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This one is an interview between Mark Ames and Susan Webber, the real person behind "Yves Smith" at NakedCapitalism.com. It's too full of great quotes to really summarize. If you don't have a firm understanding of the problems with Greece after reading this, you never will.
Great article, there's a lot in there I didn't know. This is exactly the reason why I found it difficult to give you an insider perspective the other day - everyone pays lip service to the issue without really understanding it or explaining it well (to me). It's a complex issue.These foreign pundits fail to appreciate that the Greeks have a better grip on what the issues are than they do.
ButterflyEffect · 1417 days ago · link ·
Interesting to read a substantial criticism of Syriza, I wasn't aware of how inexperienced they were in government affairs and I don't think they're getting as much blame as they deserve after this article. Between this and the continued insistence on austerity measures, which, if there's so much evidence that they don't work why are they still being put in place?Germany has blocked even fairly tame, pro-bank and therefore pro-financial stability measures to make Eurozone-level institutions more powerful, like having Eurozone-wide and Eurozone-level funded deposit guarantees. Even worse, by demonizing borrowers and stoking voter hostility against “dirty lazy Greeks” when Greeks actually work more hours than Germans, Merkel and other German leaders have strengthened the already large domestic political obstacles to putting the Eurozone on a sounder, more durable footing.
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blackbootz · 1413 days ago · link ·
The article raises more questions than it answers for me, but that's probably because I didn't have a strong grasp to begin with. I was completely blown away by this parenthetical. Regulated like a utility... I know it was an aside, but that's a brilliant idea. The only problem I can think of is the sheer unlikelihood of it becoming law or reality anytime soon. What would be the best way to go about understanding the big picture of commerce and international banking? I'll look up the definitions to most terms, like trade deficits and who benefits from them and when and why, but it seems that commentators use them in different senses and it gets confusing. I started by finding a copy of Yves Smith's eCONned, but where else?(for the record, Naked Capitalism routinely points out that banks get more subsidies than any other industry, including defense contractors, to the point that banks can't properly be viewed as private enterprises. They should be regulated like utilities).
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'k. So the "big picture of commerce and international banking" is something I have a perspective on, not something I have an understanding of. As such, I can only point you to what got me to my perspective, while emphasizing that what I know and what's true may only touch in a couple of points. The thing that cracked my head open first was this: The book that filled in some of those cracks was this. The book that polished the understanding was this. You make it through those three, you won't be able to say you understand international banking... but you'll be able to say you understand it better than you did. With bonus Doom'n'Gloom from John Mauldin, who has so far been mostly wrong
blackbootz · 1414 days ago · link ·
Crap. I missed this one. Any chance you could unlock it again? Is there a limit?
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flagamuffin · 1417 days ago · link ·
Confused. The ECB began its own (quite a bit smaller) QE a few months after we did, as did the UK. I want to say the ECB continued that in some of the intervening years, and they definitely began a comprehensive program in January. Euro exchange rate collapse didn't spring from nothing. My guess is, in a better format she'd clarify that the type of QE we did and they did were different in practice in some way.The reason the US response was less bad than Europe’s is that we combined it with some fiscal stimulus, albeit not that much. By contrast, Europe has gone for austerity all the way.
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ButterflyEffect · 1417 days ago · link ·
I was trying to figure that part out too. This article begins to go through what's different.
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So in other words, it's not really a stimulus. If you say you're going to give $1b to the Greeks but if they don't pay you back they're on the hook for $800m, you've actually only given them $200m.Unlike the U.S. version of QE, the European plan involves keeping most of the losses contained in the country where they’re incurred. (This is analogous to allowing the states encompassed by the Chicago Federal Reserve bank district to largely fend for themselves.)
When the ECB in March begins buying 60 billion euros' worth of securities from European institutions every month through September 2016, any financial losses that occur will be largely contained inside the countries where they happen. When ECB President Mario Draghi announced Europe’s QE on Thursday, he said the eurozone as a whole will absorb 20 percent of “risk sharing” while the rest will “not be subject to risk sharing.”
This means that if a bank investment goes bad in, say, Italy, 80 percent of the loss will stay in Italy. “There’s a serious issue about how this is going to work,” said Cecchetti. “I’m concerned that this will dilute the effect of QE.”
flagamuffin · 1417 days ago · link ·
I wrote out a long thing but the gist is, yeah, that makes some sense. I wonder if there's a better way to do it, not tied to risky national securities.