Σάββατο 30 Απριλίου 2011
The ECB’s Secret Bailout Strategy
MUNICH – Why did Greece, Ireland, and Portugal have to seek shelter under the European Union’s rescue umbrella, and why is Spain a potential candidate?For many, the answer is obvious: international markets no longer want to finance the “PIGS.” But that is only half true. In fact, international markets have not financed any of them to a considerable extent for the past three years; the European Central Bank has. The so-called “Target” accounts, hitherto ignored by the media, show that the ECB has been much more involved in rescue operations than is commonly known.
Παρασκευή 29 Απριλίου 2011
Πέμπτη 28 Απριλίου 2011
India’s Nuclear Conundrum
NEW DELHI – Japan’s nuclear disaster has fueled fear and uncertainty among all of the world’s producers of nuclear power. For India, an energy-starved country, much is at stake.That fear factor has two main causes. Although nuclear power ranks as a “clean” source of energy, it is accompanied by the terrible shadow of nuclear war, which emerged from Japan’s last reckoning with nuclear catastrophe, 65 years ago at Hiroshima and Nagasaki, and which lends it an automatic association with mass destruction and death. Moreover, the secrecy that attends all things “nuclear” has left people not knowing enough to feel confident.
The fear inspired by the Fukushima Daiichi disaster will be reflected in soaring costs for nuclear power worldwide, largely owing to demands for improved safety and the need to pay more to insure the potential risks. Indeed, nuclear plants are prone to a form of “panic transference.” Should a reactor of one design go wrong, all reactors of that type will be shut down instantly around the world.
Τετάρτη 27 Απριλίου 2011
Τρίτη 26 Απριλίου 2011
Σάββατο 23 Απριλίου 2011
Democracy or Finance?
A speculator can “short” a government by borrowing its debt at its current price, in the hope of selling it later at a lower price and pocketing the difference. For example: on January 1, 2010, I think to myself that the game will soon be up for the Greeks. I borrow, at face value, €10 million of the Greek government’s 2016 bond, which is then trading at €0.91, from Goldman Sachs for six months. For this, I have to pay Goldman Sachs the yield that it would receive from the bond – around 5% annually at that price, so about 2.5%, or €250,000 – during the six-month term.
Παρασκευή 22 Απριλίου 2011
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