Greece’s problems are now “solved”, at least for some weeks, until the next debt tranches are to be repaid. The biggest pink Elephant in the Mediterranean, Spain, is passing by very calmly, with the tourists enjoying the cold cerveza on the beach. The summer months are the tourist months, but after this summer, when people decide not to buy all those cheap houses, the Pain will come back. Zapatero won’t run for another term next year, and the blame game has already started. With Spain facing the huge unemployment, the more than a million unsold homes, and local regions carrying “hidden debt”, we expect the autumn to be rather Spain oriented. El Pais reports;

Far from providing any potential solutions to Spain’s economic crisis, Tuesday’s state-of-the-nation debate turned into a blame game in which the opposition insisted on early elections and the head of the Socialist government defended his legacy.The leader of the conservative Popular Party (PP), Mariano Rajoy, focused his address on the bad economic indicators, including 21-percent unemployment, a high deficit and virtually no growth. “Must we prolong this agony or call early elections?” asked Rajoy. “Time is of the essence.”

Prime Minister José Luis Rodríguez Zapatero, who has already announced he will not seek a third term when this legislature ends next March, accused his opponent of not making any specific proposals to fix the economy.

“It doesn’t seem very hard to ask for elections, but it is hard to present some kind of alternative idea, a program, a reform- something specific regarding your stand on the issues, right here before all Spaniards,” said Zapatero, who also accused Rajoy of not supporting any of the government’s reforms aimed at bringing Spain’s deficit in line with euro-zone rules.

Rajoy said that reforms are necessary, but that “the Zapatero administration is not going to make them.” Citing Spain’s public debt of 67 percent of GDP and 45-percent unemployment among Spanish youth, Rajoy said that “we are poorer, more indebted and ever-further away from Europe’s leading nations.”

In his last state-of-the-nation debate, Zapatero looked to the future and asked for a joint effort to get Spain out of the crisis. “Collective effort and institutional cooperation never made so much sense in Spain as they do now. [...] At stake is our wellbeing for the coming decades. Spain is going to overcome a tough test, in a very complicated European and international context. We need to go all the way. And we will know how to do it,” said the Socialist leader in a clear reference to continued pressure against Spain in the financial markets, where the country is considered one of the at-risk peripheral states, along with default-endangered Greece.

We have heard it all before. Self regulation, too big to fail, must be saved, bail out, tax payer paying the bill etc. Hoenig, not overly positive on the too big to fail institution, gives his view on the subject.

Reforms instituted after the financial crisis to prevent future taxpayer-funded bailouts are bound to fail and will likely be weakened within the next few years, the Federal Reserve’s longest-serving policy maker predicted Monday.

The stark warning, offered by Federal Reserve Bank of Kansas City President Thomas Hoenig, who’s been warning about the rise of too-big-to-fail banks for more than a decade, comes as international regulators finalize plans to increase supervision of and toughen requirements on the world’s largest banking organizations as a reaction to the global financial crisis. Rather than break up big banks, politicians decided to simply subject them to more oversight.

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Greek vote went great. Now we just have to fix the Economy. Remember, the ship is still sinking. After Greece short term liquidity has been “fixed”, we expect the problems in Spain to regain attention. Kathimerini on the Vote;

China is struggling with inflation, speculation, an increasingly polarized society and even some social unrest. Shilling continues his 5 part China article today on how the country is strolling along the path leading to Hard Landing.

China is hoping to cool its white- hot economy without precipitating a recession. Doing so will be extremely difficult: Inflation fears are growing, the government’s ability to respond is quite limited, and China’s economic model, which leaves bureaucrats guessing about the market effects of their directives, is ultimately untenable.

Inflation worries start with housing. With Chinese exports curtailed by U.S. consumer retrenchment, capital spending threatened by government restraints and excess capacity, and domestic spending less than robust, housing has been China’s big generator of economic growth in recent years. By some estimates, half of Chinese GDP is linked to real-estate activity.

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The Greeks invented Democracy, but it seems they also gave the World Debtocracy. Don’t forget to check the subtitles box before watching the video.

“Don’t fight the doctor……”

“For the first time in Greece a documentary produced by the audience. “Debtocracy” seeks the causes of the debt crisis and proposes solutions, hidden by the government and the dominant media. The documentary will be distributed free by the end of March without usage rights and broadcasted and subtitled in at least three languages.

Debtocracy International Version by BitsnBytes

Follow the link below for the realtime vote in Greece.

Real time Vote.

Lagarde is the winner of the Day. Now the US can start controlling the IMF in a more efficient way.