- Germany has voted to go with the Greek Bailout. From what I’ve read, Germany is set to be the largest contributor to the bailout fund. Some politicians were against it. The popular press was very much against it. But Merkel won. And the president of Germany’s HWWI economic institute (not sure what that is – but it sounds important) agreed with the Chancellor’s position, because he sees bailout as the least costly solution. Link: Merkel wins Greek Aid Vote.
- At the same time, Nobel Prize-winning economist Paul Krugman says that Greece is close to running out of alternatives, and may be forced to leave the Euro. This is the same Paul Krugman of the what-I’m-calling-infamous Jeffrey Sachs-Paul Krugman spat that I mentioned a few weeks ago. Let me pre-empt this by saying that I’m horribly biased in favour of Mr Sachs, for no reason other than Jeffrey being an authority on hyperinflation. Mr Krugman – Greece is running out of alternatives? Human emotions (and politics) aside, I think it’s going to be while before it’s cheaper for them to leave. I think that the most frustrating part of this situation is the general lack of economic education in the voting population as a whole. Austerity is the best of a bad situation, and bailouts the best chance of a return to sustainability. How do you tell an ignorant public that there is no option that permits prosperity tomorrow? Awkward. Link: Krugman on Greece.
- The last Japanese maker of DRAM computer chips, Elpida, has filed for bankruptcy. This after computer chip prices dropped to the price of “rice-balls”. Now I don’t really understand all the tech-spec terminology, but apparently DRAM chips are the most popular variety of computer chip. The problem is that smart-phones and tablets require about a quarter of what is needed for a PC. With dwindling PC sales and dramatic increases in the sales of smart-phones and tablets, Elpida didn’t position itself correctly. “Elpida” is the greek word for “hope”. No more Elpida sounds oddly prophetic. Bankruptcy is the taste of regret. Link: Elpida Bankruptcy.
- Bernanke is due to give his semiannual monetary policy report to the House Financial Services committee tomorrow (the 29th). Which reminds me that it’s a leap year. But apart from that – it’ll be interesting to see just how accommodative the Fed is planning to be. Poor Ben – he has a lot to compensate for. What the politicians refuse to do fiscally, the Central Bank has to address monetarily. And get thoroughly slated for doing it. Stay tuned. Link: Bernanke Pessimism.
- And the Africa Business News in brief. Link: ABN Briefs. The highlights:
- Impala Platinum’s CEO has rushed off to Zimbabwe for talks with the government around its indigenisation plan. After rejecting the Implats proposal, the government has given the company 14 days to effect a transfer to make the Implats Zimbabwean interests 51% locally owned. The Zimbabwean operations represent around 43% of Implats’ platinum resources. This could all be so hectic!
- Kenya tea traders are disrupting tea auctions over their opposition to a tea tax that was introduced in January.
- African Rainbow Minerals has expressed interest in buying Anglo-America’s platinum interests (Anglo owns 80% of Amplats).
- South Africa’s GDP data for the 4th quarter of last year is due to be released today. According to an independent poll, it is expected to show that economic growth accelerated.
- It looks like Senegal is headed toward a presidential run-off after Sunday’s election.
- The BRICS are going to attempt to break the American monopoly on the World Bank head position, and submit their own candidate for the position.
And that’s all for now.