Is the end nigh for the Euro? [vol. 3]

[Andy Zarse]

Walford said:

RYH64E said:

I think that the EU will do whatever is necessary to protect the euro, it's end isn't nigh, and to assume that Germany alone determines EU policy is naive.

So who else pays money in,

We do!

This however is totally irrelevant in this context since we are talking about the ECB. Not being in the Eurozone (thank god) we have zero influence. There is almost nothing Mario can actually do without Germany okaying it. Of course he can undertake what have been called OMTs (AKA Open Mouth Operations ) such as saying "whatever it takes", but the fact remains he has done almost nothing because Germany won't allow it.

All the talk of the 1 Trillion conjuring trick working is just so much hot air, the last LTROs failed and is being paid back in spades, another Eu20 billion last week, shrinking the ECB balance sheet still further.

Mario's much-vaunted purchases of Asset Backed Securities are frankly embarrassing. Naturally he is once again limited by Germany. The figures speak for themselves. After all the hyperbole the first tranche of Eu368 million Euros was paltry and it is hard to know whether to laugh or cry at the subsequent Eu233 million. After all when did central banks return to counting in millions?

So yet again we see the conflict between stating "we're going to do everything it takes" and actually doing it is as wide as ever. The fact of the matter is, to coin a phrase from Meatloaf, Germany is saying: "...But I won't do that".

And you know what? Even if they do launch full QE, what good will it do? QE is supposed to lower bond yields. Well Italian 10yr is trading at below 2%, lower than the UK, and still the banks won't lend. Meanwhile the Italian banks, who two years ago held cEu100 billion in Italian sovereign debt now hold Eu400 billion. Who on earth is going to buy all this paper when the ECB can't and the market turns and they're flaming out? To quote Newt from Aliens (again) "It won't make any difference...

So sorry to introduce some facts and figures, as opposed to the hyperbole of RYH64E, but we most definitely are still on the highway to Euro hell.

Edited by Andy Zarse on Tuesday 9th December 15:31

Edited by Andy Zarse on Tuesday 9th December 15:39

[Gargamel]

Andy Zarse said:

Meanwhile the Italian banks, who two years ago held cEu100 billion in Italian sovereign debt now hold Eu400 billion.

Sorry, run that by me again.

Who exactly owes what to whom, and what is the implication of that number doubling.

[Steffan]

Andy Zarse said:

Walford said:

RYH64E said:

I think that the EU will do whatever is necessary to protect the euro, it's end isn't nigh, and to assume that Germany alone determines EU policy is naive.

So who else pays money in,

We do!

This however is totally irrelevant in this context since we are talking about the ECB. Not being in the Eurozone (thank god) we have zero influence. There is almost nothing Mario can actually do without Germany okaying it. Of course he can undertake what have been called OMTs (AKA Open Mouth Operations ) such as saying "whatever it takes", but the fact remains he has done almost nothing because Germany won't allow it.

All the talk of the 1 Trillion conjuring trick working is just so much hot air, the last LTROs failed and is being paid back in spades, another Eu20 billion last week, shrinking the ECB balance sheet still further.

Mario's much-vaunted purchases of Asset Backed Securities are frankly embarrassing. Naturally he is once again limited by Germany. The figures speak for themselves. After all the hyperbole the first tranche of Eu368 million Euros was paltry and it is hard to know whether to laugh or cry at the subsequent Eu233 million. After all when did central banks return to counting in millions?

So yet again we see the conflict between stating "we're going to do everything it takes" and actually doing it is as wide as ever. The fact of the matter is, to coin a phrase from Meatloaf, Germany is saying: "...But I won't do that".

And you know what? Even if they do launch full QE, what good will it do? QE is supposed to lower bond yields. Well Italian 10yr is trading at below 2%, lower than the UK, and still the banks won't lend. Meanwhile the Italian banks, who two years ago held cEu100 billion in Italian sovereign debt now hold Eu400 billion. Who on earth is going to buy all this paper when the ECB can't and the market turns and they're flaming out? To quote Newt from Aliens (again) "It won't make any difference...

So sorry to introduce some facts and figures, as opposed to the hyperbole of RYH64E, but we most definitely are still on the highway to Euro hell.

Edited by Andy Zarse on Tuesday 9th December 15:31

Edited by Andy Zarse on Tuesday 9th December 15:39

I agree the comments of Andy Zarse entirely. And with the many comments of Gargamel and others on here drawing attention to the complete nonsense that this supposed EU "policy" has become.

I find the absolute refusal from the UK government to actually face this problem and admit that change is inevitable or our withdrawal from being a member of the EU must itself become inevitable deeply disturbing. Viirtually all the pundits on this subject can see that the consequences of cessation from the EU are very serious. The alternative of remaining within this financil framework whilst France, Spain and all the other failing Sovereign states currently locked within this mechanism slide steadily further and further into hopeless insolvency steadily and inexorably is becoming risibly unrealistic. Yet despite this this nonsense goes on and the EU is refusing to admit or address the inevitable consequences to the EU.

The only party in the UK actually warning that this whole business is becoming completely unsustainable is UKIP and a lonely voice they still remain. Cameron has shown himself to be pure hot air on most serious subjects. Warm words and damn all real action. The abject failure of his much vaunted Immigration targets being just one expample. There are many many more. As an aside I am not a member of UKIP but I do think that party may well play a pivotal role on the membership of the UK in the EU in 2015. One wayor another I do think there is going to be a referendum coming on this subject despite the mainstream parties all telling the UK that membership is vital. Not if the ship hits the rocks it's not.

I personally have benefitted substantially from the UK being within the EU. I do not want th EU to collapse. But long ago i realised whilst travelling all around Europe that the whole economics of this matter were entering nonsense levels. The visibly failing states cannot remain within the EU without subsidy. The ludicrous waste and huge costs now associated with the self perpetuating oligarchy that the EU has become is therefore unsustainable. None of the EU countries want to pay for any of the other states failings and only fools actually believe that the failing states currently within the EU can survive without such subsidies. This is not a coherent planned and managed solution. It is complete cobblers battered together as a solution and with QE plastic money printing being used to top up the losses of the failing states every day this continues. These states are wholly insolvent and getting worse daily. The loans are garbage.

As others on here remind us the EU suggestion of QE being the answer is complete nonsense. This allows the deliberate fraud to continue on the EU taxpayers but it cannot solve or address any of the inherent economic failure within the failing EU states. A huge smoke screen nd abject denial of the problem can never substitute for the proper managed resolution of the inherent economic failings of the insolvent EU states. The EU leaders may (And are!) line thieir pockets and stay on the gravy train for a little longer. But the crunch will come. How much better to seek to admit the mistakes and face the consequences. Not for th EU currently it would seem. But this is not a sustainable policy and one way or another the truth will out. 2015 is going to be an interesting year.

[Andy Zarse]

Steffan said:

The only party in the UK actually warning that this whole business is becoming completely unsustainable is UKIP and a lonely voice they still remain.

I will have nothing to do with a party that even suggests nationalising the railways. UKIP used to be an essentially anti-EU party and on that basis I have voted for them in the past. Not any more, they are quickly losing their way.

[Walford]

Would UKIP replacing the LibDems in the coalition work, is it a probable out come in the GE

[DJRC]

Today I feel like Draghi and Barosso...a failure

[LongQ]

Andy Zarse said:

Steffan said:

The only party in the UK actually warning that this whole business is becoming completely unsustainable is UKIP and a lonely voice they still remain.

I will have nothing to do with a party that even suggests nationalising the railways. UKIP used to be an essentially anti-EU party and on that basis I have voted for them in the past. Not any more, they are quickly losing their way.

Hang on, UKIP have a policy?

Good grief.

Are you sure they were talking about Nationalising the Railways? Not just looking at the possibilities of getting a few of the franchises back into the hands of essentially British management? Perhaps with some British rolling stock?

[Andy Zarse]

LongQ said:

Hang on, UKIP have a policy?

Good grief.
Perhaps with some British rolling stock?

I bloody well hope not!

[Andy Zarse]

DJRC said:

Today I feel like Draghi and Barosso...a failure

Been shorting the Euro again?

[s2art]

Andy Zarse said:

LongQ said:

Hang on, UKIP have a policy?

Good grief.
Perhaps with some British rolling stock?

I bloody well hope not!

Are Bombadier(sp?)really that bad?

[Andy Zarse]

Gargamel said:

Andy Zarse said:

Meanwhile the Italian banks, who two years ago held cEu100 billion in Italian sovereign debt now hold Eu400 billion.

Sorry, run that by me again.

Who exactly owes what to whom, and what is the implication of that number doubling.

Pretty much as it says. Italian banks are now absolutely stuffed full of Italian Govt debt. This is what has driven down yields. What could possibly go wrong!😃

[DJRC]

Andy Zarse said:

DJRC said:

Today I feel like Draghi and Barosso...a failure

Been shorting the Euro again?

I'm genuinely one of the best in Europe at what I do and today I completely and utterly fked, blew and generally sucked a fairly important job interview. No ifs no buts no excuses.

[Steffan]

DJRC said:

Andy Zarse said:

DJRC said:

Today I feel like Draghi and Barosso...a failure

Been shorting the Euro again?

I'm genuinely one of the best in Europe at what I do and today I completely and utterly fked, blew and generally sucked a fairly important job interview. No ifs no buts no excuses.

I can certainly appreciate the way you are feeling. From the tone of your earlier message I wondered if all was well. No point in platitudes tomorrow is another day and I have no doubt your career will recover from this set back. Awful feeling when you let yourself down but most of do at some point in life. I most certainly have spectacularly upon more than one occasion. Only thing to do is to come back stronger. You will. Best of luck to you.

[Andy Zarse]

DJRC said:

I'm genuinely one of the best in Europe at what I do and today I completely and utterly fked, blew and generally sucked a fairly important job interview. No ifs no buts no excuses.

Someone years ago told me never ever do important st like this near to Xmas. You're mentally off your game. You don't know it and you think all is normal. But Xmas somehow turns people's brains to mush and I've seen enough evidence over the years to know it's true. And once you know this fact you can turn the tables on others, which I'll be doing on Thursday to someone who has far too high an opinion of themselves

[Steffan]

Andy Zarse said:

DJRC said:

I'm genuinely one of the best in Europe at what I do and today I completely and utterly fked, blew and generally sucked a fairly important job interview. No ifs no buts no excuses.

Someone years ago told me never ever do important st like this near to Xmas. You're mentally off your game. You don't know it and you think all is normal. But Xmas somehow turns people's brains to mush and I've seen enough evidence over the years to know it's true. And once you know this fact you can turn the tables on others, which I'll be doing on Thursday to someone who has far too high an opinion of themselves

Once again I agree. I spent years trying to work through Chistmas in operating volume contract house building and this did become actually impossible at Christmas because all the professionals to a man disappear for at least two weeks. No Surveyors, Architects, Civil engineers, Solicitors or Bankers or indeed Contractirs, Housebuilders, the Land Registry etc about to chase up or speed up. Or even speak to. Eventually I was forced to realise that however inconvenient Christmas may be to those seeking to perform business effectively and without any loss of program, despite the Yuletide prescience, it just cannt be done. Better to appreciate that things return nearer to normal in the New Year and go with the flow. Saved me an awful lot of heartache once I understood this because as the New year progresses everything returns to normal and it becomes so much easier to maintain daily contacts etc. Taught me a lesson, never forgotten.

[LongQ]

s2art said:

Andy Zarse said:

LongQ said:

Hang on, UKIP have a policy?

Good grief.
Perhaps with some British rolling stock?

I bloody well hope not!

Are Bombadier(sp?)really that bad?

Canadian company. Still, the closest we have I suppose these days.

Was it the East Cost mainline or one of the others where the new rolling stock "Launch" (well ahead of any roll out) was in Japan 'cos Hitachi are building the things?

[DJRC]

Ah its nothing lads apart from a blokes pride. Want a laugh? The job would have been effectively a 30k pay cut! And I'm pissed about buggering it up!! It had long term upsides but short/medium term was financially a daft idea.

As for Xmas distracting? Hmmm, I suspect my father being in hospital very ill and my gran having a suspected heart attack last week might have more of an impact.

But I'm mostly just pissed because I feel I embarrassed myself professionally.

Oh well I'm sure I'll bugger up again soon enough

[anonymous-user]

There's always another cock-up round the corner to make the last one appear inconsequential

[mikerons88]

DJRC said:

Ah its nothing lads apart from a blokes pride. Want a laugh? The job would have been effectively a 30k pay cut! And I'm pissed about buggering it up!! It had long term upsides but short/medium term was financially a daft idea.

As for Xmas distracting? Hmmm, I suspect my father being in hospital very ill and my gran having a suspected heart attack last week might have more of an impact.

But I'm mostly just pissed because I feel I embarrassed myself professionally.

Oh well I'm sure I'll bugger up again soon enough

It could be worse. You could be me who accepted a 60k paycut (and loss of 2000euro a month accomodation allowance), hopefully for long term gain...

[Digga]

Gargamel said:

Andy Zarse said:

Meanwhile the Italian banks, who two years ago held cEu100 billion in Italian sovereign debt now hold Eu400 billion.

Sorry, run that by me again.

Who exactly owes what to whom, and what is the implication of that number doubling.

My take on that is that no one else has the appetite to take on Italian debt. Certainly not at current yields.

IIRC, at the start of the GFC, it was France who held a substantial share of Italian bank (not sovereign) debt.

garyhun said:

There's always another cock-up round the corner to make the last one appear inconsequential

Thanks for that gem. May I keep it and re-use at an opportune moment?