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Bond Markets have gone f*cking crazy since last weeks bail out activation, yields for the debt heavy nations have jumped by the most of 100 basis points at least since then.
The only thing is that this panic does not seem to be based on information but rather on the fear of contagion, which can of course be a self fulfilling prophecy but auction failures aren't prevalent yet for countries other than Greece...yet.
Today does not seem as bad though, if I may take my own country as an indicative example, yields on 10 year bonds went from 4.6% (which is certainly high) this time last week to 5.28% today, the intra day high today was 5.51% after opening at 5.1%, so I think most of the short positions have been taken and the risk averse money has been taken out of the market. Though tomorrow will tell a lot more.
One more thing that really screwed Greece is that they have massive debt redemption due in a few weeks/months and they couldn't re-finance that much, so it wasn't just the deficit that got them.
Not sure if any of the other vulnerable countries have debt roll over in the near future, largely because most of these countries only recently (last 2 years) started running deficits.
Rather annoyingly the Euro is not getting hammered as much as I would have hoped (€1=$1.32 and €1=£0.86) which is bad for nations relying on an export driven recovery<cough cough>.
One last thing, no real point blaming speculators for these problems, the countries involved only have themselves to blame, particularly mine, and they(or we) have no right to expect to be able to borrow indefinitely
All numbers ripped straight from bloomberg website
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I study political science and international development in Vienna... this said I am very left, very left indeed.
There are so many ways to get out of this debt .. but none is taken. Actually, they take the worst road down to a slim state as they are believing for if the state is slim it cannot make much debt. The Iron Lady sure is proud. On the other side, with the financial crysis and its aftermath it is very clearly shown that the national state is not down and every country pumped money into their system thus making the evidence that the slim state does not work. Very interesting times for us indeed !
We also could stop to subsidize our products to pump it onto africa.
As said, there are so many ways we could get out of this and if anyone is really interested, PM me .D
And there are so much things I could blame it on, I DO NOT EVEN WANT TO START.
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United States43905 Posts
On March 08 2010 06:29 TanGeng wrote:Show nested quote +On March 08 2010 05:11 Biff The Understudy wrote:On March 01 2010 15:27 TanGeng wrote:
Hell the British pound hangs more precariously in the balance.
Europe might go to hell in a hand basket. But it cannot be doubted that the Mediterranean countries are all basket cases. I think Greece will learn its lessons though. It is the socialist government adopting the austere measures to bring their public debt under control.
Painful but worse would be bailing Italy and Portugal and watching Spain disintegrate into three or four countries. Spain still might disintegrate into multiple countries regardless. Maybe if this bastards of Goldman Sachs didn't speculate against entire countries they are supposed to help, they wouldn't have so many problems. Why the hell would Italy or Portugal disintegrate? Doesn't make any sense. Even in Spain despite this Catalan nationalism, there is just no chance at all that the country split in two. The only State which is in danger because of separatist nationalist in Europ in Belgium, but even there, I don't believe it can really happen. about Portugal and Italy - read more carefully and check your grammar. about Spain - if the central authority fails to hold up its end of the bargain, a country will fall apart and it usually falls apart faster than anyone can imagine. The ones you can see coming a mile away like Belgium will get resolved. The ones that takes everyone by surprise happen quickly - see Soviet Union.
Soviet Union was a federated union of different nations that descended from a geographic empire, that it would breakup when the central power could no longer hold it together was inevitable. It's like saying nobody could predict the breakup of the British Empire.
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It's a half-truth: Churchill foresaw it decades before the event. Kennan too. The CIA did not foresee it, including its then-director, Robert Gates, the "Russia-expert" now in charge of the Pentagon.
As with everything clairvoyant people saw it coming, and non-clairvoyant people didn't.
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If the crysis is allowed to spread, it will eventually become global. I know the italian situation very well, the risk of a default is consistent, and once you have Spain and Italy bankrupt, even stronger states like Germany and France will follow. Europe as a whole is the first economy in the world, and it's deeply connected to all other economies. I'm not sure if this crysis going global right now is a bad thing, we could go back to gold parity and tell the banks to stfu  That would finally limit governments spending money they actually have, and lending only money to others if they have it in exceess.
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I would appreciate the economy going down to gold dependence, the only problem is... the US gave a lot of the gold from fort knox away so ... who has the gold ladies and gentleman .D
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On April 29 2010 01:01 Ganondorf wrote:If the crysis is allowed to spread, it will eventually become global. I know the italian situation very well, the risk of a default is consistent, and once you have Spain and Italy bankrupt, even stronger states like Germany and France will follow. Europe as a whole is the first economy in the world, and it's deeply connected to all other economies. I'm not sure if this crysis going global right now is a bad thing, we could go back to gold parity and tell the banks to stfu That would finally limit governments spending money they actually have, and lending only money to others if they have it in exceess.
It might, if Germany keeps bailing the Mediterranean states out, but Germany's bond maturities are far longer than the Greek. People are still buying long-term bonds for Germany, reflecting general confidence in the public finances here.
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well, our politicians opened the floodgates.
There is a law that specifically forbids helping other countries out with money here in the EU, but our politicians decided they are much better economics than some stupid gremium with experts on the subject and found a work-around.
Now they give out money to greece with no real conditions, improving nothing, dragging everybody else down and even support wasteful states. And of course, the first money hand out was not enough, so to not let the first handout go to waste they need to hand out more!
Oh and suddenly other states feel like they need money as well, why give it only to one country?
They could have just let the IMF hand out money with strict regulations, but noooo...
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On April 29 2010 01:17 LaNague wrote:
well, our politicians opened the floodgates.
....
They could have just let the IMF hand out money with strict regulations, but noooo...
Of course not...that would have been too embarrassing, so EURO pride is worth several billion umm....EURO's evidently
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On April 29 2010 01:09 Tufas wrote:
I would appreciate the economy going down to gold dependence, the only problem is... the US gave a lot of the gold from fort knox away so ... who has the gold ladies and gentleman .D
Gold parity means you can turn gold into money by paying a small interest to cover the expenses. Like the central banks convert paper to money and still want interest for it :D The state doesn't need to have all the gold at once to do it, just reinstate the parity and people will convert gold to money.
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Buy a garden for producing food, and invest in gold, the inflation is on the way.
If the politicans decide to pay for a country that faked the stats to join the EU and spend money they never had, germany alone has to pay over 45 billion euros alone... the country is rich but reforms here always are blocked because of the missing money, but tell this to the crows outside of Berlin.
Yes the euro will go down, well i think germany is the land that can live good with the old german D-Mark, because of the strong economy it has. Imo the logical best way is to count out greece from the EU. All countrys that cant pay the bills alone must be count out, they made contracts about this, now they have to pay it. Otherwise the problems only get faster bigger.
The dollar isnt worth the paper its printed on since they decided to uncouple it from the goldreserves,
the debits raise everywhere, the system called capitalism is walking to its end. Hopefully without war.
mfg
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BERLIN – Europe's debt crisis mushroomed Wednesday as Spain saw its credit rating lowered, just as Germany sought to reassure nervous investors that Greece would not be allowed to go under, saying Berlin's share of a key aid package could be approved in the next few days.
Stock and bond markets had begun to regain their composure after stinging downgrades of Greece and Portugal the day before, when Standard & Poors delivered more bad news by cutting Spain's rating to AA from AA+ amid concerns about the country's growth prospects following the collapse of a construction bubble.
Chancellor Angela Merkel stressed that Germany was still insisting Greece commit to cutbacks. German assistance for Greece is unpopular with the German public and Merkel faces key regional elections May 9.
"Germany will make its contribution but Greece has to make its contribution," she said.
Strauss-Kahn would not confirm reports that he had told German lawmakers Greece may need between euro100 and euro120 billion over the next three years, saying he would not comment on any figures as long as negotiations in Athens are still under way.
Source
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On April 29 2010 01:39 Willes wrote:
Buy a garden for producing food, and invest in gold, the inflation is on the way.
If the politicans decide to pay for a country that faked the stats to join the EU and spend money they never had, germany alone has to pay over 45 billion euros alone... the country is rich but reforms here always are blocked because of the missing money, but tell this to the crows outside of Berlin.
Yes the euro will go down, well i think germany is the land that can live good with the old german D-Mark, because of the strong economy it has. Imo the logical best way is to count out greece from the EU. All countrys that cant pay the bills alone must be count out, they made contracts about this, now they have to pay it. Otherwise the problems only get faster bigger.
The dollar isnt worth the paper its printed on since they decided to uncouple it from the goldreserves,
the debits raise everywhere, the system called capitalism is walking to its end. Hopefully without war.
mfg
It's not that fast but we risk it will eventually come to that. Greece is not the only country who faked stats and it was not a mystery, i know Italy did just the same. A strong currency does well for Germany/France but not for countries who rely more on exports, which explains why the euro has slowed down their economies and put them on the road for a default.
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On April 29 2010 03:15 {CC}StealthBlue wrote:Show nested quote +BERLIN – Europe's debt crisis mushroomed Wednesday as Spain saw its credit rating lowered, just as Germany sought to reassure nervous investors that Greece would not be allowed to go under, saying Berlin's share of a key aid package could be approved in the next few days.
Stock and bond markets had begun to regain their composure after stinging downgrades of Greece and Portugal the day before, when Standard & Poors delivered more bad news by cutting Spain's rating to AA from AA+ amid concerns about the country's growth prospects following the collapse of a construction bubble. Show nested quote +Chancellor Angela Merkel stressed that Germany was still insisting Greece commit to cutbacks. German assistance for Greece is unpopular with the German public and Merkel faces key regional elections May 9.
"Germany will make its contribution but Greece has to make its contribution," she said.
Strauss-Kahn would not confirm reports that he had told German lawmakers Greece may need between euro100 and euro120 billion over the next three years, saying he would not comment on any figures as long as negotiations in Athens are still under way. Source
we will pay, they just need to make it look like they dont really want to to the general public, because otherwise the governing party will loose the election in NRW horribly and thus loose majority in the Bundesrat, which means important laws will not be able to pass and they have to make deals with the opposition.
Its a bad position they made themselves and cant get out of now.
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i dont get some things about this whole mess
it is a given that greece made its own bed in this, corruption and mismanagement on government level coupled with most greeks being happy stealing from the government, avoiding taxes etc (u cant really get a corrupt government official without someone willing to exploit his corruption yea?:p)
that said, i have a few questions
it is known that greece will need to finance its debt or else be forced to default or restructure the debt - still basically default - and the markets are unwilling to provide this financing since they are questioning greece's ability to actually pay them back, hence they raise the interest rates at which they would be willing to start refinancing
however the people telling them greece will fail to put up enough money to pay back its debt are completely unregulated firms like standard's & poor's who have strong ties to the big firms involved in this whole market, like goldman sachs
and it just so happens that those firms have everything to gain from greece defaulting, theyre betting against greece making it, so this becomes a self-fulfilling prophecy
normally the solution to this whole thing would be the imf intervention, which imposes "fiscal responsibility" - basically privatize whatever is worthwhile and raise taxes / lower wages to pay off debt, which is entirely the wrong way of doing it since the government's overspending certainly didnt benefit the population as a whole but rather a small part of it which will get out of the whole mess practically unscathed. in this case however, since greece is part of the eurozone and all that jazz, the eu will take part in the intervention
so the end result, one way or another, is that a big part of the money that wasnt in the bankers / funds hands will end up there
so.. why is this allowed and why do nations think this system is such a good idea?
ive seen plenty of germans and other posters saying greece should gtfo of the eurozone and i agree with the basis of their arguments except for this: why on earth are u happy that u are being underpaid and overtaxed just so germany can have huge surpluses and big businesses can keep on with their income growth? its not like ure seeing any of this surplus in your personal lives, unless ure in that 0,05% of the population that benefits..
the solution suggested to this problem by the french lady was that germany should lower its taxes and up its wages.. and u dont like that? if ure not a company owner or sth id like to know the reasoning
last, about the bailout
germany borrows with a 3% interest rate and then gives that money to greece for a 5% interest rate, which greece thinks is ok since borrowing from the private sector right now goes with a 9% interest rate
so unless greece defaults - which u can make sure doesnt happen since u now can dictate economic policies until the market finds a new trend, forgets all about this problem and starts refinancing as normal - ure making money out of thin air, pretty much like a bank
why dont u like that :p? sure theres a risk involved, and apparently the market thinks ure undervaluing that risk, but that hinges on the market actually being correct, and thats a pretty big if
so to sum up, it seems obvious to me that this whole banking and lending system is a simple scam to get money from the normal people, run without any regulation by people who havent been elected to their posts, and it preys on whatever seems easiest to target, from gullible idiots who overspend with credit and then work for the rest of their lives paying interest to sovereign countries who for whatever reason screw up
why is this accepted as the norm? and why does the german taxpayer's anger target only greece and not this mess?
also, sorry for the wall of text
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last, about the bailout
germany borrows with a 3% interest rate and then gives that money to greece for a 5% interest rate, which greece thinks is ok since borrowing from the private sector right now goes with a 9% interest rate
lol raped
i have no idea, but maybe the taxes go to important stuff? like, is uni free in germany? maybe public health?
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For some reason I just assumed this was a thread about the European server going down =p
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On March 01 2010 15:27 n.DieJokes wrote:
I honestly have nothing to add or confirm or deny. I almost wish we would go back to the gold standard so at least I would have some idea what's going on.
Yeah, at least that system made sense.
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ive seen plenty of germans and other posters saying greece should gtfo of the eurozone and i agree with the basis of their arguments except for this: why on earth are u happy that u are being underpaid and overtaxed just so germany can have huge surpluses and big businesses can keep on with their income growth? its not like ure seeing any of this surplus in your personal lives, unless ure in that 0,05% of the population that benefits..
the solution suggested to this problem by the french lady was that germany should lower its taxes and up its wages.. and u dont like that? if ure not a company owner or sth id like to know the reasoning
The reason is that Germany is saving now to insure the future. Savings are re-invested and help future earnings. Germany is not lowering taxes because her present deficit is above the EU's legal ceiling, and despite the excesses caused by the downturn, discipline must be re-imposed, or else there is no point to having the Euro. Germany is not raising wages because she does not want her auto industry to wind up like General Motors. Anyway it's absurd for the Greek government to suggest that Germany is at fault for being over-competitive and implying that the only remedy would be for Germany move closer to Greco-Latin policies, in other words, if every economy were equally fiscally and socially irresponsible, the economy of the EU as a whole would be better-balanced. On the flip-side, why don't you lower your wages and raise your taxes?
germany borrows with a 3% interest rate and then gives that money to greece for a 5% interest rate, which greece thinks is ok since borrowing from the private sector right now goes with a 9% interest rate
so unless greece defaults - which u can make sure doesnt happen since u now can dictate economic policies until the market finds a new trend, forgets all about this problem and starts refinancing as normal - ure making money out of thin air, pretty much like a bank
The Greek economy is sub-prime estate right now, if there were no risk of Greece defaulting, there ought to be no risk to buying Greek bonds in the first place. However, the chances of Greece defaulting are better than 1 to 1. You say that the EU will somehow be able to control Greek fiscal policy as a trade-off for subsidized loans. Greece could control her own fiscal policy right now to meet her bond obligations without EU intervention: raise taxes and cut spending. The fact that she is not able or willing to do so is the reason that she is in risk of default in the first place.
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not willing, able is not a word that should be used.
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EPT
