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The European Debt Crisis and the Euro - Page 53

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Black Gun
Profile Blog Joined July 2009
Germany4482 Posts
November 25 2011 20:22 GMT
#1041
a downgrade of belgium shouldnt be overrated as their political crisis explains it, at least in parts.

"What am I supposed to do against this?" - "Lose!" :-]
maartendq
Profile Blog Joined December 2010
Belgium3115 Posts
November 25 2011 20:43 GMT
#1042
On November 26 2011 05:22 Black Gun wrote:
a downgrade of belgium shouldnt be overrated as their political crisis explains it, at least in parts.


Scratch "in parts". No running government = no trust in the financial situation of our country = downgrade. Everyone saw this coming from miles away.

Here's to hoping that our politicians finally wake up!
DeepElemBlues
Profile Blog Joined January 2011
United States5079 Posts
November 25 2011 23:02 GMT
#1043
Belgium forgot that the EU isn't it's real government?
no place i'd rather be than the satellite of love
maartendq
Profile Blog Joined December 2010
Belgium3115 Posts
Last Edited: 2011-11-25 23:18:28
November 25 2011 23:17 GMT
#1044
On November 26 2011 08:02 DeepElemBlues wrote:
Belgium forgot that the EU isn't it's real government?

On the contrary, we blatantly ignore everything the EU tells us to do. We're in a situation that's not unlike the one in the US. The country is basically split in half: the northern part is rather rightist while the majority in the south is more left-oriented. Neither of them really wants to get along, except for the green parties on both sides, of course. New elections would only make matters worse, so we're actively avoiding them.

All this would not be so bad were it not that we've still got a budget to balance and a deficit of 8 billion euros to get rid of.
Mango
Profile Joined July 2006
Belgium522 Posts
November 26 2011 16:15 GMT
#1045
Well after 531 days without a government (the old one was still taking care of running cases though), it seems that Belgium will finally have one in the following weeks. The financial markets pushed them towards one, and let's hope they stabilize now around us.
maartendq
Profile Blog Joined December 2010
Belgium3115 Posts
Last Edited: 2011-11-26 17:54:24
November 26 2011 17:54 GMT
#1046
On November 27 2011 01:15 Mango wrote:
Well after 531 days without a government (the old one was still taking care of running cases though), it seems that Belgium will finally have one in the following weeks. The financial markets pushed them towards one, and let's hope they stabilize now around us.

I find it a good thing that the financial markets are finally able to push Di Rupo and company to come an agreement. This has childish bickering between left and right (wallonia and flanders) has been going on for far too long. It's actually surprised me how long it took the financial markets to crack down on Belgium though. I guess they were too preoccupied with Greece and Italy.
Skilledblob
Profile Joined April 2011
Germany3392 Posts
Last Edited: 2011-11-26 18:07:13
November 26 2011 18:05 GMT
#1047
so where is the downgrade of the US?

rating agencies serve no purpose. The only purpose they have is helping the people who pay/bribe them, which are the banks they make ratings about so this whole system is a huge pile of dog crap
Shymon
Profile Blog Joined February 2005
United States620 Posts
November 26 2011 18:26 GMT
#1048
On November 27 2011 03:05 Skilledblob wrote:
so where is the downgrade of the US?

rating agencies serve no purpose. The only purpose they have is helping the people who pay/bribe them, which are the banks they make ratings about so this whole system is a huge pile of dog crap


Why would you downgrade the USA atm? The current level of debt is around 100% of the GDP which according to most is still in the manageable range, As opposed to Greece's ratio of 158%. The government is currently very divided but also very stable, there is zero pressure to say rewrite the constitution. and the US dollar is in the middle of a small rally versus the currencies of most of the world including the euro which thanks to Greece and Spain may be in for a sharp downturn. Furthermore the general public has indicated that debt reduction is a major issue for upcoming elections which should (key word here is should) allow the elections of officials who would work to lower the debt of the USA at a national level. Add to all this some positive if slightly conflicting economic indicators; inflation at 3.5%, GDP up 2.5% last quarter, and positive early numbers for consumer confidence and spending. This is tempered by a still high 9% unemployment rate, which has not dropped as fast as other positive indicators would have suggested. However all in all i would still say the overall trend would still not be adverse to the credit rating of the USA as a whole.

As a side note i am not an economist so this is a layman's opinion of the subject.
kevint
Profile Joined January 2011
Denmark42 Posts
November 26 2011 18:34 GMT
#1049
On November 26 2011 08:17 maartendq wrote:
Show nested quote +
On November 26 2011 08:02 DeepElemBlues wrote:
Belgium forgot that the EU isn't it's real government?

On the contrary, we blatantly ignore everything the EU tells us to do. We're in a situation that's not unlike the one in the US. The country is basically split in half: the northern part is rather rightist while the majority in the south is more left-oriented. Neither of them really wants to get along, except for the green parties on both sides, of course. New elections would only make matters worse, so we're actively avoiding them.

All this would not be so bad were it not that we've still got a budget to balance and a deficit of 8 billion euros to get rid of.

do you know the difference of left and right political wings? i wont claim to know much about politics outside of Denmark but i know that the rest of Europe pays less taxes than we do and it is usually the socialists who want high taxes and they are of course left wing so i don’t see how it can be split up like America with south being left wing and north being right wing
fofa2000
Profile Joined October 2010
Canada548 Posts
November 26 2011 18:53 GMT
#1050
I think these conversations belong to The Economist forum's.
-smells likes tasty soup, what's the menu?-fresh jaedong style marine stew served with a glass of dragoon slush!-The food's any good?Quite unusual names, never heard-all my food's good, the kitchen's this way-btw whatu terarn doing alone in a zerg colony?
{CC}StealthBlue
Profile Blog Joined January 2003
United States41117 Posts
November 27 2011 07:28 GMT
#1051
BERLIN (Reuters) - German Chancellor Angela Merkel and French President Nicolas Sarkozy are planning more drastic means - including a quick new Stability Pact - to fight the euro zone sovereign debt crisis, Welt am Sonntag reported on Sunday.

The Sunday newspaper reported in an advance before publication that if necessary Germany and France were ready to join a number of countries in agreeing to tough budget discipline.

The report, which echoed a Reuters report on Friday from Brussels, quoted German government sources as saying that the crisis fighting plan could possibly be announced by Merkel and Sarkozy in the coming week.

The report said that because it would take too long to change existing European Union treaties, euro zone countries should avoid such delays be agreeing to a new Stability Pact among themselves - possibly implemented at the start of 2012.


Source
"Smokey, this is not 'Nam, this is bowling. There are rules."
Maenander
Profile Joined November 2002
Germany4926 Posts
Last Edited: 2011-11-27 08:19:05
November 27 2011 08:18 GMT
#1052
On November 27 2011 03:26 Shymon wrote:
Show nested quote +
On November 27 2011 03:05 Skilledblob wrote:
so where is the downgrade of the US?

rating agencies serve no purpose. The only purpose they have is helping the people who pay/bribe them, which are the banks they make ratings about so this whole system is a huge pile of dog crap


Why would you downgrade the USA atm? The current level of debt is around 100% of the GDP which according to most is still in the manageable range, As opposed to Greece's ratio of 158%. The government is currently very divided but also very stable, there is zero pressure to say rewrite the constitution. and the US dollar is in the middle of a small rally versus the currencies of most of the world including the euro which thanks to Greece and Spain may be in for a sharp downturn. Furthermore the general public has indicated that debt reduction is a major issue for upcoming elections which should (key word here is should) allow the elections of officials who would work to lower the debt of the USA at a national level. Add to all this some positive if slightly conflicting economic indicators; inflation at 3.5%, GDP up 2.5% last quarter, and positive early numbers for consumer confidence and spending. This is tempered by a still high 9% unemployment rate, which has not dropped as fast as other positive indicators would have suggested. However all in all i would still say the overall trend would still not be adverse to the credit rating of the USA as a whole.

As a side note i am not an economist so this is a layman's opinion of the subject.

Why should short term economic indicators matter?

Just a few substantial numbers:

GDP in 2010 (World Bank):
United States $14,582,400 millions
Eurozone $12,174,523 millions

public debt in 2010 in % of GDP:
United States 89.4% according to treasurydirect
Eurozone 85.4% according to eurostat

If the Eurozone can get into trouble, so can the US.
Blix
Profile Joined September 2010
Netherlands873 Posts
November 27 2011 10:27 GMT
#1053
On November 27 2011 17:18 Maenander wrote:
Show nested quote +
On November 27 2011 03:26 Shymon wrote:
On November 27 2011 03:05 Skilledblob wrote:
so where is the downgrade of the US?

rating agencies serve no purpose. The only purpose they have is helping the people who pay/bribe them, which are the banks they make ratings about so this whole system is a huge pile of dog crap


Why would you downgrade the USA atm? The current level of debt is around 100% of the GDP which according to most is still in the manageable range, As opposed to Greece's ratio of 158%. The government is currently very divided but also very stable, there is zero pressure to say rewrite the constitution. and the US dollar is in the middle of a small rally versus the currencies of most of the world including the euro which thanks to Greece and Spain may be in for a sharp downturn. Furthermore the general public has indicated that debt reduction is a major issue for upcoming elections which should (key word here is should) allow the elections of officials who would work to lower the debt of the USA at a national level. Add to all this some positive if slightly conflicting economic indicators; inflation at 3.5%, GDP up 2.5% last quarter, and positive early numbers for consumer confidence and spending. This is tempered by a still high 9% unemployment rate, which has not dropped as fast as other positive indicators would have suggested. However all in all i would still say the overall trend would still not be adverse to the credit rating of the USA as a whole.

As a side note i am not an economist so this is a layman's opinion of the subject.

Why should short term economic indicators matter?

Just a few substantial numbers:

GDP in 2010 (World Bank):
United States $14,582,400 millions
Eurozone $12,174,523 millions

public debt in 2010 in % of GDP:
United States 89.4% according to treasurydirect
Eurozone 85.4% according to eurostat

If the Eurozone can get into trouble, so can the US.


The difference is that the FED is allowed to do more than the ECB. I think that the FED will just create money, to limit the interest rate on govt bonds and if necessary prevent default. So banks that hold US bonds don't need to be afraid they don't get repaid. The dollars they receive may worth much less, but that doesn't matter if the obligations are also in dollars. Although obviously the US may get into trouble (i think it already is), the effect on the stability of the financial system should be less severe. But then again, if EU system goes down, so will the US and the rest of the world imho.

Secondly, you shouldn't pool the EU debt like that (although the politicians are trying with their EU-bond abomination), because for example a German does not feel responsible for Italian debt.
Conquer yourself not the world. - Descartes
BrTarolg
Profile Blog Joined June 2009
United Kingdom3574 Posts
November 27 2011 10:29 GMT
#1054
The bund has dropped like 500 points

From a traders point of view - game over.

People have clocked on germany is no longer a safe haven, and everyons is rushing out from contagion. We all expect an exit from germany which could cause a bund rally, or an exit of the insolvent states
Problem is that the crisis dragged too long so now more states are becoming insolvent, it won't be long before germany is forced to pullout

All the money is rushing into dollar as a result as it is literally the only and last safe haven
RvB
Profile Blog Joined December 2010
Netherlands6272 Posts
November 27 2011 10:40 GMT
#1055
On November 27 2011 02:54 maartendq wrote:
Show nested quote +
On November 27 2011 01:15 Mango wrote:
Well after 531 days without a government (the old one was still taking care of running cases though), it seems that Belgium will finally have one in the following weeks. The financial markets pushed them towards one, and let's hope they stabilize now around us.

I find it a good thing that the financial markets are finally able to push Di Rupo and company to come an agreement. This has childish bickering between left and right (wallonia and flanders) has been going on for far too long. It's actually surprised me how long it took the financial markets to crack down on Belgium though. I guess they were too preoccupied with Greece and Italy.


I don't think it will last long anyway, doesn't the new government have like 6 parties? That won't go well for to long and they probably will be known for not doing a fuck because it's almost impossible to reach an agreement with 6 parties...
Maenander
Profile Joined November 2002
Germany4926 Posts
Last Edited: 2011-11-27 11:14:20
November 27 2011 11:07 GMT
#1056
On November 27 2011 19:27 Blix wrote:
Show nested quote +
On November 27 2011 17:18 Maenander wrote:
On November 27 2011 03:26 Shymon wrote:
On November 27 2011 03:05 Skilledblob wrote:
so where is the downgrade of the US?

rating agencies serve no purpose. The only purpose they have is helping the people who pay/bribe them, which are the banks they make ratings about so this whole system is a huge pile of dog crap


Why would you downgrade the USA atm? The current level of debt is around 100% of the GDP which according to most is still in the manageable range, As opposed to Greece's ratio of 158%. The government is currently very divided but also very stable, there is zero pressure to say rewrite the constitution. and the US dollar is in the middle of a small rally versus the currencies of most of the world including the euro which thanks to Greece and Spain may be in for a sharp downturn. Furthermore the general public has indicated that debt reduction is a major issue for upcoming elections which should (key word here is should) allow the elections of officials who would work to lower the debt of the USA at a national level. Add to all this some positive if slightly conflicting economic indicators; inflation at 3.5%, GDP up 2.5% last quarter, and positive early numbers for consumer confidence and spending. This is tempered by a still high 9% unemployment rate, which has not dropped as fast as other positive indicators would have suggested. However all in all i would still say the overall trend would still not be adverse to the credit rating of the USA as a whole.

As a side note i am not an economist so this is a layman's opinion of the subject.

Why should short term economic indicators matter?

Just a few substantial numbers:

GDP in 2010 (World Bank):
United States $14,582,400 millions
Eurozone $12,174,523 millions

public debt in 2010 in % of GDP:
United States 89.4% according to treasurydirect
Eurozone 85.4% according to eurostat

If the Eurozone can get into trouble, so can the US.


The difference is that the FED is allowed to do more than the ECB. I think that the FED will just create money, to limit the interest rate on govt bonds and if necessary prevent default. So banks that hold US bonds don't need to be afraid they don't get repaid. The dollars they receive may worth much less, but that doesn't matter if the obligations are also in dollars. Although obviously the US may get into trouble (i think it already is), the effect on the stability of the financial system should be less severe. But then again, if EU system goes down, so will the US and the rest of the world imho.

Secondly, you shouldn't pool the EU debt like that (although the politicians are trying with their EU-bond abomination), because for example a German does not feel responsible for Italian debt.

You can't really think inflation doesn't matter to creditors. In the new, globalized world inflation is a less viable tool than ever before, because investors have more alternatives. That said, financial players are not rational and might fall for the cheapest tricks.

And yes, I can't pool the Eurozone debt like that. What it goes to show is that the risk of contagion is overstated by the market. But once again, economics is not hard science because the players are not rational. Madness abounds.
lOvOlUNiMEDiA
Profile Blog Joined October 2007
United States643 Posts
November 30 2011 09:13 GMT
#1057
"The Euro Area is coming to an end"
To say that I'm missing the point, you would first have to show that such work can have a point.
x2fst
Profile Blog Joined August 2004
1272 Posts
December 01 2011 12:42 GMT
#1058
interesting stuff the last few days. strange to see positive news in the papers with equity indexes up, italian/french/spanish bond yields down etc. good news not likely to last long tho

interesting repost over at zerohedge of a report from kyle bass, a hedge fund manager who has garnered a bit of a following for predicting (and profiting from) the us housing bubble and the current euro sovereign debt crisis. serves as a timely reaffirmation that all the liquidity in the world won't change the reality of the debt situation

read here (20 pages, nothing technical)
muda, is a crime for me to wear a shirt, cos I is so good lookin
Robinsa
Profile Joined May 2009
Japan1333 Posts
Last Edited: 2011-12-01 12:54:32
December 01 2011 12:50 GMT
#1059
On November 30 2011 18:13 lOvOlUNiMEDiA wrote:
"The Euro Area is coming to an end"

Im going to point this out because I think its important. Almost all of the media saying the Euro is going down is either American or Brittish media as far as I know. I have yet to see any serious arguments for that in the European or Japanese newspapers I read. I think its a way for americans to scare the market and influence it. I wish EU had the same sort of power in the media establishment.

Edit: Neither do I think its possible. Europe will never let the Euro fall. It wont happen.
4649!!
Cubu
Profile Blog Joined February 2011
1171 Posts
December 01 2011 12:58 GMT
#1060
On December 01 2011 21:50 Robinsa wrote:
Show nested quote +
On November 30 2011 18:13 lOvOlUNiMEDiA wrote:
"The Euro Area is coming to an end"

Im going to point this out because I think its important. Almost all of the media saying the Euro is going down is either American or Brittish media as far as I know. I have yet to see any serious arguments for that in the European or Japanese newspapers I read. I think its a way for americans to scare the market and influence it. I wish EU had the same sort of power in the media establishment.

Edit: Neither do I think its possible. Europe will never let the Euro fall. It wont happen.


Funny. Ever since this talk of euro crisis in tl, whenever i read the posts here, it almost seemed like the americans were quick to critisize the euro.
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