GREECE / ARGENTINA: Lessons About Default...From Buenos Aires Dark Past; Paul Krugman Disagrees With Article.

NYTIMES / C. Newberry, A. Barrionuevo

NYT: "A decade ago, as Argentina slid toward financial collapse, banks barricaded themselves behind sheet metal to keep out protesters demanding access to their life savings.

"...but the debilitating effects of Argentina’s 2001 default and currency devaluation still linger. And now, as Greece edges toward a possible default, the Argentine lessons could be instructive.

For one thing, a decade later, Argentina has still not been able to re-enter the global credit market.

“A ($100bn) default is not free,” said Jaime Abut, a business consultant. “You have to pay the consequences, and for a long time. Argentina is no longer considered a serious country.”

SEE ALSO: NYT columnist and economist Paul Krugman disputes his own newspaper's analysis.
He says he can't “... see how Argentina’s default, of all examples, can be viewed as a cautionary tale for Greece”.
http://en.mercopress.com/2011/06/24/krugman-when-argentina-tried-to-act-as-a-serious-country-it-was-a-disaster?utm_source=feed&utm_medium=rss&utm_content=main&utm_campaign=rss

EUROZONE: Tensions Remain; Merkel Still Resists Increasing Bailout Fund.

GUARDIAN/ Ian Traynor / 
OPINION/ ANALYSIS/

   Allegedly, Portugal's PM José Sócrates (pictured) begged Angela Merkel for bailout aid last week.
TRAYNOR:  "He asked Merkel what he should do, promised to do anything she wanted, with one big exception. He would not ask for money – for a eurozone bailout with extremely tight strings attached.
Merkel asked Strauss-Kahn about Sócrates' dilemma. The German-speaking IMF chief was dismissive. The Portuguese plea was pointless, he said, because Sócrates would not follow any advice he was given. The exchange, which occurred last week in Berlin, highlights what a senior German official describes as "Europe's big communication problem'."

ALSO:  Nobel Prize winning economist Paul Krugman outlines 4 options for the euro's "woes" in a long Sunday mag cover story entitled "Can Europe Be Saved? He calls the current euro situation "...a tragedy not only for Europe but also for the world, for which Europe is a crucial role model."
http://www.nytimes.com/2011/01/16/magazine/16Europe-t.html?_r=1&ref=todayspaper&pagewanted=all

TEXAS, USA: Gov. Perry's Smokey Mirrors Hid Massive $25 Billion Deficit.

NYTIMES/ PAUL KRUGMAN OPINION/

    Texas may have a huge deficit in the next 2 years of, gulp!, ...$25 BILLION.
    But its easily duped citizens recently re-elected the teflon, good hair, wannabe Tea Partier Governor Rick Perry. Perry has also wants the U.S. to invade Mexico to eliminate the narco terrorists.
    NYT: "Wasn’t Texas supposed to be thriving even as the rest of America suffered? Didn’t its governor declare, during his re-election campaign, that “we have billions in surplus”? Yes, it was, and yes, he did. But reality has now intruded, in the form of a deficit expected to run as high as $25 billion over the next two years."
AND :"...just the other day Texas was being touted as a role model (and still is by commentators who haven’t been keeping up with the news). It was the state the recession supposedly passed by, thanks to its low taxes and business-friendly policies. Its governor boasted that its budget was in good shape thanks to his “tough conservative decisions.”

SPAIN: Prisoner Of the Euro; 4 Endgame Scenarios; Roubini Calls It The "Big Elephant" In The Room.

NYTIMES/ OPINION/ ECONOMIST PAUL KRUGMAN:
    "The best thing about the Irish right now is that there are so few of them. By itself, Ireland can’t do all that much damage to Europe’s prospects. The same can be said of Greece and of Portugal, which is widely regarded as the next potential domino.
    But then there’s Spain. The others are tapas; Spain is the main course."
AND:   "Spain would be better off now if it had never adopted the euro — but trying to leave would create a huge banking crisis, as depositors raced to move their money elsewhere. Unless there’s a catastrophic bank crisis anyway — which seems plausible for Greece and increasingly possible in Ireland, but unlikely though not impossible for Spain — it’s hard to see any Spanish government taking the risk of “de-euroizing.”

ALSO ON TOPIC : Economists Speculate on a Euro endgame; 4 scenarios.
By Peter Boone and Simon Johnson.
 http://baselinescenario.com/2010/11/28/the-eurozone-endgame-four-scenarios/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+BaselineScenario+%28The+Baseline+Scenario%29

AND:  Economist Nouriel Roubini is calling Spain the “big elephant” in the debt crisis because there may not be enough money to bail it out. “In Spain, in my view, the eventual fiscal costs of cleaning up the financial system are going to be much larger than have been so far estimated by the government,” Roubini said. “As we saw, the stress tests were not stressful enough, if not a total fudge.”
SEE:  http://www.bloomberg.com/news/2010-11-29/roubini-says-portugal-quite-likely-to-need-funding-update1-.html

MACROECONOMICS: Is A Third Depression Coming?

NYTIMES/ OPINION-- PAUL KRUGMAN/
     "Recessions are common; depressions are rare. As far as I can tell, there were only two eras in economic history that were widely described as “depressions” at the time: the years of deflation and instability that followed the Panic of 1873 and the years of mass unemployment that followed the financial crisis of 1929-31.
Neither the Long Depression of the 19th century nor the Great Depression of the 20th was an era of nonstop decline — on the contrary, both included periods when the economy grew. But these episodes of improvement were never enough to undo the damage from the initial slump, and were followed by relapses.
   We are now, I fear, in the early stages of a third depression. It will probably look more like the Long Depression than the much more severe Great Depression. But the cost — to the world economy and, above all, to the millions of lives blighted by the absence of jobs — will nonetheless be immense."

EUROZONE: In Germany, Is It Deja Vu 1937?

NYTIMES/OPINION/ PAUL KRUGMAN column/ On the new austery:
 "...here in Germany, a few scholars see parallels to the policies of Heinrich Brüning, the chancellor from 1930 to 1932, whose devotion to financial orthodoxy ended up sealing the doom of the Weimar Republic.
What’s the economic logic behind the government’s moves? The answer, as far as I can tell, is that there isn’t any. Press German officials to explain why they need to impose austerity on a depressed economy, and you get rationales that don’t add up. Point this out, and they come up with different rationales, which also don’t add up. Arguing with German deficit hawks feels more than a bit like arguing with U.S. Iraq hawks back in 2002: They know what they want to do, and every time you refute one argument, they just come up with another."  (Foto of Heinrich Bruning)

THE EU: Decline Of The PIIGS And Euro Fears.

NYTIMES/ Paul Krugman blog/
Europe is roiled by sovereign debt fears due to a crisis among the PIIGS (Portugal, Ireland, Italy, Greece, Spain). Krugman explains using Spain's debt problems.

U.S. POLITICS: Health Care Reform, Obama And Disillusionment.

NYTIMES/ Paul Krugman blog/
"But what’s happening, I think, goes beyond health care; what we’re seeing is disillusionment with Obama among some of the people who were his most enthusiastic supporters. A lot of people seem shocked to find that he’s not the transformative figure of their imaginations. Can I say I told you so?"

BRASIL: Economist KrugmanTurns Bearish On Bubble.

BLOOMBERG/
Nobel Prize economist Paul Krugman told the press in Sao Paulo that “I am seeking to get out (of his Brasilian investments) because of what’s happening. Not that I see a crisis, but people seem to be loving it too much.” Brazil’s economy is “doing well,” Krugman said. “It’s not the same as to say it will become the economic superpower next year. Markets are reacting as if it will.”

U.S. ECONOMY:Nobel Economist Paul Krugman Predicts A "Grim Future."

NYTIMES/Blog/
"...I have a vision — what I think is the most likely course of events. It’s fairly grim — but not in the approved way."
"So what I see is years of terrible job markets, combined with political paralysis."

ECONOMICS: Deficit Fear Mongering In U.S. Resembles Iraq War Runup.

NYTIMES/Paul Krugman blog/
"There’s something disturbingly familiar about the current deficit hysteria. There’s the way that fear, and a demand for action against a supposed threat, has spread despite the lack of any solid evidence to support it. There’s the way that many news stories seem to present only one side of the argument, and suppress or neglect contrary evidence (e.g., writing articles about how nervous investors are turning on Japan while never mentioning that the current interest rate on Japanese long-term debt is, um, 1.3 percent)."

CURRENCIES: Needless Panic Over Falling $USD.

NYTIMES/ Paul Krugman Blog with Chart/
The financial press reports that the dollar is always falling, even though it isn’t. "Hype about a falling dollar also feeds the story line that we mustn’t do anything to upset the Chinese, because terrible things would follow if they sold some of their dollar reserves."

Examining China's Dangerous Currency Policy.

NYTIMES/Economist Paul Krugman/
China’s currency policy is posing a growing threat to the rest of the world economy. What will the world and the United States do about it?

On US Republicans And The Politics Of Spite.

NYTIMES/PAUL KRUGMAN COLUMNIST/
"... the guiding principle of one of our nation’s two great political parties is spite pure and simple. If Republicans think something might be good for the president, they’re against it — whether or not it’s good for America."

Nobel Economist Krugman Wars With Neocon Historian Ferguson.

THE SUNDAY TIMES, UK.

There's a nasty row building between two commentators on global finance and economics, Nobel Prize winning professor Paul Krugman of Princeton and Harvard historian Niall Ferguson.

"It started as an argument about bond prices. But last week it blew up into a row about racism, printing money, spending our way out of recession, and the fate of the global economy..."

One pro-Krugman blogger wrote this about Ferguson:"Ferguson is truly pathetic.
There are few historians who are as hungry for attention as he. BTW, he’s the model for the character “Irwin” in Alan Bennett's “History Boys.” Check out the DVD and you’ll understand his neediness. His books aren’t that great either. Lot’s of recycled material from real historians of WWI."

Reaganism: The Zombie Doctrine That Stills Lives.

NYTIMES. Paul Krugman Column.

"Call me naïve, but I actually hoped that the failure of Reaganism in practice would kill it. It turns out, however, to be a zombie doctrine: even though it should be dead, it keeps on coming."

Oil, Gas Speculators May Face More Scrutiny/Restrictions.

The Commodity Futures Trading Commission will hold hearings this month.


Economist Paul Krugman speculates on oil speculation;

http://krugman.blogs.nytimes.com/2009/07/08/oil-speculation/

Economist Paul Krugman says "Stay the Course"

Nobel prize winning economist Paul Krugman writes that Obama must ignore those who question his current economic policies.

http://www.nytimes.com/2009/06/15/opinion/15krugman.html?ref=todayspaper