The future of the Euro and EU.

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Originally Posted by BDunnell

A fair point, but did those in those instititions that didn't fail whose actions helped precipitate the 2008 crisis believe their firms would be bailed out?

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People in those institutions might not have known for sure they would be bailed out, but they just knew there would be some sort of safety net to prevent them from falling through the cracks. In the modern day world a lot of people live under that perception, whihc quickly becomes a proven fact.

I don't know where this scheme of things originated from. Maybe, from globalization. Everybody and everything is so interconnected these days, that in the short term it is a safer option to bail out losers than let them fail and drag you with them. But then again, every temporary solution in the shape of a bailout or something similar only postpones a major systemic crash.

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Originally Posted by Rudy Tamasz

People in those institutions might not have known for sure they would be bailed out, but they just knew there would be some sort of safety net to prevent them from falling through the cracks. In the modern day world a lot of people live under that perception, whihc quickly becomes a proven fact.

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I suspect you've never met a banker or understand how they think.

Before the credit crunch hit, they didn't even explore in their minds what would happen if the system failed. They didn't 'know' what safety nets were in place nor did they care, after all the system WOULD NOT FAIL. How could it? The worst case scenario for them was as it had been for decades, an individual bank would make a catastrophic loss for whatever reason and would have its assets bought up by its competitors.

Bankers for the most part do not see the big picture. They are superspecialised and are incredibly good at what they do but often have little idea how the decisions they make affect their bank or industry as a whole. The idea that they would have behaved differently had they known that bailouts were or were not in place is simply false.

Once the credit crunch hit Wall Street hard, a lot of bankers absolutely crapped themselves because George W Bush set an early precedent with Lehmann Brothers, he let it fail as a lesson to other banks. Lehmann Brothers rejected an offer from China or South Korea the week before because they felt that associating themselves with those investors was beneath them. For a while therefore bankers faced the reality that banks would be allowed to collapse entirely and the sense of panic from top down was really something.

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Originally Posted by Rudy Tamasz

in the short term it is a safer option to bail out losers than let them fail and drag you with them. But then again, every temporary solution in the shape of a bailout or something similar only postpones a major systemic crash.

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This I agree with, and it is unbelievable that on both sides of the Atlantic there have been no major moves to increase regulation of the financial sector to prevent a repeat, although it is also true that banks now have to increase their liquidity to make another credit crisis less likely.

It is a pity that these companies are able to manipulate government policy so overtly by well placed 'donations' to the right political groups, preventing the right action from being taken.

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Originally Posted by Malbec

Bankers for the most part do not see the big picture. They are superspecialised and are incredibly good at what they do but often have little idea how the decisions they make affect their bank or industry as a whole.

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Let alone anyone outside that industry.

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Originally Posted by BDunnell

Let alone anyone outside that industry.

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No, and the opinions they do hold about people outside the industry are often ignorant and downright offensive.

Papandreou now wants to put the whole deal to a referendum in Greece. Greek cabinet backs referendum - Europe - Al Jazeera English

He also has to survive a no confidence motion this Friday. The Greeks love a tragedy. No matter what a TV program is, comedy, war, or a serial, it has to end in tragedy.
I think this will end in a Greek Tragedy.

Not too far from the truth there VB.

Either the nationalistic bandwagon will inspire the Greek people to cut their nose off to spite their face and throw off the Euro or the Greek Govt will wheedle more concessions out of the Euro spineless bureaucrats to bribe the Greek Govt with.

Whatever happens, the Euro is shagged. The next failing country knows they can blackmail the EMF and Euro nations until the whole of Europe is throughly bankrupt and crashes.

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Originally Posted by ArrowsFA1

why the rest of Europe doesn't tell us to get stuffed more often I have no idea. Our commitment to Europe is half-hearted at best, and yet our politicians are quite happy to lecture the rest of Europe.

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If they stopped dictating to us from Brussels, maybe we would STFU! ;)

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Originally Posted by Knock-on

until the whole of Europe is throughly bankrupt and crashes.

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10, 9, 8, 7............. ;)

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Originally Posted by Knock-on

Not too far from the truth there VB.

Either the nationalistic bandwagon will inspire the Greek people to cut their nose off to spite their face and throw off the Euro or the Greek Govt will wheedle more concessions out of the Euro spineless bureaucrats to bribe the Greek Govt with.

Whatever happens, the Euro is shagged. The next failing country knows they can blackmail the EMF and Euro nations until the whole of Europe is throughly bankrupt and crashes.

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The problem for you British is the fact that you'll go bankrupt too but you've got no say in the measures to stop that from happening since you're not part of the Euro. Those spineless bureaucrats will decide your destiny too.

To me the Greeks are mad. Let them say no in the vote, I mean if they want to destroy themselves, go ahead.

The sooner Germany and to a lesser extent France wise up that Greece needs to be allowed to default NOW the better. The more money they throw has to come from somewhere, and how will that get replenished.

The entire Eurozone is stalling economically, the money will run out and the debts thus far amounted to buy Italian bonds and prop up Ireland/Portugal etc will bring the whole kit and kaboodle to its knees.

It's like watching a cancer spread, knowing that it will claim the life very soon.