Yannis Stournaras, the Greek finance minister, told German newspaper Handelsblatt on Monday that Greece may seek to ease its debt burden by renegotiating its bailout terms.
The renegotiation
could involve lower interest payments and more time to repay 240bn euros in loans.
The BBC reports that on Sunday he admitted that Greece may face a hole in its finances of up to 10bn euros.
As I have noted before, the only real solution for Greece's financial and social woes are for it to leave the Eurozone and devalue its currency.
Tuesday, August 27, 2013
Thursday, August 22, 2013
Banks Embroiled In Another Mis-selling Scandal
As loyal readers know, I have on numerous occasions noted that the financial services industry in the UK has tarnished its image because of its greed and corruption, and seems intent on bringing about its own self destruction.
Today we see yet another example wherein its greed has been exposed because of yet another mis-selling scandal.
This time the mis-selling relates to card protection and identity theft insurance products by CPP Group. The BBC reports that UK banks have agreed to set up a £1.3BN fund to compensate the victims.
CPP Group and 13 banks and credit card firms will pay for the compensation.
Some seven million customers could now expect to receive letters from CPP from 29 August 2013, explaining how to claim compensation. Victims will receive 8% interest on the amounts being reimbursed.
During the period of mis-selling between January 2005 and March 2011, CPP sold 4.4 million policies and generated £354M in gross profit. A further 18.7 million policies were renewed during the same period, generating an income of £656M.
Many customers were put in contact with CPP when they rang a number on their new bank card in order to activate it. Many thought they were talking to their bank, but they were in fact being put in touch with a salesperson from CPP.
CPP then used the opportunity of the call to offer card protection insurance. If the customer bought the product, the bank got a commission.
CPP Group sold a card protection product costing about £30 a year, that was designed to cover losses if a card was lost or stolen. It said customers would benefit from up to £100,000 of insurance cover, but customers were already covered by their banks. Generally, cardholders are not liable for unauthorised card payments on lost or stolen credit and debit cards; ie the product was unnecessary.
Needless to say we can expect to see the "ambulance chasing" financial compensation firms jumping on this bandwagon and offering to reclaim victims' money back in exchange for a percentage; which of course is completely unnecessary,as the victims can reclaim the money themselves.
Tuesday, August 20, 2013
Greece Needs Another Aid Programme
According to the Twitterverse, German Finance Minister Wolfgang Schaeuble has said that Greece will need another aid programme.
This should come as no surprise, given that the Bundesbank said the self same thing the other week.
This should come as no surprise, given that the Bundesbank said the self same thing the other week.
Friday, August 16, 2013
Banks Play The Old Switcheroo
Banks and building societies are begrudgingly upping one very modest aspect of their customer "service"; namely that of guaranteeing to switch customers' bank accounts and direct
debits (if requested) within seven working days as from September 16.
The Telegraph reports that 33 banks and building societies have signed up to the agreement, which will cut the length of time it takes to move accounts from up to 30 working days to seven working days.
Customers will be refunded interest and charges if anything goes wrong.
Whilst banks are offering cash incentives to people to switch their accounts (usually £100-£125) there is of course a sting in the tail; customers have to shut down their old current account if they choose to avail themselves of this guarantee (customers are entitled to opt out of it and manually change their accounts and payments).
As to whether this new guarantee improves the level of customer service wrt bank charges, products, rates etc remains to be seen; given that the banks operate in their own interests, rather than in the interests of their customers, any dramatic improvements in customer service are unlikely to see for quite some time if at all.
Wednesday, August 14, 2013
Eurozone Out Of Recession?
The media and Europhiles are hugely excited at the headlines today that proclaim that the eurozone is out of recession.
As per the BBC, the eurozone has emerged from recession after a record 18 months of economic contraction.
GDP grew by 0.3% in the second quarter of 2013, slightly ahead of forecasts. Germany and France dragged the eurozone out of the recession with growth of 0.7% and 0.5% respectively. However, Spain experienced contraction of 0.1% on the quarter, and Italy and the Netherlands both saw output drop by 0.2%.
The eurozone cannot survive in its present form where the rich Northern countries prosper whilst the poor Southern ones collapse, just ask the good people of Greece (with close to 65% youth unemployment) if they feel that they are now out of the recession.
As per the BBC, the eurozone has emerged from recession after a record 18 months of economic contraction.
GDP grew by 0.3% in the second quarter of 2013, slightly ahead of forecasts. Germany and France dragged the eurozone out of the recession with growth of 0.7% and 0.5% respectively. However, Spain experienced contraction of 0.1% on the quarter, and Italy and the Netherlands both saw output drop by 0.2%.
The eurozone cannot survive in its present form where the rich Northern countries prosper whilst the poor Southern ones collapse, just ask the good people of Greece (with close to 65% youth unemployment) if they feel that they are now out of the recession.
Tuesday, August 13, 2013
Pre Election House Price Bubble On Its Way
According to the Office for National Statistics (ONS) House prices rose 0.4% in June compared to the previous month, the year on year rise now stands at 3.1% compared with 2.9% in May.
This increase outstrips price inflation (CPI) which was 2.9% in June.
Howard Archer, chief UK economist at IHS Global Insight, is quoted in the Telegraph:
Howard Archer, chief UK economist at IHS Global Insight, is quoted in the Telegraph:
House price bubbles of course will benefit the government in the run up to the election, as people (rather foolishly, given that the rise is relative) feel better off when the house that they live in rises in value."We now expect house prices to rise by at least 3pc over the rest of 2013 and to then increase by 7pc in 2014."
Monday, August 12, 2013
Greece Imploding
Greece is continuing on its downward spiral to financial implosion.
To add to the woes of the good people of Greece, on top of last week's truly shocking youth unemployment statistics (close to 65%), Reuters reports that Greece's economy shrank at annual pace of 4.6% in the second quarter, contributing to a slump of more than 20% in real terms since 2008.
Ironically, in the delusional world of economists, these figures were slightly better than the 5% contraction forecast.
Delusions aside, Der Spiegel has blown the whole charade of bailing out the Greek economy wide open. It quoted an internal document prepared by the Bundesbank as saying that Europe "will certainly agree a new aid programme for Greece" by early next year at the latest.
The Bundesbank also described the risks associated with the existing aid package for Greece as "extremely high", and said the approval last month of a 5.8 billion euro aid instalment to Athens had been "politically motivated".
As I have noted many times before, in order to survive as a democracy and civilised society Greece needs to exit the Eurozone now; others such as Cyprus need also to consider their positions.
To add to the woes of the good people of Greece, on top of last week's truly shocking youth unemployment statistics (close to 65%), Reuters reports that Greece's economy shrank at annual pace of 4.6% in the second quarter, contributing to a slump of more than 20% in real terms since 2008.
Ironically, in the delusional world of economists, these figures were slightly better than the 5% contraction forecast.
Delusions aside, Der Spiegel has blown the whole charade of bailing out the Greek economy wide open. It quoted an internal document prepared by the Bundesbank as saying that Europe "will certainly agree a new aid programme for Greece" by early next year at the latest.
The Bundesbank also described the risks associated with the existing aid package for Greece as "extremely high", and said the approval last month of a 5.8 billion euro aid instalment to Athens had been "politically motivated".
As I have noted many times before, in order to survive as a democracy and civilised society Greece needs to exit the Eurozone now; others such as Cyprus need also to consider their positions.
Thursday, August 08, 2013
Greek Youth Unemployment Close to 65%
Youth unemployment in Greece has risen to a shocking 64.9% in May.
Levels of unemployment such as this are normally associated with third world countries in the midst of a civil war, or the equivalent. Yet Greece is, allegedly, a first world country and is meant to be an "equal" member of a powerful and prosperous economic block (ie the Eurozone).
The reality is that Greece is not treated as an equal, it should never have joined or been allowed to join the Eurozone and the prosperity within the Eurozone is not evenly spread but confined to the wealthy Northern economies.
As such it is clear that as an experiment the Eurozone is destined to fail, indeed the world will be a better place without it. However, with levels of unemployment such as this in Greece the real danger is that of a plague of dictatorships and civil unrest spreading country by country in the Southern members of the Eurozone.
In order to survive as a democracy and civilised society Greece needs to exit the Eurozone now, others such as Cyprus need also to consider their positions.
Levels of unemployment such as this are normally associated with third world countries in the midst of a civil war, or the equivalent. Yet Greece is, allegedly, a first world country and is meant to be an "equal" member of a powerful and prosperous economic block (ie the Eurozone).
The reality is that Greece is not treated as an equal, it should never have joined or been allowed to join the Eurozone and the prosperity within the Eurozone is not evenly spread but confined to the wealthy Northern economies.
As such it is clear that as an experiment the Eurozone is destined to fail, indeed the world will be a better place without it. However, with levels of unemployment such as this in Greece the real danger is that of a plague of dictatorships and civil unrest spreading country by country in the Southern members of the Eurozone.
In order to survive as a democracy and civilised society Greece needs to exit the Eurozone now, others such as Cyprus need also to consider their positions.
Monday, August 05, 2013
UK Economy Heads Towards Escape Velocity
Following last week's jump in the UK's construction PMI, there is further good economic news.
The UK services sector grew at its fastest pace in more than six years in July. The Markit/CIPS services purchasing managers' index (PMI) rose to 60.2 in July from 56.9 in June, its highest level since December 2006. This is a larger gain than forecast by any of the economists polled by Reuters.
Paul Smith, senior economist at Markit is quoted by Reuters:
The UK services sector grew at its fastest pace in more than six years in July. The Markit/CIPS services purchasing managers' index (PMI) rose to 60.2 in July from 56.9 in June, its highest level since December 2006. This is a larger gain than forecast by any of the economists polled by Reuters.
Paul Smith, senior economist at Markit is quoted by Reuters:
"Although an early call on one month's data, the forward-looking elements from the survey point to a further strengthening of GDP in Q3 as the UK heads towards 'escape velocity' and self-sustaining economic expansion."The PMI survey showed a continued increase in services employment. However, the increase in demand is also causing firms to increase prices; ie people's incomes will remain "under pressure".
Friday, August 02, 2013
UK Construction Jumps
UK construction activity rose in July to its highest level since June 2010.
Reuters reports that the Markit/CIPS construction PMI rose to 57.0 July, up from 51.0 in June. The rise is mainly on the back of an increase in residential construction which has spurred an increase in confidence of purchasing managers.
Whilst the increase in residential construction is hardly surprising, given the increased stimuli to the sector offered by the Chancellor, the size of the increase in PMI is above expectations and as such is very welcome.
Tim Moore, senior economist at Markit said:
The question is, will this stimulation create an inflationary asset bubble?
Reuters reports that the Markit/CIPS construction PMI rose to 57.0 July, up from 51.0 in June. The rise is mainly on the back of an increase in residential construction which has spurred an increase in confidence of purchasing managers.
Whilst the increase in residential construction is hardly surprising, given the increased stimuli to the sector offered by the Chancellor, the size of the increase in PMI is above expectations and as such is very welcome.
Tim Moore, senior economist at Markit said:
"July's survey highlights a new wave of optimism across the UK construction sector, with companies reporting a pace of expansion in excess of anything seen over the past three years."Like it or not, the UK economy's bedrock is the property sector; by stimulating that sector the Chancellor has in effect stimulated the economy.
The question is, will this stimulation create an inflationary asset bubble?
Thursday, August 01, 2013
Lloyds Back In Profit
Lloyds Banking Group has returned to profit, and has made £2.1bn in the six months to the end of June. This compares very favourably with the loss of £456m for the same period last year.
The BBC reports that the bank stated that it had made substantial progress on strengthening its balance sheet, although "further work remains to be done".
Lloyds is 39% owned by the UK government (ie the taxpayer) and, based on the good results and the fact that bank said it would be talking to regulators in the coming months about resuming paying a dividend on its shares, people are now betting that the publicly held shares will be sold off (ie the bank will be privatised) and that the announcement of the privatisation will be made within the coming days.
The Treasury have just stated that there is no set target price or timetable for privatisation. However, it also stated (as per Reuters):
The BBC reports that the bank stated that it had made substantial progress on strengthening its balance sheet, although "further work remains to be done".
Lloyds is 39% owned by the UK government (ie the taxpayer) and, based on the good results and the fact that bank said it would be talking to regulators in the coming months about resuming paying a dividend on its shares, people are now betting that the publicly held shares will be sold off (ie the bank will be privatised) and that the announcement of the privatisation will be made within the coming days.
The Treasury have just stated that there is no set target price or timetable for privatisation. However, it also stated (as per Reuters):
"..we have said that we are now actively considering options for sales of the taxpayer's shares in Lloyds."Shares in Lloyds are up around 4% on the day.
Subscribe to:
Posts (Atom)