Greece on, off for the past year. People are getting rather fed up with the many conflicting news coming out of Greece, which must default (as The Trade mentioned a year ago). Southern Europe is in pain, but there might be one rising star, Serbia that today managed winning Gold in Waterpolo, Djoko dominating tenis and Silver in hand ball.
Meanwhile on Greece. From BBC.
Greek officials have reacted angrily to a leaked German proposal for an EU budget commissioner with veto powers over Greek taxes and spending.
The Greek government said it must remain in control of its own budget.
The European Commission says it wants to reinforce its monitoring of Greek finances, but Greece should retain sovereign control.
Meanwhile, Greece and its private investors are close to a deal which will pave the way for a second bailout.
Greek government spokesman Pantelis Kapsis told the BBC the discussions between the two parties had gone well and they were “close to an agreement”.
Greece must reach agreement in the next few days in order to receive the next tranche of funds from its first bailout.
It needs the money to pay off a significant number of bondholders whose bonds mature in March. Without the bailout funds, Greece could be forced into an uncontrolled default from the euro. (Full story here).
The release of Q4 2011 GDP highlighted just how close the US economy is to actual contraction as well as how vulnerable it is to the events in Europe. On the surface the 2.8% growth was a nice rebound from the 1.8% growth in Q3 2011.
But like anything if you dig beneath the headline you will see three areas of concern. Interesting that just two days before this release when asked about the recent uptick in economic activity Chairman Bernanke was less optimistic than the reporter asking the question. Apparently he was privy to the soon to be released data.
The biggest area of concern relates to the simple calculation of real GDP. As the NFP data has the often generous birth / death variable, the GDP calculation has the price deflator. Similar to CPI but different the price deflator takes nominal GDP and adjusts for inflation to get real GDP which is reported each quarter.