Greece needs €60bn in new aid, says IMF - Financial Times

July 3, 2015 at 2:01pm

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July 2, 2015 5:04 pm
Greece needs €60bn in new aid, says IMF

Greece needs more than €60bn in new financial help over the next three years and faces decades under a daunting mountain of debt that will make it vulnerable to future crises, the International Monetary Fund has warned.
In a new analysis that lays out Greece’s economic dilemma in stark terms, the IMF on Thursday called for Europe to grant the country “comprehensive” debt relief, arguing for the doubling of the maturities on its debts from 20 to 40 years.

The fund’s assessment is likely to provide succour to the Syriza-led government which is campaigning for a No vote in a referendum on Sunday. But the IMF also blamed it for the country’s deteriorating situation.
Before Syriza took power in January, the Greek economy had returned to growth and Athens had begun to put its debts back on a sustainable path, the IMF said. But the anti-austerity government’s decision to halt reform and privatisations and renegotiate the terms of its European-led bailout had led to a significant deterioration. The calling of a referendum followed by the shutting of banks and introduction of capital controls had only made the situation worse, it added.
The IMF released its analysis two days after Greece became the first advanced economy ever to default on the fund when it missed a €1.5bn repayment.
Yanis Varoufakis, Greek finance minister, insisted bailout negotiations would resume immediately after the referendum even if a No vote wins. But Jeroen Dijsselbloem, chairman of the eurogroup of finance ministers, warned Greeks their future in the euro was at stake.
“One illusion must be swept from the table: that if the outcome is negative then everything can be renegotiated and you will end up with an easier and more attractive package,” he said.
The eurozone’s top central bankers are set to reconvene on Monday and will almost certainly toughen the terms of emergency loans to Greece’s largest lenders if Greeks vote no in Sunday’s referendum, officials said. That could push one or more of the country’s biggest lenders over the edge and hasten Greece’s exit from the currency union.
The European Central Bank did not impose tougher discounts on the collateral Greek banks used to access loans on Wednesday to avoid claims that it was interfering in Greece’s referendum.
A senior IMF official also denied the fund was trying to influence the outcome of the vote by publishing its debt sustainability analysis.
The review — dated June 26, the same day Prime Minister Alexis Tsipras called for a referendum — said that even before this week’s events Greece needed €29.3bn in new financing for the 12 months beginning in October.
Chris Giles

Tsipras has earned his punishment
Efforts by Greek Prime Minister Alexis Tsipras to restart talks have been rejected by German Chancellor Angela Merkel
The Greek people are enduring the consequences of their prime minister’s childish misbehaviour
Continue reading
Over three years from October, Greece’s total financing needs amounted to €51.9bn, of which €36bn would have to come from its European creditors.
With the expiry of the eurozone’s bailout, Greece would need a further €10bn for the next four months, a senior IMF official said on Thursday. Moreover, there was a very real possibility that they would rise further as a result of the deteriorating economic situation.
“Clearly this is subject to very significant downside risks now,” a senior IMF official said. “It is urgent that we get out of this current situation.”
The IMF analysis put the onus on Greece’s eurozone creditors to grant it significant debt relief. Even with a new bailout Greece’s “debt would remain very high for decades and highly vulnerable to shocks”, the IMF said.
Among the potential concessions proposed by the IMF was a doubling of the maturities on Greece’s existing debts to 40 years and the inclusion of a 20-year grace period on repayments.
“We are saying that the key issue here is that Greece has a very high debt. It needs time to bring it down,” said a senior IMF official.
Chart: Greek government debt projections
“A significant haircut could possibly do it. But so could a significant extension of maturities that would mean that Greece would not have to go back to the markets for a very, very long time,” the official said.
Germany and other European creditors have opposed granting Greece any further debt relief until Athens has committed to and started to deliver economic and fiscal reforms.
Most creditors are strongly resistant to any “haircut” or write-off of Greece’s debt which would, in many cases, require the approval of national parliaments.
But a senior IMF official insisted that its recommendation for an extension of the maturities on Greece’s debts held by European creditors was not intended as a politically palatable compromise.
“This is a dramatic move. This is not . . . something that is easy that is being done to circumvent political constraints, whatever they may be,” the official said. “We are asking the Greeks to do very, very difficult things. We are asking the Europeans to do things that are very, very difficult for them also. Let’s be very clear about that.”

This Is the Method in the Greece Madness - TIME

July 3, 2015 at 2:07pm

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This Is the Method in the Greece Madness
Nicole Gelinas / City Journal @CityJournal July 2, 2015   

The country's leaders had a good reason to act a bit crazy

The world’s financial elite think that Greek prime minister Alexis Tsipras is insane for holding a referendum on the country’s economic future. But there is method in his madness. Greece’s crisis has gone on for too long and caused too many innocent people too much pain. It’s time to end it. If Europe’s lenders can’t come to terms with the simple fact that Greece has borrowed too much and can’t pay it back, then Greece has to come to terms with it for them.

The conventional wisdom holds that the 40-year-old Tsipras is irresponsible, impulsive, and volatile. He sure looked that way last week when he walked away from Europe’s latest offer, which was for Greece to slash spending and raise taxes in return for the cash to make a $1.7 billion debt payment to the International Monetary Fund (IMF) on June 30. Tsipras responded by closing the country’s banks, defaulting on that debt payment, and abruptly calling an election: Greek voters will decide Sunday whether to accept Europe’s terms. University of Athens economist Aristides Hatzis called the decision to hold a vote “irrational.” The Financial Times complained that Tsipras is “wielding” an “unjustified . . . referendum as a weapon against his Eurozone adversaries,” and counseled Greek voters to “listen closely to the words of Ms. Merkel.” The German chancellor and French president François Hollande have warned Greek voters that a vote against budget cuts and tax hikes is a vote to leave the euro.


But sometimes people have good reason to act a bit crazy. In 2009, Greece was running a budget deficit of more than 15% of annual spending, and investors were getting nervous. They wondered if Greece could make payments on its debt, then totaling about 130% of its national output—compared with about 75% for Britain, 54% for America, 61% for France, and 44% for Germany—and continue to provide public services. Investors cut Greece off, and the IMF, the European Commission, and the European Central Bank stepped in to provide Greece with €110 billion in return for spending cuts, tax hikes, and asset sales. The bailout didn’t work, and Greece’s economy continued to spiral down; Europe doubled its lending in 2012.

Lost in all of the talk about Greece’s possible default is that the country defaulted once before. In 2012, Greece used money from European governments to pay its private-sector creditors about half what it owed them. Was that a bailout of private creditors? The private creditors sure thought so—they happily took the deal. But Greece evidently didn’t default enough, since the rest of Europe felt the cure for Greece’s debts to private creditors was an even greater amount of debt to foreign governments.

Today, Greece owes 174% of its national output, a level of debt that simply can’t be repaid. As the IMF said last year, Greece’s debt, as a percentage of the economy, continues to rise, and “the extraordinary levels projected well into the next decade suggest that sustainability concerns”—that is, Greece’s ability to pay—“will remain an obstacle.” Greece has already tried cutting its budget and using the savings to pay down debt. In 2010, Greece raised its retirement age from 60 to 65 and reduced pension payments to retirees from 70% of their income to 60%. The formula for calculating pension payments was rejiggered to save the state money and “bonus” extra pension checks to retirees were eliminated. Because of these measures, Greece’s current budget is actually in surplus. “To have reached a surplus so swiftly is an extraordinary adjustment by any international comparison,” the IMF said last year. It wasn’t enough. Greece still can’t afford to pay its debt. Europe wants even more pension cuts as a condition of loaning to Greece. Without new loans, Greece won’t be able to pay off its old loans.

Greek citizens are suffering because their government promised them more than it could afford— and they may suffer more. But there’s no good reason why Greece’s creditors shouldn’t suffer more, too, because Greece’s government also promised them more than it could afford. If a sophisticated global creditor couldn’t grasp the debt problem before it was too late, how could a middle-class Greek retiree? Europe says it isn’t fair to ask German and French citizens to subsidize Greek retirements. By the same token, though, it’s not fair for Greece to shoulder a 27% unemployment rate—much higher among younger people—so that German and French investors, public or private, can avoid shouldering the loss they deserve for their own bad investment.

Moreover, the other measures that Europe wants Greece to take don’t seem particularly good for Greece. Europe wants Greece to raise its value-added tax and its corporate-income tax. Raising taxes in an environment of double-digit unemployment is never a good idea.

Greece’s default—and Sunday’s possible ratification of that default—need not push the country out of the euro. Greece can work out an arrangement with its European creditors, though they’ll have to settle for much less than they’re owed and wait longer to get it. Europe can force Greece out of the euro if it wants to by refusing to lend to Greek banks as they struggle to deal with panicked depositors withdrawing all their money. (Greece cannot keep its banks closed forever.) Either way, though, default doesn’t have to mean disaster, or, at least, a worse disaster than the current one.

A decisive Greek default might give the world a needed lesson: Stop lending money to borrowers who can’t pay it back fully—and when you’ve already lent too much money to borrowers who can’t pay it back, don’t expect to be fully repaid. The world should have learned this lesson in 2008, when the global financial crisis reached its nadir. Instead, Western governments continued to lend trillions of dollars at ever-cheaper interest rates to everyone from corrupt Brazilian oil companies to subprime American SUV buyers. Even with all this money sloshing around, Detroit couldn’t repay what it borrowed, Puerto Rico can’t repay what it borrowed, and Chicago probably can’t repay what it’s borrowed. Even healthier cities such as New York can’t make good on their obligations to bondholders and future pensioners.

People often visit Greece to take a vacation from reality. But perhaps it’s time for Greece to show the rest of the world what reality looks like.

Nicole Gelinas is the Searle Freedom Trust Fellow at the Manhattan Institute and a City Journal contributing editor. This article originally appeared on City Journal

The past five days have been worse than all that has gone before - Financial Times

July 2, 2015 at 11:46pm

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July 1, 2015 10:53 pm
The past five days have been worse than all that has gone before

Sir, Memory. No memory of life before the financial crisis; politics has dominated it ever since. But now I can hardly remember life before Friday night. Fear. I am terrified of tomorrow, all I now see is black. Uncertainty, leading us through our days, every remainder of hope for a brighter future being destroyed by the minute. I look at my three-year-old niece, I envy her ignorance, I envy her age. I am 21 years old and the past few days I feel tired by life. A referendum that supposedly gives me the right to define my future, seems to have taken it away.
There are hundreds of people queueing at the ATMs and petrol stations, there is silence in the streets, people’s faces are frozen. This is the reality since Friday night. There are, and have been for a long time, people literally starving. However, it seems that instead of their situation improving, the rest of us will have no different a fate.

Families and friends divide in Yes and No camps. We are called to exercise our democratic right by voting on a referendum while having no tangible explanation of what will follow each decision. I see everyone I know ready to take this huge responsibility without even being prepared to do so. I notice us, arguing endlessly, everyone supporting their stance fervently, ego dominating minds and words, while having no clue as to what is really at stake.
We all want the crisis to end, we all crave growth and happiness. I do not remember my parents being free of stress and anxiety in the past years. I do not remember not noticing shops closing every month, or the rapid increase of beggars in the streets. People that, before the financial crisis, never had to beg for anything. However, the past five days have been worse than all that has been so far. They say that all we hear is propaganda; but we have lost our trust in all sides, now everything seems to be lies.
It feels like an end. The end of our lives as we knew them. Yes, the lives that, before Friday, we already thought could be better; now we realise they were better then. The only thing we truly wish for is that the worst is not yet to come.

It Looks a Perfect Exit Stage Left for Alexis Tsipras - Wall Street Journal

July 2, 2015 at 6:05pm

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It Looks a Perfect Exit Stage Left for Alexis Tsipras
If Grexit was the prime minister’s goal, it is hard to think of anything he would have done differently

July 1, 2015 4:46 p.m. ET

How much of Alexis Tsipras’s tactics in the past five months have been driven by incompetence and how much by conspiracy? It’s a question even the historians may never fully resolve. The Greek Prime Minister said in a televised statement that those accusing him of having a deliberate plan to take Greece out of the eurozone were telling lies. But what is certain is that if Mr. Tsipras had set out in January to take Greece out of the eurozone, it is very hard to think of anything he would have done differently.

He won the election on a pledge to respect the overwhelming desire of voters to remain in the eurozone, which meant he had no choice but to go through the motions of negotiating with Greece’s creditors for as along as they were willing to indulge him. If Grexit was always his goal, then his only challenge was to ensure the talks dragged on until the bailout expired, capital controls were introduced and the country defaulted, making a euro exit hard to avoid. The only risk to such a strategy was a bank run before the bailout expired, in which case politics may have intervened.

If this was Mr. Tsipras’s plan, he has played it perfectly. Depositors were persuaded to keep their money in the banks by daily assurance for five months that a deal was imminent. In fact, for most of that time, no negotiations of any substance took place at all. Mr. Tsipras strung out the process with endless discussions over what the creditors should be called, where the talks should be held and who should talk to whom.

At the last minute, he tabled proposals that never stood any chance of being accepted, but which have allowed him to claim it was the creditors who were being unreasonable. Now with the bailout expired, the banks closed and the country in default, he has called a referendum asking voters to reject a deal that is no longer on the table.

Mr. Tsipras continues to insist that a “No” vote won’t lead to Grexit but will strengthen his hand with the creditors. No policy maker anywhere else in the eurozone thinks this is true. The relationship between Mr. Tsipras and other eurozone leaders has broken down so irretrievably that it is hard to see how they can possibly agree on new loans for Greece while he remains in power. Instead, a “No” vote would force the European Central Bank swiftly to conclude that the Greek banking system, which relies heavily on government guarantees, was insolvent, perhaps as soon as Monday. The banks would be forced to close and couldn’t be reopened until they had been recapitalized, either via a bailing in of depositors, or using a newly-printed currency.

Of course, Mr. Tsipras may have reached this point by accident. While there are certainly some hard-liners in his party who have always advocated “rupture” with the country’s creditors, the inscrutable Mr. Tsipras may simply have been one of those who accepted the assurances of Yanis Varoufakis, the self-confident finance minister and expert in game theory, who has always argued that the creditors would ultimately capitulate in the face of Greek intransigence.

Even now, most eurozone policy makers are willing to believe that Mr. Tsipras has blundered into his current position as a result of inexperience and incompetence rather than as a result of a secret mission to take Greece out of the euro. Perhaps Mr. Tsipras did miscalculate. If he sincerely thought that the eurozone would extend the bailout deal for an extra week to allow Syriza to campaign against it, then he really was naive. And if he didn’t realize that by turning his back on the only source of funding available to Athens, that the ECB was bound to take steps to protect its own balance sheet by—at the very least—capping the exposure of Greek banks to further emergency loans, then he was certainly inexperienced and incompetent.

It seems clear that Athens failed to anticipate how quickly panic would spread once capital controls were introduced and pensioners without bank cards found themselves cut off from their savings.

Yet even now, Mr. Tsipras’s tactics continue to baffle his creditors. At a meeting of Eurogroup finance ministers on Tuesday, Mr. Varoufakis formally requested the eurozone start talks on a third bailout program—yet somehow failed to provide a promised letter detailing what reform commitments Greece was ready to make in return. When the letter duly arrived on Wednesday, it turned out to fall far short of the expected capitulation.

Creditor officials said it created substantial new fiscal gaps compared to what the creditors had been demanding and took no account of further damage to the economy since the introduction of capital controls. Besides, many Eurogroup ministers made clear to Mr. Varoufakis that there could be no discussion of a new bailout program until Athens either canceled the referendum or agreed to campaign for a “Yes” vote. Instead, Mr. Tsipras took to the airwaves on Wednesday to reiterate his call for a “No” vote.

Mr. Tsipras’s decision to escalate rather than capitulate raises the stakes but not all of Greece’s creditors will be disappointed. Opposition leaders believe that with each day that capital controls remain in place, the polls are swinging further in their direction and that they are on for a large win.

That would bring a degree of political clarity to the situation: Mr. Tsipras would be forced to resign while eurozone officials say that in the event of a strong “yes” vote, they would have an obligation to find a deal with any new Greek government to keep Greece in the eurozone.

But the situation may not be so simple. In deciding to continue to fight for a “No,” Mr. Tsipras and his party can absolve themselves of any responsibility to implement a deal. Since Syriza and other antibailout parties dominate the current parliament, new elections would then be needed which would take up vital time and which could return him to power. Indeed, if Mr. Tsipras really did have his heart set on Grexit, then campaigning for a “No” vote in the referendum could enable him to “win” whatever the outcome.

Write to Simon Nixon at simon.nixon@wsj.com

Explainer: If Greece leaves the euro - Financial Times

June 30, 2015 at 1:31pm

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EU/IMF inspectors in Greece as eurozone exit fears grow...epa03316123 An illustration showing a Greek flag projected onto a Greek one euro coin in Schwerin, Schwerin,†Germany, 24 July 2012. International creditors will on 24 review Greece's troubled austerity programme at a time of renewed concern about the country's future in the eurozone. The new conservative-led coalition government is scrambling to come up with 2.5 billion euros (3 billion dollars) more in savings to meet the target of 11.5 billion euros set by the European Union and the International Monetary Fund (IMF) for 2013 and 2014. Among the measures recommended by the Center of Planning and Economic Research (KEPE) pension cuts worth an estimated total of 5.1 billion euros. EPA/JENS BUETTNER©EPA
What happens once a country leaves the euro?
On financial markets a new currency first needs a new currency code that can be identified by computers for trading and payments. They are issued by the Swiss-based International Standards Organisation, a worldwide federation of national standards. It provides an alphabetic three-character code, with the first two letters representing the country and the third the name of the currency. In Greece’s case it could not go back to its old code for drachma, GRD, because there are still some outstanding payments to be made. It would require a new code, most likely GRN.

After that, the code must be entered into software and payments systems so the computers can recognise it for payments processing and trade confirmations and other critical but unseen functions. Market infrastructure providers say this can be done in one business day if needed.
Is that really all it takes for markets?
In reality it requires far more. Switching over to a new currency is trickier when it comes to resolving long-dated forward financial contracts, such as swaps and options.
There is a host of legal questions that have to be resolved as payments are switched from one currency to another. Some trades may have to be modified or even rebooked. It is far from an impossible job, but as it involves legal changes, it is a slow and careful process.
Thankfully there is no wall of long-term Greek derivatives trades. The five-year saga has made investors wary and few have accepted Greek central bank-backed collateral for their trades, even if the European Central Bank has permitted it to be used as collateral in Eurosystem monetary policy operations. Some market participants have suggested it could be done in 30 business days but that might prove to be optimistic too.
What would the market expect the Greek government to do to support its new currency?
The Greek government would be likely to set a new Greek currency at half the value of the euro to gain some degree of competitiveness, and enforce that through a mixture of capital controls and currency intervention, and create liquidity through bond issuances.
But how to redenominate euro notes is the hard part. Greece would suffer from disruption to the banking system, bankruptcies, people trying to take their money out of the country illegally and uncertainty about commercial transactions.
It took the euro three years to get from launch date to notes issuance, and although it is unlikely that it would this long for Greece to set up a new currency the process could still take months.
What impact would Greek exit have immediately on the markets?
Market turmoil following an announcement of capital controls or an exit from the euro would not worry a forex settlement service such as CLS.
It is unlikely that there would be a lot of trading business at first though. It is an open question as to how much of the new currency people would have to trade.
Beyond that, Greece would also have to develop a system to settle payments in central bank money, but that could take several years.
Could be a good outcome for Greece?
“Introducing a new Greek currency is do-able over time,” says David Puth, CLS chief executive, “but it is not cost-free.”
“The introduction of a new currency is complex when done in a planned way. When done suddenly and under duress, the process will be disruptive with many unintended consequences that cannot all be anticipated.”
OK, so that’s the Greek side of the saga. What about the euro, is that unaffected?
Not exactly. That is because a Greek exit blows apart the principle sacrosanct to the EU — that eurozone membership is a club you can join but cannot leave. That affects investors, corporations and others with uneven exposure to a break-up of the eurozone.
Such as who?
Such as an Italian manufacturer, say, whose assets and revenues are in Italy but whose financing is done in euros.
So what could it do to protect itself?
James Wood-Collins, chief executive of Record Currency Management, which advises clients on hedging forex exposures, suggests establishing re-denomination swaps or legal tender contracts. They would put a price on the likelihood and impact of a country leaving the eurozone and re-establishing its domestic currency.

“Banks and other market participants have discussed such instruments in recent years, but a market has not yet been established,” he says. “The potential exit of Greece could provide the necessary catalyst for this development.”

Greece must be saved from political, economic and social collapse - Financial Times

June 30, 2015 at 12:07am

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June 27, 2015 8:30 pm
Greece must be saved from political, economic and social collapse
Tony Barber


This may be the first step backwards in the harmonious integration of Europe, writes Tony Barber
 The leaders of Germany and France offered to release billions in frozen aid on Friday in a last-minute push to talk Greek Prime Minister Alexis Tsipras into contentious pension reforms in exchange for filling Athens' empty coffers until November. REUTERS/Yannis Behrakis©Reuters

In spite of the recklessness of its radical leftist-led government, in spite of the failures of the political classes that have misruled the nation since the return of democracy in 1974, in spite of the chronic clientelism and corruption of the state, in spite of the selfishness of its business oligarchies and in spite of the unerring capacity of its foreign creditors to miss the big picture, Greece must today be saved from political, economic and social collapse.
Without such an effort, which must be led by the EU, Greece will be sucked ever more deeply into the political radicalism, economic misery, organised crime, uncontrolled migration and even outright war that characterises an arc of countries from Bosnia-Herzegovina in the Balkans to Syria on the east Mediterranean coast.

It is irrelevant today to assign blame for what is shaping up as a Greek debt default and exit from the eurozone. The clock will not stop just because Greece’s eurozone partners — if “partners” is even the right word any more — have stated their patience is at an end. Greece is in south-eastern Europe, and the stability of south-eastern Europe is a matter of the highest importance to the EU and the Nato alliance.
If Plan A was to find a way of kicking the can down the road and keeping Greece in a support programme that maintained its eurozone membership, and if Plan B (now being implemented) is to protect the rest of the eurozone from Grexit, then there needs to be a Plan C. Plan C will require immediate action to prevent the implosion of the Greek economy and contain the poisonous political repercussions of the failed aid-for-reform negotiations. It will mean demonstrating to ordinary, desperately hard-pressed Greek citizens that its allies will not let down their country.
Even if these efforts achieve some success, however, let there be no doubt about the broader historical significance of what is unfolding in the Greek tragedy. It marks the first step backwards in what used to be celebrated as a steady, if sometimes wobbly, process towards the harmonious integration of Europe, a continent torn to shreds in the second world war and then divided, until 1989, into a democratic west and Soviet-controlled communist east.
The goal of harmonious European integration is now under greater threat than ever, thanks to the challenges of irregular migration, economic stagnation, Russian truculence, narrow-minded British attitudes and the appalling mishandling of the eurozone’s troubles.
But, for now, the overriding priority must be to help Greece — in or out of the eurozone.
tony.barber@ft.com

Greece’s Debt Crisis Sends Stocks Falling Around Globe - New York times

http://www.nytimes.com/2015/06/30/business/international/daily-stock-market-activity.html?hp&action=click&pgtype=Homepage&module=a-lede-package-region&region=top-news&WT.nav=top-news&_r=0

Greece’s Debt Crisis Sends Stocks Falling Around Globe
By DAVID JOLLY and KEITH BRADSHERJUNE 29, 2015


The Nikkei 225 ended 2.9 percent lower on Monday, its weakest close since June 19. Credit Thomas Peter/Reuters
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PARIS — Stocks fell sharply in Europe and Asia on Monday, and markets in New York appeared headed for a slump at the opening, as Greece’s financial difficulties spread worries about possible broader harm to the global financial system, and Chinese investors endured another topsy-turvy session.

The Euro Stoxx 50 index of eurozone blue chips were down 3.9 percent in afternoon trading, having fallen about 5 percent at the opening. The FTSE 100 index in London was down 1.8 percent.

In Greece, banks and markets are closed until July 6, after Prime Minister Alexis Tsipras interrupted last-ditch debt negotiations early Saturday with the announcement that he was calling a referendum for July 5 on whether to accept the tough terms offered by international creditors.



Greeks lined up to withdraw cash from an Alpha Bank A.T.M. in central Athens on Sunday. Daily limits on cash withdrawals loomed as part of the government's emergency measures in the face of its fiscal crisis.Greece Will Shut Banks in Fallout From Debt CrisisJUNE 28, 2015
An anti-austerity protester burned a euro note at a demonstration in Athens on Sunday.Currency Crisis: The Next Few Days Have the Potential to Transform Greece and EuropeJUNE 28, 2015
Graffiti on a street in central Athens on Sunday. The European Central Bank said it would not expand an emergency loan program that has been propping up Greek banks in recent weeks while the government was trying to reach a new debt deal with international creditors.Cash Withdrawals and Hoarding as Default Looms Over GreeceJUNE 28, 2015
Investors have been concerned by the probability that Athens will be unable to meet a 1.6 billion euro, or roughly $1.8 billion, loan repayment to the International Monetary Fund that is due on Tuesday, with uncertain consequences for Greece’s future in the eurozone and even in the European Union.

While investors were clearly concerned about the events of the weekend, there was no sign on Monday of widespread panic. Holger Schmieding, chief economist at Berenberg Bank in London, wrote in a note that the current situation was “a tragedy for Greece,” but that it was “not a ‘black swan’ moment.”

The European Central Bank and other eurozone authorities have had four years to prepare for this moment, Mr. Schmieding wrote, and “we expect contagion control to work, by and large.”

The euro also dropped, falling 0.5 percent against the dollar, to $1.1111, as investors feared that Greece’s troubles would have a spillover effect and would make European assets less attractive.



Bonds of the most exposed European governments, including Italy and Spain, fell sharply, while their yields — or interest rates, which move in the opposite direction of prices — rose. The prices of bonds sold by countries considered safe investments, like Britain, Germany and the United States, all rose.

Greek two-year bond prices were down sharply, with yields rising to more than 32 percent. Comparable German bonds were trading to yield less than 1 percent.

With the Athens exchange closed, Greek equities in the form of American depositary receipts fell sharply in premarket trading in the United States. Those equities for the National Bank of Greece, the country’s biggest lender in terms of assets, fell more than 30 percent early Monday.


The country became the epicenter of Europe’s debt crisis after Wall Street imploded in 2008. Now, it is struggling to pay its debt, and its people and creditors are growing restive.



Greece has been struggling to find a solution to its debt troubles for years. But the speed with which its government called a referendum on the bailout terms and shut its banks appears to have caught at least some investors off guard.

“Most people’s consensus forecast was for them to muddle through with some kind of a deal,” said Kymberly Martin, the senior market strategist at the Bank of New Zealand, “so it has taken people a little bit by surprise.”

Standard & Poor’s 500 index futures were down more than 1 percent in the European morning, suggesting that Wall Street would open lower.


Greece Shuts Banks to Stem Tide of Withdrawals

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Pensioners line up outside a closed bank in Athens on Monday. The European Central Bank said it would not expand an emergency loan program that had been propping up…Greek banks for weeks. Credit Yannis Behrakis/Reuters
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In Asia, an interest-rate cut by Beijing on Saturday failed to stem the fall in Chinese stock markets beyond the first hour of trading. The Shanghai composite index closed the day 3.3 percent lower, having been down as much as 7.6 percent and after plunging more than 7 percent on Friday. In Hong Kong, the Hang Seng fell 2.7 percent.



The Tokyo benchmark Nikkei 225 stock average fell 2.9 percent, and the Australian market barometer S&P/ASX 200 fell 2.2 percent in Sydney.

The price of gold, which tends to become more popular during times of financial or political instability, climbed 0.6 percent, to $1,180.30 per ounce.




The People’s Bank of China, the country’s central bank, reduced one-year lending and deposit rates by a quarter percentage point, effective on Sunday, and reduced the reserves that some banks are required to hold, allowing them to lend more money.

The central bank had previously refrained from acting so quickly after a market downturn, so its action over the weekend was interpreted as a clear sign that the government was reluctant to see the Chinese stock markets lose their gains after doubling in the past 12 months.


“It marks a slight departure from the previous P.B.O.C. moves, because this time it looks to be directly timed as support for the equity markets,” said Erwin Sanft, the head of China strategy in Hong Kong at Macquarie Capital Securities, referring to the Chinese central bank.

Rajiv Biswas, chief economist for Asia at IHS Global Insight, said that if Greece defaulted and left the eurozone, the effects on Europe’s economy and on exporters in Asia would depend on whether European leaders could prevent financial troubles from spreading to Portugal, Spain and possibly Italy. If the damage is not contained, economic output in Asia could drop 0.3 percent next year on lower exports to Europe, Mr. Biswas said.

Ms. Martin of the Bank of New Zealand said such calculations were not at the front of investors’ minds. “I think people are still more concerned about the immediate impact, not the longer-term effects on eurozone growth,” she said.

David Jolly reported from Paris, and Keith Bradsher from Hong Kong.

8 Epic Business Failures with Donald Trump’s Name on Them - TIME

http://time.com/money/3923629/donald-trump-name-business-failures/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+timeblogs%2Fcurious_capitalist+%28TIME%3A+Business%29

Brad Tuttle @bradrtuttle June 16, 2015  
Donald Trump


Business mogul Donald Trump gives a speech as he announces his candidacy for the U.S. presidency at Trump Tower on June 16, 2015 in New York City.

On Tuesday, Donald Trump threw his name into the ring as an official candidate for president in 2016. “I’m using my own money. I’m not using the lobbyists. I’m not using donors,” Trump explained of his candidacy, before adding a heaping dose of trademark bluster: “I don’t care. I’m really rich.”

As for why he’s running, Trump pointed to his business sense and declared, “We need somebody that can take the brand of the United States and make it great again.”

Yet time and again over the years, the Trump brand has been featured in many embarrassing high-profile flops in the business world. Here are some of the misfires attached to the “Trump” name.

Trump Shuttle
In 1989 the Eastern Air Shuttle was reborn as the Trump Shuttle, complete with a large “T” on the tails of the planes and—no joke—”gold lavatory fixtures.” The goal was to create a top-notch luxury flight service—they even paired with a company that rented laptops, which was cutting edge at the time—but the operation was hemorrhaging cash within weeks and was completely out of business by 1992.

Trump: The Game
The original catchphrase for the Monopoly-like Trump board game introduced in 1989 was the Trumpism “It’s not whether you win or lose, but whether you win!” Sales were underwhelming, to put it mildly. But after Trump became a cultural phenomenon in the reality TV show “The Apprentice,” the game was back on the market featuring a new expression: “You’re fired!”

Trump Magazine
“The Trump Brand evokes elegance and TRUMP Magazine will reflect the passions of its affluent readership by tapping into a rich cultural tapestry,” explained a 2007 press release introducing Trump Magazine. A year and a half later, the quarterly periodical, billed as a “highly anticipated ‘must read’ among VIPs and influencers,” had ceased publication.

GoTrump.com
Billed as his “biggest venture to date in the $80 billion online travel industry,” Donald Trump introduced this travel search engine powered by Travelocity in 2006. The site was supposed to host “Trump Picks” and “Trump Deals,” and it was accompanied by the introduction of The Donald’s “first-ever email address” (MrTrump@GoTrump.com) which he would be using to “offer travel tips and advice.” The site was shut down a year later.

Trump Casinos
The Atlantic City casino Trump Plaza, which was built in the 1980s at a cost of $210 million, was sold off at the “fire sale price” of $20 million in 2013, not long before several casinos shut down in the fading gambling destination. Trump insists that he cashed out the vast majority of his interests in the Trump Plaza and nearby Trump Taj Mahal long before Atlantic City property values tanked, but earlier this year he reached an agreement to keep his name on them.

Trump Mortgage
“Donald Trump is putting the suit and tie back in the mortgage business,” a 2006 press release explained of his brand new venture, Trump Mortgage. Whatever that means. Less than two years later, the suit and tie were back in the closet, or perhaps up for sale at the consignment store, so to speak, as Trump Mortgage closed up shop. Trump speedily downplayed the venture as well, saying, “The mortgage business is not a business I particularly liked or wanted to be part of in a very big way.”

Trump Steaks
AdAge described Trump Steaks, featured on the June 2007 cover of the Sharper Image catalogue, as like “a ‘Saturday Night Live’ spoof, but it’s not.”

Trump Vodka
Donald Trump made no secret of the fact that he doesn’t drink. Nonetheless, a decade ago he rolled out Trump Vodka and promised it would be “a major player in the vodka arena” because “it’s a superb product and it’s beautifully packaged,” and “there’s nobody who markets better in the luxury category than Donald Trump.” This is one “major player” that disappeared from the marketplace several years ago.

Eyewitness to the Fall of Saigon - TIME

June 27, 2015 at 4:50pm

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http://time.com/3838802/fall-of-saigon-memories/

Forty years later, TIME's former staffers remember their final days in the Vietnamese city




It was 40 years ago that Roy Rowan heard the surprising song coming through the radio in Saigon. Rowan was in the city as a correspondent covering the Vietnam War for TIME. It had been clear for weeks that the end of the war was imminent. But, until that moment, hearing a Christmas song in April, it hadn’t been clear just how soon the end would come.

“The ending was very dramatic, as everybody knows,” Rowan recalls. “The signal to evacuate was ‘White Christmas.’ I remember waking up at 3:00 in the morning and hearing ‘White Christmas’ and wondering what the hell it was going to be like trying to walk out of this place.”

Rowan is now 95, but his memory of that day is sharp. The details he summons 40 years later match those he related in the pages of TIME during those hectic weeks in 1975: the sound of the shelling, the fear of the approaching army, the sight of Tan Son Nhut airport fading away into the distance as he and his colleagues choppered away.

After a war that dragged on for years, it all happened quickly. Less than two months before, the communist forces of North Vietnam attacked in the highlands north of Saigon. The decision by the Southern forces to withdraw from that area backfired as the North continued to advance. Amid political turnover in Saigon, ceasefire proposals were rejected. The North would not rest until the Americans were gone. On April 28, the airport came under fire; President Gerald Ford made the decision to launch Operation Frequent Wind, the emergency evacuation of all Americans.


In those few weeks of warning, TIME had worked to evacuate its Vietnamese staffers, who might have faced retribution if they were left behind. It took until the last week for them and their families to get out — twice the plan had been cancelled, and Secretary of State Henry Kissinger had gotten directly involved. (Pham Xuan An was the only staffer to stay behind.) Saigon bureau chief Peter Ross Range got out around the same time.

“When the end came, it came with stunning swiftness,” Range, now 73, says, “but it was not a total surprise to most of us.”

That left Rowan, correspondent Bill Stewart, and photographers Dirck Halstead and Mark Godfrey to be evacuated on the last day. Hearing the signal to evacuate, they made their way out of the Continental Palace Hotel and to an assembly point nearby, under the watchful eye of the armed militiamen whom they were leaving behind. They ended up at the airport, under Marine guard, waiting for the word that the helicopters were ready. Later, safely on board the U.S.S. Mobile, Rowan sent the magazine a cable, which ran under the headline “This Is It! Everybody Out!”:

Just as our group of 50 prepared to leave, that rule was changed to make way for more passengers: the Marine at the door shouted, “No baggage!” Suitcases and bags were ripped open as evacuees fished for their passports, papers and other valuables. I said goodbye to my faithful Olivetti, grabbed my tape recorder and camera and got ready to run like hell. The door opened. Outside I could see helmeted, flak-jacketed Marines—lots of them —crouched against the building, their M16s, M-79 grenade launchers and mortars all at the ready.
We could view the whole perimeter.
There was a road leading to a parking lot, and on the left was a tennis court that had been turned into a landing zone.
Two Sikorsky CH-53 Sea Stallions were sitting in the parking lot. I raced for it. Marines, lying prone, lined the area, but they were hard to see because their camouflaged uniforms blended with the tropical greenery. I almost stepped on a rifle barrel poking out from under a bush as I entered the lot.
The Sea Stallion was still 200 ft. away, its loading ramp down and its rotors slashing impatiently. Fifty people, some lugging heavy equipment despite the order to abandon all baggage, piled in, one atop another: correspondents, photographers and Vietnamese men, women and children. The loadmaster raised the ramp, the two waist gunners gripped the handles of their M16s, and, with about a dozen passengers still standing like subway straphangers, the helicopter lifted off.
The confusion of the war had dissipated, leaving one indisputable fact: the U.S. was no longer in Vietnam. “Perhaps appropriately,” the magazine noted, “the American goodbye to Viet Nam was the one operation in all the years of the war that was utterly without illusion.”

On the morning of April 30, 1975—exactly 40 years ago—the last U.S. helicopter lifted off and South’s President Minh surrendered unconditionally. That afternoon, the surrender was accepted. Word came from the Provisional Revolutionary Government: Saigon was liberated, and Saigon was no more. It would be known as Ho Chi Minh city, and it was theirs.

IMF Would Be Other Casualty of Greek Default - Bloomberg

http://www.bloombergview.com/articles/2015-06-26/imf-would-be-other-casualty-of-greek-default

JUN 26, 2015 2:00 AM EDT
By Mohamed A. El-Erian
All sides are working hard to prevent Greece from defaulting on its debt obligations to the International Monetary Fund -- and with good reason: Such an outcome would have dire consequences not only for Greece and Europe but also for the international monetary system.

The IMF's "preferred creditor status" underpins its ability to lend to countries facing great difficulties (especially when all other creditors are either frozen or looking to get out). Yet that capacity to act as lender of last resort is now under unprecedented threat.

Preferred creditor status, though it isn't a formal legal concept, has translated into a general acceptance that the IMF gets paid before almost any other lender. And should debtors fail to meet payments, they can expect significant pressure from many of the fund's other 187 member countries. That's why instances of nations in arrears to the fund have been limited to fragile and failed states, particularly in Africa.

Greece's Fiscal Odyssey

The IMF has been able to act as the world's firefighter, willing to walk into a burning building when all others run the other way. Time and again, its involvement has proved critical in stabilizing national financial crises and limiting the effects for other countries.

Not long ago, it would have been improbable for the IMF to engage in large-scale lending to advanced European economies (the last time it did so before the euro crisis was in the 1970s with the U.K.). And it would have been unthinkable for the fund to worry about not getting paid back by a European borrower. Yet both are happening in the case of Greece. Moreover, compounding the unprecedented nature of the Greek situation, other creditors (such as the European Central Bank and other European institutions) are in a position to help provide Greece with the money it needs to repay the IMF. Yet that would only happen if an agreement is reached on a policy package that is implemented in a consistent and durable fashion.

If Greece defaults to the IMF, it would find its access to other funding immediately and severely impacted, including the emergency liquidity support from the ECB that is keeping its banks afloat. The resulting intensification of the country’s credit crunch would push the economy into an even deeper recession, add to an already alarming unemployment crisis, accelerate capital flight, make capital controls inevitable and, most probably, force the country to abandon Europe’s single currency.

The IMF also would be worse off. A Greek default would be the largest case of nonpayment since the institution was created in 1945. It would fuel both internal and external criticism that the fund had been co-opted by European politicians, adding to longstanding worries about the slow progress in reforming its outmoded governance, representation and some of its practices (including the “tradition” that the head of the institution always be a European). And it would make the IMF more hesitant to lend aggressively in other crises.

Fortunately, such a fate can still be avoided if Greece and its creditors succeed in completing what have been painful negotiations for all involved. If they don't, we would have to add the IMF's reputation to the casualties of a crisis that already has inflicted horrific suffering on millions of Greek citizens.

To contact the author on this story:
Mohamed A. El-Erian at melerian@bloomberg.net

To contact the editor on this story:
Max Berley at mberley@bloomberg.net

The dangers of living in a subnormal interest rate world - Financial Times

June 24, 2015 at 6:28pm

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http://www.ft.com/intl/cms/s/2/4435a95e-18fc-11e5-8201-cbdb03d71480.html?segid=0100320#axzz3dxxRYHVl

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The dangers of living in a subnormal interest rate world
John Plender


Debt and low investment returns both present problems
Federal Reserve Chair Janet L. Yellen speaks during a press briefing at the Federal Reserve June 17, 2015 in Washington, DC. The Federal Reserve left its benchmark interest rate unchanged at near zero Wednesday, while describing US economic growth as "moderate" after the winter slowdown. But predictions made by the individual participants in the Fed's monetary policy meeting indicated most expect the federal funds rate to rise above 0.5 percent by year-end. The Federal Open Market Committee trimmed its economic growth forecast for 2015 to just 1.8-2.0 percent, down from March's 2.3-2.7 percent outlook, to account for the unexpected contraction in the first quarter of the year.
Janet Yellen has said when rises do come they will be small, incremental and predictable

It is curious to reflect that when US and UK policy interest rates were cut to their lowest ever levels in March 2009, markets expected them to be on the rise within the year. More than six years later the rates remain the same and the markets are still obsessed with the timing of a rise. When that will happen is as clear as mud in the wake of the Federal Open Market Committee’s statement last week.
The one thing that is beyond doubt is that the “normalisation” of monetary policy is a long way off. Janet Yellen, chairwoman of the Federal Reserve, has indicated that when the rises do come they will be small, incremental and predictable. For some years we will confront a subnormal interest rate world.


It will also be a low growth world — witness the downward revisions to growth projections of both the Federal Reserve and the Bank of England this month. The eurozone and Japan, despite enjoying the benefits of big competitive devaluations, are struggling to deliver half-decent growth rates.
And competitive devaluation is anyway a zero sum game that does nothing to boost the global economy. China is slowing palpably even if the official figures are disguising the underlying reality. The post-crisis assumption that emerging market economies would show the developed world a clean pair of heels now no longer holds.
Against a background of inadequate global demand the collapse in energy and commodity prices has added powerful disinflationary impetus. Wage increases in the developed world, with the notable exception of the UK just recently, have been subdued.
Forward markets are telling us that interest rates are going to be much lower than pre-crisis average policy rates since 1945 for the US, UK, the eurozone and Japan, which were respectively 3 per cent, 7 per cent, 3 per cent and 4 per cent.
In other words, the markets are saying that this time is different, a formulation that is reliably dangerous when it comes to predicting the future. Of course, some things really are different. For much of the postwar period most central banks were not independent, though whether independence has been the driving force behind prolonged disinflation is another matter, as is the question of whether central banks will remain independent in future.
Given the quasi fiscal nature of their activities since the crisis and the risk that unconventional measures pose to their balance sheets, the possibility of a political land-grab in monetary policy is not negligible.
On the other hand, liberalisation of labour markets and the decline of union power seems unlikely to be reversed in the short and medium term. Note, though, that with ageing populations, a shrinking workforce may exercise market power to grab higher wages against a retired population that tries to use voting power to secure stable retirement incomes.
The dangers inherent in a subnormal interest rate world relate, first, to the accumulation of debt. Debt of almost any size in relation to gross domestic product becomes manageable at today’s negligible interest rates. Whether it stays manageable depends on whether politicians seize the opportunity to deliver structural reforms and infrastructure investment to enhance growth, without which debts cannot ultimately be serviced.
‘Gradual’ is the word as Yellen seeks to assuage markets

US policy makers expect rates to move at pace that is exceptionally sluggish by historical standards

The snag is that low growth makes it hard to summon up the political will for reform, which tends to impede growth in the short run before producing a longer term pay-off.
Then there is the problem of dismal investment returns and the impact of low discount rates on pension fund liabilities. It is impossible to know how far pension fund deficits dampen animal spirits in the boardroom, but where pension funds are big in relation to the company, deficits cannot help.
They may well have been a factor, albeit a minor one, in the weakness of investment since 2008. Equally important, a subnormal interest rate environment reduces the scale of creative destruction and confers advantage on big companies at the expense of more productive smaller companies that lack good access to credit markets.
In such a world any reversion to the historic interest rate mean is distant. There is no generalised sword of Damocles hanging over the heavily indebted developed world for the moment. Yet for individual countries an early reversion may be the reward for bad policy. Japan and southern Europe are the laboratories in which this hypothesis will be tested.
The writer is an FT columnist

劫數當年誰作孽 政改罡風廢真身 - 林行止 《信報財經新聞》創辦人。

June 11, 2014 at 4:03pm

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未來日子，北京對港政策，肯定愈來愈硬！

林行止：劫數當年誰作孽 政改罡風廢真身
http://bit.ly/THuPdX

國務院昨天上午公布題為《「一國兩制」在香港特別行政區的實踐》白皮書，本報網站第一時間分段刊出全文；「白皮書」最令人矚目的是指出「高度自治權的限度在於中央授權多少權力，香港特別行政區就享有多少權力」。《８５２郵報》及時指出「有關說法，早在二○○七年，當年的人大委員長吳邦國趁《基本法》在香港實施十周年提出」，事實確是如此；筆者當時以《我作主子你當家！》（收台北遠景社《資源吃香》）為題的評論作回應，認為「香港回歸等於香港人喪失政治權利」、「香港將成為中國的悲情城市」。結論是在香港從政，「一旦觸動涉嫌『犧牲一國』的底線，政治活躍分子將要付出代價，而這是機會成本很大的大部分港人所不願承擔的」。這點「預測」，看爭取「真普選」全面起動風起雲湧之勢，是不準確的。

「白皮書」對香港爭取普選的各方力量，尤其是以符合國際標準為依據並有對外進行游說能力的少數港人，已被說成逸出合乎香港情理，涉嫌與另有圖謀的外國勢力連氣連勢、滙合成一股來意不純的抗中力量。北京如果對港人「亂針繡萬象」的情況不加理解，把視角偏狹的成見進一步加深，甚或轉化為敵視，香港必將淪為有理說不清的地方，人們尤其是年輕人一輩從困頓中反彈，那將難以想像和駕馭，而慣於一黨操控的北京，對民主選舉須有前期協商並有把握後期結果的思路，全不了解亦不接受；「佔中」行動因為要求公民提名而可能流血，已不是不能想像的荒謬……。想不到一九八九年北京定性「廣場示威」為「動亂」還未知究竟，四分一世紀後的香港政改，又因取態分歧而面臨前所未見的社會危機！（節錄）

（信報圖片）

#白皮書 #香港 #信報 #信報財經新聞

Five reasons we should celebrate Albert Einstein - Guardian

June 17, 2015 at 11:32pm

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http://www.theguardian.com/books/2015/jun/12/five-reasons-we-should-celebrate-albert-einstein?CMP=share_btn_fb

1. His science
Einstein was, first and foremost, a scientist. In 1905 and again in 1916, he radically revised our understanding of the universe. He was a pictorial thinker who came up with a new, intuitive sense of what reality looked like. Physics at the start of the 20th century was a rather settled endeavour, not seemingly in need of radical revision. We thought light was a wave and that duration, length and mass were objective facts of the world. We thought that space was a flat, Euclidean entity, unaffected by the distribution of matter and energy within it. Einstein, a mere patent clerk when he first began suggesting differently, showed us that light must be thought of as a particle when it is emitted or absorbed, that matter is composed of atoms, that space is malleable, undulating with the distribution of the stuff within it, that how long or massive an object is or the time order of closely occurring events is not a fact of the world, but merely a fact of our point of view. He showed that these perspectival truths were well-behaved when they were placed in a four-dimensional conceptual framework. Seeing may be believing, but what we should believe about the universe, Einstein demonstrated, requires seeing it from a reference frame beyond that of the human senses.


Einstein's election riddle: are you in the two per cent that can solve it?
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2. His politics
Einstein joked to his dear friend Max Born that he had a version of the Midas touch: everything he said turned to newsprint. Einstein’s science made him a worldwide celebrity, a status others might have enjoyed, but which Einstein despised. He was no shrinking violet, yet he detested the shallowness and meaningless absurdity that came with his universal adoration. But he realised that it could be handy. He was given a cultural megaphone and he decided that its best use was to amplify the concerns of those whose voices were least heard. Whether it was his own Jewish brethren suffering the insults of antisemitism, African-Americans suffering systematic racism, the poor kept down by structural barriers to advancement, or political dissidents in the Soviet Union who were being repressed, Einstein was unabashedly vocal in trying to change the institutions that led to inequality and injustice. His standing provided him with a unique place to speak for those who were silenced and he made great use of it in the name of universal human dignity.

3. His immodesty
Einstein never lacked confidence. Strengthened by his convictions, he was impervious to the power of those with superior social or professional standing, and resolute in his willingness to state his beliefs publicly. As social psychologists have shown since the famous experiments of Solomon Asch and Stanley Milgram, humans are greatly influenced by the opinions of those around us, especially those who occupy positions of authority. We can shy away from reasonable and ethical beliefs, if we sense that we are in the minority for holding those views. But Einstein stands as an example of intellectual commitment. His revolutionary physical theories and his advocacy for peace at times of war and for better treatment of those in need were often unpopular. Einstein was investigated by the FBI for his views, and he received death threats from Nazi sympathisers. He was threatened with the loss of his position at the Institute for Advanced Study for his vocal support for his beliefs and causes. Yet he steadfastly refused to give in to fashion, expedience or groupthink. It is a cliche to say someone has the “courage of his convictions”, but Einstein is a figure of great courage in publicly expounding views he thought correct and morally necessary when such positions were dangerously unpopular.

4. His modesty
Einstein was flummoxed by his public reception. In one famous incident, he was accompanying Charlie Chaplin to the opening of his film City Lights when they were mobbed by thousands of fans. “What does it mean?” Einstein asked Chaplin, who replied: “Nothing.” We have a cognitive bias that leads us to be more apt to believe the praise we receive and to explain away criticism. We are the focus of our lives and with the contemporary cults of individuality and celebrity, too many people eagerly welcome the spotlight and take it as a sign of their superiority. But Einstein did not seek mass adoration or personal aggrandisement. He was not present to receive his Nobel prize. He refused the presidency of Israel. He was willing to step into the public eye when it suited his causes, but he was not one to seek fame for the sake of fame.

5. His meaning as a cultural symbol of modernity
I often ask audiences: “When I say the name Albert Einstein, what is the first thing that comes to mind?” Regardless of the demographic or the country in which I ask this, inevitably the response is “the hair”. Here is a man who changed the way the way we see reality, who stared down hatred and stood up for justice, yet despite all of this, the thing we immediately think of is that mane of unkempt, wild white hair. That may seem shallow of us, but I think it is a good thing. What does Einstein’s hair signify? It was a political statement – he refused to conform to social standards of personal appearance. He was unapologetic in his individuality and unashamed of being different. Growing up a Jew in Wilhelmine Germany, where he was sent to a Catholic school, he was always aware of being an outsider and became not only comfortable with his distance from the mainstream, but took it as a mark of pride. On the one hand, Einstein is the very icon of the genius, someone whose innate intelligence made him radically unlike the masses. But in allowing his hair to become the spectacle it was, he became a symbol that said that special people can come from anywhere, can look like anyone. His physics appeared at a time when the regular order was being challenged by modernist movements in mathematics, science, art, religion, governmental and economic structures, even the very sense of what it was to be a human was being reconsidered from its core. Einstein, with his wild hair, signalled that human advancement comes not from the conformity the authorities demand, but from difference – and that all of us at various times in our lives feel a sense of alienation. Einstein gives us pride in ourselves as individuals who can make a difference; we can revel in free thought, but there is no need in doing so to reject our shared humanity.

10 Behaviors of High Achievers -TIME

http://time.com/3929123/high-achiever-behaviors/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+timeblogs%2Fcurious_capitalist+%28TIME%3A+Business%29

Steve Tobak / Entrepreneur 8:00 AM ET  

Stop obsessing over 'why'


I remember the conversation like it was yesterday. After lobbying to absorb yet another project into my ever-growing engineering group, something was bugging me. “It’s like I can’t get enough,” I confided in my manager. “It sort of scares me.” Finally, I asked, “Am I power hungry?”

“No, Steve, I don’t think you’re power hungry,” my boss replied. “You’re just achievement oriented.”

Relieved, I thanked him for his time and went back to work. It was only later that I realized I had no idea what he was talking about. What the heck does “achievement oriented” even mean, I wondered.

If it sounds like I was a bit naïve, I’ll cop to that charge. Unlike today’s up-and-comers, we didn’t really spend a whole lot of time thinking about ourselves back in the dark ages. But that never stopped some of us from reaching for the stars, even if we had little understanding of why we did it.

I believe that, among a number of other behavioral elements, explains why certain people are consistently high achievers.

They do without obsessing over why.

The common thread between every successful overachiever I’ve ever known – and I’ve probably known hundreds in the tech industry alone – is that they’re born doers, troubleshooters, and problem-solvers. If something important needs to be done, they’ll figure out how to do it, no questions asked.

They have no patience for the status quo.

Beijing’s migrant children forced out of the city - Financial Times

June 17, 2015 at 11:29pm

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http://www.ft.com/intl/cms/s/0/ffafd8fa-0a9a-11e5-a8e8-00144feabdc0.html#axzz3dE4mtANt

June 16, 2015 3:35 am
Beijing’s migrant children forced out of the city
Lucy Hornby in Beijing

Second-class citizens: children of migrant workers at nap time at an illegal migrant school in Beijing
Yang Yinli, like millions of migrant workers in China, sent her first son to live with his grandparents in the countryside. It was a choice she would bitterly regret.

No one was watching the lively six-year-old when he was struck and killed by a truck roaring through the steep village roads. Heartbroken, Ms Yang bore a second son and vowed to raise him in Beijing, stuffing a crib into her tiny shop and keeping a close eye as the toddler played on the pavements.
But new regulations announced this year may force her to send her son, now five, away to be educated. The regulations, which in effect prevent migrant children from entering the first year at Beijing schools, triggered weeks of protests this spring by crowds of anguished parents.
The battle faced by migrants for a basic education in Beijing and other major urban centres shows how China is struggling to accommodate the millions flowing to its cities despite a national policy of stimulating urbanisation. “His father could move with him but then what about me? I would still be far from the child,” Ms Yang says, her voice cracking.
About 40 per cent of the primary schoolchildren in Beijing lack a city hukou , the official household residency permit that grants access to social services, including education, healthcare and the right to buy homes. Nonetheless, in recent years they have been permitted to attend primary school in the city, a concession that has allowed many migrant couples to keep young children by their side. This school year alone, 470,800 non-Beijing hukou — or migrant — students attended primary and middle school in Beijing.
A relic of the famines during early Communist rule, the hukou system was introduced in the 1950s to keep the peasantry out of cities where food was more plentiful. It has gradually been relaxed as a flood of workers moved out of rural villages to the factories in cities along the prosperous coast but migrants still remain second-class citizens in many of the cities where they have settled.
Official statistics show that 55 per cent of Chinese, or 749m people, now live in cities, up from 19 per cent in 1980 at the dawn of market reforms, although the real number is probably higher — and still rising. A government think-tank has estimated it would cost about $100bn per year to integrate another 400m people into the cities over the coming decade.

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Reforms that allow migrants to establish residency in provincial cities have been accompanied by tighter restrictions for some, mostly hitting those who have moved to the biggest cities, or those who often change jobs and residences.
“If we were a market economy, the problem of population would sort itself out and resources would flow more evenly. But China is not a fully market economy and a lot of resources are still concentrated in the hands of certain cities,” says Hu Xingdou, an economist who studies migrant issues at the Beijing Institute of Technology. “Under these circumstances we can never have the free movement of people.”
Recent policies — such as the rules on education — seek to push migrants out of the most attractive and high-wage places into provincial cities where there is a glut of new housing. Those policies, a reversal of several decades of population flow into the biggest cities, force migrant parents once again to face the choice of confiding young children to the care of elderly and uneducated grandparents or to enrol them in distant boarding schools.
In May hundreds of migrant parents staged daily protests at education offices in Chaoyang district in Beijing. Videos of one protest show burly policemen dragging off weeping mothers while the crowd chants: “It’s not right!”
Anger is particularly strong because many migrant parents paid into Beijing’s social security system following tightened regulations issued last year, only to be stymied by additional requirements announced in late April. Those include rental documentation that migrants crowded into temporary housing cannot provide.

The Beijing Municipal Education Bureau referred questions on specific policies to the district. The district bureau said it was too busy preparing for college entrance exams to answer the FT’s faxed questions.
At pick-up time at one Chaoyang district pre-school, parents exchanged notes. “I think it is unfair,” said Ms Zheng from Fujian Province, the mother of seven-year old twins who were born in Beijing. “Why should migrant children be separated out?” She declined to give her full name for fear of damaging the boys’ chances of somehow entering school.
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China's shrinking labour force
A shrinking labour force is driving huge economic change in China. James Kynge talks to Jamil Anderlini about the human cost of China's mass migration from rural areas to the cities and why it is now beginning to slow.
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Ms Zheng had hoped regulations would evolve to allow her twins to someday attend high school in the city. Currently, children can only take the university entrance exam where their hukou is registered, exiling city kids to provincial towns hundreds of miles away just as they hit their teenage years. Grades plummet and it is common for children who were decent students in the cities to drop out once they are far from their parents. Sexual abuse and delinquency are growing concerns.
Some desperate teens have made national headlines. In May a 12-year-old girl who had attended at least two years of school in Beijing before being sent back to a desolate village in Sichuan province killed herself and poisoned her grandmother with pesticide.
“It has a great impact on the children but our nation doesn’t think about this much,” says Prof Hu. “We say if the nation is unwilling to build an extra school in the cities today someday it will end up building an extra jail.”