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mises
Joined: 05 Nov 2007
Location: retired
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 Posted: Wed Dec 08, 2010 6:50 am Post subject: |
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http://www.telegraph.co.uk/finance/financetopics/financialcrisis/8187476/Iceland-offers-risky-temptation-for-Ireland-as-recession-ends.html
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The Nordic economy grew at 1.2pc in the third quarter and looks poised to rebound next year. It ends a gruelling slump caused largely by the "New Viking" antics of Landsbanki, Glitnir and Kaupthing, the trio of lenders that brought down Iceland's financial system in September 2008.
The economies of the two "over-banked" countries have both contracted by around 11pc of GDP, but Iceland has achieved it with inflation that devalues debt, while Ireland has done it under an EMU deflation regime that raises the burden of debt.
This has led to vastly different debt dynamics as they enter Year III of the drama. Iceland's budget deficit will be 6.3pc this year, and soon in surplus: Ireland's will be 12pc (32pc with bank bail-outs) and not much better next year.
The pain has been distributed very differently. Irish unemployment has reached 14.1pc, and is still rising. Iceland's peaked at 9.7pc and has since fallen to 7.3pc.
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"In the event, the recession has proved shallower than expected, and Iceland�s growth decline of about minus 7pc in 2009 compares favorably against other countries hard hit by the crisis," said Mark Flanigan, the IMF's mission chief for the country.
Total debt will peak at 115pc, before dropping to 80pc by 2015 in what the IMF called "robust debt dynamics". Meanwhile. Ireland's debt will continue rising for another three years to 120pc of GDP. The contrast will be very stark by the middle of the decade. Iceland may have a lower sovereign debt than Germany by then.
Iceland's president, Olafur Grimsson, irritated EU officials last month when he said his country was recovering faster because it had refused to bail out creditors � mostly foreigners.
"The difference is that in Iceland we allowed the banks to fail. These were private banks and we didn't pump money into them in order to keep them going; the state should not shoulder the responsibility," he said.
The comments came just as the EU authorities were ruling out investor "haircuts" in Ireland, making this a condition for the country's �85bn (�72bn) loan package.
Dublin has imposed 80pc haircuts on the junior debt of Anglo Irish Bank but has not extended this to senior debt, viewed as sacrosanct.
The Irish press reported that EU officials "hit the roof" when Irish negotiators talked of broader burden-sharing. The European Central Bank is afraid that any such move would cause instant contagion through the debt markets of southern Europe.
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Iceland is recovering. We should copy them. We = West. |
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bucheon bum
Joined: 16 Jan 2003
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| Posted: Wed Dec 08, 2010 7:33 am Post subject: |
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You know who agrees with you mises? Paul Krugman.  |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Wed Dec 08, 2010 7:34 am Post subject: |
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| bucheon bum wrote: |
| You know who agrees with you mises? Paul Krugman. |
D'oh. |
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Wed Dec 08, 2010 7:46 am Post subject: |
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| "The difference is that in Iceland we allowed the banks to fail. These were private banks and we didn't pump money into them in order to keep them going; the state should not shoulder the responsibility," he said |
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Iceland is recovering. We should copy them. We = West. |
| mises wrote: |
| bucheon bum wrote: |
| You know who agrees with you mises? Paul Krugman. |
D'oh. |
So, Paul Krugman thinks that the West, including the US, shouldn't bail out private banks with taxpayer funds?
Really? When did he convert? |
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bucheon bum
Joined: 16 Jan 2003
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| Posted: Wed Dec 08, 2010 8:37 am Post subject: |
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His column
Well, not exactly. But he did note:
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Part of the answer is that Iceland let foreign lenders to its runaway banks pay the price of their poor judgment, rather than putting its own taxpayers on the line to guarantee bad private debts. As the International Monetary Fund notes � approvingly! � �private sector bankruptcies have led to a marked decline in external debt.� Meanwhile, Iceland helped avoid a financial panic in part by imposing temporary capital controls � that is, by limiting the ability of residents to pull funds out of the country.
And Iceland has also benefited from the fact that, unlike Ireland, it still has its own currency; devaluation of the krona, which has made Iceland�s exports more competitive, has been an important factor in limiting the depth of Iceland�s slump.
None of these heterodox options are available to Ireland, say the wise heads. Ireland, they say, must continue to inflict pain on its citizens � because to do anything else would fatally undermine confidence.
But Ireland is now in its third year of austerity, and confidence just keeps draining away. And you have to wonder what it will take for serious people to realize that punishing the populace for the bankers� sins is worse than a crime; it�s a mistake. |
And he's saying Ireland, Portugal, and Greece should default on their debts |
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caniff
Joined: 03 Feb 2004
Location: All over the map
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| Posted: Thu Dec 09, 2010 1:05 pm Post subject: |
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Look Out Ben Bernanke, Ron Paul Is Gunning for You!
Dec 9 2010, 1:14 PM ET
Last week, I wrote a column about what I think is one of the more intriguing storylines for the new Congress: the possibility that Rep. Ron Paul (R-Texas)--strident libertarian, devotee of Austrian economics, author of End the Fed--might finally assume the chairmanship of the House subcommittee that oversees the Fed. Twice before he's been denied this spot because the GOP leadership worried he was too much of a rabble-rouser and too independent-minded to control. But given the broad animus toward the Fed--a new Bloomberg poll shows that half of all Americans want it reined in or abolished--especially among the ascendant Tea Party wing of the Republican caucus, denying Paul for a third time would have provoked an uproar.
Well, word has just come down from the Financial Service Committee that Paul got the job. |
http://www.theatlantic.com/politics/archive/2010/12/look-out-ben-bernanke-ron-paul-is-gunning-for-you/67779/
This should prove interesting. |
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bucheon bum
Joined: 16 Jan 2003
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| Posted: Thu Dec 09, 2010 1:32 pm Post subject: |
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| With that and the Dems finally getting a backbone (for now at least), I have to say I'm expecting some true entertainment and drama on Capitol Hill for the next year or two. |
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caniff
Joined: 03 Feb 2004
Location: All over the map
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| Posted: Sat Dec 11, 2010 7:29 am Post subject: |
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The U.S. Commerce Dept. reports a big jump in exports:
http://www.theatlantic.com/business/archive/2010/12/us-exports-jumped-to-pre-financial-crisis-level-in-october/67817/
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| You can add international trade to the list of positive U.S. economic indicators for October. The trade deficit shrunk by $5.9 billion to $38.7 billion during the month, according to the Bureau of Economic Analysis. That's still a big trade gap, but it's the smallest since January. The amount by which it declined is also the most since February 2009. The best part: it was mostly driven by a huge increase in U.S. exports. |
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Steelrails
Joined: 12 Mar 2009
Location: Earth, Solar System
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| Posted: Sat Dec 11, 2010 8:01 am Post subject: |
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| The title of this thread is misleading. I came here expecting to find information on how to treat my rampant alcoholism and nicotine addiction. Instead all I find is hope and optimism. |
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Kuros
Joined: 27 Apr 2004
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| Posted: Wed Feb 02, 2011 10:25 am Post subject: |
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America's 12 growing industries
Yes, one of these is the Federal Gov't.
Others include: Mining, Health Care, Metals Mfg, High Tech Equip Mfg, Auto Industry, Plastics & Rubber Mfg.
Manufacturing is rebounding, except, justifiably, nondurable goods mfg. |
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Menino80
Joined: 10 Jun 2007
Location: Hodor?
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| Posted: Thu Feb 03, 2011 11:55 am Post subject: Re: ... |
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| mises wrote: |
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In case its not crystal clear, this isn't the "Great Recession".
Its really the Great Bank Robbery.
First, there was the threat of martial law if the $700 Billion Tarp bailout wasn't passed. Specifically, Treasury Secretary Hank Paulson warned Congress that there would be martial law unless the Tarp bailouts were approved.
As I pointed out last October:
The New York Times wrote on July 16th:
In retrospect, Congress felt bullied by Mr. Paulson last year. Many of them fervently believed they should not prop up the banks that had led us to this crisis � yet they were pushed by Mr. Paulson and Mr. Bernanke into passing the $700 billion TARP, which was then used to bail out those very banks.
***
Congressmen Brad Sherman and Paul Kanjorski and Senator James Inhofe all say that the government warned of martial law if Tarp wasn't passed:
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This is complete BS, Inhofe is a complete loony right out of McVeigh country who can't tell TARP from a hole in the ground. This is the problem with the Senatorial system, Oklahoma gets just as much say as California. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Thu Feb 03, 2011 12:03 pm Post subject: |
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| What is incorrect. Be specific. |
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Menino80
Joined: 10 Jun 2007
Location: Hodor?
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| Posted: Thu Feb 03, 2011 12:17 pm Post subject: |
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| mises wrote: |
| What is incorrect. Be specific. |
Paulson did not threaten martial law.
On a related note, Dick Cheney killed and ate a live puppy, he told Russ Feingold once when he got drunk.
Don't think so? Prove it. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Thu Feb 03, 2011 12:26 pm Post subject: |
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James Inhofe (R) and Brad Sherman (D) say marital law was the threat.
Two US Senators.
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| This is the problem with the Senatorial system, Oklahoma gets just as much say as California. |
Sherman is from Cali. |
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Menino80
Joined: 10 Jun 2007
Location: Hodor?
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| Posted: Thu Feb 03, 2011 12:39 pm Post subject: |
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| mises wrote: |
James Inhofe (R) and Brad Sherman (D) say marital law was the threat.
Two US Senators.
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| This is the problem with the Senatorial system, Oklahoma gets just as much say as California. |
Sherman is from Cali. |
Sherman is in the House, which is full of squirrelly q's.
Sorry I'm not believing anything Inhofe reports from the Cabinet about martial law, black helicopters, or the Federal Reserve. Too directly in his constituents' paranoid anti-government wheelhouse. |
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