recession we had to have

The Greece [and European] Crisis thread

2925 posts in this topic

Steve Keen has an interesting solution.

Its worth wading through the rest of the presentation as well.

His old "neoclassical economists" walnut gets a bit grating, but the information is relevant.

I hope I can embed this media clip of his powerpoint presentation

That's one of the points I always make. Saying that a loan of $105 can't be repaid with only $100 of in the system is ridiculous,.......money turns over.

Essentially money is a measuring device and as with a school ruler it can used over until it wears out. Money is not the true value, it is simply and accounting device.

Nor do the banks create money.......because if so they would never need to borrow it. If I have an apiary I would seldom buy honey or borrow it.

As for the 'banknotes' of the 19th century, they were 'pay bearer on demand' cheques for gold and silver. If a bank created notes unbacked by deposits, it ran the risk of being 'called' by bigger and better banks.

Edited by wulfgar

Share this post


Link to post
Share on other sites

Looks like the next round of fireworks should begin in the near future. As an aside, India got downgraded as well, so Australia must be on the cards down the track at some stage,

S&P downgrades Spain, calls for EU action

MADRID/NEW YORK, April 26 (Reuters) - Standard & Poor's on Thursday cut its credit rating on Spain by two notches, citing expectations the government finances will deteriorate even more than previously thought as a result of a contracting economy and an ailing banking sector.

The ratings agency, which downgraded Spain to BBB-plus from A, also put a negative outlook on the credit and said Spain's situation could deteriorate further unless ambitious measures were taken at European level.

"We think risks are rising to fiscal performance and flexibility, and to the sovereign debt burden, particularly in light of the increased contingent liabilities that could materialize on the government's balance sheet," S&P said in a statement.

Moody's Investors Service rates Spain at A3 with a negative outlook, and Fitch Ratings at A, also with a negative outlook.

It was the first downgrade for Spain since Prime Minister Mariano Rajoy took office in December.

Share this post


Link to post
Share on other sites

Looks like the next round of fireworks should begin in the near future. As an aside, India got downgraded as well, so Australia must be on the cards down the track at some stage,

S&P downgrades Spain, calls for EU action

So what countries are now left at triple A?

Is triple B, going to be the new level of 'triple A'?

Edited by Solomon

Share this post


Link to post
Share on other sites

The Euro Is Killing Southern Europe

Spain and Argentina faced essentially similar problems. Both emerged from dictatorship with reputations for pleasant climate, good food, fun people, bad macroeconomic management, and low productivity. And after floundering a bit, both hit upon a similar solution: outsourcing macroeconomic management.

Argentina’s strategy was a currency peg, a firm commitment enshrined in law that Argentine pesos would always be exchangeable at a fixed rate with American dollars. Spain’s strategy was to join the euro, technically a joint project of all member countries but universally understood as a way for countries like Spain and Italy and Portugal to sign up for German-style macroeconomic management. To underscore the point, the European Central Bank was located in Frankfurt, home of the German Bundesbank, rather than in the European Union capital of Brussels.

So what’s the lesson for Spain? Piggybacking on the dollar ultimately failed Argentina, because pegging to the dollar didn’t suddenly turn Argentina into the United States. Similarly, adopting macroeconomic policies made in Frankfurt and Berlin doesn’t give Spain Germany’s fundamentals, it just saddles Spain with policies that are designed for Germany. A full monetary union is not the same thing as a currency peg, and unwinding the euro would wreak even more short-term havoc than Argentina’s default. But an economically sovereign country at least has the opportunity to get things right, while a country shackled to another nation’s macroeconomic policies is basically left hoping for charity. If officials in Spain and elsewhere aren’t considering the possibility of quitting the eurozone, they should be.

Share this post


Link to post
Share on other sites

No wonder we're looking like goldilocks when compared to a lot of countries!

Teenage Wasteland: Teen Unemployment in U.S. at 24.9%, Greece and Spain Above 51%!

The report from the Department of Labor today was terrible. The U.S. economy should be creating 300k-500k jobs per month to achieve a robust recovery. But 115k jobs created isn’t cutting it.

But at 8.1% unemployment, the adult unemployment situation is rosy compared to the teenage unemployment: 24.9%.

This reminds me of the Who tune, “Teenage Wasteland” (known as “Baba O’Riley” with that monotonous synth intro). The U.S. is bad enough, but take a look at Europe. A true Teenage Wasteland.

Here are the teen (under 25) unemployment rates. Both Greece and Spain have under 25 unemployment at over 51%! Portugal is at 36.10% and Italy is at 35.90%.

Even France has a lower under 25 unemployment rate than the U.S. at 21.80%.*...

Share this post


Link to post
Share on other sites

I grew up in a town which had 25% unemployment for under 25's. I left.

Share this post


Link to post
Share on other sites

I grew up in a town which had 25% unemployment for under 25's. I left.

So all European teenagers should migrate to Germany and all teenagers in the US should migrate to Canada?

I'm waiting for politicians to start another world war - it has always fixed teenage unemployment in the past!! dry.gif

Share this post


Link to post
Share on other sites

So all European teenagers should migrate to Germany and all teenagers in the US should migrate to Canada?

I'm waiting for politicians to start another world war - it has always fixed teenage unemployment in the past!! dry.gif

Not sure what they should do now but when I go back home now and see people I grew up with living their lives I am sure I made the right decision then.

Share this post


Link to post
Share on other sites

So all European teenagers should migrate to Germany and all teenagers in the US should migrate to Canada?

I'm waiting for politicians to start another world war - it has always fixed teenage unemployment in the past!! dry.gif

Watch how many seats Golden Dawn get tonight in Greece and their membership.

Share this post


Link to post
Share on other sites

Watch how many seats Golden Dawn get tonight in Greece and their membership.

Greece is most likely to elect a party against austerity measures. Then the IMF will withdraw the bailout funds. Then they get kicked out of the Euro club and the other piggies might be tempted to follow!

Share this post


Link to post
Share on other sites

Greece is most likely to elect a party against austerity measures. Then the IMF will withdraw the bailout funds. Then they get kicked out of the Euro club and the other piggies might be tempted to follow!

Now a fait accompli looking at interim results on BBC. Pasok currently a clear third, Golden Dawn with seats and a mish-mash coalition of ideological enemies likely. Meanwhile in France, an anti-austerity govt and Sarkozy joins d'Estaing in history...

PS Currency markets opened a shortwhile ago and Euro gapping down over 1%. Risk off trades such as AUD getting a mini pounding (0.5%). Carry trades unwinding across the board. BOJ should be intervening by afternoon tea ;)

Share this post


Link to post
Share on other sites

BOJ should be intervening by afternoon tea ;)

Someone (?) shorting YEN now and in huge volume. Already rebounding 0.3%, haven't even finished morning coffee. Someone has the sense to realise that last night we moved significantly closer to another Lehmann moment via a PIIGSFUK sovereign default.

Share this post


Link to post
Share on other sites

Here's a cool interactive map of GDP in Europe.

i don't accept that one quarter of positive GDP means the technical end to recession. if a technical recession requires two negatives then i think it's fair to say it requires two positives to get out of a recession.

and that's just technical recession. if you look at Ireland it's clear they've been in recession for 4 years, but even by my definition they've only been in recession for 6 months.

Share this post


Link to post
Share on other sites

Here's a cool interactive map of GDP in Europe.

i don't accept that one quarter of positive GDP means the technical end to recession. if a technical recession requires two negatives then i think it's fair to say it requires two positives to get out of a recession.

and that's just technical recession. if you look at Ireland it's clear they've been in recession for 4 years, but even by my definition they've only been in recession for 6 months.

Thanks zaph.

That is very good.

Very helpful

What happened to Sweden? Down 2.0% on last quarter. Recession?

Some other countries I noticed are not far away either. Estonia, Romania, etc.

This next leg down, will be far worse than the first. There ain't no wood to burn in the fire.

Share this post


Link to post
Share on other sites

The sooner these countries leave the Euro and appropriately initiate lower value Francs, Drachmas etc the sooner they recover. The banking cabal with its hands up Merkel's skirts will push back but hang a few of them first.

Share this post


Link to post
Share on other sites

Found this link with a graphic of the greek election results.

linky

Anyone know greek politics? I'd like to know what sort of coalition can be formed that would welch on the austerity deal? The far right and the far left seem to have split the vote. It would be strange if these extremes formed a coalition. One or the other previous majors will need to capitulate.

Share this post


Link to post
Share on other sites

So how did the 3/5 auctions perform?

Francois Hollande has ten weeks to avert a French bond crisis

...Watch the French debt auctions on May 3 and May 16 carefully, says Sophie van Straelen from the French hedge fund consultancy Asterias.

If they go well, a President Hollande may start to think that bond vigilantes will stomach his big state romanticism...

Share this post


Link to post
Share on other sites
My own view is slightly different. The German deflation regime is - in the current circumstances - the greater threat to Greco-Latin societies, and to post-War comity in Europe. Sometimes you have to go through a cathartic trauma to break free.

This is something new? Ok, new strategy......this time keep out of the woods!

Share this post


Link to post
Share on other sites

There would be some mad scrambling going on in back rooms in the Greco world

Greece must be getting closer to......

miller-lite-dominoes.jpg

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!


Register a new account

Sign in

Already have an account? Sign in here.


Sign In Now