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Good evening ! Everybody ! 周四的作业,现在发上来~~ 大家加油! Enjoy reading ~
【Speed】 Time 1 Eurozone Finance Chiefs Resume Greek Bailout Talks
[attachimg=598,336]110234[/attachimg] From left, European Commissioner for the Economy Olli Rehn, European Central Bank President Mario Draghi, Greek Finance Minister Yannis Stournaras, and other European finance ministers during a meeting of eurogroup finance ministers in Brussels, Nov. 20, 2012
Eurozone finance chiefs are meeting in Brussels in another effort to decide whether to release more bailout money to debt-ridden Greece.
Greece hopes the finance ministers on Tuesday will approve a $40 billion rescue segment the Athens government says it needs to avoid a default on its financial obligations. The payment is part of Greece's second bailout in two years.
The head of the finance ministers, Luxembourg Prime Minister Jean-Claude Juncker, says he thinks there is a good chance of approval. But other European officials, including Finnish Finance Minister Jutta Urpilainen, remain skeptical about Greece's commitment to financial reforms.
Contentious negotiations over Greek spending plans have lasted for months. Greece imposed a new round of austerity measures to meet the demands of its international lenders, even as workers staged frequent street protests in opposition.
One independent economist, Vagelis Agapitos, said he thinks the bailout money will eventually be released.
"Irrespective of whether an installment is decided [Tuesday] or in a week's time, the fact is that the installment is likely to get paid in December," he said. "It's either going to be early December or mid-December, which effectively settles the immediate financing needs of the Greek government and avoids any Greek default in December."
With the extensive layoffs of government workers, Agapitos said the Greek economy is moving away from an economy based on the public sector to one focused on private businesses.
"Let's not forget, the Greek economy is right now in transition," Agapitos said. "It's transitioning from a domestically driven consumption model based on a very large public sector to an internationally competitive model based on foreign-direct investment as well as the strengthening of the private sector. This will be done through a combination of measures, not only privatization of public entities, but also recapitalizing the banks in order to finance the real economy because liquidity is a major issue for Greek businessmen at the moment, but also through product and labor reforms."
(332 words)
Time 2 As Sanctions Ease, US Companies Start Investing in Burma [attachimg=548,339]110235[/attachimg] American tourist Ryan Russell withdraws cash from an ATM machine using a MasterCard card, the first such ATM transaction, Rangoon, Burma, November 15, 2012
With the easing of longstanding U.S. economic sanctions against Burma, major American companies are quickly starting to invest in the Southeast Asian nation.
Competing soft drink giants Coca-Cola and Pepsi-Co. are returning to Burma for the first time in many years. Meanwhile, both MasterCard and Visa have reached deals with Burmese banks for use of their internationally-known credit cards. The ConocoPhillips and Chevron energy companies have been looking for investment opportunities as well.
U.S. President Barack Obama in July eased restrictions on American investment in Burma after Burmese President Thein Sein moved away from strict military control and embraced initial democratic reforms.
Obama made a short trip to Burma Monday, the first serving U.S. president to visit the country. He praised Burma's move toward democracy, while calling for more changes, which he said would lead to more U.S. economic investment.
"So today I've come to keep my promise, and extend the hand of friendship," said Obama. "America now has an ambassador in Rangoon, sanctions have been eased, and we will help rebuild an economy that can offer opportunities for its people and serve as an engine of growth for the world.''
Analysts say that Burma represents a new Asian market, after decades of being largely closed to investment from Western companies. The International Monetary Fund says Burma's economy will expand 6 percent this year, with direct foreign investment increasing 40 percent to a record of nearly $4 billion.
Natural gas is the country's biggest revenue source, but Burma needs to find new reserves to reverse a recent 15 percent annual depletion of the commodity.
(273words)
Time 3 Buttonwood Converging world Countries’ fiscal policies are becoming more similar
[attachimg=276,422]110236[/attachimg]
ALL around the developed world politicians are struggling to figure out the best way of balancing their budgets, at least over the medium term. But is it easier to get spending down or taxes up?
The charts show the recent record on tax and spending for America, the euro zone and the OECD as a whole. The spending numbers are slightly more variable and consistently higher than the tax take. Both tax and spending are subject to cyclical effects. Spending has a cyclical component because of the cost of unemployment benefit as well as the use of deliberate Keynesian stimulus. On the tax side revenue from corporate profits and capital gains falls sharply during downturns, although consumption taxes are more stable.
What is striking is the narrow range within which the tax take has moved. Since 1994 euro-zone taxes have not been below 44.6% or above 46.6% of GDP. In America the total tax take has been between 30% and 35% of GDP since 1970. Such stability may be partly due to efforts by reforming governments of the 1980s and 1990s to reduce taxes. But it raises the question of whether there might be some upper limit to the amount of tax governments can grab.
In a globalised economy people and capital can move to escape high-tax regimes—France’s new 75% top income-tax rate comes to mind—or base their operations in low-tax places such as Ireland. Tax competition is clearly not the only thing at work; otherwise it would not be possible for the euro zone to have a tax take 14 percentage points higher than America’s. The big difference between the two is consumption taxes; Europe has hefty value-added tax and America has no national sales tax. Europeans are unlikely to migrate to escape VAT.
Nevertheless, there are signs of a narrowing in the spread between the highest- and lowest-taxing jurisdictions. In 1994 the five highest tax regimes in the OECD had an average tax take of 55.7%; this year, it is 53.6%. The five lowest tax regimes in 1994 had an average take of 30.5%; now it is 33%. (352 words)
Time 4
Countries do not “compete” on government spending. But if there is a tax constraint on policy you would expect that high-spending governments would eventually have to cut their coat to meet their cloth. The six highest-spending countries of 1994 (France and Norway were tied for fifth place) were spending 59.4% of GDP; this year they are spending just 52.8%. France is the only one of the group with a higher tax take than in 1994.
By contrast low-spending (and taxing) governments have faced no such constraint. The five lowest spenders of 1994 have seen their average outlays rise from 32.7% to 36.5% of GDP. In short, fiscal policies are converging rather than diverging.
Much economic analysis of tax regimes focuses on the optimal system: the maximum marginal rate, the balance between taxes on consumption and income, the need to reduce loopholes and so on. When it comes to discussing the overall tax take from GDP the debate tends to be ideological. Conservatives favour a smaller state on grounds of both liberty and economic efficiency. By destroying the incentives to work, welfare states weaken growth, they say.
In contrast Peter Lindert of the University of California, Davis claims that historical analysis suggests no link between high social spending and growth rates. A rough-and-ready look at the past 18 years certainly provides no clear pattern. The low spenders of 1994 included Japan and Switzerland, neither of which have grown very rapidly since. The low-spending group also included South Korea, where GDP has more than doubled since 1994. In that time, however, the country has also seen the largest rise in spending relative to GDP of all OECD nations.
A reasonable guess is that nations will continue to converge in their fiscal policies. High-spending Europe is undergoing austerity; lower-spending countries are grappling with the costs of an ageing population. In America, as national politicians bicker, state and local authorities face huge pension-fund deficits; higher taxes are likely to be part of the answer.
(330 words)
Time 5 Spain Gets Mixed Reviews on Handling Economy [attachimg=582,343]110237[/attachimg]
People sleep outside the headquarters of Spanish nationalized lender Bankia, where protesters have camped for more than three weeks, in Madrid, November 20, 2012.
SEVILLE — One year ago Tuesday, November 20, Mariano Rajoy's Partido Popular (PP) won a landslide victory in Spain's parliamentary elections, but it is facing mounting criticism from voters on its handling of the economic crisis. Experts counter results will take time.
When Spain’s conservative Partido Popular won an absolute majority in the November general elections last year, the country’s economy was already sliding on a downhill slope, headed towards its second recession in three years. A record 21.5 percent of Spaniards were out of a job.
In his first speech as prime minister-elect, Mariano Rajoy promised to tackle unemployment, the deficit and the country’s excessive debt.
Within seven months, his government had announced $80 billion worth of cost-saving measures, including cuts to all ministries. And it made labor laws less rigid.
Streets and squares have been filling regularly with angry protesters. The leading unions and the opposition believe the government is irreversibly destroying Spain’s cherished social model.
Socialist party leader Alfredo Rubalcaba says Spaniards are worse off than a year ago. Unemployment now stands at 25 percent. But some argue it was bound to get worse before it gets better.
Ramon Pacheco Pardo, a lecturer in European and international studies at King’s College in London, says it is too early to judge whether or not the government’s plan is good or bad.
“I think [what] the government has done right is that it has started to tackle some of the long-term problems of the Spanish economy," said Pardo. "On the other hand, I think some of the measures that have been taken, like cuts in the health sector, cuts in the education sector have been introduced far too quickly.”
Economist and former bank inspector Rubén Manso Olivar believes the reforms and economic measures have not gone far enough.
He says, for example, that banks should have been allowed to fail rather than the government transferring their toxic real estate assets to a newly formed entity, and it should have been more forceful in demanding autonomous regions rein in their spending.
(347 words)
剩余: Although talks of a bailout have subsided lately, both Manso Olivar and Pacheco Pardo think there will be calls again for Spain to seek help, as borrowing costs are likely to remain high.
“The central government and the regional governments in Spain really have no means to pay off their debt," said Pardo. The Spanish deficit is not as high, yeah, if you compare with other European countries. The problem is that there is a lack of confidence in the Spanish government paying off its debt.”
He says there will probably be more social unrest in the coming months because the economic situation will not improve in 2013.
Mariano Rajoy’s government seems determined to maintain its course. And it should, says Rubén Manso Olivar.
He says Spaniards voted to give the Partido Popular a four-year mandate, and the government should be afforded a chance to govern.
(146 words)
【Obstacle】 Randomness, probability and uncertainty Stress best How surprises make you stronger [attachimg=568,319]110238[/attachimg]
Antifragile: Things that Gain from Disorder. By Nassim Nicholas Taleb. Random House; 519 pages; $30. Allen Lane; £25. Buy from Amazon.com, Amazon.co.uk
WHAT is the opposite of fragility? Though not quite right, “resilience” and “robustness” are two words that come to mind. If fragility means something that breaks under stress, its exact opposite should mean something that grows stronger under pressure. There is no word that quite captures this, says Nassim Nicholas Taleb, an American essayist and scholar, so he has invented one: “antifragile”.
The neologism is necessary because antifragility, he argues, is the secret to success in a world full of uncertainty. Mr Taleb’s earlier books were devoted to showing that no one can measure the likelihood of rare events—or “black swans”, in his now famous phrase. From the financial crisis to the tsunami that struck the Fukushima nuclear reactor in 2011, the worst-case scenario will never be quite bad enough. So instead of trying to predict the future and failing, the best thing to do is try to benefit from shocks when they occur.
That, after all, is what nature does. Evolution is a system for turning random mutations to lasting advantage. The body responds well to certain pressures; the bones in the racquet-holding arm of professional tennis players are stronger than those in the other arm, for example.
There are all sorts of ways in which bad events contain useful information. Pain teaches children what to avoid. The failures of past entrepreneurs steer the next lot of start-ups away from the same mistakes. Plane crashes yield data that make the next flight safer. (Bank failures have the opposite effect; because of the interconnectedness of the financial system, one blow-up makes another more likely, not less.)
Indeed, Mr Taleb thinks the big mistake is trying too hard to avoid shocks. Long periods of stability allow risks to accumulate until there is a major disaster; volatility means that things do not get too far out of kilter. In the economy cutting interest rates at the first sign of weakness stores up more trouble for later. In markets getting rid of speculators means prices are more stable in general but any fluctuations cause greater panic. In political systems the stability brought by regimes such as Hosni Mubarak’s in Egypt was artificial; without any effective way for people to express dissent, change leads to collapse.
The principle applies to career choices too. An apparently secure job within a large company disguises a dependency on a single employer and the risk that unemployment will cause a very sudden and steep loss of income. Professions that have more variable earnings, like taxi-driving or prostitution, are less vulnerable to really big shocks. They also use volatility as information: if a cabbie is in a part of town where there are no fares, he heads to a different area.
This is getting to the heart of antifragility: being in a position where the unexpected allows improvement, where the potential gains from a surprising event outweigh the potential losses. The obvious example from finance is the option, which gives the buyer the right, but not the obligation, to undertake a transaction at an agreed price. The first option on record was exercised by Thales of Miletus, an ancient Greek philosopher who bought the right to use every olive press in the area and was then able to specify his terms when a good olive harvest meant high demand for the presses. At worst, his losses were limited; at best, his gains were enormous.
The equivalent in investment terms is to hold mostly ultra-safe assets and have a sliver of wealth in something that offers a huge pay-off if there is a positive surprise. In business, inefficiency becomes a potential virtue; holding lots of inventory is a great strategy if there is a shortfall elsewhere in the market. As for countries, Switzerland takes the prize for being the “most antifragile place on the planet”. When bad things happen, the money flows in.
“Antifragile” is an interesting idea, but as a book it is not without flaws. Mr Taleb takes on everything from the mistakes of modern architecture to the dangers of meddlesome doctors and how overrated formal education is. He overstretches the argument and is not as iconoclastic as he likes to think. There is a lot of familiar-sounding praise for Steve Jobs and the warnings about the dangers of stability will be well known to followers of Hyman Minsky. The valid reasons why people become employees (pensions, say) or companies become bigger, such as economies of scale, are skated over. But this is an ambitious and thought-provoking read.
It is also a highly entertaining one, thanks to Mr Taleb’s in-your-face nature. “Antifragile” is as much about the author as it is about the world. He is a weightlifter and calls himself “an intellectual who has the appearance of a bodyguard”. He avoids fruit that does not have an ancient Greek or Hebrew name and drinks no liquid that has not been in existence for at least 1,000 years. He has little time for copy editors, even less for economists, bankers and those who cluster at Davos. He once spent two years in bed reading every book about probability he could lay his hands on. Whether you find Mr Taleb amusing or irritating, you want to read on.
(903 words) |
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