Economic News Articles – Archive for Week of 12-18-2011
To recap last week’s economic news: Concerns over the euro crisis continued to worsen. The BBC laid out a doomsday scenario for the eurozone. China explained why it is not ready to sign on to the euro deal. The U.S. stated no further help would be forthcoming, and credit agency, Fitch, concluded a comprehensive solution to the euro problem is not possible. Bank of America took a hard fall. And Republicans backed down from their latest brinksmanship over the payroll tax cut, which they were on the odd side of opposing.
A summary of the significant economic headlines follows:
Euro crisis updates in the economic news this week:
- BBC Podcast: Eurozone doomsday cycle described for Europe’s banks There shall be no quiet Christmas for Europe’s leaders if they were foolish enough to think their summit plan would ease the eurozone’s problems. Signs of stress now exceeding those seen before Lehman Brothers.
- BBC Podcast: Is Germany Dictating the New Rules in Europe? Or does Germany simply remember well the pain of the fallen Deutsch mark before WWII and have a lesson for all about avoiding hyper-inflation and fallen currency that comes from printing money in an attempt to avoid austerity?
- Chairman of China’s Sovereign Fund Speaks Out The euro bailout requires raising over a trillion euros in funding and looks toward China for a significant part of that. China speaks out on why it is not stepping forward as of yet and gives a lesson on capitalism.
- Euro zone IMF loan target in danger as UK bows out Euro zone ministers agreed on Monday to boost IMF resources by 150 billion euros to ward off the debt crisis and won support for from EU allies, but it was unclear if the bloc would reach its 200 billion euro target after Britain bowed out.
- Fitch: comprehensive euro zone deal “beyond reach” Fitch concluded that “a ‘comprehensive solution’ to the eurozone crisis is technically and politically beyond reach”: Too much austerity may split Europe. Banks resisting pressure to buy euro debt. Greek bondholder haircut deal still uncertain.
- New EU deal faces multiple referendum threat Serious obstacles are beginning to materialise in Ireland, the Netherlands, Austria, Romania and Denmark, while Finland, Latvia and the Czech Republic may also present the process with additional hurdles.
- US rules out eurozone bail-out, as recession looms The US Federal Reserve has no plans to contribute to a bail-out of Europe, but a euro collapse would have devastating effects on the economy, its chief, Ben Bernanke, told Republican senators at a closed-door hearing.
- World economy at a ‘very dangerous juncture’: IMF chief She said the IMF’s global growth forecast expected in January looked to be lower than the previous one in September. Early this month, the UN also cut its growth forecast, warning that the global economy is “teetering on the brink of a major downturn.”
Occupy Wall Street (OWS) / Occupy Movement news articles:
- Occupy Movement in Seattle Turns to Violence as a TacticMembers of Occupy crowd illegally blocking the Port of Seattle turn to throwing a brick, sharpened rebar, paint and smoke canisters at Seattle police officers.
US bank crisis in this week’s economic news:
- Bank of America Dips Below $5 First Time Since March 2009The fall was brought on by growing concern that Europe’s debt crisis will drag on the world’s financial system. BofA shares have been pummeled as bond buyers and insurers demanded the bank repurchase soured mortgages made by Countrywide Financial Corp.
- BofA Agrees to Record $335 Million Fair-Lending SettlementBank of America Corp. will pay a record $335 million to compensate Countrywide Financial Corp. Countrywide helped create the Great Recession through sub-prime loans and assessed higher fees and interest to more black and Hispanic borrowers.
- U.S. stocks drop; Citi and other big banks fall hard Stocks retreated Monday amid concerns European policymakers were failing in efforts to fix the debt crisis and as financial companies tumbled.
US government moves and blunders in the week’s economic headlines:
- Boehner Bows to Pressure and Agrees to Extend Payroll Tax Cuts The speaker conceded to reporters that it might not have been “politically the smartest thing in the world” for House Republicans to put themselves between a tax cut and the 160 million American workers
- Boehner Says House G.O.P. Opposes Senate Deal on Payroll Tax A day after the Senate overwhelmingly approved legislation to extend a payroll tax cut for two months, House Republicans made clear Sunday that they would not support the measure.
- House Republicans scrap direct vote on Senate payroll tax planThe change in the plans by House Republican leaders indicated confusion over how to proceed in the face of relentless pressure from the White House, Democrats and Senate Republicans to accept the Senate plan that passed on a bipartisan 89-10 vote.
- Republicans risk backlash in 2012 “Republicans seem opposed to a payroll tax cut even though they have positioned themselves as the party of lower taxes. It’s nuts,” said Rothenberg, a non-partisan analyst. They’re popular with the Tea Party, but getting unpopular with independent voters.
(To view earlier summaries of the weekly news, click on Economic News Archive.)
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