Counterparties

By Nick Rizzo
November 29, 2011

Is it cheaper for Germany to bail out EU countries rather than leave the euro? — Washington Post

Weisenthal and Platt question the importance of debt-to-GDP ratios. It’s possible they didn’t read all of This Time Is DifferentBusiness Insider

James Surowiecki argues that Italy and Spain are still saveable — The New Yorker

While Wolfgang Munchau says the euro zone could be only days from collapse — DeLong

Daniel Kahneman: “Emergent weirdness is a good bet” — Freakonomics

“Fitch slams US indecisiveness, delays AAA rating decision” — FT Alphaville

Krugman gleefully quotes Greenspan getting everything wrong in 2005 — NYT

3 Connecticut Gold Coast money managers win $254 million from the lottery — Greenwich Time

The Silicon Valley startup that built the “matrix” behind the War on Terror — BusinessWeek

And a long, controversial, intriguing piece on the mysteries of l’affaire DSKNYRB

5 comments

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Is it cheaper for Germany to bail out EU countries rather than leave the euro?

Does anybody want to speculate on how long it will take Germany’s $100B+ trade surplus to evaporate if they leave the euro? I’m guessing less than a year. The only thing that would change that would be their economy collapsing, which would happen once they stopped exporting all those Mercedes’, BMWs, Porsches, Audis, and VW’s (the latter of which are the new Toyota. they are everywhere). and that would happen once their sticker prices increased by 30% or so.

Or they can just bail out the troubled states, like we do in the U.S. Some states pay way more in federal taxes (cough, California, cough) than they absorb in federal spending, resulting in a net transfer to the south and midwest, but that’s part of being a giant economic union.

Posted by KenG_CA | Report as abusive

The scatter plot of debt/GDP speaks for itself and does not require Wiesenthal to read someone else’s book. Slovakia has debt/GDP of 35% yet can’t fund itself at any price. The US has debt/GDP of approximately 100% (multiple thousands of percent if you extend current Medicare trends out to infinity, as some like to do) yet borrows 7 year money at 1%. And let’s not even get started on Japan.

Posted by johnhhaskell | Report as abusive

Weisenthal and Platt make the beginners’ mistake of starting with the assumption that a correlation would demonstrate causation (and the lack of correlation maeans no causation). I think there are any number of confounding variables in this so-called analysis.

Posted by Curmudgeon | Report as abusive

Or, there’s a huge difference between current suppliers and currency users.

Posted by djiddish98 | Report as abusive

wow. that NYRB story on l’affaire DSK is really cool. It reads like something outta “La Femme Nikita” and its ‘Plunge Protection Team’. I look forward to the DSK espionage movie.

Posted by dedalus | Report as abusive