banking

Greece overwhelmingly rejects EU austerity bailout plan

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Greece held its referendum today on the European Union bailout plan for more austerity, and voters overwhelmingly rejected the plan. Greece is facing a brave new world this week.

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The Wall Street Journal reports, Greeks Set to Reject Creditors’ Bailout Terms, Projections Show:

Greek voters were set to resoundingly reject the terms of an international bailout on Sunday, an outcome that would set the country on a collision course with the rest of the eurozone.

With more than 87% of votes counted, preliminary results showed more than 61% of voters had cast ballots against creditors’ demands in the historic referendum—a heavier-than-expected victory for the “no” campaign against the austerity policies demanded by Greece’s lenders: the rest of the eurozone and the International Monetary Fund.

Voter turnout, based on the partial counting of votes, was reported at about 62%. Opinion polls conducted during Sunday by private broadcasters had pointed to a narrower majority for the “no” camp.

The projected outcome would strengthen the domestic standing of Greek Prime Minister Alexis Tsipras, who campaigned vehemently for Greeks to reject lenders’ terms for further bailout funding.

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Global economy on edge

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It looks like fireworks are not going to be limited to the 4th of July in the U.S. this weekend.

I warned you about this . . . it’s Time to start paying attention to world economic news. China has been engaging in the same speculative “casino capitalism” that brought down Wall Street in 2008. There are market forces at play right now that are beyond the U.S. ability to do anything about it this time. We are part of a global economy, and when part of the global economy blows up, we all pay for it.

CNBC reports China stock rout worsens as CSRC opens market probe:

economy 1The bloodbath in Chinese equities extended into Friday, with the benchmark Shanghai Composite plunging as much as 7 percent amid reports that the securities market regulator has launched a probe into suspected market manipulation.

The China Securities Regulatory Commission (CSRC) had set up a team to look at “clues of illegal manipulation across markets,” spokesman Zhang Xiaojun said in comments on the CSRC’s official Weibo microblog late on Thursday.

“Cases that meet legal standards will be immediately investigated, seriously cracked down upon according to law, and those suspected of a crime will be resolutely transferred to the police for investigation,” he said. Meanwhile, the China Financial Futures Exchange has suspended 19 accounts in the past month for short-selling, sources told Reuters.

The market is now down about 28 percent from its June 12 peak, firmly in bear market territory, despite intensifying efforts by authorities to shore up investor confidence. The market closed down 5.8 percent lower on Friday.

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Krugman on Greece’s ‘Grexit’ from the euro

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Greece is heading for a default on its debts as early as tomorrow, depending upon the IMF. The government has scheduled a referendum for Sunday for its citizens to vote on a new austerity plan that the government itself is recommending a “no” vote on.  This will likely result in Greece leaving the euro, and possibly undermine the euro currency union if other distressed countries decide to leave the euro currency union.

The New York Times‘ Paul Krugman writes, Greece Over the Brink:

krugman.pngIt has been obvious for some time that the creation of the euro was a terrible mistake. Europe never had the preconditions for a successful single currency — above all, the kind of fiscal and banking union that, for example, ensures that when a housing bubble in Florida bursts, Washington automatically protects seniors against any threat to their medical care or their bank deposits.

Leaving a currency union is, however, a much harder and more frightening decision than never entering in the first place, and until now even the Continent’s most troubled economies have repeatedly stepped back from the brink. Again and again, governments have submitted to creditors’ demands for harsh austerity, while the European Central Bank has managed to contain market panic.

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Time to start paying attention to world economic news

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economy 1I have complained many times that our television “lamestream news media” no longer reports economic news, and long ago closed its foreign bureaus and ceased reporting international news.

Since most Americans, sadly, get their news from television news, this is a very bad thing indeed. Too many Americans may wake up to news soon that will elicit this response: “WTF? When did this happen? I never heard anything about this on the news!”

World economic news is about to overtake the American media’s singular focus on  personal interest stories, weather, sports and entertainment. Wake up America, and start paying attention!

On Friday, the long overdue day of reckoning for China’s overvalued “stock bubble” may have finally arrived. China has been engaging in the same speculative “casino capitalism” that brought down Wall Street in 2008. China’s Market Selloff Accelerates – WSJ:

China’s stock markets plunged Friday, a sharp turnaround after a year of strong gains, as investors start to question the sustainability of that breathless rally.

China’s smaller Shenzhen market has fallen 20% from its recent peak, entering bear territory, while the Shanghai market has dropped nearly as much from its high earlier this month.

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Arizona House disregards the will of the voters to favor predatory payday lenders

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wolvesBack in 2008, when predatory “payday lender” rules sunset under existing Arizona law, Jonathan “Payday” Paton convinced his fellow Tea-Publicans in the legislature to put Prop. 200 on the ballot, which would have extended existing exemptions for the payday loan industry regarding maximum interest rates.

The voters of Arizona resoundingly said “no” to the predatory practices of payday lenders.

But banksters never give up, and neither do their servile lickspitter servants in the lawless Tea-Publican Arizona legislature who badly want their campaign donations. The expressed will of the voters be damned — what do voters know anyway? Our authoritarian Tea-Publican legislators know what’s best for us. Just do as they say.

So once again, payday lenders are back with a bill to allow these predators to prey on Arizona citizens with HB 2611 (.pdf). The Arizona Capitol Times (subscription required) reported last week, Arizona House adopts bill to OK new loans for payday lenders:

The Arizona House passed a bill Wednesday that allows payday lenders to offer a new product with more than 200 percent interest, despite voters barring them from operating in the state under a 2008 initiative.

The proposal received approval in a 31-29 vote that included lawmakers from both sides of the aisle rising to champion their causes. [Vote detail at end of post.]

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