National planning Cyprus-style solution for New Zealand

National planning Cyprus-style solution for New Zealand


The National Government are pushing a Cyprus-style solution to bank failure in New Zealand which will see small depositors lose some of their savings to fund big bank bailouts, the Green Party said today.

Open Bank Resolution (OBR) is Finance Minister Bill English’s favoured option dealing with a major bank failure. If a bank fails under OBR, all depositors will have their savings reduced overnight to fund the bank’s bail out.

“Bill English is proposing a Cyprus-style solution for managing bank failure here in New Zealand – a solution that will see small depositors lose some of their savings to fund big bank bailouts,” said Green Party Co-leader Dr Russel Norman.

READ MORE:  http://www.scoop.co.nz/stories/PA1303/S00306/national-planning-cyprus-style-solution-for-new-zealand.htm

The America that works

"THE greatest nation on earth—the greatest nation on earth—cannot keep conducting its business by drifting from one manufactured crisis to the next. We can’t do it,” fulminated Barack Obama last month. The crisis of the moment, the “sequester” (a package of budget cuts designed to be so ghastly that Congress would pass a better version), duly came into effect on March 1st. Unless Congress agrees on an extension to its budget, the government will start to shut down on March 28th. In May the greatest nation will hit its debt ceiling; unless it is raised, Uncle Sam will soon start defaulting on his bills.

This is the America that China’s leaders laugh at, and the rest of the democratic world despairs of. Its debt is rising, its population is ageing in a budget-threatening way, its schools are mediocre by international standards, its infrastructure rickety, its regulations dense, its tax code byzantine, its immigration system hare-brained—and it has fallen from first position in the World Economic Forum’s competitiveness rankings to seventh in just four years. Last year both Mr Obama and his election opponent, Mitt Romney, complained about the American dream slipping away. Today, the country’s main businesses sit on nearly $2 trillion in cash, afraid to invest in part because corporate bosses cannot imagine any of Washington’s feuding partisans fixing anything.

READ MORE:  http://www.economist.com/news/leaders/21573544-luckily-dysfunction-washington-only-one-side-americas-story-america-works

Fed Throws Junk Bond Lifeline to Weak Companies

Struggling companies that otherwise might not be able to stay afloat have found a friend in the Federal Reserve.

The central bank's cheap-money policies have allowed borderline companies to get low-cost financing thanks to investors who are thirsting for yield and buying risky bonds as the Fed keeps its target funds rate near zero.

While that's been a boon for poorly rated firms, it also poses the threat that companies that otherwise might fail are getting artificial support and in danger of causing substantial economic damage once interest rates rise.

READ MORE:  http://www.cnbc.com/id/100558326

China Showing Symptoms of Financial Crisis: Report

Just as concerns over a hard landing in the world's second largest economy look to have faded, economists at Nomura sounded a warning that the Chinese economy is exhibiting the same worrying symptoms that triggered the 2008 financial crisis.

The country's rapid buildup of leverage, decline in potential growth and elevated property prices, are three red flags that should not be downplayed, according to economists at the bank, Zhiwei Zhang and Wendy Chen.

"China faces rising risks of a systemic financial crisis and the government needs to take action quickly to contain such risks. We believe the true extent of financial risks in China is not fully appreciated by investors," Zhang and Chen wrote in a report released over the weekend.

READ MORE:  http://www.cnbc.com/id/100562024

Cyprus deal shock sends shares tumbling, gold up

LONDON (Reuters) - The surprise decision by euro zone leaders to part-fund a bailout of Cyprus by taxing bank deposits sent shockwaves through financial markets on Monday, with shares and the bonds of struggling euro zone governments tumbling.

The bloc struck a deal on Saturday to hand Cyprus rescue loans worth 10 billion euros ($13 billion), but defied warnings - including from the European Central Bank - and imposed a levy that would see those with cash in the island's banks lose between 6.75 and 9.9 percent of their money.

Parliament in Cyprus put off a vote on the measure - which has shaken depositors' confidence in banks across the continent - until Tuesday, however, and with public anger at the deal widespread the government said it was already looking to ease the pain for small savers.

READ MORE:  http://finance.yahoo.com/news/yen-firms-asia-shares-fall-001926588.html

Tax Prof: ObamaCare Tax Increases Are Double Original Estimate

The Joint Committee on Taxation recently released a 96 page report on the tax provisions associated with Affordable Care Act. The report describes the 21 tax increases included in Obamacare, totaling $1.058 trillion – a steep increase from initial assessment, according to the Tax Prof Blog. The summer 2012 estimate is nearly twice the $569 billion estimate produced at the time of the passage of the law in March 2010.

READ MORE:  http://www.economicpolicyjournal.com/2013/03/tax-prof-obamacare-tax-increases-are.html

Boxer-Sanders Carbon “Fee” Relies on Huge Bait-and-Switch

A recent story in EnergyGuardian (sub. req’d) centered on Senator Sheldon Whitehouse’s (D-R.I.) support for the carbon “fee” bill introduced by his colleagues Sen. Barbara Boxer and Sen. Bernie Sanders.

Fortunately, the newly-released NERA study gives us a quantitative estimate of how much their scheme would hurt the U.S. economy. The whole episode fulfills the warnings that many of us have been making during the carbon tax debate. Specifically, advocates of a carbon tax rely on a bait-and-switch, where they make wild promises about the alleged environmental benefits of a relatively modest tax rate. As the NERA study shows, however, if the tax rate is modest, the environmental impact is negligible, but if the rate is high enough to really reduce U.S. carbon dioxide emissions, the economic impacts are absolutely devastating.

READ MORE:  http://www.instituteforenergyresearch.org/2013/02/28/boxer-sanders-carbon-fee-relies-on-huge-bait-and-switch/