| Author | Message | ||
     Ferris_von_bueller |
Collapse of the euro is 'inevitable': Bailing out the Greek economy futile, says FRENCH banking chief By Sam Fleming and Tim Shipman Last updated at 1:07 PM on 13th February 2010 The European single currency is facing an 'inevitable break-up' a leading French bank claimed yesterday. Strategists at Paris-based Société Générale said that any bailout of the stricken Greek economy would only provide 'sticking plasters' to cover the deep- seated flaws in the eurozone bloc. The stark warning came as the euro slipped further on the currency markets and dire growth figures raised the prospect of a 'double-dip' recession in the embattled zone. The bailout of Greece will only act as a 'sticking plaster' for the Euro crisis, the bank warned today. Claims that the euro could be headed for total collapse are particularly striking when they come from one of the oldest and largest banks in France - a core founder-member. In a note to investors, SocGen strategist Albert Edwards said: 'My own view is that there is little "help" that can be offered by the other eurozone nations other than temporary, confidence-giving "sticking plasters" before the ultimate denouement: the break-up of the eurozone.' He added: 'Any "help" given to Greece merely delays the inevitable break-up of the eurozone.' The alarming claim came a day after European Union leaders promised 'determined and co-ordinated' action to shore up Greece's tattered public finances, but disappointed traders by failing to provide specifics. Further details are expected early next week, but markets were in high anxiety yesterday amid fears political divisions among rich eurozone members could derail any rescue. The euro slid almost 1 per cent to $1.357 yesterday, meaning it has lost 10 per cent of its value since November. The pound rose to 1.14 euros. Earlier this week Business Secretary Lord Mandelson's claimed that the single currency had been a 'remarkable success' and that it remained in Britain's interests to join. David Cameron ridiculed that claim yesterday. He told the Tories' Scottish conference: 'Are this Government the only people in the country who still think that would be a good idea? Our deficit and debt are bad enough without the straightjacket of the euro. 'If I am elected for as long as I am prime minister the United Kingdom will never join the euro.' The French bank's warning was echoed by Mats Persson, Director of the Open Europe think-tank, which campaigns for reforms in Brussels. He said: 'The eurozone is facing a fully-fledged crisis. The Greece episode has made it painfully clear how flawed the euro project was from the very beginning. 'Even if Greece receives a one-off bailout it would not solve the real problem, which is the huge differences in competitiveness between the eurozone's richest and poorest members. Tory leader David Cameron said if he is elected, the UK will not adopt the euro. 'If these differences are to be evened out, the EU would need a single budget and common taxes so it can redistribute resources. 'One thing is clear, Britain made the right choice in staying out.' Mr Edwards argued that Portugal, Ireland, Greece and Spain are too economically weak to withstand the rigours of eurozone membership. Countries that are highly uncompetitive are normally able to slash interest rates and devalue their currencies to prop up their economies. But this is not possible within the euro, given its one-size-fits-all economic governance. The implication is that weak, peripheral eurozone members will have to suffer years of painful deflation and tumbling living standards, as well as draconian budget cuts, in order to adjust. Harvard University Professor Martin Feldstein, a long-standing sceptic on the euro, yesterday said the single currency 'isn't working' because member governments have no incentive to keep their public debts under control. There's too much incentive for countries to run up big deficits as there's no feedback until a crisis,' he said. Axel Weber, President of Germany's Bundesbank, warned the German economy will contract this year. The eurozone faces the danger of a 'doubledip' recession after Germany's economy retreated into stagnation. Figures published yesterday revealed that the countries who have joined the euro collectively grew a mere 0.1 per cent in the fourth quarter of last year - equal to Britain's own faltering performance. Germany was the biggest drag, recording zero growth in the final three months of 2009 after emerging from recession earlier in the year. Axel Weber, President of Germany's Bundesbank, warned this week there is a chance his nation's economy will contract in the first quarter of 2010, in part because of the severe winter, in a major blow to recovery hopes. The figures from the European Commission are a blow to Britain's embattled manufacturers, which count the eurozone as their biggest export market. France provided a bright spot in the report, expanding by 0.6 per cent in the fourth quarter-But Italy, Spain and Greece all registered contractions in their gross domestic product. Economist Martin van Vliet of ING Bank said: 'The paltry pace of fourth quarter growth makes crystal clear that the eurozone economy cannot yet stand on its own feet. 'The disappointing eurozone growth data are a sobering reminder that recovery from financial crisis led recessions tends to be slow and protracted, and might not prove very supportive in calming markets' fears about the region.' http://www.dailymail.co.uk/news/worldnews/article- 1250433/Greece-debt-bailout-EU-leaders-split-euro- crisis.html | ||
| Gohot |
Just like the global warming farce, it makes me wonder about all the christians take on this and the end days....remember 'sposed to be a one world currency etc. etc. the ten horns, So.... wheres that going christian buddies? | ||
| Indy_bueller |
That's scary. If Europe's economy takes a plunge, it will be the beginning of a "double-dip" for everyone. | ||
| Glitch |
Dang Richard, that was a bit harsh, not to mention uncalled for. | ||
| Hex |
http://www.nytimes.com/2010/02/14/business/global/ 14debt.html?hp "February 14, 2010 Wall Street Helped to Mask Debts Shaking Europe By LOUISE STORY, LANDON THOMAS Jr. and NELSON D. SCHWARTZ This article is by Louise Story, Landon Thomas Jr. and Nelson D. Schwartz. Wall Street tactics akin to the ones that fostered subprime mortgages in America have worsened the financial crisis shaking Greece and undermining the euro by enabling European governments to hide their mounting debts. As worries over Greece rattle world markets, records and interviews show that with Wall Street’s help, the nation engaged in a decade-long effort to skirt European debt limits. One deal created by Goldman Sachs helped obscure billions in debt from the budget overseers in Brussels. Even as the crisis was nearing the flashpoint, banks were searching for ways to help Greece forestall the day of reckoning. In early November — three months before Athens became the epicenter of global financial anxiety — a team from Goldman Sachs arrived in the ancient city with a very modern proposition for a government struggling to pay its bills, according to two people who were briefed on the meeting. The bankers, led by Goldman’s president, Gary D. Cohn, held out a financing instrument that would have pushed debt from Greece’s health care system far into the future, much as when strapped homeowners take out second mortgages to pay off their credit cards. It had worked before. In 2001, just after Greece was admitted to Europe’s monetary union, Goldman helped the government quietly borrow billions, people familiar with the transaction said. That deal, hidden from public view because it was treated as a currency trade rather than a loan, helped Athens to meet Europe’s deficit rules while continuing to spend beyond its means. Athens did not pursue the latest Goldman proposal, but with Greece groaning under the weight of its debts and with its richer neighbors vowing to come to its aid, the deals over the last decade are raising questions about Wall Street’s role in the world’s latest financial drama. As in the American subprime crisis and the implosion of the American International Group, financial derivatives played a role in the run-up of Greek debt. Instruments developed by Goldman Sachs, JPMorgan Chase and a wide range of other banks enabled politicians to mask additional borrowing in Greece, Italy and possibly elsewhere." | ||
| Moxnix |
Of the leading brands of paper money, America's is the most reliable. It has been around for two centuries. And it enjoys the full faith and credit of the United States of America. The euro, on the hand, is a recent innovation. It is paper money backed by more paper - the Treaty of Lisbon, from which member states may withdraw when they feel like it. This has led many observers to think Europe's money is inherently weak and unnatural. Nor does the euro enjoy the kind of dynamic, can-do management that the dollar gets. You can imagine Ben Bernanke turning up at the office at 7AM. Jean-Claude Trichet, Bernanke's couterpart in the EU, probably arrives at 11 and leaves after lunch. But which is worse - a currency that is controlled by people who are only marginally interested in keeping it up or one that is backed by people fully determined to make it go down? Last week, the aforementioned Mr. Trichet seemed hardly inclined to bail out the Greeks. Instead, he lectured them... "...belonging to the euro area, you...have an easy means of financing your current account deficit. You share a currency that is credible, so that you have a quality of financing that corresponds to that of a credible currency." He let it be known that the European Union could do just fine without them. Greece's GDP represents only 3% of the Eurozone (about the same as New York City's portion of US GDP). It is 3% the rest of Europe could live comfortably without, he seemed to say. But by Tuesday, there was hope that Mr. Trichet's heart may have softened. Or maybe it was his head. He was flying back from Australia early. German lawmakers were being told that they had 'more flexibility' to deal with the crisis than they had previously thought. After vague assurances on Thursday, investors were betting that a bailout deal would be forthcoming. Instead, Mr. Trichet should tell the Greeks to drop dead. There are 27 different nations in the European Union. And guess how many languages? Two-hundred and thirty. Spain alone has 6 official languages. But without doing any real research on the subject, I discovered one word which is common to all these languages: bailout. Yes, 'bailout'...spoken in hundreds of different languages and dialects...that lit a fire under the financial markets late this week. The embers were still hot yesterday; the Dow rose 106 points. Gold had it best day in weeks - up 18 bucks. But does a single bailout a real boom make? Will bailing out the spendthrift Greeks make American businesses more profitable? You know the answer. It won't. In fact, it will make them less profitable. What it does is allow the Greeks to continue spending in the style to which they've become accustomed. And if the Greeks are going to do that you can bet that the Irish aren't going to want cut back. Or the Portuguese. To say nothing of the Italians. And what about the English? Bailing out the Greeks is a big mistake. But it's a mistake everyone seems to want to make, especially when the bankers come out ahead. What did you think? Who do you think the Greeks owe money to? That's right, the big banks are behind this. They've got hundreds of billions at stake in Greece. If the Greeks can't pay, the banks take a hit. Since no one wants the bankers to take a loss - except for me - once again, the feds are coming to the rescue. Oh...why does this make US businesses LESS profitable? Well, it's a marginal thing. But what we're witnessing is a shift of economic power away from the private sector towards the public sector. Private businesses no longer borrow like they used to. Now, the feds do the borrowing and the spending. That leaves less capital...and less spending power...in private hands. Ergo, businesses will find it harder to make money. They'll also find it harder to make money because interest rates will rise. Instead of letting the bad credit risks default, the feds weaken all credit. They're giving debt a bad name, in other words. The risk of default for the particular country goes down; the risk of default of the entire system increases. After all, the debt doesn't disappear. It has to be paid by someone. Sooner or later. Guess who that will be? | ||
| Blake |
Huh?  | ||
| Gregtonn |
The thing that really pissed me off in that article was use of the term "one off". For some reason over past decades the term "one of" as in "one of a kind" has been bastardized to "one off". I blame the Brits.  G  | ||
| Jon |
Gohot, You call out for Christians to give an answer to your assumptions not realized? You sound like an idiot...ok, well if not an idiot, then something like an idiot. So do tell how all christian believe what you say they do and how are all you "buddies". Do tell. (Message edited by jon on February 14, 2010) | ||
| Ferris_von_bueller |
remember 'sposed to be a one world currency etc. etc. the ten horns, So.... wheres that going christian buddies Not all Christians believe that. The books of Daniel and Revelation are prophecy and thus open to interpretation. Some believe the prophecies have already come to pass during the Roman Empire. | ||
| Crusty |
THE SKY IS FALLING!!! THE SKY IS FALLING!!! | ||
| Cityxslicker |
I hope they all flee portugal, I dont really want the traffic  | ||
| Moxnix |
The sky is, indeed, falling. So is the Euro. When prices drop (deflation), it's a depression. When companies cannot borrow money, people lose jobs. | ||
| Ferris_von_bueller |
Crusty, sometimes the sky does indeed fall. The world is in a precarious position, financially. | ||
| Johnnylunchbox |
It's amazing that a country the size of the US has maintained a pretty homogeneous sense of nationalism (identity is maybe a better word?). Despite the displays of differing political inclinations such as those we commonly see here (but by no means limited to here) on this board, as a nation we all get along pretty well. We cannot underestimate the power of this solidarity - socially and economically. Thank God (or whoever it is you pray to) for what we have. In my limited experiences of traveling and living in parts of Western Europe I am struck by how Europeans are so afraid of their similarities to each other. There is a lot of cross-pollination of culture, yet people in Europe are always so eager to differentiate themselves from their neighbors. They (Europeans) will never in our lifetimes have what we have - for better or for worse. | ||
| Crusty |
Crusty, sometimes the sky does indeed fall. The world is in a precarious position, financially. What's the worst that will happen? What can I do to improve the situation? Bear in mind that I spent a fair amount of time as an adult living as a tramp. I've been homeless a few times. I've slept under bridges and eaten in soup kitchens. Do you honestly think I should spend a lot of time worrying about things that I have abso-fraggin-lutely no control over? Should I get worried every time some "Expert" starts screaming that the End is Near? Back in the early '70s I read a book that offered concrete evidence that by 1989, concentrated sulphuric acid would be raining down on major cities and would kill thousands at a stroke. We're more than 20 years past that deadline, and I haven't seen it yet. I grew up with the Bomb. I remember "Duck and Cover" drills from grammar school. I also remember reading about "Professor No and the Prophets of Doom" in my 12th grade religion class. So, while some may get great mileage out of worrying about things they have freakin' no control whatsoever over, I get better sleep worrying over how I'm going to get Homecoming farkles made, and is three weeks enough time to attend two separate Rallies, see Mt. Rushmore and Glacier National Park. | ||
| Rex |
Hopefully all of the christians will be caught up before all of that happens. | ||
| Teeps |
+1 Crusty, I remember as a kid, during the Cuban Missile crisis, going to bed wondering if I'd wake up in the morning. And, if did wake up, what would the world be... Haven't worried or planned anything beyond one day, since then. | ||
| Swampy |
Yeah, I am an old effer myself, growing up in the post war era has lead me to make some really poor decisions based on percieved global threats. I might have even thought it a worthwhile endevor and make a plan because I never thought I was ever going to get this old, the world would have ended by then. So that is what Pisses me off the most, "F" the global warming religion, burn a tire and go make money. Put a lawyer to their place! | ||
| Sifo |
Collapse of the euro is 'inevitable': Bailing out the Greek economy futile, says FRENCH banking chief | ||
| Oldog |
wheres that going christian buddies? at some point in the future things are going to get realy realy bad. If you believe in the christian bible and what it says, the prophesy indicates in general terms that a general world wide economic collapse will happen giving rise to one world currency, and a demonic head of state this person will make, Stallin, Hitler, and Husein look like angelic quire boys, The world will go thru terrible troubles part way thru the "anit christ's" reign, till the second comming, When the Christ will return and deal with the evil one and satan many folks over the generations have held the belief that the end was happening in their time. If you are concerned / Curious I suggest that you join a bible study group with some devout christians and ask questions, they will happily share the information with you, deciding what you want to do with it is up to you. Not all of us are wild eyed telivanjizing-zelotwacconuts, } there is also a school of thought that says that many of the things in revolation are symbolic, so for example the beast with 7? heads and ten horns is thought to be ( by some ) the EU.. I dont worry to much ultimately God is in charge.. He lets me live in a nice home and ride my buells, Pretty sure that he loves us as it says L8R | ||
| Cityxslicker |
new elections in Ukraine.... a pro Russian hardliner is apparently claiming victory, the incumbant is claiming ballot rigging | ||
| Throttlepansy |
The thing that really pissed me off in that article was use of the term "one off". "One-off".. as in unique, singular. "is that car mass-produced?" "...No, it's a one-off..." Got to get the lingo, old boy...}} BTW, lots of people post links from the "Daily Mail" here. Wouldn't you rather use a newspaper? Hee-hee.... | ||
| Gregtonn |
See I told you it was the Brits!  G  | ||
| Throttlepansy |
Blast! Fell into the Elephant trap.....  | ||
| Strokizator |
Crusty, the only thing I get from these news items is that our own gov't shouldn't be traveling down the same paths as are the PIGS (Portugal, Ireland, et al)of this world. Our own national debt is unsustainable and as you and I are nearly the same age, we should be worried that the things we were counting on for retirement (SS, 401(k), home equity, etc) will be worthless or none-existent. The point of discussing the situation in other countries is that we should learn from their mistakes. I, for one, am tired of people saying we should be more like Europe; a place that my grandfathers on both sides couldn't wait to leave. | ||
| Gohot |
jon that so went over your head.....Ferris knows what I'm talking about....peace bro  | ||
| Moxnix |
The dubious "PIIGS" club - Portugal, Italy, Ireland, Greece and Spain. Allowing Europe's PIIGS to feed at the public trough will undoubtedly undermine credibility in the already embattled Euro. (The sixteen- nation currency currently trades at an 8-month low.) Trichet & Co. can cut their swine loose...or they can follow them over the cliff. The Peterson Foundation commissioned a rigorous national poll by Hart Research Associates and Public Opinion Strategies in late March 2009. They wanted to see whether the recent hard times had made people in the U.S. more likely to accept reforms. And the answer was yes. Above all, Americans told them that they want to get the economy back on track. But their second priority for the Obama administration was somewhat surprising. They wanted the president and the Congress to address our escalating deficits and debt levels. 2/3 of the stimulus money has not been spent. We could save our children's future by simply not spending it and not increasing the national debt by that amount. Of course, the party in the White House is going to start spreading it around congressional districts in the coming summer and fall to influence elections through a "jobs" program. Buying votes with counterfeit money is what politicians do best, here and abroad. |
