Financial Crisis

[Naam]

Good article on Euro problems

http://www.spiegel.de/international/busine...,676507,00.html

The Uk should be able to see what is coming - Then the US

Men like Wilhelm Nölling, former member of the German Central Bank Council, and Wilhelm Hankel, an economics professor critical of the euro, have been out of the spotlight for years.Now both men are in demand again, and the old euro critics' beliefs are more relevant than ever.

Wilhelm Hankel was C.E.O. of Hessische Landesbank (a huge statebank of the german federal state Hessen) and nearly ran it into the ground with billions of losses nearly four decades ago. his title "economics professor" was an honorary one, he never lectured and was fired in 1973 after 2½ years. now he is age 81 and "in demand again".

Edited February 11, 2010 by Naam

[teletiger]

He's back.

"Last week’s winner of the Mogambo Most Stupid Quote Of The Week (MMSQOTW) goes to that arch-idiot, Barack Obama."

Not a bad entrance.

http://www.lewrockwell.com/daughty/mogambo29.1.html

http://www.lewrockwell.com/daughty/mogambo30.1.html

Regards.

[churchill]

Good article on Euro problems

http://www.spiegel.de/international/busine...,676507,00.html

The Uk should be able to see what is coming - Then the US

Men like Wilhelm Nölling, former member of the German Central Bank Council, and Wilhelm Hankel, an economics professor critical of the euro, have been out of the spotlight for years.Now both men are in demand again, and the old euro critics' beliefs are more relevant than ever.

Wilhelm Hankel was C.E.O. of Hessische Landesbank (a huge statebank of the german federal state Hessen) and nearly ran it into the ground with billions of losses nearly four decades ago. his title "economics professor" was an honorary one, he never lectured and was fired in 1973 after 2½ years. now he is age 81 and "in demand again".

Well this is half the problem - The European Union is a political Union , run for the benefit of politicians and beaurocrats - As seen today they are asking the IMF for advice - They have no idea .

They will continue to defend the Euro until the end ( Merkel and Germany are probably the only hope - if they stand and refuse to bail out ) - Perhaps Germany/France should exit the Euro and creat a duel currency ?

Niel Kinnock , ex UK PM , who could bore the pants off anyone when asked a question was given a hugh salary and guaranteed pension - along with his wife and daughter , I think - They don't care about the general population they only care about there own pockets -

Why are they spewing out never ending rules and regulations - because if they don't they will have nothing to do and lose their jobs .

Why is the parliment moved every 6 months at hugh cost - Politics

Luckily the UK stayed out of the Euro but the contagion will now probably make it worse for Sterling and the UK especially as they are coming up to a hung parliment .

Perhaps though better to happen now than to be delayed that will make problems even worse .

The whole thing is a joke and cannot survive in its present form -

[flying]

A more severe crisis is already "Baked in the Cake"

I think anyone with eyes, ears & a memory already knew this.

please put up and define "severe crisis"

As always my comments are based on the reality being seen/felt in the US

Of course your mileage may vary in Pattaya

[12DrinkMore]

make it worse for Sterling and the UK especially as they are coming up to a hung parliment .

Please can I pull the lever?

And can we hang the fuc_king bankers too?

I would love to see those guys dangle.

[Naam]

The European Union is a political Union , run for the benefit of politicians and beaurocrats - As seen today they are asking the IMF for advice - They have no idea .

i [not so] humbly beg to disagree strongly. there is no way that the IMF can be involved with a EU-country which has the €UR as currency because it would affect the integrity and decisions of the European Central Bank.

[churchill]

The European Union is a political Union , run for the benefit of politicians and beaurocrats - As seen today they are asking the IMF for advice - They have no idea .

i [not so] humbly beg to disagree strongly. there is no way that the IMF can be involved with a EU-country which has the €UR as currency because it would affect the integrity and decisions of the European Central Bank.

Who knows at this stage ? Who knows who is in charge and able to make decisions in Europe - Is it Trichet , Barroso , The new preseident whose name I do not know , The Spanish President whose turn it is to be in charge for 6 months , Merkel , Sarkosy , perhaps the head of the German Central Bank or European Central Bank ?

Greece faces devaluation, default or deflation. Next stop the IMF

http://www.guardian.co.uk/commentisfree/20...ebt-crisis-euro

[Naam]

"Greece faces devaluation, default or deflation. Next stop the IMF"

hmm... some people believe what journàsslists write, others believe in blogspot lecturing and then there are those who base their conclusions on their own homework. to each his own

[flying]

China orders retreat from risky assets

China has ordered managers of its vast currency reserves to withdraw from risky dollar assets and retreat to core debt guaranteed by the US government, a clear sign that Beijing is battening down the hatches for fresh trouble on global markets.

Full article at link above

[churchill]

Yes , I posted this yesterday on another thread and was wondering how this could be good for the Us$ - BUT from the article

"Mr Redeker said this will have the paradoxical result of boosting the dollar. Flight from risk can lead to an automatic rise as hedge funds, banks, and investors across the world cut back leverage on dollar balance sheets.

David Bloom, head of currencies at HSBC, said the explosive dollar rally over the last six weeks has been the reversal of the dollar carry trade. "It has been short, sharp, and vicious. People borrowed in US dollars to invest in places like Brazil, Turkey, and New Zealand and now it is unwinding."

"We don't think the dollar rally is going to last much beyond the first quarter because we're in a new world of rotating sovereign crises where politics matters again. It's Greece right now but it could be the UK next, and then US which has yet to take any steps at all to tackle it fiscal deficit," he said. "

[flying]

Yes , I posted this yesterday on another thread and was wondering how this could be good for the Us$ - BUT from the article

"Mr Redeker said this will have the paradoxical result of boosting the dollar. Flight from risk can lead to an automatic rise as hedge funds, banks, and investors across the world cut back leverage on dollar balance sheets.

David Bloom, head of currencies at HSBC, said the explosive dollar rally over the last six weeks has been the reversal of the dollar carry trade. "It has been short, sharp, and vicious. People borrowed in US dollars to invest in places like Brazil, Turkey, and New Zealand and now it is unwinding."

"We don't think the dollar rally is going to last much beyond the first quarter because we're in a new world of rotating sovereign crises where politics matters again. It's Greece right now but it could be the UK next, and then US which has yet to take any steps at all to tackle it fiscal deficit," he said. "

Thanks & sorry I thought it looked familiar

It will be interesting to see if it has the effect you mentioned

Thanks

[12DrinkMore]

The Greek problem

http://www.spiegel.de/international/busine...76507-2,00.html

Deficits, lies, spending and more spending, debt, bail outs; I am fed up with hearing these words. Is there nobody apart from the Germans who even attempt to match income and expenditure? Why has it become the accepted norm that governments always spend a couple of percent more than they can tax off the peeps? Why has it proved to be impossible for them to have a program to say reduce deficits by say a tiny 0.25% per year until income exceeds expenditure in a decade?

It has been well known for years that the PIGS have been pigging out on borrowed/non existent money. Why were they lent any money at all? I suppose once again the foreign banks assumed that in the end they would be bailed out and again the tax payers will take the hit.

QE finished for the UK???

http://www.telegraph.co.uk/finance/economi...sts-for-UK.html

Not by a long way, I expect. Why can't the press report things accurately? "Asset purchases" my arse, it is "printing money to pay off government overspending and putting massive bonuses into bankers' pockets".

"massive stimulus packages used to rescue the global economy" absolute bullshit, again it is "putting massive bonuses into bankers' pockets".

The latest figures from the economy paint a mixed picture. Retail sales has their worst month in 15 years in January, while figures today showed that manufacturing grew quicker than expected in December.

The worst for FIFTEEN years! Blimey, that is a huge step backwards. So is the great UK debtor/consumer finally reigning in spending on credit? Is the debt deflationary period about to settle in for a decade? I hope so, it is the only long term solution, all the other attempts to fix tis fundamental issue of too much debt and trying to stimulate even more debt, just a short term band aid before the abscess gets too big.

And on the subject of the great UK housing market; that source of perpetual wealth and prosperity

http://www.housing.org.uk/default.aspx?tab...;ArticleID=2747

Given the scale of the country’s housing crisis, the Federation has called on the three major political parties to go into the forthcoming general election with a pledge to ring-fence spending on housing – in the same way that ministers have pledged to protect investment in health, education and policing.

The Federation says that unless spending on housing is ring-fenced, the consequences will be dire for millions of families stuck on housing waiting lists.

So the Federation is basically asking the government to bailout/underpin the housing market by constructing cheap houses? I have a much better option, let the house prices sink down to the historic affordable average, around 50% of the current level.

Edited February 12, 2010 by 12DrinkMore

[sokal]

"Greece faces devaluation, default or deflation. Next stop the IMF"

hmm... some people believe what journàsslists write, others believe in blogspot lecturing and then there are those who base their conclusions on their own homework. to each his own

devaluation is inflation. People are idiots, look at Iceland. Its economy and banking system collapsed and it has INFLATION.

[Naam]

"Greece faces devaluation, default or deflation. Next stop the IMF"

hmm... some people believe what journàsslists write, others believe in blogspot lecturing and then there are those who base their conclusions on their own homework. to each his own

devaluation is inflation. People are idiots, look at Iceland. Its economy and banking system collapsed and it has INFLATION.

"Greece faces devaluation" is utter rubbish as its currency is the €UR which cannot be devalued unilaterally. only a journàsslist who has no idea (but a wealth of that "no idea") could write this BS. perhaps this clown thinks that Greece still has the Drachma?

[Naam]

question for Churchill:

you proved that you are not a newbie investor. then how can you take somebody serious who writes "Greece faces devaluation..."?

[Naam]

question for Churchill:

you proved that you are not a newbie investor. then how can you take somebody serious who writes "Greece faces devaluation..."?

or are you a newbie?

[Naam]

"Greece faces devaluation, default or deflation. Next stop the IMF"

hmm... some people believe what journàsslists write, others believe in blogspot lecturing and then there are those who base their conclusions on their own homework. to each his own

devaluation is inflation. People are idiots, look at Iceland. Its economy and banking system collapsed and it has INFLATION.

so the Icelanders are idiots? did 300,000 Icelanders go abroad and piled up billions of debt or was this caused by their bankers? were the country's top bankers idiots who cheated, filled their pockets with high salaries, fat bonuses and now smile because their millions are stashed safely somewhere offshore?

by the way, first the banking system collapsed and then the currency was devalued. not the other way round.

[churchill]

question for Churchill:

you proved that you are not a newbie investor. then how can you take somebody serious who writes "Greece faces devaluation..."?

Did you read the article ?

[churchill]

The European Union is a political Union , run for the benefit of politicians and beaurocrats - As seen today they are asking the IMF for advice - They have no idea .

i [not so] humbly beg to disagree strongly. there is no way that the IMF can be involved with a EU-country which has the €UR as currency because it would affect the integrity and decisions of the European Central Bank.

"The International Monetary Fund on Friday joined the European Union in pledging support for Greece in its struggle to bring its ballooning budget deficit under control and contain its debt crisis.

The IMF's declaration follows an EU summit, which sent Athens a "clear message of solidarity," but produced no specific rescue plan, disappointing markets and sending both the euro and Greek government bonds lower.

"We stand willing and able to support Greece in ways that the Greek authorities think is appropriate," IMF First Deputy Managing Director John Lipsky told reporters on the sidelines of an international central banking conference.

An EU source told Reuters earlier the bloc looked to draw on IMF expertise on designing financial rescues, but not the Fund's money."

http://www.cnbc.com/id/35362397/

Edited February 12, 2010 by churchill

[12DrinkMore]

"Greece faces devaluation" is utter rubbish as its currency is the €UR which cannot be devalued unilaterally. only a journàsslist who has no idea (but a wealth of that "no idea") could write this BS. perhaps this clown thinks that Greece still has the Drachma?

Although the article didn't say very much, more a mundane space filler, he was quite clear on the options as he saw them.

Default runs the risk that Greece would not be able to get access to the global credit markets, although this fear proved to be exaggerated for Russia in 1998 and Argentina in 2001. Devaluation is incompatible with Greece's membership of the single currency. That leaves deflation, grinding out improvements in competitiveness by cutting wages and keeping the lid on costs.

[Naam]

Although the article didn't say very much, more a mundane space filler, he was quite clear on the options as he saw them.

Default runs the risk that Greece would not be able to get access to the global credit markets, although this fear proved to be exaggerated for Russia in 1998 and Argentina in 2001. Devaluation is incompatible with Greece's membership of the single currency. That leaves deflation, grinding out improvements in competitiveness by cutting wages and keeping the lid on costs.

then why the rainbow press sensationalist headline?

[Naam]

The European Union is a political Union , run for the benefit of politicians and beaurocrats - As seen today they are asking the IMF for advice - They have no idea .

i [not so] humbly beg to disagree strongly. there is no way that the IMF can be involved with a EU-country which has the €UR as currency because it would affect the integrity and decisions of the European Central Bank.

"The International Monetary Fund on Friday joined the European Union in pledging support for Greece in its struggle to bring its ballooning budget deficit under control and contain its debt crisis.

The IMF's declaration follows an EU summit, which sent Athens a "clear message of solidarity," but produced no specific rescue plan, disappointing markets and sending both the euro and Greek government bonds lower.

"We stand willing and able to support Greece in ways that the Greek authorities think is appropriate," IMF First Deputy Managing Director John Lipsky told reporters on the sidelines of an international central banking conference.

An EU source told Reuters earlier the bloc looked to draw on IMF expertise on designing financial rescues, but not the Fund's money."

http://www.cnbc.com/id/35362397/

that does not mean anything. Lipsky can talk freely because he is well aware that the IMF will never be called by the greek cheaters who fear nothing more than IMF people sitting in their central bank and other offices, looking over their shoulders and telling them "not like this!". any IMF assistance has stringent conditions. most of them, if not all, can and will not be accepted by the ECB. period!

[Naam]

question for Churchill:

you proved that you are not a newbie investor. then how can you take somebody serious who writes "Greece faces devaluation..."?

Did you read the article ?

each and every day i am reading research for hours but i refuse to waste my time reading any article where already the headline displays either ignorance or is deliberately misleading. if this is the case it does not matter to me whether the author back-paddles in his article or not.

[churchill]

The European Union is a political Union , run for the benefit of politicians and beaurocrats - As seen today they are asking the IMF for advice - They have no idea .

i [not so] humbly beg to disagree strongly. there is no way that the IMF can be involved with a EU-country which has the €UR as currency because it would affect the integrity and decisions of the European Central Bank.

"The International Monetary Fund on Friday joined the European Union in pledging support for Greece in its struggle to bring its ballooning budget deficit under control and contain its debt crisis.

The IMF's declaration follows an EU summit, which sent Athens a "clear message of solidarity," but produced no specific rescue plan, disappointing markets and sending both the euro and Greek government bonds lower.

"We stand willing and able to support Greece in ways that the Greek authorities think is appropriate," IMF First Deputy Managing Director John Lipsky told reporters on the sidelines of an international central banking conference.

An EU source told Reuters earlier the bloc looked to draw on IMF expertise on designing financial rescues, but not the Fund's money."

http://www.cnbc.com/id/35362397/

that does not mean anything. Lipsky can talk freely because he is well aware that the IMF will never be called by the greek cheaters who fear nothing more than IMF people sitting in their central bank and other offices, looking over their shoulders and telling them "not like this!". any IMF assistance has stringent conditions. most of them, if not all, can and will not be accepted by the ECB. period!

So Greece the EU will not accept IMF stringent conditions to solve this problem - So they, the euro club , all go on talking and coming out with supportive statements / Greece tries and fails to raise taxes , Unions refuse to accept pay cuts , pension cuts - What next ?

There will be a political fudge and attempt to hoodwink the markets - This surely will not work - So a sinking Euro and increased risk in Greece , Portugal , Italy , spain - We can see it coming

Can you see a solution through the politics ? Merkel for sure , I think , will not commit any German Tax money to bailing out other poorly run economies ?

Let us hear some of your research !

Edited February 12, 2010 by churchill

[churchill]

"The German GDP for Q4 is much weaker than expected, showing a flat q/q reading against the consensus for 0.2% q/q growth. This risks the overall eurozone growth coming in much weaker than expected. Indeed, it was expected that the growth readings at the periphery of Europe would be weak, but the countries at the core of Europe were expected to put in a far more robust performance. However, the initial readings from Germany suggest that weakness in the Eurozone is far broader than initially anticipated. This will add to the euro’s problems."

http://ftalphaville.ft.com/blog/2010/02/12...xport-decision/

[Naam]

So Greece the EU will not accept IMF stringent conditions to solve this problem - So they, the euro club , all go on talking and coming out with supportive statements / Greece tries and fails to raise taxes , Unions refuse to accept pay cuts , pension cuts - What next ?

There will be a political fudge and attempt to hoodwink the markets - This surely will not work - So a sinking Euro and increased risk in Greece , Portugal , Italy , spain - We can see it coming

Can you see a solution through the politics ? Merkel for sure , I think , will not commit any German Tax money to bailing out other poorly run economies ?

Let us hear some of your research !

i am not quoting any research or journàsslists but my personal opinion and conclusion -based on my own research- is:

they can't come out with something tangible except supportive statements in such a short time. after all the EU is in uncharted territory. besides, Greece, its politicians and its population have to simmer a while in hot water till they are done and accept their austerity fate for quite some years to come. it is incredible what is going on this country for decades! the same applies to Italy and to a (much) lesser extent Spain.

yes! the EUR might get weaker. but the german industry which exports to non-€ countries is smiling. if it was up to these exporters EUR/USD would be at par.

Merkel has no other choice than committing german taxpayers' money and that goes for the others (especially France) too. of course the bloody politicians will not admit it but keep on bullshitting the taxpayers as they have always done. besides committing actual cash a part of the assistance can be pledges which do not cost anything. look back to 2009 and realise that not even half of the alleged wasted trillions was help by injecting real money. then consider what percentage of real has been paid back already and will be paid back within a rather short period.

my expectation is that none of the PIIGS will go into default. if -besides Greece- either Spain or Italy would default on its debt then Lehman2008™ was a breeze what we can expect globally.

to all Thaivisa Doom&Gloomers: thanks for not listening and try to keep your underpants clean!

[churchill]

So Greece the EU will not accept IMF stringent conditions to solve this problem - So they, the euro club , all go on talking and coming out with supportive statements / Greece tries and fails to raise taxes , Unions refuse to accept pay cuts , pension cuts - What next ?

There will be a political fudge and attempt to hoodwink the markets - This surely will not work - So a sinking Euro and increased risk in Greece , Portugal , Italy , spain - We can see it coming

Can you see a solution through the politics ? Merkel for sure , I think , will not commit any German Tax money to bailing out other poorly run economies ?

Let us hear some of your research !

i am not quoting any research or journàsslists but my personal opinion and conclusion -based on my own research- is:

they can't come out with something tangible except supportive statements in such a short time. after all the EU is in uncharted territory. besides, Greece, its politicians and its population have to simmer a while in hot water till they are done and accept their austerity fate for quite some years to come. it is incredible what is going on this country for decades! the same applies to Italy and to a (much) lesser extent Spain.

yes! the EUR might get weaker. but the german industry which exports to non-€ countries is smiling. if it was up to these exporters EUR/USD would be at par.

Merkel has no other choice than committing german taxpayers' money and that goes for the others (especially France) too. of course the bloody politicians will not admit it but keep on bullshitting the taxpayers as they have always done. besides committing actual cash a part of the assistance can be pledges which do not cost anything. look back to 2009 and realise that not even half of the alleged wasted trillions was help by injecting real money. then consider what percentage of real has been paid back already and will be paid back within a rather short period.

my expectation is that none of the PIIGS will go into default. if -besides Greece- either Spain or Italy would default on its debt then Lehman2008™ was a breeze what we can expect globally.

to all Thaivisa Doom&Gloomers: thanks for not listening and try to keep your underpants clean!

Yes I basically agree /

I have not read this but perhaps as part of your research ! Source: Mckinsey Institute. http://www.mckinsey.com/mgi/publications/d...aging/index.asp

Edited February 12, 2010 by churchill

[Naam]

File Not Found

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Please make sure you have entered the URL correctly. In a few seconds, you will be redirected to our main page.

i like McKinsey Churchill. please try again.

[churchill]

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i like McKinsey Churchill. please try again.

Worked for me - try again .> http://www.mckinsey.com/mgi/publications/d...aging/index.asp

[churchill]

Euro Area Headed for Break-Up, SocGen’s Edwards

"Southern European countries are trapped in an overvalued currency and suffocated by low competitiveness, a situation that will lead to the break-up of the euro bloc, according to Societe Generale SA’s top-ranked strategist Albert Edwards.

The problem for countries including Portugal, Spain and Greece “is that years of inappropriately low interest rates resulted in overheating and rapid inflation,” London-based Edwards wrote in a report today. Even if governments “could slash their fiscal deficits, the lack of competitiveness within the euro zone needs years of relative (and probably given the outlook elsewhere, absolute) deflation. Any help given to Greece merely delays the inevitable break-up of the euro zone.”

and

Strikes

Prime Minister George Papandreou’s drive to get Greece’s ballooning budget under control is being challenged in the streets by striking schools, hospitals and airline employees.

“Unlike Japan or the U.S., Europe has an unfortunate tendency towards civil unrest when subjected to extreme economic pain,” Edwards wrote. Consigning the countries in southern Europe with the weakest finances “to a prolonged period of deflation is most likely to impose too severe a test on these nations.”

The budget crisis in Greece may escalate in the way the Asian currency meltdown of 1997 paved the way for the Russian default and the collapse of Long-Term Capital Management LP in 1998, Edwards added.

This is “a different chapter in the same book,” he wrote, adding that the need to tighten deficits is a “particular issue for the U.S. and U.K.” “There will be more crises to follow Greece, both inside and outside of the euro-zone.”

from http://www.bloomberg.com/apps/news?pid=206...id=ahuQR4YFStHQ