Breaking Up is Hard to Do

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Martin Wolf’s latest column is here.

157 Responses to “Breaking Up is Hard to Do”

  1. John corcoran Says:

    “RBS’s Chief European economist Jacques Cailloux blames european politicians who played heedlessly to domestic galleries and focused on putting malefactors in the dock, even though bad lending is as cupable as bad borrowing.”

    Reckless lending to Irish banks from their european counterparts should be removed from Irish citizens responsibilty and our country can recover and prosper

  2. Kevin Donoghue Says:

    Wolf claims that, legally, exit from the EZ would require the country to leave the European Union. I’d like a bit more information on that. Is it really illegal to take a step such as (for example) the introduction of a domestic currency alongside the euro? Leave aside the question of whether that would really help the economy. I think in some cases it would, but that’s not my question. Why would such a step be illegal?

  3. The Dork of Cork Says:

    @John
    Not if the strategy is to export to those who take a hit……… our ass is hanging out there because we are the most open ( see violated) economies on the planet.
    This will just get better and better – 30 years of credit hyperinflation means we are incapable of imagining how to generate real wealth.

    Are we now ready to take the jump ?
    http://www.youtube.com/watch?v=dzHHPBB3Guw

    If not the old Marxist meme of the evil Markets as put forward By Joe Higgins on tonight’s VB show needs to be clarified.
    These are not markets – this is not like the friggin Cork Butter exchange.

    These markets can leverage (create money) at will with the cooperation of the CBs particularly the FED which give them base money to play with.

    Therefore if you can create money at will , why should you create physical life support ? – the easy thing to do is extract value and not create.
    This CBs / Commercial banks / hedge funds will continue to extract until they cannot – see Micheal Hudson’s various pieces about “American” money creation to extract resourses although its not really American – its just used as a unsinkable currency carrier.
    Meanwhile the Irish can be guaranteed to continue to talk about the bond extraction until they the lights go out , it gets cold and the Pub runs out of beer.
    We are champions at the bond debate now – its hilarious really , 3 years and not one quantifiable action – Brilliant awe inspiring pontification.
    We are the champions , we are the champions……………….. of …well you should know the answer to that in advance.
    http://www.youtube.com/watch?v=eJXZpoxd6TM

  4. The Dork of Cork Says:

    Sorry for the syntax errors as I was punching out my bile – but could we please end the regular bond debates on the VB show if we have decided or it was decided for us that all paper is equal – its getting beyond tiresome.
    If this madness is accepted then we must clear the decks of pontification and prepare for basic life support and possible civilizational collapse as the money supply is drained from the victim.

  5. Ceterisparibus Says:

    @Kevin
    You are right.
    This was the thesis of the UBS paper on the cost for exit from the Eurozone. Their figures were questionable and no backup was provided. They stated blandly that you could not leave the Eurozone without exiting the EU. I stated my view on an earlier thread that this was nonsense. UBS provide no basis for such legal opinion.
    Finally, the judgement of UBS must be questionable.

  6. Chris Says:

    @ Kevin,
    Martin Feildstein has propsed countires take a ‘break’ from the Euro to get around this. I wonder why Mr. Wolf is being so obviuosly misleading on this point? I suppose the FT like the WSJ plays to its gallery, who would make losses if Greece were to leave.

    @ John,
    George Soros and many others (especially leading US academics) have been saying that for a long time. Its nice to hear the obviuos staed by a banker.

  7. Chris Says:

    Personally I would like to see the Eurozone integrate further.
    In the current situation the eurozone is being run for the German and French people. Their elected representives are chossing to do what is best for their people/banks first and their is not much wrong with that as this is their mandate.
    Irish leaders could pretend they were playing for Europe with the bailouts. Lets be honest, they were done to protect Irish ‘insiders’ from axe weilding foreign creditors, and to maintian Irish workers high salaries and home equities in the short term.
    A united states of Europe is needed with a structure with as little regional bias as possible.
    Instead of Merkel deciding stuff at the behest of German voters, it would be at the behest of all eurozone voters.

  8. Jesper Says:

    It seems like European leaders are emulating the strategy of Field Marshal Kutuzov against Napoleon.

    The economic climate is winter, wholesale funding are supplies and the Grande Armee of the financial markets might be winning a few battles but unless they can force a big showdown they’ll end up losing the war.

  9. seafóid Says:

    The Euro itself isn’t the problem. The problem is an excess of debt that will never be repaid. I was looking at the FT equities page last night. Unicredit, Monte pasche di Siena, Deutsche Bank, Paribas, SocGen, Santander, BBVA are all down more than 50% yoy. This is not a euro problem. The cancer is in the banks. They need to go to recap. They don’t want to.

    I suppose this is how wars happen. WW2 was also driven by an economic crisis where the common good was subordinated to madness.

  10. Kevin Donoghue Says:

    @CP, Chris,
    Thanks. Obviously it would (or maybe I should say will) be a very big deal for any country to leave the EZ, but a lot of purely technical problems get blown up out of all proportion.

  11. zhou_enlai Says:

    This is quite a scary article. We never needed the EU to work more than now. Strong leadership support from the Commission and the general EU Civil service is needed. A joint approach between the ECB and the EU Commission with the Commission doing all the talking would help. Unfortunately, the ECB is doing all the talking and Barrosa et al are coming up short.

    In this context, it is interesting that at a time of maximum peril for Ireland and for Europe our own Commissioner, Maire Geoghan Quinn, is nowhere to be seen. I don’t know if there is a reason for this, or if it is an agreed tactic of all the Commissioners to keep their heads down, or if the Commission is completely split and so cannot act coherently. I am sorry now that we insisted on every country having a Commissioner.

    This is an important point because we rely on EU level leadership and institutions to bring/force national governments together. The fact that France and Italy are being led by narcissists could be contributing to this problem.

    At the same time, individual nations are being cowed from taking difficult decisions (e.g. bank resolution) by other nation states and EU bodies (ECB) while the EU is incapable of presenting an alternative due to limitations on the ECB’s and the EU Commission’s powers.

    @Chris

    I think you are mis-reading Martin Wolf there. He is saying exit from the Euro would actually be good for Greece economically but would be bad for everybidy else in the EU. He is basically pointing out to those people who stand to make a loss that (i) Greece is going to default and (ii) unless the rest of the EU finds a solution, Greeece may well leave the EU with disastrous effects for the rest of the EU.

  12. zhou_enlai Says:

    Is war the natural result of bad system design and consequent systemic failure in a complex technological world?

  13. John Says:

    From the Roman Empire to the Holy Roman Empire to the Hanseatic League to the Polish-Lithuanian Commonwealth to Denmark-Norway, Sweden-Norway, and our own extremely sad history as part of the United Kingdom of “Great” Britain and Ireland – amongst many, many others – all of these goofy European unions end in tears.

    There is no point making appeals to some ideal, as Chris does above. The question is how do we extract ourselves in the least painful manner possible from this mess?

  14. DOCM Says:

    @ All

    As there is no provision in the treaties for a country to leave the euro, the issue of how to do it legally is rather obscure, to say the least. Viewed politically, Martin Wolf is almost certainly right. Were Greece to decide to default and leave the euro – and the decisions can only be taken by Greece – it would be nigh impossible for the country to remain in the EU short of the latter abandoning one of its core elements and legal commitments viz. Article 3.4 TEU “The Union shall establish an economic and monetary Union whose currency is the euro”.

    Joining the euro is both an obligation and a right, the obligation being removed only in respect of two countries, the UK and Denmark, that have negotiated formal permanent derogations.

    It is up to Greece! cf. leader in FT (which has a resonance for another country that I know well).

    http://www.ft.com/intl/cms/s/0/b097b918-e38e-11e0-8f47-00144feabdc0.html#axzz1Ya4Em6nz

  15. DOCM Says:

    @ All

    The EFSF has updated its Q & A document on the EFSF to cover exhaustively the changes agreed and also the arrangements agreed with regard to the ESM.

    http://www.efsf.europa.eu/attachments/faq_en.pdf

    The standoff between the Bundesbank and its new president, who is reportedly trying to drum up support among the countries that could eventually form a hard core “new Deutschmark” area, and the political leaders – including his own – that have democratically decided the roadmap – so expertly set out in the EFSF paper – is now plain for all to see. It raises some interesting questions with regard to the question of democratic responsibility and behaviour.

  16. DOCM Says:

    @ All

    The underlying clash of political and economic philosophies is also set out in today’s FT.

    http://www.ft.com/intl/cms/s/0/4d3c0b1e-e38c-11e0-8f47-00144feabdc0.html#axzz1Ya4Em6nz

    The problem lies more with the Soziale Marktwirtschaft – or rather who pays for it – than the Ordnungspolitik. The entrepreneurial class – and organised labour – in Germany benefits from the latter while the consumer in the rest of Europe pays for the former.

  17. Ceterisparibus Says:

    @DOCM
    As you say there is no provision in the treaties for leaving the EZ so therefore no legal impediment exists. The fact that a provision exists for establishing an economic and monetary union with a currency can hardly be the basis for expulsion from the EU when a limited number of members have adapted the said currency.
    Furthermore, we have seen horses and carts driven through existing treaties as regards funding of state debts etc. A way can and will be found so that Greece can exit the Eurozone without being expelled from the EU.

  18. Desmond Brennan Says:

    @Seafóid
    Yup, the problem isn’t the Euro per se, rather the backup of debt. Medium term solutions will be needed for monetary and trade policy, macroprudential regulation…etc – but for now the problem is the debt quantum

  19. DOCM Says:

    @ Ceterisparibus

    Horses and carts in this instance are in the eye of the beholder. Whether they exist or not is a matter for the European Court of Justice to decide. Even this competence is disputed by the German constitutional court. As the FT also pointed in a leader some time ago, Germany cannot have it both ways; rigid application of the rules when it suits Germany, near total disregard for them when it does not. It wanted an independent ECB. It got it.

    P.S. The UK has taken a case against the ECB before the ECJ with regard to the latter’s proposals on clearing houses which the UK consider would disadvantage the City. That is an example of responsible utilisation of the treaties. Without such responsible behaviour, the entire EU is threatened with collapse.

  20. DOD6 Says:

    Doom! Our economic nightmare is just beginning says the New Republic

    http://www.tnr.com/article/economy/magazine/94963/economic-doom?passthru=ZTQ0NjYwNGNiYzc5MzhjYjUwN2ZlNTA0ZGNkNmIxNTQ

  21. Chris Says:

    @Zhou,
    I am reading Martin Wolf basically as rebutting Roubini. They are both agreed that it is economically sensible for Greece to devalue its currency to encourage growth. I dont think many people can argue against that.
    Roubini basically goes on to describe how it is possible for Greece to leave the Euro and the actions it would need to take.
    This must be quite scary for the financial industry as Roubini makes many valid points and gives the example of Iceland.
    Martin Wolf is basically saying no Greece can’t leave cause of this and that.

    @DCOM,
    I have yet to read of anyone giving Martin Feildstein a proper rebuttal on his point that Greece could be allowed to take a break from the Euro and say that it will rejoin in a few years.

  22. Chris Says:

    I am reminded now of when Greece were getting there first bailout, Irish people were watching on thinking, this will never happen to us.
    Once again Irish people are watching Greece being ‘blackmailed and humiliated’ and having to maybe cut another 100,000 public service jobs and being jumped into all sorts of deals to get their next installment.
    They are thinking, well Ireland is different.
    When does the bailout monet run out again?

  23. The Dork of Cork Says:

    It does not matter what internal “reform” is done to indivdual countries – whatever sacrifice they make will be vacuumed up by the banks – this extraction game has been going on since at least 1971 , its just that the the crude oil production peaked in 2006 – ever since the phenomena is much more noticeable.
    The old France would have responding in some way to this monetory mischief – but now with the dwarf in charge it just sits there impassively..

    Once constructive capital creation was no longer profitable given the mad monetory hatters that run this sorry planet – civilisation was doomed , it just takes some time to play out.

  24. Shay Begorrah Says:

    @DOCM

    As there is no provision in the treaties for a country to leave the euro, the issue of how to do it legally is rather obscure, to say the least

    Certainly that is the position of those invested, politically and financially, in the unfolding disaster of the status quo. I understood that in a strictly legal sense everything that is not forbidden is allowed though, so it’s a mistake to even think of leaving the Euro other than as a practical and political issue.

    Politics, and the idea of popular pan European democracy, is of course the missing factor in all of this. Democratically it seems pretty clear that the Euro was a terrible mistake as it effectively transferred responsibility for monetary policy out of the the political arena and into the technocratic one without acknowledging that the chosen technocratic approach (strict monetarism) was itself intensely political. The ECB has been a baton for the right of the political spectrum and the investing classes to deform the rest of the EU into its preferred shape , it is no coincidence that the arrival of the Euro coincided with the dismal drift to the right in Europe as ideas of competition undermined ones of solidarity.

    For Ireland, and for the EU, a blow to the lack of democratic accountability of the ECB would be a huge boon, whether Greece’s need for inflation and rescue will do it is another question. It is interesting to note that its Denmark, one of the countries free of the yoke of the ECB, that has started to buck the trend of EPP dominance. Europe’s best hope for progressive politics lies outside of the monetary and financial dogma required of Eurozone membership.

  25. PR Guy Says:

    @zhou_enlai

    “it is interesting that at a time of maximum peril for Ireland and for Europe our own Commissioner, Maire Geoghan Quinn, is nowhere to be seen”

    +1 and I can’t understand why a journalist hasn’t picked that up yet (c’mon Sarah).

    Beyond the capabilities of most Commissioners to even sensibly comment let alone suggest solutions though imho

  26. Ceterisparibus Says:

    @Chris
    Yes, poster boy today..pariah tomorrow. The cuts being imposed on the Greeks are nothing short of savage. A flavour of them appeared today…
    “Sources indicated that the measures likely to be adopted include at least 25,000 sackings in the public sector with another 70,000 civil servants being placed on labor reserve, where they will receive reduced wages for a limited time before being laid off.

    Public servants’ salaries are likely to be cut by up to 50 percent, while state pensions are due to be capped at under 1,700 euros per month.

    The government is also thought to have agreed to equalize heating oil tax with the levy on diesel fuel, which will lead to the price of the former rising by 40 cents per liter.

    There were also discussions between Venizelos and the troika about reducing the tax-free threshold for incomes. Currently at 8,000 euros, the ceiling could be brought down as far as 4,000 euros. Combined with other measures, the adjustments are designed to save at least 1 billion euros this year and 6.5 billion in 2012.”

    All transport being closed down tomorrow and air traffic control closing Sunday.

    The social upheaval could be worse than the financial problem.

  27. Chris Says:

    On the subject of Martin Wolf he seems to have a educated understanding of global financial issues. He anaysles the issues from the viewpoint of the financial industry, which I would find normal as the editor of a financial newspaper.
    Martin Wolf was a ‘free-market supporter’ until 2008 when he changed his mind. He decided that monetary and fiscal stimulus was needed to help out the financial industry. It curious how many free marketers changed their tune when the free-market was going to be applied to the financial industry.
    Here he is writing in 2007
    “Much of the institutional scenery of two decades ago – distinct national business elites, stable managerial control over companies and long-term relationships with financial institutions – is disappearing into economic history. We have, instead the triumph of the global over the local, of the speculator over the manager and of the financier over the producer. We are witnessing the transformation of mid-20th century managerial capitalism into global financial capitalism.
    Powerful arguments can be made in its favour: active financial investors swiftly identify and attack pockets of inefficiency; in doing so, they improve the efficiency of capital everywhere; they impose the disciplines of the market on incumbent management; they finance new activities and put inefficient old activities into the hands of those who can exploit them better; they create a better global ability to cope with risk; they put their capital where it will work best anywhere in the world; and, in the process, they give quite ordinary people the ability to manage their finances more successfully. “

  28. Ceterisparibus Says:

    @Chris
    “active financial investors swiftly identify and attack pockets of inefficiency; in doing so, they improve the efficiency of capital everywhere”
    Unadulterated crap. They no longer allocate capital to productive purposes instead focusing on short term gain. Just look at private equity buyouts where they supposedly spot value..load up on debt and rip as much cash out as possible before the inevitable crunch comes. I could go on and on..but what’s the point.

    BTW. Go GO just surfaced on the news.

  29. Eureka Says:

    @Ceteris
    +1 on the anger. But every generation has to face its marauding hoarde.
    Question is now about how to deal with them.
    They tend to thrive on uncoordinated resistance. Sometimes capitulation leads them to internal conflict and destroying each other.
    With such a marauding hoarde as this I don’t know what the best option is. In some ways I can’t see one….depressing…innit!

  30. Desmond Brennan Says:

    Since mid August it has been apparent that the July 21st Frankenfudge was especially unpalatable, and that we were staring at the cusp of an imminent crisis of global scale. Thus new solutions (not fudge) were required.

    Since then the pressure has ratcheted up on the plump ditherer and her maniacal imp sidekick. The IMF drumbeat is almost daily, with the US and China on the pitch also – and this is aside from the market carnage.

    Thus, we really should assume it likely, that a real solution is imminent. However any real solution will have implications well beyond any financial legerdemain – and will be of huge importance for the political and even cultural fabric of Europe.

    Yet…yet…we’ve had NO proper discussion of options, nor sense that there’s any choices. This means that radical and important policies, will not be well tested – and will likely be decidedly sub optimal.

    I think it behoves the Irish government to see that a set of official options for discussion are created, and let circulate. Else there’ll just be another minute to midnight rubberstamping of shoddy policy.

  31. Ceterisparibus Says:

    I’m beginning to feel sorry for the Greeks..
    Banner headline on RTE news…
    Greece will do “anything” to stay in the Eurozone.

  32. DOCM Says:

    @ Chris

    I do not suppose that anybody thought it worthwhile to provide a rebuttal to Martin Feldstein as it seems rather obvious that membership of a single currency is not like joining Lanigan’s Ball.

    @ Zhou_enlie and PR Guy

    Your point about MGQ is a mistaken one. She is the member of the Commission from Ireland, not the representative of Ireland in the Commission. You seem to be asking her to take on a role that is expressly forbidden to her by the treaties. “..the members of the Commission shall neither seek nor take instructions from any government or other institution, body, office or entity. They shall refrain from any action incompatible with their duties or the performance of their tasks”. [Article 17.3 Treaty on European Union].

  33. Ceterisparibus Says:

    @Desmond
    “Thus, we really should assume it likely, that a real solution is imminent. However any real solution will have implications well beyond any financial legerdemain – and will be of huge importance for the political and even cultural fabric of Europe.”

    I don’t think the real solution is imminent. All the signs indicate that the Troika are preparing to capitulate, at least on the current tranche. My prediction,foolhardy as it may well be, is that the funds will be released by mid October after massive cuts are announced this evening. That will leave three months to get the EFSF up and running and to recapitalize the dodgy European banks. It seems probable that Greece will not meet the targets for the December examination and with big bond redemptions coming due they will be forced to default. The unknowable, to my mind,is , will the Greek people accept the cuts indicated. Even if the Greeks accept all the austerity it is likely that it will result in an acceleration of the depression.
    As for a lasting solution I wouldn’t count on anything likely to enrage German and French voters in upcoming elections.

  34. Chris Says:

    @Ceter,
    Just to be clear I was quoting Martin Wolf 2007.

    @DOCM,
    My point is that there is nothing in the treaties banning Greece from taking a break from the Euro while staying in the single market etc. Thats what Martin Feildsteins is saying.
    I think Greece taking a break has become relevant now. The Dutch are asking about a mechanism to throw them out.

  35. PR Guy Says:

    I’ve only just read a hard copy of this article in the FT. Did anyone notice the editorial on the facing page (Greeks’ Tragedy).

    Is the FT advocating the deliberate engineering of even higher levels of civil unrest (by deliberately holding back the next tranche so that wages and social payments cannot be made thereby getting the recipients to take to the streets) to get the Greek government to do the Troika’s bidding faster than they are currently doing it?

    It sure as hell reads that way to me (there isn’t really any room for doubt). The word ‘incitement’ comes to mind. Mind blowing stuff.

    It would no doubt serve as an example ‘pour les autres’ too just in case those pesky Irish and Portugese should get ideas above their station.

    I’m limited in my access to the net where I’m currently sitting. Can anyone post a link to it so that others can read this editorial?

    @DOCM

    I’m happy to be corrected but she does seem to have an opinion about everything else so why so quiet now? Surely she can express her thoughts without them having to be ‘seeking or taking instruction’?

  36. Gavin Kostick Says:

    @ zhou_enlai

    “Is war the natural result of bad system design and consequent systemic failure in a complex technological world?”

    Cor, that’s a big one. I do wish some of our poets would have a go about thinking about the big stuff.

    SEPTEMBER 1, 1939
    by W.H. Auden

    I sit in one of the dives
    On Fifty-second Street
    Uncertain and afraid
    As the clever hopes expire
    Of a low dishonest decade:
    Waves of anger and fear
    Circulate over the bright
    And darkened lands of the earth,
    Obsessing our private lives;
    The unmentionable odour of death
    Offends the September night.

    Accurate scholarship can
    Unearth the whole offence
    From Luther until now
    That has driven a culture mad,
    Find what occurred at Linz,
    What huge imago made
    A psychopathic god:
    I and the public know
    What all schoolchildren learn,
    Those to whom evil is done
    Do evil in return.

    Exiled Thucydides knew
    All that a speech can say
    About Democracy,
    And what dictators do,
    The elderly rubbish they talk
    To an apathetic grave;
    Analysed all in his book,
    The enlightenment driven away,
    The habit-forming pain,
    Mismanagement and grief:
    We must suffer them all again.

    Into this neutral air
    Where blind skyscrapers use
    Their full height to proclaim
    The strength of Collective Man,
    Each language pours its vain
    Competitive excuse:
    But who can live for long
    In an euphoric dream;
    Out of the mirror they stare,
    Imperialism’s face
    And the international wrong.

    Faces along the bar
    Cling to their average day:
    The lights must never go out,
    The music must always play,
    All the conventions conspire
    To make this fort assume
    The furniture of home;
    Lest we should see where we are,
    Lost in a haunted wood,
    Children afraid of the night
    Who have never been happy or good.

    The windiest militant trash
    Important Persons shout
    Is not so crude as our wish:
    What mad Nijinsky wrote
    About Diaghilev
    Is true of the normal heart;
    For the error bred in the bone
    Of each woman and each man
    Craves what it cannot have,
    Not universal love
    But to be loved alone.

    From the conservative dark
    Into the ethical life
    The dense commuters come,
    Repeating their morning vow;
    ‘I will be true to the wife,
    I’ll concentrate more on my work,’
    And helpless governors wake
    To resume their compulsory game:
    Who can release them now,
    Who can reach the dead,
    Who can speak for the dumb?

    All I have is a voice
    To undo the folded lie,
    The romantic lie in the brain
    Of the sensual man-in-the-street
    And the lie of Authority
    Whose buildings grope the sky:
    There is no such thing as the State
    And no one exists alone;
    Hunger allows no choice
    To the citizen or the police;
    We must love one another or die.

    Defenseless under the night
    Our world in stupor lies;
    Yet, dotted everywhere,
    Ironic points of light
    Flash out wherever the Just
    Exchange their messages:
    May I, composed like them
    Of Eros and of dust,
    Beleaguered by the same
    Negation and despair,
    Show an affirming flame.

  37. Shay Begorrah Says:

    @DOCM


    @ Chris

    I do not suppose that anybody thought it worthwhile to provide a rebuttal to Martin Feldstein as it seems rather obvious that membership of a single currency is not like joining Lanigan’s Ball.

    How very odd. Obviousness has not previously been a barrier to LBS or any of the assorted ECB backing singers making any contributions to the debate.

    eg: Bini Smaghi Says ECB ‘Fully Aware’ of Risks in Bond Buying)

  38. paul quigley Says:

    @ DOD6

    Thanks for the pointer. Looks like the doom is getting doomier.

    ‘Will it take another global catastrophe to convince the leaders of the United States, Europe, and Asia to halt the repetition of past errors—to recognize that they need to establish a new economic order? What will it take to convince the people of the United States that they have to overcome their cultural predilections against big government?’

    @ Dork

    Have to watch the oul bile. It would be a disaster for the blog if you were to be stretchered off. No one else had your field of vision, it’s just that a red most blows in sometimes. I know the feeling.

    Try peppermint tea. Very soothing. And count to ten. That’s what people are always telling me :)

  39. Ceterisparibus Says:

    @PR Guy
    Think this is the link but behind pay wall..
    http://www.ft.com/intl/cms/s/e4c7e080-d530-11e0-bd7e-00144feab49a

  40. paul quigley Says:

    red mist

  41. seafóid Says:

    @ Chris

    I remember reading that Wolfman ráiméis in an Irish Times supplement and even at the time it was off the wall.

  42. seafóid Says:

    @ Gavin Kostick

    http://www.nybooks.com/articles/archives/2011/aug/18/trouble-coming/

    Trouble coming
    Charles Simic

    One saw signs of it in certain families.
    The future was like an unfriendly waiter
    Standing ready to take their dinner order
    From a menu they could not read.

    To look without understanding was their lot
    While a salesman in the TV store
    Kept changing channels too quickly
    For them to retain a single image.

    The little flags freshly posted in a cemetery
    Said nothing as they hung listlessly
    In the early summer breeze,
    Not that anybody particularly noticed.

    The sunset over the approaching city
    Was like a banquet in a madhouse
    The inmates were happily setting on fire
    Just as our train ducked into a tunnel

  43. Peter Stapleton Says:

    @John

    ‘Goofy unions’? Like Italy, perhaps?

  44. DOCM Says:

    @ PR Guy

    She does! (Maybe she knows that you are on her case!).

    http://www.irishtimes.com/newspaper/world/2011/0921/1224304482198.html

    Joking aside, the point I am trying to make is an important one. Commissioners have no power to act on their own. They are members of a college – the Commission – which decides by simple majority and they constitute, collectively, an essential building block in the decision-making procedures of the EU. The Commission proposes and the Council, acting with the European Parliament now in most cases, disposes. The Council cannot act without a proposal from the Commission. This is a vitally important political lever and the counterweight to it is that there be no question about the total independence of the Commission.

    It is best that individual commissioners stick to their allocated brief (and especially not make suggestion about flying flags at half mast).

  45. seafóid Says:

    @CP, PR guy

    http://www.ft.com/intl/cms/s/0/b097b918-e38e-11e0-8f47-00144feabdc0.html#axzz1YUl2839g

    “Greece’s tragedy is made at home”

    Is this the one you were looking for? The other link was about tracker mortgages.

  46. zhou_enlai Says:

    @Gavin Kostick

    Thanks for that. Had not read that poem before but recognize some of the lines.

    @DOCM

    My point is not that MGQ should be acting in Ireland’s interest but rather:
    (i) she should be acting in Europe’s interest, and
    (ii) insisting on having a commissioner from Ireland was of no benefit, and
    (ii) insisting on having a commissioner from Ireland may have done harm in making the commission so big as to be wholly incoherent ineffective.

  47. seafóid Says:

    @ PR guy

    It looks like that FT editorial was written by Paulos Huntocoupolous

    “..the government has shied away from measures to wrest the economy away from the grip of the privileged few, in contrast with drastic if insufficient action on the fiscal deficit.
    Redirecting popular indignation where it belongs – with those who exploit a broken system – would be politically smart, too. Greece can only be rescued by a leader who owns up to this conflict – and sides with the outsiders.”

  48. Gavin Kostick Says:

    @ zhou_enlai, & seafóid

    Good poem seafóid – must read more contemporary stuff.

    This from William Carlos Williams, 1935. Reminded of it by footage of the Formula 1 at Monaco, where you see the millionaires and billionaires yachts all stacked together.

    The Yachts

    contend in a sea which the land partly encloses
    shielding them from the too-heavy blows
    of an ungoverned ocean which when it chooses

    tortures the biggest hulls, the best man knows
    to pit against its beatings, and sinks them pitilessly.
    Mothlike in mists, scintillant in the minute

    brilliance of cloudless days, with broad bellying sails
    they glide to the wind tossing green water
    from their sharp prows while over them the crew crawls

    ant-like, solicitously grooming them, releasing,
    making fast as they turn, lean far over and having
    caught the wind again, side by side, head for the mark.

    In a well guarded arena of open water surrounded by
    lesser and greater crafts which, sycophant, lumbering
    and flittering follow them, they appear youthful, rare

    as the light of a happy eye, live with the grace
    of all that in the mind is fleckless, free and
    naturally to be desired. Now the sea which holds them

    is moody, lapping their glossy sides, as of feeling
    for some slightest flaw but fails completely.
    Today no race. Then the wind comes again. The yachts

    move, jockeying for a start, the signal is set and they
    are off. Now the waves strike at them but they are too
    well made, they slip through, though they take in canvas.

    Arms with hands grasping seek to clutch at the prows
    Bodies thrown recklessly in the way are cut aside.
    It is a sea of faces about them in agony, in despair

    until the horror of the race dawns staggering the mind;
    the whole sea become an entanglement of watery bodies
    lost to the world bearing what they can not hold. Broken,

    beaten, desolate, reaching from the dead to be taken up
    they cry out, failing, failing! their cries rising
    in waves skill as the skillful yachts pass over.

  49. The Dork of Cork Says:

    @Paul
    Yes well the “markets” and the remaining bits of the physical economy are not the same thing – even a child could figure this out.
    But almost all economists are waiting for the “markets” to cock a doodle doo.
    http://www.youtube.com/watch?v=tE9kHVA_Mqs
    Which is why I eject various bits of unpleasant Flem & Bile every so often…………
    Its so damn frustrating – exposing simple logic to the debate can be dangerous – too much reality can be a shock to the delicate system of tribute I guess.
    Asking where the wealth comes from is just asking too damn much.

  50. Yields or Bust Says:

    @Dork

    “..But almost all economists are waiting for the “markets” to cock a doodle doo..”

    Luv it !

  51. The Dork of Cork Says:

    @Yields
    The “markets” unfortunetly are not familiar with a very simple word – they need to be educated me thinks.
    No to leverage , no to the money power , No to credit as no more wealth is available to extract.
    http://www.youtube.com/watch?v=cWwBVFrpEDw

  52. Eureka Says:

    @ Seafoid
    As a great man once said – it takes two to tango…..
    Sovereign debt markets have no place in the modern world. They only finance misery – first through warfare, now through austerity. And most bondtraders (obviously excluding the contributors here) would sell their mother for a quick buck (after they got her addicted to crack of course….)

  53. PR Guy Says:

    Any more poems on this thread and I’m going to have to don the shades, put on the beret and start listening to jazz (man).

    Can we have one in the style of Pam Eyres, or perhaps Purple Ronny, please?

    The boy stood on the burning decks of JCT’s ECB
    He took a job over in sunny Greece
    Now he’s doing austerity!

    Boom boom

  54. Ludwig Heinrich Edler Says:

    Der deutsche Steuerzahler sagt:

    Blaming the lenders for having lent money irresponsibly is like telling a woman who has been beaten by her husband that she was asking for it. After all, she married him, didn’t she?

    Actually no, the “blame game” for lenders in which most of this site’s commentariat indulge is more like telling a women who has been beaten by her husband that she was asking for it, and then telling her she has to take him back in because he has nowhere to spend the night. (Everyone thinks the markets ought to keep lending to us, right?)

    You borrow money you make a promise to pay it back. Ireland, Greece: Pay your !%&@ debts. No money? Work harder.

    horcht die Angie nicht, so werden wir für jemanden stimmen, der die Dinge so sieht wie wir.

  55. Kevin Donoghue Says:

    Ludwig, I never borrowed a brass farthing from you. I actually did lend money to the Irish government, but my chances of getting all of it back have been impaired thanks to the fact that some of your compatriots think their loans to Sean Fitzpatrick’s defunct bank should have priority.

  56. Kevin Donoghue Says:

    Meanwhile I see that the Italy-Germany 10-year spread is hitting new records.

  57. The Dork of Cork Says:

    @Ludwig
    In this monetory system – when credit production stops it is impossible to pay external debt as the interest on real money goes exponential relative to a declining credit money.
    Germany or France would be in trouble paying a 5 % at present credit production rates never mind under Greek or Irish conditions.
    Theres no point working harder because yee guys get all the dosh.
    If Europe wants to develop it needs to spend money into existence rather then loan credit which in reality is just wealth extraction.
    I am disappointed in France really – it had a certain element of republican bankers who realised this and created at least some organic wealth.
    If you want to get your precious interest back you need to do something dramatic – such as digging a rail tunnel under the Irish sea using new money.
    Otherwise you can kiss your interest tribute goodbye.

  58. Rich Says:

    Yeah Ludwig

    The psychology on this site is quite something, this country is as stupid as it is poor and no lessons have been learned just a another chapter in the victimised bible of the loveable, yet stupid, but forgivable Irish. Sure didn’t the pixies make them borrow like morons?. I look forward to the day of financial reckoning when all the gombeen logic falls to nothing in the face of hard sums

  59. ceterisparibus Says:

    The latest out of Greece is that George will not announce the cuts today and will wait until he gets approval from Christine when he goes to Washington next week.

  60. ceterisparibus Says:

    An extraordinary statement from Greek Finance Minister..

    “”The danger is that the (Greek) economy and the financial sector will stop operating, this could happen without our will, it could happen by mistake, because the EU and the eurozone in particular faces enormous political, institutional and economic problems,” Venizelos said.”

    Is he setting the stage for running out of cash?

  61. Rich Says:

    From what I can see there is little doubt that Ireland will be next after Greece in the ‘quickening’ as rightly Europe demands we cut our cloth to produce a budget surplus excluding pixie logic around promisory notes and interest repayments – these are debts like any consultants salary.

    No doubt it will be unfair and everyones elses fault, the legacy will be this blog and I have made sure to copy and save for my own enjoyment when I reflect on the hubris there in

  62. seafóid Says:

    @ CP

    It’s high stakes poker.

    He knows the markets are twitchy and that the Euro banks with investment banking arms have no f**** idea what their exposures are.

    ETFs . WTF.

  63. seafóid Says:

    @Rich

    It does look like the cuts are coming.
    But it’s hardly the blog’s fault.
    Hugh Sheehy has 2 reactionary of the month prizes FFS.

  64. PR Guy Says:

    @ceterisparibus

    “Is he setting the stage for running out of cash?”

    Will try and have a look at the statement later – up to my eyes at mo.

    On face of it, sounds more like a threat – possibly in response to having received a threat last night from the Troika (see my earlier post about the FT editorial – stuff like that doesn’t just get made up by journalists/editors… someone put that in the author’s ear).

    Politicians are such big kids. Yar boo sucks.

    There was some talk about the phone call last night ending on a ‘tense’ note. It’s a high stakes game if that is what he is doing (making a threat).

    They’re starting to refer to George Papandreou as ‘Sisyphus’ in the Troika.

  65. seafóid Says:

    This was in Martin Wolf’s article . A very evocative image.

    “Presumably, an effort would be made to build a firewall between the exiting country and other vulnerable countries. But it would be tested to destruction.”

    Like a dog humping the leg of a chair until it gives way.

  66. grumpy Says:

    Now where have we heard this before: – Greek opposition to make renegotiation of the deal the centrepiece of their election campaign.

    Property / electricity tax, rumour may only apply to “second homes”.

  67. grumpy Says:

    http://www.bbc.co.uk/news/business-15011847

  68. vinny Says:

    @Ludwig ‘/~#?
    …and what about the stupid German banks who could not get enough of the putrid American financial derivatives/cds’es etc – as Colm McCarthy has been pointing out for months – German and French banks are bust through their own greed and incompetence…….and their pols are looking for and have found scapegoats….soft targets..etc

  69. seafóid Says:

    Deutsche Bank and its 25% RoE per annum

    http://uk.finance.yahoo.com/q/bc?s=DBK.DE&t=5y&l=on&z=l&q=l&c=

  70. Ceterisparibus Says:

    @Grumpy
    That ties in with a statement by Venizelos to the effect he would not let 1% derail the plans.

    But, as I posted earlier, they won’t achieve 7.5% with all the new cuts and the upcoming social unrest.

    You have to wonder what Papandreou is going to meet Christine for.

  71. seafóid Says:

    BNP paribas 5 year- Quelle immense saloperie

    http://uk.finance.yahoo.com/q/bc?s=BNP.PA&t=5y&l=on&z=l&q=l&c=

    Alors, throwing Ireland under the bus didn’t help much

    110628 Pledging to exercise control over France’s own debt, he said: “I wasn’t elected so that France would experience the agony of Greece, Ireland and Portugal.”

  72. David O'Donnell Says:

    from the Dastardly Deauville Tango to the Waltz of InDecision ….

    Is Nikki Sarkozy really a ‘kept’ man?

    http://www.spiegel.de/international/europe/0,1518,787369,00.html

    ‘Daniel Cohn-Bendit believes it’s time to end the waltz of indecision.’

  73. Ceterisparibus Says:

    @Seafoid
    Interesting that Deutsche Bank is worth less than AIB.

    My financial health barometer …a share in all three Irish quoted banks today =13 cents.

    Poor Wilbur…and all those pension funds that bought the story.

  74. Eureka Says:

    Greek austerity plan? Not that bad
    http://www.zerohedge.com/taxonomy_vtn/term/12167

  75. The Dork of Cork Says:

    Only money can pay down debt – austerity does pay down debt , it just transfers consumption.
    Heres a tasty vehicle for money creation………
    One of the busiest short haul air routes in the world…………
    2010 figures
    Dublin to Heathrow : 1,491,297
    Dublin to Gatwick : 842,777
    Dublin to Stansted : 719,536
    Dublin to Birmingham : 538,702
    Dublin to Luton : 272,582

    Cork to Heathrow : 395,117
    Cork to Stansted : 205,333
    Cork to Gatwick : 188,177
    Cork to Birmingham : 82,192

    Also Dublin to Charles de Gaulle : 585,231
    Cork to Charles de gaulle : 92,857

    So if over half of these passengers travel by a rail tunnel thats 3 million outbound a year + considerable container and car traffic………

    Is this the Hoover damn project for a New Europe………. not if the Malthusian clique in the ECB have anything to do with it.
    Maybe Jean Claude has shares in Ryanair.
    The lack of ambition in Europe seems to suggest they have imported the British shopkeeper mentality.
    Truly shocking.
    They are Gold Drug Pushers – must must get more precious.

  76. The Dork of Cork Says:

    Not sure if its the Hoover Damn or dam – I have to think about that one.

  77. Ceterisparibus Says:

    @DOD

    Holy god. The Swiss franc is starting to look attractive. Or even their bonds.

    Maybe Danny CB. Could arrange the disappearance of some of the awkward
    Players!!!!

    The bit I really liked ……
    “A more rational approach would be to authorize the European Commission to oversee European economics. For that to be possible, though, at least some of the Commission’s personnel would have to be replaced, since neither Sarkozy nor Merkel would trust José Manuel Barroso, the current president of the European Commission, with such a mandate. The Portuguese politician was chosen, after all, precisely because no one wanted him in a serious position. The Commission’s initiatives, for example models for the disbursement of euro bonds, or the introduction of a tax on financial transactions, have been immediately overruled or taken out of the Commission’s hands. It seems no one is actually that eager to strengthen the capacity for political action at a European level.”

  78. Eureka Says:

    I like this
    When the accumulation of wealth is no longer of high social importance, there will be great changes in the code of morals. We shall be able to rid ourselves of many of the pseudo-moral principles which have hag-ridden us for two hundred years, by which we have exalted some of the most distasteful of human qualities into the position of the highest virtues. We shall be able to afford to dare to assess the money-motive at its true value. The love of money as a possession — as distinguished from the love of money as a means to the enjoyments and realities of life — will be recognised for what it is, a somewhat disgusting morbidity, one of those semi-criminal, semi-pathological propensities which one hands over with a shudder to the specialists in mental disease … But beware! The time for all this is not yet. For at least another hundred years we must pretend to ourselves and to everyone that fair is foul and foul is fair; for foul is useful and fair is not. Avarice and usury and precaution must be our gods for a little longer still. For only they can lead us out of the tunnel of economic necessity into daylight.”

    I think we’re slowly getting there.

  79. DOCM Says:

    @ All

    Of course, debt should be repaid and LHE is quite right on this point. But, as the old joke has it, if you owe 1,000 euros the bank owns you, owe a million and you own the bank. There is no morality to this situation one way or the other. Just hard facts.

    It is important in this context to underline that Germany, apart from bailing out her own banks, as all other countries have done, has not put up one red cent up to this point. What Germany has accepted is a quantifiable contingent liability as made clear in the EFSF Q & A document. The amendments agreed on 21 July change this. Germany – and the other creditor countries – has accepted to provide guarantess and not to be paid for them and, in the context of the ESM, will have to put up hard cash. This is a form of accepted default of all the participants in the various “programmes” (bilateral Greek, EFSM, EFSF).

    That is one half of the bill. The other half is to make the French and German banks that lent the money (including for the purchase of expensive helicopters from France and equally ruinously costly submarines from Germany, in the case of Greece) show the true value of the loans in their books, which cannot be done other than through recapitalisation (a point being made with increasing vehemence by both the IMF and the Commission). This will require immediate hard cash, with an impact on the national budgets of both France and Germany, which is the harsh reality that both Merkel and Sarkozy are trying manfully to avoid.

    The most interesting sentence to my untutored eye in the piece by Martin Wolf is the following;

    “The results will include runs on sovereign and bank debt, and even the disintegration of the capital market into national components”.

    What can the phrase “runs on sovereign debt” imply other than that the governments of the weaker countries in the eurozone have turned into banks at risk. This is exactly the point developed in a broad sense by De Grauwe and Gros and analysed in detail by Professor Winkler in his paper some months ago on the “Joint Production of Confidence”. We have a game of ping pong going on between the ECB that can only provide the liquidity under its present mandate and the governments that have to provide the confidence to ensure the solvency of the overall system and to avoid that solvent countries, such as Ireland, Portugal, Italy and Spain, are not brought down, and the entire system with them, because of the refusal to face up to the insolvency of one rogue bank, I mean state, Greece.

    There has to be a technical solution to this problem. After all, Greece represents 2% of the economic activity of the EU. A failure to find it will go down in the history books as the most monumental error imaginable.

  80. Ceterisparibus Says:

    @DOCM
    I wouldn’t knock those expensive submarines the Greeks bought from Germany. They might come in handy with the Turks threatening to send warships to stop the oil drilling off Cyprus.

    Maybe a little war between the Turks and Greeks is all that is needed.

  81. The Dork of Cork Says:

    I think there’s a basic misconception about modern money – specifically debt , you cannot save debt – thats a absurdity.
    It must have locomotion…….. it can have negative locomotion with catostrophic results such as investing in Bungalows in some bog or you could build a undersea rail tunnel to link the busiest short haul air route in the world.
    Sure it won’t pay positive interest rates over a short time period such as a decade or so which is why the privately financed Channel tunnel was a financial disaster but that tunnel is still giving positive wealth and may do so for a century or more – but that Bungalow in the midlands will at best be a curiosity in a centuries time.
    Why is this a hard concept ?
    I think Europe has lost itself in micromanagement which it cannot do with the same efficiency of even so so former nation states such as Ireland – if it can’t or will not do the big International linkages then theres no point to the poltical construct – through frustration it tells us how best to construct septic tanks – given the huge input costs in the Brussels beaucrcey this is a net negative activity.
    Its so sad that De Gaulles Europe of sovergin nations cooperating on the Big things that they could not do alone was abandoned and subsumed by a grotesque Brussels and now detached Central banks vandalism.
    But such is life.
    Implosion is immenient unless they grasp that vision thing.

  82. DOCM Says:

    @ All

    For the information of those sufficiently technically proficient to understand it. It looks to me like the ECB declaring that it will, as usual, hold the fort while the governments dither.

    http://www.ecb.europa.eu/press/pr/date/2011/html/pr110921.en.html

  83. David O'Donnell Says:

    @Ceterisparibus

    Well – when Danny The Red sounds like the most sane pragmatist at the Party (and he is a hard worker) then it time to …. really worry … course the reason that Mer_Kozy don’t like Manuel is that he was elevated by Bertie as a compromise Fianna Fail candidate

    BTW Don’t worry too much about those submarines that the Germans sold to the Greeks – Blind Biddy picked up two of them for a song at a recent FIRE sale to accompany the Polaris that she has on loan from HRH. She is well ahead of the curve and smiled quietly to herself last night as she listened to Olivier Blanchard, IMF Chief Economist, CALL to ARMS.

  84. David O'Donnell Says:

    @all & LBS/DOCM

    ‘For the information of those sufficiently technically proficient to understand it. ….

    Heard a rumour that Lorenzo Bini-Smaghi had been cloned late last year ….. the empirics are beginning to stack up … are there more of them? Should we be concerned?

  85. Joseph Ryan Says:

    They’re starting to refer to George Papandreou as ‘Sisyphus’ in the Troika.

    It just goes to show the level of endemic stupidity in the Troika.
    Who do they think gets rolled over at the bottom of the hill when Papandreou says **** this and lets go the stone.
    There seems to be a singular lack of intelligence in European ‘leaders’ and the European body politic.

  86. seafoid Says:

    Deutsche Bank’s current market value is less than what Ireland has pumped into the dead carcase of Anglo Irish Bank.

    http://uk.finance.yahoo.com/q/bc?s=DBK.DE&t=5y&l=on&z=l&q=l&c=

    “When you are born you get a ticket the freak show’ – George Carlin

  87. ceterisparibus Says:

    @DOCM

    First, the Eurosystem has abolished the eligibility requirement (Sections 6.2.1.5 and 6.2.1.6) that debt instruments issued by credit institutions, other than covered bank bonds, are only eligible if they are admitted to trading on a regulated market.

    So our funny money becomes eligible…. I thought they had already hocked this at the ECB. Better get rid of it fast while the window is open…it could be slammed shut rather quickly.

  88. Joseph Ryan Says:

    @DOCM

    It is important in this context to underline that Germany, apart from bailing out her own banks, as all other countries have done, has not put up one red cent up to this point……

    How right you are. But as another comentator would say ‘they are fond of the auld victims cross’.

    I cannot agree with Ludwig’s comment that all debts must be paid. In the real world debts get written off all the time. What is so sacrosanct about Euro country debts or banks that we are all compelled to hurtle towards destruction so that they are paid?

    It looks like 20th century history has not been studied at all by the youth of Europe. What a pity. They may come to regret not studying it.

  89. PR Guy Says:

    From a Greek on the ground over there:

    “we have sold owr pereus port to cosco a chinese company.and cosco bribing some public workers and politicians are importing things from china without paying enty fees.the method is simple.for 20 conteiners they pay only for one ,becouse they have the same sirial number.the same they do in port of napoli in italy.”

    Good to see someone is making a profit out of a crisis.

    @ceterisparibus

    “Maybe a little war between the Turks and Greeks is all that is needed.”

    Unfortunately, many a true word is often spoken in jest.

    I’m going to have to give up commenting on the Greek situation. It is getting FU beyond belief. I suspect that lowering the tax threshold from 8k to 5k is going to be the straw that broke the camel’s back. Now they are after the poor too and it suddenly becomes a matter of eating or not. Have you ever seen a person who’s children aren’t getting food. I have and I can assure you, they get pretty desperate and very violent.

    Good luck Greece. You’re going to need it. You might get the next tranche then I think you’ll be hung out to dry.

  90. Joseph Ryan Says:

    @Seafoid

    re Deutsche Bank Market Cap €22 billion.

    AIB and BOI should start putting ads in French/German newspapers.
    ‘Best capitalised banks in Europe etc’.
    The gombeen deposit flight to the continent should start to reverse itself pretty soon.

  91. AMcGrath Says:

    “You borrow money you make a promise to pay it back. Ireland, Greece: Pay your !%&@ debts. No money? Work harder.”

    We just have to learn that “Arbeit macht frei” I guess.

  92. ceterisparibus Says:

    @Joseph

    Bloomberg TV reporting tonight that Lloyds of London are removing their funds from European Banks and Moodys have downgraded 7 Italian banks.
    The S&P took fright and is off 2.65%.

    @PR Guy

    Yes, the Greek quagmire is getting to be more of a cesspit. The reduction in tax band is down to 5000 from 12,000 last year. That will definitely hit the poorest.
    The earlier reports were off, obviously, the George was going to announce them after visiting Christine. But what he is going to talk about is beyond me.

  93. DOCM Says:

    @ Joseph Ryan

    Is not what is now proposed, but not yet formally ratified, confirmation that Germany and France are being compelled to join the real world, as you put it ? That was one of the main points I was trying to make, coupled with the need for both countries to carry more of the burden of returning their banks to health (despite the attempt to spread this pain around).

    Merkel would not be in such trouble were the situation otherwise.

  94. The Dork of Cork Says:

    And whats stopping our Belfast brethern disappearing under the sea at Rosslare and reappearing at Fishguard……….. I hope.
    2009 figures
    Belfast Int – Gatwick : 309 ,976
    Belfast Int – Stansted : 293,077
    Belfast INT- Heathrow : 266,819
    Belfast INT – Luton : 246,905
    Belfast INT – Birmingham :155,920

    Belfast city – Heathrow : 522,676
    Belfast city – Stanstead :328,619
    Belfast city – Gatwick :215,485
    Belfast city – Birmingham :195,383.

    Me thinks the CBs lack that vision thing – or else really want deindustrialisation – it must be the later…. as you cannot be that stupid.
    Whats stopping the BoE & ECB giving MONEY and not credit to companies that can create something wonderful ?
    The Big picture thingy is that we are a Island – lets fix it while there is spare capacity – now is the time…………
    Debt is a illusion.
    http://www.youtube.com/watch?v=hU3a1PDtTYk

  95. Joseph Ryan Says:

    @Ceteris

    Trichet started out with a tree legged stool.
    A currency, a European banking system, price stability.
    There is now only one leg of the stool left, price stability.

    But all this was predictable. The European interbank system is finsihed for several years to come. It is very easily solved.

    1. Route all EZ interbank funding through the ECB, fully insured.
    2. Charge a premium 1% or so on all funds to fund insurance.
    3. Existing banks can be insured but a much higher premiums.
    4. Wind down bust banks using the fund, haircutting as you go with bondholders.
    5. Same procedure with all Government funding, but applies only for new government issues.
    6. Insist on large default of Greek bonds to start, probably about 75%, but Greece stays in Euro.
    7. Existing Gov bonds can be routed through central insurance facility for unredeemed bonds of all other countries (optional) , but high premium for existing bonds (say 10%-50%).

    In summary the debt must be washed out of the system. The best way to do this is offer insurance at a cost but at deep discount of original debt.

  96. Rich Says:

    Dork
    I do my best to follow your logic but I guess i need a dimensional shift to appreciate your angle. ‘Giving money’ towards a tunnel would reignite growth? The Chunnel barely makes money on the volumes it carries which are substantial, 17 million passangers and 15 million tonnes of freight.

    With money being thrown about for good causes but not necessarily self sustaining causes there will be no end to good reasons to print money

    Debt is real and useful just not when uncontrolled which in a way is what you are suggesting?

  97. The Dork of Cork Says:

    Then there is Waterford Airport……
    2010 figures
    Waterford to Luton : 64,887 – Luton airport is on the Midland Main line….
    Waterford to Birmingham international : 15,672 – this is on the west coast main line……
    If ever there was a massive collective investment project needed – this is it.
    WE ARE A ISLAND – WAKE UP TO THE POSSIBILITIES OF TECHNOLGICAL CAPITAL CONSTRUCTION EUROPE.
    The Victorians dreamed about such ventures.
    The majority of Irish air passenger traffic flows into Londons Hub airports and also such a hypotetical high speed train would pass big cities such as Birmingham – this makes it a ideal rail investment unlike the Seiken tunnel
    Think of all that kerosene saved……. 100 years of massive Kerosene consumption taken out of the system and redirected towards end use consumption.
    The ECBs & BoEs sister commercial banks can play in the credit sty again – but first you need core investment.
    Wealth will no longer magically come out of the ground – these adventures will be much more capital intensive then the easy money of the 20th century.

  98. grumpy Says:

    @ceteris

    I would be looking more at reaction to the size of helicopter Ben’s rabbit. Lots of people for whom staying long for the asset squeeze has become automatic are now starting to wonder “was that it?”

    Buy the rumour, sell the fact is an old classic and seems very appropriate currently. The flattener will undermine the banks in that if you go all the way back to 1991 the repeated soft bailout has been flooring short rates and recapitalisation through borrow short lend long. They were expecting Ben to do QE but not step so heavily on the bank’s toes.

    On the horizon is the end of a cul de sac for the right wing of economics that powers much of Wall St.

  99. The Dork of Cork Says:

    @Rich
    No the Channel tunnel Company itself may not make much money but the twin cities of London & Paris are Joined in ways hard to imagine – this creates synergies in very unexpected and unquantifiable ways.
    This is the true value of a utility.
    This can be for good or ill – for instance the Concorde link between London & New York created some very nasty creatures but it was very effective during the 80s oil glut.
    Also the credit hyperinflation has already happened – it cannot be stopped now – its in the past.
    Money will have to be spent to pay down the debt if they want the banks to continue to exist.
    So in this monetory system you must spend wisely – not spending will not save anything , if that is the decision everything will rot from the inside out.

  100. Eureka Says:

    Just a thought but has anybody been thinking about the firm that has been there through the subprime crisis, the Greek debt falsification crisis and the Euro crisis – yes – Goldmann Sachs! Gods work me arse!

  101. grumpy Says:

    @Eureka

    People who know Goldman are generally comfortable with the summary “these guys are not really gangsters or criminals, but if they spot a rat hole – they are going to go through it”

  102. Eureka Says:

    @Grumpy
    “people who know Goldman” = people who work for/with them.
    Don’t know enough to go through the criminal bit but think about it – betting against your own clients, selling “shitty” products, cooking Greeces books etc. We have all come to know Goldman and their work.
    They make the rat holes and they run through them because…. they are rats

  103. Ceterisparibus Says:

    @Grumpy /Joseph

    Bernake’s qe 3 failed to impress. I think the S&P fell about 3%. Asia will no doubt follow suit. As Grumpy says they are in the cul de sac but the question is how far in?
    The signals are flashing red and the train continues at high speed and still they won’t accept that Greece has to be sorted out for once and for all.

    Will the twist work. Hard to know. My own view is that it will send more and more funds to high growth area to avoid the stagnation of Treasury returns of about 1% eventually.

    But then who knows. Maybe sanity will prevail. In the meantime guard your assets and don’t believe any of the sh1t you are being fed.

  104. Bklyn_rntr Says:

    Problem with the twist is that it flattens the yield curve, how can the banks recap themselves on the carry (borrow at zero and lend at 4%) if the 4 falls to 1%…. I know it won’t be as extreme as that, but the curve flattening reduces (not eliminates) the carry gains in the banks in order to prevent a spike in long rates.

    So we are moving to a phase where the banks have to hurt or the whole facade crumbles…. Extremely complicated and delicate….

  105. PR Guy Says:

    Ominous rune reading about Spain and Portugal in the FT this morning.

    http://www.ft.com/cms/s/0/76d01926-e39a-11e0-8990-00144feabdc0.html#axzz1YeMqK5tq

    If you have problems with it being a pay wall, go and register. I think you get 8 free articles a month or something like that. Choose your articles well (avoid ‘how to spend it’ on Saturdays :-)

    So, the banks are cooked, Greece is toast and Christine is in a spot of hot water at the IMF. Even Irish exports are getting a roasting.

    One thing that hadn’t struck me before was that if some countries do leave the Euro, voluntarily or not, the massive problems this would cause for people with mortgages. Am I right in thinking interest rates would climb overnight if we went back to the Punt and there would be mortgage defaults left right and centre? And would the banks try and pull a fast one, telling us our mortgages are still in Euros and we will have to pay in Punts at the by then chronic exchange rate (didn’t something like that happen in Hungary and Baltic states?)

    Is there any upside, at an individual level, in breaking up and leaving the Euro? Do we know what the consequences would be for the average Irish Joe with a couple of kids and a mortgage with little disposable income left after paying the bills each month?

  106. Chris Says:

    @PR guy,
    This is what Roubini says on this
    “This process will be traumatic. The most significant problem would be capital losses for core eurozone financial institutions. Overnight, the foreign euro liabilities of Greece’s government, banks and firms would surge. Yet these problems can be overcome. Argentina did so in 2001, when it “pesified” its dollar debts. America actually did something similar too, in 1933 when it depreciated the dollar by 69 per cent and repealed the gold clause. A similar unilateral “drachmatization” of euro debts would be necessary and unavoidable.
    Major eurozone banks and investors would also suffer large loses in this process, but they would be manageable too – if these institutions are properly and aggressively recapitalised.”

    So people would be repaying their mortage interest in Drachma for the duration of their mortage. Their interest payments might be slightly higher, inflation would also be higher. Their debts would immediatly be lower in euro terms, they would also be inflated away.

  107. Chris Says:

    In the case of Greece leaving and drachmatizing its debts the German banks would be taking a loss and the German taxpayer would be paying to recapitalise them.
    In the case of Eurobonds German taxpayers will have to pay up too. Of course the banks want Eurobonds to keep them out of the loop.
    The only way German taxpayers don’t have to pay is continuing the current policy of austerity and asset stripping in the peripheries.
    In any case, that situation is clearly not sustainable for Greece, Ireland and Portugal and perhaps Italy and Spain. So German taxpayers are going to have to pay up eventually.
    The markets have realised that.
    We are are waiting for the penny to drop with the German taxpayer so we can get on with further integration.

  108. Chris Says:

    I wonder if the Germans/French will try to use the new changes to the ESM to recap their banks quietly at the expense of all EU taxpayers without having to sign up to any austerity ‘program’. That would just be going too far.

  109. Chris Says:

    Well actually it would be mainly at the expense of their own taxpayers, they still would get a ‘non-program’ loan though.

  110. Rich Says:

    Dont worry PR guy, mortgage default is not recognised in Ireland for populist reasons. Sure why dont we ask them nicely to pay back what they can – once they have looked after other bills like their two cars, private health insurance, multiple mobile phone bills, sky tv, broadband etc etc

  111. seafóid Says:

    @ PR Guy

    It would probably be like 1993? when Sterling left the ERM and mortgage rates hit 15%.

    The public sector gets a lot of stick over Croke park but mortgage holders are also cosseted and only have to pay nominal interest rates courtesy of the ECB . Bond yields are over 8% so mortgage rates would be north of 10% I imagine. That is just with the status quo.

  112. Rich Says:

    I’m not certain this panacea of the generous German tax payer will pan out in anything that a social disaster for Ireland (unavoidable no matter how we turn it). Various estimates on the impact to GDP of a Euro exit range from 40-60% reductions. When Ireland is forced to address the deficit in full, mortgage defaults in full and the further losses to banks that are inevitable when businesses and salaries are recalibrated to the new national income I would imagine that the fall in domestic GNP will not be far off the lower estimates of the Euro exit disaster scenario. Furthermore our growth prospects in the German dominated economy will be reduced beyond what will be possible with zero credit availability

  113. vinny Says:

    @PR guy – your last paragraph on the possibe/probable fallout for the ‘ordinary Joe/Jane’ of this current crisis is highly relevant and is not addressed in any forum – including this one – its all macro stuff – but the ‘real world’ is micro – businesses/farms/family units etc!
    Maybe it is all summed up by ‘socialised losses’ over the next three generations while a tiny minority escape unharmed – indeed prosper as a result of being bailed out – by the ordinary Joe/Janes!

  114. seafóid Says:

    The IT namechecks an IMF report that says

    ” debt crisis has generated some €300 billion in credit risk. This figure is €100 billion greater than previous estimates”

    € 300bn is peanuts compared to the minimum $2 trillion the Yanks have spent fighting a noun in Afghanistan and Iraq.

    I wonder what the the big great game picture is. How does 9/11 fit into it ? Who wants this breakup ? If the Yanks could spend $2 tn on a wild goose chase what’s €300bn? Or is it all just incompetence ?

  115. Yields or Bust Says:

    @seafoid

    Looks like the ESRI were doing the credit risk projections – the miss is about equivalent to the most recent census projection error !

    @PR Guy

    I think the actual answer to your question is that nobody really knows how the average Joe/Jane will fare when/if the Euro collapses.

    Sadly too many people over the past decade were either too stupid or arrogant to say ‘I don’t know’ when questions were posed to them. When asked in 2007 where would Ireland Inc be today if the following was reenacted.

    Question to Mr Neary : ‘Do you believe the banks balance sheets’ ?

    Answer: ‘Absolutely, the banks are sound the Directors are sound the borrowers are sound the lending models are sound, sure it’s all sound’

    Correct Answer: ‘I don’t know’

  116. grumpy Says:

    @seafoid

    You have that the wrong way round. Interest rates were raised to 12% to attempt to halt the depreciation, then, on one day to 15% at which point we were sure sterling was going to have to exit.

    Interest rates were reduced as Sterling depreciated. James Capel were forecasting inflation 12 months – 2yrs out as a result, of about 8.5%. They were the top rated economics team at the time, but they didn’t seem to understand that if you depreciate during a recession inflationary pressures may not really emerge.

  117. seafóid Says:

    Thanks, Grumpy

    I was into the Smashing Pumpkins and Ride at the time and didn’t have a mortgage. I just remember one of the wallas coming into the office and telling us the rate on his Killiney shoebox had gone up to 15%.

  118. PR Guy Says:

    @Chris

    “drachmatizing”

    Great word.

    It’s all getting very “drachmatic” and JCT is turning into a “drachma-queen” :-)

  119. PR Guy Says:

    Anyone actually working in ‘the markets’ out there today?

    I hear whispers of the French government considering taking action over their banks. Anyone else picking that up?

    I wonder if they are mixing up ‘France’ with ‘Qatar’ … or ‘Warren Buffett’?

  120. grumpy Says:

    @PRG

    Thatr was out yesterday. Post QE hangover, back to clueless politicians plus China dodgy today.

  121. seafóid Says:

    Obama is working on protecting Israel’s Jewish settlements at the UN anyway so who cares about the global economy ?

  122. Bond. Eoin Bond Says:

    @ All

    rocket Irish growth figures just released.

    GDP +2.3% Y/Y, +1.6% Q/Q
    GNP +1.1% Y/Y, +1.1% Q/Q

    Big upward revisions to previous quarters, Q1 GDP Q/Q +1.9% vs +1.3%.

  123. Yields or Bust Says:

    @Eoin

    So a slowdown from Q1 to Q2 on the revised number Q/Q ?

  124. Bond. Eoin Bond Says:

    @ YoB

    on GDP, yes, small slowdown, but basically all figures higher from previous or f’cast. Big bounce in GNP though, -3.0% q/q Q1 to +1.1% q/q Q2.

    Standard caveat remain in place here – quarterly Irish data very volatile, but good to see (a) decent growth in Q1 GDP being at least somewhat maintained and (b) positive GNP figure returning in Q2 (Q1 GNP neg print was first since Q4 2009).

  125. Bond. Eoin Bond Says:

    @ YoB

    interestingly, also the first back to back positive Q/Q GDP figures since Q3 2006.

  126. grumpy Says:

    Thanks Eoin, oddly enought cac – off 4.5% didn’t bounce on that ;-)

  127. Yields or Bust Says:

    @Eoin

    Given this is a Q2 number and the climate since 30th June to date has been less than inspiring so in keeping with all economic metrics we look to the Q3 number with significantly less optimism as there is no doubt that H1 2011 looks likely to be the better half.

    Equity markets have just seen another Euro collapse ghost. Not good.

  128. Bond. Eoin Bond Says:

    @ YoB

    you’re right, the release was terrible news…

    If there is indeed, as is likely, a generally poor global performance in Q3/Q4, at least we’re going in with much better momentum than the rest of the Eurozone, which almost universally had awful Q2 GDP outturns. AT no stage did i say we’re back into a boom, only that the economic performance in Q2 is much much better than expected. Difficult to disagree with that, hard and all as you try….

  129. Ceterisparibus Says:

    @Grumpy
    CAC -5.29% now.

    Latest on UBS …losses bigger than 2.3b reported.

  130. seafóid Says:

    Ceterisparibus

    The UBS CRO was previously chief risk officer at Lehman.
    What happened to them ?

  131. Ceterisparibus Says:

    @Bond Eoin Bond
    You are in danger of sounding like jto. The place is in meltdown mode today so I wouldn’t be getting excited about one quarter. Is Greece or the Fed causing this acceleration? Btw, no sign of him. (can’t do nice smileys like grumpy)

  132. Ceterisparibus Says:

    Ken Rogoff says the big danger now is a run on European banks. I believe that is already underway with the Lloyds of London and Siemens news. Bloomberg tv are reporting Euro banks cannot sell senior bonds and the majors are apparently rooting for corporate cash deposits in Asia. It’s that Chinese curse again.

  133. zhou_enlai Says:

    Off topic, for those who may be interested…

    Garrett Simons SC will be speaking on the legal aspects of the Bank Guarantee at the upcoming Rouhd Hall NAMA conference in the Westbury on 22 October 2011.

    The topics he will cover include:
    • The 3 Bank Guarantees
    • Restrictions on retrospective legislation
    • Bondholders and Deposit Holders
    • The Northern Rock Litigation
    • Subordinated Debt and The Credit Institutions (Stabilisation) Act 2010

    Garrett Simons SC previously railed against NAMA and the Guarantees and questioned the legality of giving Ministers so much power.

  134. Carson Says:

    “The UBS CRO was previously chief risk officer at Lehman.
    What happened to them ?”

    Bit misleading that. She was at State Street during Lehman’s crisis period. Left Lehman in 2002 I think. But still, the UBS trading loss was a shocking indictment of their risk controls.

  135. Ceterisparibus Says:

    Jurgen says countries that don’t abide by their MOUs should surrender their economic sovereignty.

  136. seafóid Says:

    A la recherche du temps perdu

    http://blogs.ft.com/the-a-list/2011/09/22/french-banks-could-tip-europe-back-into-recession-2/#axzz1YgecqplL

    Paribas are looking for a dig out in the Middle East according to George Magnus

    http://www.news.com.au/business/ireland-sought-libyan-bailout/story-fn7mjon9-1226013196144

    THE Irish government attempted to secure a multi-billion euro bailout for the country’s struggling banks from Colonel Moamar Ghadafi’s international investment fund in December but failed because Libya dismissed it as a low-level investment.

  137. Joseph Ryan Says:

    @Ceteris

    Jurgen:
    Making his way from the oxymoron title of ECB economist, to the next great dictator.

  138. seafóid Says:

    @Carson

    UBS risk management must have been desperate

    I went to a presentation by their auditors 2 weeks ago where they pimped their VaR model.

    http://www.ccfz.ch/files/rd_2_rickert-lambrigger.pdf

    They were moaning about regulation

    “• Risk taking becomes “disproportionally” capital intense and expensive”

    Grübel was too recently but seems to have stopped now.

    they also showcased the sophistication of the model

    “Complexity of the portfolio (and hence V ): need sophisticated front office pricing models”

    How do you model malfeasance ?

  139. ceterisparibus Says:

    Caution advised by CSO…from Reuters

    “The jump in quarterly GDP was fuelled by a 6.4 percent increase in capital investment and officials from the Central Statistics Office cautioned against reading too much into the figures.

    Ireland’s quarterly GDP data are notoriously volatile due to the inclusion of the earnings of Irish-based multinationals.

    The data reinforced the view that Ireland’s economy is on a two-speed track with a growing export sector compensating for a domestic economy still stuck in the doldrums due to an unprecedented housing crash and prolonged austerity measures.

    Gross National Product (GNP), seen by some economists as a more accurate indicator of the state of the economy because it strips out multinationals, rose 1.1 percent in April-June, broadly meeting expectations for a 1 percent increase.”

  140. grumpy Says:

    Italy / German spreads hit >4.1 today with ECB mopping up. Real liquidity rout, gold down >3.5%.

  141. seafóid Says:

    The ECB Einsatztruppen mopping up in Italy just like the Germans in 1943

  142. AMcGrath Says:

    @Eureka
    “Just a thought but has anybody been thinking about the firm that has been there through the subprime crisis, the Greek debt falsification crisis and the Euro crisis – yes – Goldmann Sachs! Gods work me arse!”

    You woke up the beast – Suds was on Morning Ireland listen – if you can without getting sick – to him tell us we need to cut more, and irony of ironies, given that without the fradulent accounting manipulation orchestrated and devised by GS it should not have been admitted to the EZ in the first place, that Greece is a major threat tousually Ok) never alluded to the murky (and now illegal) collusion between GS and the corrupt Greek gov officials in disguising and hiding it’s true deficit.
    http://seekingalpha.com/article/188715-did-goldman-help-greece-trick-its-way-into-the-eu

    1 hour 13 mins in (08:13)
    the Eurozone.

    Of course RTE (I think it’s Sean O’ Rourke who is
    http://www.rte.ie/radio/liveplayer2_av.html?1_real,http://dynamic.rte.ie/av/live/radio/radio1.smil,real,200

  143. AMcGrath Says:

    Sorry it got corrupted in transit :

    The last sentence should be:
    Of course RTE (I think it’s Sean O’ Rourke who is usually Ok) never alluded to the murky (and now illegal) collusion between GS and the corrupt Greek gov officials in disguising and hiding it’s true deficit.

    and the previous one should finish:

    ” ..that Greece is a major threat to the Eurozone

  144. seafóid Says:

    http://www.guardian.co.uk/business/2011/sep/22/global-economy-autum-2008-again

  145. Ceterisparibus Says:

    “The world is on the eve of the next financial crisis, with sovereign debt its epicenter, said Mohamed El-Erian, chief executive officer of Pacific Investment Management Co., which runs the biggest bond fund.
    The European Central Bank hasn’t put in place a “circuit breaker” to contain the region’s debt crisis, El-Erian, who is also Pimco’s co-chief investment officer, said at an event in Washington today.”

  146. grumpy Says:

    This via Alphaville. Karl wrt the potential use of efsf funds for Anglo, and fans of principled behaviour by France, might find the last bit quite interesting:

    “European officials look set to speed up plans to recapitalise the 16 banks that came close to failing last summer’s pan-EU stress tests as part of a co-ordinated effort to reassure the markets about the strength of the 27-nation bloc’s banking sector.

    A senior French official said the 16 banks regarded to be close to the threshold would now have to seek new funds immediately. Although there has been widespread speculation that French banks are seeking more capital, none is on the list.

    And here’s who made the cut. Or rather didn’t make the cut… Whatever, these are the banks that will be raising funds with a quickness:

    The list includes Germany’s HSH Nordbank and Banco Popolare of Italy…

    The other 14 banks on the list are: Espirito Santo and Banco Português of Portugal; Piraeus Bank and Hellenic Postbank of Greece; Banco Popular Espanol, Bankinter, Caixa Galicia, BFA-Bankia, Banco Cívica, Caixa Ontinyent, Banco De Sabadell of Spain; Nova Ljubljanska Banka of Slovenia; Cyprus’s Marfin Popular Bank and Norddeutsche Landesbank of Germany.

    The article notes that if private sources of funds are unavailable, then some governments (reportedly including the French) favour allowing the EFSF to inject capital into the banks. Other governments are less keen on the idea and want the individual nations to invest themselves. So there’s some fractiousness over the issue — shocking.”

  147. Joseph Ryan Says:

    @Grumpy

    “Although there has been widespread speculation that French banks are seeking more capital, none is on the list.”

    What or more to the point who is keeping these highly leveraged French banks off the bad boy lists!

  148. grumpy Says:

    http://www.theatlantic.com/business/archive/2011/09/is-irish-austerity-paying-dividends/245522/

  149. Desmond Brennan Says:

    ‘Omlettes require breaking eggs’

    Europe is teetering on diasaster…and is verging on a forced decision. John McHale of this parish told us all ‘shush, don’t be bothered’ in August:
    http://www.irisheconomy.ie/index.php/2011/08/21/not-so-stupid/

    John is of course chair of the ‘Fiscal Advisory Authority’ and a government advisor. Mysteriously we’ve no Economic Advisory Authority, and an ex quangocrat whio has been ridiculed on these pages over his ‘banking plan’ (Andrew McDowell), is chief economic adviser to the government

    I think it is time that people called time….whatever about modest fiscal improvements…people like Andrew and John seem to be out to kill the real economy, without any debate

  150. Dom K. Says:

    “re Deutsche Bank Market Cap €22 billion.

    AIB and BOI should start putting ads in French/German newspapers.
    ‘Best capitalised banks in Europe etc’.”

    Market Cap and Book value are two different things.

  151. PR Guy Says:

    Did anyone see Will Hutton on the C4 news last night? He was very alarmed (which is not like him) about the Euro situation. Thinks it will collapse and take us back to the 1930′s. He spooked me.

  152. seafóid Says:

    @ PR guy

    He was in the observer on sunday on the same theme

    http://www.guardian.co.uk/commentisfree/2011/sep/18/euro-crisis-recession-europe

    We are living through the most dangerous confluence of economic circumstances in modern times. Trying to pretend the interdependencies do not exist or that the collapse of the euro is the answer can only make matters worse. It is a straight choice: we do all we can to help each other or risk going down in what could be the worst economic contraction for a century.

  153. David O'Donnell Says:

    @PR guy Seafoid

    Should have listened to Evans-Pritchard ‘Telegraph’ on France-24 last nite – he had every bank in Europe ‘nationalized’ …. every shareholder wiped out …. he was salivating like a tea party hack at the hanging of a So-shalllllllllll-eeest

    The Sterling ultra_Roight and the Dollar ultra_Roight love to bash the Euro – in the mistaken belief that it makes their brand stronger – IDIOTS.

    & Christine – Ah Christine Christine The Vichy_Bankers’ Queen – she wants us all to recapitalise the lot of them – OK ALL BANKS ARE NOW CAPITALISED.

    Now is the TIME to trim the sails of the casino-bankers – the Quid (no pun intended) pro Quo is to ban Ban BAN all those toxic dodgy derivatives that have no citizen use-value whatsoever …. and the penalty for all who attempt to use them in future is to sentence them to 25 years of social welfare in Rick Perry’s Texas.

  154. hoganmahew Says:

    @grumpy
    I said the first EU bank stress tests were a fiasco, I said the second ones were too. How much credibility has been lost by attempting to fool the markets twice? Even the blusterers here only had one go at it before digging deep into our collective pockets. Likewise in the US, when spoof didn’t work, money was required.

    Are the pillar banks now amongst the safest in Europe?

  155. seafóid Says:

    @ DoD

    Christine was saying back in February when she was MoF in France that the markets had no idea about the reality of the situation in the French banks and that it was all a big misunderstanding.

    You lied
    You faked
    You cheated
    let the bubble burst
    all in all a three ring circus

    etc

  156. PR Guy Says:

    @seafóid

    I’m even more spooked now.

    I see ‘the markets’ shrugged off G20 assurances this morning and the FTSE has gone < 5000.

    I’m off to lunch…. I may be some time (I forget who said the ‘I may be some time’ bit. Was it Captain Scott?)

  157. hoganmahew Says:

    @PR Guy
    It was Oates. Get used to them, they’re cheaper than wheat…

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