Acropolis Now

[gaelic cowboy]

Sorry, I'm not sure what you're saying.

It seems to me that they're making it up as they go.

The more transactions there are the more fee's they earn, the less transactions ie the more saving the less fee's they earn.

[rory_20_uk]

With Pensions the rate of churning has massively increased over the last 60 years. Since few are aware, there's good commission in doing almost nothing repeatedly.

~:smoking:

[Vladimir]

With Pensions the rate of churning has massively increased over the last 60 years. Since few are aware, there's good commission in doing almost nothing repeatedly.

~:smoking:

:laugh4: I knew I should have went into banking!

[Strike For The South]

So the Germans are taking over smaller European countries in the name of stability.

I've seen this movie before

[Banquo's Ghost]

So the Germans are taking over smaller European countries in the name of stability.

I've seen this movie before

This time however, they are having to pay up front instead of getting the bill in arrears. :wink:

[rory_20_uk]

:laugh4: I knew I should have went into banking!

Same here. Taking time to slide across.

~:smoking:

[drone]

This time however, they are having to pay up front instead of getting the bill in arrears. :wink:
Maybe this time the French will remember to put troops on the Belgian border...

[Vladimir]

Maybe this time the French will remember to put troops on the Belgian border...

"French jockey on a German horse."

They'll be fine.

[drone]

"French jockey on a German horse."

They'll be fine.
Not if their banks keep taking advantage.

[Furunculus]

time to introduce the Neuro:

http://www.telegraph.co.uk/finance/currency/7797396/Why-a-new-euro-could-be-the-saviour-of-the-European-dream.html

welcome to the Neurozone!

[Furunculus]

interesting article on Britain's problems:

http://www.telegraph.co.uk/finance/comment/edmundconway/7798450/The-gamblers-betting-on-Britain-going-bust.html

Too much our our debt is index-linked to inflation to let us get away with inflating our way out of debt.

[Beskar]

interesting article on Britain's problems:

http://www.telegraph.co.uk/finance/comment/edmundconway/7798450/The-gamblers-betting-on-Britain-going-bust.html

Too much our our debt is index-linked to inflation to let us get away with inflating our way out of debt.

I find it interesting how multinationals are purposefully trying to get Britain-to-bust to line their pockets. I have to actually agree with the European plans get rid of the vermin.

[Furunculus]

that is a stupid sentiment, for one simple reason; you cannot buck the markets when you require 10% of your annual spending from market lending.

markets take a risk in lending to government, so they charge an interest rate, if they hold debt to which they have little confidence the government intends to repay, then they are right to dump it on some other market player with a higher tolerance for risk.

i will support punitive measures against market speculation ONLY when governments get their own affairs in order and stop spending well in excess of the revenue.

[Louis VI the Fat]

The ECB was located in Frankfurt for a reason, to let a culture of German monetary discipline seep through in its workings.

I want stern, pointy-helmeted Teutons, preferably devoid of any sense of humour too, to govern the currency. Curse the modern Germans, their modesty and their allergy to rule others!


Maybe this time the French will remember to put troops on the Belgian border... Not that I'd want to mistake a little tease for a historical analysis, but:

The best troops and the whole of the British Expeditionary Force were at the Belgian border, fully expecting Germany to attack from the north by invading a neutral country without warning again.

As the French and British rushed north to finally protect Belgium and the Netherlands, which they had declined all this time so as not to antagonise Hitler, the Germans rushed south. It immediately became a war of mobility, of decentralised intiative, of pinpointing force. This the Germans excelled in, the war was lost virtually from the start.

[Furunculus]

we can only hope that such a culture permeates germany's neighbours, but it does indeed appear that germany is acquiring some self confidence.

-------------------------

interesting parallel between how estonia dealt with the crisis compared to greece:

http://www.spiegel.de/international/europe/0,1518,698299,00.html

[gaelic cowboy]

The ECB was located in Frankfurt for a reason, to let a culture of German monetary discipline seep through in its workings.

I want stern, pointy-helmeted Teutons, preferably devoid of any sense of humour too, to govern the currency. Curse the modern Germans, their modesty and their allergy to rule others!

Not that I'd want to mistake a little tease for a historical analysis, but:

The best troops and the whole of the British Expeditionary Force were at the Belgian border, fully expecting Germany to attack from the north by invading a neutral country without warning again.

As the French and British rushed north to finally protect Belgium and the Netherlands, which they had declined all this time so as not to antagonise Hitler, the Germans rushed south. It immediately became a war of mobility, of decentralised intiative, of pinpointing force. This the Germans excelled in, the war was lost virtually from the start.

You could say the Germans basically agreed to the Euro in exchange for the right to unify Germany again. The stability and growth pact rules were as loose as they were because Germany made them so.

[Furunculus]

the Bilderberg group is getting the jitters over the Euro's survival:

http://www.timesonline.co.uk/tol/news/world/europe/article7142478.ece

[gaelic cowboy]

the Bilderberg group is getting the jitters over the Euro's survival:

http://www.timesonline.co.uk/tol/news/world/europe/article7142478.ece

Bah nothing to see here everyone knows it's the Grand High Lizard Queztaclejythasd who give the Bilderbergers there orders, even now I can feel the radio waves bouncing off the tinfoil I am using to block the brainwashing.

In fact i found a picture of her from her cloaked battleship

Your Lizard Overlords have decreed that this was a hotlinked picture in violation of the Shadow Proclamation. Please stand still while the Black Helicopters arrive and remove your brains for processing into food additives.

[gaelic cowboy]

Speaking of Bilderbergers though the Trilateral Commision met in the Four Seasons in Dublin recently

Big money boys back pressing the flesh as potential investors gather (http://www.independent.ie/national-news/big-money-boys-back-pressing-the-flesh-as-potential-investors-gather-2182106.html)

No crisis for Cowen as he keeps the economic big-wigs waiting (http://www.independent.ie/national-news/no-crisis-for-cowen-as-he-keeps-the-economic-bigwigs-waiting-2173425.html)

[Tellos Athenaios]

Hmm. Furunculus' link is sure an interesting read, as is what a commenter posted: http://gregpytel.blogspot.com/

[Furunculus]

To 25 leading economists - "will the Euro survive until the end of the next parliament?"

The results - No = 12, Yes = 8, Don't know = 5

And even some of the "Yes" votes clarify that they don't believe it will be the same Euro that currently exists, as members will have exited and dafaulted.

http://www.telegraph.co.uk/finance/financetopics/budget/7806064/Euro-will-be-dead-in-five-years.html

--------------------------------------------------------------------------------------------------------

Germany & France on the verge of open conflict over Euro's future:

http://www.timesonline.co.uk/tol/news/world/europe/article7144778.ece

[Vladimir]

Time to withdraw U.S. forces and watch those two go at it again. Just like old times.

[Husar]

Time to withdraw U.S. forces and watch those two go at it again. Just like old times.

Lies and deception, if our two leader want to go to war it will be a cage match or a mudfight or something like that.

[Furunculus]

Lies and deception, if our two leader want to go to war it will be a cage match or a mudfight or something like that.

what is lies and deception?

---------------------------------------------------------------

good article on how Soros drove Britain out of the ERM:

http://www.theatlantic.com/business/archive/2010/06/go-for-the-jugular/57696/

[Husar]

what is lies and deception?

The part where he insinuates France and Germany are almost at war again.

[Furunculus]

The part where he insinuates France and Germany are almost at war again.

he didn't, he said that political convergence necessary to keep france and germany as the engine of european federalism is in danger of stalling as a result of different policy objectives over the euro crisis.

germany is being pragmatic and restricting economic governance to the Eurozone, thereby damaging the political ideal that everyone goes down the ever-deeper-union path together.

france is being idealogical and attempting to rope the whole EU into economic governance because they are afraid that an a-la-carte EU will destroy momentum for a federal union.

[Husar]

he didn't, he said that political convergence necessary to keep france and germany as the engine of european federalism is in danger of stalling as a result of different policy objectives over the euro crisis.

Oh yes, he did, he was obviously looking forward to us "going at it again" like we did in WW1, WW2 and the Franco-Prussian war etc. What you describe is the link he posted and used to build his guerretic-voyeurist propaganda on top of it. ~;p

[Furunculus]

Oh yes, he did, he was obviously looking forward to us "going at it again" like we did in WW1, WW2 and the Franco-Prussian war etc. What you describe is the link he posted and used to build his guerretic-voyeurist propaganda on top of it. ~;p

sorry, i thought you were responding to me.

[PanzerJaeger]

The part where he insinuates France and Germany are almost at war again.

I would totally repatriate to get in on some of that action. Invading France is practically a family tradition. :laugh4:

[Louis VI the Fat]

I would totally repatriate to get in on some of that action. Invading France is practically a family tradition. :laugh4:Too late for that! The Nazis, who brought such dishonour and shame to the German army, and unspeakable misery to their first victim, Germany, are no longer.

If you desire, however, to march into France in a German military uniform, then our good friends, modern democratic Germans, have held military parades on the Champs-Élysées since 1994, to the respect and friendship of the audience.

:germany: :love: :france:



https://img692.imageshack.us/img692/1457/brigadefrancoallemande1.jpg


~~o~~o~~<<oOo>>~~o~~o~~


The symbolism of the Franco-German axis served a historical purpose. It is getting a bit old, a bit empty though. Also, although WWII is always close to the surface on the internet, in real life nobody is interested in that ancient history.

Quite apart from any symbolism, and independent of the personal chemistry of leaders, France and Germany must closely co-operate out of necessity. With Spain and Italy in trouble, and the UK not part of the Euro, it is clear that France and Germany have a preponderous weight in the Euro rescue operation.

Me, I think the Euro needs closer political and economical co-operation succeed in the long term - Sarkozy's position. However, in the short term, focus needs to be on discipline, an independent ECB, etc - Merkel's position.
I hope the AD/HD midget will be firmly wrestled to the ground by the bulky Wagnerian Valkyrie.

[gaelic cowboy]

bloody tinternet posted on wrong thread

[Philippus Flavius Homovallumus]

Me, I think the Euro needs closer political and economical co-operation succeed in the long term - Sarkozy's position. However, in the short term, focus needs to be on discipline, an independent ECB, etc - Merkel's position.
I hope the AD/HD midget will be firmly wrestled to the ground by the bulky Wagnerian Valkyrie.

I agree with you, but unlike you I don't want the Euro to succeed in the long term; I think the project is doomed through it#s corrupt inception.

[Furunculus]

Me, I think the Euro needs closer political and economical co-operation succeed in the long term - Sarkozy's position. However, in the short term, focus needs to be on discipline, an independent ECB, etc - Merkel's position.
I hope the AD/HD midget will be firmly wrestled to the ground by the bulky Wagnerian Valkyrie.
reading Der Spiegel it seemed fairly clearly that Sarkozy was argueing for EU economic governance whereas Merkel was argueing for Eurozone economic convergence..........?


I agree with you, but unlike you I don't want the Euro to succeed in the long term; I think the project is doomed through it#s corrupt inception.
i am quite happy for the Euro to succeed, as long as its participants are both willing and able.

[PanzerJaeger]

Too late for that! The Nazis, who brought such dishonour and shame to the German army, and unspeakable misery to their first victim, Germany, are no longer.

If you desire, however, to march into France in a German military uniform, then our good friends, modern democratic Germans, have held military parades on the Champs-Élysées since 1994, to the respect and friendship of the audience.



It was, of course, only a joking reference to the fact that three successive generations of my family participated in three successive invasions of France with varying degrees of success. I currently hold no claims on French territory... :grin:

[Furunculus]

Me, I think the Euro needs closer political and economical co-operation succeed in the long term - Sarkozy's position. However, in the short term, focus needs to be on discipline, an independent ECB, etc - Merkel's position.
I hope the AD/HD midget will be firmly wrestled to the ground by the bulky Wagnerian Valkyrie.

Der Speigel has changed its tune:

they now say that Sarkozy wants Eurozone governance whereas Merkel wants to widen it to the EU27.

odd............

http://www.spiegel.de/international/europe/0,1518,699672,00.html

..........................................................................................

lol:

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/7817200/Deutsche-Bank-shorts-2bn-eurozone-sovereign-debt.html

[Vladimir]

lol:

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/7817200/Deutsche-Bank-shorts-2bn-eurozone-sovereign-debt.html

I never thought banking news could be so funny.

[Furunculus]

Spain pushes for the public result of Eurozone banking stress testing in an effort to unfreeze lending:

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/7831117/Spain-plays-high-stakes-poker-game-with-Germany-as-borrowing-costs-surge.html

this should have been done long ago, British banks were put through this back in 2009, the result of which is that interbank lending in the UK is seen as a much less risky proposition.

[gaelic cowboy]

Just some article's for the interested on Irish involvement in UK.

AIB have to raise some extra capital to satisfy the new banking regulator a man by the name of Matthew Elderfield (http://en.wikipedia.org/wiki/Matthew_Elderfield) as a result they are having to sell prized assets across Europe. This man has really kicked butt here and long may it continue :thumbsup:


AIB faces tough sale on UK assets (http://www.independent.ie/business/european/aib-faces-tough-sale-on-uk-assets-2220573.html)




Irish debt nightmare for UK banks
(http://www.independent.ie/business/european/irish-debt-nightmare-for-uk-banks-2220572.html)

[Furunculus]

ugly for britain, but only if ireland goes down the tubes which is highly unlikely as long as the Euro doesn't.

[Husar]

Maybe the Merkel-Sarkozy rift wasn't as wide as some people thought (http://www.spiegel.de/international/europe/0,1518,700737,00.html):


One area where they reached easy agreement was the performance of the German national team which beat Australia 4-0 in the World Cup on Sunday. "My first words will be to congratulate our German friends on a remarkable start for the German football team in the World Cup. We are delighted for you. It was even pretty spectacular," said Sarkozy.

Even though there may be some differences, we solve them with words here in Europe. ~:cheers:

I'm not sure about this whole financial government thing and taxing this and prohibiting that and what it's supposed to achieve. Will they finally be able to throw someone out of the eurozone or is it just a lot of talk about establishing more talk and trying to seem concerned? :sweatdrop:

[gaelic cowboy]

I'm not sure about this whole financial government thing and taxing this and prohibiting that and what it's supposed to achieve. Will they finally be able to throw someone out of the eurozone or is it just a lot of talk about establishing more talk and trying to seem concerned? :sweatdrop:

Pretty much watch as we see more reports from the "Markets Raising Concerns" bah

[Vladimir]

Maybe the Merkel-Sarkozy rift wasn't as wide as some people thought (http://www.spiegel.de/international/europe/0,1518,700737,00.html):



Even though there may be some differences, we solve them with words here in Europe. ~:cheers:

I'm not sure about this whole financial government thing and taxing this and prohibiting that and what it's supposed to achieve. Will they finally be able to throw someone out of the eurozone or is it just a lot of talk about establishing more talk and trying to seem concerned? :sweatdrop:

No, you solve them with 50,000 U.S. troops stationed in Germany.

Did Austria even show up?

[rory_20_uk]

he didn't, he said that political convergence necessary to keep france and germany as the engine of european federalism is in danger of stalling as a result of different policy objectives over the euro crisis.

germany is being pragmatic and restricting economic governance to the Eurozone, thereby damaging the political ideal that everyone goes down the ever-deeper-union path together.

france is being idealogical and attempting to rope the whole EU into economic governance because they are afraid that an a-la-carte EU will destroy momentum for a federal union.

France is not being idealistic as desperate to keep hold of German subsidies. If Germany stopped believing - and therowing money liberally to almost everyone else then France would have to sort out itself. France has been reliant on foreign support from at least 1939, and arguably since 1914.

~:smoking:

[Vladimir]

France is not being idealistic as desperate to keep hold of German subsidies. If Germany stopped believing - and therowing money liberally to almost everyone else then France would have to sort out itself. France has been reliant on foreign support from at least 1939, and arguably since 1914.

~:smoking:

Aren't we all?

[Louis VI the Fat]

France is not being idealistic as desperate to keep hold of German subsidies. If Germany stopped believing - and therowing money liberally to almost everyone else then France would have to sort out itself. France has been reliant on foreign support from at least 1939, and arguably since 1914.

~:smoking:What kind of tabloids do you read? :huh:


If you mean strategically - all countries except a hegemon rely on a balance of power and on alliances. Only during Louis XIV and the Revolutionary era did France not need alliances.

The kiddie version of history in the UK is that the silly continentals can't help misbehaving themselves, repeatedly start petty wars, which are then sorted out by Britain, which a most ungrateful continent is never thankful for. Reality is that Britain and its enormously overstretched empire, fully part of Europe, relied on a balance of power, the aggressive maintenace of which has always been Britain's policy.
For example, the UK did not fight in Flanders because the English like the French so much better than they like Germans. The British allied with France to stop Germany, the largest power of Europe, from its threat to topple Britain, in particular its fleet building policy. Britain did not save France, Britain saved its Empire, with Belgium coming in as a handy battlefield. In 1914, the Empire was defended to the last Frenchman, in 1940, it was defended to the last Russian. Both World Wars also showed Britain was not at all capable of defending its Empire on its own.

If you mean economically dependent - massive French financial, political and intellectual expenditure has been quite instrumental in maintaining and spreading democracy and stability in Europe, including the British Isles. As has been German desire to create a peaceful Europe, and a European Germany.

[gaelic cowboy]

Both World Wars also showed Britain was not at all capable of defending its Empire on its own.

I would agree with this entirely, after all every Totalwar game that has a British Isles in it the English are usually weaker and poorer than Europe. Safe behind a channel without fear of attack it can involve itself in wars on the mainland to disrupt any one nation dominating Europe

[Vladimir]

I would agree with this entirely, after all every Totalwar game that has a British Isles in it the English are usually weaker and poorer than Europe. Safe behind a channel without fear of attack it can involve itself in wars on the mainland to disrupt any one nation dominating Europe

And in every Total War game the British Isles are the perfect place to forge an unbeatable empire. Not a good comparison.

[Louis VI the Fat]

I would agree with this entirely, after all every Totalwar game that has a British Isles in it the English are usually weaker and poorer than Europe. Safe behind a channel without fear of attack it can involve itself in wars on the mainland to disrupt any one nation dominating Europe
And in every Total War game the British Isles are the perfect place to forge an unbeatable empire. Not a good comparison.The two don't exclude the other. On the contrary...:beam:

[gaelic cowboy]

And in every Total War game the British Isles are the perfect place to forge an unbeatable empire. Not a good comparison.

Wrong it's because it is disadvantaged that Britain is so strong, it 's a geopolitical reality that Britain must always prevent a single nation dominating Europe.

Once Europe is divided Britain can rest easy in the knowledge her empire will not be troubled.


This is real reason Britain is in the EU to my mind, Britain ensure's it does not get overly powerful and overshadow it. They can never hope to dominate it themselves but they must ensure that Germany and France also do not

[Vladimir]

Wrong it's because it is disadvantaged that Britain is so strong, it 's a geopolitical reality that Britain must always prevent a single nation dominating Europe.

Once Europe is divided Britain can rest easy in the knowledge her empire will not be troubled.


This is real reason Britain is in the EU to my mind, Britain ensure's it does not get overly powerful and overshadow it. They can never hope to dominate it themselves but they must ensure that Germany and France also do not

Wrong (let's just keep saying it back and forth)

But seriously, that's silly. You're saying they're strong because they're weak. What you mean to say is that Britain is easily defensible once it has naval superiority. Internal lines of communication give it the ability to respond quickly to invasion and the channel presents a logistical challenge to any would-be invader.

[gaelic cowboy]

Wrong (let's just keep saying it back and forth)

But seriously, that's silly. You're saying they're strong because they're weak. What you mean to say is that Britain is easily defensible once it has naval superiority. Internal lines of communication give it the ability to respond quickly to invasion and the channel presents a logistical challenge to any would-be invader.

Well I meant land area and manpower really which Europe has in bags, plus historicallly most the resources were in Europe ie coal steel.

I take your point on the Navy stuff etc really one could say technology has been the gamechanger for Britain.

[Vladimir]

Well I meant land area and manpower really which Europe has in bags, plus historicallly most the resources were in Europe ie coal steel.

I take your point on the Navy stuff etc really one could say technology has been the gamechanger for Britain.

Yes. Poor Britain had to travel far from home to become Great.

I love those guys, I really do; but this has been on my mind lately: http://en.wikipedia.org/wiki/Perfidious_Albion

:grin:

[Louis VI the Fat]

this has been on my mind lately: http://en.wikipedia.org/wiki/Perfidious_Albion
Britain's history is not one of unmitigated perfidity. At least not more so than that of most others. If anything, Britain has a history of being more liberal than most.

I don't care about Britain's actual past - I care about an unrealistic portrayal of that past. (Hah! Déjà vu! I feel I've argued the exact same thing after I had written i some thread some critical assesments of the dealing with history in Germany, Serbia, Poland, the Netherlands, Romania etc)

What happened, happened. Fine with me. One can scarcely blame Britain for being an agressive power like all the others, nor for being usually just a little bit smarter than the others. What I do care about, is that the world's largest Empire, a country with a relentlessly agressive involvement in all major European wars, with colonies throughout Europe's southern rim, should sometimes present its history as that of disinterested outsider, well above such continental madness.


Public history requires some simplification, for educational purposes (how much nuance can one teach a twelve year old?); some mystification, for dealing with less glamorous events; and some mythification, for matters of national pride and cohesion.

Problems start, when this simplified, mytholigised narrative is then mistaken for actual history, and entire identities and political ideologies are build around a few of those mistaken concepts. Or worse, when national grudges and feelings of revenge are build or sustained by them.
Not that the UK by any means is the worst in this regard - one needs only look to several areas of Europe to see that British dealing with its past is far less dangerous, or outright pathetic, than most.

One annoying, sometimes downright insulting, element though, in British historical dealing is the idea that Britain has always been an outsider to European affairs, that the silly continentals are prone to wage aggressive war, which Britain then sorts out. After which the continentals then have the cheeck to be ungrateful. This is usually followed by a slightly exasperated comment that Britain should've just stayed out, and that next time they are going to just leave 'Europe' to sort itself out. It is akin to Germany sighing that Germany should not have involved itself in the silly wars waged by Europe's peripheries in the past century.

[Beskar]

One annoying, sometimes downright insulting, element though, in British historical dealing is the idea that Britain has always been an outsider to European affairs, that the silly continentals are prone to wage aggressive war, which Britain then sorts out. After which the continentals then have the cheeck to be ungrateful. This is usually followed by a slightly exasperated comment that Britain should've just stayed out, and that next time they are going to just leave 'Europe' to sort itself out. It is akin to Germany sighing that Germany should not have involved itself in the silly wars waged by Europe's peripheries in the past century.

Britain sees itself as an outsider, due to being on the Island, but Britain is an outsider with a really big poking stick. Britain keeps poking and poking making all the other powers fight eachother, then laugh at them. We are never taught that Britain is on the outside ignoring the continent at all. If anyway, the reason we had such a massive navy (other than trade later) was to make sure hte continentials couldn't cross the channel to land on our shores.

[gaelic cowboy]

The British have a narrative which is at odds with the reality of Empire which is seen as essentially good while national liberation movements were bad(til they were no longer bad of course). This of course ignore's the fact that empire is the most extreme form of nationalism

People like Gordan meddled on there own as much as any continental he should be fully disowned as a warmonger, he was a dangerous renegade whose death dragged Britain to war by the force of public opinion. Basically he broke his oath and got killed, but that bloody film is the narrative everyone remembers instead of what really happened.

Interstingly this all feed's into the Acroplis Thread very easy, the City looks at the PIIGS and says not serious players typical Euro blah blah etc etc. The PIGS of the south I only know a small bit about, however my own country once it got some money it wanted to ensure that people seen us as serious with trophy buys in London.

Battersea PowerStation and various places in Knightsbridge were all bought and bought big to erase the the memory of our inferior status, we have instead assured it for another decade.

The UK thinking it was remote from Europe as it was in the past at least psychologically, choked itself in debt without even noticing due to the global nature of capital and debt today.

[gaelic cowboy]

Interesting article by the resident economist for Irish Independent

http://www.independent.ie/opinion/columnists/brendan-keenan/brendan-keenan-information-not-austerity-is-what-financial-markets-really-want-to-see-2232463.html


Information, not austerity, is what financial markets really want to see

By Brendan Keenan
Thursday June 24 2010
'WHAT Do Women Want?' was the title of a book by the feminist writer Erica Jong. The phrase throws up 138 million results on Google. As a mere man, I am not really surprised.

Professionally, I would like to see more answers to the burning question: "What do markets want?" The last few days were no help at all in solving this riddle.

It seemed to start with a chilling comment from Francisco Gonzalez, chairman of one of Spain's biggest banks, BBVA. "For the majority of Spanish companies and financial firms, international capital markets are closed. If the Spanish state is having difficulty in financing itself outside Spain, then the difficulties will be even greater for those in the private sector," he said.

This remarkable statement came just before the EU summit, where leaders were clearly aware that Europe faces an extraordinary crisis and moved with remarkable speed and unanimity to agree new EU surveillance of national budgets and the publication of stress tests on EU banks.

As history shows all too well, EU leaders agree to things quickly only when they are in trouble. The stress-test decision was opposed by the banks and their lobby groups. It deeply offends the cult of secrecy endemic in Irish officialdom and political life, but the objections melted like snow in an Irish June. So they must be in real trouble.

We probably have not reacted enough to this extraordinary turn of events. Gonzalez's comments -- or rather the reality behind them -- may well have spurred the Bank of Spain to publish the results of stress tests on Spanish banks, and for EU leaders to promptly agree to follow suit at last week's summit.

Even so, the rest of us may not fully have grasped the scale of the trouble we are in -- still less the reason for it. It is clear that, as of this moment, markets are not willing to replace the existing debt of many European banks as it falls due. In the case of Irish banks alone €77bn of such debt must be repaid and replaced with fresh debt by the end of the year.

Markets also appear increasingly reluctant to lend to the governments of Ireland, Portugal and Spain. Had the National Treasury Management Agency not squirrelled away €20bn so far this year, we might need outside help by now just to keep the country functioning.

Puny

Yet, just when one thinks this may be the terminal crisis, a successful but puny €3bn bond auction by the Spaniards gives the euro its best day for a couple of years.

After the stress-test announcement the euro rose again, as did European shares -- on the grounds that the test results would turn out to be positive. That being so, why were we facing a lenders' strike in the first place? What do these people want?

One obvious answer is that they -- which means banks and investment funds -- simply want more information. It would certainly seem odd to the visitor from Mars that inter-bank lending is shaky because one bank does not know what another one holds in government bonds that might be at risk of default.

He might be even more puzzled by the fact that, two years on, there is still considerable doubt about the losses faced by European banks on the dodgy assets they still hold from the bubble days. But then, policymakers in general seem to have forgotten that markets are essentially exchanges of information rather than of actual products bought and sold.

We all know the trouble caused by Sean Quinn's secret purchase of a stake in Anglo Irish through "contracts for difference". Compulsory declarations of shareholdings were introduced precisely to let markets have the vital information as to who was building stakes in a company. Yet there seem to be no moves to close the gaping loophole in the operation of an efficient stockmarket represented by secret stakes.

So perhaps all markets want is more information? If they knew enough -- especially about the state of the banks -- they would lend to countries at an interest rate which reflected the risk. Governments could choose whether they preferred to borrow and pay that interest rate -- with the future burden on taxpayers which it represents -- or to cut their budget deficits and risk the immediate burden of further contraction in the economy.

Suddenly, this choice -- cutting or borrowing -- has become the big issue in economists' chatter and political discourse. The arguments swirled around Tuesday's UK budget. Is Chancellor Osborne killing the recovery? Or would failure to act on the deficit risk lead to a punitive rise in long-term interest rates -- or even a refusal to lend at all?

Here, some Irish economists have formed an unlikely alliance with the trade union movement in calling for a slower approach to reducing this country's yawning deficit. Others say the difficulties in the market show the Government is not cutting fast enough.

There are big guns ranged on both sides. In just the past seven days, Alan Greenspan warned that the market could yet treat the US like Greece if present deficits continued. He called for "a tectonic shift" in fiscal policy in much of the developed world.

On the other side, veteran UK analyst Samuel Brittan argues that an expanding economy will itself generate most of the savings required to finance budget deficits, "and much else"; while Harvard's Professor Paul Krugman brought in the Irish angle.

He pointed out that Ireland's budget correction has been much praised, and Spain's much criticised. Yet the interest rate demanded by markets for lending to Ireland is significantly higher than they will accept from Spain.

He thinks this shows that markets are not persuaded by fiscal austerity. They prefer growth. Which is fine, except that Spain's growth prospects are generally seen as somewhat worse than Ireland's and, according to some calculations, its budgetary position is also poorer.

The last few weeks also suggest that Prof Krugman may have been a bit premature about Spain.

And if information is key, the fact is that markets know more about the true state of Irish banking than they know about banking in Spain. It is, though, a great pity that something so vital for economic policymaking -- how much borrowing lenders will tolerate -- is subject to so much uncertainty. Any bloke with a bunch of flowers knows the feeling well.

- Brendan Keenan

Irish Independent

[Furunculus]

cheers, intreresting read.

in other news Soros is recommending Germany leave the Euro as its austerity measures (in place of economic governance) are killing the weaker nations in the eurozone:

http://www.telegraph.co.uk/finance/currency/7849965/Soros-tells-Germany-to-step-up-to-its-responsibilities-or-leave-EMU.html

[gaelic cowboy]

The only problem is all of the PIIGS debt is in Euro, if Germany pulls out then Ireland will just devalue it's new currency.

I can see the senario going summit like this "Here you go Germany here is 100billion new Paddy Punts worth about 3 new D-Marks", "Yes of course you can buy stuff here lovely and cheap isnt it"


interesting line near end of article

"The truth is that what we have in Europe is not a currency or sovereign debt crisis as many people think, but a banking crisis,"

[Louis VI the Fat]

Greece (http://www.reuters.com/places/greece) should consider selling some of its islands as one option to reduce debt, two members of the German parliament in Chancellor Angela Merkel's centre-right coalition said.


http://www.reuters.com/article/idUSLDE6230BL20100304Germany gets its way!



Greece puts its islands up for sale to save economy
http://getsomenews.com/2010/06/greece-puts-its-islands-up-for-sale-to-save-economy-57163 :laugh4:



Ten quid says Merkel will start buying to satisfy Teutonic lust for territorial expansion!



https://img695.imageshack.us/img695/7514/plageb.jpg

[Louis VI the Fat]

cheers, intreresting read.

in other news Soros is recommending Germany leave the Euro as its austerity measures (in place of economic governance) are killing the weaker nations in the eurozone:

http://www.telegraph.co.uk/finance/currency/7849965/Soros-tells-Germany-to-step-up-to-its-responsibilities-or-leave-EMU.htmlBless the Telegraph!


On one single day, it splatters all thoughout its pages that austerity measures are absolutely crucial for Britain at the moment, celebrating the Conservative measures to combat the sovereign debt crisis.

And on a different page, in a hurried bid to satisfy anti-euro sentiment, the paper triumphantly quotes Soros saying austirity measures are a big no-no at the moment, and that we don't face a sovereign debt crisis but a banking crisis.



Even bearing in mind the obvious difference between the UK and Germany, one must be of only one of either one of the two economic thoughts.

:balloon:

[gaelic cowboy]

https://www.youtube.com/watch?v=TeQC45KunwA

[Philippus Flavius Homovallumus]

Bless the Telegraph!


On one single day, it splatters all thoughout its pages that austerity measures are absolutely crucial for Britain at the moment, celebrating the Conservative measures to combat the sovereign debt crisis.

And on a different page, in a hurried bid to satisfy anti-euro sentiment, the paper triumphantly quotes Soros saying austirity measures are a big no-no at the moment, and that we don't face a sovereign debt crisis but a banking crisis.



Even bearing in mind the obvious difference between the UK and Germany, one must be of only one of either one of the two economic thoughts.

:balloon:

Bit of an Own Goal for you Loius, Soros was making the point that Germany was causing trouble for the rest of the Euro-block because it is enforcing it's fiscal policy of states which cannot currently absorb it. You also skipped over the point that he said Germany could just leave the Euro, which the Spectator said last week.

Maybe the Euro is unsustainable, eh?

[Louis VI the Fat]

Maybe the Euro is unsustainable, eh?Not when the Greeks finally start selling of those islands it's not!

[Furunculus]

Bless the Telegraph!

On one single day, it splatters all thoughout its pages that austerity measures are absolutely crucial for Britain at the moment, celebrating the Conservative measures to combat the sovereign debt crisis.

And on a different page, in a hurried bid to satisfy anti-euro sentiment, the paper triumphantly quotes Soros saying austirity measures are a big no-no at the moment, and that we don't face a sovereign debt crisis but a banking crisis.



Even bearing in mind the obvious difference between the UK and Germany, one must be of only one of either one of the two economic thoughts.


as PVC said; own goal.

we are not the eurozone.

[rory_20_uk]

And the French decide to work for a change? ~;)

Greek Islands are close to worthless as they have nothing on them, no access nor mineral wealth.

~:smoking:

[Louis VI the Fat]

own goalThe point is Soros' warning about Germany's austerity measures further depressing demand during an economic downturn. He also identifies the crisis as not a sovereign debt crisis.

Despite the obvious differences between Germany, the eurozone, and the UK, both insights have acute relevance to Britain, which adopted severe austerity measures to combat a sovereign debt crisis.

[Lemur]

Good summary of Euro & world debt in the Economist today. (http://www.economist.com/blogs/buttonwood/2010/06/indebtedness_after_financial_crisis) Worth reading.

[Furunculus]

The point is Soros' warning about Germany's austerity measures further depressing demand during an economic downturn. He also identifies the crisis as not a sovereign debt crisis.

Despite the obvious differences between Germany, the eurozone, and the UK, both insights have acute relevance to Britain, which adopted severe austerity measures to combat a sovereign debt crisis.
regardless, there is nothing inherently contradictory about supporting fiscal austerity in britain and a news article on soros warning against german imposed austerity within the eurozone. there is a clear difference between editorial and reporting.

---------------------------------------------------------

more grim reading from the economist:
http://www.economist.com/node/16438831?story_id=16438831&source=hptextfeature

[Philippus Flavius Homovallumus]

The point is Soros' warning about Germany's austerity measures further depressing demand during an economic downturn. He also identifies the crisis as not a sovereign debt crisis.

Despite the obvious differences between Germany, the eurozone, and the UK, both insights have acute relevance to Britain, which adopted severe austerity measures to combat a sovereign debt crisis.

Yes, but Germany is enforcing those measures as a straight jacket for the whole of the Eurozone, which is what I think he was concerned about. Also, Britain historically has a much higher resistence to various forms of loopyism, be it Facism or anything else. So maybe we can tighten our belts without triggering WWIII.

Just a thought.

[Tellos Athenaios]

Well until you consider the sort of loopyness that seems now quite specific to Britain. :shrug: Such as the ruling clique handing out titles in exchange for hefty sums of money , members of parliament claiming their wage 10 times over in “expenses”. Less seriously but still rather peculiar: a national fetish for costume drama/corsets.

By world standards that was outdated practice by about 100-150 years depending on which country you look at.

I understand what you mean but I'd disagree with you: that kind of thinking ought to have been firmly debunked about 50 years ago or so.

[Furunculus]

I understand what you mean but I'd disagree with you: that kind of thinking ought to have been firmly debunked about 50 years ago or so.

What kind of thinking, did we start having revolutions and coups about fifty years ago? I'm confused...... :indian_chief:

[Tellos Athenaios]

Are you confused, or are you wearing pink glasses that show the world through tea and scones, and possibly stiff upper lips? There's some kind of odd stereotype that suggests Britain is some bedrock of stability: all the world could perish but we on our island are impeccable and immune to such turmoil.

And 50 years ago is especially significant (well, 52 years ago) because of: http://en.wikipedia.org/wiki/1958_Notting_Hill_race_riots
Perhaps you might enjoy that article since it places the word “Fascism” in more illuminating context. As if Britain was any less prone to such loopyism.

[Furunculus]

no, i'm not confused, this country absolutely has been a beacon of external and internal stability for a VERY long time.

you're wonderful example is an exception that very much proves the rule.

[Philippus Flavius Homovallumus]

Are you confused, or are you wearing pink glasses that show the world through tea and scones, and possibly stiff upper lips? There's some kind of odd stereotype that suggests Britain is some bedrock of stability: all the world could perish but we on our island are impeccable and immune to such turmoil.

And 50 years ago is especially significant (well, 52 years ago) because of: http://en.wikipedia.org/wiki/1958_Notting_Hill_race_riots
Perhaps you might enjoy that article since it places the word “Fascism” in more illuminating context. As if Britain was any less prone to such loopyism.

And yet, through all that how many time has the government fallen and chaos ensued? The fact that there have been occasional riots does not make Britain unstable, it demonstrates that we don't usually riot.

Take the sedate way the constitutionally troubling Hung Parliament was handled, in less than a week.

[Tellos Athenaios]

Is a falling government the pinnacle of or the cue for chaos? I don't think so, we have a care-taker government for that and everyone goes about his way (well some might privately celebrate a bit first :beam:).

No the real point is that Britain is more like the other banana republics than you think: riots occur in Britain all the same , and the banana republics actually know a thing or two about gracefully (well as far as politics is ever graceful) handling a “crisis” without it being the cue for heads against the wall and blood on the street[**]. Or in other words: to sneer that a Britain merely tightens its belt whereas a Germany unleashes World War III is almost alarmingly outdated.

Which is not to say that they occur all the time; just that they occur in much the same way.
[**] Elections, referendums, constitutional courts, and “keep calm & carry on” is not uniquely British.

[rory_20_uk]

Ok...

Where to start: AAA credit rating - financial markets think we're stable.
Riots: what riots? Occasional demonstrations on small things like a new road / Iraq war (and that's going back a few years now). None aimed at trying to overthrow the political system. Last general strikes: roughly 30 years ago.
For all its faults, a country with low political corruption, no record of political prisoners, few breaches of Habeas Corpus.

IN all honestly, your post is pretty nonsensical if you're trying to compare the UK with Nicaragua. Saying that things - although haven't happened - might is hardly an argument.

I do intend to emigrate in c. 2 years, but this is purely due to economic / career motives, not that I've any concern with the stability of the UK.

~:smoking:

[Tellos Athenaios]

Ok...

Where to start: AAA credit rating - financial markets think we're stable.
Riots: what riots? Occasional demonstrations on small things like a new road / Iraq war (and that's going back a few years now). None aimed at trying to overthrow the political system. Last general strikes: roughly 30 years ago.
For all its faults, a country with low political corruption, no record of political prisoners, few breaches of Habeas Corpus.

Same can be said of France, Germany, Netherlands, Belgium... list goes on. See? The others not as different as you might think.


IN all honestly, your post is pretty nonsensical if you're trying to compare the UK with Nicaragua. Saying that things - although haven't happened - might is hardly an argument.


Good thing I don't try to compare Britain with Nicaragua (or any literal banana republic for that matter), then.

[Philippus Flavius Homovallumus]

Is a falling government the pinnacle of or the cue for chaos? I don't think so, we have a care-taker government for that and everyone goes about his way (well some might privately celebrate a bit first :beam:).

No the real point is that Britain is more like the other banana republics than you think: riots occur in Britain all the same
, and the banana republics actually know a thing or two about gracefully (well as far as politics is ever graceful) handling a “crisis” without it being the cue for heads against the wall and blood on the street[**]. Or in other words: to sneer that a Britain merely tightens its belt whereas a Germany unleashes World War III is almost alarmingly outdated.

Which is not to say that they occur all the time; just that they occur in much the same way.
[**] Elections, referendums, constitutional courts, and “keep calm & carry on” is not uniquely British.

During the current election Commonwealth observers noted that although the electoral system was run in a way which allowed endemic corruption, they could find virtually none in fact.

Britain is an inherrently stable country, this is why we still have paper ballot registers and didn't have a revolution 200 years ago like everyone else. If you think about it, this is not surprising because Britain, and before that England, has been politically cohesive for a lot longer than most of Europe.

[Furunculus]

Euro stress tests a joke, politically inspired rubbish that will do zilch to reassure the markets:

http://www.telegraph.co.uk/finance/comment/jeremy-warner/7873541/Why-European-banks-stress-tests-and-GCSE-exams-have-far-too-much-in-common.html

when the yanks and the brits conducted their stress tests on the banks the markets had confidence that they were rigorous, the result is that the markets trust those banks enough to lend to them.

right now, the strong suspicion is that the strees tests conducted on euro-zone banks are a political flummery, the result will be the markets have zero confidence that further lending is responsible.

this will have two results:
1. bank debt will be flogged off on the cheap to those willing to take the risk, thus devaluing the banks reputation
2. markets will be unwilling to provide new loans to banks to roll over debt that has become due, so they must call on the ECB

this is going to lead to a european Lehmans, and if it does it will trigger a meltdown in any bank that is deemed to be overexposed to PIIGS debt. all. over. the. euro. zone!

the purpose of the stress tests is to admit that x percent of your value is likely to be bad debt, and that this has been appropriately written down, and new capitalisation created to accommodate for this loss, therefore when you ask for more credit it is because it is a sensible business decision and not a last minute attempt to avert insolvency.

the eurozone is treating it like a political beauty pageant, and appears oblivious to the fact that the markets are not interested in what europes political objectives, they want to know whether it is safe to lend to european banks or not.

i predict two utterly predicable responses when the first big euro-bank crisis arrives:

1. it was all the speculators fault for their immoral profiteering ways leading to the destruction of poor citizens savings

2. the answer must be more regulation to reign in their free-wheeling piratical ways, and it must come from Brussels

try, just try and tell me that this is not exactly what will happen.................

[edit]

interesting Der Spiegel article on the perils facing german banking and the flaws in the stress tests:

http://www.spiegel.de/international/business/0,1518,704663-2,00.html


Renewed Turbulence Guaranteed

Indeed, as long as the financial markets refuse to shed their anxiety, the foundation of the new recovery remains fragile. Renewed turbulence is virtually guaranteed. The banks still have enormous quantities of toxic assets on their books. Nobody knows when or to what extent these debts will have to be written off.

In some cases, these bad investments consist of junk bonds from the days before the crisis, including second-class US real estate loans called subprimes. In other cases, they include burdens that hardly anyone was aware of a year ago, like government bonds from Greece and other southern European countries, which were touted as a fairly sound investment at the time.

Analysts at the US investment bank Morgan Stanley say that Europe is caught in a "vicious cycle." Instead of using government funds to forcibly recapitalize all banks, as the US did, the euro countries opted for another approach. After the Lehman Brothers bankruptcy, many banks loaded up on cheap cash from the European Central Bank (ECB).

According to Morgan Stanley, they have been using this money since October 2008 to finance the purchase of government bonds worth €420 billion. During this spending spree, the banks targeted high-yielding bonds from shaky southern European countries, primarily Spain, Greece and Portugal. They then deposited these bonds with the ECB as security for more loans from the central bank.

At the outset these lucrative deals soothed nerves on the markets, but they have now turned out to be time bombs. Nobody knows exactly how these bonds are weighted on the balance sheets -- and even less can be said about what they will actually be worth in the end.

Indeed, despite euro-zone bailout packages for ailing members of the currency union, few doubt that Greece will eventually have to restructure its mounting debt. Creditors would be forced to forego some of their claims.

Breeding Mistrust

Would all banks survive such a haircut? And what happens if further euro-zone members run into trouble, plunging even more banks into difficulties?

There is an enormous sense of uncertainty, and that breeds mistrust. Banks recently parked over €300 billion with the ECB overnight for the ridiculously low interest rate of 0.25 percent. Anyone who borrows money for 1 percent, only to turn around and deposit it overnight with the ECB for just 0.25 percent -- instead of earning considerably more by loaning it to the competition -- has one problem above all: fear.

Last week the banks borrowed significantly less money in new loans than what they had to pay back to the Bundesbank, but that only briefly reduced the edginess. "There is still a great deal of tension," says Hans-Günter Redeker, head foreign exchange strategist for the major French bank BNP Paribas. He says that the balance sheets are too shadowy. "We need a sound stress test on the table, which will also be made public." This is something, at least in principle, that everyone attending last Wednesday's meeting in Frankfurt also agreed on. But there were differing opinions on what was sound and what wasn't.

There have been a number of stress tests in the past. But they weren't made public, and they did not take into account -- of all things --the greatest risk on the banks' balance sheets: the government bonds from the so-called PIIGS countries (Portugal, Italy, Ireland, Greece and Spain).

Horror Scenario

What the markets fear most of all is that these assets could plummet in value -- that these countries could declare bankruptcy and their debts would need to be refinanced. But this horror scenario is not taken into consideration in the current stress test. Otherwise critics could insinuate that the Bundesbank and the BaFin have doubts about the success of the bailout package.

Instead, the bank auditors went on the assumption that a deepening of the debt crisis could drive up the price of credit default swaps on bonds from countries like Portugal and Spain, causing their value to drop and leading to write-offs for the banks. An additional routine scenario goes on the assumption that there could be another economic downturn.

Many questions remain unanswered, however, and the representatives of the banks, the Bundesbank and the BaFin will no doubt have to meet again soon.

[Beskar]

The eurozone is treating it like a political beauty pageant, and appears oblivious to the fact that the markets are not interested in what europes political objectives, they want to know whether it is safe to lend to european banks or not.

That is sugar coating it. They want to know if they can profit from them, and if not, can they profit from their demise.

[Furunculus]

you want to borrow more then you demonstrate you are solvent and prudent.

you need to borrow to rollover old debt then you still have to demonstrate you are solvent and prudent.

if the banks do not consider you solvent and prudent then they will charge you a higher rate for new issued debt.

if the banks believe your imprudence is leading to insolvency then they will seek to sell off your old debt to those willing to assume the increased risk.

if banks are flogging off your current debt that will lower the attractiveness (and hence the return) of any new issue of government bonds, which if combined with an inability to afford the market rates for new borrowing, will result in a default on your debt.

if you default on your debt the result will be less inward investment into what is now considered a volatile market, and interest on borrowing will be much higher than given to your peers for many years afterwards.

it is that simple.

[rory_20_uk]

To profit from a market's demise you need to "short" stock - borrow from one who has already the stock, sell it and buy it back later for less. Or invest in tracker funds or other derivative markets who will pay out when the market falls. Both, as well as any other systems for one lot to profit, others have to have lost. FOr the whole market it is still a bad thing - money isn't being made, merely one lot do well whilst everyone else falls.

Free markets are supposed to be an efficient method of providing resources to those in a position to make best use of them. Ideally, governments / companies borrow to improve infrastructure / expand which increases returns so the interest can be paid off - and everybody wins. These more exotic structures were initially supposed to help spread the risk to a wider audience, making the cost of risk decrease: you can hedge currency spreads so the future is more stable, or hedge the cost of commodities if they are one's raw materials for example.

Most countries recently have been borrowing to pay off... borrowing and in essence pay off their voters / backers today. Any attempt to try to fix the system is met by squeals of rage and accusations that the rich are benefiting the most - such as reducing civil servants redundancy payouts for the current up to 6 YEARS they get, or cutting the renovation of schools that wasn't done for 13 years, but was announced during a downturn before an election.

~:smoking:

[gaelic cowboy]

you want to borrow more then you demonstrate you are solvent and prudent.

you need to borrow to rollover old debt then you still have to demonstrate you are solvent and prudent.

Is this not part of the problem no one was actually prudent and solvent before the crisis and the banks lent the money anyway. The banks had trapped themselves in a cycle which basically grew through lending which generated fee's.

[Furunculus]

Is this not part of the problem no one was actually prudent and solvent before the crisis and the banks lent the money anyway. The banks had trapped themselves in a cycle which basically grew through lending which generated fee's.

because the banks accepted the political fiction that eurozone was an optimal economic unit, because brussels said it was and national leaders pretended it was too.

that mistake won't be made again for quite some time!

[Tellos Athenaios]

Hmm. Don't think that did apply much to the USA or UK who were outside of the Euro zone anyway? Try again?

[gaelic cowboy]

because the banks accepted the political fiction that eurozone was an optimal economic unit, because brussels said it was and national leaders pretended it was too.

that mistake won't be made again for quite some time!

Are you lads kidding me I am talking in a generic sense about the banking system worldwide here. UK USA are just as culpable as anyone EU me :daisy: this has nothing to do with the EU and everything to do with eejits thinking they can sell house's or debt and whatever your havin yourself forever and ever regardless of income.




Hmm. Don't think that did apply much to the USA or UK who were outside of the Euro zone anyway? Try again?

Yes it did how could it not.

[Tellos Athenaios]

Are you lads kidding me I am talking in a generic sense about the banking system worldwide here. UK USA are just as culpable as anyone EU me :daisy: this has nothing to do with the EU and everything to do with eejits thinking they can sell house's or debt and whatever your havin yourself forever and ever regardless of income.
Obviously, which was why asked Furunculus to try again?

Specifically I meant to say that since I don't think UK or USA debt can be explained in terms of “Eurozone membership”, making the concept of “Eurozone” a scapegoat to explain away general banker's responsibility when they lend is just silly. (And let's not forget that banks only got into trouble because they essentially lent themselves loans they could not repay -- hence the excessive demands for CDS packages which in turn are basically one big “toxic asset”.)

[Furunculus]

Hmm. Don't think that did apply much to the USA or UK who were outside of the Euro zone anyway? Try again?

no.

US and the UK had their own problems, GC may have selectively quoted just a portion of my post but it came from a wider discussion of the failure of the european market and the inevitable failure of the policy response to that original failure.

Are you lads kidding me I am talking in a generic sense about the banking system worldwide here. UK USA are just as culpable as anyone EU me :daisy: this has nothing to do with the EU and everything to do with eejits thinking they can sell house's or debt and whatever your havin yourself forever and ever regardless of income.
.
my response presumed your selective quote was referencing the wider argument in the original post, not isolating one statement and assuming it applied more broadly.

Obviously, which was why asked Furunculus to try again?

Specifically I meant to say that since I don't think UK or USA debt can be explained in terms of “Eurozone membership”, making the concept of “Eurozone” a scapegoat to explain away general banker's responsibility when they lend is just silly. (And let's not forget that banks only got into trouble because they essentially lent themselves loans they could not repay -- hence the excessive demands for CDS packages which in turn are basically one big “toxic asset”.)
i'm getting board now, read above.

[Furunculus]

EU publishes some of the assumptions that its bank stress tests presume, and they turn out to be a joke:

http://blogs.telegraph.co.uk/finance/jeremywarner/100006835/banking-stress-tests-confirmed-as-completely-stress-free/

quell surprise? ~:handball:

[gaelic cowboy]

Part opinion piece part omen for the future I would say from Brendan Keenan


Brendan Keenan: Economics and politics diverge, but in Europe politicians usually win
Many governments do not share academic perspective

THE Baltic Dry Index is falling -- and I am keeping a careful eye on it. This measure of the costs of shipping goods across the globe was one of the earliest signs that something nasty was happening to the world economy. So early that I did not pick up on its significance. Nor did anybody else very much.

Okay, I admit it -- I didn't actually ever look at the Baltic Dry Index. But when other, more familiar, data became available, it was clear what the Baltic had been telling us: the fall in trade and output was at a pace even greater than that of the crash of 1930.

Fortunately, it levelled out sooner than happened in the 1930s. This critical difference is generally ascribed to the huge stimulus applied almost immediately after the crash, through large government deficits and record low interests

But, while economic output has not contracted by as much as it did 80 years ago, it has not yet shown any sustained recovery.

Now, the Baltic Dry is falling again. Those who know about such things say it is being distorted by a surfeit of ships, but it has now been followed by other data pointing to renewed weakness in the world economy.

Paradoxically, the Irish services sector had its strongest showing in June since the crisis began, while the euro area and the UK weakened -- but Ireland has been out of step for some time.

This makes us look particularly vulnerable to what has become known as a "double dip". The domestic crash was so profound that it has taken until now for the surveys to show manufacturing and services returning to growth. Presumably, it would not take much to go wrong abroad to see them shrink again.

Response

If something is going wrong -- and the evidence is growing -- the response of governments may be very different from 2008. Interest rates are very low, and little more direct stimulus can come from them. Governments have piled up far more debt in the past few years and their ability to offset another downturn with further borrowing is limited. Or is it?

The fiercest argument is not over whether governments can borrow more to offset a second downturn. If they cannot, they can always print money. It is whether they ought to do so.

This seems quite extraordinary. After 80 years of sophisticated economic science, and 65 years of unprecedented international co-operation, one would have thought there would be agreement on such a basic matter as the role of government in a financial and economic crisis. Far from it.

There is, it has to be said, a fair degree of consensus among the economics profession. For them, what matters is the sum of saving and borrowing, rather than who does it. Private firms and households are reducing their debts in response to the crash, so governments should compensate -- at least partly -- for this by borrowing more.

Yet many governments, led by that of Germany, seem not to accept the majority academic view. Germany has been followed by Conservative-led Britain and, somewhat more surprisingly, by France and Italy. Do they disagree with the economists? Do they -- as has sometimes been suggested -- not actually understand them?

A more probable answer is that, in Europe anyway, the politics and the economics diverge. When that happens, politics usually win. In the USA, both tend towards encouraging further stimulus measures.

One reason the economics are more favourable in the US is that, even with current heavy borrowing, public debt would not reach 100pc of GDP until 2025. Some EU countries already exceed that figure.

Others, including Ireland, could well reach it in the next three or four years.

Even so, it is the politics of Europe that differ most from those of the USA, and which seem to pose the greatest dangers to the economy. Those four decades of international co-operation meant the recent G-20 summit could not be seen publicly to fail. Under the resulting compromise, those countries that wish to are cleared to try to halve their budget deficits in just three years.

Germany is going to try, which means others, especially in the eurozone, will have to follow. The words "have to" must surely apply to Ireland, although not everyone seems to agree.

Irish mixture

That peculiar Irish mixture of pessimism and arrogance has been to the fore recently.

The pessimism holds that our problems are insoluble: the arrogance maintains we should do a solo debt default, even a devaluation -- an event which, if it happened, would probably break up the euro. In the real corridors of power, no such options are open to Irish governments.

The position of a country like Ireland in these circumstances is the one complained of by Cassius in "Julius Caesar" -- creeping under the huge legs of the great powers to find somewhere safe. If we had been more aware of that, we might be in less trouble. And now, the huge legs are on the move.

In a recent essay for the Bruegel thinktank, Wolfgang Proissl, a former Brussels correspondent for 'Financial Times Deutschland', argues persuasively that, despite the existence of the euro, under the pressures of the crisis, the old European monetary system is reasserting itself. Germany is the benchmark and, to survive in the system, other member states must follow the benchmark.

It is not that the Germans want it that way. But it has become clear that they cannot pay the political price of a true monetary union. Not only would there be transfers between states, but the union would have a softer currency, larger deficits and higher inflation than Germany alone can have -- and wants.

The French on the other hand, says Proissl, wanted the euro precisely as a way of not letting Berlin and Frankfurt set the parameters for everyone else.

The resulting messy euro compromise has not worked well in its first great test and may yet fail altogether. Or at least come close.

If these forces do look like pushing the eurozone into a second recession, or threatening the whole euro project, once unthinkable changes could yet come to pass.

Until the fog of this battle clears a bit, a country like Ireland is best advised to play by the rules -- whether Merkel's or the market's -- whatever we may think of them. What we think of them is irrelevant, and arguing about them at best pointless, and at worst dangerous.

Irish Independent

[Furunculus]

It is not that the Germans want it that way. But it has become clear that they cannot pay the political price of a true monetary union.

If these forces do look like pushing the eurozone into a second recession, or threatening the whole euro project, once unthinkable changes could yet come to pass.

good article, been saying for ages.

agreed, germany must decide whether the bundestag is sovereign.............. or not, and have their constiutional court rule accordingly.

[Furunculus]

interesting article on the need for EU reform:

http://www.economist.com/node/16536898

[Furunculus]

Entering a Death Spiral?
http://www.spiegel.de/international/europe/0,1518,712511,00.html

"The only thing that interests me anymore is my daily wage. A loaf of bread is my political party. I want to help my country -- give me work and I'll pay taxes! But our honor as first-class skilled workers, as heads of families, as Greeks, is being dragged through the dirt!"

"If you take away my family's bread, I'll take you down -- the government needs to know that," Meletis says. "And don't call us anarchists if that happens! We're heads of our families and we're desperate."

He predicts the situation will only become more heated. "Things are starting to simmer here," he says. "And at some point they're going to explode."

[rory_20_uk]

Slightly delusional, aren't they? Reminds me of the 1970's where workers appeared to think they had a god given right to do a certain type of work for a certain wage and that the government should somehow stop other countries producing cheaper and more reliable alternatives.

Emotive talk of bread. I imagine their trigger is vastly above that.

~:smoking:

[Furunculus]

the euro crisis still has a way to go yet!

[InsaneApache]

When the national sport is tax evasion, what do they expect?

[Fragony]

Slovakia says screw you, good for them. I don't mind working till I'm 67 but not because Greeks want to quit at 55. Pay your own socialism. Oh wait you can't.

[InsaneApache]

When the national sport is tax evasion, what do they expect?

Just so you know.....

http://www.vanityfair.com/business/features/2010/10/greeks-bearing-bonds-201010?printable=true

It's a long read but worth it if you want to see inside the Greek psyche.

[Furunculus]

lol, cheers.

[Vladimir]

I used to love Greek tragedy. Now the entire culture is.

Still...crafty monks.

I think my avatar could use their services.

[gaelic cowboy]

Anglo Irish Bank bailout could reach €34bn (http://www.rte.ie/news/2010/0930/anglo_banks.html)


The Governor of the Central Bank has said that even after today's banking system announcements, the total figure was still one that could be worked out without external help.

Patrick Honohan said the process would be painful but, while the bill was colossal, it was manageable.

His comments came after Minister for Finance Brian Lenihan confirmed the cost of sorting out Anglo Irish Bank would be €29bn, but could go to €34bn in a worst case scenario.

He indicated that the Government will have to bring in a harsher Budget in December than originally planned.

Brian Lenihan said that the proposed €3bn in cuts would have to be increased, and a significant consolidation in public finances achieved next year.

The Government is to publish a budgetary framework for the next four years at the start of November.

Speaking at Government Buildings, Mr Lenihan would not be drawn on what the additional cuts for next year would be, until the Government had analysed exchequer returns due next week.

The Government had committed €23bn to Anglo by the end of August.

The bank is to be split into an asset recovery bank and a funding bank.

The Financial Regulator said the asset recovery bank would need €29bn, while the funding bank would require €250m.

Its estimate was based on advice from the National Asset Management Agency on how much it will pay Anglo Irish Bank for the loans it is taking on.

The bank has taken discounts of 58% so far, but the Regulator's assessment estimates a discount of 67% on the remaining loans.

But the Regulator carried out an additional assessment based on an 'extreme' scenario, which included a discount of 70% on the rest of the NAMA loans. This led to the additional €5bn 'extreme' estimate.

A special Cabinet meeting last night signed off on the figures. The early morning announcement was timed to secure a head start on markets that have been nervous about the scale of the State's exposure to Ireland's banks.

In a statement, Finance Minister Mr Lenihan said that while the overall level of State support to the banks remains 'manageable', there will have to be further 'consolidation' of the public finances next year, over and above the targets already announced.

He also said greater certainty on the final cost of repairing the banking system would provide reassurance to the international markets.

He added that the National Treasury Management Agency had decided not to proceed with the remaining auctions of Government bonds scheduled for the next two months, but would return to the bond market in 2011.

A statement from eurozone finance ministers meeting in Brussels described today's banks statement as an 'important and helpful clarification of the situation'.

Irish borrowing costs fell slightly on bond markets after the announcements on the banks.

The interest rate demanded by investors to lend money to Ireland for ten years was at 6.81%, down from 6.9% earlier.

The gap between Irish and German costs was steady compared with yesterday.

AIB to get €3bn, Nationwide to get €2.7bn

AIB and Irish Nationwide will also require more money from the State.

The development will push Ireland's deficit to 32% for this year, according to the Minister for Finance.

AIB will need a further €3bn on top of existing State funds being converted into shares.

That is likely to push the Government's shareholding to a majority stake potentially over 90%, but the bank will retain a stock market listing.

Shares in AIB dropped by almost 20% to 45 cent in early trading in Dublin.

Irish Nationwide will need a further €2.7bn, bringing its total bailout to €5.4bn.

Minister Lenihan has confirmed that AIB Chairman Dan O'Connor will step down within the coming weeks.

AIB's Managing Director, Colm Doherty, will also leave the bank before the end of the year.

Asked whether the pair had chosen to stand down or had been asked to leave the institution, Mr Lenihan said discussions had been conducted with AIB on his behalf by the NTMA and agreement was reached.

He said there has to be change because the existing board has been unable to attract sufficient capital.

The Minister said that in conjunction with the recapitalisation of the bank, he expects there will be progressive management and board changes at AIB.

The Government has accelerated the process of transferring loans to NAMA to get final figures to repair Ireland's banking system.

Anglo Irish Bank's remaining loans will be transferred by the end of October, while loans from all of the other banks will now be transferred in one single batch each by the end of the year.

Market analysts have welcomed the figures. Analysts said they provide much-needed clarity on the anticipated final cost of the Irish bank restructuring, which could come to €46bn in total.

In a statement this morning, Central Bank Governor Patrick Honohan said the higher costs will mean a bigger deficit for Ireland.

He said that would require a reprogramming of budgetary profile.

He added that it was important to recognise most of the funding would come from other sources.

Labour Party Finance Spokesperson Joan Burton has said today would go down as a day of infamy in Irish history and would become known as Brian Lenihan's Black Thursday.

[gaelic cowboy]

Budget will be harsher than planned - Lenihan (http://www.rte.ie/news/2010/0930/budget.html)


Minister for Finance Brian Lenihan has warned that December's Budget will be harsher than originally planned.

The Government is to publish a budgetary framework for the next four years at the start of November.

Mr Lenihan said he did not anticipate that hospitals or schools would have to close as part of the fiscal adjustments.

He said some of the Irish banks had deliberately concealed massive losses even before the emergence of the banking crisis.

The Minister said the State now had to downsize Anglo Irish Bank and Irish Nationwide to stop them becoming a systemic threat to the State itself.

The Central Bank announced this morning that the bill to bailout Anglo Irish Bank is expected to be €29.3bn, although under a worst case scenario, the figure could be €34bn.

The Central Bank said AIB and Irish Nationwide will also require more funding from the State.

Earlier, Taoiseach Brian Cowen said that the Government remains on target to reduce the Budget deficit to 3% by 2014.

Critics have called for that deadline to be extended, arguing that the measures required to meet the deadline would be too brutal and trigger a slump.

However, addressing the IBEC HR Conference, Mr Cowen warned that there were no soft options solutions for economic recovery.

He acknowledged that people were rightly angry about the cost of bailing out the banks and described those costs as an appalling reflection on the lending policies pursued by the banks.

The Taoiseach described the period between now and the end of the year as crucial for Ireland.

He echoed Finance Minister Brian Lenihan's comments that a four-year budgetary plan is being prepared and will be published in early November, adding that this would build confidence at home and abroad in our fiscal policy and capacity to meet targets

[Furunculus]

hmmm, still not looking good in the eurozone..........

[gaelic cowboy]

^^
Then ye better hope we do not go under because who else but Britain would be hit Irish insolvency

[InsaneApache]

Like diarrhea on a tiled floor it just keeps on speading outwards.

[gaelic cowboy]

To be fair though it's not like this was not unexpected for Ireland.

Everyone will grumble but disruption like Greece is not really gonna happen.