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Generational Dynamics Web Log for 16-Apr-2010
16-Apr-10 News -- Greece capitulates, asks for aid

Web Log - April, 2010

16-Apr-10 News -- Greece capitulates, asks for aid

South Korea may be close to military action against North Korea

Greece seeks 'consultations' for European and IMF aid

The Greek crisis worsened again on Thursday, when the yield (interest rate) demanded by investors for Greek 10-year bonds soared to 7.22%, according to WSJ, compared with a 3.13% yield on German bonds.

Events continued to move rapidly, as Greece "capitulated to market pressure," according to the Financial Times, and formally sought "consultations" over an aid program.

In a letter to the European Commission, Greece asked to discuss "a multi-year economic policy programme with the Commission, the European Central Bank and the International Monetary Fund."

By not actually requesting aid, Greece avoided the trap that we mentioned yesterday, that an actual request for aid could be interpreted as an actual default on its debts.

Still, events are expected to unfold rapidly now, because Greece's financial situation is deteriorating quickly.

The market is also moving fast with respect to Portugal and Spain, as credit default swap prices for debt for those two countries has been rising. WSJ quotes Gavan Nolan of Markit as saying that "the pressure is mounting on the peripheral euro-zone countries."

Generational Dynamics predicts that the financial crisis is far from over, and we're headed for a sharp deflationary crash. What will trigger this event cannot be predicted, but one possibility is the quickly deteriorating situation in Europe.

South Koreans may be considering military action against North

It's been almost three weeks since the Cheonan, a South Korean navy warship, exploded and sank near North Korean waters. Only 58 people were rescued out of 104 crew members, and the other 46 drowned. And yet, no explanation has yet been provided for the cause of the explosion.

Officially, no cause has been determined, but reading the various press reports increasingly gives the impression that the cause has unofficially been determined to be a North Korean torpedo or sea mine.

If the conclusion is reached that the explosion was caused by hostile military action by North Korea, then it's hard to see how war can be avoided. The 1950s Korean War never officially ended, but remains in a state of armistice to this day. Relations have been extremely tense between the North and South for some time now.

JoongAng Daily quotes Defense Minister Kim Tae-young as saying: "I believe it’s inappropriate for us to presume a North Korean attack when the cause hasn’t been determined yet. But we are developing plans to deal with every possibility. We’re considering military and nonmilitary measures."

Was that a slip of the tongue, or did he really mean that military measures against North Korea are being considered? At any rate, when asked to explain later, he said, "I would like to withdraw what I’d said earlier."

However, he added that "I think it’s the obligation and responsibility for our ministry [to consider military action]."

Operations are under way right now to hoist the sunken stern of the Cheonan from the sea bottom. For those who are interested in such things, here's a neat little diagram of how they're doing it:

South Koreans raise the sunken ship, the Cheonan <font size=-2>(Source: JoongAng Daily)</font>

South Koreans raise the sunken ship, the Cheonan (Source: JoongAng Daily)

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Kyrgyzstan’s ousted President Kurmanbek Bakiyev resigned and fled to neighboring Kazakhstan on Thursday. Meanwhile, the US is negotiating an aid package, after Russia agreed to contribute $50 million to the new government. Bloomberg. This is the price one must pay to keep an air base in Kyrgyzstan.

The foreclosure rate for U.S. homes surged in the first three months of this year, indicating that housing prices still have far to fall. Associated Press

Further evidence of the incompetence of Boomer management: Federal workers involved with cybersecurity are far less confident than their bosses that the U.S. is prepared to handle a cyber attack. Fierce Government IT

China's GDP jumped by 11.9% in the first quarter of this year. This is so ridiculously high that even the most Pollyannish pundits are considering the possibility that China's economy is in a bubble. NY Times

Yesterday we told you that Islamist terror groups in Somalia have ordered radio stations to stop playing music, claiming that it's not Islamic. Now the terrorists are ordering school teachers to stop using bells to signal the end of class, because the bells sounded too much like Christian church bells. So teachers are now clapping their hands or banging on tables and doors to signal the end of class. BBC

(Comments: For reader comments, questions and discussion, see the 16-Apr-10 News -- Greece capitulates, asks for aid thread of the Generational Dynamics forum. Comments may be posted anonymously.) (16-Apr-2010) Permanent Link
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Generational Dynamics Web Log for 16-Apr-2010 16-Apr-10 News -- Greece capitulates, asks for aid

Greece seeks 'consultations' for European and IMF aid

South Koreans may be considering military action against North

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Generational Dynamics Web Log for 16-Apr-2010
16-Apr-10 News -- Greece capitulates, asks for aid