KeNo's Housing and Economic Portal: Wednesday November 30 Housing and Economic stories

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TOP STORIES:

Spain’s short-term borrowing costs surge - (www.ft.com) Spain is paying more to borrow for a year than it was paying to borrow for 10 years last month in a sign that Madrid risks being dragged back into the centre of Europe’s debt crisis. In an auction of €3.16bn of short term treasury bills Spain was forced to pay an average of 5.022 per cent to borrow for a year – a level higher than its 10 year bond was yielding in October. For much of the last two years concerns over Spain’s budget deficit caused investors to focus on the possibility of the eurozone’s fourth-largest economy becoming the next domino to fall after Greece, Portugal and Ireland. Spain, however, in recent months has been overshadowed by worries about the political instability and sheer indebtedness of Italy, whose borrowing costs over the summer overtook Spain’s for the first time since the start of the eurozone crisis.

Congress corrupted by moneyed interests to the point of instability - (www.bostonreview.net) In the first quarter of this year, what was the number one issue that Congress addressed? In the middle of two wars, a huge unemployment problem, huge budget deficit problem, still issues about health care, still no addressing global warming—what’s the number one issue they addressed? The banks’ swipe-fee controversy. Why do you address the banks’ swipe-fee controversy? There is not one congressman who decided to run for Congress because he thought, “I’m going to deal with the problem of the banks’ swipe fees.” It’s only because if you can dance as a congressman with a little bit of uncertainty of which side you’re going to come down on in this controversy, millions of dollars gets showered down upon you because there’s $19 billion on the table depending on how this issue is resolved. So there Congress is driving the agenda in part because of the fundraising opportunities the agenda produces. If they didn’t have a fundraising opportunity from the agenda like that, they would maybe drive their agenda differently.

Italy's Monti centre stage, France "alarm bells" - (www.reuters.com) France came under heavy fire on global markets on Tuesday reflecting fears that the euro zone's second biggest economy is being sucked into a spiraling debt crisis after a warning that Paris's failure to adapt should be "ringing alarm bells". Nervous markets also showed concern about whether Italy's Mario Monti and new Greek leader Lucas Papademos, unelected European technocrats without a domestic political base, can impose tough austerity measures and economic reform. European Central Bank President Mario Draghi has predicted the 17-nation currency bloc will be in a mild recession by the end of the year, a view underlined by data showing the economy barely grew in the third quarter and faces a sharp downturn.

IMF warns on Chinese financial system - (www.ft.com) The Chinese financial system faces “a steady build-up in vulnerabilities” that require the government to relax its grip on banks, the exchange rate and interest rates, the International Monetary Fund said in its inaugural evaluation of China’s financial sector. The IMF applauded the progress that China has made in giving freer rein to market forces and strengthening regulation but warned of a series of short-term risks facing the world’s second-biggest economy, from defaults on infrastructure projects to the rise of shadow banking. “While the existing structure fosters high savings and high levels of liquidity, it also creates the risk of capital misallocation and the formation of bubbles, especially in real estate,” said Jonathan Fiechter, head of the IMF team that conducted the analysis.

There's Something Fishy About The White House's $433 Million Investment In A Smallpox Vaccine - (www.businessinsider.com) Several critics believe that the Obama administration’s $433 million investment in the new ST-246 smallpox vaccine reeks of scandal. How could a multimillion dollar investment in an antiviral pill that could cure smallpox be scandalous? Part of the reason lies in the word “could.” The drug has never been tested on humans. See, smallpox was all but eliminated in 1978 and the U.S. already has vast stockpiles of the original vaccine. Why would the current administration push so vigorously to invest millions of dollars in what could rightly be described as an unnecessary (and untested) drug? As the saying goes, “follow the money.” The company that scored the federal contract is called Siga Technologies and they won it through a “sole-source” procurement; they are the only company that will be doing business with the Feds. And here’s the best part: the controlling shareholder of Siga Technologies is billionaire Ronald O. Perelman, one of the world’s richest men and a longtime Democratic Party donor, reports the Los Angeles Times. Moreover, back in June 2010, Siga named Andrew Sterns (former head of the SEIU) to its board. That certainly raises some eyebrows. Surprisingly enough, the deal gets even more suspicious.