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

[Welshbeef]

So will Italy nationalise the worlds oldest bank this weekend?

If not the bank is going to fail - which may cause a domino effect.
Just how those banks have been permitted not to Erie down the bad debt is beyond me.


If the debt is that bad why not offer individuals vastly longer debt terms so they can pay it off eventuallly over making hem fire sale an asset and then never pay back anything.

[Seek]

Welshbeef said:

If the debt is that bad why not offer individuals vastly longer debt terms so they can pay it off eventuallly over making hem fire sale an asset and then never pay back anything.

That depends on who gets to pick up the assets at vastly discounted prices ;-)
Nationalise the bad debts.

What's not to like? (if you're one of the lucky few...)

[loafer123]

Welshbeef said:

So will Italy nationalise the worlds oldest bank this weekend?

If not the bank is going to fail - which may cause a domino effect.
Just how those banks have been permitted not to Erie down the bad debt is beyond me.


If the debt is that bad why not offer individuals vastly longer debt terms so they can pay it off eventuallly over making hem fire sale an asset and then never pay back anything.

The two extremes are Japanese "Extend And Pretend" which has arguably resulted in lost decades of economic growth and the "Slash And Burn" of the US, which sees capital destroyed quickly, but a fast recovery.

The UK is closest to the US, and Europe generally closer to the Japanese.

Whilst it might be painful in the short term, taking the pain is better than kicking the can down the road.

[paranoid airbag]

Gargamel said:

I'd hate to see this thread defend into the kind of bile filled nonsense elsewhere on NP&E, so if you want to believe all is well in Euroland and those of us who don't are fools. Then so be it..

I am content to be a contrarian, The money is running out and a reckoning is coming for the Euro countries.

When?

You sound like every other group that says "the end is nigh". Go on, put a date on it and have the balls to admit you were wrong, completely, if that date passes without the promised end materialising.

[Art0ir]

loafer123 said:

The two extremes are Japanese "Extend And Pretend" which has arguably resulted in lost decades of economic growth and the "Slash And Burn" of the US, which sees capital destroyed quickly, but a fast recovery.

The UK is closest to the US, and Europe generally closer to the Japanese.

Whilst it might be painful in the short term, taking the pain is better than kicking the can down the road.

Schumpeter would argue the capital was already destroyed as soon as the poor investments were made

Agreed on the can kicking as well.

[Welshbeef]

loafer123 said:

The two extremes are Japanese "Extend And Pretend" which has arguably resulted in lost decades of economic growth and the "Slash And Burn" of the US, which sees capital destroyed quickly, but a fast recovery.

The UK is closest to the US, and Europe generally closer to the Japanese.

Whilst it might be painful in the short term, taking the pain is better than kicking the can down the road.

I'm not sure how the bad debts pass audits frankly

[jurbie]

LongQ said:

Well, that is interesting.

I'm fairly sure the idea of Germany leaving the Euro was aired here a couple of years back.

If not precisely that then something akin to it.

I think it was, the consensus being that the Euro could be left to get on with being the basket case currency it was always destined to be.

I think it was also suggested that Germany should then join in a union with the UK and the combination of our R&D and their manufacturing would make us unbeatable.

[maffski]

Welshbeef said:

So will Italy nationalise the worlds oldest bank this weekend?

If not the bank is going to fail - which may cause a domino effect.

Trouble is the ECB rules mean that anyone with money in the bank (shareholders, bondholders and depositors) will take a hit as a part of the refinancing.

Fine if it's just the one bank but some other Italian banks are 'stressed' - not anywhere near as badly at the moment, but if you had money in one of those would you be leaving it there?

Unless they can get around the ECB rules rescuing Monte Dei Paschi might be just as likely to cause a run on other banks as not rescuing it.

Forbes - The Problem With The Monte Dei Paschi Problem Is That It Doesn't Have A Solution - Not A Good One

[Gargamel]

paranoid airbag said:

When?

You sound like every other group that says "the end is nigh". Go on, put a date on it and have the balls to admit you were wrong, completely, if that date passes without the promised end materialising.

May the 8th 2017.

The effective end,

[wc98]

Gargamel said:

May the 8th 2017.

The effective end,

that soon ? i was thinking around august 2018.

[motco]

Welshbeef said:

loafer123 said:

The two extremes are Japanese "Extend And Pretend" which has arguably resulted in lost decades of economic growth and the "Slash And Burn" of the US, which sees capital destroyed quickly, but a fast recovery.

The UK is closest to the US, and Europe generally closer to the Japanese.

Whilst it might be painful in the short term, taking the pain is better than kicking the can down the road.

I'm not sure how the bad debts pass audits frankly

They use the same auditors as Equitable Life

[Funkycoldribena]

paranoid airbag said:

When?

You sound like every other group that says "the end is nigh". Go on, put a date on it and have the balls to admit you were wrong, completely, if that date passes without the promised end materialising.

I put my dog down when he was suffering.
Could've kept him alive for years but I saw past my selfishness.

Edited by Funkycoldribena on Saturday 10th December 13:51

[Driller]

Funkycoldribena said:

paranoid airbag said:

When?

You sound like every other group that says "the end is nigh". Go on, put a date on it and have the balls to admit you were wrong, completely, if that date passes without the promised end materialising.

I put my dog down when he was suffering.
Could've kept him alive for years but I saw past my selfishness.

Kippers?

Edited by Funkycoldribena on Saturday 10th December 13:51[/footnote]

[footnote]Edited by Driller on Sunday 11th December 17:39

[Digga]

maffski said:

Welshbeef said:

So will Italy nationalise the worlds oldest bank this weekend?

If not the bank is going to fail - which may cause a domino effect.

Trouble is the ECB rules mean that anyone with money in the bank (shareholders, bondholders and depositors) will take a hit as a part of the refinancing.

Fine if it's just the one bank but some other Italian banks are 'stressed' - not anywhere near as badly at the moment, but if you had money in one of those would you be leaving it there?

Unless they can get around the ECB rules rescuing Monte Dei Paschi might be just as likely to cause a run on other banks as not rescuing it.

Forbes - The Problem With The Monte Dei Paschi Problem Is That It Doesn't Have A Solution - Not A Good One

For the benefit of those who didn't know, the average Italian saver (this is meant with no disrespect) was financially unsophisticated; they tended to have faith in bank shares and bonds, a fact that is perhaps understandable, given the inflationary history of the lira. So, long story short; roughly half of the EU 5.5 bn MDP high risk bonds that are in mortal peril are in private hands. That, even for an economy of the size and stature of Italy, is a huge jut. There have already been riots following the demise of other (far smaller) banks and there are bound to be repurcussions with MDP.

There us, in a similar way to Greece, a growing resentment of Germany appearing to sit in judgment and pulling the levers of the Troika. You can't see the Italians taking this lying down.

The idea of political and financial pressures squeezing a big player out of the Euro are now significant. I do also wonder and genuinely don't know; what if other periphery Euro economies? How is it actually working out for them?

[davepoth]

Digga said:

The idea of political and financial pressures squeezing a big player out of the Euro are now significant. I do also wonder and genuinely don't know; what if other periphery Euro economies? How is it actually working out for them?

It only works if you are a large economy with an export surplus. Other than that you're screwed.

[Welshbeef]

davepoth said:

It only works if you are a large economy with an export surplus. Other than that you're screwed.

Germany sits facing huge risks if they stay in

Greece basket case subsiding
Portugal in trouble
Ireland in trouble
Cyprus in trouble
Hungary in trouble
France struggling
Italy really struggling

Germany booming.
One winner lots of losers doesn't seem that fair does it especially as socialism is all about "fairness"

[Art0ir]

Welshbeef said:

Germany sits facing huge risks if they stay in

Greece basket case subsiding
Portugal in trouble
Ireland in trouble
Cyprus in trouble
Hungary in trouble
France struggling
Italy really struggling

Germany booming.
One winner lots of losers doesn't seem that fair does it especially as socialism is all about "fairness"

Ireland is sitting quite pretty, in fact they're now one of the few NET contributors to the project now.

[Welshbeef]

Art0ir said:

Welshbeef said:

Germany sits facing huge risks if they stay in

Greece basket case subsiding
Portugal in trouble
Ireland in trouble
Cyprus in trouble
Hungary in trouble
France struggling
Italy really struggling

Germany booming.
One winner lots of losers doesn't seem that fair does it especially as socialism is all about "fairness"

Ireland is sitting quite pretty, in fact they're now one of the few NET contributors to the project now.

It's in deficit
It has £80billion bail out
It has high youth unemployment
It is facing a risk on BREXIT

[Art0ir]

Welshbeef said:

It's in deficit
It has £80billion bail out
It has high youth unemployment
It is facing a risk on BREXIT

Their deficit is shrinking to 0.9%, an enviable number amongst the G20 nevermind the Eurozone. They're also meeting the targets set out by the Department of Finance year on year and are set to be in surplus by 2018. In fact they reduced the deficit more this year than they had planned for.

Most of the bailout loans have or are being refinanced using market lenders.

Their youth unemployment is 15%, only 2 points higher than the UK's 13% and a reduction from almost 20% this time last year.

Brexit certainly offers some challenges.

But your dire predictions for the country are completely unfounded so long as the multinationals stick around.

Edited by Art0ir on Sunday 11th December 19:37

[Funkycoldribena]

Art0ir said:

Their deficit is shrinking to 0.9%, an enviable number amongst the G20 nevermind the Eurozone. They're also meeting the targets set out by the Department of Finance year on year and are set to be in surplus by 2018. In fact they reduced the deficit more this year than they had planned for.

Most of the bailout loans have or are being refinanced using market lenders.

Their youth unemployment is 15%, only 2 points higher than the UK's 13% and a reduction from almost 20% this time last year.

Brexit certainly offers some challenges.

But you're dire predictions for the country are completely unfounded so long as the multinationals stick around.

Well,that's one out of seven if we take your view that everything is now wonderful.
Try Greece next.