IMF Official: Greece Will Need Third Bailout - (online.wsj.com) Greece will need a third bailout package from the euro zone, and the country's European creditors will have to find the money for it, according to a senior International Monetary Fund official. "Greece will require additional financing, which may take the form either of official-sector involvement or of additional loans, hopefully on more favorable terms," Thanos Catsambas, an IMF alternate executive director, who represents Greece at the Fund's board, said in an interview. Mr. Catsambas is an IMF veteran with experience of Fund programs in Europe, Asia, Latin America and the Middle East.
Shadow Bankers Vanishing Leave China Victims Seeing Scams - (www.bloomberg.com) To live out his retirement years, He Zhongkui was counting on steady income from an investment that promised interest payments five times higher than what he could earn in a Chinese bank. Now He, a 62-year-old former municipal official in Wenzhou who rides a rusty bicycle, is cutting back on food and gasoline, having found himself one of a growing number of victims of China’s nebulous world of shadow banking. A “friend,” who he said had been paying him 2,400 yuan($379) a month after He gave him one-third of his 600,000-yuan life savings to invest in real estate, suddenly disappeared. So did the payments and principal. “I called, but the number was no longer in existence,” said He, who worked for the Water Resources Bureau in Wenzhou, a city of 9 million people on China’s east coast. “I went to his home, but nobody was there. “I was even invited to his daughter’s wedding, for heaven’s sake. It was all a scam.” China’s slowest economic growth in three years and a slumping property market, where many so-called shadow-banking investments are parked, are squeezing millions of Chinese who have invested the money of friends and acquaintances chasing higher yields to honor those payments.
Census: Middle class shrinks to an all-time low - (www.washingtonpost.com) The vise on the middle class tightened last year, driving down its share of the income pie as the number of Americans in poverty leveled off and the most affluent households saw their portion grow, new census data released Wednesday showed. Income inequality increased by 1.6 percent, the Census Bureau said in its annual report on poverty, income and health insurance. This was the biggest one-year increase in almost two decades and suggested that a trend in place since the late 1970s was picking up steam. As a snapshot of a nation recovering from one of its worst recessions ever, the census report had both shadows and highlights. Median household income declined $777, to $50,054 before taxes. But the poverty rate, which many experts had predicted would rise to rates unseen in nearly half a century, inched down a hair to 15 percent, a decline of about 100,000 people.
Spain Calls Europe’s Bluff as Region’s Debt Crisis Eases - (www.cnbc.com) Europe's four-year old debt crisis seems to be in remission. Dutch votersbacked pro-euro parties in Wednesday's poll, the German Constitutional Court gave the go-ahead for the region's permanent bailout fund and the European Central Bank's (ECB) latest bond program seems to be working, even before it's begun. Yields on Spanish and Italian bonds have fallen, the euro is at its strongest in four months against the dollar and European stocks are trading at their highest in almost a month. The turnaround has been so dramatic that it's allowed Spain, one of the most badly affected countries, to suggest that it may not need aid after all.
Schaeuble Cautions Spain Against Aid Bid in Poke at France - (www.bloomberg.com) German Finance Minister Wolfgang Schaeuble discouraged Spain from seeking a full international bailout, saying another request for outside aid risked a fresh round of financial-market turmoil. “I’m not in the camp that says ‘take the money,’” Schaeuble said in an interview in Berlin today when asked about French moves to press Spanish Prime Minister Mariano Rajoy’s government to ask for more aid. Spain “would be daft” to ask for a bailout on top of the 100 billion euros ($129 billion) for its banks if it didn’t need it. European policy makers are at odds over Spain as Rajoy stalls on whether to request more aid from the euro-area rescue funds and potentially win European Central Bank help to lower borrowing costs. France is pressing Spain to request help to contain the euro-area crisis almost three years after it emerged in Greece, three people familiar with negotiations said yesterday.