Is the end nigh for the Euro? [vol. 3]
Discussion
FN2TypeR said:
Digga said:
Petty-minded cronyism, corruption and bureaucracy have killed Greece. (I could add numerous examples I've heard first hand.)
I am very surprised that the French tourism figures have fallen much, let alone more than those from Germany.
Italy next, me thinks.I am very surprised that the French tourism figures have fallen much, let alone more than those from Germany.
This is, I assume, because Italy has finally
Run
Out
Of
Money
In fairness socialising losses and burdens across the Eurozone is in my opinion, a logical step in this attempt at stitching the Eurozone members up into a closer and more unified fiscal union - if I were an optimist I would say that it could be a reasonable first step in an attempt to have something more than just a currency union, which, were the Eurozone ever to have properly worked, is what should have been done from the outset.
Where as in the real world, I would suggest that the Italian government simply want to paper over the cracks of their tin pot and moribund economy with other nations (see: Germany) money as they have little to no clue on how to stimulate that economy whilst shackled to the Eurozone.
Where as in the real world, I would suggest that the Italian government simply want to paper over the cracks of their tin pot and moribund economy with other nations (see: Germany) money as they have little to no clue on how to stimulate that economy whilst shackled to the Eurozone.
NPLs, & LLPs are a much wider problem for the Eurozone than just the peripheral states. Its everywhere.
A lot of the debt ends up in the banking / trading books of German particularly and other Eurozone banks. IFRS9 does them in (if can not kicked); and CECL does to US banks.
With changes to bank bail in – specifically bond holders under Minimum Requirement for Eligible Liabilities, the idiosyncratic risk profile of debt could look a lot more like equity. At the same time FRTB (Fundamental Review of the Trading Book) will be adjusting (increasing) the risk sensitivities for holding assets – or rather the capital cost.
The risk of contagion is increasing, at the same time the ability of the finance sector to deal with it being diminished. Systemic risk has increased post 2008 as leverage has had no meaningful break. An equivalent to TARP wouldn't touch the sides and using CCPs to control leverage is untested and @ required margining levels tip weaker players into default (like pre-default haircut ramping did to Lehman Bros).
f
k knows what goes on at G20 discussions, Davos let alone Europe. Its like governments are not talking to central banks, whom aren’t talking to anyone else.
In fact, the mandates of central banks appear to have one KPI, controlling inflation. Similar to legacy trading books; which were totally P&L driven – and according to the govt, regulators, press etc is why we’re all in this to begin with!
The dichotomy between regulatory policy and Monetary policy is growing quicker than ever. Extending QE (as the money says Draghi will do); looks to be increasingly pointless. I can see helicopter money becoming real. And knowing politicians; it won’t be sensible via infrastructure spending, but probably through your letterbox.
Debt relief & haircuts are ever more likely; but these pose massive threat to financial stability. Like Brexit; this problem is even bigger and for most politicians & regulators far too difficult to comprehend. Forgot the press and man in the street, PH does appear much more learned (also DonkeyApple’s posts on finance / economics always worth a read).
A lot of the debt ends up in the banking / trading books of German particularly and other Eurozone banks. IFRS9 does them in (if can not kicked); and CECL does to US banks.
With changes to bank bail in – specifically bond holders under Minimum Requirement for Eligible Liabilities, the idiosyncratic risk profile of debt could look a lot more like equity. At the same time FRTB (Fundamental Review of the Trading Book) will be adjusting (increasing) the risk sensitivities for holding assets – or rather the capital cost.
The risk of contagion is increasing, at the same time the ability of the finance sector to deal with it being diminished. Systemic risk has increased post 2008 as leverage has had no meaningful break. An equivalent to TARP wouldn't touch the sides and using CCPs to control leverage is untested and @ required margining levels tip weaker players into default (like pre-default haircut ramping did to Lehman Bros).
f
k knows what goes on at G20 discussions, Davos let alone Europe. Its like governments are not talking to central banks, whom aren’t talking to anyone else. In fact, the mandates of central banks appear to have one KPI, controlling inflation. Similar to legacy trading books; which were totally P&L driven – and according to the govt, regulators, press etc is why we’re all in this to begin with!
The dichotomy between regulatory policy and Monetary policy is growing quicker than ever. Extending QE (as the money says Draghi will do); looks to be increasingly pointless. I can see helicopter money becoming real. And knowing politicians; it won’t be sensible via infrastructure spending, but probably through your letterbox.
Debt relief & haircuts are ever more likely; but these pose massive threat to financial stability. Like Brexit; this problem is even bigger and for most politicians & regulators far too difficult to comprehend. Forgot the press and man in the street, PH does appear much more learned (also DonkeyApple’s posts on finance / economics always worth a read).
Edited by stongle on Tuesday 6th September 13:26
jonnyb said:
Would agree with that.
It's greater political union or an end to the Euro. My money's on political union.
The EU's answer to crises like Greece is never 'Less Europe'. It's greater political union or an end to the Euro. My money's on political union.
EU leaders are like an addict in denial, "If I just take this one more law from you, we'll all be better off.....".
stongle said:
fk knows what goes on at G20 discussions, Davos let alone Europe. Its like governments are not talking to central banks, whom aren’t talking to anyone else.
The contemporary parade of the Emperor' new clothes. I'm glad I'm not the only one who's concerned - great post.k knows what goes on at G20 discussions, Davos let alone Europe. Its like governments are not talking to central banks, whom aren’t talking to anyone else. stongle said:
Like Brexit; this problem is even bigger and for most politicians & regulators far too difficult to comprehend. Forgot the press and man in the street, PH does appear much more learned (also DonkeyApple’s posts on finance / economics always worth a read).
The NP&E does provide a very good, balance flow of (mostly) useful points of view. At times, even the views that are technically wrong and culturally interesting - they usually have a basis in contemporary politics and media and are therefore informative as such.I agree, there are a few tin foil hat wearers but it's easy to sort the wheat from the chaff.
Brexit is a very serious issue for the UK and perhaps more so the EU. We have to negotiate with a wounded animal with so many vested interests it's impossible to predict or even see a rational outcome. The longer this takes the worse the situation will get. The fact (and it is one) that many people voted for Brexit due to immigration concerns (in some instances valid), missed the wood for the trees. We don't have an immigration issue in this country, but a lazy c**t problem. Our social and labour markets are not fit for purpose and the issue is the same across Europe. There is not enough momentum to change the flaws in the system, so you may as well do what the banks always do and game it.
Brexit is a very serious issue for the UK and perhaps more so the EU. We have to negotiate with a wounded animal with so many vested interests it's impossible to predict or even see a rational outcome. The longer this takes the worse the situation will get. The fact (and it is one) that many people voted for Brexit due to immigration concerns (in some instances valid), missed the wood for the trees. We don't have an immigration issue in this country, but a lazy c**t problem. Our social and labour markets are not fit for purpose and the issue is the same across Europe. There is not enough momentum to change the flaws in the system, so you may as well do what the banks always do and game it.
Mark Benson said:
The EU's answer to crises like Greece is never 'Less Europe'.
EU leaders are like an addict in denial, "If I just take this one more law from you, we'll all be better off.....".
To be fair, they're more right on this than most things. Not that I agree with it, but the answer is either all EU or no EU, it's the half-way house that has caused all of these problems. It's where national sovereignty gets in the way that there are huge problems.EU leaders are like an addict in denial, "If I just take this one more law from you, we'll all be better off.....".
The fundamental problem though is that rather than asking the people whether they want all EU or no EU, they're trying to force the answer they want by the backdoor and have hit the limit of acceptance and now can't push forward. Who knows how long it will be before the issue is resolved properly, but it must be resolved at some point. That it can't get past this point towards all EU suggests the answer to the question of what the people of the EU want is obvious.
paulrockliffe said:
To be fair, they're more right on this than most things. Not that I agree with it, but the answer is either all EU or no EU, it's the half-way house that has caused all of these problems. It's where national sovereignty gets in the way that there are huge problems.
The fundamental problem though is that rather than asking the people whether they want all EU or no EU, they're trying to force the answer they want by the backdoor and have hit the limit of acceptance and now can't push forward. Who knows how long it will be before the issue is resolved properly, but it must be resolved at some point. That it can't get past this point towards all EU suggests the answer to the question of what the people of the EU want is obvious.
Agreed 100%The fundamental problem though is that rather than asking the people whether they want all EU or no EU, they're trying to force the answer they want by the backdoor and have hit the limit of acceptance and now can't push forward. Who knows how long it will be before the issue is resolved properly, but it must be resolved at some point. That it can't get past this point towards all EU suggests the answer to the question of what the people of the EU want is obvious.
I think the half baked attempts at political and financial union have harmed the EU badly and now it looks like a lame duck people aren't keen on the answer of "more EU" as they don't trust those in power to deliver that in a way that would work or be beneficial to the man on the street.
Quite right too, in my opinion. Stuff 'em I say.
From 2012, but just tweeted again by author Richard North:
A discussion of the Airbus analogy and the beneficial crisis of the Euro...
http://www.eureferendum.com/blogview.aspx?blogno=8...
A discussion of the Airbus analogy and the beneficial crisis of the Euro...
http://www.eureferendum.com/blogview.aspx?blogno=8...
Norfolkit said:
jonnyb said:
Would agree with that.
It's greater political union or an end to the Euro. My money's on political union.
My money's on an attempt at political union followed by the end of the Euro, they won't give up until Germany's had enough.It's greater political union or an end to the Euro. My money's on political union.
t, particularly without (impossible) economic reforms from the miscreants.jacobingonzo said:
methinks something is rotten in the state of Denmark!- could be the beginning of the end if Deutsche Bank is teetering on the precipice.
In a move that could in no way have been influenced by the EU attempt to land grab Apple revenues...WSJ - Deutsche Bank fined 14 billion
Share price down by around 8%
maffski said:
In a move that could in no way have been influenced by the EU attempt to land grab Apple revenues...
WSJ - Deutsche Bank fined 14 billion
Share price down by around 8%
The US have been pulling these stunts for years (seemingly against non-US banks in the main, though even they get spanked when Uncle Sam needs some cash).WSJ - Deutsche Bank fined 14 billion
Share price down by around 8%
ECB chief economist says 60 pct of its money printing ends up in Germany....
http://www.reuters.com/article/eurozone-ecb-german...
http://www.reuters.com/article/eurozone-ecb-german...
steveT350C said:
ECB chief economist says 60 pct of its money printing ends up in Germany....
http://www.reuters.com/article/eurozone-ecb-german...
So we get nearer to the 'shttp://www.reuters.com/article/eurozone-ecb-german...
t or get off the pot' moment for the currency; closer (fiscal) union, or divergence and fracture.Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff