There was talk about renaming the Krugman thread for this purpose, but that seems to be going nowhere. Besides which, I feel the Krugman thread should be left to discuss Krugman while this thread can be used for more general economic discussion.
Discuss:
- The merits of competing theories.
- The role of the government in managing the economy.
- The causes of and solutions to our current economic woes.
- Comparisons between the economic systems of different countries.
- Theoretical and existing alternatives to our current market system.
edited 17th Dec '12 10:58:52 AM by Topazan
Oh, aye - we've already covered the bullshit HSBC has gotten up to and JPMC is no different. When fines for blatantly illegal shit are basic operating expenses for a bank, we have a problem.
Lost in Space
As I understand it, JPMC's problem was partly that it acquired a bank that had been deeply involved with mortgage fraud, then got on the hook for that bank's liabilities.
Anyway, bank bailouts are typically funded by borrowing, not tax revenue, at least in a sovereign currency issuer. The problem with Greece is that it lacks access to capital markets due to its effective default status, so it has no capacity to fund its banks if they get into trouble. They've been reliant on the ECB for emergency capital, which is part of the hold that the troika has over the country.
The "taxpayers on the hook" meme is both trite and misleading. Ultimately, "taxpayers" are collectively on the hook for everything in an economy, but some effects are stronger than others — letting banks fail is generally worse in the long term than saving them, for everyone involved. That said, we should be making breakups of overly large institutions — and the return of executive compensation — a part of the deal to save them to help diffuse systemic risk.
edited 3rd Jul '15 5:14:45 AM by Fighteer
"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"
What Fighteer means by "systemic risk" is the risk the entire financial system is taking when the banks own each other's securities. When everyone is borrowing from each other and in debt to each other, then when one major player goes under, they all do. The fewer big banks there are, the more likely this is to happen.
And I wasnt making a distinction between "banks" and other financial services firms. Technically, you all are right.
V
UberPOP halts service in France after clampdown, protests
After fierce protests last week by licensed French taxi drivers who argue it threatens their livelihood with unfair competition, France took two executives from California-based Uber into custody and said they will face trial in September.
France's legal clampdown was the latest setback for Uber in Europe. An Italian court in May banned unlicensed car-sharing services, two months after a German court issued a similar ban and imposed stiff fines for violations of local transport laws.
"We have decided to suspend UberPOP in France from 1800 GMT (1400 EDT) this Friday evening, primarily to assure the safety of Uber drivers," Uber France head Thibaud Simphal told Le Monde daily, adding that some drivers had been targets of violence.
"The second reason is that we want to create a spirit of reconciliation and dialogue with public authorities to show we are acting responsibly," he said.
Prime Minister Manuel Valls welcomed the decision but said France's licensed taxis needed to improve the quality of their service, often criticized by locals and foreign visitors.
"Taxis need to reform too, to contribute to our country's attractiveness," he told reporters at an event in east France.
In a June 25 protest in numerous French cities, cabbies blocked roads to the capital's airports, overturned cars and burned tyres to press for the scheme to be abolished. Police said 70 cars were damaged and seven police officials injured in the protests. Ten people were arrested.
For its part, Uber argues it is offering a much-needed service that complements licensed taxis and is offering a sideline income for some 10,000 people in France.
So, it looks like licenced Taxi Drivers have won in France, and increasingly in the rest of Europe. In general, that's what the transport business in Europe is like.
edited 3rd Jul '15 10:27:18 AM by Greenmantle
Keep Rolling On
Honestly not unexpected. Europe has a stronger tie to unions than the U.S. does, so to speak.
Bruce Greenwald: The Death of Manufacturing
Mark Thoma: The Problem with Completely Free Markets
Krugman: Europe's many economic disasters
...So let’s talk about something else… Finland, which couldn’t be more different from that corrupt, irresponsible country to the south… a model European citizen; it has honest government, sound finances and a solid credit rating, which lets it borrow money at incredibly low interest rates. It’s also in the eighth year of a slump that has cut real gross domestic product per capita by 10 percent and shows no sign of ending…. If it weren’t for the nightmare in southern Europe, the… Finnish economy might well be seen as an epic disaster. And Finland isn’t alone. It’s part of an arc of economic decline that extends across northern Europe through Denmark–which isn’t on the euro, but is managing its money as if it were–to the Netherlands. All of these countries are, by the way, doing much worse than France…. And what about southern Europe outside Greece?… Spain… real income per capita that is still down 7 percent from its pre-crisis level. Portugal has also obediently implemented harsh austerity — and is 6 percent poorer than it used to be….
What’s striking at this point is how much the origin stories of European crises differ…. The Greek government borrowed too much…the Spanish government didn’t… private lending and a housing bubble… Finland’s story doesn’t involve debt… [but] weak demand for forest products… and the stumbles of Finnish manufacturing…. What all of these economies have in common, however, is that by joining the eurozone they put themselves into an economic straitjacket…. [Was] creating the euro… a mistake? Well, yes. But that’s not the same as saying that it should be eliminated now that it exists. The urgent thing now is to loosen that straitjacket… a unified system of bank guarantees… a willingness to offer debt relief… a more favorable overall environment… by renouncing excessive austerity and doing everything possible to raise Europe’s underlying inflation rate–currently below 1 percent–at least back up to the official target of 2 percent. But there are many European officials and politicians who are opposed to anything and everything that might make the euro workable, who still believe that all would be well if everyone exhibited sufficient discipline. And that’s why there is even more at stake in Sunday’s Greek referendum than most observers realize.
edited 3rd Jul '15 1:06:17 PM by PotatoesRock
From Krugman's NYT article in your link, here's the bottom line.
The NYT article is more aggressive about the need to kick the austericrats in the ass.
edited 3rd Jul '15 4:20:51 PM by Ramidel
I have very little doubt the outcome will be "no".
I'm not as confident. The Greeks wanted to stay in the euro without austerity, which turns out to have been a desire to have their cake and eat it (because the central figures of the Euro want austerity). Now the eurocrats have made it clear that austerity is not something subject to popular vote, which leaves Greece with the choice of either kowtowing or leaving.
I've been reading up foreign reserves which are basically assets held by governments in another currency.
My county for example has 80B$ forex reserves compared to 80B$ debt. (correcting, I mistook to-GDP percentage for actual amount)
I know that you can use the interest of money you loan out to pay down the interest of money you borrow and come out better than if you just pay off all your debt and do business without debt.
But the more complicated the math, the bigger the chance for fuck-ups even if there's not a single corrupt official handling the money.
I don't want to care about this. It's too damn infuriating.
edited 3rd Jul '15 7:36:42 PM by probablyinsane
Plants are aliens, and fungi are nanomachines.
Fuck you, Fascist sympathizers
Yeah, i'm worried that the Greeks will cower and kowtow, not willing to face the devil they don't know rather than continue to be whipped by the devil they know.
Except that "no" is the lesser evil.
For some reason, it's tough to find a list of (total, not just external) debt by gross amounts instead of ratio to GDP.
Philippines
Total Debt: approx. 129 B $
External (owed to foreigners) Debt: approx. 80 B $
Domestic Debt: 49 B $
Foreign Reserves: 79 B $
Japan
Total Debt: 11 T $
External Debt: 5 T $
Domestic Debt: 6 T $
Foreign Reserves: 1.267 T$
(decided to include Japan because I had been wondering how much of its debt is owed domestically).
Based on information from:
https://www.cia.gov/library/publications/resources/the-world-factbook/
Fuck you, Fascist sympathizers
Because gross amount matters little. What really matters is the service payments and how burdensome they are.
![[up]](https://static.tvtropes.org/pmwiki/pub/smiles/arrow_up.png "[up]"){kind=icon}
I suppose, but it's still funny that "total overall debt" is not included in long lists of economic factoids. (Or maybe it's there but they don't label it as debt...)
Had to figure it out by multiplying GDP by the "debt to GDP" ratio.
Plants are aliens, and fungi are nanomachines.
V
And even despite pushing for a "No" vote, Greece still wants to stay in the Eurozone.
![[down]](https://static.tvtropes.org/pmwiki/pub/smiles/arrow_down.png "[down]"){kind=icon}
Everybody thought it was a good idea at the time; the time being the late 1980s/early 1990s, about 1988-92.
edited 4th Jul '15 3:12:27 AM by Greenmantle
Keep Rolling On
Well, yeah. Greece doesn't want to have to deal with the mess of leaving the currency union. Who would?
More to the point, Greece thought it was a good idea at the time and didn't realize that they'd be taking on unelected pro-austerity bureaucrats.
edited 4th Jul '15 1:38:52 AM by Ramidel
Greek economists to Stiglitz and Krugman: Butt out!:
"...A yes vote would mean depression almost without end," said Stiglitz in a blog post this week. "By contrast, a no vote would at least open the possibility that Greece, with its strong democratic tradition, might grasp its destiny in its own hands."
Kind of quiet
Europe's creditor powers must finally face reality: Greece needs mass debt relief now
Looks like austerity isn't going to get the creditors their money back after all. Oh, dear...
Likely busy writing something.
Shameful Display
How much has Greece already slashed? Is the retirement age over their still 50? How big is their welfare state? I'm trying to get a handle on how much damage has been done. That said, I think Greece does need debt relief, could the IMF or the US forgive some of it's debt or give it money? It would help show we are relevant in the face of recent competition from China.
I Bring Doom,and a bit of gloom, but mostly gloom.
Fuck you, Fascist sympathizers
Seems like Greece is leaning towards "yes," which will topple Tsipiras.
Ugh.
The ECB wants Greece to commit economic suicide.
A vote no is like someone trying to jump out of a burning building. Is not a good choice, but what are you gonna do? be burned alive?
"leaning". I doubt that's anything more than western propaganda. They are tied. And the no vote seems to have more incentive to actually show up/
edited 4th Jul '15 8:53:32 AM by BAFFU
V
Since when was Greece not a Western Nation?note
HGW XX/7
I've been away from this thread for a while. Have we been talking about how the Chinese stock market just got hammered?
Is 2015 the year when the wheels finally fall off the cart?
Schild und Schwert der Partei
Lost in Space
It's been discussed. Overall, we don't expect a Chinese collapse to affect the U.S. that dramatically, but it will have serious impacts on nations that form part of China's manufacturing supply chain.
"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"
HGW XX/7
That's unfortunate. Those tend to be countries you want to do well.
Schild und Schwert der Partei
It's not good for us if biggest bank is good at settling out of court.
Their stock actually went up because investors expected the fine to be worse.
Plants are aliens, and fungi are nanomachines.