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Thread: Obama: Solving Euro Crisis of ‘Huge Importance’

  1. #101
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    Re: Obama: Solving Euro Crisis of ‘Huge Importance’

    Quote Originally Posted by PeteEU View Post
    Well the critics are morons on so many levels and their views are most likely based on partisan political ideology than reality.. wonder if it is the same morons.. err critics that claimed that the EU had to be bailed out with 6 trillion Euros... any ways... Banks and the financial industry run on liquidity, and when liquidity is drained from the market then yes banks get into solvency problems because they can not meet their day to day liquidity needs. So what the fed and the rest of the industrialised worlds banks did today might be a temporary solution some what, but it had the desired effect and hopefully the market will start to question validity of the "critics" who are ruling the world markets now.

    The only downside might be that the need for the ECB to actually print money will be dampened a tad, which will play into the hands of the Germans who dont want the ECB to print money.... but then again it might give the Eurozone the time politically to get their ducks in place so to say.
    Spreads on inter bank loans denominated in Euros are becoming alarmingly high once again, the swap lines are being implemented so that central banks can offer liquidity in foreign currencies and also reduce the cost of such transactions. The risk premium paid while using Euro's (see Euribor EONIA spread) shows that the ECB has not only failed to keep the markets liquid in comparison to other central banks, but there is considerably more default risk associated with banks holding the currency. If, for instance the fed, or any other central bank has to use the swap lines, not for domestic currency, but for the Euro, they will have to distinguish between a liquidity problem and a solvency problem. A central bank cannot solve the problem of a debt that will not be repaid. The Euro-zone has a balance of payments problem, some countries have large external debts within the Euro, but due to the monetary union the currency cannot make the necessary adjustments, and with the ECB unwilling to back up these sovereigns it threatens to leave these countries and the banks that hold their debts bankrupt. That is reality. The recent action by central banks can only solve liquidity problems, it is only a way to soften/slow down the process and protect solvent institutions, but the underlying dynamics are unchanged.

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    Re: Obama: Solving Euro Crisis of ‘Huge Importance’


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    Re: Obama: Solving Euro Crisis of ‘Huge Importance’

    PeteEU: I want you to read this later from start to finish and give me your honest opinion on it. THIS is why I say debt matters and that the Eurozone is in a lot worse shape than the markets have already priced in. I can't articulate the problem half as well as the author can so I'm just going to use his words as my response on Greece and Italy plus the EFSF and IMF. As far as I'm concerned Greece is cooked and done and Italy isn't looking to hot. Goldman Sachs economists just revised GDP estimates for Q1 2012 tfrom 0.1% to -0.8%. Just read the letter and tell me if you still think the debt crisis is made up and that debt doesn't really matter.

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    Re: Obama: Solving Euro Crisis of ‘Huge Importance’

    ECB President issued some strong words today about further fiscal consolidation within the EU. He noted that the most important aspect for the ECB would be a “new fiscal compact” that would “start restoring credibility.” He stated that “There cannot be a single currency without economic convergence”. Everyone knows what is needed: fiscal rules that can be enforced and a common economic policy for the region. There were also news reports that a deal would be reached with the IMF to expand its lending to “nearly” distressed EU countries.

    FTA: "A European proposal to channel central bank loans through the International Monetary Fund may deliver as much as 200 billion euros ($270 billion) to fight the debt crisis, two people familiar with the negotiations said."

    Euro Central Banks May Provide $270B Through IMF - Bloomberg

    Can someone explain to me how the ECB loaning to the IMF to provide 200 billion euros in aid is not printing Euros? It almost seems like a shell game at this point.
    "There is an excellent correlation between giving society what it wants and making money, and almost no correlation between the desire to make money and how much money one makes." ~Dalio

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    Re: Obama: Solving Euro Crisis of ‘Huge Importance’

    One thing is for sure we're not going to print them any of our money, till they learn to print their own

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    Re: Obama: Solving Euro Crisis of ‘Huge Importance’

    Quote Originally Posted by grip View Post
    One thing is for sure we're not going to print them any of our money, till they learn to print their own
    Too late. We just did on Wednesday.
    "There is an excellent correlation between giving society what it wants and making money, and almost no correlation between the desire to make money and how much money one makes." ~Dalio

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    Quote Originally Posted by apdst View Post
    The only criminals--if you must call them that--are the ones in the government that created the mess.
    Well, to be fair, government simply changed the laws in such a way that these fortune 500 companies could act as the criminals they are, and with the revolving doors between government and corporations, I suppose government had a role to play.

    But, the most extensive criminality comes from the biggest banks, the ones deemed "too big to fail".

    If you agree with me, why do you keep saying thta austerity won't work?
    Because what is being pushed is NOT austerity by the definition you provided, but much closer to fleecing people that have paid into a system their entire lives and are being cut off before they had a chance to benefit from the money they put in.

    It's like you make a large purchase through a layaway plan, and pay for the thing for 40 months, then right as youre nearing the final payment then austerity measures that get put in, and they tell you that you still have another 5 months to pay before you can get your purchase... AND that the monthly price is gone up, and that's because the company handling your layaway plan went bankrupt. That's effectively a theft.

    You can't be serious! That housing bubble the government created doesn't have anything to do with it? What about the billions that the Eruos owe those fat cat pensions, that they can't afford, because there is more money going out and less money coming in, with the gap getting wider and wider every year? Ya think maybe a 30 hour work week might have been a bad idea??
    The housing bubble was facilitated by the government, but it was bankers that made the bad loans... And then stepped it up by allowing hundreds of times worth of investments derivative of those bad loans, and when those investments fell apart they go to government and ask for tax money to cover those bad loans.

    The problems otherwise were the results of fraud, very little to do with the 30 hour work week.


    All the more reason to spend less and run the household on what you've actaully have coming in, or--I know this is going to sound really freaky-deaky to some folks--figure out a way to make more money, without raising taxes.
    Ya, two simple solutions to that situation :
    First, implement regulations, deregulation being a major cause of the crisis.
    Second, lower taxes so more can afford to pay those taxes, and so increasing overall revenue.

    Actaully, it doesn't, but whatever
    Oh, so you don't pay on a loan for a few months and they don't start adding interest to the accrued interest??


    Uh, right, but I don't see how it's contrary to anything I've said.
    Contrary to the point that government was doing the most wrong...


    Another great case for drastic austerity measures.
    Elaborate ?

    If anything, this is a case for "austerity" on the fortune 500...



    The IMF doesn't create the situation; politicians with all kinds of government handouts create the situation.
    Frankly, this point shows your ignorance of IMF policies... And how it impacts governments they work "with".

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    Re: Obama: Solving Euro Crisis of ‘Huge Importance’

    The housing bubble was facilitated by the government, but it was bankers that made the bad loans... And then stepped it up by allowing hundreds of times worth of investments derivative of those bad loans, and when those investments fell apart they go to government and ask for tax money to cover those bad loans.
    That's the whole thing in a nutshell. The economies of the US and Europe were ramped up beyond sustainability by home purchases that ultimately started to default. When the job creation and income of workers resulting from the housing bubble were eliminated countries and states whose budgets were expanded from the extra taxed income over the years became depleted throwing them into debt and over budget. And the derivatives which were way over valued and insured fell through, causing trillions of dollars on paper to become toxic debt.
    Last edited by grip; 12-03-11 at 11:46 AM.

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    Re: Obama: Solving Euro Crisis of ‘Huge Importance’

    Quote Originally Posted by AdamT View Post
    Yep, I guess that's what they said after WWII.
    You see a whole lot of similarity between that generation and this generation? Really? Like I said...you know anyone who ever has kids or grandkids...you make sure to tell them how proud you are of the debt you saddled them with because you and people like you mindlessly support this inane spending. But **** them...right? What do you care Pete...let THEM deal with it.
    Last edited by VanceMack; 12-04-11 at 06:35 AM.

  10. #110
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    Re: Obama: Solving Euro Crisis of ‘Huge Importance’

    Quote Originally Posted by VanceMack View Post
    You see a whole lot of similarity between that generation and this generation? Really? Like I said...you know anyone who ever has kids or grandkids...you make sure to tell them how proud you are of the debt you saddled them with because you and people like you mindlessly support this inane spending. But **** them...right? What do you care Pete...let THEM deal with it.
    What I'll tell them is that you and people like you mindlessly supported tax cuts when we could have paid down debt, and an idiotic war that cost them $3 trillion. I'll also apologize for you and people like you who idiotically refused to deal with environmental issues that screwed up their future.

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