Matt 0 Posted July 12, 2011 Share Posted July 12, 2011 The French banks are knee deep in CDS exposure to southern med countries- hence all the fuss about the Greek restructuring not being classed as a 'default event' by the ratings agencies. I agree though, this whole thing is fast becoming a nonsense. The problem is that we have built up about 400 years of wealth based on the concept of money creation, relying on a continued game off pass the parcel. Everyone is busy passing the parcel, but when the music stops, only one kid is left holding it. Link to comment Share on other sites More sharing options...
Park Life 71 Posted July 12, 2011 Author Share Posted July 12, 2011 The French banks are knee deep in CDS exposure to southern med countries- hence all the fuss about the Greek restructuring not being classed as a 'default event' by the ratings agencies. I agree though, this whole thing is fast becoming a nonsense. The problem is that we have built up about 400 years of wealth based on the concept of money creation, relying on a continued game off pass the parcel. Everyone is busy passing the parcel, but when the music stops, only one kid is left holding it. Central banks need to start cleaning house. Shit is getting real. Link to comment Share on other sites More sharing options...
Guest alex Posted July 13, 2011 Share Posted July 13, 2011 I'd just abolish ratings agencies and force banks to lend to governments at 2% in return for not nationalising their assets. How would that work for global institutions- which governments would they be forced to lend to? Maybe the EU will speed up the process of bolstering bank capital by insisting they hold more highly-rated securities. How about eurozone bonds? That would be convenient. I wasnt being that serious but there is a fundamentally massive problem when 3 private US institutions control EU fiscal and social policy on the basis of how much shit is coming out of their arse. Isnt the panic about the impact on the Credit Default Swap market? Those toxic instruments that caused this mess? I must admit, a lot of your humour goes over my head Link to comment Share on other sites More sharing options...
ChezGiven 0 Posted July 13, 2011 Share Posted July 13, 2011 Or it's just not that funny. The pass the parcel image is a good one Matt but I don't see it like that completely. Wealth is a psychological trick that provides the power of incentive - to force people to act or to give you things - that continues go work as long as people believe in it. If people believe in it then we will continue to create, build and sell to each other. The problem with finance and dare I say people who work in the sector, is that they are now far too far removed from the basic Market insights that guide our behaviour. Finance or Economics was always the study of people, not money. Krugman's recent lecture on voxeu.org is worth a read on this topic. Link to comment Share on other sites More sharing options...
ChezGiven 0 Posted July 13, 2011 Share Posted July 13, 2011 http://www.voxeu.org/index.php?q=node/6668 Link to comment Share on other sites More sharing options...
Park Life 71 Posted July 13, 2011 Author Share Posted July 13, 2011 Or it's just not that funny. The pass the parcel image is a good one Matt but I don't see it like that completely. Wealth is a psychological trick that provides the power of incentive - to force people to act or to give you things - that continues go work as long as people believe in it. If people believe in it then we will continue to create, build and sell to each other. The problem with finance and dare I say people who work in the sector, is that they are now far too far removed from the basic Market insights that guide our behaviour. Finance or Economics was always the study of people, not money. Krugman's recent lecture on voxeu.org is worth a read on this topic. Very true. But the survival of man is now bound up in moving away from money, competitive and predatory behaviour. The next rung of the ladder beckons... Link to comment Share on other sites More sharing options...
Kevin S. Assilleekunt 1 Posted July 13, 2011 Share Posted July 13, 2011 /parky/ I've been to the year 3000... It's not much different but they live underwater... /parky/ Link to comment Share on other sites More sharing options...
McFaul 35 Posted October 20, 2011 Share Posted October 20, 2011 Can someone explain something to me. I actually got a B in me Economics GCSE, but I've got forgot most of the crack. We're all shouting and bawling about Greece, Italy, Spain and Portugal being dangerously in debt, people being pissed off that we'll have to fork out. So why then do we as a country have nearly as much debt as the rest of the EU put together, and nee ones panicking about us? Can someone explain, this table to me. 8 trillion wor debt 400% of GDP (this is external debt) yet Greece's is % wise less than half wors and people are saying they're basically fucked for the next 40 years. Is it because we are good payers that no one is worrying about wors? Apologies about the Kevin nature of this post, I just genuinely don't understand it as well as I should. Rank Country External Debt[2] US dollars Date Per capita[3][4][5][6] US dollars % of GDP[7][8][9] 1 United States 14,825,308,000,000 30 June 2011 47,568 99 — European Union 13,720,000,000,000 30 June 2010 27,864 85 2 United Kingdom 8,981,000,000,000 30 June 2010 144,338 400 3 Germany 4,713,000,000,000 30 June 2010 57,755 142 4 France 4,698,000,000,000 30 June 2010 74,619 182 6 Japan 2,441,000,000,000 30 September 2010 19,148 45 8 Italy 2,223,000,000,000 30 June 2010 est. 36,841 108 9 Spain 2,166,000,000,000 30 June 2010 47,069 154 10 Luxembourg 1,892,000,000,000 30 June 2010 3,759,174 3,443 11 Belgium 1,241,000,000,000 30 June 2010 113,603 266 12 Switzerland 1,200,000,000,000 30 September 2010 154,063 229 13 Australia 1,169,000,000,000 31 December 2010 est. 52,596 95 14 Canada 1,009,000,000,000 30 June 2010 29,625 64 15 Sweden 853,300,000,000 30 June 2010 91,487 187 16 Austria 755,000,000,000 30 June 2010 90,128 200 — Hong Kong 750,800,000,000 31 December 2010 est. 105,420 334 17 Norway 643,000,000,000 12 August 2011 131,220 141 18 Denmark 559,500,000,000 30 June 2010 101,084 180 19 Greece 532,900,000,000 30 June 2010 47,636 174 20 Portugal 497,800,000,000 30 June 2010 46,795 217 21 Russia 480,200,000,000 30 November 2010 est. 3,421 33 22 China 406,600,000,000 31 December 2010 est. 303 7 5 Netherlands 371,028,000,000 31 December 2009 47,172 74 23 Finland 370,800,000,000 30 June 2010 68,960 155 24 Korea, South 370,100,000,000 31 December 2010 est. 7,567 37 25 Brazil 310,800,000,000 31 December 2010 est. 1,608 15 Link to comment Share on other sites More sharing options...
Tom 14002 Posted October 20, 2011 Share Posted October 20, 2011 Link to comment Share on other sites More sharing options...
ewerk 29580 Posted October 20, 2011 Share Posted October 20, 2011 Stevie, I'm guessing that the figures you're quoting are for both public and private debt. Given the size of the UK's financial sector our banking debt will no doubt make up a large chunk of that. It isn't proportional to government debt. Link to comment Share on other sites More sharing options...
Park Life 71 Posted October 20, 2011 Author Share Posted October 20, 2011 Britain still has the ability to make a lot of money, Greece and Italy don't. Link to comment Share on other sites More sharing options...
ChezGiven 0 Posted October 20, 2011 Share Posted October 20, 2011 Its simple, the price of debt rises with the risk of being unable to pay it back. If Italy's income is $1 Trillion and its outgoings are $1.2 Trillion (a 20% budget deficit) and its total debt is $1 Trillion. What happens next year? Their income is $ 1Tr, outgoings are $1.2 Tr and its total debt is $1.2 Tr. The following year? Their income is $ 1Tr, outgoings are $1.2 Tr and its total debt is $1.4 Tr Now add in reality, i.e. rising interest payments, rising outgoings because of higher unemployment and lower income due to a recession. You will never be able to pay off the debt and are essentially bankrupt by standing still. The markets think there is no way back for Greece or Italy because of politics, unions, labour law AND because they dont believe their economies can grow enough to sort out the deficit. Small growth (2-3%) will increase income and decrease outgoings. The size of the debt is not important, its the risk assessment and price demanded by the market to lend the govt more money (i.e. buy govt bonds), Link to comment Share on other sites More sharing options...
Park Life 71 Posted October 20, 2011 Author Share Posted October 20, 2011 Basically what I said but wrapped up in Chezlingo. Link to comment Share on other sites More sharing options...
peasepud 59 Posted October 20, 2011 Share Posted October 20, 2011 Greece could save a fortune if they stopped smashing plates Link to comment Share on other sites More sharing options...
manc-mag 1 Posted October 20, 2011 Share Posted October 20, 2011 Greece could save a fortune if they stopped smashing plates Then their plate making industry would go to the wall over night. You've got to think these things through, Pud. Link to comment Share on other sites More sharing options...
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