ShcShc11 0 #1 June 25, 2012 Quote According to the study, if Ireland, Portugal, Spain and Italy joined Greece in leaving the euro, 29 large European banks would see a total capital shortfall of about €410 billion. "If the peripheral countries withdraw from the euro zone, a few of the large, publicly traded banks would come to a standstill," reads the analysts' sobering conclusion. In their predictions, the experts did not even take into account the likelihood that France would come under pressure if Italy withdrew from the euro. Banks in the crisis-ridden countries would be especially hard-hit, but so would investment banks like Deutsche Bank. According to Credit Suisse, the market leader in Europe's largest economy, which prides itself in having survived the financial crisis without government assistance, would face such heavy loses that it would suffer a capital shortfall of €35 billion. Whereas Greece is now almost irrelevant for Deutsche Bank, Italy and Spain account for a tenth of its European private and corporate banking business. The bank estimates the credit risks in these countries at about €18 billion (Italy) and €12 billion (Spain). ... Economists with the Dutch bank ING have calculated that in the first two years following a collapse, the countries in the euro zone would lose 12 percent of their economic output. This corresponds to the loss of more than €1 trillion. It would make the recession that followed the bankruptcy of investment bank Lehmann Brothers seem like a minor industrial accident by comparison. Even after five years, say the ING experts, economic output in the euro zone would still be significantly lower than normal. Many of us are pretty unhappy with 8% unemployment (which we should rightfully be). However, there was a study (from C) that mentioned in the event that EuroBanks collapsed (keyword: the Banks), U.S unemployment would rise to around 20-30%.. It was approximately the same figure given by Hank Paulson (George Bush's secretary of treasury back in November 2008). It sounds like fear-mongering, but if banks like Citigroup/Bank of America/JP Morgan barely survived the Lehman brother collapse, I'm not too sure how they would survive a major Euro Bank collapse. http://www.spiegel.de/international/europe/fears-grow-of-consequences-of-potential-euro-collapse-a-840634.html And for our friends at the Bundesbank: Quote The German Finance Ministry's prognosis is even grimmer than that of the ING experts. According to their scenarios, in the first year following a euro collapse, the German economy would shrink by up to 10 percent and the ranks of the unemployed would swell to more than 5 million people. The officials were so horrified by their conclusions that they kept all of their analyses under lock and key, for fear that the costs of rescuing the euro could spin out of control. Cheers! Shc Quote Share this post Link to post Share on other sites
matthewcline 0 #2 June 25, 2012 Some of the adjusted numbers say unemployment under Bush was three to four % higher as well as the current number being four to five % higher. If the banks had completely collapsed, how long for the world to recover enough to not be in a global recession? Would it have made the "new" economy stronger? Is this economy "weak" due to all the "band aids" holding it together? Where is the bail out money truly coming from? if every Country is running in a debt, how do they loan what they do not have? MattAn Instructors first concern is student safety. So, start being safe, first!!! Quote Share this post Link to post Share on other sites
kallend 1,623 #3 June 25, 2012 QuoteSome of the adjusted numbers say unemployment under Bush was three to four % higher as well as the current number being four to five % higher. If the banks had completely collapsed, how long for the world to recover enough to not be in a global recession? Would it have made the "new" economy stronger? Is this economy "weak" due to all the "band aids" holding it together? Where is the bail out money truly coming from? if every Country is running in a debt, how do they loan what they do not have? Matt Well, I think you just sneaked a peek at the deep shit into which our financial system and its overpaid architects have led us.... The only sure way to survive a canopy collision is not to have one. Quote Share this post Link to post Share on other sites
piisfish 135 #4 June 25, 2012 my question is : how can we call these people who drive world economy to a massive failure "financial experts" ?? scissors beat paper, paper beat rock, rock beat wingsuit - KarlM Quote Share this post Link to post Share on other sites
matthewcline 0 #5 June 25, 2012 QuoteQuoteSome of the adjusted numbers say unemployment under Bush was three to four % higher as well as the current number being four to five % higher. If the banks had completely collapsed, how long for the world to recover enough to not be in a global recession? Would it have made the "new" economy stronger? Is this economy "weak" due to all the "band aids" holding it together? Where is the bail out money truly coming from? if every Country is running in a debt, how do they loan what they do not have? Matt Well, I think you just sneaked a peek at the deep shit into which our financial system and its overpaid architects have led us. Maybe they should stop meddling in it then? Let is "natural" cycle happen? MattAn Instructors first concern is student safety. So, start being safe, first!!! Quote Share this post Link to post Share on other sites
billvon 2,400 #6 June 25, 2012 >Maybe they should stop meddling in it then? >Let is "natural" cycle happen? What's natural about an economy? It's about the most artificial system we have generated thus far. Quote Share this post Link to post Share on other sites
airtwardo 6 #7 June 25, 2012 Quote >Maybe they should stop meddling in it then? >Let is "natural" cycle happen? What's natural about an economy? It's about the most artificial system we have generated thus far. That & welfare. ~ If you choke a Smurf, what color does it turn? ~ Quote Share this post Link to post Share on other sites
lawrocket 3 #8 June 25, 2012 QuoteWould it have made the "new" economy stronger? Is this economy "weak" due to all the "band aids" holding it together? I'm of the opinion that what we're doing is little more than some hardcore enabling. It's like a son with a gambling problem, and the parents want to keep the son from having his legs broken so they keep giving him money. The difference being that in this case, the parents are using money they've been taking from everyone else. As with a degenerate gambler (which really is what we're talking about) it is time to let them hit rock bottom. This would be something that could cause the necessary structural changes that could build strength. Of course there's no way that anyone would actually let stuff get messed up. Because that would require fixing it. My wife is hotter than your wife. Quote Share this post Link to post Share on other sites
ShcShc11 0 #9 June 25, 2012 QuoteQuoteWould it have made the "new" economy stronger? Is this economy "weak" due to all the "band aids" holding it together? I'm of the opinion that what we're doing is little more than some hardcore enabling. It's like a son with a gambling problem, and the parents want to keep the son from having his legs broken so they keep giving him money. The difference being that in this case, the parents are using money they've been taking from everyone else. As with a degenerate gambler (which really is what we're talking about) it is time to let them hit rock bottom. This would be something that could cause the necessary structural changes that could build strength. Of course there's no way that anyone would actually let stuff get messed up. Because that would require fixing it. Apart from Greece, this isin't really a matter of peripheral Euro countries "borrowing too much". The structure of the EURO itself is the problem. Countries with a debt problem cannot depreciate its currency to: A) make its business profitable and competitive again B) to bring their economic engine at full speed Greece and Portugal are relatively poor, with GDP per capita of 82 and 77 percent, respectively, of the EU average. But it’s no different, really, than the US situation. Alabama is at 74 percent of the US average, Mississippi at 67. What's the difference between U.S and EURO? The FEDERAL Government transfers money to STATES that are in trouble. If the STATES banks are in trouble, the FEDERAL mops it up. In the EURO, the country has to mop up its own banks. If it the single currency was to work, Germany-France need to do transfers in the same way U.S FEDERAL GOV does with the STATES. In the future, when I have more time on hand, I can write about Texas and how one of their economic crisis was as bad (or worse) than Greece. No real crisis developed because the Federal Gov just handed them "free money" to stop the confidence crisis. References for my STATS about EURO competitiveness vs US competitiveness: http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/2-20062012-AP/EN/2-20062012-AP-EN.PDF http://bea.gov/iTable/iTable.cfm?ReqID=99&step=1 This whole notion that countries are sucking money off Merkel's tits is a very destructive ideology. It undermines real European reform and brings us closer to bankapocalypse. Economics is not a morality lesson and it does not work at all like a family budget. Cheers! Shc Quote Share this post Link to post Share on other sites
billvon 2,400 #10 June 25, 2012 >That & welfare. And Twinkies. And Paris Hilton. Quote Share this post Link to post Share on other sites
kallend 1,623 #11 June 25, 2012 Quote>That & welfare. And Twinkies. And Paris Hilton. And skydiving.... The only sure way to survive a canopy collision is not to have one. Quote Share this post Link to post Share on other sites
matthewcline 0 #12 June 25, 2012 Quote>Maybe they should stop meddling in it then? >Let is "natural" cycle happen? What's natural about an economy? It's about the most artificial system we have generated thus far. That is why I used - " " - around the word natural, it is man made, artificial, etc. But economies grow and shrink, even explode or collapse, that is part of the "natural cycle". That lead to my "what if?" MattAn Instructors first concern is student safety. So, start being safe, first!!! Quote Share this post Link to post Share on other sites
nanook 1 #13 June 26, 2012 QuoteQuoteQuoteSome of the adjusted numbers say unemployment under Bush was three to four % higher as well as the current number being four to five % higher. If the banks had completely collapsed, how long for the world to recover enough to not be in a global recession? Would it have made the "new" economy stronger? Is this economy "weak" due to all the "band aids" holding it together? Where is the bail out money truly coming from? if every Country is running in a debt, how do they loan what they do not have? Matt Well, I think you just sneaked a peek at the deep shit into which our financial system and its overpaid architects have led us. Maybe they should stop meddling in it then? Let is "natural" cycle happen? Matt If you don't mind your retirement becoming instantly worthless, your employers wouldn't be able to pay you, and your bank accounts worthless, then not meddling would be a snap._____________________________ "The trouble with quotes on the internet is that you can never know if they are genuine" - Abraham Lincoln Quote Share this post Link to post Share on other sites
ShcShc11 0 #14 June 26, 2012 The Euro crisis is because of the way the Euro was structured. The U.S/U.K economic lag is due to a failure of the "natural" market. The problem is that the U.S from the PRIVATE SECTOR accumulated too much debt and the bubble popped in 2008 in the form of a housing crisis. People in the private sector are now paying their debt. More Saving > Spending = Recession So what to do in that case? Interest Rates need to be pushed down until Saving = Spending. U.S Interest Rates are already near-zero and Savings > Spending, and thus there is a failure of the "natural market". What to do in that case? The Government needs to step in and spend because the Private sector won't in order to make Savings = Spending However, the U.S economic debate got hijacked into "omg the Federal Government is accumulating too much debt" and "Public does a worse job than the Private sector". These two topics completely misses the point how the U.S got into the economic meltdown of 2008, why their economy is still lagging and how to bring the U.S economy into full-employment again. People will continue to doubt what I say, but it is almost textbook economics. But honestly, Euro crisis dwarf any problems the U.S has. Cheers! Shc Quote Share this post Link to post Share on other sites
nanook 1 #15 June 26, 2012 QuoteThe Government needs to step in and spend because the Private sector won't in order to make Savings = Spending I think I felt a "whoosh" passing through my hair, or I am completely missing something I haven't considered. What actual process would the gov't be able to spend to achieve this? And, yes I agree with the Euro crisis._____________________________ "The trouble with quotes on the internet is that you can never know if they are genuine" - Abraham Lincoln Quote Share this post Link to post Share on other sites
matthewcline 0 #16 June 26, 2012 "The Government needs to step in and spend because the Private sector won't in order to make Savings = Spending" What are they spending? Aren't the private sector holding there monies in fear of a collapse, caused by the Gov's? You say text book economics, but it seems counter productive, to continue to spend what you don't have, and go further into debt with only an occasional pay back. Doesn't the same text book talk about budgets, revenue and expenditures, equal out and equal in, the risk of excessive debt, etc? MattAn Instructors first concern is student safety. So, start being safe, first!!! Quote Share this post Link to post Share on other sites
kallend 1,623 #17 June 26, 2012 Quote"The Government needs to step in and spend because the Private sector won't in order to make Savings = Spending" What are they spending? Aren't the private sector holding there monies in fear of a collapse, caused by the Gov's? You say text book economics, but it seems counter productive, to continue to spend what you don't have, and go further into debt with only an occasional pay back. Doesn't the same text book talk about budgets, revenue and expenditures, equal out and equal in, the risk of excessive debt, etc? Matt Text book says to pay back when times are good. Unfortunately we had 2 unfunded wars and unwise tax cuts while times were good.... The only sure way to survive a canopy collision is not to have one. Quote Share this post Link to post Share on other sites
matthewcline 0 #18 June 26, 2012 The wars, under or unfunded, sure, the Tax cuts, if they are bad why are both "sides" continuing them? Seems more of a spending issue, going back to the under/unfunded point. Get spending under control and then maybe the debt will go down? What about the rest of the question? MattAn Instructors first concern is student safety. So, start being safe, first!!! Quote Share this post Link to post Share on other sites
kallend 1,623 #19 June 26, 2012 QuoteThe wars, under or unfunded, sure, the Tax cuts, if they are bad why are both "sides" continuing them? Because Good Times <> Bad Times. During the boom of the early 2000s we should have been paying down the debt, not increasing it. The people who denigrate Keynes always seem to forget that part.... The only sure way to survive a canopy collision is not to have one. Quote Share this post Link to post Share on other sites
lawrocket 3 #20 June 26, 2012 QuotePeople in the private sector are now paying their debt. More Saving > Spending = Recession So what to do in that case? Interest Rates need to be pushed down until Saving = Spending. U.S Interest Rates are already near-zero and Savings > Spending, and thus there is a failure of the "natural market". What to do in that case? Isn't there a part of this you aren't considering? People AREN'T saving. Only 30% of American households have any liquid savings. So we can take the "Saving>spending" and toss that for 70% of the population. So how does one actually encourage people to spend money? An easy way would be by letting them actually KEEP it. So if I make $50k per year but with all federal, state and local taxes, fees and duties and withholdings I'm only netting $30k per year, that leaves less money to save OR spend. What you are indicating is exactly my problem with government spending. You are suggesting that "government needs to spend." Why not leave that to the people? Government spending hasn't done anything to improve the situation and, if anything, just pushes the problem back a bit. On top of that, government spends on what it wants to spend things. Versus, I don't know, maybe allowing the people to decide what to do with their money. The government wants people to spend money? But what if people want to save it? Saving is bad? And we've got $15 trillion in debt here in the US. So instead of the government spending $10k per person, why not let the people KEEP the $10k and do what they want with it? If they spend it, then that's good and it's liquid and currency starts changing hands. If they save it, then that's fine. It goes to the depository bank where it can be loaned, etc. But isn't a problem with spending that people don't have money to spend? I'll tell you I'm a cheap SOB, and perhaps would be a bit more willing to spend if I was able to keep a bit more. Or save if I was able to save a bit more. How about letting the people decide as individuals what they want to do with the money? Maybe it won't be what the government wants it to be. But then again, maybe freeing up money so people can spend it on what they want or need can actually rejuvenate confidence, rather than spending on things that the people don't need, want, etc. My wife is hotter than your wife. Quote Share this post Link to post Share on other sites
wolfriverjoe 1,340 #21 June 26, 2012 Quote... the Tax cuts, if they are bad why are both "sides" continuing them? ... Because they are popular. Because nobody (well, at least not many) wants to pay for what they get. Because allowing the tax cuts to expire (remember that they were supposed to be temporary?) is being called a "Tax Increase" Because "Tax Increases" are "bad." Because the idiots in charge care more about being reelected than being responsible. Although if they did do the responsible thing, then they would likely be replaced by someone who wouldn't. Look at Greece. The government that actually tries to be realistic falls and is replaced by one that is trying to renegotiate the austerity measures. More "Bread and Circuses.""There are NO situations which do not call for a French Maid outfit." Lucky McSwervy "~ya don't GET old by being weak & stupid!" - Airtwardo Quote Share this post Link to post Share on other sites
billvon 2,400 #22 June 26, 2012 >the Tax cuts, if they are bad why are both "sides" continuing them? Because foolish people like them, and foolish people vote. >Get spending under control and then maybe the debt will go down? Problem is that if the "get spending under control" thing tanks the economy the debt will go UP since fewer people working = less tax income = more debt. Quote Share this post Link to post Share on other sites
matthewcline 0 #23 June 26, 2012 But Gov spending is just a shell game in many aspects and creates no true revenue to decrease the debt. Gov Employees, paid from the taxes, so no "real" revenue. Welfare, unemployment, Gov Retirements, and so many other items, are just a shift in a small amount of US held money. Exports, imports , private business' and other None-Gov run corporations are where the money that is tax revenues truly comes from. MattAn Instructors first concern is student safety. So, start being safe, first!!! Quote Share this post Link to post Share on other sites
shah269 0 #24 June 26, 2012 How about the untold trillions that the private companies have locked up in the banks and are not investing in the economy due to a total lack of demand? Any way that can be brought out to get things going?Life through good thoughts, good words, and good deeds is necessary to ensure happiness and to keep chaos at bay. The only thing that falls from the sky is birdshit and fools! Quote Share this post Link to post Share on other sites
matthewcline 0 #25 June 26, 2012 Reduce their fear. Some people in the small business world are borrowing less for fear of not being able to pay it back, so the bank loans less. Investments are riskier, so money is not being spent their for fear of no pay back. Most all of us are watching and fearing what the Gov will do to affect how we are losing or earning money. Lots of us are fearing an end to our pay checks for our hard work, or in many of our cases, our jobs being ended buy the Gov directly or indirectly. Reduce the Fear. MattAn Instructors first concern is student safety. So, start being safe, first!!! Quote Share this post Link to post Share on other sites
