Wednesday, 23 May 2012

status update....

I've not pushed anything out there recently, because I don't think there is too much to say. I thought the Greeks would look to repudiate their existing debt when they started running a balanced primary budget, it looks like we are getting closer to that point. I think the pressures in the eurozone system are definitely increasing, and the press trying to whip up panic with stories of deposit flight and bank runs is certainly not going to help.

It is the mechanism that I thought could pull the rug out from the system, but would be hard to predict. I guess the ECB is falling over itself to provide liquidity to those banks who are losing deposits. I am not sure whether it should or not, given the uncertainty of the solvency and the questionable collateral they have accepted. Additionally there is the risk to the system they add as the subordinate other creditors, without the political mandate. But then I am a euroskeptic and I don't feel that the project has any democratic legitimacy.

I'd like to have a quick moan though, I find it increasingly difficult to read newspapers, magazines or watch the news. Maybe it is just my inevitable middle aged crankiness, but the ratio of factual reporting to opinion and "analysis" seems to be at an all time low. I like the next punter enjoy a bit of gossip, and hearing opinions, but surely not every article should soley consist of dumb down clich├ęs, rhetoric and the journos political views. The place for rants and froth is opinion pieces, editorials, letters and blogs, not leading stories and bulletin pieces surely.

The media, economist covers and consensus is definitely focussed on the euro, with a shocked belief that they will muddle through. A lot of the better macro commentary is talking about the slow down in China, which I agree remains the biggest risk, not that I feel I have any edge calling that or finding ways to express it. With complete consensus that the US is recovering better than 'expected'.

I'll resist the urge to slate the bookrunning skills of MS.


  1. Glad you're still around. Been light at my place too.

    BR, you being a finance whizz, you don't happen to be able to get your hands on a spreadsheet that can calculate APR on loan agreements under the new EC directive rules do you?

  2. The austerity measures demanded by France and Germany in return for two massive bailout packages, totaling 240 billion euros, have ripped holes in the Greek safety net and plunged the country into a recession of near-Great Depression dimensions.

    Click here.

    1. The alternative for Greece was immediately balancing their budget. ie bigger cuts.

      States do not have some inherent right to spend as much money as they like, they have to finance it.

      The Greek economy is in trouble because it is massively uncompetitive, not because there is too little spending by the state.

      One only has to look at the rail system, to pharmacies or the plethora of state sponsored oligopolies to see the absurd level of protectionism and cronyism at every level of the Greek economy.

      Who else should pay taxes to fund Greek spending if not Greek citizens??