Greece: Euro crisis
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A Dashing Blade
Takes horses to water but can't make donkeys drink
Was more pointing out how your rebuttals were incorrect.
If not a rhetorical question then I would point you in the direction of Mr Google.
Blagsta
Minimum cage, maximum cage
How did you end up working in finance?
A Dashing Blade
Takes horses to water but can't make donkeys drink
Don't mistake my disagreement with you as my agreement with them.Fuck me it's Margaret Thatcher.
butchersapron
Bring back hanging
My rebuttals were and are entirely correct. The household/personal debt analogy fails on every single level. Your last line admits this - it accepts that the greek state raises a load of money via taxation, this admittance destroys your analogy. The thing is, you just had the fucking cheek to demand accurate analogies from other posters as well.
I notice that you're ignoring my other post .
littlebabyjesus
one of Maxwell's demons
You very precisely agree with Thatcher that looking after a country's finance is like looking after personal finance, despite the fact that they are totally different. You are objectively, factually wrong, and that shows that you do not know what the hell you are talking about.
butchersapron
Bring back hanging
Just look at the beautiful world they've built for you you ungrateful sod.How did you end up working in finance?
Louis MacNeice
Autumn Journalist
The point being made is that you were using the same personal economy analogy as Thatcher, and that it was similarly inaccurate. If you don't think it is inacurate then please explain why you see state and personal economies as analogous.
Louis MacNeice
ska invita
back on the other side
Thing is it seems to me the 'spend less' or 'spend more' solutions to the crisis are both flawed, and have been for a long time. What needs changing is not tinkering with the budgets, but something more fundamental, because that's where the problem is.
littlebabyjesus
one of Maxwell's demons
A better analogy for Captain Finance here would be that of a company that can't cover its wages because it is waiting on some unpaid invoices. Does it take out a loan to pay the wages and continue in business, or does it sack everyone and wind itself up?
But even that doesn't work, because the state is like a company that still has to pay its workers a reduced wage even if it sacks them. So the company winds itself up, removes the possibility of income and still has to pay out money. What happens then to its debt? By putting itself out of business, it is guaranteeing that its debt will spiral ever upwards.
But even that doesn't work, because the state is like a company that still has to pay its workers a reduced wage even if it sacks them. So the company winds itself up, removes the possibility of income and still has to pay out money. What happens then to its debt? By putting itself out of business, it is guaranteeing that its debt will spiral ever upwards.
butchersapron
Bring back hanging
About time for London_calling to make an ill-informed post he's unable to back up, followed up by LOL and nothing else isn't it?
A Dashing Blade
Takes horses to water but can't make donkeys drink
Not quite, in this case the invoices due from its workers rather than a supplier (in the form of unpaid taxes)
Depends on whether or not it can afford the interest payments
A Dashing Blade
Takes horses to water but can't make donkeys drink
Yup, however I'd argue that one is more flawed than the other.
littlebabyjesus
one of Maxwell's demons
so you accept that your analogy with personal finance was complete bollocks, then?
A Dashing Blade
Takes horses to water but can't make donkeys drink
You asked, "can a person print money or raise taxes" yes?
I pointed out that Greece, atm, can do neither
Do you actually read posts before replying to them?
A Dashing Blade
Takes horses to water but can't make donkeys drink
It was a play words based on Orwell's famous phrase, sorry, just one of those instances where interweb postings can't (and shouldn't be expected to) convey certain nuances.
Get the point about the invoices?
butchersapron
Bring back hanging
Er...no, you used a household personal finance analogy to argue that cutting spending always cuts debt - always and everywhere. (I also pointed out that ongoing events show this not to be true - but you've chosen to ignore that). I correctly pointed out how the analogy fails. A point which you implicitly accepted by recognising that Greece does in fact have tax based revenue.
butchersapron
Bring back hanging
What was Orwell's phrase about maxing out on a credit card?
littlebabyjesus
one of Maxwell's demons
I get the point that my analogy also doesn't work either as a state isn't an individual or a company.
Try this:
I owe 50 pounds. I have no money to get the train to work, where for a day's graft I will be paid 60 pounds. Do I borrow the five pounds it will take to get to work, thus increasing my debt to 55 pounds, or do I stay at home? Which of these - increasing spending or freezing spending - results in the longer term in a reduction of the debt?
The point is that the most important thing of all is to keep people working and doing things in an economy.
A Dashing Blade
Takes horses to water but can't make donkeys drink
What do you do if no-one is willing to lend you a fiver?
Crispy
The following psytrance is baṉned: All
Starve
A Dashing Blade
Takes horses to water but can't make donkeys drink
Right, apols if I'm going to lose some people on this one but time for a sensible post that relates to the OP . . .
As I see it, these are the options Greece has to get out of its current debt trap
1) It can grow itself out . . . Unlikely within the context of soft global demand and its inability to finance at levels that would be demanded by lenders
2) ECB can inflate the debt away . . . but this would also affect the rest of Euroland so not a solution to this particular crisis
3) The tooth-fairy (ie another Euroland sovereign) can give it the money at preferential interest rates . . . less unlikely but would entail considerable political risk for that sovereign (French elections are on the horizon which is why Sarkozy is resisting a French bank bail out, German press increasingly antagonistic, Finns have already said that they would want collateral)
4) Default (managed or hard) . . . implies the acceptance of contagion risk, however an exit-risk premium is already observable in the bond prices of other sovereigns but the politicians (remembering that, in reality, the Euro was imposed by politicians rather than economists) would have to admit they were wrong.
5) Some sort of restructuring of existing debt co-ordinated by a supra-national . . . as a restructuring using some sort of guaranteed zero-coupon bond (cf “Brady Bonds”) is too expensive in the current low interest-rate environment I would guess that a some sort of “floating-rate perpetual” (where the floating rate is linked to (say) Greek GDP growth rather than 3M Euribor) structure is most attractive.
Personally I reckon the last one is the most likely.
As I see it, these are the options Greece has to get out of its current debt trap
1) It can grow itself out . . . Unlikely within the context of soft global demand and its inability to finance at levels that would be demanded by lenders
2) ECB can inflate the debt away . . . but this would also affect the rest of Euroland so not a solution to this particular crisis
3) The tooth-fairy (ie another Euroland sovereign) can give it the money at preferential interest rates . . . less unlikely but would entail considerable political risk for that sovereign (French elections are on the horizon which is why Sarkozy is resisting a French bank bail out, German press increasingly antagonistic, Finns have already said that they would want collateral)
4) Default (managed or hard) . . . implies the acceptance of contagion risk, however an exit-risk premium is already observable in the bond prices of other sovereigns but the politicians (remembering that, in reality, the Euro was imposed by politicians rather than economists) would have to admit they were wrong.
5) Some sort of restructuring of existing debt co-ordinated by a supra-national . . . as a restructuring using some sort of guaranteed zero-coupon bond (cf “Brady Bonds”) is too expensive in the current low interest-rate environment I would guess that a some sort of “floating-rate perpetual” (where the floating rate is linked to (say) Greek GDP growth rather than 3M Euribor) structure is most attractive.
Personally I reckon the last one is the most likely.
You are such a pedant Dashing blade. It's a very well known term both in popular parlance and recent academiic works - see works of for instance Susan Strange - and her "Casino Capitalism" or Ha-Joon Chang's "23 Things they don't tell you about capitalism".
I didn't write this myself but the nub of the argument is :
The key to understanding of Casino Capitalism is that it was a series of government decisions (or rather non-decisions) that brought on the present state of financial instability and economic disorder. In other words casino capitalism has distinct "Made in the USA" and "Government property" marks. It was the USA elite, which refused to act responsibly in the face of changing economic conditions resulting from its own actions, and instead chose to try to perpetuate, by whatever means it had at its disposal, the institutional advantages that it had vis-a-vis its main economic rivals, stemming from the role of dollar as international reserve currency.
Self-reinforcing ‘positive’ feedback loops prevalent in Casino Capitalism trigger an accelerating creation of various debt instruments, interest of which at some point overwhelm systemic carrying capacity. Ability to lend against good collateral is quickly exhausted. At some point apparently there is no good collateral against which lending freely was possible, even at high rates. This means that the next stage of financial innovation involves scam and fraud, on increasing scale. Gradually Ponzi economy is replaced with Madoff economy.
This means that "society at large" does not have effective brakes to the assent of financial kleptocracy (or financial oligarchy), save the laws of physics—gravity and thermodynamics. In a way this was a silent coup. I would add to this the computer revolution and internet that made many financial transaction qualitatively different and often dramatically cheaper that in previous history. Computers also enabled creation of new financial players like hedge funds, exchange-traded funds (ETFs), as well as high-frequency trading and derivatives.
For Strange the speed at which computerized financial markets work combined with new much larger size and their now, near-universal pervasiveness is an important qualitative change. One of the side effects of this change is that volatility extends globally. Approximately $1.5 trillion dollars are invested daily as foreign transactions. It is estimated that 98 per cent of these transactions are speculative. In comparison with this casino Las Vegas looks like a aborigine village in comparison with Manhattan.
Ok ?
But of course you are undoubtedly WELL aware that capitalism, especially the bit you apparently work in, is a casino, you just don't care, and are so full of your own smug cleverness that you don't give a toss what damage speculative activity wreaks across the world. I'm afraid that's why increasing numbers of your fellow citizens view your class of persons as blood sucking leeches on the body of Humanity. Cruel. unfortunate, you are all no doubt sadly misunderstood, but there it is.
iROBOT
CURRENTLY RE-BOOTING
The we can take it that you were against public money being spent to bale out the banks?
A Dashing Blade
Takes horses to water but can't make donkeys drink
Ahhhhh, casino as in "everyone's speculating" rather than "operates on a casino business model"
Yup, I'd guestimate at least 90% by value of any and all financial transactions are speculative in nature (defined as intending a holding period under 45 days) and would make the point that many banks/institutions genuinely but erroneously (imo) would disagree with you. ie they just don't get it.
Yup, I'd guestimate at least 90% by value of any and all financial transactions are speculative in nature (defined as intending a holding period under 45 days) and would make the point that many banks/institutions genuinely but erroneously (imo) would disagree with you. ie they just don't get it.
A Dashing Blade
Takes horses to water but can't make donkeys drink
Their investment banking arms? Yes, 110%.
I also think that far better bail-out terms could have been imposed by Govts.
Bottom line is that the general public simply does not get just how far the wool has been pulled over their eyes on that particular issue.
iROBOT
CURRENTLY RE-BOOTING
Seems as if Keynesian economics is wrong for the working classes but right for the super rich. The entire banking structure is a charade and I would go as far as say it's institutionalized corruption. We shouldnt be giving them more money or any more concessions we should be jailing them
SpineyNorman
Inappropriate content removed
If you were a self-employed builder in this situation would you stop buying petrol for your van and cease replacing worn out tools? Would that help you to repay your credit card?
A Dashing Blade
Takes horses to water but can't make donkeys drink
Obviously not, but Sky would go, cut down on beer & fags etc . . .
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