Euro Area

[lars573]

You are mistaken as to the nature of the Holy Roman Empire: http://en.wikipedia.org/wiki/Holy_Roman_Empire

As I said, the Emperor's authority derives from the Pope - the later arrangement with the "Electors" was Papally endorsed, tacitely at least, because all temporal monarchs derive their authority ultamately from God.

The Holy Roman Emperor also had 2 ancillary titles. King of Germany and King of the Romans. After Charlemagne the title of HRE and king of the Romans was passed around by his grand-sons descendants. It end up with the elected king of the Germans also being HRE. With a stipulation that it was only official if you crowned by the Pope in Rome. Electors were the original dukes of the German tribal duchies. After the 15th century no HRE really bothered going to Rome for a coronation. But the late dark age idea that the Pope had the authority to make Emperors is why Napoleon had the Pope crown him Emperor.

[Philippus Flavius Homovallumus]

To be clear, I'm making a distinction between being the ruler of those German states and having the title of Emperor. Only the electors could name a King of Rome; wether the Pope actually went through and named him emperor didn't impact his power in any factual sense- in many cases the rulers of the HRE didnd't bother or just didn't get around to travel to Rome for actual coronation. They were still the rulers of the Empire, in fact if not on paper.

That's fine - but to clarify the point, being "Holy Roman Emperor" doesn't have to apply to a German Emperor, which explains Napoleon's use of the Aqulia etc.

[HopAlongBunny]

How much of a stink is the LIBOR scandal causing in the EU? Not much about it here, I guess we just need to wait for JPM or BoA to get hit with the investigation.

Not in the EU myself, but it looks like Barclays will take the fall. I get the impression that no one wants to open the Pandora's Box; whack the one with the poor taste to raise the issue and hope it goes away.

[Kralizec]

That's fine - but to clarify the point, being "Holy Roman Emperor" doesn't have to apply to a German Emperor, which explains Napoleon's use of the Aqulia etc.

I'm still not sure what your point is. The Germans assumed the imperial mantle after they absorbed the middle kingdom and the city of Aachen; which was Charlemagne's favoured residence, and the Pope induldged them in their pretentions.

The actual title is meaningless beyond its empty symbology. It's supposed to stress preemincence over the other monarchs of Europe, but even their power over the petty German princes waxed with the ages. The Papal recognition of their "imperial" crown was essentially a useless gesture but it gave the impression that the Pope actually did have authority over worldy rulers. Napoleon dispensed with this obvious nonsense and essentially crowned himself; the fact that the Pope was present was insult to injury.

Why Juan Carlos would have any claim to the title, a useless one anywa, is unclear to me. He did not descend from the Emperors and even if he did that would not be enough.

[Philippus Flavius Homovallumus]

Why Juan Carlos would have any claim to the title, a useless one anywa, is unclear to me. He did not descend from the Emperors and even if he did that would not be enough.

He would not need to "descend" from anyone, although it became a de facto Hapsburg title it was never a de jure one.

He would get it by defeault - he's the only Roman Catholic King left!

[Kralizec]

He would not need to "descend" from anyone, although it became a de facto Hapsburg title it was never a de jure one.

He would get it by defeault - he's the only Roman Catholic King left!

Is my usage of the word "descend" incorrect?

Belgium.

Also, Luxembourg. That's just a grand duchy, though. And if the Pope can name any king an emperor, no matter how much power he actually has, surely he could name a beggar as well.

[Philippus Flavius Homovallumus]

Is my use of the word "descend" incorrect?

Belgium.

Also, Luxembourg. That's just a grand duchy, though. And if the Pope can name any king an emperor, no matter how much power he actually has, surely he could name a beggar as well.

The first crowned Western Emperor was, irrc Clovis - nobody is "descended" from him. The point, it's not blood which is the key issue.

Is Luxemborg Roman Catholic, I did not know that.

[Kralizec]

I'm pretty sure that Charlemagne was the first one to be crowned after 476 AD.

Yes.

[Kralizec]

The Holy Roman Emperor also had 2 ancillary titles. King of Germany and King of the Romans. After Charlemagne the title of HRE and king of the Romans was passed around by his grand-sons descendants. It end up with the elected king of the Germans also being HRE. With a stipulation that it was only official if you crowned by the Pope in Rome. Electors were the original dukes of the German tribal duchies. After the 15th century no HRE really bothered going to Rome for a coronation. But the late dark age idea that the Pope had the authority to make Emperors is why Napoleon had the Pope crown him Emperor.

That's mostly correct, except that the term "Holy Roman Empire/Emperor" was only used from Otto I and onwards. IIRC, being king of Germany (that is, the eastern portion of the divided Carolingian realm) was originally hereditary, but that male-line branch of Charlemagne's descendants died out at some point. Strictly speaking all the lands should then have passed to the Carolingian heir in west-Francia (i.e. France), but the German dukes decided to elect a new monarch instead. Since then, the king/emperor of Germany was elected.

[HopAlongBunny]

Apparently I was wrong about the LIBOR scandal winding down to oblivion.

Canadian banks are under investigation as well as ones in USA. The article (http://www.cbc.ca/news/business/stor...nk-probed.html) mentions Canadian branches of involved banks, as well as an investigation by the US. If any findings see the light of day, it could get very ugly indeed.

[drone]

Excellent, this need to get the full light-of-day treatment. It's high time the heads of bank execs started rolling, and the uproar might prevent the regulatory rollbacks the industry is currently bribing our congresscritters for.

[Strike For The South]

In 100 years, this will be the new gilded age, only with bankers taking the role that heavy industry played.

Any takers?

sigh. I would be a revolutionary, if there were any money in it.

[HopAlongBunny]

In 100 years, this will be the new gilded age, only with bankers taking the role that heavy industry played.

Any takers?

sigh. I would be a revolutionary, if there were any money in it.

I'll bite.

Unlike Twains' Gilded Age where cheap money saw enormous expansion of industry, agriculture and infrastructure (raising all boats), this gilded age is all about cheap money chasing paper returns essentially resulting in asset inflation. The beauty of Twains' take on things is it is just as relevant today as when published. The actors change but the mechanism of gov't/industry and "wealth creation" is much the same.

[Jolt]

I'm sorry, but what has the Western Roman Emperors, Clovis, Charlemagne and the Pope got to do with this thread again?

[Kagemusha]

People are passing time, waiting for the default.

[Philippus Flavius Homovallumus]

Treaty of Rome.

The EU is a Papist plot to spread peace and joy across the continent.

[gaelic cowboy]

People are passing time, waiting for the default.

Actually it happened already back in March

[Tellos Athenaios]

Ehrm I was promised a full scale Euro zone default and all I got was this lousy ... ?

[Fragony]

Ehrm I was promised a full scale Euro zone default and all I got was this lousy delay?

Fixed

[gaelic cowboy]

Ehrm I was promised a full scale Euro zone default and all I got was this lousy ... ?

Then people have been missunderstanding what default means in this case.

Default does not have to mean expulsion of a member or the end of the EURO.

However by denying such simple solutions the Very Important People who deal with Very Serious Matters actually nearly broke the EURO and it's not entirely certain they understand that.

[Tellos Athenaios]

No I understand perfectly well what a default is. But Greece on its own does not a default of the Euro zone make, yet.

[Sarmatian]

Actually it happened already back in March

That's not a default, that's debt restructuring.

[Vladimir]

Bankruptcy?

[gaelic cowboy]

That's not a default, that's debt restructuring.

Did they get paid the money they were supposed to?


Unlike some of the people posting here I dont believe a default is the end of the EURO in fact it's the lack of default the makes the end of the EURO more likely.

Eventually the ECB will burn people holding Eurozone paper and basically nothing will happen in fact I bet after a few weeks the markets forget about it and start rallying.

[Kralizec]

1) some other countries got into trouble when they started bailing out their banks. Are you saying they should have just let the banks gone bust? Or that they should have bailed them out and then defaulted on those debts? Because the latter would have ruined not just the governments credibility but also that of its respective financial sector
2) if a country defaults, it screws over a string of banks, pension funds and governments in other EU countries. I can see how this would be beneficial to the defaulting country in the short run, but why should the rest stand for this behaviour?
3) just speculation: let's say a country has about 100% GDP sovereign debt, and it defaults on half of it. If that causes the interest rates at which they can refinance their remaining debt to double or tripple, how is that country any better off? If a country defaults on all of its debt, can it manage to run a positive budget for the next couple of decades? Because a lot of people will be pissed, and simply not lend at all.

[gaelic cowboy]

1) some other countries got into trouble when they started bailing out their banks. Are you saying they should have just let the banks gone bust? Or that they should have bailed them out and then defaulted on those debts? Because the latter would have ruined not just the governments credibility but also that of its respective financial sector
2) if a country defaults, it screws over a string of banks, pension funds and governments in other EU countries. I can see how this would be beneficial to the defaulting country in the short run, but why should the rest stand for this behaviour?
3) just speculation: let's say a country has about 100% GDP sovereign debt, and it defaults on half of it. If that causes the interest rates at which they can refinance their remaining debt to double or tripple, how is that country any better off? If a country defaults on all of its debt, can it manage to run a positive budget for the next couple of decades? Because a lot of people will be pissed, and simply not lend at all.

Q1 Bailing banks has been forced on people because everyones respective central bank has been against any form of restrucure or default from the start. This policy was based on much of the thinking you yourself profess about market sentiment turning bad due to investor losses blah balh and frankly it's a lod of cobblesrs and neither is it working and in fact is getting worse. We have seen where this policy has led us and to continue it now for Spain and Italy will be suicide both for the Euro the EU and the world economy.

Q2 So what your saying is that you prefer to reward bad investment strategies by private corporations and individuals by taking money from taxpayers etc etc. Therefore you want to increase the debt burden on the sovereign by making it liable for bank losses which increases the amount need to be borrowed for bailouts and as a result deflates said economy which increase the debt burden. This cycle needs to be broken or it will break us all.

Q3 Because there is less burden on the sovereign to borrow to refinance existing loans and because much of the reticence in the bondmarket is due to the need to refinance and the fear of restructuring. The markets have no memory they only care about returns and they will lend if they feel there is one available.

I'm confident if Ireland gets to cancel much of it's bank debt then it's bond rates will actually go down and facilitate a return to market funding in 2013 as envisaged all along by the Troika. Every paper released by every investment bank/hedge fund/financial blah blah says the same thing Ireland must restructure it's bank debt ie to effectively not pay it back. The continual burden on taxpayers of Ireland to pay back the bailout money merely increase the cost of the debt making it harder to exit the programme.

I believe Portugal could get a simmilar bounce depending on the situation in Spain but unfortunately it appears Spain is as we speak paying more for it bonds. If Spain is paying more it probably means that the proposed spanish bank deal is nothing of the sort and is actually a bailout of the sovereign.

[Fragony]

I am probably stupid for asking, especially because I'm asking it, but what exactly is a 'default'. It was never explained to me in a way I can understand

[rory_20_uk]

At its most simplest the monies owed are not paid.

[a completely inoffensive name]

Just popping in here to ask real quickly, are we still boned?

[Kralizec]

Q1 Bailing banks has been forced on people because everyones respective central bank has been against any form of restrucure or default from the start. This policy was based on much of the thinking you yourself profess about market sentiment turning bad due to investor losses blah balh and frankly it's a lod of cobblesrs and neither is it working and in fact is getting worse. We have seen where this policy has led us and to continue it now for Spain and Italy will be suicide both for the Euro the EU and the world economy.

Q2 So what your saying is that you prefer to reward bad investment strategies by private corporations and individuals by taking money from taxpayers etc etc. Therefore you want to increase the debt burden on the sovereign by making it liable for bank losses which increases the amount need to be borrowed for bailouts and as a result deflates said economy which increase the debt burden. This cycle needs to be broken or it will break us all.

Unilaterally erasing your banks' debt is quite illegal per EU law. As the effects of that, or a default on sovereign debt for that matter, will dramatically affect financial institutions and pension funds in other countries it's not surprising that those other countries won't look kindly on such a move.

Bad investment strategies? Maybe. "We're defaulting on our debt. Don't like it? Then you shouldn't have invested in us in the first place. What were you thinking, lolz."

It's not just an abstract matter of "reduced confidence" but also a direct matter of reduced money supply when (other) banks have to write off a huge amount of assets. You could make the case that there should be a EU wide restructuring of debt, but that will disproportionately reward those countries who either made a mess out of it themselves or countries who enjoyed the benefits of large financial sectors for many years.

Q3 Because there is less burden on the sovereign to borrow to refinance existing loans and because much of the reticence in the bondmarket is due to the need to refinance and the fear of restructuring. The markets have no memory they only care about returns and they will lend if they feel there is one available.

Fair enough. A sovereign default is not necessarily an armageddon, and restructuring/defaulting will actually make it easier to repay the remainder of the debt. But if a country defaults at a time when there's still actually hope that it could repay debt it sets a poor precedent.