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

#121

Post by bluedanieru » Thu, Oct 06, 2011, 5:28 AM UTC

blue1 wrote: post #51

jasonkolb wrote: post #45

While I generally abhor taxes, I really like the idea of a financial transaction tax. It would effectively eliminate the profit margin for high frequency trading and remove a LOT of volatility from the markets. IMHO the market volatility is causing the average person to doubt the stability of the economy and hurting the entire ecosystem. Even a small transaction tax... Say, $1/EUR per trade would remove the incentive…

By drastically reducing volume it would also reduce liquidity and increase spreads. Sweden tested this in the eighties and abandoned after seeing the market substantially dry up (and the resulting taxes as well).

It would certainly reduce liquidity and increase spreads, but I think that's the point. Stocks are not supposed to be a terribly liquid instrument, yet volume continues to outpace growth in the market. It's true that trading in Sweden basically moved to London when they tried this, which is part of why now you're seeing a push against this unless the entire EU hops on board, or even the entire world (however it will not happen in New York in a million years).

There are lessons to be learned from Sweden's experience, but I'm not sure you can necessarily point to as a definitive case study and say "See? It won't work."

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

#122

Post by tomjen3 » Thu, Oct 06, 2011, 6:29 AM UTC

tsotha wrote: post #106

tomjen3 wrote: post #97

Earlier quoted context omitted.

Well, yes they do. Unless the bamks are fdic insured, which I believe all banks are.

But bank failures cause a run on other banks. If the entire system collapses the FDIC will be unable to make good on its obligations.

The FDIC is backed by the full faith and credit of the United States and just like no politician will vote to reinstitute the draft, no politician will do anything but prioritize those payments very, very high.

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

#123

Post by derpapst » Thu, Oct 06, 2011, 6:35 AM UTC

zwieback wrote: post #49

derpapst wrote: post #19

Also interesting that the Economist continues to come up with the same kind of story every week. Just check the last Economist links that were posted on HN over tha last weeks and you will see that they all have the same message. To be honest, I would expect them to be more diverse.

That's what the Economist is all about, though - extremely well written and produced with a very predictable and consistent message and opinion.

Zwieback - that's the coolest alias I've seen for a long time :-D Are you plattdeutsch?

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

#124

Post by j_col » Thu, Oct 06, 2011, 7:41 AM UTC

Uchikoma wrote: post #116

j_col wrote: post #109

Earlier quoted context omitted.

Eh, who exactly is getting bailed out? I think you mean loans, which are expected to be paid back in full (and up until very recently, interest was also paid on these "bail outs" making it a profitable venture for the country doing the lending).

With bail out, I mean you default on the debt and I pay your dept towards a bank.

Nobody has defaulted (yet!).

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

#125

Post by coldarchon » Thu, Oct 06, 2011, 9:04 AM UTC

Aloisius wrote: post #36

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…

Are you saying Germany has no debt?

There's a difference between investment and debt. If your cash flow equals your debts, it's an investment.

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

#126

Post by wnight » Thu, Oct 06, 2011, 4:56 PM UTC

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…

> investors will no doubt assume that financial institutions are state-guaranteed

They are state-guaranteed. Too big to fail. Every piece of financial machinery for the debt circus is required and they can't get rid of it or let it fail without exposing the same functionality elsewhere.

As long as we use a debt-based state currency the banks can't be allowed to fail. At some point they'll just print new money and start fresh hoping it doesn't happen again.

Until we declare the debt-currency game to be unwinnable and stop playing, we'll keep losing.

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

#127

Post by wnight » Thu, Oct 06, 2011, 5:15 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…

IMHO the answer is to show Turkey what they're missing. Open our borders (Canadian specifically, but all ideally) to their mistreated (and those from everywhere else) and let them live happy productive lives.

Accelerate the brain-drain until nothing but the dictator is left, then go back and take over.

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

#128

Post by wnight » Thu, Oct 06, 2011, 5:20 PM UTC

samstave wrote: post #114

jonnathanson wrote: post #35

Earlier quoted context omitted.

The sentiment is justified, but the position is untenable. With every passing day, Greek debt compounds massively, and the hole gets bigger. Meanwhile, the uncertainty in the markets causes further volatility and pain for all concerned, and you risk the setting in of total panic. You end up with the worst of both worlds: all the market pain of a Greek default, without the default itself...but with the default still q…

It was mentioned today that the Greek government employs TWENTY PERCENT of the population - and there was a 100-year old constitutional law that prevented the effective firing of anyone working in the government. This is institutionalized graft and is surely a main contributing factor in the corruption.

Meh. Our governments (USA, Canada, EU) waste more, they just give it to lobbyists. At least this is a bottom-up instead of our top-down theft.

Given that the lower income you have the more of your income you spend, giving stimulus packages exclusively to the poorest members of society and letting it trickle up seems the only reasonable way to do it.

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

#129

Post by wnight » Thu, Oct 06, 2011, 5:35 PM UTC

HSO wrote: post #24

zerostar07 wrote: post #9

Earlier quoted context omitted.

It only makes sense, right? Personally i am quite pleased that the Germans lead this psychological warfare against the faceless 'markets', that are pushing more and more to funnel taxpayer's money in their ill-gone investments. As a greek, i find it ridiculous that the world's markets are turbulent over a tiny small country like Greece (the only PIGS country that is actually bankrupt), and exaggerate the risks so muc…

Have you ever thought twice about what exactly "faceless markets" are? Markets are composed of many agents, people, institutions, and mostly your pension money! It's true. Pension funds and other institutional investors are the single-largest segment, esp. of sovereign bond markets! Now ask yourself, with the Greek government in its current position, if it came to you today and asked you to lend it money, not to inve…

> Now ask yourself, with the Greek government in its current position, if it came to you today and asked you to lend it money, not to invest it in some thing or other but merely to pay back previous creditors, would you do it?! Yeah, me neither...

Absolutely not. Nobody rational would. That's the point.

>> [...] this psychological warfare against the faceless 'markets', that are pushing more and more to funnel taxpayer's money in their ill-gone investments. > Have you ever thought twice about what exactly "faceless markets" are? Markets are composed of many agents, people, institutions, and mostly your pension money! It's true.

Yeah, so? They don't have to step up and ask for a loan. They just sit back in their masses and demand institutionalized theft to bail out their investments.

And why does it suddenly make things right that it's just regular people doing it?

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

#130

Post by Iv » Fri, Oct 07, 2011, 7:17 AM UTC

tsotha wrote: post #100

Iv wrote: post #37

Earlier quoted context omitted.

I see only one way out : find responsibles and punish them. Through fines and prison terms. Some people have hidden the true state of Greece by fraudulent accounting with the help of experts from Goldman Sachs. Politician who participated in that should be judged for treason. Financial experts for fraud. Goldman Sachs must be fined heavily for this. Right now, Dexia is falling despite 6 billions of aid in 2008 and a…

Throwing people in jail, however satisfying, is not a "way out".

If you want to make heavy and painful reforms, putting culprits in jail is the way to undergo the reform without riots.