Comments on: Europe’s dangerous new phase Sat, 21 Jun 2014 15:30:06 +0000 hourly 1 By: frf Mon, 01 Aug 2011 04:32:15 +0000 I find it particularly amusing how suddenly a compromise is reached just in the nick of time before we default. I honestly wonder if all the hubbub was a political ploy. It seems that way the Congress and the President bickered like abunch of adolescent young people over such vital issues like like our economy and the debt ceiling makes one wonder if anything can be done smartly prudent for the good of our nation. Quite honestly my next greatest concern will Congress and the President be able to smartly and honestly and prudently put compromise into play over the next few years.

By: lisandro Tue, 19 Jul 2011 12:01:25 +0000 A masterful discourse by Mr. Summers on what are the essential wrongs of the Euro and EU governance. Congratulations. I particularly liked the swipe at politically driven arithmetic versus arithmetically driven politics. The whole Euro edifice is built on politically driven arithmetic and has deep and valid historic roots. Mr Helmut Kohl and Mr Mitterrand decided to risk it, knowing full well they were as blind to markets and confidence as much derided leaders from autocratic countries. At the time, I agree the risk was well worth taking but with current leaders’ backgrounds, the Euro stands little chance. Just yesterday I read that in 2010 Mr Sarkozy sniped at Mr Trichet with Mrs Merkel in attendance, when Mr Trichet went about the need for systemic confidence when asking private creditors to contribute to the Greek bailout. Mr. Sarkozy’s snipe was that Mr. Trichet was listening to much to bankers, while they (Sarkozy & Co) were answerable to the public. How much more arrogant can you get? France herself is a big debtor and runs high budget deficits. Where is Mr. Sarkozy borrowing from? From people he commands to lend his country money? And how has he been explaining the budget policies of his country over the last 20 years? What does it say about our democratically elected leaders when they pursue policies dictated by political dogma rather than economic common sense? How much different are they from the Chavezes of this world? At best, they are irresponsible, at worst they are blind to free markets and the accountability of the individual. By all means punish gullible private investors but not when you were the prime driver for their gullibility in the first place. Mr. Sarkozy rode the free Euro cart of deep capital markets, low interest rates and low inflation long enough to now shoulder responsibility for the mess as well.

By: DutchChinaman Tue, 19 Jul 2011 02:25:48 +0000 Larry summer is the man who:

1. Deregulated the US financial system
2. Blocked useful people who were trying regulate and create transparency concerning derivatives yes the same financial products that dumped the whole world into recession.
3. Was one of the responsible people arguing it be a great idea for banks to be allowed to leverage themselves up to their neck (33-1).

Cant even believe this guy is still a advisor to Obama..crazy.

As far as Europe, politician have to get their act together and just realize that mainly the countries in trouble have been living above their means for the past 10 years, and will all default in time if nothing gets done.

But with politics and economics in the mixture like this something is bound to blow up, the north isn’t going to be taking care of the south forever.

By: breezinthru Mon, 18 Jul 2011 23:48:09 +0000 The Summers 4 Point plan sounds great for the banks. I have no quarrel with Points #1, #2, and #4, but I have a big problem with Point #.

Under Point #3, banks can take any risks they wish to take and hoard the profits that those risks engender until a collapse similar to or greater than the 2008 collapse occurs and “no matter what”, those banks will not be allowed to fail.

The only way failures of great magnitude can occur without causing banks to fail is by shifting the cost of massive failures to the public.

The public needs a banking system that functions, but they also need a system that fears failure. Shifting the cost of failures to the public leaves banks and their management with unearned solvency and ludicrous bonuses and it leaves the public with poverty, reduced standards of living, austerity measures, and despair.

Mr. Summers, please step out of your academic ivory tower long enough to take a good look at the harm Point #3 has already wrought upon the American people and in the rest of the world.

You have some good ideas, but Point #3 is a deal breaker, perhaps the kindling for a future war.

By: colt1210 Mon, 18 Jul 2011 21:15:44 +0000 Larry Summers is part of the problem not the solution.

By: Indus88 Mon, 18 Jul 2011 19:15:12 +0000 Summer’s analysis is wishful thinking and beside the point. What he is advocating is effective Europianization of individual country debt. Apart from the huge moral hazard this creates in the absence of federal fiscal policies, it is not wanted politically by those who would have to provide the money. Greece and other countries if they cannot sustain participation in the common currency will have to exit until their economies have been restructured. For the rest of the Euro area the problem is not the country debt, but the stability of the financial system which would need to be protected.

By: TomKi Mon, 18 Jul 2011 18:32:26 +0000 Does Larry Summers know no hubris?

Larry’s economic analysis and forecast performance on the U.S. economy over the past 2 decades has been most dismal. His accomplishment in government is a subject of endless bewilderment, even outrage. After all, Larry was a participant with the failed-maestro Greenspan to deregulate financial services to the point of absurdity, and indeed promoted recklessness.

With such as sorry resume, Larry now pops over the Europe and offers his considerable ‘wisdom’ on the complex European situation. He even lectures European leadership on basic economics as if they were his students. Then he, a failed American economist, proceeds to proclaim “it now threatens both European integration and the global recovery”. Larry Summers assigns to himself the considerable genius of what will or will not sustain European integration, as if he was a founding father of the EU.

Does Larry hubris knows no bound?

By: Ocala123456789 Mon, 18 Jul 2011 16:42:58 +0000 extreme leftist policies killed the economies… aging population without any future… sad to be european… they are lazy enough to give birth… a doomed society…

By: notRMusgrave Mon, 18 Jul 2011 15:45:51 +0000 Bottom Line: Banks pay; or govts pay:

i) Banks won’t pay until 11:59 (cf. Lehman);
ii) Summers’ solution assumes banks go for (i), which is individually irrational; so,
iii) If you want a solution on Summers’ timeframe => govts + the IMF will have to cough up more money (think TARP II).

Summers’ solution is fairer, but assume banks take near-term pain over the long-run. In both scenarios, bank stock prices fall.

By: changeling Mon, 18 Jul 2011 14:24:27 +0000 Mr.Summers, your emphasis on ‘confidence’ is worrisome. We all know by now that statements of confidence by our politicians need to taken with a large grain of salt. An emphasis on facts and transparency would serve us better. Uncoupling national sovereignty from national currency was a bad idea all along (we would never do it). We are witnessing the neccesary demise of the Euro. I say, let nature run its course. Further intervention of any sort only delays the inevitable break up.