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The glitch was human. ceebs and I seem to have got our wires crossed over his replacing me for today's Salon that I was not available to do.

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Oct 15th, 2012 at 01:54:43 PM EST
[ Parent ]

Re: Monday Chat (4.00 / 3)

Eurointelligence Daily Morning Newsbriefing: Grexit postponed (15.10.2012)

German newspapers report that Angela Merkel and Wolfgang Schauble have decided against a Greek exit in the foreseeable future; Suddeutsche said that Schauble is effectively providing a guarantee to the Greeks that they can remain in the eurozone; frantic efforts are under way to plug the Greek budget gap; Jorg Asmussen has proposed a debt repurchase scheme, but Schauble says there are many unanswered questions regarding such a scheme; other options under discussion are the issue of T-bills and an extension of the timetable for a primary surplus target; the Greek government and the troika are hoping to reach an agreement on the 2013 budget ahead of Thursday's EU summit; Heike Goebel says Schauble has lost all credibility through his U-turn; Willem Buiter says a Greek exit will happen later, but it will happen; Spain seeks a 200bp maximum spread guarantee as a condition for applying for a bailout; Spain's holiday weekend was dominated by Catalan independence; Bart de Wever's Flemish separatists came out top in the regional elections in Flanders, and de Wever himself is now likely to become mayor of Antwerp; the troika is unhappy about how the Irish government is implementing austerity; Olivier Blanchard says the German anti-inflation position lacks logic: if you support a eurozone-wide inflation target of 2% and stronger competitiveness of the south, you must logically accept a higher inflation rate in the north; banks are rushing to issue tier-two debt ahead of a Basel III deadline; Italy's commercial real estate market is hit by the recession; Eugenio Scalfari says that Italy's last hopes rest in President Napolitano; Luca Ricolfi says Mario Monti is unbelievably inequitable; Portugal will introduce its austerity budget today; Wolfgang Munchau, meanwhile, says the economic evidence against austerity at a time like this is overwhelming.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS

by Migeru (migeru at eurotrib dot com) on Mon Oct 15th, 2012 at 04:39:23 AM EST

Well, we know how long the foreseeable future is.

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sapere aude

by Number 6 on Mon Oct 15th, 2012 at 05:36:47 AM EST
[ Parent ]

Suddeutsche said that Schauble is effectively providing a guarantee to the Greeks that they can remain in the eurozone;

To whom are they addressing ... the Greek politicians or the Greek people? If I was an ordinary Greek citizen what would be my take on this?

http://www.youtube.com/watch?v=_wp4O7v5320

by THE Twank (yatta blah blah @ blah.com) on Mon Oct 15th, 2012 at 07:37:02 AM EST
[ Parent ]

Re: Monday Chat (4.00 / 3)

The assets formerly known as Greece.

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sapere aude

by Number 6 on Mon Oct 15th, 2012 at 07:53:24 AM EST
[ Parent ]

That's an interesting perspective ... let me think about that.

http://www.youtube.com/watch?v=_wp4O7v5320

by THE Twank (yatta blah blah @ blah.com) on Mon Oct 15th, 2012 at 07:57:10 AM EST
[ Parent ]

Eugenio Scalfari says that Italy's last hopes rest in President Napolitano;

Or what? Godzilla attacks Rome?

http://www.youtube.com/watch?v=_wp4O7v5320

by THE Twank (yatta blah blah @ blah.com) on Mon Oct 15th, 2012 at 07:47:20 AM EST
[ Parent ]

Willem Buiter says Grexit is only postponed
Willem Buiter (hat tip FT Alphaville) is sticking to his view that Greece will ultimately have to leave the eurozone - though later than he originally envisaged.
"We still believe that increasing austerity fatigue in Greece, continuous missing of deficit targets and the ensuing stalemate in the negotiations between the Greek government and its official lenders will ultimately lead to a suspension of EFSF/IMF funding which, in our view, will eventually lead to Greek banks being cut off from Eurosystem funding. Without virtually any domestic resources available, we believe the only way out for Greece would be to leave EMU and start printing a new currency to fill its funding gaps."

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS

by Migeru (migeru at eurotrib dot com) on Mon Oct 15th, 2012 at 10:02:53 AM EST
[ Parent ]

More Willem Buiter (4.00 / 3)

FT.com: Only big debt restructuring can save euro By Willem Buiter on October 15, 2012

During the summer there were a number of developments justifying optimism about the euro's survival chances. Since late September, however, the euro area's political leaders have done all they can to dash these hopes.
...
To save the euro, a faster move towards full banking union is needed.
This means the ECB becomes supervisor of all euro area banks, there is a single eurozone-wide bank resolution regime and one deposit guarantee regime and fund, covering redenomination risk, too. Banking union is necessary to restore the eurozone's monetary transmission mechanism, destroyed by pernicious feedback loops between weak sovereigns and banks and national banking supervisors in the core imposing de facto capital controls disguised as prudential regulation.
Also necessary to save the euro and create the conditions for a resumption of growth is a restructuring of the debt of the most likely insolvent sovereigns - Greece, Portugal, Ireland, Cyprus and possibly Spain, Italy and Slovenia. Austerity fatigue in the periphery and growing bailout fatigue in the core mean that the ECB/euro system is the only Santa Claus capable of filling the solvency gaps of sovereigns and banks in the euro area. However, any attempt by the ECB/euro system to play this role on a sufficient scale to make a material difference would cause an exit of the strong, who reject the ECB as an open-ended Santa. The coming year will be a lively one.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS

by Migeru (migeru at eurotrib dot com) on Mon Oct 15th, 2012 at 10:05:29 AM EST
[ Parent ]

Re: More Willem Buiter (4.00 / 2)

Well, they might consider 'restructuring' the debt held by core country banks, debt that should never have been allowed to be created, debt that mostly reveals the ease with which large financial players can play 'regulators' in small countries and, most of all, debt for which there is little hope of repayment due to the economic death spiral which attempts to repay are producing. But that would involve the telling of some ugly truths about core country actors.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Oct 15th, 2012 at 01:48:30 PM EST
[ Parent ]

"austerity fatigue" ???

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin

by Crazy Horse on Mon Oct 15th, 2012 at 11:03:47 AM EST
[ Parent ]

Depending on who says it, it's probably polite for 'lazy, shiftless, non-creator, moocher'.
You know, people who cannot handle simple things like not sleeping indoors or eating.

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sapere aude

by Number 6 on Mon Oct 15th, 2012 at 11:06:07 AM EST
[ Parent ]

Pwn3rship society fatigue (4.00 / 2)

"Austerity fatigue" is what happens when you don't "own the policy".

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS

by Migeru (migeru at eurotrib dot com) on Mon Oct 15th, 2012 at 11:29:28 AM EST
[ Parent ]

Re: Pwn3rship society fatigue (4.00 / 3)

yes, it's pretty tiring, paying the rent on a policy you don't own.

_{It is rightly acknowledged that people of faith have no monopoly of virtue
- Queen Elizabeth II}

by eurogreen on Mon Oct 15th, 2012 at 11:33:51 AM EST
[ Parent ]

Re: Pwn3rship society fatigue (none / 1)

The polite term for that rent is 'premium'. According to the dominant paradigm the premium is for the very considerable risk the lender undertook. And don't even consider raising the question of 'prudence'. These lenders are, by definition, prudent. It is the borrowers who are feckless.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Oct 15th, 2012 at 01:52:22 PM EST
[ Parent ]

At this point the issue of Greece and the Euro has become so distracting and drawn-out that an actual exit in my opinion is best for everybody involved hands-down.

The fact is that Greece entered to the Eurozone fraudulently to begin with - that alone should be sufficient justification for removing them while providing a cover against precedent for other 'faltering' Eurozone partners.

What of the debt? Greece's debts are actually not that large considering the scale of the Eurozone - and again, mostly they are owed to the rest of the Eurozone. Solution? The Eurozone should completely buy them out of those debts, IE pay themselves off. Then kick Greece out - let them worry about the Drachma conversions, etc. If you take that issue out of play then removing a member from the zone becomes far less damaging.

Removing uncertainty and thus risk is the most important part of restoring financial stability and credibility. The problems of Spain are very different from the problems of Greece at their core. At this point does it not appear that removing Greece from the Eurozone would be addition-through-subtraction? That much seems obvious to me.

Take the write-down. Blame Greece, who cares. Let them sort out their problems.

Would somebody care to explain why this would be a problem? In my view even the total cost of all Greek public debt in Euro's is a bargain to make this problem go away.

As for Greece, it's the fresh-start they need.

by paving on Mon Oct 15th, 2012 at 02:09:51 PM EST
[ Parent ]

The fact is that Greece entered to the Eurozone fraudulently to begin with - that alone should be sufficient justification for removing them while providing a cover against precedent for other 'faltering' Eurozone partners.

I am reminded of this from Spiegel: Operation Self-Deceit: New Documents Shine Light on Euro Birth Defects (05/08/2012)

In response to a request by SPIEGEL, the German government has, for the first time, released hundreds of pages of documents from 1994 to 1998 on the introduction of the euro and the inclusion of Italy in the euro zone. They include reports from the German embassy in Rome, internal government memos and letters, and hand-written minutes of the chancellor's meetings.
The documents prove what was only assumed until now: Italy should never have been accepted into the common currency zone. The decision to invite Rome to join was based almost exclusively on political considerations at the expense of economic criteria. It also created a precedent for a much bigger mistake two years later, namely Greece's acceptance into the euro zone.
Instead of waiting until the economic requirements for a common currency were met, Kohl wanted to demonstrate that Germany, even after its reunification, remained profoundly European in its orientation. He even referred to the new currency as a "bit of a peace guarantee."

The whole point of the Euro for Germany was to lock its EU trading partners into an exchange rate regime that would bar them from "competitive devaluation". So it would have been self-defeating for Germany to exclude Greece or Italy.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS

by Migeru (migeru at eurotrib dot com) on Mon Oct 15th, 2012 at 03:23:22 PM EST
[ Parent ]

I suppose that is where you draw the line then - the Eurozone itself let Italy in - the fraud is theirs. Greece, on the other hand, appears to have run its own game.

I think the symbolic move would mean far more than the balance-sheet moves. Greece has a problem that is bigger than the Euro. Free Greece from the chains of the Euro.

by paving on Mon Oct 15th, 2012 at 04:19:15 PM EST
[ Parent ]

Well for one if you are willing to do what it takes to allow the Eurozone to survive a Greek exit you might as well do it now. The policies that have destroyed Greece and are on the verge of destroying Spain will destroy everything else as well. If you reverse them you can have a currency union including Greece. If not you can have a civil war.

Von überall könnte das Volk, Urbrut alles Undemokratischen, Zelle des Terrors, über die gewählten Hüter von Wachstum und Wohlstand® kommen. - flatter

by generic on Mon Oct 15th, 2012 at 03:54:33 PM EST
[ Parent ]

Exactly - the time to act is definitely now. The existing Eurozone minus Greece will be fine, and Greece can function perfectly well without the Euro.

by paving on Mon Oct 15th, 2012 at 04:20:03 PM EST
[ Parent ]

Re: Monday Chat (4.00 / 4)

The existing Eurozone minus Greece will be fine

The largest part of the problem is political, not financial or economic. You are right that it would be much better to just write off Greek debt, especially for the Greeks and for the European economy. But then the hit would have to be taken by the banks who lent the money. They would be insolvent and dealing with that cannot be done in a politically acceptable way. The financial sector and wealthy elites won't accept eating the losses and the vast majority of Germans would not accept paying the debts of their own bankers. So we have this maddening game of pretense - extend and pretend - accompanied by policies designed to help the core creditors, but stealthily.

The stealth unwind consists largely of transferring unpayable debt from the originators to public institutions, working assiduously to identify the creation and necessity for the EFSF, etc. as arising from the feckless nature of the peripheral countries. The longer this process runs the less is owed directly to to core banks. In the US similar actions were taken directly by the Federal Reserve.

See the Fed's ironically named Maiden Lane I, II and III Special Investment Vehicles for some highly impaired assets. Same problem in the US, but, due to our sovereign currency and the willingness of the Fed to cover the banker's asses there was much less of a crisis. If you are not going to deal with the underlying problem - feckless financial elites who control the political process - it is probably better just to create the money to cover the inevitable losses.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Oct 15th, 2012 at 05:11:19 PM EST
[ Parent ]

I think people are against paying those debts if they receive nothing in return. Not necessarily so if they get something out of it.

"We pay this much, Greece goes away, the whole union gets stronger." The main resistance to a bail-out of any sort comes down to the moral hazard. It's distasteful not that it happened, rather that i could happen again. If you find a way to make that second part go away then yeah sure people will cough up the cash to put it behind them. You can't change the past but you can change the future.

Give the population some credit.

by paving on Mon Oct 15th, 2012 at 07:49:57 PM EST
[ Parent ]

The US has a different problem from Europe.

by paving on Mon Oct 15th, 2012 at 07:50:41 PM EST
[ Parent ]

Europe's problem is the German people's Soffin fatigue, and an inability to understand fiat money. Just like in the US with TARP and the debt cliff.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS

by Migeru (migeru at eurotrib dot com) on Tue Oct 16th, 2012 at 02:41:00 AM EST
[ Parent ]

He! Had to google Soffin.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Oct 16th, 2012 at 10:24:45 AM EST
[ Parent ]

I just realised a key link was missing from the story I referred to: The Bottomless Pit: Germany's Faltering Bank Bailout Program (Spiegel, 12/23/2008).

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS

by Migeru (migeru at eurotrib dot com) on Tue Oct 16th, 2012 at 10:33:34 AM EST
[ Parent ]

I think people are against paying those debts if they receive nothing in return.

Perhaps. Suggest what 'people' could get that would make paying the debts of feckless bankers acceptable and that would also be acceptable to financial elites.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Oct 16th, 2012 at 01:24:22 AM EST
[ Parent ]

ARGeezer:

Suggest what 'people' could get that would make paying the debts of feckless bankers acceptable

access to their 'savings'? working ATMs? business loans?

It's a fine line between homage, parody, and consumer opportunism. Jess Walter

by melo (melometa4(at)gmail.com) on Tue Oct 16th, 2012 at 02:15:58 AM EST
[ Parent ]

There will always be banks ready to dish cash to the masses. They don't have to be the existing ones. The ones who make the bad loans can die; the species is in no danger of extinction.

_{It is rightly acknowledged that people of faith have no monopoly of virtue
- Queen Elizabeth II}

by eurogreen on Tue Oct 16th, 2012 at 04:09:56 AM EST
[ Parent ]

eurogreen:

There will always be banks ready to dish cash to the masses.

yes, but first they have to establish a relationship of public trust to attract the savings in the first place. that takes time...

It's a fine line between homage, parody, and consumer opportunism. Jess Walter

by melo (melometa4(at)gmail.com) on Tue Oct 16th, 2012 at 06:14:44 AM EST
[ Parent ]

But if the loss of access in the first place was due to the fecklessness of these same banks the mere return of what they had caused to go missing might be somewhat less than satisfying.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Oct 16th, 2012 at 10:17:42 AM EST
[ Parent ]

And the existing banks still are not routinely making business loans on any significant scale, certainly not anything approaching first half of 2008 levels. But less than one in ten appreciate the significance of this factor.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Oct 16th, 2012 at 10:36:39 AM EST
[ Parent ]

the banks clearly here are dishonouring the implicit social pact...

after taexes, what's left i sdeposited as savings or spent, if the savings are returned to the community in the form of business loans, the pact's respected.

but the savings are going into a black hole... paying off profligate gamblers' debts and profits offshored into places safe from taxation.

not a good recipe for trust or social cohesion...

It's a fine line between homage, parody, and consumer opportunism. Jess Walter

by melo (melometa4(at)gmail.com) on Tue Oct 16th, 2012 at 11:17:32 AM EST
[ Parent ]

Credit Unions, some local banks and new online funding sites are present alternatives.

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Oct 16th, 2012 at 12:05:38 PM EST
[ Parent ]

Patrick Breyer » EU-Kommission will Internetveröffentlichung von Schriftsätzen zur Vorratsdatenspeicherung unterbinden (Piratenpartei) - Klarmachen zum Ändern!		Patrick Breyer? EU Commission wants to prevent Internet publication of Documents concerning Data Retention (Pirate Party) -? Prepare to change?

Wörtlich schreibt der Juristische Dienst der EU-Kommission meinem Rechtsanwalt:		The Legal Service of the European Commission writes my lawyer:
Im Anbetracht des Vorangegangenen fordert die Kommission Ihren Mandanten förmlich dazu auf, dafür Sorge zu tragen, dass die Klage sowie die Klagebeantwortung der Kommission von der oben genannten Internetseite und jeder anderen Internetseite, auf der sich diese Dokumente ggf. befinden, umgehend entfernt werden und auch ansonsten nicht der Öffentlichkeit zuganglich gemacht werden. Dieses Entfernen hat umgehend zu erfolgen, spätestens aber innerhalb von drei Tagen nach dem Erhalt dieses Briefes.		In view of the foregoing the Commission demandes your client takes responsibility for the immediate removal of the bill of indictment and the defense of the Commission from the aforementioned website and any other website on which documents are located and the prevention of other publication. This removal has to be carried out immediately, but no later than within three days of receipt of this letter.

Von überall könnte das Volk, Urbrut alles Undemokratischen, Zelle des Terrors, über die gewählten Hüter von Wachstum und Wohlstand® kommen. - flatter

by generic on Mon Oct 15th, 2012 at 07:23:05 AM EST

I cannot read the response - document is apparently 18 pages but nothing shows up. Has it been taken down or is it my computer/firewalls/browser/plugins?

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sapere aude

by Number 6 on Mon Oct 15th, 2012 at 11:20:33 AM EST
[ Parent ]

Works for me.

Von überall könnte das Volk, Urbrut alles Undemokratischen, Zelle des Terrors, über die gewählten Hüter von Wachstum und Wohlstand® kommen. - flatter

by generic on Mon Oct 15th, 2012 at 11:37:32 AM EST
[ Parent ]