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Analysis: Italy's politics turned upside down by election
aftermath - (www.reuters.com) Five months ago, Silvio Berlusconi was in steep decline and his party
was in shambles. His center-left enemies looked triumphant and sat on a
15-point opinion poll lead. Today that situation has turned 180 degrees. The
center-left is devastated by divisions and the 76-year-old media tycoon has an
opinion poll lead ranging from five to eight points. The extraordinary upset is
the result of powerful aftershocks from an electoral earthquake in February
when the populist 5-Star Movement swept up a huge protest vote against Italy's politicians and
grabbed an unprecedented 25 percent to become the third force in parliament. Now
that the dust is starting to settle with the inauguration of a new broad-based
coalition government led by center-left politician Enrico Letta, it is possible
to see more clearly the winners and losers from one of the most turbulent
periods in recent Italian political history. One of the winners is Berlusconi. He
has gone from a pale, indecisive figure last autumn to a position of strong
influence over Letta's government, helped greatly by the implosion of the
center-left and his own astonishing resurgence since he was forced from power
in November 2011 as Italy faced a major
financial meltdown.
Why
Occupy Wall Street Failed - (www.ft.com)
When the anti-consumerist magazine Adbusters issued a call to “Occupy
Wall Street” (OWS) in 2011, the response took everyone by surprise – including
the Occupiers themselves. Anti-capitalist activists and their sympathisers
flooded the streets, starting in Zuccotti Park in
Manhattan and spreading quickly to St Paul's Cathedral in
London and cities across the Anglo-American world. Largely supported by the
public, they also captured significant media attention. In retrospect, the real
surprise is that all this did not happen sooner. Anger with banks and the mess
they had caused had been boiling for three years. Recall, for example, the
(thwarted) attempt by the US House of Representatives – not normally an
anti-Wall Street body – to impose a 90 per cent tax rate on bonuses by
bailed-out financial companies. That the protests proved shortlived is
explained in part by the relative speed with which the Occupy encampments were
cleared by shamefully thin-skinned authorities. A more profound reason was yet
another surprising fact about the Occupy movement: while it suddenly and
unexpectedly held the establishment’s attention, it chose to be silent.
Mortgage
re-defaults increasing at an 'alarming rate' - (www.consumeraffairs.com) Now there is more distressing news. Even many of those homeowners who
successfully navigated the obstacles to a mortgage modification are in trouble.
At a time when the housing market is generally accepted to be in a robust
recovery, the Special Inspector General for the Troubled Asset Relief Program
(SIGTARP) has issued a warning. “SIGTARP is concerned that the number of
homeowners who have re-defaulted on permanent mortgage modification under
TARP’s signature housing support program, HAMP, is increasing at an alarming
rate,” the Inspector General said in a new report. After four years only
862,279 remain in a HAMP permanent modification. As of March 31, 2013, more
than 312,000 homeowners have re-defaulted on their HAMP permanent modification,
according to the report. While the headlines proclaim a housing recovery, some
homeowners are still jumping through modification hoops. “We had a loan
modification in place with Chase,
then they sold it to Ocwen
and several months later, the amount went up by $400,” Vera, of Chicago, wrote
in a Consumer Affairs post. “We are attempting to be remodified and everything
we send to them is not legible or they never get it. They set up appointments
and when you hang up, they say everything is fine, we got all the info.
Southern
Europe's Recession Threatens to Spread North - (www.cnbc.com) No company
symbolizes German industrial might like Daimler, the giant maker of
Mercedes-Benz autos and trucks. So when the company said this week that it,
too, had finally been caught in the downdraft of the European economic crisis,
it was an ominous sign for all of the Continent, if not the whole world. German
exporters like Daimler have been bastions of stability on a continent burdened
with shaky banks, dysfunctional governments and legions of unemployed youth —
not to mention the worst auto industry slump in two decades. But Daimler's glum forecast for
2013 was the latest evidence that Germany, and other relatively healthy
countries like Austria and Finland, risk falling into the recession that has
long afflicted their southern neighbors. The slowdown in Germany was
foreshadowed by months of declining industrial output, said Carl B. Weinberg,
chief economist of High Frequency Economics in Valhalla, N.Y. "The E.U.
has made Europe a much more cohesive economy, which is good when things are
going up," he said. "But when things are going down the multiplier is
very strong. An outgoing tide lowers all ships."
Italy's Letta government begins life in climate of crisis
- (www.reuters.com) Letta was backed by his own centre-left Democratic Party (PD), Silvio
Berlusconi's centre-right People of Freedom (PDL) party as well as centrists
led by former prime minister Mario Monti. The government will be fully
empowered after a second vote in the Senate on Tuesday. However, the first
opinion poll published since his cabinet was announced, conducted by the EMG
agency, gave Letta an approval rating of just 41 percent, showing that many
Italians are unconvinced by the coalition of former adversaries. Just 13
percent of Italians said they wanted Letta as prime minister, suggesting he may
struggle to obtain the honeymoon period usually enjoyed by new governments.
Monti began his government with approval ratings as high as 70 percent. "We
will die of fiscal consolidation alone, growth policies cannot wait any
longer," Letta said in his speech to the Chamber of Deputies, describing
the country's economic situation as still "serious" after more than a
decade of stagnation.
Reinhart-Rogoff Rebuttal Says UMass Critics Politicized Debt
- (www.bloomberg.com) Harvard University economists Carmen Reinhart and Kenneth Rogoff have defended the
technical aspects of a 2010 paper that’s been cited in the U.S. and Europe to
bolster arguments to drive down budget deficits, saying their critics have
“politicized the issue.” “Our critics seem to suggest that they can ignore
everything else we have done because we are somehow going around placing great
emphasis on one outlier estimate for growth,” Reinhart and Rogoff wrote in
a New York Times Op-Ed piece today. “This
is wrong. We have never used anything but the conservative median estimate in
our public discussions.” The economists acknowledged on April 17 that they had
inadvertently left some data out of their calculations in the study, in
response to a paper released on April 15 by three researchers from the University of Massachusetts at
Amherst. Still, the error didn’t change the basic findings of their research,
they said.
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