I understand this but I just don't buy the Armageddon scenario(They will let them burn), they have been willing to bailout insolvent countries to prevent minor defaults, its hard to see them allowing solvent countries to create massive defaults, there is Lehmanphobia out there. I believe even the US will have to join the bailout, they will probably expand the IMF money and ask Germany to contribute 'one last time'
Global Macro Trading Journal
- Thread starter Daal
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I understand this but I just don't buy the Armageddon scenario(They will let them burn), they have been willing to bailout insolvent countries to prevent minor defaults, its hard to see them allowing solvent countries to create massive defaults, there is Lehmanphobia out there. I believe even the US will have to join the bailout, they will probably expand the IMF money and ask Germany to contribute 'one last time'
Listen, Daal, I know what you're saying, but if you have heard the Germans today and throughout all this, there's one thing that's clear. They're being dragged willy-nilly to an altar where they will be joined in not so blissful fiscal union with the Italians and other Mediterranean types. Now it might be that they agree to it for the sake of current financial stability, as well their future economic performance. However, I wouldn't bet the farm on that, as it's by no means a sure thing now. And, as Tremonti correctly pointed out the other day, if the Germans (as well as the Finns, the Slovaks, etc) don't wanna participate in a rescue, why should anyone else.
Belgium's index (who cares right 
) is down like close to 20% in two weeks or so, you don't want to know individual stock permormances really.
A lot of people lost huge amounts of money again but then again one could ask himself the question after 08 which mom and pop are still in this market right...
) is down like close to 20% in two weeks or so, you don't want to know individual stock permormances really.A lot of people lost huge amounts of money again but then again one could ask himself the question after 08 which mom and pop are still in this market right...
Well, DAX is down 20% in 10 sessions, so it's pretty much the same everywhere...
BAC down 15%. Apparently David "if it's good it's good, if it's bad it's good" Tepper has unloaded his entire stake. Geithner/Bernanke house of cards is imploding. QE3/TARPII/Money from helicopters announcement imminent.
Daal, you need to stop worshipping of the alter of these bureaucrats. Italy - and whether they have a primary surplus or not - is not the issue anymore than Greece was the issue, or Ireland was the issue. The issue is Western society (and China too, but we'll get to that later) with a mountain of debt perched on a thimble of capital.
We had the chance to write off the debt in 08/09, suffer a severe recession and move on from a solid point. Instead the debt was shuffled around, money was printed, the can kicked. Now we remain in an ongoing depression and the debt has gone nowhere. I have little doubt the same solution is about to be attempted again. Last time, it reflated financial markets and commodities, with no lasting help to the economy. That's the best we can hope for this time as well.
Daal, you need to stop worshipping of the alter of these bureaucrats. Italy - and whether they have a primary surplus or not - is not the issue anymore than Greece was the issue, or Ireland was the issue. The issue is Western society (and China too, but we'll get to that later) with a mountain of debt perched on a thimble of capital.
We had the chance to write off the debt in 08/09, suffer a severe recession and move on from a solid point. Instead the debt was shuffled around, money was printed, the can kicked. Now we remain in an ongoing depression and the debt has gone nowhere. I have little doubt the same solution is about to be attempted again. Last time, it reflated financial markets and commodities, with no lasting help to the economy. That's the best we can hope for this time as well.
To be honest, I don't know any more. I used to think that it's certain that the EMU sorts itself out somehow. Now I would say the probability of an Italian exit from the EMU and the subsequent devaluation of the new lira is quite significant. I'd say 15% is my probability that the EMU countries abandon the whole experiment and go their separate ways. In that case, I don't really see any reason for the IMF to be involved (especially since for ages the EMU countries have been telling the IMF to mind its own business and not meddle in internal European affairs) and it's everyone for themselves. Every individual country will have to deal with the fallout and ring-fence its own banking system. So a not so nice free-for-all...
I am quite sure Weber is breathing a sigh of relief that he threw in the towel. Pretty good timing.