Major editorial: how and why the Euro became a ticking bomb

Skybird · 10-07-11, 01:59 PM

Der Spiegel has published a major editorial on the Euro crisis, which got translated for the international online edition, and was released in three parts over the past three days. It is a good overview and reminder of single events which all linked up to form one big disaster - a home-made disaster.

Part 1

Part 2

Part 3

What will happen, how will it turn out? Some say, a transfer union. Others say a splitting-up of the Euro zone, into regions with comparable economic conditions, and one Euroe from Northern, solid countries, and at least one Euro fomred by the weak, diverse economies in the south.

While I would prefer a "North-Euro" formed by Germany, Holland, Austria, Finland, I think it will not happen, becasue politically it cannot be installed. A tranfer union also is politically not achievable at home. Whjat wiull most likely happoen is that the whole issue constantly degenrates due to stagnation and doing npthing, becasue nobody dares to make and enforce decisions. Paralysis will render all ambitions for solving the Euro issue as useless and as hopeless - and after that, render the EU a paralysed hopeless case, too.

Which means Europe will die a slow death, and ultimately end up in utter unimportance, and a going back to regional, local, individual fight for survival. An essay I read some days ago compoared it to a status worse than the dead-locked WTO which also is paralysed since severla years, since the failed talks at Doha.

the fincial bill will be payed by ordinary people, old people, pensioneerrs, private people who get expropriated of their financial savings by which they hoped to secure their future when they had become old.

soopaman2 · 10-07-11, 03:06 PM

I believe allowing certain countries to cook the books is what is messing this endeavor up. Some countries evade taxes and retire at 50, while others have to entertain bailing them out.

Your vision of North Euro countries would work without killin too much of the already existing structure.

You may have a cool club, but when you let everyone in it becomes a mess. Some people refuse to clean up, they pee on the couch and crash a motorboat throught the front wall, then expect someone else to clean it up. It pretty much becomes a flophouse.

Maybe the Euro club should let less frat boys in. Poor Germany, having to fix all this mess.

Jimbuna · 10-07-11, 03:09 PM

Well speaking purely as an Englishman....I wish we would get the hell out of Europe, we are an island nation and I doubt pulling out of Europe would affect us that much, it's not as if Europe can afford to cease trading with us.....and vice versa.

MothBalls · 10-07-11, 03:16 PM

Well speaking purely as an American....I wish we would get the hell out of Everwhere.

JU_88 · 10-07-11, 03:21 PM

Dont really matter why anymore, its pointless to analyse now.
Our beloved capitalist economy is gonna tank (in the next few months probably) and we just got to live with it.

If you want to prepare for the worst case scenario then invest in gold, buy a gun and stock up on tinned beans.

I dont know, You give man 'Free Enterprise' and he trashes it with greed and exploitation.
Our childrens children will be spitting on our graves when they get the bill, (if the human race can survive another 2 generations that is)

Jimbuna · 10-07-11, 03:22 PM

Quote:

Originally Posted by MothBalls

Well speaking purely as an American....I wish we would get the hell out of Everwhere.

LOL

Skybird · 10-07-11, 05:04 PM

Quote:

Originally Posted by jimbuna

Well speaking purely as an Englishman....I wish we would get the hell out of Europe, we are an island nation and I doubt pulling out of Europe would affect us that much, it's not as if Europe can afford to cease trading with us.....and vice versa.

You may not have the euro, but you HEAVILY depend on it - almost as if you had the Euro. This is due to the tightly interwoven (?) mutual relations in the banking sector, and since your nation depends more on the finance sector than any other in Europe to create a national income, you are maybe one of the fattest turkeys on the shooting gallery.

Did you note what happened today? The mass-downgrading by Fitch for British banks, three heavyweights amongst them, came as a surprise for many in the british finance business. But not for me. Especially the Bank of Scotland holds enormous ammounts of Euro-burdens. State debts and state finances also are anything but healthy, to put it mildly.

So you may noit have the Euro. But you are nevertheless extremely vuilnerable to it. What happens to the Eurozone, will create heavy fallout over Britain and London City, too.

There is no escape, muhahahaha...

Edit:
Not Fitch, but Moody - Moody kicked British banks today. Fitch spanked 21 Italian and Spanish institutes yesterday.

Diopos · 10-07-11, 05:26 PM

Really interesting these Fitch et al rating agencies:

Day 1: [Fitch et al ]: It is our assessment that bank XXX has not a positive outlook so we downgrade it.
Day 2: People start moving money out of bank XXX because it is downgraded by the experts
Day 3: [Fitch et al ]: Bank XXX is additionaly experiencing an outflow of deposits worsening its prediction so we downgrade it (again).
Day 4: Panic sets in. Bank run.
Day 5: [Fitch et al ]: Bank XXX is now reduced to junk. Of course we warned you from Day 1.

Eventually you don't quite know if these bastards rate you or blackmail you (not that it really matters in the end).

Destruction via negative feedback loop. It is so obvious it should banned.

Or taxed!

.

Skybird · 10-07-11, 06:18 PM

That simple it is not, Diopos. Why I do not take the word of rating agencies as a holy gospel, it has become common habit in Europe to demonise them because they dare to not confirm lies and claims by european politicians when they tell their newest fairy-tales. Instead they often just point out the obvious vulnerabilities and unhealthy details that politicians try to gloss over. No wonder that Eurocrats want to gag them and fight them with counter-propgaanda by a European rating agency. Which meansan agency that is saying what Eurocrats and politicians want it to say, and deceiving the public.

There are so many more agencies than just the big three from the US. There are many other americans ones, practically every nation has at least one own agency, big natiosn even have several ones. The biggest agencies btw are not American, but Chinese. And the two biggest of them already had doiwngraded the US long before it made it into the news that another Chinese rating agency had owngraded the US some weeks ago. The Chinese just see the purpose of such agencies differently, and thus often do not make a show of their assessements. That'S why we do not notice their verdicts.

I personally see these Chinese agencies as at least as important in their assessments, than the three big American ones.

10-07-11, 01:59 PM	#1
Skybird Soaring Join Date: Sep 2001 Location: the mental asylum named Germany Posts: 42,603 Downloads: 10 Uploads: 0	Major editorial: how and why the Euro became a ticking bomb Der Spiegel has published a major editorial on the Euro crisis, which got translated for the international online edition, and was released in three parts over the past three days. It is a good overview and reminder of single events which all linked up to form one big disaster - a home-made disaster. Part 1 Part 2 Part 3 What will happen, how will it turn out? Some say, a transfer union. Others say a splitting-up of the Euro zone, into regions with comparable economic conditions, and one Euroe from Northern, solid countries, and at least one Euro fomred by the weak, diverse economies in the south. While I would prefer a "North-Euro" formed by Germany, Holland, Austria, Finland, I think it will not happen, becasue politically it cannot be installed. A tranfer union also is politically not achievable at home. Whjat wiull most likely happoen is that the whole issue constantly degenrates due to stagnation and doing npthing, becasue nobody dares to make and enforce decisions. Paralysis will render all ambitions for solving the Euro issue as useless and as hopeless - and after that, render the EU a paralysed hopeless case, too. Which means Europe will die a slow death, and ultimately end up in utter unimportance, and a going back to regional, local, individual fight for survival. An essay I read some days ago compoared it to a status worse than the dead-locked WTO which also is paralysed since severla years, since the failed talks at Doha. the fincial bill will be payed by ordinary people, old people, pensioneerrs, private people who get expropriated of their financial savings by which they hoped to secure their future when they had become old. __________________ If you feel nuts, consult an expert.

10-07-11, 03:06 PM	#2
soopaman2 Der Alte Join Date: Sep 2011 Location: New Jersey, USA Posts: 3,316 Downloads: 61 Uploads: 0	I believe allowing certain countries to cook the books is what is messing this endeavor up. Some countries evade taxes and retire at 50, while others have to entertain bailing them out. Your vision of North Euro countries would work without killin too much of the already existing structure. You may have a cool club, but when you let everyone in it becomes a mess. Some people refuse to clean up, they pee on the couch and crash a motorboat throught the front wall, then expect someone else to clean it up. It pretty much becomes a flophouse. Maybe the Euro club should let less frat boys in. Poor Germany, having to fix all this mess. __________________ If Hitler invaded Hell I would make at least a favourable reference to the devil in the House of Commons. -Winston Churchill- The most fascinating man in the world.

10-07-11, 03:09 PM	#3
Jimbuna Chief of the Boat Join Date: Feb 2006 Location: 250 metres below the surface Posts: 190,473 Downloads: 63 Uploads: 13	Well speaking purely as an Englishman....I wish we would get the hell out of Europe, we are an island nation and I doubt pulling out of Europe would affect us that much, it's not as if Europe can afford to cease trading with us.....and vice versa. __________________ Wise men speak because they have something to say; Fools because they have to say something. Oh my God, not again!!

10-07-11, 03:21 PM	#5
JU_88 Silent Hunter Join Date: Jan 2006 Location: UK Posts: 3,803 Downloads: 11 Uploads: 0	Dont really matter why anymore, its pointless to analyse now. Our beloved capitalist economy is gonna tank (in the next few months probably) and we just got to live with it. If you want to prepare for the worst case scenario then invest in gold, buy a gun and stock up on tinned beans. I dont know, You give man 'Free Enterprise' and he trashes it with greed and exploitation. Our childrens children will be spitting on our graves when they get the bill, (if the human race can survive another 2 generations that is) Last edited by JU_88; 10-07-11 at 03:45 PM.

10-07-11, 05:26 PM	#8
Diopos Ace of the Deep Join Date: Jul 2008 Location: Athens, the original one. Posts: 1,226 Downloads: 9 Uploads: 0	Really interesting these Fitch et al rating agencies: Day 1: [Fitch et al ]: It is our assessment that bank XXX has not a positive outlook so we downgrade it. Day 2: People start moving money out of bank XXX because it is downgraded by the experts Day 3: [Fitch et al ]: Bank XXX is additionaly experiencing an outflow of deposits worsening its prediction so we downgrade it (again). Day 4: Panic sets in. Bank run. Day 5: [Fitch et al ]: Bank XXX is now reduced to junk. Of course we warned you from Day 1. Eventually you don't quite know if these bastards rate you or blackmail you (not that it really matters in the end). Destruction via negative feedback loop. It is so obvious it should banned. Or taxed! . __________________ - Oh God! They're all over the place! CRASH DIVE!!! - Ehm... we can't honey. We're in the car right now. - What?... er right... Doesn't matter! We'll give it a try anyway!

10-07-11, 03:16 PM	#4
MothBalls Ace of the Deep Join Date: Aug 2006 Posts: 1,012 Downloads: 20 Uploads: 0	Well speaking purely as an American....I wish we would get the hell out of Everwhere.

10-07-11, 06:18 PM	#9
Skybird Soaring Join Date: Sep 2001 Location: the mental asylum named Germany Posts: 42,603 Downloads: 10 Uploads: 0	That simple it is not, Diopos. Why I do not take the word of rating agencies as a holy gospel, it has become common habit in Europe to demonise them because they dare to not confirm lies and claims by european politicians when they tell their newest fairy-tales. Instead they often just point out the obvious vulnerabilities and unhealthy details that politicians try to gloss over. No wonder that Eurocrats want to gag them and fight them with counter-propgaanda by a European rating agency. Which meansan agency that is saying what Eurocrats and politicians want it to say, and deceiving the public. There are so many more agencies than just the big three from the US. There are many other americans ones, practically every nation has at least one own agency, big natiosn even have several ones. The biggest agencies btw are not American, but Chinese. And the two biggest of them already had doiwngraded the US long before it made it into the news that another Chinese rating agency had owngraded the US some weeks ago. The Chinese just see the purpose of such agencies differently, and thus often do not make a show of their assessements. That'S why we do not notice their verdicts. I personally see these Chinese agencies as at least as important in their assessments, than the three big American ones. __________________ If you feel nuts, consult an expert.