"Fitch Ratings on Monday said it was revising its outlook on the U.S. credit rating to negative from stable, while keeping its 'AAA' rating intact."
news?
Nothing has changed except the rating. Not news though. Typical.
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"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you a hope and a future." Jeremiah 29:11
Jesus is Awesome! Geaux Saints! Geaux Cajuns!
stay tuned...if the IMF doesnt issue the $750b bond package, the pendulum will swing in the opposite direction. Its almost as if someone is attempting to back the IMF into a corner to either pony up the aid-tranche or it will be because of them that Europe indeed "unwinds".
I don't think that $750b would do the trick, but it would at least buy Europe some time to the next crisis point. It would probably carry Europe to early 2013 is my best guess. But it's all up to the U.S. if Europe is counting on the IMF. I know Obama said today that the U.S. would do it's part to help, but...I just don't see that kind of help forthcoming, that's some serious size. Aside from the questionable economics, it would be very difficult to justify politically.
The European status quo is coming to an end, I think that much is obvious.
Eventually large structural changes are going to be needed. When and how these changes come around is going to be very interesting to watch over the next year or so.
The Euro-zone will either break apart (most likely not disintegrate, but keep a France-Germany core) or will move closer to a true fiscal union.
I'm not sure which would be better in the long run - and both are probably going to be messy for the markets.
This is a game changer, at least for the short term. Several central bank banks agreed to provide liquidity to struggling banks. China also lowered capital requirements for their banks as well.
This may stave off a major collapse in the short term, but doesn't address directly the debt and structural issues of the weaker EU governments.
Not sure what will change long term, but the central banks may have bought themselves a little time to figure out where they want to go for the longer term.
FWIW, I think this move is pretty much unprecedented, so no telling how it plays out. Any opinions on this?
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"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you a hope and a future." Jeremiah 29:11
Jesus is Awesome! Geaux Saints! Geaux Cajuns!
This is a game changer, at least for the short term. Several central bank banks agreed to provide liquidity to struggling banks. China also lowered capital requirements for their banks as well.
This may stave off a major collapse in the short term, but doesn't address directly the debt and structural issues of the weaker EU governments.
Not sure what will change long term, but the central banks may have bought themselves a little time to figure out where they want to go for the longer term.
FWIW, I think this move is pretty much unprecedented, so no telling how it plays out. Any opinions on this?
Saw this at 7 am this morning.
Included is the Federal Reserve. I cant imagine that the ONLY thing they are doing is lowering the "inter-bank lending" rate by .5%?
Soooooo....what other measures are bieng instituted?
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1987 Shelby Metcalf, basketball coach at Texas A&M, recounting what he told a player who received four F's and one D: "Son, looks to me like you're spending too much time on one subject."
Here are the main points of the agreement, reached in the small hours of Friday after overnight talks.
"• EU leaders described the deal as based on a new 'fiscal compact' and 'on significantly stronger co-ordination of economic policies in areas of common interest'.
"• Eurozone states' budgets should be balanced or in surplus; this principle will be deemed respected if, as a rule, the annual structural deficit does not exceed 0.5% of gross domestic product.
"• Such a rule will also be introduced in eurozone member states' own national legal systems; they must report national debt issuance plans in advance.
"• As soon as a eurozone member state is in breach of the 3% deficit ceiling, there will be automatic consequences, including possible sanctions, unless a qualified majority of eurozone states is opposed.
"• Voting rules in the ESM will be changed to allow decisions by a qualified majority of 85% in emergencies, although that remains subject to confirmation by the Finnish parliament."
The actual consequences and sanctions fall into the category of "a player to be named later."
1. So: these *are* the same fiscal rules that have been in place since the Euro started, but *this* time you're going to stick to them, right?
2. What possible sanctions are we talking about here? Fining a nation in deficit doesn't sound like a good idea.
3. What constitutes 'emergency' in this context?
I should say I've spent the last few days trying - and failing - to figure out exactly what Europe has agreed to (and Britain has rejected). I've watched an ever-increasing number of so-called political reporters/editors making ever-larger fools of themselves, blathering hopelessly on and on until it's abundantly clear that they don't have a clue either, and in a couple of cases, no script to disguise that fact.
I don't see how anyone does well out of this though, except possibly those states seeking bailouts but having no serious intention of abiding by the fiscal constraints being proposed. They'll get their help in the short term. Maybe.
Britain is on the outside looking in, with a weakened Prime Minister facing domestic revolt on several fronts - his own back benchers, an increasingly Eurosceptic public, his coalition partners, even big business: the financial sector may be happy for now, but there are no long term guarantees, and the manufacturing sector are deeply worried about their largest export market going protectionist (i.e. penalising British exporters to Europe).
Merkel is facing growing hostility at home, as Germany runs out of reasons for not bailing out most of Europe.
Even Sarkozy's long term prospects don't look good. France is heading for grief if the proposed deal goes through, and as we've already seen, the sorts of thing austerity measures bring (worse pensions, later retirement, shorter holidays, lower pay) are not popular in France. Worse, Sarkozy is already unpopular, and he's the man most responsible. How can he say no to darling Angela's demands now?
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"People should be encouraged to look to their own self interest, but avoid inflicting themselves on other people - especially don't inflict yourself on a schmuck. The guy has already made his choice. Cut the schmuck some slack." Frank Zappa
1. So: these *are* the same fiscal rules that have been in place since the Euro started, but *this* time you're going to stick to them, right?
2. What possible sanctions are we talking about here? Fining a nation in deficit doesn't sound like a good idea.
3. What constitutes 'emergency' in this context?
I should say I've spent the last few days trying - and failing - to figure out exactly what Europe has agreed to (and Britain has rejected). I've watched an ever-increasing number of so-called political reporters/editors making ever-larger fools of themselves, blathering hopelessly on and on until it's abundantly clear that they don't have a clue either, and in a couple of cases, no script to disguise that fact.
I don't see how anyone does well out of this though, except possibly those states seeking bailouts but having no serious intention of abiding by the fiscal constraints being proposed. They'll get their help in the short term. Maybe.
Britain is on the outside looking in, with a weakened Prime Minister facing domestic revolt on several fronts - his own back benchers, an increasingly Eurosceptic public, his coalition partners, even big business: the financial sector may be happy for now, but there are no long term guarantees, and the manufacturing sector are deeply worried about their largest export market going protectionist (i.e. penalising British exporters to Europe).
Merkel is facing growing hostility at home, as Germany runs out of reasons for not bailing out most of Europe.
Even Sarkozy's long term prospects don't look good. France is heading for grief if the proposed deal goes through, and as we've already seen, the sorts of thing austerity measures bring (worse pensions, later retirement, shorter holidays, lower pay) are not popular in France. Worse, Sarkozy is already unpopular, and he's the man most responsible. How can he say no to darling Angela's demands now?
Funny, I was thinking almost the exact same thing regarding the fiscal rules...one more time, but with feeling. This time we really, really mean it.
Andy, you touch on a critical issue, the retaliatory measures taken against British exporters. Is this going to also be the case if say, Italy, breaks the new fiscal rules and gets booted out. Or Ireland. Or Spain. Or Portugal. Greece is already pretty much a distant memory.
I was watching the Cameron speech here in Seattle around 9:30 pm Thursday night, and I was thinking that pulling out seemed like a very rational thing to do. There are no good choices. But when you get in the clinches, can you really trust other countries to look out for your country's best interests, and in this case, I don't think you can.
More of the same ole same ole. I would not be surprised to see an entirely different EU six months from now.
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"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you a hope and a future." Jeremiah 29:11
Jesus is Awesome! Geaux Saints! Geaux Cajuns!
I like the 3% rule on deficits.
We should have a similar rule.
It'll be interesting to see how all of this plays out considering each country has to vote within their own parliament. Seems to me just a matter of time before that will no linger be required....
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Ask not what your country can do for you. Ask what you can do for your fellow Americans.
Simply put, the 3% rule is unenforceable. Now way all of them would comply with it anytime soon.
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"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you a hope and a future." Jeremiah 29:11
Jesus is Awesome! Geaux Saints! Geaux Cajuns!
I like the 3% rule on deficits.
We should have a similar rule.
It'll be interesting to see how all of this plays out considering each country has to vote within their own parliament. Seems to me just a matter of time before that will no linger be required....
The problem is that the EU destroyed it's creditibility when it turned a blind eye to similar fiscal "rules" in allowing Greece into the EU. Greece blatantly lied it's way into the EU.
The EU now has zero creditibility when it talks about things they're "going to do". The time for rosey talk has passed, and when it comes right down to credible actions, tangible actions, enforceable actions, there really isn't much meat on the bone regarding the latest summit meeting.
I think this was one of the big reasons the Brits refused to join the Union. Not to mention their concern about their currency being completely devalued in the long term.
Quote:
Originally Posted by dapperdan
The problem is that the EU destroyed it's creditibility when it turned a blind eye to similar fiscal "rules" in allowing Greece into the EU. Greece blatantly lied it's way into the EU.
The EU now has zero creditibility when it talks about things they're "going to do". The time for rosey talk has passed, and when it comes right down to credible actions, tangible actions, enforceable actions, there really isn't much meat on the bone regarding the latest summit meeting.
__________________
"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you a hope and a future." Jeremiah 29:11
Jesus is Awesome! Geaux Saints! Geaux Cajuns!
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