Dummies guide to what went wrong in Europe.

[The-Noid]

We already have a full guarantee from lenders, we are operating on that premise.

In short, the BoE is solvent, we don't have a problem at this point in time and our GDP-spending is in perfect order.

Yes, 8.2% of GDP (according to the CBI) in deficit for 2012, assuming the UK actually grows which after the exports report today looks suspect.

Definitely in perfect order...

The one thing I will say is I talk to people from the UK in finance on an every couple of day basis and all I hear about is how fucked things are. It's nice to see someone who is actually positive on things.

Friday, the BOE will explain the size and timing of the first auction under its new extended collateral term repo facility, or ECTR, which will offer sterling loans for six months to any banks in desperate need of funds. <-- countries and banks that are in good shape always need to do this as well...

 

[JohnOfSheffield]

Yes, 8.2% of GDP (according to the CBI) in deficit for 2012, assuming the UK actually grows which after the exports report today looks suspect.

Definitely in perfect order...

The one thing I will say is I talk to people from the UK in finance on an every couple of day basis and all I hear about is how fucked things are. It's nice to see someone who is actually positive on things.

Friday, the BOE will explain the size and timing of the first auction under its new extended collateral term repo facility, or ECTR, which will offer sterling loans for six months to any banks in desperate need of funds. <-- countries and banks that are in good shape always need to do this as well...

In a word, no.

It doesn't even matter if BOE goes belly up we'd still have solvent banks, we have guarantees for 13x that, we are doing so fucking well that the US would have to go back to the 1800's to be in the same position.

The US has never been financially solvent and never will be, it's a nation ran by seperate interests and they own everything from your economy to your politicians, it's a sham of a nation in it's entirety with democracy slapped on as a label that doesn't really stick.

 

[Rakewell]

we already knew this without the need for oversimplification;

My my... how defensive!

 

[The-Noid]

In a word, no.

It doesn't even matter if BOE goes belly up we'd still have solvent banks, we have guarantees for 13x that, we are doing so fucking well that the US would have to go back to the 1800's to be in the same position.

The US has never been financially solvent and never will be, it's a nation ran by seperate interests and they own everything from your economy to your politicians, it's a sham of a nation in it's entirety with democracy slapped on as a label that doesn't really stick.

I think I broke you.

Kind of fun.

Cheers with your 13x guarantees, is that on the full GBP 8.5 trillion of banking assets or only the smallish home loan portfolios from pre-crisis, we both know the answer to that. Also, a central bank can't go tits up. It just leads to inflation or possibly hyperinflation under any kind of circumstance that would truly lead to a breaking of the central bank's balance sheet. Hence why the ECB won't allow writedowns of its Greek PSI portfolio as it would be deemed an inflationary event, which the Germans would obviously be against.

 

[JohnOfSheffield]

I think I broke you.

Kind of fun.

Cheers with your 13x guarantees, is that on the full GBP 8.5 trillion of banking assets or only the smallish home loan portfolios from pre-crisis, we both know the answer to that. Also, a central bank can't go tits up. It just leads to inflation or possibly hyperinflation under any kind of circumstance that would truly lead to a breaking of the central bank's balance sheet. Hence why the ECB won't allow writedowns of its Greek PSI portfolio as it would be deemed an inflationary event, which the Germans would obviously be against.

You are using made up numbers to prove yourself right, that is the last refuge of a scoundrel.

You are amusing though.

And in fact that is for the full loaned income, which is less than one third of a dollar per capita whereas it's one 1000'th of the US debt per capita.

You are going from Greece which have an economy as unstable as yours to ours to other nations, you're all over the place and don't get EU economy at all.

We'll handle this, the Chinese dictatorship which you praise with the products you buy and the salaries you pay will handle yours.

We own our workforce and market, the Chinese owns yours. There is no debate to be had, you like your Chinese overlords too much.

Tell me, who makes the Chrysler, Pontiacs, IBM computers, APPLE computers, anything you can name, we still have Intel, AMD, ARM patents, you name it...

You sold out, we didn't.

 

[The-Noid]

You are using made up numbers to prove yourself right, that is the last refuge of a scoundrel.

You are amusing though.

And in fact that is for the full loaned income, which is less than one third of a dollar per capita whereas it's one 1000'th of the US debt per capita.

You are going from Greece which have an economy as unstable as yours to ours to other nations, you're all over the place and don't get EU economy at all.

We'll handle this, the Chinese dictatorship which you praise with the products you buy and the salaries you pay will handle yours.

We own our workforce and market, the Chinese owns yours. There is no debate to be had, you like your Chinese overlords too much.

Tell me, who makes the Chrysler, Pontiacs, IBM computers, APPLE computers, anything you can name, we still have Intel, AMD, ARM patents, you name it...

You sold out, we didn't.

Yes, made up.

Do you know how to read a balance sheet? My B-Unit is at my house, so will have to do it free hand, there is an index on BBG of total UK bank assets, I will post a screenshot tomorrow.

http://www.bloomberg.com/quote/HSBA:LN/balance-sheet GBP1.6T assets
http://www.bloomberg.com/quote/BARC:LN/balance-sheet GBP1.6T assets
http://www.bloomberg.com/quote/LLOY:LN/balance-sheet GBP970B assets
http://www.bloomberg.com/quote/RBS:LN/balance-sheet GBP1.4T in assets.

That's GBP5.6T or $8.68T US in assets just by the big four. There is another GBP3-4T in remaining banking assets, plus there's obviously conduit and securitized financing outside of that.

So the question becomes, do you lie and know you are lying, or are you really that out of touch with finance and economics in the UK? I think your slightly confused on who doesn't get the EU economy.

Again, if the European banking system gets sick, the UK gets the sick, the US gets sick and as you see by the Chinese GDP numbers they slow as well.

The advantage the US has is total debt (banking, public, private, etc) all inclusive 300% of GDP, total debt to GDP for the UK again exceeds 1100%.

 

[ShawnD1]

we already knew this without the need for oversimplification;

This. The crashes are always the same, and roughly 100% of all people in the developed world understand why. 1929 is always the example used in textbooks. The thing that is common in every case is that people are allowed to borrow money that they can't pay back. It sounds stupid that a bank (or people buying government bonds) would do such a thing, but it's based on the bond being used to buy something that is going to make money. If it's assumed that the house being purchased with this money will go up in value, then it doesn't matter if the person can't pay this loan. All they need to do is sell the house. That's fine for 1 person, but what happens with most of the loans are like this? Then everybody is forced to sell, the market value drops like a rock, and suddenly you're left with all this debt, no assets to back it up, and no way to pay it back.

All of the market crashes can easily be prevented just by putting some kind of limit on how much a person can borrow. If you can't pay this back with your current job and current assets, you should not be able to get a loan. That includes governments. If there's no way Greece can pay back a loan, then STOP GIVING THEM LOANS.

 

[Smoblikat]

Meh, looks ugly, flat chest, and wierd hair.

 

[Smoblikat]

If everyone is fucked, why dont we all pretend like nothing ever happened and forget about all the debts so we can have a functional world again ;p

 

[JohnOfSheffield]

Yes, made up.

Do you know how to read a balance sheet? My B-Unit is at my house, so will have to do it free hand, there is an index on BBG of total UK bank assets, I will post a screenshot tomorrow.

http://www.bloomberg.com/quote/HSBA:LN/balance-sheet GBP1.6T assets
http://www.bloomberg.com/quote/BARC:LN/balance-sheet GBP1.6T assets
http://www.bloomberg.com/quote/LLOY:LN/balance-sheet GBP970B assets
http://www.bloomberg.com/quote/RBS:LN/balance-sheet GBP1.4T in assets.

That's GBP5.6T or $8.68T US in assets just by the big four. There is another GBP3-4T in remaining banking assets, plus there's obviously conduit and securitized financing outside of that.

So the question becomes, do you lie and know you are lying, or are you really that out of touch with finance and economics in the UK? I think your slightly confused on who doesn't get the EU economy.

Again, if the European banking system gets sick, the UK gets the sick, the US gets sick and as you see by the Chinese GDP numbers they slow as well.

The advantage the US has is total debt (banking, public, private, etc) all inclusive 300% of GDP, total debt to GDP for the UK again exceeds 1100%.

And the advantage the UK has is the EU, which provides 116% more in financial promise whle the US is fighting a losing battle against itself.

And no, the UK banking system is independent enough with EU and UK base guarantees to cover ALL debts.

So you are just plain wrong but hey, since you are just making shit up, that will happen.

You are uneducated on this matter, you don't have the faintest clue regarding the safeties or the international guarantees nor do you understand that even if EVERY bank in the EU except British banks went belly up it wouldn't affect UK banks IN THE LEAST, well it would on the savings side and over time on the other side but the financial security is there.

the US are lending out foreign money and has been doing so for a good 20 years and people don't know this?

So no, we'd do fine of Greece would go belly up, the US would be MORE affected, if Spain and Italy goes the same route (i expect as much) then the US dollar will be 85% Chinese (they will buy the debt) but our banks are already protected against that.

No matter what, we're good.

 

[JohnOfSheffield]

If everyone is fucked, why dont we all pretend like nothing ever happened and forget about all the debts so we can have a functional world again ;p

Not too fucking bright are ya?

US=MONEY

EU=FREEDOM

in the way that Americans care about money mostly while Europeans are ok with higher taxes since they have a five week vacation, every weekend off and can still afford to live in a seven bedroom house and have two cars but no extra sattelite TV set for the bathroom.

 

[The-Noid]

And the advantage the UK has is the EU, which provides 116% more in financial promise whle the US is fighting a losing battle against itself.

And no, the UK banking system is independent enough with EU and UK base guarantees to cover ALL debts.

So you are just plain wrong but hey, since you are just making shit up, that will happen.

You are uneducated on this matter, you don't have the faintest clue regarding the safeties or the international guarantees nor do you understand that even if EVERY bank in the EU except British banks went belly up it wouldn't affect UK banks IN THE LEAST, well it would on the savings side and over time on the other side but the financial security is there.

the US are lending out foreign money and has been doing so for a good 20 years and people don't know this?

So no, we'd do fine of Greece would go belly up, the US would be MORE affected, if Spain and Italy goes the same route (i expect as much) then the US dollar will be 85% Chinese (they will buy the debt) but our banks are already protected against that.

No matter what, we're good.

I finally understand what you are attempting to explain in a very nationalistic way that is not based in fact; however your still doing a poor job doing it because you don't understand banking in the least. HSBC, BARCAP and SC are monumental derivative houses to the rest of the EU and huge borrowers of wholesale funding from EU banks. They could get the liquidity from the BoE; however if we see a real Euro funding problem, that will lead to EZ recession which will lead to solvency (not liquidity) problems for UK banks.

What you are attempting to say is that since the British control their own printing press and a vast majority of their debt is held internally (which is not factual, external UK debt is 350-400% of GDP and they are a net debitor) that your banks are protected. None of this takes into account capital of banks or really anything to do with banks (derivative books, sales and trading, wholesale funding). It's a feel good bedtime story your simple mind has contrived. I think you are confusing the FSCS and your simple savings account with the big picture, which is the firms balance sheet risk as a whole. The FSCS like the FDIC are both horribly underfunded entities that are feel good in nature, not there to actually protect the equity and balance of the firm, but to stop simpletons from withdrawing their deposits. You may not see a deposit run in the UK because of the FSCS, but that doesn't mean you won't see a bank failure from the wholesale and repo markets, i.e. Lehman and BSC (which failed not because deposits fled).

You really have no idea what you are saying and your posts amount to rambling, have fun with your 5 weeks of vacation and continued recession. I think its also been proved by the fact that I have pasted many links, you have no idea what you are talking about and I have not been wrong.

Like I said were all in the shit together. England has the loosest central bank in the world and the Fed is a close second, that is what is saving us because Spain and Italy can't carry on a whole lot longer with borrowing costs where they are (like you said) and it doesn't appear like the ECB is coming to the table anytime soon.

I

 

[Jhhnn]

Helga was actually a lot smarter than that. Helga's bar was actually owned by Helga's PE group, who had the bar borrow a lot of money based on sales & sales projections, paid themselves an enormous special dividend in the process. Helga's bar also securitized her customers' debt, offered what it held as collateral in the repo market for cash, paid more to the PE firm, then Helga's hedge fund bought protection in the synthetic derivatives market for 10X the value of the bonds.

When it all falls down, as planned, Helga's personal fortune will soar in ways that just selling booze to drunks never would have accomplished. All the other players take the high hard one. Yeh, her bar went broke & anybody it owed money got screwed- so what? Helga is fabulously rich.

Spain? Their banks got left holding the bag from their own housing bubble, and need to be bailed out or nationalized (actually EU-itized) Italy? A target for speculators. Greece? Greece is the Mississippi of Europe- if you want them to have money to buy your stuff, you can't loan them money- you have to give it to them.

As The-Noid offers, if the ECB doesn't come to their senses rather soon, then the Euro will collapse & even the most prosperous member states' economies will take an enormous & unnecessary hit.