Greece Tumbles Into The Deflationary Abyss, While Its Primary Surplus Sounds The “Grexit” Alarm

While the second-derivative hopers and primary budget surplus believers cling to the faith that Stournaras talking about recovery is enough to bring the depressing Greek nation out of its slumber, the fact is that Greek deflation has never been worse. However, it gets worse… as a recent study by CFR finds that countries are most at risk of defaulting the year they turn a positive primary budget – meaning they are no longer reliant on their creditors. Simply put, the Greek government has far less incentive to pay, and far more negotiating leverage with, its creditors once it no longer needs to borrow from them to keep the country running – this makes it more likely, rather than less, that Greece will default sometime next year. Beggars, once again, become choosers.

 

Less worse un-growth and Hope deflating…

 

Via CFR,

Things are looking up in Greece – that’s what Greek ministers have been telling the world of late, pointing to the substantial and rapidly improving primary budget surplus the country is generating.  Yet the country’s creditors should beware of Greeks bearing surpluses.

 

A primary budget surplus is a surplus of revenue over expenditure which ignores interest payments due on outstanding debt.  Its relevance is that the government can fund the country’s ongoing expenditure without needing to borrow more money; the need for borrowing arises only from the need to pay interest to holders of existing debt.  But the Greek government has far less incentive to pay, and far more negotiating leverage with, its creditors once it no longer needs to borrow from them to keep the country running.

 

 

 

This makes it more likely, rather than less, that Greece will default sometime next year.  As today’s Geo-Graphic shows, countries that have been in similar positions have done precisely this – defaulted just as their primary balance turned positive.

 

The upshot is that 2014 is shaping up to be a contentious one for Greece and its official-sector lenders, who are now Greece’s primary creditors.  If so, yields on other stressed Eurozone country bonds (Portugal, Cyprus, Spain, and Italy) will bear the brunt of the collateral damage.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/riFlVAaQ0bs/story01.htm Tyler Durden

Greece Tumbles Into The Deflationary Abyss, While Its Primary Surplus Sounds The "Grexit" Alarm

While the second-derivative hopers and primary budget surplus believers cling to the faith that Stournaras talking about recovery is enough to bring the depressing Greek nation out of its slumber, the fact is that Greek deflation has never been worse. However, it gets worse… as a recent study by CFR finds that countries are most at risk of defaulting the year they turn a positive primary budget – meaning they are no longer reliant on their creditors. Simply put, the Greek government has far less incentive to pay, and far more negotiating leverage with, its creditors once it no longer needs to borrow from them to keep the country running – this makes it more likely, rather than less, that Greece will default sometime next year. Beggars, once again, become choosers.

 

Less worse un-growth and Hope deflating…

 

Via CFR,

Things are looking up in Greece – that’s what Greek ministers have been telling the world of late, pointing to the substantial and rapidly improving primary budget surplus the country is generating.  Yet the country’s creditors should beware of Greeks bearing surpluses.

 

A primary budget surplus is a surplus of revenue over expenditure which ignores interest payments due on outstanding debt.  Its relevance is that the government can fund the country’s ongoing expenditure without needing to borrow more money; the need for borrowing arises only from the need to pay interest to holders of existing debt.  But the Greek government has far less incentive to pay, and far more negotiating leverage with, its creditors once it no longer needs to borrow from them to keep the country running.

 

 

 

This makes it more likely, rather than less, that Greece will default sometime next year.  As today’s Geo-Graphic shows, countries that have been in similar positions have done precisely this – defaulted just as their primary balance turned positive.

 

The upshot is that 2014 is shaping up to be a contentious one for Greece and its official-sector lenders, who are now Greece’s primary creditors.  If so, yields on other stressed Eurozone country bonds (Portugal, Cyprus, Spain, and Italy) will bear the brunt of the collateral damage.


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/riFlVAaQ0bs/story01.htm Tyler Durden

Vid: Federal Reserve, Not Free Market, Caused Crisis says “Money for Nothing” Filmmaker Jim Bruce

“I view one of the big myths of the [2007-08 financial] crisis
as that it was purely the effect of free markets, that this is what
happens when you have free markets,” says Jim Bruce, filmmaker
behind the new documentary “Money for Nothing: Inside the Federal
Reserve.”

Bruce
predicted the meltdown
, invested accordingly, and used the
money he made from the collapse to fund his movie, which features
interviews with economists who predicted the crisis, as well as
former and current Federal Reserve officials such as Paul Volcker
and future Fed Chair Janet Yellen.

Bruce sat down with Reason TV’s Zach Weissmueller to discuss the
film and his thoughts on current Fed policy, incoming Fed Chair
Janet Yellen, the legacy of alleged free marketeer Alan Greenspan,
and the future of the U.S. economy and monetary system.

Approximately 9 minutes. Shot by Tracy Oppenheimer, Alex
Manning, and Alexis Garcia. Edited by Zach Weissmueller.

Watch the video above, or click the link below for downloadable
versions and subscribe to Reason TV’s YouTube
Channel
to receive automatic updates when new material goes
live.

View this article.

from Hit & Run http://reason.com/blog/2013/12/09/vid-federal-reserve-not-free-market-caus
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Vid: Federal Reserve, Not Free Market, Caused Crisis says "Money for Nothing" Filmmaker Jim Bruce

“I view one of the big myths of the [2007-08 financial] crisis
as that it was purely the effect of free markets, that this is what
happens when you have free markets,” says Jim Bruce, filmmaker
behind the new documentary “Money for Nothing: Inside the Federal
Reserve.”

Bruce
predicted the meltdown
, invested accordingly, and used the
money he made from the collapse to fund his movie, which features
interviews with economists who predicted the crisis, as well as
former and current Federal Reserve officials such as Paul Volcker
and future Fed Chair Janet Yellen.

Bruce sat down with Reason TV’s Zach Weissmueller to discuss the
film and his thoughts on current Fed policy, incoming Fed Chair
Janet Yellen, the legacy of alleged free marketeer Alan Greenspan,
and the future of the U.S. economy and monetary system.

Approximately 9 minutes. Shot by Tracy Oppenheimer, Alex
Manning, and Alexis Garcia. Edited by Zach Weissmueller.

Watch the video above, or click the link below for downloadable
versions and subscribe to Reason TV’s YouTube
Channel
to receive automatic updates when new material goes
live.

View this article.

from Hit & Run http://reason.com/blog/2013/12/09/vid-federal-reserve-not-free-market-caus
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Rand Paul Says He is “Seriously Thinking About” Running For President

Sen. Rand Paul
(R-Ky.) said yesterday that he is “seriously thinking about”
running for president in 2016, but added that “I’m also very
serious about the family considerations.”

The news comes a few days after Paul said that
his wife opposes
 him running.

From
Reuters
:

(Reuters) – Republican Senator Rand Paul said on Sunday he is
giving serious thought to a run for the presidency in 2016 but
might decide against it because of the burden a campaign would
cause for his family.

“Well, you know, the thought has crossed my mind,” the Kentucky
senator said on “Fox News Sunday.” “And I am seriously thinking
about it.

“But I’m also very serious about the family considerations.”

Paul, a favorite of the conservative Tea Party movement, said
politics had become “uncivil” and that sometimes “you have a good
week” and other times “the haters and the hacks go after you.”

More from Reason.com on Rand Paul here

Follow these stories and more at Reason 24/7 and don’t forget you
can e-mail stories to us at 24_7@reason.com and tweet us
at @reason247.

from Hit & Run http://reason.com/blog/2013/12/09/rand-paul-says-he-is-seriously-thinkin
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Rand Paul Says He is "Seriously Thinking About" Running For President

Sen. Rand Paul
(R-Ky.) said yesterday that he is “seriously thinking about”
running for president in 2016, but added that “I’m also very
serious about the family considerations.”

The news comes a few days after Paul said that
his wife opposes
 him running.

From
Reuters
:

(Reuters) – Republican Senator Rand Paul said on Sunday he is
giving serious thought to a run for the presidency in 2016 but
might decide against it because of the burden a campaign would
cause for his family.

“Well, you know, the thought has crossed my mind,” the Kentucky
senator said on “Fox News Sunday.” “And I am seriously thinking
about it.

“But I’m also very serious about the family considerations.”

Paul, a favorite of the conservative Tea Party movement, said
politics had become “uncivil” and that sometimes “you have a good
week” and other times “the haters and the hacks go after you.”

More from Reason.com on Rand Paul here

Follow these stories and more at Reason 24/7 and don’t forget you
can e-mail stories to us at 24_7@reason.com and tweet us
at @reason247.

from Hit & Run http://reason.com/blog/2013/12/09/rand-paul-says-he-is-seriously-thinkin
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Anti-Surveillance Hero Edward Snowden May Testify Before European Parliament’s Committee on Civil Liberties, Justice and Home Affairs


Snowden ObamaThe Guardian
today is reporting
that various members of the European Parliament are working to
arrange for video testimony from NSA whistleblower Edward Snowden
before that body’s committee on civil liberties, justice and home
affairs. From The Guardian:

The LIBE committee would most likely want questions on what role
other European information services played in data gathering for
the NSA, and whether servers and data networks in the EU were used
as part of the process…

European parliament sources considered it likely committee
members would vote in favour of a Snowden hearing, with the only
vocal opposition from British Tory MEPs…

Sarah Ludford, the Lib Dem MEP, said: “Edward Snowden’s
revelations merit serious debate on whether the intelligence
services are out of control. But if Snowden’s video appearance is
to be more than a high-profile stunt, it is essential that he is
asked the right questions, including whether he had any other
motivation than the public interest.

“We also need to get testimony from the intelligence chiefs
responsible if we are to give European citizens the answers they
deserve.”

After President Obama
pardons Snowden
, perhaps he could testify about the constitutional
abuses
of national security surveillance in the U.S. before the
judiciary and intelligence committees in both Houses of
Congress.

from Hit & Run http://reason.com/blog/2013/12/09/anti-surveillance-hero-edward-snowden-ma
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Anti-Surveillance Hero Edward Snowden May Testify Before European Parliament's Committee on Civil Liberties, Justice and Home Affairs


Snowden ObamaThe Guardian
today is reporting
that various members of the European Parliament are working to
arrange for video testimony from NSA whistleblower Edward Snowden
before that body’s committee on civil liberties, justice and home
affairs. From The Guardian:

The LIBE committee would most likely want questions on what role
other European information services played in data gathering for
the NSA, and whether servers and data networks in the EU were used
as part of the process…

European parliament sources considered it likely committee
members would vote in favour of a Snowden hearing, with the only
vocal opposition from British Tory MEPs…

Sarah Ludford, the Lib Dem MEP, said: “Edward Snowden’s
revelations merit serious debate on whether the intelligence
services are out of control. But if Snowden’s video appearance is
to be more than a high-profile stunt, it is essential that he is
asked the right questions, including whether he had any other
motivation than the public interest.

“We also need to get testimony from the intelligence chiefs
responsible if we are to give European citizens the answers they
deserve.”

After President Obama
pardons Snowden
, perhaps he could testify about the constitutional
abuses
of national security surveillance in the U.S. before the
judiciary and intelligence committees in both Houses of
Congress.

from Hit & Run http://reason.com/blog/2013/12/09/anti-surveillance-hero-edward-snowden-ma
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A. Barton Hinkle on the Recurring Push for Universal Preschool

Back in February, President Obama
proposed “working with states to make high-quality preschool
available to every child in America. Every dollar we invest in
high-quality early education can save more than seven dollars later
on by boosting graduation rates, reducing teen pregnancy, even
reducing violent crime.” This is worrisome, says A. Barton Hinkle,
because the claim was bunk. Yet, the president’s proposal enjoys
growing support.

View this article.

from Hit & Run http://reason.com/blog/2013/12/09/a-barton-hinkle-on-universal-pre-k-mozar
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“No Way To Tell How Many People Who Have Signed Up For Obamacare Actually Have”

The Obamacare enrollment portal is the gift that keeps on giving endless examples of government incompetence. The latest comes from Bloomberg which informs us that “there’s no way to tell how many people who think they’ve signed up for health insurance through the U.S. exchange actually have, after about 1 in 4 enrollments sent to insurers from the federal website had garbled included incomplete information.” Still that particular glitch was not enough to prevent Obama from taking full credit for a “fixed” website after somehow the White House managed to calculate that sign ups soared to 100,000 people, and have taken off since the “fix.”

More:

[T]he acknowledgment suggests consumers need to be vigilant about their health plan purchases. Letters from insurers confirming coverage can take a week or more, and the Obama administration now says people should call their companies if they aren’t contacted within that time.

 

With repairs to the front end of healthcare.gov leading to a spurt of 29,000 new enrollments in the first two days of December, U.S. officials are now focusing on what happens after customers select a plan on the website. Enrollment isn’t complete until consumers make their first payment, which is due Dec. 31 for insurance coverage that will begin on Jan. 1.

 

It’s time for people to move toward locking in coverage and paying for it,” said Joel Ario, a consultant with Manatt Health Solutions, in a telephone interview. Insurers will face “a tall challenge” trying to resolve enrollment errors as the time shortens before coverage begins Jan. 1, he said.

 

The Centers For Medicaid & Medicare Services, which runs the federal health website, doesn’t have “precise numbers” on how many of the enrollment forms called 834s have been sent to insurers or how many have errors, Julie Bataille, an agency spokeswoman, said during a Dec. 6 conference call.

One aspect where Obamacare is working, is where the government decided to bypass the healthcare.gov 500 million lines of code monstrocity entirely and allow consumers to enroll directly with state insurance companies.

A project the government began two weeks ago with 16
insurance companies in three states — Texas, Florida and Ohio
– to allow them to enroll people directly into health plans,
bypassing healthcare.gov, has improved the working relationship
among the government’s technicians and those at the companies,
said a person familiar with the work who asked not to be
identified because the information is private. The new
cooperation has helped to resolve issues with the data
transfers, the person said.

Alas, the bulk of the enrollment problems remain when using the central portal:

“In general our 834 files have been pretty good,” said Kathleen Oestreich, CEO of Meritus, a Tempe, Arizona, startup insurer funded by government loans. The company has seen only one “orphan” member, she said — a person who called and said they hadn’t received an enrollment notice even though they had picked Meritus as their insurer.

 

More troubling are “ghosts” — people whose files never reach their insurers, Robert Laszewski, an insurance industry consultant, said. It’s unclear how many people may fall into that category or how companies will identify or reach them.

 

“If they enroll 500,000 people and 25,000 of them walk into the doctor’s office and nobody knows who they are, that’s a problem,” he said in a phone interview.

It is indeed. And it is just the start, because while the enrollment process of Obamacare will (one hopes) eventually be fixed, that will merely unleash all new, and far more disturbing problemsn. Such as the deductible sticker shock that is about to be unleashed upon Americans in need of medical aid, especially those who choose the cheaper “bronze” plan. The WSJ reports:

As enrollment picks up on the HealthCare.gov website, many people with modest incomes are encountering a troubling element of the federal health law: deductibles so steep they may not be able to afford the portion of medical expenses that insurance doesn’t cover. The average individual deductible for what is called a bronze plan on the exchange—the lowest-priced coverage—is $5,081 a year, according to a new report on insurance offerings in 34 of the 36 states that rely on the federally run online marketplace.

 

That is 42% higher than the average deductible of $3,589 for an individually purchased plan in 2013 before much of the federal law took effect, according to HealthPocket Inc., a company that compares health-insurance plans for consumers. A deductible is the annual amount people must spend on health care before their insurer starts making payments.

 

The health law makes tax credits available to help cover insurance premiums for people with annual income up to four times the poverty level, or $45,960 for an individual. In addition, “cost-sharing” subsidies to help pay deductibles are available to people who earn up to 2.5 times the poverty level, or about $28,725 for an individual, in the exchange’s silver policies. As enrollment picks up on HealthCare.gov, many people with modest incomes are encountering a troubling element: deductibles so steep they may not be able to afford the portion of medical expenses that insurance doesn’t cover. 

 

But those limits will leave hundreds of thousands or more people with a difficult trade-off: They can pay significantly higher premiums for the exchange’s silver, gold and platinum policies, which have lower deductibles, or gamble they won’t need much health care and choose a cheaper bronze plan. Moreover, the cost-sharing subsidies for deductibles don’t apply to the bronze policies.

 

That means some sick or injured people may avoid treatment so they don’t rack up high bills their insurance won’t cover, according to consumer activists, insurance brokers and public-policy analysts—subverting one of the health law’s goals, which is to ensure more people receive needed health care. Hospitals, meantime, are bracing for a rise in unpaid bills from bronze-plan policyholders, said industry officials and public-policy analysts.

Ah: central planning, also known in the now-defunct USSR as the where “whatever can go wrong, will.” As Obama (and soon the Fed) are learning first hand…


    



via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/F0qPqBbv3MM/story01.htm Tyler Durden