Whither the euro?

[Senor Chevalier]

Euro crisis explained:

http://www.guardian.co.uk/business/blog/2011/oct/28/euro-debt-crisis-animated-explanation

[HAL9000]

[HAL9000]

I wonder whether Papandreou's brinkmanship over the referendum was used to extract further undisclosed concessions from the EU?

The 50% bond "haircut" agreed by EU banks is a crock: it is not binding. There is no provision to stop the banks from selling their Greek bonds to wholly owned hedge funds that insist on full redemption at maturity.

Why would any bank lose half of its investment when it didn?t have to?

Eurozone financial crisis: Winners and losers

[????]

You reckon HedgeFunds are going to be itching to buy a load of Greek bonds??? Mmmmmmmmmm, they aren't saleable,there's no market for them, Hedgies not int#erested,etc

[????]

Hugenot's bizzarre logic strikes again.UK Companies get the advantages of the Euro in terms of a single currency so avoiding transaction costs etc BUT somehow this doesn't work the oither way back IE Eurozone customesr don't get the disadvantages of using Sterling to buy their goods/services from UK Companies???? so where's the parisitical part of this relationship?

Huge, maybe it's your physical distance from Europe but in caes you hadn't heard there is a massive crisis going on as the people in ivory towers with 'vision' created a single currency without the neccessary fiscal and political centralisation and thus, completley predictably, the whole thing is collapsing under its unfirm foundations.

You seem to be getting this point totally mixed up with arguing to with yourself about the principles of a single currency WHICH WE ALL BY AND LARGE UNDERSTAND and are not arguing about. The Euro has been a dissater not because its principle is flawed but because it wasn't set up properly....as its non-bigoted critics, including Mr Brown and Mr Balls, pointed out at its foundation.

The irony is that the Euro has the potential of destroying the European Union rather than making it firmer which will be a disaster for us all.

Give me pragmatism over idealism all day long.

[StraferJack]

Hence big Sam at upton park

Hello? Is this thing on??

[HAL9000]

???? Wrote:

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> You reckon HedgeFunds are going to be itching to

> buy a load of Greek bonds???

That isn't what I was suggesting. Although, MF Global did sink last week under the weight of European junk bonds, including Greek, to the tune of 6.3 billion dollar's worth. (Leveraged at 40:1, I heard. No lessons learnt there, then!)

My scenario, from the POV of the EU banks, eliminates the 50% haircut without adding any additional risk. They can?t lose: 100% repayment of junk-grade sovereign paper the banks already hold IF the issuers survive until maturity.

[????]

The IF is the crucial bit, i'd be buying a few of them at 10-20% max as a small gamble, maybe - theoretically I take your point but I'd not be buying....what are they on the trading market now? Not shifting?. MF were trying to get out of a hole they'd already dug methinks, shit or bust(Red or Black :)))

[Huguenot]

Quids, are you being deliberately daft? The parasite element is because the other countries carry the risk of the common currency (such as Greek debt) whereas we only get the upside. Sarkozy is quite within his rights to tell Euro-sceptic little Englanders to keep their opinion to themselves. UK critics are like fat ugly mouthy grannies lecturing premiership managers.

You endlessly crap on in your disparagement for 'visionaries', presumably because you'd prefer to hang out in the deadbeat world of yesterday, but the truth is that your own world is a tight little ball of criticism for just about anything that anybody else does to move on.

Why don't you take a risk, snooky, and tell us about your own famous plan for the future which is so clever that there will be no opportunity for people like you to throw tomatos at it? ;-)

[HAL9000]

May be worth watching these as the Eurozone struggles to survive: International Government Bond Rates

[silverfox]

17 democratically elected leaders sitting on a wall ...

15 democratically elected leaders sitting on a wall and if one democratically elected leader should accidentally fall (be pushed) there'll be ...

17 IMF technocrat puppets sitting on a wall, 17 ...

(sung to the tune of 10 green bottles)

[HAL9000]

Statements made by various UK politicians on Friday strongly suggest that they think the Eurozone is circling the drain and may 'go down' quite soon.

If, and depending on how, it happens - a domino-like collapse of EU and UK banks could be triggered in which millions of people lose most, if not all, of their savings (according to several observers ? it?s not just me being negative).

I doubt there'll be any recourse to deposit guarantees or bailouts in the event of an EU-wide financial collapse.

I'm surprised how steady Euro FX rates and precious metal prices have been as the crisis has escalated during these last few weeks.

What?s happening: government intervention, public resignation to the inevitable or simply stunned helplessness?

[Huguenot]

And how you'd love a collapse wouldn't you HAL9000?

I'm pleased to see that it's just business as usual. Little bit of stress, but largely unless people like you can drive a panic there'll be nothing much to talk about.

Good heavens, the Italian parliament working on a Saturday to make sure it all goes smoothly - doesn't really fit into armageddon, but I'm sure you'll find a reason to prove it's a presager.

The rates are steady because confidence is high and business is average. Tin foil hat pillocks are praying for a disaster. ;-)

[HAL9000]

Your paranoia about my paranoia knows no bounds :)

[Huguenot]

I don't think you're paranoid HAL9000, I think you get off on creating stress and unhappiness.

In your last post you suggested everyone could lose all their savings. Not only is this such a marginal probability that we'd be better off worrying about asteroids, but you couldn't possibly hope to gain anything by making these claims.

These claims, and you in making them, are pathetic. Why would you want to make people feel anxious, sick and distressed?

[Tarot]

Forty years of empty promises and pipe dreaming has to end. Man up the bell is tolling for the eurozone, ding dong.

[Marmora Man]

One reading of the European "experiment", conceived after WWII, was to end the warring between nation states of Europe by binding them ever closer. This can be seen as an ideological exercise with an impeccable and irreproachable aim but dogged, as almost all ideological social experiments are, by theory coming into collision with the harsh reality of expectations, actions and beliefs of individual people and international economics. The end point remains desirable,but the speed and processes of the European journey appear to be unpalatable / unachievable.

Soviet Communism failed, Chinese Communism is tempered by reality and will transmute into a form of capitalism light years from Mao's intentions, Pol Pot failed, fascism failed and so on.

I do not equate the European experiment with the unacceptable aspects of these failed regimes. Dictatorship, military / political repression and ethnic cleansing have not, thank goodness, been an element of the European experiment. Nevertheless, it has overreached itself, moving faster than its members can or wish to cope with. However, the experiment shares the repeatable lesson that "perfect" social systems with high aims tend to fail.

On the other hand messy, pragmatic, historical arrangements that evolve from real experiences based on shared cultures, lifestyles and systems tend to work - viz the British Constitution, the Commonwealth, the US constitution (which started as a noble ideal but, sensibly, allowed itself to be modified by series of amendments to reflect reality).

[HAL9000]

Perhaps Huguenot is right, we shouldn?t mention the devil in case he appears ? far too scary!

*buries head in sand and thinks nice warm fuzzy thoughts*

[Marmora Man]

we shouldn?t mention the devil in case he appears ? far too scary!

Surely it's the emperor's new clothes that we shouldn't mention?

[Huguenot]

It's ridiculous to talk about a European experiment without reducing every political decision to an experiment.

The reason you don't is because you're trying to deliberately diminish and dismiss European politics as part of your foolish Euroscepticism. Europe remains our runaway leader in trade exports, in a boom driven by the economic benefits of political detente and the single currency.

To snootily patronise the efforts that others have done to deliver this is insulting to their efforts and their sacrifices. As for the speed of convergence, you'll note that most world economists are recommending that it be accellerated not decellerated.

The 'views' of Europeans regarding this are difficult to identify, but I'd be wary of taking the views of people like Tarot as an example of British sentiment when looking at other European nations.

If you don't imagine that the European arrangements are also allowing themselves to be modified by a series of amendments that refelct reality then you're in cloud cuckoo land.

As for 'head in the sand', don't be stupid - you weren't discussing the challenges, you we throwing up doomsday scenarios as a fait accompli, and you were delberately doing it to raise anxiety. Pathetic attempt at justification.

[HAL9000]

My original post refers to comments made by 'various British politicians' and a doomsday scenario posited by 'several observers'.

Perhaps you are too far away to be aware of the media reports this issue has generated? My post is insignificant compared with what has been disseminated by the press hereabouts.

My question is: why are Gold and the Euro relatively calm in circumstances that should have unleashed a maelstrom of volatility?

In other words, can those of us outside the loop deduce anything noteworthy from this apparently anomalous behaviour? What is the market telling us, if it is capable of telling us anything?

(I've got your response down as, ?All?s well. Nothing to see here, move along.?)

[silverfox]

Mario Monti's new cabinet has some very able specialists. However it does not include one politician.

Given the austerity measures about to be imposed on the Italian populace, is it wise to have non-elected officials telling people what to do?

[Huguenot]

I'm sure DaveR knows more about it than any of us, but I think it's pretty safe to say that in Italy's patchwork political tapestry populated by hookers and their johns, an 'elected' seat is no mandate to govern.

They're a bit like those safe-seat conservatives reappointed every 5 years irrespective of their views, who think that's somehow a reflection of their intellectual capacity to reject Europe when it's over 50% of exports.

I'm pretty confident that a seasoned academic will do a better job of running Italy than a bit of bunga bunga, and Italians probably feel the same way.

[Jeremy]

Huguenot Wrote:

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> I'm pretty confident that a seasoned academic will

> do a better job of running Italy than a bit of

> bunga bunga, and Italians probably feel the same

> way.

I'm sure you're right there, pretty much every Italian person I've met seems to hate Berlusconi (and I mean hate).

[silverfox]

Food for thought in today's leader in The Times - The European Autumn

'In the year that the Arab Spring toppled undemocratic regimes in one part of the world, the notion of democracy is being severely tested in another. The appointment of a civilian junta in Italy, by the country?s new unelected Prime Minister, is a profoundly worrying development. In Arab countries, democracy has bloomed out of dictators? failure to pursue sustainable economics. In the eurozone, the failure of so many elected leaders to manage their economies sustainably now poses a challenge to democracy. A European Autumn has dawned, and it is chilling...

...Mr Monti?s decision to appoint an emergency Cabinet made up entirely of technocrats...

Able as many of these individuals may be, they do not represent the will of the people. The true price of membership of the euro is becoming clear: having your finances, and your future, decided by people you have not chosen. The European Union has always had a democratic deficit, but this is a gulf...'