Is the end nigh for the Euro? [vol. 2]
Discussion
Gary11 said:
...Where were we?
German showdown with IMF looms as Bundestag blocks rescue fundsTelegraph said:
Germany's ruling parties are to introduce a resolution in parliament blocking any further boost to the EU’s bail-out machinery, vastly complicating Greece’s rescue package and risking a major clash with the International Monetary Fund.
http://www.telegraph.co.uk/finance/financialcrisis...Financial Times said:
“The program is much, much more ambitious than economic reform,” said Mujtaba Rahman, Europe analyst at the Eurasia Group risk consultancy. “This is state building, as typically understood in traditional low-income contexts.”
European creditor countries are demanding 38 specific changes in Greek tax, spending and wage policies by the end of this month and have laid out extra reforms that amount to micromanaging the country’s government for two years.
Mr Rahman said the scale and the speed of the reforms demanded raised questions about whether sceptical euro zone lenders were setting up Greece to fail sometime within the next year.
“Even if one understands the political imperative, the program is being set up to fail as many of the targets will be impossible to achieve,” he said.
All still go for mid march default.European creditor countries are demanding 38 specific changes in Greek tax, spending and wage policies by the end of this month and have laid out extra reforms that amount to micromanaging the country’s government for two years.
Mr Rahman said the scale and the speed of the reforms demanded raised questions about whether sceptical euro zone lenders were setting up Greece to fail sometime within the next year.
“Even if one understands the political imperative, the program is being set up to fail as many of the targets will be impossible to achieve,” he said.
Graeme Leach, the Institute of Directors’ chief economist, said Berlin’s “...There is zero chance that the eurozone will survive in current form this year, and Greece will be out by the summer, just in time for cheap holidays,” he said.
From the article above, this tickled me, sounds like a paragraph from the Daily Mash.
From the article above, this tickled me, sounds like a paragraph from the Daily Mash.
Piersman2 said:
Graeme Leach, the Institute of Directors’ chief economist, said Berlin’s “...There is zero chance that the eurozone will survive in current form this year, and Greece will be out by the summer, just in time for cheap holidays,” he said.
From the article above, this tickled me, sounds like a paragraph from the Daily Mash.
TBH from a Greek perspective of getting the eocnomy to bounce back and begin to assimilate post-default, surely the sooner the better to attract the cheapo holiday punters?From the article above, this tickled me, sounds like a paragraph from the Daily Mash.
Piersman2 said:
Graeme Leach, the Institute of Directors’ chief economist, said Berlin’s “...There is zero chance that the eurozone will survive in current form this year, and Greece will be out by the summer, just in time for cheap holidays,” he said.
From the article above, this tickled me, sounds like a paragraph from the Daily Mash.
I think predicting an exact date is difficult, as I know from experience, although March 23rd does see probable.From the article above, this tickled me, sounds like a paragraph from the Daily Mash.
What I do think is undeniable is that Greece will default.
The real question, then, is what about the other insolvent sovereign states in Europe?
I honestly believe there is a real possibility that the loss of confidence which the EU as an entity will suffer, as a direct result of being completely in denial of the reality of the insolvency of Greece and largely distrusted as a result in the financial world.
As each country defaults, and IMO default, is inevitable for Portugal and Spain, the credibility of the EU will take a severe hammering.
In my view the credibility of the EU has already been severely depleted, by the amateurish way in which the EU pretended that all was well, when clearly all was not well, nor could it be well in Greece, which was teetering on the edge of default from the beginnings of all this.
How much more derision and distrust will fall upon the EU and the Euro if another country defaults?
And then another?
Frankly I question whether the EU could actually ride the storm when all this happens. I would expect wholesale connivance between the IMF, ECB, EU and all the other players to prevent a run on the Euro. What I am not sure about is whether they could actually manage the mess.
We live in interesting times. Its going to get a lot more interesting yet!
Steffan said:
I think predicting an exact date is difficult, as I know from experience, although March 23rd does see probable.
What I do think is undeniable is that Greece will default.
In reality Greece has already defaulted, because it cannot pay it's creditors back the money. That's it, all washed up.What I do think is undeniable is that Greece will default.
The fact that EU spinmeisters are using the blatant lying tactic doesn't change this.
The question is which is the next PIIGS country to fall?. Portugal isn't looking so good just now...
Globs said:
Steffan said:
I think predicting an exact date is difficult, as I know from experience, although March 23rd does see probable.
What I do think is undeniable is that Greece will default.
In reality Greece has already defaulted, because it cannot pay it's creditors back the money. That's it, all washed up.What I do think is undeniable is that Greece will default.
The fact that EU spinmeisters are using the blatant lying tactic doesn't change this.
The question is which is the next PIIGS country to fall?. Portugal isn't looking so good just now...
But the essence of the EU position is that a negotiated reduction in debt is not a default. I think its a default. IMO it is a default. Not according to the EU.
I will be very interested to see what the Hedge Funds who bought Greek debt cheaply, for as little as 20% of nominal vale do about this.
If the CDS insurance pays out they will rake money in. IMO if the CDS insurance pays out the Greeks have, as a matter of fact, defaulted.
Anyone got the latest on what is happening with CDS insurance on the Greek Bonds?
I do agree with you about the lies of the EU not changing the facts.
What the EU has, and is abusing, is the printing presses of the ECB. They can slaver EU taxpayers money over any difficulty at will. And are doing so. Disgraceful. Throwing Billions of OP money away.
Whilst the EU pretense continues and the EU oils the wheels with Billions of Euro's from the poor EU taxpayer the rotten edifice may continue.
Not for long.
The real crunch is coming. Then we will see the EU in full retreat.
Steffan said:
I agree 100% with you Globs.
But the essence of the EU position is that a negotiated reduction in debt is not a default. I think its a default. IMO it is a default. Not according to the EU.
I will be very interested to see what the Hedge Funds who bought Greek debt cheaply, for as little as 20% of nominal vale do about this.
If the CDS insurance pays out they will rake money in. IMO if the CDS insurance pays out the Greeks have, as a matter of fact, defaulted.
Anyone got the latest on what is happening with CDS insurance on the Greek Bonds?
I do agree with you about the lies of the EU not changing the facts.
What the EU has, and is abusing, is the printing presses of the ECB. They can slaver EU taxpayers money over any difficulty at will. And are doing so. Disgraceful. Throwing Billions of OP money away.
Whilst the EU pretense continues and the EU oils the wheels with Billions of Euro's from the poor EU taxpayer the rotten edifice may continue.
Not for long.
The real crunch is coming. Then we will see the EU in full retreat.
I am interested in the mechanics of the CDS insurance and cannot work out the goldman sachs connection,and indeed how the haircut will be reflected in any payout as its not a technical default,IMO with my limited understanding here TBH it all looks like a house of cards and reeks of corruption,manipulation and lies on a scale dwarfing any crime to date,I say crime beacause obtaining money by deception is that a crime,what sort of bankrupt defaulted entity would be lent ANY money in the real world today!But the essence of the EU position is that a negotiated reduction in debt is not a default. I think its a default. IMO it is a default. Not according to the EU.
I will be very interested to see what the Hedge Funds who bought Greek debt cheaply, for as little as 20% of nominal vale do about this.
If the CDS insurance pays out they will rake money in. IMO if the CDS insurance pays out the Greeks have, as a matter of fact, defaulted.
Anyone got the latest on what is happening with CDS insurance on the Greek Bonds?
I do agree with you about the lies of the EU not changing the facts.
What the EU has, and is abusing, is the printing presses of the ECB. They can slaver EU taxpayers money over any difficulty at will. And are doing so. Disgraceful. Throwing Billions of OP money away.
Whilst the EU pretense continues and the EU oils the wheels with Billions of Euro's from the poor EU taxpayer the rotten edifice may continue.
Not for long.
The real crunch is coming. Then we will see the EU in full retreat.
They all deserve each other the EU and the bankers a fatal self fulfillng bunch of b
ds killing so much more than they know or care about (by this I mean proper buisness unable to continue with existing facilities or obtain refinance)unlike this bunch to whom there seems to be unlimited money...always.G
Steffan said:
We live in interesting times. Its going to get a lot more interesting yet!
Indeed.It's a slow paced novel this one, with lots of twists and turns and the Author keeping you guessing on the outcome until the very end.
Re CDS, this is interesting - I think many of the parties involved in them are sitting on both sides (owe/owed) so are happy with the status quo. But if the hedgies who've bought cheap and insured think they will get 100% of their cash I'm not so sure.
There is a lot of greed about and (as those american lenders who lent to the poor who were never going to pay back discovered) when you lend/insure with someone who's got risk attached you aren't guaranteed to get your cash back.
Ireland won't default. The Irish Govt won't entertain the notion of default, the EU/IMF/ESF won't let it default.
Ireland will be supported so they can be held up as a shining example of a poster boy proving it's possible to take the tough medicine and survive.
At any cost to Irish social fabric or its Citizens suffering.
Ireland will be supported so they can be held up as a shining example of a poster boy proving it's possible to take the tough medicine and survive.
At any cost to Irish social fabric or its Citizens suffering.
Can Ireland turn the taps fast enough on its deficit to avoid the Greek problem of just accumulating an unsustainable level of debt forcing a default? Pity I always liked Ireland and the Irish, even in the early 90's before the Celtic tiger and all the educated young where buggering off to the U.S.
speedy_thrills said:
Can Ireland turn the taps fast enough on its deficit to avoid the Greek problem of just accumulating an unsustainable level of debt forcing a default? Pity I always liked Ireland and the Irish, even in the early 90's before the Celtic tiger and all the educated young where buggering off to the U.S.
Parts of the Irish economy are doing really well. Lots of partners in the law and accounting firms taking home 700k plus per annum. Technology booming. Pharma doing well. Financial services in rude health (international funds business as opposed to domestic).Don't right it off. Debt burden not unsustainable - EU have backstopped most of it.
speedy_thrills said:
Can Ireland turn the taps fast enough on its deficit to avoid the Greek problem of just accumulating an unsustainable level of debt forcing a default? Pity I always liked Ireland and the Irish, even in the early 90's before the Celtic tiger and all the educated young where buggering off to the U.S.
Again an interesting question. I like both Ireland and the Irish. Many a happy evening spent in southern Ireland pubs. Glorious countryside, lovely people.Which sadly counts for nothing when poverty rides high.
IMO the EU can sustain Ireland and the Italians and hold Europe and the remaining Euro membership providing three major changes are made to the EU.
Firstly, the EU must centralise all taxation and then government expenditure of all the Sovereign states, and control the entire fiscal process for every state who wishes to be in the Euro.
Secondly, the EU must find a fiddle mechanism by which they can subsidise the economies of the poorer EU members with hidden payments, not apparent to the richer countries who will be permanently subsidising Italy, Belgium, Italy and very probably France. That would work, providing the EU can hide it.
From the complete and utter dishonesty that is manifest within the EU and the current funny money activities of the ECB and ESF. I think that is possible.
Thirdly, the EU must ensure that there are no ripples of discovery through the EU, or outside the EU. Plenty of Grandstanding, Strutting about on stages, Major Intercontinental Governmental Conferences, Meetings, Committees and so forth should pretty well ensure that.
The downside will be that the EU will become exactly what the protagonists have always wanted. A United States of Europe under one undemocratic control with unelected commissioners and unelected Bureaucrats in absolute control of all EU finance, subsidy passing unnoticed from state to state and absolutely no way any election can interfere with the glorious plan of the EU.
Rather like the USSR under Putin and the Chinese approach.
Do I think this is possible? Sadly, if the Eu can fool enough people I think it might be. Has Cameroon withdrawn his objection? Yes he has and therby hangs the problem. Merkozy and the Bureaucrats are a very firm Band.
Do I think it is likely. Again possibly although I hope not. The real problem is the time this will take to implement. The collapse of Greece may make the EU states realise where this centralist policy is going in the EU. There are a number of states including the Scandinavian countries who may well call a halt. Germany clearly has concerns over everlasting subsidy, because they will be by far the biggest contributors.
But I have not the slightest doubt that is what the EU would like to do.
At a stroke they would dispense with the encumbrance of Democracy and get everything they want with no questions asked.
That is, and has always been their aim.
So in answer to the Question can Ireland stay in the EU? Yes, but only if there is permanent subsidy. Otherwise like all the defaulters, the reality of the burden of their debt, with interest on the debt, will destroy the country.
Default becomes the only, practical solution, for wholly insolvent Sovereign states.
Gary11 said:
I am interested in the mechanics of the CDS insurance and cannot work out the goldman sachs connection
JP Morgan, Morgan Stanley, Goldman Sachs, Bank of America, and Citigroup sold & underwrite credit default insurance for many European banks, who in turn hold Greek 'gilts'. 1point7bar said:
Gary11 said:
I am interested in the mechanics of the CDS insurance and cannot work out the goldman sachs connection
JP Morgan, Morgan Stanley, Goldman Sachs, Bank of America, and Citigroup sold & underwrite credit default insurance for many European banks, who in turn hold Greek 'gilts'. Do you know whether the Greek haircut constitutes a default?
If it does these insurance companies are going to be toast shortly. I wonder if the state will be the rescuer again.
The more I learn of this cobbled "solution" the more certain the Greeks will default. Indeed since many of the Greek Bonds were, I understand, issued under UK legislation I would expect the High Court to rule this as a default in any event.
But I am no expert on CDS insurance. I wonder what the experts say?
Steffan said:
1point7bar said:
Gary11 said:
I am interested in the mechanics of the CDS insurance and cannot work out the goldman sachs connection
JP Morgan, Morgan Stanley, Goldman Sachs, Bank of America, and Citigroup sold & underwrite credit default insurance for many European banks, who in turn hold Greek 'gilts'. Do you know whether the Greek haircut constitutes a default?
If it does these insurance companies are going to be toast shortly. I wonder if the state will be the rescuer again.
These are no insurance companies, these guys own the FED, the US and go golfing with their mates at the BIS, ECB, BoE etc..
It's all starting to make sense as to why Greece is not allowed to default.
In fact with this new information, I'd like to say that Greece will NEVER be allowed to officially default.
Not with these guys running the game, No Chance.
Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff