I guess you’re reading the same things as me, or coming from the same square at the very least.

Depends what you’re reading. Don’t forget we’re very detached from the Euro here and what I see is that people don’t fully understand what it is. There still exist exchange rates between countries, my old Spanish Euro simply didn’t have the same value in France, nor were the same rules applied when it came to earning them.

Let the markets be free to work. More and better Capitalism, not less.

Yes I think we can all safely say that we are not where we are today because of capitalism in action or to do to with the markets actions.

Good shout

Apparently profit is the reward for risk so I would say suck uyp the risk in the form of huge losses and let sthe banks go under

We dont subisides failing companies but we do bail out investment bankers
frankly **** em well done Greece – they will be poor/shafted whatever happens but at least they may take the **** with them.

in all seriousness, the reason you keep getting all this doom and gloom and then suddenly it all gets pulled back from the brink, is that the german economy is vital to propping up the euro, and that it is germany’s best interests to keep it propped up, but it will only do the bare minimum that it needs to in order to keep it afloat, because it is already putting more into it than it is getting out, and doesn’t want to pour any more money down a black hole than it can help.

from each according to ability, and all that.

We dont subisides failing companies but we do bail out investment bankers
frankly **** em well dont Greece – they will be poor/shafted whatever happens but at least they may take the **** with them.

Good point. maybe papandreou made a calculated call that he will get shafted by the troika whatever, so he might as well not get shafted by his own people as well.

The German public should be sending every cent they have to keep Greece and Italy in the Euro. Soon as they fall out whats left of the Euro is going to go through the roof as the Drachma and Lira devalue. How many VWs or Liebherr fridges will they sell down there then?

It comes back to politics, the man in the German street doesnt see why he should bail out Greeks who retire way before he does, but the politicians havent been able to sell the case that it is the Germans who benefit most from the Euro.

There still exist exchange rates between countries, my old Spanish Euro simply didn’t have the same value in France, nor were the same rules applied when it came to earning them.

you could argue the same thing about any currency though. A pound takes (on average) less time to earn in the south east than it does ‘up north’, but buys you less (a pint of beer, dinner, housing, etc is cheaper in the north)

we still don’t have an exchange rate. you can’t buy 1.5 ‘southern’ pounds for a ‘northern’ pound

Govt gets elected runs up debt, passes on debt to new govt…ad infinitum. One day we all have to pay, or the debt becomes unrecoverable.

Govt gets elected runs up debt, passes on debt to new govt…ad infinitum. One day we all have to pay, or the debt becomes unrecoverable.

The point is generaly to borrow, invest, then grow, thus making the initial borrowing smaller in comparison to GDP. It’s only a problem when growth slows down.

If you didn’t borrow there’d be no money to invest, and growth would be slower. Whether thats taking out a student loan at 18 to get a degree or borowing £1billion to build a new motorway, the principal is the same, there’s no point paying for the motorway or degree in 50 years time after the growth because the growth wouldnt happen without it.

For the Greeks to drop out of the Euro, they’d have to convert back to the Drachma and then devalue, and anyone with Euros in Greece would see the value of those dramatically drop.

So if the Greeks even threaten to actually drop out of the Euro, then everyone with money in the Greek banks will rush to move it to another Euro country which is safer. Thus causing a run on the Greek banks, and so their entire banking system could collapse.

If I was Greek it would be this that I was more worried about!

http://www.bbc.co.uk/news/business-15452180

an expert speaks

Thing is though Nick, what you’re suggesting is rational.

And rational is in short supply everywhere right now. Least of all with ‘The Markets’, who seem to react to every fresh jolt like an elephant reacts to a mouse in a Tom and Jerry Cartoon

If its rational behavior we’re depending on to get us out of this, then we really are ****ed

TINAS, Thats great in theory.

The point is generaly to borrow, invest, then grow, thus making the initial borrowing smaller in comparison to GDP. It’s only a problem when growth slows down.

If you didn’t borrow there’d be no money to invest, and growth would be slower. Whether thats taking out a student loan at 18 to get a degree or borowing £1billion to build a new motorway, the principal is the same, there’s no point paying for the motorway or degree in 50 years time after the growth because the growth wouldnt happen without it.

I’d agree thats the theory

However just like a student loan, it depends how much you borrow, and what you spend it on.

If you spend your loan on a laptop and reference books, live moderatley in reasonable accomodation, then you’ll come out well at the other end, if however you spend your loan on luxuries like partying every night, drinking starbucks, and taxi’s – then you’re headed for a problem.

In much the same way, if a government invests borrowed money in motorways, hospitals schools and business parks (and, yes, housing) then in the long term its going to be good for the economy, if the same money instead gets pissed up the wall on millenium domes, olympic stadia, vanity projects and huge realms of paper pushing administrators… then the country is headed for a brick wall at speed!

Ok. Purely seflish mode now. I will be needing to convert £ to euros sometime between now and March for a house deposit. I will need about 55k in euros. What’s the best plan? I don’t have all the money yet, but have about 70% of it.

Is my house purchase at risk? I can probably go to a 1:1 exchange rate but If I get less than 1 euro for £1 I am borked.

This should cheer you all up

http://www.guardian.co.uk/commentisfree/2011/oct/31/corporation-london-city-medieval

thats a good read idave, sounds more pratchet than mieville though!

greece will limp through, eventually pass the measures and europe will very very slowly pick itself up, not because greece had the courage to opt out and not because the eurocrats showed the balls to properly federalise europe; harmonise tax, pensions and welfare accross the continent
but because asia will start consuming more, be able to call in favours on those european loans and everything will be rosie till the next crash
of course there will be a
[video]http://www.youtube.com/watch?v=tPlhRmRLxeU[/video]
with power shifted from the west to the east

Mugsy – I’ve had a look at the property pages in the Eurozone, and spotted this. Your 55k will easily cover it:

Needs a bit of work on the roof admittidly, and there’s been a bit of argy-bargy with anti-social behavior in the area, but check out the views

🙂

Nice one Binners.
Doesn’t look like the house that we’ve signed a promise to buy contract for though and already put a deposit down to guarantee that we will buy it.

my mate was telling me that iraqi dinars are the way to go
hes bought a load but reckons they smell like camel crap

im starting to think hes right

hmm just got sn e-mail from my currency house offering euros at 1.16 to the £.

i remeber writing a post circa end of 2007 about how i saw the ecomonic situation giong.

as a self-employed carpenter i had been strugling for work and then sitting on my arse for a month or more.

it’d be interesting if i could find it, but it was on the “old” forum.

i spoke about the banks reluctance to lend, the ecomony slowing and the pound taking a beating against the euro…..

many people poo-pooed it.

but i agree with much of the above… we’re somewhat in the shits.

i’m wondering whether i’ll have much work next year, but large companies still seem happy to spend large amounts of money on promotion and advertising and individuals still want their occasional week long holiday. besides, i’m in germany and they’re not so feckless as much of europe.

i think it’s going to be a turbulent for a few more years to come.

The fact that Argentina is doing well, is probably due to the obscene amount of natural resources they have.

Don’t quite think that Greece is the proverbial “gold mine” that Argentina is somehow.

😀 Well having an “obscene amount of natural resources” didn’t stop Argentina in 2002 from being forced into the largest sovereign default in history.

Or did this obscene amount of natural resources only mysteriously appear after 2002 ? 🙂

Coincidently after 2002 the Argentine government’s economic polices changed dramatically, from years of free-market neo-liberalism, to tax and spend interventionism. Since then as a consequence, the Argentine economy has grow at twice the rate of neighbouring Brazil’s economy, and it has halved poverty and unemployment. Today Argentina’s economy is growing faster than any other economy in the world after China’s. All the more impressive as it is so dependant on exports…..global recessions are not good for exports.

The Banks will probably lower the interest of the monies owed
but paid back over a longer period, so they will be able to pay back without
getting into more shite. pretty simple.

iDave – Member
This should cheer you all up

http://www.guardian.co.uk/commentisfree/2011/oct/31/corporation-london-city-medieval

LOL thats not new news, You wanna try your luck with there police
they run totally different too. Made up of mainly ex army not anyone can join.
You won’t find Mr Two bob plastic cop there.

I love the square mile how its run.

So, where are we this morning, then?

“WHO will blink first? The Greeks – or the Eurozone? Both have lots to lose from a Greek collapse and withdrawal from the euro; and Georgios Papandreou’s decision to bet everything on a referendum on the bailout package has massively upped the stakes. Until yesterday, it seemed as if Nicolas Sarkozy and Angela Merkel would huff and puff but never actually deliver on their threats to cut off the cash, preferring instead the cowardly way out. After all, quietly agreeing to ever more handouts – even when Greece failed time and again to deliver on its promises and austerity package – has been the Eurozone’s strategy all along.

Since last night’s press conference, however, I am no longer so sure. They may still be bluffing, but the French and Germans appear for the first time to be contemplating the possibility that the point of no return has been reached, that Greece may be finished and that the only way to save the entire EU political project will be to cut Greece loose. The establishment still hopes Greece could be persuaded to vote yes, thus keeping the birthplace of Western civilisation within the euro-empire, but the psychology has changed drastically. The Greeks could vote No in December – especially given that Papandreou wants the referendum to address austerity, not euro membership, which remains popular in Greece. If that happens, the only way for the bailout plan announced with such fanfare last week to retain any credibility would be for Greece no longer to be included.

Many in Brussels are livid at Papandreou’s decision to ask the people what they think, always a no-no to undemocratic elites. But European taxpayers are also rightly angry; as far as they are concerned, beggars cannot be choosers and Greece should either do what it is told or be thrown out. The arrogance of those who believe that they are entitled to live beyond their means forever, courtesy of taxpayers in harder-working, less corrupt economies, is indeed extraordinarily galling. The Germans and many others would undoubtedly vote to throw Greece out of the EU if they were given the choice in a referendum.

The Eurozone’s main aim now will be to contain the fallout from any Greek default and withdrawal from the euro. The value of Greek assets (land, equity and debt) redenominated in a new drachma would slump 70-80 per cent. Combined with inevitable capital controls, social collapse and mass nationalisation, the chaos would inflict huge losses on all companies with operations in the country. The European Central Bank itself may become insolvent as its Greek government bonds would become near-worthless. It too may require recapitalisation. Yet it would undoubtedly provide liquidity to those hit by the write-offs; the printing presses would go into over-drive.

To backstop other countries, especially Spain and Italy, Merkel and Sarkozy now want to accelerate the leveraging up of their bailout fund – but with the Chinese getting cold feet and the news yesterday that the fund’s latest bond auction had been postponed, prospects are poor. So what next? The EU is terrified investors will now start to question Italian, Irish and Portuguese bonds. If one country defaults and quits the euro, why not more? Should Ireland’s and Portugal’s debt be restructured too? Will the Eurozone unravel next year? Anything is now possible. ”

Mr Woppit – an interesting read:

http://www.ft.com/cms/s/2/69988c22-0544-11e1-b8f4-00144feabdc0.html#axzz1cd6wYb7H

thm – who inside these shores do you think is sitting on the most greek CDSs? There’s much shit still to rise I reckon 😉

That seems to be the root of the problem Stoner. Same as last time. The banks have created such complex financial structures that they won’t have a clue how exposed they are until it goes tits up. The difference this time is that we all know that they’re… how shall we put it? … somewhat prone to underestimating the scale of their cock-ups.

I’d take their professed ‘worst case scenario’, double it, then add on a few hundred billion for good measure. And that is going to be absolutely catastrophic! For all of us. I suspect quite a few European leaders know this full well and are more focussed on what to do in the aftermath. Hence the constant dithering and fudging now. They just want the inevitable over with quickly. As no-one knows what will actually play out

Merkel and Sarkozy are doing themselves no favours by threatening the Greek people with an ultimatum to vote for the referrendum or leave the Euro, that may well get their backs up enough to vote against the proposal. Such arrogance from thew EU leadership! Trying to write the refferendum question…

Within the UK probably Barclays and RBS given that they have an input into the reluctance of ISDA to declare a ‘credit event’ based on the proposed bond haircuts.

somewhat prone to underestimating the scale of their cock-ups.

TBH most of them are only too well aware how exposed they are, they just wont go round telling anyone.

I was working on putting a value on a debt book full of delinquent subordinate junk and unmatched swaps earlier this year. It was brought to the market by a UK bank. Im pretty certain that they had only written down the nominal value by about 20%. I reckon it needed to be at least 50% which would have been about a £500m writedown. It’s still out there. Lying to us. And that’s just one debt book at one bank.

reluctance of ISDA to declare a ‘credit event’

got to say, Im astonished that everyones managed to dodge that so far…

My understanding is that they are getting round it by making the proposed haircut ‘voluntary’

As if anyone would ‘volunteer’ to lose money!

by making the proposed haircut ‘voluntary’

the problem with that is that any org buying stressed greek notes that doesnt accept the voluntary haircut can hold the greeks to ransom for a much higher recovery rate to a) prevent a default event and b) mop up rescue funds that the banks “forced” to take the haircut have unlocked with their charidee 🙂

Anyone know where I can buy some greek notes for 10c in the €? 😉

“And rational is in short supply everywhere right now. Least of all with ‘The Markets’, who seem to react to every fresh jolt like an elephant reacts to a mouse in a Tom and Jerry Cartoon”

Damn right

Been in the city for getting on for 20 years and I’ve never know anything like it. Up and down like a yo yo… for those of you worried about bankers gambling… the markets never been more like roulette wheel.

Just this morning the euro has rallied 1.5 cent, the SnP has turned around 30 points, FTSE rallied 110, sterling/doller a cent higher ….. all in 2 hours and more importantly on NO real news.

Such arrogance from thew EU leadership!

Not really, they are/have invested a lot of money into saving Greece’s economy, they just want to make sure its worthwhile to continue doing so.

Been in the city for getting on for 20 years and I’ve never know anything like it. Up and down like a yo yo… for those of you worried about bankers gambling… the markets never been more like roulette wheel.

yep. Pulled out of all but my real estate stocks 3 weeks ago. just getting too hairy for my tastes.

Well having an “obscene amount of natural resources” didn’t stop Argentina in 2002 from being forced into the largest sovereign default in history.

The collapse of Argentina’s economy was largely down to it being run on extreme neoliberal policies, much like the yanks and the city boys want to see our economies run now.

This is well worth a read

Its about what happened in Argentina and the rest of South America. Extreme Chicago school economics. The only difference to now is that then it was applied through the end of a rifle, a la Pinochet. As the population (hardly surprisingly) wouldn’t wear it

Its now a text-book for what call-me-dave is doing here under the cover of cutting the defecit. Slash and burn of the public sector.

The Greek example at the moment is scarily close to the South American ‘Experiment’