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Those of you prattling on about bond yields etc have lost touch with the experience of the general public. Commercial bank mortgage and savings rates are driven by Central bank lending rates* so the ECB rate is of much more significance to people and businesses in the here and now than the bond market.
Erm if that is true why did Italy have to borrow at over 6% this morning? Why does bank capital trade at 9 or 10% when central bank rates are low single digits? Another one that needs to read the Economist.
So sorry to prattle
It's really markets that have failed.
Again.
binners - MemberI think you're missing the point here though. The biggest failure of the whole Euro project isn't economic - though that's a big enough car crash!
The biggest failure has been in the sidelining of Democracy. Essentially the Greeks and the Italians, and other countries to a lesser degree, have effectively been told by 'the Markets' that elected representative government is a luxury they can no longer afford. And if they do insist on it, then they will be punished severely for their impudence with effective bankruptcy. With the associated unemployment, collapse of living standards etc that that entails.
The Euro project was always fundamentally undemocratic. The degree to which that is now the case is staggering though
That imo, is the most important point which has been made on this thread, and yet sadly an issue which is largely ignored.
I'm no fan of Berlusconi but it is for the Italian electorate to decide who their Prime Minister should be - not the unelected European Commission and European Central Bank.
And don't be under any illusion as to why Berlusconi was given the shove, by those unelected entities which wield the real power, it's because he was deemed too reluctant to slash social spending even more, and too resistant to implement more privatisation.
In the case of Papandreou, he was sacked by unelected bankers because he had the barefaced cheek to ask the Greek people what policies their government should adopt. They were particularity outraged as it seemed likely that the Greek people would vote "incorrectly", otherwise I'm sure they would have warmed to the idea of [i]democracy[/i].
Both have now been replaced by totally unelected individuals because they failed to do what the European Commission and European Central Bank demanded of them.
It would have been bad enough if unelected European commissioners had insisted that Greece and Italy held general elections, but they didn't even bother with such niceties. After all, the outcome would have been uncertain.......and "the market" doesn't like that. So just impose your own "technocrat", in other words, banker.
Much as I dislike Cameron and want rid of him, and however much he might screw up the UK economy, it is for the British people, and no one else, to get shot of him and replace him with someone of [u]their[/u] choosing.
I certainly don't want him replaced with an European commissioner to serve the best interests of bankers, as has been the case with Berlusconi.
This is a banker's dictatorship.
The same people who got us in this mess, are now calling the shots. Wake up.
Another one that needs to read the Economist.
I'll think I'll just read my Economics degree certificate instead. Don't like the Economist and it's 'free-markets are perfect markets' stance.
All well and good mortgages rates being low, but useless if the banks aren't lending. Also the variable rate loans previously referred to (1.75%) are no longer available, the banks are getting hammered on these loans so they pull them and save their money instead. For evidence of this, see the spectacular failure of project merlin.
The whole edifice of european monetary integration is what is in danger: while there is monetary integration without fiscal integration the eurozone periphery are trapped in a austerity-recessionary spiral.
I agree there is some truth in the Minsky hypothesis, the real problem with the euro is the lack of fiscal integration. It's really hard however to imagine a fully integrated federal europe under the current circumstances. This is why I think the route will be inaction until the crisis forces action at gunpoint: either literal or metaphorical.
OK I will see your economics degree and raise you a 15yr career in the bond markets.
I'd agree with you on Minsky though.
And Ernie, you are right sir, just wait until the unelected technocrats start pushing through proper austerity measures, lets see how long they last without having to face the electorate.
15yr career in the bond markets.
You see, with all due respect (and I really mean that), that's where your problem lies - a lack of perspective, all you speculators chasing each other around, going whichever way the wind blows for a quick buck. No offence intended honestly.
My 15 years teaching A level Economics to bright young things probably means I need to get a 'real job' in the 'real economy' too. 😉
lets see how long they last without having to face the electorate
Yep, we're entering fairly uncharted waters. One of the enduring appeal of "elections" is that they provide a safety valve. So whilst people are often angry with their elected governments the counterargument is based heavily on the fact that people have a choice at election time, and that even unpopular governments generally have some sort of mandate.
Take that 'counterargument' away, and there is considerable less justification for the direction which a government is taking. And it lays the bases for considerably more anger.
European leaders such as General Franco have in the past been able to subdue popular discontentment in the absence of elections by relying on powerful repressive state apparatus. However modern European democracies have no really comparable structures.
These new technocrats which now control the Greek and Italian economies best get some good results fast, and without creating too much popular discontentment, otherwise the eventual reaction/outcome is unknown.
Although as neither technocrat needs consider facing the electorate in the future, and their brief is merely to satisfy the bankers (which is drastically different to our own Prime Minister's situation btw) then I'm sadly not too optimistic.
Nah I'm pretty sure I thought the single currency was a bad idea before I became a bond salesman. In fact I can remember arguing such in my economic history tutorials in 1991. Being the only economic liberal in the room at that time will leave a mark on a man.
Bloody hell, I graduated in '92,it sounds like we've led parallel lives, although I dare say yours has been a far more financially rewarding one...oh well at least I'm gonna get a decent pension...???
I've never been for the UK joining the Euro either, far too restrictive on national governments' ability to manage their own economies. However I'd say it's too early to announce the death of the Euro, don't forget there are 17 countries in the Euro and they're not all going down the pan.
Anyways, I've got some essays on the commodities markets to mark before 'I'm a Celebrity...' starts, so I'm off. Feel free to carry on without me.
Anyways, I've got some essays on the commodities markets to mark before 'I'm a Celebrity...' starts, so I'm off.
See, us bankers dont have time for TV. We're too busy burning orphanages.
We're too busy burning orphanages.
Save yourself the bother, there's no need to - we have politicians who are willing and able to dismantle the care system to pay for your competence.
[url= http://www.guardian.co.uk/society/2011/jun/04/children-care-home-cuts-risk ]Children's care home cuts may leave hundreds at risk[/url]
[i]Closing of residential children's homes by local authorities will mean rejection for most vulnerable, warn experts
.....as local authorities look to slash their spending, the homes are under threat in what critics claim is the latest evidence of the dismantling of the care system for the most vulnerable.[/i]
However I'd say it's too early to announce the death of the Euro
It's not dead, it's resting.
Of course the Euro will last, it's the currency of the thousand-year Reichs.
Wohooooo! Godwin!