If countries co-ordinate their legislative approach to how certain contracts are enforced then they could regulate them.

As an purely hypothetical example, if all countries said bonds are not enforceable unless they are for a term of atleast 7 years then all bonds would have to be seven years long. Similarly, if they all said that no contract in the nature of a CDS could be enforced unless the buyer had an insurable interest greater than the value of their aggregate swap position and the documents must be traded on an exchange then that would mean the market would have to be regulated.

I think this is part ofthe reason why they think bondholders may have been chastened by Christine Lagarde’s comments.

Would it not be easier at a certain point, simply to establish a ‘European Agency’ within the state - with capabilities to work across several departments and state agencies, to pool resources, information and policy formation? Rather than the normal procedure, which is to sit down at the boardroom table, without info, without preparation and then spend a week or two, on the air waves etc, trying to spin it, so that the mess gets buried? BOH.

http://designcomment.blogspot.com/2010/02/matters-for-house.html

The more I think about it, the more I think that vanilla politicians of the house, are out of their depth and expertise. Perhaps in future, we should establish a key speciality within the civil service to deal with Europe?

I mean, something that spans across Tourism (minister Cullen), Trade and Employment (minister Coughlan) and state agencies like DAA, EI, IDA etc. I mean, to have parties who do present a credible opposition in the boardroom to competition such as Ryanair.

There was a good comment yesterday, Michael O’Leary asked minister Coughlan how many jobs does Ryanair provide in Ireland, and she had no idea.

BOH.

Government bonds are traded on exchange and ‘over the counter’ in the case of some issues. One must be registered with the stock exchange in order to deal in government bonds in Ireland, this varies slightly with country but it does mean that there is some oversight of the market.

CDS contracts are traded ‘over the counter’ and it is effectively a self regulating market. Standardised contracts were drawn up by the ISDA, and trades are voluntarily submitted to Markit to provide some transparency, but as Pat Donnelly alluded to these are private deals and as such can take any form that is desired.

@ Pat Donnelly

I agree that too much regulation will force trading ‘off exchange’, in fact this is occurring to a certain extent in the commodity markets. However as long as any regulation isn’t excessively prohibitive (and I don’t think my suggestion is prohibitive at all) the benefits of centralised trading will attract liquidity.

“I’ll just say a few more words, to heck with it. ”

Such restraint and modesty, Brian!

“Europe was late to the game”

I don’t agree!

Talent is not to be helped Brian, it is to be suppressed and derided, or haven’t you been reading the posts on this blog? Vested interests are bad for those who are not, Brian! You are not. Liam Carroll was and may be again.

http://www.huffingtonpost.com/2010/02/16/jp-morgan-bombing-bomb-ex_n_464128.html

Wrong address? Unless it wasn’t Brussels letting the Greek government know how it feels about being fooled??

Can you give a little more detail on CDSs. Is it the Stock Exchange rules that govern their form and are they generally governed by the law of the nation where the stock exchange is based? Is this the same for bonds or are bonds traded more widely, governed by more laws and would therefore require greater concerted action amongst nations?

As predicted, the B Hussein O anti-evasion package increases the number of US companies HQ in Ireland! Expect more!

Paying off the foreign?, unknown bondholders at 60% would save a lot of euro to pay into the ex-inspector of taxes’ pension fund. I recommend it to the government!

Somehow I do not believe that the Greek government and Gold-in-Sacks used any public market for their “swap” designed to mislead Brussels.

I happen to own the Brooklyn bridge, it is about to be sold for scrap. I can sell it to you for $10,000?

zhou_enlai
Show me an unrigged market and I will see a business opportunity. Do you think reform and regulation work? I will sell you the scrap for $9,000!

“Michael O’Leary hasn’t named his price but is clearly pushing for high public subsidies.”

Having thought about it, you are probably right. The point I wanted to make in the blog entry I linked above - I suppose it is just a general point, about business and competition in the EU region. The point is, whether it is Dell moving to Poland, Ryanair to Glasgow or Zoe moving to NAMA, (that is, NAMA as approved by the EU, to ensure fairness of competition across the European wide banking sector) this is the Europe we now live in. These are the big employers. They are the best employers, the best and most efficiently run companies. Why not let Michael O’Leary run the country? But the point is, my experience has led me to understand - there needs to be some counter balance to the Ryanair, Dell, Zoe, Ford approach. Make no mistake about it, these kinds of companies will take full advantage of free movement within the EU region of operations and personnel. But if you want to support real innovation, inventors and creativity - you do need something else. Otherwise, we’ll never get the better wind shield wiper.

It doesn’t really matter whether it is Zoe developments fighting DDDA over North Wall Quay. It doesn’t matter really, if it is Ryanair fighting DAA over Hanger no. six. It always happens with these ‘high volume, low cost’ operators. It always happens with them. Michael Hennigan is correct - they will push it to the limit - they will push for every kind of state subsidy available to them. They thrive on this bargain-ing (on behalf of shareholders). Ford motor company, was probably the original and greatest of them all. And it took the guts of a college professor to sue them over a wind shield wiper! That quote by Charles Lindbergh from the 1930s about Ford Motor company is about as good as you will get.

“Once they got an idea, they want to start in right now and get action tomorrow, if not today. Their policy is to act first and plan afterward, usually overlooking completely essential details. Result: a tremendous increase of cost and effort, unnecessarily.”

BOH.

These approaches would avoid redenomination of bank accounts and debt which seems legally and practically impossible.

I scribbled something today.

http://designcomment.blogspot.com/2010/02/change-management.html

BOH.

‘One wonders could the problem of sovereign debt being susceptible to self fulfilling panics and amplifying dynamics be overcome by co-ordinated reform of sovereign debt markets and national laws governing debt instruments.’

Now that CDS contracts are starting to be centrally cleared it would make sense to enforce trading breaks (in this case a limit bid) similar to what we have in commodity contracts to mitigate against the effect of leverage in creating positive feedback.

Prof Ferguson’s comments on sovereign debt here,

http://www.youtube.com/watch?v=JzpsgDdoE0Y

Greece ‘faces Europe sanctions without spending cuts’
http://news.bbc.co.uk/2/hi/business/8517499.stm

Mr Juncker - chairman of the 16 nations that share the single currency and also Luxembourg’s prime minister - has said Greece agreed to outline additional cuts in March if necessary.

He added that further measures would be imposed if Greece’s debt reduction plans were not shown to be on target by 16 March.

MSM stories about a depression …… what are they aimed at? Deepening the likely panic so that the overshoot is a deep as possible. The real economy is actually fairly small but boring. It will not be too badly affected by this but the funny money will.

Thus it appears that there is a problem with the real economy. Wrong, all bubble!

Capital being withdrawn again. There is no end to this as debts are repaid. What is that sucking sound? Growth? Not for a long time!

Damnit! Someone noticed. Now who do we pay off and for how much? It’ll take more than a fat job in the IMF……

The SR business is interesting. Will the whole kit and kaboodle be set up again, with less pay and no pension obligations? Shades of chapter 11 in the US. Given the shortage of capital, it may be lost, despite the tax advantages. Shame! Now that would be worth borrowing for, but we can’t cos we are funding NAMA first!

Ryanair’s PR offensive is a very good example of what for Europe?

Michael O’Leary hasn’t named his price but is clearly pushing for high public subsidies.

BTW, the DAA has said two operators will provide jobs for more than 250 aircraft maintenance workers at Dublin Airport.

http://www.rte.ie/news/2010/0215/ryanair.html

As one of the workers said today, this 5-600 highly skilled workforce will never again be produced here on this island - yet we have a massive fleet stationed here. BOH.

It seems to me that it is sovereign debt that the really big world problems lie. This is because individuals borrow on behalf of governments, thereby leaving the taxpayers at the mercy of corrupt officials. This is obvious in the third world but not quite so in say Europe, where they are likely to be more sophisticated at covering tracks.

Not impossible but how practical would it be to put a siege economy in place until a referendum outcome?

Besides, the Irish record in handling big projects is hardly inspiring.

A referendum (or other legislative change) surely is not impossible, thus leaving the Euro is certainly feasible.

Indeed I remember the thread in which Richard Toll expressed puzzlement also.

Co2 emissions from cement production varies on several factors, however basically anywhere from 0.5 kg Co2 per kg of cement produced to 1.5KG Co2/ Kg of cement produced. The type of process and efficiency of the plant are factors.

Depending on which figures you look at, but global cement production contributes around 5% of total global Co2 emissions.

Indeed it is puzzling that Irelands emissions have not come down as much as one would expect in this recession.

Unless of course we are exporting cement instead of using it at home, or else most of our cement is imported instead of being home made. In which case some other countries Co2 emissions have gone down.

Perhaps another look at the data, another topic, another time perhaps.

Monsieur Lee’s retraction on comments on Euro noted. I simply read some of the Indo …….

My comment on his comment on corporation tax stands - has George retracted this as well?

@all
Breaking news: UK Independent - Goldman Sachs diverts $20 billion in staff bonuses to Greek Gov as a gesture of ’solidarity’ with the EuroZone ….. I jest of course ……

More on Goldman Sachs and the Greek Connection ……..

http://www.independent.co.uk/news/business/news/goldman-sachs-the-greek-connection-1899527.html

Who a the gun to their head if Greece, or indeed another peripheral Eurozone country, says ‘no’ to the conditions of a proposed bail-out? Who is holding the gun? If Greece defaults then could they cripple the Eurozone? It is interesting that discrete legal problems are again featuring in economic crises.

BTW, if Gerard Hogan is Gerard Hogan SC of TCD then it is great to see his input.