such great suffering through economic malpractice and their ideological assault on eurozone workers would be instantly discredited and would soon lose power. These leaders cannot admit what economists have been overwhelmingly saying since 2008 about the self-destructive nature of austerity as a response to a Great Recession, for if they do so they will be "humiliated" politically.
- As China Intervenes to Prop Up Stocks, Foreigners Head for Exits (Bloomberg) Foreign investors are selling Shanghai shares at a record pace as China steps up government intervention to combat a stock-market rout that many analysts say was inevitable. For a description of a wild day yesterday (Monday) see GEI News: Shanghai Market Opens Up Nearly 8% . . .
- Supercharged Tuberculosis, Made in India (Scientific American) Improper treatment of TB at some clinics in India has just made it stronger.
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