Bundesbank´s Weidmann:"ECB intervention would be violation of laws."

[Scataphagos]

Quote from DontMissTheBus:

I'll preface by saying that my own personal politics lean towards liberalism (though I'm not bat sht insane and believe in certain compromises given that we live with other people around us) - I say that because I want to point that I actually pose the following question with some sympathy to your views:

Let me ask you: in your view, has there ever been a single form of government that hasn't caused a giant mess?

I suspect you will say no - and again, I'm very sympathetic to that - but shouldn't that point out that perhaps, economic crisis is more ingrained in either natural law or human nature than can be simply scapegoated to some minority malicious actors, be them bankers, aristocrats, or technocrats?

"Economic crisis in natural law"... of course. Famine, plague, floods.

"Has there EVER been a single form of government hasn't caused a mess"? The answer to that is mostly NO. (Maybe there is an exception or two, but that wouldn't refute the argument.)

Government's PROPER function... is to set the framework of laws and enforce them to the equal justice of all.... not to have their manipulative fingers in EVERY FRICKIN' THING... like they do nowdays.

There hasn't been all that much genuine "freedom" in the history of the world. It's mostly been about Kings, despots, and dictators imposing their personal greed upon their populace.

The Founders gave us a shot at genuine personal and economic freedom. We had it for a while, but we've morphed into a form of "oligarchical despotism".

 

[Butterball]

Quote from Scataphagos:

I wasn't "leaving myself an out".. it's a fact! Significant economic problems are almost always caused by governments and bankers

That's not a fact. It's just your opinion.

Explain how most of the worst (and longest!) economic downturns in the last 250 years occurred when governments' share of expenditures to GDP have been much lower.

 

[Martinghoul]

Quote from C6H12O6:
And that principle applies to public companies that cover more than 50% of their costs with market revenues and not with taxes.

So I have to correct myself: that's not greek bookkeeping... that's Lehman bookkeeping

Do rating agencies know this, or are they playing tricks too ?

The ratings agencies do know. The mkt also knows. Moreover, KfW isn't an issue, as it has assets. Which means that it's sensible to classify KfW differently. Just like it's sensible to classify Reggione Campania (for example) debt different to that of the central govt of Italy.

Again, IMHO, KfW isn't the first place to look to find off-balance sheet govt liabilities.

 

[Scataphagos]

Quote from Butterball:

That's not a fact. It's just your opinion.

Explain how most of the worst (and longest!) economic downturns in the last 250 years occurred when governments' share of expenditures to GDP have been much lower.

STUPID SPEW... Do your own research. ON IGNORE!!

 

[DontMissTheBus]

Again, not that I disagree in spirit with your views of the proper role of government...

BUT, none of what you've said actually leads one to conclude that government is the cause of recessions rather than being a co-actor in the grand schemes of our economic history with varying burden of blame.

Least we forget, our revered founding fathers (and I'm not being sarcastic here) were not without their own economic fiasco and difficulties of their own making.

Quote from Scataphagos:

"Economic crisis in natural law"... of course. Famine, plague, floods.

"Has there EVER been a single form of government hasn't caused a mess"? The answer to that is mostly NO. (Maybe there is an exception or two, but that wouldn't refute the argument.)

Government's PROPER function... is to set the framework of laws and enforce them to the equal justice of all.... not to have their manipulative fingers in EVERY FRICKIN' THING... like they do nowdays.

There hasn't been all that much genuine "freedom" in the history of the world. It's mostly been about Kings, despots, and dictators imposing their personal greed upon their populace.

The Founders gave us a shot at genuine personal and economic freedom. We had it for a while, but we've morphed into a form of "oligarchical despotism".

 

[Scataphagos]

Quote from DontMissTheBus:

Again, not that I disagree in spirit with your views of the proper role of government...

BUT, none of what you've said actually leads one to conclude that government is the cause of recessions rather than being a co-actor in the grand schemes of our economic history with varying burden of blame.

Least we forget, our revered founding fathers (and I'm not being sarcastic here) were not without their own economic fiasco and difficulties of their own making.

The government never purposefully "causes" recessions.... in fact, they live in PANIC of them.. feared they will be held accountable at the next election.

 

[C6H12O6]

Quote from Martinghoul:

The ratings agencies do know. The mkt also knows. Moreover, KfW isn't an issue, as it has assets. Which means that it's sensible to classify KfW differently. Just like it's sensible to classify Reggione Campania (for example) debt different to that of the central govt of Italy.

Again, IMHO, KfW isn't the first place to look to find off-balance sheet govt liabilities.

It's easy to answer "assets, or toxic assets ?" since we are talking about a bank managed by politicians.... Anyway you know better than me that assets don't reduce the gross debt figure. Then, for instance Italy's debt, with real estates valued 500bln, state owned oil and energy companies, etc, should be not 120% but 60%.
Italy for instance has something similar to KFW, it's called CDP (Cassa Depositi e Prestiti) but its debt goes into the gross national figure.
So why Germany is allowed to conceal it ? ZeroHedge where are you ?

And BTW, is there a chance UK is pulling similar tricks with nationalized banks ? But who cares, UK has a REAL Central Bank.

 

[Martinghoul]

Quote from C6H12O6:
It's easy to answer "assets, or toxic assets ?" since we are talking about a bank managed by politicians.... Anyway you know better than me that assets don't reduce the gross debt figure. Then, for instance Italy's debt, with real estates valued 500bln, state owned oil and energy companies, etc, should be not 120% but 60%.
Italy for instance has something similar to KFW, it's called CDP (Cassa Depositi e Prestiti) but its debt goes into the gross national figure.
So why Germany is allowed to conceal it ? ZeroHedge where are you ?

And BTW, is there a chance UK is pulling similar tricks with nationalized banks ? But who cares, UK has a REAL Central Bank.

Sure, I know about CDP as well... Point I am trying to make is that all govts are guilty of some "financial shenanigans" and all media reports the wrong figures. The mkts are generally well-aware of who has what where, including the assets.

As to the UK, RBS and Lloyds are actually included in the national accounts. What isn't is the various PFI debt and that's one of the places where the the commonly reported numbers aren't quite reflecting reality. But the mkt, again, is relatively well-aware of this stuff.

 

[joneog]

Quote from Butterball:

That's not a fact. It's just your opinion.

Explain how most of the worst (and longest!) economic downturns in the last 250 years occurred when governments' share of expenditures to GDP have been much lower.

1) that's a correlation, not necessarily a cause
2) econ contraction under a gold standard puts a cap on expenditures as revenues fall (large deficits are tough to fund without an eventual drain of gold reserves). It may be an effect rather than a cause
3) theres been a secular shift in political philosophy from a classically liberal towards a more "progressive" policy of gov. spending that has driven up expenditures/gdp over the last century or so, independent of the business cycle. You'd have to normalize for this trend to make any type of historical comparison.
4) currently expenditures/gdp are the highest they've been in 65 years and we're not exactly living in economic nirvana with 16% under-employment that hasnt improved much.

also, the amount of expenditures is only one way the gov affects the economy: there's monetary policy, trade policy, tax policy, regulations, regime uncertainty etc.

Quote from Scataphagos:

The government never purposefully "causes" recessions.... in fact, they live in PANIC of them.. feared they will be held accountable at the next election.

Not always true, the Volcker fed did in the early 80s.

 

[Tsing Tao]

Quote from Martinghoul:

Well, I don't see a strategy of Fed dollar debasement. What I do see is the mkt pricing the likely loss of the reserve ccy status by the USD, as the world starts refusing to fund the US current account deficit. Moreover, your very own Congress has given the Fed a particular mandate. If the people and their democratic government were concerned about the weakness of their ccy, why not make this an explicit part of the Fed mandate? Given that it's not the case, I don't see why the Fed shouldn't consider the weakness of the ccy a palatable side effect that results from them discharging their headline mandate. As to the group of people it hurts the most, I am pretty sure you have it right.

As to the Eurozone, I am pretty sure the idea is spread the love, i.e. hurt Germany and help the periphery.

Sorry, had to take the old battle axe to the airport, otherwise I'd have replied sooner.

I think you're right, the idea IS spread the love. But the Germans aren't going to give it up, not with Wiemar on their mind.