Is the end nigh for the Euro? [vol. 3]
Discussion
Gargamel said:
jogon said:
Dave only managed to waste £375 billion protecting our precious financial institutions..
http://youtu.be/4l06RhFoLE4
Sorry what ? Is this the first revisionist history from the left wing in this country for what happened to RBS and Northern Rock, you know the two financial institutions that were bailed out by GORDON BROWN.http://youtu.be/4l06RhFoLE4
Just a film with all kinds of wrong in it.
Look, I was strongly against the extreme levels to which QE was extended, it went too far IMHO, but honestly! I have never seen such rubbish in my entire life (well at least not until I saw a video on fracking yesterday, made by 38 Degrees...).
Lefties huh, so clever they're thick as planks.
Edited by Andy Zarse on Monday 6th July 10:22
Andy Zarse said:
Gargamel said:
jogon said:
Dave only managed to waste £375 billion protecting our precious financial institutions..
http://youtu.be/4l06RhFoLE4
Sorry what ? Is this the first revisionist history from the left wing in this country for what happened to RBS and Northern Rock, you know the two financial institutions that were bailed out by GORDON BROWN.http://youtu.be/4l06RhFoLE4
Just a film with all kinds of wrong in it.
turbobloke said:
Andy Zarse said:
Gargamel said:
jogon said:
Dave only managed to waste £375 billion protecting our precious financial institutions..
http://youtu.be/4l06RhFoLE4
Sorry what ? Is this the first revisionist history from the left wing in this country for what happened to RBS and Northern Rock, you know the two financial institutions that were bailed out by GORDON BROWN.http://youtu.be/4l06RhFoLE4
Just a film with all kinds of wrong in it.
911Gary
Also worth pointing out that the biggest "bail out" in the Greece fiasco so far was essentially a bailout of the banks, some of whom are on that list. The ECB and the EU governments made the ludicrous decision to take on this debt when it was quite clear that Greece wasn't going to be able to service it. They have kept this up for years while the debts have grown, and can't really now cry foul that the inevitable has happened.
They should have let the banks take the debt default losses, as they were the ones who lent to Greece seeking profit in exchange for taking on risk. They palmed off their downside on the European taxpayers, who are now understandably angry with Greece.
Better to be angry with the governments and EU institutions who, for whatever reason but I'm not inclined to suspect altruism had much of a role, decided to take on this debt.
Also worth pointing out that the biggest "bail out" in the Greece fiasco so far was essentially a bailout of the banks, some of whom are on that list. The ECB and the EU governments made the ludicrous decision to take on this debt when it was quite clear that Greece wasn't going to be able to service it. They have kept this up for years while the debts have grown, and can't really now cry foul that the inevitable has happened.
They should have let the banks take the debt default losses, as they were the ones who lent to Greece seeking profit in exchange for taking on risk. They palmed off their downside on the European taxpayers, who are now understandably angry with Greece.
Better to be angry with the governments and EU institutions who, for whatever reason but I'm not inclined to suspect altruism had much of a role, decided to take on this debt.
Steffan said:
Listening to Robin Corbett a few moments ago on the Beeb one has to gve very grateful that there is no hope of such a dangerous dreamer every actually achieving power in the UK. Indeed I susoect Labour are literally decades away from any power. Good!
They will be if they elect socialist peer Lord Robin Corbett; he's been dead for years! I think you mean Jeremy Corbyn? I know, one sour pinched-faced Lenin-bearded leftie looks and sounds much like another....
Gargamel said:
ralphrj said:
$868 billion bailout for Barclays?
The bailout didn't help Lehman's did it. Why Lehmans was not rescued
Steffan said:
Once one state drops out the carefully constructed appearance of a united centrally controlled economic union will be very seriously damaged. If another follows then the EU, in it's current form, will not continue. The UK referendum in 2016/2017 will bring about just that decision, I regret to say. I am highly doubtful that with significant Tory right wing support for exit and 4,000,000 voters from UKIP set agsinst membership, Cameron can actually deliver continuance within the EU. I personally support continuing membership. But this will be seen in the future as the start of truly fundamental changes in the EU.
As I repeatedly post - the EU will not be diverted from it's path and will do anything and everything to ensure 'stability' (political, economic stability comes a very far second).Greece won't be allowed to drop out, we're seeing it already - Varoufakis is the sacrifical lamb demanded by the EU to continue to fund Greek debt, Syrzia played a good game, they knew the EU's biggest fear is a state dropping out and they're relying on this to keep their ball in the game.
Repeat as nauseum - Ever Closer Union.
Steffan said:
Absolutely spot on and an excellent synopsis of the reality of the results of the last two uk elections. the UK electorate have seen the consequences or Labour governments first hand. Hence improvements in the wealth of the UK. Hopefully the current burial of Labour will continue.
If Labour choose Corbyn as leader, they'll have another "Michael Foot moment".Edited by Borghetto on Monday 6th July 11:15
Mark Benson said:
As I repeatedly post - the EU will not be diverted from it's path and will do anything and everything to ensure 'stability' (political, economic stability comes a very far second).
Greece won't be allowed to drop out, we're seeing it already - Varoufakis is the sacrifical lamb demanded by the EU to continue to fund Greek debt, Syrzia played a good game, they knew the EU's biggest fear is a state dropping out and they're relying on this to keep their ball in the game.
Repeat as nauseum - Ever Closer Union.
Mark, interesting view, don't you think that if a compromise was possible, it would have been reached by now? Surely it is going to be even harder for the Greeks to accept any bailout that doesn't include debt restructure as a part of it, something the EU and EX council of Finance Ministaer have repeatedly refused to agree to. It would be a U turn of absolutely EPIC proportions to do so now. Greece won't be allowed to drop out, we're seeing it already - Varoufakis is the sacrifical lamb demanded by the EU to continue to fund Greek debt, Syrzia played a good game, they knew the EU's biggest fear is a state dropping out and they're relying on this to keep their ball in the game.
Repeat as nauseum - Ever Closer Union.
France is the only Eurogroup country now still hoping for a deal/compromise. Almost every other country now wants Greece to exit the Euro.
Gargamel said:
Mark Benson said:
As I repeatedly post - the EU will not be diverted from it's path and will do anything and everything to ensure 'stability' (political, economic stability comes a very far second).
Greece won't be allowed to drop out, we're seeing it already - Varoufakis is the sacrifical lamb demanded by the EU to continue to fund Greek debt, Syrzia played a good game, they knew the EU's biggest fear is a state dropping out and they're relying on this to keep their ball in the game.
Repeat as nauseum - Ever Closer Union.
Mark, interesting view, don't you think that if a compromise was possible, it would have been reached by now? Surely it is going to be even harder for the Greeks to accept any bailout that doesn't include debt restructure as a part of it, something the EU and EX council of Finance Ministaer have repeatedly refused to agree to. It would be a U turn of absolutely EPIC proportions to do so now. Greece won't be allowed to drop out, we're seeing it already - Varoufakis is the sacrifical lamb demanded by the EU to continue to fund Greek debt, Syrzia played a good game, they knew the EU's biggest fear is a state dropping out and they're relying on this to keep their ball in the game.
Repeat as nauseum - Ever Closer Union.
France is the only Eurogroup country now still hoping for a deal/compromise. Almost every other country now wants Greece to exit the Euro.
Or something. If they're of the opinion that losing Greece doesn't matter, then will they be bothered about Portugal? or Spain? or Ireland? what about Italy?
It strikes me that the peoples of Europe are about to make it very clear what they think of Brussels.
davepoth said:
THE PROJECT MUST CONTINUE! WE MUST NOT BE DIVERTED FROM THE PATH TO EVER CLOSER UNION!
Or something. If they're of the opinion that losing Greece doesn't matter, then will they be bothered about Portugal? or Spain? or Ireland? what about Italy?
It strikes me that the peoples of Europe are about to make it very clear what they think of Brussels.
This religious fervour can carry on longer than traders can keep on betting against it. Or something. If they're of the opinion that losing Greece doesn't matter, then will they be bothered about Portugal? or Spain? or Ireland? what about Italy?
It strikes me that the peoples of Europe are about to make it very clear what they think of Brussels.
Gargamel said:
Mark Benson said:
As I repeatedly post - the EU will not be diverted from it's path and will do anything and everything to ensure 'stability' (political, economic stability comes a very far second).
Greece won't be allowed to drop out, we're seeing it already - Varoufakis is the sacrifical lamb demanded by the EU to continue to fund Greek debt, Syrzia played a good game, they knew the EU's biggest fear is a state dropping out and they're relying on this to keep their ball in the game.
Repeat as nauseum - Ever Closer Union.
Mark, interesting view, don't you think that if a compromise was possible, it would have been reached by now? Surely it is going to be even harder for the Greeks to accept any bailout that doesn't include debt restructure as a part of it, something the EU and EX council of Finance Ministaer have repeatedly refused to agree to. It would be a U turn of absolutely EPIC proportions to do so now. Greece won't be allowed to drop out, we're seeing it already - Varoufakis is the sacrifical lamb demanded by the EU to continue to fund Greek debt, Syrzia played a good game, they knew the EU's biggest fear is a state dropping out and they're relying on this to keep their ball in the game.
Repeat as nauseum - Ever Closer Union.
France is the only Eurogroup country now still hoping for a deal/compromise. Almost every other country now wants Greece to exit the Euro.
The Greeks will hold out for writeoff or at least a haircut, they're banking (literally) that the EU will value the Project more than they value their dignity in this and will fund the Greeks as infinitum.
A year ago I'd have been of the opinion that the Greeks would be out on their Drachmas by now, but as the EU machine repeatedly shows - they're willing to do almost anything to avoid any compromise to the grand plan.
ETA - This is repeatedly framed as an economic problem - it's not, it's purely political and you have to understand the political motivation - the bigger prize is a federal EU run from Brussels, what does a minnow like Greece matter?
Edited by Mark Benson on Monday 6th July 12:19
Mark Benson said:
What the countries want is also secondary to the 'vision'. The Greeks know this and are holding out, knowing that this could go on forever or until someone blinks - so no, I don't think they could have reached a compromise because the EU didn't expect the Greeks to have the cohones to do what they're doing.
The Greeks will hold out for writeoff or at least a haircut, they're banking (literally) that the EU will value the Project more than they value their dignity in this and will fund the Greeks as infinitum.
A year ago I'd have been of the opinion that the Greeks would be out on their Drachmas by now, but as the EU machine repeatedly shows - they're willing to do almost anything to avoid any compromise to the grand plan.
Trouble is, while the politicians are having their staring contest the banks won't open, the shops will have no food, the hospitals no drugs and businesses will have no customers or suppliers. How much damage will Greece suffer whilst they wait for the EU to cave? They need a deal quickly, or at least a temporary package while they negotiate.The Greeks will hold out for writeoff or at least a haircut, they're banking (literally) that the EU will value the Project more than they value their dignity in this and will fund the Greeks as infinitum.
A year ago I'd have been of the opinion that the Greeks would be out on their Drachmas by now, but as the EU machine repeatedly shows - they're willing to do almost anything to avoid any compromise to the grand plan.
Andy Zarse said:
Steffan said:
Listening to Robin Corbett a few moments ago on the Beeb one has to gve very grateful that there is no hope of such a dangerous dreamer every actually achieving power in the UK. Indeed I susoect Labour are literally decades away from any power. Good!
They will be if they elect socialist peer Lord Robin Corbett; he's been dead for years! I think you mean Jeremy Corbyn? I know, one sour pinched-faced Lenin-bearded leftie looks and sounds much like another....
Borghetto said:
Steffan said:
Absolutely spot on and an excellent synopsis of the reality of the results of the last two uk elections. the UK electorate have seen the consequences or Labour governments first hand. Hence improvements in the wealth of the UK. Hopefully the current burial of Labour will continue.
If Labour choose Corbyn as leader, they'll have another "Michael Foot moment".Edited by Borghetto on Monday 6th July 11:15
Jim Edwards has some contrarian thoughts this morning (that I'm sure many on here won't like)
Jim Edwards said:
Greece has effectively voted to default on its debt to the IMF and the EU, and it is a massive defeat for Germany's Angela Merkel and the troika she led, which insisted there was no way out for Greece but to pay back its massive debts.
The vote is huge lesson for conservatives and anyone else who thinks this is about a dilettante government of left-wing idealists who think they can flout the law while staging some kind of Che Guevara-esque dream:
Wrong.
This is what capitalism is really about.
From the beginning, Merkel and the EU have operated from the position that because Greece took on debt, Greece now needs to pay it back. That position assumed — bizarrely, in hindsight — that debt only works one way: if you lend someone money, then they pay it back.
But that is NOT how free markets work.
Debt is not a guarantee of future payments in full. Rather, it is a risk that creditors take, in hopes of maybe being paid tomorrow.
The key word there is "risk."
If you're willing to take the risk, you'll get a premium — in the form of interest.
But the downside of that risk is that you lose your money. And Greece just called Germany's bluff.
The IMF loaned Greece 1.5 billion euros, due back in June, and Greece isn't paying it back. Greece has another 3.5 billion due to the ECB in July, and that looks really doubtful right now.
This is how capitalism works. The fact that it took a democratically elected government whose own offices are adorned with posters of Lenin, Engels and Guevara to teach this lesson to Germany is astonishing.
More astonishing still is that Merkel et al knew Greece could not pay back this debt before these negotiations started. The IMF's own assessment of Greek debt, published just a few days ago, states: "Coming on top of the very high existing debt, these new financing needs render the debt dynamics unsustainable ..."
"Unsustainable"! Germany's own bankers knew Greece couldn't pay this back. And yet Merkel persisted.
Take a look at Greek GDP. In order to pay back debt, you have to have a growing economy. That's a basic law of economics. It's how credit cards work. It's how mortgages work. And it is how sovereign/central bank debt works. But Greece's economy was never in a position to benefit from debt, because it has been shrinking for years:
There is another key fact that the Greeks are keenly aware of (but which everyone else has forgotten). This debt was initially owed to private investment banks, like Goldman Sachs. But the IMF and the ECB made the suicidal decision to let those private banks transfer that debt to EU insitutions and the IMF to "rescue" Greece. As Business Insider reported back in April, former ECB president Jean-Claude Trichet insisted that the debt transfer take place:
The ECB president “blew up,” according to one attendee. “Trichet said, ‘We are an economic and monetary union, and there must be no debt restructuring!’” this person recalled. “He was shouting.”
The result was that the ECB made this catastrophically stupid deal with Greece, according to our April report:
And so there was no restructuring agreed for Greece. The country paid off its immediate debts to the private financial sector — investment banks, basically — and replacement debt was laid onto European taxpayers. The government agreed to a package of harsh government spending cuts and structural reforms in exchange for loans totalling €110 billion over three years.
Trichet made a colossal, elementary mistake. The right place for risky debt by definition is in the private markets, like Goldman. The entire point of private debt investment is that those creditors are prepared for a haircut. The risk absolutely should not be borne by central banks who rely on taxpayer money for bailouts.
Had Trichet made the opposite decision — and left the Greek debt with Goldman et al — then today's vote would be a footnote rather than a headline in history. "Goldman Sachs takes a bath on Greek debt." Who cares? Goldman shareholders and clients, surely. But it would not have triggered a crisis at the heart of the EU.
Now Italy, Spain and Portugal are watching Greece closely, and thinking, hey, maybe we can get out of this mess too.
Now, before we all start singing "The Red Flag" and breaking out old videos of "The Young Ones" in celebration, let's inject a note of realism. Greece isn't actually a country full of crazy socialists who don't understand how the FX markets work. In fact, a huge chunk of its tax collection problems stem from the fact that there are two and a half times more self-employed and small business people in Greece than there are in the average country. And small businesses are expert at avoiding tax, Greece's former tax collector told Business Insider's Mike Bird recently.
Conservatives who hate paying taxes and who urge small businesses to pursue tax avoidance strategies take note: Your dream just came true in Greece.
If Greece was more socialist — more like Germany, with its giant corporations that have massive unionised workforces paying taxes off their payrolls — then tax collection would be a lot higher in Greece.
Greece is now likely an international pariah on the debt markets. It may have to start printing its own devalued drachma currency. It will have no access to credit. Sure, olive oil, feta and raki will suddenly become incredibly cheap commodities on the export markets. Tourism in Greece is about to become awesome. But mostly it will be awful. Unemployment will increase as Greece's economy implodes.
But the awfulness will be Greece's alone. Greece is now on its own path. It is deciding its own fate.
There is something admirable about that.
The vote is huge lesson for conservatives and anyone else who thinks this is about a dilettante government of left-wing idealists who think they can flout the law while staging some kind of Che Guevara-esque dream:
Wrong.
This is what capitalism is really about.
From the beginning, Merkel and the EU have operated from the position that because Greece took on debt, Greece now needs to pay it back. That position assumed — bizarrely, in hindsight — that debt only works one way: if you lend someone money, then they pay it back.
But that is NOT how free markets work.
Debt is not a guarantee of future payments in full. Rather, it is a risk that creditors take, in hopes of maybe being paid tomorrow.
The key word there is "risk."
If you're willing to take the risk, you'll get a premium — in the form of interest.
But the downside of that risk is that you lose your money. And Greece just called Germany's bluff.
The IMF loaned Greece 1.5 billion euros, due back in June, and Greece isn't paying it back. Greece has another 3.5 billion due to the ECB in July, and that looks really doubtful right now.
This is how capitalism works. The fact that it took a democratically elected government whose own offices are adorned with posters of Lenin, Engels and Guevara to teach this lesson to Germany is astonishing.
More astonishing still is that Merkel et al knew Greece could not pay back this debt before these negotiations started. The IMF's own assessment of Greek debt, published just a few days ago, states: "Coming on top of the very high existing debt, these new financing needs render the debt dynamics unsustainable ..."
"Unsustainable"! Germany's own bankers knew Greece couldn't pay this back. And yet Merkel persisted.
Take a look at Greek GDP. In order to pay back debt, you have to have a growing economy. That's a basic law of economics. It's how credit cards work. It's how mortgages work. And it is how sovereign/central bank debt works. But Greece's economy was never in a position to benefit from debt, because it has been shrinking for years:
There is another key fact that the Greeks are keenly aware of (but which everyone else has forgotten). This debt was initially owed to private investment banks, like Goldman Sachs. But the IMF and the ECB made the suicidal decision to let those private banks transfer that debt to EU insitutions and the IMF to "rescue" Greece. As Business Insider reported back in April, former ECB president Jean-Claude Trichet insisted that the debt transfer take place:
The ECB president “blew up,” according to one attendee. “Trichet said, ‘We are an economic and monetary union, and there must be no debt restructuring!’” this person recalled. “He was shouting.”
The result was that the ECB made this catastrophically stupid deal with Greece, according to our April report:
And so there was no restructuring agreed for Greece. The country paid off its immediate debts to the private financial sector — investment banks, basically — and replacement debt was laid onto European taxpayers. The government agreed to a package of harsh government spending cuts and structural reforms in exchange for loans totalling €110 billion over three years.
Trichet made a colossal, elementary mistake. The right place for risky debt by definition is in the private markets, like Goldman. The entire point of private debt investment is that those creditors are prepared for a haircut. The risk absolutely should not be borne by central banks who rely on taxpayer money for bailouts.
Had Trichet made the opposite decision — and left the Greek debt with Goldman et al — then today's vote would be a footnote rather than a headline in history. "Goldman Sachs takes a bath on Greek debt." Who cares? Goldman shareholders and clients, surely. But it would not have triggered a crisis at the heart of the EU.
Now Italy, Spain and Portugal are watching Greece closely, and thinking, hey, maybe we can get out of this mess too.
Now, before we all start singing "The Red Flag" and breaking out old videos of "The Young Ones" in celebration, let's inject a note of realism. Greece isn't actually a country full of crazy socialists who don't understand how the FX markets work. In fact, a huge chunk of its tax collection problems stem from the fact that there are two and a half times more self-employed and small business people in Greece than there are in the average country. And small businesses are expert at avoiding tax, Greece's former tax collector told Business Insider's Mike Bird recently.
Conservatives who hate paying taxes and who urge small businesses to pursue tax avoidance strategies take note: Your dream just came true in Greece.
If Greece was more socialist — more like Germany, with its giant corporations that have massive unionised workforces paying taxes off their payrolls — then tax collection would be a lot higher in Greece.
Greece is now likely an international pariah on the debt markets. It may have to start printing its own devalued drachma currency. It will have no access to credit. Sure, olive oil, feta and raki will suddenly become incredibly cheap commodities on the export markets. Tourism in Greece is about to become awesome. But mostly it will be awful. Unemployment will increase as Greece's economy implodes.
But the awfulness will be Greece's alone. Greece is now on its own path. It is deciding its own fate.
There is something admirable about that.
Edited by Art0ir on Monday 6th July 13:04
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