TheHipHopBillGates
02-11-2010, 06:24 PM
.
View Full Version : Will the PIGS take the Euro down?
James Maxx
02-13-2010, 10:27 AM
Yea I hope they do. Euro is over-valued that is why Greece is in bad shape. Their Drachma was 1/4 of the value of the Euro how was the country supposed to survive? I knew this was gonna happen this is what happens when you try to force a universal currency down countries' throats.
James Maxx
02-13-2010, 10:28 AM
Euro will be the same value as the dollar by end of the year. Europe has no choice.
ERR
02-13-2010, 07:16 PM
Euro will be the same value as the dollar by end of the year. Europe has no choice.
Ain't no way in HELL.
Ain't no way in HELL.
Mr Wilson
02-13-2010, 10:25 PM
Euro will be the same value as the dollar by end of the year. The GERMANS/FRENCH have no choice.
fixed....the Germans are especially grumbling about this latest pull down by the Greeks and Spanish....lets see how this would develop ;)
fixed....the Germans are especially grumbling about this latest pull down by the Greeks and Spanish....lets see how this would develop ;)
Mr Wilson
02-14-2010, 07:19 AM
oh and speaking of pigs.................
Wall St. Helped Greece to Mask Debt Fueling Europe’s Crisis (http://www.nytimes.com/2010/02/14/business/global/14debt.html?hp)
By LOUISE STORY, LANDON THOMAS Jr. and NELSON D. SCHWARTZ
Published: February 13, 2010
Wall Street tactics akin to the ones that fostered subprime mortgages in America have worsened the financial crisis shaking Greece and undermining the euro by enabling European governments to hide their mounting debts.
As worries over Greece rattle world markets, records and interviews show that with Wall Street’s help, the nation engaged in a decade-long effort to skirt European debt limits. One deal created by Goldman Sachs helped obscure billions in debt from the budget overseers in Brussels.
Even as the crisis was nearing the flashpoint, banks were searching for ways to help Greece forestall the day of reckoning. In early November — three months before Athens became the epicenter of global financial anxiety — a team from Goldman Sachs arrived in the ancient city with a very modern proposition for a government struggling to pay its bills, according to two people who were briefed on the meeting.
The bankers, led by Goldman’s president, Gary D. Cohn, held out a financing instrument that would have pushed debt from Greece’s health care system far into the future, much as when strapped homeowners take out second mortgages to pay off their credit cards.
It had worked before. In 2001, just after Greece was admitted to Europe’s monetary union, Goldman helped the government quietly borrow billions, people familiar with the transaction said. That deal, hidden from public view because it was treated as a currency trade rather than a loan, helped Athens to meet Europe’s deficit rules while continuing to spend beyond its means.
Athens did not pursue the latest Goldman proposal, but with Greece groaning under the weight of its debts and with its richer neighbors vowing to come to its aid, the deals over the last decade are raising questions about Wall Street’s role in the world’s latest financial drama.
As in the American subprime crisis and the implosion of the American International Group, financial derivatives played a role in the run-up of Greek debt. Instruments developed by Goldman Sachs, JPMorgan Chase and a wide range of other banks enabled politicians to mask additional borrowing in Greece, Italy and possibly elsewhere.
In dozens of deals across the Continent, banks provided cash upfront in return for government payments in the future, with those liabilities then left off the books. Greece, for example, traded away the rights to airport fees and lottery proceeds in years to come.
Critics say that such deals, because they are not recorded as loans, mislead investors and regulators about the depth of a country’s liabilities.
Some of the Greek deals were named after figures in Greek mythology. One of them, for instance, was called Aeolos, after the god of the winds.
The crisis in Greece poses the most significant challenge yet to Europe’s common currency, the euro, and the Continent’s goal of economic unity. The country is, in the argot of banking, too big to be allowed to fail. Greece owes the world $300 billion, and major banks are on the hook for much of that debt. A default would reverberate around the globe.
A spokeswoman for the Greek finance ministry said the government had met with many banks in recent months and had not committed to any bank’s offers. All debt financings “are conducted in an effort of transparency,” she said. Goldman and JPMorgan declined to comment.
While Wall Street’s handiwork in Europe has received little attention on this side of the Atlantic, it has been sharply criticized in Greece and in magazines like Der Spiegel in Germany.
“Politicians want to pass the ball forward, and if a banker can show them a way to pass a problem to the future, they will fall for it,” said Gikas A. Hardouvelis, an economist and former government official who helped write a recent report on Greece’s accounting policies.
Wall Street did not create Europe’s debt problem. But bankers enabled Greece and others to borrow beyond their means, in deals that were perfectly legal. Few rules govern how nations can borrow the money they need for expenses like the military and health care. The market for sovereign debt — the Wall Street term for loans to governments — is as unfettered as it is vast.
“If a government wants to cheat, it can cheat,” said Garry Schinasi, a veteran of the International Monetary Fund’s capital markets surveillance unit, which monitors vulnerability in global capital markets.
Banks eagerly exploited what was, for them, a highly lucrative symbiosis with free-spending governments. While Greece did not take advantage of Goldman’s proposal in November 2009, it had paid the bank about $300 million in fees for arranging the 2001 transaction, according to several bankers familiar with the deal.
Wall St. Helped Greece to Mask Debt Fueling Europe’s Crisis (http://www.nytimes.com/2010/02/14/business/global/14debt.html?hp)
By LOUISE STORY, LANDON THOMAS Jr. and NELSON D. SCHWARTZ
Published: February 13, 2010
Wall Street tactics akin to the ones that fostered subprime mortgages in America have worsened the financial crisis shaking Greece and undermining the euro by enabling European governments to hide their mounting debts.
As worries over Greece rattle world markets, records and interviews show that with Wall Street’s help, the nation engaged in a decade-long effort to skirt European debt limits. One deal created by Goldman Sachs helped obscure billions in debt from the budget overseers in Brussels.
Even as the crisis was nearing the flashpoint, banks were searching for ways to help Greece forestall the day of reckoning. In early November — three months before Athens became the epicenter of global financial anxiety — a team from Goldman Sachs arrived in the ancient city with a very modern proposition for a government struggling to pay its bills, according to two people who were briefed on the meeting.
The bankers, led by Goldman’s president, Gary D. Cohn, held out a financing instrument that would have pushed debt from Greece’s health care system far into the future, much as when strapped homeowners take out second mortgages to pay off their credit cards.
It had worked before. In 2001, just after Greece was admitted to Europe’s monetary union, Goldman helped the government quietly borrow billions, people familiar with the transaction said. That deal, hidden from public view because it was treated as a currency trade rather than a loan, helped Athens to meet Europe’s deficit rules while continuing to spend beyond its means.
Athens did not pursue the latest Goldman proposal, but with Greece groaning under the weight of its debts and with its richer neighbors vowing to come to its aid, the deals over the last decade are raising questions about Wall Street’s role in the world’s latest financial drama.
As in the American subprime crisis and the implosion of the American International Group, financial derivatives played a role in the run-up of Greek debt. Instruments developed by Goldman Sachs, JPMorgan Chase and a wide range of other banks enabled politicians to mask additional borrowing in Greece, Italy and possibly elsewhere.
In dozens of deals across the Continent, banks provided cash upfront in return for government payments in the future, with those liabilities then left off the books. Greece, for example, traded away the rights to airport fees and lottery proceeds in years to come.
Critics say that such deals, because they are not recorded as loans, mislead investors and regulators about the depth of a country’s liabilities.
Some of the Greek deals were named after figures in Greek mythology. One of them, for instance, was called Aeolos, after the god of the winds.
The crisis in Greece poses the most significant challenge yet to Europe’s common currency, the euro, and the Continent’s goal of economic unity. The country is, in the argot of banking, too big to be allowed to fail. Greece owes the world $300 billion, and major banks are on the hook for much of that debt. A default would reverberate around the globe.
A spokeswoman for the Greek finance ministry said the government had met with many banks in recent months and had not committed to any bank’s offers. All debt financings “are conducted in an effort of transparency,” she said. Goldman and JPMorgan declined to comment.
While Wall Street’s handiwork in Europe has received little attention on this side of the Atlantic, it has been sharply criticized in Greece and in magazines like Der Spiegel in Germany.
“Politicians want to pass the ball forward, and if a banker can show them a way to pass a problem to the future, they will fall for it,” said Gikas A. Hardouvelis, an economist and former government official who helped write a recent report on Greece’s accounting policies.
Wall Street did not create Europe’s debt problem. But bankers enabled Greece and others to borrow beyond their means, in deals that were perfectly legal. Few rules govern how nations can borrow the money they need for expenses like the military and health care. The market for sovereign debt — the Wall Street term for loans to governments — is as unfettered as it is vast.
“If a government wants to cheat, it can cheat,” said Garry Schinasi, a veteran of the International Monetary Fund’s capital markets surveillance unit, which monitors vulnerability in global capital markets.
Banks eagerly exploited what was, for them, a highly lucrative symbiosis with free-spending governments. While Greece did not take advantage of Goldman’s proposal in November 2009, it had paid the bank about $300 million in fees for arranging the 2001 transaction, according to several bankers familiar with the deal.
TheHipHopBillGates
02-18-2010, 11:49 AM
No shocker, the European Central bank is going to have a few options: do nothing(which will devalue the currency), print $$$ like the Fed(which they have be reluctant to do, but would also devalue the currency) or kick these countries out of the EU let them default which will devalue the Euro in at least the short term..........I don't see how it's avoidable, if they're not careful they'll be in the same situation that America is high unemployment, high "federal" deficit, inflated currency.....etc....
James Maxx
02-23-2010, 08:10 PM
Greece will most likely get kicked out of EU. The people never WANTED to be part of them.
The Prime Minister himself said that this occurred due to speculative markets, which goes to show he himself is not faithful to it.
If the country tries to cut government salaries (at least half the country works for the government, or union) there will be immediate strikes and riots. This has happened before when the sanitation department went on strike for a week and left Athens looking like a Staten Island landfill.
The people there don't give a shit about their government. 30% of them work off the books and they are proud of that. There is also a small anarchist sect there and are very anti-government. Budget cuts or tax increases of any kind will not fly in Greece. The country will grind to a halt and people will just leave.
This is why I say the Euro will fall to the Dollar's value. It will have to in order for Greece, Portugal and a few other countries to strive.
The Prime Minister himself said that this occurred due to speculative markets, which goes to show he himself is not faithful to it.
If the country tries to cut government salaries (at least half the country works for the government, or union) there will be immediate strikes and riots. This has happened before when the sanitation department went on strike for a week and left Athens looking like a Staten Island landfill.
The people there don't give a shit about their government. 30% of them work off the books and they are proud of that. There is also a small anarchist sect there and are very anti-government. Budget cuts or tax increases of any kind will not fly in Greece. The country will grind to a halt and people will just leave.
This is why I say the Euro will fall to the Dollar's value. It will have to in order for Greece, Portugal and a few other countries to strive.
tommy_guns
02-23-2010, 08:29 PM
the eu was just going in this direction from the begining. fiscal and monetary policy are controled from different avenues so to speak. theres no central control in the eu. i wouldnt be surprised to see the euro and the dollar at parity.
greece wont be kicked out its gonna be sucked in more and not control its own fate. the thing thats going to happen eventual with the eu is a central government will become part of it. these european countries are just going to become like states.
Back when the eu was being ceated my grandfather who was a vet of the RAF for Great Britian said that this was germany's new way of taking over europe. he always claims there up to no good and you can never trust em. looks like thats comin true.
greece wont be kicked out its gonna be sucked in more and not control its own fate. the thing thats going to happen eventual with the eu is a central government will become part of it. these european countries are just going to become like states.
Back when the eu was being ceated my grandfather who was a vet of the RAF for Great Britian said that this was germany's new way of taking over europe. he always claims there up to no good and you can never trust em. looks like thats comin true.
TheHipHopBillGates
02-24-2010, 12:45 PM
http://www.msnbc.msn.com/id/35560375/ns/world_news-europe
TheHipHopBillGates
03-24-2010, 10:58 AM
Will Greece turn from euros to gyros?
Athens is abuzz with a rumor: Greece might leave the euro zone and adopt a new currency -- a Greek euro, so to speak, something of a cross between a drachma and a euro to be used only internally. Some hungry economists have jokingly given the new money a nickname: the "Gyro."
If only the solution to Greece's problems could be rolled up as neatly as a gyro sandwich. A bailout from the European Union or its partner countries is growing increasingly unlikely -- German Chancellor Angela Merkel just put a kibosh on discussing the topic at the upcoming EU Summit. While the International Monetary Fund sits in the wings ready to swoop in, it is unlikely the EU would allow its aid, and stigma, to affect the other Euro nations.
As a member of a currency union, Greece is "stuck in a Euro-zone straightjacket," writes economist Desmond Lachman of the American Enterprise Institute. Its options to dispose of its debt are limited: a default is not politically viable, a restructuring is unworkable, and currency devaluation to make the mess go away -- a tactic Argentina used in 2001 -- is impossible. To remain in the EU, Greece must accept its rules in good times, and in bad.
If Greece thinks it's trapped in a bad marriage, it could choose to leave the eurozone, but that would be a shocking development, one that prime minister George Papandreou insists is not on the table.
Fears of a Greek bank run
Yet the country may have no choice -- Greece might even be asked to go. As the crisis deepens, Greece's "leaving the Euro area, though still a low probability scenario, can no longer be ruled out," says Uri Dadush, the director of Carnegie International Economics Program. "It's a painful route, but a lot less painful than others."
Greeks are starting to wonder what a euro-less future might look like. One possible roadmap: copying California's 2009 debt solution of issuing warrants later redeemable for dollars.
The proposal by London School of Economics' Charles Goodhart and Oxford Said Business School's Dimitrios Tsomocos, would introduce a new way to pay debts inside Greece (or any of the other ailing "Club Med" countries -- Spain, Portugal, and possibly Italy), while leaving the euro in place for international transactions.
Countries would print scrip that would act and look like a new currency domestically but not be legal tender overseas. There would be an exchange rate that would allow citizens to convert scrip to euros when necessary, but also allow the countries to devalue their economies while not affecting the euro's strength in other eurozone countries.
Or, perhaps, a two-euro European Union
Other economists like Michael Arghyrou of the Cardill Business School and John Tsoukalas, a lecturer at the Nottingham School of Economics, have proposed a grander version of this idea, where a two-euro European Union would be formed. One euro will serve the union's weaker economies like Greece and Portugal, and another would circulate in the rest. In their plan, both currencies would be overseen by the European Central Bank. "We can't deny that at the moment in Europe we have a two-speed European economy," explains Arghyrou. "This is not such a big mental leap."
Arghyrou believes the plan would calm international markets because it would provide a credible outcome to the guessing game that's happening now. But the political debate likely to follow such an arrangement will be anything but serene. Whatever countries get the cheaper Euro aren't much going to like the stigma of using the weaker currency, Club Med or not.
Countries assigned to a junior currency might protest, but can their sovereign pride get in the way of hard facts? "The euro as it is now is not sustainable," says Arghyrou. "We'll be talking about 27 currencies ten years from now, not two, if the present trend continues."
"The euro was set up with a handicap," says Italian economist Mario Nuti. "It's a currency without a federal state, without a fiscal authority and without a budget." In the end, the fact that the EU is a currency union without a political foundation may turn out to be its death knell.
How this plays out for the European Union rests in Greece's hands. The task ahead is Herculean: The government must cut budget expenses by about 25%. "That's a heavy lift. If they do, it would be a miracle," says Charles Calomiris of Columbia University's business school. "But then again they said the same thing about the 2004 Olympics. No one thought Greece would pull it off, but it did." One could say it takes a Greek to figure out how to make and eat a gyro, all without spilling a drop.
http://money.cnn.com/2010/03/23/news/international/greece_euro_currency.fortune/index.htm
Athens is abuzz with a rumor: Greece might leave the euro zone and adopt a new currency -- a Greek euro, so to speak, something of a cross between a drachma and a euro to be used only internally. Some hungry economists have jokingly given the new money a nickname: the "Gyro."
If only the solution to Greece's problems could be rolled up as neatly as a gyro sandwich. A bailout from the European Union or its partner countries is growing increasingly unlikely -- German Chancellor Angela Merkel just put a kibosh on discussing the topic at the upcoming EU Summit. While the International Monetary Fund sits in the wings ready to swoop in, it is unlikely the EU would allow its aid, and stigma, to affect the other Euro nations.
As a member of a currency union, Greece is "stuck in a Euro-zone straightjacket," writes economist Desmond Lachman of the American Enterprise Institute. Its options to dispose of its debt are limited: a default is not politically viable, a restructuring is unworkable, and currency devaluation to make the mess go away -- a tactic Argentina used in 2001 -- is impossible. To remain in the EU, Greece must accept its rules in good times, and in bad.
If Greece thinks it's trapped in a bad marriage, it could choose to leave the eurozone, but that would be a shocking development, one that prime minister George Papandreou insists is not on the table.
Fears of a Greek bank run
Yet the country may have no choice -- Greece might even be asked to go. As the crisis deepens, Greece's "leaving the Euro area, though still a low probability scenario, can no longer be ruled out," says Uri Dadush, the director of Carnegie International Economics Program. "It's a painful route, but a lot less painful than others."
Greeks are starting to wonder what a euro-less future might look like. One possible roadmap: copying California's 2009 debt solution of issuing warrants later redeemable for dollars.
The proposal by London School of Economics' Charles Goodhart and Oxford Said Business School's Dimitrios Tsomocos, would introduce a new way to pay debts inside Greece (or any of the other ailing "Club Med" countries -- Spain, Portugal, and possibly Italy), while leaving the euro in place for international transactions.
Countries would print scrip that would act and look like a new currency domestically but not be legal tender overseas. There would be an exchange rate that would allow citizens to convert scrip to euros when necessary, but also allow the countries to devalue their economies while not affecting the euro's strength in other eurozone countries.
Or, perhaps, a two-euro European Union
Other economists like Michael Arghyrou of the Cardill Business School and John Tsoukalas, a lecturer at the Nottingham School of Economics, have proposed a grander version of this idea, where a two-euro European Union would be formed. One euro will serve the union's weaker economies like Greece and Portugal, and another would circulate in the rest. In their plan, both currencies would be overseen by the European Central Bank. "We can't deny that at the moment in Europe we have a two-speed European economy," explains Arghyrou. "This is not such a big mental leap."
Arghyrou believes the plan would calm international markets because it would provide a credible outcome to the guessing game that's happening now. But the political debate likely to follow such an arrangement will be anything but serene. Whatever countries get the cheaper Euro aren't much going to like the stigma of using the weaker currency, Club Med or not.
Countries assigned to a junior currency might protest, but can their sovereign pride get in the way of hard facts? "The euro as it is now is not sustainable," says Arghyrou. "We'll be talking about 27 currencies ten years from now, not two, if the present trend continues."
"The euro was set up with a handicap," says Italian economist Mario Nuti. "It's a currency without a federal state, without a fiscal authority and without a budget." In the end, the fact that the EU is a currency union without a political foundation may turn out to be its death knell.
How this plays out for the European Union rests in Greece's hands. The task ahead is Herculean: The government must cut budget expenses by about 25%. "That's a heavy lift. If they do, it would be a miracle," says Charles Calomiris of Columbia University's business school. "But then again they said the same thing about the 2004 Olympics. No one thought Greece would pull it off, but it did." One could say it takes a Greek to figure out how to make and eat a gyro, all without spilling a drop.
http://money.cnn.com/2010/03/23/news/international/greece_euro_currency.fortune/index.htm
Forca Barca
03-24-2010, 11:44 AM
Euro hit a 10 month low against the USD today.
James Maxx
03-25-2010, 04:28 PM
Damn I wish I went to Greece this summer instead of last summer. It was $1.45 per euro. Now its $1.32.
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