KeNo's Housing and Economic Portal: Thursday June 9 Housing and Economic stories

Wednesday, June 8, 2011

Thursday June 9 Housing and Economic stories

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TOP STORIES:

How Long Before Greek People Demand Default? - (www.cnbc.com) The Greek government is unsurprisingly unable to find consensus on new, even stronger austerity measures aimed meeting the terms of its bailout by the European Union and the International Monetary Fund. Anger is growing in Athens as the economic situation worsens and the government is pushed into privatizing state-owned assets if it wants to get access to its next tranche of aid. Divisions among policy makers in Europe over what to do next indicate inertia can be expected until the market forces the next leg of the crisis but some analysts say the Greek people are beginning to question the direction of policy. “The rescue package has never been right in the first place,” said Karsten Schroeder, the CEO of Amplitude Capital told CNBC. “In all honesty, the EU-IMF package was a rescue package for banks exposed to their debt and not Greece itself. It was wrong in the first place,” Schroeder added.

Smucker hikes Folgers coffee 11 pct in fourth rise - (www.reuters.com) Top U.S. packaged coffee maker J M Smucker Co (SJM.N) raised prices for key brands including flagship Folgers by an average of 11 percent on Tuesday, its fourth and biggest hike in a year. The increase comes even after benchmark coffee futures slipped back from a 34-year high, as roasters are still absorbing the steep costs of beans bought during the long rally. Smucker has raised prices by a total 38 percent since last May, while arabica futures in New York have doubled.

Moody's warns UK banks of potential downgrades - (finance.yahoo.com) Ratings agency Moody's Investors Service has put 14 British banks on review for potential credit rating downgrades, citing the lack of any state-sponsored bailouts in the future. The list of banks on the watch-list released by Moody's on Tuesday includes the Royal Bank of Scotland and Lloyds Banking Group, both of which were bailed out by the government at the height of the global credit squeeze in 2008 and retain significant state ownership. Moody's said the 14 lenders have levels of government support in their existing ratings that may be "too high for the evolving post-crisis environment."

Options Narrowing for Greece - (www.reuters.com) Europe's policy options to avert a Greek default are narrowing fast after the ECB and ratings agencies warned against even voluntary debt rescheduling and Athens highlighted its urgent need for more EU cash. Moody's became the latest agency on Tuesday to warn of a chain reaction of severe consequences for the 17-nation euro area if Greece were allowed to default next month, when it faces a 13.4 billion euro ($18.9 billion) funding crunch. Greece kick-started a stalled privatization program on Monday and promised tougher austerity measures and tax hikes to meet EU/IMF conditions for the release of a 12 billion euro loan tranche in June, vital to keep Athens afloat.

The world's most reckless central bankers - (fortune.cnn.com) Should the guys at the European Central Bank have to sit through a screening of "Too Big to Fail"? It might remind them that a lesson of 2008 meltdown is that you can't extend and pretend your way out of the abyss, even if you're brandishing a bazooka. If Europe's central bankers accept this fact, they aren't showing it. Take the ECB's decision this month to oppose a restructuring of Greek debt. By now everyone who isn't employed in a policymaking role acknowledges that Greece's finances are unsustainable and getting worse. Even some politicians are coming around. As Ireland's post-bailout death spiral makes clear, austerity alone simply is not going to do the trick. Balancing a budget that is as out of whack as Greece's "has been known to cause riots if done in a single year," warns Paolo Manasse, an economics professor at the University of Bologna.