asterisk2a + default   60

The ten graphs which show how Britain became a wholly owned subsidiary of the City of London (and what we can do about it) – New thinking for the British economy
[ uk banks overinvested enabled by political policy into houses and high streets. underinvested in productive capital like R&D companies in general etc ] >> But it doesn’t increase the productive capacity of the economy one iota: a more expensive house doesn’t produce more intelligent children, and a higher share price doesn’t boost a company’s productivity (though it can indirectly boost its capacity to raise funds for investment). [...] Debt-financed asset purchases are thus fundamentally a Ponzi activity: // not just tight housing supply is increasing prices, but also easy credit/debt/mortgage market! // [...] ultimately, there is a limit to just how much debt individuals and corporations can take on – even with low interest rates
UK  ZIRP  NIRP  QE  housing  market  mortgage  household  consumer  debt  disposable  income  servitude  GFC  recovery  wage  growth  Ponzi  asset  capital  Kapital  BOE  credit  card  affordable  social  servicing  default  rate  insolvency  speculation  unintended  consequences  economic  history  consumption  secular  stagnation  Brexit  policy  fiscal  monetary  Mark  Carney  underinvestment  productivity  R&D  Career  Politicians  Margaret  Thatcher 
may 2017 by asterisk2a
Griechenland: Was Angela Merkel noch alles angeboten hat - SPIEGEL ONLINE
Für den Fall, dass Tsipras die Verlängerung des aktuellen zweiten Hilfspakets zu den veränderten Konditionen akzeptiert hätte, bot Merkel ihm dem Vernehmen nach in einem letzten Gespräch am Freitag vergangener Woche unter anderem Folgendes an: ein drittes Hilfsprogramm, Schuldenerleichterungen, also eine teilweise Umschuldung, Investitionen in Höhe von rund 35 Milliarden Euro. // BUT NO debt jubilee/haircut and admitting that it was a EU bank bailout through the back door. // Counter-off on day 0 from Syriza; ESM to take on debt for two years. Another delay. Country will NOT start to grow in two years to pay off EFSF and IMF ... &! IMF pushes back on default scenario - &! Germany paid 85bn to EU banks (aka Greece Debt payments via EFSF, IMF and ECB ELA liability and bonds that ECB bought via their bank refinance programms (LTRO) via BuBa capital ownership of ECB) in case of default - // &! &!
Grexit  default  IMF  EFSF  Angela  Merkel  PIGS  Wolfgang  Schäuble  European  Union  Career  Politicians  economic  history  sovereign  debt  crisis  zombie  banks  GFC  recovery  Great  Depression  Greece  austerity  Troika  ECB  Syriza  democracy  solidarity  political  error  political  economy  political  folly  policy  error  policy  folly  ESM  ELA  BuBa  Bundesbank  LTRO  TLTRO  MarioDraghi  Jean-Claude  Juncker 
june 2015 by asterisk2a
Griechenland vor dem Referendum: Banken sind Herd der Krise - SPIEGEL ONLINE
Angesichts dieser Lage würden rationale Menschen den Schaden begrenzen wollen. Die einzige Möglichkeit, die es jetzt noch gibt, wäre ein verhandelter Schuldenschnitt für Griechenland ohne neues Programm, aber mit einer Refinanzierung der griechischen Banken. Mit anderen Worten: Wir müssten die Schmach über uns ergehen lassen, dass wir einem Teilverzicht unserer Forderungen zustimmen und gleichzeitig einen weiteren Kredit vergeben. So irrsinnig, wie sich das anhört, so sinnvoll wäre ein solcher Schritt aus deutscher Sicht. Nicht aus Mitleid oder Verantwortung. Sondern aus Eigennutz. Die Betonung hier liegt auf Teil-Verzicht. // // in the end it was a bank bailout through the backdoor sold to the people as Greece Bailout, the money went to the EU banks. period. so sell it as it is, the fucking pig. isn't politics about compromise? >> THUS LOL by Merkel call for more compromise - &! Merkel and Junker is at fault for putting them before Europe at large -
haircut  debt  jubilee  Grexit  Greece  PIGS  contagion  EFSF  IMF  Angela  Merkel  Wolfgang  Schäuble  ChristineLagarde  Career  Politicians  Leadership  unintended  consequences  2015  political  error  political  economy  European  Union  political  folly  policy  error  policy  folly  short-term  thinking  short-term  view  solidarity  Podemos  Syriza  Gesellschaft  zombie  banks  banking  bank  crisis  banking  crisis  stresstest  EuropeanSystemicRiskBoard  ECB  MarioDraghi  Jens  Weidmann  sovereign  debt  crisis  default  default  scenario 
june 2015 by asterisk2a
Greece isn't any old troubled debtor - BBC News
What is very striking - and important - about the agonised talks between Greece and its creditors is that no European leader has tried to bind the feuding sides together with a call to European solidarity, or with any emotive rhetoric about how this great monetary project is all about prosperity and peace for all eurozone citizens. [Career Politicians are are managing the status quo. They are no missionaries.] Nor has any great sense been conveyed that maintaining the wholeness and integrity of the eurozone is a matter of passionate principle. Instead the public and private debate has been couched in the language of national interests, rather than the imperative of keeping the so-called great European project on the road. [...] And some of them would say the creditors are in self-harming denial [not accepting a haircut or lengthy pause of repayment till economy is on a growth track] Or to put it another way, Mrs Merkel and Mr Hollande don't want the backlash from their own citizens.
Grexit  Brexit  European  Union  Leadership  Greece  PIGS  sovereign  debt  crisis  GFC  banking  zombie  banks  Career  Politicians  No  Representation  solidarity  crony  capitalism  Wall  Street  lobbyist  lobby  Lobbying  interest  groups  democracy  Angela  Merkel  Wolfgang  Schäuble  European  Parliament  Protest  Partei  Protest  Party  Principle  austerity  IMF  ChristineLagarde  Troika  economic  history  policy  error  policy  folly  short-term  thinking  short-term  view  bailout  haircut  humanitarian  crisis  human  tragedy  dehumanisation  subhuman  Germany  unintended  consequences  unknown  unkown  default  default  scenario 
june 2015 by asterisk2a
Is This What A Bursting Bubble Looks Like? - YouTube
- bear market, not a 2008/09 decline, more like a lost decade of little productivity growth and very very slow closing of the still existing output gap. - companies benefit form technological progress (accelerating); get more done with less people. +++
asset  bubble  hunt  for  yield  unintended  consequences  ZIRP  QE  liquidity  trap  NIRP  unconventional  monetary  policy  monetary  policy  Fed  ECB  BOE  BOJ  GFC  recovery  greatdepression  greatrecession  2014  lost  decade  productivity  output  gap  G20  G  Zero  G8  Europe  USA  UK  complexity  unknown  unknowns  Taper  deflation  deflationary  globalisation  globalization  flat  world  working  poor  squeezed  middle  class  middle  class  skill-biased  technological  change  technological  progress  knowledge  worker  knowledge  economy  economic  history  history  faultlines  Structural  Impediments  unemployment  deficit  imbalance  global  imbalances  sovereign  debt  crisis  Super  Cycle  debt  bubble  debt  jubilee  debt  monetization  debt  monetisation  default  demographic  bubble  speculative  bubbles  signal  vs  noise  noise  dysfunctional  marketplace  efficiencies  market  dynamics  market  intervention  financial  market  market  failure  market-failure  lost  generation  lostdecade  lostgeneration  currency  debasement  fiat  currency  fiat  money 
july 2014 by asterisk2a
▶ Dan Mitchell testifies on the debt ceiling in front of the Joint Economic Committee on C-SPAN 3 - YouTube
private sector is a tax base/revenue stream. as well as resources like land, oil, dams, fracking. gov has a conflict of interest in terms of regulation and taxation - long-term thinking diminished to zero plus influenced by lobby.
debtceiling  2013  Politics  fiscal  sovereignty  short-term  thinking  economic  history  fiscal  policy  Debt  Super  Cycle  fiscal  discipline  budget  deficit  fiscal  stimulus  sovereign  crisis  USA  default  barackobama  treasury  democracy  ceiling  presidency  fiscal  deficit 
september 2013 by asterisk2a
Junk's heyday is here and now - YouTube "We would stress that we fully understand why the authorities wouldn't want free markets to operate today as the risk of a huge global default and unemployment cycle would still be very high. However their intervention has a cost in our opinion. Socially this might be worth paying but we do think it exists."
bankruptcy  cycle  unemployment  monetary  policy  bond  bubble  zombie  banks  fixed  income  miltonfriedman  BOJ  artificial  demand  Insolvenzverschleppung  QE  lostgeneration  demand  and  supply  property  bubble  hayek  debt  monetisation  debt  bubble  bubble  default  greatdepression  zombie  consumer  debt  monetization  centralbanks  insolvency  cycle  Free  Lunch  IMF  default  cycle  GFC  refinancing  corporate  debt  haircut  unintended  consequences  high  yield  debt  Student  Loan  zombie  corporations  ECB  monetary  system  default  rate  credit  bubble  greatrecession  lostdecade  NIRP  Fed  economic  history  financial  repression  Super  monetarism  sovereign  debt  crisis  youth  unemployment  unconventional  monetary  policy  default  scenario  ZIRP  Junk  Bonds 
may 2013 by asterisk2a
Kyle Bass' 5 Reasons Why The Japanese Government Bond Market Will Collapse by 2016 - YouTube
>> his balance of payments/trade prediction at current trajectory (from 2011 & 1H 2012) was correct. Q3 & Q4 trade deteriorated dramatically, may have to do w global slowdown 2012/2013 ... or ...

Original Here Oct 2012:

2011 Talk:

>> More:
Kyle Bass on Europe from late 2011

>> More:
Market Pulse: Japan's FX intervention warning...with a twist
JPY  greatrecession  GFC  default  scenario  default  2013  2012  Abenomics  lostdecade  lostgeneration  Politics  BOJ  sovereign  debt  crisis  JGB  Japan 
december 2012 by asterisk2a
Five years on, the Great Recession is turning into a life sentence - Telegraph
Five years on it is clear that subprime was merely the first bubble to pop, a symptom not a cause. Europe had its own parallel follies. Britons were extracting almost 5pc of GDP each year in home equity by the end. Spain built 800,00 homes in 2007 for a market of 250,000. Iceland ran amok, so did Latvia and Hungary. The credit debacle was global. If there was an epicentre, it was Europe’s €35 trillion banking nexus.

There comes a point when extra debt draws down prosperity from the future. The future arrived in 2008.

A study by Stephen Cecchetti at the Bank for International Settlements concludes that debt turns “bad” at roughly 85pc of GDP for public debt, 85pc for household debt, and 90pc corporate debt. If all three break the limit together, the system loses its shock absorbers.

Much of the debt will have to be written off. Whether this done by inflation (1945-1952) or default (1930-1934) will be the great political battle of this decade.
politics  policy  folly  policy  error  default  scenario  inflation  reflation  debt  jubilee  economic  history  globalisation  global-economy  global  imbalances  savings  glut  creditcrunch  economic-thought  economic  model  BIS  banking  crisis  bank  crisis  balance  sheet  recession  deleveraging  debt  bubble  debtoverhang  credit  bubble  subprime  property  bubble  sovereign  debt  crisis  UK  China  USA  Europe  2012  2008  lostdecade  GFC  greatrecession 
august 2012 by asterisk2a
EZB: Ankündigung von Draghi zum Anleihenkauf enttäuscht Anleger - SPIEGEL ONLINE
ECB loading up on sovereign debt (PIIGS + France, Belgium) poses a balance sheet risk if just one country Defaults outright and or even imposed just a haircut even for ECB [ECB demanded and pulled through this demand to take no haircut in the Grecce's partial default/PSI 2011].

Meaning then that the ECBs balance sheet is under water and thus the National Central Banks of each country within the EMU have to raise money via its respective governments on debt markets (which are likely then closed because of the severity of the situation, meaning they have to sell their reserve holding of foreign currencies and assets) and without appropriate funds ... Europe's sovereign debt crisis once defined to the south would likely turn into an outright currency crisis.

Baseline: Open Market Operations (SMP) by the ECB have massive tail risk, unintended consequences for the ECB, the monetary system, price stability, the Euro.
ZIRP  QE  SMP  bank  crisis  banking  crisis  greatrecession  GFC  currency-war  currency  debasement  default  Greece  policy  folly  policy  error  2012  Europe  blackswan  confidence  trustagent  trust  tail  risk  Euro  creditcrunch  Monetary  System  theory  policy  sovereign  debt  crisis  PIIGS  Jens  Weidmann  MarioDraghi  Bundesbank  ECB 
august 2012 by asterisk2a
All the bail-out systems under the sun cannot make the eurozone work - Telegraph
Their costs are 30-40pc out of line with Germany's. It is a fantasy to believe that such a gap can be closed by "reform". Whereas money values can move up with dazzling speed, the real economy can be improved only slowly.
Consequently, when nominal values get out of line, the problem can only be solved by a price or exchange rate adjustment. Theoretically, this could be through internal deflation but that would increase the real value of debt and depress aggregate demand still more. Deflation is the road to catastrophe.

Throwing yet more money at the vulnerable countries and calling this by a fancy name is not an answer. Just as with the Gold Standard and with Bretton Woods, the system has to break.

There will be more summits and bail-outs, more fudge and mudge, and more money poured into a black hole. But the end is approaching inexorably.

Roger Bootle is managing director of Capital Economics.
bailout  2012  Grexit  default  scenario  default  economic  history  brettonwoods  goldstandard  sovereign  debt  crisis  Europe  EMU  Cyprus  PIIGSFB  PIIGS 
june 2012 by asterisk2a
"Which Eurobonds?" by Jeffrey Frankel | Project Syndicate
The introduction of Eurobonds – joint, aggregate eurozone liabilities – could be part of the solution, if designed properly. There is certainly demand for them in China and other major emerging countries, which are desperate for an alternative to low-yielding US government securities.
CommentsBut Germany remains opposed on moral-hazard grounds: a joint guarantee of Eurozone members’ liabilities would strengthen individual national governments’ incentive to spend beyond their means. Indeed, this version of Eurobonds would fail, both economically and politically.

But a different version has begun to gain traction in Germany. The German Council of Economic Experts has proposed a European Redemption Fund (ERF). The plan would convert into de facto 25-year Eurobonds the existing sovereign debt of member countries in excess of 60% of GDP.

[But there is still moral hazard left even with this solution .. at the 60% margin.]
PIIGS  Europe  EMU  debtoverhang  history  default  ERF  European  Redemption  Fund  moralhazard  eurobond 
june 2012 by asterisk2a
Quantum Finanzas's Marx Discusses Greece, Argentina
Quantum Finanzas's Marx Discusses Greece, Argentina (Audio)

Feb 7, 2012

Daniel Marx, executive director of Quantum Finanzas in Argentina and a former finance secretary, discusses similarities and differences between Argentina and Greece. Marx talks with Bloomberg's Sara Eisen and Michael McKee on "Bloomberg On the Economy."

- debt overhang and not being competitive in global economy is not the same ailment of Greece (PIIGS) economy. Greece has not primary surplus (and debt overhang), no competitiveness, and a deep recession and massive shadow economy.

Default and deep restructuring, plus liberal economic reforms (and fiscal policy) seem the only way out, as they don't have one tool - monetary policy.
2012  monetary  policy  fiscal  policy  economic-thought  debtoverhang  competitiveness  sovereign  debt  crisis  economic  history  history  restructuring  default  Greece  Argentina 
february 2012 by asterisk2a
Staatsbankrott: Was eine Griechen-Pleite jeden Bundesbürger kosten würde - SPIEGEL ONLINE - Nachrichten - Wirtschaft
Deutschland und damit jeder einzelne Steuerzahler haftet für vier Risiken:

für die Zahlungen aus dem ersten Rettungspaket für Griechenland,
für die griechischen Staatsanleihen, die bei der Europäische Zentralbank (EZB) liegen,
ferner für die griechischen Staatsanleihen im Besitz von staatlichen deutschen Banken
und schließlich für Ausfälle im sogenannten Target2-System.

[...] "Wenn Griechenland aus dem Euro austritt und seine Target-Salden nicht bedient, müsste Deutschland gemäß seinem Anteil von rund 27 Prozent an der EZB die Verluste tragen." Im schlimmsten Fall wären das geschätzte 27 Milliarden Euro. Westermann: "Die großen Risiken im Target-System sind meiner Meinung nach der Grund, dass Griechenland von den Euro-Ländern nicht fallengelassen wird."
sovereign  debt  crisis  PIIGS  contagion  Germany  ECB  EFSF  target2-system  2012  default  scenario  default  greece 
february 2012 by asterisk2a
Capturing the ECB - Joseph E. Stiglitz - Project Syndicate
Moreover, “innovation” in financial markets has made it possible for securities owners to be insured, meaning that they have a seat at the table, but no “skin in the game.” They do have interests: they want to collect on their insurance, and that means that the restructuring must be a “credit event” – tantamount to a default. The ECB’s insistence on “voluntary” restructuring – that is, avoidance of a credit event – has placed the two sides at loggerheads. The irony is that the regulators have allowed the creation of this dysfunctional system.

.... involuntary restructuring vs voluntary restructuring

The ECB’s behavior should not be surprising: as we have seen elsewhere, institutions that are not democratically accountable tend to be captured by special interests. That was true before 2008; unfortunately for Europe – and for the global economy – the problem has not been adequately addressed since then.
lobby  accountability  democracy  politics  Europe  contagion  credit  event  ISDA  CDS  restructuring  regulation  banking  transparency  2012  default  Greece  ECB 
february 2012 by asterisk2a
Bloomberg’s Harper Says Bank Exposure to Europe Clouded (Audio)
Nov 16, 2011
Bloomberg reporter Christine Harper says U.S. bank investors are being kept in the dark about exposure to European sovereign default. Harper talks with Bloomberg's Ken Prewitt and Tom Keene on Bloomberg Radio's "Bloomberg Surveillance."

- ISDA - the body for CDS / Derivatives decided that greece 50% PSI (haircut) is not default,
- bc ISDA is owned by banks, if they would rule it as default scenario - everyone would have owed somebody something - which would have introduced great uncertainty, volatility, share price losses
- did it in their own interest.
= this equals to collusion in an oligopolistic market.
ISDA  CDS  derivatives  collusion  oligopol  financialmarket  Greece  default  2011  OTC  exposure  sovereign  debt  crisis  PIIGS  accounting  fraud  transparency  confidence 
november 2011 by asterisk2a
JPMorgan Joins Goldman Keeping Italy Debt Risk in Dark - Bloomberg
tied together w bungee cords

JPMorgan Chase & Co. (JPM) and Goldman Sachs Group Inc. (GS), among the world’s biggest traders of credit derivatives, disclosed to shareholders that they have sold protection on more than $5 trillion of debt globally.

JPMorgan said in its third-quarter SEC filing that more than 98 percent of the credit-default swaps the New York-based bank has written on PIIGS debt is balanced by CDS contracts purchased on the same bonds.

By contrast, Goldman Sachs discloses only what it calls “funded” exposure to PIIGS debt -- $4.16 billion before hedges and $2.46 billion after, as of Sept. 30. Those amounts exclude commitments or contingent payments, such as credit-default swaps, said Lucas van Praag, a spokesman for the bank.

“Their position is you don’t need to know the risks, which is why they’re giving you net numbers,” said Nomi Prins, “Net is only as good as the counterparties on each side of the net -- that’s why it’s misleading in a fluid, dynamic market.”
jpmorgan  goldmansachs  sovereign  debt  exposure  derivatives  2011  PIIGS  CDS  toobigtofail  counterpartyrisk  citigroup  bankofamerica  boa  morganstanley  USA  Europe  lehmanbrothers  crisis  analysis  financialmarket  default  liquidity  solvency  confidence  trust 
november 2011 by asterisk2a
Wikileaks Exposes German Preparations For "A Eurozone Chapter 11" | ZeroHedge

¶9. (C) DB Chief Economist Thomas Mayer told Ambassador Murphy he was pessimistic Greece would take the difficult steps needed to put its house in order. A worst case scenario, says Mayer, could be that Germany pulls out of the Eurozone altogether in 20 years time. In 1990, Germany's Constitutional Court ruled that the country could withdraw from the Euro if: 1) the currency union became an "inflationary zone," or 2) the German taxpayer became the Eurozone's "de facto bailout provider." Mayer proposes a "Chapter 11 for Eurozone countries," which would place troubled members under economic supervision until they put their house in order. Unfortunately, there is no serious discussion of this underway, he lamented.
germany  greece  bailout  PIIGS  EMU  wikileaks  cable  cablegate  Europe  Euro  chapter-11  default  2011  politics 
november 2011 by asterisk2a
Greece on Edge of Biggest Insolvency 24 Centuries After First City Default - Bloomberg
History’s first sovereign default came in the 4th century BC, committed by 10 Greek municipalities. There was one creditor: the temple of Delos, Apollo’s mythical birthplace.Twenty-four centuries later, Greece is at the edge of the biggest sovereign default and policy makers are worried about global shock waves of an insolvency by a government with 353 billion euros ($483 billion) of debt -- five times the size of Argentina’s $95 billion default in 2001.
greece  default  2011  history 
september 2011 by asterisk2a
Meredith Whitney Wins If Default Meaning Is Lost: Joe Mysak - Bloomberg
So far this year, $746 million in munis have defaulted, according to the Distressed Debt Securities newsletter. In the first half of 2010, the figure was $2.3 billion, and in 2009 it was $4.89 billion.
MeredithWhitney  municipal  bond  debt  default  2011 
july 2011 by asterisk2a
Europe's bank stress tests as bad as 1979 Irish driving test - Telegraph
Take one of the more pertinent “stressed” assumptions the European authorities have used to test the 90 banks in the latest tests.Greek bonds are currently trading in the market at half their face value, yet the EBA seriously asks sophisticated investors to believe that they have properly tested the banks by applying a “haircut” of just 15pc to Greek debt.Or look at the €2.5bn (£2.2bn) of new capital the EBA says the eight banks that failed the tests will have to raise.Analysts at Credit Suisse, just three hours and 25 minutes after the EBA announced its results, have concluded that the actual amount needed would be more like €45bn and that 14 banks should have failed.

 honesty really is the best policy.
EBA  stresstest  europe  2011  banking  sovereign  debt  PIIGS  default  fraud  hypocrisy  policy  politics 
july 2011 by asterisk2a
Britain should start spying on Eurozone neighbours, former MI6 chief says - Telegraph
The failure of governments in the eurozone to disclose the true extent of deficit spending and revenue shortfalls has been a constant feature of the euro financial collapse. It took the European Statistics agency Eurostat a full year to produce an accurate record of Greek spending after it got full access to the country’s accounts.“If we had known 3 or 4 years ago that the Greek deficit was really twice as much as they said it was, we would have had a great heads up of future trouble,” Raoul Ruparel, chief economist of the Open Europe thinktank. “There’s a lot of things that countries involved in the euro do behind closed door that are still not disclosed.”
Greece  default  PIIGS  deficit  accounting  accountability  sovereign  debt  crisis  2011 
july 2011 by asterisk2a
Wolfgang Munchau On How The Greek Rollover "Deal" Is A Toxic CDO | zero hedge
"This structure is still not quite so complex as some of the more elaborate CDOs we have encountered in the global financial crisis. If you take some time to work through the arrows and boxes, you see relatively quickly that this complex structure is not a private sector participation at all. Rather it is a private sector bail-out...

The punchline is not surprising, but it is funny:
The rollover agreement represents, from an economic point of view, nothing but a collateralised bond. It subordinates all other bondholders. The rating agencies would normally not hesitate to attach a default rating to Greek government debt.
So the solution is to create a complex structure, and claim that it is technically not a collateralised bond, but something that defies definition.
transparency  financial  finance  financialcrisis  financialmarket  ratingagencies  default  greece  PIIGS  EFSF  ESM  bailout  2011  germany  ECB  angelamerkel  ponzischeme  CDO  SIV  scam  sovereign  debt  crisis 
july 2011 by asterisk2a
Euro Debt Crisis - Europe Must 'Acknowledge' Greek Default: Economist - CNBC
"Eventually we will have to acknowledge that in fact there's a Greek default and take it from there," Sir Howard Davies, former director of the London School of Economics and former chairman of the Financial Services Authority, the UK banking watchdog said.
"We are dancing on the head of a pin here, in trying to pretend that the default is not a default, but it's quite clear that nobody would lend to Greece at the moment in a free market."
Greece would likely be in "selective default" even if it follows a debt rollover plan pushed by French banks, ratings agency Standard & Poor's warned on Monday.
default  debt  sovereign  greece  PIIGS  2011  EFSF  ESM 
july 2011 by asterisk2a
Trichet Says Risk Signals Are Flashing Red as Debt Crisis Threatens Banks - Bloomberg
European Central Bank President Jean-Claude Trichet said risk signals for financial stability in the euro area are flashing “red” as the debt crisis threatens to infect banks.

“On a personal basis I would say ‘yes, it is red’,” Trichet said late yesterday in Frankfurt after a meeting of the European Systemic Risk Board, referring to the group’s planned “dashboard” to monitor risks. “The message of the board is that” the link between debt problems and banks “is the most serious threat to financial stability in the European Union.”

BNP Paribas (BNP) SA, France’s biggest bank, and rivals Societe Generale (GLE) SA and Credit Agricole SA (ACA) may have their credit ratings cut by Moody’s Investors Service because of their Greek investments, the ratings company said on June 15. German banks could also be at risk from contagion, Fitch said last month.
PIIGS  sovereign  debt  trichet  ECB  ESRB  contagion  bank  solvency  capital  2011  exposure  libor  Greece  default  complexity  credit  creditcrunch  liquidity  interbank 
june 2011 by asterisk2a
EU urged to block Greece bail-out - Telegraph
The Chinese Foreign Ministry said it was willing to talk about ways it could help stabilise the European financial system during its visit to Britain, Germany and Hungary this week.Ahead of the visit by Premier Wen Jiabao, a spokesman said: “The Chinese government has already taken a series of proactive measures to push Sino-Europe trade and economic cooperation, such as buying euro bonds … China is willing to continue helping European countries realise economic growth.”
PIIGS  china  bailout  2011  EFSF  ESM  Greece  default 
june 2011 by asterisk2a
YouTube - Griechenland & das Drehbuch der Deutschen Bank
auf zeit gespielt ...

1. (00:00) Monitor, 16.06.20112. (07:41) Deutscher Bundestag, 115. Sitzung, Freitag, 10.06.2011, Rede Gregor Gysi (Ausschnitt)
Das neue Konzept, mit dem Bundesfinanzminister Wolfgang Schäuble die Auslandsschulden Griechenlands "sanft" umschulden will, geht offensichtlich zurück auf einen Vorschlag der Deutschen Bank. Der Redaktion MONITOR liegen entsprechende Papiere vor. Die Vorschläge der Deutschen Bank wurden demnach fast deckungsgleich in das Konzept des Bundesfinanzministeriums übernommen.
Greece  2011  deutschebank  ECB  germany  default  wallstreet  haircut  sovereign  debt  PIIGS  toxicassets  politics  josefackermann  angelamerkel  IMF  architect 
june 2011 by asterisk2a
PIMCO | Viewpoints - The Eurozone Needs a Plan B, as 'Quarantining' the Weak Is Too Costly
Greece and Ireland are on programs that are neither working in terms of restoring stable debt dynamics, nor in keeping current investors engaged or attracting new ones. Portugal is now following the same approach.There is a fat, political tail-risk that the Greek political system will not be able to deliver on the demands to “do more,” ending in disorderly default.The better and more realistic approach for the eurozone as a whole might be to acknowledge the Greek plan is not working and move to Plan B – address the need for a restructuring of Greece’s public debt and perhaps that of other countries too.
PIIGS  2011  default  restructuring  debt  sovereign  crisis 
june 2011 by asterisk2a
When Austerity Fails -
Realistically, then, Europe needs to prepare for some kind of debt reduction, involving a combination of aid from stronger economies and “haircuts” imposed on private creditors, who will have to accept less than full repayment. Realism, however, appears to be in short supply.
On one side, Germany is taking a hard line against anything resembling aid to its troubled neighbors, even though one important motivation for the current rescue program was an attempt to shield German banks from losses.
On the other side, the E.C.B. is acting as if it is determined to provoke a financial crisis.
austerity  PIIGS  greece  paulkrugman  default  restructuring 
may 2011 by asterisk2a
Greece Has Options to Fix Debt Woes, but All Lead to Misery -
extending the maturity of Greece’s debt appears to be the most likely and politically palatable. The European Union can claim that it is still paying Greece’s obligations in full while also showing to Germany and other Northern European nations that there is pain for the bondholders.
If these debt maturities are extended a few years, the European Union would not have to cover the looming private financing gap Greece faces. In such a case, the accountants may still allow European banks that hold billions in Greek debt to still value it at 100 cents on the dollar, allowing them to avoid their own solvency issues and allow time to build up reserves. The European Central Bank can thus avoid haircuts or defaults that might affect the other troubled European countries or European banks.

 And the extension is likely to last for decades to allow the debt’s value to be eaten away by inflation.
Greece  default  restructuring  accounting  finance  banking  2011 
may 2011 by asterisk2a
World on course for next crisis, warns Gordon Brown - Telegraph
Mr Brown said the "resolve" to act seen immediately after the crisis has been replaced by indecision and vested interest. He urged politicians at the next G20 summit, which takes place in Cannes in November, to take control of a globalised financial system which is still "perilously" unregulated.

They fear "with good cause" that if Greece has to restructure its debt - effectively default - it could unravel a chain of trades based on the problematic debt and lay bare the interconnectedness of institutions around the world, said Stephen Lewis, an analyst at Monument Securities.
gordonbrown  2011  PIIGS  default  restructuring  greece  banking  EMU  lehmanbrothers  finance  financialcrisis  FinancialCrisisInquiryCommission  toobigtofail 
may 2011 by asterisk2a
Special report: Europe's Greek tragedy | Reuters
In Europe, by contrast, the banks holding Greek debt are gradually being bought out by European governments in what former Argentine central bank governor Mario Biejer has likened to a "giant Ponzi scheme".
"If the sword of a debt restructuring must eventually fall in order to render Greece's debt stock manageable, that sword will fall principally on the neck of the official sector lenders," wrote Lee Buchheit, a lawyer at Cleary Gottlieb Steen & Hamilton in New York who helped negotiate Uruguay's 2003 debt restructuring, in a paper on Greece's options last month.
"The original creditors will have swapped place in the tumbrel with official lenders quite literally in the shadow of the guillotine."
Reuters calculations, based on a conservative estimate that official lenders -- EU governments, the IMF and ECB -- will hold about 160 billion euros in Greek debt two years from now,  ...
Greece  default  economy  PIIGS  2011  restructuring  bailout  EFSF  ESM  ECB 
may 2011 by asterisk2a
Head Of Eurogroup Admits To Lying About "Secret Greek Meeting" Out Of Fears For Market Collapse - "When It Becomes Serious, You Have To Lie" | zero hedge
On the tape, Mr. Juncker says he has “had to lie” and, speaking about touchy economic topics, “When it becomes serious, you have to lie.”
EMU  Europe  Euro  PIIGS  greece  2011  sovereign  debt  politics  economics  default  restructuring  ireland  portugal  EFSF  ESM  ECB  Fed  fraud 
may 2011 by asterisk2a
Griechen-Umschuldung: Chef von Euro-Rettungsfonds unterstelltBanken Gier - SPIEGEL ONLINE - Nachrichten - Wirtschaft
"In den achtziger und neunziger Jahren haben die Banken für die Restrukturierung von Staatsschulden in Lateinamerika und Asien sehr hohe Honorare kassiert. Das würden sie in Europa gerne wiederholen."
Zwar würde eine Teilentschuldung des Landes einige Banken dazu zwingen, griechische Staatspapiere in ihrer Bilanz teilweise abzuschreiben, räumte Regling ein. Die dabei entstehenden Verluste würden sich aber "in Grenzen halten". Dagegen wären die mit einer Restrukturierung verbundenen Provisionen vielversprechend.Der Präsident der Europäischen Zentralbank (EZB), Jean-Claude Trichet, glaubt ebenfalls, dass die Banken den Schuldenschnitt Griechenlands bewusst herbeireden wollen. Nach "Handelsblatt"-Informationen hat Trichet die Finanzminister der Euro-Zone explizit davor gewarnt, sich im Hinblick auf Griechenland von den Instituten beeinflussen zu lassen.
EFSF  default  restructuring  greece  PIIGS  2011  trichet  banking  fees  ECB  europe  history 
may 2011 by asterisk2a
Niall Ferguson Discusses U.S. Debt, `Bond Vigilantes' - Bloomberg
Niall Ferguson Discusses U.S. Debt, `Bond Vigilantes'

July 6 (Bloomberg) -- Niall Ferguson, a professor at Harvard University, talks about so-called bond vigilantes and the U.S.'s debt position and fiscal policy. Ferguson talks with Erik Schatzker on Bloomberg Television's "InsideTrack." (This is an excerpt. Source: Bloomberg)
NiallFerguson  USA  default  bonds  sovereign  debt  2010 
july 2010 by asterisk2a
Bob Janjuah: "We Are Trapped In Some Sort Of Horrendous Keynesian/Monetarists' Nightmare...." | zero hedge
Kevin's work also made clear that one 5%+ GDP data point, driven by inventory, was certain - he thgt it would be Q3 09 but it ended up being in Q4. However, we both have felt and feel that the prvte sector is in the middle of a long multi-yr period of balance sheet repair, and that the questions re sustainable real 'growth' could/can only be answered once we strip out and/or see the abatement/absence of UNSUSTAINABLE government largesse/bailouts/handouts etc. To us, once you strip away the policymaker and his period of peak effectiveness, where we are now much closer to the end rather than the beginning, what is left to take grwth forward is not very much at all.

I refer of course to the key themes Sovereign Creditworthiness; and The Great Battle between Voluntary Austerity & Deflation, vs Involuntary Austerity, Inflation/Stagflation, Serial Bailouts, Debt & Debasement.

MV = PY / EMU M3 was -.3% y/y in 09, means that even with +M, V was negative. It is a balance sheet recession.
Keynesianism  monetization  balancesheet  recession  richardkoo  private  public  debt  sovereign  austerity  default  globalisation  economics  M3  moneysupply  macroeconomics  greatrecession  UK  history  Japan  argentina  Greece  PIIGS  EMU  Europe  USA  BRIC  China  brasil  emergingmarkets  paulvolcker  competitive  competitiveness  Germany  Finland  euro  reflection  double-dip  reflate  developing-world  may  2010 
may 2010 by asterisk2a
Angst vor Dominoeffekt: Griechenland-Krise weckt Lehman-Erinnerungen |
Bundeskanzlerin Angela Merkel sprach von einem "Krieg" der Regierungen gegen die Märkte. EU-Währungskommissar Olli Rehn verglich die hellenische Schuldenkrise mit der Pleite der US-Investmentbank Lehman Brothers im September 2008. "Die Institutionen der USA konnten damals nicht ermessen, was der Bankrott von Lehman auslösen würde", schrieb Rehn in einem finnischen Magazin. Das Finanzsystem sei so paralysiert gewesen wie zur Zeiten der Großen Depression in den 30er-Jahren. "Sollte Griechenland pleite gehen, wären die Konsequenzen ähnlich gravierend, wenn nicht sogar schlimmer."
greece  bailout  may  germany  ECB  Fed  usa  default  banking  systemicrisk  restructuring  2010 
may 2010 by asterisk2a
John Taylor: "Dead Man Walking...The Euro Is Finished" | zero hedge
Our pencil pushers and Excel experts have made lots of projections on the Greek situation and can find almost no possibility of success. The EU/IMF team projects Greek debt at 149% of GDP when this rescue ends, but their nominal GDP estimates are incredibly optimistic when salaries and jobs are cut dramatically. We see a 20% decline over the three years as a good outcome, the debt would stay the same, and the ratio goes to 186% of GDP. Almost like Japan, but foreigners own the Greek debt – no way! This rescue reminds us of Bob Rubin’s rescue of Russia in July 1998, which lasted about one month before the whole house of cards collapsed. We knew that one couldn’t work, and this one can’t either. It might take longer, but the euro is finished.
EMU  greece  bailout  euro  currency  sovereign  debt  germany  may  2010  default  restructuring  2011  hisotry  BobRubin  russia  outlook 
may 2010 by asterisk2a
What A Difference A Day Made! - Credit Writedowns
Highly respected US economist and Harvard University Professor Martin Feldstein went even further, saying that in his opinion Greece will eventually default on its bonds and he feared other euro-area nations may follow, most probably Portugal. “Greece is going to default despite all the talk, despite the liquidity package,” he said. Portugal’s name is mentioned frequently these days, since although the government deficit and debt levels are lower in Portugal than in Greece and the Portuguese government has much more fiscal credibility than its Greek counterpart, when you add private sector debt to the public part the number is not far short of 300% of GDP, and in fact the underlying problems are very similar.

Read more:
PIIGS  greece  bailout  germany  ECB  IMF  hungary  April  2010  default  restructuring  EMU 
may 2010 by asterisk2a
Rick Bookstaber: The Municipal Market
Once a few municipalities default, there is a risk of a widespread cascade in defaults because the opprobrium will be lessened, all the more so if the defaults are spurred along by a taxpayer revolt – democracy at work.
municibal  bonds  government  economy  default  recession  2010  greatrecession  recovery  california  newyork 
april 2010 by asterisk2a
2010 Predictions From Shiller, Blinder, Rajan and More - Real Time Economics - WSJ
Robert Shiller, Yale University:
“Strategic default on mortgages will grow substantially over the next year, among prime borrowers, and become identified as a serious problem. The sense that ‘everyone is doing it’ is already growing, and will continue to grow, to the detriment of mortgage holders. It will grow because of a building backlash against the financial sector, growing populist rhetoric and a declining sense of community with the business world. Some people will take another look at their mortgage contract, and note that nowhere did they swear on the bible that they would repay.”
mortage  default  2010  robertshiller  prediction  2011  2012 
january 2010 by asterisk2a

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