Into the Storm

The independent Office for Budget Responsibility (OBR) forecast assumes that the euro crisis can be resolved without too much fuss, which seems increasingly unlikely—and the uncertainty is pushing the euro zone towards recession fast. Across the continent banks are finding it hard to refinance their own debts cheaply. They are also shedding assets at an alarming rate in order to meet EU capital-adequacy targets by next June. Britain’s banks have lent heavily to businesses and governments in the euro zone’s worst trouble spots, as well as to German and French banks. The threat of a severe credit shortage will force businesses across Europe to conserve their cash and make them cautious about spending on new equipment or hiring new workers. Add in the ever more severe budget cuts planned by euro-zone countries and the picture gets even stormier.

Leaders Struggle for Deal to Keep Euro Intact

In the article, the problems with the euro and possible ideas to help solve the problems are discussed. A major issue is the disagreements between the countries that are in debt and those that are not. Those that are in debt want more help from the European Central Bank and for it to buy more of their loans. However those countries that are not in debt (Germany is the one that is discussed here) are completely against it, since it will in large part be their tax payers who are now on the hook for the debt of others.

Chancellor Angela Merkel of Germany is also calling for fiscal reforms in the countries of the euro zone. She believes the countries spending and level of debt should be most closely monitored and those that exceed the accepted level should have some sort of predetermined penalty.

Jobless Rate Dips to Lowest Level in More Than 2 Years

Even with the Euro crisis debt the unemployment rate drop to 8.6%, the lowest in 2.5 years. Part of the reason was that more than 120,000 jobs were created and 315,000 people simply stopped applying for jobs. 64% participated in the work force. Also companies have been taking more part time and temporary workers rather than hiring people and they cut low wages salary. Jobs in the retail sales and auto sales have increased and businesses are able to loan from banks.

With the tax cut more than 160 million middle class Americans received more money on their paychecks but the tax cut will expire soon this will slow down the job creation and output growth. This will affect the consumer spending. This is a good sign for Obama.

Haunted by Hyperinflation

At lot of people are looking to Germany, as a leader in the Eurozone, to get out of this European Debt Crisis. Recently, Germany has been criticized for being slow to act on account of its fears of inflation.

Yet, you can't entirely blame Germany for being slow to act. First, Germany has it comparably good right now and increasing inflation could change that. Germans also have an intense fear of inflation, which the article explains in detail. Germans remember or have been raised to fear the hyperinflation of the 1920s, which wiped out savings and devastated the economy. Because of that financial strength, security, and saving have been key, which has been good for Germany in the last couple of decades, but bad for the countries in trouble now. So, the question is, will Germany be able to get over its fear of inflation in time to act to help Greece and the others?

The Euro Crisis: One Problem, Two Visions

This makes one think that they keep talking about reform for the future, but what about the present? Greece is still on the verge of collapse and they still don't seem to have a plan of action for when the inevitable occurs. Are they just going to keep pumping money in these countries or what? I'm sure if they properly restructured the EU so that strict regulations were placed on worrisome states, the markets would be satisfied with that.

In contrast, as all of this is going on, Turkey must be happy that the EU rejected them. In retrospect, Turkey has been doing very well with its economy and the money they could have contributed to the EU would have been invaluable. Now they will watch from a distance while their role in the Middle East only grows...

Jobs growth nice. But show us the money!

We already had several piece of news talking about that the unemployment rate has decreased currently. But according to this new article, people now actually haven't enjoyed the benifit.

There are some signs of life showed in the job market. And that's of course a good thing. It's just too bad that people still aren't making enough money to keep up with the fact that the cost of almost everything is getting more expensive.

"Hourly wages fell in November. So much for consumers having more cash to spend this holiday season. And over the past 12 months, wages are up just 1.8%. Through October, the consumer price index rose 3.5%. That's a big problem. "As we know, the inflation rate is pretty low, but it still higher than the wage growth.

There are several reasons that the job market still stinks. Employers still hold all the cards. Many people who have been out of work for years and can get jobs are just happy to get back to work. They're not going to take a hard-line stance negotiating how much of a salary they will get.

Unemployment 8.6%

This article talks about the recent decrease in the unemployment rate to 8.6%. This serves are evidence to the gradual rectification of the economy. Another important part about this article is its reference to the idea that unemployment insurance that has been given out during this financial crisis should be a source from which the economy would benefit. They say that recipients of this money will spend it quickly which will boost the spending in the economy. This is interesting as it suggests another good side to the availability of unemployment insurance, while in class and in previous articles it was generally seen as an incentive to stay unemployed.

Big Banks get sued for unethical practices

This article talks about a recent lawsuit filed by the state of Massachusetts against JP Morgan, CitiGroup, and Bank of America for highly unethical foreclosure practices. The lawsuit claims that the banks seized many homes they had no legal right to seize since they did not own the mortgages on the properties. The lawsuit also accuses the banks of "robosigning" , which is when employees sign mortgage documents without even reading them, using false signatures, and /or not having proper witnesses present. Its amazing how unethical many of the leading banks' practices are, even after the housing crisis hit. It just makes you shake your head at the culture of greed that these banks have fostered at the detriment of their customers.

Inside Obama's Re-election Math

This article goes into the detail of which states are crucial to O'bama and his need for electoral votes. He has visited Pennsylvania eight times this year in order to get as much support as he can from the state that holds twenty electoral votes. Pennsylvania is not the only crucial state for O'bama and many feel that it will be a slim margin to whether or not he will be able to stay another term. O'bama's presidential game may be coming to an end soon.

Fears of U.S Safety Keep Investors in Europe

With everything going on in Europe, you would think that more and more money is coming from abroad into the U.S. Well, not so fast. Data shows that even though the turmoil in the eurozone is causing money to fly out of Europe, doesn't necessarily mean it is coming into the U.S. Europeans do not feel that the U.S is a safe haven. Europeans are suspicious of how the Fed is using quantitative easing and are unsure of how their money will do in this economy.