To view popup window put your cursor on the blue words

Perplexity

“…upon the earth distress•Strongs 4928: sunoche, soon-okh-ay´; from 4912; restraint, i.e. (figuratively) anxiety: — anguish, distress. of nations, with perplexity•Strongs 640: aporia, ap-or-ee´-a; from the same as 639; a (state of) quandary:—perplexity.
•Strongs 639: aporeo, ap-or-eh´-o; from a compound of 1 (as a negative particle) and the base of 4198; to have no way out, i.e. be at a loss (mentally):— (stand in) doubt, be perplexed….”
—Luke 21:25

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Root of All Evil

“For the love of money is the root •Strongs 4491: rhiza, hrid´-zah; apparently a primary word; a “root” (literally or figuratively):—root of all.of all evil •Strongs 2556: kakos, kak-os´; apparently a primary word; worthless (intrinsically, such; whereas 4190 properly refers to effects), i.e. (subjectively) depraved, or (objectively) injurious:—bad, evil, harm, ill, noisome, wicked. …..”
—1 Timothy 6:10a

“For where your treasure is, there will your heart be also.”
—Matthew 6:21

IMF chief Christine Lagarde warned Tuesday that the world economy is at a “very dangerous juncture,” speaking of the potential impact on poorer nations during her first visit to Africa as head of the fund.

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Perplexity

“…upon the earth distress•Strongs 4928: sunoche, soon-okh-ay´; from 4912; restraint, i.e. (figuratively) anxiety: — anguish, distress. of nations, with perplexity•Strongs 640: aporia, ap-or-ee´-a; from the same as 639; a (state of) quandary:—perplexity.
•Strongs 639: aporeo, ap-or-eh´-o; from a compound of 1 (as a negative particle) and the base of 4198; to have no way out, i.e. be at a loss (mentally):— (stand in) doubt, be perplexed….”
—Luke 21:25

“For the love of money is the root •Strongs 4491: rhiza, hrid´-zah; apparently a primary word; a “root” (literally or figuratively):—root of all.of all evil •Strongs 2556: kakos, kak-os´; apparently a primary word; worthless (intrinsically, such; whereas 4190 properly refers to effects), i.e. (subjectively) depraved, or (objectively) injurious:—bad, evil, harm, ill, noisome, wicked. …..”
—1 Timothy 6:10a

The International Monetary Fund managing director spoke of a crisis of confidence with high unemployment and slowing global growth.

“Currently the world economy stands at a very dangerous juncture,” Lagarde told a roundtable on Africa’s economic future in the Nigerian city of Lagos.

She said the IMF’s revised global growth forecast expected in January looked to be lower than the previous one in September, which was four percent, already down from June’s outlook.

“And what’s more, there are downside risks on the horizon that are really threatening the recovery process that had started” after the 2008-09 global financial crisis, she said.

The IMF has said Europe’s worsening economy and financial market turmoil meant it will revise downwards its predictions for global growth contained in its World Economic Outlook report published three months ago.

Early this month, the UN cut its 2012 world growth forecast to 2.6 percent from 3.6 percent, warning that the global economy is “teetering on the brink of a major downturn”.

Lagarde said on Monday during meetings with Nigerian officials that the European debt crisis posed a risk for “all economies of the world”.

The eurozone debt crisis eased slightly Tuesday with an agreement on extra funds for the IMF, strong data from Germany and a good bond sale in Spain which boosted stocks and the euro.

The IMF also said Tuesday that bailed-out Ireland was on track to complete its budget turnaround after the fund completed a fourth review.

But the broader deal on funds for the IMF — aimed at allowing the crisis lender to come to the aid of European nations caught up in the debt crisis — fell short of targets, with Britain again out of line with its EU neighbours.

Lagarde did not comment directly on the new pledges of funds from European nations for the IMF, nor did she respond to a question on Britain’s stance on the issue.

She said during the roundtable in Lagos that European leaders “have made some very strong decisions” but added later that “it’s going to boil down to implementation”.

Lagarde spoke of the impact on trade and finance, among other areas, that could cause trouble across the globe, and called on wealthy nations to enact policies that would send clear positive signals to investors and consumers.

“Those problems seem a world away but they are not a world away because what we see very clearly is channels of contagion between those advanced economies and the rest of the world,” she told the audience in Nigeria.

She earlier held talks with Nigerian President Goodluck Jonathan after meeting Finance Minister Ngozi Okonjo-Iweala, a respected former World Bank managing director who also participated in Tuesday’s roundtable.

Nigeria has long been held back by corruption and mismanagement despite its vast oil wealth.

Most of its population lives on less than $2 per day and electricity blackouts occur daily, while the country’s mainly Muslim north has been hit by scores of deadly attacks attributed to Islamist group Boko Haram.

The government is seeking to enact reforms, including a deeply controversial measure which would lead to an increase in petrol prices, to allow the country to invest more in its badly neglected infrastructure.

Lagarde later left Nigeria, Africa’s most populous nation and largest oil producer, and travelled to neighbouring Niger, one of the world’s poorest countries and heavily dependent on trade with Europe, particularly France.

On Wednesday she was due to meet President Mahamadou Issoufou at 1100 GMT and deliver a speech on economic challenges amid the global uncertainty at 1500 GMT before the National Assembly.

Lagarde is also expected to visit South Africa, the economic powerhouse of sub-Saharan Africa, in the coming weeks.

Nearly half, 48.5%, of the population lived in a household that received some type of government benefit in the first quarter of 2010, according to Census data. Those numbers have risen since the middle of the recession when 44.4% lived households receiving benefits in the third quarter of 2008.

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Perplexity

“…upon the earth distress•Strongs 4928: sunoche, soon-okh-ay´; from 4912; restraint, i.e. (figuratively) anxiety: — anguish, distress. of nations, with perplexity•Strongs 640: aporia, ap-or-ee´-a; from the same as 639; a (state of) quandary:—perplexity.
•Strongs 639: aporeo, ap-or-eh´-o; from a compound of 1 (as a negative particle) and the base of 4198; to have no way out, i.e. be at a loss (mentally):— (stand in) doubt, be perplexed….”
—Luke 21:25

Root of All Evil

“For the love of money is the root •Strongs 4491: rhiza, hrid´-zah; apparently a primary word; a “root” (literally or figuratively):—root of all.of all evil •Strongs 2556: kakos, kak-os´; apparently a primary word; worthless (intrinsically, such; whereas 4190 properly refers to effects), i.e. (subjectively) depraved, or (objectively) injurious:—bad, evil, harm, ill, noisome, wicked. …..”
—1 Timothy 6:10a

“For where your treasure is, there will your heart be also.”
—Matthew 6:21

Families were more dependent on government programs than ever last year.

Nearly half, 48.5%, of the population lived in a household that received some type of government benefit in the first quarter of 2010, according to Census data. Those numbers have risen since the middle of the recession when 44.4% lived households receiving benefits in the third quarter of 2008.

The share of people relying on government benefits has reached a historic high, in large part from the deep recession and meager recovery, but also because of the expansion of government programs over the years. (See a timeline on the history of government benefits programs here.)

Means-tested programs, designed to help the needy, accounted for the largest share of recipients last year. Some 34.2% of Americans lived in a household that received benefits such as food stamps, subsidized housing, cash welfare or Medicaid (the federal-state health care program for the poor).

Another 14.5% lived in homes where someone was on Medicare (the health care program for the elderly). Nearly 16% lived in households receiving Social Security.

High unemployment and increased reliance on government programs has also shrunk the nation’s share of taxpayers. Some 46.4% of households will pay no federal income tax this year, according to the nonpartisan Tax Policy Center. That’s up from 39.9% in 2007, the year the recession began.

Most of those households will still be hit by payroll taxes. Just 18.1% of households pay neither payroll nor federal income taxes and they are predominantly the nation’s elderly and poorest families.

The tandem rise in government-benefits recipients and fall in taxpayers has been cause for alarm among some policymakers and presidential hopefuls.

Benefits programs have come under closer scrutiny as policymakers attempt to tame the federal government’s budget deficit. President Barack Obama and members of Congress considered changes to Social Security and Medicare as part of a grand bargain (that ultimately fell apart) to raise the debt ceiling earlier this year. Cuts to such programs could emerge again from the so-called “super committee,” tasked with releasing a plan to rein in the deficit.

Republican presidential hopefuls, meanwhile, have latched onto the fact that nearly half of households pay no federal income tax, saying too many Americans aren’t paying their fair share.

UPDATE: Nearly half of the population lives in a household that has at least one member who receives some kind of government benefit. An earlier headline incorrectly suggested that half of American households receive some government benefit. Due to differences in household size that isn’t the case.

German Chancellor Angela Merkel and British Prime Minister David Cameron strained Friday to stress their unity on tackling Europe’s spiralling debt crisis but differed sharply on key points.

To view popup window put your cursor on the blue words

Perplexity

“…upon the earth distress•Strongs 4928: sunoche, soon-okh-ay´; from 4912; restraint, i.e. (figuratively) anxiety: — anguish, distress. of nations, with perplexity•Strongs 640: aporia, ap-or-ee´-a; from the same as 639; a (state of) quandary:—perplexity.
•Strongs 639: aporeo, ap-or-eh´-o; from a compound of 1 (as a negative particle) and the base of 4198; to have no way out, i.e. be at a loss (mentally):— (stand in) doubt, be perplexed….”
—Luke 21:25

Root of All Evil

“For the love of money is the root •Strongs 4491: rhiza, hrid´-zah; apparently a primary word; a “root” (literally or figuratively):—root of all.of all evil•Strongs 2556: kakos, kak-os´; apparently a primary word; worthless (intrinsically, such; whereas 4190 properly refers to effects), i.e. (subjectively) depraved, or (objectively) injurious:—bad, evil, harm, ill, noisome, wicked. which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows•Strongs 3601: odune, od-oo´-nay; from 1416; grief (as dejecting): — sorrow..”
—1 Timothy 6:10

After tensions flared in the run up to their talks in Berlin, the two conservative leaders put a brave face on their differences but failed to make headway on crucial issues such as the role of the European Central Bank (ECB).

Cameron renewed his appeal for all eurozone institutions to do their utmost to rescue the common currency, in response to a question about his call for the ECB to be used as a “big bazooka” for the euro.

“As we agreed at the G20, all the institutions of the eurozone have to stand behind and back the currency and do what’s necessary to defend it — that is what needs to happen,” Cameron told a joint press conference.

But Merkel underlined her opposition to the ECB buying up bonds on a major scale and becoming the lender of last resort to debt-mired countries.

“You have to be careful not to pretend to have powers that you do not,” she said, following remarks she made this week that the ECB would not have the right to take such action under existing rules.

“The markets will catch on quickly that that will not work.”

New ECB chief Mario Draghi Friday also brushed off the political pressure, saying the bank’s overriding task was to safeguard price stability and that governments must put their finances in order to buck the crisis.

Cameron and Merkel also differed on a financial transaction tax (FTT), which he reiterated Britain could only accept if it were introduced on a global scale.

Britain fears such a tax for the EU would drive banks out of the City of London, Europe’s top financial centre and a major revenue contributor.

Merkel has said she would be willing to press forward on the tax in the 17-member eurozone alone if the 27 EU members could not agree on it. Britain belongs to the EU but not the eurozone.

“Both our countries would introduce (the FTT) immediately on a global level but we did not make any progress on the European level,” she said.

Cameron nevertheless stressed his confidence in the eurozone’s ability to find its way out of its debt crisis and said Britain had a key stake in the euro’s success.

“This is obviously a difficult time — you can see that in the markets — but I don’t underestimate for a minute the commitment of countries like Germany and those in the eurozone to make the currency work,” he said.

“And that is what is in Britain’s interest and that is what we would like to see happen.”

He added: “It is obvious that we don’t agree on every aspect of European policy, but I am clear that we can address and accommodate and deal with those differences.”

Merkel also turned on the charm after a trying week, saying that she was confident they would strike a compromise.

“Whenever David and I work together on a problem, we have always found a solution,” she said.

Cameron, arriving after talks with EU leaders in Brussels, and Merkel have clashed recently on the way forward for Europe as it suffers what she has called perhaps its most difficult hour since World War II.

While Merkel sees “more Europe” as the solution, with member states agreeing to cede more sovereignty on issues such as fiscal policy, Cameron has taken a hard eurosceptic line of late in response to domestic pressure.

Merkel stressed at the press conference that she was seeking “limited treaty change” only for eurozone members to impose more fiscal discipline as a means of winning back investors’ confidence “step by step”.

The opposing views could put the two camps on a collision course ahead of a December 9 EU summit which may step up the role of Brussels in enforcing economic discipline among eurozone nations.

The proposals could trigger the need to tweak the EU’s rule-book, the Lisbon Treaty, and a commission official confirmed that treaty change was on the menu at talks Cameron held earlier Friday with commission chief Jose Manuel Barroso.

On that issue, Cameron’s message “was let’s solve the crisis first,” an EU diplomat said.

“There is definitely going to be another financial crisis around the corner,” says hedge fund legend Mark Mobius, “because we haven’t solved any of the things that caused the previous crisis.”

To view popup window put your cursor on the blue words

Perplexity

“…upon the earth distress•Strongs 4928: sunoche, soon-okh-ay´; from 4912; restraint, i.e. (figuratively) anxiety: — anguish, distress. of nations, with perplexity•Strongs 640: aporia, ap-or-ee´-a; from the same as 639; a (state of) quandary:—perplexity.
•Strongs 639: aporeo, ap-or-eh´-o; from a compound of 1 (as a negative particle) and the base of 4198; to have no way out, i.e. be at a loss (mentally):— (stand in) doubt, be perplexed….”
—Luke 21:25

Root of All Evil

“For the love of money is the root •Strongs 4491: rhiza, hrid´-zah; apparently a primary word; a “root” (literally or figuratively):—root of all.of all evil •Strongs 2556: kakos, kak-os´; apparently a primary word; worthless (intrinsically, such; whereas 4190 properly refers to effects), i.e. (subjectively) depraved, or (objectively) injurious:—bad, evil, harm, ill, noisome, wicked. …..”
—1 Timothy 6:10a

We’re raising our alert status for the next financial crisis. We already raised it last week after spreads on U.S. credit default swaps started blowing out. We raised it again after seeing the remarks of Mr. Mobius, chief of the $50 billion emerging markets desk at Templeton Asset Management.
Speaking in Tokyo, he pointed to derivatives, the financial hairball of futures, options, and swaps in which nearly all the world’s major banks are tangled up.
Estimates on the amount of derivatives out there worldwide vary. An oft-heard estimate is $600 trillion. That squares with Mobius’ guess of 10 times the world’s annual GDP. “Are the derivatives regulated?” asks Mobius. “No. Are you still getting growth in derivatives? Yes.”
In other words, something along the lines of securitized mortgages is lurking out there, ready to trigger another crisis as in 2007-08.
What could it be? We’ll offer up a good guess, one the market is discounting.
Seldom does a stock index rise so much, for so little reason, as the Dow did on the open Tuesday morning: 115 Dow points on a rumor that Greece is going to get a second bailout.
Let’s step back for a moment: The Greek crisis is first and foremost about the German and French banks that were foolish enough to lend money to Greece in the first place. What sort of derivative contracts tied to Greek debt are they sitting on? What worldwide mayhem would ensue if Greece didn’t pay back 100 centimes on the euro?
That’s a rhetorical question, since the balance sheets of European banks are even more opaque than American ones. Whatever the actual answer, it’s scary enough that the European Central Bank has refused to entertain any talk about the holders of Greek sovereign debt taking a haircut, even in the form of Greece stretching out its payments.
That was the preferred solution among German leaders. But it seems the ECB is about to get its way. Greece will likely get another bailout — 30 billion euros on top of the 110 billion euro bailout it got a year ago.
It will accomplish nothing. Going deeper into hock is never a good way to get out of debt. And at some point, this exercise in kicking the can has to stop. When it does, you get your next financial crisis.
And what of the derivatives sitting on the balance sheet of the Federal Reserve? Here’s another factor behind our heightened state of alert.
“Through quantitative easing efforts alone,” says Euro Pacific Capital’s Michael Pento, “Ben Bernanke has added $1.8 trillion of longer-term GSE debt and mortgage-backed securities (MBS).”
Think about that for a moment. The Fed’s entire balance sheet totaled around $800 billion before the 2008 crash, nearly all of it Treasuries. Now the Fed holds more than double that amount in mortgage derivatives alone, junk that the banks needed to clear off their own balance sheets.
“As the size of the Fed’s balance sheet ballooned,” continues Mr. Pento, “the dollar amount of capital held at the Fed has remained fairly constant. Today, the Fed has $52.5 billion of capital backing a $2.7 trillion balance sheet.
“Prior to the bursting of the credit bubble, the public was shocked to learn that our biggest investment banks were levered 30-to-1. When asset values fell, those banks were quickly wiped out. But now the Fed is holding many of the same types of assets and is levered 51-to-1! If the value of their portfolio were to fall by just 2%, the Fed itself would be wiped out.”
Mr. Pento’s and Mr. Mobius’ views line up with our own, which we laid out during interviews on our trip to China this month.
An Eye on the Next Financial Crisis by Addison Wiggin originally appeared in the Daily Reckoning.

For Anthony Hardwick, Thanksgiving has special meaning. Last year, he proposed to his girlfriend, Denise, in front of her whole family during the holiday.

To view popup window put your cursor on the blue words

Root of All Evil

“For the love of money is the root •Strongs 4491: rhiza, hrid´-zah; apparently a primary word; a “root” (literally or figuratively):—root of all.of all evil •Strongs 2556: kakos, kak-os´; apparently a primary word; worthless (intrinsically, such; whereas 4190 properly refers to effects), i.e. (subjectively) depraved, or (objectively) injurious:—bad, evil, harm, ill, noisome, wicked. …..”
—1 Timothy 6:10a

“For where your treasure is, there will your heart be also.”
—Matthew 6:21

This year though, he will be working. A part-time employee at Target in Omaha, Neb., Hardwick said his manager requested he start his shift at 11 p.m. In order to make it through the night, he’ll need to sleep on Thanksgiving Day.
“My fiancee is sad because I was supposed to have Thanksgiving dinner with her family, and talk about wedding plans,” he said. “It’s kind of a raw deal,” he said.
Hardwick started an online petition entitled “Tell Target to Save Thanksgiving,” in the hope that the retailer would push the store opening back to Friday to allow workers to spend more time with family. Working with online advocacy site Change.org, he has collected more than 80,000 signatures as of Tuesday.
Target spokeswoman Molly Snyder said Hardwick is not currently scheduled to work on Thanksgiving or Black Friday.
This year marks Target’s earliest opening ever. Target, Best Buy, Macy’s and Kohl’s are all opening at midnight on Thanksgiving eve. Wal-Mart recently announced plans to open its doors to the public at 10 p.m. then Toys R Us followed suit, announcing it would open most stores as early as 9 p.m. the day before Black Friday.
“We have heard from our guests that they want to shop following their Thanksgiving celebrations rather than only having the option of getting up in the middle of the night,” Target said in a statement. “Target will offer holiday pay to all hourly team members who work on Thanksgiving Day.”
Thanksgiving Day openings have been a boon to retailers during the economic downturn. The number of people who shop on Thanksgiving — both online and in stores — rose to 22.3 million in 2010, about double the amount just five years earlier, according to the National Retail Federation.
Last year, the number of people who began their Black Friday shopping at midnight was triple the amount in 2009.
“Retailers have been through a very difficult three or four years,” said Michael Hicks, director of the Center for Business and Economic Research at Ball State University in Muncie, Ind. “They’re looking for a competitive advantage anyway they can.”
Black Friday predictions: What should you buy?
But once the retailers move into Thanksgiving Day, “it’s hard to back off of these things,” he said. “How do you put the genie back in the bottle on what has traditionally been a day without consumers?”
Some consumers believe retailers have gone too far.
“I used to love shopping on Black Friday,” said Sarah Caron, 31, “but the earlier hours — or worse, opening on Thanksgiving — have been a complete turnoff to me. That takes people away from their families on a day that should be all about family.”
Caron said she plans to refrain from shopping at any store that opens on Thanksgiving Day, “because of the complete disrespect for our culture, heritage and their employees.”
For some consumers though, Black Friday shopping is considered part of the Thanksgiving holiday.
Hottest holiday toys of 2011
“About a third of consumers want to go shopping after Thanksgiving dinner,” explained Kit Yarrow, consumer psychologist and chair of the psychology department at Golden Gate University in San Francisco. “They feel like Thanksgiving is ending when the dishes are done and Black Friday is starting.”
Amanda Ostrowski, 25, is embracing the new hours.
“I’m thankful these stores are opening on Thanksgiving,” said Ostrowski, who has made Black Friday an annual event — even camping out at Best Buy last year. “It’s easier to wait outside during the day and this year, we don’t have to sleep outside.”
Most other shoppers, though, “find it [an] offense that a national holiday is being encroached upon,” said Yarrow.
View this article on CNNMoney

PARIS – The world’s leading economies pressed Europe on Saturday to act decisively within eight days to resolve the euro zone’s sovereign debt crisis which is endangering the world economy.

To view popup window put your cursor on the blue words

Perplexity

“…upon the earth distress•Strongs 4928: sunoche, soon-okh-ay´; from 4912; restraint, i.e. (figuratively) anxiety: — anguish, distress. of nations, with perplexity•Strongs 640: aporia, ap-or-ee´-a; from the same as 639; a (state of) quandary:—perplexity.
•Strongs 639: aporeo, ap-or-eh´-o; from a compound of 1 (as a negative particle) and the base of 4198; to have no way out, i.e. be at a loss (mentally):— (stand in) doubt, be perplexed….”
—Luke 21:25

Root of All Evil

“For the love of money is the root •Strongs 4491: rhiza, hrid´-zah; apparently a primary word; a “root” (literally or figuratively):—root of all.of all evil•Strongs 2556: kakos, kak-os´; apparently a primary word; worthless (intrinsically, such; whereas 4190 properly refers to effects), i.e. (subjectively) depraved, or (objectively) injurious:—bad, evil, harm, ill, noisome, wicked. which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows•Strongs 3601: odune, od-oo´-nay; from 1416; grief (as dejecting): — sorrow..”
—1 Timothy 6:10

In unusually direct language, finance ministers and central bankers of the Group of 20 major economies said they expected an October 23 European Union summit to “decisively address the current challenges through a comprehensive plan”.

French Finance Minister Francois Baroin, who chaired the meeting, said Berlin and Paris, the leading euro zone powers, were well on the way to agreeing a plan to reduce Greece’s debt, stop contagion and protect Europe’s banks.

Non-euro countries highlighted the damage the European crisis was already doing to their economies and underlined the urgent need for action by the 17-nation single currency area.

“Europe needs to get its act together because unless the crisis is put to an end, it will start to affect emerging economies which have enjoyed strong growth,” Japanese Finance Minister Jun Azumi said.

His Canadian counterpart, Jim Flaherty, said the risk of a global recession would be dramatically higher if next Sunday’s European summit failed to deliver.

British finance minister George Osborne told reporters his continental euro zone colleagues “will have left Paris under no misunderstanding that there is a huge amount of pressure on them to deliver a solution to the crisis”.

Treasury Secretary Timothy Geithner told reporters he was encouraged that the latest EU moves toward an overall strategy to tackle the two-year-old crisis contained the right elements, notably a recapitalization of European banks.

“They clearly have more work to do on the strategy and the details, but when France and Germany agree on a plan together and decide to act, big things are possible,” Geithner said.

“I am encouraged by the speed and direction in which they are moving.”

The communique urged the euro zone “to maximize the impact of the EFSF (bailout fund) in order to address contagion”. EU officials said the most likely option was to use the 440 billion euro fund to offer partial loss insurance to buyers of stressed member states’ bonds in a bid to stabilize the market.

Efforts by some countries to increase the IMF’s warchest to fight the crisis ran into resistance from the United States and others on Friday, burying the idea for now and putting the onus firmly back on Europe.

Geither said the IMF already had very substantial financial firepower and Washington would support committing more of the existing resources to supplement a well-designed European strategy with more euro zone funding.

As the G20 finance ministers and central bankers met in Paris, anti-capitalist protesters rallied around the world, shouting their rage against bankers and politicians accused of ruining economies and condemning millions to hardship through greed and bad government.

Many of the protests, galvanized by the Occupy Wall Street movement, were small and peaceful. But in Rome hundreds of hooded rioters burned cars and smashed shop and bank windows in some of the worst violence in the Italian capital for years.

RESISTANCE FROM BANKS

Germany and France are trying to put flesh on the bones of a crisis resolution plan in time for the EU summit.

It will involve plans to recapitalize banks, make Greek’s debt mountain more sustainable and ramp up the firepower of the bloc’s rescue fund.

For once in the long-running crisis, the timetable is ambitious. But analysts see risks that forcing banks, the main source of business investment in Europe, to raise more capital could doom the region’s faltering growth, and that the reduction in Greek debt may be too small to avoid a default.

There were growing signs that Athens’ creditor banks will fight any attempt to make them shoulder a bigger burden in restructuring Greece’s debts. The lead negotiator of the banking lobby representing private bondholders said there were no grounds to impose bigger “voluntary” losses on their debt than the 21 percent agreed in July, which looks insufficient.

“We do not see that a compelling case has been made to reopen the (July) deal. A deal is a deal,” Charles Dallara, managing director of the Institute of International Finance (IIF) told the Financial Times.

The G20 statement pledged to ensure banks are adequately capitalized and have sufficient access to funding, and said central banks would continue to provide liquidity to banks as required.

Fears of a Greek default have undermined confidence on volatile markets since late July, with global stocks falling 17 percent from their 2011 high in May.

But they have picked up since the leaders of France and Germany set an end-October deadline for comprehensive action.

NO CHANGE ON YUAN, FOREX LANGUAGE

While the European crisis was the main focus, Washington and Beijing continued to spar over China’s currency.

Geithner said China should let the yuan rise more rapidly to benefit global growth.

Chinese Premier Wen Jiabao rebuffed U.S. pressure for a more rapid appreciation, assuring exporters at the Canton Fair in Guangzhou on Saturday that China’s exchange rate would remain “basically stable” to protect them.

Chinese negotiators prevented the G20 from going beyond wording issued at their last meeting in Washington on the need for emerging market nations’ currencies to be more flexible.

Ministers agreed that advanced economies would cut deficits while emerging economies would continue their move toward greater exchange rate flexibility and boost domestic consumption.

French President Nicolas Sarkozy wants progress on bigger goals such as setting parameters to measure global imbalances and reining in speculative capital flows at a November 3-4 summit in Cannes, where France passes the G20 baton to Mexico.

(Additional reporting by Daniel Flynn, Francesca Landini, Randall Palmer, Gernot Heller, Glenn Sommerville, Kevin Yao, Abhijit Negoy; Writing by Janet McBride/Mike Peacock/Paul Taylor)

Europe’s crisis a threat to rest of world

* Preparing for new push at G20 talks next week

To view popup window put your cursor on the blue words

Perplexity

“…upon the earth distress•Strongs 4928: sunoche, soon-okh-ay´; from 4912; restraint, i.e. (figuratively) anxiety: — anguish, distress. of nations, with perplexity•Strongs 640: aporia, ap-or-ee´-a; from the same as 639; a (state of) quandary:—perplexity.
•Strongs 639: aporeo, ap-or-eh´-o; from a compound of 1 (as a negative particle) and the base of 4198; to have no way out, i.e. be at a loss (mentally):— (stand in) doubt, be perplexed….”
—Luke 21:25

Root of All Evil

“For the love of money is the root •Strongs 4491: rhiza, hrid´-zah; apparently a primary word; a “root” (literally or figuratively):—root of all.of all evil•Strongs 2556: kakos, kak-os´; apparently a primary word; worthless (intrinsically, such; whereas 4190 properly refers to effects), i.e. (subjectively) depraved, or (objectively) injurious:—bad, evil, harm, ill, noisome, wicked. which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows•Strongs 3601: odune, od-oo´-nay; from 1416; grief (as dejecting): — sorrow..”
—1 Timothy 6:10

WASHINGTON, Oct 5 (Reuters) – Europe needs to step up efforts to control its debt crisis before it pulls the United States and the rest of world into a renewed downturn, Treasury Secretary Timothy Geithner urged on Wednesday.

Speaking at the Washington Ideas Forum in the downtown Newseum, Geithner mixed praise and criticism of Europe as he continued an ongoing effort to push its policymakers toward a more forceful approach toward dealing with debt woes.

“Europe matters a lot to us. We don’t want to see Europe weakened by a protracted crisis. Europe understands that,” he said but left no doubt at his impatience with progress so far.

“They are moving too slowly,” Geithner said. “Europe is a large part of the global economy, and a severe crisis in Europe would be damaging” around the world.

He sidestepped a question about how close the U.S. economy might be sliding back into recession, however.

Asked whether he agreed with Federal Reserve Chairman Ben Bernanke that U.S. growth was close to faltering, Geithner said that growth is “slower, weaker” in the United States and around the world than hoped at the start of the year.

Geithner has met European counterparts in France and in Poland in recent weeks to push for stronger action, including possible leveraging of an established European bailout fund, to a debt crisis now raging in countries like Greece from spreading to Bigger European economies.

He travels to Paris next week to again meet group of 20 finance ministers Oct 14-15 and is expected to pick up the refrain that they must move faster and more convincingly to persuade financial markets that governments are determined to stop the crisis.

Geithner said he believed Europe has decided it will “escalate substantially” its response, and he is confident that they will do so.

“They have the financial resources as a continent that are very large relative to this crisis. It is just a matter of moving more quickly and more forcefully,” he said.

“I expect they will do that.”

Geithner avoided a direct response when asked whether he supported the “Occupy Wall Street” protesters who have staged continuing demonstrations against what they see as excessive pay for bankers amid high rates of joblessness for young Americans. He said he was sympathetic toward people who feel they have lost a sense of future opportunities that use to be plentiful in America.

Geithner was on the front lines dealing with the 2007-2009 financial crisis that drove the United States into recession — first as president of the New York Federal Reserve Bank and later as the Obama administration’s Treasury chief.

He said the key lesson to be taken from battling crises is that it is necessary to move strongly to quell them and then to not let up before the problems are dealt with and growth can resume.

“The basic problem and reason why governments make these things harder over time is that what happens is the political costs of the initial response is so difficult, so devastating as you saw in the United States, that people tend to pull back too early and leave the job unfinished,” Geithner said.

(Reporting by Stella Dawson and Glenn Somerville, editing by Diane Craft)

Germany has stepped up its rhetoric against Greece, warning that the debt-laden country could default on its debts in a move that highlights the growing divisions at the heart of Europe.

To view popup window put your cursor on the blue words

Perplexity

“…upon the earth distress•Strongs 4928: sunoche, soon-okh-ay´; from 4912; restraint, i.e. (figuratively) anxiety: — anguish, distress. of nations, with perplexity•Strongs 640: aporia, ap-or-ee´-a; from the same as 639; a (state of) quandary:—perplexity.
•Strongs 639: aporeo, ap-or-eh´-o; from a compound of 1 (as a negative particle) and the base of 4198; to have no way out, i.e. be at a loss (mentally):— (stand in) doubt, be perplexed….”
—Luke 21:25

Root of All Evil

“For the love of money is the root •Strongs 4491: rhiza, hrid´-zah; apparently a primary word; a “root” (literally or figuratively):—root of all.of all evil•Strongs 2556: kakos, kak-os´; apparently a primary word; worthless (intrinsically, such; whereas 4190 properly refers to effects), i.e. (subjectively) depraved, or (objectively) injurious:—bad, evil, harm, ill, noisome, wicked. which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows•Strongs 3601: odune, od-oo´-nay; from 1416; grief (as dejecting): — sorrow..”
—1 Timothy 6:10

Philipp Roesler, Germany’s economy minister, said an “orderly default” for Greece could no longer be ruled out and branded the country’s deficit-reduction measures “insufficient”.
The warning is likely to spook financial markets further and comes despite Greece yesterday announcing a fresh €2bn (£1.7bn) of budget cuts and the introduction of a country-wide real estate tax.
Evangelos Venizelos, the finance minister, said the cuts and tax measure were necessary to allow Greece to meet obligations demanded by the European Union and IMF in exchange for bail-out funds.
Writing in the Die Welt newspaper, Mr Roesler said: “To stabilise the euro, we must not take anything off the table in the short run. That includes as a worst-case scenario an orderly default for Greece if the necessary instruments for it are available.”
He said such a default would mean “re-establishing the affected state’s ability to function, perhaps with a temporary restriction of its sovereign rights”.

Mr Roesler’s comments come as Germany’s Der Spiegel magazine said finance minister Wolfgang Schaeuble had ordered preparations be made for a Greek bankruptcy. The report claimed the German government is preparing for two eventualities under that scenario – Greece staying in the euro or the country exiting and reintroducing the drachma. Despite the speculation, the European Commission said it was sending a team to Athens “in the next few days” tasked with finalising the payment of a new tranche of loans for Greece by the end of the month.
EU economy commissioner Olli Rehn said the team – which represents the troika of the Commission, the European Central Bank and the IMF – would “provide technical support to the Greek authorities”. The previous team was pulled out of Athens earlier this month because of a lack of progress by the Greek government in reducing its deficit.
Mr Rehn on Sunday praised Greece’s new cuts, saying they would “go a long way to meeting the fiscal targets” for 2010 and 2011. “Greece needs to meet the agreed fiscal targets and implement the agreed structural reforms to fulfil the conditionality and ensure funding from its partners,” he said.
G7 finance ministers late on Friday vowed to “take all necessary actions to ensure the resilience of banking systems and financial markets”. However, underlining the difficulties facing German authorities, a survey showed 53pc of Germans oppose further aid for Greece and would not save the country from default should it fail to fulfil loan criteria.

The loss of market confidence in economic leadership in key countries like the United States and Europe coupled with a fragile economic recovery have pushed markets into a new danger zone, something that policymakers have to take seriously, the head of the World Bank said on Sunday.

To view popup window put your cursor on the blue words

Perplexity

“…upon the earth distress•Strongs 4928: sunoche, soon-okh-ay´; from 4912; restraint, i.e. (figuratively) anxiety: — anguish, distress. of nations, with perplexity•Strongs 640: aporia, ap-or-ee´-a; from the same as 639; a (state of) quandary:—perplexity.
•Strongs 639: aporeo, ap-or-eh´-o; from a compound of 1 (as a negative particle) and the base of 4198; to have no way out, i.e. be at a loss (mentally):— (stand in) doubt, be perplexed….”
—Luke 21:25

Root of All Evil

“For the love of money is the root •Strongs 4491: rhiza, hrid´-zah; apparently a primary word; a “root” (literally or figuratively):—root of all.of all evil•Strongs 2556: kakos, kak-os´; apparently a primary word; worthless (intrinsically, such; whereas 4190 properly refers to effects), i.e. (subjectively) depraved, or (objectively) injurious:—bad, evil, harm, ill, noisome, wicked. which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows•Strongs 3601: odune, od-oo´-nay; from 1416; grief (as dejecting): — sorrow..”
—1 Timothy 6:10

Speaking at the Asia Society dinner in Sydney, Robert Zoellick also said the global economy was going through a multi-speed recovery, with developing countries now the source of growth and opportunity.

“What’s happened in the past couple of weeks is there is a convergence of some events in Europe and the United States that has led many market participants to lose confidence in economic leadership of some of the key countries,” he said.

“I think those events combined with some of the other fragilities in the nature of recovery have pushed us into a new danger zone. I don’t say those words lightly … so that policymakers recognize and take it seriously for what it is.”

Zoellick said the process of dealing with the sovereign debt problem and some of the competitive issues in the euro zone have tended to be done “a day late,” leaving markets worried that authorities may not be ahead of the problem or moving in the right direction.

“That (worry) has accumulated and so we’re moving from drama to trauma for a lot of the euro zone countries,” he said.

On the United States, Zoellick said it wasn’t fears the world’s biggest economy faced an imminent problem, but “frankly that markets are used to the United States playing a key role in the economic system and leadership.”

He said efforts to cut U.S. government spending have so far been focused on discretionary spending as opposed to the entitlement program such as social security. “Until they make an effort on those programs, there is going to be continued skepticism about dealing with long-term spending.”

Zoellick said while market confidence has been hit, the real issue was whether this will spread to business and consumer confidence, something that was still unclear.

“What is different from the world of the past is now emerging markets are sources of growth and opportunity. About half of global growth is represented by the developing world … so this is a very rapid change in a relatively short span of time in historical terms,” he added.

On China, Zoellick said the appreciation of the yuan would be constructive, especially in helping tackle the country’s inflationary pressure.

On Australia, he said the country was in a much better position than other developed countries because it undertook structural reforms. On the fiscal side, he noted Australia’s debt was only 7 percent of gross domestic product and taking advantage of its position in the Asia Pacific..

(Reporting by Ian Chua; Editing by Cecile Lefort)