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Old 09-29-2016, 03:21 PM
 
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Quote:
Originally Posted by WIHS2006 View Post
With or without the UK, the EU is on borrowed time. It's days are numbered. The French and the Germans squandered the idea by trying to forge a Franco-German Empire out of a trade pact.

My advice, stay in the EU for now and wait for it to die a natural death. At least there will still be a UK when that happens.
It is the smart move by them to leave now. Their politicians and national leaders tried to stop them, but the people made the right call anyway. This is really a seminal event on our planet that will have profound consequences, in the short and long terms, and for generations to come.
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Old 09-29-2016, 10:20 PM
 
Location: ATX/Houston
1,818 posts, read 474,175 times
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The UK left an economic bloc of ~$13 trillion, the largest in the world. Still seems like a move to cut off its nose to spite its face but only time will tell.
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Old 09-30-2016, 12:59 AM
 
Location: England
22,391 posts, read 5,544,595 times
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Quote:
Originally Posted by Spartacus713 View Post
It is the smart move by them to leave now. Their politicians and national leaders tried to stop them, but the people made the right call anyway. This is really a seminal event on our planet that will have profound consequences, in the short and long terms, and for generations to come.
Thank you for your informative posts on this subject. I have read each one with great interest. I haven't commented before, because I have talked about this subject until I am blue in the face elsewhere......

We are slowly making our way to the exit door of the EU. They are still coming at us with the occasional threat, but seem to be calming down somewhat. The leader in Scotland is yapping like a little dog about it, but we pay her no heed. The people who really matter in all this are the English. We form the vast majority of the UK, and we voted by a good margin to leave.

In the long term, I feel the EU needs us, more than we need them. It sells vast amounts of goods in my country. If they want a tariff war, then bring it on. We had to leave, becaude the EU wouldn't listen to our concerns about unfettered immigration.

The very much ex Prime Minister was stupid enough to give us a vote. Well, he got the wrong result from that, and is quitting politics. The new PM Theresa May knows very well the levels of anger and frustration within England, and whether some folks wants to believe it or not, we are leaving the EU.
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Old 09-30-2016, 10:07 AM
 
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To bail out Deutsche Bank, or not to bail out Deutsche Bank, that is the question.

Angela Merkel and the Germans currently say they will not, as they have consistently insisted on holding other EU countries feet to the fire with regards to not bailing out their banks.

If they stick with that and refrain from bailing out DB, then DB could fail, much like Lehman did eight years ago this month. That of course was the official start of the nose-dive phase of the 2008 financial crisis. It could result in a run on the bank, which could develop into a full-scale financial panic. Or, it might just be that someone recapitalizes DB from the outside at the last minute and all this pre-emptive hyperventilating is averted.

Then again, if Merkel and the Germans decide to approve a bail-out of DB, there will swiftly follow a veritable tsunami of other banks being bailed out by their governments and the EU. They do not have the financial resources to recapitalize all of these banks. Also, the fiscal discipline of the Euro (currency union) would be destroyed, what little there is remaining, almost certainly never to be re-established again.

Which is the worse threat? To me it appears it is the latter, especially if they have continued dreams of a prosperous, united Europe that is on track to become the socialist utopia that you know the leaders of this crew long for. If they allow the latter to happen, that dream probably goes away along with it. But if they can somehow manage the former, as one troubled bank, in need of some external capital and a stitch-up here and there, then that they can probably overcome, at least as a stand alone incident.

But what do I know? In any case, I suspect this is why the Germans are holding out and why they have not already bailed out DB already.

Here is a good article that discusses this.

Quote:
Angela Merkel is playing a dangerous game with firm stance that Deutsche Bank is on its own

There are some words that make such an unlikely pairing that we find it hard to put them together. “Italy” and “efficiency”, for example. And “Germany” and “banking crisis” is another one. Our image of German banks, and the German economy, as rock solid is so strong that it takes a lot to persuade us they might be in trouble.

And yet it has become increasingly hard to ignore the slow-motion car crash that is Deutsche Bank, or to avoid the conclusion that something very nasty is developing at what was once seen as Europe’s strongest financial institution. Its shares have been in free-fall for a year. Over the weekend, the German chancellor, Angela Merkel, waded into the mess, briefing that there could be no bail-out of the bank.

But hold on. Surely that is an extraordinary decision? If the German government does not stand behind the bank, then inevitably all its counter-parties — the other banks and institutions it deals with — are going to start feeling very nervous about trading with it. As we know from 2008, once confidence starts to evaporate, a bank is in big, big trouble. In fact, if Deutsche does go down, it is looking increasingly likely that it will take Merkel with it — and quite possibly the euro as well.

Perhaps we would be better off now if a few had been allowed to fail. That said, Merkel is surely playing with fire. In the markets, investors, along with other financial institutions, have rightly or wrongly come to assume that major banks are, as the saying has it, “too big to fail”. If the crunch came, the state would always ride to the rescue. In Germany, that appears not to be the case — certainly for Deutsche, and possibly for its next biggest player, Commerzbank, which is hardly looking much healthier. Would you want to trade a few billion with Deutsche right now, and would you feel sure you’d get paid next month? Nope, thought not. The risk is that confidence evaporates — and as we know, once that is gone, a bank is not long for this world.

True, Merkel’s position is understandable. The politics of a Deutsche rescue are terrible. Germany has set itself up as the guardian of financial responsibility within the eurozone. Two years ago, it casually let the Greek bank system go to the wall, allowing the cash machines to be closed down as a way of whipping the rebellious Syriza government back into line. This year, there has been an unfolding Italian crisis, as bad debts mount, and yet Germany has insisted on enforcing eurozone rules that say depositors — that is, ordinary people — have to shoulder some of the losses when a bank is in trouble.

For Germany to then turn around and say, actually we are bailing out our own bank, while letting everyone else’s fail, looks, to put it mildly, just a little inconsistent. Heck, a few people might even start to wonder if there was one rule for Germany, and another for the rest. In truth, it would become impossible to maintain a hard-line in Italy, and probably in Greece as well.

And yet, if Deutsche Bank went down, and the German government didn’t step in with a rescue, that would be a huge blow to Europe’s largest economy — and the global financial system. No one really knows where the losses would end up, or what the knock-on impact would be. It would almost certainly land a fatal blow to the Italian banking system, and the French and Spanish banks would be next. Even worse, the eurozone economy, with France and Italy already back at zero growth, and still struggling with the impact of Brexit, is hardly in any shape to withstand a shock of that magnitude.

A rock and a hard place are hardly adequate to describe the options Merkel may soon find herself between. The politics of a rescue are terrible, but the economics of a collapse are even worse. By ruling out a rescue, she may well have solved the immediate political problem. Yet when the crisis gets worse, it is impossible to believe she will stick to that line. A bail-out of some sort will be cobbled together — even if the damage to Merkel’s fraying reputation for competence will be catastrophic.

In fact, she is playing a very dangerous game with Deutsche — and one that could easily go badly wrong. If her refusal to sanction a bail-out is responsible for a Deutsche collapse that could easily end her chancellorship. But if she rescues it, the euro might start to unravel. It is hardly surprising that the markets are watching the relentless decline in its share price with mounting horror.
We also have to remember, this is not the only enormous financial problem that the EU faces right now. They still have whole countries precariously tip-toeing along the ledge, including both Greece and Italy.

If they bail out DB, this will be like removing the finger from the hole in the dikke. Rather than resolving the underlying issues, it is truly likely to make them worse.
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Old 09-30-2016, 10:13 AM
 
8,374 posts, read 3,259,723 times
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The weakest link in the EU right now, aside from Greece, appears to be Italy. As this article from Deutsche Welle spells out, Italy is arguably the sick man of Europe.

What is wrong with Italy? Just to list a few noteworthy issues:
  • Nearly half of Italy wants to leave the EU according to recent polls,
  • Italy's banking system appears to be in worse shape than Germany's,
  • Italy is a major immigration gateway from African, it has big problems with regards to immigration and the protests that go with that,
  • Their economy has been among the worst in Europe for over a decade, with no signs of turning around.
  • The Italian PM, Matteo Renzi, has called a referendum in November 2016 for constitutional reform and has promised to resign if he loses. The polls are currently too close to call.
Quote:
Italy, the sick man of Europe?

Nearly half of Italy's population wants to leave the EU, the country's economy is among the worst in the eurozone. Can the government solve this? Sandro Gozi, European Affairs Minister, is on Conflict Zone this week. "We need to relaunch the European integration process," the Italian European Affairs Minister Sandro Gozi told DW's Conflict Zone.

Referring to Germany's vice-chancellor Sigmar Gabriel, who said that the EU would go "down the drain" unless more EU states were kept from following Britain's lead, Gozi acknowledged the Union was in a "delicate phase" and could not afford to maintain "the status quo".

But a poll in May of this year showed that 48 percent of the Italian public would like to leave the EU, especially members of the Eurosceptic Five Star Movement. Minister Gozi told Tim Sebastian: "I love too much my country to let my country go towards suicide." And referring to Brexit he said: "I fully respect the British choice, I think that it is a deeply wrong choice." But many Italians have grown frustrated over the EU's failure to look after the refugees and migrants arriving on Italian shores and turning down the country's requests for financial assistance.
Deutsche Bank and Brexit may be the hot issues of the moment, but Italy has the potential to be a more serious problem for the EU than either of them.
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Old 09-30-2016, 10:21 AM
 
8,374 posts, read 3,259,723 times
Reputation: 4330
Quote:
Originally Posted by English Dave View Post
Thank you for your informative posts on this subject. I have read each one with great interest. I haven't commented before, because I have talked about this subject until I am blue in the face elsewhere......

We are slowly making our way to the exit door of the EU. They are still coming at us with the occasional threat, but seem to be calming down somewhat. The leader in Scotland is yapping like a little dog about it, but we pay her no heed. The people who really matter in all this are the English. We form the vast majority of the UK, and we voted by a good margin to leave.

In the long term, I feel the EU needs us, more than we need them. It sells vast amounts of goods in my country. If they want a tariff war, then bring it on. We had to leave, because the EU wouldn't listen to our concerns about unfettered immigration.

The very much ex Prime Minister was stupid enough to give us a vote. Well, he got the wrong result from that, and is quitting politics. The new PM Theresa May knows very well the levels of anger and frustration within England, and whether some folks wants to believe it or not, we are leaving the EU.
Thank you, Dave, I appreciate that. I appreciate the courage that the people of the UK have shown in over-ruling their elected leaders and choosing a path that will be difficult and will face huge resistance from the UK and EU establishments, but is the right decision anyway.

I think you guys are putting yourself forward as the true leaders of democracy and freedom in the world right now. It used to be us, but obviously not anymore.

For all of that, you cannot be commended nearly enough.
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Old 09-30-2016, 10:43 AM
 
38,052 posts, read 19,032,537 times
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Quote:
Originally Posted by okcthunder1945 View Post
The UK left an economic bloc of ~$13 trillion, the largest in the world. Still seems like a move to cut off its nose to spite its face but only time will tell.
Obviously the people were not happy hence the Brexit vote to leave the EU. After all, what matters more, the people or the elitist? government is supposed to work for the people, not the other way around.
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Old 09-30-2016, 10:48 AM
 
8,374 posts, read 3,259,723 times
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Quote:
Originally Posted by petch751 View Post
Obviously the people were not happy hence the Brexit vote to leave the EU. After all, what matters more, the people or the elitist? government is supposed to work for the people, not the other way around.
The elitists clearly do not agree.
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Old 09-30-2016, 10:49 AM
 
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To address the enormous problems with the EU's banking system, which has not been dealt with in anything close to a sufficient way since the 2008, crash, surely there must be some sort of reforms in the works, right?

Well, no. Instead, they want to relax proposed capital requirements, because having them this high means that European banks are likely not to meet these requirements. So, rather than firm up the banks, they want to lower the requirements.

Apparently no lessons were learned by these people from the 2008 worldwide financial debacle, which they suffered arguably worse than anybody.

Quote:
EU banking chief calls for sweeping changes to proposed capital rules

Global banking regulators need to make sweeping changes to proposed new rules on measuring asset risk to protect European Union banks against a spike in capital requirements, said Valdis Dombrovskis, the EU’s financial-services chief. The Basel Committee on Banking Supervision should rework planned restrictions on how banks estimate the risk from property loans as well as corporate and infrastructure lending, Mr Dombrovskis, a vice president of the European Commission, said in Brussels on Thursday.

Banks have warned that the proposals on how they assess credit, operational and market risk would lead to hundreds of billions of dollars in additional capital charges.The planned introduction of capital floors, a restriction on firms’ use of their own statistical models to measure risk, should be scrapped, Mr Dombrovskis said.

The position of the commission, the EU’s executive arm, puts it at odds with the US, which has said regulators should consider discarding the internal-model approach altogether because it creates the potential for banks to game the rules.

“A solution we could not support is one which would weigh unduly on the financing of the broader economy in Europe,” Mr Dombrovskis said, according to the text of a speech distributed by his office. At a time when we are focused on supporting investment, we want to avoid changes which would lead to a significant increase in the overall capital requirements shouldered by Europe’s banking sector.”
The one requirement that helps to insure the safety and soundness of banks and the banking system more than any other are the capital requirements. These requirements force these banks to keep their liabilities to depositors and bondholders below a certain level, in order to reduce the risk of failure. While typical well-established main-street businesses are usually not able to get unsecured financing if their debt to equity is over 2-1, banks have for many years had debt to equity ratios exceeding 12-1. This is the mechanism for the huge returns on equity that banks earn in good times. But when things turn south, this works against them, and financial crashes and panics ensue.

So as unpopular as the idea is among the well financed banking sect, the answer to this is to reduce risk to depositors and tax payers by requiring higher capital reserves. Even after these proposed increases, banks will still be leveraged over 10-1, which is still quite high.

I would suggest it is not high enough. But the problems in the European banking sector are so pervasive and so severe, that the European bankers and their regulators are balking at the proposal.
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Old 09-30-2016, 11:13 AM
 
9,857 posts, read 6,753,080 times
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They get their nation back and stop the flow of the cult of sharia loving Islamic radicals into their country.
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