The Big Bailout of the Eurozone (Another crisis coming? - Seriously)

[seafoid]

http://www.rightrelevance.com/search/articles/hero?article=40676da52be00f6928545c86e292cd979dcbe063&query=fixed%20income&taccount=govtbondsrr

Rumours of a 20% haircut for Ukraine on their debt.

Why does a country that overthrew its democratically elected pro-Russian leaders and replaced them with equally corrupt pro-Western leaders, get a haircut and Greece doesn't? Or is the answer in the question?

Greece must be punished pour encourager les autres

[Kursk]

Also it is not a coincidence that Greece is the most natural ally to Russia within the European Union.

See how all the pieces fall together ?

[Kursk]

I've never quite understood why they went after Greece so hard. It is not like other countries have not experienced financial difficulties.
Can anyone explain this ? They gave Ukraine a pass and they are not even in the EU !!

[muppet]

I've never quite understood why they went after Greece so hard. It is not like other countries have not experienced financial difficulties.
Can anyone explain this ? They gave Ukraine a pass and they are not even in the EU !!

The US gave Ukraine a pass for strategic reasons.

Greece wasn't as strategic.

[CiKe]

Clearly an element involved that Greece is in EU and not wanting to set precedent etc but although almost certainly not nearly enough and just a question of kicking the can down the road, Greece was given some relief through maturity extensions and whatnot.

[muppet]

http://www.breakingnews.ie/ireland/lynch-banking-inquiry-will-meet-over-christmas-if-necessary-707026.html

These clowns having spent €5m on an equity, can't even agree a report into the enquiry. Surely in the event of conflicting evidence the report can simply publish all the evidence as presented to the enquiry.

If these clowns can't even perform a simply fact finding exercise competently, then they all be run out of the Dáil.

Here are the representatives involved:

Ciarán Lynch (Chairman) Labour
Pearse Doherty Sinn Féin
Joe Higgins Socialist Party
Michael McGrath Fianna Fáil
Eoghan Murphy Fine Gael
Kieran O'Donnell Fine Gael
John Paul Phelan Fine Gael
Senators:
Sean D Barrett Independent
Michael D'Arcy Fine Gael
Marc MacSharry Fianna Fáil
Susan O'Keeffe Labour

[seafoid]

https://www.academia.edu/17957086/The_Political_Economy_of_Regulatory_Risk_Management_-_A_Case_Study_of_HBOS

[armaghniac]

http://www.breakingnews.ie/ireland/lynch-banking-inquiry-will-meet-over-christmas-if-necessary-707026.html

These clowns having spent €5m on an equity, can't even agree a report into the enquiry. Surely in the event of conflicting evidence the report can simply publish all the evidence as presented to the enquiry.

Well they can publish a dump of all the transcripts, but that has little added value. I think the problem is that if they publish an edit which points the finger at someone that that person will sue.

[seafoid]

http://www.breakingnews.ie/ireland/lynch-banking-inquiry-will-meet-over-christmas-if-necessary-707026.html

These clowns having spent €5m on an equity, can't even agree a report into the enquiry. Surely in the event of conflicting evidence the report can simply publish all the evidence as presented to the enquiry.

If these clowns can't even perform a simply fact finding exercise competently, then they all be run out of the Dáil.

Here are the representatives involved:

Ciarán Lynch (Chairman) Labour
Pearse Doherty Sinn Féin
Joe Higgins Socialist Party
Michael McGrath Fianna Fáil
Eoghan Murphy Fine Gael
Kieran O'Donnell Fine Gael
John Paul Phelan Fine Gael
Senators:
Sean D Barrett Independent
Michael D'Arcy Fine Gael
Marc MacSharry Fianna Fáil
Susan O'Keeffe Labour

Way too late. The political economy is very complex and no horses are to be frightened.
How safe is the economy now if something goes wrong again is a far more relevant question.

With negative rates in the EZ there is no margin to mop up the next mess.

[muppet]

http://www.breakingnews.ie/ireland/lynch-banking-inquiry-will-meet-over-christmas-if-necessary-707026.html

These clowns having spent €5m on an equity, can't even agree a report into the enquiry. Surely in the event of conflicting evidence the report can simply publish all the evidence as presented to the enquiry.

If these clowns can't even perform a simply fact finding exercise competently, then they all be run out of the Dáil.

Here are the representatives involved:

Ciarán Lynch (Chairman) Labour
Pearse Doherty Sinn Féin
Joe Higgins Socialist Party
Michael McGrath Fianna Fáil
Eoghan Murphy Fine Gael
Kieran O'Donnell Fine Gael
John Paul Phelan Fine Gael
Senators:
Sean D Barrett Independent
Michael D'Arcy Fine Gael
Marc MacSharry Fianna Fáil
Susan O'Keeffe Labour

Way too late. The political economy is very complex and no horses are to be frightened.
How safe is the economy now if something goes wrong again is a far more relevant question.

With negative rates in the EZ there is no margin to mop up the next mess.

Yes but no we know what can happen, isn't it rather pathetic that we can't agree what went wrong, so that we can introduce safeguards against it happening again? Limiting mortgage approvals is just a tiny drop in the financial ocean. But as it is the only action taken to date, it would appear that the only people to blame are those parties involved in mortgages.

[muppet]

http://www.rte.ie/news/business/2015/1126/749477-unite-central-bank/

"The bank stressed that these are retention payments, not bonuses."

Unbelievable. An extra payment for staying, is not a bonus?

The Central Bank was paying some of its 'key' staff, outside the arrangement whereby all public servants and their 'bonuses withdrawn' (FEMPI). Some of us might view this type of payment as the same as brown envelopes or under the table payments. Regardless, the fact that the Central Bank was guilty of this, after all that happened, is unforgivable.

I look forward to the 2025 Dáil Committee report into the matter.

[seafoid]

The ez has a deflation problem. Ecb interest rates are below zero and could go even further.
Draghi cant do much.

[seafoid]

Here's a very interesting angle

http://www.ft.com/intl/cms/s/0/457a3484-9443-11e5-bd82-c1fb87bef7af.html

"Reinstating full border controls would be hugely expensive. Officials lack the staff, equipment or infrastructure. Were it to happen, the Schengen accord may revert to the mini-zones, such as the Benelux or Nordic free movement areas, that pre-dated the project. Such a break-up could mark a dangerous collective loss of trust. "If the spirit leaves our hearts, we will lose more than the Schengen," said Mr Juncker. "A single currency does not exist if the Schengen fails.""

[Declan]

The Politics of Economic Stupidity

NEW YORK – In 2014, the world economy remained stuck in the same rut that it has been in since emerging from the 2008 global financial crisis. Despite seemingly strong government action in Europe and the United States, both economies suffered deep and prolonged downturns. The gap between where they are and where they most likely would have been had the crisis not erupted is huge. In Europe, it increased over the course of the year.

Developing countries fared better, but even there the news was grim. The most successful of these economies, having based their growth on exports, continued to expand in the wake of the financial crisis, even as their export markets struggled. But their performance, too, began to diminish significantly in 2014.

In 1992, Bill Clinton based his successful campaign for the US presidency on a simple slogan: "It's the economy, stupid." From today's perspective, things then do not seem so bad; the typical American household's income is now lower. But we can take inspiration from Clinton's effort. The malaise afflicting today's global economy might be best reflected in two simple slogans: "It's the politics, stupid" and "Demand, demand, demand."

The near-global stagnation witnessed in 2014 is man-made. It is the result of politics and policies in several major economies – politics and policies that choked off demand. In the absence of demand, investment and jobs will fail to materialize. It is that simple.

Nowhere is this clearer than in the eurozone, which has officially adopted a policy of austerity – cuts in government spending that augment weaknesses in private spending. The eurozone's structure is partly to blame for impeding adjustment to the shock generated by the crisis; in the absence of a banking union, it was no surprise that money fled the hardest-hit countries, weakening their financial systems and constraining lending and investment.

In Japan, one of the three "arrows" of Prime Minister Shinzo Abe's program for economic revival was launched in the wrong direction. The fall in GDP that followed the increase in the consumption tax in April provided further evidence in support of Keynesian economics – as if there was not enough already.

The US introduced the smallest dose of austerity, and it has enjoyed the best economic performance. But even in the US, there are roughly 650,000 fewer public-sector employees than there were before the crisis; normally, we would have expected some two million more. As a result, the US, too, is suffering, with growth so anemic that wages remain basically stagnant.

Much of the growth deceleration in emerging and developing countries reflects China's slowdown. China is now the world's largest economy (in terms of purchasing power parity), and it has long been the main contributor to global growth. But China's remarkable success has bred its own problems, which should be addressed sooner rather than later.

The Chinese economy's shift from quantity to quality is welcome – almost necessary. And, though President Xi Jinping's fight against corruption may cause economic growth to slow further, as paralysis grips public contracting, there is no reason for Xi to let up. On the contrary, other forces undermining trust in his government – widespread environmental problems, high and rising levels of inequality, and private-sector fraud – need to be addressed with equal vigor.

In short, the world should not expect China to shore up global aggregate demand in 2015. If anything, there will be an even bigger hole to fill.

Meanwhile, in Russia, we can expect Western sanctions to slow growth, with adverse effects on an already weakened Europe. (This is not an argument against sanctions: The world had to respond to Russia's invasion of Ukraine, and Western CEOs who argue otherwise, seeking to protect their investments, have demonstrated a disturbing lack of principle.)

For the past six years, the West has believed that monetary policy can save the day. The crisis led to huge budget deficits and rising debt, and the need for deleveraging, the thinking goes, means that fiscal policy must be shunted aside.

The problem is that low interest rates will not motivate firms to invest if there is no demand for their products. Nor will low rates inspire individuals to borrow to consume if they are anxious about their future (which they should be). What monetary policy can do is create asset-price bubbles. It might even prop up the price of government bonds in Europe, thereby forestalling a sovereign-debt crisis. But it is important to be clear: the likelihood that loose monetary policies will restore global prosperity is nil.

This brings us back to politics and policies. Demand is what the world needs most. The private sector – even with the generous support of monetary authorities – will not supply it. But fiscal policy can. We have an ample choice of public investments that would yield high returns – far higher than the real cost of capital – and that would strengthen the balance sheets of the countries undertaking them.

The big problem facing the world in 2015 is not economic. We know how to escape our current malaise. The problem is our stupid politics

Read more at http://www.project-syndicate.org/commentary/politics-of-economic-stupidity-by-joseph-e--stiglitz-2015-01#cV4vZwqrVmmGsZ1U.99

[periere]

"ample choice of public investments that would yield high returns – far higher than the real cost of capital "

Wish he'd give more detail. Could an ordinary punter get in on these high return investments ?