Is the end nigh for the Euro? [vol. 2]
Discussion
We'll probably have to agree to disagree, the way I see it is that you are asking the fox to be restrained in the chicken coop and frankly that's never going to happen.
The problem is that the consequences of people's actions are delayed from the actions themselves.
Take the sub-prime mortgage situation. At the point when those mortgages were sold the brokers must have felt that the customers could afford to pay, after all no mortgage broker is going to give someone a big wad of cash unless they think they're going to get their money back plus something on top.
I'm pretty sure those mortgage sellers acted in genuine good faith, yet their actions precipitated the 2008 banking crisis. Why? Because the individuals involved failed to grasp the global situation, they had no idea how bad their deals were any more than the customers knew that they were entering something akin to a Faustian pact.
Without appropriate oversight people will do stupid things, people will push to the highest level of profit they think they can get away with. Only sufficient regulation can put the sufficient safety margins in place.
ETA:
The problem is that the consequences of people's actions are delayed from the actions themselves.
Take the sub-prime mortgage situation. At the point when those mortgages were sold the brokers must have felt that the customers could afford to pay, after all no mortgage broker is going to give someone a big wad of cash unless they think they're going to get their money back plus something on top.
I'm pretty sure those mortgage sellers acted in genuine good faith, yet their actions precipitated the 2008 banking crisis. Why? Because the individuals involved failed to grasp the global situation, they had no idea how bad their deals were any more than the customers knew that they were entering something akin to a Faustian pact.
Without appropriate oversight people will do stupid things, people will push to the highest level of profit they think they can get away with. Only sufficient regulation can put the sufficient safety margins in place.
ETA:
davepoth said:
In the current situation, the FSA and the other regulators tell the banks that "a debt/equity ratio of x is fine" and "We'll cover pretty much all of your depositors' losses if you cock everything up"; so the banks don't have to worry about that stuff themselves.
Governments taking on risk that should be borne by the banks themselves encourages stupidity and if you're saying that this is part of the problem then I'll 100% agree on that point.Edited by Tartan Pixie on Saturday 19th May 22:22
The fundamental difficulty all governments face with the Banking systems as they are now, is that, the Banks have been given the freedom, to lend as they will, and investors know, that, if the Banks fail the Taxpayers and Governments will pick up the tab. Thus does not ensure probity and sound lending rationale in Banking.
By becoming too big to fail, the Banks can and are acting without due commercial care. Look at the losses racked up by JP Morgan Chase very recently and think about the madness of such commercial activity being underwritten by the Taxpayer. It us simply unacceptable.
Then think about the Banking crisis, that will follow, the collapse of Greece, then Spain, then Portugal, then Italy. As DJRC says repeatedly the French Banks will be toast and France will be penniless bailing them out. All over Europe the Banks will be only able to continue because the taxpayers is the patsy. Thus is not business it is madness.
Probably the best example is the 2 £BILLION loss on Norther Rock now anticipated by Robert Peston and others as the final cost to the Taxpayer. All the Taxpayer did was save the UK Banking system in its entirety, and the Taxpayer will lose 2 £Billion as a reward.
Then remember, that, throughout this nonsense the FSA has been in charge and absolutely ineffective, indeed complicit, on the losses.
This banking insanity could be allowed IF the banks became self regulated and investors knew that, the buck stops with the Bank. On that case the investors would be aware of the risk. So would the Banks. As it is, the system is totally unwieldy and the system of Regulation is simply not fit for purpose.
By becoming too big to fail, the Banks can and are acting without due commercial care. Look at the losses racked up by JP Morgan Chase very recently and think about the madness of such commercial activity being underwritten by the Taxpayer. It us simply unacceptable.
Then think about the Banking crisis, that will follow, the collapse of Greece, then Spain, then Portugal, then Italy. As DJRC says repeatedly the French Banks will be toast and France will be penniless bailing them out. All over Europe the Banks will be only able to continue because the taxpayers is the patsy. Thus is not business it is madness.
Probably the best example is the 2 £BILLION loss on Norther Rock now anticipated by Robert Peston and others as the final cost to the Taxpayer. All the Taxpayer did was save the UK Banking system in its entirety, and the Taxpayer will lose 2 £Billion as a reward.
Then remember, that, throughout this nonsense the FSA has been in charge and absolutely ineffective, indeed complicit, on the losses.
This banking insanity could be allowed IF the banks became self regulated and investors knew that, the buck stops with the Bank. On that case the investors would be aware of the risk. So would the Banks. As it is, the system is totally unwieldy and the system of Regulation is simply not fit for purpose.
Steffan said:
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Probably the best example is the 2 £BILLION loss on Norther Rock now anticipated by Robert Peston and others as the final cost to the Taxpayer. All the Taxpayer did was save the UK Banking system in its entirety, and the Taxpayer will lose 2 £Billion as a reward.
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So how about just one bank per country - lots of savings to be made, and the health of "Bank GB" is the health of the nation. Probably the best example is the 2 £BILLION loss on Norther Rock now anticipated by Robert Peston and others as the final cost to the Taxpayer. All the Taxpayer did was save the UK Banking system in its entirety, and the Taxpayer will lose 2 £Billion as a reward.
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Tartan Pixie said:
ETA:
That was the thing. All the banks know that they can piss their retail banking entirely up the wall, safe in the knowledge that the governments will bail them out if it does go badly wrong. davepoth said:
In the current situation, the FSA and the other regulators tell the banks that "a debt/equity ratio of x is fine" and "We'll cover pretty much all of your depositors' losses if you cock everything up"; so the banks don't have to worry about that stuff themselves.
Governments taking on risk that should be borne by the banks themselves encourages stupidity and if you're saying that this is part of the problem then I'll 100% agree on that point.Edited by Tartan Pixie on Saturday 19th May 22:22
As in so many areas of life these days, we have replaced responsibility with entitlement, and we need to reverse that trend.
Steffan said:
DJRC said:
Driller said:
Gary11 said:
wanna friend....buy a dog, the harsh world of buisness we live in.
I think the business world is farcical not harsh, everyone trying to be Top Monkey with the biggest, reddest arse. Don't need a friend, have a conscience is all and the principle that to earn money one should provide a useful service to society otherwise we are no better than the benefit scroungers.
I wholeheartedly resent being put in this situation because of the stupid, selfish actions of a few of said monkeys.
k about you 2000 yrs ago, 1900, 1800, 1700, 1600, 1500....300,200,100, 50, 10 yrs ago, etc, etc.Nothing has changed. NOTHING.
Humanity has no emotion when it comes to either making money or gaining power. It never has had in any society at any point in human history. Ever.
"The strong do as they can and the weak suffer what they must." Thucydides. He was Greek by the way.
I agree in business focus is critical and benevolence can be seen as weakness. But I do think you are presenting a pretty ruthless edge.
I merely picked Thuc and that quote to demonstate the ruthless edge that has been applied to the current situation. Note the use of "has" there, as in its happened, done, existed in reality, fact. It matters not whether I think "rights" or "wrongs" have been done, none of my posts have been moralistic judgements...just a what, how, why and when. If anything Steffan, my philosophy is much more in line with Horace and the Stoics.
Hmm, Ill give you another blast from history.
What happened the last time France was mortally threatened by overly powerful financial interests with a strong man at the helm determined to resolve the situation?
He chosen eradication and gave us the most famous date in history. Friday the 13th.
What happened the last time France was mortally threatened by overly powerful financial interests with a strong man at the helm determined to resolve the situation?
He chosen eradication and gave us the most famous date in history. Friday the 13th.
DJRC said:
Steffan said:
DJRC said:
Driller said:
Gary11 said:
wanna friend....buy a dog, the harsh world of buisness we live in.
I think the business world is farcical not harsh, everyone trying to be Top Monkey with the biggest, reddest arse. Don't need a friend, have a conscience is all and the principle that to earn money one should provide a useful service to society otherwise we are no better than the benefit scroungers.
I wholeheartedly resent being put in this situation because of the stupid, selfish actions of a few of said monkeys.
k about you 2000 yrs ago, 1900, 1800, 1700, 1600, 1500....300,200,100, 50, 10 yrs ago, etc, etc.Nothing has changed. NOTHING.
Humanity has no emotion when it comes to either making money or gaining power. It never has had in any society at any point in human history. Ever.
"The strong do as they can and the weak suffer what they must." Thucydides. He was Greek by the way.
I agree in business focus is critical and benevolence can be seen as weakness. But I do think you are presenting a pretty ruthless edge.
I merely picked Thuc and that quote to demonstate the ruthless edge that has been applied to the current situation. Note the use of "has" there, as in its happened, done, existed in reality, fact. It matters not whether I think "rights" or "wrongs" have been done, none of my posts have been moralistic judgements...just a what, how, why and when. If anything Steffan, my philosophy is much more in line with Horace and the Stoics.
DJRC said:
Hmm, Ill give you another blast from history.
What happened the last time France was mortally threatened by overly powerful financial interests with a strong man at the helm determined to resolve the situation?
He chosen eradication and gave us the most famous date in history. Friday the 13th.
The financial corruption, fraud and secrecy bits match up OK but who's idolising any of the eurocrats...then again there was a hint of obscene rituals in this or another thread when Merkel, Sarkozy and Bruni were seen as potentially quids in if the granny/dwarf/preggers porno DVD ever surfaces.What happened the last time France was mortally threatened by overly powerful financial interests with a strong man at the helm determined to resolve the situation?
He chosen eradication and gave us the most famous date in history. Friday the 13th.
Mst007 said:
Isnt the biggest elephant in the room that taxpayers worldwide are being hammered paying interest on FIAT funny money that never existed in the first place? I hope like hell the fractional reserve system collapses this decade, we`ve been defrauded for far too long.
Can't see us returning to the gold standard, especially since the last government flogged off all the gold.You're right about taxpayers paying interest being a total scam, though IMO it says more about the incompetence of our politicians than the greed of the banks. After all, those investments in government debt are paying for people's pensions, savings and crashed cars (or not paying for them as the case may be).
The point I was trying to make concerning the elephant in the room is that davepoth was 100% correct, inflation is driven by the cost of raw materials. For the last few hundred years this has put Europe at a big advantage because, thanks to our military, we've had a supply of cheap raw materials.
Since 1945 empire and military expansionism has become socially unacceptable, thus we no longer have the same supply of cheap raw materials. It's taken half a century but those countries who we used to take the piss out of are now our direct competitors.
The net result of all this is that we can not sustain the same levels of spending on welfare, defense and other public sector spending that we have become accustomed to, neither can the private sector take our position in the world for granted, nor can unions expect remunerations of the past (see the vauxhall deal for a case of unions doing it right).
Like it or not lefties like me have been shouting for many years about the way westerners consume too high a percentage of the worlds resources to sustain our way of living, and now the chickens are coming home to roost. Even if sanity prevailed tomorrow and southern Europe was allowed the devalued currencies they need for recovery we will never again consume the percentage of the worlds resources that we used to.
Apologies for the long post and for banging on about this. I just feel that this aspect of our situation is little understood by the main stream media, hence is worth repeating even if it's not exactly news to many contributors in this thread.
Tartan Pixie said:
Like it or not lefties like me have been shouting for many years about the way westerners consume too high a percentage of the worlds resources to sustain our way of living, and now the chickens are coming home to roost. Even if sanity prevailed tomorrow and southern Europe was allowed the devalued currencies they need for recovery we will never again consume the percentage of the worlds resources that we used to.
I don't see it as a left/right issue really - you'll find many people in the ranks of the right wings that think the same thing. I get the feeling that the alignments and sizes of the political parties are going to shift a bit in the next few years to take account of new realities. turbobloke said:
The lefties at WWF are on side with that, proposing global poverty as the solution to a miscalculated problem.
Well thank fek they're not in charge.WWF said:
economic growth should be abandoned and citizens of the world's wealthy nations should prepare for poverty
Mmmm global poverty, nice.There's pragmatists and ideologues on all sides but I tend to think Henry Ford had it right, the workers must be the consumers because that is the balance at which you get the highest velocity of money and everyone is happy.
Perhaps I'm showing my roots as a country bumpkin but if you want to eat you must look after the sheep.
Foxes are pretty but everyone suffers if the farmer/government is weak.
Now where's that shotgun.
Tartan Pixie said:
turbobloke said:
The lefties at WWF are on side with that, proposing global poverty as the solution to a miscalculated problem.
Well thank fek they're not in charge.WWF said:
economic growth should be abandoned and citizens of the world's wealthy nations should prepare for poverty
Mmmm global poverty, nice.
DJRC said:
Tough. Nobody gave a fk about you 2000 yrs ago, 1900, 1800, 1700, 1600, 1500....300,200,100, 50, 10 yrs ago, etc, etc.
Nothing has changed. NOTHING.
Humanity has no emotion when it comes to either making money or gaining power. It never has had in any society at any point in human history. Ever.
"The strong do as they can and the weak suffer what they must." Thucydides. He was Greek by the way.
Tough? k about you 2000 yrs ago, 1900, 1800, 1700, 1600, 1500....300,200,100, 50, 10 yrs ago, etc, etc.Nothing has changed. NOTHING.
Humanity has no emotion when it comes to either making money or gaining power. It never has had in any society at any point in human history. Ever.
"The strong do as they can and the weak suffer what they must." Thucydides. He was Greek by the way.
You seem to have a lot of anger inside. You should chill out, play a guitar, smoke a joint
Driller said:
DJRC said:
Tough. Nobody gave a fk about you 2000 yrs ago, 1900, 1800, 1700, 1600, 1500....300,200,100, 50, 10 yrs ago, etc, etc.
Nothing has changed. NOTHING.
Humanity has no emotion when it comes to either making money or gaining power. It never has had in any society at any point in human history. Ever.
"The strong do as they can and the weak suffer what they must." Thucydides. He was Greek by the way.
Tough? k about you 2000 yrs ago, 1900, 1800, 1700, 1600, 1500....300,200,100, 50, 10 yrs ago, etc, etc.Nothing has changed. NOTHING.
Humanity has no emotion when it comes to either making money or gaining power. It never has had in any society at any point in human history. Ever.
"The strong do as they can and the weak suffer what they must." Thucydides. He was Greek by the way.
You seem to have a lot of anger inside. You should chill out, play a guitar, smoke a joint
Never said it was unfair, fair doesn't come into it as I'm sure you'd agree. I just resent being forced to get involved in a soulless diversion to protect what I have worked hard for in a conscientious and ethical way.
You'll say "but ethics doesn't come into it", I say "exactly".
In my world everyone is a winner, give and take, in the world of finance it's winner takes all, destroy the competition. And the really stupid thing is that everyone has the potential to lose everything with just a spot of bad luck in-spite of hard work and good strategy and finish up leaping out the window on the 32nd.
For me this is an intolerably uncivilized and senseless way to live.
Anyway, right now the worry has become that the Euro is going to head back up to €1.50 to the £ and beyond. What then? Is it a question of hang tight and if all funds/place of work/residence remain in Europe then no problem and later on all will come good or is there a real potential to actually lose money in a ponzi type way?
You'll say "but ethics doesn't come into it", I say "exactly".
In my world everyone is a winner, give and take, in the world of finance it's winner takes all, destroy the competition. And the really stupid thing is that everyone has the potential to lose everything with just a spot of bad luck in-spite of hard work and good strategy and finish up leaping out the window on the 32nd.
For me this is an intolerably uncivilized and senseless way to live.
Anyway, right now the worry has become that the Euro is going to head back up to €1.50 to the £ and beyond. What then? Is it a question of hang tight and if all funds/place of work/residence remain in Europe then no problem and later on all will come good or is there a real potential to actually lose money in a ponzi type way?
Excellent 4 page article in the ST today, paints a frightening picture for Greece if the exit isn't managed carefully (the exit sort of taken as a given). Full scale civil breakdown could be expected that could lead to a civil war or (more likely) a (short term) military coup.
In the worse case scenario, total economic collapse, police etc. don't get paid so don't go to work, armed, politically partisan gangs roaming the streets of Athens, it's difficult to see how the military couldn't intervene, someone would have to to bring some measure of order before a recovery could begin
In the worse case scenario, total economic collapse, police etc. don't get paid so don't go to work, armed, politically partisan gangs roaming the streets of Athens, it's difficult to see how the military couldn't intervene, someone would have to to bring some measure of order before a recovery could begin
Tartan Pixie said:
So you're arguing that it's ok to let the predators run riot until the system crashes? Well if you thought 2008 was a good thing for finance then you're entitled to that opinion but I suspect a few people may disagree.
I prefer to think of it like the predator prey curve. If you want to avoid boom and sudden horrible bust then sometimes you have to cull the predators. It's ruthless but better to kill off a few folk in the speculative/predatory part of banking than let them kill off large parts of our economy.
This ruthlessness has largely been missing from the FSA but, as anyone involved in countryside management will tell you, sometimes you need to cull to be kind and keep it all balanced.
Don't worry about those clunk ker-click noises in the background, it's just the noise of me loading the shotgun.
To be honest he is kinda right. part of what led to this issue was regulation forcing financial institutions to find ever more creative ways to make money the problem there was that it became such a complex system that it broke the bank.I prefer to think of it like the predator prey curve. If you want to avoid boom and sudden horrible bust then sometimes you have to cull the predators. It's ruthless but better to kill off a few folk in the speculative/predatory part of banking than let them kill off large parts of our economy.
This ruthlessness has largely been missing from the FSA but, as anyone involved in countryside management will tell you, sometimes you need to cull to be kind and keep it all balanced.
Don't worry about those clunk ker-click noises in the background, it's just the noise of me loading the shotgun.
Edited by Tartan Pixie on Saturday 19th May 21:42
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