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

[Digga]

Welshbeef said:

I'm sure I heard on R4 this morning that doctors and nurses had not received payment for any overtime from 1/1/2015 to date, medical suppliers to the Greek NHS have not been paid - unsure for how long. Plus a few other things.

FWIW this is not spin or bullst and, if anything, understates the issue. It is truly screwed up.

As of last month, many medical staff were still awaiting overtime from October 2014.

[Gargamel]

Digga said:

WIW this is not spin or bullst and, if anything, understates the issue. It is truly screwed up.

As of last month, many medical staff were still awaiting overtime from October 2014.

Yeah, well I have news for them, they are never getting paid that....

Lots of suppliers to the government haven't been paid in months, and the Greeks issued some pretty angry responses when two of the big international pharma companies refused to send more drugs until some bills had been paid.

I am continually reminded of that bankruptcy quote from Hemingway, The Sun Also rises

How did you go bankrupt?"

Two ways. Gradually, then suddenly.

[EskimoArapaho]

It's all going to be fine. Greece is going to join a new bank with impeccable credentials and a very forgiving set of shareholders: https://www.youtube.com/watch?v=iJra9v56czg

[Andy Zarse]

Gargamel said:

Digga said:

WIW this is not spin or bullst and, if anything, understates the issue. It is truly screwed up.

As of last month, many medical staff were still awaiting overtime from October 2014.

Yeah, well I have news for them, they are never getting paid that....

Lots of suppliers to the government haven't been paid in months, and the Greeks issued some pretty angry responses when two of the big international pharma companies refused to send more drugs until some bills had been paid.

AFAIUI Greece has owed medical suppliers more than a billion Euros for at least the last five years. I was told this figure over two years ago, God knows what it must be now...

Greece is, as Steffan would have it, utterly insolvent. Worse than that they are utterly illiquid too, which presents an even greater present problem.

[Steffan]

Gargamel said:

Digga said:

WIW this is not spin or bullst and, if anything, understates the issue. It is truly screwed up.

As of last month, many medical staff were still awaiting overtime from October 2014.

Yeah, well I have news for them, they are never getting paid that....

Lots of suppliers to the government haven't been paid in months, and the Greeks issued some pretty angry responses when two of the big international pharma companies refused to send more drugs until some bills had been paid.

I am continually reminded of that bankruptcy quote from Hemingway, The Sun Also rises

How did you go bankrupt?"

Two ways. Gradually, then suddenly.

As Digga and Gargamel both confirm the future of Greece Is seriously perilous at best.

Many years of exerience working in Insovency taught me a great deal about the more unpleasant side of human nature. Some of the characters I met had made a lifestyle choice to make a pretty good living from repeated personal bankruptcies. The largest individal number of personal bankruptcies I have ever seen was seven peronal bankruptcies over a thirty year period. Outright criminality in fact and treated as such from the fourth bankruptcy on as Criminal Bankruptcy. Time was served but not a great deal and millions were obtained and disappeared in the process.

In the case of Greece as Gargamel righty suggests the path to bankruptcy has been slow and steady with this sovereign state and is about to become sudden I think. Unless the EU can dream up another bail out which will still end in bankruptcy but might manage to increase the overall indebtedness significantly.

There have been so many years of nonsense from the EU on this solution, which have achieved very litte, excet Billions of Euro's being wasted in the vain attempts by the EU. Greece is never going to recover and clearly Syriza are not going to face the problem, but are preferring to pretend that escape from Bankruty by Greece is still possible for Greece. Sadly for the Greek population it is most certainly is not, possibe, and crucially never was possible once the crazy unaffrdable debts were racked up by Greece. There will be no escape.

Greece has been heading towards chaos and disaster, economically, year upon year for the last five years. The sudden drop is about to engulf them. Unless a fairy godmother appears which seems highly unlikely to me. Tragedy for the Greek population. Very possibly seriously bad news for the credibility and therefore the future of the EU. Whilst the losses are not significant to the EU budget as a whole they will be deeply significant to the solvent Sovereign states who are landed with the debts. Equally I suggest there will be serious doubts cast over the real ability of the EU to manage these problems.. That is the sting in the tail for the EU I think.

[Andy Zarse]

Just to cheer you up Steffan, and against the best predictions of the EU for a "Grecovery" of 2.50%, the Greek economy fell back into recession and recommenced its wretched string of contractions. It fell by 0.20% in Q1 2015, one can only speculate how the Hellenic Statistics Agency massaged these figures to get them to come out so well... how long until the terminal breath?

[maffski]

Steffan said:

Unless the EU can dream up another bail out which will still end in bankruptcy but might manage to increase the overall indebtedness significantly.

I'm sure Germany had been against the Syriza plan for a referendum to approve any bailout, but suddenly "That might even be a helpful measure for the Greek people to decide whether it is ready to accept what is necessary, or whether it wants something different." - http://www.telegraph.co.uk/finance/economics/11598...

Of course there wouldn't be any kind of bail out before a referendum, but it would be undemocratic to let the Greeks go bust before they'd voted on how they want to go bust. And it would take a while to organise, so there would have to be a 'quiet' agreement. Not a bailout, obviously, just a few billion here, a few billion there.

[Mr Whippy]

Andy Zarse said:

who in their right minds thinks QE was necessary?

GDP up because Euro is down?

Race to the bottom is popular because it boosts trade/exports competitiveness.

Or maybe something else.

Still all a bit dumb though because I struggle to see how anything can be more or less valuable simply because of a currency exchange... in practice it's not more/less valuable. It's a distortion that needs to correct but isn't being allowed to naturally do so.
Keynesian economics will never generate a nice playing field for proper capitalism because it's perpetually being distorted to control one random facet or another, with perpetual unforseen consequences.


Dave

[Digga]

Roger Bootle has weighed into the debate fairly robustly: http://uk.businessinsider.com/capital-economics-ro...

And I also notice the head of the Bundesbank is echoing AndyZarse's comments about QE being superfluous and ridiculous: http://www.zerohedge.com/news/2015-05-14/bundesban...

[Art0ir]

Been offered work south of the border. Just how bad do we think the Euro could end up going?

At today's rates I'd be quids in. Next year could be a different prospect altogether.

[Mr Whippy]

Digga said:

And I also notice the head of the Bundesbank is echoing AndyZarse's comments about QE being superfluous and ridiculous: http://www.zerohedge.com/news/2015-05-14/bundesban...

Printing money has always been ridiculous.

Re-branding it to QE just fooled non-thinkers or the greedy.

Managing economics is sensible to a degree, but the law of unintended consequences is going to bite hard soon I think.


Best stock up on wheelbarrows

[Mermaid]

Mr Whippy said:

Printing money has always been ridiculous.

Re-branding it to QE just fooled non-thinkers or the greedy.

Managing economics is sensible to a degree, but the law of unintended consequences is going to bite hard soon I think.


Best stock up on wheelbarrows

Been thinking that for a few years now, but "don't fight the Fed/ECB is a good rule for trading.

[Steffan]

Mermaid said:

Mr Whippy said:

Printing money has always been ridiculous.

Re-branding it to QE just fooled non-thinkers or the greedy.

Managing economics is sensible to a degree, but the law of unintended consequences is going to bite hard soon I think.


Best stock up on wheelbarrows

Been thinking that for a few years now, but "don't fight the Fed/ECB is a good rule for trading.

Afternoon Mermaid. Good to see you are still following the markets and playing the opportunities this can bring. You are if course absolutely correct in that not seeking to fight the mighty resources seeking to keep this nonsense going as long as they can. The reality is that Greece s hopessky insolvent and the Greek Syriza government have followed policies which clearly go against the very essence if the economic measures such a desperate situation requires if there is to be any cance of recovery.

I can well understand the frustration and disbelief expressed on here by others that this can be carrying on as it is when virtually all the observers are aware that in the end reality will dawn and Greece must fall away from a union which requires much greater economic strengths and management than Greece has ever acheved throughout this sad affair. I do think the time is approaching where despite all the efforts of the ECB and EU the reality of the hopeless worsening insolvency of Greece will become so overwhelming that to seriously suggest attempting to continue to pretend (for this has become a hollow pretence) that recovery by Greece is possible, simply defies sensibility. But the EU have shown how foolish they can be in chasing their dream way beyond the point of prudent risk and if that is what they decide the losses will get bigger and bigger.

In the end Greece will be ruined. I cannot see how that tragic end can now be avoided. But whilst the printing presses are being used to push the problem on and on, the losses and the consequent damage to the EU and the Euro in being mired in such a muddle, will inevitaby continue to rise and rise.

[Mr Whippy]

Steffan said:

Good to see you are still following the markets and playing the opportunities this can bring.

Playing is probably the right terminology.


But as many wise people have said before, it's great until it's not.

At some stage those that control the market will suffer from a loss of control due to unintended consequences, and those 'in' will be hurt.

It's a risky game to play unless it's just gambling money...



All that said, I do often wonder what is the most secure wealth storage right now. Cash, a bit iffy due to cash rules changing actively. Money in a bank account, a bit iffy, look at Cyprus.
Gold, look at early 20th century USA. Stocks/shares, great, till it's not.


The Greeks are probably gonna be the better off in the longer run by going through this pain now, while the rest of the world is somewhat 'working'...

Dave

[Gandahar]

Looking forward for "Is this the End of the Euro vol 127" which will be circa 2028.

No matter how much you might want it to fail, it an't going to happen. At some point their will be one currency on earth. It might be the dollar, it might be the Yuan, it might be the Euro.

It certainly will not be the British Pound. You're just going to have to suck it up in the meantime

[eldar]

Gandahar said:

Looking forward for "Is this the End of the Euro vol 127" which will be circa 2028.

No matter how much you might want it to fail, it an't going to happen. At some point their will be one currency on earth. It might be the dollar, it might be the Yuan, it might be the Euro.

It certainly will not be the British Pound. You're just going to have to suck it up in the meantime

Probably be the Drachma.

[LongQ]

Gandahar said:

Looking forward for "Is this the End of the Euro vol 127" which will be circa 2028.

No matter how much you might want it to fail, it an't going to happen. At some point their will be one currency on earth. It might be the dollar, it might be the Yuan, it might be the Euro.

It certainly will not be the British Pound. You're just going to have to suck it up in the meantime

There will never be one "currency" as there will never be one "political system".

Or maybe there will, but only as a last resort seconds (in geological time) before humanity self destructs.

At the point of unity Humanity will have lost its drive to discover and create. It will be time for it to disappear when that
state arrives. For then humanity will have no supposed purpose left to pursue.

By then the name of anything will mean little.

That's an old meme.

"You call it rain but the human name doesn't mean st to a tree."

Which is true but perhaps for different reasons than the author intended.

[Irish]

Back to the UK....Punkenomics

https://www.youtube.com/watch?feature=youtu.be&amp...

[Mermaid]

Mr Whippy said:

Playing is probably the right terminology.


But as many wise people have said before, it's great until it's not.

At some stage those that control the market will suffer from a loss of control due to unintended consequences, and those 'in' will be hurt.

It's a risky game to play unless it's just gambling money
Dave

I agree, but the trend has been clear for a while - bottom left to top right.
said, I do often wonder what is the most secure wealth storage right now. Cash, a bit iffy due to cash rules changing actively. Money in a bank account, a bit iffy, look at Cyprus.
Gold, look at early 20th century USA. Stocks/shares, great, till it's not.
But like all trends, a swift and sharp reversal is always on my mind - can happen at any time and wipe out a whole years gains within days or less.

[Mr Whippy]

Mermaid said:

Mr Whippy said:

Playing is probably the right terminology.


But as many wise people have said before, it's great until it's not.

At some stage those that control the market will suffer from a loss of control due to unintended consequences, and those 'in' will be hurt.

It's a risky game to play unless it's just gambling money
Dave

I agree, but the trend has been clear for a while - bottom left to top right.

But like all trends, a swift and sharp reversal is always on my mind - can happen at any time and wipe out a whole years gains within days or less.

Yep, anything that goes up and right for long enough will correct at some stage. If you're in for a long time then it's irrelevant, but I'm sure the volumes in markets are in for short term gain, not long term gain.

Anyone in say the FTSE100 for long term gain obviously can't read an inflation corrected % growth chart for the last few decades

Dave