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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Sunny Jim who wrote (46450)	2/16/2009 2:09:18 AM
From: elmatador	Respond to of 218621

economic devastation in once-buoyant corners of Europe Europe is plunging deeper into recession February 16, 2009 The global economic crisis had plunged the EU into recession, fresh data revealed on Friday, as Group of Seven (G7) finance chiefs grappled with the downturn. New statistics revealed the extent of economic devastation in once-buoyant corners of Europe such as the Baltic states, while Fitch Ratings downgraded Ukraine and warned of the risk of a full-blown collapse there. A 1.5 percent drop in gross domestic product (GDP) for the last quarter of last year in the EU's 27 member states was the region's second consecutive quarterly contraction. The euro zone shrank by 1.5 percent, the biggest drop since the creation of the European single currency, said data agency Eurostat. Howard Archer, the chief European economist at London-based research group IHS Global Insight, said the euro zone figures were "horrific". Capital Economics, a British consultancy, said the recession was "deepening at an alarming rate". Europe's biggest economy, Germany, shrank by 2.1 percent in the last quarter of last year from the previous quarter, data from the EU's statistics agency showed. Latvia's economy went into free fall, with GDP plummeting 10.5 percent last quarter compared to the last three months of 2007. The European Automobile Manufacturers Association reported that new car sales in Europe had slumped by 27 percent last month to the lowest level in 20 years. With governments going into crisis mode to limit the fallout, finance ministers from the G7 leading economies met in Rome on Friday amid warnings of a rising tide of protectionist reactions to the downturn. German finance minister Peer Steinbrueck said Germany had "a massive interest" in avoiding a repetition of the combination of economic crisis and protectionism of the 1930s. Ahead of the Rome talks, Japanese finance minister Shoichi Nakagawa lashed out against the US and the EU for boosting domestic industry at the expense of their trade partners, calling the tendency an "absolute evil". There was more gloomy corporate news too, as Europe's biggest airline, Air France, reported a e194 million (R2.5 billion) operating loss for the third quarter of last year and announced that up to 1 200 jobs would be axed. On the markets, the euro slid against the dollar, as news on recession in Europe stoked prospects of a cut in European Central Bank interest rates. But lingering doubts among investors over the effectiveness of US economic rescue efforts continued to put pressure on the dollar on Friday.

To: Sunny Jim who wrote (46450)	2/16/2009 7:38:25 AM
From: KyrosL	Read Replies (1) \| Respond to of 218621

"Daily Policy Digest Federal Spending & Budget Issues January 29, 2001 Greenspan Supports Tax Cuts To Reduce Surplus Opponents of tax cuts are dismayed that Federal Reserve Board Chairman Alan Greenspan supports reductions in the federal tax burden. His reasoning implies that paying off the national debt is not a good idea. According to projections by the Office of Management and Budget and Congressional Budget Office, within a decade the public debt will disappear, and the federal government will accumulate close to $2 trillion in net financial assets -- private financial assets, such as stocks and bonds (see figure). "The federal government should eschew private asset accumulation," says Greenspan, "because it would be exceptionally difficult to insulate the government's investment decisions from political pressures." Greenspan must also be concerned about how the Federal Reserve will function in the absence of any Treasury securities. The Fed has always conducted monetary policy by buying and selling Treasury bonds, notes and bills. Thus the Fed owns more than $500 billion of the public debt. The Fed could use corporate bonds. The corporate debt market as a whole is quite large -- about $5 trillion -- but unlike Treasury debt it is not homogeneous. Greenspan says the orgy of spending that accompanied the close of the last two sessions of Congress was ample proof that failure to cut taxes will inevitably lead to unproductive spending increases. Indeed, some forecasters believe OMB and CBO are greatly overestimating future surpluses precisely because they have underestimated the likely outpouring of new spending. Economist Brian Nottage of Dismal.com, for example, notes that discretionary outlays were higher last year than any year since 1991. If such outlays were to continue growing at the same rate, projected surpluses will be almost $1 trillion lower over the next decade, he estimates. Source: Bruce Bartlett, senior fellow, National Center for Policy Analysis, January 29, 2001. " ncpa.org