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funny to see everyone theorizing about the possible causes of the crisis without considering that maybe the system is inherently flawed.
"One explanation for the appearance of contradictions in investing is that economics and finance are social (or soft) sciences. In a hard science, like physics or chemistry, there are precise measurements and well-defined laws that can be replicated and demonstrated time and time again in experiments. In a social science, it's impossible to "prove" anything. People can develop theories and models of how the economy works, but they can't put an economy into a lab and perform experiments on it.
In fact, humans, the main subject of the study of the social sciences are unreliable and unpredictable by nature. Just as it is difficult for a psychologist to predict with 100% certainty how a single human mind will react to a particular circumstance, it is difficult for a financial analyst to predict with 100% certainty how the market (a large group of humans) will react to certain news about a company. Humans are emotional, and as much as we'd like to think we are rational, much of the time our actions prove otherwise."
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On July 31 2012 05:50 xeo1 wrote:
funny to see everyone theorizing about the possible causes of the crisis without considering that maybe the system is inherently flawed.
"One explanation for the appearance of contradictions in investing is that economics and finance are social (or soft) sciences. In a hard science, like physics or chemistry, there are precise measurements and well-defined laws that can be replicated and demonstrated time and time again in experiments. In a social science, it's impossible to "prove" anything. People can develop theories and models of how the economy works, but they can't put an economy into a lab and perform experiments on it.
In fact, humans, the main subject of the study of the social sciences are unreliable and unpredictable by nature. Just as it is difficult for a psychologist to predict with 100% certainty how a single human mind will react to a particular circumstance, it is difficult for a financial analyst to predict with 100% certainty how the market (a large group of humans) will react to certain news about a company. Humans are emotional, and as much as we'd like to think we are rational, much of the time our actions prove otherwise."
i not just consider it, i think it is.
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On July 30 2012 04:33 Gaga wrote:Show nested quote +On July 30 2012 02:22 M4nkind wrote:
If they disband euro, heavy export countries such as Germany will suffer hard. And poor countries would do well, that's why Germany is not giving up on helping those poor countries. Since if they leave Deutch mark would rise high so that their exports would be screwed and they would get insane recession.
Thats the highest problem of euro - since we have no centralized government and all counties are on their own doing whatever they like they can easily make others suffer. US has same currency same government and thats why its better then Europe situation. Now we just dont know what to do, either we need to make agreements on some governing guidelines or disband euro - thats why Merkel is pushin greeks and spain politically. Some countries made crap desicions and now we all have to suffer, but its ok since we are union. that's a myth. Germany has 0 natural resources. Everything we export in machinery/chemistry was imported as raw material or machine part. -> if exports get more expensive imports would get cheaper as well. We did well with the strong DM as well, remember ? and right now our export surplus hurts us as well. Because in reality that means we deliver real goods while getting credit that probably won't be paid back.
That's not a myth, you're just too stuck in your own beliefs to see that. A collapse of the EU zone would mean a massive crisis, in any way possible, that would directly impact on demand. Since Germany's economy is elastic to his partner demand, then Germany will suffer more than others, period. Just like Germany suffered more from the subprime crisis than any other european countries.
But again, since Germany has such an export surplus, if the system does not change, any possible reaction or stimulus from european country will end up in German's pocket, which is basically what happened after the subprime crisis.
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On July 31 2012 06:28 WhiteDog wrote:Show nested quote +On July 30 2012 04:33 Gaga wrote:On July 30 2012 02:22 M4nkind wrote:
If they disband euro, heavy export countries such as Germany will suffer hard. And poor countries would do well, that's why Germany is not giving up on helping those poor countries. Since if they leave Deutch mark would rise high so that their exports would be screwed and they would get insane recession.
Thats the highest problem of euro - since we have no centralized government and all counties are on their own doing whatever they like they can easily make others suffer. US has same currency same government and thats why its better then Europe situation. Now we just dont know what to do, either we need to make agreements on some governing guidelines or disband euro - thats why Merkel is pushin greeks and spain politically. Some countries made crap desicions and now we all have to suffer, but its ok since we are union. that's a myth. Germany has 0 natural resources. Everything we export in machinery/chemistry was imported as raw material or machine part. -> if exports get more expensive imports would get cheaper as well. We did well with the strong DM as well, remember ? and right now our export surplus hurts us as well. Because in reality that means we deliver real goods while getting credit that probably won't be paid back. That's not a myth, you're just too stuck in your own beliefs to see that. A collapse of the EU zone would mean a massive crisis, in any way possible, that would directly impact on demand. Since Germany's economy is elastic to his partner demand, then Germany will suffer more than others, period. Just like Germany suffered more from the subprime crisis than any other european countries. But again, since Germany has such an export surplus, if the system does not change, any possible reaction or stimulus from european country will end up in German's pocket, which is basically what happened after the subprime crisis.
Ofc there would be a depression or even collapse of our whole financial system if the Euro collapses. But every country will suffer from that.
there is a saying in germany : "besser ein ende mit schrecken als schrecken ohne ende" which roughly translates to : better an end with terror than terror without ending.... which fits quite well in this situation.
That doesnt say anything about the benefits of germany from the Euro. The one who benefited was ofc the export industrie of Germany (the big global players), but the german people payed the price for it (stagnating wages, subisdising the periphery to buy the goods ... etc.) So for the whole of germany my point is that is not beneficial to stay in the Euro, ESPECIALLY when the german people have to pay for the dept of the whole Euro Zone and inflating their money in the process to keep the ship floating.
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Germany doesn't benefit from the euro, but from the europe and the schengen treaty. The euro is only a currency.
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On July 31 2012 06:55 WhiteDog wrote:
Germany doesn't benefit from the euro, but from the europe and the schengen treaty. The euro is only a currency.
wtf dude, i speak about the currency.
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On July 31 2012 06:56 Gaga wrote:Show nested quote +On July 31 2012 06:55 WhiteDog wrote:
Germany doesn't benefit from the euro, but from the europe and the schengen treaty. The euro is only a currency. wtf dude, i speak about the currency.
You don't even know what you are talking about really... You said that Germany suffering more than others from the euro collapse is a myth, which is wrong. Germany will suffer more, even if it doesn't mean that they are indeed gaining more than other from the euro zone.
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On July 31 2012 07:00 WhiteDog wrote:Show nested quote +On July 31 2012 06:56 Gaga wrote:On July 31 2012 06:55 WhiteDog wrote:
Germany doesn't benefit from the euro, but from the europe and the schengen treaty. The euro is only a currency. wtf dude, i speak about the currency. You don't even know what you are talking about really... You said that Germany suffering more than others from the euro collapse is a myth, which is wrong. Germany will suffer more, even if it doesn't mean that they are indeed gaining more than other from the euro zone.
Thats a very hypothetical thing to say when one cannot really predict what would happen in/after a collapse. Ofc germany would loose all the money they lend to others ... but i would say it's lost anyway.
The only thing that will have to happen is that we will export less and have to consume more ourselves.
Why would that equate to more suffering, than others who right now live on external loans, will have to face huge troubles as well ?
Care to explain ?
p.s. and please shut the fuck up with that "You don't even know what you are talking about really... " thats what i have in my mind about you as well, but i don't write it in every fucking post.
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On July 31 2012 07:07 Gaga wrote:Show nested quote +On July 31 2012 07:00 WhiteDog wrote:On July 31 2012 06:56 Gaga wrote:On July 31 2012 06:55 WhiteDog wrote:
Germany doesn't benefit from the euro, but from the europe and the schengen treaty. The euro is only a currency. wtf dude, i speak about the currency. You don't even know what you are talking about really... You said that Germany suffering more than others from the euro collapse is a myth, which is wrong. Germany will suffer more, even if it doesn't mean that they are indeed gaining more than other from the euro zone. Thats a very hypothetical thing to say when one cannot really predict what would happen in/after a collapse. Ofc germany would loose all the money they lend to others ... but i would say it's lost anyway. The only thing that will have to happen is that we will export less and have to consume more ourselves. Why would that equate to more suffering, than others who right now live on external loans, will have to face huge troubles as well ? Care to explain ?
Germany's debt is 81% of GDP. I'm not sure where this myth that Germany is immune to crisis because they have a balanced budget was propagated.
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On July 31 2012 07:10 Trowa127 wrote:Show nested quote +On July 31 2012 07:07 Gaga wrote:On July 31 2012 07:00 WhiteDog wrote:On July 31 2012 06:56 Gaga wrote:On July 31 2012 06:55 WhiteDog wrote:
Germany doesn't benefit from the euro, but from the europe and the schengen treaty. The euro is only a currency. wtf dude, i speak about the currency. You don't even know what you are talking about really... You said that Germany suffering more than others from the euro collapse is a myth, which is wrong. Germany will suffer more, even if it doesn't mean that they are indeed gaining more than other from the euro zone. Thats a very hypothetical thing to say when one cannot really predict what would happen in/after a collapse. Ofc germany would loose all the money they lend to others ... but i would say it's lost anyway. The only thing that will have to happen is that we will export less and have to consume more ourselves. Why would that equate to more suffering, than others who right now live on external loans, will have to face huge troubles as well ? Care to explain ? Germany's debt is 81% of GDP. I'm not sure where this myth that Germany is immune to crisis because they have a balanced budget was propagated.
anymore who want to put words into my mouth ? where the hell did i say Germany is immune to crisis ... god... ofc it is not.
I just said that this "Germany profits sooo much from the euro becauze they export so much" is just not true.
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MADRID — The Spanish economy remains stuck in its second recession in three years after contracting 0.4 percent in the second quarter of 2012 from the previous three months, according to official data.
It was the third consecutive contraction following the previous two 0.3 percent quarterly declines, Spain’s National Statistics Institute said Monday.
The institute said that compared to the second quarter in 2011, the economy had contracted 1 percent. A technical recession is commonly defined as two consecutive quarters of economic contraction. The slump was due to a fall in demand at home, offset slightly by an increase in exports, the institute added.
The conservative government predicts the economy will contract 1.5 percent for all of this year and 0.5 percent next year.
Spain has near 25 percent unemployment and is struggling to avoid having to seek a financial bailout, as Greece, Ireland and Portugal have already done.
Spain has asked for as much as €100 billion ($123 billion) in loans for its banks, which are laden with soured investments following a property sector collapse in 2008. A sovereign bailout for Spain, which has a €1.1 trillion economy, would be far larger.
Source
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I feel like a lot of people in this thread heavily misunderstand one another. Also there are a lot of people who simply have no clue but try to be smartasses. Then again, there are some people who seem to be pretty smart, but might use wrong words at times are being picked upon. All I want to say is that I study this shit and also I don't know too much about it.
The thin is that everybody thinks to know something while everybody agrees upon noone knowing anything.
I don't really know where I am going with this post (lol), all I'm trying to say is that a lot of people have a lot of different opinions. And this is especially pronounced in politics and economics.
One thing though is worth contributing to this thread, I feel. http://www.amazon.com/This-Time-Different-Centuries-Financial/dp/0691152640/ref=sr_1_1?ie=UTF8&qid=1343687100&sr=8-1&keywords=this time is different
This book! Not trying to advertise it but it is the best read I have had on debt, default and crises. It elaborates on topics such as debt levels (and ratios) not being the sole contributers to default. This explains why Germany is less prone to crises than other countries with comparable debt ratios.
Sorry for the bad post.
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On July 31 2012 07:12 Gaga wrote:Show nested quote +On July 31 2012 07:10 Trowa127 wrote:On July 31 2012 07:07 Gaga wrote:On July 31 2012 07:00 WhiteDog wrote:On July 31 2012 06:56 Gaga wrote:On July 31 2012 06:55 WhiteDog wrote:
Germany doesn't benefit from the euro, but from the europe and the schengen treaty. The euro is only a currency. wtf dude, i speak about the currency. You don't even know what you are talking about really... You said that Germany suffering more than others from the euro collapse is a myth, which is wrong. Germany will suffer more, even if it doesn't mean that they are indeed gaining more than other from the euro zone. Thats a very hypothetical thing to say when one cannot really predict what would happen in/after a collapse. Ofc germany would loose all the money they lend to others ... but i would say it's lost anyway. The only thing that will have to happen is that we will export less and have to consume more ourselves. Why would that equate to more suffering, than others who right now live on external loans, will have to face huge troubles as well ? Care to explain ? Germany's debt is 81% of GDP. I'm not sure where this myth that Germany is immune to crisis because they have a balanced budget was propagated. anymore who want to put words into my mouth ? where the hell did i say Germany is immune to crisis ... god... ofc it is not. I just said that this "Germany profits sooo much from the euro becauze they export so much" is just not true.
Sorry, I misunderstood your post. I apologise.
And to the poster above, which year of your economics degree are you in?
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Maybe America wants Europe to fail because China is getting very jealous about not being a world reserve currency. China then comes up to help stabalize the world, only to have America fuck China over. There's no way China will attack America and vice versa, so we play economy wars.
Just think about it.
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America wants europe to fail because america iself is failing so hard (50m people on foodstamps, below poverty line)
They are begging europe to print monney, so that they can continue to print their dollars.
When the usa and the dollar still ruled the world there used to be a saying "The dollar:our currency, your problem" but the euro has severly undermined the position of the dollar.
You kinda right i think, its an economic war on a verry grand scale.
"and ironically one of the reasons for the Euro's creation was to dethrone the dollar. Look at it now, lol."
Then we see that the euro is still way stronger then the dollar compared to the situation at the start of the euro..
There wont be need for cooperation to "kill" the dollar
The usa will do it themselves, they will keep printing monney because the economy is beyond repair.
just look at the value of the dollar during the past 10-15 years.
Its only now when people anticipate europe to start printing more euros that the dollar is regaining some of the ground lost.
If europe can get out of this crisis without printing monney you will see the euro @ 1.50$+ within 6 months again.
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On July 31 2012 08:00 DigiGnar wrote:
Maybe America wants Europe to fail because China is getting very jealous about not being a world reserve currency. China then comes up to help stabalize the world, only to have America fuck China over. There's no way China will attack America and vice versa, so we play economy wars.
Just think about it.
Hmmm this massive problem in this is that, if we were to believe what you suggest, China would have to be willing to lose Trillions of dollars on US debt... and remember that the Yuan isn't an attractive reserve currency because the Chinese manipulate and devalue their currency all the time, and no one has any idea what will happen in China when they are unable to stimulate the economy so much with public investment.
The problem of the dollar as a reserve currency is that so many people rely it; foreign bonds are often priced in dollars, foreign securities and other investments are priced in dollars, commodities are priced in dollars etc. Remember that 62% of currency reserve holdings are in USD. Taking the dollar down would take a massive global co-ordination against the dollar, and a lot of past attempts to diversify reserve currencies away from the dollar have failed.. OPEC tried it then realised it would take too much time and money, and ironically one of the reasons for the Euro's creation was to dethrone the dollar. Look at it now, lol.
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On July 30 2012 03:15 Trowa127 wrote:Show nested quote +On July 30 2012 01:23 Caryc wrote:
why would england be so dumb to pay for other countries?
germany wont leave tho..at least not with merkel.
unfortunately (maybe luckily?) im no expert ,but how is this mess going to end
if things go on like this? the minority pays the majority because they dont want
to change stuff? thats so stupid (on this scale at least) The likely end game solution is either dissolution, a richer Country leaving the Euro or mass debt monetization (judging from the respones of German and other Northern European posters in this threat, I don't think politcians could sell money printing to their populations, but who knows - nobody circumvents democratic process like unelected EU leaders).
I'm cherrypicking this post because I don't want to get stuck in the general debate (simply put, I really haven't kept up with the debate or the stituation during July). The truly sad thing about the EU is that our leaders are in fact elected. Each country decided to elect those idiots and send them to Brussels to represent us. The commission is selected by the European Parliament, from candidates nominated by the national goverments. Parliament is elected directly, and the European Council (Rat? not sure about the english word, vacation has ruined my brain) is directly staffed by our National Goverments.
Closing words regarding the debtate in general, I am unsure if there is any way left out of this crisis without a total collapse / breakdown of the EU in the mean time. The sums involved simply have become so large that we can't just pay it off and hope it becomes better. The news from Spain isn't in any way encouraging. Succintly put, I don't think the EU can make it, which is a damned shame because it seemed to be a step in the right direction.
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On July 31 2012 07:00 WhiteDog wrote:Show nested quote +On July 31 2012 06:56 Gaga wrote:On July 31 2012 06:55 WhiteDog wrote:
Germany doesn't benefit from the euro, but from the europe and the schengen treaty. The euro is only a currency. wtf dude, i speak about the currency. You don't even know what you are talking about really... You said that Germany suffering more than others from the euro collapse is a myth, which is wrong. Germany will suffer more, even if it doesn't mean that they are indeed gaining more than other from the euro zone.
You're speaking out of your ass. Should you even take a glimpse where Germany, Finland and the Netherlands export you will see that the majority of the exports go outside of Euro zone. This is especially true with Finland, with the only real export country in euro zone is Germany (we export lower techonology products like paper and steel for the germans to make machines :D). We export a third of our exports to euro zone, and the weight of the euro zone is going down all the time in exports.
Really this entire crisis is not only euro and economy related. It's a crisis of democracy, as we can obviously see that democracy is not working on Southern Europe unless there's so big economic growth that they can't go into debt. The entire system and people's mentality will have to change, or eventually at this rate democracy will come to an end in Greece for instance. They're already dictated by foreign powers what to do (and rightfully so).
The other part is the entire Europe's ability to compete with the rest of the world. We have to start competing with Asia in manufacturing and in everything. We have to up our competiveness by a) creating good environment for businesses b) halting the rise of unit costs. This problem is largest in Southern Europe, but it's a problem in Germany, Finland, Austria and The Netherlands also. Germany has done the best progress here and Finland probalbly the worst (although we made some good progress in last pay negotiations, there will actually be a slight decay in our pays this year).
Euro is just speeding up the underlying problems in Europe to surface, no matter what we do we will eventually have to deal with the real problems. Even breaking up the euro (which I think is horrible idea) and devaluing the currencies in Southern Europe will only postpone the inevitable: economic collapse that results from a badly functioning political system and uncompetitive inefficent economy. I mean, Greece and Italy are more corrupt that half of Africa.
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US had some good news today. Good trade on USDCAD. EUR had some bad news today. Waiting to see if this Head and Shoulders is a Head and Shoulders.
Isn't August 20th the last day for Greece until it runs out of money?
USD
CB Consumer Confidence
65.9 61.5 62.7
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On July 31 2012 11:26 Tula wrote:Show nested quote +On July 30 2012 03:15 Trowa127 wrote:On July 30 2012 01:23 Caryc wrote:
why would england be so dumb to pay for other countries?
germany wont leave tho..at least not with merkel.
unfortunately (maybe luckily?) im no expert ,but how is this mess going to end
if things go on like this? the minority pays the majority because they dont want
to change stuff? thats so stupid (on this scale at least) The likely end game solution is either dissolution, a richer Country leaving the Euro or mass debt monetization (judging from the respones of German and other Northern European posters in this threat, I don't think politcians could sell money printing to their populations, but who knows - nobody circumvents democratic process like unelected EU leaders). I'm cherrypicking this post because I don't want to get stuck in the general debate (simply put, I really haven't kept up with the debate or the stituation during July). The truly sad thing about the EU is that our leaders are in fact elected. Each country decided to elect those idiots and send them to Brussels to represent us. The commission is selected by the European Parliament, from candidates nominated by the national goverments. Parliament is elected directly, and the European Council (Rat? not sure about the english word, vacation has ruined my brain) is directly staffed by our National Goverments. Closing words regarding the debtate in general, I am unsure if there is any way left out of this crisis without a total collapse / breakdown of the EU in the mean time. The sums involved simply have become so large that we can't just pay it off and hope it becomes better. The news from Spain isn't in any way encouraging. Succintly put, I don't think the EU can make it, which is a damned shame because it seemed to be a step in the right direction.
Regardless of whether they are elected, the U.K. government in particular had no right to enter the EU without our permission; it was in breach of our constitution (see this link http://www.acasefortreason.org.uk/ - I know the guys who set up that page might be conservative, but they do prove it was illegal) and therefore all our politicians are 'complicit.' We were never given a referendum even though we were promised one a number of times. So regardless of whoever elected these people in our parliament specifically, they had no legal grounds to do so. Another example is the activities of the various bail out vehicles and our contribution to them; again, we weren't asked. I think this idea that as we elected our parliaments they can do what they want without asking us is farcical. I do agree with your basic premise, but I don't really understand how our elected governments (remembering there is very little choice by design - the three major parties in the U.K have a few noticeable differences, but they are all parroting the same rubbish and no one will take any action over Europe, or action over anything for that matter) can make such huge decisions (many they themselves don't understand). But you were most certainly right about one things - they ARE idiots :D.
But I agree - the Euro in this state doesn't have far to go, and was flawed from the start. A single currency without a proper central bank, linking such weak economies to strong ones and then leaving so much room for social unrest by refusing referendums on any issues, you can really see why the public are so unhappy about all this. It just looks like the political class playing a giant game of chess (which they are losing, very very badly).
Btw I think this quote is very telling of how far the European Commission are willing to go to circumvent the need for national votes on European decisions. It's a section of a speech Jean-Claude Trichet gave on transference of sovereignty to the EU.
'In the event of a country not abiding by the budgetary rules, national sovereignty would be automatically transferred to the European level on a scale that can ensure compliance with the objectives.'
That is what I meant by circumvention of democratic process. Really, a very scary statement to make.
PS - Thank you Tula, you are the only person in this thread ever to respond to me without being sarcastic or claiming I'm an idiot.
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EPT
