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The Sick Men Of Europe: The Definitive Guide To The European Crisis
The Sick Men Of Europe: The challenges of a monetary union in middle age. Submitted by Michael Cembalest, CIO of JP Morgan Private Banking, who, we are happy to report, in rearranging the PIIGS has demonstrated some very acute "completely random" letter scrambling skills.
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A pig by any other name...or something.
Don't mess with this foo when it comes to scrabble!
Dude will smoke you on yahoo literati.
"Quibble quibble, rubble rubble..."...Hegelian dialectic. So the GIPSI can not make ends meet? What about the Samurai? What about the Brit? What about the 'merican? "Quibble quibble, rumble rumble."
pretty soon the chinese too if they emulate our policies..
the whole of europe is sick in one way or another.
Oooh, the Romanian-American (and Romanian-American Romanians, to borrow a phrase from Eleanor Mondale) contingent is going to be offended by this. How insensitive can JPM get?
He was just trying to hit the triple letter score on the higher valued G piece.
Don't worry to much about europe, California and others are in an even worse position, The US media are doing a good job deflecting attention away from US problems. In the long run everyone has to pay the reaper at least europeans will pay up vis a vie tax, Thats a dirty word State side, but theres no free lunch. Somethings go to give sooner or later, by bet's later.
Ever since the bubble burst, people have been telling me that the corruption and fraud in China, Eastern Europe, etc makes the US look like amateur hour. Hard to get my head around when I live at the epicenter of the War on Savers, I guess. So far I've only seen a few real comparisons. Russ Winter did this one:
Calif.: 49.3% budget gap, $1.92 trillion GDP, 37 million pop
Ill.: 47.3% budget gap, $610 billion GDP, 12.8 million pop
Ariz.: 41.1% budget gap, $206 billion GDP, 6 million pop
NJ: 30% budget gap, $416 billion GDP, 8.7 million pop
*
Portugal: 10.1% budget gap, 233 billion GDP, 10.7 million pop
Greece: 11.9% budget gap, 335 billion GDP, 11.0 million pop
Ireland: 11.6% budget gap, $217 billion, 4.2 million pop
Italy: 5.4% budget gap, $1.9 trillion, 60 million pop
Spain: 11.4% budget gap, $1.4 trillion, 47 million pop
Pointers to any more info along these lines is much appreciated.
Gold Uptrend Remain Intect; $1500 Ounce
Nichols' reasons: Loose monetary and fiscal policy that could lead to inflation, resurgent demand for the metal by central banks, increased investment interest from institutions and individuals, and declining worldwide mine output.
Europe is done for. This will be 10 year of painful deflation as low labor productivity (PIGS) and overcapacity (France, Germany) take their toll. 10 years of Japan style no real growth is the best case. Germany exiting the EUR and EU at the same time spin in the worst case, sending the south into a tail spin.
"Europe is done for." - what total nonsense. As others have said, to understand the Euro and the EU, you have to understand where it came from. The forerunner of the EU/ EEC/ Common Market was the "European Coal and Steel Community", which actually had its precursor in the central control of steel production under Albert Speer during the war. The other nations realized they could not compete with the productivity or efficiency of the German steel industry, therefore deciding to work together without tariffs or barriers and with standardized labor laws, i.e. hours, wages etc, was the only way to go. The benefits of a common economic practices were clear for all and because there was equality of terms, this was the most peaceful way forward.
In reality, the Latin nations always believed in their exceptionalism, they did not work like Germans, because they were more passionate and artistic etc etc, but they felt that because they were in the union, they deserved the same standard of living. Therefore, this is why (despite the Germans having paid out trillions in aid and grants to the other member nations and for the reunification costs) these countries have much higher debt to GDP. The governments have filled the productivity, or should we say "siesta" gap.
Certain member states need to decide what matters more to them, their standard of living or their lifestyles. If they want to maintain their standard of living, they have to become more productive, if they want to maintain their lifestyle, they will earn less and need to spend less.
Back when the Euro was first being discussed the idea that in the absence of exchange rates and interest rate differences, the imbalances would lead to migration of workers to go where the jobs are. The reality is that the generous buffer of the welfare state, plus the real estate bubble of the last 10 yrs has prevented this. Plenty of workers enter the EU to work in places like Germany or the UK, but very few workers move across from other member states. However, this is still a very new project and we will see how it develops.
As for Germany leaving the EU or the Euro, it will never happen, if it came to this, the other members would do whatever they needed to do to prevent it.
"Plenty of workers enter the EU to work in places like Germany or the UK, but very few workers move across from other member states".
I think 1.5 million Polish people would disagree with you. Overall though, you have a point.
Good reminder about how the whole 'EU thing' started with the ECSC, for those that think the Union is simply just about having 1 single currency or, even more facetiously, world domination.
"The crisis takes on broader implications as well: it has surfaced support for a more powerful federalist government in Europe. EU President Van Rompuy proposed giving the EU more "economic governance" powers in the aftermath of the recession, perhaps without explicit agreement from national delegations. More direct calls for a pan-European government with powers of economic enforcement, bond issuance and civilian deployment come from Guy Verhofstadt, President of ALDE (the 3rd largest group in the European Parliament) and author of "United States of Europe".
Time to read "The Tainted Source" again this weekend.
The real pigs are in Brussels.
nothing but payback time
Europe has actually a very bright future. The largest collection of the worlds most talented high IQ peoples. Central and eastern europe are slowly joining western style living standards. Highly educated work-force. Currency union dramatically lowering cost of business. Russia supplying endless stream of oil and gas and natural resources (uranium, lumber, etc.). No country wants to leave the euro. And none will do so voluntarily.
You could say that Europe had a very bright future in 1788 because of its large and growing bourgeoisie as well.
A policy that binds nations to a single currency yet lets each determine their own fiscal and tax policy obviously does not work.
How does it apply to the US ... it does not at all I would believe as per your guidance ... :-)
The Euro Crisis and The Euro Collapse- Germany is pushing Greece into debt deflation
There is a big difference between a liquidity problem and a solvency problem. When a company or a country has enough assets to cover its liabilities but they have a problem raising the money they need to pay off the loan they have a liquidity problem. But when an entity has more debt than it can serve than it has a solvency problem and in that case more debt and loans will only dig it into a bigger hole. Greece has a liquidity problem since it has much more debt than the economy can serve. Germany and the Euro are perhaps will to give them loan in attractive interest rates but unless they are willing to consistently transfer money from the core of Europe to the weak countries those countries are doomed.
If German politicians think they can convince there citizens to fund Greece's recklessness throw transfer payments all I have to say to them is GOOD LUCK!
http://israelfinancialexpert.blogspot.com/2010/02/euro-crisis-and-euro-c...
The next shoe to drop? China's Move to Curb Inflation: Good News for the Mainland, BAD NEWS for U.S., Strategist Says
If you're looking for a fresh - and refreshing - take on the Greek crisis, here's a little tidbit from Patrick Cockburn over at Counterpunch that will stoke your anger:
http://www.counterpunch.org/andrew02122010.html
I particularly liked this paragraph which offers a vision of the vermin that have stolen everything but the kitchen sink over the last thirty years or so:
"Blankfein, according to Andrew Ross Sorkin’s book 'Too Big to Fail,' displays a framed Gary Larson cartoon on his office wall. It depicts a father and son looking over the garden fence at a line of wolves entering the house next door. 'I know you miss the Wainwrights Bobby,' the father is saying 'but they were weak and stupid people, and that’s why we have wolves and other large predators.'"
If the Greek people will be looking for someone to eviscerate next week, they'll need to descend a level deeper than they are most likely to. Its only then that one finds the putrescent mass at the core of their problems.
My favorite Gary Larson is appropos of the chances we have of getting ourselves out of this economic and debt fix. The cartoon is of a man carrying a gas can and walking away from a vehicle which has written on the side "Time Machine". Also in the photo are various dinosaurs chomping on brush.
A couple of things stand out ... for me. The shadow economies are interesting. Am I wrong to hope Canada's shadow economy, where I live, increases? It seems to me that a small shadow economy indicates either strict control or a permissive state. It could be either.
The European union is in part a reaction to centuries of warfare. As long as that is not forgotten it will survive.
Whiel one can certainly blame GS for many misdeeds,I tend to disagree with "Andrew Cockburn" artilcle(why all people has anything to do with finance,usually have common names?You find a lot of Andrews,Nigels,makes you think that the Brits are the finance wizards of the world while their country is close to bankruptcy)."Poor Greece" has many options in its hands. It can simply declare bankruptcy,or it can print its way out after leaving the union. Now I can blame Somebody,because I save and don't borrow,if somebody else makes my saving worthless. But frankly,if I borrow my way into riches, I can't blame my lenders if they come after me when their money is due. So mixing up issues actually don't help the case against GS and other parsites. In fact it only help enforcing an image of a blacksheep where people arre trying to unload each and every world problem on them. And in fact it gives them a lot more credit. This is a Mafia like organization,and it is successful only becuause of what it had bought,and the cleaning "elliot"is not here yet.
Forgot to mention that the population of Europe didn't want the Euro, but was voted in any way. I know, I know conspiracies don't exist, but PIIGS fly.
"What about the United States as an example of a currency union that can survive a severe recession."
Er, the US is COUNTRY, Europe is a CONTINENT. The EU is a soft-left version of the Soviet Union that will end the same way that shithole did.
this is an excellent post. Unfortunately, the Euro is not done as some suggest here because it is a "political" currency.
Missing: **To Whom** the greeks owe the money.
You owe a bank 10,000, it's your problem.
You owe the bank 10,000,000, it's the Bank's problem.
I think the european pension funds expecting to draw down and cover retiring dutch/british/german/french pension costs, will want to protect thier investments..
I was with the guy until he got to "investment implications" in which he offered that they are overweighting U.S. equities and shortening EU bond durations?
And this passes for insight?
The Euro is the main problem!! The Germans and French should have known it would create boom and bust cycles in a monetary zone without political union!
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