European Financial Stability Facility: Q & A

- "The creation of the European Financial Stability Facility (the EFSF for short) was announced on 9 May. There is still considerable confusion as to how it will function. Below we tackle some of the key issues in ‘Q and A’ format, on the basis of the information available, beginning with the basics."
BNPParibas Daily Economic Spotlight 20100706


Finance directors fear double-dip recession - Financial Times
A Market Forecast That Says ‘Take Cover’ - New York Times
ECB credit easing by buying debt from Greece and Spain - Credit Writedowns
China Property Market Beginning Collapse That May Hit Banks - Bloomberg
Manning the Gates: Migration Policy in the Great Recession - Federal Reserve of Dallas
To Spend or Not to Spend - New York Times
Swiss SNB Currency Reserves Drop To CHF225.8 Bln In June - Wall Street Journal
What Bond Bubble? - Bondsquawk
U.S. Banks Risk `Untold Problem' as Muni Holdings Climb to 25-Year High - Bloomberg
Investors fear rising risk of US regional defaults - Financial Times
In praise of default - Reuters
Greece is Restructuring Debt Now - Naked Capitalism
More on China’s reserve holdings, banks and infrastructure - Credit Writedowns
Why is the American Jobs Machine Broken - Economist's View

Upturn in profitability at the end of recessions: The causes of the difference between the United States and the euro zone

- "We can see that at the end of recessions (we look at the cases of the recessions in 2001-2002 and 2008-2009), the profitability of companies as a whole (but not large, listed companies) picks up much faster in the United States than in the euro zone, where, in addition, profitability does not return to its pre-recession level."
- "We look at:
• what accounts for this difference: it results from the rapid return of labour productivity to its previous trend in the United States, but not in the euro zone;
• what it entails for the real economy; there is a faster upturn in corporate investment and creditworthiness in the United States;
• what it implies for the financial markets: stock market performance is better in the United States than in the euro zone during economic recoveries, but this is not the case for the credit market."
- "The distortion of income sharing in favour of profits during economic recoveries in the United States adversely affects employment, but neither real wages received by households, nor consumption."
Natixis Flash Economics 334 20100629