Credit Suisse - Is it going to go bust, if so what happens?
Discussion
Earthdweller said:
Carl_Manchester said:
JagLover said:
"If you have any money in Germany’s largest bank, the only rational move right now is to get it out. Once a run like this starts it is impossible to stop."]
Didn’t we have a thread on this
“A Deutsche collapse could bring the euro down with it. Unless the government and the central bank can shore it up over the weekend, very soon the entire currency will be in deep trouble.”
Earthdweller said:
Carl_Manchester said:
JagLover said:
"If you have any money in Germany’s largest bank, the only rational move right now is to get it out. Once a run like this starts it is impossible to stop."]
Didn’t we have a thread on this
“A Deutsche collapse could bring the euro down with it. Unless the government and the central bank can shore it up over the weekend, very soon the entire currency will be in deep trouble.”
French President Emmanuel Macron also told reporters in Brussels that the banking system is solid.
European Central Bank President Christine Lagarde said the euro area is resilient because it has strong capital and solid liquidity positions.
Bob Farrell said:
When all the experts and forecasts agree — something else is going to happen
Vanden Saab said:
Earthdweller said:
Carl_Manchester said:
JagLover said:
"If you have any money in Germany’s largest bank, the only rational move right now is to get it out. Once a run like this starts it is impossible to stop."]
Didn’t we have a thread on this
“A Deutsche collapse could bring the euro down with it. Unless the government and the central bank can shore it up over the weekend, very soon the entire currency will be in deep trouble.”
French President Emmanuel Macron also told reporters in Brussels that the banking system is solid.
European Central Bank President Christine Lagarde said the euro area is resilient because it has strong capital and solid liquidity positions.
Bob Farrell said:
When all the experts and forecasts agree — something else is going to happen
DeejRC said:
Er chaps, you realise this isn’t a good thing right? Gloating at a suboptimal situation for *everybody* is less than bright.
A very bad thing for all of us and the world economy in general. People have been warning about the Euro for years though and so if we have yet another crisis created by forcing such disparate economies together, without the creation of the necessary infrastructure to support it, then they may be entitled to at least a mild "I told you so".I remember in my Economics course a long session on optimum currency areas and why the Euro wasn't one.
JagLover said:
DeejRC said:
Er chaps, you realise this isn’t a good thing right? Gloating at a suboptimal situation for *everybody* is less than bright.
A very bad thing for all of us and the world economy in general. People have been warning about the Euro for years though and so if we have yet another crisis created by forcing such disparate economies together, without the creation of the necessary infrastructure to support it, then they may be entitled to at least a mild "I told you so".I remember in my Economics course a long session on optimum currency areas and why the Euro wasn't one.
I do agree and had a similar lecture a long time ago on why monetary union without fiscal union was ultimately doomed. That was however 30 years ago and the Euro is still here. I would have lost a lot of money on that short
JagLover said:
DeejRC said:
Er chaps, you realise this isn’t a good thing right? Gloating at a suboptimal situation for *everybody* is less than bright.
A very bad thing for all of us and the world economy in general. People have been warning about the Euro for years though and so if we have yet another crisis created by forcing such disparate economies together, without the creation of the necessary infrastructure to support it, then they may be entitled to at least a mild "I told you so".I remember in my Economics course a long session on optimum currency areas and why the Euro wasn't one.
It's not gloating at all it's looking at a s
t show and saying yep figured this would happen one dayWhoozit said:
It's not clear to me what you mean by highlighting the Euro as the reason for the current crisis? CS is a Swiss bank - no Euro. The concerns on bank asset quality are not dependent on the currency - absent the ECB eligible collateral issues which were such a problem in 2012-2014.
I do agree and had a similar lecture a long time ago on why monetary union without fiscal union was ultimately doomed. That was however 30 years ago and the Euro is still here. I would have lost a lot of money on that short
It is only when the tide goes out that you can see who has been swimming naked. The tide first went out out following 2008 and the Euro would have collapsed then, or at least lost a number of members, if it weren't for the interventions then.I do agree and had a similar lecture a long time ago on why monetary union without fiscal union was ultimately doomed. That was however 30 years ago and the Euro is still here. I would have lost a lot of money on that short
The Euro area doesn't have formal fiscal union, but it has an unusual structure in its place to avoid the consequences. The structure is basically that Germany has vast trade surpluses but doesn't actually, in effect, receive payment for all of this and instead is owed hundreds of billions by other members of the eurozone. It is likely that it will never receive payment for a big chunk of this so that is your transfer.
Furthermore the ECB acting on behalf of all members has been monetarising a big chunk of the debts of the weaker states. Again this is a form of transfer as now the resulting inflation is hitting all member states.
A further piece of the puzzle is that when crisis do come along there are now emergency transfers to keep the show on the road. Italy for example is going to receive over $200bn in "covid recovery funds".
This is not to say that the theoretical analysis was wrong, or that the Euro has been a great success. To take the example of Italy again they have had basically no growth in gdp per head since they adopted the euro. What it shows instead is that politicians and central banks have done just enough to keep the whole thing from collapsing and many of the measures adopted have the practical affect of massive fiscal transfers, even if they are called something different.
Gecko1978 said:
25 plus years ago I recall my economics lecturer angrily barrating me telling me the euro could not fail countries could not fail and bailouts were forbidden because all would manage debt levels and there were rules that would be followed.....I think maybe they just didn't understand humans, politicians, bankers, greed, power and control.
It's not gloating at all it's looking at a st show and saying yep figured this would happen one day
Sounds like you had a cr*p lecturer who was letting politics influence his understanding of economics rather than the reverse. Ours set out the case calmly and rationally. I believe he was pro-EU but that doesn't change economic reality. It's not gloating at all it's looking at a s
t show and saying yep figured this would happen one day
JagLover said:
Gecko1978 said:
25 plus years ago I recall my economics lecturer angrily barrating me telling me the euro could not fail countries could not fail and bailouts were forbidden because all would manage debt levels and there were rules that would be followed.....I think maybe they just didn't understand humans, politicians, bankers, greed, power and control.
It's not gloating at all it's looking at a st show and saying yep figured this would happen one day
Sounds like you had a cr*p lecturer who was letting politics influence his understanding of economics rather than the reverse. Ours set out the case calmly and rationally. I believe he was pro-EU but that doesn't change economic reality. It's not gloating at all it's looking at a s
t show and saying yep figured this would happen one dayUniversities are populated largely by one flavour of political opinion, with 80% of academic staff self-reporting as left-wing in surveys. In one uni a prof held a workshop for lecturers on 'how to deal with right wing attitudes'. As expected, some unis and some subjects are worse than others. Students are routinely soaked in redwash aka 'ideological homogeneity'.
JagLover said:
It is only when the tide goes out that you can see who has been swimming naked. The tide first went out out following 2008 and the Euro would have collapsed then, or at least lost a number of members, if it weren't for the interventions then.
Well you are also conflating things. Does the euro have a structural issue that ultimately has to somehow be solved via fiscal unions? Probably yes. However the crowing about the EU/Euro in earlier posts being dysfunctional kind of misses the point about the current ongoing banking issues. CS obviously was never in the EU anyway and has been a bit of a basket case for a while. SVB which was the major trigger for this clearly isn't a EU bank. DB was a not dissimilar basket case but seemingly had turned things around (certainly they have been profitable for a while now and much more so vs say 2017 and not constantly puking out losses like CS had. Unrealised losses in banks leading to a very quick turnaround in confidence in liquidity isn't by any means an EU issue. Having a dig at Von der Leyen and doing the 'I told you so' to have a swipe because one disagrees with the EU seems to be quite missing the point....
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