Here are a few stories from the past week that caught my eye.
Iran Sells Euro Reserves for Dollars
With all the talk a year ago over pricing oil in Euros, this headline sure has me laughing: Iran Selling 45 Billion Euros of Reserves for Dollars
Iran’s central bank began the first phase of the 45 billion-euro ($55 billion) sale of some of its reserves for dollars, the state-run Jaam-e-Jam newspaper reported, citing people it didn’t identify.
The bank is selling 15 billion euros in the first of three stages, which will be completed by Sept. 22, the newspaper reported on its website on May 31.
Iran will “substantially” decrease its oil sales in euros, the paper said. It informed Japan and other crude-oil customers of the change, Jaam-e-Jam said. The Persian Gulf country’s euro reserves are 55 percent of the total, and would be reduced to 20 to 25 percent after the sale is complete and after oil sales in euros have been reduced, the paper said.
Iran’s shift out of euros has been prompted by the single currency’s decline, said Jaam-e-Jam, which is owned by the state broadcaster. Other central banks, including those of the Persian Gulf states, also are selling their euro reserves, it said.
Japan May Spark Next Sovereign Debt Crisis
Bloomberg reports Japan May Spark Next Sovereign Debt Crisis
Japan may spark the next global debt crisis unless the nation’s new leader addresses its widening fiscal deficit, Kusano Global Frontier Co. said.
“If bond yields spike, Japanese financial institutions will take a heavy blow, shaking the nation’s financial system,” Kusano said.
Government Sponsorship of Newspapers
Government sponsorship of newspapers is certainly on my list of things we absolutely do not want to see but if the FTC gets its way, it could be coming. Please consider FTC floats Drudge tax
The Federal Trade Commission (FTC) is seeking ways to “reinvent” journalism, and that’s a cause for concern. According to a May 24 draft proposal, the agency thinks government should be at the center of a media overhaul.
The ideas being batted around to save the industry share a common theme: They are designed to empower bureaucrats, not consumers. For instance, one proposal would, “Allow news organizations to agree jointly on a mechanism to require news aggregators and others to pay for the use of online content, perhaps through the use of copyright licenses.”
In other words, government policy would encourage a tax on websites like the Drudge Report, a must-read source for the news links of the day, so that the agency can redistribute the funds collected to various newspapers. Such a tax would hit other news aggregators, such as Digg, Fark and Reddit, which not only gather links, but provide a forum for a lively and entertaining discussion of the issues raised by the stories. Fostering a robust public-policy debate, not saving a particular business model, should be the goal of journalism in the first place.
The report also discusses the possibility of offering tax exemptions to news organizations, establishing an AmeriCorps for reporters and creating a national fund for local news organizations. The money for those benefits would come from a suite of new taxes. A 5 percent tax on consumer electronic devices such as iPads, Kindles and laptops that let consumers read the news could be used to encourage people to keep reading the dead-tree version of the news. Other taxes might be levied on the radio and television spectrum, advertising and cell phones.
4-Day School Weeks Gain Popularity
Cash-strapped school districts turn to 4-day school weeks to save money.
Peach County [Georgia] is one of more than 120 school districts across the country where students attend school just four days a week, a cost-saving tactic gaining popularity among cash-strapped districts struggling to make ends meet. The 4,000-student district started shaving a day off its weekly school calendar last year to help fill a $1 million budget shortfall.
It was that or lay off 39 teachers the week before school started, said Superintendent Susan Clark. “We’re treading water,” Clark said as she stood outside the headquarters of her seven-school district. “There was nothing else for us to do.”
The results? Test scores went up.
So did attendance — for both students and teachers. The district is spending one-third of what it once did on substitute teachers, Clark said. And the graduation rate likely will be more than 80 percent for the first time in years, Clark said.
On their off day, students who don’t have other options attend “Monday care” at area churches and the local Boys & Girls Club, where tutors are also available to help with homework. The programs generally cost a few dollars a day per student.
I sure would have loved a 4-day week when I was a kid.
Greece to sell stakes in railways, utilities
In an effort to plug its budget deficit Greece to sell stakes in railways, utilities.
Greece’s cash-strapped government will sell off stakes in a string of state-owned companies — including a rail operator, two water companies, the Post Office and several casinos — to pay off debt, officials said Wednesday.
Finance Minister George Papaconstantinou said the rail company is losing euro1 billion ($1.2 billion) a year and that routes causing the greatest financial losses will be scrapped.
Under the planned sell-off announced Wednesday, Greece will sell a 49 percent stake in rail operator Trenose and yield management control. It will also reform the broader Hellenic Railways group, which has accumulated debts of some euro 10 billion and runs daily losses of close to euro 3 million.
“Clearly this situation with the railways cannot be allowed to continue,” Public Works and Transport Minister Dimitris Reppas said.
He said the government would reevaluate Hellenic Railways workers’ skills, keep those who were needed and transfer others to different public sector jobs — as Greek law forbids the sacking of civil servants.
The government will also sell a 10 percent stake in the greater Athens water company and a 23 percent stake in the water company in Greece’s second largest city, Thessaloniki.
Papaconstantinou said the state would sell 39 percent of the country’s Post Office. The state will retain a 51 percent stake in all the companies named Wednesday in the privatization bid, and proposes to fully privatize a string of state-owned casinos.
For starters it is absolutely insane to have a law that forbids firing civil servants. What the hell is it going to do with the workers a private company does not want?
More importantly, what company in its right mind would buy into a scheme that gives government 51% control? That is surely a recipe for disaster. Finally, what private corporation wants to buy money losing operations?
“The Greek state owns huge real estate assets, whose precise value has never been calculated,” Papaconstantinou said.
Other than the casinos, the operations Papaconstantinou is describing might be worth nothing.
Govt to Collect Addresses, ATM Records of Bank Customers
Under guise of financial reform Senate Democrats Pass Bill Allowing Govt to Collect Addresses, ATM Records of Bank Customers
Senate Democrats united to pass a financial regulatory bill that allows the government to collect data on any person operating in financial markets at any level, including the collection of personal transaction records from local banks that list customers’ addresses and ATM receipts.
The Senate voted 59-39 on Thursday to pass the bill, the chief aim of which is to more-heavily regulate the financial industry. The bill now goes to a conference committee in the House of Representatives, where differences between the House and Senate versions will be ironed out.
The bill, if it becomes law, would create the Bureau of Consumer Financial Protection and empower it to “gather information and activities of persons operating in consumer financial markets,” including the names and addresses of account holders, ATM and other transaction records, and the amount of money kept in each customer’s account.
The new bureaucracy is then allowed to “use the data on branches and [individual and personal] deposit accounts … for any purpose” and may keep all records on file for at least three years and these can be made publicly available upon request.
Senator Shelby slammed the new consumer bureaucracy, saying that it was meant not to protect consumers but to “manage” them by monitoring their behavior.
“Mr. President, make no mistake, behind the veil of anti-Wall Street rhetoric is an unrelenting desire to manage every facet of commerce under the guise of consumer protection.
“They may be interested in protecting consumers, but they are more interested in managing them,” Shelby said.
Shelby also criticized the idea that Americans need government to watch over their every financial move, saying that it was better to allow people the freedom to make their own choices and fail than to never allow them the freedom to choose at all.
I side 100% with Senator Shelby.
This bill has absolutely nothing to do with financial reform or protecting consumers, but everything to do with more government spying on activities of its citizens. Taxpayers have to foot the bill for this outrageous behavior.
“Big Brother” just got bigger.
Mike “Mish” Shedlock
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