Our Two Cents – Week of 2/13/12
While many of us in the U.S. watched the Grammy Awards this past weekend, Greece made significant next steps in its debt talks and Americans continued to see economic confidence after completing the first month of 2012.
After Greece passed its austerity plan, which sparked strings of riots, the nation’s leaders rushed to identify about 3.25 million euros in budget cuts because they omitted longer-term issues of debt sustainability and growth. On Feb. 12, the country passed its rescue package, which included a 22-percent cut in benchmark wages and 150,000 government layoffs by 2015. Arriving at that agreement—via a vote of 199 in favor and 74 opposed (and 27 absentations or blank ballots)—came after days of intense debates. As officials approved economic reforms in Greece, the U.K. city of Bristol decided to introduce its own currency. Called the Bristol Pound, officials designed the monetary unit to “support independent businesses in and around Bristol, retaining and multiplying the benefit of every pound spent for ordinary people and businesses.” Also in Britain, the British Monetary Policy Committee increased the Asset Purchase Facility by an additional 50 billion pounds, as expected.
In the U.S., economic optimism prevailed. The U.S. federal and state authorities agreed to a $26 billion settlement with five major banks, and The Corporate Executive Board’s Business Barometer report found consumer spending expected to rise. A recent Gallup chart showed that Americans have become less and less worried about the economy for five full months. The year 2012 saw an upbeat start, according to a report by IHS Global Insight. January saw the lowest level of jobless claims (325,000), and the fourth quarter of 2011 posted a nearly 3-percent growth—the strongest quarter of 2011. In the hedge fund world, the investment fund in January added 2.6 percent, according to the HFRI Fund Weighted Composite Index.
- • Greek Parliament Passes Austerity Plan After Riots Rage, The New York Times, Feb. 12, 2012
- • Feeling Better About the Economy, The New York Times, Feb. 9, 2012
- • British QE Raised to £325 as Expected – GBP/USD Jumps, Forex Crunch, Feb. 9, 2012
- • HFR: Hedge Funds Add 2.6% In January, FINalternatives, Feb. 7, 2012
- • British Town Prepares To Launch Its Own Currency -- Here's How That's Going To End , Business Insider, Feb. 7, 2012
- • U.S. Economy: An Upbeat Start Seen in 2012, Says Expert, International Business Times, Feb. 6, 2012
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