• Greece failed to agree on new austerity measures across political parties yesterday, a requirement for the proposed bailout to avoid default in March. There was some progress on bank recapitalization. Overcoming the political realities of further austerity after almost 5 years of recession is proving very difficult. From Reuters News.
• The EU’s statistics agency released data on government debt to GDP ratios in the euro zone. The aggregate debt ratio for the 17 countries fell slightly to 87.4% of GDP. The ratios for countries in need of EU/IMF funding saw thier ratios rise, however. Portugal, Greece, and Ireland all showed an increase in the debt to GDP ratio, providing more evidence that austerity measures cannot solve the debt crisis. From The Wall Street Journal.
• Corporate profit margins may be flashing warning signals for the US equity market. Stocks are at their highest levels since 2008, and one of the key drivers for the move has been corporate profits. Profit margins have gone from 5.77% in early 2009 to 8.95% in the second quarter of 2011. They are now running about 8.23%. US corporations may have squeezed as much profit out of cost cutting as is practical. A peak in corporate profit margins often precedes a recession by 2 or 3 quarters. From The Wall Street Journal.