Will Portugal become Brazil's colony?

From today's Globe and Mail of Toronto:

'“Yes, Brazil could help Portugal, just as Portugal helped Brazil economically,” Brazilian President Dilma Rousseff declared during an official visit to the European country.

'And her popular predecessor, Luiz Inacio Lula da Silva, who is also in Portugal (as is Prince Charles, who apparently made no mention of the debt crisis), flatly told officials to forget about relying on the European Union or the International Monetary Fund – which the government repeatedly says it has no intention of doing anyway.

'A bailout from either or both sources would come with even more austerity measures attached than the beleaguered economy could tolerate.

'“The IMF won't resolve Portugal's problem, like it didn't solve Brazil's,” Mr. Lula said, referring to an IMF intervention in the late 1990s. “Whenever the IMF tried to take care of countries' debts, it created more problems than solutions.'

High School must be challenging in Portugal

Wall Street Journal March 25, 2011: "Just 28% of the Portuguese population between 25 and 64 has completed high school. The figure is 85% in Germany, 91% in the Czech Republic and 89% in the U.S"

42% of Japanese heads of household over 60 years of age

Prof. Marvin Zonis of the University of Chicago notes:

From my Annual Forecast, dated December 7, 2011:

“The population began to shrink in 2005 and the new data from the 2010 census will be released in February 2011. It will show an accelerating decline in the number of Japanese. What will increase is the number of households headed by people 60 years of age or older. In 1990, Japan claimed 10.2 million such households. In 2011, watch for the number to leap to 21.2 million households, likely comprising a full 42 percent of all households.

“Why does this matter? Because, while households headed by ‘oldsters’ own some 80 percent of all household assets, Japan’s low interest rates have devastated the income generated by those assets. (The interest rates are low, of course, because of the quantitative easing instituted by the central bank.) The result is that those households have largely stopped spending. But because
consumption is about 60 percent of the GDP, there has been little to drive the economy besides exports.

The "new Europe" might just work. Will the new rules transform Europe into Germany?

From the EUobserver:

"EUOBSERVER / FEATURE - After months of often bitter back-room negotiations, European finance ministers have finally given the green light to a radical new centralised EU oversight of national budgeting processes and, broader still, of all economic policies - both of countries that use the single currency and those that do not.

The unprecedented shift in powers to the bloc from member-state parliaments, heavily limiting what is known in the jargon as "policy space", or the ability of countries to write their own laws, was saluted by EU economics chief Olli Rehn.

"Today the EU member states are endorsing the basic thrust of the six legislative proposals by the commission," he told reporters after ministers had given their approval to what European decision-makers have dubbed the 'Six Pack'."

Full article:

http://euobserver.com/9/31993/?rk=1

A flock of black swans

An insurance executive in today's New York Times:


“What makes today’s natural disaster so extraordinary is that four of the five costliest earthquakes and tsunamis in the past 30 years have occurred within the past 13 months,” said Robert Hartwig, president of the institute, citing two big quakes in New Zealand and one in Chile along with the disaster in Japan."

Are we in a cluster of black swan events?

Robert Schiller's dire prediction

"The end of the world was predicted to take place at the end of 2012. This would be the day of reckoning for mankind. Well, at the rate things are going right now, it seems like this deadly package has checked in a little too early. Robert Shiller, the economist who predicted the subprime housing crisis has another dire prediction. He issues a warning that the Japanese quake and the tsunami could reach a global scale. This could shake stocks across the globe and set the markets up for a crash within days. "

If Europe agrees to the German/French proposals, the euro crisis will go away

From today's New York Times:

Germany is calling for several measures: raising retirement ages to reduce the burden on pension funds, ending the linking of wages to increases in the cost of living, committing to debt reduction and submitting to a level of budget scrutiny that was until recently considered anathema — and is still viewed by many as a step too far>