i've seen that example before. it sounds too good to be true, and it is!
none of the participants in the example is a net debtor to start with... each has assets of +€100 and liabilities of -€100 and ends up with assets and liabilities of €0.
Eurozone debt crisis
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CaerMyrddin
- Posts: 1271
- Joined: Mon Sep 07, 2009 10:47 am
The problem is that most of the money is being stuck at the banks and they aren't lending to the real economy. It's as if they we're the hotel owner, and simply kept the money because they thought it was safer to have it in his hand (in this case book and do they need money in their books!).
Most companies small and large are not investing at the moment until they feel confident it will be worthwhile. If confidence returns there will be a big bounce, but the politicians and electorate are doing their hardest to dent business confidence at every turn at the moment. The economy is stuck in a wait and see scenario.
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superfrank
- Posts: 2762
- Joined: Fri Aug 14, 2009 8:28 pm
imo that's because the credit bubble has not yet been dealt with, just papered over. if things had been left to sort themselves out naturally we'd have had a harsh and deep recession, but by now we'd be seeing signs of real recovery. now we're left with a semi-permanent recession where the structural problems have not been resolved. zombie banks, zombie economies. it's what happens when people interfere with market forces.Euler wrote:Most companies small and large are not investing at the moment until they feel confident it will be worthwhile. If confidence returns there will be a big bounce, but the politicians and electorate are doing their hardest to dent business confidence at every turn at the moment. The economy is stuck in a wait and see scenario.
I agree.
Just to cheer us up, tonight: -
The great Euro crash
http://www.bbc.co.uk/programmes/b01hy4xr
Just to cheer us up, tonight: -
The great Euro crash
http://www.bbc.co.uk/programmes/b01hy4xr
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superfrank
- Posts: 2762
- Joined: Fri Aug 14, 2009 8:28 pm
i can't wait!
UK property market broken, housing groups say
http://www.bbc.co.uk/news/business-18098956
this is a great example of what we're talking about re investment.
the housing market has been artificially propped up with record low interest rates, stamp duty holidays, SMI, govt. backed mortgages etc.
it's all market interference that solves a short-term 'problem' (falling house prices), but screws things up longer term. banks don't wanna lend on property anymore because they know the assets are overpriced (and they've enough exposure already thanks). if we'd had the crash then plenty of property firms and BTL empires would have gone to the wall (as they deserved to because it was all a gamble on forever rising asset prices and not real investment), prices would be back to sane (market) levels, demand would start to recover (with the rest of the economy) and things would get moving again (without taxpayer support).
UK property market broken, housing groups say
http://www.bbc.co.uk/news/business-18098956
this is a great example of what we're talking about re investment.
the housing market has been artificially propped up with record low interest rates, stamp duty holidays, SMI, govt. backed mortgages etc.
it's all market interference that solves a short-term 'problem' (falling house prices), but screws things up longer term. banks don't wanna lend on property anymore because they know the assets are overpriced (and they've enough exposure already thanks). if we'd had the crash then plenty of property firms and BTL empires would have gone to the wall (as they deserved to because it was all a gamble on forever rising asset prices and not real investment), prices would be back to sane (market) levels, demand would start to recover (with the rest of the economy) and things would get moving again (without taxpayer support).
Plenty of spare housing in Ireland and Spain by the sounds of it."Building new homes will help fix our broken housing market and, with rising unemployment and living costs, spur economic growth by creating jobs and supporting small businesses," said David Orr, chief executive of the National Housing Federation.
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convoysur-2
- Posts: 1110
- Joined: Thu Jan 12, 2012 10:00 am
edit
Last edited by convoysur-2 on Thu May 17, 2012 9:45 pm, edited 1 time in total.
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CaerMyrddin
- Posts: 1271
- Joined: Mon Sep 07, 2009 10:47 am
That's really impressive, Marc.
As the ECB shut down funding to 4 greek banks, things look really ugly now. As they will only have a government in June, their response will be weak, one would guess?
Some news report that the greek people withdrew €2.000M since monday, it will make banks go bust...
Are you guys taking any measures, should the euro collapse? i bought some australian dollars as a safety measure and have them at my place!
As the ECB shut down funding to 4 greek banks, things look really ugly now. As they will only have a government in June, their response will be weak, one would guess?
Some news report that the greek people withdrew €2.000M since monday, it will make banks go bust...
Are you guys taking any measures, should the euro collapse? i bought some australian dollars as a safety measure and have them at my place!
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andyfuller
- Posts: 4619
- Joined: Wed Mar 25, 2009 12:23 pm
It is covered by the UK protection scheme covering the first £85,0000 of money including interest or double if it is a joint account. If they were to fail I think from memory the rules changed and they now payout within 7 days.hgodden wrote:Anyone with cash in a santander account would be wise to keep half an eye on the situation in spain
If you hold more than you are covered by the FSA then I would consider moving some otherwise I don't think there is anything to worry about IMO.
Yes I heard about the scheme, didn't realise they paid out within seven days though - I was imagining a great deal of hassle! Hopefully wont be neccesary anyway.
Does anyone know off the top of their head what would happen on the flip side to that coin? What would happen if you had a mortgage or credit card debt with a bank that went under?
Does anyone know off the top of their head what would happen on the flip side to that coin? What would happen if you had a mortgage or credit card debt with a bank that went under?