The Euro meltdown

[Mr Jules]

Yes, it scary. We have no idea how awful this going to be.

Just remember: Sunday 17 June. This is the date the Greeks go to the polls to choose a new government. Because that new government may say "no more austerity and we're not paying back the money we own the rest of the EU (European Union).

This is when much financial sh1t is going to hit many fans.

[D.A.L.U.I.]

Things seem to hinge on Merkel's continued objection to EU based bonds, but what I find really troubling is the outline for a weekend exit set out at the 11:44a entry in the Guardian's site: http://www.guardian.co.uk/business/2012/may/23/eurozone-crisis-markets-summit-eurobonds#block-21, that coupled with the almost open acknowledgment that Brussels is advising everyone to make concrete plans for a possible exit on and individual basis and some rumors that the manufacturer of currency is dusting off equipment for drachmas makes it all very real.  My personal bet is that Merkel will blink, but then have a difficult time putting together the politics to make the structural changes necessary for the bonds to issue.  She may have waited too long.  Hopefully Hollande and others supporting the bond concept have a viable plan B.

We in the colonies are possibly going to get a very tough lesson on how intertwined our economy is with the EU and the eurozone in particular within the next 12 to 18 months.  Since it can't be explained in less than a minute--the attention span utilized and encouraged by our politicians of all stripes--it's going to be really ugly. 

[Mr Jules]

Saintc,

You've nailed it with your post.

And you rightly say, there may simply not be time to rustle up workable plans to stop the Greek collapse.

If the crisis unfolds in disorganised way, you in the States will get a lesson.

In 2008, american banks were lending on the sub prime market. When that went wrong, there was a run on one of our British banks - Northern Rock. Northern Rocky turned out the be a rather 'rocky' bank. So yes, we are all intertwined.

I agree with you: the only way short term way to avert a miserable crisis is for the European Central Bank to be lender of last resort (it's not at the moment) and issue eurozone wide eurobonds.


 

[D.A.L.U.I.]

I agree with you: the only way short term way to avert a miserable crisis is for the European Central Bank to be lender of last resort (it's not at the moment) and issue eurozone wide eurobonds.

But first the Germans, Dutch, Austrians and others have to agree, then the EU nations have to enact significant legislation and treaties to make it possible--Step one--Hard, Step two, probably impossible.  That's why there has to be a next best thing, a Plan B, and I haven't seen anything except speculation that they even have an idea what to do as Plan B. 

[Mr Jules]

and I haven't seen anything except speculation that they even have an idea what to do as Plan B. 

This is why our British prime minister David Cameron is making daily repeated calls to the Eurozone politicans to sort things and fast.

Because when the messy crisis unfolds, our prime minister will have to explain to the British electorate why our own economy is being dragged down too - like a smaller boat next to the sinking Titanic.

I take part in a UK based politics forum. On this forum, we are transfixed, speculative and anxious.

[tomgallagher]

All this and the hacking scandal to boot.

[buddha]

Adults Only video: George Carlin at one of his fine moments.



I guess everybody can believe what makes them feel most comfortable. All the complicated economic theories are fine for some. For me the above vid breaks it down simply and effectively. BTW, adults only: It's George Carlin speaking from beyond the grave. There's a longer version of it out there somewhere where he goes into the control issues of "The Masters" but this one hits the salient points.

[Baldstu]

I would not want to see the  UK leave  the  EU  , not sure we can continue to prop up the  greek economy economy though . Christine  Largade  is  right in suggesting  that the Uk should consider  reducing  VAT to make us  more competetive   to imports  . A  strong  sterling is not  good for us  in seeking new  markets  Stick it out and  the government should be seeking for fair play

[Mr Jules]

And amidst all this Euro crisis, today it's the 57th Eurovision Song Contest. This year the contest is being held at the Crystal Hall, Baku in Azerbaijan.

26 countries will be participating with televoting in 44 countries. It's the biggest televoting television event in the world.

The 3 hr live contest starts at 21:00 CEST, 20:00 BST. And for those in the States, 15:00 ESDT.
http://en.wikipedia.org/wiki/Eurovision_Song_Contest_2012

[tomgallagher]

And amidst all this Euro crisis, today it's the 57th Eurovision Song Contest. This year the contest is being held at the Crystal Hall, Baku in Azerbaijan.

26 countries will be participating with televoting in 44 countries. It's the biggest televoting television event in the world.

The 3 hr live contest starts at 21:00 CEST, 20:00 BST. And for those in the States, 15:00 ESDT.
http://en.wikipedia.org/wiki/Eurovision_Song_Contest_2012

I have often heard of the Eurovision show but on this this side of the pond it causes barely a ripple.

[Mr Jules]

That's a great shame. Because Eurovision is BIG here in Europe. And there's always some politics involved.

For instance, this year, the Iranians have recalled their ambassador from
Azerbaijan - host nation and fellow Muslim neighbour. Iranians saying Eurovision Song Contest does not fit Muslim values.

[Mr Jules]

Now it looks like large Spanish banks need money. And the Spanish government is going to run out of money.

Well, at least it takes our minds of the impending crisis in Greece. If you recall, they go to the polls on Sunday 17 June. Greece may choose a government that wants more financial help, but with Germany's terms and conditions.

Apparently today, British prime minister had another frustrating call with President Obama.

[Laser Man]

Ireland's financial difficulties partly stemmed from the government's backing of the failing banks, only realizing too late that the banks' liabilities far exceeded the government's ability to pay out.  Sounds like the same situation Spain is facing now.  It is hard to imagine the euro crisis being resolved without a massive dislocation.  The austerity medicine is going to kill the patients.

By the way, in 1987, the U.S. stock market crashed, partly on fears of federal budget deficits, trade deficits and a weak economic outlook.  There was a call for spending reductions and tax hikes to cure the federal deficit immendiately.  A few days later, a brilliant article in the Wall Street Journal that described a White House burning the midnight oil, working with Congress to cut spending, looking into tarriffs, etc. and then revealed that this story was about Herbert Hoover in 1929 when the market crashed!  As it turned out, the efforts to cut spending and balance the budget trade deficits caused an enormous contraction in the U.S. economy...and the Great Depression followed. 

[schro]

Apparently today, British prime minister had another frustrating call with President Obama.

I think most people would describe any conversation with B. Hussein Obama as frustrating.

[Mikekoz13]

Apparently today, British prime minister had another frustrating call with President Obama.

I think most people would describe any conversation with B. Hussein Obama as frustrating.

Ladies and Gentlemen..... we have a winner.