Reuters: Situation in Europe is serious

[Martinghoul]

Quote from Anaconda:
A $1 Trillion bailout is not serious?

It most certainly is, but that was blindingly, painfully obvious well before the bailout. It's like looking at a dismembered corpse and saying that this person's condition is serious. Although, I do hope the Eurozone stages a recovery.

 

[morganist]

Quote from Anaconda:

You assume too much about what their goals are and what the general plan is. They are not making mistakes, contrary to your beliefs.

I will say that most of the PhD economists and the talking heads do not know any better and just regurgitate what is fed to them by those in power.

i don't know. i know a lot of economists and they are very specific about discussing topics because they often do not have a good all round knowledge. you would be surprised.

 

[morganist]

Quote from Martinghoul:

It most certainly is, but that was blindingly, painfully obvious well before the bailout. It's like looking at a dismembered corpse and saying that this person's condition is serious. Although, I do hope the Eurozone stages a recovery.

the thing that worries me is the reduction in demand the austerity package will create. if the fiscal policy is tightened the demand will reduce and the output will deminish. how will they make the payments if the income is less?

this is one concern there are others.

 

[Anaconda]

Quote from Martinghoul:

It most certainly is, but that was blindingly, painfully obvious well before the bailout. It's like looking at a dismembered corpse and saying that this person's condition is serious. Although, I do hope the Eurozone stages a recovery.

I think what needs to be realized is that the bailout itself is only making things worse. No recovery can take place if the problems are never faced.

 

[IanMacQuaide]

Quote from morganist:

the thing that worries me is the reduction in demand the austerity package will create. if the fiscal policy is tightened the demand will reduce and the output will deminish. how will they make the payments if the income is less?

this is one concern there are others.

Morgan, I've heard enough "worst case scenarios" to last a lifetime. I know social unrest is possible, as is the collapse of all fiat currencies.
What's the most PROBABLE outcome of our current situation?

 

[morganist]

Quote from IanMacQuaide:

Morgan, I've heard enough "worst case scenarios" to last a lifetime. I know social unrest is possible, as is the collapse of all fiat currencies.
What's the most PROBABLE outcome of our current situation?

I never said anything about social unrest. The situation cannot be resolved by lending more money. How can they repay it?

Where will the money come from if they have less money to demand output. It is not a worst case scenario it is a genuine observation.

Lower fiscal expenditure = lower demand = lower output = lower employment = lower gdp = smaller payments.

 

[Martinghoul]

Quote from Anaconda:
I think what needs to be realized is that the bailout itself is only making things worse. No recovery can take place if the problems are never faced.

I am willing to give the Greeks and the Eurozone as a whole the benefit of doubt... I think they deserve a fair chance to try to make all the measures work.

 

[morganist]

Quote from Martinghoul:

I am willing to give the Greeks and the Eurozone as a whole the benefit of doubt... I think they deserve a fair chance to try to make all the measures work.

Ok answer my question. How can they repay the money if their GDP declines when they introduce the spending reductions?

 

[Martinghoul]

Quote from morganist:
the thing that worries me is the reduction in demand the austerity package will create. if the fiscal policy is tightened the demand will reduce and the output will deminish. how will they make the payments if the income is less?

this is one concern there are others.

The IMF is taking this into account in their proposed timeline for Greek austerity measures. Obviously, reality can always shock the forecasters, but, if I remember correctly, the IMF's numbers are on the pessimistic side. Given that they're the experts at this (or as close to that as we're likely to get), I am not sure we have reason to doubt them, here and now.

Quote from morganist:
Ok answer my question. How can they repay the money if their GDP declines when they introduce the spending reductions?

Do you want the details? I can dig up the IMF blurbage on the Greek aid mechanism, if you like.

 

[morganist]

Quote from Martinghoul:

The IMF is taking this into account in their proposed timeline for Greek austerity measures. Obviously, reality can always shock the forecasters, but, if I remember correctly, the IMF's numbers are on the pessimistic side.

Do you want the details? I can dig up the IMF blurbage on the Greek aid mechanism, if you like.

Yes please. Then I can tell you what is wrong with it.

Also do you have faith in the IMF?