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Wall Street Journal (August 7)

2015/ 08/ 08 by jd in Global News

In China, the Government is estimated to have spent more than 10% of GDP ($1.3 trillion) “since the market panic started in late June,” producing only questionable results. “The failed bailout reinforces the expectation that Beijing will attempt to manage the financial markets in the future. This moral hazard means the volatility will continue, along with the costs of future bailouts. The first lesson of investing, buyer beware, has yet to be learned in China.”

 

Wall Street Journal (May 7)

2015/ 05/ 07 by jd in Global News

As its economy slows, China is taking “tentative steps toward crucial financial reform.” These steps may leave some firms without the comfortable support of the Government’s safety net. “A few bankruptcies and defaults in recent months suggest that the bailout culture may give way to creative destruction. The year ahead should show whether China has reached a reform turning point.”

 

Wall Street Journal (October 11)

2013/ 10/ 12 by jd in Global News

The misleading “story you hear in Brussels, Berlin and Frankfurt” is that “Greece’s fiscal adjustment is on track and its economy is bottoming out.…. Europe’s politicians prefer the status quo of eternal, rolling bailouts because it serves their purposes. They never have to present their taxpayers with a bill for the Greek rescue. And while Greece’s economy never really recovers, it might avoid any new crisis.” The time has come for more realistic reckoning.

 

New York Times (October 12)

2012/ 10/ 14 by jd in Global News

“Bank bailouts were supposed to be followed by financial reform to limit the banks’ destructive power. Instead, bailed-out banks are bigger than ever and have resisted reforms to limit their size and complexity.” Fortunately, there are some promising signs of change. The most recent arrived in a report from a committee led by Erkki Liikanen for the European Commission. Should the recommendations be approved “the lack of progress, however, may yet give way to change.”

 

New York Times (June 11)

2012/ 06/ 14 by jd in Global News

“Bailouts—this one is worth up to $125 billion—are supposed to help restore investor confidence. But investors have clearly figured out what too many European politicians are still denying: serial bailouts, piecemeal plans and one-size-fits-all austerity are not a solution.” The Spanish bailout did not calm anybody’s nerves. The next flashpoint lies just days away with the upcoming Greek election. “With every stopgap solution to the euro-zone debt crisis, the gaps have gotten larger and the stops have gotten shorter.”

“Bailouts—this one is worth up to $125 billion—are supposed to help restore investor confidence. But investors have clearly figured out what too many European politicians are still denying: serial bailouts, piecemeal plans and one-size-fits-all austerity are not a solution.” The Spanish bailout did not calm anybody’s nerves. The next flashpoint lies just days away with the upcoming Greek election. “With every stopgap solution to the euro-zone debt crisis, the gaps have gotten larger and the stops have gotten shorter.”

 

Boston Globe (April 23)

2011/ 04/ 25 by jd in Global News

The Pension Benefit Guaranty Corporation (PBGC) receives small premiums from corporate pension plans. In return PBGC ensures that workers receive their benefits even if their employer goes bankrupt. Congress needs to raise these premiums to put “the corporation on more solid footing.” Doing so will protect the 44 million Americans covered by company pension plans “and spare taxpayers another costly bailout.”The Pension Benefit Guaranty Corporation (PBGC) receives small premiums from corporate pension plans. In return PBGC ensures that workers receive their benefits even if their employer goes bankrupt. Congress needs to raise these premiums to put “the corporation on more solid footing.” Doing so will protect the 44 million Americans covered by company pension plans “and spare taxpayers another costly bailout.”

 

The Wall Street Journal (April 8)

2011/ 04/ 11 by jd in Global News

Many have forgotten the “Lisbon Irony.” The 2000 EU summit was held in Portugal where European leaders unveiled the Lisbon Agenda “to transform the European economy into the world’s most ‘competitive and dynamic’ by 2010.” Instead, Portugal is now asking the EU and the IMF for a bailout. As the Journal notes, the Lisbon Agenda “didn’t turn out that way, least of all for Portugal.”

Many have forgotten the “Lisbon Irony.” The 2000 EU summit was held in Portugal where European leaders unveiled the Lisbon Agenda “to transform the European economy into the world’s most ‘competitive and dynamic’ by 2010.” Instead, Portugal is now asking the EU and the IMF for a bailout. As the Journal notes, the Lisbon Agenda “didn’t turn out that way, least of all for Portugal.”

 

Wall Street Journal (March 5)

2011/ 03/ 07 by jd in Global News

Many recent financial reforms are designed to prevent banks from becoming too big to fail. In fact, large banks and holding companies still enjoy “a lower cost of funds than banks in every other category.” The market still believes the banks are too big to fail. The Wall Street Journal believes there will be even more bailouts come the next crisis because, “Dodd-Frank is making the big banks bigger and more protected than ever against failure.”

 

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