Spain seeks bailout of up to 125 billion

[Economics]

Since Europe and the US are so fukked right now economy wise,why cant we all forgive eachother's debts and start over? i mean we all lose on what is owe to us but fukk it....

Doesn't quite work like that. Yea, the bond holders lose out but you have to remember which bond holders they are as in the U.S's case they're a lot of external/internal bond holders (The Fed, the gov itself in intragoverment holdings, mutual/pension funds, and all the external holders like China, Japan, the oil nations). Think of it like when a individual goes into bankruptcy/default, that individual can no longer get credit until after the bankruptcy is done and must fund their current livestyle with w.e. cashflow they currently have.

These countries cashflows are already negative (hence the deficits and borrowing) so total default means a lockout of the bondmarket to borrow or high ass interest rates. It eventually will lead to true fiscal cuts. And remember just like an individual when you're out of bankruptcy to say if/when they did that (U.S./Europe) its still on your "record" that you were bankrupt for some time before you establish new creditworthiness. At best, like an individual the countries would have "beginner's credit" but not a history of good credit. In short, they will be punished by the bond market either way. And since many western nations spend more than they take in, in addition to using the bonds sold for current fiscal operations by a total lockout of the bond market will require them to conduct true austerity (real deep cuts to match w.e. current revenues they would take in) not just cuts from projected spending (the baseline budging stuff they do now for some countries). A sudden jump in any of these countries interest rates will have the same result if the bond maket thinks the default is imminent. And since our country and theirs also run some real trade deficits all those imported goods (gone since many won't be able to afford the new market price for them)-you'll see a real decrease in the standard of living here and in Europe for a while.

The U.S. will just continue to monetize the debt, devalue the currency to help pay it off as long as they can get away with it, it'll be the last place where they'll straight up be responsible and make the proper fixes to this situation.

 

[Turenne]

Economics can you recommend me a noob's book on the subject of economics to help me get to grip with the subject?

 

[Economics]

Economics can you recommend me a noob's book on the subject of economics to help me get to grip with the subject?

Are you a total noob? For the visual learning Khan Academy is nice for basic economics for someone trying to learn something real quick and he goes over current topics.

This is a fiscal/macroeconomics issue you're referring to so I'll try to be varied with the books that I can recall right now. Sidenote: Microeconomics (I'm biased towards the microside and is usually where noobs need to start off at then go from there).

But for a good recent book people where telling me about that might help you out that isn't too technical is....

This Time Is Different: Eight Centuries of Financial Folly by Carmen M. Reinhart & Kenneth Rogoff (they go over macro/fiscal issues as well as econ history)

The Economics of Industrial Organization by William G. Shepherd.
The Structure of American Industry by James Brock. (these two go over micro/somewhat macro issues) These books are somewhat technical but you'll learn alot.

The Law by Frederic Bastiat (very old book you can read/find online. Regardless of how you lean politically he does a great job at explaining opproutnity costs and tradeoffs)

Economics in One Lesson by Henry Hazlitt (its really extension of Bastiat but helps explains tradeoffs-this is more micro)

Armchair Economist: Economics & Everyday Life by Steven E. Landsburg (simple book)

Naked Economics: Undressing the Dismal Science by Charles Wheelan (noob book)

Basic Economics: A Common Sense Guide to the Economy by Thomas Sowell (I don't think he ventures much in political economy here just more basic economics - no pun intended)

Economic Foundations of Law second edition by Stephen Spurr (as the title implies it shows the relationship of law and economics and the impacts of laws on an economy and human behavior-its somewhat technical but great read for a noob)

Simple Rules for a Complex World by Richard A. Epstein (he's a lawyer first and foremost but understands the connection of law and economics and gives a contrarian view of things you might not of thought of. I seen him debate against other economists and . Powerful mind.)

Development as Freedom by Amartya Sen (development economics relates both to micro/macro-noob book)

The Globalization Paradox: Democracy and the Future of the World Economy by Dani Rodrik (more of a political economy book, more current issue economics)

Getting Better: Why Global Development is Succeeding by Charles Kenny (noob book)

The Rise and Fall of Great Powers by Paul Kennedy (Political Economy book, relevant to today)

Freefall: America, Free Markets, and the Sinking of the World Economy by Joseph Stiglitz (current issues political economy book)

Irrational Exuberance by Roberty Shiller (financial economics/macro)

Wealth, Virtual Wealth and Debt by Frederick Soddy (old book, he was a scientist but understood more clearly than others the relationship of energy and economics or how understanding ecology is vital for economies/wealth creation)

For more textbook type of technical books I have a pdf somewhere on a usb drive but that's really for schoolwork doubt you'd want that, plus just refer to the khanacademy econ links nice simplicity

Have fun

 

[TLR Is Mental Poison]

I think this is the start of the end really. It could take over a trillion dollars to actually fix Spain. Even if the debts were written off and Banks were nationalized somehow there's still no way to protect the depositors(no money). Italy is about to spiral out of control by the look of it as well. The size of Spain's real estate debacle is unimaginable all over the country prices were halved or quartered, million + houses and apartments are vacant. Even on the outskirts of Madrid there are whole communities that were built that are unfinished or vacant. It's the same around the entire country as well.

The worst part is a lot of the same problems are facing China, which everyone is looking at as a ticket to prosperity like they did houses in the early aughts

Southern Europe is fcking useless and humans seem incapable of managing debt properly. I hope things unwind smoothly.

 

[He Who Posts Well]

Are you a total noob? For the visual learning Khan Academy is nice for basic economics for someone trying to learn something real quick and he goes over current topics.

This is a fiscal/macroeconomics issue you're referring to so I'll try to be varied with the books that I can recall right now. Sidenote: Microeconomics (I'm biased towards the microside and is usually where noobs need to start off at then go from there).

But for a good recent book people where telling me about that might help you out that isn't too technical is....

This Time Is Different: Eight Centuries of Financial Folly by Carmen M. Reinhart & Kenneth Rogoff (they go over macro/fiscal issues as well as econ history)

The Economics of Industrial Organization by William G. Shepherd.
The Structure of American Industry by James Brock. (these two go over micro/somewhat macro issues) These books are somewhat technical but you'll learn alot.

The Law by Frederic Bastiat (very old book you can read/find online. Regardless of how you lean politically he does a great job at explaining opproutnity costs and tradeoffs)

Economics in One Lesson by Henry Hazlitt (its really extension of Bastiat but helps explains tradeoffs-this is more micro)

Armchair Economist: Economics & Everyday Life by Steven E. Landsburg (simple book)

Naked Economics: Undressing the Dismal Science by Charles Wheelan (noob book)

Basic Economics: A Common Sense Guide to the Economy by Thomas Sowell (I don't think he ventures much in political economy here just more basic economics - no pun intended)

Economic Foundations of Law second edition by Stephen Spurr (as the title implies it shows the relationship of law and economics and the impacts of laws on an economy and human behavior-its somewhat technical but great read for a noob)

Simple Rules for a Complex World by Richard A. Epstein (he's a lawyer first and foremost but understands the connection of law and economics and gives a contrarian view of things you might not of thought of. I seen him debate against other economists and . Powerful mind.)

Development as Freedom by Amartya Sen (development economics relates both to micro/macro-noob book)

The Globalization Paradox: Democracy and the Future of the World Economy by Dani Rodrik (more of a political economy book, more current issue economics)

Getting Better: Why Global Development is Succeeding by Charles Kenny (noob book)

The Rise and Fall of Great Powers by Paul Kennedy (Political Economy book, relevant to today)

Freefall: America, Free Markets, and the Sinking of the World Economy by Joseph Stiglitz (current issues political economy book)

Irrational Exuberance by Roberty Shiller (financial economics/macro)

Wealth, Virtual Wealth and Debt by Frederick Soddy (old book, he was a scientist but understood more clearly than others the relationship of energy and economics or how understanding ecology is vital for economies/wealth creation)

For more textbook type of technical books I have a pdf somewhere on a usb drive but that's really for schoolwork doubt you'd want that, plus just refer to the khanacademy econ links nice simplicity

Have fun

 

[No1]

Are you a total noob? For the visual learning Khan Academy is nice for basic economics for someone trying to learn something real quick and he goes over current topics.

This is a fiscal/macroeconomics issue you're referring to so I'll try to be varied with the books that I can recall right now. Sidenote: Microeconomics (I'm biased towards the microside and is usually where noobs need to start off at then go from there).

But for a good recent book people where telling me about that might help you out that isn't too technical is....

This Time Is Different: Eight Centuries of Financial Folly by Carmen M. Reinhart & Kenneth Rogoff (they go over macro/fiscal issues as well as econ history)

The Economics of Industrial Organization by William G. Shepherd.
The Structure of American Industry by James Brock. (these two go over micro/somewhat macro issues) These books are somewhat technical but you'll learn alot.

The Law by Frederic Bastiat (very old book you can read/find online. Regardless of how you lean politically he does a great job at explaining opproutnity costs and tradeoffs)

Economics in One Lesson by Henry Hazlitt (its really extension of Bastiat but helps explains tradeoffs-this is more micro)

Armchair Economist: Economics & Everyday Life by Steven E. Landsburg (simple book)

Naked Economics: Undressing the Dismal Science by Charles Wheelan (noob book)

Basic Economics: A Common Sense Guide to the Economy by Thomas Sowell (I don't think he ventures much in political economy here just more basic economics - no pun intended)

Economic Foundations of Law second edition by Stephen Spurr (as the title implies it shows the relationship of law and economics and the impacts of laws on an economy and human behavior-its somewhat technical but great read for a noob)

Simple Rules for a Complex World by Richard A. Epstein (he's a lawyer first and foremost but understands the connection of law and economics and gives a contrarian view of things you might not of thought of. I seen him debate against other economists and . Powerful mind.)

Development as Freedom by Amartya Sen (development economics relates both to micro/macro-noob book)

The Globalization Paradox: Democracy and the Future of the World Economy by Dani Rodrik (more of a political economy book, more current issue economics)

Getting Better: Why Global Development is Succeeding by Charles Kenny (noob book)

The Rise and Fall of Great Powers by Paul Kennedy (Political Economy book, relevant to today)

Freefall: America, Free Markets, and the Sinking of the World Economy by Joseph Stiglitz (current issues political economy book)

Irrational Exuberance by Roberty Shiller (financial economics/macro)

Wealth, Virtual Wealth and Debt by Frederick Soddy (old book, he was a scientist but understood more clearly than others the relationship of energy and economics or how understanding ecology is vital for economies/wealth creation)

For more textbook type of technical books I have a pdf somewhere on a usb drive but that's really for schoolwork doubt you'd want that, plus just refer to the khanacademy econ links nice simplicity

Have fun

I really wish I took econ in undergrad, but those professors were not concerned with teaching anyone who wasn't trying to get into the business school. My GPA did not need all that pain. Khan Academy huh?

 

[Economics]

I really wish I took econ in undergrad, but those professors were not concerned with teaching anyone who wasn't trying to get into the business school. My GPA did not need all that pain. Khan Academy huh?

Yea, Khan is ok for some undergrad stuff and the basic econ that is taught. Sometimes that's better of seeing the work done out by someone like that rather than reading a book from an economist because many times they'll dumb it way down to get the basic points across. Mitopencourse is very good as well as they post old exams regarding the topics they taught and you can check yourself with the solutions after.

 

[No1]

Yea, Khan is ok for some undergrad stuff and the basic econ that is taught. Sometimes that's better of seeing the work done out by someone like that rather than reading a book from an economist because many times they'll dumb it way down to get the basic points across. Mitopencourse is very good as well as they post old exams regarding the topics they taught and you can check yourself with the solutions after.

I'll look into it.

 

[ogc163]

By Geoffrey T. Smith

The European Union’s hastily-arranged bailout of Spain over the weekend, potentially to the tune of €100 billion ($125 billion), leaves as many questions as answers. Geoffrey Smith addresses some of them.

Q: Is this a sovereign or a bank bailout?

A: Sovereign. The eurogroup’s statement on Saturday made clear that the Spanish government is responsible for any money received. The only difference between this and previous bailouts is that there are no extra fiscal strings attached, because Spain is already following a deficit reduction plan agreed with the EU — and because the rest of the eurogroup realize that asking for more would be counterproductive.

Q: How will it work?

A: The idea is that the money will be paid to the Fund for Orderly Bank Restructuring, 100% owned by the Spanish government, which will then inject capital into the banks. In what form it does that, and what conditions it imposes in return, still have to be thrashed out.

Q: So, it’s still possible that euro-zone taxpayers could end up forking out €100 billion to support Spanish banks, without the shareholders or bondholders having to take any hit at all?

A: It’s unlikely that the shareholders will get away scot-free, but the eurogroup statement said nothing about losses for bondholders. German banks still have €112 billion in exposure to Spain, and French ones had around €90 billion at the end of last year.

Q: Where will the money come from?

A: The eurogroup’s statment mentions both the European Financial Stability Facility and its permanent successor, the European Stability Mechanism, without specifying further.

Q: What difference does it make where the money comes from?

A: Quite a lot. If the money comes from the ESM, then any loans Spain gets will form a new class of debt over and above its outstanding government bonds. Even if it comes from the EFSF, bondholders will fear being subordinated because all official loans came out of the Greek debt restructuring untouched, while all private holdings were written down. All other things being equal, that should raise Spain’s ongoing borrowing costs. In any case, it’s more likely that at least some of the money will come from the EFSF.

Q: Why is that?

A: Because the money is needed urgently, and the ESM isn’t operational yet. Only three of the 17 countries have ratified it. Also, the eurogroup will probably want to avoid drawing on the ESM as long as it can use the EFSF, to preserve as much of its €500 billion firepower as possible. The EFSF still has over €200 billion in unallocated resources. It’s possible that countries like Finland will ask for collateral in return for their agreement, as they have done with previous EFSF bailouts, but that shouldn’t be a problem — the banks’ equity is an obvious candidate.

Q: Will the IMF be contributing money?

A: The eurogroup has so far only invited it “to support the implementation and monitoring of the financial assistance with regular reporting.”

Q: Is this the end of Spain’s problems?

A: Definitely not. Adding €100 billion to its sovereign liabilities will probably make further ratings downgrades likely, which will increase its borrowing costs. Nor does it change the fact that the economy is shrinking by over 1.5% this year, and that unemployment is over 24%.

Q: But at least the banks’ problems are solved now, surely?

A: The bailout’s aim is to get the banks to recognize their losses and make a fresh start. In the meantime, the healthier banks such as Grupo Santander SA and Banco Bilbao Vizcaya Argentaria SA will be complaining that their competitors are being bailed out with cheap EU money, instead of being wound up. This is not the end of anything.

Q: What happens to Spanish bonds in the meantime?

A: They’ll almost certainly be downgraded again, and that will make it more expensive for Spanish banks to roll over their €316 billion in borrowings from the ECB. That means less money available to lend to the economy.

Q&A: Spanish Bailout - The Euro Crisis - WSJ

 

[TopKat]

On the other hand, this all is going to mean more Spanish, Italian and Greek woman are going to emigrate to Ireland...

....c'mon you know they gettin an easy ride into England just like everyone else

 

[Turenne]

....c'mon you know they gettin an easy ride into England just like everyone else

I'm cool with the cast-offs the Brits don't want...

That olive complexion...