Silvio in trouble. From The Telegraph.
Silvio Berlusconi, the former Italian prime minister, has been sentenced to four years in prison after a court in Milan convicted him of tax evasion.
The verdict comes two days after Mr Berlusconi, 76, announced he will not run for in upcoming elections. The three-time premier stepped down last November after Italy came under mounting market pressure to deal with its high debt load and Berlusconi failed to come up with persuasive financial reforms.
The former Italian prime minister will have a right of appeal however.
Prosecutors allege the defendants were behind a scheme to purchase the rights to broadcast US films on Mr Berlusconi’s private television networks through a series of offshore companies and had falsely declared the payments to avoid taxes.
And some Bunga bunga pictures below.
We are all equal, but some are more equal than others. Nothing really new, but an article getting a lot of attention. From NYT.
The mother of China’s prime minister was a schoolteacher in northern China. His father was ordered to tend pigs in one of Mao’s political campaigns. And during childhood, “my family was extremely poor,” the prime minister, Wen Jiabao, said in a speech last year.
But now 90, the prime minister’s mother, Yang Zhiyun, not only left poverty behind — she became outright rich, at least on paper, according to corporate and regulatory records. Just one investment in her name, in a large Chinese financial services company, had a value of $120 million five years ago, the records show.
The details of how Ms. Yang, a widow, accumulated such wealth are not known, or even if she was aware of the holdings in her name. But it happened after her son was elevated to China’s ruling elite, first in 1998 as vice prime minister and then five years later as prime minister.
Many relatives of Wen Jiabao, including his son, daughter, younger brother and brother-in-law, have become extraordinarily wealthy during his leadership, an investigation by The New York Times shows. A review of corporate and regulatory records indicates that the prime minister’s relatives, some of whom have a knack for aggressive deal-making, including his wife, have controlled assets worth at least $2.7 billion. (full read here)
Guest post by Azizonomics.
Britain has returned to growth:
But compared even to the USA — which has huge problems of its own — Britain is still mired in the depths of a depression:
An Olympic bounce does not constitute a recovery. As I noted in March, in every respect Britain is under-performing the United States — in GDP and in unemployment. Although Cameron and Osborne keep claiming that they are deficit hawks who want to cut the government deficit, the deficit keeps climbing, at an even faster pace than the United States.
Defenders of Cameron’s policies might claim that we are going through a necessary structural adjustment, and that lowered GDP and elevated unemployment is necessary for a time. I agree that a structural adjustment was necessary after the financial crisis of 2008, but I see little evidence of such a thing. The over-leveraged and corrupt financial sector is still dominated by the same large players as it was before. True, many unsustainable high street firms have gone out of business, but the most unsustainable firms that had to be bailed out — the banks and financial firms who have caused the financial crisis — have avoided liquidation. The real story here is not a structural adjustment but the slow bleeding out of the welfare state via deep and reaching cuts.
We won’t bother you with explaining how good they are.
Below is a simply must watch video with Hugh Hendry and Einhorn from the Buttonwood Conference.
Spanish unemployment climbed to a record in the third quarter as a deepening recession left one in four workers jobless, adding pressure on Prime Minister Mariano Rajoy to seek a second European bailout.
Unemployment, the second highest in the European Union after Greece, rose to 25.02 percent from 24.6 percent in the previous quarter, the National Statistics Institute said in Madrid today. That is the highest since at least 1976, the year after dictator Francisco Franco’s death ledSpain to democracy.
“The situation is serious,” Ricardo Santos, an economist at BNP Paribas SA in London, said by telephone. “There is still room for a deterioration in unemployment. Activity is weak and the government will reduce jobs as there are strict targets to adjust the number of public-sector temporary workers, especially in health and education.” (Full read here).
Meanwhile, the not so popular Mr Rato is about to get some uncomfortable questions with regards to the collapse of Bankia….
Guest post by Doug Short.
Earlier this month Business Insider posted a commentary with the attention-grabbing headline:DAVID ROSENBERG: Here’s Your Big Red Flag That We Could Be Heading For Recession. I generally find Rosenberg’s chronically bearish commentaries of interest and in this case by the fact that he’s reported to view CAPEX as a recession indicator.
This morning the Census Bureau released the October Durable Goods report for data through September. The CAPEX referenced by Rosenberg is the Manufacturers’ New Orders: Nondefense Capital Goods Excluding Aircraft data series, which is conveniently available in the FRED database. The data goes back to February 1992, so we only have two recessions during this timeframe to evaluate CAPEX as a recession indicator. Here is a look at the monthly data.