Quite what is actually happening over the Eurozone I can't actually tell you: it's not that things change too fast to write about them, it's that things change to fast to read about them. Berlusconi still PM? Italian bond yields over or under 7 per cent? That changes as often and as fast as Berlusconi does condoms. France to go …
@No such thing as an Anonymous Coward
your take on history is, well, how can i put it. utter horse shit?
So without the two wars, we would have been financially crippled?
thats an intresting take on history, much in the way the americans didnt kill the natives, they gave them tea and cakes an they did everything in the wars, an everything they did was perfect or so much harder than anything else on any front and THAT was why so many of them died.
Quick history lesson, the reasons for both the wars started a long time before they really got down to it, History its self was a large driving force, you could go back decades reading about events which were essentially adding wood an petrol in an ever increasing pile, moral an treaty alliances all over the place an finally the spark that set the whole thing off. Archduke Franz Ferdinand, that pissed off quite a few people an set off a chain of events that eventually set fire to the massive bonfire that had built up in Europe. Now, you could argue that Britian was involved in this through its relentless hand slapping with the other big players in Europe, but intrestingly our main reason for getting involved was because of alliances.
Now, that war COST britian its Empire, we were up to our eyes in debt an we didnt get much out of it in the end, but we still had it is name an potentially we could have kept some of it.
The second war was just a continuation of the first, only this time we were more active in trying to stop it before it started,, we were apart of the reason it started again but only through association, we got bugger all out of the surrender on the first war, but Germany an co was raped for all it was worth by everyone else. Thus the world war part 2 started. That broke the back of the UK and we were never to be the same again. Once again we got bugger all out of it an it cost us everything.
So your two points, firstly we were involved in starting the war. Not directly an no more than any other European country, your wrong.
Secondly, you are saying we are better off WITH the wars, financially speak? im not sure how you came to that, We lost everything, the UK was ruined and got almost nothing in return, the rest of Europe picked over the remains of Germany after the first an second wars, France especially, an we got largely nothing except a pat on the back, Americans re writing history, lost an empire and was debt up to our eye balls!
so i cant see you logic im afraid
"the Bromberg Massacre on September 3, 1939, in which 5 500 people were murdered. These provocations and atrocities were stoically ignored."
That "stoically ignored" is a bit odd. For you've just placed the massacre two days *after* the Nazis invaded Poland.
And there were rather a lot of killings of Poles in Bromberg by Nazis in the weeks and months that followed as well.
Er, not quite
The debt of GDP for Greece is 161% of GDP, so thats like someone on 10K a year owing 16K. So its bad, but not that bad. The problem is that also, their deficit is -8.5%, so even though they take home 10K, they have to spend 10.85K to survive. and nothing to spend on the debt when they want their annual interest paying.
It's not feasible for the govt to take 100% of the GDP as taxes. Even after Labour's stealth taxes and the like, we're still only at about 50% here, and the Greeks are well known for under-collecting.
But even if the Greek govt could collect 50% of the GDP as tax, then it would be like someone with an income of £10k owing £32k.
According to http://www.oecd.org/dataoecd/48/27/41498733.pdf the 2006 %age of GDP taken as tax revenue was 31.3 (2006 is the latest I could see, but I didn't look that hard). at 31.3%, it's the equivalent of someone earning £10k who owes £51.44k. So the original statement was actually pretty close...
the same economic blind spot....
....as the council worker I met last week. (Housing officer or something). Was quite adament that she deserved an above inflation pay rise and one of her arguments was that she would pay more in tax and it would help boost the economy because she would spend it in local shops.
I asked what car she drove. When she said a Mazda, I kept waiting for the penny to drop.........but nothing.
Inflation is the greatest danger
Inflation is never good unless you are a spendthrift individual or government. The Germans are right : let the spendthrifts go to hell in a handcart.
:: ...let the spendthrifts go to hell in a handcart. ::
Nice theory. One problem with it - the spendthrifts have your economy by the short-n-curlies, and they're taking it with them when they go.
"You expect me to default? No bonds, I expect you to die"
TY for that : )
Nice 007 reference in the second section title....
In the spirit of your subtitle, and since the whole Euro-bailout seems to be heading in the direction of black comedy, might I suggest the following line if an outright parody is ever penned:
"My name is bond....lame bond"
That's all I've got, and the sad thing is all I've got is at least as much as the various pols and technocrats who are supposed to steer Europe out of this trainwreck.
Hardly an unbiased commentator.
If this is meant to be a criticism, it's a bit of a fail.
We all have our own bias. At least the author has declared his.
That's why mentioned it, so that the bias is known.
Would you prefer that it wasn't?
there's no such thing, so what's your point? evaluate his arguments.
@Mage As long as people are honest about their political ideology all points of view are welcome. I have listened to opinion from independent financial types who have held the same opinion (Greece will default eventually) for many weeks.
Listen, for example, to Johnathan Davis - jonathandaviswm.com
I'd rather a pieace like this
with a declared allegiance. Than the tosh that gets printed in the tabloids.
Are there any unbiased commentators inside a house on fire?
What's your point?
An analysis stands up or fails by the quality of it's arguments. Saying that someone has invalid opinions because he is a member of political party you happen not to like is stupid, though admittedly tempting.
Who, with anything wotrhtwhile to say ...
...is unbiased ?
And how does having a point of view diminish the information conveyed ?
Thats exactly right (though it's spelt 'worthwhile')
It's virtually pointless to hear from people with no bias, even those with extreme views should have their say. We're human, we're all bound to have biases - even if legally we're not allowed to have them <rolls eyes>
Just because someone says something does not make it necessarily true, it's a view point that can be debated and judged on it's merits.
Let statements be valued according to their ability to stand up to scrutiny - if they are false then they will be ignored.
you expressed your opinion but I can't fail to notice you forgot to declare you bias. I don't believe you have none.
Peston Eat Your Heart Out
Cracking explanation - someone forward this as a lesson to the ubiquitous Mr Robert Peston.
Thanks God that I don't have anything to do with politics (Even the office sort!).
I have to agree with EddieD above - I've been cautious and lived within my means ("If you can't pay cash, you can't afford it!") and am peeved that I will now be suffering because of someone else playing fast and loose with the bookkeeping. Sort of makes Enron's accountants look employable again..
I'm curious, did you pay for your house with cash as the vast majority could not do so? If you do not own but instead rent then you may find issues further down the track with housing affordability unless your rent has been markedly cheaper than a mortgage on a similar property and that saving has been incredibly wisely invested.
There is a solution
Eurozone countries must become federalised and subject to a central federal government, enforcing the policies of a central federal treasury and the ECB.
This is the US Civil War moment for Europe - no more procrastination is possible.
Don't want austerity? - woosh, paratroops land on the Government building, PM "voluntarily" resigns, Parliament suspended, no questions allowed.
Can't decide when to resign? - a descendant of Otto Scorzeny will gladly escort Musso... Berlusconi to Berlin, for extensive "debriefing".
There will be blood...
Oh, I'm so glad the UK has managed to dodge the Euro!
Oh the Irony!
Interesting thought. It would be deeply ironic if Jean Monnet and his successors managed to do through years of incompetence what Bismarck and Hitler failed to do in Europe by political & military means.
we don't seem to need overt means like paratroopers, you just get the Prime Miniater to resign and replace him with a technocrat with lots of EU experience, has already happened in Greece and looks like Italy will get "Super Mario"
@ Fred Bloggs
Hit it right on the nail
Germany won't print money.
The Euro's problem has always been that it tried to mix together a group of countries that believed that inflation and printing money was the obvious answer (if you are in debt and can keep your income inline with inflation it pays off your debt - that's how the pension generation in this country paid for their houses). Then there is a group of countries, primarily Germany, that doesn't believe in printing money and inflation.
Who knows - probably both of them.
But you sure as hell can't mix them.
The best solution is for Germany to leave the Euro along with anyone else who wants to follow them. The rest can then change the rules and print money to their hearts content.
In the mean time, we still stuffed, because there is no way we are ever going to pay for the pensions we've promised each other. If you're not already drawing your pension you can look forward to a bleak future.
The author wrote "I've been saying it will all end in tears for at least a decade. I can find a Usenet post of that vintage saying exactly that. Being right is quite wonderful,"
I'm always intrigued by people who say that as generally it means they made a mass of predictions and can drag them out individually in the future to show how right they were. I have no idea on the percentage of correct predictions the author has made but in the interest of fairness I think it should be considered.
Regarding Europe, perhaps Israel and Iran will kick off soon and then we won't have to worry about the state of the economy. If not, mine is a pint so I can sit back and watch us all sinking.
I'm a business. I supply stuff on credit and I expect to be paid back in due course. I have a Credit Control team so that I don't lend money to people who clearly are unable to pay me. Mostly it works. Occasionally it hiccups, and usually I survive (the Credit Control folk may have to be extra nice to me for a while). But on the whole, mostly it works. If it goes wrong in a big way, my company goes bust. I know this because it's been that way for decades.
Now change the picture ever so slightly.
I'm a bankster. I supply money on credit and I expect to be paid back in due course. I don't have a Credit Control team, I use ratings agencies. Mostly it works. Occasionally it hiccups, and usually I survive. But on the whole, mostly it works. If it goes wrong in a big way, the taxpayer will bail me out. I know this because it's been happening with different sets of banks every few months for the last few years, and very few people seem to realise what's going on.
See any problem with that?
[The more detailed pictures goes into Credit Default Swaps and other such tools of the "masters of the universe" in a lightly regulated world. But that'll be tl;dr.]
Austerity for the 99%.
Megabonuses for the 1%.
@Anonymous Coward - Posted Thursday 10th November 2011 20:28 GMT
Businesses actually deal with real things.
The banks create money out of nothing, then expect real money (which has had value attached to it by for example: work) to pay off the fake non existent money - in return. Every thing else (the tools of the "masters of the universe") is just to fool you into believing that illusion was real.
@No such thing
"The banks create money out of nothing"
If you would be so kind as to explain precisely how that works we will also happily join the banks in the process.
lender's commitment == lender's IOU == lender's issue
"The banks create money out of nothing"
They don't, we do - but not out of nothing so long as we intend paying it back. We issue our own IOUs which the bank anonymises and circulates whenever we purchase something on a credit card. Or we create the money when we take out an overdraft or mortgage. (Those who rabbit on about 'fractional reserve banking' don't understand how the current loan-backed money system works. Banks don't keep fractional reserves and haven't for many years.)
But once understood that it's _our_ money that circulates why should we have to pay interest for the right to circulate IOUs ( which fractional reservists misrepresent as a privilege ?) I can understand the person accepting IOUs from someone with a bad credit rating wanting the issuer to pay insurance. Apart from that centralised cost-recovery function (insurance) , the only fair way to get this job done is if the bookkeeper, as a mutual service to the community, gets paid based on cost of service, pretty much the same way Building Societies or Credit Unions do.
See also: http://www.gmlets.u-net.com/ .
Keynes once claimed only 3 people in the UK understood money. I'd now say it's closer to several thousand but mostly they're people who use LETS.
RE: creating money out of nothing
It's called fractional reserve banking, toss that into google for an explanation. If you are unfamiliar with the practice, prepare to get very angry...
I like how we can dismiss economic points on the basis of the author's political affiliation.
How I see it
Think of the European union as a couple of Gamblers, a few Alcoholic benefit scroungers, some low income earners working hard to survive, some well paid professionals and a couple of millionaires sharing a house and bills. There is only so much 'lend me a fiver till my giro clears' you can take before you want to move out.
You could of course join the Euro!
With the Euro you get to share the same bank account as well. Imagine finding out your car payment hasn't gone out because Geoff has put the lot on the 3:30 at Cheltenham. Or that because you share a house with an investment banker your granny has to pay for her own home care.
What I think most people signed up for when we joined Europe was :
'we all live in the same village lets start a neighbourhood watch,have a farmers market Thursdays, collect for the church roof and organise a bonfire committee'.
We have got something completely different.
I'm not a UKIP voter (the local representative appeared a little racist which put me off) but I did find myself agreeing with Nigel Farrage's 'FIRE THEM ALL' speech today.
According to the nice lady on the phone this morning I could have been mis-sold payment protection, and could get a lot of money back. I wonder if greece had it too... Problem solved then.
A UKIP column on the Europe on theregister? Really? What next, the BNP on immigration policy?
UKIP supporter does not = UKIP column. As for the BNP point ... very silly.
You seem suprised, didn't you see Lewis Page's anti-Lib Dem rant on the eve of the last general election?
Have you not noticed Andrew Orlowski's climate change denialist posts and pro-music industry/abusive business posts?
The stories supportive of extremely right wing celebrities like Jeremy Clarkson?
If you didn't get the clue that The Register is extremely right wing before this article then there's not much hope for you. It's the Fox News of the IT world.
Why has no-one mentioned Belgium?
... to be THAT rude, eh.
Good article Tim, some interesting thoughts there. I would however disagree with your comment that Credit Default Swaps were "that system worked for a decade". That it "worked" is a stretch, I'd probably argue that the only reason they went on so long is because there was a bit more liquidity in the system, hence it sort of hid the problem until the liquidity ran out. Fundamentally though, it's a flawed concept that got swept along in the euphoria.
For those interested in this sort of thing, I highly recommend "Inside Job". It's only 90 minutes long, and it will make your f**king bloody boil.
"Credit Default Swaps"....I think you mean CDO...mortgages piled up into bonds and sliced and diced, not CDS, which is an insurance policy on the default of a bond.
But yes, I take the point, "worked" might be too strong, "continued" might be better.
"...CDS, which is an insurance policy on the default of a bond."
I thought the thing with a CDS was that it was an insurance policy on a debt which could be held by somebody else, and might have been deliberately engineered to fail (Merrill Lynch/MBIA).
More like an under the counter bet on an event organised by an unlicensed promoter placed with an unregulated bookmaker that an insurance policy really. Or ta least my home contents policy doesn't look anything that :-)
Spain was not a problem, but that is not relevant
Almost convinced me, until I realized how all this works and why those explanations are absurd. What started to make me wary was the statement about Spain. Spain was never a problem of public, but private debt. All these talks about Spain defaulting were completely baseless, but that was, and is not relevant, because what mattered was, and is, to instill fear, uncertainity and doubt.
Because what is relevant is why all this is a non existent "problem" . This "problem" is created by the need of having bigger profits than the previous quarter, or year, having spent the previous profits in big bonuses, more risky loans to entities whose ability to pay is doubtful and who knows what else.
Everybody forgets that, in absence of a money printing machine, this is a closed system. A zero sum game. Whenever someone profits, someone else is losing. So when they have sucked all the possible profits, current and future, from a market, the market collapses because there is no one to profit from. Easy solution, we demand for "rescue" packages whose only purpose is to make someone else richer by giving them a few more percentage points of interest. And who is going to pay for those rescue packages? The taxpayer, of course.
This is a master plan: they have created a situation where they can only benefit from, extracting more and more wealth from the public.
They created the problem, only to profit from the solution. The only question that I want answered is this: who is profiting from all this?
Are you all really that slow?
There's a lot of ignorance around these days, never more so than when it comes to City finance.
All those complaining that we should nationalise the banks and moaning about bailouts, please get back on your meds. You evidently know nowt of economics or finance and should really stop embarrasing yourselves.
There's a fourth solution that would work and isn't mentioned (funny, the author being UKIP n all) which is to simply issue Euro-bonds. These would be underwritten by all Euro denominated states, which provides an effective guarantee against insolvency, but without the need to print money and thus scare the auld enemy.
Now, obviously, there is simply no way we can all continue as we are. State spending MUST drop below the level of tax receipts across the board and permanently. That will require the public sector to feel some real pain of actual cuts, but since that is where the borrowed wealth has been squandered they really have no right to complain.
Ok, so you've issued them and they're backstopped (underwritten) by all the Euro states. Given you know a fair few can't balance their books and/or cannot be trusted with their finances they are effectively backstopped by Germany. How do you sort out who pays what of the coupons, or are they couponless, and you still need to work out who pays what of the final par? What is to stop them saying they have no money when the bill is due? Who pays what then? Unless of course they are backed by the ECB as the head of all these countries' central banks, which would in effect make them the lender of last resort. I don't understand how this works.
OK, it's not as rude as Belgium. But the reason that French bond yields are rising (ie, prices are falling) is because France has made great big promises through the EFSF about backing up Greek, Irish, Portuguese, soon to be Italian etc bonds.
And when you crunch through the numbers France cannot afford to back up those promises without becoming Greece.....
Everybody Pay Attention
Only two things is required to exist in order for somebody to make money. Delta. Thats a difference between two markets and the change in that difference.
There is always money to be made, if you understand that Delta. Thig biggest one of all is the collapse and replacement of world currencies. Anybody that thinks a magical solution will be found, are kidding themselves. The big investers want the change.
They don't know or care who is protesting, or what they are protesting for, they are just making adjustments for the market accounts
back in 2001/2
I was in Greece visiting the ex missus family and with the olympic development and every bank on every corner offering credit cards/mortgages to all and sundry I joked the Greeks would lend themselves into oblivion.
And lo and behold it came to pass, all those ninja loans and borrowing for the Olympics plus joining the euro really did kill the Greek economy.
Its time for the Greeks to call Ocean Finance and consolidate into one affordable repayment
Like a thief in the night
And that is not all, for there is more s**** to hit the fan, for your political representatives are avoiding making their positions publicly known on this little gem trying to get itself kicked into the mainstream by the back door ........ http://youtu.be/5CZr17HLH5U
Bring out the Madame Guillotine. She gonna be needed.
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