Counterparties: Angela’s murky trip to Athens

October 9, 2012

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During Angela Merkel’s six-hour visit to Athens today, her first in three years, she was officially given the “red carpet treatment”, Reuters’ Noah Barkin and Harry Papachristou write. The purpose of her trip was a symbolic show of support for Prime Minister Antonis Samaras and his government’s reforms aimed at turning around the country’s battered economy. Ordinary Greeks seemed intent on producing a different kind of symbolism:

Tens of thousands of demonstrators defied a ban on protests, gathering in Syntagma square to voice their displeasure with the German leader, who many blame for forcing painful cuts on Greece in exchange for two EU-IMF bailout packages worth over 200 billion euros.

Some pelted police with rocks, bottles and sticks, and tried to bust through a barricade set up to protect Merkel and her delegation.

Some 7,000 police were needed to control an estimated 50,000 protesters, some of whom burned Nazi flags or clashed with police. (As usual, the Guardian’s excellent live-blog has full details on the day’s events.) Merkel attempted to convince Greeks that she understood there were “many people suffering in Greece” due to EU-mandated austerity measures, and said she hoped and wished that Greece would stay in the euro zone.

That optimistic message was undercut by a new IMF report that reduced the Fund’s projected 2013 growth rates for advanced economies to 1.5%, from 2%, and highlighted the issues that remain unresolved among euro zone members. The report’s title, “Coping With High Debt and Sluggish Growth,” pretty much says it all. In terms of economic policy, the IMF growth forecast assumes the US will prevent itself from falling off the fiscal cliff, that euro zone crisis measures will be effective, and that long-term solutions to thorny issues like fiscal transfers and a banking union will be achieved.

FT Alphaville’s Kate Mackenzie thinks that with that kind of optimism, the IMF may just be setting itself, and the rest of us, up for “probable disappointment”. — Ben Walsh

On to today’s links:

Goldman: Whatever you do, don’t let the payroll tax cut expire – WaPo
Regardless of who wins the election, you can kiss the payroll tax cut goodbye – Annie Lowrey
America, don’t worry: There is a fiscal cliff, but Jamie Dimon and Lloyd Blankfein are ON IT – Ben White

Mysterious algorithm accounted for 4% of trading activity last week – CNBC

Long Reads
How Bain made millions convincing Russians they should smoke – Huffington Post

Big Ideas
Ireland’s bold, simple plan to fix housing: reduce homeowners’ debt – DealBook

After four years, banks and regulators are still squabbling over annual stress tests – WSJ

New Normal
Total US debt is at a six-year low, and everyone still loves Treasuries – Bloomberg
Investment-grade companies issue record amounts of long-term debt – WSJ

How Washington’s Grand Bargaineers are hurting America – Matt Yglesias
How Congress Turns Deficit Reduction Into a Videogame – Kevin Drum

In defense of idleness (economically) – Stumbling and Mumbling

Data Points
There are some countries where government-produced economic data is suspicious. The US is not one of them – Mark Thoma
Jack Welch quits writing for Fortune and Reuters after jobs conspiracy tweet – Fortune
Why unrevised jobs numbers matter – Ben Walsh

Wall Street bonuses could fall 35% in 2012, after being cut 30% in 2011 – NY Post

UK universities respond to government cuts by entering the bond market – WSJ

Baudrillard, The Matrix and the postmodern economy – FT Alphaville

Secular Declines
Americans making fewer Americans – New Scientist

Help Wanted
The worst writing job ever offers to pay writers between .009 and .02 dollars per word – Gawker

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