Why Germany seems not to want a quick fix for the euro crisis • Hacker News Board

Re: Why Germany seems not to want a quick fix for the euro crisis

#81

Post by gahahaha » Wed, Oct 05, 2011, 6:07 PM UTC

yequalsx wrote: post #23

zerostar07 wrote: post #14

Earlier quoted context omitted.

Others will jump in to say that markets are not predictable like chemical bonds, but i would counter-argue that they should be more predictable and less fear-and-rumour-driven

A great quote from Galbraith is appropriate here. "The markets can stay irrational a lot longer than you can stay solvent." I don't know exactly what you mean by should but whether or not fear and rumor should drive markets the fact remains that they do sometimes drive markets.

The quote is not by Galbraith but Lord Keynes. Still true, tho'.

Re: Why Germany seems not to want a quick fix for the euro crisis

#82

Post by zerostar07 » Wed, Oct 05, 2011, 6:07 PM UTC

cbr wrote: post #67

zerostar07 wrote: post #39

Earlier quoted context omitted.

I fail to believe that markets serve the common good when the price of gold (a barely useful metal that on its own can't feed a single child) soares and also that the economic output of europe relies on greece. That's what the market would suggest. I'm not saying kill the markets, i just like rational markets. PSI invested in greek bonds (for 10 years now), for their own reasons, let them take the hit.

Gold is "barely useful"? See http://en.wikipedia.org/wiki/Gold#Use_and_applications , especially "Industry". You are right that the price of gold is far higher than it would be if people weren't using it for investing, though.

"The world consumption of new gold produced is about 50% in jewelry, 40% in investments, and 10% in industry."

If the value of gold was determined by industrial demand only, it would be a fraction of what it is now.

Re: Why Germany seems not to want a quick fix for the euro crisis

#83

Post by _delirium » Wed, Oct 05, 2011, 6:09 PM UTC

hugh3 wrote: post #73

phillmv wrote: post #31

Earlier quoted context omitted.

This is what I hate, hate, hate about all the language used to describe the PIIGS. Deadbeats! Irresponsible losers! Well, a little bit but – someone had to lend them the money in the first place . The liquidity crisis of 2008 hit everyone…

Sounds like Animal House: "You fucked up! You trusted us."

That happens pretty commonly even in a traditional view of debt, though the dividing line for whether the lender or lendee is more to blame varies. At one extreme, if you lend money to an alcoholic who's well known for not paying back his loans, and he spends it on alcohol and doesn't pay you back, not too many people will be sympathetic to you for making an obviously-stupid loan. In fact they might blame you for enabling bad behavior in an entirely predictable way. And if you lend so much money that his failure to repay puts you in risk of going bankrupt yourself, then people will really think you're irresponsible...

Re: Why Germany seems not to want a quick fix for the euro crisis

#84

Post by [deleted] » Wed, Oct 05, 2011, 6:20 PM UTC

overgard wrote: post #15

paulkoer wrote: post #5

As a German I must say that in my opinion this article captures the German sentiment very well. On the one hand it is short sided, it will likely lead to more economic problems than necessary and the stance of the Euro members (and Germany especially) on Greece is hurting the economy there much more than necessary. On the other hand I do feel that some of this sentiment is justified. After all the example of Italy (B…

The german government seems really wise in this regard. The notion that there are any easy "fixes" to something as complex and intricate as an economy is very suspect to me. Things like quantitative easing seem way more dangerous than simply making sure your financial fundamentals are sound.

[deleted]

Re: Why Germany seems not to want a quick fix for the euro crisis

#85

Post by [deleted] » Wed, Oct 05, 2011, 6:22 PM UTC

discreteevent wrote: post #61

yequalsx wrote: post #27

Earlier quoted context omitted.

I've said this over and over again to Germans that I know and they simply don't believe what you say. They really think that they are bailing out profligate Greeks and that there is no benefit to them. Politically, it isn't feasible for Merkel to come out and say that German banks need to be bailed out. It's much easier to talk about European unity and solidarity as the reason for "bailing" out Greece. Germans pride…

I agree. The simplest way to make this clear is to simply let the Greek banks default (and any other banks for that matter). This will expose the German banks and the German Government will be forced to bail them out. This bailout will be a much easier sell than the current one as it will be clear to the German taxpayer that they are bailing out their own banks who made bad bets out of greed, lack of diligence and ju…

[deleted]

Re: Why Germany seems not to want a quick fix for the euro crisis

#86

Post by jules » Wed, Oct 05, 2011, 6:29 PM UTC

jfruh wrote: post #71

IdeaHamster wrote: post #57

Earlier quoted context omitted.

There's an interesting extension of this line of thought. My sister-in-law works in Istanbul for a Greek company. She says that most of the actual profit-generating work done for this company is done in Romania or Turkey. The Greek offices, from what she describes, are more or less completely dysfunctional. Now, take that insight of conditions on the ground along with a chart of the growth of the Greek vs Turkish eco…

Human rights are a factor, plus there's the fact that Turkey is a Muslim country, though many in the EU won't admit that. But even that could probably be overlooked if not for the fact that Turkey is a huge country. With a population of 73 million people (and a growing population, whereas many European states are stagnant in this regard), Turkey would immediately become the second-largest EU state, which means more m…

Some Turks joke that the Turkish army has the largest gay porn collection in the world.

According to a Turkish friend of mine, yours is not an accurate characterization of Turkey. There are still huge problems with democracy, power of the army, corruption, media controlled by people in power, torture, Cyprus, and more. According to him many of these things are worsening -- he is afraid that Turkey is going to go further in the direction of Syria instead of the EU. Telling is the 6 month compulsory military service for all men, except gay men, who are barred from military service and are considered to have a disease in need of treatment by the minister of family affairs. Those who follow the rules (and choose safety over the risk of rape and violence) and disclose that they're gay are asked to supply photographic evidence of enjoyment of being penetrated as proof (being exclusively the active sexual partner is not considered gay). The less lucky have to undergo a rectal medical exam. Additionally on the point of censorship: gay organisations' web sites are being blocked by the government.

Despite improvements in the economy Turkey is not yet fit for joining the EU. Sadly "stuff like the acceptance of evolution" (see below) is one of the least of the concerns.

Re: Why Germany seems not to want a quick fix for the euro crisis

#87

Post by Atropos » Wed, Oct 05, 2011, 6:34 PM UTC

abollaert wrote: post #62

tftfmacedo wrote: post #60

Earlier quoted context omitted.

Regarding Turkey negotiations, I guess you know why. Human rights issues ( http://en.wikipedia.org/wiki/Human_rights_in_Turkey ), Cyprus, death penalty.

The cynic in me sometimes wonders if this argument is used as a red herring, and that there are other issues that need sorting out (involving money and control).

Of course there are control issues as well, turkey has 73 million population and so would instantly be the 2nd largest voting bloc, very likely to become the biggest due to demographics in the future. It would make sense to have a much stricter standard for accepting large than tiny countries as new members.

Re: Why Germany seems not to want a quick fix for the euro crisis

#88

Post by Uchikoma » Wed, Oct 05, 2011, 6:55 PM UTC

discreteevent wrote: post #61

yequalsx wrote: post #27

Earlier quoted context omitted.

I've said this over and over again to Germans that I know and they simply don't believe what you say. They really think that they are bailing out profligate Greeks and that there is no benefit to them. Politically, it isn't feasible for Merkel to come out and say that German banks need to be bailed out. It's much easier to talk about European unity and solidarity as the reason for "bailing" out Greece. Germans pride…

I agree. The simplest way to make this clear is to simply let the Greek banks default (and any other banks for that matter). This will expose the German banks and the German Government will be forced to bail them out. This bailout will be a much easier sell than the current one as it will be clear to the German taxpayer that they are bailing out their own banks who made bad bets out of greed, lack of diligence and ju…

German banks are - by a large margin - not the most exposed to Greece. French banks for example are much more exposed to Greek dept. If Greece fails, this will hit German banks, but other banks much more, it might be especially hard for countries with a smaller GDP and a higher bailout/GDP ratio.

As a German taxpayer I don't care whom I bail out.

Funny thing: People talk about Germany, instead of Greece. Sure, bailing out German banks will cost some money, a state breakdown in Greece will cost Greek people much more.

Re: Why Germany seems not to want a quick fix for the euro crisis

#89

Post by lispm » Wed, Oct 05, 2011, 6:56 PM UTC

jtbigwoo wrote: post #63

gibsonf1 wrote: post #26

I have no idea why Keynesian ideas are assumed as the proper way to solve economic problems when, in fact, they never work. Germany is unusual, especially in comparison to the United States, in that they make a point of only spending the money they have. They have been watching the "wonderful" results of Keynesian intervention in the US recently and around the world and likely noticed that the results are always grea…

...they make a point of only spending the money they have. Germany has the third-highest public debt in the world with only the fifteenth-highest population. Their debt is much higher as a percentage of GDP than the U.S. (83% vs. 62% according to the CIA world Factbook. [1]) They've spent plenty of money they don't have. [1] https://www.cia.gov/library/publications/the-world-factbook/...

But Germany was/is in a very different situation. We are absorbing since twenty years a formerly communist econom - the GDR. Germany had little choice than invest a lot of money to do so. If you look at current policies, they are much about getting the debt problem under control.

Re: Why Germany seems not to want a quick fix for the euro crisis

#90

Post by jfruh » Wed, Oct 05, 2011, 6:58 PM UTC

jules wrote: post #86

jfruh wrote: post #71

Earlier quoted context omitted.

Human rights are a factor, plus there's the fact that Turkey is a Muslim country, though many in the EU won't admit that. But even that could probably be overlooked if not for the fact that Turkey is a huge country. With a population of 73 million people (and a growing population, whereas many European states are stagnant in this regard), Turkey would immediately become the second-largest EU state, which means more m…

Some Turks joke that the Turkish army has the largest gay porn collection in the world. According to a Turkish friend of mine, yours is not an accurate characterization of Turkey. There are still huge problems with democracy, power of the army, corruption, media controlled by people in power, torture, Cyprus, and more. According to him many of these things are worsening -- he is afraid that Turkey is going to go furt…

I am not at all trying to minimize Turkey's real problems. But many of the Eastern European EU states also have some of the same or similar problems (particularly Romania and Bulgaria). In their cases much of the reason given for admitting them to the EU was that membership would bring them closer to European norms. (Indeed, this is an incentive held out by those in Europe who favor Turkish EU membership.)

My point is that all these problems would be easier to ignore or fix if Turkey had 10 million people. At 70 million, they'd have such a strong voice in EU institutions that they'd be as likely to change the EU as vice versa.