dagblog - Comments for "Angela Merkel's Fairytale"

If Germany dumped the Euro

NCD — Fri, 09 Dec 2011 01:13:29 +0000

In reply to All of this ignores the fact

If Germany dumped the Euro the Euro would turn into the Zeuro, the DMark would soar, and German exports would dive. They would have no trouble paying off a Euro debt with more valuable DMarks, they would have trouble with exports.

Germany runs a monthly 12-14 billion Euro balance of trade surplus dependent in part on the a cheap Euro. If they went back to the DM, unless they printed DM like the Fed prints dollars, Germany would suffer deflation and a spike in unemployment due to increased prices of their DM based exports, that's why they don't want to abandon the Euro.

I don't recall the IMF

kgb999 — Fri, 09 Dec 2011 01:12:02 +0000

In reply to Well were Germany's banks the

I don't recall the IMF chipping in when time came for TARP, etc. If they shouldered a good portion of that and I just missed it, it would probably change my opinion.

If not, I don't think Goldman Sachs is forgotten necessarily. It's just that, for once, Goldman Sachs' wreckage is the EU's responsibility. Much like it was apparently the US's responsibility to protect economies beyond our own from Deutschbank's actions (among many others) when they helped blow up our economy on purpose to great profit.

Maybe the EU will do a better job of holding these guys to account than we did. We know little of the cash scored has actually been invested in *anything* other than more financial instruments. It *should* all be pretty much recoverable.

I'll tell you this. Sure hope they learn from us (if they don't blow up first). Our stupid response is costing a bundle and we didn't recover diddly/squat.

How is giving these guys

kgb999 — Fri, 09 Dec 2011 00:35:13 +0000

In reply to What would really get people

How is giving these guys access to the discount window and randomly handing them cash whenever they make a bad investment "great terms" for the US Taxpayer? Don't we just turn around and pay them much higher rate than the one they are borrowing at when they use our own money to buy T-Bills ... potentially losing like an instant 3% (or whatever) on every transaction?

The whole thing doesn't seem to be good for ANYONE on either side of the equation beyond a teeeny tiiiny handful of crooks. And maybe the people who sell absurdly expensive shit to crooks.

The reason people keep using our money instead of the increasingly bullshit EU crap is because when push comes to shove ... even though it is often through the most corrupt and inefficient practices and policies ... our system will pony up when the problems explode on our court.

The way I see it, the ECB's behavior demonstrates that in reality the rest of the world is genuinely privileged to benefit from our comparative responsibility and stability. And considering just how irresponsible and unstable *we've* been recently - a supposed world-class currency has got to be managed by some serious jackasses to see even crappier stewardship.

Obama...the pest republican

cmaukonen — Fri, 09 Dec 2011 00:21:07 +0000

In reply to They simply shouldn't have

Obama...the pest republican president since Eisenhower.

And Cameron is the best PM since Chamberlain

A cartoon.

They simply shouldn't have

kgb999 — Fri, 09 Dec 2011 00:02:58 +0000

In reply to What would really get people

They simply shouldn't have taken over the regional economy like they did if they didn't want to shoulder the responsibility ... it's not like Germany and France were unaware of the structure going in. Germany, in particular, seemed awful gung-ho on the situation when they were a driving force behind integration. OTOH, it seemed at least some of those other nations were pretty much blackmailed into submitting in the first place. And now *someone* has carried out soft coups in both Greece and Italy.

There's no way the Germans don't know they are totally full of shit. They are just playing chicken with Obama because they know Obama always folds.

It could be that they were

Michael Maiello — Thu, 08 Dec 2011 18:35:24 +0000

In reply to Excellent article, Destor.

It could be that they were zombies looking to hide other problems. It could also be that people can't resist getting something for nothing.

Hey, look! This bond full of mortgages has the same rating as GE's bonds, but the mortgages pay more!

Hey, look! Fannie Mae and Freddie Mac bonds pay more than Treasuries but have the same rating!

Neat! Greek, Italian and Spanish bonds pay more than German bonds and have the same risk!

Oh, but if you tell most of these people that we should have a public health care option they'll call you an idiot for believing in free lunches. Go figure!

Some of Germany's banks are

Michael Maiello — Thu, 08 Dec 2011 16:48:55 +0000

In reply to Well were Germany's banks the

Some of Germany's banks are in trouble over this, just like they were over mortgage securities three years ago. They were chased yield just like everybody else. It's not just Greek debt, remember. Heck, Greece is small. Italy is the real problem, followed by Spain. You're right, it's a problem throughout Europe, but Germany's banks are part of the problem.

Well were Germany's banks the

PeraclesPlease — Thu, 08 Dec 2011 16:39:50 +0000

In reply to Greek tax evasion wasn't

Well were Germany's banks the problem?

From this one, it looks like Germany had 1/4 the exposure that France had, and quickly reduced it to about 1/2 that,€18 billion to €10bill. http://www.ft.com/intl/cms/s/0/96a96fc4-92c1-11e0-bd88-00144feab49a.html#axzz1ftI1q3DM

As well, Goldman Sachs covered up €10 billion of Greek debt so perhaps those German bankers didn't know how bad it had gotten? http://johntrumanwolfe.com/2011/04/a-greek-tragedy-goldman-sachs-and-the-european-financial-crisis/

Is there a reason Goldman Sachs keeps getting forgotten here, or that there were other EU banks involved? Or is it just happy Germany bashing day?

Excellent article, Destor.

Oxy Mora — Thu, 08 Dec 2011 16:03:41 +0000

In reply to Angela Merkel's Fairytale

Excellent article, Destor. The essential fact that the German banks over-invested in questionable sovereign debt has been little discussed. Also, I gather, that one of the reasons the banks liked the sovereign debt is that they themselves were/are zombie banks looking for higher yields to help conceal their other problems.

As I understand it, there

Michael Maiello — Thu, 08 Dec 2011 15:06:30 +0000

In reply to I'm trying to follow who

As I understand it, there will be no "forced" Greek haircuts, at least so far as private institutions are concerned. They can voluntarily agree to extend maturities or accept haircuts and prepayments. But, as you say, there are a lot of moving parts. I'm sure that Merkel's main concern is the solvency of Germany's banks, though.