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Generational Dynamics Web Log for 26-Jul-2011
26-Jul-11 World View -- New concerns on bailout of Greece

Web Log - July, 2011

26-Jul-11 World View -- New concerns on bailout of Greece

Israel considers revoking the 1993 Oslo accords

This morning's key headlines from GenerationalDynamics.com.

Israel considers revoking the 1993 Oslo accords

Israeli Prime Minister Yitzhak Rabin and PLO chairman Yasser Arafat signing the Oslo Accords in 1993 (Reuters)

Israeli Prime Minister Yitzhak Rabin and PLO chairman Yasser Arafat signing the Oslo Accords in 1993 (Reuters)

Israel's National Security Council is discussing the option of revoking the 1993 Oslo Accords agreement between Israel and the Palestine Liberation Organization (PLO), that established the framework for relations between the two governments, and created the Palestinian Authority (PA). The move would be in retaliation for the Mahmoud Abbas's plan to have the United Nations recognize the state of Palestine, based on pre-1967 borders. Haaretz

Israel is virulently opposed to Mahmoud Abbas's plan because recognition of Palestinian statehood by the UN General Assembly would enhance the Palestinians options, including allowing them to take Israel to the International Criminal Court (ICC) in The Hague on charges of war crimes. However, Palestinian statehood, ICC charges, and revoking the Oslo Accords would only be symbolic, and would not change life on the ground. Al-Arabiya

Moody's downgrades Greece's debt

Greece's 2 year bond yields at 28.131%

Greece's 2 year bond yields at 28.131%

Looking at the graph on the right, you might think that things have returned to normal for Greece, with 2 year bond yields (interest rates) plummeting. But then you realize that they've plummeted to a still astronomically high 28.1%.

Moody's Investors Service announced on Monday that it was once again downgrading Greece's sovereign debt rating, to just a single notch above default. In doing so, Moody's warned that last week's bailout of Greece, whose main purpose was to prevent "contagion" of the crisis to Italy and Spain, was actually increasing, rather than decreasing, the danger that Europe's debt crisis could spread to Italy and Spain. Moody's said that by agreeing to write down the value of their Greek government bonds by 21%, a precedent had been set that left investors open to further "haircuts" on the sovereign debt of other countries. Independent

In fact, although bond yields fell sharply on Friday, just after the bailout was announced, they've started to creep up again for Italy and Spain. Telegraph

American funds no longer flowing to European banks

As a side effect of the bailout, American money market funds are no longer willing to loan money to European banks, including those in Italy and Spain, for fear of losing the loan money in a default. Financial Times (Access)

The euro is 'Not a hot topic' in Bulgaria

Bulgaria is putting on hold its plans to adopt the euro as its currency. "We want to wait and see how the remaining questions for the euro zone itself are resolved," according to the country's finance minister. Bloomberg

China's bullet train crash sours their marketing plan

The companies that manufactured China's high-speed bullet trains had hoped to sell into markets in North America and Europe, but because of the weekend crash that we reported yesterday, "Their chances of selling high-speed trains are zero." Bloomberg

U.S. and South Korea maintain firm stance against North Korea

Anti-war activists in Seoul wear masks of President Barack Obama, North Korean leader Kim Jong-il and South Korean President Lee Myung-bak

Anti-war activists in Seoul wear masks of President Barack Obama, North Korean leader Kim Jong-il and South Korean President Lee Myung-bak

A top diplomat from North Korea visited the United States this week to discuss the possibility of renewing stalled nuclear talks in return for money. However, the U.S. and South Korea reaffirmed their previous statements that the North Koreans must take concrete steps to demonstrate that it is serious. In return for disabling its nuclear program, which has already produced up to 10 atomic bombs, the North would receive economic aid, diplomatic recognition from the United States and a formal treaty to end the Korean War. Reuters

(Comments: For reader comments, questions and discussion, see the 26-Jul-11 World View -- New concerns on bailout of Greece thread of the Generational Dynamics forum. Comments may be posted anonymously.) (26-Jul-2011) Permanent Link
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Generational Dynamics Web Log for 26-Jul-2011 26-Jul-11 World View -- New concerns on bailout of Greece

Israel considers revoking the 1993 Oslo accords

Moody's downgrades Greece's debt

American funds no longer flowing to European banks

The euro is 'Not a hot topic' in Bulgaria

China's bullet train crash sours their marketing plan

U.S. and South Korea maintain firm stance against North Korea

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Generational Dynamics Web Log for 26-Jul-2011
26-Jul-11 World View -- New concerns on bailout of Greece