Greek austerity offers temporary fix, Ferguson says

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Niall Ferguson, a history professor at Harvard University and a Bloomberg Television contributing editor, discusses Greece’s debt crisis and the potential impact of austerity measures on its economy. Ferguson, also talks about the U.S. economy and Italy’s budget woes.

Source: Bloomberg, June 30, 2011.

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Country default risk – Greece leading the pack

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The comments below come courtesy of the Bespoke Investment Group.

“Greece has really distinguished itself this week as the country that is most at risk of default. It has separated from the pack when looking at five-year credit default swap prices (CDS). As shown in the table below, Greek the five-year CDS is now at 2,236.70 basis points, which means it costs $2,236.70 per year to insure $10,000 worth of Greek debt for five years. Talk about a high premium!

“The second riskiest country in terms of default risk is Venezuela, and its CDS price is currently half that of Greece!”



Source: Bespoke Investment Group, June 17, 2011.

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Goldman Sachs’s O’Neill on Greece

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Jim O’Neill, chairman of Goldman Sachs Asset Management, discusses the risk of contagion from the Greek debt crisis. He speaks with Bloomberg’s Ryan Chilcote on the sidelines of the St. Petersburg International Economic Forum.

Source: Bloomberg, June 17, 2011.

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Greek unemployment in uncharted territory

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This post is a guest contribution by Rebecca Wilder, author of the News N Economics blog.

And you wonder why the Greek citizens are pushing back against austerity. Today the National Statistical Service of Greece released its quarterly labour force figures. From today’s release (pdf):

In the 1st Quarter of 2011 the number of employed amounted to 4,194,429 persons while the number of unemployed amounted to 792,601. The unemployment rate was 15.9% compared with 14.2% in the previous quarter, and 11.7% in the corresponding quarter of 2010

I’ll first note that the period (.) at the end of 2010 was not in the release, i.e. even the presentation of the data lacks formality. However, the report doesn’t need grammatical bells and whistles for one to see that the economy is disintegrating. According to the labour market, debt deflation, ‘infernal devaluation’ (as Marshall Auerback puts it) is taking its toll on the real economy.

The unemployment rate is (WAY) higher now than it was even before Greece joined the Euro area (2001).

The release also reports the female unemployment rate, which stood at 19.5% in Q1 2011 and up from 15.5% in Q1 2010. Furthermore, the aged 15-29 unemployment rate stood at 30.9% (35.8% for females) in Q1 2011, up from 22.3% in Q1 2010. Key parts of the labour force are being hit harder than others, i.e. young and female versus males aged 30-44.

You wonder who’s rioting? I bet its those younger citizens, 30% of the labour force, that are not working but WANT TO. This is a problem that’s not going to disappear with more austerity.

Source: Rebecca Wilder, News N Economics, June 17, 2010.

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Bill Gross on Europe’s debt woes

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Bill Gross, Chief Investment Officer at PIMCO joined CNBC to discuss the eurozone’s debt woes.

Source: CNBC, May 24, 2011.

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John Mauldin: A Greek default won’t be “contained”

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Endgame” author John Mauldin says Greece won’t be any more “contained” than subprime mortgages were in 2008.

“It’s not something that stops at the European waters. Just like the subprime crisis didn’t stop in California … I’m worried this one has a lot of contagion and it’ll affect the world, he said in an interview on Yahoo! Finance – The Daily Ticker.

Source: Yahoo! Finance – The Daily Ticker, May 24, 2011.

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