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None dare call it treason

by Carrie Wed Nov 17th, 2010 at 04:27:25 AM EST

Deutsche Welle: EU steps up the pressure on Irish banks, opens talks with IMF(16.11.2010)

The European Union on Tuesday announced it is in talks with the International Monetary Fund (IMF) and the European Central Bank (ECB)about taking on growing problems in Ireland's banking sector.

EU economy commissioner Olli Rehn said ahead of a meeting with eurozone finance ministers in Brussels that Ireland's banking crisis was "the most pressing problem" facing the monetary union.

Meanwhile, Luxembourg Prime Minister Jean-Claude Juncker, who headed Tuesday's talks by the panel of financial ministers known as the Eurogroup, vowed to protect the 16-nation euro currency.

Colour me astounded.

The European Commission is in talks with the IMF to organize a rescue of the Irish banking system instead of telling the European System of Central Banks to do its job as banking regulators and put the Irish banks into receivership already.

IMF interventions are designed to help monetary areas whose central bank and treasury cannot procure enough hard currency to keep their economies going.

The Eurozone has balanced trade and negligible non-Euro-denominated debt. Most of Ireland's debt is held by EU bondholders. In addition, the Euro is "hard currency" globally, and it is a fiat currency the ECB can create at will. Therefore the whole problem is one of intra-EU redistribution and calling in the IMF is simply asinine.

With friends like these, who needs enemies?

Display:
None dare call it treason | 107 comments (107 topical, 0 editorial, 0 hidden)
Re: None dare call it treason (4.00 / 3)
Central bankers, central wankers.

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Carrie (migeru at eurotrib dot com) on Wed Nov 17th, 2010 at 04:28:20 AM EST
Re: None dare call it treason (none / 1)
Should be your new sig line.
by Bernard (bernard) on Wed Nov 17th, 2010 at 04:52:26 AM EST
[ Parent ]
Re: None dare call it treason (none / 0)
I know.

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Carrie (migeru at eurotrib dot com) on Wed Nov 17th, 2010 at 04:53:31 AM EST
[ Parent ]
Re: None dare call it treason (none / 0)
Actually, it would go very well WITH your existing sig line.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Nov 17th, 2010 at 07:50:09 PM EST
[ Parent ]
Re: None dare call it treason (none / 1)
They're either total idiots or of the view that putting Irish banks into receivership will screw over their banks too.

Why the IMF, I don't know.

Here's fun:


German finance minister Wolfgang Schaeuble today said the European Union is "ready to act" to help Ireland.

"We are ready to act in any case," Mr Schaeuble told reporters today in Brussels as he arrived for a meeting of EU finance ministers. "Ireland has shown itself to be very responsible over the last two years in the crisis and able to act and that's why Ireland doesn't need the counsel of other governments.

"If everyone sticks to what we discussed together, we will best fight the wrong speculations in the markets."


So, has Ireland been virtuous enough for the German government to sell the bailout to its voters?
by Colman (colman at eurotrib.com) on Wed Nov 17th, 2010 at 04:33:41 AM EST
Re: None dare call it treason (none / 1)
The or in "total idiots or of the view" was, of course, an inclusive or.
by Colman (colman at eurotrib.com) on Wed Nov 17th, 2010 at 04:34:28 AM EST
[ Parent ]
Re: None dare call it treason (4.00 / 2)
Colman:
"If everyone sticks to what we discussed together, we will best fight the wrong speculations in the markets."
Bwahahahahahaaaaaa

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Carrie (migeru at eurotrib dot com) on Wed Nov 17th, 2010 at 04:41:47 AM EST
[ Parent ]
Re: None dare call it treason (none / 1)
Colman:
Why the IMF, I don't know.
Clearly, if the IMF can be brought in, the EU will have be able to claim that the IMF-style austerity package was imposed by the IMF and not by the EU. Apparently the Brussels Consensus can manage PR when it matters.

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Carrie (migeru at eurotrib dot com) on Wed Nov 17th, 2010 at 04:44:59 AM EST
[ Parent ]
Re: None dare call it treason (none / 0)
That could be it.
by Colman (colman at eurotrib.com) on Wed Nov 17th, 2010 at 04:47:04 AM EST
[ Parent ]
Re: None dare call it treason (none / 0)
Take it from the mouth of the chief racketteer:

EU steps up the pressure on Irish banks, opens talks with IMF

Juncker urged that the Irish government would have to decide on financial aid, with inevitable strings attached, within days. However, he stressed that no aid could be given if Ireland did not request it.


Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Carrie (migeru at eurotrib dot com) on Wed Nov 17th, 2010 at 04:48:42 AM EST
[ Parent ]
Re: None dare call it treason (none / 1)
Colman:
They're either total idiots or of the view that putting Irish banks into receivership will screw over their banks too.

Not that they are mutually exclusive, but I do think that it would hurt those German, French and British banks that has claims on the Irish debt.. At least if I remember that graph correctly (and understood it in the first place).

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Wed Nov 17th, 2010 at 05:37:35 AM EST
[ Parent ]
Re: None dare call it treason (4.00 / 4)
I find it absolutely outrageous that national governments expend huge efforts in trying to support the shareholders of their domestic and stupid banks. They should protect the interests of their citizens, not those of their bank shareholders! Indeed, one could argue that governments should look forward to failing banks, as it might mean that state will have to step in and take over the banks, cheaply. This will result in windfall profits at a later date, which can be distributed to the populace in the form of lower taxes.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Wed Nov 17th, 2010 at 12:09:34 PM EST
[ Parent ]
Re: None dare call it treason (4.00 / 3)
I'm not even sure it's the shareholders they're concerned about but the management.

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Carrie (migeru at eurotrib dot com) on Wed Nov 17th, 2010 at 12:17:28 PM EST
[ Parent ]
Re: None dare call it treason (none / 0)
While I also think it's outrageous for the sovereign to concern itself with the financial well-being of private shareholders, you're wrong about the implication of any windfall profits from resolving the banks.

Profits from publicly owned companies work exactly like taxes: They drain purchasing power from the private sector. So if the government obtains an unplanned windfall from a nationalised company, it must, ceteris paribus, spend an equivalent amount elsewhere in the public sector in order to retain full employment.

So to translate what you said: "This will result in windfall profits unplanned tax hikes at a later date, which can be distributed to the populace in the form of must be balanced by increased sovereign outlays or lower taxes elsewhere in the economy."

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Nov 17th, 2010 at 12:45:52 PM EST
[ Parent ]
Re: None dare call it treason (none / 0)
I don't get what you're saying. I'm going to make a thought experiment, and then maybe you can point out where you think I go astray?

  1. Bank becomes insolvent. Shareholders are wiped out, bondholders take a haircut. The bank is recapitalised by the State and other private actors.

  2. Fifteen years later the state sells it shares, and gets a load of money. This money is used to lower taxes.


Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Wed Nov 17th, 2010 at 12:51:53 PM EST
[ Parent ]
Re: None dare call it treason (none / 0)
Starvid:
This money is used to lower taxes.
Or to raise spending, depending on the macroeconomic conditions.

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Carrie (migeru at eurotrib dot com) on Wed Nov 17th, 2010 at 12:54:20 PM EST
[ Parent ]
Re: None dare call it treason (none / 0)
Yes of course. My point wasn't what the money was to be used for, but the fact that it might very well be a profitable opportunity for the state.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Wed Nov 17th, 2010 at 12:58:47 PM EST
[ Parent ]
Re: None dare call it treason (none / 1)
The State need not concern itself with profit, assuming it's monetarily sovereign.

In fact, state profit is a deficit of the private sector, all other things being equal.

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010

by Carrie (migeru at eurotrib dot com) on Wed Nov 17th, 2010 at 01:03:08 PM EST
[ Parent ]
Re: None dare call it treason (none / 1)
What you don't see is that this is a wealth transfer process, from people stupid enough to hold shares and bonds in bad banks, to the populace at large, via the state. A lot like a state lottery, actually. Furthermore, this is a bonus, as the real target of the state when it itervenes is to stabilise and secure the payment system. (At least in theory...)

The state has to intervene. If it does this at a small cost for the taxpayer: great. If it can do it a profit for the taxpayer: even better!

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Wed Nov 17th, 2010 at 01:12:27 PM EST
[ Parent ]
Re: None dare call it treason (none / 1)
The state has to intervene.

<Brussels>Nah, it's better to call in the IMF.</Brussels>

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010

by Carrie (migeru at eurotrib dot com) on Wed Nov 17th, 2010 at 05:06:34 PM EST
[ Parent ]
Re: None dare call it treason (none / 1)
Another good comparison is a thing our former PM said yesterday. During his tenure, about a quarter of the state-owned telecom company Telia was listed on the stock exchange in the middle of the IT bubble. Pretty much immediately the share lost half its price, pissing of the 1 million people who had taken part in the IPO. This has since always been a scandal wich no politician has defended, but yesterday the old PM dared say the obvious: it might have been a bad deal for the 1 million people who bought the share, but it was a great deal for the 8 million citizens who didn't, but who instead recieved plenty of money when their company was listed.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Thu Nov 18th, 2010 at 05:16:42 AM EST
[ Parent ]
Re: None dare call it treason (none / 0)
But only assuming that it was not a company that the public sector needed to hang on to in order to manage essential infrastructure, or that it was subsequently re-acquired at a lower price.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Nov 18th, 2010 at 07:32:38 AM EST
[ Parent ]
Re: None dare call it treason (none / 0)
Those assumptions are correct. It was not a strategic company that needed be kept in state ownership.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Thu Nov 18th, 2010 at 09:32:43 AM EST
[ Parent ]
Re: None dare call it treason (4.00 / 3)
What you don't see is that this is a wealth transfer process...

What you don't see, I suspect, is that, per Rob Parenteau, in three sector national accounting, by definition:

Domestic Private Sector Financial Balance + (State)Fiscal Balance + Foreign Financial Balance = 0

This is not so much good or bad as it just IS.

Thus, when the State has a fiscal surplus the private and/or the foreign sector must have a negative financial balance, if you want to retain double entry book-keeping, at least. Put in other words, state fiscal surplus = private sector debt if the current account balances. And public deficit = private assets if the current account balances. (When the current account equals zero the left-right axis collapses and the graph collapses to the vertical axis and is not as useful.)

The 45o segment in the lower half of the top right quadrant is where everyone wants to be. Then the government can be in surplus due to exports exceeding imports. But, obviously, not everyone can be a net exporter. If the private sector runs a chronic deficit, i.e. is to the left side of the diagonal, DPS = 0, the companies and individuals residing in the state will go further and further in debt. If the state runs a chronic deficit it will go further and further in debt.

At some point, NCE notwithstanding, debt in the public sector, the private sector or both will grow too large to service and there will be a problem, such as the USA and other countries are experiencing today. That is why Keynes proposed that countries that run chronic trade surpluses be fined. In this (accounting) view international trade IS a zero sum game.  

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

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Nov 17th, 2010 at 08:42:56 PM EST
[ Parent ]
Re: None dare call it treason (4.00 / 2)
At some point, NCE notwithstanding, debt in the public sector, the private sector or both will grow too large to service and there will be a problem,

Not as long as the public sector debt is denominated in its own currency and you are willing to accept a floating exchange rate. As long as that is the case, only private sector debt can generate panics. That's the genius of Keynesian economic policy.

Keynes' Bancor policy prescription was about reconciling the above diagram with a fixed-rate ForEx system... but that's not what we have today.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Nov 17th, 2010 at 08:47:17 PM EST
[ Parent ]
Re: None dare call it treason (none / 1)
Not as long as the public sector debt is denominated in its own currency and you are willing to accept a floating exchange rate.

True, so long as your country doesn't HAVE to import anything -- such as oil -- that is not denominated in terms of your currency. If oil exporters tired of accepting depreciated US currency and insisted on a "hard" currency, that could be a problem. Even if they just keep raising the price per barrel in $US that will also produce problems by accelerating the downward spiral. I would also expect other problems involving capital flight in such circumstances.

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

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Nov 17th, 2010 at 08:56:53 PM EST
[ Parent ]
Re: None dare call it treason (none / 1)
True, so long as your country doesn't HAVE to import anything -- such as oil -- that is not denominated in terms of your currency. If oil exporters tired of accepting depreciated US currency and insisted on a "hard" currency, that could be a problem.

If oil exporters start demanding hard currency and you do not have sufficient exports to satisfy their demands, then your balance of payments deficit will disappear. Painfully. Obviously you will want to avoid that if you can, by making sure that your exports are sufficient to purchase what you judge to be necessities, and any trade deficit is purely due to luxury consumption.

But in any case, this has to do with the foreign debt, not the sovereign debt. At no point does excessive sovereign debt become a problem in this scenario - it is the excessive combined private and public foreign debt that matters.

I would also expect other problems involving capital flight in such circumstances.

If your economy crashes because you can't obtain enough hard currency to import essential necessities? Certainly.

If your currency depreciates and you experience cost-push inflation from imports? Not necessarily. That would depend on whether you run an activist industrial policy or not.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Nov 17th, 2010 at 09:04:37 PM EST
[ Parent ]
Re: None dare call it treason (none / 0)
In any case, absent an export surplus, I would generally favor government spending being modestly in deficit. The USA has certainly shown that it can accommodate worse over long periods of time.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Nov 17th, 2010 at 09:17:44 PM EST
[ Parent ]
Re: None dare call it treason (none / 0)
your balance of payments deficit will disappear. Painfully.

:-) Yeah, operating our society on >30% of current oil consumption would be a bitch. Worse, the big oil companies would want to sell their oil to foreign buyers so as to get hard currency. Then things would get really ugly.

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

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Nov 17th, 2010 at 09:22:26 PM EST
[ Parent ]
Re: None dare call it treason (none / 0)
Eh, if there's one thing the US government will do in the event of a serious currency crash, it is to make absolutely damn sure that every last drop of oil taken out of the ground on US soil stays on US soil.

Where "US soil" may be taken to include Iraq and Ethiopia the first time it occurs, but probably not the second.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Nov 17th, 2010 at 09:50:37 PM EST
[ Parent ]
Re: None dare call it treason (none / 1)
And that would make their oil industry patrons very unhappy. I.E. "things would get really ugly."

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Nov 17th, 2010 at 10:53:58 PM EST
[ Parent ]
Re: None dare call it treason (none / 0)
Why keep the oil at home when you can sell it international markets instead and recieve more money?

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Thu Nov 18th, 2010 at 05:20:56 AM EST
[ Parent ]
Re: None dare call it treason (none / 0)
For much the same reason that the Irish peasants would, had they possessed the political wherewithal to do so, have preferred to keep their beef in Ireland rather than export it during the Potato Famine.

The scenario was an unplanned US$ collapse. The US needs oil. If it does not have oil, it stops working. It is already questionable whether it could run its society on its domestic production, let alone if they become net exporters. So the internal cost of going without oil is much, much greater than the international hard-currency price of oil in that scenario.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Nov 18th, 2010 at 07:30:18 AM EST
[ Parent ]
Re: None dare call it treason (none / 0)
The rational thing for the Irish would have been to export the beef, and use the money so aquired to buy needed goods and services, among them food. That would lead to greater economic efficiency.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Thu Nov 18th, 2010 at 09:35:21 AM EST
[ Parent ]
Re: None dare call it treason (none / 0)
You're assuming the proceeds from export would be equitably redistributed to allow the general population to purchase food.

Taking a page from Amartya Sen's book, the Irish Potato Famine was as much a problem of lack of food as a problem of inequitable access to wealth.

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010

by Carrie (migeru at eurotrib dot com) on Thu Nov 18th, 2010 at 09:42:50 AM EST
[ Parent ]
Re: None dare call it treason (none / 0)
Yes, I am indeed assuming that very thing. If you change that fact, then you have a very different situation. But I hardly think such things would be accepted today in the developed countries. Amartya Sen by the way exactly hits the nail on the head there.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Thu Nov 18th, 2010 at 10:06:20 AM EST
[ Parent ]
That only works because... (none / 0)
... there are readily available and cheaper substitutes for beef as food.

What, precisely, is the readily available and cheaper substitute for petroleum as liquid fuel?

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Nov 18th, 2010 at 09:57:11 AM EST
[ Parent ]
Re: That only works because... (4.00 / 3)
Legs

You can't be me, I'm taken
by Sven Triloqvist on Thu Nov 18th, 2010 at 09:59:08 AM EST
[ Parent ]
Re: That only works because... (none / 1)
Caol Ila?

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Carrie (migeru at eurotrib dot com) on Thu Nov 18th, 2010 at 10:00:29 AM EST
[ Parent ]
Re: That only works because... (none / 0)
For Peats' sake!

You can't be me, I'm taken
by Sven Triloqvist on Thu Nov 18th, 2010 at 01:52:35 PM EST
[ Parent ]
Re: That only works because... (4.00 / 3)
Caol Ila is special liquid that requires staying in the one place. As such it is a rather useful contributor to transport sustainability.

Why travel in your body, when you can travel in your mind? Let's think outside the laatikko here.

You can't be me, I'm taken

by Sven Triloqvist on Thu Nov 18th, 2010 at 02:00:16 PM EST
[ Parent ]
Re: That only works because... (none / 0)
Conservation and efficiency. In the short run, that is.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Thu Nov 18th, 2010 at 10:06:59 AM EST
[ Parent ]
Re: That only works because... (none / 0)
And how will selling your oil to other countries help you achieve that in ways that you couldn't do without selling the oil?

I mean, aside from the obvious fact that you will learn to do without any oil you sell. Which, while effective in promoting demand destruction, is rather on the painful side as policy proposals go.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Nov 18th, 2010 at 10:10:38 AM EST
[ Parent ]
Re: That only works because... (none / 0)
Because you get lots of hard currency which you can use to finance the transformation of the economy. And don't say that you can just print money to do that, because you might not produce all the things you need for the transformation domestically. Indeed: no country with the possible exception of the US is in that position.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Thu Nov 18th, 2010 at 10:22:56 AM EST
[ Parent ]
Re: That only works because... (none / 0)
Because you get lots of hard currency which you can use to finance the transformation of the economy.

Do you have a plausible story about how that's going to happen, or are you Oil E. Coyote forecasting here?

If the US economy is instantly cut to substantially less than a third of its oil consumption, there is a realistic possibility that it will simply stop working altogether. And even if it doesn't, the terms on which a country strapped for hard currency can sell its raw materials are not always beneficial to that country.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Nov 18th, 2010 at 12:50:35 PM EST
[ Parent ]
Re: None dare call it treason (none / 0)
Historically, much of the Alaska crude oil has been exported to Japan with the bulk of the remainder going to California and, until recently, the Prudhoe Bay oil field, originally developed by Atlantic Richfield, ARCO, a California Corporation, was owned by BP. In the Gulf of Mexico BP, Shell and # BHP Billiton are non-US based companies operating in the GOM.

While it is possible to invoke national security to order them to sell only to the USA, and while that is likely to happen in such a circumstance, the process will not be without cost or friction.

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

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Nov 18th, 2010 at 10:17:47 AM EST
[ Parent ]
Re: None dare call it treason (none / 0)
And it won't have any effect either, as oil is fungible.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Thu Nov 18th, 2010 at 10:24:00 AM EST
[ Parent ]
Re: None dare call it treason (none / 1)
"...oil is fungible."

Only if you have access to it. When politics re-enters the process political boundaries become important. And then there is the problem that refineries are built and adapted to process the crude oil being shipped to them, which varies greatly according to point of origin. One of the reasons so much oil from Saudi goes to Texas is that investments have been made to convert refineries from West Texas Light Sweet Crude to the heavier sour crude from Saudi. And at least one of the newer fields in the Rub al Khali in southern Saudi produces light sweet crude. If the US lost access to Saudi oil it could likely strong arm Venezuela into selling us their oil, but it is becoming increasingly heavy and sour.

Oil from the North Slope fields in Alaska was under an export ban until 1995. When the ban was lifted the price of Alaska crude did rise for California refiners. Given that history, a re-imposition of that ban would be quite likely. Prior to the removal of the ban there were complaints of an "oil glut" on the US West Coast. After the ban was lifted some of the oil went to Asia, primarily Japan, IIRCC.  

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

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Nov 18th, 2010 at 01:53:37 PM EST
[ Parent ]
Re: None dare call it treason (4.00 / 2)
In a scenario where the US ability to import oil disappeared then worldwide demand for oil would have collapsed for both direct reasons (the US consumes over a fifth of the world's oil production) and indirect ones (massive global economic depression).  The mini gulf states, Norway, and Saudis might be willing and able to try to reduce production to keep up prices, but not if they had to shoulder the entire burden, and they would since all other oil exporting countries would be in desperate straits.  And for those reasons, the US would still be able to import at least some oil.  
by MarekNYC on Wed Nov 17th, 2010 at 10:07:45 PM EST
[ Parent ]
Re: None dare call it treason (4.00 / 2)
It would be the $US price of oil that would soar. As the USA became less and less able to afford imported oil that would increase supply for those with sound currencies. It would increase supply for the US as well, but for currency revulsion problems. But we could mitigate these effects by selling agricultural products, which we still know how to produce -- except for the need for petroleum inputs for mechanized agriculture and for fertilizer.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Nov 17th, 2010 at 10:51:39 PM EST
[ Parent ]
Re: None dare call it treason (none / 1)
I bet fertilizer and mechanized agriculture are some of the last things we will stop using petroleum for (together with emergency services, the military and intercontinental maritime shipping), due to the massive value added per barrel. That's why I think Heinberg et al are completely wrong about stuff like we'll be seeing a reversal of urbanisation and a massive return to the countryside. Furthermore, non-oil based transportation systems are very capital intensive, and hence only make economuc sense where there is considerable population density.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Thu Nov 18th, 2010 at 05:26:22 AM EST
[ Parent ]
Re: None dare call it treason (4.00 / 2)
Electric powered golf carts are suddenly going to be at a big premium.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Nov 18th, 2010 at 09:56:24 AM EST
[ Parent ]
Re: None dare call it treason (none / 0)
(Or, perhaps I misread your comment?)

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Nov 17th, 2010 at 08:48:50 PM EST
[ Parent ]
Re: None dare call it treason (none / 0)
I don't get what you're saying. I'm going to make a thought experiment, and then maybe you can point out where you think I go astray?

I'm not arguing with your accounting. I'm arguing with your rhetoric. You're framing the question as if the sovereign outlays are subject to an income constraint. In that frame, incomes from elsewhere are used to lower taxes. This implies a discretionary power to decide to lower taxes or not, because you have income that is surplus to requirements (the corollary being that you must discontinue spending when income falls short of requirements).

This is not reality. Reality is that the sovereign outlays are constrained by the need to maintain macroeconomic stability. Nothing else. So incomes from elsewhere are not "used to lower taxes." Incomes from elsewhere force the sovereign to lower taxes. There is no discretionary power here, as long as you are pursuing macroeconomic stability as the principal policy objective (the corollary to this is that when revenues fall short of requirements, you must keep spending anyway if that is what it takes to maintain macroeconomic stability).

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Nov 17th, 2010 at 01:13:18 PM EST
[ Parent ]
Re: None dare call it treason (4.00 / 4)
If it is true that the Irish government is funded on a cash basis until the middle of next year, then the rational strategy for Ireland is to tough it out, let the panic in the markets crash its bonds in the secondary markets and buy their own bonds back at cents on the Euro.

The market can remain irrational longer than Ireland can remain solvent, but can the British, French and German holders of Irish bonds remain solvent longer than Ireland if the market crashes the liquidity (and therefore the value) of their bond portfolios?

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010

by Carrie (migeru at eurotrib dot com) on Wed Nov 17th, 2010 at 05:13:04 AM EST
Re: None dare call it treason (4.00 / 2)
I wonder if anyone in Dublin has had the guts to point that out to our friends.
by Colman (colman at eurotrib.com) on Wed Nov 17th, 2010 at 05:24:17 AM EST
[ Parent ]
Re: None dare call it treason (none / 0)
Has anyone in Dublin had the guts to point it out to Lenihan and Cowen?

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Carrie (migeru at eurotrib dot com) on Wed Nov 17th, 2010 at 05:27:16 AM EST
[ Parent ]
Re: None dare call it treason (none / 0)
Who knows?
by Colman (colman at eurotrib.com) on Wed Nov 17th, 2010 at 05:46:06 AM EST
[ Parent ]
Re: None dare call it treason (none / 0)
Maybe Frank could write an LTE about this...

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Carrie (migeru at eurotrib dot com) on Wed Nov 17th, 2010 at 05:53:30 AM EST
[ Parent ]
Re: None dare call it treason (4.00 / 5)
Oh, nonono, that would be Evul Gub'mint Manipulation of the Perfect-If-Not-For-You-Evil-Sinners international money markets. You can't possibly believe that EU member states should be allowed to exploit the fact that they can remain solvent longer than the market can remain rational to carry out arbitrage against the market's irrational behaviour.

Why, that would put junk bond traders out of business, and we can't have that. And think of what it would do to our fiscal discipline. Won't somebody think of the fiscal discipline?

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Nov 17th, 2010 at 06:25:42 AM EST
[ Parent ]
Re: None dare call it treason (none / 1)
JakeS:
the Perfect-If-Not-For-You-Evil-Sinners international money markets
Is that what Schäuble is hinting at when he says
"If everyone sticks to what we discussed together, we will best fight the wrong speculations in the markets."


Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Carrie (migeru at eurotrib dot com) on Wed Nov 17th, 2010 at 06:30:16 AM EST
[ Parent ]
Re: None dare call it treason (none / 1)
No, I believe that would be an example of Galbraith's observation that

By affirming solemnly that prosperity will continue, it is believed, one can help insure that prosperity will in fact continue. Especially among businessmen the faith in the efficiency of such incantation is very great.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Nov 17th, 2010 at 06:39:52 AM EST
[ Parent ]
Re: None dare call it treason (4.00 / 3)
I'd love to see the Irish government and all kinds of public officials running around like scared hens, constant anonymous leaks to the media about sovereign default, increased panic as the price of Irish bonds on the secondary markets crashes to almost nothing... and then the Irish government launches a press conference that there is no more reason to worry about the Irish debt crisis, as the government has bought all outstanding debt at 2 cents at the dollar, and that they managed to buy it that cheaply because they had actually been the source of all those anonymous leaks about default. :) It would be the greatest and most glorious coup deal since the Hong Kong currency board event during the Asian crisis.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Wed Nov 17th, 2010 at 12:24:51 PM EST
[ Parent ]
Re: None dare call it treason (none / 0)
Starvid:
the Hong Kong currency board event during the Asian crisis
Huh?

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Carrie (migeru at eurotrib dot com) on Wed Nov 17th, 2010 at 12:55:10 PM EST
[ Parent ]
Re: None dare call it treason (4.00 / 3)
During the Asian financial crisis, currency speculators sold the Hong Kong dollar heavily and shorted local stocks and Hang Seng Index futures. The government controversially used the exchange fund to acquire HK$120 billion (US$15 billion) worth of blue-chip shares in a two-week market intervention, beginning 12 August 1998 with the aim of punishing and deterring currency speculators.[7] The intervention was widely criticised as being detrimental to the reputation as one of the world's financial centres. Instead of being a regulator, the government has become "a player, a very key player."[8]

http://en.wikipedia.org/wiki/Hong_Kong_Monetary_Authority

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Wed Nov 17th, 2010 at 01:03:54 PM EST
[ Parent ]
Re: None dare call it treason (4.00 / 4)
Starvid:
The intervention was widely criticised as being detrimental to the reputation as one of the world's financial centres.

It was 'widely criticised' by the greedy bastard speculators who got completely stuffed.

Mahathir's shafting of the speculators when he imposed exchange controls comes close.....and that was equally heavily 'criticised'.  

Correa carried out a pretty neat trading coup with Ecuadorean bond-holders, too not long ago. More criticism there as well....

"They don't like it up 'em" - as Corporal Jones of 'Dad's Army' used to say with a mock bayonet thrust.....

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Wed Nov 17th, 2010 at 01:52:53 PM EST
[ Parent ]
Re: None dare call it treason (4.00 / 4)
To those whining "widely criticising" market players I have only one thing to say: if you don't want to get burnt, don't play the game. Suckers!

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Wed Nov 17th, 2010 at 02:27:49 PM EST
[ Parent ]
Do they (the eurocracy) have a model... (4.00 / 4)
... of the future starkly divided EU will work, I wonder?

The future for Ireland, Greece and probably Portugal at least is becoming quite obvious - wage cuts, permanent high unemployment, drastic cuts in social services and security, homelessness, social dislocation and unrest, and a decline in life expectancy.  Meanwhile the core will continue to provide a partly civilised standard of living to most of it's people, at least for the next few years.

Perhaps they envisage a lot of people moving from the debt crippled periphery.  Forced emigration is one of the unspoken key elements of the Irish government 'policy' (along with corporate tax evasion using the 'double Irish').  As usual those who emigrate will be the most able, although this mobility is hindered by crippling and un-repayable property debts, more likely to have been taken on by the young.

I know that firefighting is probably the order of the day, but is anyone doing any future modelling/planning?

by Pope Epopt on Wed Nov 17th, 2010 at 05:26:47 AM EST
Re: Do they (the eurocracy) have a model... (none / 1)
Did you mispell Eurocrazy?

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Carrie (migeru at eurotrib dot com) on Wed Nov 17th, 2010 at 10:27:15 AM EST
[ Parent ]
Re: Do they (the eurocracy) have a model... (none / 0)
Do personal credit rating agencies have euro-wide records?

If someone walks from a mortgage in Ireland and tries to get a mortgage in Spain, does their previous history follow them?

I suspect it doesn't, but I could be wrong.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Wed Nov 17th, 2010 at 10:31:16 AM EST
[ Parent ]
Re: Do they (the eurocracy) have a model... (none / 1)
Personal credit agencies don'toperate in all countries. In Spain, they don't. In the UK and Ireland they do because of American influence.

My guess is it has something to do with data protection laws.

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010

by Carrie (migeru at eurotrib dot com) on Wed Nov 17th, 2010 at 10:42:19 AM EST
[ Parent ]
Re: Do they (the eurocracy) have a model... (none / 1)
Migeru:
In Spain, they don't.
It looks like I was wrong. Then again, I suspect they are not as pervasive as in Anglosaxonia.

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Carrie (migeru at eurotrib dot com) on Wed Nov 17th, 2010 at 10:45:39 AM EST
[ Parent ]
Re: Do they (the eurocracy) have a model... (none / 0)
In Anglosaxionia everyone is warned regularly, with utmost seriousness, that misbehaviour 'may affect one's credit score.'

But if there's no euro-wide credit ranking system (yet), that would seem to make personal strategic default rather easier in the EU - should anyone choose to do that.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Wed Nov 17th, 2010 at 10:52:10 AM EST
[ Parent ]
Re: Do they (the eurocracy) have a model... (4.00 / 2)
It depends on whether debt follows you or not. In Spain and France, it does. Even secured debt after foreclosure and sale of the assets pledged as collateral.

Jerome a Paris:

In France (4.00 / 2) You are also personally liable for the full amount of the debts you take, irrespective of the value of the assets provided as collateral.
This was posted as a comment to A bundle of laughs
Ireland, unlike other countries, loads the dice in favour of the lender in these circumstances. If a lender sells a house after it is repossessed it can still pursue the original mortgage holder for the balance between the outstanding debt, plus all sorts of penalties and interest, and the new selling price. Nearly all the risk is assumed by the borrower, little or none by the banks. The banks thought they could not lose and lent accordingly.
As I commented, "unlike other countries" must refer to the US and UK, because in most of Continental Europe debt is a serious business...

It might be useful to note that this was the case in the US before the Great Depression, but part of FDR's financial reforms included relaxing bankruptcy laws and specifically making mortgage borrowers not liable for any shortfall that remains after their property is sold to pay for a delinquent loan.

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010

by Carrie (migeru at eurotrib dot com) on Wed Nov 17th, 2010 at 11:00:34 AM EST
[ Parent ]
Re: Do they (the eurocracy) have a model... (none / 1)
Mortgages were very different animals back before the depression.  Higher downpayments, medium term interest only loans followed by a balloon payment or rollover.  And these days mortgages are non-recourse only in some states.
by MarekNYC on Wed Nov 17th, 2010 at 11:12:26 AM EST
[ Parent ]
Re: Do they (the eurocracy) have a model... (none / 1)
Sure, but the issue is cross-border debt.

If Person A walks from an Irish mortgage and moves to Spain, will the debt follow them to Spain?

My guess is that even if it does in theory, debt collection agencies are going to be so busy with local business that they're not going to waste time trying to track down someone in a different country with different laws.

And even if debt does exist in law - which may be difficult to prove across separate jurisdictions - there are likely to be data protection issues that limit access to that information in practice.

Of course none of this may stop banks from hiring goons to try to bankrupt someone if they move. But first they have confirm residence, then they have to confirm identity, then they have to confirm ownership of the debt and organise legal proceedings - all of which costs time and money.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Wed Nov 17th, 2010 at 11:19:44 AM EST
[ Parent ]
Re: Do they (the eurocracy) have a model... (none / 1)
But first they have confirm residence, then they have to confirm identity, then they have to confirm ownership of the debt...

US banks and their loan servicing agents are demonstrating that this ain't necessarily so.

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

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Nov 17th, 2010 at 09:06:42 PM EST
[ Parent ]
Re: Do they (the eurocracy) have a model... (none / 1)
Yeah, but in Europe we still have something resembling that quaint old "rule of law" thing.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Nov 17th, 2010 at 09:15:15 PM EST
[ Parent ]
Re: Do they (the eurocracy) have a model... (none / 0)
US banks and their loan servicing agents aren't in a situation where mortgagees have the option of walking out on all of their loan payments and moving to another country.

And doing it again. And again. And again.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Wed Nov 17th, 2010 at 10:00:51 PM EST
[ Parent ]
Re: Do they (the eurocracy) have a model... (4.00 / 2)
Bankruptcy is more difficult since the recent "bankruptcy reform" but not impossible, and people can and are walking away from underwater mortgages. In a year of so they may be able to qualify for another mortgage, with a significant down payment. Personally, I would recommend renting till the next down leg in the real estate market, if not until there has been a total collapse and order, including rule of law in real estate transactions, has been reestablished.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Nov 17th, 2010 at 10:59:44 PM EST
[ Parent ]
Re: Do they (the eurocracy) have a model... (none / 0)
Wasn't there some article here on the ET about the situation, where it was claimed that generally only rich people walked away from underwater mortages, while the poor had some old-fashioned morals or something?

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Thu Nov 18th, 2010 at 05:31:39 AM EST
[ Parent ]
Re: Do they (the eurocracy) have a model... (4.00 / 2)
The Poor are Honest by ChrisCook on February 12th, 2009
I learned the reality a few years ago in London, talking to a commercial bank strategist there. "We've had an intellectual breakthrough," he said. "It's changed our credit philosophy."

"What is it?" I asked, imagining that he was about to come out with yet a new junk mathematics formula?

"The poor are honest," he said, accompanying his words with his jaw dropping open as if to say, "Who could have guessed?"

The meaning was clear enough. The poor pay their debts as a matter of honor, even at great personal expense. Unlike Donald Trump, the poor are less likely to walk away from their homes when market prices sink below the mortgage level. In today's neoliberal Chicago School language, the poor behave "uneconomically." That is, they make choices that do not make economic sense, but rather reflect a group morality. This sociological gullibility is what made them rich pickings for predatory lenders such as Countrywide, Wachovia and Citibank.



Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Carrie (migeru at eurotrib dot com) on Thu Nov 18th, 2010 at 05:44:08 AM EST
[ Parent ]
Re: Do they (the eurocracy) have a model... (none / 0)
Thanks! I've been looking for that diary for along time, using both Google and the blighted ET search function.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Thu Nov 18th, 2010 at 09:38:06 AM EST
[ Parent ]
Re: Do they (the eurocracy) have a model... (4.00 / 4)
To which the reply "Ha! what credit rating" is met with wonder as to why you don't care.

Any idiot can face a crisis - it's day to day living that wears you out.
by ceebs (ceebs (at) eurotrib (dot) com) on Wed Nov 17th, 2010 at 11:08:06 AM EST
[ Parent ]
Re: None dare call it treason (none / 0)
Irish Aid Talks Stop Short of Bailout as EU Lauds Austerity - Bloomberg
European finance ministers started work on possible aid for Ireland's debt-laden banks, stopping short of an immediate bailout package and risking a setback in bond markets.

Finance chiefs from the 16-country euro area lauded Ireland's budget cuts, echoing the rhetorical support offered in the early stages of Greece's debt trauma before a rescue became necessary. Ireland said it won't plead for money when European and International Monetary Fund officials arrive in Dublin tomorrow to begin talks on the banking system's needs.

"If banking problems are too big for this small country to manage, Europe has made it clear they'll help," Irish Finance Minister Brian Lenihan told state broadcaster RTE today before meetings of European finance ministers wrap up in Brussels.



"People only accept change when they are faced with necessity, and only recognize necessity when a crisis is upon them." - Jean Monnet
by Melanchthon on Wed Nov 17th, 2010 at 06:00:20 AM EST
Re: None dare call it treason (none / 1)
Perhaps Gerry Adams sees an opportunity and that is why he is moving to County Louth.

If all the parties in the Republic, except the pariahs of Sinn Fein, sign up to a National government and unpopular austerity measures could SF have their best Irish election since the early 1920s?

by Gary J on Wed Nov 17th, 2010 at 07:39:30 AM EST
Re: None dare call it treason (4.00 / 2)
If SF frames this as Ireland being recolonized (and they wouldn't be wrong to say it) by external forces thanks to the craven greed and failures of the Civil War parties, then they might make some headway with a nationalistic appeal. Better that than some sort of rightist "blame the immigrants" approach that I keep reading is bound to emerge as a force in Irish politics, although I'm not sure where that'll come from. And that would probably only carry SF in a few more seats; they'd need a compelling economic agenda to really break through.

The recent polling suggests that a Fine Gael/Labour alliance would win a majority, although Enda Kenny barely survived his leadership review earlier in the year. So they'd probably be able to pick up the pieces from Fianna Fail's collapse.

I'm sure the Irish residents here have a FAR better view of the political impacts of this than I do, so take my comments with a whole shaker of salt...

And the world will live as one

by Montereyan (robert at calitics dot com) on Wed Nov 17th, 2010 at 01:15:18 PM EST
[ Parent ]
Re: None dare call it treason (none / 1)
Alas, you can have a "blame the immigrants" approach from so-called left wing parties, in the name of "defending the workers against people whose competition lowers wages".  too, especially when they have a nationalist component. We even have seen this kind of narrative on ET.

In fact, a few years ago, when i was working in Dublin, I've seen Sinn Féin come very close to "blame the immigrants" slogans, even before the outbreak of the crisis...

"People only accept change when they are faced with necessity, and only recognize necessity when a crisis is upon them." - Jean Monnet

by Melanchthon on Wed Nov 17th, 2010 at 05:33:57 PM EST
[ Parent ]
Re: None dare call it treason (none / 0)
An increased supply of low-qualified labour while demand doesn't grow as fast, results in a lower price for low-qualified labout. If you refuse to lower the wages the result is increased unemployment. That's just a sad fact, and there isn't much to do about it.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Thu Nov 18th, 2010 at 05:33:59 AM EST
[ Parent ]
Re: None dare call it treason (none / 0)
You are assuming that the internal supply and demand for low-qualified labour are exogenously determined. Neither is true. The internal supply can be boosted by educational and vocational training initiatives, and the demand can be boosted by deliberate sovereign intervention while waiting for the supply-side effects to take hold.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Nov 18th, 2010 at 07:34:22 AM EST
[ Parent ]
Re: None dare call it treason (none / 0)
Nonetheless, it is still true, ceteris paribus. You could of course have those initiatives without immigration, which would push up the wages of low-qualified labour even more.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Thu Nov 18th, 2010 at 10:09:49 AM EST
[ Parent ]
Re: None dare call it treason (none / 0)
Not if you are targeting a minimum wage.

Which variables are endogenous to the economic system is (partly) an institutional decision, not (exclusively) a fact of life.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Nov 18th, 2010 at 10:12:00 AM EST
[ Parent ]
Re: None dare call it treason (none / 0)
I'm not targeting a minimun wage: I'm targeting high wages for low-qualified workers so as to reduce economic inequality. But to quote Krugman:
There is no issue more painful for the serious liberal than immigration, which inevitably pits the interests of poorly paid workers in advanced countries against those of even worse-paid workers in the Third World.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Thu Nov 18th, 2010 at 10:23:09 AM EST
[ Parent ]
Re: None dare call it treason (none / 0)
Yes - but there's also no need for a lot of the current crisis, if simple policies were put in place.

However, the politicians we have...

by Metatone (metatone [a|t] gmail (dot) com) on Thu Nov 18th, 2010 at 11:02:05 AM EST
[ Parent ]
Re: None dare call it treason (none / 0)
Can George Osborne capitalise on Ireland's weakness? - Telegraph Blogs

George Osborne says he is ready to help the Republic of Ireland because it is in the British national interest. "Ireland is our closest neighbour and it is in Britain's national interest that the Irish economy is successful and we have a stable banking system," he says.

But what will the Conservative party say if he pledges UK funds to rescue the Republic? We carry about £6bn in contingent liabilities already as our part of the non euro rescue scheme, plus whatever we are in for through our membership of the IMF. Now we learn from the FT that the Chancellor is considering offering Ireland "billions" in loans. At one level, there is an inevitability to it: we are all in this together, as a politician once said. So even if the Irish failed to mend the roof while the sun was shining, we can't let them sink. But will Tory MPs see it that way? Will they want scarce resources diverted from their constituents?



Any idiot can face a crisis - it's day to day living that wears you out.
by ceebs (ceebs (at) eurotrib (dot) com) on Wed Nov 17th, 2010 at 07:55:09 AM EST
Re: None dare call it treason (none / 1)
The title of this piece has some rather unpleasant associations with the John Birch society style extreme right viewpoint for Americans courtesy of a bestselling book by that name by a Bircher who argued that all American institutions had been infiltrated and taken over by Communists.  Just a heads up.
by MarekNYC on Wed Nov 17th, 2010 at 08:23:31 AM EST
Re: None dare call it treason (4.00 / 6)
All European institutions have actually been taken over or infiltrated by Market Fundamentalists, to our ruin, so it is entirely appropriate.

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Carrie (migeru at eurotrib dot com) on Wed Nov 17th, 2010 at 08:48:26 AM EST
[ Parent ]
Re: None dare call it treason (4.00 / 2)
Why is there no word equivalent to "racism" to label violent and sociopathic economic discrimination?
by ThatBritGuy (thatbritguy (at) googlemail.com) on Wed Nov 17th, 2010 at 09:47:46 AM EST
[ Parent ]
Re: None dare call it treason (none / 1)
That's called "market discipline".

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Carrie (migeru at eurotrib dot com) on Wed Nov 17th, 2010 at 10:04:50 AM EST
[ Parent ]
Re: None dare call it treason (none / 0)
because it's the mental illness epidemic that dares not speak its own name?

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty
by melo (melometa4(at)gmail.com) on Wed Nov 17th, 2010 at 10:49:15 AM EST
[ Parent ]
Heh (none / 1)
A bit like Voldermort?
by Nomad (Bjinse) on Wed Nov 17th, 2010 at 11:01:27 AM EST
[ Parent ]
Re: None dare call it treason (none / 0)
because then it'd be easy to criticise

Any idiot can face a crisis - it's day to day living that wears you out.
by ceebs (ceebs (at) eurotrib (dot) com) on Wed Nov 17th, 2010 at 11:10:04 AM EST
[ Parent ]
The French have "pensée unique" (none / 1)
I disagreed with the concept then, but tend to agree it is relevant today (even though it is less used now). I wonder if it encompasses the same things, though.

Wind power
by Jerome a Paris (etg@eurotrib.com) on Wed Nov 17th, 2010 at 03:05:43 PM EST
[ Parent ]
Re: The French have "pensée unique" (none / 0)
It is rarely mentioned any more because it's no longer an issue. Pensée unique is a reality and its critics have been defeated.

Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Carrie (migeru at eurotrib dot com) on Wed Nov 17th, 2010 at 05:15:46 PM EST
[ Parent ]
Re: None dare call it treason (none / 0)
Reuters: Austria fin min says Greek aid tranche delayed to Jan
Austrian Finance Minister Josef Proell said on Wednesday the next tranche of an EU-backed aid package for Greece has been delayed to January from December.

...

He did not spell out if this applied just to Austria's contribution, or to the package as a whole.

Proell had said on Tuesday that Greece had not fulfilled commitments for its European Union-backed aid package and that Austria had not yet submitted its contribution for December. He also said at the time that Austria's 190 million euro contribution was not automatic.



Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Carrie (migeru at eurotrib dot com) on Wed Nov 17th, 2010 at 09:47:08 AM EST
Re: None dare call it treason (none / 0)
UE, FMI y BCE empiezan a preparar un plan de ayuda para la banca irlandesa · ELPAÍS.comThe EU, FMI and ECB beginto prepare an aid plan for the Irish banking sector - ElPais.com
... Este movimiento supone el inicio de los preparativos para poner en marcha un plan de ayuda con fondos comunitarios para sus bancos, ya nacionalizados, y descarta, de momento, un rescate para hacer frente a sus problemas de deuda. El anuncio, que en cualquier caso aún depende de Dublín para activarse de forma definitiva, ha moderado la huida de inversores de los bonos de Irlanda y el resto de países señalados por sus altos niveles de déficit, sobre todo Portugal, pero también España o Italia. ...... This motion [by the Ecofin] is the beginning of preparations to put in place a plan to aid with Community funds [Ireland's] already nationalised banks, and discards, for the moment, any rescue to face [Ireland's] debt problems. The announcement, which in any case still depends on Dubli to be finally activated, has moderated the flight of the investors away from Ireland's bonds, and those of ther countries tagged by their hig deficit levels, especially Portugal but also Spain or Italy. ...

Note again, no effort is being made to deal with Ireland's debt problems, but only with the banking sector. I thought this was a sovereign debt crisis precipitated by concerns over Ireland's public finances...!?

Anyway, the good news (heh) is that Ireland appears to have capitulated and it will accept help.

Irlanda empezará mañana a trabajar sobre el terreno con el Banco Central Europeo y el Fondo Monetario Internacional para evaluar la situación real de su sector financiero y decidir los términos de la ayuda. ...Ireland will begin to work tomorrow on the ground with the ECB and the IMF to evaluate the real situation of its financial sector and decide the terms of the aid. ...


Of all the ways of organizing banking, the worst is the one we have today — Mervyn King, 25 October 2010
by Carrie (migeru at eurotrib dot com) on Wed Nov 17th, 2010 at 10:03:51 AM EST
Re: None dare call it treason (none / 1)
Except that Cowen keeps denying it.
by Colman (colman at eurotrib.com) on Wed Nov 17th, 2010 at 10:55:10 AM EST
[ Parent ]
None dare call it treason | 107 comments (107 topical, 0 editorial, 0 hidden)


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