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France and Britain ready to lay out eco-friendly tax cuts
Katrin Bennhold, International Herald Tribune
In a bid to solidify Europe’s position as a leader in the fight against global warming, France and Britain this month will lay out an ambitious plan to subsidize environmentally friendly products through Europe-wide tax cuts.
The blueprint, to be presented at a meeting of European Union finance ministers in Brussels on Nov. 13, proposes reductions in value-added taxes on energy-efficient products sold across the bloc’s 27 member states. In a letter to the European Commission, Paris and London said they wanted to make the cuts mandatory, but leave it up to member states to decide how much each country will reduce the tax.
(1 November 2007)
The Catastrophist View
Duff McDonald, New York Magazine
What would it take to send the U.S. economy-and New York’s-into free fall? A doomsday primer.
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Peter Schiff is laughing at me. I’ve just asked him to entertain the following notion: that we dodged a bullet during August’s financial-market turmoil and, with the stock market bouncing right back from every dip, things might be okay. So why worry?
He stops laughing. “Why worry?” he asks. “Because we dodged a bullet but are about to step on a hand grenade.”
Sitting in a corner office of a nondescript building just off I-95 in Darien, Connecticut, Schiff, the president of brokerage Euro Pacific Capital, and author of Crash Proof: How to Profit From the Coming Economic Collapse, will spend the next hour spelling out a singularly pessimistic view of the American economy. And he will do so while exhibiting a curious juxtaposition unique to the bearish prognosticator: He speaks of disaster with a smile on his face. No, he’s not happy about our impending doom. But he is happy that people are finally taking him seriously.
Some people, anyway. The recessionary fears that were sparked by the global liquidity crisis in August have eased, largely because of a resilient stock market and a belief that the Federal Reserve’s interest-rate cut in September curtailed deeper losses. When Goldman Sachs invested in its own imploding Global Equity Opportunities hedge fund in August, calling it an “opportunity” and not a “rescue,” people laughed. Guess who laughed last? Goldman, which had reportedly enjoyed a $370 million gain on its $2 billion rescue by October. The optimists stay focused on stories like Steve Jobs’s next stroke of genius.
But Schiff, whom CNBC calls “Dr. Doom,” has not, as bears do when winter approaches, gone off to hide in a cave. Why not? Because every single one of the underlying economic factors that he has identified as cause for concern has worsened. And his is no longer a lone voice in the woods. If you don’t care to listen to a man nicknamed Dr. Doom, you can listen to people like former Federal Reserve chairman Alan Greenspan, esteemed bond-fund manager Bill Gross, or famed money manager Jeremy Grantham. They’re part of a growing chorus of voices that are saying many of the same things as Schiff.
Their bearish arguments come in many shapes and sizes, but here’s the basic one: The past five or six years have been deceptively fortunate ones for the U.S. economy. That’s because any troublesome developments-the surge in oil prices from $28 per barrel in 2003 to about $87 today, for example-have been papered over by rising home prices. Home equity has been used to buy flat-screen TVs, SUVs, and more homes. Wall Street bought up all this debt from lenders, thereby allowing them to lend more.
(28 October 2007)
Recommended by Jason Bradford of the Reality Report.
The Finance Round-Up: November 2nd 2007
Stoneleigh, The Oil Drum: Canada
The credit crunch that has been unfolding in slow-motion all year appears ready to make headlines again as equities experience a sharp sell-off. As Ambrose Evans Pritchard says, the evidence that something serious is underway is already present in abundance. Losses and writedowns are mounting, and problems seem to be spreading to bond insurers, which will further impact on the value of insured bonds.
Trillions of dollars of off-balance sheet activities are increasingly coming back to haunt the banking system, as downgrades come in thick and fast. ‘Discounted’ is the new ‘contained’, but these losses are neither fully discounted nor contained.
(2 November 2007)
