The Collapse Of The Euro: Insights By Joseph Stiglitz And Hugh Hendry - Two Part BBC Miniseries

Tyler Durden's picture

Must watch two part BBC series recapping recent events from the perspective of the other side of the pond, including some much needed "on location" reporting (as opposed to persistent theorizing of "what may happen"). The first part provides the background on the currency crisis and how hedge funds are profiting from shorting the euro. As a commentator points out, the dilemma is moral hazard or austerity measures. And while countries certainly prefer the former, sovereign bond and currency vigilantes are making the second the only viable outcome.

"The sovereign debt crisis has exposed a flaw in the design of the Eurozone. To make a currency strong you don't just need bank notes and a central bank, you need central authority and political will. Some in the markets, are beginning to see the euro not as a permanent currency for all time, but as temporary and fragile, as, well, Lehman Brothers." 


The second part is a great exchange between Nobelist Stiglitz and the ever outspoken, and conversation dominating, Hugh Hendry.

"Hello, can I tell you about the real world. Greece is paying 7% on 2 year money. Greece has debt which is 107% of its GDP. It never used the good time to save money. Therefore it finds itself compromised in the difficult economic environment of today cause it spent all the money in the prosperity."

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IKEA Is Swedish's picture

Hugh is more vicious and condescending when he sports a tie. He should wear one more often.

Benthamite's picture

because there's not enough of them walking around already?

Ripped Chunk's picture

Not with that kind of haircut, no.

Anonymous's picture

Wait, just a few weeks ago the dollar was crashing with hyperinflation imminent. Now the Euro is crashing? And the dollar will skyrocket with relative strength?

Bah, humbug. The system is crashing with teeter-totter effect. Paper is a trap. Putting all one's savings in PMs removes it from the chicanery of global greedy central bankers. Unless, of course, you like your hard-earned being used by TPTB to bailout their zombie necrotizing friend of the day.

Today this currency STRONG! Tomorrow this currency WEAK!

Complete hogwash.

viahj's picture

is it a two week cycle?  the dollar strengthens the week that there are UST auctions?

dark pools of soros's picture

its was a clip on..  the studio must of made him wear it

aus_punter's picture

Hugh let them off on a few points way to easily.  For instance when beardie went on about cds on the USA.....  he missed the point entirely

Anonymous's picture

Hugh Hendry is the best...

Traianus Augustus's picture

As a commentator points out, the dilemma is moral hazard or austerity measures. And while countries certainly prefer the former, sovereign bond and currency vigilantes are making the second the only viable outcome.

How long until the market realizes this?!?!?!


Anonymous's picture

Great stuff, bravo ZH!

Bill DeBurgh's picture

More proof that the Nobel Prize is a farce.

Anonymous's picture

I think I have a man crush.

Double down's picture

I think I have a man crush 

Daedal's picture

Stiglitz is a hottie for sure...

Anonymous's picture

Yaah !even I have a crush for mumbling girlies!..not! LOL
Take a bow you people who force Nobel prizes!
No problem at all eh! "Start a Ponzi scheme and pay off now its only part of your income!"
Ick cheaters!Bad teaching! take away his licence now!

WaterWings's picture

Hey, kids, skip the old fogies. Wanna see something beautiful, and something scary? Not necessarily in that order - you decide. Full screen for best effect:

RowdyRoddyPiper's picture

Game, set, match.  Why oh why can't I ever get to see this on BBC World?

Anonymous's picture

not only that but we never see such things on cn bullshit either. gee i wonder why? it is a big mistake to allow general electric to massage the information we get in the business media.

Double down's picture

Stiglitz advising Greece! I think the short euro risk premium just disappeared.

Anonymous's picture

The Good, The Bad and The Ugly

The speculator comes out looking pretty good next to the academic and the bureaucrat.

Leave it to BBC though to omit in its charts or narrative any discussion of Ireland or the United Kingdom and their debt ratios.

Good luck, Europe.

Anonymous's picture

the us government can print its own money? that's news to me. if that were true, we would not be having this problem. that right if you want to call it that, has been taken from us by the FED. ron paul says get rid of the FED. there stiglitz is talking like all of the rest of them. he comes off as a total idiot in this clip. nobel prize? what did he offer mankind? more of the same bullshit?

Racer's picture

"It never used the good time to save money. Therefore it finds itself compromised in the difficult economic environment of today cause it spent all the money in the prosperity." Isn't that..... exactly... what the US has done??? There has been no savings, just loading up on debt over the bubble years and now... exactly... the same as Greece. But, the world is made to believe in Hopium and the emperor has clothes of the finest gold cloth...

but the gold cloth.... isn't

Missing_Link's picture

Yes, you're right, and no, you're not dreaming.

Anonymous's picture

You might be in trouble if:

Your country hires a Nobel Laureate to argue that reality is absurd.


jmc8888's picture

Yes but the system has been broken for years/decades.  Liquidity hid that.


It made everyone think times were good, after all people lived like it.




But it was really down here.

The sad thing is the problem was everyone was telling Greece and the World that everything was fine, no problem.  So they spent like it.  Of course prices have been going up because of the debt for a long time, which exacerbated the problem.  But with a quadrillion in extra liquidity flowing around the world, the WORLD thought there was no problem.


But there was, and now EVERYBODY is in trouble. 


So complaining about Greece not saving when times were good is asinine.  The whole world was told times are good and getting better.  You keep preaching it, people will believe it.  The world did.  The world is screwed because of it.


But it's not nations that are failing, it's the broken imperialist banking system making nations fail.  40 years long this road has been.  


Of course you could never know when times would turn around, except you could, but if you believed it, you would have lost in the market for about 40 years.  That's the truth about how irrational the markets have been.  It's 40 years of fluff unwinding.


It's only now everything is coming home to roost.  Which is why the manufacturing in China is a bit illusory.  It's only here because of the broken system, but we better pray it continues afterwards, and that they can shift to domestic demand.  

So many imbalances, so much inflation due to debt, levering up, and as mentioned by otherse, debt held in a strong could they eventually not fail?  How can any country not fail?  We're all going to be here, unless we switch systems.


Who were the dips who didn't see this all coming? Because it was quite obvious. Funny they're the ones that are pushing austerity now, when they were pushing 'goldilocks economy' and the like and considered someone nuts if they thought otherwise.


If it wasn't obvious, then you were just as oblivious as Greece, which pretty much evens the pedestals out.


So do we blame each other for social spending? Or do we place the blame where it's deserved.



Missing_Link's picture

So complaining about Greece not saving when times were good is asinine.

Not at all.  Greece is inevitably going to serve as a reminder to the rest of the world of the dangers of getting too deep in debt.  No way around it; may as well use the educational opportunity.


But it's not nations that are failing, it's the broken imperialist banking system making nations fail.  40 years long this road has been. 

Do you blame the pusher, the addict, or the lax law enforcement and regulatory structure that allows the pusher to repeatedly take advantage of the addict?

If you blame only the pusher, you do not solve the problem, and arresting the current set of debt pushers will only create a business opportunity for new set of debt pushers to come in.  You MUST address the addict (the public addiction to debt and failure to recognize its dangers) and the regulatory structure (the massive corruption and incompetence in the SEC, FINRA, and Congress, particularly Barney Frank).

Capitalism has not failed us.  WE HAVE FAILED CAPITALISM.

THE DORK OF CORK's picture

How can you blame the individual when most do not even understand the concept of modern money/debt - they have to swim across a river of propaganda before they can see the lay of the land

Anonymous's picture

Watching the ebb and flow of sentimental tides, I'd say 2 or 3 years tops before we're in worldwide Austerity measures.
The IMF becomes the de-facto central bank of the world.

The word Poverty will be used as the name of a famous singer of happy love ballads, thus substituting meaning in the collective mind.

Without the words to describe their condition, the serf's will fail to rebel.


Mr Lennon Hendrix's picture

Stiglitz and guys like him (Volker) used to be they are batting for the NWO.  Running out of options, are we?

Ted K's picture

I think it's fine if Hugh Hendry makes his opinions clear and on the record.  But he should be able to do that without insulting people. I think Joseph Stiglitz has earned the right to that much.  Hugh can go down to Killary Fjord and make fart noises if he feels hanging around Nobel Laureates is beneath him.

Anonymous's picture

Stiglitz deserves what he got. Thats what happens
in the real world when you open your mouth without
understand what the hell you are talking about.

Anonymous's picture

That's a fair definition of the destruction of a democratic space. Hell, if your opponent is simply too inferior to respect....

Your attitude is one of the keys to the shithole we're in.

Yardfarmer's picture

a most interesting exchange indeed and indicative of the rock and the hard place which the "sovereigns" find themselves today. Joseph Stiglitz representing the interests of the IMF, is flanked conveniently by one of the government satraps who implement the predatory lending policies of the IMF. National assets used as collateral are sequestered first in the form of high rates of interest and the expansion of national debt in the inevitable inflation of asset and housing bubbles. With the subsequent and inevitable collapse leading to the austerity of "structural adjustments" said assets are ultimately stripped in subsequent repurchase agreements at fractional costs. What is forgotten these days is the role Stiglitz, our nobel laureate, played in the same asset stripping and plundering of the former Soviet Union in his capacity of head of the World Bank with the able assistance of head of Russian finance under Al Gore, present OMB head Peter Orszag. The World Bank and IMF then turned their attention to Iceland with the predictable result that under the aegis of Stigltz and Orzsag, the Bank Of Iceland failed precipitating an economic crisis which is still unfolding to this day. Hendry for his part representative of another notable predator class, hedge fund manager, swoops in to pick the leavings clean with short raid speculation along with Soros, Goldman Sachs et al. all the while squawking"you should have saved for a rainy day". Meanwhile the "sovereigns" (don't you love that great new term) are left holding the bag and are left to fend off their dispossessed new underclass of plebes rioting, pillaging and robbing, madly scavenging for any scraps that fall from the master's table.

AnonymousMonetarist's picture

These folks are like arsonists who push for the bomb-making material and then, after planting the bombs and lighting the fuses, extort the firemen and get a tax on the water.

fresh.air's picture

currently reading: yes crisis will intensify

besodemuerte's picture

Can someone ban his IP or something?

Hephasteus's picture

It's more fun when Marla changes their links.

I've seen funny and I've seen FUNNY but when she does that. It's FUN-NY!!!

A Man without Qualities's picture

For the record, this rumor Germans not accepting Euros with the wrong letter on them is bullshit...



Brak82's picture

yeah, i wondered what he was saying about that. No one in germany does that. Euro is Euro whatever place they were printed.

Anonymous's picture

ummm..hello? When was the last time you were in Germany. In actuality, yes he's correct.

Brak82's picture

ummm hello? i live there and im there right now paying with all kinds of euros...

Anonymous's picture

Shiitlitz is a giant douche of the highest order.

Going Down's picture




Feb. 10 (Bloomberg) -- European Union leaders meeting in Brussels tomorrow will probably press Greece to present more detailed budget cuts and stop short of announcing an aid package for the debt-stricken nation, a German government official said.

Anonymous's picture

Really? Does it bother no one that a select very few stand to profit enormously while millions of workers through no fault of their own are forced to have pensions stripped and wages cut? That families may go hungry or without shelter or food? Are we to cheer the death of the euro, civil unrest, upheaval and the growing prospect of war in a world armed to the teeth with nuclear weapons? Debt is not worth one human life. Not one. There has to be some way out of all this without causing so many to suffer for so few.

Anonymous's picture

Your fatal mistake was to buy into the ridiculous notion that we have moved far beyond the cave.

As The Tribe on Wall Street has proven, the richest among us are Alpha Gorillas, very much barbarians. Look at Haiti and sub-Sahara Africa, Ethiopia, Indonesia, Compton, Detroit, inner cities all over the states devastated by chronic overpopulation and unemployment, drugs, and shootings.

A select few have always profited handsomely, always will. The citizens are not rioting and killing the Tsar Nicholas and his family any longer.

Anonymous's picture

I could care less if the people of Greece suffer or even starve. The should have lived withing their means. They should have saved more and spent less. To hell with them.

Anonymous's picture

And Ludwig von Mises couldn't get a teaching job in this country.