"Full Fledged Panic" - World Economic Crisis Moving to a New Stage UPDATE:Euphoric Stocks Bubble While Wages Plummet

[DCon]

Monday could be....interesting....

yes it could

France's top banks are bracing themselves for a likely credit rating downgrade from Moody's, sources close to the situation said on Saturday, further complicating their efforts to assure investors they are riding out the tensions in funding markets.

http://uk.reuters.com/article/2011/0...78927620110910

[Apjp]

yes it could



http://uk.reuters.com/article/2011/0...78927620110910

Looks like the running dogs have run out of rabbits to chase. Perhaps its time the Red Bucks herded together??

[barrym]

Well, it wasn't Monday but Tuesday that is/was/will be/may be interesting. Moves afoot to allow an 'ordered' defult by Greece.` I will say I told ye so.....if anyone cares to go back through my posts (fairly safe bet that no one will) you'll find I predicted a default. Despite all the guff from Angela, Sarko, G7 Gx and everybody else, it was never possible for an underdeveloped country like Greece to pay. Now the question is who's next?

Oh, Angela and Co will blubber on about keeping the Euro and all that but they have blinked and the market knows it. Inda is whistling away in the dark that we are the troika's good boys, we're doing what we were told, as if that counted for anything.

All bets are now off, all sovereigns are now in play.

Note also that the blame in Greece is being placed at the door of a corrupt civil service; would you all feel that ours is squeaky clean?? Maybe not altogether corrupt, more like incompetent, starting with the bank guarantee.

[morticia]

Oh, Angela and Co will blubber on about keeping the Euro and all that but they have blinked and the market knows it. Inda is whistling away in the dark that we are the troika's good boys, we're doing what we were told, as if that counted for anything.

Well, they did cut our rates again today... throw a dog a bone...

[barrym]

Well, they did cut our rates again today... throw a dog a bone...

Quite, but note the context - we get a reduction, but we don't get to burn the Anglo bond bookies - the last gasp insistence of Trichet..... I know that Noonan is famous for the obscurity of his pronouncements but his guff on this one exceeds his best. It was so bad I thought he was talking Polish.....

In the end we are being given photo and sound opportunities to say we are getting reductions, in return for toeing the line. It is made out in such a way that we argued for all this stuff and got our way.. nothing could be further from the truth.

B

[barrym]

Ok, I know he has form for changing his coat but here is the latest McWilliams take....

"A few years ago, we were the poster boy for deregulation, low taxes and free capital movements. Our politicians went around Europe advising the rest of the continent to copy Ireland. Just be like us and it’ll all be grand, they said.

Having fallen so sharply, we are again the poster boy, but this time for austerity. Our politicians are now advising the rest of Europe to be like us. If you – Greece, Portugal, Spain and Italy – can just do austerity like Ireland, it’ll all be fine, they say. Sound familiar? The problem with austerity is that it has never worked anywhere in the world without either being preceded, or followed, by a massive devaluation or massive credit injection. Our ‘successful’ period of austerity from 1987 to 1990 was preceded by a devaluation in 1987 and followed by another one in 1992, and all the while interest rates fell dramatically.

Likewise, Reagan and Thatcher’s massive fiscal contractions of the early 1980swere accompanied by the most rapid injection of credit either economy had seen since the 1920s, leading to a bubble and two housing busts in the late 1980s.

Without a massive injection of credit or a massive devaluation, austerity can’t work. It will lead to long-term, higher levels of unemployment and emigration. This is what is happening in Ireland right now."

Would anyone disagree?? If so why?

We are craven wimps, tugging the forelock in response to Frankfurts requirements.

[morticia]

Without a massive injection of credit or a massive devaluation, austerity can’t work. It will lead to long-term, higher levels of unemployment and emigration. This is what is happening in Ireland right now."

Would anyone disagree?? If so why?

We are craven wimps, tugging the forelock in response to Frankfurts requirements.

I'd agree, but I think that the Euro is going to undergo either a massive involuntary devaluation (in which case, we get what we need without annoying anyone), or a breakup, which won't be blamed on us,now, unless we do anything really stupid.

The problem with the doom economists is that, while they are technically and financially correct, they are ignoring political realities that, while nonsensical, are strongly felt and which it would be unwise to ignore.

Frankly, the big boys are now in such merde that they'll have to print and devalue the Euro itself, sooner rather than later. They also need austerity to work somewhere, which means we are now benefitting from favourable creative accounting, with more to come (rate drops are just the beginning).

Finally, oil is both so essential and so expensive, we quit the Euro at our peril. However, we have several aces up the sleeve, including agri-food and the fact that Germany, the UK and US really CAN'T afford to let us go down.

Oh, and if we look like we're quitting despite them, say good bye to the FDI and 500K direct and indirect jobs. Not good. The other PIGS have less export dependent economies and are much less globalised... their strategy should maybe be different....default would hurt less.

My advice to the powers that be, though, would be to walk quietly with a big stick, and seize all concessions possible, on the back of other people's disasters.

For example, if the Greeks go down and the French banks implode, expect the ECB to ride to the rescue. Then, we should go..."same terms please, that's not fair; take some of the debt originating from our banks off us... thanks!"

[C. Flower]

Moodys downgraded Bank of America today two notches from AA2 to BAA1.

There is a general admission that many banks are bust need recapitalisation.

The IMF is suggesting major bank recaps, but does not seem to be wondering in too realistic a way where the cash will come from, and how much of a deflationary effect it will have, taking it out of the active economy.

http://www.marketwatch.com/story/moo...MW_latest_news

[PaddyJoe]

And S&P downgrades 15 Italian banks this evening.......

[concernedparent]

Well if austerity is a successful policy things should be improving not degenerating.

Or am I the only one that is having difficulties managing a budget on less money and more bills.

[morticia]

And S&P downgrades 15 Italian banks this evening.......

The sh!t is not far from the industrial turbo sized fan, folks, overalls on!

[Apjp]

Well, it wasn't Monday but Tuesday that is/was/will be/may be interesting. Moves afoot to allow an 'ordered' defult by Greece.` I will say I told ye so.....if anyone cares to go back through my posts (fairly safe bet that no one will) you'll find I predicted a default. Despite all the guff from Angela, Sarko, G7 Gx and everybody else, it was never possible for an underdeveloped country like Greece to pay. Now the question is who's next?

Oh, Angela and Co will blubber on about keeping the Euro and all that but they have blinked and the market knows it. Inda is whistling away in the dark that we are the troika's good boys, we're doing what we were told, as if that counted for anything.

All bets are now off, all sovereigns are now in play.

Note also that the blame in Greece is being placed at the door of a corrupt civil service; would you all feel that ours is squeaky clean?? Maybe not altogether corrupt, more like incompetent, starting with the bank guarantee.

Well You and I are both in France. What I have seen with civil servants here so far has made me wish I was back in DIT with sanity intact-not to mention how technologically retarded My university here is(University of Burgundy). So that takes incompetence to a whole new low. I also would be careful about labeling Greece underdeveloped as an Irish man. We are technologically superior to a lot of europe-but we are backward in many other ways. No society is perfect tho.

[Apjp]

I'd agree, but I think that the Euro is going to undergo either a massive involuntary devaluation (in which case, we get what we need without annoying anyone), or a breakup, which won't be blamed on us,now, unless we do anything really stupid.

The problem with the doom economists is that, while they are technically and financially correct, they are ignoring political realities that, while nonsensical, are strongly felt and which it would be unwise to ignore.

Frankly, the big boys are now in such merde that they'll have to print and devalue the Euro itself, sooner rather than later. They also need austerity to work somewhere, which means we are now benefitting from favourable creative accounting, with more to come (rate drops are just the beginning).

Finally, oil is both so essential and so expensive, we quit the Euro at our peril. However, we have several aces up the sleeve, including agri-food and the fact that Germany, the UK and US really CAN'T afford to let us go down.

Oh, and if we look like we're quitting despite them, say good bye to the FDI and 500K direct and indirect jobs. Not good. The other PIGS have less export dependent economies and are much less globalised... their strategy should maybe be different....default would hurt less.

My advice to the powers that be, though, would be to walk quietly with a big stick, and seize all concessions possible, on the back of other people's disasters.

For example, if the Greeks go down and the French banks implode, expect the ECB to ride to the rescue. Then, we should go..."same terms please, that's not fair; take some of the debt originating from our banks off us... thanks!"

unbelievable. you'd beggar your neighbours to feed yourself. FDI does not account for 500k jobs. not even when knock on effects are included. its 100 directly, 200 max overall.

[Apjp]

VB and Yanis made a great point recently. Irish banks cannot go any more bust. We have a lot less to lose in many ways compared to the French and germans from a major default, which is becoming probable in my view. I dont believe many people back home would want more hardship for other countries and at the same time think that somehow a small 'globalised' economy will benefit. This whole take advantage of all the other slip ups is nonsense if it damages our best friends in any way shape or form-the other periphery nations who need us as much as we need them.

[concernedparent]

Well I know that what I am about to say is me on my hobby horse yet again.

Many, not all, of our problems stem from the inability of politicians on a Europe wide scale to 'TAKE DECISIONS'.

The tin can has been kicked down the road for so long that Europe has reached the cliff edge.

What was needed at the start was controlled bank closures with some amalgamations. The current policy of the EU is to chuck money into a bottomless pit. Its just disappearing. Its not filling the hole because no one has thought to put a foundation in the bottom.

The system of public service in all countries is too slow to respond to emergencies like this. Decisions are based on reports submitted by committees following a long process of consultation. The EU is worse than most based on its size and inefficient way of working.

The contagion is spreading and no one country is immune or will be immune to its effects and the unfortunate thing is that countries like Germany and France will always look to their own interests first. They have elections to fight remember. The Irish ruling body just wants to be at the party regardless of the consequences to their own.

It also strikes me that really none of the ruling elite have any idea how to handle the current problems. The image of headless chickens, dressed in Armani, springs to mind.