08:48 – Merkozy have scheduled another failed summit for today, calling Papandreou on the carpet to explain how he dared give the Greek people the right to vote on what Merkozy had decided Greece must do. Obviously, the EU elitists can’t afford to allow little things like freedom, democracy, and national sovereignty obstruct their grand plans for EU über alles. In all fairness to Merkozy, though, they’re not just picking on the Greeks. They don’t want German and French citizens to have any say, either. Nor any other EU citizens. If only everyone–especially those troublesome ratings agencies and the market itself–would stop asking questions and just do what Merkozy order them to do, the trains would run on time.
Meanwhile, making it obvious that Greece is just a distraction from the real problem, benchmark Italian 10-year bond yields have now reached a disastrous 6.2% and continue to climb. It’s long past time to stop rearranging deck chairs and start heading for the lifeboats, i.e., converting as quickly as possible back to local currencies.
12:11 – It starts again. One would think big publishers might have noticed the catastrophic results when music companies and movie studios decided to start suing listeners and viewers, but apparently they’re too stupid to learn from others’ mistakes. So Wiley has decided to track down and sue people who share Wiley books on torrent sites.
I suspect that Wiley isn’t even aware that it’s not illegal, in the US at least, for people to download a torrent of a copyrighted work. To the extent that the music and movie industries have had any success against torrents, it’s been to persecute those upload the material, not those who download it. In fact, those industries strove mightily to establish the very questionable legal concept of “making available”, just so they wouldn’t actually have to prove that their targets had actually uploaded any data. For now, merely “making available” that data to others is the crime. Someone who takes advantage of that availability commits no crime. Of course, the music and movie industry would like to see that change to include downloaders, but that’s not likely to happen any time soon.
I think you are going to find that going back to local currencies will be the very last thing that will happen — if it happens at all. China is standing in the wings with plenty of help, and they would much rather see the euro succeed and the dollar fail.
Papandreou has delivered a suicide note for Greece. I think today’s meeting will deliver him the message that if Greece votes against the Merkozy plan, then he needs to withdraw Greece from the EU. At this point, his political career is dead, so he had nothing to lose by throwing a wrench into the works.
And if it is so important to have citizens voting referendums on monetary policy, why don’t we get to do it? We should have had one on the bank bailouts and another on the debt ceiling.
The Chinese are smart enough to realize that the euro cannot succeed, and furthermore they are by no means standing by to help. In fact, they’ve basically told the EU that they wish them well but not to expect any significant investment from China. Why would China even consider throwing good money after bad?
We don’t get to vote on these things for the same reason that EU citizens don’t get to vote: our elites are no different from their elites in their contempt for their electorates. One difference, though. At least we get to elect our elites. The Greeks didn’t get to vote for or against Merkozy, and they certainly didn’t get to vote for or against Rompoy, Barroso, and the rest of the euroscum that are actually running things.
By the way, if you think the Tea Party was not bought out already, then look at how they voted on raising the debt ceiling. Over half voted for raising it. Some difference they are making against big government!
And people wonder why I believe that any government is too much government.
I agree with your last point, but they are putting the cart before the horse. Europe will federalize, but they are taking over monetary policy before implementing the full Monty.
We must not be reading the same things on China. A few weeks ago, I read a report that said China was willing to commit hundreds of billions, if necessary (naturally, I cannot find that link now). Actually, the EU is now China’s biggest trading partner, the EU having surpassed the US within the last couple of years. They do not want to see that disappear.
Well, if you search Google news for EU and China, you’ll find that China has no intention of bailing out the euro, and especially not contributing large amounts to the EFSF to help lever it. They’d be stupid to do that, and the Chinese are far from stupid.
To the extent that China supports the EU in this crisis, it will be in return for tangible benefits to China. The EU will end up with the shitty end of the stick, in other words. China may buy significant European assets, but they’re not going to give anything away.
Incidentally, anything you read “a few weeks ago” is almost certainly OBE. This stuff changes dramatically literally day to day if not hour to hour. As far as the EU, eurozone, and euro are concerned, we’re essentially in a positive feedback loop now, and we all know what happens as the amplitude of the oscillations continues to increase.
Oh, yeah. Speaking of positive feedback loops, I just found some excellent YouTube footage that illustrates the current status of the EU crisis.
http://www.youtube.com/watch?v=IqK2r5bPFTM
The (biting) dog being Greece, the car being Italy, and the span the EU itself?
Tacoma-Narrows is an interesting aeroelastic problem, bending-torsion plus the non-linear cable supports.
Is Papandreou the guy on the bridge? 😀
By default, the bit torrent client shares the content you’ve downloaded with other users. So If you download a Copyrighted torrent, you’re probably also uploading at least some of the parts of it you have already downloaded.
Not if you set your client to leech-only mode by setting the upload transfer rate to 0.00 kb/s.
Alas, I’m afraid he’s the little dog in the car.
I don’t know why the Greeks couldn’t keep using the Euro, even after they defaulted. It seems to me that any supporter of the gold standard can support using the hard currency of a more responsible nation. I mean, going back to their own currency would give the Greeks another way to be feckless, but is that really so important? Even if the Greeks were to really insist on being feckless, there are so many other ways of being so.
The line that “monetary union doesn’t work without fiscal union” is often repeated, but I’ve never seen any justification for it. Eurocrats of course like that mantra, since they want fiscal union and would like to parlay monetary union into it; but whether it makes any real sense is another question.
As time goes by, I find myself more and more in agreement with Robert that ANY government is probably always too much, part of that being a result of human nature. And the bigger government gets, the more insatiable and powerful it becomes. I think it was Plato originally who suggest that the ideal upper limit of population for a viable political entity, i.e., a town or city, was around 2-5k.
The line that “monetary union doesn’t work without fiscal union” is often repeated, but I’ve never seen any justification for it.
It goes like this:
– Greece passes laws spending lots of money on public works, public workers, generous worker benefits, early retirements, etc.
– At the same time, Germany practices austerity – raising the retirement age, limiting benefits, etc.
Both use the same currency, but have different fiscal policies. As a result, Greece is bankrupt and Germany is doing well. So Germany ends up paying to bail out Greece, because they have the money, and because Greece can’t do a classic move to help their situation – devalue their currency.
It’s like the ants (Germans) and the Grasshoppers (the southern half of the EU) writ large.
You had me until the “So Germany ends up paying” bit. Why does the existence of the Euro force Germany to pay? Germany wouldn’t have to pay, if both they and Greece were on a gold standard. Why is the Euro any different?
By the way, another ending to that story is “So now that Germany owns Greece, they send in the panzers to enforce their rightful claims”. Which, in fact, is somewhat the way the protesters in the Greek street view the current situation. They’re wrong, of course; things haven’t gotten that bad, yet. But as Evans-Pritchard put it, “this is what happens when you insert words such as “Überwachungskapazität vor Ort” (monitoring capacity on the ground) into EU summit conclusions.”
Bankruptcy of a nation is an ugly thing, any way you slice it. But why the Germans have to share in the ugliness — other than to accept the fact that the money they lent to the Greeks just can’t be extracted by any means short of enslaving them, and maybe not even that — is unclear.
How about some good news for a change? I went to the dentist today expecting to need a cap/crown because a small edge had fallen off one of my rear molars. Turns out he can just extend the filling a bit. Whew! Wasn’t looking forward to what I thought would be a huge bill as a cash-only customer — though I probably would have had it done in India.
“12:11 – It starts again. One would think big publishers might have noticed the catastrophic results when music companies and movie studios decided to start suing listeners and viewers, but apparently they’re too stupid to learn from others’ mistakes. So Wiley has decided to track down and sue people who share Wiley books on torrent sites.”
From what I read, they are starting to go after the IP addresses of those sharing copyrighted material. My question is: “If one takes their laptop to Starbucks to share via torrent sites…………?”
IIRC, back in the day of sharing mp3 songs via Napster and similar, folks were doing it at home via dialup, DSL or cable whereby they could be identified by ISP. Every corner with a stoplight did not have a Starbucks with Wi-fi.
Recently, my ISP, TW Cable, has started installing Wi-fi hotspots for its subscribers to use away from home. I took my laptop to the nearest one at a parking lot of a Sam’s Club and logged right in using my RR email and PW. However, did not check the IP address for that to compare to this at home.
Well, if you search Google news for EU and China, you’ll find that China has no intention of bailing out the euro, and especially not contributing large amounts to the EFSF to help lever it. They’d be stupid to do that, and the Chinese are far from stupid.
You are right that I cannot find that story again. I know it is in my browser history somewhere, but there is no way to search that, and looking at hundreds of pages again is not in the cards. I know I did not dream that story up–although it is possible I misread or misunderstood it.
I did find an AP story of 28 Oct that says China has already bought 40% of the offerings of EFSF since its inception up until the recent decision to expand the bailout funds.
http://finance.yahoo.com/news/Europe-bailout-fund-chief-apf-2209866447.html
So China is already well-invested in the fund — over 100 billion. But you are right, I cannot find any mention of further investment by China in the fund.
Why does the existence of the Euro force Germany to pay? Germany wouldn’t have to pay, if both they and Greece were on a gold standard. Why is the Euro any different?
Greece needs to inflate the Euro to get out of their fiscal bind. Because Germany doesn’t want to inflate the Euro, they have to bail out the banks and therefore Greece. They have the spare Euros.
(And a gold standard is of no help, either, because Greece could inflate their currency by changing how the Drachma is tied to gold. It’s one of the reasons why a gold standard is no better than fiat currency. There are many others. Left as an exercise for the reader.)
Jim wrote:
“How about some good news for a change? I went to the dentist today expecting to need a cap/crown because a small edge had fallen off one of my rear molars. Turns out he can just extend the filling a bit. Whew! Wasn’t looking forward to what I thought would be a huge bill as a cash-only customer — though I probably would have had it done in India.”
Fortunately all my crowns, inlays and root canals seem to be in my past. Had to have a root canal job about 10 years ago, and I would not wish that on *anyone*. It took six visits to complete. Drove me nuts. There are few things I dread more than going to the dentist, although he an his assistants are very nice and easy to get on with – especially the assistants… 🙂
Why would Greece need to inflate the euro? Can’t they welsh on their obligations in some other way? Because that’s the real problem, here — that they owe lots of money. Even if they did reintroduce the drachma, and deflate it, they’d still have to persuade their foreign creditors to accept payment in drachmas rather than euros. They could just as well get those creditors to accept payment of the same value in the form of a reduced number of euros.
Of course if they’d already been on the drachma, and if foreign creditors had been silly enough to make loans denominated in drachmas, then inflating the drachma would be a fix. But that isn’t the way things are. Instead, the Greeks contracted huge debts in hard currency. (Which they could have done even with the drachma, just by borrowing in dollars or pounds sterling.)
And though I called that a “fix”, even it would amount to the same stiffing of foreign creditors; the only difference would be that the creditors couldn’t say they hadn’t been warned. Stiffing creditors slyly, via devaluation/inflation, really isn’t any better than stiffing them openly and honestly.