World View: Europe at Crossroads over Greece

This morning's key headlines from
  • Wells Fargo, Bancorp and other banks charging 300%+ interest for 'payday loans'
  • Netanyahu's government in Israel to move to far right
  • New Boeing weapon can target and shut down all electronics
  • Europe is at a crossroads over Greece

Wells Fargo, Bancorp and other banks charging 300%+ interest for 'payday loans'

Wells Fargo and U.S. Bancorp are among two banks that have are now charging 300% interest or more for small short-term loans often called "payday loans" because the bank recovers the money automatically from direct deposit accounts, as soon as the borrower receives his weekly or monthly pay. The loans are fairly low risk for the bank, since they can recover the loan, plus interest and fees, by directly debiting the borrowers bank account, and yet the banks are charging interest rates that are so high as to be in violation of some state laws. These payday loans are particularly vicious, because the banks target them at people who don't understand interest rates, of which there are plenty, and pull them into a vicious cycle where they have to keep borrowing because each new paycheck keeps getting swallowed up by the bank. Earlier this year, Wells Fargo was fined $175 million for defrauding for overcharging minorities during the subprime bubble. Banksters continue to search for new ways to increase their million dollary bonuses. Bloomberg

Netanyahu's government in Israel to move to far right

Israel's prime minister Benjamin Netanyahu announced that he will join forces with his foreign minister, Avigdor Lieberman, in January's elections. Lieberman is often referred to as "ultra-nationalist" because of his inflammatory rhetoric directed at Arabs, including a proposed law that would require Israelis to sign a loyalty oath or have their citizenship revoked. According to Netanyahu on Thursday: 

We are facing great challenges and this is the time to unite forces for the sake of Israel. Therefore Likud and Yisrael Beitenu [political parties of Netanyahu and Lieberman, respectively] will run together on the same ticket in the next elections.

We are asking for a mandate from the public to lead Israel against security threats, above all preventing Iran from arming itself with nuclear weapons and the struggle against terror.

Lieberman himself was a 1978 immigrant from Moldova, and has sought to represent the more than 1 million immigrants from the former Soviet Union. Al-Jazeera

New Boeing weapon can target and shut down all electronics

Boeing has successfully tested a new weapon, the Counter-Electronics High Power Microwave Advanced Missile Project (CHAMP), that can target electronic devices without harming humans or buildings. A plane can shoot a CHAMPS burst at a compound and immediately shut down all electronic equipment, including radar stations. The weapon was developed to counter "passive radar" systems that many countries are adopting to defeat American stealth technology. Business Insider

Europe is at a crossroads over Greece

Officials from the International Monetary Fund (IMF) reported to euro zone financial ministers that Greece's situation is much worse than previously predicted, and that Greece will badly miss its financial targets:  "It is clear that Greece is off track and there is no chance they will cut the debt to 120 percent of GDP in 2020 as envisaged. It will be rather 136 percent, and this would be under a positive scenario of a primary budget surplus, a return to economic growth, and privatisation."

In other words, even in the most unrealistically optimistic assumptions, the austerity measures already committed by Greece will fail by a substantial amount to meet Greece's commitment to lower its debt to 120% of GDP by 2020. If more realistic assumptions are plugged in, the target will be missed by substantially more.

This news comes at a time when the political situations in both Athens and Brussels are in total chaos. In Athens, the coalition of prime minister Antonis Samaras was threatened with collapse, as the Democratic Left persisted in opposition to the demands of the "troika" of European leaders for labor reforms that would lay off public sector works and raise retirement ages. In Brussels, the question of whether Greece would be granted its requested 2-year postponement of additional austerity measures was still a subject of debate. Furthermore, Wednesday's IMF report contained further bad news: Granting the 2-year extension would require giving Greece an additional 30 billion euros in bailout money, not just 20 billion as previous estimated.

As I and other people have been saying for two years, there is no solution to the problem of Greece's debt in this generational Crisis era. That is, it's not that politicians are not clever enough to think of a solution, and it's not that they've thought of two or three different satisfactory solutions, but can't agree on which one to implement. It's that no solution exists. This has been apparent for two years to anyone who does the math.

But now the same thing has become apparent to pretty much everybody, including people who are incapable of doing any math. There will be a European summit meeting for four days over the weekend, with plans for working sessions day and night. My bet is still that they'll find a way to kick the can down the road a while longer, just allowing the problem to worsen. But there's a growing opposition to that, especially from Germany, Finland and the Netherlands, since it's just "throwing good money after bad." So there's a possibility, though in my opinion not likely, that after four days and nights of arguing and haggling and shouting, the European summit leaders may finally conclude that they have no choice but to throw Greece under the bus. Reuters and Kathimerini

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