Europe -- Its still a jungle out there..

[anders]

"Voluntary" what does it mean... and CDS contracts doesn't get written down since it would be voluntary.. but if a creditor is using CDS to hedge and decides not to participate, then he would still hold his original debt claim and CDS hedge..?

 

Banks must now set aside 9% of funds -- or put in another way, raise 106 Billion euros in coming 8 months.. how are they going to be able to achieve that without going to the equity market..? The Governments, but where are those money going to come from since ECB wont print money..?

 

How long before other troubled nations start to ask for cuts..Why should the top-performers in Ireland pay dearly while demonstrators in Greece get the easy way out..?

 

Furthermore, they don't actually put in money into the pot but instead lever the EFSF 4x-5x.. If Europe doesn't get actual economic growth, this solution is just a massive SIV with levered risk..

 

I don't get it..  ???

 

 

[Baoxiaodao]

Me neither. The key words are "kicking the can as hard as you can".

[Zorrofan]

A big fear for Germany is that every other PIIG will want a deal like Greece now. Could Ireland be next??

 

http://news.businessweek.com/article.asp?documentKey=1376-LTRXIX0UQVI901-563C0GK2TCSTS7GP8C2NDFUO2F

 

What happens if Spain, italy, Portugal and Ireland all want a deal?  Perhaps 1.4 trillion euros won't be enough??

 

cheers

Ziorro

[Santayana]

What if the holders of Portugese, Spanish and Italian debt that have thought they were hedged by CDS contracts decide that since their hedge is unlikely to be honored, they better scale back their positions? 

[Parsad]

What happens if Spain, italy, Portugal and Ireland all want a deal?  Perhaps 1.4 trillion euros won't be enough??

 

That may not be as appealing as you think.  Greece is going to have to implement severe austerity measures, sell state assets, implement higher taxes, mass layoffs and possible future sanctions by the EU if they aren't done.  Would you rather go through what Greece is going to have to do, or try and take your future into your own hands?  Cheers!

[Zorrofan]

What happens if Spain, italy, Portugal and Ireland all want a deal?  Perhaps 1.4 trillion euros won't be enough??

 

That may not be as appealing as you think.  Greece is going to have to implement severe austerity measures, sell state assets, implement higher taxes, mass layoffs and possible future sanctions by the EU if they aren't done.  Would you rather go through what Greece is going to have to do, or try and take your future into your own hands?  Cheers!

 

True, but to a degree these countries are already implementing these measures. One shouldn't discount political pressure as well - home country taxpayers will be upset "Greece got a deal but we didn't".  Merkel is already worried about this as she made a statement earlier today trying to discourage others from seeking a debt writeoff.....

 

cheers

Zorro

[Parsad]

What happens if Spain, italy, Portugal and Ireland all want a deal?  Perhaps 1.4 trillion euros won't be enough??

 

That may not be as appealing as you think.  Greece is going to have to implement severe austerity measures, sell state assets, implement higher taxes, mass layoffs and possible future sanctions by the EU if they aren't done.  Would you rather go through what Greece is going to have to do, or try and take your future into your own hands?  Cheers!

 

True, but to a degree these countries are already implementing these measures. One shouldn't discount political pressure as well - home country taxpayers will be upset "Greece got a deal but we didn't".  Merkel is already worried about this as she made a statement earlier today trying to discourage others from seeking a debt writeoff.....

 

cheers

Zorro

 

Greek debt is primarily restricted to European banks.  Spain, Italian, Portuguese and Irish debt is held by many other countries outside of the European Union, thus they would never get such concessions by non-European banks or nations.  Cheers! 

[Ballinvarosig Investors]

What happens if Spain, italy, Portugal and Ireland all want a deal?  Perhaps 1.4 trillion euros won't be enough??

 

That may not be as appealing as you think.  Greece is going to have to implement severe austerity measures, sell state assets, implement higher taxes, mass layoffs and possible future sanctions by the EU if they aren't done.  Would you rather go through what Greece is going to have to do, or try and take your future into your own hands?  Cheers!

In Ireland, we have all that already.

 

The state-run electric and gas company is soon to be put on the auction block.

 

We have been bombarded with massive tax increases (income tax is up, lower-paid workers being brought into the tax net, water charges, property taxes, etc.).

 

There is a ban on new public sector employment and many public sector workers are been pushed into early retirement.

 

What I have outlined isn't even the end of it for Ireland. Under the EU/IMF bailout deal, it is planned that we will have austerity budgets every year until the end of 2015, when it is expected that we finally bring our deficit to under 3%.

 

The European crisis isn't over by a long shot and the action that has been taken this week has just introduced even more moral hazard. Nations like Portugal, Ireland, Spain and Italy, which are already teetering on the brink are now being told that if they do miss their targets and end up becoming a complete basket case, they'll have their debts written off. Also, the measures of this week do nothing to address the real issue of why Europe is a basket case (i.e. because most countries simply cannot live within their means).

 

I'm getting really sick of hearing this phrase, but this is yet another instance of the can being kicked down the road.

[Packer16]

The first quote I heard out of Greece was that there was to be more additional austerity.  If this is true, all the other PIGS are going to want in.

 

Packer