Saturday, December 19, 2015
'Default looms for South Africa'; UK's richest 10% hold nearly half of all wealth; US lifts 40-year ban on oil exports
1 Default looms for South Africa, feels COPE (Johannesburg Times) South Africa is close to defaulting on its debt repayments and if the government does not act immediately‚ it will have to go to the International Monetary Fund cap in hand for a bailout very soon‚ the Congress of the People (COPE) party warned.
COPE spokesman Dennis Bloem said President Jacob Zuma did not seem to be acutely aware that it was economic crunch time. “His plan in axing Minister Nene (as finance minister) was to seize the treasury‚ bail out SAA and confirm the nuclear deal with Russia.
Today‚ is all that matters to President Zuma. Tomorrow is someone else’s problem and responsibility. Unlike President Thabo Mbeki who wanted to keep the state coffers full‚ President Zuma has been in a dreadful hurry to empty them.
“That is why the national debt has gone over the two trillion rand ceiling and why the state coffers are dangerously empty‚” Bloem asserted. He said Zuma was also not concerned that a heap of state debt payments were falling due between 2016 and 2017.
The budgetary haircuts of three years ago must now become military style crew cuts. “If action is delayed any longer and the national debt rises faster‚ it is inevitable that the government will face debt defaults within eighteen months it and will have to go‚ cap in hand‚ to the IMF for a bailout‚” Bloem stated.
He added: “COPE urges the ruling party to call in the IMF right now‚ not for a bailout‚ but for a medical examination of its finances and for a request for a home remedy regimen. If the home remedy does not work‚ South Africa will get a prescription for the IMF that will be humiliating.
2 UK’s richest 10% households hold nearly 50% of wealth (Heather Stewart in The Guardian) Britain’s richest households have pulled further ahead of the rest of the population as house prices have accelerated, with the top 10% now owning almost half of the country’s £11.1tn total private wealth.
The Office for National Statistics (ONS) said the average household was worth £225,100 in 2012-14, when it carried out its latest survey of the country’s assets. Since the previous survey two years earlier, the top tenth of households had seen a 21% increase in their wealth, including property and shares. That was three times as fast as the increase over the same period for the poorest half of households, who saw their wealth rise by 7%.
It left the top tenth of households owning 45% of total wealth, while the bottom half were left to share just 9%. The poorest 1%, meanwhile, owned just 0.05% of wealth. Inequality of wealth tends to be exacerbated when the prices of assets such as property and shares are rising rapidly, and has become an increasingly controversial political issue. Labour advocated a “mansion tax” on the most valuable homes in its 2015 manifesto.
3 After four decades, US lifts oil export ban (BBC) US politicians have approved a measure to lift the 40-year ban on crude oil exports. The move is part of a $1.1 trillion spending bill approved by the Senate that will fund the US government until 2016.
Oil prices rose on Friday following several weeks of falls, as the markets cope with a glut of crude. US West Texas Crude gained 1.1% to $36.38 a barrel, while Brent rose 0.7% to $37.32 a barrel. US oil producers will now be able to sell crude to the already saturated international market.
The bulk of US oil comes from shale producers. Production and exploration companies argued the ban - imposed during the Arab oil embargo in the mid-1970s - was outdated and unnecessary. Opponents claimed that lifting the ban would lead to the loss of oil refining jobs and would be bad for the environment.
As a trade-off for lifting the ban, the spending bill includes tax breaks for solar and wind power and a pledge by Republicans not to block a $500m payment to the UN Green Climate Fund. The global glut meant that lifting the ban was not expected to lead to significant US exports for months or even years, but could give producers extra flexibility.