Comments on: Europe’s insoluble problems http://blogs.reuters.com/felix-salmon/2011/11/25/europes-insoluble-problems/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: traduceri daneza romana http://blogs.reuters.com/felix-salmon/2011/11/25/europes-insoluble-problems/comment-page-1/#comment-53528 Mon, 29 Sep 2014 13:57:35 +0000 http://blogs.reuters.com/felix-salmon/?p=11258#comment-53528 in Glitschka’s very celebrated guide, “Vector Essential Coaching: A scientific Inventive Procedure regarding Making Detail Vector Artwork, very well typically the hands-on course will certainly guide people via a step-by-step process to get developing about Glitschka’s really acclaimed publication, “Vector Fundamental Exercising: A scientific Creative Procedure with regard to Creating Excellence Vector Lady, very well typically the hands-on study course will probably information people via a methodical process with regard to getting So that they can get a majority of the perform posted on this website (eventually); currently I’m sharing an old task: the cacher for a departmental chili cook-off that I won a united states Gate design give intended for in 2010. Often the photography of the soup potatoes will be stock which i have a bit fun doodling through. Each of our Copy Publisher Charlie Barcus published often the duplicate, i mixed some web site from Outdoors Western Press, that is Ashwood Abridged along with Gatlin Striking, in addition to Lucas een Groot’s The combo coming from the Thesis typeface placed for any smaller sized duplicate. The backdrop texture and consistancy originated Von Glitschka’s guide Fall apart Crackle Shed.

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By: DanHess http://blogs.reuters.com/felix-salmon/2011/11/25/europes-insoluble-problems/comment-page-1/#comment-33628 Wed, 30 Nov 2011 21:24:08 +0000 http://blogs.reuters.com/felix-salmon/?p=11258#comment-33628 El Erian’s home country of Egypt is a total shambles economically and could sure use some leadership. It has none and yet El Erian is the world’s best.

If El Erian has any decency and patriotism at all (and he should since his father was an Egyptian diplomat and he owes much to his homeland) he would help lead his country out of an economic situation that is getting more dire by the day for his 80 million countrymen.

The real problem with the global economy is that younger countries like Egypt are so poor, meaning that as Europe ages, the slack is not picked up.

Great men like El Erian, instead of leading, whip up governments to do their bidding while profiting from the process. I suppose it is much less fraught than the processes of trying to squirrel away a fortune while actually leading a country.

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By: zhmileskendig http://blogs.reuters.com/felix-salmon/2011/11/25/europes-insoluble-problems/comment-page-1/#comment-33481 Mon, 28 Nov 2011 19:25:41 +0000 http://blogs.reuters.com/felix-salmon/?p=11258#comment-33481 Inflating away is just another way of saying defaulting away, just in a more socially acceptable way.

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By: trevorh http://blogs.reuters.com/felix-salmon/2011/11/25/europes-insoluble-problems/comment-page-1/#comment-33444 Sun, 27 Nov 2011 23:39:38 +0000 http://blogs.reuters.com/felix-salmon/?p=11258#comment-33444 @seymourfrogs

I think this crisis is not because of that kind of illiquidity. This crisis is in government bond. The kind of assets that you think is precisely ‘government bond’ in this case. Government bond is the thing that is now a third of what was paid. (Certain government wants it to be 0 of what was paid)

A side problem with this crisis is that we simply refuse to accept that we have been in a bubble. We need to deflate it. We don’t deflate to death, that’s bad. We deflate to reality. And we can only do this if everybody accepts some sacrifice (some little, some a lot), stop looking on someone else to take the sacrifices for you!

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By: seymourfrogs http://blogs.reuters.com/felix-salmon/2011/11/25/europes-insoluble-problems/comment-page-1/#comment-33443 Sun, 27 Nov 2011 22:52:00 +0000 http://blogs.reuters.com/felix-salmon/?p=11258#comment-33443 I thought the clearing Banks’ illiquidity was because they’d bought “assets” – land, buildings, etc, bundled or not – at a cocaine driven price, and now those assets are worth about a third (on average) of what was paid.

I wonder if there’s some way everything can shrink and (as far as the horizon) we all seem to be relatively unchanged.

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By: TFF http://blogs.reuters.com/felix-salmon/2011/11/25/europes-insoluble-problems/comment-page-1/#comment-33441 Sun, 27 Nov 2011 17:50:26 +0000 http://blogs.reuters.com/felix-salmon/?p=11258#comment-33441 Excellent points, ARJ.

Reminds me also of the story of the grasshopper and the ant. The ant toils away, the grasshopper borrows some of the produce to support its relaxed lifestyle. But what is there to borrow against? If the grasshopper wasn’t willing or able to support itself last year, it seems unlikely that it will be able to support itself next year either, even WITHOUT bond payments on top of everything else.

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By: trevorh http://blogs.reuters.com/felix-salmon/2011/11/25/europes-insoluble-problems/comment-page-1/#comment-33440 Sun, 27 Nov 2011 17:45:08 +0000 http://blogs.reuters.com/felix-salmon/?p=11258#comment-33440 ARJTurgot2

From my view, I disagree with you entirely.

Merkel is not saving just the bank. Whom are the banks keeping money for?
Right, it’s the people, the pension funds, etc…

If the banks collapse, the deposit collapse, bank run, the people with the deposit will need to be compensated by government insurance. They will need to call in central banks and the inkjet. And after that you have hyper inflation. And you know what often comes after hyper inflation already. Violence, chaos and possibly war.

Just wanting the banks to collapse seems to be shorted-sighted and jealousy minded thinking in my view (no offense intended). Yes I agree bank execs make too much money, and they need to be drag back to reality, but put them on an explosion is too dangerous for everybody else.

We should all think about how to peacefully deflate all the bubles that some of us unknowingly inflated, and some evil within us knowingly inflated.

And the side point of democracy, we have not reached near the perfect point where EVERY person is smart enough to make non-narrow minded decision in a democracy. So the system of perfect democracy is a flaw that will be exploited by some devil. If you want to see how ‘smart’ common people are, just look at the protesters, and of course: Black Friday chaos just passed. For now, we need technocrats who are smart enough to take care. The problem is finding ones that are sincere and capable. As we move closer to perfection, the population will be smarter and we will expand democracy further to best fit the situation. As I always love saying: Impatience for perfection will lead to utter failure, and it looks like we go in just that way.

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By: ARJTurgot2 http://blogs.reuters.com/felix-salmon/2011/11/25/europes-insoluble-problems/comment-page-1/#comment-33439 Sun, 27 Nov 2011 16:42:17 +0000 http://blogs.reuters.com/felix-salmon/?p=11258#comment-33439 I’ve come around to Dr. Merkel’s approach on this. She is faced with saving the banks or preserving democracy. The German People decided not to give the government the authority to bail out the EU, and the people are sovereign, not the government.

The EU Commission has lost contract with reality, and is now acting to save itself. Europe is not going to collapse, it will still be there tomorrow. Germany/France/Spain/Etc. are not going to go away, they will struggle but they will still be there in the morning. What is at risk is not the concept of Europe, but the concept of Europe as resident in a few unelected technocrats, and some over-compensated bankers who are facing a very severe loss of stature.

Nigel Farage is correct on this one, there is more at risk here than banks. Germany came to its democracy through a very hard path, but it got there. If it needs to flush the EUC and EUR keep it, so be it.

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By: Sechel http://blogs.reuters.com/felix-salmon/2011/11/25/europes-insoluble-problems/comment-page-1/#comment-33438 Sun, 27 Nov 2011 12:25:20 +0000 http://blogs.reuters.com/felix-salmon/?p=11258#comment-33438 Solvency and liquidity are related but different. In a solvency issue the party is under-collateralized, while in a liquidity issue is more of an inability to convert assets to cash regardless of cost. With regards to the banks we clearly have a liquidity issue built on years of regulatory gaming of capital requirements. We all know the big banks are insolvent(e.g. BofA, Dexia etc)

El Arien is arguing for a government(taxpayer) injection, but this ignores the fact that capital is available via bond holders. It’s because governments around the world have, for reasons I can only guess, decided to shield debt holders, with the result that banks have negative equity, are insolvent and in need of tax payer injections.

Not only have we done away with debt conversion of bank debt holders, but we’ve also done away with the double liability of stock holders.

When bond holders don’t have risk of loss, the bank managements have less reason to act prudently. This is just more corporatism. Lets’ not forget PIMCO is a debt holder of banks.

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By: TFF http://blogs.reuters.com/felix-salmon/2011/11/25/europes-insoluble-problems/comment-page-1/#comment-33437 Sun, 27 Nov 2011 11:27:43 +0000 http://blogs.reuters.com/felix-salmon/?p=11258#comment-33437 “It’s not a liquidity problem we are having, as you will see when the stockmarket jumps up by 10% again within a week or two, as it did in October.”

Isn’t this the definition of a “liquidity problem”? Solvency problems are not solved overnight.

“we never got through the crisis of 2009 and anyone who believes that we did simply drank the Kool-Aid.”

We got through the liquidity crunch. Solvency problems and fiscal imbalances take longer to solve.

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