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Spain Watch, and Catalan independance
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emordnilap



Joined: 05 Sep 2007
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Location: Houǝsʇlʎ' ᴉʇ,s ɹǝɐllʎ uoʇ ʍoɹʇɥ ʇɥǝ ǝɟɟoɹʇ' pou,ʇ ǝʌǝu qoʇɥǝɹ˙

PostPosted: Thu May 31, 2012 12:54 pm    Post subject: Reply with quote

JavaScriptDonkey wrote:
emordnilap wrote:

Irish foreign debt per person: 390,969.
What was the money spent on


Mostly speculation.

JavaScriptDonkey wrote:
emordnilap wrote:

Irish foreign debt per person: 390,969.
how much higher would taxes have had to have been if they hadn't borrowed it all?


No higher - unless you're expecting taxpayers to subsidise property bubbles. How does a guy buying a piece of land worth half a mill for twenty mill affect taxes?

JavaScriptDonkey wrote:
emordnilap wrote:

Irish foreign debt per person: 390,969.
And most importantly, are you prepared to cough up the back taxes to make up the short fall?


Why me? I don't owe anything to anyone. Hell, we might not earn that much gross before (if) we retire.
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Little John



Joined: 08 Mar 2008
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PostPosted: Thu May 31, 2012 3:07 pm    Post subject: Reply with quote

It's also worth remembering that, in the case, of Ireland, prior to this crisis, it was running a surplus in it's sovereign finances. Yes, that's right folks, a surplus. Ireland should not be categorized along with some other club-med countries where there was a lot of sovereign debt as well as private debt in the run up to this crisis.

The main reason that Ireland is in the shit is because a mountain of commercial bank debt was socialized by the Irish governing elite onto the Irish taxpayer. Commercial bank debt that was owed mostly to other European banks. A very large portion of which was owed to German and French banks. In other words, the unsustainable mountain of sovereign debt that Ireland currently labours under is actually an indirect bailout of the Franco-German and wider European banking system.

But, then, that's what all of this shit was always about anyway.
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emordnilap



Joined: 05 Sep 2007
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PostPosted: Thu May 31, 2012 4:15 pm    Post subject: Reply with quote

Indeed. There was about 80 billion in cash alone sloshing around during 2008; it's possible that Fianna Fil and the Greens naively believed they could buy and sell the banks several times over (as well as believing the money was theirs to spend on such utter idiocies in the first place).

iirc, the first estimate of the Irish banks bailout was 7 billion...
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UndercoverElephant



Joined: 10 Mar 2008
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PostPosted: Thu May 31, 2012 11:38 pm    Post subject: Reply with quote

http://www.cbsnews.com/8301-505123_162-57444517/the-eu-is-out-of-time-to-deal-with-crisis/

Quote:

The European Union has run out of time and its leaders don't know it. They are proposing plans which - even if they could be done - would take months or years and they only have weeks. Spain's bank crisis will be resolved, for better or likely worse, soon.

It is indeed all over but shouting, as you can tell if you listen to the shouting.

European Central Bank President Mario Draghi is shouting for a clear vision of the euro. The EU's top financial minister, Olli Rehn, is shouting for more integration among the members. Bankrupt nations are shouting for the creation of euro bonds. The European Commission is shouting for Spain to come up with a bank bailout plan based on something besides wishful thinking.

What's odd about the EC's shout is that it is itself nothing but wishful thinking. According to Reuters, commission spokesman Amadeu Altafaj believes, "Spain should carry out the refinancing of its banking sector ... by market mechanisms or government funds rather than a European rescue which would have negative connotations." The market mechanism doesn't exist - that's why Bankia collapsed in the first place. As far as government funding goes: Spain is broke. It cannot afford to pay for all the public debt it already has.

[continues]


Now we just need a curveball from the Irish people and another impossibly hung Greek parliament.

The Descent into the Maelstrom nears its conclusion?
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UndercoverElephant



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PostPosted: Fri Jun 01, 2012 12:28 am    Post subject: Reply with quote

http://www.foreignpolicy.com/articles/2012/05/31/grexit_spexit_let_s_call_the_whole_thing_off

Quote:

As an economist, I have always argued that the common currency was a mistake. I am a "euro" skeptic, but not a "Euroskeptic," and I think it important that people outside Europe understand that this distinction exists. There is no doubt that the euro, like Dr. Stangelove's doomsday machine, is an infernal device destined to blow up one day, but also so designed that any attempt to dismantle it simply detonates the bomb. This is why, tired as they may be, those who live on Europe's southern fringe have little appetite for leaving or taking part in yet another experimental new currency order. Better put, they have little appetite for leaving in a disorderly fashion. And disorderly the leaving would have to be, since if core Europe has little appetite for assuming the cost of keeping the eurozone together, it will surely have even less for paying the much larger bill associated with exit and default.


(his bold)

Quote:

The real question is what happens next. Spain, like the euro itself, is both too big to rescue and too big to fail. Spain's banks need capital from the government, but the government itself can't finance them. Foreign investors are leaving in droves, but no matter how many liquidity offers they get from the ECB, the country's banks simply can't buy all the debt. So the country needs European (read: German) money. The problem is that if this takes the form of an injection of bank equity, then Germany could end up all but owning Spain's banks, which would expose German taxpayers to considerable potential losses should the situation deteriorate further. At this point Berlin could firmly put its foot down, and we will have another impasse.

At the end of June, Europe will face what many consider to be a perfect storm: results of the Greek elections and details of the new, independent, Spanish bank valuations, which are sure to find that significantly more money will be needed for recapitalization. This will undoubtedly be a make-or-break moment in the ongoing debt crisis, and, if things were to spiral hopelessly out of control, a Spexit could become a real possibility. My advice to all those external well-wishers would be: Be careful what you ask for, since you might not like what you finally get.


My bold - this wouldn't be an "impasse". It would be the point a disorderly default begins, because the moment it becomes clear that the Germans are not going to bail out the Spanish banks, the bank run becomes a tsunami. Which is why it still isn't clear what they are going to do. They are being forced to choose between two paths, both of which lead to some sort of catastrophe. If they bail out the Spanish banks and everybody will know we are heading towards euro hyperinflation, rather than mass default. But if they refuse to hand over any more money (or issue eurobonds, which amounts to the same thing), and it will trigger the biggest wave of credit defaults in human history.

http://www.guardian.co.uk/business/nils-pratley-on-finance/2012/may/30/spain-bank-crisis-germany-bailout?newsfeed=true

Quote:

Spain banking crisis German U-turn on eurozone bailout pot seems a fair bet

Bankia et al can't wait. With a backdoor bailout closed, it is time for Germany to show what it is prepared to do to save the euro


Quote:

Is Germany prepared to take the historic step of throwing its financial muscle decisively behind the eurozone? As ever, the answer hinges on several impossible-to-measure factors. For example: would German voters' instinctive resistance to bailouts and eurobonds crumble in the face of a full-on market panic that might develop if the Spanish crisis remains unresolved much longer?
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Little John



Joined: 08 Mar 2008
Posts: 6009
Location: UK

PostPosted: Fri Jun 01, 2012 12:39 am    Post subject: Reply with quote

UndercoverElephant wrote:
http://www.foreignpolicy.com/articles/2012/05/31/grexit_spexit_let_s_call_the_whole_thing_off

Quote:

As an economist, I have always argued that the common currency was a mistake. I am a "euro" skeptic, but not a "Euroskeptic," and I think it important that people outside Europe understand that this distinction exists. There is no doubt that the euro, like Dr. Stangelove's doomsday machine, is an infernal device destined to blow up one day, but also so designed that any attempt to dismantle it simply detonates the bomb. This is why, tired as they may be, those who live on Europe's southern fringe have little appetite for leaving or taking part in yet another experimental new currency order. Better put, they have little appetite for leaving in a disorderly fashion. And disorderly the leaving would have to be, since if core Europe has little appetite for assuming the cost of keeping the eurozone together, it will surely have even less for paying the much larger bill associated with exit and default.


(his bold)

Quote:

The real question is what happens next. Spain, like the euro itself, is both too big to rescue and too big to fail. Spain's banks need capital from the government, but the government itself can't finance them. Foreign investors are leaving in droves, but no matter how many liquidity offers they get from the ECB, the country's banks simply can't buy all the debt. So the country needs European (read: German) money. The problem is that if this takes the form of an injection of bank equity, then Germany could end up all but owning Spain's banks, which would expose German taxpayers to considerable potential losses should the situation deteriorate further. At this point Berlin could firmly put its foot down, and we will have another impasse.

At the end of June, Europe will face what many consider to be a perfect storm: results of the Greek elections and details of the new, independent, Spanish bank valuations, which are sure to find that significantly more money will be needed for recapitalization. This will undoubtedly be a make-or-break moment in the ongoing debt crisis, and, if things were to spiral hopelessly out of control, a Spexit could become a real possibility. My advice to all those external well-wishers would be: Be careful what you ask for, since you might not like what you finally get.


My bold - this wouldn't be an "impasse". It would be the point a disorderly default begins, because the moment it becomes clear that the Germans are not going to bail out the Spanish banks, the bank run becomes a tsunami. Which is why it still isn't clear what they are going to do. They are being forced to choose between two paths, both of which lead to some sort of catastrophe. If they bail out the Spanish banks and everybody will know we are heading towards euro hyperinflation, rather than mass default. But if they refuse to hand over any more money (or issue eurobonds, which amounts to the same thing), and it will trigger the biggest wave of credit defaults in human history.
Yes, both courses of action are unthinkable for the Germans and yet they must choose on of them.

If they choose to draw a line in the sand and to not to bail out the club-meds unconditionally, then both the Euro and European project which they have worked so hard to build, are utterly destroyed

Or, if they attempt to bail out the club-meds unconditionally or introduce Euro bonds, which is effectively putting them on the hook just the same, then their own people will take to the streets.

I can't see how they can avoid, when push comes to shove, being forced to acquiesce to their own people's will. In which case, the European project is over. When that happen, dominoes start falling over in the UK and USA.

It's just a matter of when.
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UndercoverElephant



Joined: 10 Mar 2008
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Location: south east England

PostPosted: Fri Jun 01, 2012 12:42 am    Post subject: Reply with quote

http://www.telegraph.co.uk/finance/financialcrisis/9301270/Spain-faces-total-emergency-as-fear-grips-markets.html

Quote:

Brussels floated the idea on Wednesday for a eurozone bank union and use of the European Stability Mechanism -- which has not yet been ratified by most states -- to rescue banks and sever the dangerous nexus between crippled lenders and crippled states.

The proposals were shot down instantly by Berlin. Such plans amount to debt-mutualization, a form of back-door eurobonds. German opposition is well known, said the Kanzleramt.

Sources in Berlin say Germany wants Spain to tap the International Monetary Fund -- as well as the EU -- to spread the rescue burden to the US, China, Japan, Britain and others.


And we'll all go down together...
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Little John



Joined: 08 Mar 2008
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PostPosted: Fri Jun 01, 2012 12:47 am    Post subject: Reply with quote

UndercoverElephant wrote:
http://www.telegraph.co.uk/finance/financialcrisis/9301270/Spain-faces-total-emergency-as-fear-grips-markets.html

Quote:

Brussels floated the idea on Wednesday for a eurozone bank union and use of the European Stability Mechanism -- which has not yet been ratified by most states -- to rescue banks and sever the dangerous nexus between crippled lenders and crippled states.

The proposals were shot down instantly by Berlin. Such plans amount to debt-mutualization, a form of back-door eurobonds. German opposition is well known, said the Kanzleramt.

Sources in Berlin say Germany wants Spain to tap the International Monetary Fund -- as well as the EU -- to spread the rescue burden to the US, China, Japan, Britain and others.


And we'll all go down together...
Time to think about transferring paper and electronic number assets into metal. If things go completely tits up in the world banking system again, then governments will print and devalue like there is no tomorrow as this will be their final and only option.
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UndercoverElephant



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Location: south east England

PostPosted: Fri Jun 01, 2012 12:51 am    Post subject: Reply with quote

stevecook172001 wrote:
UndercoverElephant wrote:
http://www.telegraph.co.uk/finance/financialcrisis/9301270/Spain-faces-total-emergency-as-fear-grips-markets.html

Quote:

Brussels floated the idea on Wednesday for a eurozone bank union and use of the European Stability Mechanism -- which has not yet been ratified by most states -- to rescue banks and sever the dangerous nexus between crippled lenders and crippled states.

The proposals were shot down instantly by Berlin. Such plans amount to debt-mutualization, a form of back-door eurobonds. German opposition is well known, said the Kanzleramt.

Sources in Berlin say Germany wants Spain to tap the International Monetary Fund -- as well as the EU -- to spread the rescue burden to the US, China, Japan, Britain and others.


And we'll all go down together...
Time to think about transferring paper and electronic number assets into metal.


My late father's house has just been put on the market. I just hope the bank meltdown doesn't happen the day it gets sold.
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UndercoverElephant



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PostPosted: Fri Jun 01, 2012 3:07 pm    Post subject: Reply with quote

http://www.bbc.co.uk/news/business-18276691

Quote:

Spain's economy minister has dismissed talk of it seeking a bailout from the International Monetary Fund (IMF) as "senseless".

And the IMF denied that Spain had asked to discuss rescue loans.

The IMF has contributed to bailouts of all the other eurozone nations, such as Greece, that needed help.

Meanwhile, the European Central Bank (ECB) president Mario Draghi described the current set-up of the eurozone as "unsustainable".

There were rumours that Spain had already gone to the IMF, after the Spanish deputy prime minister went to meet the IMF's managing director Christine Lagarde.

"My desire is to not come out and deny these rumours because they are senseless," Spanish Economy Minister Luis de Guindos said on Spanish television.


Mr. Green
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PS_RalphW



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PostPosted: Fri Jun 01, 2012 3:56 pm    Post subject: Reply with quote

Gold up by $70 in the last 2 hours....


Default over the bank holiday?

I'll be in a field away from all electronics.

Confused
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RenewableCandy



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PostPosted: Fri Jun 01, 2012 4:24 pm    Post subject: Reply with quote

Jubilee (the other kind) Very Happy
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JavaScriptDonkey



Joined: 02 Jun 2011
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PostPosted: Fri Jun 01, 2012 7:23 pm    Post subject: Reply with quote

RalphW wrote:
Gold up by $70 in the last 2 hours....


Default over the bank holiday?

I'll be in a field away from all electronics.

Confused


The only 2 commodities not in the red on the BBC pages is gold pm fix and corn futures.

Gold am fix is down $15.

Hardly a flight to assets.
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Cabrone



Joined: 05 Aug 2006
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PostPosted: Sat Jun 02, 2012 8:49 am    Post subject: Reply with quote

stevecook172001 wrote:
It's also worth remembering that, in the case, of Ireland, prior to this crisis, it was running a surplus in it's sovereign finances. Yes, that's right folks, a surplus. Ireland should not be categorized along with some other club-med countries where there was a lot of sovereign debt as well as private debt in the run up to this crisis.

The main reason that Ireland is in the shit is because a mountain of commercial bank debt was socialized by the Irish governing elite onto the Irish taxpayer. Commercial bank debt that was owed mostly to other European banks. A very large portion of which was owed to German and French banks. In other words, the unsustainable mountain of sovereign debt that Ireland currently labours under is actually an indirect bailout of the Franco-German and wider European banking system.

But, then, that's what all of this shit was always about anyway.


True, and the commercial bank debt was caused by the banks going on an orgy of lending caused by artificially low interest rates set by the ECB for the whole EZ.

The banks were stupid, greedy and irresponsible but the fuel for their greed was the ultra low interest rate. It was like putting a drink infront of an alcoholic.

Had the Irish government (and the others) had the Punt they could have upped the interest rates and slowed down the lending but they forfeited that control the day they stepped into the disaster called the EZ.

Ireland was never a Celtic Tiger, it was an accelerating car with no brakes (thanks to the EU) that eventually hit the wall and took out a lot of working people with it.

The EU and their half baked ideas have a lot to answer for.
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UndercoverElephant



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PostPosted: Sat Jun 02, 2012 10:16 am    Post subject: Reply with quote

Cabrone wrote:

The EU and their half baked ideas have a lot to answer for.


Agreed. I sat on the fence regarding the EU and the single currency for a very long time, but history has proved that much of what the euroskeptics said was true, even if their motivation wasn't always pure as the driven snow. I would now vote for the UK to leave the EU completely if I was given the choice in a referendum.
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