Don't sell Germany short
Berlin: "Germany's lost the plot: it's rushing ahead on banning speculation, and now it wants other countries to go along."
This has been the widespread reading of what the German regulator did yesterday.
I write this from Berlin, and I can tell you that this summary is completely wrong.
For starters, the German government has not lost the plot - it merely wants to rewrite it to reflect German political realities.
German officials are under no illusions. They know that a unilateral ban on these trades - just in Germany - will not make much difference to anything.
They also know that other countries are unlikely to follow them anytime soon. They are not really asking them to.
I'm sitting in the Finance Ministry, at their G20 conference on reforming financial regulation. The finance minister hosted a dinner last night for the delegates, and I'm told that the German officials present were a bit sheepish about yesterday's ban.
They were also privately furious at Bafin, the German regulator, for allowing news of the ban to leak on Tuesday, before the Germans had been able to brief other governments.
So yes, that part of the German move was cock-up, not conspiracy. Officials had wanted to explain the move in advance.
Germany does want to see longer term reforms in this area - it is pressing the European Commission to put forward a draft directive that would take a serious look at some of these trades.
To be clear, as Robert Peston notes today, naked trading of sovereign credit default swaps doesn't have a lot of fans in official circles right now. Even if no-one thinks they have contributed much to the euro's troubles.
But this move isn't about that kind of longer term reform. It's about getting the 440bn euros special vehicle for supporting eurozone governments through the German parliament.
The key vote happens tomorrow. That is why we are seeing more of Chancellor Merkel today than originally planned. She's giving a last-minute speech to parliament later as well.
As I said on Today this morning, she needs to make this a crisis about "who runs Europe - governments or the markets?" If it is about whether or not to bail out profligate Southern Europeans, she will fail.
In order to see this content you need to have both Javascript enabled and Flash installed. Visit BBC Webwise for full instructions. If you're reading via RSS, you'll need to visit the blog to access this content.
So, yes, it might have increased instability in the short run - witness what happened to European stocks yesterday.
But the German government's argument to officials in the US, the UK, and elsewhere has been that this ban will actually be a net positive for the markets - in the end - if it helps Germany get that support package through.
It's a pretty roundabout argument. But who knows? They might be right.
Certainly, investors are going to lose patience with eurozone governments quite soon if they don't get more details on how this massive support programme is going to work.
If this helps that move forward, it will help the eurozone, at least in the short-term.
Tomorrow the European governments - all 27 of them - will start work on the macroeconomic co-ordination side of the package, a discussion which, once again, the Germans plan to dominate.
The UK is not going to get dragged into anything it doesn't want to get into. But we will be there.
Be in no doubt: in return for signing-off on this rescue package, Germany will want the new rules of the road to be written in Germany's own image.
Chancellor Merkel has just alluded to this in her speech here - Germany wants tough fiscal controls for every eurozone country to come out of this. And, as one official said to me, at times like this, what Germany wants, Germany tends to get.
But outside Germany, the worry is that the big losers in all this won't be speculators - but ordinary citizens in countries like Spain and Portugal who find they cannot combine massive budget cuts with decent economic growth.
Make no mistake, the UK and the rest of the world will suffer as well, if the conclusion of this crisis is a eurozone based on the same export-led growth model as Germany.
The rest of the world needs domestic demand in the eurozone to grow, not shrink even further, in the next few years. But right now it is very difficult to see how that will happen.
Indeed, if Germany has its way, the eurozone is going to make an even smaller contribution to future global growth than we thought.
~RS~q~RS~~RS~z~RS~12~RS~)
I'm 
© MMXI
Comments
Sign in or register to comment.
...and what will eventually happen as a result is another round of banking crises.
Major European banks that received government bailouts have time limits to repay their state debts. Selling assets in such a climate will not help to raise capital and revenues are not likely to increase.
So eventually, in a few years, the end result will have to be a bailout of those big losers in Spain and Portugal through state intervention in private debt, which will have to take place through the banks, which in turn will become increasingly state owned and/or regulated.
Complain about this comment
Amazing how "the markets" will cry "foul" as soon as one of their fiddles is stopped. Caledonian Comment
Complain about this comment
Sooner or later the Eurozone will fragment.
If I were a (spit) hedgie, I'd be betting on it right now.
Complain about this comment
Forget the rest of the world, the Eurozone needs more domestic demand in the Eurozone! Especially from Germany.
Paul Krugman points out that the countries on the periphery need wages to fall 30% relative to Germany to become competitive.
Germany wants it all there own way and they're stuck in their ways. They don't want to inflate, so the periphery will need to deflate and it will be painful for those people. This will take years of suffering with high unemployment and over burdening debt for countries on the periphery.
The "speculators" are right to ask how this adjustment going to work out. Germany has no answers.
I don't blame Merkel for fighting her corner but it up to the rest of Europe to stand up to German stubbornness.
Complain about this comment
I thought the original euro was a good and practical idea, which also originally included a fairly durable international credit standard as agreed upon by the several advanced nations which created the euro.
Yet, apparently EU politicians then largely ignored such a strict credit standard, for a political end.
Therefore, in this current situation I believe Germany is doing exactly as it should as an effort to return to a high euro credit standard as was once agreed upon by several nations.
Complain about this comment
It just doesn’t seem to make sense.
They want to raise €440 billion Euros to bail out Club Med.
This going along side the IMF’s $320 billion contribution.
But wait a minute, hasn’t the American Congress just voted 94 : 0 against the IMF bailing out countries with a debt in excess of 100% of GDP (Greece is up to 130%).
And the US is the biggest shareholder in the IMF, and it can veto aid packages.
And if Greece isn’t bailed out, there are going to be some Germany banks in trouble.
And the German short selling ban came directly after the Congress vote.
Something doesn’t quite add up.
Perhaps it’s all a coincidence.
Complain about this comment
The Euro zone seems to me a bit like a lads night out at a curry house.
The Southern Europeans have been ordering more poppadoms, lots of side dishes and quaffing the beer like it is going out of fashion. The sober sensible Germans who are driving home, after all it saves money on a taxi, have had a couple of glasses of water and no starter.
Now it comes to settle up the bill and one of the Southern Europeans has suggested that they split the bill. The Germans look annoyed but these things happen with mates and already they have had grief about moaning about always seeming to be the first to have to buy a round.
To make things even better for the Germans the Greeks have just said they forgot to go to the cash machine and could someone, i.e. the Germans, sub them for the meal and they will pay them back next time. Honest!
And we still wonder why the Germans are in a mood?
Complain about this comment
1. The naked short selling ban in Germany ONLY applies to institutions regulated in Germany.
2. The majority (80%) of the trading in this kind of 'securities' gambling is done in London.
3. It is already banned by the SEC in the USA and had been for a number of years.
4. It was banned in the UK for a while during 2008/09 in London.
This is a game of catch-up. Of course it outrages the gamblers in London and as they can buy as much publicity as they want they are making a lot of noise.
A simple change that said that financial institutions are bound by the highest (i.e. most restrictive) rules in any country in whose bonds and debt they trade should do the trick.
We must remember that this from of financial gambling employs very few people - actually generates little tax take and is also highly destructive of the real economy.
We can well do without such trading in London - permanently.
If the Government is serious about rebuilding a manufacturing economy in the UK here is an excellent place to start! Indeed if they do not crush these gamblers it must be taken as a very serious indication that they do not intend to help the rebuilding of manufacturing.
(It is also true that the trans-border currency flows need to be curbed to stop fake transactions transferring deals to uncontrolled countries. We will have to have Exchange Control!!!!)
Complain about this comment
Is the short selling ban a reaction to the problems of the Euro Bailout?
Because up to press the bailout is supposedly going to be funded by:
Some countries that can’t afford it.
and
Some other countries that don’t want to pay for it.
Is it really going to happen, and what happens if it doesn’t?
Have we finally reached the point where common sense will prevail and bad debt gets written off?
Or will the pass the debt parcel game continue for another season in the hope that all those who made hopelessly flawed lending decisions can survive intact?
Complain about this comment
Lets not get carried away with the notion of the German's being maverick. Our own FSA is in the process of imposing liquidity standards on all UK branches of foreign banks in a one size fits all solution; the two options for such banks are 1] allow the FSA to become a global shadow-regulator, allowing it wreak havoc world-wide, not just in the UK or 2] foreign branches become stand-alone from their Head Office and pour tons of cash into the UK gilts market. The FSA, in trying to bolt the stable door long after the horse has bolted, has only managed to isolate itself, rather than wait for global consensus on bank liquidity which will arrive later this year.
Complain about this comment
THIS IS A COVERUP.
It's about German (and other Euro) banks not soveriegns.
See my item on Roberts blog on the other side.
Complain about this comment
...and here we have the first act of stupidity from our new coalition Government.
Read through all these proposals and not once does it mention anything to tackle the greatest threat to us all - Globalised Corporatation.
In fact, while the policies are written up as 'helping small businesses' - the tax regime being offered is to further sweeten the pillaging of our natural resources by corporations in order to sell them back to us at a profit.
http://news.bbc.co.uk/1/hi/uk_politics/8693832.stm
Once again - we see who is in control.
Complain about this comment
" But outside Germany, the worry is that the big losers in all this won't be speculators - but ordinary citizens in countries like Spain and Portugal who find they cannot combine massive budget cuts with decent economic growth.
Make no mistake, the UK and the rest of the world will suffer as well, if the conclusion of this crisis is a eurozone based on the same export-led growth model as Germany."
So, what's better - a debt-burdened import-orientated consumerism fed by high borrowing government demand aided by finacial innovation? I think that's failed. Let's stop bemoaning Germany.Let's take lessons from them on what they do well, mix and match and go our own way. If Germany set down rules we dont want, we dont play. Not sure why this alarm-bell keeps sounding, really.
Complain about this comment
Germany clearly knows there is something bad 'coming down the line' pretty soon and this move is designed to protect German banks which is why the French are so miffed about it - 'first mover' advantage and all that.
In answer to the question in your headling though - the markets of course (and a handful of very powerful elites).
Complain about this comment
Micawber moneynomics is assuming Tsunami proportions and the persuit of 'tough' fiscal policies will expand the pressure on government debt as it either disables growth or sends it into reverse.
Complain about this comment
Again another example to me of the conflict between nation states trying to run their economies, and multinational systems on which nations depend.
Most nations proudly comprehend their sovreignity, pretending that finance is a kind of conduit that somehow joins or passes through them, a nuisance that has to be borne.
Well it ain't like that. The big finance multinationals run the world. They don't care about nations as long as they don't lose out. And people will always bet when they think the odds are clearly in their favour. Only suckers take up the losing side of the bet. Merkel will not stop hedging, CDSs or even "short selling". I mean, what's to stop me selling my shares when the market's on the turn then buying them back when it bottoms out? That isn't short selling, it's astute business practice.
Merkel's just playing (necessary) politics. She likes the idea of bailing out Greece no more than any other German; but if Germany wants to retain economic power in Europe the Euro has to survive. It's the Deutschmark by any other name.
I sympathise even while I disdain these premature, ill-considered regulations. What nations/people/politicians don't understand is that a united europe is about the only hope of having some say in the control of the multinationals, finance, corporations that operate on a global scale (initally courtesy of the Americans who also won't like these regulations).
It's all part of the Friedman vision of the world. Some decades are good, some are bad but (so said Friedman mistakenly) markets tend to equilibruim. No they don't... this is how these hedgies and private investors on the casinos make their money.
I don't think the Euro can survive much longer unless Europe finds a greater unity than just its currency. And keep inviting or promising more nations membership of the EU doesn't help at all. 27 nations with heaven-knows how many languages, cultural differences, with a single currency loosely holding about 16 of them together? It's a nonsense.
I like Ms Merkel, feel her pain, but hystical reaction to solving what might be the wrong problem won't help anyone.
Complain about this comment
Well there is plenty of evidence that quite a few governments havn't been running their economies and finances very effectively.
The markets are merely reflecting this. Governments may not, perhaps understandably, like the way at least some elements of the market behave but one has to ask in return why governments have created the economic conditions where they could.
The regulations they are proposing are merely papering over the cracks governments created to try and stop things falling through them. The cracks are still there and the paper will split sooner or later.
Complain about this comment
The Masters of the Universe are being mastered by a woman.
Is it not understandable that a country that actually makes things has little sympathy for spivs and gamblers. I apply these terms to the extremists (economic terrorists) who use CDS and 'naked' short selling to destabilise and achieve an end by any means; short selling and hedging used responsibly has a role to play in the markets (price smoothing, hedging, liquidity). The notion that one can insure against the debt of an unrelated third-party and then manipulate the market to achieve an end is clearly 'economic terrorism' period.
Though it was unfortunate that BaFin action leaked out before Merkel could consult with her fellow leaders in Europe. Though this may have a deliberate shock tactic on the part of the German government.
It will be interesting to see how this pans out and whether our new Chancellor (Osborne) has the vision to see that something significant is happening.
Complain about this comment
#8
If the Government is serious about rebuilding a manufacturing economy in the UK here is an excellent place to start! Indeed if they do not crush these gamblers it must be taken as a very serious indication that they do not intend to help the rebuilding of manufacturing.
Agreed.
This is the first real test of our new coalition. This is big and far more important than scrapping the ill-conceived HIPS.
Will they be up to it.
Complain about this comment
You have to feel sorry for the German taxpayer. The have been spending the last 20 years financing the results of unification, now they are expected to bail out countries that, frankly, should never have been admitted to Euroland in the first place.
The admission of Greece in particular had more to do with politics than economics, since they (the Greeks) couldn't run an inebriation party in a brewery when they had the drachma, and nothing has changed since.
The Euro should have been set up as a currency limited to those nations that pay their way in the world, and in that respect, the UK should have had the door slammed in it's face had it applied to join!
I believe the future lies in a euro operating as the single currency in Germany, Benelux, France, Luxembourg and Austria. Any other states would have to sign up to proper fiscal controls and prove, for a period of minimum 5 years that they can operate to a discipline that would ensure the situation at the moment can never be repeated.
As for these speculators, Robert Peston and you (Stephanie) insist that the German action can't / won't have an impact, but clearly the casino bankers are worried enough to have got themselves in a flat spin over them. Hopefully European governments will wrest control of their financial systems from the speculators who's time has certainly come.
Complain about this comment
Glad to see you're coming round to Angela's was of thinking Steph.
What a difference a day makes eh?
Complain about this comment
Merkel is paving the way for bank defaults on a massive scale. This is the idea behind 'an orderly insolvency process' for Club Med.
It seems to me that the German position is that the only real solution is default which will hammer the banks and pension funds; to this end the ban on short selling is to prevent speculators, in Germany at least, not making money out of the crisis.
Contrast with the French position which is to throw money at the problem.
At the end of the day Germany is a trading nation and needs a stable currency and Merkel is coming to the conclusion that sovereign defaults is the only practical solution on offer.
Complain about this comment
I don’t reckon this is about credit default swaps or naked short selling.
I think this is about trying to convert bad debt into good debt.
We should have a sweepstake.
How long can the game of ‘pass the Euro debt parcel’ last, when will the music stop?
For the avoidance of doubt:
The ECB printing shed loads of money or a Nation debt restructuring represents the music stopping.
Complain about this comment
From what I’m reading, I’d say my understanding of “short selling” is the equivalent of deadbeats & hoodlums getting credit to gamble from racket run underground bookies. Only rather than having the option of insuring your slef against potential loss, the street hoods take a beating if it all goes beally up.
Please correct if I’m wrong.
Complain about this comment
"who runs Europe - governments or the markets?"
I seem to remember a similar question was asked in 1992, just before sterling crashed out of the European exchange rate mechanism. The answer in 1992 was quite clearly "the markets". Has anything very much changed since then?
Complain about this comment
As previously mentioned I don’t reckon this is about credit default swaps or naked short selling. I think this is about trying to convert bad debt into good debt.
And again as previously mentioned, perhaps we could have a sweepstake.
When will the music stop in the game of ‘pass the Euro debt parcel’.
For the avoidance of doubt:
The ECB printing shed loads of money
or
A nation debt restructuring
Represents the music stopping.
Now you may want to consider exactly how much is a shed load of money.
Prior to Mr King undertaking QE there was in fact no defined amount.
A shed load simply referred to a large but undefined quantity.
However after he printed £200 billion, it became universally recognised that a shed load of money was in fact £200 billion.
Remembering of course this is a wonderfully British concept, and therefore we need to convert it into Euros, which at the current exchange rate is around £231.34 billion.
So if the ECB announces its going to print an amount equal to, or in excess of €231.34 billion Euros, it will in fact have created a shed load of money, and the music can then be described as having stopped.
Now the sweepstake could be furthered by trying to predict the number of Euro sheds created.
Complain about this comment
For too long the city and other financial centres have had there way and we all know why were in the present economic difficulties. An outright ban on all forms of short selling should be adopted its creates nothing and was instrumental in the destruction of Northern Rock. I totally agree with Germany that we should be concentrating on an export lead recovery and re-build our manufacturing base and even go as far as bring in selective import restrictions particularly with regards to China, India and other countries that impose restrictions on foriegn ownership and trade.
Britain needs less reliance on the banking & services sector we desperately need a balanced economy, a stable currency and decent interest rates for savers with high interest rates for private borrowers with a lower rate for business to invest or tax incentives to offset higher interest rates.
Complain about this comment
It is worth remembering, it is only the 'Naked Shorts' (unbacked by borrowed stocks or bonds) that have been banned.
The ordinary trades are unaffected.
It is only the worst of the spivs, a select group indeed, who use them.
Complain about this comment
If there was any doubt, I approve !
Angela would get my Vote.
Complain about this comment
If the markets are in charge, why the heck did we have to bail them out?
Hang 'em up to dry and see if they come out any cleaner
Complain about this comment
The BONNIE AND CLYDE political/banking game for a larf, is a vast edifice of unrecoverable debt ,only kept solvent by ever increasing amounts of freshly minted fiat, it will end like this LOL
Maid in England
http://www.telegraph.co.uk/news/uknews/7741921/Wife-fighting-400-million-divorce-case-runs-out-of-money.html
Complain about this comment
When will they realise, that they are not fighting the markets,they are fighting their own people to support their own ego, so as not to admit that the Euro was fundamentally flawed from the start and remains so. You can not have monetary union without genuine political, cultural and economic union.
The markets are simply refelcting the political, cultural and social reality of the situation Europe now finds its self in. the markets have concluded that the people of europe, in the end, will not put up with the consequences of supporting the single currency at all costs.
The germans are not greeks and never will be in terms of national characteristics, intension and motivation for being. The economic architecture has to refelct that basic reality, the economic architecture can not force an alternative reality upon us.
Wake up Merkel and Co...smell the coffee...or is that the smell of burning tyres in the streets?
Complain about this comment
This comment has been referred for further consideration. Explain
It means that Germany is only interested in itself
The Euro is finished...who will pull out first
Germany or Greece?
Complain about this comment
After the events of the last few years isn't it time ban short selling never mind naked short selling? Only the truly greedy or stupid would want to see the market fall, it's just daft but then they have the cheek to expect the tax payer to bail them out when it all goes wrong.
Complain about this comment
I wonder if the question "who runs Europe - governments or the markets?" is not unlike "what determines the power output of a wind farm - turbines or winds?"
Complain about this comment
How naive can one human being be? You don't even have to place a phone call to New York City, Hong Kong, or Shanghai. Type, click, done! It happens that fast. If you want to play in the world market, you play but its rules. These are the rules governments all over the world have agreed to. They are beyond the power of Germany or all of Europe combined to change on its own. There are a lot of powerful people who have a vested interest in keeping them about the way they are now with only a few minor changes. The renegotiation of market rules would take years and would be very different from what would protect Europe from its past sins. By the time any change could occur at all, the horse would not only have left the barn before the door was closed, he'd be clear into the next county. Why would a perfectly intelligent woman deliberately do something the whole world knows is futile and pointless and in the process making such a public spectacle of herself by advertising her inadequacy to the challenge?
Complain about this comment
Stephanie, you say:
"The rest of the world needs domestic demand in the eurozone to grow, not shrink even further, in the next few years"
I agree if you mean Germany but I disagree if you mean Greece, Portugal, Spain and Italy. People in countries with large government debts and large annual deficits first need to pay more tax to keep their governments from defaulting. Otherwise chaos will reign.
Complain about this comment
#16 doctor bob'
I agree with much of what you have said but would probably have described it in different terms.
As many on here have noted, the German authorities appear to have mistaken a symptom as a cause. The main factor for all Western economies is globalisation which has been driven by the needs of the international financial industry. In the constant drive for short term gain, it has destroyed the long term wealth of large parts of the Western economies. This has and will continue to lead toward either major social disruption or increasing militarisation.
Until Europe adopts protectionist strategies and starts putting its own people back to work then these effects of globalisation will intensify.
None of us can say with any confidence it rhe Euro will survive in its present form or not. It really does not matter for the UK if we are in the Erozone or out. However, it is imperative that the UK take a leading role in the development of a pan-European economic strategy.
Complain about this comment
Stephanie,
Please can you clarify exactly what the German authorities have banned? I have heard/read three different bans from/on the BBC:
All short selling
Currency short selling
Sovereign credit/debt short selling.
In the middle example it was said not to be a total ban but a ban on free shorting - no buyer in sight deals.
What exactly has been banned?
Complain about this comment
When the fans of things can only get beterr stop running, the giant gullibliesed bouncy castle theme park in the do buy sands which allowed bankster carpetbaggers to take pension fun ds for a ride will go pssssssssssssssss as the seams unravel and the kidded bouncers disappear into the quacks.
Now you see it soon you wont.
Take consolation in the simple fact that fiat currency was no more than an attempt to monopolies hope or as it now is seen with its mask ripped off,wishful thinking.
What a purrformance however the showboat must go on for the fat cats to be able to take their piece of the pie out of the sky and spend it today swanning around the med .
Complain about this comment
The rest of the world needs domestic demand in the euro zone to grow, not shrink even further, in the next few years. But right now it is very difficult to see how that will happen.
Indeed, if Germany has its way, the euro zone is going to make an even smaller contribution to future global growth than we thought.
Stephanie,
Any chance of working out an estimate of this impact on the UK. I know the UK budget is based on us growing by 3.25% from 2011 to 2015 without any glitches in that growth rate.
What I don't know is what the assumptions were in those figures for the Euro growth, which clearly impacts our exporting success.
I do know that each 1% less growth we achieve than the forecast 3.25% means a shortfall of tens of billions in our budget. So if this is going to be assumed in the new estimates by George Osborne next month we will all need to be sat down to hear the news, as the impact will be nothing less than shocking.
Complain about this comment
"Be in no doubt: in return for signing-off on this rescue package, Germany will want the new rules of the road to be written in Germany's own image. ... Germany wants tough fiscal controls for every eurozone country to come out of this."
Me too. If those tough fiscal controls had been there in the first place would we all be in such a mess?
"But outside Germany, the worry is that the big losers in all this won't be speculators - but ordinary citizens in countries like Spain and Portugal who find they cannot combine massive budget cuts with decent economic growth."
Disagree - the "ordinary" citizen lives hand to mouth already while corruption is all over and the big fat cats and certain politicians pocket millions unashamedly. The game is up and some useless high level spongers are starting to sweat: and not before time. The ordinary citizen can't starve to death - twice.
".. the UK and the rest of the world will suffer as well ..."
There's a GLOBAL crisis, then a recession, heading for depression and 'we're all going to suffer'. Blow me down, never thought of that....
Complain about this comment
If I were a German taxpayer I wouldn't be impressed at attempts to take the heat off Greek politicians by introducing meaningless rules attacking negative market sentiment that many Germans themselves subscribe to.
I'd rather see a clearly defined set of targets for fiscal balance with realistic exit routes (eg currency exit with dowry) if those targets couldn't be met. Otherwise I might be suspicious that the SPV could turn into a never ending round of political fudges and requests for more funding.
Complain about this comment
re #8
In addition, the amounts of money earned by some involved and the bonuses that accrue, especially to those at the top, have some unfortunate effects:
They lead to tax avoidance at best, evasion at worst,
They distort other markets, especially the housing market in the UK, and
They lead to other salary and bonus distortions.
Not a good idea.
I am not against people doing well for themselves, if they have skills and opportunities and the acquisition of those skills and opportunities are open to others. Regulation of the activities - self or otherwise - needs to be transparent and done with integrity. They should also pay a fair share of tax to the state in which they operate.
Unfortunately, we started to chuck a lot of those principles, and others, out of the window a long time ago. Now we are paying the price!
Complain about this comment
#8 john_from_hendon
Your argument is half-reasoned but in the end your world is impossible.
1. There is nothing to stop you and I entering into a naked short-sell gamble, we just need to find a jurisdiction where its legal. It shouldn't be hard, and I can't think of any similar attempt to control a market which has worked.
2. I have never seen any evidence that the UK version of this helped matters at all a couple of years ago.
3. You clearly advocate industrial policy on a grand scale to kill off hedge funds and boost manufacturing. This age-old argument ignores the traditional economic maxim of trying to maximise profit and efficiency and relies on wishful thinking. If (and what a big if) we turn the rules of economics on their head and assume that governments really can pick winners, it would take time and right now we need profits and taxes from anywhere at all to finance our bankrupt country.
I think someone said here yesterday that this German initiative was driven by their domestic politics. This rings true to me - they are playing to the gallery that is baying for the blood of financiers even though doing so threatens to undermine the EU itself.
They want someone to blame, but the blame lies with the EU itself, the profligate member states, the complacency and arrogance of the ECB and the eurocrats. If they could run a whelk stall they wouldn't be in this mess.
Complain about this comment
I think we're missing the point.
Germany is worried about its banks. They have very big exposure to Club Med and will take a serious hit with any sovereign defaults. They know that and the markets know that. This comes on top of their heavy exposure to derivative losses incurred.
They have tried to ring-fence their top ten banks in German trading but not elswehere (and it seems with unintended consequences). The markets rightly have guessed some form of panic with this unilateral measure.
BTW - all those going on about 'bad market speculators' please do some reading up on the subject. The ban is on 'naked' short selling only. But its still a heads/tails call that you can lose as much as win.
The market doesn't go down because of it only if enough investors think that the outlook is negative on the asset traded.
Whichever way you look at it yesterday's action was not good for the Euro's longevity. Some commentators on here will just have to deal with that........
Complain about this comment
"Make no mistake, the UK and the rest of the world will suffer as well, if the conclusion of this crisis is a eurozone based on the same export-led growth model as Germany."
To me this does not make any sense at all. The article also equates 'export-led' with lack of domestic demand. This is distorted logic and not economics. Export led economies including Korea, Japan, China,large sectors of Indian economy, and Germany obviously, do not stop importing goods. And contrary to the claims, the growth of their domestic markets depends precisely on their success on exporting, among other others. An export based economy is also a proof that your products make sense in the world, they are in demand. Its makes your economy stronger. Therefore its very hard to imagine that the 'UK population will suffer' if there is more demand for UK goods around the world. From the perspectives of the developing countries, there is no better way to promote their economies than to build up comparative advantages (products, technology, HR etc.)in export vis-a-vis other countries. Is the article suggesting better models that i do not get or carrying on the good tradition of denouncing anything German?
Complain about this comment
This comment was removed because the moderators found it broke the House Rules.
Stephanomics
Who runs Europe: The governments or the markets?
You might make that "the World" rather than Europe?
Stephanie what if you and Robert were to open a new blog called something like 'the big picture' designed to go further than your current remit (which I imagine is something like 'clear and unbiased reporting of events...) and have a clear and incisive, investigative blog that opens things up in the way of 'what does that actually mean?'
That could be a positive focus for the surprising (in every way!) intelligence of the comments posted on this site. When I last looked at the main page 61,114 BBC pages had just been read. How many read your blogs? from where in the world? and who are they? I have seen comments from people who seem 'beyond communism' to others who could be 'investors' yet to greater or lesser degrees we are all in the same bigger picture, for example:
The shifting struggle for economic power and influence between old and new regions of the world
That power is based on Fiat currencies, that are themselves are so divorced from reality (how many IOU's have been printed?) that they cannot sustain much longer, especially as more and more people cease to believe in them. As so many of your contributors indicate.
So obviously even at this 'kiddie' level it is obvious the situation is like a sinking boat where those in it start to panic and desperately flail around, and so we will see more and more crazy hysterical actions and events, laws and 'certainties' being re written over night - all just to try and keep something unsustainable afloat.
I think we all know this, without even adding a baby dinosaur into the room of the fact that we as a race are stripping the resources of the planet by many times what would be sustainable, and then we have 'mommy huge dinosaur' which is the population of the worlds unstoppable growth - we are in some kind of trouble...
Again we all know this but how do we think about it? where do we go from here? let's look at that in the tangible way so many things are discussed here. For example, if (if?) Fiat currency is based on political madness and does not have a future - what do we actually do instead?
What is the point?
There is a story I keep hearing that, could, be true. At things like village fairs if you have a 'guess the number of sweeties' contest and you take all the guesses, including the wacky ones, then you end up with an average not far off the actual number.
Or another way to put it is that everything has consequences and these consequences can affect us all.
Complain about this comment
How long before the FTSE is back below the 4400 level when Blair took office?
Complain about this comment
re #8
Governments, more specifically our (past) Government, realised that setting up markets is quite a good idea. There is a chance to make some money even if the tax take is not all it could be. It makes us look good around the world. And as some individuals get rich, they might just remember who enabled them to get rich and bless them with a vote at the next general election.
Just think. Forty years ago, if you were an environmental crusader, you paid for it yourself. Twenty years ago, you might have a part-time job with a charity but you had to earn a bit of a(n) (extra) crust doing something else. Now, I would not be the slightest bit surprised to learn that our nationally/internationally known figures earn six figure salaries (before the decimal point) for telling you and me not to use a supermarket's plastic bag when we go to the only market that's important to us - for our food.
See! I am a CHEERFUL cynic!
Complain about this comment
" 7. At 11:34am on 20 May 2010, Ian_the_chopper wrote:
The Euro zone seems to me a bit like a lads night out at a curry house.
The Southern Europeans have been ordering more poppadoms, lots of side dishes and quaffing the beer like it is going out of fashion. The sober sensible Germans who are driving home, after all it saves money on a taxi, have had a couple of glasses of water and no starter.
Now it comes to settle up the bill and one of the Southern Europeans has suggested that they split the bill. The Germans look annoyed but these things happen with mates and already they have had grief about moaning about always seeming to be the first to have to buy a round.
To make things even better for the Germans the Greeks have just said they forgot to go to the cash machine and could someone, i.e. the Germans, sub them for the meal and they will pay them back next time. Honest!
And we still wonder why the Germans are in a mood?"
Couldn't have put it better. Cheers Mate!!
Complain about this comment
"Germany's lost the plot"
Oh no, the plot is there and waiting. The grave has already been dug. The tombstone that will mark the mortal remains of its carcas has already been engraved;
"Here lies the German Economy 1945-2010
It fell on its sword and died for an impossible dream
R.I.P."
Complain about this comment
Snow white Merkel has said to the seven dwarfs "there'll be no hi ho ing in my back yard by the anglosaxon lumpend mervinking pro lettoryat.
"Off to work you go now and you can take your pick ease with you."
HiHo hiho its off to hedge fun we go hiho hiho hiho.
Complain about this comment
Let’s be absolutely clear. This is nothing to do with markets, it’s about the Euro and political union, or should I say federalism. The rest is just another smokescreen.
Again let’s be absolutely clear. There has never been a currency union that has worked in the long term. Currency union without political union is nonsense. The bureaucrats and some notable Europhiles dreamed the Euro idea up, in the full knowledge of historical evidence pointing to its eventual failure, and expecting that the crisis which was inevitable would force countries to accept political union or risk financial disaster.
The Euro is near that point now. The people in Southern Europe are feeling the consequences of the inevitable crisis and their politicians’ should be honest with their electorate, as should those of Germany and France, and ask them in the referendum, so frequently and fondly denied by the bureaucrats and politicians of Brussels’, if they are willing to unite in a federal system of government and give up their respective national governments or not. If the proposal is rejected by the majority then an organised dismantling of the Euro should be accepted as the consequence. What Germany and France and the rest of the ‘rich north’ must accept if they vote for a federal system, and consequently federal taxes, is that in the main and until the ‘poor south’ catch up in productivity terms then the majority of federal taxes will be spent in the poor south.
Given the current bailout is now expected to last three to four years at most and produce devastating economic consequences’ for the recipients of the bailout in the form of massive deflation isn’t it about time the politicians of all parties told the truth to their respective electorates.
Complain about this comment
If Euroland doesn't want to be traded on the world markets, it can become a non convertable currency like the Russian ruble was during the Soviet era. It will be completely insulated from the winds of the investors and speculators. No one will short it...or buy it. It will be worthless. In other words, no difference.
Complain about this comment
I am with Angie all the way to a third term!!!
Complain about this comment
As the Wealth of the West moves East to Asia and Australia we will have the Dollar, Euro, and Pound locked into a Competitive Devaluation spiral.
What a miserable state of affairs.
Complain about this comment
I have to give the Europians credit. It isn't easy to bankrupt an entire continent and drive 500 million people broke all at the same time.
Complain about this comment
#47. StopFiddling wrote:
"#8 john_from_hendon
Your argument is half-reasoned but in the end your world is impossible."
Sorry, but that assumes that the World as it is is possible and as we see it collapsing all around us somehow I don't think it will work(Stagger from every worse crisis to an even worse crisis) without some more regulation.
Easy steps would be: transactions that do not go through a recognised exchange are not enforceable at law (just like gambling debts that they are.) Furthermore anyone engaging in such transaction shall cease to be a member of any recognised exchange. That seems quite reasonable. All this without re-imposing exchange control too (that is the ultimate threat.)
And what about a wealth tax on global wealth? Cut them off at the knees!
We need a new-world and we must strive to construct one or this depression we are just entering will go on for a couple of generations.
Complain about this comment
It is becomming clearer that Germany is now making the move that was anticipated by some when the Euro was started, which is to merge the countries in the Euro into one country, just as hapened when Germany was formed. It is very strange that a single currency for Europe was implemented at a time when Italy was having problems between its North and South with the lira too weak for the North and too strong for the South. Doubters will sayn that it does not affect America with over 50 States, but having lived there I can state that the inequalities for the Americans are massive. They only tend to show their middle and higher classes to the rest of the world, covering up those at the bottom of the pile. Germany can not complain about cover ups by politicians to suit their own ends, as they to practice them. Having found out about fake companies run by the state to keep their unemployment numbers down in the past, I always take their statistics with a bag of salt!!!
Complain about this comment
In the words of a popular song 'Don't cry for me Argentina'. I was there when the peso devalued from parity with the US dollar to 50 cents on the dollar. Ten years later they still haven't settled with their remaining creditors but at least they have some economic growth. There is no way that the PIIGS can improve their competitiveness with Germany by 30%, so the only route will be devaluation. This will come as no surprise to the markets, since it's what the UK has done for the last two years. Banning short selling will not change this reality and Chancellor Merkel knows that.
Complain about this comment
#48
"Germany is worried about its banks. They have very big exposure to Club Med and will take a serious hit with any sovereign defaults. They know that and the markets know that."
Half right Prof.
The Germans intend to engineer sovereigh defaults in Club Med; this is the train they see coming down the line. They have come to the sensible realisation that the problem worldwide is just too big to keep throwing money at it.
This is the same banking crisis that started 3 years ago. It started with the banks and will end with the banks.
The only solution is to tear up all this paper debt and move on. It will not be good for economies over dependent on banks like the UK.
The BaFin ban on naked shorting and CDS will probably be followed by other countries (both New York and London have been there) and will avoid a banking sector share collapse which is far more dangerous than writing-off bad debts.
The FTSE has now come to the end of the longest Bear rally in history and will sink down below 3500.
As for the Euro. It is just a currency that will find its level that reflects economic reality. If, and only if, the Germans abandon the Euro, will it fail.
The end game is approaching. (God, I sound like Armegediontimes :) ).
Complain about this comment
#55
"Germany's lost the plot"
Oh no, the plot is there and waiting. The grave has already been dug. The tombstone that will mark the mortal remains of its carcas has already been engraved;
"Here lies the German Economy 1945-2010
It fell on its sword and died for an impossible dream
R.I.P."
So a devaluing Euro is bad for the German export machine.
Hmmm.
German banks are lined up for a mullering. Who cares. They are not a big cog in the German machine.
Complain about this comment
#57
"The bureaucrats and some notable Europhiles dreamed the Euro idea up, in the full knowledge of historical evidence pointing to its eventual failure, and expecting that the crisis which was inevitable would force countries to accept political union or risk financial disaster.
The Euro is near that point now."
Good analysis which I share.
Complain about this comment
#55,
What's R.I.P.?
Complain about this comment
Black Friday tomorrow.
US Non-Farm payroll figures will be interesting.
Complain about this comment
Deutchebank must be run by some of the dumbest bankers on earth. They fall for every scam. They nearly got blown away in the US housing market train wreck. If President Bush hadn't bailed out AIG they wouldn't exist. Now Merkel has to bail them out, that's what this fund is really all about, German and French taxpayers bailing out German and French banks. If it was only about the Greek people, they wouldn't get a cent. They'd be told to go take a hike.
Complain about this comment
Although Germany's move on short selling contradicts its plans of the 1990s for Frankfurt to supplant London as the financial centre for this third of the globe, it shouldn't surprise anyone who knows the Germans. They are still very much an industrial nation with an industrial mentality. They believe the only respectable way to make money is to design, develop and manufacture high value, quality products.
I agree with their innate suspicion of other methods.
Complain about this comment
A perfect song for the EU's funeral;
http://www.youtube.com/watch?v=6E2hYDIFDIU
Complain about this comment
Based on the assumption that Germany is looking at the potential of ultimately no bailout for Club Med and endeavouring to protect its banking system from the fallout, will others do the same? ....... The French, The Italians, The ECB unilaterally perhaps?
Complain about this comment
As a general thought, it is perhaps time for united intergovernmental action against the "markets" Sit back and think over the last 2 years. The market allowed asset bubbles that most knew had to burst. When they did burst they turned thier attention to government debts as the next method of increasing profits. Do not forget they lent the money in the first place to develop the excess debt. I look at at simply, the markets are a tad like drug dealers,they let governments and joe public have a quick "fix" of cheap loans,once well and truly hooked the cost of loans increase. Classic model of dealer junkie relationship.
So come on you governments,face these dealers down.
Complain about this comment
61. At 3:46pm on 20 May 2010, MarcusAureliusII wrote:
'I have to give the Europians credit. It isn't easy to bankrupt an entire continent and drive 500 million people broke all at the same time'
Well I don't think you should give out the credits just yet.
It's still undecided as to whether the ECB prints money or lets nations go bust.
No bailout = No European Union
No European Union = No need for Euro Politicians
What would you push for if you were a Euro Politician on £300,000+ a year (including expenses but excluding back handers).
Complain about this comment
We owe a huge vote of thanks to Germany for this statement of intent to confront the speculation industry head-on and regulate it out of existence.
Quoting SF's blog: "Germany does want to see longer term reforms in this area - it is pressing the European Commission to put forward a draft directive that would take a serious look at some of these trades."
An EU Directive will of course apply to all of Europe, so no matter how many splenetic interventions by the likes of City apologist Boris Johnson and his financier cronies there are, there will be no exceptions for London.
The tide is really turning now against the rampant greed of the speculation industry, but like Canute they are still deluded enough to think they can order the waves to retreat - pretty soon they'll be well ensconced in Davy Jones's locker!
Complain about this comment
52. At 2:35pm on 20 May 2010, Kevinb wrote:
'How long before the FTSE is back below the 4400 level when Blair took office?'
Not long now that the Conservatives are back. Well, sort of back, they were not wanted enough to let them get there on their own.
Is lack of Blair dragging down the Dow too? The Moscow RTS maybe? I am amazed that he had so much positive global impact, who would have guessed!
Complain about this comment
If the Euro was got rid of an national currencies came back in a reasonably controlled and planned way what would the consequences be?
Other than lots of politicians with bruised egos that is...
Complain about this comment
Based on advice given on this blog which has proven to be a reliable...negative indicator, I'm shorting the Euro. Given the source of the advice, I don't see how I can lose.
Complain about this comment
'but ordinary citizens in countries like Spain and Portugal who find they cannot combine massive budget cuts with decent economic growth'
This assumes that government spending based on borrowing generates economic growth.
It definitely generates an increase in spending.
It might, concievably, generate an increase in GDP.
But growth? over what period?
Complain about this comment
"So a devaluing Euro is bad for the German export machine."
Interest rates will go up. Costs for anything bought from outside Euroland will go up (energy, technology just to name two.) Prices internally will go up. People will demand their salaries or entitlement payments go up to offset their decreased buying power. And you think that will be good for competition? Considering that much of Germany's exports are to other EU countries and much of it financed by German banks, I'd say that the trouble Euroland is in won't do Germany's economy any good.
Stick a fork in the Euro, that turkey is cooked.
Complain about this comment
#71
Although Germany's move on short selling contradicts its plans of the 1990s for Frankfurt to supplant London as the financial centre for this third of the globe, it shouldn't surprise anyone who knows the Germans. They are still very much an industrial nation with an industrial mentality. They believe the only respectable way to make money is to design, develop and manufacture high value, quality products.
I agree with their innate suspicion of other methods."
Hear hear
But only 29% of German GDP is manufacturing, with 70% service sector.
Complain about this comment
I was advised some years back by a guy heading up a corporate "future scenarios" team that in his view the best thing to do was to buy a place in the country with fertile land, near a water supply! In addition he recommended I purchase an AK47 with which to protect my potato-patch from the starving landless. Not a happy thought!
So let's hope that the market manipulators and spivs manage to work out a way of turning banknotes into a nourishing broth. Once they've had their peculiar phyrric victory over the ECB what will do with all the now useless money? Maybe they'll settle down to trading on Europe's first root-vegetable exchange.
We're all doomed, 1000 years of European trade and culture is about to come an end, the beast is at the gate. So burn some tyres in the street, if you have any gold, exchange it for an air ticket to the Cayman Islands. Alternatively, pour a drink, sit back and ignore this ridiculous panic-fest. You're actually playing into the hands of the market manipulators!
Complain about this comment
#70. At 4:39pm on 20 May 2010, MarcusAureliusII wrote:
"Deutchebank must be run by some of the dumbest bankers on earth. They fall for every scam. They nearly got blown away in the US housing market train wreck." ...
No I think you'll find the US is home to the dumbest bankers on earth - the people who created the US housing market train wreck in the first place, the geniuses who thought lending vast amounts of money to people with no prospect of paying it back was a sound long-term investment strategy.
Complain about this comment
People are complaining about Germany take control of the EU. I can provide these politicians a simple advice. If you don't want Germany to control your economies, don't put your economy in a situation where it will need German money to keep it running. I know there'll be those saying that German money fuelled the property bubble is Spain.Well, Spain failed terrible in observing what was happening and let itself be carried out by the unsustainable housing speculation.China has realised that its property market is turning into a bubble and has already taken measures to avoid greed taking over the country housing market. So do your homework and there'll be no need for you to be humiliated by German and IMF bailing out conditions.
Complain about this comment
68. At 4:35pm on 20 May 2010, The Patriot wrote:
#55,
What's R.I.P.?
Rampaging in Poland
Complain about this comment
77. At 5:18pm on 20 May 2010, Squarepeg wrote:
52. At 2:35pm on 20 May 2010, Kevinb wrote:
'How long before the FTSE is back below the 4400 level when Blair took office?'
Not long now that the Conservatives are back. Well, sort of back, they were not wanted enough to let them get there on their own.
Is lack of Blair dragging down the Dow too? The Moscow RTS maybe? I am amazed that he had so much positive global impact, who would have guessed!
You appear to be in a round hole...this is for grown-ups
Complain about this comment
Surely all this economic turbulence is the inevitable consequence of hitting the bottom of the pyramid - running out of naive developing populations to fuel the giant Ponzi scheme that is free market capitalism. Don't get me wrong I am no radical socialist, but it is pretty obvious that the world has limited natural resources and wealth; money as a token of wealth is neither created nor destroyed, just transferred from one pocket to another, and limitless "growth" is by definition impossible. When we reach the bottom of the barrel, as we are doing, the get-rich-quick traders realise they have to swish things around even more violently in order that they can take from someone else and fill their greedy hands.
In summary, I admire the Germans for seeing the obvious truth that short termism benefits no-one but the traders.
Complain about this comment
Talk about 2 wrongs not making a right! Ban naked short selling so that the Greek rescue package can go through? So you ban something that has little or nothing to so with the break-up of the Eurozone to allow something to happen that will be a catalyst to the break-up of the Eurozone. What sort of twisted logic is this? The same sort I suppose that thinks that the best way to help a country with their debt problem is to load them with more of it i.e. Greece, 150% debt = 7.5% of GDP minimum interest payments per annum, good luck! Only way out is to restructure the debt, not increase it. Why can't the powers that be grasp this simple fact?
Complain about this comment
#83 Anglophone - cheers and completely agree with you! Outside for a glass of CoatwithSpecks Chicken; 'twas lovely and helped a UK business too. Couldn't recommend it enough. Have one on me. Merkel knows what she is doing, somehow I have more faith in her than any of our leaders. So cheers MerkyBaby, good luck to you.
Complain about this comment
#62 john_from_hendon
Some reasonable ideas there John but they won't work!
The world is not collapsing around us. A goofy monetary union may reduce to its core and eject a couple of bankrupt states, maybe. The odd German bank thats been a clot may even hit the skids. Armageddon, no.
A transaction is enforceable in the jurisdiction its in. This has long gone on - for example a property agreement to lease is often signed offshore to avoid stamp duty in this country. There's nothing wrong with it at all. Its an agreement to agree, a signed piece of paper, nothing more. I don't see why short-sellers need to be a member of an exchange.
Exchange controls to go with industrial policy? This sounds like the failed mistakes of the seventies.
We definitely don't need a new world order imposed in haste by panicky euro-enthusiasts.
Even Alistair Darling called the German statement "displacement activity" and today Angela Merkel is all shrill about regulating everything.
The EU is learning that it can't legislate its way out of financial trouble, you have to manage your way out.
Complain about this comment
I wonder how long it will be before the crash of the Euro and then the break up of the Union. Say five years!!!!! Many said it could never last - I never thought it was suited to Britain, am I glad we did not go into the Euro.
Complain about this comment
Dear all,
I'm not quite clever enough to understand all of the reactions of the markets to this bail-out and ban-on-naked-trades situation. Nor am I able to predict, what's really going to happen in the next few days on the political stage in the Euro-zone and the EU. And it IS a stage, even if the outcome turns out to be very real - for us (unfortunately in any way, we'll lose against markets AND politics, so what does the rabbit care, whether it's eaten by the wolf or the bear).
I am, however, right now sitting in my living room in Germany and quite convinced, Germans do actually really approve of any steps taken to tame the markets at this stage, tame the speculators, tame the gamblers (not metaphorically prison them, however! In fact: Prison them, if they act(ed) unlawfull, that's for sure^^). If I read the signs correctly, the German population is completely fed up with any sort of gambling - on the political side and on the economic side, and there is exactly zero tolerance left for any player in the markets (or politics!) speculating or gambling - on whatsoever!
I am very convinced that all this fuss is not about "Germany wanting to retain it's export surplus" or suchlike. I am, however, convinced that there is a slight tendency in German policy to believe the time to be right to go on with further integration. And this isn't completely off the point, since we're all in deep trouble and it might turn out to be a realistic alternative. I am absolutely sure that the German population is at the edge: They won't any longer pay and pay and pay... for nothing. These days are gone, far too late. I guess they'll still pay, but only for things that change the situation for good, nothing that preserves it at a status-quo.
We are living in interesting times.
Ash
Complain about this comment
Funny how the article shifts from the new German regulations on short selling to an attack on the Germans for wanting their ways if they bail out Greece. Or is it seriously implying that a ban on certain financial transactions and possible taxation (let's see if that happens) will actually cost us any economic growth? These activities don't add economic value - hence why they want to get rid of them.
There is nothing wrong with the Germans insisting on tighter controls on exactly those rules that the EU countries have signed up to in order to join the monetary union - especially if they are the ones that pay the bulk of the cost produced by others that have enjoyed higher living standards than they could afford through their own labor.
"The rest of the world needs domestic demand in the eurozone to grow, not shrink even further, in the next few years" - fine, go ahead with that on borrowed money, but don't expect the Germans to bail you out.
Complain about this comment
#6 >>And the US is the biggest shareholder in the IMF, and it can veto aid packages.
There are no vetos in the IMF as far as I can tell. The US can refuse to pay up its share of the funds but then it risk losing its share of the voting rights.
If the US Congress wants to set up Festung Amerika, then so be it. They can't complain that other countries are not buying their goods when they insist on messing up other people's economies !!
Re. the Eurozone economies - The problem here is not that they don't have enough exports but that their spendings are far in excess of their earnings. This is because their Elysian dreams of a Socialist paradise is costing them more than they can afford. Therefore, they can pare down their dreams or go up in flames.
If the Greeks think that their strikes and riots will scare anyone into bailing them out for free, then they will discover that the rest of the world don't give a hoot about them. They will end up being booted out of the Eurozone and sent off to go on their own sweet way. The world doesn't care for children throwing toys out of their prams.
The same could happen to Britain.
Complain about this comment
94 wrote
There is nothing wrong with the Germans insisting on tighter controls on exactly those rules that the EU countries have signed up to in order to join the monetary union - especially if they are the ones that pay the bulk of the cost produced by others that have enjoyed higher living standards than they could afford through their own labor.
Actually, Germany and France were the two countries to break the entry conditions first......whichever way you look at the Eurozone it is flawed, and will need to be altered, in one way or another
This is conveniently overlooked by many attacking the south med. countries
Italy is also a basket case, yet due to the attention on Greece and Portugal, they have so far slipped under the radar
Complain about this comment
Another day, another set of problems, all willfully misunderstood. Get real people this is all about propping up collapsing German banks.
Look at LIBOR rates. Surely periodic infusions of $ trillions, coupled with zero interest rates makes what is happening with LIBOR rather hard to explain.
So...Why bother, let´s not explain it - perhaps it isn´t happening. If it is it must be to do with speculators. It most definitely cannot have anything to do with systemic insolvency, because otherwise the game would be over.
Some will drown in an ocean of debt, but most will be seduced by the siren voices that pull them toward their nemesis in the ocean of delusion.
The time is drawing near when the words of Kenneth Wolstenholme will resonate one last time.
Complain about this comment
@ #95
I agree to you, to some point. I even agree that strikes in Greece won't help. Riots won't help at all. However, it isn't the majority of Greece's population who caused these troubles. They are victims, and we should never forget that! I interpret these strikes as their right to pronounce: This wasn't our fault!
However, it is for sure, there have to be actions, which will hurt the Greek population, hurt deeply. Much more painful than today anticipated. And I'm not sorry to say this, because this is what's waiting for ALL of us Europeans, Greece is only a start!
So, I'd like to change your comment from "could" to "will"... "The same WILL happen to Britain." , somehow. As it will to all EU members. But not, because they are EU members, probably, we'll all be better off, because we are EU members.
Ash
Complain about this comment
#72
"A perfect song for the EU's funeral;"
Intrigued.
Why do you guys hate the EU and Germany so much.
Is it the football (well you have a bottle problem with penalties) or were you jilted at a tender age by a blond pigtailed German lass.
How about an intelligent objection to the EU.
There isn't one.
How about an intelligent objection to the Eurozone.
Well it can't work without fiscal and political union.
If the EU fails the nightmare begins.
A German and Russian carve-up of Europe.
Do you want that. Are you that stupid.
Blimey, I sound like KevinB.
Complain about this comment
#86. At 5:54pm on 20 May 2010, Kevinb wrote:
68. At 4:35pm on 20 May 2010, The Patriot wrote:
#55,
What's R.I.P.?
Rampaging in Poland
------------------------------
Thanks for that - very nearly choked on my coffee.
Nice one Centurion - LOL
Complain about this comment
The reason the UK does not have the Euro is not because they were far sighted - it's because it could not fulfill the rules of the ERM under the attacks of one Mr Soros who gained 1B $ from shorting pounds (so naked shorting has its value after all?).
Complain about this comment
It appears Mr Cameron is cosying up to Merkel and Sarkozy just as I predicyed. It seems his anti-EU rhetoric is really designed for his backward back benches.
I predict the Conservatives taking us into the Euro before long.
Complain about this comment
#97. At 8:03pm on 20 May 2010, armagediontimes wrote:
The time is drawing near when the words of Kenneth Wolstenholme will resonate one last time.
------------------------------------------------
Was that - "It's gonna be a tense ride this one, get me an extra twenty woodbines, half a bottle of scotch and me brown trousers"
Or - "I don't believe it the Russian linesman has given it, the Germans won't be happy about that one, they'll surely want a change of rules in the morning."
Maybe - "There's people on the pitch, they think it's all over, hang on a minute the Germans are saying they just scored three goals with a ball they'd borrowed but haven't quite got it on the pitch yet."
Complain about this comment
I don't like Merkel and her government at all, but with this move I totally agree. One has to take the frst step, no matter how small. The criticism indicates making this small step is no small achievement! Some people seem to think it matters!
Complain about this comment
"As I said on Today this morning, [Chancellor Merkel] needs to make this a crisis about "who runs Europe - governments or the markets?" "
This very long standing idea that "running" - aka "ruling" - Europe (or anywhere) is still what is needed in the world is strangely being ignored by the vast majority of people, including (and maybe especially) by those who are well read/educated.
Today (2010), electronic access to countless sources of information (many not even available 40 years ago) and rapid lengthy communication with virtually anyone else can be had by the vast majority of those in the industrialized areas of the world and much of what is still on the road to "development". It is a rare person (adult and child) in the industrialized world who does not have access to, if not actually own, hir own computer; many have computer features in their cellular phones. For an individual in much of the world these days to be informed on everything that happens currently or in the past and on ideas published by anyone currently or in the past is now mostly a matter of interest/desire/time rather than purely technical and/or cost availability.
So the questions can and should be asked, "Why does the individual still need to be ruled by others? Is there not a better way now to achieve social order than by some centralized governing body to which an individual can, at best, only have an effect if part of a majority casting votes for a particular candidate/bond/referendum in a particular election?"
The nature of human beings does not automatically lead to the conclusion that individuals must be ruled by others in order that there be orderly interactions between them. Society, just like any other natural system can be naturally self-regulating by means of interactions between its members, if only humans seek to discover and are allowed to implement the methods by which such self-regulation can be effective, rather than continuing to embrace social systems that need to be constantly held in an unnatural (and very unoptimal) state of balance by the operations of their rulers and other influencers. Individual self-order without rule by others is the social system whose members are fully adult (particularly meaning self-responsible) humans. Just as people can become physical adults, so can they become psychological and social adults - if only they are allowed (and even required in the sense that they will not achieve their desires unless they do) to socially mature sufficiently.
Understanding the social interaction methodology by which more individuals would progress to become fully socially mature adults requires a paradigm shift in thinking about human interactions.
Complain about this comment
99. At 8:30pm on 20 May 2010, Richard Dingle wrote:
#72
"A perfect song for the EU's funeral;"
Intrigued.
Why do you guys hate the EU and Germany so much.
Is it the football (well you have a bottle problem with penalties) or were you jilted at a tender age by a blond pigtailed German lass.
How about an intelligent objection to the EU.
There isn't one.
How about an intelligent objection to the Eurozone.
Well it can't work without fiscal and political union.
If the EU fails the nightmare begins.
A German and Russian carve-up of Europe.
Do you want that. Are you that stupid.
Blimey, I sound like KevinB.
You're the stupid one
I don't like the Euro as it was always going to fail and it will
I would not want my country (The UK) joining such a disastrous wreck of a currency
That I have the intelligence to see this, and you don't, is hardly my problem
I am not against the EU, and it would be a good idea if it was a common market, with co-operation
I do not want any more power going to Brussels, no sir, I do not
I do not hate Germany
However, twice in the last hundred years, the fact is we have gone to war to prevent German and then Nazi take overs of Europe
These are basic facts, the things you tried to lecture me in only yesterday
Germany is hamstrung, as Merkel had to help Greece to some extent to 'save' the Euro, yet won't help enough to solve the problem, merely delaying the time when that problem needs resolution
Only in your dreams will the euro survive in it's current state, and only in your dreams will you be capable of being in any way like me
The Euro will only work with full political and economic convergence, and this will just not happen
The foolishness of this project is there for all to see
So please don't suggest that nobody is giving an intelligent view, the damn thing is imploding before your eyes
Earlier this year you mocked me when I said Franco-German tensions would surface, yet that is where we are
It is doomed
Get used to it
Get over it
Complain about this comment
While I never liked her politics (but then, I'm not German) I've liked her a lot ever since she told the Big Boyz that they were heading for Big TroubL shortly after she was elected, and they all gave her a little pat (Sarkozy literally) and told her not to worry her little Kopf.
She is reality-based (how could she not be, having grown up in post-war Germany?) and she knows that (this year and next) interest rates on double and triple A residential and commercial mortgages in the States
(the supposedly really valuable properties) are going to go through the roof. She knows that this will be the end of the US dollar's reserve currency status, and that China will then have to finally bite the bullet and drink from the poison chalice of being the economic King O' the Poop Pile for the Whole Wide World.
The EU can get with the programme (i.e., get over the fantasy of an Anglo-Saxon money tree (that only bears fruit for rich white people who are allowed to make toys of their Treasuries) or throw in the towel. Germany (unlike the UK and the US) makes quality things that Real-Life Asian people want to buy. Do likewise, Europe, or learn to live in a new Dark Age.
Bwana, the Big Game is over after four centuries, so get used to it.
That is my humble opinion.
Complain about this comment
#106
"and only in your dreams will you be capable of being in any way like me"
A nightmare methinks :)
Complain about this comment
Sterling is Junk.
It's obvious that Sterling is becoming the Euro, despite the misguided complaints of some here. At least those whining about input costs will have no further cause for complaint when it does happen.
Complain about this comment
Before you start knocking "Club Med", remember that the Spanish debt to GDP ratio is lower than Germany's and many other Euro countries. That doesn't mean that there aren't problems, but they are different. They build an economy on easy money (tourism, construction) instead of investing in developing higher value-added industries which is very vulnerable to external shocks, such as recessions. They are therefore now having to spend a lot of money to try to stimulate their economy.
Now, I'm not saying the Spanish government was wise. They should have used the good times to build up their economy rather than just relying on housing. However, it's also silly to accuse them of going on a binge and living off other people's money.
Also, let's not forget that many of the speculators who are now making a killing are still in business because the governments ran up the huge deficits to save the banks which allowed them to make their obscene profits.
I used to be of the opinion that the bank bailouts were necessary, but I'm now starting to come around to the opinion that although it would have caused a lot of pain to lower and middle classes, it might have been better to let them fail and thus not save the thieves and leeches in international finance. At the end of the day, there is still a lot of pain coming for the lower and middle classes, just that now the people at the top are even better off than they were before the banking crisis.
Complain about this comment
#8 >>3. It is already banned by the SEC in the USA and had been for a number of years.
4. It was banned in the UK for a while during 2008/09 in London.
For all its laissez faire attitude to most things financial, I believe Hong Kong had actually banned this ages ago.
Complain about this comment
the Germans may be the only responsible government on the planet. Everyone else is kow-towing to the banks and scraping around on their knees afraid to anger the bankers. Pitful scenes of representative government. If governments are too weak to control the banks than new forms of government are needed. The Germans are attempting to at least represent the interest of the people and try to prevent the banks from stelaing retirements and investments again but the other nations seem to have levels of corruption that prevents this from happening. The Germans may be the only ones willing to say in a political sense that this is a long term matter and will not get better soon, unless you listen to the bankers who are more than willing to create another bubble that will play well politically but create a crash again. No one and no national economy is secure until the banks are controlled. The bigger banks call all the shots, set all the fees, have indirectly taxed entire nations and now want to continue with the same. They will not give up this power it must be taken away, it is just the human condition.
Complain about this comment
#107
"Germany (unlike the UK and the US) makes quality things that Real-Life Asian people want to buy. Do likewise, Europe, or learn to live in a new Dark Age. "
This is the point.
To a limited degree it will be helped by slight Euro devaluation. A few weeks ago the Euro Sterling rate was 1.10 it is now 1.15; in 2005 it was 1.45.
So the death of the Euro is slightlty exagerated.
So I stand by my prediction that Sterling is in greater danger.
All these losers who have to rake up two world wars to justify a theory or wish for Euro failure cut a pathetic figure.
Complain about this comment
100
Sorry about the coffee
Complain about this comment
#110
"I used to be of the opinion that the bank bailouts were necessary, but I'm now starting to come around to the opinion that although it would have caused a lot of pain to lower and middle classes, it might have been better to let them fail and thus not save the thieves and leeches in international finance."
This has been my argument. Bailing out the banks is akin to feeding the blackmailer. It is also I believe behind Merkel's action; a recognition that all bailouts must stop.
Complain about this comment
#112
Agreed.
The game is changing.
Complain about this comment
110
Unemployment in Espana is 20%
So they do have big difficulties
The issue with Spain is the deficit, which is 11.20% of GDP
Not ideal when your economy is shrinking.......
Complain about this comment
The reality of political office is a wonderful thing.
Cameron is making warm noises re. the Eurozone. His latest rhetoric is no Euro membership in the current Parliament. This is movement; it was no Euro membership ever.
The point is the UK has no choice in the medium and long term other than to join.
Complain about this comment
113
Dingle wrote
All these losers who have to rake up two world wars to justify a theory or wish for Euro failure cut a pathetic figure.
The world wars were facts...I did not start them, the Germans did
You said that if the EU broke down, Europe would be swallowed up by Germany and Russia...
So it was YOU that brought it up
As usual, you unfortunately are unable to debate anything without reverting to hyperbole
Stand by your prediction, it will be incorrect none the less
You told me that the euro would be at parity by Easter...since then it has risen
You also made accusations of people hating Germany and the Eu
If you are unable to deal with the responses, then may I suggest that you don't make such incorrect assumptions in the future
You are only able to communicate by insulting those that you disagree with
Unfortunately the Euro is doomed
I will be pleased when it collapses, as it will end the stupid idea of USE
Complain about this comment
I think Germany is heading for the exit!
Given the modern world political climate, I fail to see what superior benefits Germany derives from the current arrangements.
They are footing a large proportion of the bills run up by their profligate colleagues. This could continue for years.
Like it or not, the nation state must come first.
Complain about this comment
117. At 9:31pm on 20 May 2010, Kevinb wrote:
110
Unemployment in Espana is 20%
So they do have big difficulties
The issue with Spain is the deficit, which is 11.20% of GDP
If you include the percentage not seeking employment the true UK unemployment figure is 20%.
Add to that a higher UK deficit of 13% and we have not much to choose between Spain and the UK.
Complain about this comment
118. At 9:38pm on 20 May 2010, Richard Dingle wrote:
The reality of political office is a wonderful thing.
Cameron is making warm noises re. the Eurozone. His latest rhetoric is no Euro membership in the current Parliament. This is movement; it was no Euro membership ever.
The point is the UK has no choice in the medium and long term other than to join.
This was the wording of the coalition agreement...ie without these words, no coalition
Not surprising that you can't tell the difference between the two!
Complain about this comment
99. At 8:30pm on 20 May 2010, Richard Dingle wrote:
"How about an intelligent objection to the Eurozone."
If we just talk about the Eurozone, the problem is that it has all been created the wrong way round. Monetary union has to have as a prerequisite political union.
Once the core countries converge, there has to be a central bank or treasury that establishes the rules and has Reserve Banking behind it.
Other aspiring members when joining need to converge in terms of their economies and their Government budgetary processes (we couldn't in 1992 and we still cannot). There needs to be a reasonably long period for this adjustment to occur. Countries have to earn the right to join.
Each stage of the process of establishing this greater monetary union has to have individual countries with sufficient reserves to back up their currency's link with the Euro (similar to Hong Kong's link to the US Dollar).
In the beginning of EMU the stronger core countries did converge but political expediency took over and the Club Med countries joined EMU and then the Euro too early.
However my main objection the the Eurozone and the EU is the lack of democracy. There seems to be a core of Europhiles who seem hell bent on ignoring the concerns of their citizens and plough along regardless of the risks they are taking with democracy and economic processes.
The Eurozone should have taken 50 plus years to establish, no the ten years taken. Look at Asia - most of the countries are linked to the dollar but their is sufficient leeway for countries to devalue when economic circumstances go against them.
Personally I don't blame the Germans for not wanting to pay the tab for Greece but ask yourself why did they let Greece or some of the other Club Med countries in in the first place.
The current crisis and response is not a surprise. Let's get back to the Common Market, which did at least work - didn't it Delors?
Complain about this comment
#91. StopFiddling wrote:
"A transaction is enforceable in the jurisdiction its in. This has long gone on - for example a property agreement to lease is often signed offshore to avoid stamp duty in this country. There's nothing wrong with it at all. Its an agreement to agree, a signed piece of paper, nothing more. I don't see why short-sellers need to be a member of an exchange."
I think you (perhaps deliberately) miss the point: Gambling debts are unenforceable. Most 'casino' banking is so like gambling it would not be a stretch of the imagination to make their 'contracts' unenforceable at law. If there is no actual interest in the underlying security it is questionable whether a consideration exists and thus any contract is potentially void or at least voidable. All one needs to do is to make it essential that these securities are only traded through an exchange - the main reason for this is so that there is some possibility of regulatory oversight possible, (unlike the cataclysmic crash of these securities in 2008 - when nobody could possible know what was going on).
Furthermore it is one of the major planks of US banking and market reform to stop all over the counter trading in these securities. So in consequence all transactors of business will have to be members of an approved exchange to trade in these securities - and we should do the same.
Complain about this comment
#119
"I will be pleased when it collapses, as it will end the stupid idea of USE"
There is no connection; the Euro is just a currency.
A Euro collapse will have severe ramifications for the UK and given the state of our finances (far worse than the Eurozone with an average deficit of only 6.8%) could tip us over the edge. Even Cameron understands that.
Try developing a sense of proportion and balance, rather than ill informed rants.
Complain about this comment
121. At 9:45pm on 20 May 2010, Richard Dingle wrote:
117. At 9:31pm on 20 May 2010, Kevinb wrote:
110
Unemployment in Espana is 20%
So they do have big difficulties
The issue with Spain is the deficit, which is 11.20% of GDP
If you include the percentage not seeking employment the true UK unemployment figure is 20%.
Add to that a higher UK deficit of 13% and we have not much to choose between Spain and the UK.
Yeah right...........
Complain about this comment
Come off it Stephanie, you seem to be saying "export-led..bad; import-led..good". How daft is that in the context of the Eurozone's massive collective budget deficit? The only reason Germany exports so much is that they do a decent day's work (right up to the age of 67) but the euro's exchange rate naturally finds a sufficiently low level to provide some relief for the "PIGS" people who don't.
What's the point in the Eurozone's leaders railing at the bond vigilantes and destroying investor confidence? (I'm talking about investment in real capital, the sort that ultimately matters).. better to shut up and have the ECB quietly push the money supply petty hard to inflate away the problem.. maybe a bit less painful than mass unemployment!
Incidentally, all you people who think shorting (selling something you don't own) is so bad... is it any worse than buying stuff (I mean real goods and services) with money you don't have? We are all sinners so who is entitled to cast the first stone?
Complain about this comment
#106. Kevinb wrote:
"Unfortunately the Euro is doomed. I will be pleased when it collapses, as it will end the stupid idea of USE"
If you say it is stupid then it must be a good idea and very likely to become a reality!
Kevin you surely cannot believe your even one of you single line outbursts!
You will be pleased when the World is plunged into disarray? How ridiculous!
What on earth do you think you will gain from this? I don't ask what you think the country will gain as you so obviously hate that too!
Please stop being so negative and pessimistic.
Complain about this comment
125. At 9:55pm on 20 May 2010, Richard Dingle wrote:
#119
"I will be pleased when it collapses, as it will end the stupid idea of USE"
There is no connection; the Euro is just a currency.
A Euro collapse will have severe ramifications for the UK and given the state of our finances (far worse than the Eurozone with an average deficit of only 6.8%) could tip us over the edge. Even Cameron understands that.
Try developing a sense of proportion and balance, rather than ill informed rants.
Any balance would be wasted on someone with your lack of ability to understand English properly
The Euro is not going to last in it's current state
Sooner this happens, the sooner it stops you talking garbage
Shame about Ballack
Complain about this comment
#123
"If we just talk about the Eurozone, the problem is that it has all been created the wrong way round. Monetary union has to have as a prerequisite political union. "
Agreed. Your post, unlike some, is an intelligent analysis.
The founders of the Euro were aware of the eventual need for a political and fiscal union and it is in the pipeline. The trouble is 'events dear boy' - they have moved very fast.
The Euro will survive though with an orderly withdrawal of certain members and this is behing Merkel's recent actions.
Complain about this comment
#120. Tony wrote:
"Like it or not, the nation state must come first."
Need I remind you that the Euro has created the most prosperous and wealthiest single market on the planet. Germany lives by its trade. It is hugely in Germany's interest to keep the Euro and fix the current problems as these are in and of its home market.
The USA succeeded and a trading unit because of the dollar (simplification). Europe and its major trading states will succeed because of the Euro.
If Germany reverts to the Mark there will be a gigantic World wide depression the like of which has never been seen - global trade will dramatically reduce and everyone will be much much poorer. Is that what you want?
The Nation state is Europe, and we sink or swim together.
Complain about this comment
Lets look at the facts for a bit and by this I mean recent history.
The EURO started as currency between countries with some measure of common interest and common capacity. Not identical perhaps but close enough and TA DA It Worked.
Ten years latter additional countries that at that time as now we KNOW were not ready to be in this group. TA DA trouble every which way.
Europe's leaders seem unwilling to go back to the model they and we know works. This is because of Pride, Pig Headiness or the inability to accept simple fact.
And more countries are to be added soon. Wow what a deal.
Might it make more sense for some leaders to (Swallow their Pride) fix to the way it was originally and start adding countries the correct way for a change?
Bart
Complain about this comment
#123. dontmakeawave wrote:
"However my main objection the the Eurozone and the EU is the lack of democracy."
Quite right - but that is fixable.
The people of Europe must directly elect their Government. Both the executive and the legislature. Presently the executive is a put up job controlled by governments. It is a bit like US State Governors picking the President of the USA - the US citizenry would not put up with this, and nor should we. We need electoral subsidiarity!
We demand a direct vote for the President of Europe (and the executive).
Complain about this comment
128. At 10:02pm on 20 May 2010, John_from_Hendon wrote:
#106. Kevinb wrote:
"Unfortunately the Euro is doomed. I will be pleased when it collapses, as it will end the stupid idea of USE"
If you say it is stupid then it must be a good idea and very likely to become a reality!
Kevin you surely cannot believe your even one of you single line outbursts!
You will be pleased when the World is plunged into disarray? How ridiculous!
What on earth do you think you will gain from this? I don't ask what you think the country will gain as you so obviously hate that too!
Please stop being so negative and pessimistic.
I am not negative, I am not pessimistic
The USE is a stupid idea, and the Euro will not last in it's current form
What is pessimistic about that?
What is negative?
When it does not last in it's current format, will you be apologising?
I very much doubt it
Complain about this comment
Germans banning naked shorting in Germany doesn't seem unreasonable to me. It is their country and they are not imposing their will on anyonelse
They may want other countries to follow suit but that is presumably because they think it is a good idea.
Merkel is doing the speculators a favour, they are addicted to a game whose final winning outcome would be amageddon. Then, when the dust has settled and there is nothing left, all the gold they have amassed will just be so much shiny metal and if they are lucky they wont find themselves lined up against a wall.
We don't live in a perfect world but by and large it is pretty good so why let a greedy few spoil it for the rest of the class? It's not big and it's not clever.
Complain about this comment
The world IS being plunged into disarray by the stupidity of the Euro.....
Complain about this comment
130
Dingle wrote
The Euro will survive though with an orderly withdrawal of certain members and this is behing Merkel's recent actions.
In which case IT WILL NOT SURVIVE IN IT'S CURRENT FORM, as I have been saying for months, and you have been denying until now
And you have the cheek to call me unintelligent?
Complain about this comment
117
Agreed. It's the high unemployment rate that is pushing up the deficit. However, the debt to GDP ratio can still increase before it catches up to that of most other European countries and right now they probably need to stimulate the economy more than cutting if they are to eventually get to a position where they can deal with spending.
Unfortunately, the response of cutting spending while the economy is still shrinking, as is being done in response to the vultures circling Europe, risks contracting the economy even further....which exacerbates the problem.
So, it's not clear that there is a reason to panic yet, as the markets have done. It would, obviously, be necessary to show that the government can and will deal with spending when the economy starts recovering, but I don't think that responding with cuts while the economy is still in trouble will help either the deficit or the debt.
Complain about this comment
#129
"Shame about Ballack"
Clutching at straws eh, stalker KevinB.
You have no argument just an inferiority complex.
Complain about this comment
re #65
Could some of the people in certain markets take against Germany and decide to cut across the circle - miss out the PIIGSUK - and go for the German financial jugular?
Do I recall correctly that, in Germany, enthusiasm for the EU and the Euro is a bit suspect and has always been thus. The Euro project - whichever one you have in mind - was always a Franco-Benelux product. Might those on the western edge of Europe put a bit of financial pressure on Germany, just to concentrate doubting minds?
Then there is a lot of individual wealth out in areas east of Europe that do not like our (European) religion(s) [whether debt growing/interest charging, sex obsessed, beer/wine swilling or 'christianity'] and might use it for a bit of financial terrorism.
You only need for them all to act at once for something quite horrific to result.
Could be some pulp fiction there, based on real life
Complain about this comment
The American lending problem did not start with American Banks.
It started with American politicians.
And-the idea of Democratic, and Liberal thinking people that it is not fair, or not right to give people that have never raised or saved a dime well plot and scheem to keep those people from buying a home.
After all having a home is a God Given Right.
Affirmative action principles require we correct these deficiencies.
Well so-much for the Kum Bi Ya attitude of the liberals, socialists in the country.
As for the people who sell things it is not reasonable to expect a sales person to walk away from a sale simply because it makes no sense. Kind of like shooting oneself in the foot.
Especially if the US Govt. is promising to cover all defaults.
Complain about this comment
re #99
The EU was founded and built on a succession of lies.
It is an old man's club living in the past.
The club was founded to prevent something that was never going to happen internally and has failed to prevent it happening externally - ie. war.
It costs everyone a lot of money.
European kids are Brits, French, German, Italian, whatever, first and Europeans second and they tend to like and get on with each other. They own bits of each others' countries, they work in each others' countries and they are getting married to each other.
They will not want to go on paying for a ridiculous old man's club merely to save the hassle of going to a Bureau de Change for their holiday money.
Complain about this comment
#136
"The world IS being plunged into disarray by the stupidity of the Euro....."
Any facts to support this ridiculous unintelligent statement.
The Euro has grown from nothing in ten years to being the number two world currency after the Dollar.
During this time it has substantially appreciated against all major currencies including the Dollar and Sterling.
All currencies rise and fall. The Eurozone has fiscal issues in its southern part that were not caused by the Euro rather by poor government in these countries.
So where is the fire.
Incidentally if the Euro falls through the floor the UK (we export 60% of our goods/services to Europe) recovery will reverse.
Also average EU deficit is 6.8% compared to UK deficit of 13.0%.
So where is your argument. You don't have one. You seem driven by ignorance and hatred of all things foreign.
Complain about this comment
Germany has a history of doing what it wants to do then discussing. If Germany is party to underwriting Greek rescue missions then who is to rush forward to take their place or argue with Germany. Only somebody wanting to take Germanys place in underwriting. Short queue. Surely Germany is saying governments should rule supported by borrowing.
Reality appears to be dawning in the media that strong growth is difficult. About time. What is surprising about this, the whole strategy has been to dilute a debt which cannot be redeemed overnight. Dilution has implications and time spans. That remains dominant and will for some time. Until the subsidy on housing reduces, and house prices decline to a FTB affordibility point, (probably timed for the next UK GE), UK economic pick up will be delayed. The UK above all needs housebuilding to resume because it provokes spending and employs and is difficult, though not impossible, to import.
To return to a previous point - If you devalue currency and import then inflation follows. Following inflation is interest rate rises.
The issue remains the problem that the debt limits policy.
Furthermore if demand is slack outside the country then exports remain difficult. How can the situation be described as anything other than slack in Europe.
Those with money with no immediate need require somewhere relatively safe to put it. Money in a bag is no use to anybody. The matter is not one sided. If you want to borrow you want to look safe. The money holders can huff and puff, it makes no difference, they have to put the money somewhere or it loses value. Only somebody who has never had money could fail to understand this.
The impact of globalisation were somebody elsewhere is prepared to do a job for a few dollars a day has not gone away. This continues to undermine the UK economy. The fact remains nearer home that minimum wages on the EU fringes are a fraction, yes fraction, of the UK minimum wage which is the second highest in the EU, the first placed being Luxemburg which is awash with international civil servants.
What is difficult about this. Why on Earth does anybody pretend this is rocket science. It clearly is not. The UK is looking at a 6 percent drop in activity and the risk of further decline trends unless restructuring is put in place. Oh dear, the UK middle class, who are 5x wealthier than 50 years ago, might not like it. Thats going to stop it. Yes. Supported by marching public sector workers getting fit with this new activity. Getting fit sounds a good idea. Marching will not make any difference. Debt rules, KO.
Complain about this comment
#136 kevinb,
There you are totally wrong.
The world is being plunged into disarray by the concentration of wealth in the hands of a small number of people and organusations and the continued slavish adherence to globalisation (though the 2 are inextricably linked).
Complain about this comment
138 fjlm:
'Unfortunately, the response of cutting spending while the economy is still shrinking, as is being done in response to the vultures circling Europe, risks contracting the economy even further....which exacerbates the problem.'
Cuts, ie cuts to public services - Hmm. You seem to have missed the fact that paying ex public sector workers (or would be workers in the face of natural wastage policies) to be on the dole from public funds is substantially cheaper than paying the same public sector workers to work from the same public funds. JSA is less than the minimum wage, and in fact less than the state pension, there are no holidays and voluntary work can be requested. The matter of defining activity is simply one of transition as the current public sector expenditure is unsustainable. It is inescapable that the public sector shrinks as the economy has shrunk significantly and cannot grow rapidly enough to carry the current load. Focus on essential services will follow. The general public aversion to higher taxation will almost certainly be greater than the aversion to service cuts. There are predictable outcomes from likely public sector natural wastage policies and OAP age criteria rising but I will leave you to work them out. It will affect a minority group who are increasingly carrying the can without much public disquiet at the moment.
Complain about this comment
136. At 10:23pm on 20 May 2010, Kevinb wrote:
The world IS being plunged into disarray by the stupidity of the Euro.....
The Euro is just a currency, whereas stupidity is something human, you should know about.
You either invest into Euro or into AI
Complain about this comment
141 bart
'As for the people who sell things it is not reasonable to expect a sales person to walk away from a sale simply because it makes no sense. Kind of like shooting oneself in the foot.
Especially if the US Govt. is promising to cover all defaults.'
That is obviously the position of somebody who cannot differentiate between fraudulent and legitimate transactions. As will be determined in various international courts, in process and pending.
Complain about this comment
Why Europe Will Win
http://www.newsweek.com/id/236598/page/1
somebody posted this in another blog
Complain about this comment
My God! Flanders and everyone else on this blog whose head does not rattle ..surely you have not forgotten Amschel Rothschild's chilling declaration about having control of a nations currency.
Economic hardship maybe an interim price worth paying if it means the slurry that washes the streets of the City of London is diverted into a makeshift sewer.
Complain about this comment
Re 142 : "They will not want to go on paying for a ridiculous old man's club merely to save the hassle of going to a Bureau de Change for their holiday money."
How true... I don't think anyone wants to go back to their national currencies any more. The Euro is here to stay. In what form, what state, who knows. It's gone a long way to let it fall now. You cannot really understand this until you spend some time in the low counties/Germany/France. They are for all purposes one country even today. Perhaps PIIG countries will exit the Eurozone, but I think that the core founding members will remain.
Complain about this comment
We should all approve of the psychology behind Germany's tactics in introducing this ban!
Oh for the glorious '50s and '60s - days when inflation was perpetually low, when mortgage rates and house prices hardly moved at all - days when there was virtually no casino banking and spiv speculation, when pay rises were never an annual God-given right and this media obsession with growth was virtually non-existent - when houses were bought to be lived in and buy-to-let was just a figment of imagination....days of full employment...those were days....those were the days my friend.
Complain about this comment
Rather than aimlessly spend money, as we do here in America, on useless consumerism made in China; what the West needs to do is invest in efficiencies.
Make our homes & offices more energy efficient to reduce our dependence on imported fossil fuel and clean up the enviroment. Build out mass transit systems & community gardens. Invest in resiliancy!
Complain about this comment
139. At 10:36pm on 20 May 2010, Richard Dingle wrote:
#129
"Shame about Ballack"
Clutching at straws eh, stalker KevinB.
You have no argument just an inferiority complex.
I very much doubt it is possible to have an inferiority complex when up against your cucumber sharp intelligence
With the Euro in the mess it is in, only you, and John from Swindon are foolish enough to advocate joining it still
Case proven
So Ballacks to you
Complain about this comment
Regarding the EU, Germany and the Euro, most of the comments above are totally way off mark. This is how it is:
- The EU want stronger regulation of financial markets, and the Greek crisis helped them start putting those plans into place
- The EU want the role of rating agencies and speculating institutions (eg: hedge funds) diminished, and the Greek crisis helped them to start putting those plans into effect
- The Germans want the Euro to devalue so that their exports become cheaper and dilly-dallying over Greece and creating an atmosphere of market uncertainty with new regulations had precisely that effect.
- A cheaper Euro will benefit exporting nations and hurt those who don't do anything but speculate in the finance sector (eg : the UK), which is a good thing on the whole
- Banks will not be able to dive into headlong into a spree of moral hazard when no one is interested in bank related assets, so creating uncertainty around PIIG t-bonds is a good thing, and ultimately these banks will be nationalised anyway
So, there you have it. The EU and the EURO are going to come out of this in wonderful shape. Sterling here is under real threat, and it is not beyong the pale that the UK will end up having to abandon it.
Complain about this comment
#153 Lucerne96
Could not agree more.
Built upon a system that evolved with 20th century mechanisation and out of the post-war economic regulatory frameworks, we now have a situation where everything we eat, drink, buy or sell requires to be moved by vehicles that each hold a petrol tank.
Like a vast tree of supply the roots of this organism are buried deeply in the middle east, and closely guarded by the US military. To buy oil, you need dollars. This is the fundament of Western mechanised 'civilisation,' which relies totally on the tentative relationship between OPEC, guns, and the USD.
Economic changes will need changes in infrastructure, and this must involve both a change in energy and systems for international trade, as the petrodollar is what is essentially being replaced, and is not a sustainable basis for the future.
Complain about this comment
143
Dingle wrote
Also average EU deficit is 6.8% compared to UK deficit of 13.0%.
So where is your argument. You don't have one. You seem driven by ignorance and hatred of all things foreign.
There is no evidence whatsoever to make your slur of my hating all things foreign
Just because I don't agree with the Euro, it does not mean I hate all things foreign!!
This is just your myopic interpretation, in your binary world, of slagging off anyone who is cleverer than you
Sadly, this is most people
You mention Eu figures when it suits you, intermingling them with Eurozone figures when that suits you
You have spoken often of the euro usurping the Dollar as the world's reserve currency, you talked of Sterling/Euro being at parity by Easter 2010
In all these areas you are WRONG
The deficit's....
Germany 3.3% (although they have just committed 200bn to theEuro bail out fund)
France 7.5%
Italy 5.3% (Debt up to their necks though, and dodgy book keeping)
Portugal 9.4%
Greece 13.6%
Spain 11.20%
Unemployment
France 10.10%
Spain 20.00%
Italy 8.8%
Portugal 10.5%
Greece 12.10%
You cannot keep denying the mess, and your average figures are clearly utter garbage
You mention Holland's unemployment, which is under 5%, and great though Holland is as a country, it is small
You have to stop being in denial about the Euro, it is making you look utterly absurd
Thankfully, this is something you should be able to deal with well, due to the regularity of this phenomenon
Complain about this comment
It is important to realise that the City does not MAKE money, it merely CONCENTRATES it. For the banker to achieve his £1m bonus, 1m ordinary investors must lose £1. The best we can hope for is that these investors live a long way away and hence do not matter. The government doesn’t care either way though as whenever money moves from one to another it takes its cut, whenever the rabbit runs it takes a pot shot.
The financial elite do not, as they often quite laughably declare, grow our pension funds, because there must always be other funds elsewhere that lose out (even if it is just inflationary devaluation of your savings). Of course the odds in this game are heavily stacked in favour of the “insiders” – we could all be good at it if it were our full time job. Nevertheless there can be no net gain in a fully exploited global economy. There must be a shift back to regionally sustainable economy with the emphasis on meeting local needs and a balancing of trade.
Complain about this comment
145. At 11:20pm on 20 May 2010, foredeckdave wrote:
#136 kevinb,
There you are totally wrong.
The world is being plunged into disarray by the concentration of wealth in the hands of a small number of people and organusations and the continued slavish adherence to globalisation (though the 2 are inextricably linked).
It was a brief comment posted in response to an insulting comment
Taken in isolation, with no context it does look absurd, yes
Complain about this comment
#157
My argument all along has been that Eurozone economic fundamentals are better than those of the UK and this will become apparent over the next few years.
Your illogical, unintelligent and bitter tirades will not change that.
Insult as much as you want. I find it amusing. It is also proof that I have won the argument. End of.
Complain about this comment
This comment was removed because the moderators found it broke the House Rules.
160
Dingle
Where is your evidence that I hate all things foreign?
There is none
Rather like your evidence for the Eurozone being stronger than the UK
It is not
Complain about this comment
re #153
Building efficient road networks would be a good place to start. Unfortunately, due to all sorts of muddled thinking, we have been making most British urban roads, plus some of our motorways, as inefficient as possible for about forty years.
Complain about this comment
re #143
Re-reading this in the cold hard light of morn, I think you are overrating the Euro. You could bolt the Aussie dollar, the NZ whotsit and the Fijian pound together, call them Australs, and say they are a successful corrency if still there in ten years time.
All the Euro does is represent the underlying (now non-existent) currencies - ie. means of exchange - of the Eurozone members. They decided to huddle together for strength, security and mutual encouragement and to avoid nasty things like speculation and big rises and falls and the problems all that brings.
Hhhmmmnnnn.
Complain about this comment
re #133
All Government costs. European Government costs a lot.
Can we afford a lot of that sort of thing now?
Complain about this comment
#162
"Rather like your evidence for the Eurozone being stronger than the UK
It is not"
Oh yes it is...
'Indeed, recent worries over a Greek government default and its implications for the euro have obscured a string of good news coming out of the continent. Fresh numbers show a stronger-than-expected recovery—which would seem to confirm Berger's and McKinsey's reappraisal of European economic performance. In March, a key index measuring European export orders hit the highest level in 10 years. Industrial production—the total output of Europe's factories—also beat expectations, rising at the fastest quarterly pace on record. An average of GDP forecasts shows 1 percent growth in 2010, roughly equal in per capita terms to America's 2 percent.' (Stefan Thiel, Newsweek)
Full article....
http://www.newsweek.com/id/236598/page/1
Even Italy is in better shape than the UK; lower deficit, lower inflation, higher exports, a bigger manufacturing economy.
As I said 'end of'.
Complain about this comment
Why has Britain such an interest in discussing the EURO Zone? Because they want to get away from their own problems. A country which lives permanently over its means ( Trade deficit in one month £ 6 Billion).
The only real issue Brits are discussing , how can we get the Housing market running, So we can sit down and and watch how "wealthy" we get.
Comsumption is all what Brits are thinking about. The other thing the want to protect "THE CITY" of BabyLondon.They are laisy people not hard working. How much "wealth" in Britain was lost in the last two years? Billions and who did bebefit from that? So I think, the world cannot learn anything from Britain in economical terms.
Complain about this comment
166
There is far more counter comment, which you just dismiss
Italy is not in better shape, you are just incapable of understanding any fact that you don't like
Italy is uncompetitive, it has an ageing population, and debt just under 120% of GDP!
Unemployment is rising, and there is a big North (Rich) South (poor) divide
Yes, the deficit is 5.3%, which is adding further to the very high debt as each month passes
The only thing that is the end of...is your falling credibility
Complain about this comment
Dear Stephanie
Recently someone on BBC did a 'What if' scenario on Greece with about 5 different options and the likely impacts - I thought this was good journalism.
Recently there was also a fun/serious thing with the volcano where different possible solutions (some wild and wacky) were put forward and discussed by scientists.
I think it would be excellent if you could do a similar piece on the global financial crisis - Where could/should we go from here and the impacts of doing these things and the barriers that stop them being done?
I would like to see the following 'What If's' covered;
1) What if the Euro implodes as a currency?
2) What if all debt all over the world is simply written off?
3) What if all personal debt only around the world is written off?
4) What if all intergovernmental debt only around the world is written off?
5) What if unilaterally we just write off all our international debt?
6) What if Greece and the PIIS just get thrown out of the Euro?
7) Would a big war help?
8) What would happen around the world if interest rates were put up about 3%? Please think beyond the immediate effect and go longer term.
And then of course do some good journalism and come up with lots of scenarios of your own.
This may have to be a series of articles.
Thank you.
Complain about this comment
167. At 09:22am on 21 May 2010, didigermany wrote:
Why has Britain such an interest in discussing the EURO Zone? Because they want to get away from their own problems. A country which lives permanently over its means ( Trade deficit in one month £ 6 Billion).
The only real issue Brits are discussing , how can we get the Housing market running, So we can sit down and and watch how "wealthy" we get.
Comsumption is all what Brits are thinking about. The other thing the want to protect "THE CITY" of BabyLondon.They are laisy people not hard working. How much "wealth" in Britain was lost in the last two years? Billions and who did bebefit from that? So I think, the world cannot learn anything from Britain in economical terms.
What nonsense
Frankfurt wanted to overtake NY and L and didn't
Merkel is now caught between playing to the domestic audience, and trying to ensure that the Euro project doesn't fail
Yes, we had an inept Government, which flagrantly overspent
We did not, and the new coalition government, will, in time, correct this
Complain about this comment
#65. Up2snuff wrote:
"re #133
All Government costs. European Government costs a lot.
Can we afford a lot of that sort of thing now?"
I recall the the whole of Europe is run by fewer civil servants that Scotland. The problem is with the huge number of civil servants in the Nation States and their inability to keep proper record of expenditure and income.
The Nation state of Europe is vital for the well-being of all European citizens. It is also vital that it is democratic. We need democracy it stops the over-powerful state from doing things that the people do not want. The defective British form of democracy of serial dictatorships has been shown to produce irritation in the country and that is perhaps why we now have a coalition!
The President and executive of Europe MUST be elected by the people - not by a tiny cabal of prime ministers and presidents. As we now enter a terrible time of severe austerity democracy is even more vital. The voice of the people my be directly heard.
Are you arguing against democracy?
Complain about this comment
55. At 2:56pm on 20 May 2010, MarcusAureliusII wrote:
"Germany's lost the plot"
Oh no, the plot is there and waiting. The grave has already been dug. The tombstone that will mark the mortal remains of its carcas has already been engraved;
"Here lies the German Economy 1945-2010
It fell on its sword and died for an impossible dream
R.I.P."
-----------------------------------------------------------------------------------
86. At 5:54pm on 20 May 2010, Kevinb wrote:
68. At 4:35pm on 20 May 2010, The Patriot wrote:
#55,
What's R.I.P.?
Rampaging in Poland
-----------------------------------------------------------------------------------
100. At 8:32pm on 20 May 2010, NorthSeaHalibut wrote:
#86. At 5:54pm on 20 May 2010, Kevinb wrote:
68. At 4:35pm on 20 May 2010, The Patriot wrote:
#55,
What's R.I.P.?
Rampaging in Poland
------------------------------
Thanks for that - very nearly choked on my coffee.
Nice one Centurion - LOL
----------------------------------------------------------------------------------
I not so sure. Given the context of use (post #55), I am sure R.I.P means "Rise If Possible". ROFLOL.
Complain about this comment
87. At 6:10pm on 20 May 2010, Kevinb wrote:
'You appear to be in a round hole...this is for grown-ups'
I agree that this is a serious subject. However I suggest that my comment is no more immature or nonsensical than yours and that was my point.
As you appear to have a completely partisan view of politics and economics in this country (by the way, my vote went to someone who now has a government post) maybe you would like to give your view on Samuel Brittan's piece in the FT this week (being grown-up I assume that you either take a paper copy or have an account).
http://www.ft.com/cms/s/0/1b9189ea-6444-11df-8618-00144feab49a.html?ftcamp=rss
Much of your argument here appears to be at odds with informed mainstream opinion. That in itself is entirely reasonable but I would have thought you would see yourself on the same side of the fence as Mr Brittan?
Complain about this comment
At the risk of stepping on various people's toes...
For those of you who complain that globalisation is the problem (or at least one of the problems) I have a question. Given that Britain has been a trading nation for its entire existence, not least because there are some good we cannot produce, to reverse globalisation obviously implies that we would have to stop trading either with some people or in some goods. How do you propose selecting those people/countries we stop trading with?
As for the Euro. From the very beginning I have said that the Euro would suffer problems when the Euro zone area suffered assymetric shocks, ie economic shocks that effect some countries differently from others. However, it is clear that there is a further problem. Where countries are simple not willing to take the necessary steps to keep their economy competitive and live off borrowing from the other countries then this is not sustainable.
I am against the Euro for the UK not on the basis of little Englander nationalism but simply because I have yet to be convinced that it is economically a good idea, especially as our economy has been very different to the rest of Europe
Complain about this comment
#154. Kevinb wrote:
"With the Euro in the mess it is in, only you, and John from Swindon are foolish enough to advocate joining it still"
Kevin, the reason why your position with regard to the Euro and the Eurozone is foolish is that it is short-sighted and shows that you really do not care about the well-being of this country at all.
Your little England pull up the drawbridge mentality of rampant xenophobic unreason shows that you seem simply and blissfully unaware of the economic realities of our country.
Unless you view this country solely as an off shore parasitic tax haven for a few mainly foreign tax exiles to leech other peoples wealth you must comprehend that we need customer to whom to sell our manufactured goods and from whom to buy large quantities of our food.
Your naiveté is just crass and will do immense damage to the country that you profess to want to help - although from your blog contributions I cannot recall you expressing any desire to help our country.
Your views on policy are less driven by economics and the benefit to the country, but more driven by a pre-determined bigoted xenophobic irrationality.
Complain about this comment
171 wrote
The problem is with the huge number of civil servants in the Nation States and their inability to keep proper record of expenditure and income.
Further evidence of myopic thinking
The EU hasn't had it's accounts audited for how long?
Unbelievable
Complain about this comment
173. At 10:18am on 21 May 2010, Squarepeg wrote:
87. At 6:10pm on 20 May 2010, Kevinb wrote:
'You appear to be in a round hole...this is for grown-ups'
I agree that this is a serious subject. However I suggest that my comment is no more immature or nonsensical than yours and that was my point.
As you appear to have a completely partisan view of politics and economics in this country (by the way, my vote went to someone who now has a government post) maybe you would like to give your view on Samuel Brittan's piece in the FT this week (being grown-up I assume that you either take a paper copy or have an account).
http://www.ft.com/cms/s/0/1b9189ea-6444-11df-8618-00144feab49a.html?ftcamp=rss
Much of your argument here appears to be at odds with informed mainstream opinion. That in itself is entirely reasonable but I would have thought you would see yourself on the same side of the fence as Mr Brittan?
I think the Euro is flawed and doomed in it's current state
Which is a perfectly valid view
Not sure of your point with the Brittan article?
Where is this at odds with mainstream opinion?
The FTSE is falling, and I made the point it would soon be back to 1997 levels
Not sure what you are trying to say, really
Complain about this comment
175. At 10:25am on 21 May 2010, John_from_Hendon wrote:
#154. Kevinb wrote:
"With the Euro in the mess it is in, only you, and John from Swindon are foolish enough to advocate joining it still"
Kevin, the reason why your position with regard to the Euro and the Eurozone is foolish is that it is short-sighted and shows that you really do not care about the well-being of this country at all.
Your little England pull up the drawbridge mentality of rampant xenophobic unreason shows that you seem simply and blissfully unaware of the economic realities of our country.
Unless you view this country solely as an off shore parasitic tax haven for a few mainly foreign tax exiles to leech other peoples wealth you must comprehend that we need customer to whom to sell our manufactured goods and from whom to buy large quantities of our food.
Your naiveté is just crass and will do immense damage to the country that you profess to want to help - although from your blog contributions I cannot recall you expressing any desire to help our country.
Your views on policy are less driven by economics and the benefit to the country, but more driven by a pre-determined bigoted xenophobic irrationality.
There is no evidence whatsoever for these wild accusations you make
Where is there any xenophobia?
Because I don't agree with the Euro?
What drivel
IF we had joined the Euro we would be in an even worse mess
Just because you don't see that, it hardly makes me bigoted or xenophobic
The fact that you never deal with the points raised and resort to such labelling reveals your tiny mind over heating
Complain about this comment
175
Considering you are posting these messages from public funded tax payers money provided IT, I doubt you even have the faintest idea what helping the country means
Complain about this comment
Dear Kevinb,
I like this blog - the report itself is often lacking and the discussions that follow are normally informative with some really good contributions.
However you are flooding the blog with a lot of aggressive comments which often become tit for tat comments with other bloggers.
This is becoming tiresome and I would really appreciate it if you could be more constructive by possibly making your own comments without necessarily personally attacking other bloggers and their comments - after all the issues discussed are normally very complex, with much greater minds than ours unable to agree and therefore there are often two points of view. Yours may always be the correct one but at least allow other people to make theirs without being attacked.
Thank you in advance.
Best wishes
Grim.
Complain about this comment
PS #180 written without being able to read your #177,#178 and #179 as they are still awaiting moderation.
Complain about this comment
I always smile when some or other blogger says that the maxim of produce and trade (goods & real services) to prosper as a nation is dead. They always point to the new paradigm of fiancial engineering via CDS, short selling and hedging. It's as if the laws of economics, unlike those of physics are not immutable but can change with fashion. The problem with fashion is that as soon as it's created it's obsolete and so with these new paradigms.
I think we've massivley under-estimated and mis-understood the Germans. They have always got it right: Produce and trade goods AND provide services that go with those goods (SAP etc) and at the same time keep the nation's banks roughly proportionate to their own economy's needs.In the UK we thought we could offshore the produce and trade function and keep the 'service' and financial engineering business. Daft - do you really think that (apart from the Germans) the Indians and Chinese cannot tailor those services to their own needs?
In the entire Universe, not simply Germany, the laws of physics are constant and so it seems to me are the laws of economics. Germany can now call the tune.
Complain about this comment
This comment was removed because the moderators found it broke the House Rules.
#16 >>I mean, what's to stop me selling my shares when the market's on the turn then buying them back when it bottoms out? That isn't short selling, it's astute business practice.
If you sell share that you already own, that's normal business !! *NOT* short selling !!
If you borrow share to sell and then buy them back at a later date to return to the original owner, then *that's* short selling !!
WHat the Germans are talking about is when individuals/companies sell what they *DON'T* own and try to buy back at a later date to give to those who bought from them !! That's called "Naked Short Selling" !! That's gambling, pure and simple, and should not be allowed !!
It's like borrowing money from your dad to bet on the horses and thinking to pay him back when the horses won !! No thinking is given to what happens when the horses lose !! That's when these guys are "caught short" !!
Then again, what do I know about exchanges and derivatives ??
Complain about this comment
#17 >>Governments may not, perhaps understandably, like the way at least some elements of the market behave but one has to ask in return why governments have created the economic conditions where they could.
Well, they have to blame someone for their failures !! They can't/won't blame themselves so they blame others; like "it's the fault of the US that we have such a high deficit" !! Who said that ??
Complain about this comment
87. At 6:10pm on 20 May 2010, Kevinb wrote:
"You appear to be in a round hole...this is for grown-ups"
Coming from someone who thinks this time the fault was at Blair / Brown's door - someone who is clearly not mature enough to recognise that last time there was a different set of people running the show
It's funny how no matter who get's put in charge, the result ends up being the same - what's even funnier is how many times will people like KevinB will believe this time is any different to any other
I suppose it keeps you from having to face reality and picking up a copy of Das Kapital and reading the answers for yourself. I mean it's much simpler to blame someone you can see - rather than blaming the system you can't - and I'm guessing you like to keep things simple - right KevinB?
Your political bias is one thing, but your ignorance regarding the root cause of financial crisis shows how your faith in the blue party is totally misplaced.
Still I'm guessing self interest is a large part of your life - which is why you think your future is aligned with theirs. Sadly this will not be the case, because when the chips are down - you won't matter a bean to them.
Complain about this comment
#21 >>I believe the future lies in a euro operating as the single currency in Germany, Benelux, France, Luxembourg and Austria. Any other states would have to sign up to proper fiscal controls and prove, for a period of minimum 5 years that they can operate to a discipline that would ensure the situation at the moment can never be repeated.
The Swede and the Danes have far better economies than the Benelux countries !! If anyone should be admitted, they should !! The Norweigians wisely kept out of the mess so that the Eurocrats can't get their dirty mitts on their oil and gas revenues or their salmon (oh, those lovely salmon !!) !!
Complain about this comment
170. At 09:44am on 21 May 2010, Kevinb wrote:
"Yes, we had an inept Government, which flagrantly overspent"
Can you justify this statement?
Before the banks colapsed we were running with public spending around 40% - after the banks collapsed this shot up to nearly 80%.
How is that 'flagrantly overspending'? - do you not spend about 40% of your annual income on improving your home and garden?
...and when someone else in your house comes home with a credit card bill of 40% of you annual income, taking you close to bankruptcy - do you then criticise yourself for improving your home when you should have been preparing for the poor money management of others?
Your argument is totally baseless - it's a Tory argument designed to cover up the fact that the majority of the current deficit was brought on by the banks and the Governments decision to bail those banks out.
This is designed to make it acceptable when the coallition cut every public service to the bone - but don't worry, people like me will continue to remind people - with facts about where that debt came from.
You'll notice that the same trick is being tried in greece - but the people are not stupid. All the blame is placed by the media at the overspending Government's door - but every person I have seen interviewed on TV in Greece are clearly there because they know this isn't true.
The banks made the debt - not the Governments. No amount of repeating the same lie will change that KevinB.
Complain about this comment
#32 Ha, ha !! People who get into court cases should have at least some facts to back up their claims. Not just "oh, he has millions hidden away because I think so" !!
Vague claims without substance is usually considered as malicious !!
Complain about this comment
As I see it, so far all that has been proposed is a bailout of Club Med.
However those who are supposed to be doing the bailing comprise of:
Some countries that can’t afford it.
and
Some countries that don’t want to pay for it.
Which tends to mean that selling the bailout to the people of those nations that actually have to pay for it, isn’t going to be easy.
Now based on the premise that you can let individuals fail, companies to, but not nations.
And further assuming that no bailout = no union, and therefore no need for Euro politicians, I suspect that they're going to have to come up with something else.
Something that the people that actually have to pay, either won’t fully understand, or better still won’t understand at all.
So what does that leave…………………quantitative easing.
QE-D
Complain about this comment
180
As long as you can write the same to Richard Dingle and John from Hendon, for their tiresome attacks on me then fine
Otherwise you are just being uneven in your comments
Complain about this comment
One thing about politicians and regulators is that they hate markets. Markets, being the free expression of individual and institutional rights to buy and sell what they want, when they want, how they want. Free and competitive markets where fundamental investors, speculators and arbitrageurs back their judgement - putting their money where their mouths are - provide high quality information about the value of financial securities and ultimately the state of the underlying economy. Speculators, taking huge risks, force price movements to completion much more rapidly than other investors playing the long game. Arbs make sure that securities trading in one market are identically priced in other markets. Politicians hate markets - they tell them what they do not want to hear. Markets find the weak point just like the ocean beating on a sea wall and rarely do they get it wrong. The banking crisis was a salutory example of the efficiency of the markets - once the vulnerability of the banks to the sub-prime mortgage market was apparent, the markets reacted. Too fast for the politicians and the regulators to cope with. So they called foul and banned short selling in banking stocks. Again, the markets are testing the economies of the Eurozone and in particular the political weakness and risks attaching to sovereign debt. So how do the politicians react? Merkel, dithered over supporting the Greek economy, the markets saw the hole in the Eurozone project and went for it. Guess what? Blame the markets. Shoot the messenger.
Complain about this comment
wotw
You are welcome to be a marxist
I am not, thankfully
Complain about this comment
178. At 10:46am on 21 May 2010, Kevinb wrote:
"Just because you don't see that, it hardly makes me bigoted or xenophobic"
Followed by...
"The fact that you never deal with the points raised and resort to such labelling reveals your tiny mind over heating"
Bigot? - surely not...
KevinB - you have failed to answer most points put to you - because if you can't somehow bring the conversation to a politically motivated bashing then you don't seem to be interested.
It appears that 'tiny minds' cannot comprehend the fact that the current encumbants are no better qualified for stewardship of the Economy than the last, the one's before that, and the one's before that etc.
I mean they're even regurgitating the same faces - like Ken Clarke - and yet you still cannot see the blindingly obvious connection?
I bet you still believe in the tooth fairy, and when you caught your Dad putting 10p under your pillow one night - you accepted his explanation that "he was just checking it was there".
The rest of the country woke up to this a long time ago.
Complain about this comment
"188. At 11:29am on 21 May 2010, writingsonthewall wrote:
170. At 09:44am on 21 May 2010, Kevinb wrote:
"Yes, we had an inept Government, which flagrantly overspent"
Can you justify this statement?
Before the banks colapsed we were running with public spending around 40% - after the banks collapsed this shot up to nearly 80%."
Now then WOTW you should know better than that. The Previous Government were treading a tightrope with regard to the so called 40% golden rule long before the credit crunch hit - and as you well know had long since exceeded it when PFI and public sector pensions are included.
With regard to the banks - sure they have been a big part of the problem but not the only part - and at some point we were always going to have another recession which would have tested the public finances - you can't end boom and bust you know! Plus if it's all down to the banks why are we going to still be running huge defecits for many years after the bail outs (here's hoping we don't have to bail out again).
Remember that 40% you keep banging on about included all of the fake growth and tax receipts based on the banks reckless lending - so in fact we shouldn't have had that in the first place if your approtioning of blame is to be believed. So in effect growth AND spending should have been much less - which is the challange that the coalition is going to have to tackle.
With regard to the politicians you are right they will look after themselves first, second, and third. I haven't seen Tony Blair sharing his new found riches with his Unite comrades. All we can do is pick the bunch that we feel will serve us best after they have helped themselves.
Complain about this comment
wotw wrote
The banks made the debt - not the Governments. No amount of repeating the same lie will change that KevinB.
No, between 2001 and 2010 Brown overspent massively
If you are unable to see that, then may I suggest that you should have gone to Sp******ers
Complain about this comment
This article states what the action of the German regulator is not but doesn't make it clear what it IS.
Complain about this comment
181. At 11:04am on 21 May 2010, GRIMUPNORTH77 wrote:
PS #180 written without being able to read your #177,#178 and #179 as they are still awaiting moderation.
You did'nt miss much.
Complain about this comment
#193 Kevinb
So..summarise Marxism and explain what is wrong with it?
Complain about this comment
177. At 10:42am on 21 May 2010, Kevinb
That's fine. I am confident that the majority of the adults here probably grasped it. If you are suggesting that your comment that I originally responded to was free from political dogma then I doubt you will find many who would agree.
I note that the budget defective and the required borrowing rates have been revised down notably today. It is great to see that George is having such a positive effect so quickly though he seems keen to try to revise it back up again next month. There is some hope that the less ideological approach possible under a coalition may find a means of cutting spending significantly without increasing the deficit:GDP but based on all other attempts in Europe that seems unlikely.
I listened at some length the George Osborne’s (somewhat recycled) speeches to the IoD and CBI and found the piece on growth somewhat weak. At this point he seems to be relying almost entirely on improving the tax regime as a means of promoting growth. I have yet to understand how that adds up in the current world climate but maybe he will have more to say in the longer format offered by the Mansion House speech next month.
Fundamanentlly the entire system is flawed (exposed by of the most recent failure of global finance) and any particular flavour of UK administration represented by the main parties is largely irrelevant.
The Euro won’t fail just because you want it to. You may have an easy get out in suggesting ‘in its current form’ as in the context of the current global systemic pressure many things will need to be changed but, assuming our current capitalist system continues largely as is, a stronger Europe is the essential result (as a stronger Europe is a basic requirement for the current system to continue).
Complain about this comment
FTSE below 5000? - how many gamblers are loosing their (or rather our) stakes?
The slience of the Bull pen is only visible because of the growls from the bear pit.
I wonder if people will start to believe now they are seeing it for a second time in 2 years. What will become of free market ideology when the Tory / Lib coallition start bailing out the private sector (again).
TOO BIG TO FAIL - NOT TO BIG TO JAIL
Shhh slaves, get back to work.....there's nothing to see here - it's only a recession...
Complain about this comment
193. At 12:06pm on 21 May 2010, Kevinb wrote:
"wotw
You are welcome to be a marxist"
Still trying to label me so you can justify my complaints "oh he's just a Marxist" which means I can be ignored.
Considering I only use the critique of Capitalism to demonstrate how and why our Economic world is collapsing does not make me a Marxist. The fundamental principle of surplus value is Adam Smith diminishing profit - so does this also mean I am a 'Smithist'?
Surely it's better to understand the reasons for the collapse rather than stick with the people who keep telling you they can fix it - when demonstrating they can't!
If chancellors traded their skills, they would be on rogue traders all the time. They keep telling you it's fixed, and yet a few years later it's broken again.
Ever get the feeling you're being taken for a sucker?
Complain about this comment
194
The tooth fairy?
Are you that devoid of anything worth saying?
Good grief
Complain about this comment
KevinB
Maybe I should add that I don't disagree at all with your prediction re the value of the stock market, I suspect it will drop lower than that (below 3500).
I think I disagree with your reasons as to why though it is not clear to me from your posts exactly what your reasons are other than some temporary marginal deficit spending from the last government.
Complain about this comment
174. At 10:23am on 21 May 2010, Justin150 wrote:
"For those of you who complain that globalisation is the problem (or at least one of the problems) I have a question. Given that Britain has been a trading nation for its entire existence, not least because there are some good we cannot produce, to reverse globalisation obviously implies that we would have to stop trading either with some people or in some goods. How do you propose selecting those people/countries we stop trading with?"
It's not international trade that's the problem - nor is it a fundamental part of globlaisation. It's the leeches who use international trade to accumulate more and more wealth - creating bigger and bigger companies in order to retain their profit margin. In a non 'globalised world' we would be able to choose not to import goods from countries who employ slave labour - but in globalisation there is no control - in fact large comapnies actively assist in the spreading of slave labour by making that decision for us. They conveniently hide the truth about the origins of the goods - so we don't revolt as consumers.
"As for the Euro. From the very beginning I have said that the Euro would suffer problems when the Euro zone area suffered assymetric shocks, ie economic shocks that effect some countries differently from others. However, it is clear that there is a further problem. Where countries are simple not willing to take the necessary steps to keep their economy competitive and live off borrowing from the other countries then this is not sustainable."
This isn't a Euro problem, it's an unsustainable world debt problem. Some countries who are already in debt have no hope of getting out of it - regardless of whether there is austerity or not. The debts countries amassed have been steadily growing for years - this is the only way Governments can prevent total collapse.
"I am against the Euro for the UK not on the basis of little Englander nationalism but simply because I have yet to be convinced that it is economically a good idea, especially as our economy has been very different to the rest of Europe"
I agree - it's not a good idea, but then our position is no better. The world has outgrown the need for money and it is now holding back our development. All FIAT currency systems will collapse - whether it's the Euro, the pound or the Dollar.
Complain about this comment
In the short term the best solution would be for Greece, Portugal and maybe Spain to leave the Eurozone and devalue their currencies. I don't think that the European Union itself necessarily will suffer from that. The vast majority of its citizens back the freedom of working anywhere in the EU and appreciate the absence of trade barriers. But I guess that most EU citizens think (Greece and Germany alike) that a common currency was one (unnecessary) step too far. In very few countries the Euro was introduced after a referendum.
Complain about this comment
196. At 12:33pm on 21 May 2010, Kevinb wrote:
'wotw wrote
The banks made the debt - not the Governments. No amount of repeating the same lie will change that KevinB.
No, between 2001 and 2010 Brown overspent massively
If you are unable to see that, then may I suggest that you should have gone to Sp******ers'
Not one to intervene in a disagreement usually.
But WOTW does have a point.
Without fractional reserve banking, the amount of government borrowing would have been severely limited.
Complain about this comment
The problem with the US, UK and most of Europe, is governments spending more than they are earning.
You can't build up government debt forever, but if they withdraw the stimulus all of these economies will plunge back into double dip recessions.
The popular idea is that government spending for a short time could cause a recovery in private demand to "take root". I don't buy it.
The UK has about a 12% budget deficit. Government is about 50% of the economy, so that is roughly 6% of total GDP being unsustainable government borrowing. So JUST TO REPLACE THAT we need 6% growth in overall GDP, which is 12% growth in the private sector.
Anyone out there in the private sector expecting their wages, turnover, profit etc to jump up 12%?
Double dip it is, then.
Complain about this comment
170. At 09:44am on 21 May 2010, Kevinb wrote:
"Yes, we had an inept Government, which flagrantly overspent"
188. At 11:29am on 21 May 2010, writingsonthewall wrote:
Can you justify this statement?
Ah or oh dear WOTW, the percentage argument on Government spending will not wash. Labour kept to Tory spending plans till around 2001 at which point total Government debt was around £300billion. Over the next six years to 2007 it went up to £500 billion - an increase of 66%.
If you extrapolate to 2010 it would have increased, had there been no recession, to £600billion - i.e. a doubling of debt since 2001. Maybe even you might acknowledge that doubling your debt over the last decade is a tad profligate.
However because of the recession and bank bailouts, our UK debt in Feb 2010 was nearly £900billion.
OK £180billion was bank bailouts (not good but necessary to save the economy from meltdown) but the point Kevinb and other Tory bloggers are trying to get across is that in good times you should be saving for bad times, which always come sometime. The Labour Government, or should I say Mr Prudence Brown, were profligate - Kevinb is right, Comrade!
Complain about this comment
The Eurozone is in a specific difficult position owing to some structural deficiencies that have been highlighted recently.
I personally think that we will see changes that allow economic devolutions of some functions (an export driven German economy has very different needs to a tourist driven Greek / Spanish one) that allows for currency fluctuations across the region along with some form of central banking returned to member states this is clearly needed:
If the PIGS countries were able to drop their prices for goods and services this would allow them to become attractive to other Eurozone countries (slightly protectionist perhaps) as well as investors - providing more stability for the Euro on the whole.
If we got this type of flexibility, we may well see the UK join the Euro (out of choice - a double dip recession or a depression could well cause this out of necessity across the area).
The UK is linked to the Eurozone in terms of trade and economic potential. The main difference is that the UK is able to devalue (not much to devalue against mind you) and has central control over it's own economic policy that allows quicker action.
I think that we can all agree that the UK economy is currently horrendously out of scale and that public expenditure needs to be reduced to counter this. Much political discussion has focussed on this and we have a broad agreement to cut spending as soon as possible. The causes for this can be placed on financial services firms and the political basis of this is open to interpretation (the right under Thatcher advocated the free market; the left enhanced this unregulated and Clinton - left leaning - repealed Glass - Steagall and Labour put no cash away in the boom but chose instead to repeatedly tell us that the days of boom and bust are over) but does not deal with how to resolve the problem. The electorate disagreed with Labour and saw the need to reduce. This is where we are. The sooner this budget is out the better and we can hopefully see the markets back off a little as it becomes apparent that Britain will reduce its' deficit to an acceptable level - its' not pleasant or nice - but at tge end of the day the only solution is not to get into this position again.
This will be in public services. I also suspect that this will effect the North and NI most severely as sites of greater government administration and services. I personally expect to see the areas that suffer from these cuts being given substantial incentive to commence manufacturing activities (be it tax cuts, NI exemption, assisted supply side policy, whatever) otherwise we will compound problems for generations. One big advantage of the city is that we will have the contacts globally to expand / create trade networks - use this.
Couple of further thoughts:
1. Unilateral fiscal policy could, in the long term, make it much more difficult for financial firms to create a global recession as products could not be sold globally limiting risk; to you or I of having to bail out these institutions.
2. No - one is mentioning the potential revenue to the State from share dividends of taxpayer funded institutions. Won't these help restore the countries' balance sheet?
Complain about this comment
199
Marxism is all about class struggle (yawn) and makes the assumption that this is holding back further human development
This overlooks the fact the human society collectively, merely mirrors the flaws in human beings individually
That do you?
Complain about this comment
RE: post 169 GRIMUPNORTH77
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Excellent comment - I'll sign up for that!
also agree with your comments later on, about the value of these blogs, I always find something interesting in the comments, even, if it is something I do not agree with it initially! Important information clearly and concisely put is always interesting, and of course especially when well reasoned. Good reasoning can get us all beyond our limitations.
But 'personal spats' (doesn't matter who) just spoil it
Complain about this comment
We shouldn't be surprised at this mess. German attempts to take over Europe have always ended in failure in the past.
Complain about this comment
188. At 11:29am on 21 May 2010, writingsonthewall wrote:
170. At 09:44am on 21 May 2010, Kevinb wrote:
"Yes, we had an inept Government, which flagrantly overspent"
Can you justify this statement?
Before the banks colapsed we were running with public spending around 40% - after the banks collapsed this shot up to nearly 80%.
-----------------------------------------------------------------------------------
40 of what? Of tax receipt? Some other ration?
Complain about this comment
@ 192 Bob Ryan wrote: "One thing about politicians and regulators is that they hate markets. Markets, being the free expression of individual and institutional rights to buy and sell what they want, when they want, how they want."
I thought democracy ensures free expression of individuals and the rule of law. Or do you mean George Soros bringing down few African countries here and there to be examples of "free expression of individual...." You also leave it unexplained why the super intelligent, super democratic markets did not take care of the global financial crisis itself. Or should millions of people have been left to go down the drain in a 'free expression of individual ...rights"
Complain about this comment
@206
"But I guess that most EU citizens think (Greece and Germany alike) that a common currency was one (unnecessary) step too far."
I wouldn't completely rule this out, however, there is a second way to interpret - at least German- frustration. Possibly, it isn't seen as a step too far but on the contrary, introducing the Euro without full political union could be seen as a step too short.
Introducing a common currency for Nations with such a wide range of different economies is possible. But only, when it is completely clear to each and everyone that there's loads of financial transfer necessary to stabilise it. Just think of Germany: After reunification, and even before that, a very complex transfer system takes money from the "richer" parts of Germany and transfers them too, let's say, less developed regions. In a working Euro-Zone, exactly this mechanism is completely necessary for stable economics and a stable currency. However, this transfer union is exactly, what all politicians said was never going to happen. That was foolish. I would guess, politicians are in for a rough time (as are actually we, because we're going to pay it), time for truth, Euro-Zone can only survive, if full political union is back on the agenda (including: same rules for all) and financial transfer mechanisms are put in place to overcome the economic differences.
I can't right now think of an intermediate way: Either we do it, or we let it be. There's no way to just try and improvise and hope, everything will sort of fall into the right places...
Ash
Complain about this comment
214. At 2:51pm on 21 May 2010, The Patriot wrote:
"40 of what? Of tax receipt? Some other ration?"
GDP.
Complain about this comment
209. At 2:05pm on 21 May 2010, dontmakeawave
They do have a valid point; the language is coloured by ideology but that does not invalidate the underlying point.
However this is almost an irrelevance in terms of the overall global picture and was not, in any way, a cause of the current global market failure. The problem is systematic and UK public finances are a side show, though one that matters very much to all of us in the UK.
People still seem to be suggesting that this is just some kind of normal recession. Far from it.
Complain about this comment
211. At 2:32pm on 21 May 2010, Kevinb wrote:
199
Marxism is all about class struggle (yawn) and makes the assumption that this is holding back further human development
This overlooks the fact the human society collectively, merely mirrors the flaws in human beings individually
That do you?
I think yawning at the class struggle elucidates your perspectives clearly enough. If society truly does hold any correlation to individuals (a dubious notion in itself) it is surely to those individuals with a monopoly on economic, political and ideological power, those who shape the societal landscape.
Or are the 'flaws' you are talking about comprised of things like, being poor, lacking access to education etc.?
Noone in this world profits unless it is at someone else's expense.
Complain about this comment
211. At 2:32pm on 21 May 2010, Kevinb wrote:
"Marxism is all about class struggle (yawn) and makes the assumption that this is holding back further human development"
Marxism isn't all about class struggle (well the works of Marx certainly isn't) - as 95% of what Marx wrote was about CAPITALISM and it's failings. Maybe if you had read the work rather than grabbing a 'back of a cornflake packet' explanation you might know this.
"This overlooks the fact the human society collectively, merely mirrors the flaws in human beings individually"
Only those with flaws themselves believe this - believe in original sin do you? - well it seems to me you failed as a human before you were even born.
It's always amusing to hear the self centred talk about collectivism through their own eyes (self interested view) and then use this as evidence that collectivism doesn't work.
If collectivism doesn't work then none of us would be here today as we would have all been eaten by predators or starved to death. Still - maybe we should follow the neoliberal view of allowing freedom to the people - except the people who are 'allowing freedom' had no right to take it in the first place. They also coincidently will make sure that whilst some freedoms are given, they will retain the power - I mean that's what individualism teaches us right? - look after number 1 - so how does that fit in with Neoliberal faux freedom offers - mmmmm?
Complain about this comment
209. At 2:05pm on 21 May 2010, dontmakeawave wrote:
"Ah or oh dear WOTW, the percentage argument on Government spending will not wash. Labour kept to Tory spending plans till around 2001 at which point total Government debt was around £300billion. Over the next six years to 2007 it went up to £500 billion - an increase of 66%."
...but still around 40% of GDP - did you forget to account for the rise in GDP during that time? - like to fiddle the figures do we?
"If you extrapolate to 2010 it would have increased, had there been no recession, to £600billion - i.e. a doubling of debt since 2001. Maybe even you might acknowledge that doubling your debt over the last decade is a tad profligate."
Ah the old 'extrapolation' - well I have just 'extrapolated the FTSE' on today's performance and I can announce with as much certainty as you that by 2030 the FTSE will be at 0
"However because of the recession and bank bailouts, our UK debt in Feb 2010 was nearly £900billion.
OK £180billion was bank bailouts (not good but necessary to save the economy from meltdown) but the point Kevinb and other Tory bloggers are trying to get across is that in good times you should be saving for bad times, which always come sometime. The Labour Government, or should I say Mr Prudence Brown, were profligate - Kevinb is right, Comrade!"
Where to start with these mis-truths....
Firstly the figure of £180 Billion is merely the 'cash' stumped up by Government. It does not cover the paper loss in the nationalised banks, all the stimulus programmes (as some haven't concluded yet), The tax loss, the damage to the Economy, the unemployment payments, the insurance schemes put up by Government, the cost to everyone for the recession, the bankruptcies and the future public spending cuts. The figure you quote is the absolute minimum spent on bailing out the private sector - and it's not over yet either.
...and as for 'saving in the good times' - well how does that fit into Tory economic ideology?
If the market is to be free - then why is there a need for a policy to 'save in the good times in case the private sector fails in the bad times' - seems to me that's closer to fascism than liberal Economics.
You seem to want to have our cake and eat it - the Government is now the insurer for the private sector - merging state and government into one big state machine - hardly 'Tory' now is it?
I suggest you review the Tory party's ideology before you start claiming that the state is the 'insurer of last resort' for a free market private sector.
Complain about this comment
199. At 1:04pm on 21 May 2010, Oblivion wrote:
"#193 Kevinb
So..summarise Marxism and explain what is wrong with it?"
...and while you're there - could you also explain why Capitalism isn't failing and why it is still a viable system of resource allocation?
What 'alternative theories' do you have that I can look at - I (unlike you) have an open mind and would be prepared to look at any alternatives (as I have done with the resource based economy).
Even the hardcore monetarists have given up on Friedman, isn't it time you considered doing the same? His ideas lasted about 20 years - Marx's have survived the last 100 - and are still explaining today's crisis.
Complain about this comment
196. At 12:33pm on 21 May 2010, Kevinb wrote:
"No, between 2001 and 2010 Brown overspent massively"
You still haven't justified how - as I asked you before - you keep repeating the same thing over and over again like a clockwork toy.
"If you are unable to see that, then may I suggest that you should have gone to Sp******ers"
no problem with my eyesight - I have seen this coming - can you say the same?
I knew the end would come before Labour came to power - unlike you I didn't look at the last man steering the boat - but the boat itself. This is why the coallition will disappoint you - I don't get my hopes up for them to be dashed.
This is also why I do not fear the future - as I have been preparing for it probably longer than you have been alive.
Complain about this comment
220
You seem to have an endless supply of bile and smugness.....
You really do think you are something special
Well, at least you are in your own mind
Complain about this comment
220
You accuse me of being self righteous because I don't think the Euro will last, and I think Marx talked out of his backside
There is no connection, only in your mind
Like most on the left, you then simply attack
Very immature
Your crude attempt to label me a catholic is also incorrect, you are thinking of Tony Blair
Complain about this comment
#209 dontmakeawave. You must be in awe of Gordon Brown and his powers. I thought he was the Prime Minister of the UK.
How then to explain the turmoil in the entire Eurozone, the collapse of the Baltic States, the Ukraine and Romania, the unending recession in the US, the property and asset bubble in China, riots in Thaliand, the new found phobia of the AU$, the ongoing deflation of Japan...and on and on we could go around the world. And everywhere we look we will find countries that have collapsed, are collapsing or will very shortly collapse.
And you would have us believe that one slightly eccentric Scotsman is responsible for all this?
No my friend this is just believable, much less plausible.
Complain about this comment
219. At 4:04pm on 21 May 2010, Cuautehmoc wrote:
211. At 2:32pm on 21 May 2010, Kevinb wrote:
199
Marxism is all about class struggle (yawn) and makes the assumption that this is holding back further human development
This overlooks the fact the human society collectively, merely mirrors the flaws in human beings individually
That do you?
I think yawning at the class struggle elucidates your perspectives clearly enough. If society truly does hold any correlation to individuals (a dubious notion in itself) it is surely to those individuals with a monopoly on economic, political and ideological power, those who shape the societal landscape.
Or are the 'flaws' you are talking about comprised of things like, being poor, lacking access to education etc.?
Noone in this world profits unless it is at someone else's expense.
You are cynical, and bitter
Deal with it
You even chose to misunderstand a basic point made in one sentence
Human beings as individuals are flawed, we make mistakes
Societies are collectives, and as such also make mistakes
How can you possibly misunderstand that?
The class struggle is boring, because it is a distraction
A huge number in the world die of starvation, have nothing
Try worrying about them, instead of pathetically pretending there is a class struggle in the UK
Complain about this comment
This comment was removed because the moderators found it broke the House Rules.
223. At 4:25pm on 21 May 2010, writingsonthewall wrote:
196. At 12:33pm on 21 May 2010, Kevinb wrote:
"No, between 2001 and 2010 Brown overspent massively"
You still haven't justified how - as I asked you before - you keep repeating the same thing over and over again like a clockwork toy.
"If you are unable to see that, then may I suggest that you should have gone to Sp******ers"
no problem with my eyesight - I have seen this coming - can you say the same?
I knew the end would come before Labour came to power - unlike you I didn't look at the last man steering the boat - but the boat itself. This is why the coallition will disappoint you - I don't get my hopes up for them to be dashed.
This is also why I do not fear the future - as I have been preparing for it probably longer than you have been alive.
If that were true, then you would be dead soon, so at least something to look forward to
Complain about this comment
Sorry for the addition, lads and lassies,
just wanted to make a point:
I am completely happy with those saying: I don't want a USE, I don't want a European Nation. I want to stay french, british, or danish, italian, or german or whatever nationality. That's completely acceptable and nothing bad at all. It's straight forward, honest, true, valid. My opinion.
I am also completely happy with those saying: I do want a USE, I would like to see the European Nations to dissolve in in real European Union. That's completely acceptable and nothing bad at all. It's straight forward, honest, true, valid. My opinion.
I'm incredibly tired of those who think that you could make an omlet without breaking eggs. Not possible at all. Neither the EU nor the Euro-Zone will work, if the Nations don't accept to give up their sovereignty. And let me make one thing clear: If this project should fail, good-bye to the common market and all the nice and convenient economic agreements. Maybe the UK should think about this, too. If this is going down the drain, then all we achieved in 60 years will be going down the drain, and Europe will be shattered to fragments again, each Nation struggling on it's own. This is the perspective. Either we have the omlet or the unbroken eggs. Either the complete union or sovereign Nations. There is no in-between.
Debatable.
Ash
Complain about this comment
17. At 3:58pm on 21 May 2010, writingsonthewall wrote:
214. At 2:51pm on 21 May 2010, The Patriot wrote:
"40 of what? Of tax receipt? Some other ration?"
GDP.
-----------------------------------------------------------------------------------
How is that 'flagrantly overspending'? - do you not spend about 40% of your annual income on improving your home and garden?
-----------------------------------------------------------------------------------
Exactly! As such, it's not correct to say "annual income". The gist is, the previous Labour Gov. did spend. But it had to. Why? To postpone the crisis to 2007/8.
Complain about this comment
221. At 4:16pm on 21 May 2010, writingsonthewall wrote:
"If the market is to be free - then why is there a need for a policy to 'save in the good times in case the private sector fails in the bad times' - seems to me that's closer to fascism than liberal Economics."
I can't believe you wrote that sentence! I presume, or infer as you seem to do always, that you have no savings, spend more than you earn and go bankrupt on a regular basis?
"It's the economy stupid" - supply and demand, capitalism, call it what you may. Nothing goes up forever, especially economies - do I really have to say this?
WOTW wrote also "I suggest you review the Tory party's ideology before you start claiming that the state is the 'insurer of last resort' for a free market private sector."
I didn't say that, you inferred it - as it happens a wrong inference. I have consistently said the problem we faced in 2007 was as a result of Glass-Steagall being repealed by Clinton and our adoption of Casino Banking. I think the pendulum will swing to Widows and Orphans Banks of a small size and the separation of Consumer and Casino Banking. We must get rid of moral hazard - easier said than done.
Complain about this comment
226. At 4:53pm on 21 May 2010, armagediontimes wrote:
#209 dontmakeawave. You must be in awe of Gordon Brown and his powers. I thought he was the Prime Minister of the UK."
I never thought of it that way - yes, I am. He's the first Scot I have ever met you hasn't got a zip or moths in his wallet!
Complain about this comment
230
That is just wrong
We could have a common market, where countries trade openly, yet are not entering into a political of riscal union
So your analysis is just flawed in suggesting there is no 'middle ground'
Complain about this comment
171. At 10:10am on 21 May 2010, John_from_Hendon wrote:
#65. Up2snuff wrote:
"re #133
All Government costs. European Government costs a lot.
Can we afford a lot of that sort of thing now?"
I recall the the whole of Europe is run by fewer civil servants that Scotland. The problem is with the huge number of civil servants in the Nation States and their inability to keep proper record of expenditure and income.
The Nation state of Europe is vital for the well-being of all European citizens. It is also vital that it is democratic. We need democracy it stops the over-powerful state from doing things that the people do not want. The defective British form of democracy of serial dictatorships has been shown to produce irritation in the country and that is perhaps why we now have a coalition!
The President and executive of Europe MUST be elected by the people - not by a tiny cabal of prime ministers and presidents. As we now enter a terrible time of severe austerity democracy is even more vital. The voice of the people my be directly heard.
Are you arguing against democracy?
------------------------------------
Last question first. No. The EU democratic? Hmmn. Marks out of ten, overall, about three. In some areas improving. I would agree that the election of a President was a start. {I was deeply upset by Nigel Farrage's rude outburst which cost UKIP the other half of my vote that they had not already lost, but that's another story.} Budget, accounts, finance in general - two out of ten and declining.
If you knew what happened (if we all knew exactly what happened) to our EU money then I expect we would be out on the streets straight away for a revolution. The EU may be efficiently run - in people number terms - but it has blown an awful lot of cash, for sometimes not very good reasons (and not just in the EU)- we could start talking about Greek olives if you like. When did the EU accounts last get audited fully and signed off?
You are right about the numbers of workers involved at running the core of the EU and I glad you expand that out to include the extra workers in the member countries. But, BUT the EU is a layer of government that did not exist until 1957. It has even started to create another layer of government within Europe - regions. We are going to have to pay for that soon!
Meanwhile back in Blighty, dear old bodgers Blair & Brown completely cocked up devolution, leaving the Brits in two parts of the Union footing bills for extra Parliaments. All this is great for keeping people off the unemployment figures but I, and a lot of others posting here for the last few weeks are saying can we afford that many bureaucrats? What size of state sector can be supported by what size of private sector? And if the latter shrinks a bit or has a major heart attack, how quickly and how heavily do we cut back on the former?
'The EU is vital for the well being of everyone.' How? Why? When? Where? Please do answer those questions for yourself and, if you have time, please post them up here. We'll debate some more and keep the 'teenagers' from getting in and fighting.
'It is vital that it is democratic.' It got by without being democratic for a long time. Arguably, it has only recently made the first steps towards full democracy. [However after the last few years of Brit Parliamentary goings on plus the GE we can hardly point the finger!]
'We need democracy it stops the over-powerful state from doing things that the people do not want.' Oh yeah? I'm going to get in trouble for being cynical again. When has that applied fully all the time in the last three hundred years of British Parliamentary democracy, let alone across the EU in fifty years? For examples try just the following: Iraq war? French nuclear testing? German involvement in Croatia? I can't remember some 'little' examples but I seem to recall at the end of last year, the EU decided to change a rule after twenty-something years of lobbying by subjects, citizens and member states. That is a peculiar form of democratic safeguard to my way of thinking. How do you reconcile it?
Having typed all this, I am now wondering whether your #177 is a wind up! If not, do come back on this and let us discuss further.
Complain about this comment
Whoops! I meant your #171, not #177. Sorry.
Complain about this comment
215: Tridiv wrote: 'You also leave it unexplained why the super intelligent, super democratic markets did not take care of the global financial crisis itself.'
A good point worth making but this is my answer: most examples of market failure are brought about by political interference in their operation or by over regulation. The market for mortgage backed security was highly restricted and limited to a relatively small group of financial institutions. The trigger for the collapse arose when the market for bank equity perceived that the banks were facing asset failure - the banks themselves were unwilling to admit this and the politicians only started to take notice when the markets started to take a hit. Similarly, the sovereign debt markets started to price down the traded debt of Greece and other vulnerable countries setting the agenda for the ensuing political panic. You see when we talk about democracy 'rule by people' we are talking about a market for political control. Markets, like elections have an unerring habit of achieving good solutions - time and again we see it - time and again the politicians of left and the right try to undermine their effectiveness. If you doubt the ability of markets to solve problems much more quickly than politicians have a look at the extensive literature on market efficiency and the work that has been done on pseudo markets. By the way - if Soros had not took the risky bet on sterling and driven us out of the ERM how much longer would the 1991 recession have lasted? A grossly overvalued pound was driving this country into a deeper and deeper hole and the situation was made worse by the BoE and the British Government attempting to prevent the inevitable.
Complain about this comment
Kevinb,
I'd be interested to know which geographical circumstances of the UK you have actually experienced, how can you call the class struggle in this country illusionary with the streets of Southwark, Toxteth, Glasgow, Mosside etc. in your mind's eye? You speak of distraction, but I think you had better allow yourself to be a little more distracted by the conditions of human beings in your own land.
Your rhetoric relies on blindness, you seem to be saying that the UK is a shining and laudable example in the manner that it conducts its government and economy. It would be foolish to deny that there is a higher standard of living here than in many parts of the world, but it would be even more stupid to deny the DIRECT correlation between this 'progress' in the West and the large-scale suffering of people in the rest of the world.
Your knowledge of Marxism is woeful, most of Marx's work was about Capitalism itself. What is your actual opinion? That there is no class divide? Or is it that the boundaries are now so ambiguous that they don't influence people's lives? I don't have the answers to questions about distinctions in the upper, middle and working classes in the UK today, but I do know that there is an underclass of people throughout the world who are constantly struggling against the ideologies constructed by a few people in favourable circumstances.
Now that the West has cloaked its exploitation of the rest of the world in the sordid and impermeable meta-narrative of global economics, it seems that too many people have been taken in once more by the same old mechanisms of oppression and manipulation.
Are you seriously going to continue believing that everything in good old Britain is fine? And am I mistaken in inferring from your argument that Capitalism is a viable platform for the reduction of starvation throughout the world? Get a grip of reality
Complain about this comment
238
My knowledge of Marxism is woeful because I write two sentences in response to a question on a blog?
You should get a life, instead of judging everyone else
I actually live in a palace
I will have the butler see you off with the hounds
Complain about this comment
Lolzies Kev. I believe it is actually you, who must have spent most of your day on this discussion by the looks of it, who needs to get a life and abdicate from your throne in the Western, internet-hub- wing of your palace, dispersing nasty judgements and hopelessly implosive justifications of yourself when the conversation grows dialectically beyond your control. Now I'm going to roll myself a large, loose, herbal cigarette, think some New Age lefty thoughts and cherish my beautiful youth
Complain about this comment
Hilarious.
Blame the markets for bad government.
They just want the public to take their eyes off that pea they keep shuffling under the cups.
They can't regulate the markets (or themselves) so now they want to CONTROL the markets.
Complain about this comment
240
Enjoy cherishing your youth
What's his name?
Complain about this comment
@234
"We could have a common market, where countries trade openly, yet are not entering into a political of riscal union
So your analysis is just flawed in suggesting there is no 'middle ground'"
Perhaps you are right, we could have a common market - for how long, I wonder. However, I'll not bet on this. Trade openly... what does this imply? Profit. OK, nothing bad about profit at all, granted. But I admit, I find it incredibly naive to think, Nations will agree to enter a common market without common rules and common policies, since this would lead to a common market with ellbow economies. This would lead to mistrust and hence to a closing of the markets and protectionism, automatically. No, sorry, Sir, am I am absolutely convinced that the European common market is intimately linked to political and fiscal union.
Ash
Complain about this comment
243
Which is why, on that path, it is doomed to fail
Complain about this comment
@ 244 Kevinb
And, Sir, what would you think, if the whole common market crashed, which economies would survive?
The PIIGS wouldn't, in this scenario. I am pretty sure, the German economy would. The Frensh... perhaps...the UK's? The UK would collapse within 5 years and that's the reason why even The Iron Lady and nowadays David Cameron are holding on to this course within EU and have tried to avoid any referendum on EU in the UK: They know what the results would be. My interpretation, of course, but I don't see too obvious flaws in my chain of argumentation so far, Kevinb.
Ash
Complain about this comment
245
The main issue with the Eurozone is that the economies need different interest rates at the same time, and this is not possible with the euro currently
All countries would survive, as they did so prior to the the Eu, so would after it
The CAP has been destructive, and there is much wrong with the EU parliament
The UK would not collapse, and Cameron has hardly been able to have a referendum whilst in opposition
It was in Labour's 2005 manifesto, yet they broke the promise
So not sure your analysis works there
Complain about this comment
@246
"The main issue with the Eurozone is that the economies need different interest rates at the same time, and this is not possible with the euro currently"
Either that, and that's impossible using the same currency, or installing a transfer system. I am pro transfer system (and I'm a German, I'm one of those likely to pay, but I'm willing to pay, considering the lessons history taught us!). I don't see any way to realise variable interest rates, and actually, it's not, what it's worth to strive for. We are a union, acting as a union... that's the goal, probably. This means, all our differences will have to be sorted internally rather than externally. My point of view, as always: debatable.
"All countries would survive, as they did so prior to the the Eu, so would after it"
Survive, yes. Prosper?
"The CAP has been destructive, and there is much wrong with the EU parliament"
Totally agreed. But, as posted before, democracy and integration go hand in hand. As long as we demand our Nations to be sovereign, EU can't become really democratic. How to have European democracy and persist on having "the last word" nationally?
"The UK would not collapse, and Cameron has hardly been able to have a referendum whilst in opposition"
Granted. I'll be interested in how the new British government handles European issues. However, these days, they are pretty much in-line with EU.
"So not sure your analysis works there"
So far, it does.
Ash
Complain about this comment
I am not sure how Marx got involved in this discussion. As an economic pholosopher I think he lost it when he claimed that proper tea is theft. Presumably he and Engels had to share a tea bag.
Complain about this comment
Just something to consider on political / economic philosophy: Marcuse comments that by disucussing the same object, left and right are both in agreement of it's inherent value rather than discussing whether the object is actually necesary or changing it; i.e. discussing the faults with capitalism contains an inherent beleif in the system. As Orewll put it, some pigs are more equal than other pigs.
Also, Kant tells us that we cannot comment on any experience outside the human sphere as all comment on experience is inherently human comment owing to being a construct of the human mind and therefore subjectively human.
Complain about this comment
Germany’s ban on the naked short ‘attack’ by the Global financial Empire attempts to protect its public flock:
But, boy, are the wolves howling now --- and the sharks in a feeding-frenzy!
The whole pack of private predators is howling about any protections being provided for us --- the public lambs.
The ruling-elite private Global corporate/financial/militarist Empire --- which controls all lobbying clout and all clownish shills in the 'Vichy' faux democratic governments of many Western countries --- is starting to 'play' its old trump card of 'divide and conquer'.
Germany is trying to defend its citizens and working-class from the sharks and wolves, but other countries (like the US & UK) that are more fully 'captured' by the Global Empire, are allowing the so-called free market ‘flexibility' to insure that their citizens are open prey for the Global Empire's private predators' bared capitalist jaws and fangs.
So the predator pack will divide out the weakened and diseased countries first --- and howl that all countries must drop any defenses.
Alan MacDonald
Sanford, Maine
PS. The only real sustainable and long term solution is to have a democratic Global reserve currency, instead of the US dollar (which is now the Global Empire's perverse currency). Germany seems to know this, but the jump from Euro to Global currency is tough and the Global corporate/financial/militarist Empire (HQ'ed in the US) will attack fiercely to prevent such 'creative destruction' of its current ‘currency of Empire’.
Complain about this comment
@237 Bob Ryan wrote: "most examples of market failure are brought about by political interference in their operation or by over regulation."
A controversial statement to say the least. In the arena of policy i can point out more market failures than state failures. The point is however, neither the state nor the market is immune to failures. Therefore to say that market is equally democratic to a democratic state is a unfounded. In a democracy i have a say, i demand accountability from the representatives, i am guaranteed right to information etc. The market does not ensure you any such thing. Besides the Soros example, if it was left to the market, there will be a thriving enriched uranium market catering to all sorts of shady people and organisations. Then there is the question of legitimacy of power. If you accept the thesis that power is based in the people meaning the electorate, i would anyday have a politician elected by the people, rather than a guy from Goldman Sachs
Complain about this comment
The real intention of this German regulation is to prevent that tax payers´ money is spent on saving the private economy. As a rwesult of the financial crisis, many people are still furious that the banks are saved - this will most probably not work one more time.
But regulations at the financial markets do only make sense of they are accepted by all - the UK is the only country in the EU to reject regulations on hedge fonds - as the hedge fonds are by far mostly at London. This issue has been pushed up as German tax payers go to Switzerland - not legally! - or other countries in order to pay no taxes, CDs with the data of the tax sinners are offered to the German state. The fear is we can not go one like that - with Greece topping that all - as Churchill would have said in such an urgent situation: "Action now"!
Complain about this comment
225. At 4:50pm on 21 May 2010, Kevinb wrote:
220
You accuse me of being self righteous because I don't think the Euro will last, and I think Marx talked out of his backside
There is no connection, only in your mind
Like most on the left, you then simply attack
Very immature
Your crude attempt to label me a catholic is also incorrect, you are thinking of Tony Blair
-----------------------------------------------------------------------------------
What's wrong with being Catholic? WOTW?
Definitely beats being "English" - LOL :D
Complain about this comment
I predicted the financial crisis over 5 years ago and I also predicted the collapse of the Euro as a result. It is inevitable that certain countries would fail to maintain economic stability within the constraints of the EU.
The only option is for countries in default to not only be thrown out of using the Euro but also to be thrown out of the European Union itself. The member countries, including the UK, cannot afford to prop up these errant countries.
Complain about this comment
Interesting article regarding whether Greece should be thrown out and the outcome if Germany exited:
http://www.qfinance.com/blogs/anthony-harrington/2010/05/24/a-strategic-look-at-the-euro-problem-what-if-greece-stayed-and-germany-left
What would happen to those that Greece owe money to if they returned to the Drachma? They would be losing out. As for Germany, they could benefit hugely from returning to the Deutschemark.
Complain about this comment
View these comments in RSS