July 5, 2012 By gpc1981
http://albertpeia.com/germanywillbailoneuro.htm
‘It
all boils down to
I’ve (Summers) been forecasting for months that the country will
increasingly focus on domestic interests and that it will ultimately opt to
leave the Euro rather than prop up the EU.
The
former (focusing on domestic issues) is already underway.
Chancellor Angela Merkel agreed to
share borrowing costs with Germany’s states to help ease their budget squeeze,
completing a deal the opposition said will help secure German ratification of
the European Union’s fiscal pact.
Germany’s
federal and state governments plan their first joint debt sale in 2013 to help
the states meet the pact’s deficit limits, the German government’s press office
said in an e-mailed statement in
Pressed
by the Social Democrat-led opposition that could block the stricter European
fiscal rules in parliament, Merkel
agreed to a policy she opposes in confronting the debt crisis in the rest of
the 17-nation euro area. She signaled her rejection of joint euro-area debt as
recently as June 23, saying “liabilities and controls” must “go together.”
“We
reached a solution that makes it clear there will be approval” of the fiscal
pact in the upper house of parliament, Kurt Beck, the premier of
Rhineland-Palatinate state and member of the opposition SPD, said in an ARD
television interview.
As
for the latter development (
So
far the markets have been willing to ignore the fact that
By
the look of things, this development is not too far away.
Michel
Sapin, the labour minister,
has promised to make it so expensive
for companies to lay off workers that it will no longer be worth their while.
Firms that fire people while still paying dividends may be penalised.
Another planned ruse is to force companies to sell factories, presumably along
with the brands manufactured there, to competitors rather than close them down…
But
the most important consequence of stratospheric taxes will be less visible, at
least at first. Marc Simoncini is one of
Tax
is not the only threat to executive pay. Last week Pierre Moscovici,
the finance minister, announced that
pay for bosses of companies in which the French state holds the majority of
shares will be capped at a flat rate of €450,000, or roughly 20
times the wage of the lowest-paid worker. The French experiment will no doubt
be watched with interest around the rich world. In some cases it will lead to a 70% pay cut. Over time,
the quality of management at these state firms, which had become more
professional over the past decade, will surely suffer. Executives such as
Guillaume Pepy, the boss of SNCF, the national
railways, for instance, could secure a top position anywhere in his industry. Measures to limit pay at fully private firms are
expected before long.
http://www.economist.com/node/21557318?fsrc=rss|bus
As
one would expect, the wealthy French are fleeing the country.
Wealthy French Take Their Assets to
It began in 2010, when wealthy
Greeks started coming to
Then rich Spaniards started
arriving. They were following by well off Italians, who at the start of the
year overtook Russians as the biggest group of foreign buyers snapping up
property in
Whenever the euro crisis heats up somewhere in
Europe, the demand for expensive homes increases in
Real
estate agents have been aware of a new wave of interest for months, but it’s
been especially noticeable since Feb. 28. The night before, the then Socialist
candidate for French president, François Hollande,
who famously said “I don’t like the rich,” announced that, if elected, he would
raise the top rate of tax on incomes over €1 million to 75 percent. At home, he
got much applause for the announcement. But in
“Since February, when Hollande announced his wealth tax, there has been a large
rise in web searches from French customers,” Liam Bailey, head of residential
research at Knight Frank, recently told the Daily Telegraph…
To meet the demand, the property
company Douglas & Gordon has just opened an office in
French
banks are already leveraged at 25-to-1. The impact of a capital exodus by the
wealthy will rapidly push leverage levels even higher. And given that French
banks’ exposure to the PIIGS is equal to 30% of French GDP, it’s no surprise
that French banks are posting some truly horrible charts.
I
expect the EU Crisis to spread to
With
that in mind, I’ve begun positioning subscribers of my Private Wealth Advisory for the next
leg down. We’ve already locked in over 30 winning trades this year by finding “out
of the way” investments few investors know about and timing our positions to
benefit from the various developments in
