Top Diaries

Just me being curious, but what sector do you work in? I'm trying to figure out what kind of business requires 6 months to close a sale... Finance, powerplants, ships, aircraft? Not asking about the company of course, and if you think I should mind my own business, please just say so. :)

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

by Starvid on Thu Nov 10th, 2011 at 09:44:12 AM EST
[ Parent ]

I think in consultancy "closing a sale" has a different meaning to what you imagine.

Jerome can take 18 months to "close a deal" in project finance.

To err is of course human. But to mess things up spectacularly, we need an elite — Yanis Varoufakis

by Carrie (migeru at eurotrib dot com) on Thu Nov 10th, 2011 at 09:48:40 AM EST
[ Parent ]

Miguel had it right -management consultancy.

I'm more than happy for other people (especially ET company) to mind my business. Best when they bring me some of course ;-)

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Thu Nov 10th, 2011 at 11:16:29 AM EST
[ Parent ]

You've brought up a very good point Cyrille. I can't think of anything I'd like to do more than support my friends at ET in their various endeavors. But how can one do that unless one knows what other peoples' needs are?

Maybe the topic has been discussed here before, I don't know. But in the event it hasn't, does anybody have any ideas on how we could better network and help one another? I've just been wondering and curious about this for a very long time; actually, since I started visiting here a few years ago. Of course I rec comments that are in line with my thinking, inspirational, etc., . . . but there must be more I can do . . . could a database of info be established, or something?

by sgr2 on Thu Nov 10th, 2011 at 12:27:51 PM EST
[ Parent ]

Quite the opposite (4.00 / 3)

I focus even more on my job. It's all the more important to get actual work done today. Forget about the crisis mood and prophets of doom, let's get more wind farms financed and built!

Wind power

by Jerome a Paris (etg@eurotrib.com) on Thu Nov 10th, 2011 at 12:02:41 PM EST
[ Parent ]

Re: Quite the opposite (none / 0)

I don't want to speak for Cyrille, but it's possible that the difference between your job and Cyrille's or mine is that you can actually see a broader point to yours.

To err is of course human. But to mess things up spectacularly, we need an elite — Yanis Varoufakis

by Carrie (migeru at eurotrib dot com) on Thu Nov 10th, 2011 at 12:13:51 PM EST
[ Parent ]

Re: Quite the opposite (4.00 / 6)

Of course, there is that too. When I'm asked to make a better use of resources (reducing energy consumption, or production variability, or increasing reliability, or making working conditions better), then I have no problems finding a broader point, though of course it's not as strong as helping enough alternative energy make it online that you can replace a bunch of coal plants (yes, Crazy Horse, I maintain that there it is far more urgent to close these than nuclear ones).

When it's purely what they call "productivity" (ie making slightly less stuff, because the buyers aren't here anyway, while using far fewer people), or "cost rationalisation" (ie cutting each and every time, because of course that's always the rational thing to do, oh, how could anyone guess that without maintenance this system was going to break down?), indeed the broader point is harder to find.

Thankfully, I have thus far mostly managed to avoid the latter ones. Will I be able to for much longer though?

But a major current concern is that there will be a lot of futility to our commercial efforts over the near to medium future, and ever diminishing prospects of getting work on things that would truly make a difference in the right direction.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Thu Nov 10th, 2011 at 01:20:02 PM EST
[ Parent ]

Re: Quite the opposite (4.00 / 2)

... a major current concern is that there will be a lot of futility to our commercial efforts over the near to medium future

Puts us -- OK, me :-) -- back to the discussion, which I lost, about "building alternative structures" versus "revolutionary action." I don't see it as Exclusive Or ... lost that argument, too.

Starting with what somebody (afew? eurogreen? asdf?) said the other day about how the fewer the nodes there are in the economic network, the more disastrous it is when one of them fails. It's clear creating more firms may not be "efficient" - never cleanly defined - in the short run, or over the long run for those few firms, but it does provide greater resiliency in the economic network as well as creating niches for new economic Agents to emerge and prosper.

Looking at it this way, e.g., the political-economy as an 'economic ecology,' is an addition to the pure political resistance as well as an actual start of moving from Here to There. Starting a business, such as a co-operative, is by definition a Bottom/Up, grassroots, organization that, by circumstances, has to affect the local (mini-micro) economy.

Fact:

THE PROPERTIES OF A NETWORK ARE INVARIANT ACROSS SCALE.

IOW, a local (mini-micro) economic network, e.g. a Farmer's Market, provides the same overt benefits as a ginormous macro-economic network, e.g., Tesco Grocery Chain. The benefit of buying at a local Farmer's Market is the money 'rattles around' the local economy (See Jane Jacobs, Henry George, & etc.) meaning the local producers of the goods and services receive a greater share of the wealth they produce as well as ensuring the wealth created in and by the local community stays (more) in the local community rather than being 'out-sourced.'

The key to persistence of a local (mini-micro) economic network is:

1. How 'closed' it is to plunder and/or exploitation by ginormous macro-economic networks

which intimates

2. The more 'complete' it is, the better

implying

3. The larger the number of firms, the better

Obviously, Shropshire isn't going to be able to support the same number of firms as Oxfordshire; Kristianstad can't approach the number of businesses Stockholm can support ... but that's not the point. The goal is to start moving away from the Zero Sum Game where local economies are losing because they aren't big enough to resist exploitation and plundering by macro-networks who appropriate wealth but do not have to pay the "externality" cost(s) of that exploitation.

IMO, then, "business development" in local communities is the key factor we're - at the moment - missing. People can Occupy Wall Street or San Francisco or London or wherever but if they then go home and purchase from a Big Box store they are undercutting their protest.

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Thu Nov 10th, 2011 at 03:18:09 PM EST
[ Parent ]

Well yeah. Why buy from a Big Box store when you can buy from your neighbor (who you presumably like and would want to help out), assuming the price were comparable, and let the money 'rattle around' your own community? It's hard to understand why this isn't more the norm.

Beyond helping your neighbor out, you're buying food that's tastier because it's fresher and has less impact on the environment because it hasn't had to travel so far. It could also even be organic. So what's not to like about an arrangement like that?

by sgr2 on Thu Nov 10th, 2011 at 03:58:16 PM EST
[ Parent ]

Because, carried to sustainability, it will mean ConAgra will no longer control the US wheat market!

"THINK OF THE STOCKHOLDERS!," he shouted. Clutching his pearls and dropping on the fainting couch.

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Thu Nov 10th, 2011 at 04:04:59 PM EST
[ Parent ]

Re: Quite the opposite (4.00 / 2)

Most areas don't do general food farming, and some areas do very little food farming at all.

There's a lot of be said for managed economies of scale. One of the first things the railways did in the UK was dropped the price of fish, coal and milk (and doubtless other goods) because everything suddenly became much more affordable - even when it was shipped from a long way away.

So localisation is good for some things, but not so good for others.

The part of the UK I live in still has regular markets, in market towns. But interestingly most traders buy as wholesalers - fruit and veg, carpets, small electrical goods, clothing, either bought mailorder or in London or some other big city - and sell from a stall.

There's actually very little made locally. And very little could be made locally, apart from bread and wheat products, and the kind of specialised foods you get from a deli.

Some organic farmers do regular personal vegetable deliveries. But they're usually add-ons rather than staples.

I'm sure there is a balance between centralisation and localisation, but I don't think either extreme works all that well in practice.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Thu Nov 10th, 2011 at 04:07:00 PM EST
[ Parent ]

Re: Quite the opposite (4.00 / 3)

Partly true, but the reason a lot of food is not produced locally is not that it's not possible, it's that agro-productivism has pushed it out and replaced it with subsidised grain farming. That doesn't just mean pushed out what once was (market gardening, small-scale poultry production, etc) but what could have been and could be (means of production like tunnel greenhouses, convenient mechanisation, improved techniques, greater variety and quality of products). We made a bit of a stir here by pointing out that this département had no more market gardeners, and traditional market gardening land had been built up, while the pols were communicating about their dearest wish to provide organic school meals at the same time as trained young professionals were looking in vain for land to set up on.

No, it's not possible to do everything locally, and provincialism, obscurantism, and sclerosis might well attend an attempt to do so systematically. But more can be done than is currently the case.

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Nov 10th, 2011 at 04:31:19 PM EST
[ Parent ]

Re: Quite the opposite (4.00 / 3)

I don't think either extreme works all that well in practice.

I agree.

A "collapse" of manufacture to 100% local-made is usually associated with a decline to a lower standard of living. And, thinking of the post-oppida and post-Roman eras, an increase in small scale battles. (Although it's not "small scale" if you die in one.)

The opti-max solution is a vibrant Bottom/Up meeting a sustainable Top/Down.

I note we are heading towards a macro-decline ("Recession,") and perhaps a macro-collapse ("Depression,) no matter what. The choice is whether local and regional micro-economic structures and businesses exist prior to ker-splat or have to be established post-splat without the benefits, and that's not snark, of existing macro-economic structures & etc.

It's not only ideologically correct, it's factually accurate to state: Communities survive times of economic hardship better than isolated individuals.

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Thu Nov 10th, 2011 at 04:38:53 PM EST
[ Parent ]

Re: Quite the opposite (none / 0)

I can understand Cyrille's dilemma, since I once left a management consultancy that was offering me a long-term job because I didn't like the content of what I could see before me, and I understand what you're saying about local structures, since I'm actively involved in organizing one.

How could large businesses of the consultancy type find an interest, or more crudely see a product for them, in a multiplicity (not necessarily a network, each node may well be independent of the others) of small local structures? Or is this far from your thinking?

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Nov 10th, 2011 at 04:13:44 PM EST
[ Parent ]

"Management Consultancy" covers a wide range of services with each specific service requiring a broad as well as specific skills.

The "trick" about a network is nodes have varying degrees of independence and dependence which vary over time, sequence, and "position" when graphed. Which are some of the reasons they are so resilient to damage and self-heal when damaged - to some extent.

Overall, a Node can be anything from starting a Farmer's Market to a Food Producers Co-Op or a Consumer's Co-op in a city to a Credit Union to baking bread for your Barter Group to manufacturing to "I can get it for you wholesale" individual sales.

So, if I may translate "Management" to "Node" there may be a market for "Node Consultancy" as per Network Building (local, micro, meso) as well as the 'How-To' wrt building specific, individual, Nodes.

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Thu Nov 10th, 2011 at 04:51:54 PM EST
[ Parent ]

Re: Quite the opposite (4.00 / 2)

In The Global Minotaur Varoufakis provides a concise summary of US post WW II political economy. He notes that the architects were all deeply concerned about guaranteeing against a repeat of the collapse during the Great Depression. By about 1949 that concern merged with a concern to prepare for a prolonged struggle with the Soviet Union. For both purposes they made a conscious decision to create two strong pillars of financial strength to support US hegemony: Germany and Japan.

The creation of the German pillar took the form of The Marshall Plan, an end to the dismantling of German industry and encouragement towards economic integration of coal and steel industries in Germany, France, Belgium and Luxembourg. This would serve as a bulwark against future aggression and serve to strengthen all these countries economically.

The creation of the Japanese pillar was simpler. Japanese industry was substantially intact but needed markets. Originally, it was expected that China would be Japan's market. With the "loss" of China and the outbreak of hostilities in Korea they made the decision to turn Japan into the manufacturing and logistics support base for military operations in Korea. Of course for both Germany and Japan the US opened markets in the USA to their products.

The explicit goal was to have the US economy as the driver of the world prosperity, but not the sole driver. It was to have a European and a Japanese pillar to buffer the US economy from downturns. The result was a great increase in economic activity and the development of much greater industrial infrastructure in both Europe and Asia.

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

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Nov 10th, 2011 at 11:25:17 PM EST
[ Parent ]

yes, sorry (4.00 / 7)

on the other hand, I am in a situation where the current crisis is supposedly directly impacting the ability of banks to lend to anything - and specifically to lend long term, which is what I need.

So I'm working as if the lending capacity will be there when I go to the market to ask for it to be committed - which can be considered to be a leap of faith today!

(But I'm actually back from London and a market sounding exercise, and the result is better than expected)

Wind power

by Jerome a Paris (etg@eurotrib.com) on Thu Nov 10th, 2011 at 01:27:43 PM EST
[ Parent ]

Re: yes, sorry (4.00 / 4)

Well, except that if banks collapse enough they'll be nationalised and will be able to lend pretty much what they want.

But I take your point (in passing, that is yet another time that you have been in London without letting the Londoners know, tssk tssk). It's more thrilling of course to take the leap of faith when you're doing it for a worthy cause, but we should still be thankful that you do.

One thing that does sometimes manage to give me hope (in my field) is that at some point developed countries are going to have to promote a return of quite a lot of things that have been off-shored -whether because of rising transportation costs or because the popular pressure to repatriate the jobs will become too great to withstand.

Somehow, organising a local business environment would be more motivating to me than dismantling it (I know, I'm the odd one out in the trade). I doubt that it will happen within 6 months, though.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Thu Nov 10th, 2011 at 03:12:27 PM EST
[ Parent ]

Re: yes, sorry (4.00 / 5)

Starting to see "re-shoring" in the US. Hiring of programmers has picked-up as companies realize They Got What They Paid For.

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Thu Nov 10th, 2011 at 03:19:33 PM EST
[ Parent ]

Re: yes, sorry (4.00 / 3)

My company has been bought by an Indian one... (Business is software for insurance companies). My employer is suddenly much more interested in reshoring...

Un roi sans divertissement est un homme plein de misères

by linca (antonin POINT lucas AROBASE gmail.com) on Thu Nov 10th, 2011 at 04:04:47 PM EST
[ Parent ]

Re: yes, sorry (none / 0)

A major Indian manufacturer of steel pipe has set up a pipe plant in Little Rock, AR. in the last two years.

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

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Nov 10th, 2011 at 11:28:33 PM EST
[ Parent ]

Re: yes, sorry (4.00 / 4)

except that if banks collapse enough they'll be nationalised

Alas! More likely, they'll just get huge donations of taxpayer funds, no change in management, and with more or less the same old lot of owners.

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

by Starvid on Thu Nov 10th, 2011 at 03:22:31 PM EST
[ Parent ]

Re: yes, sorry (4.00 / 2)

I fear. We were already talking about nationalising banks with the first round of bailouts after Lehmann, and in fact it turned out they were just being massively subsidised - and we're still worrying about how to save private shareholders the cost of a haircut.

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Nov 10th, 2011 at 03:38:34 PM EST
[ Parent ]

Re: yes, sorry (none / 0)

We need to let them crash and burn if we cannot bring ourselves to clean them up.

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

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Nov 10th, 2011 at 11:29:40 PM EST
[ Parent ]

Re: yes, sorry (none / 1)

An American friend of mine is looking into starting a business. In one meeting a couple of MBA types they'd brought on board suggested that they should outsource everything but sales, in order to improve their return on investment.

His response: "What? No, guys, we have to actually create some value here if we want people to keep paying us."

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Nov 11th, 2011 at 05:29:55 AM EST
[ Parent ]

Oh, but I do work for the existing contracts and do my best to develop existing clients such as SNCF.
It's for the initiating new contacts for deals that cannot come through before the budget is cancelled anyway where motivation is rather hard to find.

The few projects that are likely to survive the budgetary cuts will probably be the ones seeking to cut the workforce. Not exactly the ones I'm dreaming of running.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Thu Nov 10th, 2011 at 01:04:29 PM EST
[ Parent ]

The EU executive makes the same mistake that so many others make. They think The Real Business Cycle, RBC, is like the sun. It always comes up in the East - every morning. When it fails to do so then, obviously, this cycle is just a little longer than expected and it will come up tomorrow. For the economists amongst them, this is part of the catechism they learned when going through confirmation, aka grad school. To think otherwise would be akin to assassinating the confidence fairy - just when she was about to reappear.

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

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Nov 10th, 2011 at 08:32:53 AM EST

French yield | Business | guardian.co.uk

These are real numbers, not nominal, right?

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

by Starvid on Thu Nov 10th, 2011 at 09:19:20 AM EST

France's turn... (none / 0)

The yield on France's 10-year government bonds has risen sharply today to 3.45%, amid speculation over its AAA rating (see 3.10pm)
That means that the difference between French and German borrowing costs has hit its highest level since 1992..

"yield" is not enough. Time to beg for mercy?

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

by eurogreen on Thu Nov 10th, 2011 at 11:10:10 AM EST

Re: France's turn... (none / 1)

Did we say weeks?

by Colman (colman at eurotrib.com) on Thu Nov 10th, 2011 at 11:14:55 AM EST
[ Parent ]

Once AAA goes the predators will swoop.

by Colman (colman at eurotrib.com) on Thu Nov 10th, 2011 at 11:17:31 AM EST
[ Parent ]

Once AAA goes it won't matter. The EFSF will unravel as Germamy is not actually prepared to make good in its guarantee.

To err is of course human. But to mess things up spectacularly, we need an elite — Yanis Varoufakis

by Carrie (migeru at eurotrib dot com) on Thu Nov 10th, 2011 at 11:22:58 AM EST
[ Parent ]

There is apparently a rumour going round "the markets" that one of the agencies is preparing to downrate the AAA.

Though rumours, markets...

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Nov 10th, 2011 at 11:34:32 AM EST
[ Parent ]

I'm betting AAA won't go (none / 1)

not until the French presidential election anyway, and right after it if Hollande wins.

I just don't see the rating agencies voting for the French socialists (whatever people on ET may think of them).

Wind power

by Jerome a Paris (etg@eurotrib.com) on Thu Nov 10th, 2011 at 11:57:46 AM EST
[ Parent ]

I said before the end of the month in any case.

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Nov 10th, 2011 at 11:35:04 AM EST
[ Parent ]

0.14 weeks...

To err is of course human. But to mess things up spectacularly, we need an elite — Yanis Varoufakis

by Carrie (migeru at eurotrib dot com) on Thu Nov 10th, 2011 at 11:35:55 AM EST
[ Parent ]

Re: France's turn... (4.00 / 4)

Three months that will test the Eurozone (April 16th)

See this third-person account by the Bundesbank itself:
Crises in the ERM. In 1992, investors lose confidence in the stability of the pound sterling, in particular, and then, in 1993, in the French franc, resulting in speculative selling of the pound and franc; in 1992, the United Kingdom and Italy leave the ERM; in 1993, the fluctuations margins around the bilateral central rates are expanded sharply. The Bundesbank with its commitment to price stability had refused to lower interest rates massively. The partner countries are forcibly reminded of their responsibility for their currencies; the process of convergence needed for monetary union is strengthened.
Now, there is an interesting detail about the 1992 events which is very relevant to our current predicament in 2011:
On Monday, October 26, 1992, The Times quoted Soros as saying: "Our total position by Black Wednesday had to be worth almost $10 billion. We planned to sell more than that. In fact, when Norman Lamont said just before the devaluation that he would borrow nearly $15 billion to defend sterling, we were amused because that was about how much we wanted to sell."
Further,
Soros said he had been confident that the German Bundesbank wanted devaluations in Italy and Britain, but not in France. I felt safe betting with the Bundesbank. The Bundesbank clearly wanted the lira and pound devalued, but it was prepared to defend the franc. In the end, the score was Bundesbank, 3-nil; speculators, 2-1. I did even better than some others by sticking to the Bundesbanks side.
Note here, that the Bundesbank was politically prepared to defend the Franc, but not Sterling or the Lira. Ask yourself, does it look like Germany is prepared, politically, to defend Spain from debt speculators? Come to that, would it be prepared to defend France any longer?

To err is of course human. But to mess things up spectacularly, we need an elite — Yanis Varoufakis

by Carrie (migeru at eurotrib dot com) on Thu Nov 10th, 2011 at 11:20:41 AM EST
[ Parent ]

French Bond Risk Rises to Record as Crisis Spreads - Bloomberg

The cost of insuring against default on French government debt rose to a record on concern Europe's leaders are failing to contain the region's deficit crisis.
Credit-default swaps on France rose eight basis points to 204, according to CMA prices at 12 p.m. in London, surpassing the record closing price of 202 set Sept. 22. The Markit iTraxx SovX Western Europe Index increased for a fifth day, climbing four basis points to a five-week high of 345.

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Nov 10th, 2011 at 11:32:47 AM EST
[ Parent ]

Remember (4.00 / 2)

that the last time the French yields were that high were ... early this summer, and back then German yields were at 3% (so a spread of 35-40bps).

So French yields have not really moved, but German ones went down as everybody is selling out of other bonds and buying German ones.

Not to disagree that the French debt will not be taken in the same death spiral as Italy, just to put some perspective.

but I think it's a good thing that France is finally attacked, because then the Germans will finally be forced to take the Yes/No decision on the death of the EU which they've successfully avoided so far (at a cost to others), and the earlier this happens, the better.

Wind power

by Jerome a Paris (etg@eurotrib.com) on Thu Nov 10th, 2011 at 12:01:25 PM EST
[ Parent ]

Re: Remember (4.00 / 3)

the Germans will finally be forced to take the Yes/No decision on the death of the EU which they've successfully avoided so far (at a cost to others), and the earlier this happens, the better.

Be careful what you wish for.

To err is of course human. But to mess things up spectacularly, we need an elite — Yanis Varoufakis

by Carrie (migeru at eurotrib dot com) on Thu Nov 10th, 2011 at 12:15:24 PM EST
[ Parent ]

Re: Remember (none / 0)

Do you really want to continue with today's slow destruction?

(not a rhetorical question - maybe slow movement to collapse is better than immediate collapse, if there is no chance of improvement beyond)

Wind power

by Jerome a Paris (etg@eurotrib.com) on Thu Nov 10th, 2011 at 01:25:13 PM EST
[ Parent ]

Re: Remember (none / 1)

I would prefer for the Eurozone to unravel without the EU coming undone. And that seems more likely if the initiative to exit the Euro comes from the debtor countries. But that requires the crisis to last long enough that they stop eating poison "because all the cool kids are doing it."

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Nov 10th, 2011 at 01:32:43 PM EST
[ Parent ]

Re: Remember (none / 0)

Maybe the best way to keep the EU together is to abandon the Euro by mutual consent. If putting the blame on debtors or creditors becomes so important, I think it becomes more difficult to keep that which is worth saving. Since our leaders seem incapable of figuring out how to save the Euro, perhaps they should start working on a graceful exit for all concerned.

by Andhakari on Thu Nov 10th, 2011 at 03:26:40 PM EST
[ Parent ]

Re: Remember (none / 0)

How? Leaving the Euro implies massive defaults. Those are rarely friendly affairs.

by generic on Thu Nov 10th, 2011 at 05:03:10 PM EST
[ Parent ]

Re: Remember (none / 1)

The defaults seem likely to happen regardless, and clinging to a Euro which apparently exacerbates the financing problem isn't going to help. The creditor nations are going to have to let go of some wealth; they'll probably lose less if they maintain good trading relations with their neighbors. Waiting for the collapse is likely to be messier than an orderly retreat. But it looks likely to happen either way.

by Andhakari on Fri Nov 11th, 2011 at 02:38:05 AM EST
[ Parent ]

Re: Remember (none / 0)

I have no idea, but I am just shocked to see you entertain an EU breakup as a palatable solution.

To err is of course human. But to mess things up spectacularly, we need an elite — Yanis Varoufakis

by Carrie (migeru at eurotrib dot com) on Thu Nov 10th, 2011 at 06:24:04 PM EST
[ Parent ]

Re: Remember (none / 0)

maybe the eurozone has to give way to save the EU.

2 arguments...

we could dissolve the common currency, default away merrily and then there'd have to be a jubilee.

and meanwhile the EU could go back to becoming a socio-cultural union, not a monetary one.

maybe we need a century or so like that as neighbours before we embark on sharing such delicate houseware as our currencies.

'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 Thu Nov 10th, 2011 at 09:09:36 PM EST
[ Parent ]

Re: France's turn... (4.00 / 5)

FT Alphaville

About that France "downgrade"...Posted by Neil Hume on Nov 10 17:03. Comment.
... We don't know whether there were any bullets in the revolver at the time:
LONDON (Standard & Poor's) Nov. 10, 2011-As a result of a technical error, a message was automatically disseminated today to some subscribers of S&P's Global Credit Portal suggesting that France's credit rating had been changed. This is not the case: the ratings on Republic of France remain `AAA/A-1+' with a stable outlook, and this incident is not related to any ratings surveillance activity. We are investigating the cause of the error.
How strange is that? And obviously not related to any ratings surveillance activity whatsoever.
After all why would anyone be looking to downgrade France? That's clearly ridiculous, right?
Good luck with that investigation S&P!

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

by eurogreen on Thu Nov 10th, 2011 at 12:12:09 PM EST
[ Parent ]

Thinking outside the box (none / 0)

They could always threaten to send DGSE and Commandos marine to put bombs on the yachts of the credit rating agency executives. People know the French can be a little crazy at times.

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

by Starvid on Thu Nov 10th, 2011 at 03:28:56 PM EST
[ Parent ]

Re: Thinking outside the box (none / 0)

were you referring to their Greenpeace episode?

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

by Crazy Horse on Thu Nov 10th, 2011 at 03:53:27 PM EST
[ Parent ]

Re: Thinking outside the box (none / 1)

Indeed I was. That one was something of a failure though, to say the least. But they have teh crazy in them, sometimes.

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

by Starvid on Thu Nov 10th, 2011 at 05:44:04 PM EST
[ Parent ]

Doooooomed (none / 0)

ECB's Policy Makers Say They Can't Do Much More to Stem Financial Crisis - Bloomberg

European Central Bank policy makers said the bank can't do much more to stem the region's sovereign debt crisis, suggesting they are reluctant to significantly ramp up bond purchases to lower Italy's borrowing costs.
"Not much more can be expected from us, it's up to the governments," Governing Council member Klaas Knot, who heads the Dutch central bank, told lawmakers in The Hague today. Three other policy makers have also publicly rejected calls for more ECB intervention and two further officials, who spoke on condition of anonymity, said the central bank has no plans to make its purchase program unlimited.

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Nov 10th, 2011 at 11:37:58 AM EST

Sigh. They don't have to make purchases, just make a credible promise that they will do so... They are getting the worst of all worlds today... buying tons of paper they hate and not having any effect...

Wind power

by Jerome a Paris (etg@eurotrib.com) on Thu Nov 10th, 2011 at 12:03:42 PM EST
[ Parent ]

They're learned idiots...

To err is of course human. But to mess things up spectacularly, we need an elite — Yanis Varoufakis

by Carrie (migeru at eurotrib dot com) on Thu Nov 10th, 2011 at 12:12:14 PM EST
[ Parent ]

Re: Doooooomed (none / 1)

Was the Swiss Bank able to achieve its goal with minimal purchases? And would that apply to the Treaty chains around the ECB?

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

by Crazy Horse on Thu Nov 10th, 2011 at 12:17:52 PM EST
[ Parent ]

When you state your policy and immediately turn the leveraged into fondue, it tends to be rather cheap to maintain the position.

To err is of course human. But to mess things up spectacularly, we need an elite — Yanis Varoufakis

by Carrie (migeru at eurotrib dot com) on Thu Nov 10th, 2011 at 12:28:29 PM EST
[ Parent ]

Re: Doooooomed (4.00 / 3)

At this point they will have to buy a lot of paper to make such a threat credible. A threat to fix the price of bond is only credible if you're actually prepared to buy unlimited quantities if challenged to do so. And speculators would (rightfully) be skeptical of that willingness, so they would challenge it, at least for a few days, perhaps weeks.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Nov 10th, 2011 at 12:22:36 PM EST
[ Parent ]

It would have been soooo cheap back in February 2010...

To err is of course human. But to mess things up spectacularly, we need an elite — Yanis Varoufakis

by Carrie (migeru at eurotrib dot com) on Thu Nov 10th, 2011 at 12:26:39 PM EST
[ Parent ]

Re: Doooooomed (none / 1)

No, I don't think it would. There's a substantial real imbalance that they have to work against.

Much cheaper than it would be today, but that's a slightly different point.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Nov 10th, 2011 at 01:06:31 PM EST
[ Parent ]

Re: Doooooomed (none / 1)

Isn't the entire stock of greek debt outstanding something like €50bn?

Aren't we talking about a debt meltdown on the order of 2 to 3 trillion already?

But, yes, your point stands. They might have had to buy the entire Greek debt stock.

To err is of course human. But to mess things up spectacularly, we need an elite — Yanis Varoufakis

by Carrie (migeru at eurotrib dot com) on Thu Nov 10th, 2011 at 01:10:14 PM EST
[ Parent ]

Re: Doooooomed (none / 0)

Migeru:

debt outstanding

Can you explain?

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Nov 10th, 2011 at 02:53:04 PM EST
[ Parent ]

Just the amount already issued, not yet matured, and not held by the issuer.

To err is of course human. But to mess things up spectacularly, we need an elite — Yanis Varoufakis

by Carrie (migeru at eurotrib dot com) on Thu Nov 10th, 2011 at 06:21:39 PM EST
[ Parent ]

yeah (none / 0)

but once the speculators had been burned, and the credibility of the ECB established, they could then discreetly sell it off again in dribs and drabs, no?

(in the fantasy world we're postulating for the sake of argument)

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

by eurogreen on Thu Nov 10th, 2011 at 12:27:32 PM EST
[ Parent ]

Re: yeah (4.00 / 2)

Or hold to maturity. The ECB of all institutions should have a longer time horizon.

by IM on Thu Nov 10th, 2011 at 12:36:50 PM EST
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Re: yeah (4.00 / 2)

But there would be no need. The ECB would be acting as market maker. When demand for bonds at reasonable yields picked up, the ECB could quietly unwind its position. Bonds bought at the enforced limit of, say, 6% yield, would be sold back to the market at lower yields, therefore at a profit.

To err is of course human. But to mess things up spectacularly, we need an elite — Yanis Varoufakis

by Carrie (migeru at eurotrib dot com) on Thu Nov 10th, 2011 at 12:41:29 PM EST
[ Parent ]

Re: yeah (none / 0)

Once you make it a policy to fix the price, you lose all ability to conduct discretionary sales.

So no.

They could hold to maturity, or they could sell them back at a profit if and when demand for government instruments picks up. But stabilising the price is not in and of itself sufficient to allow the price fixer to abandon the policy.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Nov 10th, 2011 at 01:28:58 PM EST
[ Parent ]

Re: I think congratulations are due (4.00 / 2)

Pretty deceptive article. Says that it's based on a forecast for all 27 EU countries, but then goes on to mention only the growth projected for the Eurozone countries. Which is meaningless, unless the growth rate for the entire 27 country area is given, along with the comparable projected rates of growth for the non-Euro countries. Without those there's no basis for comparison. Are non-Euro countries such as the UK doing any better? I don't think so. It makes it look as though lower growth is related to the Euro, when it has to do with a general slowdown. No one ever claimed that the Euro would eliminate all recessions and other economic problems, nor is it true that prior to the Euro there were no recessions or other economic problems. For example, Greece's and Italy's financial mismanagement problems long predate the Euro.

by mikep on Thu Nov 10th, 2011 at 04:36:59 PM EST

Re: I think congratulations are due (none / 1)

Eurozone countries (and countries hell-bent on maintaining their accession pegs) have routinely performed worse than Iceland during this crisis.

I think maybe it's time to accept that the Eurozone's members lacks the political will to make the Eurozone work, by printing unlimited amounts of money for unrestricted fiscal intervention in defense of full employment.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Nov 11th, 2011 at 05:28:09 AM EST
[ Parent ]

Moreover, it's time to accept that the Eurozone's institutional makeup is designed on crackpot economics.

To err is of course human. But to mess things up spectacularly, we need an elite — Yanis Varoufakis

by Carrie (migeru at eurotrib dot com) on Fri Nov 11th, 2011 at 06:58:13 AM EST
[ Parent ]

Re: I think congratulations are due (none / 1)

There's nothing wrong with the makeup of the Eurozone that a Bancor couldn't solve.

It's a crude hack compared to building it on the basis of reality-based economics. But Europe is built on crude hacks, so that's not in and of itself a disqualification.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Nov 11th, 2011 at 01:05:12 PM EST
[ Parent ]

A Bancor and the ECB doing its job presumably?

by generic on Fri Nov 11th, 2011 at 06:49:56 PM EST
[ Parent ]

That would be better, of course, but I don't think it's strictly necessary to make the Eurozone a sustainable construct. The ECB not doing its job will just mean that bankruptcy laws have to become extra debtor-friendly so countries can get out of private debt overhangs without unrestricted fiscal stimulus.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Nov 12th, 2011 at 04:50:52 AM EST
[ Parent ]

Would a Bancor prevent a run on state debt?

by generic on Sat Nov 12th, 2011 at 05:46:58 AM EST
[ Parent ]