Jew World Order

I would be prepared to do whatever it takes to keep our country safe, to
keep our banking system strong, to keep our economy robust

16.53 After the bell in London, Ben Critchley, sales trader at IG
Index, said:

With our American cousins enjoying a half day in preparation for their
Independence Day holiday, it was always going to be a fairly quiet session.
The FTSE has succeeded in gaining for a third consecutive day, as investors
look to central banks for new hope. Thursday’s Bank of England and ECB
meetings raise the prospect of some crisis-stemming moves from London and
Frankfurt, while continued weak US data means that talk of QE3 has been
revived once again. The eurozone remains quiet for now, although how long
this will last remains to be seen, as this problem has a nasty habit of
exploding into life at the most inopportune moments.

16.51 David Cameron has been speaking about the potential for
greater banking integration in the eurozone. He has said this would not
necessarily be a fundamental change for Britain as long there are proper
safeguards in place:

If the 17 countries of the euro zone bring about a banking union for
themselves, which I think frankly they need to do …. and if we can get
proper safeguards in place then that wouldn’t be a fundamental change for us

16.38 The IMF also said that unemployment was also a particular
worry for the country, where half the people out of work have not had a job
for more than six months.

16.25 Those folks at the IMF have been busy today. They’ve just
released another economic report, this time on Luxembourg:

Economic growth has slowed in 2011 amid the euro area sovereign debt
crisis. Private consumption held up in the first half of the year. But as
the crisis and uncertainty lingered, consumer and manufacturing business
confidence fell and slowed domestic demand. Reflecting the waning impact of
global fuel price increases and postponements in automatic wage indexation,
inflation has eased.

[…] Reflecting sluggish external demand, economic activity is expected to
further weaken, with growth projected to decline to ½ percent in 2012.
Volatile financial markets and unclear economic prospects will likely
continue to weigh on domestic demand. These factors will also likely reduce
price pressures and reinforce inflation’s declining trend. Risks are tilted
to the downside given ongoing uncertainties in the euro area.

16.05 More from Richard
Blackden, our US business editor, on the IMF review:

The fund added its voice to a rising chorus of concern that sharp political
divides in Washington mean that the world’s biggest economy will fall off
what has dubbed a “fiscal cliff” in less than six months time.

As it stands, the expiration of George W Bush’s tax cuts on December 31,
and the start of more than $1 trillion in spending cuts in January, mean the
US is facing a severe fiscal headwind just as growth is slowing.

Fears are increasing in the US and beyond that Republicans and Democrats
will fail to reach agreement over how to temper the pace of the deficit
reduction in 2013, alongside delivering a long-term plan on the country’s
$15 trillion of debt.

“It is critical to remove the uncertainty created by the “fiscal
cliff” as well as promptly raise the debt ceiling, pursuing a pace of
deficit reduction that does not sap the economic recovery,” the IMF
said in its annual survey of the US.

15.36 Back to France, as well as cutting its growth forecasts
(see 14.50), the new socialist government has also been outlining its plans
for the next five years. In a speech to parliament, prime minister Jean-Marc
Ayrault confirmed plans to hire more teachers and police, create 150,000
state-aided jobs and promote more competitive industry.

To help industrial innovation, a public investment bank would be put in place
before the end of this year, he said, and the government would also announce
a plan shortly to address problems in the auto sector.

15.10 And in a good sign for the US economy, factory orders rose
0.7pc in May, chalking up the first increase in three months.

15.09 As well as running a health check on Germany’s economy (see
14.35), the IMF has also given America’s economy the once-over. It
thinks that the US economy will grow by 2pc this year and about 2.25pc in
2013 amid a “tepid” recovery and the European debt crisis.

The US economy remains “subject to elevated downside risks, in light of
financial strains in the euro area and uncertainty over domestic fiscal
plans,” the IMF said in a statement.

14.54 On the markets, the FTSE 100 is up 0.4pc to 5662; the CAC
is up 0.2pc to 3247 and the DAZ is 0.6pc higher at 6537.

Spain’s 10-year bond yields are down 9 basis points to 6.2pc and Italy’s are
down 8.7 basis points to 5.6pc.

The euro is trading at $1.2572.

14.50 France has cut its growth forecast for next year to 1.2pc from
1.75pc under the previous government. Its growth forecast for this year has
been reduced to 0.3pc from 0.7pc.

14.35 The International Monetary Fund has run a health check on
Germany’s finances and reckons the conditions are in place for Europe’s
biggest economy to recover this year – bar a further intensification of the
eurozone crisis. Here’s a taster of the report:

Executive Directors commended Germany’s strong macroeconomic management,
which has resulted in a favorable economic performance despite the uncertain
external environment. They noted, however, that the near-term outlook is
clouded by downside risks, including a strong intensification of the
euro-area crisis and potentially lower global growth prospects. The main
priorities in the period ahead will be to manage the transition to domestic
demand-led growth, secure financial stability, and address the challenges
posed by the euro-area crisis in conjunction with European partners.

14.26 Christos Staikouras, Greece’s deputy finance minister, has also
said that the government aims to pay arrears to suppliers of about €6.5bn
this year and that the government plans to cut defence spending and
restructure state utilities.

14.20 Greece’s deputy finance minister is saying a few words. He says
the government’s objective is to reduce debt in combination with economic
growth. Here’s what the Telegraph‘s Andrew Trotman had to say about
that:

14.11 Dow Jones reports that Jose
Manuel Barroso, the European Union president, said today that the
Libor scandal strengthens the case for a financial transaction tax.

In a speech at the European Parliament in Strasbourg, Mr Barroso said:

We have seen once again in recent months and weeks both in the United
States and in Europe, including in some of the major financial institutions,
that practices that have fuelled the financial crisis are not yet eradicated
from the sector.

Once again, we have been confronted with reckless trading and market
manipulation. It is time that these practices stop once and for all. And it
is time that a sector that owes so much to the taxpayers’ support accepts
handing back a fair share to society.

14.00 The Dutch senate has approved the introduction of the
eurozone’s permanent bailout fund. In a vote that went largely as expected,
50 members of the 75-seat Senate voted in favour of the European Stability
Mechanism.

13.50 Greek newspaper, Ekathimerini, has this tale about Pasok
leader, Evangelos Venizelos, saying he hoped Greece would be able to
benefit from a European Union concession allowing the use of EU rescue
funding for the direct recapitalization of cash-trapped local banks.

Speaking on the second day of a conference organized by The Economist,
Venizelos said he hoped the benefit could could apply to “Cyprus,
Portugal and Greece”. “This would help reduce the debt,” the
socialist leader and former finance minister told delegates.

The Pasok chief also presented a 10-point plan for Greece exiting the
crisis which includes honoring the country’s commitment to the country’s
creditors but also extending the fiscal adjustment period by three years,
until the end of 2007.

13.15 Louise Cooper, markets analyst at BGC Partners, reckons the European
Central Bank is not fit for purpose. She writes:

The European banking industry is teetering on the brink of disaster but the
ECB has never been given the right tools to deal with such a crisis – it is
not fit for purpose. It does not have the ability to print money neither has
it the ability to save failing banks.

In the great American banking crisis of the early 1930s, it was only when
the Federal Reserve was given the power to print money and become the Lender
of Last Resort to banks did the banking system finally stabilise and the
economy rebound (this was part of a package of measures put into law by the
newly elected Franklin De Roosevelt). In the meantime, massive damage was
done to US output. In three years commerical bank credit had contracted from
$50bn to $30bn (credit truly crunched) and a quarter of country’s banks had
failed. National Income had shrunk from $100bn to $55bn and a quarter of the
workforce was unemployed. This is the terrifying damage that a banking
meltdown can cause.

Due to political reasons the ECB was never given the right to print money
or given the right to step in and backstop banks – the LLR status. Without
these two key powers, the ECB is seriously constrained it is ability to step
in to rescue the European banking system. This is a serious weakness. It is
all credit to Mario Draghi that he creatively used the ECB’s remit for “transmission
of monetary policy” to provide half a trillion Euro of funding to
Europe’s banks via the LTRO (which averted the kind of banking crisis that
America experienced in the 30s). However he is still operating with one arm
tied behind his back. After the latest summit it appears the ECB is to be
given new powers (greater role in banking supervision, some oversight of
Spain’s banking rescue) but they do not go far enough.

12.51 There is another bone of contention over the ESM. Yesterday, Finland
said it would block the fund from buying government bonds in the open
market.

Angela Merkel, the German chancellor, was asked about this today. She said we
must accept decisions of other states and there is no need to make decisions
now…

12.48 Confusion still reigns, it would appear, over whether direct
recapitalisation of banks by the eurozone’s permanent rescue fund would
require a treaty change.

Yesterday, the European Commission said no legislative changes were needed in
the treaty governing the European Stability Mechanism. But the Dutch
government said today it was uncertain if a direct recapitalisation of banks
by the euro zone’s permanent rescue fund would require a treaty change.

For now, however, it was assuming that no treaty change would be needed and,
when appropriate, the cabinet would propose that parliament approve the
addition to the ESM’s mandate.

12.35 France’s finance minister has said that the country’s
revised budget, due to go before the cabinet on Wednesday, will rein the
government’s deficit to a targeted 4.5pc of GDP.

Reuters reports that Pierre Moscovici said that without budget
amendments the deficit would hit 5.0pc of GDP this year – implying the
government needed some €10bn in new deficit cutting measures.

12.26 Nicholas Spiro of Spiro Sovereign Strategy argues that
Ireland’s return to the debt market is a vote of confidence in the country’s
adjustment programme. He says:

Although the size of the offering is very modest and the maturity extremely short
(€500m in 3-month bills), the symbolic and psychological importance of the
auction is significant.

…

The results of Ireland’s T-bill sale on Thursday will, inevitably, be
compared to those of Spain’s bond auction which is being held on the same
day.

While we would caution against such comparisons given the different
maturities and amounts on offer, an impressive Irish sale could make a
relatively solid Spanish one look worse in the minds of investors.

12.13 According to a source quoted by Reuters, Italy’s prime
minister, Mario Monti, expects the savings from spending cuts this
year to be “much higher” than €4.2bn.

The government is expected to present a package of state spending cuts this
week that it wants to pass in place of a 2-percentage-point increase in VAT
which is otherwise scheduled to come into force in October.

11.52 Staff at the European Central Bank are suffering from stress
and overwork from coping with the eurozone’s debt crisis, according to a
study by the IPSO labour union seen by AFP.

In an internal ECB staff poll, 80.1pc of employees complained of a “heavy
workload” at the moment and 74.4pc of them said it was a “permanent”
situation.

More than 76pc said they were working longer hours, for which most of them
(77.7pc) received no extra pay.

Nearly 16pc of those polled said their workload was having a “serious
effect” on their private life and/or their health.

11.32 Ireland is set to auction bills this week in its first
public sale since September 2010, about two months before the nation
requested an international bailout.

Bloomberg reported that the National Treasury Management Agency will
sell €500m of treasury bills on Thursday.

11.06 Over in Cyprus, European Union and International Monetary
Fund representatives have begun meetings with bank and government officials.

The finance ministry said:

It’s important to emphasize that this team, during this phase, is
restricted to examining the whole situation. It’s purely exploratory in
nature and there will be no negotiation or discussion of measures.

Cyprus, which has just taken over the presidency of the European Central Bank,
last week applied for aid from the EU bailout fund and the IMF. Its aid
package could total up to €10bn.

10.49 Christian Noyer, a member of the European Central Bank governing
council, has been speaking this morning. Reuters has all the
details, reporting that he said a proposed fund to guarantee eurozone bank
deposits would need massive firepower and the ability to borrow on financial
markets with the guarantee of member states.

Speaking in Paris, Mr Noyer called for:

A deposit guarantee scheme, with massive firepower, provided that it could
collect an annual contribution from all euro area banks and could borrow on
the markets with a supranational guarantee.

He also urged unified supervision of all euro zone banks, not just big ones,
headed by the ECB but with day-to-day implementation carried out via
national central banks.

He added the third pillar of the proposed “banking union”, a unified
banking resolution scheme, could have either a separate fund or be mixed
with the bank guarantee fund.

10.29 In the eurozone, factory prices fell more than expected in
May, dipping 0.5pc from April. The fall came as the cost of energy dropped
sharply.

10.24 In the UK, construction activity has fallen at its fastest
pace in two-and-a-half years. The PMI slipped to 48.2 in June from 54.4 in
May.

Meanwhile, mortgage approvals for house purchase fell to 51,098 from 51,627, a
smaller decline than economists had forecast.

Commenting on the construction figures, Howard Archer, chief UK and European
economist at IHS Global Insight, said:

There is now a very real danger that construction output contracted again
in the second quarter after plunging 4.9% quarter-on-quarter in the first
quarter, when it contributed 0.4 percentage point to overall GDP contraction
of 0.3% quarter-on-quarter.

This is a further blow to hopes that the overall economy avoided further
contraction in the second quarter. Although construction only account for
6.8% of GDP on the output side, it had been hoped that the economy would be
helped in the second quarter by an appreciably bounce back in construction
output after the 4.95 quarter-on-quarter contraction in the first quarter.

The construction sector is clearly finding life very difficult at the
moment as it struggles against serious headwinds. In particular, the
government’s spending cuts are limiting overall expenditure on public
buildings, schools and hospitals.

10.04 Over in Greece, the head of the taskforce that is helping
to rebuild the country’s economy has said that Greece must prioritise paying
out arrears it has racked up with suppliers to get funds flowing again to
cash-strapped businesses. Horst Reichenbach told a conference in Athens:

The first step [in improving access to financing] is to pay the arrears
that have accumulated.

It would be very difficult to really improve the situation of the Greek
economy even with these reforms if the very difficult situation of access to
finance is not tackled

Greece owes over £6bn to suppliers in industries ranging from
pharmaceuticals to construction, local officials estimate.

09.34 Some good news out of Spain. Unemployment there fell by
nearly 100,000 people in June as the tourism season kicked in. The number of
people registered as unemployed fell by 98,853, or 2.1pc, to 4.62m from the
previous month, the Labour Ministry said in a statement.

09.20 Here’s an outline of some of the events we’re expecting today:

About now: European Union President Herman Van Rompuy and European Commission
President Jose Barroso brief the European Parliament in Strasbourg on the
results of last week’s Summit
10.00 Euroarea producer-price inflation for May
11.00 Barroso and Danish Prime Minister Helle Thorning-Schmidt brief the
press in Strasbourg
12.30 Dutch upper house of parliament to vote on the European Stability
Mechanism treaty
14.30 Michel Barnier, the EU’s financial services chief, unveils proposals on
investment and consumer protection at the EU parliament

09.13 It turns out that Luis de Guindos, Spain’s economy
minister, has been speaking this morning at an event in Madrid. He said
there: “[We] will make additional efforts to guarantee our deficit
reduction objectives.”

Figures released last week suggest Spain’s efforts to reduce its deficit to
5.8pc of GDP are unattainable without new measures. The government said it
was considering raising consumer, energy and property taxes to make up for
the shortfall.

08.54 More flashes appearing on Reuters from Spain’s economy
minister. He has also said this morning that individual eurozone
countries have no blocking capacity over European summit agreements and that
aid for state-rescued banks in Spain could come within weeks.

08.39 Equities are ticking higher this morning on hopes that central
banks will take further policy action – such as a rate cut – to spur the
global economy after manufacturing figures showed that factories had been
dented by the eurozone crisis. Traders are focused on a meeting on July 5 of
the European Central Bank, when it is expected to cut its main interest rate
by 25 basis points to 0.75pc.

The FTSE 100 is up a fraction – 0.04pc – at 5643 while the CAC is up
0.3pc to 3249 and the DAX is up 0.2pc to 651.

08.25 A flash appears on Reuters, with Spain’s economy
minister saying the country is to make additional efforts to achieve its
deficit targets.

Spain has what the IMF recently dubbed a “very ambitious 5.3pc of GDP
deficit target for 2012!. It was watered down from 4.4pc to 5.3pc in March
amid evidence that the initial target was impossible to reach.

07.45 The Bank of England will announce on Thursday whether it
has decided to print more money to try and lift Britain’s ailing economy.
Analysts’ money is on another £50bn of quantitative easing (QE), but as Philip
Aldrick reports, though pension groups may not be big fans, two
would-be pensioners at the Bank of England have not done too badly out of
money printing:

Charlie Bean, 59, and Paul Tucker, 54, the two Deputy Governors, saw the value
of their final salary pension pots rise by £1.04m and £1.35m respectively
last year due mainly to a fall in gilt yields. For Mr Tucker, it meant his
pension pot increased by 37pc to £5m, while Mr Bean’s leaped 41pc to £3.56m.

Bank sources said the largest part of the increase was due to the sharp
fall in gilt yields, for which the Bank has in the past been proud to take
credit. Its own analysis has estimated that QE “depressed gilt yields by
around 100 basis points [one percentage point]”, which in turn helped boost
economic growth by up to 2pc.

_{(L-R) Charlie Bean and Paul Tucker saw the value of their final salary
pension pots rise}

07.40 There are also troubling signs across the pond that the world’s
largest economy could be slowing more quickly than expected. America’s
manufacturing sector contracted for the first time in almost three years last
month, raising the spectre of the world’s major economic centres suffering a
simultaneous slowdown.

07.32 Just when you thought the eurozone was closer to solving its debt
crisis – along comes a party pooper. This time, in the shape of Finland.

Yesterday, Finland
pledged to block Brussels’ celebrated plans to allow its new bail-out fund
to buy sovereign bonds in the market. Louise Armitstead
reports:

A Finnish government report on last week’s milestone European Summit showed
that prime minister Jyrki Katainen opposed plans to give the European
Stability Mechanism (ESM) the option to buy government bonds in the
secondary market. On Monday a spokesman said Finland’s stance was supported
by the Netherlands too.

“Finland finds it an inefficient way to stabilise markets,” said a senior
Finnish government official told reporters.

A spokesman for the Dutch finance ministry said: “The Prime Minister said
on June 29 he is not in favour of buying up bonds. Using the existing
instruments to buy up bonds will be expensive and can only be done if there
is unanimity (between member states). That means the Netherlands would need
to vote in favour.”

07.30 Good morning and welcome back to our live coverage of the
European debt crisis.

Debt crisis
live: archive