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On June 29 2012 14:09 farvacola wrote:http://www.bloomberg.com/news/2012-06-29/eu-leaders-ease-debt-crisis-rules-for-spain-as-merkel-retreats.htmlTalks in Brussels have yielded significantly different results when compared to previous summits in which the tag-team of Sarkozy and Merkel managed to push through austerity measures, with Francois Hollande leading the charge against Merkel through a championing of providing immediate relief to countries in continuously dire financial straits. Preferred creditor status on loans to Spains banks are no more for members of the Eurozone.
Yeh traders are really happy today.
IMO it makes little sense why DAX is up around 3.5%. German taxpayers just got lower seniority (which decreases interest rate of spanish bonds). Of coure this helps the extend and pretend methodology of the euro zone, but I doubt it will change anything fundemental.
In a nutshell all this meeting did was to change the risks from the spanish bondholders (likely the spanish banks) to the german taxpayers. I think markets are overreacting, (european stocks averaging around 4%. I would have throgt 1-2 % made more sense).
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ESM can now give money directly to the banks.
Ofc the markets love that ... in the first days until their realize what u just said haider ... germany is not strong enough...
the next domino in line. Germany is maybe the one-eyed among the blind. but thats all.
markets in our days are political markets.
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On June 30 2012 00:12 Gaga wrote:
ESM can now give money directly to the banks.
Ofc the markets love that ... in the first days until their realize what u just said haider ... germany is not strong enough...
the next domino in line. Germany is maybe the one-eyed among the blind. but thats all.
markets in our days are political markets.
Yeh but markets aren't really pricing in that Germany is in the line as well (as german bonds offer really lower rates - only around a 0.2 premium to a non euro bond like Denmark). So the fact that Germany now can bail out other countries in a more efficient way shouldn't really send the stock market higher. Esp. if you combine this with the news that Germany had higher than expected unemployment.
Anyway I am almost certain that markets are overreacting to this news, but momentum may carry on for days, or perhaps even a week or 5.
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of course they are overreacting ....
thats what i mean by politicial markets ... they (over)react on polticial actions.
Doesn't matter whats happening in the long run ...
"in the long run we are all dead" that's what keynes said ... and thats how our markets work today...
i'm just wondering if we we are dead in month or if they are able to glue it together another 10 years ...
put in an image (not mine):
![[image loading]](http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2012/06/Einhorn%20chart_0.jpg)
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I'm pretty sure market and some EU countries are just overhyping the decisions...
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What worries me is the reliability of Italian and Spanish banks. Take Bankia for example, just look at how they mislead their customers, how does such a bank have the right to exist? And now that they have screwed over their own customers the EU is supposed to save them? Great plan! The people in charge of such a bank don't even deserve a salary, and yet I have the feeling they are making salaries in the top 0.1% of Europeans. If a bank needs help the people in charge of that bank should at the very least be fired and put to ten years of forced labor in Siberia or something.
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On June 30 2012 07:06 Domus wrote:
What worries me is the reliability of Italian and Spanish banks. Take Bankia for example, just look at how they mislead their customers, how does such a bank have the right to exist? And now that they have screwed over their own customers the EU is supposed to save them? Great plan! The people in charge of such a bank don't even deserve a salary, and yet I have the feeling they are making salaries in the top 0.1% of Europeans. If a bank needs help the people in charge of that bank should at the very least be fired and put to ten years of forced labor in Siberia or something.
no .. the owners of that bank should loose it. and the bank's good parts distributed among it's creditors (the people who put their money in that bank are the banks creditors).
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On June 30 2012 06:25 Gaga wrote:of course they are overreacting .... thats what i mean by politicial markets ... they (over)react on polticial actions. Doesn't matter whats happening in the long run ... "in the long run we are all dead" that's what keynes said ... and thats how our markets work today... i'm just wondering if we we are dead in month or if they are able to glue it together another 10 years ... put in an image (not mine):
I disagree that it doesn't matter what happens in the long run. There is a crisis currently because of "the long run". The euro didn't work in the long run due to fundenmental problems. But at times traders kinda live their own lifes, instead of doing the fundementals. But over a couple of months the EUR/USD will probably go down again.
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The long run?
We only 12 years underway,this is not the long run yet.
This are just infancy, starting up problems, huge fundamental changes like this can take decades.
Like the image alot and thats one thing keynes was right about.
In the long run we are all death and our existance is futile.
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On June 30 2012 08:31 Gaga wrote:Show nested quote +On June 30 2012 07:06 Domus wrote:
What worries me is the reliability of Italian and Spanish banks. Take Bankia for example, just look at how they mislead their customers, how does such a bank have the right to exist? And now that they have screwed over their own customers the EU is supposed to save them? Great plan! The people in charge of such a bank don't even deserve a salary, and yet I have the feeling they are making salaries in the top 0.1% of Europeans. If a bank needs help the people in charge of that bank should at the very least be fired and put to ten years of forced labor in Siberia or something. no .. the owners of that bank should loose it. and the bank's good parts distributed among it's creditors (the people who put their money in that bank are the banks creditors).
And where do people's savings come into play?
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On June 30 2012 19:42 kemoryan wrote:Show nested quote +On June 30 2012 08:31 Gaga wrote:On June 30 2012 07:06 Domus wrote:
What worries me is the reliability of Italian and Spanish banks. Take Bankia for example, just look at how they mislead their customers, how does such a bank have the right to exist? And now that they have screwed over their own customers the EU is supposed to save them? Great plan! The people in charge of such a bank don't even deserve a salary, and yet I have the feeling they are making salaries in the top 0.1% of Europeans. If a bank needs help the people in charge of that bank should at the very least be fired and put to ten years of forced labor in Siberia or something. no .. the owners of that bank should loose it. and the bank's good parts distributed among it's creditors (the people who put their money in that bank are the banks creditors). And where do people's savings come into play?
Lol, you silly lad thinking about the people... It's all about the free market!!!111
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The national governments all guarantee safings up to 100k/bank/person.
This would cost the government (virtual) monney off course, but thoose bailouts are not free either.
Tbh they should just nationalise the whole banking industry.
Competition here did not lead to better products for clients, on the contrary.
Let the free profits they get, from lending out monney they dont have against 5% while paying 1% to lend that monney from someone else who doesnt have it either, let all thoose profits go into the national treasurys.
Get rid of the silly bonusses and overpaid inventors of complex derivates to safe another huge amount of monney,then you have a foundation to build on.
As long as this culture of grab what you can keeps existing at the banks i doubt we will see a stable financial industry whos goal is to serve the public, instead of themselves.
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On June 30 2012 19:42 kemoryan wrote:Show nested quote +On June 30 2012 08:31 Gaga wrote:On June 30 2012 07:06 Domus wrote:
What worries me is the reliability of Italian and Spanish banks. Take Bankia for example, just look at how they mislead their customers, how does such a bank have the right to exist? And now that they have screwed over their own customers the EU is supposed to save them? Great plan! The people in charge of such a bank don't even deserve a salary, and yet I have the feeling they are making salaries in the top 0.1% of Europeans. If a bank needs help the people in charge of that bank should at the very least be fired and put to ten years of forced labor in Siberia or something. no .. the owners of that bank should loose it. and the bank's good parts distributed among it's creditors (the people who put their money in that bank are the banks creditors). And where do people's savings come into play?
wtf man ...
i even explained it in the brackets... when people want to save money in a bank they LEND THE BANK MONEY AND BECOME IT's CREDITORS. i know that this seems not to be common knowledge ... but thats the case when you look on the balance sheet of a bank.
so they would get whats left of worth of the bank.
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wich would be nothing lol.
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if that's the case, your advice would be to create a zombie bank without any worth fully dependend of the money from the government ? (and ultimately people's taxes who had nothing to do with it ?)
while the owners (ultimately who is responsible) get a free ride ?
yeah ....
if the goverment should give someone money its the "savers" after the bank did go bankrupt.
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"Greece is an exception in the Euro Zone" - Angela Merkel, December 9, 2011
"Exception from ESM Seniority only applies to Spanish aid" - Angela Merkel, June 29, 2012
No way I trust Merkel in this one.
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On June 30 2012 20:35 Gaga wrote:
if that's the case, your advice would be to create a zombie bank without any worth fully dependend of the money from the government ? (and ultimately people's taxes who had nothing to do with it ?)
while the owners (ultimately who is responsible) get a free ride ?
yeah ....
if the goverment should give someone money its the "savers" after the bank did go bankrupt.
Can't have savers without lenders or we are talking about a seriously imbalanced core business model for the bank.
If you let the stocks go down in flames, the owners will also take huge private financial losses for their roles because of all the options and stock-package-bonuses they get as part of their salary. The "bailouts" in the US, did infact tank the stocks and therefore hurt the bosses on their economy. Some of the bad economic decisions were however bought out by the government and that is the true bail.
The banks did survive, but at a high cost for investors and therefore also bosses.
Without having all dimensions in the equation you end up with some misnomer like free market good, regulated market bad. With all dimensions in play none of these are good and you can only hope to limit the bad effects of free market and regulated market, by mixing them.
What is worth to discuss is what constitutes and how to enact. "Crime and Punishment" and it will ultimately be what will determine the risk-willingness of the market.
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Good Game Germany. Our politicians are selling us out...
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On July 02 2012 05:25 Yuljan wrote:
Good Game Germany. Our politicians are selling us out...
Merkel folded faster than someone drawing 2-9 offsuit for their hole cards in Hold 'Em. And in another few months after this does basically nothing to reverse the downward spiral she'll fold again to the next demand for more money. Get her out of there fast before she allows Hollande and Club Med to drag Germany down with them.
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On July 02 2012 05:25 Yuljan wrote:
Good Game Germany. Our politicians are selling us out...
Doubt it. Merkel and Schäuble have something up their sleeves. They aren't this stupid. Not to mention they will lose the elections, and no politician wants that.
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EPT
