P.I.G.S.

He obviously is the wrong person to be saying it, and what an investigation is supposed to yield I have no idea, but the media didn't exactly cover themselves in glory. It appears now that every known economist and journalist was telling everyone for years that the system was rotten and the end of the world was nigh, but somehow they didn't get themselves heard.
 
Bar the Bull said:
FORMER TAOISEACH Bertie Ahern has called for an investigation into the media for what he said were failures to follow the economy because journalists were more concerned with following his dealings with the Mahon tribunal.

Mr Ahern said that from the time he began evidence to the tribunal, the media “just stopped following the economy”.
In an interview on Dublin City University’s radio station DCU FM, he said: “There should be an investigation into it. They should have been following the economy from August 2007, but they weren’t, they were following me. I think a lot of these guys really should have looked at themselves.

“The government were following the economy but the media weren’t. It was a very poor job by the media really. They were shown to be incompetent and that was the trouble – everything was on me.”
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Who in God's name is advising him or does he actually believe he is God?? The man is off his face.
 
Greece forgiven 50% of its (privately sourced) debt?

I don't think this euro-zone package is going to work.
Chiefly because it's trying to fix a market-originated problem & markets are way smarter than these or any other politicians ... as should be evident to all by now!
 
markets are way smarter
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Surely the dotcom bubble, the property bubble, the bad loans, the recklessness of the banking sector, the millions unemployed, the millions left with miserable pensions, etc etc show that this statement is simplistic at best.

Channels need to be dug so that market forces flow where they are needed. Don't just open the dam like we did 25 years ago with the so-called 'big bang' and end up with a mess.
 
If it doesn't look right, perhaps adjust your way of looking ... just in case?

I'd say it goes to show how dumb the politicians are ... when it's not their own interests being served, of course.

So, markets still rule.
 
Markets are good. They are the best way we know of matching supply with demand.

More than that, market forces cannot be ignored. Not indefinitely anyway.

But markets do not automatically produce the most desirable outcomes, as the examples I gave earlier indicate, and they don't produce the fairest outcomes. Sometimes this is because of market imperfections such as manipulation by cartels, monopolies, criminals or whatever, and one way to address them is to ensure the market is properly competitive.

Other times, however, markets give undesirable results even though nobody has misbehaved. There are the familiar examples of road signs and lighthouses - goods which benefit the public, and help markets, but which markets won't produce of their own accord. There is also the problem of the pollution created by economic activity and who should pay for it. I could go on.

A further category of reasons why market intervention is needed is that we are social beings, not simply buyers and sellers in a market, and so we try to protect people from the worst consequences of the market. If some people are unemployed, or unable to work, or the market won't pay them enough to live on, we think it right that they should receive some help.

The very act of doing these things changes the outcome of markets without necessarily impeding their efficiency, and that is a good thing. Markets shouldn't rule. They should certainly exist, but they are there to serve society, not the other way round.
 
The point I was making is that 'markets' are smarter than politicians, who are the ones who think they can regulate the markets.
In a way, it's not the fault of the politicians that they aren't smart enough, but it is their fault that they think they are.

Nice to look after other people, in the same way as it's nice to have hospitals; far better, though, to look and try to find out exactly why there is a need for so many 'hospitals' -- i.e. social benefits, safety nets.

Until the way economies work is understood, such kind responses will be needed until kingdom come.

Oh, and markets are part of society, not separate entities, aren't they?
 
The point I was making is that 'markets' are smarter than politicians, who are the ones who think they can regulate the markets.
In a way, it's not the fault of the politicians that they aren't smart enough, but it is their fault that they think they are.
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This is blame-politicians-for -everything formula thinking. The fact is we all want and need to regulate markets.

Nice to look after other people, in the same way as it's nice to have hospitals; far better, though, to look and try to find out exactly why there is a need for so many 'hospitals' -- i.e. social benefits, safety nets.


Until the way economies work is understood, such kind responses will be needed until kingdom come.
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This is an argument in favour of influencing the outcome of markets so that they deliver something different.

Oh, and markets are part of society, not separate entities, aren't they?
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Exactly! Markets are part of society and serve its needs. Our positions are not all that different. It's just that your sloganising about 'markets ruling' and stupid politicians is unrelated to what you really believe.
 
The financial markets are a means to allocate capital and to facilitate trade.

They do neither perfectly efficiently, nor inefficiently.

In reality, markets (like other systems such as our roads systems, water systems, hospitals, etc.) need levels of intervention for the greater good. Our entire system (call it Ireland/UK, or the EU or the world) relies upon its politicians/central bankers to intervene. This can be via regulation, interest rate decisions, tax changes, etc.

But politics / economics is not a perfect system either. Neither are they completely useless.

To try to say markets are dumber than politicians or vice versa doesn't make sense.

Sometimes markets do stupid things (in hindsight usually, but sometimes things look stupid as they happen).

Sometimes politicians do stupid things.

But both are completely interdependent given how we structure our world.
 
I think your last sentence there is generous, Grey.

However, picking up the kernel, which I didn't really emphasise at all: it is the lack of knowledge and understanding of what economies are and how they work.
Plain old 'political economy', which is not an area anyone I know has any expertise in.

I have seen the working class re-squeezed, after the 50s - 70s, when there seemed a better distribution of wealth and leisure, so that now they work longer for less quality of life.

I've come to a conclusion that 'capitalism' is the vehicle of oppressive greed most favoured by wealthy democrats ... they have to be 'democrats' if they wish to survive & prosper in the West, don't they?

Unhappily, the condition of the poor - i.e most people in any western country, would they but look at themselves - is not yet so bad that there is a natural up-welling of desire for a better, more wholesome arrangement of affairs between society's members.

We'll have to put up with this state of ignorance until we all (well, most of us) say 'Enough! There must be a better way!'

Then, cometh the hour, cometh the man ... so we pray.
 
infograf.jpg


I'm just surprised the 90% get so much .....
 
Are there any true free markets? Nearly all markets that I can think of have some form of regulation or intervention. How do we know that this intervention or regulation does not cause some kind of butterfly effect? Perhaps that small initial interference, done with the best intentions, causes a series of events that ultimately leads to the markets doing stupid things.

A free market represents true demand. A regulated market, to whatever degree, reflects demand as desired by some entity. Ultimately that desire may prove to be the market's weakness.
 
Thats bollocks frankly.

It would be somewhat difficult to link the internet bubble, credit default swaps, south sea bubble and dutch tulip bubble to government interventions.

These are markets "doing stupid things"

Free markets are essential but markets need interventions to be able to act freely. As an exmaple thats what the US anti trust laws and our (weaker) competition laws are all about

As for the EU, it is incredible that Greece joined the club without anyone bothering to look at the books. What are all those overpaid suits doing? One result of this should be a hard look at who does what and where in this bloated organisation (post to follow on working condition of EU employees)

I am generally pro EU but bailing out countries who still maintain low tax rates on corporations (you know who you are) is a an absolute farce. I am beginning to agree with Nigel Lawson (and others assertion) that you cannot have this degree of monetary union without fuller fiscal union
 
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Isn't reduced fiscal autonomy an almost certain by-product of the current crisis, and the response to it, clivex?

Hard to see our super-efficient and growth-generating Northern-European cousins continuing to bust their balls, when they see their peers in the Southern European states receiving handsome state pensions, earlier retirement and beefier social security arrangments.

Isn't it almost a given that the 'final solution' deal will result in the ECB mandating a pan-Eurozone fiscal policy, which countries like the PIGS have no choice but to accept?
 
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Yes. Can see that. I think that will be the longer term payback. In an ideal world Greece would be booted out and left to its own crap devices but with the euro loans to Greece being completely impossible to maintain when converted to a pretty worthless dracma then Greek borrowers would collapse bringing screwing numerous eu banks (especially france..so might be fun) and we would be back on that roller coaster again

And it has been said that ithe Greek business community is pretty blameless in all of this, but they would pay heaviest price.



I will direct you to my blog

http://cpcmcredit.wordpress.com/2011/10/17/things-you-didnt-know-about-greece/
 
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As for the EU, it is incredible that Greece joined the club without anyone bothering to look at the books. What are all those overpaid suits doing? One result of this should be a hard look at who does what and where in this bloated organisation (post to follow on working condition of EU employees)
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Churchill Paxman put this question to Roman Proddie last night on Newsnight. Signor Prodi reminded him that it is in fact the national governments who decide these things in the Council of Ministers, and that this body had fought off what some would have termed a sinister power-grabbing proposal by the faceless Commission bureaucrats, who were trying to poke their noses where they weren't wanted.
 
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I have been dealing with this pretty much everyday for the last 2 years and to say the bailout fund and the default (or as the politicians like to call it voluntary haircut) won't work is an understatement. The whole rescue (can kicking exercise) has been conjured up by politicians who for all their bluster don't have a clue.

How can a debt crisis be solved by producing more debt? (ponzi anyone)

How can a 50% default (voluntary haircut if you're a politician) not be seen as a credit event? It is it just the people who make the decision are a political body (sounds suspicious?) This has in turn destroyed the sovereign CDS market (law suits coming from those holding them)

The forced recap of the banks is in fact going to cause more pain than gain. By doing this the banks are going to be forced into selling assets and hoarding this cash as opposed to lending it causing the eurozone banking system to freeze up more making a contraction possibly a recession. This applies particularly to France as if their growth rate falls much lower than the 1% forecast then the ratings agencies will have the AAA off them leading to more pain.

Meanwhile the big pink elephant in the room Italy is about to cause the whole thing to come crashing down anyway.
 
Churchill Paxman put this question to Roman Proddie last night on Newsnight. Signor Prodi reminded him that it is in fact the national governments who decide these things in the Council of Ministers, and that this body had fought off what some would have termed a sinister power-grabbing proposal by the faceless Commission bureaucrats, who were trying to poke their noses where they weren't wanted.
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To which the obvious answer is audit and due diligence.

If thats the excuse then quite simply the EU is completely dead and if that is the way these things are run, then i believe it should be killed off

Quite incredible when you think it through
 
China cant handle its internal problems (which are going to get a lot worse) let alone fulfil the thick lefts dream of world dominance
 
The Commission sought powers to audit Member State economic statistics but were refused. It is not an excuse, it is what happened. One reason they were refused is that Member States don't like giving up power to Brussels. Another reason is that the Member States who joined the euro wanted as many others in as possible. They knew, and everybody else knew, that a proper vetting of the Greek figures would lead to them being refused. Prodi confirmed this in the same interview.

Yes, something of a shambles, clive, but has anyone emerged from the crises of the last few years with much credibility, from the central banks and financial regulators to the banks, speculators and financial whizz kids who gave us completely wrong advice?

The euro has been a political (not meant here as a dirty word) project from the start, and it's fair to say it was launched without all the tools needed to manage it properly. These are now being gradually assembled as Member States are forced to acknowledge that they are needed if the currency is to survive.

The coverage of the whole subject in the Anglo Saxon world has been relentlessly negative, and not without a strong self interest. As long as it remains the world currency of choice, the Americans can continue to get away with printing as many dollars as they like. The euro has become the second most used currency in the world and it would suit the Americans if it disappeared.

In my opinion the euro will continue to survive for as long as the Germans want it to, but they still have to think through the full consequences of the project. From a personal point of view the euro has been a godsend, being able to buzz around Europe without having to worry about having the right currency with you. I hope the Germans stick with it.
 
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