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Postby JR8 » Tue, 06 Mar 2012 7:23 pm

The fireworks show continues!

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Dutch Freedom Party pushes euro exit as €2.4 trillion rescue bill looms
"The euro is not in the interests of the Dutch people," said Geert Wilders, the leader of the right-wing populist party with a sixth of the seats in the Dutch parliament. "We want to be the master of our own house and our own country, so we say yes to the guilder. Bring it on."

Mr Wilders made his decision after receiving a report by London-based Lombard Street Research concluding that the Netherlands is badly handicapped by euro membership, and that it could cost EMU’s creditor core more than €2.4 trillion to hold monetary union together over the next four years. "If the politicians in The Hague disagree with our report, let them show the guts to hold a referendum. Let the Dutch people decide," he said.

Mr Wilders is not part of the coalition. However, the minority government of Mark Rutte relies on the Freedom Party to pass legislation. The two men were in talks on Monday on €16bn of fresh austerity cuts needed stop the budget deficit jumping to 4.5pc of GDP.

The study said the eurozone cannot survive in its current form. The longer Europe’s politicians dither, the more costly it will become. "The euro can only survive if it becomes a fiscal transfer union with national sovereign debt subsumed in eurozone bonds," said co-author Charles Dumas.

Greece will opt for a "negotiated exit" later this year, once the pain becomes excruciating.


Some other notable comments:


'Portugal will follow in "short order" ..."At that point, if not before, attention will turn to Spain and Italy, both likely by then to be much weakened by savage austerity programmes now being implemented," said Mr Dumas.

That is the moment when the creditor core will face the decision they have "ducked" for the past two years: either accept an EMU reflation strategy, along with debt pooling, fiscal union, and transfers; or accept a break-up.

Under an "optimistic scenario" it would cost €1.3 trillion to shore up Med-Europe, rising to more than €2.4 trillion if Italy and Spain need some form of bond relief. "The staggering trillion bill to preserve the euro only takes us to 2015. In reality, most of the debts will never be repaid and subsidies will need to continue, year in and year out," said Mr Dumas.

... 'As many readers will already have seen, Premier
[of Spain] Mariano Rajoy has refused point blank to comply with the austerity demands of the European Commission and the European Council...

Taking what he called a "sovereign decision", he simply announced that he intends to ignore the EU deficit target of 4.4pc of GDP for this year, setting his own target of 5.8pc instead (down from 8.5pc in 2011).

In the twenty years or so that I have been following EU affairs closely, I cannot remember such a bold and open act of defiance by any state. Usually such matters are fudged. Countries stretch the line, but do not actually cross it.'

... 'The report said exit by Italy would be relatively easy. The country would recover once it regained currency freedom, though foreign bondholders would take an exchange rate hit. Spain’s exit would be harder to manage since it has a primary budget deficit of 7pc of GDP, and its companies have large euro debts abroad.

Exit costs will rise relentlessly for both countries over time. Prolonged economic depression within EMU would render their debt mostly worthless in the end. So if there is to be break-up, "the sooner the better".

Italy and Spain are more likely to hang on as long as they can, until Northern patience snaps. Germany and Holland would then leave, causing a general return to the "sanity" of floating currencies.'

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And that's not all, it continues at length! :)
http://www.telegraph.co.uk/finance/fina ... looms.html

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Postby JR8 » Tue, 06 Mar 2012 7:36 pm

Some choice morsels I cannot resit posting...

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'The report said Holland had fallen behind non-euro Sweden and Switzerland since the launch of EMU. Its growth rate dropped from 3pc over the preceding 20 years to 1.25pc under the euro, compared with 2.25pc in Sweden and 1.75pc in Switzerland. The Swedes have stolen a march worth €3,500 per head over the past decade.

The report said Sweden and Switzerland have performed better on every front, relying on currency swings to check imbalances. "They created more jobs than the Dutch and especially the Germans. They enjoyed lower inflation. They were more successful in balancing their budgets. And they have run larger current account surpluses. Only wishful thinking could absolve the euro from blame."

... Mr Wilders said the study "goes against everything we are told in the media and by the left-wing elite on a daily basis".

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Postby JR8 » Tue, 06 Mar 2012 10:19 pm

aster wrote:Interestingly it's usually the press in the UK that keeps on publishing fairy tales about the "end of the Euro." It's becoming exceedingly funny to read such nonsense, as the fact that it's not happening (and not going to happen) just infuriates the pseudo-journalists who seem to act like Clinton on viagra when it comes to this subject matter.



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'What is striking is the wave of support for Mr Rajoy from the Spanish commentariat.

This one from Pablo Sebastián left me speechless.

My loose translation:

"Spain isn’t any old country that will allow itself to be humiliated by the German Chancellor."

"The behaviour of the European Commission towards Spain over recent days has been infamous and exceeds their treaty powers… these Eurocrats think they are the owners and masters of Spain."

"Spain and other nations in the EU are sick and tired of Chancellor Merkel’s meddling and Germany’s usurpation – with the help of Sarkozy’s France and their pretend "executive presidency" that does not in fact exist in EU treaties."

"Rajoy must not retreat one inch. The stakes are high and the country is in no mood to suffer humiliations from a Chancellor who is amassing all the savings of Europe and won’t listen to anybody, as if she were the absolute ruler of the Union. Merkel and the Commission should think hard before putting their hand into the sovereignty of this country – or any other – because it will be burned."

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http://blogs.telegraph.co.uk/finance/am ... ls-europe/

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Postby aster » Fri, 09 Mar 2012 7:09 pm

Absolutely lovin' the Greek debt "swap" that which whack those greedy, private lenders, who should have known better than to give a 12-year-old, spendaholic on a work-avoidance scheme a dozen credit cards with a ridiculous spending limit. :)

A deal will of course be reached, as losing 70% is still better than losing 100%, so it's a no-brainer that Greece will get the required 75% consensus. Especially after it was decided that a debt write-off will not be considered... a default or a "credit event" as they call it.

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Postby JR8 » Fri, 09 Mar 2012 7:14 pm

aster wrote:Absolutely lovin' the Greek debt "swap" that which whack those greedy, private lenders, who should have known better than to give a 12-year-old, spendaholic on a work-avoidance scheme a dozen credit cards with a ridiculous spending limit. :)

A deal will of course be reached, as losing 70% is still better than losing 100%, so it's a no-brainer that Greece will get the required 75% consensus. Especially after it was decided that a debt write-off will not be considered... a default or a "credit event" as they call it.


You sound confused, behind the times, and blinded by anger as usual...

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Postby aster » Fri, 09 Mar 2012 7:35 pm

Reading comprehension has never been one of your strong points.

I'm happy with the way those greedy, morally-devoid thieves are all getting a kick up the rear to the tune of 70%. They certainly deserve everything that comes there way.

It's the shylocks who you adore so much that are angry.

Speaking of "behind the times," any more funny stories about the Euro falling apart? :D

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Postby aster » Sat, 10 Mar 2012 9:58 am

aster wrote:it was decided that a debt write-off will not be considered... a default or a "credit event" as they call it.


Interesting change in position at the final whistle. So now compensation will be paid after all?

I wonder if this change of mind happened just before or just after everyone's decision on whether to sign up "voluntarily" for Greece's debt reduction...

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Postby JR8 » Sun, 11 Mar 2012 12:20 pm

aster wrote:Interestingly it's usually the press in the UK that keeps on publishing fairy tales about the "end of the Euro." It's becoming exceedingly funny to read such nonsense, as the fact that it's not happening (and not going to happen)


3 days later...

aster wrote:If the US economy tanks or the Euro breaks apart, the AUD will crash.



So your position is, er, pretty clear-cut eh?


:???: :lol:

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Postby aster » Mon, 12 Mar 2012 11:59 pm

If an asteroid the size of Texas hits our planet, life on Earth will cease to exist.

Saying that doesn't mean I think this will happen now, does it?

But since you keep repeating "the end of the Euro" lyrics like a broken record, why don't you put your money where your mouth is and make a fortune in the process? Not interested, not at all, not even a little bit... oh... only safe bluechip stocks then, is it? :D Thought so... all talk and no action.

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Postby JR8 » Thu, 15 Mar 2012 12:33 am

Spain gives Merkel the finger. What happens next... ?


Getting to grips with the EU's new fiscal pact
http://www.telegraph.co.uk/finance/fina ... -pact.html


The picture at the head of the article page speaks volumes that have previously gone unspoken. The arrogance, the bullying, the presumed superiority amongst technically equal partners.

If Junker did that to me I've have completely decked him.

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Postby Mi Amigo » Thu, 15 Mar 2012 1:18 am

Excellent article, thanks for posting it. I have to admit to some sympathy for Rajoy (well as much sympathy as I could ever have for a politician, which isn't much). I get the feeling that even though he knew things were bad when he won the election, he didn't quite realise what a catastrophic situation he was inheriting until he got his hands on the accounts. I have visions of Scotty shouting at Captain Kirk from the engine room of the Enterprise: "She just canna take any more, Cap'n!"

So given the 'wouldn't start from here' nature of the situation, I think Rajoy is doing as well as anyone could in the circumstances. If he can make the labour reforms stick that would be a good thing for the long term IMO. Currently the rules and costs for laying off permanent employees are so onerous that millions of people are working under so-called contratos de basura ('rubbish' temporary contracts) that give them virtually no rights. And they, relatively speaking, are the lucky ones.

There are households in Spain where three generations are all surviving on the grandmother's pension, so things are almost as bleak as in Greece in some areas. Sure, you could argue that the country brought its problems upon itself, but Rajoy does at least appear to be making an attempt at long-term fixes for some of the country's endemic problems.
Be careful what you wish for

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Postby JR8 » Thu, 15 Mar 2012 3:38 am

When Rajoy was elected and then announced a hold on cuts until after the Andalucian regional elections I thought, oh hear we go, same ol' same ol' electioneering. However the independence he has shown recently is.... well, let's hope it's not suicidal! One has to recall that Papandreou and Berlusconi were turfed out within days for less...

I find it grimly ironic that the EU is founded with 1950s Marxist ideals of 'jobs for all, prosperity for all, equality for all' (Working Time Directive, Minimum Wage, etc), but what it seems to have excelled in doing is creating an awful lot of unemployment and misery.

¡Qué sorpresa

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Postby aster » Thu, 15 Mar 2012 12:43 pm

This from another thread...

JR8 wrote:What I do recall is that shortly after the euro came about there was a bit of a stink as banks were still charging higher fees for cross-border euro transfers than domestic ones. The stink was because it had been intended that this kind of dual charging would cease.


You've finally figured out why banks hate both the EU and Euro so much, and you've even laid it out in your own words.

Hallelujah!!! :D

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Postby BillyB » Thu, 15 Mar 2012 1:34 pm

This is doing the rounds on news sites:

Why I Am Leaving Goldman Sachs

By GREG SMITH

Published: March 14, 2012


¶ TODAY is my last day at Goldman Sachs. After almost 12 years at the firm — first as a summer intern while at Stanford, then in New York for 10 years, and now in London — I believe I have worked here long enough to understand the trajectory of its culture, its people and its identity. And I can honestly say that the environment now is as toxic and destructive as I have ever seen it.

¶ To put the problem in the simplest terms, the interests of the client continue to be sidelined in the way the firm operates and thinks about making money. Goldman Sachs is one of the world’s largest and most important investment banks and it is too integral to global finance to continue to act this way. The firm has veered so far from the place I joined right out of college that I can no longer in good conscience say that I identify with what it stands for.

¶ It might sound surprising to a skeptical public, but culture was always a vital part of Goldman Sachs’s success. It revolved around teamwork, integrity, a spirit of humility, and always doing right by our clients. The culture was the secret sauce that made this place great and allowed us to earn our clients’ trust for 143 years. It wasn’t just about making money; this alone will not sustain a firm for so long. It had something to do with pride and belief in the organization. I am sad to say that I look around today and see virtually no trace of the culture that made me love working for this firm for many years. I no longer have the pride, or the belief.

¶ But this was not always the case. For more than a decade I recruited and mentored candidates through our grueling interview process. I was selected as one of 10 people (out of a firm of more than 30,000) to appear on our recruiting video, which is played on every college campus we visit around the world. In 2006 I managed the summer intern program in sales and trading in New York for the 80 college students who made the cut, out of the thousands who applied.

¶ I knew it was time to leave when I realized I could no longer look students in the eye and tell them what a great place this was to work.

¶ When the history books are written about Goldman Sachs, they may reflect that the current chief executive officer, Lloyd C. Blankfein, and the president, Gary D. Cohn, lost hold of the firm’s culture on their watch. I truly believe that this decline in the firm’s moral fiber represents the single most serious threat to its long-run survival.

¶ Over the course of my career I have had the privilege of advising two of the largest hedge funds on the planet, five of the largest asset managers in the United States, and three of the most prominent sovereign wealth funds in the Middle East and Asia. My clients have a total asset base of more than a trillion dollars. I have always taken a lot of pride in advising my clients to do what I believe is right for them, even if it means less money for the firm. This view is becoming increasingly unpopular at Goldman Sachs. Another sign that it was time to leave.

¶ How did we get here? The firm changed the way it thought about leadership. Leadership used to be about ideas, setting an example and doing the right thing. Today, if you make enough money for the firm (and are not currently an axe murderer) you will be promoted into a position of influence.

¶ What are three quick ways to become a leader? a) Execute on the firm’s “axes,”

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Postby JR8 » Thu, 15 Mar 2012 4:28 pm

aster wrote:This from another thread...

JR8 wrote:What I do recall is that shortly after the euro came about there was a bit of a stink as banks were still charging higher fees for cross-border euro transfers than domestic ones. The stink was because it had been intended that this kind of dual charging would cease.


You've finally figured out why banks hate both the EU and Euro so much, and you've even laid it out in your own words.

Hallelujah!!! :D


You don't get it do you.

Bank's costs were higher when they were doing multi-currency and cross-border transfers, than single currency. That doesn't mean their profits were higher (duh).

The issue was over their foot-dragging on reducing their fees when their costs went down. But that is only to be expected.


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