Money and Economic News

An Italian security van was robbed in Italy by armed gunmen. Approximately €10 million in loot was stolen, including a number of gold ingots. The gunman fired a number of shots from their arms, Kalashnikov rifles, but no one was hit. The robbers escaped by car, and the van was later found in Switzerland.

Andreas Artemis says his resignation from the Bank of Cyprus was due primarily to the fact he was left out of negotiations regarding his bank. He says he was at the mercy of the Troika, who acted to penalize both banks and banks’ depositors. The reaction of the Bank of Cyprus to Artemis’s resignation, was to give him time to think, saying they would only accept the resignation if Artemis did not withdraw it within a week.

For their part, Fitch has already cut the country’s credit rating, and to add further injury, cut the bank’s rating as well. Other European officials are now criticizing one another — Benoît Coeuré called Jeroen Dijsselbloem, “wrong” for suggesting the Cypriot model may be applied elsewhere in the EU. So, while leaders and administrators in the EU argue and criticize one another, the rest of the PIIGS continue to trudge on toward their unknown resolutions.

A store in Australia seems to have gotten ticked about people who window shop in their store. So, they have decided the consumer ought to pay them — even if they do not but anything! The store wants $5 just to allow the shoppers to view what the store is selling. If the shopper decides to purchase anything, the money will be refunded. If the shopper decides they do not want to buy anything, the $5 fee is forfeited.

The Dow closes in on new all-time highs this week, as the United States’s productivity and employment/welfare numbers continue to remain slow to improve. While workers with retirement accounts may celebrate, the masses of already retired folks continue to shudder as interest rates force them into stocks and other riskier investments.

The Fed will, at a future point, sell all the assets that they have purchased to bolster the faltering economy. Even Warren Buffett has mentioned that investors are sitting on the edge of their seats, waiting for a change in Federal Reserve policy. Potential Fed selling may lead to a domino-like mass of other sellers, forcing the Dow to drop precipitously.

• 32% of families self-identifying as “lower class”, up from 25% from 2008.
• Electrical bills rising faster than the rates of inflation, for the 5th consecutive year
• The number of Americans now dependent on government hand-outs is at an all-time record, and still growing.
• The unemployment rate (if using the same methods as when Obama took office) would stand at 11.2%

Ratings house Fitch, has cut Argentina’s bond rating by five notches, leaving the country looking precariously close to a new default (Argentina also defaulted in 2002). As investors take heed of the ratings cuts, expect financing to become harder for Argentina, and funds to continue to tighten. A judge in the U.S. has already ordered the government to create a $1.3 billion fund for holders of Argentine bonds.

For their parts, Argentine politicians decried the judge’s order. Fitch based their cuts on the ongoing global recession, and a massive slowing of the Argentine economy this year. Argentina has Latin America’s third-largest economy.

France lost their prized AAA credit rating from Moody’s this week, leaving the country with one top rating, from their domestic company, Fitch. The rating agency cited: a lackluster labor market and France’s possible reaction in the face of continuing European financial and credit distresses. France had been on “negative-outlook” for nine months previously.

The current French government blames former government leadership for the downgrade. Despite plans of Francois Hollande to force changes designed to rebuild the French economy and labor market, past attempts have had mediocre effects at best.

Writer Nikos Konstandaras writes a great piece (“Delusions in the face of danger”)about the fragile state of the Greek economy and the government’s ongoing political strife. He writes about the inability of the people to face reality and recognize the dire situation that they now face. While politicians promise an easy solution, or even flagrantly lie about the situation, the people still seem to have faith in the politicians that created the mess.

The United States, with its ongoing, piecemeal debt-ceiling raises, and partisan bickering, draws a great parallel. While the European Union seems to also be unable to come up with a viable solution, the government of Greece falls further into ruin. The U.S. government, continuously stressing how tax hikes are the only solution (or that massive spending cuts are the only solution), mirror the Greeks’ folly.