At the heart of the clash over how best to manage a vast financial crisis is the question of how far governments must bend or even bow to the power of the markets.

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Euro Crisis Pits Germany and U.S. in Tactical Fight

Italy, the euro zone’s third-largest economy, struggled to find a new government as anxious investors drove Italian bond rates above 7 percent and the markets tumbled worldwide.

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Euro Fears Spread to Italy In a Widening Debt Crisis

A jobs-for-votes system entrenched at all levels of Italian politics may hinder the country’s efforts to cut its deficit and reassure the markets.

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Austerity in Italy May Not End Its Jobs-for-Votes System

Sharon Bowles, chair of the European Parliament’s economic and monetary committee criticises some of her colleagues for ignoring the markets.

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Euro politicians ‘ignore markets’

Anyone who has money invested in some way or another could be affected by the continuing turmoil on the markets.

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VIDEO: Do the volatile markets affect me?

U.S. and European stock markets plummeted again Wednesday as the debt crisis rocking a handful of smaller European nations threatened to engulf the continent’s biggest economies, France and Germany. Major markets on both sides of the Atlantic declined by more than 4 percent, with investors dumping financial stocks in particular amid signs that the debt crisis on the periphery of Europe is rapidly becoming a banking crisis at its core. The Dow Jones industrial average fell 520 points, or 4.6 percent, to 10,720, while the Standard & Poor’s 500 dropped 52 points, or 4.4 percent, to 1,121. The declines erased the major gains made Tuesday and dashed hopes that the markets were starting to rebound from their recent lows. Read full article > >

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Stock markets in U.S., Europe show major drop

At least the price of oil went down. That’s about the only silver lining to a miserable day in the markets Thursday, as the threat of protests in Saudi Arabia panicked investors and sent the Dow Jones Industrials Average diving 228 points to just below…

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Dow Jones Plunges Below 12000

Compete to reinvent a shipping container for Brooklyn’s new community market Located in the heart of downtown Brooklyn’s Fulton Street mall, the upcoming Dekalb Market will be home to a food market and incubator farm, restaurants, work-sell shops, a performance venue and more. One of the spaces dreamed up to enclose all these attractions is a re-imagined shipping container, which Dekalb Market developer Urban Spoon is challenging you to design. The ” Not Just A Container ” competition tasks the creative community with coming up with an innovative idea for the structure, with the winner receiving six months free rent and $3,000 for design and construction, as well as one year memberships to 3rd Ward and the Brooklyn Chamber of Commerce . Beginning today, the contest spans one month and I’m looking forward to checking out the designs as one of judges on the panel. Suggestions for use range from art installation to sports venues, but entrants are free to stretch their imagination while keeping to key criteria like design quality, sustainability, community impact and entrepreneurship. Designs must also conform to the size limitations for an ISO steel shipping container (8′ x 20′ x 9.5′). For a full list of rules and regulations, visit the Not Just a Container website.

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Not Just A Container

One of the downsides of being a triple-crisis blogger is that you are always on the lookout for crises. It’s not a role I particularly enjoy, but it is what it is. So as the markets wind down for the year and the illusion of calm falls over us like a blanket of denial (yes, keep positive folks), I thought I’d write a piece about what I see as, perhaps, the emerging story of 2011. read more

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The Christmas Bonus is Not What You Expect

A government plan to restore confidence to the markets worked but it did not fully succeed in boosting lending, a report says.

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Bank scheme ‘did not lift loans’

Clearly, the European Union’s bailout of Ireland has not reassured the markets, which are still shaky as the nation’s borrowing costs continue to climb. It’s hard to escape the suspicion that the European officials involved in the loan process are completely out of their depth. They know how to deal with liquidity problems, but it appears they cannot come to grips with the reality read more

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Ireland Stuck in a Vicious Circle, With No Real Exit in Sight

Some have thought that getting high-speed rail in the U.S. is impossible. But maybe not, now that the Chinese appear to be making a serious play for both California and Florida. This piece of news yesterday seems a significant first step: General Electric Co. and CSR Corp. , China’s largest maker of rail vehicles, plan to invest $50 million in their U.S.-based venture for supplying passenger trains for high-speed lines in California and Florida. The initiative may “sustain or create” 250 jobs by 2012, potentially at GE Transportation factories in Erie and Grove City, Pennsylvania, the company said today. The partners also will form a business to work on medium-speed trains and on urban rail-transit systems, GE said in a statement. China’s CSR is of course the rolling stock company that has been doing the heavylifting on high-speed rail, having ran its fastest Chinese high-speed train last week, clocking in at just above 300mph during a trial. GE, given its long track record of operating in China, powerful brand, technological complementarity, makes sense as the joint venture partner. Of course, a mere framework agreement does not mean commencement of a high-speed rail line next year. And the myriad political hoops, both at the federal and state levels, remain serious obstacles, particularly given the sensitivity surrounding Chinese investment in the U.S. But this recent venture speaks to several larger points that may give some reason for optimism on seeing ground break on a high-speed rail line. China can leverage the kind of state financing that a debt-ridden state like California currently cannot. Beijing has also approved using its $2.6 trillion in foreign exchange reserves to help fund Chinese investments in other markets. (You probably wouldn’t want to pump forex reserves back into the domestic economy anyway because it would create inflationary pressures.) I suspect a certain level of pledged financing by China to support construction would be necessary to get any eventual deal done. In other words, a China that’s willing to offer some relief to the fiscal constraints in various states.  The messaging on “jobs” and “manufacturing” in the U.S. seems to indicate that certain companies in China may be finally feeling the political pulse in the U.S. Yes, the estimated paltry 250 jobs created by 2012 won’t cut it. But should the shovel actually hit the gravel on the project, China will almost certainly have to use U.S. labor force (somewhat paralleling what the Japanese and Korean giants did by investing in manufacturing capacity in the US and creating domestic jobs). Already, it seems like the joint venture has agreed to “Buy American” local content requirements–so U.S. steel, cement, etc. Joining forces with a notable American industrial and technological icon like GE is also smart strategy. It might go some way toward mitigating the politics around Chinese investment in a high-tech sector in America. China will probably have to send over some engineers and design specialists, but those jobs will be kept to a minimum. In short, the Chinese strategy in developing markets, particularly in Africa, of exporting Chinese workers is going to fall flat in the U.S. For Chinese investors, accessing an OECD market has increasingly become a preoccupation. Of course, cracking the U.S. market would be capturing the crown jewel in their minds, not to mention it would be in a high-tech sector that could dramatically alter the reputation/perception of “Made in China.” Of course, none of this is preordained, and numerous factors could derail (no pun intended) such a gambit in entering the U.S. market. But clearly, these steps taken so far suggest a more sophisticated strategy on the part of the Chinese. We’ll see whether these initial steps will bear fruit and result in 300mph trains zipping from SF to LA or Boston to NYC and elsewhere. As someone who was always fond of trains, I remain hopeful.

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A Step Closer to Getting High-Speed Rail in America?

Efforts to help stabilize the markets at the height of the financial crisis reached far beyond Wall Street and deep into the economy, newly released data show.

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Fed Papers Show Breadth of Emergency Measures

With so much uncertainty surrounding Europe’s response to its continuing debt crisis, sentiment in the markets took a turn for the worse.

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Europe Shares Fall on Portugal Worry

Despite an unexpected drop in first-time jobless filings, the markets turned lower as traders focused on disappointing quarterly results.

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Wall Street Stumbles on Earnings