Eurozone Sovereign Debt Crisis part 2 - Ireland

[Drifterwood]

BBC News - Private sector pensions in seismic collapse, says ACA

As predicted - you can't pay for a home in the UK and have a pension now.

What do you propose Jason? or are you happy with your gold lined State Pension, overvalued SE property and sod the rest of them?

Is this the Nation State you want?

 

[dandelion]

Pension schemes are just another bubble. The stock market hasnt risen in more than 10 years, so where can anyone place an investment to give a future income? Schemes have closed because companies refuse to pay for them. Maybe its a sign of collapsing industry that we can no longer afford the pensions we once could, or maybe its just that such schemes only ever could work if few people had them. The only kind of pension which works is one paid out of current revenue, like the state pension.

But just who exactly says governments have seriously tried to encourage people to save for retirement? They have given tax breaks to the rich to tuck away money they already have, mainly resulting in huge guaranteed commissions to banks. They have a benefits system which means anyone who thinks they might ever have to rely on state benefits even a little should absolutely never save anything.

 

[eurotop40]

I haven't watched the Q's speech for years. I do however have a great deal of respect for her.

Do you feel the same about the pope then, Euro?

The Pope gave the title "Defensor Fidei" to Henry VIII, who was a nice little innocuous man, in particular with very high moral standards (does the British Monarch still comply with these standards?). Obviously, the Pope then revoked the title.
The Pope himself has not the title "Defensor Fidei", as far as I know (he is only the Vicar of Christ :biggrin1. How should I feel about the Pope? He is not head of the Swiss Confederation, although some of our brave men serve in his army. Personally, I have nothing against him, he does his job not less well than QE2.

 

[Perados]

The CEBR thinks that there is a 99% probability that the euro will no longer exist in 10 years' time. The collapse will start this year.

Eurozone collapse 'starts this year' says CEBR - Telegraph

The CEBR is authoritative. I know the political rhetoric is still that the euro is rock solid and cannot possibly collapse. After all there were only three dozen crisis meetings last year, and the first this year is 9th Jan - with all those crisis meetings it cannot possibly fail, can it! IMO the argument about whether the euro will or will not survive has been answered by all serious economists. Politicians have failed to stop the process and failed to manage the process - now we have a system where the markets will take down the EuroZone. This is as messy as can be imagined.

@Dandelion, I think putting all bank euro assets in one bad bank does make sense. Of course you are right - the debt is unchanged. But the trauma to many dozen banks both before and during a collapse is the bigger problem. At least if our banks can shed the euro debt they are not directly at risk - the issue is around the timing of such a move. And it seems we have dusted off the Emergency Powers Act specifically for this sort of need. The bad assets bank would have to be directly bailed out by the UK, which would be possible through bond issue. The markets would buy a lot, and we seem to be negotiating special arrangements with the USA and others to buy up the rest. For example if our bond markets refused to buy the USA would, and in return we would buy US bonds backed by more UK bonds which the markets would buy because US debt would be considered tradable. Yes it is the economics of the madhouse, but it is the way the UK could survive the initial shock of structural failure of the euro.

Lame lame lame... and you can notize that, on the simple fakt, that the first euro meeting isnt the 9th jannuary... Thats just a meeting of merkozy to prepare everything for the first ez meeting at the 30th jannuary...

so they wanna tell us that they know that the euro will fail but they doesnt even know what meeting is when

 

[Perados]

I have decent French, some Russian and can do something with most Romance and Slavonic languages, but my German is not good. I don't see the relevance in this case - Merkel's speech did not appear to be particularly nuanced. She did say that 2012 would have more problems than 2011.

The Queen's Christmas speech is to the Commonwealth, therefore to a quarter of the globe. This year it had an overtly Christian theme fitting the Queen's role as Defender of the Faith and head of the Church of England. It included reference to the Queen's visit to Ireland.

1/4 of the world??? Do you still count india to your commonwealth? Please read some 65years old newspaper...
Your empire isnt that large anymore

 

[eurotop40]

1/4 of the world??? Do you still count india to your commonwealth? Please read some 65years old newspaper...
Your empire isnt that large anymore

When people can only listen to propaganda and biased news this is the logical consequence.

 

[ConanTheBarber]

1/4 of the world??? Do you still count india to your commonwealth? Please read some 65years old newspaper...
Your empire isnt that large anymore

India remains in the Commonwealth.
And the Commonwealth, FWIW, contains more than a quarter of the world's population.

 

[Perados]

India remains in the Commonwealth.
And the Commonwealth, FWIW, contains more than a quarter of the world's population.

Not in the way jason talks about it
He name the queen as the head of the commonwealth... With this he is talking about the commonwealth of ream... And india isnt part of it

India is just part of the commonwealth of states...

So no the british empire is by far not as large as you think

 

[eurotop40]

Not in the way jason talks about it
He name the queen as the head of the commonwealth... With this he is talking about the commonwealth of ream... And india isnt part of it

India is just part of the commonwealth of states...

So no the british empire is by far not as large as you think

Wikipedia: "The handover ceremony of Hong Kong in 1997 marked for many, including Charles, Prince of Wales, who was in attendance, the end of the Empire".

This is also interesting: http://www.youtube.com/watch?v=bWedTbuAtR4

And for those who understand French: http://www.ina.fr/divertissement/ch...ca-n-est-pas-ce-qu-on-fait-qui-compte.fr.html

 

[Jason]

There's a lot in the dozen or so posts above. Interested to hear of the Czech property market. I've heard similar from Poland where flats have been bought by Brits at prices which are probably way too high - in many cases they seem high by UK standards. I think there are comparisons to be made with London and SE England - and yes it is a problem. @Drifterwood I fully agree that it is a problem, but it is happening and right now I don't see it stopping anytime soon.

The Commonwealth is as Conan rightly points out OVER a quarter of the world by population. What we are now seeing is a banking development which is broader than the Commonwealth - it includes Ireland, USA, Japan, some others. A name that is being used is "Anglosphere" (yes I know the Japanese don't speak English.) The idea seems to be as follows:

* The euro goes catastrophically wrong - there is structural failure.
* As euro debts are held throughout the world the risk is global contamination. The challenge is to stop this through decoupling.
* Decoupling requires that all bad debts held in euros can be dumped somewhere else. The UK and every non-EZ nation does not want lots of its banks failing. Therefore the nation states will be willing to buy these assets.
* It may be possible for the UK and others to sell bonds to cover all of these bad debts. If so the problem has been kicked ten years into the future.
* More likely the UK and others will not be able to sell the bonds they need. All around the Anglosphere there will be nations trying to sell bonds the markets don't want.
* The rabbit out of a hat is that the Anglosphere nations agree to buy each other's bonds. They do this by issuing yet more bonds. Because these bonds are to buy non-euro debt they will be tradeable - the markets will buy.
* The problem has been contained and the economies decoupled from the EZ. However controls on capital movement may well be needed. In the case of the UK it will almost certainly mean substantial border controls with the EZ nations, perhaps with tariffs on trade.
* The euro-denominated debt will still exist and will still be a charge on the EZ nations. They may well have to defer payment, but the debt won't just go away. Meanwhile the non-EZ nations will have kicked the debt problem ten years into the future and have the potential for ten years of growth.
* This is a completely different world. It is hard to see how the EU could continue, and hard to see how the EZ could avoid years of stagnation. It is the worst possible outcome for the EZ. For the non-EZ countries it is a problematic environment, but there are better and worse outcomes depending on how it is managed.

 

[Perados]

There's a lot in the dozen or so posts above. Interested to hear of the Czech property market. I've heard similar from Poland where flats have been bought by Brits at prices which are probably way too high - in many cases they seem high by UK standards. I think there are comparisons to be made with London and SE England - and yes it is a problem. @Drifterwood I fully agree that it is a problem, but it is happening and right now I don't see it stopping anytime soon.

The Commonwealth is as Conan rightly points out OVER a quarter of the world by population. What we are now seeing is a banking development which is broader than the Commonwealth - it includes Ireland, USA, Japan, some others. A name that is being used is "Anglosphere" (yes I know the Japanese don't speak English.) The idea seems to be as follows:

* The euro goes catastrophically wrong - there is structural failure.
* As euro debts are held throughout the world the risk is global contamination. The challenge is to stop this through decoupling.
* Decoupling requires that all bad debts held in euros can be dumped somewhere else. The UK and every non-EZ nation does not want lots of its banks failing. Therefore the nation states will be willing to buy these assets.
* It may be possible for the UK and others to sell bonds to cover all of these bad debts. If so the problem has been kicked ten years into the future.
* More likely the UK and others will not be able to sell the bonds they need. All around the Anglosphere there will be nations trying to sell bonds the markets don't want.
* The rabbit out of a hat is that the Anglosphere nations agree to buy each other's bonds. They do this by issuing yet more bonds. Because these bonds are to buy non-euro debt they will be tradeable - the markets will buy.
* The problem has been contained and the economies decoupled from the EZ. However controls on capital movement may well be needed. In the case of the UK it will almost certainly mean substantial border controls with the EZ nations, perhaps with tariffs on trade.
* The euro-denominated debt will still exist and will still be a charge on the EZ nations. They may well have to defer payment, but the debt won't just go away. Meanwhile the non-EZ nations will have kicked the debt problem ten years into the future and have the potential for ten years of growth.
* This is a completely different world. It is hard to see how the EU could continue, and hard to see how the EZ could avoid years of stagnation. It is the worst possible outcome for the EZ. For the non-EZ countries it is a problematic environment, but there are better and worse outcomes depending on how it is managed.

Jason has a way to simple picture of the world... And he has way to mutch fantasy.
But lets imagen it would be possible for the rest of the world to decouple from europe and to pay for the debts with new bonds without creating huge inflation...
How would you fight the recession the whole world would get kicked in?
Even if britain could fight the effects of a euro collaps, the british exports to the ez would shrink also...

 

[ConanTheBarber]

Not in the way jason talks about it
He name the queen as the head of the commonwealth... With this he is talking about the commonwealth of ream... And india isnt part of it

India is just part of the commonwealth of states...

Here is what Jason said:

The Queen's Christmas speech is to the Commonwealth, therefore to a quarter of the globe.

India is part of the Commonwealth of NATIONS and the Queen is head of the Commonwealth of Nations. It has MORE than a quarter of the world's population.
The commonwealth of ream ... ah, a Peradosism.

Perhaps you mean the Commonwealth Realm.
If you can show me why you think Jason had that seldom-referred-to group in mind, please do so.

So no the british empire is by far not as large as you think

There IS no British Empire.

 

[ColonialBoy]

1/4 of the world??? Do you still count india to your commonwealth? Please read some 65years old newspaper...
Your empire isnt that large anymore

India remains in the Commonwealth.
And the Commonwealth, FWIW, contains more than a quarter of the world's population.

There's a large sporting traditions between Commonwealth countries, particularly cricket, rugby union & rugby league. Sporting matches on TV between Commonwealth countires are a weekly event here. Non-commonwealth countries are essentially unaware of this.

India is spending a small fortune on cricket with many players from Commonwealth countries (many Australian) Rajasthan Royals - Team

Australia has a strong connection to Pakistan simply because of 'cricket diplomacy'. With South Africa is 'rugby diplomacy'.

 

[ConanTheBarber]

There's a large sporting traditions between Commonwealth countries, particularly cricket, rugby union & rugby league. Non-commonwealth countries are essentially unaware of this.

India is spending a small fortune on cricket with many players from Commonwealth countries Rajasthan Royals - Team

Australia has a strong connection to Pakistan simply because of 'cricket diplomacy'.

Well, there you go ....
;-)

 

[eurotop40]

There's a large sporting traditions between Commonwealth countries, particularly cricket, rugby union & rugby league. Sporting matches on TV between Commonwealth countires are a weekly event here. Non-commonwealth countries are essentially unaware of this.

India is spending a small fortune on cricket with many players from Commonwealth countries (many Australian) Rajasthan Royals - Team

Australia has a strong connection to Pakistan simply because of 'cricket diplomacy'. With South Africa is 'rugby diplomacy'.

So what? It is only virtual reality. Have you every been to Pakistan?

 

[Jason]

Commonwealth countries share similar political and legal systems as well as a common culture and heritage, and often extensive and close military co-operation. Many (not all) have the same Head of State (the Queen). They do not regard one another as foreign. Commonwealth countries do not have embasies with one another, rather they have high commissions. Commonwealth nations who are resident in the UK automatically have the right to vote in the UK. The sporting links are among the most visible, but the heads of government meeting and the work of the secretariat make the Commonwealth a real political co-operation.

The debt crisis is encouraging co-operation of a Commonwealth+ - including USA and Ireland, and perhaps some others. It is an interesting development. I don't think there is any pressure to formalise this as some new institution, rather there is increasing realisation that the nations have to work together in order to survive the euro failure, along with willingness and even enthusiasm among the nations to do just this.

Meanwhile in EuroLand, Greece has today announced that she may leave the euro. I know it is just a political position (do this or we might leave) but it is still a pretty amazing statement from the Greek government. The markets think it is inevitable that Greece will leave - now Greece is openly talking of the possibility. So when is the exit date?

Greek departure would put enormous presure on othe EZ nations as markets factor in the possibility that other nations will leave. It isn't just Ireland and Portugal - Italy is now firmly in the euro exit road.

 

[B_thickjohnny]

Just heard that PWC in central Europe is letting 500 people go because of anticipate problems in the region. A friend who have been with them 23 years in among those being let go. Just thinking about it and seeing this as an indicator of things to come.

 

[Drifterwood]

Just heard that PWC in central Europe is letting 500 people go because of anticipate problems in the region. A friend who have been with them 23 years in among those being let go. Just thinking about it and seeing this as an indicator of things to come.

Thanks Johnny. Good to remind us that this thread is about the European debt crisis and its effects. Granted that one is pressure on the Union itself and its predominant currency, however one of my NY resolutions will be to try to keep this thread on track and not just, with all due respect to Jason, his agenda for EU armageddon.

My biggest local concern is that the average family in the UK can not make ends meet on the average household income. This is incredibly serious IMO. People who bought property in the last seven years with an LTV over 75% and loan to earnings ratio of more than 4 times, will not make a profit on their homes after 25 years of paying for it. In the meantime they and those who rent, and do not have a job related pension, will not be able to afford one. Many of the luxury trappings, cars, holidays etc etc that came with easy debt will also go.

The economy and business will retract, hence PWC seeing the writing on the wall. There is massive rebuilding required in Europe (and the US IMO), and it is going to be painful.

 

[dandelion]

The debt crisis is encouraging co-operation of a Commonwealth+ - including USA and Ireland, and perhaps some others.

So what you are really saying is that the eu should be extended to allow in commonwealth countries and the US? To form a world government? Certainly having just one world currency would be an emormous benefit to everyone.

Meanwhile in EuroLand, Greece has today announced that she may leave the euro. I know it is just a political position

Exactly the trouble with headline diplomacy. If Greece is not in crisis, why take extraordinary action? thus no extraordinary action is possible unless the existence of a crisis and its possible consequences are admitted. See drifters post, what we are talking about is stark economic retrenchment for everyone in the 'developed' world at least, possibly the entire world. Do we see this as a headline despite it staring us in the face? No, what we see is the british government pretending everything is fine. Is there still hope that ostrich head in sand will work?

Just heard that PWC in central Europe is letting 500 people go

Are they expecting less business in total or simply companies being very much more economical in what services they are willing to pay for?

My biggest local concern is that the average family in the UK can not make ends meet on the average household income. This is incredibly serious IMO.

well, yes. However, one of the features of the recession to date has been basement level interest rates which actually improved finances for a big proportion of households. If I know this, I cant but think it is written in letters of fire on the desk of the governor of the bank of England. Why do you think this is going to change?

People who bought property in the last seven years with an LTV over 75% and loan to earnings ratio of more than 4 times, will not make a profit on their homes after 25 years of paying for it.

You mean an actual profit, or a numerical profit? I imagine we are in for significant inflation (over 25 years even 5% inflation mounts up quite a bit, in fact comes out as money having 1/3 its value) which will majorly erode those debts and even create notional profits. Or do you anticipate an actual house price crash rather than the half hearted slump thus far?

In the meantime they and those who rent, and do not have a job related pension, will not be able to afford one. Many of the luxury trappings, cars, holidays etc etc that came with easy debt will also go.

I would be interested in Jason's view on this problem facing the Uk economy. It has seemed to me for some time this is the heart of the modern crisis. We have 'growth' based upon debt and thus we now have excessive debt. The only solution is to get rid of the debt, which must entail abandoning what has become the accepted level of debt fuelled future growth (never to return), plus the shorter term pain of repaying the existing debt.

 

[Perados]

Here is what Jason said:


India is part of the Commonwealth of NATIONS and the Queen is head of the Commonwealth of Nations. It has MORE than a quarter of the world's population.
The commonwealth of ream ... ah, a Peradosism.

Perhaps you mean the Commonwealth Realm.
If you can show me why you think Jason had that seldom-referred-to group in mind, please do so.



There IS no British Empire.

UUUHH i missed a L...

why do i think that he is talking about realm and not nation?...

mmmhh, why should the queen speak to the com. o N.? it would be like merkel speaks to the people of the EU... and why should someone do so, as long as he/she is not the "head of state"
so when he talks about, her speach to the commonwealth (she is just head of Com. o R. and thats just a part of the com. of nations) , i would say he only can talk about the realm...

best example is, that even collonies of netherland france and germany are now part of the com. of nations. and THAT also shows that the commonwealth isnt sutch a hegemonic area as jason wish it would be...

and i know that there is no empire anymore... but it is in the tradition of ur empire