Thread: More Euro junk

I really wonder if the Eurozone will survive. I kind of doubt it.

(Reuters) - A Moody's downgrade and growing speculation Greece may eventually restructure its debt took the shine off Ireland's thumbs-up from the EU and the IMF on Friday for its efforts to claw its way back from crisis.

Dublin's creditors said the euro zone struggler had passed the first quarterly review of an 85 billion euro ($125 billion) bailout package but warned the new government that challenges remained, including spluttering growth.

"This program is a lifeline for Ireland," Ajai Chopra, the IMF's head of mission for Ireland, told a news conference.

"This crisis will not be over till we see jobs coming back."

The International Monetary Fund this week cut its 2011 forecast for Irish gross domestic product (GDP) growth to 0.5 percent from 0.9 percent and said unemployment would hit 14.5 percent, from 13.5 percent anticipated previously.

Moody's also cited Ireland's weaker growth prospects when it cut the country's rating by two notches earlier on Friday to the verge of junk status and kept its outlook on negative, meaning the next move could also be down.

Ireland gets thumbs-up from EU/IMF | Reuters

Greece, Ireland and Portugal counted together stand for less than 10 % of the EU´s population and less than 10 % of its economy. I am seriously at a loss why Europe would supposedly not be able to handle that. Californias financial crisis isn´t shooting down the entire US as well.

Originally Posted by Voland

Greece, Ireland and Portugal counted together stand for less than 10 % of the EU´s population and less than 10 % of its economy. I am seriously at a loss why Europe would supposedly not be able to handle that. Californias financial crisis isn´t shooting down the entire US as well.

Absolutely agree, Voland!

And, by the way, if the Eurozone is in such trouble. . .why is the Euro still gaining on the dollars?

The Euro keeps going up, the Dollars keeps going down! So, who is in trouble?

Originally Posted by Voland

Greece, Ireland and Portugal counted together stand for less than 10 % of the EU´s population and less than 10 % of its economy. I am seriously at a loss why Europe would supposedly not be able to handle that. Californias financial crisis isn´t shooting down the entire US as well.

We will see, how it looks like, when Spain and Italy join the suppliants.

Originally Posted by Bearman

I really wonder if the Eurozone will survive. I kind of doubt it.

(Reuters) - A Moody's downgrade and growing speculation Greece may eventually restructure its debt took the shine off Ireland's thumbs-up from the EU and the IMF on Friday for its efforts to claw its way back from crisis.

Sorry, but you've fallen for English media hysteria on the Eurozone. The zone has indeed problems and a need for substantial reform. Thats as far as they are right.

But the suggestion that the Eurozone would be not only in an existential threat but already as good as dead is utter nonsense and shows a severe lack of understanding of not only European economy but even more so of European politics. It is not news that most English speaking media have little clue of how Europe works.

The Eurozone as a whole shows solid growth rates, and deficit rates are stabilizing making a solidification of sovereign debts a likely outcome. Thats by average, you have some minor fringes which are in deep troubles however. If the bail out won't suffice, than restructuring of the debt will. If the ambitious and serious reforms are continued there this might be in the long run a healthy shock.

Same can't be said of the USA. Not only is its deficit out of control, also sovereign debt is considerably worse to start with. Just because the rating agencies are for mysterious reasons turning a blind eye on it and markets being irrationally focused to such an extend on Europe does not make these fundamental facts going away.

Originally Posted by Bleipriester

We will see, how it looks like, when Spain and Italy join the suppliants.

Italy's sovereign debt is huge, but its almost entirely domestic. In these regards its similar to Japan, just that the debt is still considerably smaller than the Japanese one. Furthermore the Italian deficit is not at all out of control. Also the economic development is ok, far from eternal crises.

Spain has some serious problems, especially high unemployment, but it had already high unemployment during boom times and it worked. The deficit is high, but not as high as in the US and the debt is actually rather low compared to other developed countries. Neither Spain nor Italy are another Greece, they are not even another Portugal.

But I take it that fundamental data is not much matter of concern for many people nowadays. Just feed the hype.

Originally Posted by Voland

Greece, Ireland and Portugal counted together stand for less than 10 % of the EU´s population and less than 10 % of its economy. I am seriously at a loss why Europe would supposedly not be able to handle that. Californias financial crisis isn´t shooting down the entire US as well.

True... 100% true.

Right now.

I only say that because California's financial crisis is having an effect on the whole muni bond market... right down to the local school district. Right now it's only reflected in an increase of from 5-8 basis points on new issues. But it will only go up. California is the 800# gorilla in the US muni bond market.

Originally Posted by Slartibartfas

Italy's sovereign debt is huge, but its almost entirely domestic. In these regards its similar to Japan, just that the debt is still considerably smaller than the Japanese one. Furthermore the Italian deficit is not at all out of control. Also the economic development is ok, far from eternal crises.

Spain has some serious problems, especially high unemployment, but it had already high unemployment during boom times and it worked. The deficit is high, but not as high as in the US and the debt is actually rather low compared to other developed countries. Neither Spain nor Italy are another Greece, they are not even another Portugal.

But I take it that fundamental data is not much matter of concern for many people nowadays. Just feed the hype.

You really exert yourself to palliate the situation. Respect!
But who thougt two years ago, that even one country could run into such trouble! And the cases Greece and Portugal have nothing to do with the economic crisis.
It´s all over town! Soon, Spain and Italy will be the next shaky candidates.

Originally Posted by Bleipriester

You really exert yourself to palliate the situation. Respect!
But who thougt two years ago, that even one country could run into such trouble!

Who? Approximately the whole English speaking press did. I remember it very well as I had been in the English speaking world back then. Even though they had all their bets on Central and Eastern Europe back then. Their doomsday articles did not quite turn out very much spot on however. What the situation back then and today has in common is that very different situations and problems are thrown into one pot and fundamental data is being ignored if it doesn't fit into the doomsday theory.

Well, at least the press did get the region which experiences serious problems currently right this time. It's a start.

Originally Posted by Slartibartfas

Who? Approximately the whole English speaking press did. I remember it very well as I had been in the English speaking world back then. Even though they had all their bets on Central and Eastern Europe back then. Their doomsday articles did not quite turn out very much spot on however. What the situation back then and today has in common is that very different situations and problems are thrown into one pot and fundamental data is being ignored if it doesn't fit into the doomsday theory.

Well, at least the press did get the region which experiences serious problems currently right this time. It's a start.

So the English speaking press only?
Watch the little EU-girl, who says: "Don´t worry!" This is what you are doing here: