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  #21  
Old 06-09-2010, 01:13 PM
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Originally Posted by vtek View Post
maybe the 5.3% deficit is in absolute currency and the surplus you see there is in proportion to their gdp, which is negative.
I think you just revolutionized economics. All you need to solve the debt problem is a negative GDP.
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  #22  
Old 06-09-2010, 02:11 PM
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Note the title: "structural deficits"

No, I have no clue what they're including and what they're excluding in that, but it's obviously not the full deficit.
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  #23  
Old 06-09-2010, 02:31 PM
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Note the title: "structural deficits"

No, I have no clue what they're including and what they're excluding in that, but it's obviously not the full deficit.

wiki article on it. can't say I understand, though, the division, or how the components are measured

http://en.wikipedia.org/wiki/Deficit...the_fiscal_gap

Quote:
A government deficit can be thought of as consisting of two elements, structural and cyclical.

At the lowest point in the business cycle, there is a high level of unemployment. This means that tax revenues are low and expenditure (e.g. on social security) high. Conversely, at the peak of the cycle, unemployment is low, increasing tax revenue and decreasing social security spending. The additional borrowing required at the low point of the cycle is the cyclical deficit. By definition, the cyclical deficit will be entirely repaid by a cyclical surplus at the peak of the cycle.

The structural deficit is the deficit that remains across the business cycle, because the general level of government spending is too high for prevailing tax levels. The observed total budget deficit is equal to the sum of the structural deficit with the cyclical deficit or surplus.

Some economists have criticized the distinction between cyclical and structural deficits, contending that the business cycle is too difficult to measure to make cyclical analysis worthwhile.
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  #24  
Old 06-09-2010, 02:43 PM
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In that case I don't beleive this graph. Canada has had surpluses for about 10 years. This is the first year we had a deficit, so I would think we have a structural surplus.
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Old 06-09-2010, 02:48 PM
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In that case I don't beleive this graph. Canada has had surpluses for about 10 years. This is the first year we had a deficit, so I would think we have a structural surplus.
You are forgetting the 5 point 'Conservative Government' penalty.
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  #26  
Old 06-17-2010, 08:49 AM
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More Spain:
http://www.independent.co.uk/news/wo...d-2002676.html

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European leaders meet in Brussels today amid growing fears that Spain, Europe's fifth-largest economy, is preparing to ask for a bailout which would dwarf the €110bn (90bn) rescue plan for Greece.

The Spanish government yesterday dismissed reports that it was already in discussions with the European Commission, International Monetary Fund and the US Treasury for a rescue package worth up to €250bn.

Officials in Madrid, Brussels and Paris were forced to deny that a Spanish bailout – which would take the European debt and euro crisis into a potentially dangerous new phase – was on the Brussels summit agenda.
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  #27  
Old 06-27-2010, 12:50 PM
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http://knowledge.wharton.upenn.edu/a...articleid=2532

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For some financially distressed European countries, the question may never have been whether austerity would become necessary. The more pressing questions, experts note, most likely concern scale and timing, and whether austerity would prove adequate to the scope of the problem. In an ideal world, an indebted country would simply grow its way out of the problem. But in the case of Greece, for example, poor economic growth potential is widely viewed as a large part of the reason it faces a dire fiscal future.

A second approach would be to reschedule or restructure the debt burden -- in effect a negotiated default -- but this solution is highly problematic. "Restructuring would be rational in some cases," Gultekin says, "but in that event, markets just freeze. Markets get very upset." A third choice is to devalue the currency, which can also invigorate an economy by making exports cheaper. But the troubled countries of the euro zone, which do not control their own currencies, would have to take the radical step of leaving the zone in order to make devaluation possible.
....

Still, for a country carrying such mammoth debt, what sort of austerity measure could possibly address the problem? Ito prescribes gradually raising the value-added tax, currently set at 5%, to 25%. According to Dadush, Japan is under no immediate threat of a credit crisis: "They still have some room. But if three years from now they are in the same situation that they are in today, they are going to be in trouble." He believes the same is true of the United States, a country whose finances are under considerable stress because of reduced tax receipts resulting from the global financial crisis, as well as stimulus spending and money used to fund the wars in Afghanistan and the Middle East.

But the most serious long-term strain on U.S. finances comes from rising expenditures on health care, creating a fiscal picture that "does not look good at all," says Kent Smetters, a Wharton professor of insurance and risk management. "The shortfalls are absolutely enormous, specifically in the Medicare system." Smetters points out that projected fiscal shortfalls represent, in present-value terms, almost twice the value of the country's capital stock -- its "lands, buildings, homes, and publicly and privately held companies." But as with Japan, investors have to yet to display much nervousness about U.S. debt. Gultekin notes that the U.S. dollar's status as the world's reserve currency "provides tremendous flexibility."

Although countries and Europe and elsewhere have gotten themselves into trouble through heavy borrowing, "you try to fix things, and you learn," Gultekin says. "Learning does not happen in democracies, or much of anywhere else, until people experience problems for themselves."

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  #28  
Old 07-20-2010, 06:19 AM
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IRELAND
http://dailycaller.com/2010/07/19/mo...t-debt-rating/

Quote:
The Moody’s agency cut Ireland’s credit rating Monday, citing the country’s swelling national debt, the unpredictable cost of its bank-bailout plans and its weak growth prospects for the next three to five years.

Shares on the Irish Stock Exchange slumped after Dietmar Hornung, Moody’s lead analyst for Ireland, announced that the New York-based agency was dropping its credit-worthiness rating one notch to Aa2. Moody’s previously cut Ireland’s rating to Aa1 from the top grade, Aaa, in July 2009 as Ireland plunged into its worst recession since the Great Depression of the 1930s.

Hornung cited what he called “the Irish government’s gradual but significant loss of financial strength as reflected by its deteriorating debt affordability.”

However, Ireland’s National Treasury Management Agency or NTMA — responsible for managing Ireland’s ballooning government debts — welcomed Moody’s accompanying decision to raise its outlook on the risk of loaning money to Ireland to “stable” from its previous “negative” rating. That suggests it will issue no more downgrades in coming months.

“We’d prefer not to have a downgrade, but there is still a lot of good news in (the Moody’s report),” said Oliver Whelan, the NTMA’s director of funding and debt management.
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  #29  
Old 07-29-2010, 05:14 PM
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http://www.marketwatch.com/story/moo...0-07-29-152600

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Moody's Investors Service on Thursday cut the outlook on Iceland's Baa3 sovereign rating to negative from stable in response to a recent Supreme Court ruling on the illegality of foreign-exchange-linked loans. "The magnitude of the banking system losses that will result from the recent court ruling is not known at this time but it is clear that Iceland still faces significant risks to its economic and financial recovery," says Kathrin Muehlbronner, a Moody's vice president and lead analyst for Iceland. Moody's also cited the government's inability to resolve its "Icesave" dispute with the U.K. and Dutch governments, noting that a failure to find a resolution could lead the International Monetary Fund to withhold future disbursements from Iceland.
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  #30  
Old 08-17-2010, 01:53 PM
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Really good interview by Kyle Bass on CNBC, largely about Japan. How would one go about buying the cheap options on Japan's bonds which he references in the last bit of the second clip?

http://www.zerohedge.com/article/mus...be-long-stocks
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