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I'd like to see something more specific: the US treasury does not have anything at stake here other than the possible collapse of a huge trading partner, but the UK govt. which is here claimed to by sympathetic has been actively defending UK banks and investors. Certainly Pat Honohan may have things he can and cannot say as well.

Yves-Smith has a serious grievance against Geithner -she'd believe any story - even one that nobody has told.

by rootless2 on Sun May 8th, 2011 at 10:52:24 PM EST
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I'm much more inclined to believe this rather than rumors.

by rootless2 on Sun May 8th, 2011 at 11:05:28 PM EST
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Are we supposed to compare by eye the area of the blue wedge with the area of the circles?

How to lie with statistical graphs...

Economics is politics by other means

by Carrie (migeru at eurotrib dot com) on Mon May 9th, 2011 at 02:12:21 AM EST
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Do you dispute the numbers?

Another way of looking at those numbers is by population, roughly:

Greece: 11 mil (28 bil)
Portugal: 11 mil (28 bil)
Ireland 4 mil (114 bil)
Spain: 46 mil (146 bil)
Germany: 81 mil (79 bil)

You can't be me, I'm taken

by Sven Triloqvist on Mon May 9th, 2011 at 03:20:45 AM EST
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I dispute the graphical presentation of the numbers.

Economics is politics by other means
by Carrie (migeru at eurotrib dot com) on Mon May 9th, 2011 at 05:13:17 AM EST
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...is in the eye of the bondholder

I agree that the size/area of the circles does not conform to the figures contained within, and thus has only a semiotic or perceived value.

If you really want to object though, the main point of the graphic is that the four yellow countries are rolling downhill, with the 'stable' slope as Germany. OR, alternatively, the greater 'weight' of Ireland and Spain are tilting the horizontal axis. However the first explanation seems more likely, as the numbers within the circles are slightly rotated to indicate rotation/rolling.

If this graphic comes from a newspaper, it is very likely to have been created by a sullen youth of indeterminate gender in Converse boots and a possible piercing, on the basis of a hurried email instruction by a sub-ed.

Scientists, as you well know, are barred from all publishers.

You can't be me, I'm taken

by Sven Triloqvist on Mon May 9th, 2011 at 08:16:16 AM EST
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If this graphic comes from a newspaper

It says "Der Spiegel" on the right, in white on a yellow background (though I doubt they were actually trying to hide this). I suspect that the areas do actually conform to the figures, but they sure don't look at first as though they do.

by gk (gk (gk quattro due due sette @gmail.com)) on Mon May 9th, 2011 at 08:23:30 AM EST
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Well, I measured the areas of the circles and they don't!

You can't be me, I'm taken
by Sven Triloqvist on Mon May 9th, 2011 at 09:43:05 AM EST
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If you say so.... I estimated by eye that Spain had slightly more than twice the diameter of Greece and figured that it wasn't really worth more careful examination....
by gk (gk (gk quattro due due sette @gmail.com)) on Mon May 9th, 2011 at 09:49:37 AM EST
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If you really want to object though, the main point of the graphic is that the four yellow countries are rolling downhill, with the 'stable' slope as Germany. OR, alternatively, the greater 'weight' of Ireland and Spain are tilting the horizontal axis. However the first explanation seems more likely, as the numbers within the circles are slightly rotated to indicate rotation/rolling.
Precisely. This is narrative-pushing, using the numbers as a poor excuse.

Maybe there's a third interpretation, a sort of domino effect/snowballing down the German deficit slope.

Whichever way you interpret it, the visual presentation has precious little to do with the data.

Economics is politics by other means

by Carrie (migeru at eurotrib dot com) on Mon May 9th, 2011 at 09:03:43 AM EST
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My point was purely to highlight the immense amount owed to German banks. The rest of it is something I don't have an opinion about.

plus 100B to UK banks just for Ireland and we start to get an outline of cui bono.
 

by rootless2 on Mon May 9th, 2011 at 09:32:05 AM EST
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It is clear that this whole "rescue" mess is simply a way to transfer the losses to the public sector.

Under a default scenario the creditor countries still have to pick up the losses of their banks, so this is just a different way of achieving the same effect, just delayed so well-connected people have time to liquidate their positions...

Economics is politics by other means

by Carrie (migeru at eurotrib dot com) on Mon May 9th, 2011 at 09:35:35 AM EST
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And to hide the rescue from their publics.

Remember, the original sin here is depressing German wages in the name of competitiveness. Telling the German people that they have to bail out the German banks because they lent the money that should have been paid to them to cowboy banks is unlikely to do anyone's political career any good. I'm guessing German workers would have been much happier if it was them rather than Irish bankers who were buying the Mercedes.

by Colman (colman at eurotrib.com) on Mon May 9th, 2011 at 09:39:54 AM EST
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Right - the German government can now tell the gullible German public that the trouble is the reckless spending of Irish and Greeks, not the need to bail out a failed German banking industry.
by rootless2 on Mon May 9th, 2011 at 09:54:13 AM EST
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Take it from the German SPD: it's all been "crass keynesianism"...

Economics is politics by other means
by Carrie (migeru at eurotrib dot com) on Mon May 9th, 2011 at 11:36:27 AM EST
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Do those numbers include money owed to German and UK banks by their subsidiaries operating from Ireland?
by Colman (colman at eurotrib.com) on Mon May 9th, 2011 at 09:41:19 AM EST
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i dunno - does it make a difference?
by rootless2 on Mon May 9th, 2011 at 10:45:32 AM EST
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Thou shall not use pie charts (or any other representation using area).
by asdf on Mon May 9th, 2011 at 08:21:41 PM EST
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Graphics, like statistics are important tools for conveying messages and can also be misleading.  Critiquing their use can be an important part of appraising the validity of an argument.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue May 10th, 2011 at 05:43:25 AM EST
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Friends come and go. Enemies accumulate.
by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue May 10th, 2011 at 09:22:38 AM EST
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And they're comparing a stock (debt outstanding) with a flow (GDP).

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon May 9th, 2011 at 06:25:48 AM EST
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The ratio is the interest rate at which you'd spend your entire GDP servicing debt.

Economics is politics by other means
by Carrie (migeru at eurotrib dot com) on Mon May 9th, 2011 at 06:27:52 AM EST
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The figure is budget deficit, not GDP.
by gk (gk (gk quattro due due sette @gmail.com)) on Mon May 9th, 2011 at 06:31:09 AM EST
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Friends come and go. Enemies accumulate.
by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon May 9th, 2011 at 06:34:54 AM EST
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Doesn't matter. The claim made is that Germany/UK were happy to toss away many billions, that an Irish government that signed up to pay suddenly took a different path and that a US official with no apparent motivation except character defect prevented them from doing the right thing. Generally, I find it a good practice to be skeptical of self-serving rumors coming from such meetings.
by rootless2 on Mon May 9th, 2011 at 06:49:56 AM EST
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Yves-Smith has a serious grievance against Geithner

His conduct as Governor of the New York Fed and then as Secretary of Treasury would account for serious disdain from Yves and many others, myself included. Do you have any specific reason why she has a personal grievance or a grievance arising from her professional activities against Geithner? And do you think Giethner has done a good job both as Governor of the NY Fed and as Sec. of Treas.?

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon May 9th, 2011 at 12:10:06 AM EST
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Her politics are libertarian/conspiracy and she's fixed on Geithner/GS as the axis of evil. The fact that e.g. DB was a bigger player in the US mortgage mess in key years than GS or that Geithner's team ruthlessly slashed bondholders to protect GM/Chrysler or that the approach taken by Geithner/Bernanke to the crisis required far less of a taxpayer hit than the ones Yves advocated - or the ones taken by the European central bank are facts that conflict with her stupid narrative.

I find proposed explanations of this crisis that are based on character defects and alleged criminality to be a lot less plausible than ones that are based on who makes money and whose interests are at stake.

by rootless2 on Mon May 9th, 2011 at 06:55:20 AM EST
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Libertarian? I don't remember her advocating for unfettered free markets and goldbuggery.
by generic on Mon May 9th, 2011 at 07:30:56 AM EST
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there is certainly a lot of chatter about "fiat money" on that site and Yves nutty devotion to "market value" of bank assets plus her conspiracy mongering gives me a strong flavor of libernuttian. I could be wrong, but that's what i see. Certainly there is not a hint of a suggestion that there could be a systematic issue of finance capital not caused by the moral turpitude of Geithner.
by rootless2 on Mon May 9th, 2011 at 09:44:42 AM EST
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She has self identified as having been a Reagan Democrat back in the early '80s. The core of her work as presented on naked capitalism, and, from reviews of her book, Econned, has been to show how the US government and, especially, the financial regulators have been captured and corrupted by big finance over the last 40 years and how that has been facilitated by the systematic take-over of academic economics by the Chicago School, Friedmanite-NCE approach, largely funded by libertarian billionaires.  Over that time she has worked for many of the major Wall Street firms, including Goldman, some of whom are now "considered" to be TBTF.

A substantial part of those who regularly comment on her site ARE libertarian and some are goldbugs, but she has, at times distanced herself from them. Don't conflate the views of those who comment with her views. My sense is that she would be an Eisenhower Republican, were there such a wing of the current Republican Party.

As for conspiracy theorists, see her recent spoof: Blacklisted Economics Professor Found Dead: NC Publishes His Last Letter

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon May 9th, 2011 at 12:09:15 PM EST
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