Austerity is certainly helping to take jobs away from the mature, but the younger class is suffering horribly.

You know the usual suspects, but now we must worry over central banks not having any tools left.

Hackers are out of control lately. This time they were on the hunt for deal data…

Debt talks have progressed for what seems like an eternity…

SEOUL (Reuters) – South Korea’s Hyundai Mobis (:012330.KS) said on Tuesday that had it signed deals worth $1.07 billion to supply automobile parts for General Motors (NYSE:GM – News) and Chrysler Group. Read More

Jan. 31 (Bloomberg) — Asian stocks rose, with a regional benchmark index poised for its biggest monthly rally since September 2010, after Greek Prime Minister Lucas Papademos said major progress has been made in debt-swap talks and Japan’s industrial production grew faster than economists estimated.

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BRUSSELS (Reuters) – European leaders struggled to reconcile austerity with growth on Monday at a summit that approved a permanent rescue fund for the euro zone and was trying to put finishing touches to a German-driven pact for stricter budget discipline.

Officially, the half-day 27-nation summit was meant to focus on ways to revive growth and create jobs at a time when governments across Europe are having to cut public spending and raise taxes to tackle mountains of debt.

But disputes over the limits of austerity, and Greece’s unfinished debt restructuring negotiations with private bondholders, hampered efforts to send a more optimistic message that Europe is getting on top of its debt crisis.

Leaders agreed that a 500-billion-euro European Stability Mechanism will enter into force in July, a year earlier than planned, to back heavily indebted states. But Europe is already under pressure from the United States, China, the International Monetary Fund and some of its own members to increase the size of the financial firewall.

The risk premium on southern European government bonds rose while the euro and stocks fell on concerns about a lack of tangible progress in the Greek debt talks and gloom about Europe’s economic outlook.

Highlighting those fears, Spain’s economy contracted in the last quarter of 2011 for the first time in two years and looks set to slip into a long recession.

France halved its 2012 growth forecast to a mere 0.5 percent in another potentially ominous sign for President Nicolas Sarkozy’s troubled bid for re-election in May. Prime Minister Francois Fillon said the cut would not entail further budget saving measures.

Conservative Spanish Prime Minister Mariano Rajoy, attending his first EU summit, said Madrid was clearly not going to meet its target of 2.3 percent growth this year. That has raised big doubts about whether it can cut its budget deficit from around 8 percent of economic output in 2011 to 4.4 percent by the end of this year as promised.

European Commission President Jose Manuel Barroso hinted Brussels may ease Spain’s near-unattainable 2012 deficit target after it updates EU growth forecasts on February 23.

Italy, rushing through sweeping economic reforms under new Prime Minister Mario Monti, was rewarded with a significant fall in its borrowing costs at an auction of 10- and 5-year bonds, despite double-notch downgrades of its credit rating by Standard & Poor’s and Fitch this month.

But Portugal’s slide towards becoming the next Greece – needing a second bailout to avoid chaotic bankruptcy – gathered pace as banks raised the cost of insuring government bonds against default and insisted the money be paid up front instead of over several years.

The yield spread on 10-year Portuguese bonds over safe haven German Bunds topped 15 percentage points for the first time in the euro era. It cost a record 3.9 million euros ($5.12 million) to insure 10 million euros of Portuguese debt.

OUTLAWING KEYNES?

With Britain standing aloof, most of the other 26 EU leaders were set to approve a fiscal pact to write balanced budget rules into their national law, despite economists’ doubts about the wisdom of effectively outlawing deficit spending.

“To write into law a Germanic view of how one should run an economy and that essentially makes Keynesianism illegal is not something we would do,” a British official said.

European Parliament President Martin Schulz told the leaders the new fiscal treaty was unnecessary and unbalanced, because it failed to combine budget rigor with necessary investment in public works to create jobs.

The 17th summit in two years as the EU battles to resolve its sovereign debt problems was called to shift the narrative away from politically unpopular austerity and towards growth.

Negotiations between Greece and private bondholders over restructuring 200 billion euros of debt made progress over the weekend, but were not concluded before the summit.

A Greek official said Prime Minister Lucas Papademos would give the summit a brief report on the situation and meet German Chancellor Angela Merkel on the sidelines.

Until there is a deal, EU leaders cannot move forward with a second, 130-billion-euro rescue program for Athens, which they originally pledged at a summit last October.

Germany caused outrage in Greece by proposing that a European commissar take control of Greek public finances to ensure it meets fiscal targets. Greek Finance Minister Evangelos Venizelos said that to make his country choose between national dignity and financial assistance ignored the lessons of history.

The German call won cautious backing from the Dutch and Swedish prime ministers. But Merkel played down the idea of placing Greece under stewardship, saying: “We are having a debate that we shouldn’t be having. This is about how Europe can be supportive so Greece can comply, so there are targets.”

Lots to be learned from recent conference calls…

Kindly refer to my 2012 predictions, a.k.a. “future history.”

Irish people are going to be very pissed they agreed to do things the right and noble way. Probably furious enough to blow a hole in European fiscal union…

DUBLIN (Reuters) – It would be difficult for Ireland to remain in the euro zone if its voters rejected a proposed new fiscal treaty, its European Affairs minister said on Monday, raising the stakes in a political battle over whether to put the plan to a referendum.

European leaders are expected to agree to tighten budget rules on Monday, seeking to regain market confidence in the public finances of the 17 countries sharing the euro after three, including Ireland, had to seek international bailouts in a crisis that now threatens major economies such as Italy.

Irish citizens have twice rejected changes to EU treaties before voting through amended versions.

“It would be a very sad day if we somehow decided to opt out of that (new treaty) and allowed the other 16 members of the euro zone to progress and try to find a solution without us,” junior minister Lucinda Creighton told state broadcaster RTE.

“I think it would make it almost impossible for us to continue as part of the currency union because being part of a currency union means you have to abide by the rules,” Creighton said.

The government has rubbished opposition suggestions that Ireland should leave the euro zone rather than continue to endure savage spending cuts, saying an exit would have catastrophic consequences for the economy.

Ministers have indicated they would prefer to avoid a referendum on the treaty fearing it would be rejected in a backlash against austerity.

Creighton said the government was happy with the treaty in its current draft.

Really….it’s not up, up , and away with the bears ?

Unless you live in Germany and possibly France I do not see how you would have confidence in developments within the EU.

Go figure; a downgrade would have sent rates to the moon three months ago, but now yields went down into an Italian auction. Most expect European auctions to sail smoothly this week.

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Analysts expected China to reduce bank reserves and now have a more hawkish attitude over China’s monetary policy.

The EU indicated over the weekend that Greece should give up their control of finances to the ECB. This point has been irking the Greeks and hampering resolve.

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Italy auctions as much as 6 billion euros of five- and 10- year debt today, along with securities due in April 2016 and March 2021. Belgium sells as much as 3 billion euros of bills tomorrow, with Spain, Portugal, Germany and France issuing 13 different maturities in the five days.

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French President Nicolas Sarkozy has announced plans to introduce a tax on financial transactions.

The 0.1% levy will be introduced in August regardless of whether other European countries follow suit.

The tax is part of a package of measures set out by the president to promote growth and create jobs.

Mr Sarkozy faces a presidential election in April, but is currently trailing in the opinion polls behind his Socialist rival, Francois Hollande.

In an interview with French television, Mr Sarkozy said he hoped the tax would push other countries to take action.

“What we want to do is create a shockwave and set an example that there is absolutely no reason why those who helped bring about the crisis shouldn’t pay to restore the finances,” he said.

“We hope the tax will generate one billion euros ($1.3bn, £0.8bn) of new income and and thus cut our budget deficit.”

Mr Sarkozy gave no further details on the tax, but a government source later told Reuters news agency it would target shares and not bonds.

Read the rest here.

By DINNY MCMAHON

BEIJING—For generations, Chinese men looking for a dose of vigor have sworn by a traditional remedy: fungus harvested from dead caterpillars, known in some quarters these days as Himalayan Viagra.

Now Chinese investors are using the rare fungus to try to boost something else—their investment returns. The fungus has doubled in price over the past two years and the top grade now fetches more than $11,500 a pound, according to Fuzhou-based brokerage firm Industrial Securities.

With Chinese stocks falling, real-estate markets flat and bank deposits offering measly returns, Chinese investors have been looking for help in strange places. Besides traditional medicinal products, they are plowing money into art-based stock markets, homegrown liquors, mahogany furniture and jade, among other decidedly non-Western asset classes.

Read the rest here.

via theoatmeal.com

….at least it is assumed that the Straits is where she’ll end up…