Back when the Germans were threatening to shut down Greece and sell it off for parts, it was fairly obvious that there was no way to “fix” the Greek problem. Even it were possible to radically overhaul their public sector, the debt payments are too high to maintain the level of social services expected from a modern social democracy. Default was unthinkable because close to 80 percent of Greece’s public debt is owned by public institutions, primarily the EU governments and the ECB.
The “solution” was to kick the can down the road until a miracle happened, but now the problem is back.
ATHENS—Greece’s economic recovery is proving elusive, challenging the forecasts of the country’s government and foreign creditors still counting on growth reviving this year.
The International Monetary Fund said last week that the economy is stagnating, in the first admission from creditors that Greece’s recovery is off track again. Growth will only restart next year, the head of the IMF’s team in Greece said on a conference call with reporters, without offering details.
Of particular concern is that exports, which are supposed to lead Greece out of trouble, are on a slow downward trajectory, hampered by capital controls, taxes and a lack of credit.
“There is no chance we will see a rebound unless we see some bold political decisions that would introduce a more stable business environment,” said Dimitris Tsakonitis, general manager at mining company Grecian Magnesite.
The bailout agreement between Greece and its German-led creditors assumes rapid growth from late 2016 onward, including an official forecast of 2.7% growth in 2017. Private-sector economists believe next year’s growth could be closer to 0.6%.
Weaker growth would undermine the budget, likely leading to fresh arguments with lenders about extra austerity measures.
Greece is still grappling with the measures it has already agreed to. Late on Tuesday the country’s parliament approved pension overhauls and other policy changes that have been delayed for months, holding up bailout funding.
Greek government officials are sticking to their view that the economy is on the cusp of growth. “We are at the turning point at which we can we say with certainty that we are leaving the recession behind us,” Economy Minister George Stathakis told supporters of the ruling left-wing Syriza party Sunday.
The economy will get a push from investors as of the end of the year, when lenders are expected to provide some debt relief and the country qualifies for a European Central Bank bond buyback program, Prime Minister Alexis Tsipras said in an interview with The Wall Street Journal last week.
In other words, the miracle did not happen and the problem is now worse. This comes at a time when Europe’s biggest bank is in very serious trouble.
Hedge funds have started to pull some of their business from Deutsche Bank, setting up a potential showdown with German authorities over the future of the country’s largest lender.
As its shares fell sharply in New York trading, Deutsche recirculated a statement emphasising its strong financial position.
European regulators and government officials have kept a low profile in public over Deutsche’s deepening woes. However, in private they have struck a sanguine tone, stressing that in extremis there is scope under European regulation to inject state funds to support the bank, provided it is done in line with market conditions.
Marcel Fratzscher, head of DIW Berlin, a think-tank, said: “If push comes to shove, the German government would contribute because Deutsche Bank is the only global bank that Germany has.”
There is one solid rule with banking and that is when the biggest bank is in trouble, all the banks are in trouble. The reason is a bank in trouble seeks to increase its cash by unwinding its holdings. This puts downward pressure on the price of those assets, which forces all banks holding similar assets to revalue and perhaps raise their cash holdings, by selling assets. This can easily set off a cascading effect, which is popularly referred to as contagion. The ghost of Lehman now haunts Deutsche Bank.
Deutsche Bank has something north of €42 Trillion in derivative exposure. To put that into perspective, the GDP of Europe is €14 Trillion. The phrase “systemic risk” is starting to pop up in news stories for obvious reasons. Presumably the German government would step in and bail out the bank, but this is the same German government that invited millions of Muslims into the country. That and no one really knows how big the problem is at Deutsche Bank. There’s nothing more dangerous in the financial world than uncertainty.
If that’s not enough to have you stocking up on potable water and MRE’s, the news brings word that the Obama Administration is trying its best to start a war with Russia over Syria. They are ending talks with the Russians over the bombing of Aleppo. The Russians are threatening to impose a no-fly zone, while John Kerry is making noises about sending troops to Syria. The US position is completely nuts, which is what makes it so dangerous. The same people who screwed this up are now tasked with avoiding a mistake that will lead to a shooting war with the Russians.
The world always has some problem that could get out of control and bring the whole thing crashing down, but the odds are usually long enough to not worry too much. Pakistan is now threatening to nuke India, but that happens often enough to not take too seriously. Pakistan’s military understands that they will lose a real war with India. India understands that they will gain nothing by winning a war against Pakistan. This is one of those problems that can be managed by the permanent diplomatic service, with little help from the political class.
The three crisis I’m following all have some things in common. One is they will require hard choices from the political class to contain. In politics, a hard choice is one that causes a politician to lose support. Merkel’s government is already teetering so how willing is she going to be to make a bold move to rescue Deutsche Bank? The ECB proved unable to deal with the Greeks the last time. If Merkel is facing a financial crisis, who will she play bad cop with the Greeks when Tsipris inevitably comes calling, demanding a break on Greek debt?
The Syria debacle is the most concerning because it resembles so many European problems of the past. There’s a Seven Year’s War quality to it where you have two main players with the rest changing teams after every stage. With the US now increasing the troop levels in nearby Iraq, presumably to fight in one theater of this conflict, the chances of a mistake increase. In these situations, mistakes are often not mistakes, but even when they are, they become reasons to abandon dialogue in favor of military options.
We live in a world of trouble. One can be forgiven for having a sense of foreboding.
How bizarre is it that the Libertarian running for prez, Gary Johnson, is roundly condemned as a moron because he did not know what Aleppo is nor could he name a foreign leader he admires. Trump is also criticized because, among other things, he does not have “foreign or domestic policy experience.” Yet, the ruling elites in our government and in foreign nations, who are totally knowledgeable about all this crap , are the same folks who have literally set the world on fire; who have totally fucked up the world. It is pretty damn clear that knowing stuff –… Read more »
The fundamental problem re DB leverage, Wells Fargo account fraud, etc. is that there has not been any actual price paid by the senior management who are the primary beneficiaries (via bonuses) of pushing the edge of the envelope. This is apparently due to elite collusion. The fines in the papers are paid by the stockholders only: That is, your and my pension funds. When there is general bonus disgorgement three levels down and actual legal jeopardy for the actual fraudsters. then you might see some changes. As it is, ‘Wall St.’ has socialized the risks and privatized the gains.… Read more »
Yes, but people need to hang also.
@ LetsPlay – When you have finished building a gallows, I have a few people in mind we would like to send over. Maybe we can have a repeat performance of December 26, 1862.
A war like that would quickly reveal that the U.S. armed forces are nothing but a socially engineered zoo, at least in the few days before the war went nuclear. Obama and his handlers don’t have much of a window to get this started anyway. If Trump is elected, we can expect radical policy change. If Hillary is elected, I suspect she will be more interested in domestic use of force.
Well, Merkel and the gang are reaping the whirlwind of running the largest seller financing scheme in history. For all their protests about the Greeks (who have been known deadbeats for years) the Germans were perfectly happy to bring them into the Euro, effectively lend them Germany’s sovereign credit rate and keep the Greeks buying shit from Germany. The traditional means of haircutting the bondholders gradually through inflation was never open to the Greeks so no big surprise. The bleatings coming out of DB, sure feel like the Lehman/Bear Stearns days here in NY. And many of the European banks… Read more »
Don’t forget water and lots, lots of ammo.
@ FuelFilter – If you want guns to go with that ammo, may I recommend a Glock? It’s the most popular hand gun in America if not the world. You can thank the Europeans for that – specifically the Austrians.
Hand guns are for pussies, Karl. Real men use 12 guage Mossbergs, proudly made in the USA. 🙂
Dan – If the US Army contracts with Glock, would that make them pussies too? 😉 It’s a sad commentary when your own military outsources to China and Europe for US military hardware.
If you want a nice shotgun, I would recommend the Saiga-12 built on the Klasnikov tradition of rugged firearms.
Karl, I see you are not recommending Zeiss scopes. Is this because the new ones say “ASSEMBLED in Germany”? In other words, the trend is coming to Germany too, you are just slightly behind the USA.
I know the product, but not the components. Were you aware there was an east German and West German Zeiss? If it says assembled, I would guess it’s with Czech or Hungarian parts but I would have to do the research. The Zeiss you are familiar with is actually the West German brand.
Yes, Zeiss Jena. I’ve owned their Sonnar and Planar design lenses made for a Pentacon camera (6×6). They were very good, even if not quite on par with the West German Zeiss.
See, this is the kind of products I’d like to keep buying. It left no doubts who made them, and with what quality. These days I have to wonder, “Assembled in Germany” by whom? From what components? No thanks – I’ll stick with the old stuff.
@ Striver – It would be interesting research to know. As I said, I would suspect either Czech or Hungarian. In which case I would not have any problems. The Hungarians have been building the Audi TT for over a decade. Beautiful car, well built in a very advanced and modern facility. I have complete faith in Czech, Hungarian and Croatian engineering.
@Karl, Czech lenses would be fine with me – the glass for some Zeiss products comes from Bohemia anyway from what I heard. But I wouldn’t exclude an Asian lens origin – that’s the way Leupold rolls in USA.
@ Striver – The region along the old east German / Czech border is well known for it’s crystal and glass quality. I doubt Zeiss would risk their reputation with inferior or poor quality optics from Asia. At the end of the day, even the Chinese suppliers must meet the specifications defined by the Zeiss engineers. If you do find out, it would be interesting to know where the parts actually come from.
What is this Karl? Are you on the payroll for the German Chamber of Commerce?
@ LetsPlay – I’m just pointing out we make some fine optics over here. But since you asked, do you want to see if I can get you a discount? 🙂
Most (not all folks) military officer above the rank of Lt. Col. are in fact pussies, except for the women who are a bunch of dicks.
The topic of who makes the best pistol is very subjective, and not worth a debate.
As far as contracts go… just follow the money.
I recall an episode of the Simpsons where the family attend an air show at a USAF base and the commentator says during one fly past “the pride of the U.S. Air Force — the British made Harrier jump jet!”
Jokes apart, everyone buys arms from other nations. In fact if it wasn’t for Britain selling arms to dodgy Arab nations we would have few exports at all from the UK, and we wouldn’t make much at all. Hell, even our Tower of London souvenirs are made in China.
That’s your verdict? An Army contract which is so politicized? Hillary probably got kickbacks through the Clinton Foundation from Glock, for the contract. Yeah, we know how crony business is done. Better has nothing to do with it.
@ LetsPlay – And let’s look at the facts. The U.S. share of semiconductor fabrication has decreased from nearly 50 percent in 1980 to 15 percent in 2012. Which is why most all US military hardware has Chinese made semiconductor components.
When 5.1 million manufacturing jobs have disappeared from the US since 2000, don’t get all bent out of shape because the Europeans are picking up the slack. At least our politicians (Regan, Clinton, Bush) haven’t off-shored our jobs to the lowest bidder.
Another history lesson while avoiding how business is really done these days. Glock has nothing on American design. Nothing. It’s all about marketing and payolla.
Just butting in, but Glock pretty much gives away gov’t. contracts (which are not known to be completely honest, value for price driven business deals) that in turn help them with the civilian market. In all honesty, while they are an all right brand, they are seriously overpriced. And they have some quality control issues…rather like some Sigs. German manufacturing can be good, but it doesn’t deserve the impeccable qualities sometimes ascribed to it…they’re rather like every other company on the planet; marketing just seems to be better. Although in fairness older Sigs were and are still pretty nice —… Read more »
@ Jenny – Good points. I just have to wonder why the US would favor weapons made outside of the US, (Glock) when you have excellent companies like Colt. It must be difficult for your soldiers to feel like they are defending America when their uniforms and boots come from China and their firearms from non-US manufacturers.
Yes, that is some shit, isn’t it? All in the name of “getting the best deal” for the American taxpayer! Which is of course, complete BS. It’s always about the money. Follow the money from the manufacturers, to the lobbyists, to the politicians, to the bank. “Made in America” isn’t even on their list of requirements. Quality or best for the troops is a distant second consideration to “who’s got da money?”
Come on Jenny! If you are gonna toss out the Mossberg, then you have to mention the all-time best seller, the Remington 870. With a few minor tactical upgrades, it is a downright awesome weapon.
I’ve kept a S&W .38 in my purse, and a Glock 9 under the edge of my car seat for the 2 decades or so. Would recommend. I did have a nice old Bulldog .44 under the seat, but it really was unwieldy and would get caught on the seat’s under carriage contours. No prob w/ the sleek G9.
Hard to stuff that Mossberg down your pants and walk to the store, so why not have both items available?
Is that a Mossberg in your pants, or are you just glad to see me? Well, actually, sugar . . .
You show your friends your Colts and Kimbers, you show your enemies your Glock. Preferably a 10MM.
I’m comfortable with my Colt Python .357 magnum.
@ LetsPlay – Would you be horribly upset if I told you the steel Colt uses come from here? From a small factory in Belgium to be precise. Look it up.
The one I have is my Dad’s revolver. Maybe the new one’s use that steel but pretty sure back in the ’70’s that wasn’t the case.
@ LetsPlay – I think that’s the case for many things produced in America prior to that time. That is just about the starting point when things started going from bad for American manufacturing.
From time to time there have been laws against companies financing the purchase of their own products. The reason is it is very hard to pick this up on the balance sheet. The temptation is for the company to get aggressive in lending because of the obvious short term benefits. Before too long, the company’s cash flow is entirely dependent on those loan payments. Once those shaky loans default, the company is insolvent. That’s been the German model in the Euro. They are financing the rest of Europe to buy German goods and services. Now that the rest of Europe… Read more »
Used to work for one of the ex-heads of _ _ Acceptance Corp. Funny how long you can levitate a dead company with that approach.
Works great… right up until it doesn’t. The end of times for Alfred E. Newman’s nephew in German finance?
@ thezman – That’s s simplified version of European market problems. Germany has always had the strongest industry and economy of all Europe.We have the strongest work ethic, best educated engineers and produce superior products. Don’t think so? Then turn in your German built car and drive a French or Italian or British made car (sorry UKer….but British cars are horrible). The best example Americans may be able to relate to is the idea of poor Black kids on welfare who run around in $200 Nike sport shoes, $150 sports outfits, and have $1,000 big screen TV’s but live pay… Read more »
>but do you think they are willing to do the right things to get their own financial houses in order?
And that your problem, essentially. You expect the Greeks to be Germans since you’ve included them into the Union, and then get upset that they aren’t.
We don’t expect anyone to be German. We do expect people to take responsibility for their own financial well doing. That includes living within one’s means, and paying taxes. And if your economy isn’t up to it, stay out of the EU. Spain and Portugal are also suffering. They should have stayed out in the same way Switzerland has. The EU is more than one agreement, not every member has to take on the Euro. But these governments are traditionally unstable, Spain has only had real democracy since the 1970’s. Greece has been a mess for as long as anyone… Read more »
Karl, I love you and value your contribution to this blog, but that post is only going to hold true as long as Germans, and Germany, exist. When Khalid replaces Karlheinz in Konigsberg, I imagine all of this problematic teutonic history will be loudly denounced or quietly filed away to be forgotten.
(Disclaimer: I don’t claim the US is much better on this front)
@ Jake Badlands – Thank you. 🙂 This is an interesting forum and the commentary is wonderful. I often wonder if theZman intentionally picks the topics to get a rise from the areas where he knows there’s the possibility of a local opinion such as myself from Germany, or UKer in the UK. Now that our colleague from Croatia ‘Worldly Wiseman’ has become more vocal, it will be interesting to see if “Z’ picks a topic specific to Croatia or the Balkans to see what responses he gets from that part of the world. But you are correct. All this… Read more »
Unfortunately, Sergej and Ivan Maximovitch already replaced Fritz and Gottfried in Konigsberg, after WWII.
That said, you’re of course completely correct about Khalid and Karlheinz.
@ Herzog – Have you visited Baden-Baden recently? It used to be Sergej and Ivan, now it’s a parade of coal sacks. Then again, coal sacks are much quieter than drunk Russians at 03.00 in the morning!
I think you are mostly right, but if banks decide to lend to irresponsible nations (i.e., Greece), the banks did not perform their due diligence; they screwed up. The EU screwed up twice; first by allowing Greece into the EU and second, by loaning them money. The fact is the German and French banks will never get their money (i.e., that of their depositors) back from Greece. You cannot extract blood from a stone. The EU, and the banks have to bite the bullet, admit they F’d up, try as best they can to sort out the mess, and move… Read more »
@ JohnTyler – Correct. Greece, Spain and Portugal had no business in our economy at least not giving up their currency in favor of the Euro. That was their biggest mistake, giving up control of their currency. The Swiss and the Brits knew better. But like the Germans, at least the English and the Swiss are hard working, industrious, self reliant people. If you come to know Europe, you will find we share a common north/south attitude as you do in the US. Northern states have all the industry, the south has all the agriculture. The south simply has no… Read more »
@Karl — no problem you disliking British cars. We had huge problems with unions in the 50s to 80s in our car factories with the quality and the productivity going down and down as well as employing designers who, er, couldn’t design. Jonathan Ive wasn’t born then. The tradition of British cars was not in mass production but small companies making sports cars, specialised vehicles like Land Rover and of course really expensive vehicles like the Rolls Royce. But we were crap at making cheap, reliable popular cars and Mr Marx helped make sure British car workers continued that trend.… Read more »
@ Karl – I’ll make you a deal, you build better cars and we will stop putting our towel on the deck chairs! 🙂 P.S. I did love the Stag. Wonderful car!
Rah rah rah! Sis boom bah! Go Germany! Deutschland uber alles!
Better take care of your accounts as DB goes down the tubes and takes your savings with it. Then you won’t be so smug Karl. You and your country are in the same shit as everyone else and you think not because you have a flower in your midst. But you are sinking like everyone else. Maybe the flower will wind up in your nose and you won’t realize it until you can breath any longer.
@ LetsPlay – Our exports of aircraft, cars, trucks and durable goods (something the US doesn’t export anymore) will take care of any financial problems like they always have in the past. Considering how things are going for Americans in the job market, Europeans are hiring many ex-pats since they can’t find work in the US. If you get tired of your kids living in your basement, send them this way. We’re hiring.
Karl, you are only fooling yourself with what you say. Things are not so hunky-dorey in “Strudel-land.” Merkel has rammed your ship into the iceberg and you are still with the band playing away.
LetsPlay – “Strudel-land” That is very funny! 🙂
Yes, I agree. Merkel made some serious blunders last year. We will see how she plans on changing course, or the extreme right will do it for her and we do not want that.
One big difference between Germans and the average European is we’re not in debt. And certainly not to the tune of Americans who, on average, owes $130,922 — including credit cards, mortgages, auto loans, student loans, and other forms of debt. Believe me, these are easy number to look up. No German graduates from university with debt, and certainly not to like American or British students. Germany is the envy of Europe because we are frugal people. Maybe if everyone else lived to the standard of living based on what they actual earn, and not to the standard they wished… Read more »
Don’t be so rash in your frugal pride. Your govt may very well take on the debt on behalf of its citizens. The banking system needs to be saved!
@ Striver – When your favorite sports team wins, do you not cheer? When your Olympians win a medal, do you not feel a sense of pride? So do is the German sense of pride in what we can do. We have had shame enough from what we caused in war, now we celebrate what we have accomplished in peace. Or is that being too proud?
@Karl, you have all the reasons in the world to be proud for what your nation accomplished. I’m just pointing out that the accomplishments are being cancelled for no good reason. You have leadership problems, just like ourselves.
@ Striver – Agreed. True leadership and statesmanship is becoming more rare in America and in Europe. There are so many things going on that don’t make any sense to the average person here and there. We may be following the American trend of taking everything we worked hard for and throwing it away because somehow we should feel guilty for having electricity and running water and not living in a grass hut with a stone floor.
Goldman Sachs strikes again!
They got the Greek, er, Trojan, Horse in.
It’s a nice night for a knife fight. Bring a gun.
Dennis Tueller might disagree with your preparation for a knife fight.
Problems in Germany with the main bank? No problem, just print more Deutschmarks!
Oh, wait, that might not work…
@ UKer – Ah – don’t be jealous that we have had four currencies in the past century. Just because you’ve had that boring old Pound forever. Out with the old, in with the new! 😉
Karl – Germany as a manufacturer and banker is better placed than most and can even survive a complete reset which looks very likely for all nations. That’s not the issue though, your people who are your most valuable asset, are about to be pushed under and experience intense pain that that will change them profoundly and permanently because this will redefine them. What they will do in the face of this is the uknown….
Bluehat – One of Germany’s greatest industrial strengths are the small factories that are scattered across our country, mostly in the Black Forest south of Stuttgart. These are old, family run businesses, generally less than 100-employees, which intentionally remain small, and implement shorter-hours when things slow down, rather than laying people off. This is why even when the 8th Air Force bombed factories inMannheim, Mainz, Kassel, Munich and other major industrial cities, we were still putting tanks, planes and other hardware into the field. It’s these small industries, not the big ones, that are the real backbone of German industry.… Read more »
Soo smart. But who surrendered to whom?
@ LetsPlay – To quote a phrase “At this point, what difference does it make?” Really? Please..that comment is so “1945”. 😉 Considering how many wars the US hasn’t won since then, it’s time to get off those badly worn laurels.
Hey, you are the one who brought up the 8th Air Force bombing in WWII and Germany’s industrial might being in the hinterlands. I am addressing your point. Don’t change the subject.
@ LetsPlay – Ah, okay I understand your point. Fair enough. But unfortunately, while you won the war, America has given away every possible advantage it gained since then.
There’s another, related dimension to the Syria business with the Russians that has not gotten much attention. From accounts that I’ve read, 0bama is personally pushing for the commencement of the offensive to retake Mosul from ISIS, and to that end has sent some 600 US special forces to take part alongside Iraqi special forces. 0bama is apparently very keen for the offensive to begin in October so that, according to Barry’s military timetable, ISIS will be defeated, or nearly so, by the time he leaves office. A “Pentagon official” insisted that it will be the Iraqi special forces who… Read more »
Christopher-just read on War News Updates blog French Defense Minister confirms French warplanes are flying sorties over Mosul to assist US Spec Ops and Iraqi forces.Complete shit show is right.POTUS gets his military advice from the voices in his head,along with Susan Rice and Ben Rhodes,masters of micromanagement.God help the men who have to execute this lunatic trio’s fantasies.Apparently no one in the WH has ever read a history book,despite their affectations of Islamic scholarship.It’s madness.You’re right about the homefront too.They’ve been importing ME “refugees” for 2 yrs now,mostly young males. With James “I am not a weasel” Comey and… Read more »
The underlying cause of Greek crisis, the bank crisis and the migrant crisis is the demographic failure of Europe. They simply have not had enough children to pay for their retirement. This showed up first in Greece because they have a unique combination of horrible demographics and a weak economy. There is no next generation of Greeks to make interest payments on the debt. A similar lack of children had led to ultra low interest rates across Europe (lots of older people putting cash away, not enough young people interested in borrowing from them to buy stuff). With ultra low… Read more »
@ Fondatorey – No, that’s not correct. Not paying taxes has everything to do with the Greek crisis. That and the fact they switched over to the Euro after lying about their financials…which were horrific. They never should have been allowed in the EU in the first place and certainly not into the Euro currenty. They, like Spain, Portugal and southern Italy, are agrarian economies. No one can grow an economy selling olive oil and corks. And if you refuse to pay your taxes, what do you expect? They could have all the kids they want, but it wouldn’t make… Read more »
@ Karl You are looking at the issue from an economic perspective but EU has always been a political project with economic benefits being less important. The Greeks (and others) just took advantage of that fact.
@ WW – While I do not agree with everything Europe (the EU) is doing, I am glad we have finally put our differences aside and are striving for prosperity through peace and collective effort and understanding. Individually, European countries could not compete with America and certainly not with China. Only together do we stand a better chance of securing our own future and we must accept there will be problems to overcome.
Compete with America? Those bunch of idiots who make shit and can’t tie their shoes without German help? You are so gracious to include the USofA.
The EU effort to create a United States of Europe post WWII has and always will be a joke. It to is a totally rigged game and the fact that a country like Greece was even allowed entry was for some economic reason that is still undisclosed.
@ LetsPlay – I was being polite with that comment about competing with America. But let me see…BMW’s are now built in the US, VW’s are built in the US, SAP is in the US, and Bayer now owns Monsanto. I guess you’re right, we really don’t compete with the US at all. Something about bringing a knife to a gun fight? But if you need one, the Swiss make excellent knives – small, but nice.
Sure, and putting politics aside, Americans would still kick German butt if we faced off again. Your condescending arrogance grows tiresome Karl. Reminds me of something I read recently at Straight Line Logic:
Eric Hoffer (1902–1983), American writer on social and political philosophy, The True Believer (1951):
The less justified a man is in claiming excellence for his own self, the more ready he is to claim all excellence for his nation, his religion, his race or his holy cause.
@ LetsPlay – And where exactly do you plan on building all the hardware you’d need? Those factories are long gone as the pictures of Detroit prove. Our factories, many dating back well before WW2, are still running quite nicely turning out products people are actually buying.
VDH had some good articles a few years back on his observations while living in Greece. Apparently slleping all day in your government / union job is considered the norm. Then people do actual work in the evening for cash.
I don’t blame them for dodging their absurd taxes – I blame them for expecting health care, a pension, and all the other free shit while dodging taxes.
The reason your arguments go nowhere is not because they are not true, they are true. But they are the symptoms of the whole disease, not the disease.
The agrarian economies have a place in the EU even if they aren’t quite the breadbasket that most of (northern) Europe needs. One needs bread to go with the wine. But among the gripes about the EU in the UK used to be that one of the driving forces of the affair was to protect the French economy, which is more agrarian than not. Thus once the UK entered the EU our shops were flooded with tasteless French apples. Someone once counted over 650 varieties of English apples but the EU’s pernicious rules insisted only a handful of these could… Read more »
@ UKer – You are correct, we must buy our produce from warmer climates, but you must come here if you like apples and wine.
If here is Germany, Karl, every time I have been it has been very warm and welcoming so i will be back. Cheers!
I see. They lied to the Brussels and EU money masters and everyone bought the lie! Right! Talk about not being able to read a spreadsheet.
What should be done in Syria? I have not a clue.
The bank thing really scares me- I have visions of all my plans for retirement- not too far off, disappearing in a whiff of smoke.
The easiest thing is assume you’ll need to keep working, at least part time. Retirement for the masses is brand new, as of WWII generation. Everyone else worked until they could work no more.
See it as a nursing home fund and it won’t worry you quite so much.
There are a few problems with that. One is that many companies discriminate against older workers. Another is that it becomes harder physically and mentally to keep up the pace. I personally would like to retire so that I don’t have to deal with another f’ed up version of Windows.
It looks like the perfect job for older workers is Federal employment!
I for one am just getting heartily tired of the spreadsheet jockeys that are screwing up everything. Mindless cost cutting with absolutely no mind as to how it affects prodution, quality control, rank-and-file employees, or customer service. As long as those end-of-quarter executive bonuses keep coming in it’s all okay. /snark = off
Right now, the Deutsche Bank issue scares me the most because it feels like a symptom of a greater problem. This is not a savings and loan. This is Germany’s main bank. if she’s in trouble, it most certainly means the whole system is in trouble.
It’ll be financially painful, but something positive may come out of it as well. Without the monetary fat the govt won’t have the ability to continue its reality-defying policies like flooding the nation with millions of hostile alien unemployables.
Yes – it’s not the taxes, it’s the spending. That’s the part where they hog up resources to do stupid things and buy votes. Unfortunately the spending part is popular, especially with the scum who support the worst politicians.
When you separate the spending equation from the tax-paying equation (as we did with the 24th amendment) you have created a positive feedback loop, and you will never get the spending back under control.
…. and I’ll add… no confidence in transparency or forthrightness on behalf of the German Government.
It has never been possible to believe statistics from any continental government except perhaps the Swiss and Nordics. One of the many reasons is, as usual, high taxes. A much bigger chunk of the economy than many think is cash, unreported. I base this on anecdotal evidence from my own European family, and my just finished trip to Iberia. Whenever I paid cash, which was mostly, I was asked if I wanted a “ticket”, meaning a receipt. I saw a lot of cash go into pockets rather than tills. This is actually good news – Europe is more resilient and… Read more »
How does cheating the tax man on revenues make anything more “resilient?” Paper money once devalued is worth less. Wait till super inflation hits and then you have the Wiemar Republic all over again.
David Goldman over at Asia Times is in full cloud-people mode and writing that the DB crisis just means we just need to merge more big banks. You can’t make this stuff up.
Moar!!!
I like Goldman a lot, but he gets things wrong too.
Seems almost like a Plan.
He’s great on demographics and culture, but on finance and economics, he spouts the Davos party line.
If the Greeks actually paid their taxes, instead of turning it into a national game of “catch me if you can” this story would have a very different ending. Don’t take this from me…this is a quote from your Wallstreet Journal – “At the end of 2014, Greeks owed their government about €76 billion ($86 billion) in unpaid taxes accrued over decades, though mostly since 2009. The government says most of that has been lost to insolvency and only €9 billion can be recovered.” But go ahead, blame the Germans. That’s the easy way to not take responsibility. And just… Read more »
Well, it’s more of a symptom of the EU as a whole. It’s absolutely foolish that Germany’s fate is tethered to Greece. Total opposites in terms of fiscal compatibility.
Where Germany gets the blame is on insisting this arrangement stay in place.
@ Joe_Mama – Agreed. But it may be that Germany will float Greece to ensure they bring in German products and remain connected to the rest of the EU. Even if that means they become a welfare state. Keep in mind they are one of the last gateway countries between us and the middle east where we still have influence. Turkey knows they hold the cards and we have little influence because of religions differences. Greeks are Christian and hate the Turks, so they will remain on the side of the EU. Maybe now you begin to understand the deeper… Read more »
Greece isn’t going down because the sheep aren’t willingly lining themselves up for slaughter, Greece is going down because for every sheep the Greek government runs two slaughterhouses staffed by twenty bureaucrats on extravagant pensions, healthcare plans, and vacation packages.
Karl, the problem is that the Greeks are correct to dodge and evade their taxes and you Germans are crazy for being as faithful as you are to the tax man. I am happy to say that my sense is that this is fading.
Starve the beast of money.
@ Fred_Z – While I understand your point, it’s a bit counter productive. We like the fact our bridges and roads actually work and aren’t collapsing as they are in some countries.
Said the leader of the band as the Titanic was sinking.
@ LetsPlay – I think what we are seeing is rearranging of the deck chairs (US Fed and DB).
Come on Z! “If she’s in trouble?” We all know this house of cards has been weak for some time now and yes, the whole enchilada is in deep doo-doo. But the bankers and politicians figure the taxpayers are a bottomless pit and that is why we have “Too Big To Fail.”
How about staying out of Syria altogether ?
The USA should help set up refugee camps in Syria and that’s it (and not allow any Sunni Arabs into the USA).
Let Russia, Iran, Turkey, and the Sunni Arabs slug it out.
My view is very much the same. Whatever the west does among the tribes fighting for power, it brings us nothing but heartache and ruin. The best thing is to let them all sort it out the only way they know how which curiously is by killing each other. Not that I think such a procedure is commendable but it seems to be the one policy they prefer in any situation. I am sure eventually the surviving tribe can rule the Middle East as they wish and impose whatever version of their religion on the rest, but it is nothing… Read more »
Your way seems to have worked fairly well for many centuries until the Ottoman Empire was partitioned and western busybodies’ stuck their noses in. Maybe we ought to de-busybody the place and see what happens. Of course, getting the Russkies to go home will be a problem.
Okay, two ports then.
When the Russkies were in charge, Islam was dying.
Nasserite socialism was working as a necessary step towards modernity, an Islamic Reformation.
@ BillH – The UK did well until they made the mistake of fighting WW1 and WW2. After which they were broke and quickly lost their colonies. Hitler never wanted a war with the UK and surrendered twice to Churchill and even let their soldiers retreat in safety at Dunkirk. But Churchill wouldn’t say no. Then after the war, the Indians said “No!” followed by every other British Colony. Now all they have left is a big rock covered with monkeys on the south of Spain and an island full of sheep off Argentina.
@Karl — you know I love you but we will have to disagree on Dunkirk, if only because the ‘safe get out plan’ you suggest did not save my wife’s grandfather who was one of the many killed in the Dunkirk evacuation. But while I don’t want to fight WW2 again I do want to say that though I do not know what was in Hitler’s mind some historians believe that he halted the advance of his Panzer force (and gave the Brit troops time to get away) because he or some high ups in Berlin thought maps of Northern… Read more »
@ UKer – The only reason in my mind that the German Army would allow 350,000 men to leave is to make a point that Germany did not want to fight them. I think it was a very loud message – “Go home and stay there!” Given the U-Boat success in the Atlantic, getting new equipment wasn’t going to be easy. But you are right, we will never know.
The “only” reason? Spoken like a true German. So kind and thinking always of the other. I would think Heinrich Himmler and his SS goons had other ideas if only … Again, more of your “revisionist” tripe.
Seriously? The Brits made the mistake of fighting WWI and WWII? What is this? Some kind of revisionist German bullshit?
In a sense that a hundred years from the great war germany has achieved pretty much everything as laid out in September programe through european Union it was a mistake to fight . If my history books are correct there was a juuuge oposition from both left and right .
WW2 was not a mistake as it was second half of the first one. The only true victor was US.
@ LetsPlay – The “mistake” I am referring to was the loss of British colonies due to both world wars as they were more of a financial burden to them then they could have imagined. Two key elements that doomed Germany – (1) US intervention (2) Going into Russia in the fall. The Brits were pretty well done by 1940; they were out of aircraft, out of pilots, out of military hardware and out of money. The Brits didn’t care about Poland at all (look up the phoney war) and were in serious financial difficulty after WW1. They simply couldn’t… Read more »
Well, what did Britain gain from WWI and the astounding loss of life incurred thereby, aside from the chance to collude with France to temporarily carve up and colonize the remains of the Ottoman Empire?
As for WWII, Britain went in to save Poland from Hitler and, after their lost lives and wrecked economy, agreed at Yalta to hand over Poland to Stalin. I wonder if the irony of that was lost on veterans, widows and orphans.
Nice summation.Everything is true.The last line is why Brits rule satire.10 thumbs up!
Don’t be scared and frozen into inaction. Get your money the hell out. Most advisors and my own wisdom says to transfer it into things that will hold value in the future, including food stocks, ammo, etc. All these things can be bartered. Even some precious metals although you will have to hide that as the authorities will try to confiscate it anyway at some point. If you “leave” where the bankers can get it, it WILL be gone. Only a matter of time. And that time is fast approaching.
So, my doctor notwithstanding, might as well have two more cinnamon rolls and another cup of coffee.
I prefer a neat shot of Jack Daniels.
The anti-war left and the media are showing remarkable restraint re: Syria and threatening war with Russia. Sabre rattling… cowboy diplomacy… war for oil (pipeline). Really something else. It’s as if the 1980’s called and they want their foreign policy back or something.
The Republika Srpska just voted overwhelmingly to establish an Independence Day holiday. This is regarded as a test run for an actual independence referendum next year. The government of Bosnia-Herzegovinia, which governs Republika Srpska has threatened to intervene to prevent the referendum, and Serbia itself has threatened to defend its co-ethnics in RS. Russia is supporting Serbia.
Meanwhile, the US keeps pushing B-H to join NATO, which seems likely to happen. A renewal of the recent Balkan war seems possible
It’s those damned hoof beats.
Shades of the Spanish Civil War, the precursor to WW II.
Of the cattle breaking out of the pen?
Don’t sweat it; the Archduke Ferdinand will visit there soon and straighten out the mess. He’s done it before you know.
Kosovo and imminent independence referendum is the spark that is going to light up Southern balkans , not Bosnia . The leader of the Serbian entity is just trying to save his skin. It doesn’t matter that they are Serbian ppl , serbian government will not support their separatist movement and is working quietly with Muslim government of Bosnia to solve the matter.
Russia has very little influence in the region (apart from Macedonia) . Serbia is playing for the US team – or to be more precise neocon:Hillary team
@ WW – How does Bosnian and Serbia affect you in Croatia? Do you see a repeat of 1992?
No, the fight is going to be further south, Kosovo and Macedonia . It is similar to Russia in east ukraine and Argentine and falkands – nobody in Croatia or Serbia wants to have anything with their coethnics in Bosnia . The Bosnian serbs are a natural Croatian “allies” We share a common border and a lot of those folks have residence permits so they can vote in the elections (they are our latinos; come election time the buses pick them up and off they go across the border to vote for the right party) 🙂 The only real issue… Read more »
Argentina and the Falklands (aka Malvinas)? Kelpers are UK citizens (subjects) and of British descent, not Latinos in any way. I fail to see the similarity and would appreciate an explanation. Thanks.
@ montefrio come election time in Argentina Falklands are one issue candidates can drum up nationalist sentiment and get a lot of votes. Of course there is no way for Argentina to reclaim falklands unless uk decides to surender them . Everybody knows that but for the sake of appearances have to pretend othervise. Same dynamics is at play here in the balkans . Every election cycle crazies pop up just to dissapear after the votes are counted.
“The whole of the Balkans is not worth the bones of a single Pomeranian grenadier.” – Bismarck
Much less the blood of anyone from outside the Balkans.
All Pomeranian grenadiers will soon be badly needed in Germany herself, to fight for our survival and independence in the face of the Muslim terror and insurrection. For some time now they have been having molecular test runs, so to speak, in the form of almost daily rapes, harrassments, violent assaults, student mobbings, etc. All this of course goes unreported not only internationally, but even in the nationwide media here in Germany; it’s just the local press that reports this constant drip. The problem already existed before that Merkel creature imported another million of them last year, but of course… Read more »
i forget who said it, but the balkan issues can be summed up: They create more history than can be consumed locally. re the banks: once they started getting into financial engineering ie derivatives, every thing went south
A few positive aspects to this:
– with nations in deep financial trouble, at least Europe should be more affordable soon
– as the EU begins cutting services, the Muslim moochers may start to leave
– assuming the current polls are right, we MAY have a president who want to (1) reduce the size of our military, and, (2) keep the hell out of other countries’ problems
Two days ago,Sec of State John Kerry signed a controversial Small Arms Treaty at the UN.Its proponents claim it will stop small arms trafficking worldwide,because of course Syria,Sudan,Yemen etc will comply.Hillary has long supported this treaty,because “common sense”.It must be ratified by the US Senate,but then again,POTUS has a pen and a phone.The last few weeks of this appalling administration will be stuffed with every Progressive wet dream imaginable.Happy Friday,folks. Hope Karl weighs in on DeutscheBank…oh yea,black moon rising,tonite,I believe.
@ Nori – I saw an article that stated…”For no apparent reason, DB and all Germans banks will be closed next Monday. German people will not be allowed to enter a bank to withdraw their money.”
Yes, that’s true.
Do you want to know why? It’s because it’s a bank holiday to commemorate Tag der Deutschen Einheit (The Day of German Unity).
I really wish your American press would do a little homework.
Karl, we all wish our American press would do a little homework.
Karl,I have a hunch everyone here agrees wholeheartedly with your assessment of our media.It’s a national disgrace.They’re supposed to be the bulwark against corrupt politicos,not the soft downy pillow propping them up.Zman’s past essays concerning women in the workplace come in to play here.Lots of women in our media,and they all vote Democrat/Progressive,women’s “issues”. God help us.
@ Nori – I believe it was your American press that broke the Water Gate scandal and ended President Nixon’s career. I think it is a safe bet that won’t happen again as long as a democrat is in office.
It’s funny how all those finance issues with the EU didn’t go away. The idea that Europe is actually funding homes for migrants and the EU was talking about raising armies is all late stage hubris. The money is not there and was never there.
WWIII maybe averted between European nations just because they’re too broke to go war. They will however, have to deal with Islam on the streets.
@ Piffle4Me – Germany has paid off it’s war debts, and the costs of reunification of east Germany. We’ll sort this out too. How do I know? Because we’re the only country in Europe making products everyone else in Europe wants to buy. The money will keep coming into our industries and paying our workers because we are the biggest European exporter. We have the people, materials, and the resources. Would you like to buy an airplane? Don’t bother ordering one from Boeing…their factory in Seattle is just about gone. But you can always buy a brand new Airbus here.… Read more »
Well, I guess the Fourth Reich can just take care of the rest of Europe then!
@ LetsPlay – I hope not. But the surge of European nationalism going on right now is leaning that direction.
” Late stage hubris ” rolls trippingly off the tongue, doesn’t it? Great phrase, P4M. ” What is it, Doctor?” “You have late stage hubris, Ms. Kellison. Go ahead and get another husband, house, and pool boy. It won’t matter. “
With all the noise and ruckus of the obvious ‘mistakes’, I’m wondering if the quiet giveaway of the Internet was the main reason for an Obama presidency.
Alzaebo, don’t you know Obozo’s motto “Fundamentally Transform America.” The internet is but one part of the plan. You really need to keep up. Check out http://www.discoverthenetworks.org/
@ LetsPlay – The greatest transformation of America was courtesy of NAFTA, GATT and WTO deals all done under Republican leadership – and Obama had nothing to do with any of that. He’s just following the wonderful examples of the Republican president who he followed into office.
What we are seeing with Brexit and other movements around the world is a general frustration with leadership dedicated to globalization. Yes, those “trade” deals caused lots of problems but you really need to study up on what exactly has been going on during the last eight years under Obozo. The Republicans get lots of blame and that is why people have given up on them and have turned to someone like Trump. But you are dishonest to blame only Republicans. You sound like the liberal shills who think their socialist ways are perfect and have only failed because they… Read more »
@ LetsPlay – I think the Bay Area is the perfect example of exactly what’s wrong with America. While I was there, I watched American workers being laid off and replaced with H1B and L1 visa workers who worked for less. Housing prices in the Bay Area are unaffordable so people had to live in towns like Tracy or Manteca and commute in their cars for 90-minutes since there was no public transportation (The ACE rail was a joke). Homeless people sleeping on the streets of University Ave in the middle of Palo Alto, one of the most affluent towns… Read more »
Is there a word for “logorrhea” in German?
David Stockman is good as always:
http://davidstockmanscontracorner.com/wall-street-week-interview-get-out-of-harms-way-now-the-casino-is-heading-for-a-crash/
Just heard the news- DB shares rising since American courts will reduce some punitive settlement by 2/3rds. I think this and VW explains Merkel’s immigration policy: Obama will keep stomping on her unless she brings in the ‘refugees’ he created. Hedge accordingly.
@ Alzaebo – DB isn’t going to fail. It may need to readjust and clean house, but there’s too much at stake for Germany and Europe. As to VW’s mistake (along with dishonesty), that was simply a workaround to meet unrealistic emission requirements. Funny that happened nearly at the same time they because the largest auto company in the world over the US big three. Coincidence?? Immigration policy had nothing to do with immigrants but everything to do with Syrian refugees – which is what Merkel was supporting in the first place. The media and do-gooders twisted it into an… Read more »
You forgot the damn Canadians.
Canadians I know think you are the bad neighbor! 🙂 If Hillary gets into office, Canada will have to brace themselves for a rush of conservative Americans showing up at the border. Since the elections in America are in November, I have two words of advice – dress warmly.
We plan on showing up at the border, all right, but we’ll be armed and ready. The first order of business will be liberating Vancouver from the Chinese occupiers.
@alzaebo You should have seen the hysterics in the US automotive press over the VW emissions ‘cheating’. Like in Tour de France, everyone does it, but only some get called out. Maybe they should review the ever-increasing MPG requirements instead, aggravated by the ever-growing safety features (which result in extra vehicle weight).
alzaebeo, I have been thinking about this myself lately, beginning to wonder whether the Obama administration was pursuing a political agenda with its cases against Deutsche Bank and VW. Don’t get me wrong, I don’t dispute VW’s wrongdoing (I’m ignorant about Deutsche). However, the unrelenting tenaticy with which exorbitant damages (as it seems to me) are being sought from those two companies by the US judiciary to me for one began to smell of something different than just a judicial procedeure aimed at getting fair compensation, plus a penalty premium for wrongdoing. So I was beginning to wonder whether there… Read more »
The American car companies do something like this every time they feel threatened. I remember when they decided that bumpers had to be better. This was a big problem for European imports at the time. Of course it was nearly comical that this came from a country that fought against seat belts and head restraints, and then built the Pinto which blew up if you bumped into it from behind.
I believe the “settlement” related to the 2008 US housing crisis and the role DB played in selling bad loans. A lot of banks are settling this currently and it shouldn’t be hard to find on the internet.
@ LetsPlay – And who got people to go for those bad loans? Oh, that’s right Bill Clinton under the Affordable Housing Act. So tell me how that fiscal disaster, which turned into bailing out your banks with your tax dollars, had anything to do with DB? Please. Stop looking for the boogey man over here…you have plenty of them running your house, senate and congress, and they’re doing an excellent job of driving your country right into the ground, with all engines on fire and no parachutes.
For someone who likes to lecture on things like economics, you are are ignorant of how global finance works. Or maybe it is just willful ignorance.
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