Archive for December, 2012

GERMANY goes to the polls, the global economic crisis rumbles on, the UN releases its latest findings on climate change and we reveal the best place to be born in 2013

via Economic Crisis http://www.economist.com/blogs/newsbook/2012/12/year-ahead-international-edition?fsrc=rss

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During the recent trial of Kweku Adoboli, a former trader with UBS, the prosecution described his trades that saddled the Swiss bank with a $2.3 billion loss as “unprotected, unhedged, incautious and reckless”. Sound like fun? Now there is a way to channel your inner rogue, without the seven-year prison sentence.The makers of “Market Meltdown”, a new board game, enable rampant speculation with borrowed money to play a role in family gatherings during the upcoming holiday season. In the game, you are a trader facing severe market turmoil. As your piece (a private jet) moves around a Monopoly-style board, instead of collecting money when you pass “Go”, nervous depositors withdraw funds from your bank in sums that double with each revolution, simulating an unstoppable bank run.To keep your firm afloat you need to borrow liberally and play the market, which is represented by a roulette wheel. As loans come due and the bank run accelerates, increasingly desperate bets are required. The winner is the last player not to miss a loan repayment or deposit withdrawal.

via Economic Crisis http://www.economist.com/blogs/prospero/2012/12/financial-board-games?fsrc=rss

UK Only Article: 
standard article

Issue: 

The gift that goes on giving

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2012 in charts

The Economist's year in nine charts

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Source: Thomson Reuters

Sources: ECB; Morgan Stanley

Source: Thomson Reuters

Sources: US Department of Labour; Standard & Poor’s

Source: Haver Analytics

via Economic Crisis http://www.economist.com/news/finance-and-economics/21568742-long-road-recovery?fsrc=rss

UK Only Article: 
standard article

Issue: 

The gift that goes on giving

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Spain’s prime minister

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Mariano Rajoy endured a torrid first 12 months—2013 is likely to be grim, too

Location: 

MADRID

HE HAD hoped to dig Spain out of its hole without raising taxes, cutting services or hurting pensioners. But 12 months after he became prime minister, Mariano Rajoy has broken all of these pledges. Spain has more unemployed, more debt and a deeper recession. “For many it has been a year of pain and suffering,” he has admitted.
Yet it could have been even worse. Spain’s public finances have not collapsed. Nor has the euro. Both seemed possible when Mr Rajoy took power. And during 2012 the budget deficit has shrunk by almost 2% of GDP, says José Ignacio Conde-Ruiz of Madrid’s Complutense university. “That is pretty good in a recession”—even if it is not as big a change as Spain’s euro-zone partners wanted.
Mr Rajoy took over an economy entering recession, with 23% out of work, a budget deficit …

via Economic Crisis http://www.economist.com/news/europe/21568759-mariano-rajoy-endured-torrid-first-12-months2013-likely-be-grim-too-one-year?fsrc=rss

A snapshot of 2012 in nine chartsFIVE years on from the start of the financial crisis, the global economy is enduring a feeble convalescence. The euro zone’s debt crisis became less acute in 2012, thanks largely to the promise by Mario Draghi, the European Central Bank’s president, to do “whatever it takes” to save the single currency. Bond yields in peripheral economies declined (chart 1). But Europe’s chronic problems worsened: its financial system continued to fragment (chart 2) and the euro-area economy shrank. In such lifeless company America’s economy looked almost vibrant (chart 3). Its housing market turned a corner in 2012 (chart 4), and its unemployment rate fell steadily. But the recovery is still very weak. The numbers of long-term jobless stayed high; export markets drooped. Many emerging markets had a dismal year as growth rates dropped (chart 5). Some of the slowdown is cyclical: China’s economy and underperforming stockmarket showed encouraging signs of strength at the end of the year, for instance (chart 6). But an era of souped-up growth in the BRICs—Brazil, Russia, India and China—appears to be over, which will do nothing to improve subdued commodity prices (chart 7). Despite the gloom, investors enjoyed 2012 (chart 8). A calmer year in Europe helped; so too did another 12 months of ultra-low interest rates, which prompted money to pour towards …

via Economic Crisis http://www.economist.com/blogs/graphicdetail/2012/12/daily-chart-14?fsrc=rss

WHILE it gets less attention that India or China, Poland has been one of the world’s great development success stories of the past two decades. This is due in no small part to the policies it pursued after the end of Communist rule. One of the architects of those policies, Leszek Balcerowicz, was the subject of a long interview in this weekend’s Wall Street Journal. The article is worth reading, although Mr Balcerowicz’s narrative of Poland’s success and its applicability to the beleaguered nations of the euro area leaves something to be desired.If you want to understand why Poland had a good crisis, you need to understand three things. First, you need to know that Poland’s currency, the zloty, was never pegged to the euro. This was immensely helpful both on the upside and on the downside. From 2004-2008, credit sloshed into the new member states of the European Union from Western European banks. The biggest victims were those that borrowed in currencies they could not print: euros, Swiss francs, and Swedish kronor. Worst hit were the Baltics, which had rigidly pegged their currencies to the euro since the early 2000s. Private credit doubled in those countries and all three endured punishing recessions afterwards.Private credit growth was much slower in Poland, although it was still pretty rapid. Some of this was because of Poland’s history with corporate nonperforming …

via Economic Crisis http://www.economist.com/blogs/freeexchange/2012/12/learning-abroad?fsrc=rss

The Gritty, Hard Climb Out Of Poverty

Posted: December 17, 2012 in poverty
Tags: , ,

The face of the American poor is changing. Journalist Anne Hull recently wrote about one teenager’s struggle to break the cycle of poverty in a small rust belt town. Host Michel Martin discusses the story with Hull, youth pastor Shawn Galla, and the Brookings Institution’s Ron Haskins.

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via Economy http://www.npr.org/2012/12/17/167449108/the-gritty-hard-climb-out-of-poverty?ft=1&f=1017