Sunday, 30 October 2011

Sunday times

There was a time not so long ago when I would scour the Sunday newspapers, desperate to find some info on the latest take-over or move in the market in order that  I could plan my trading for the week. Now instead the papers are full of articles like this one in the Telegraph. Well written and coherent - it still reads to me as a someone writing in Rome in the early 5th Century AD.

It will be such a shame if all is really lost, but how do we get morality back into the system. Not being a church-goer this is a question I find hard to answer. Amoral markets I would accept, possibly, but immoral markets and Governments lead us to...well I don;t know. But at worst a new set of Dark Ages.

Oh for the Sunday evenings of but 4 years ago.


Anonymous said...

I'm 100% convinced that these faux 'agreements' are simply buying time to allow the global elite to move their assets from fiat currencies, insolvent banks and under-water funds with minimal losses. Then the house-of-cards can collapse, the 'little people' will be left with nothing and the politicos will be rewarded in the usual manner.

CityUnslicker said...

Possibly, but the world is not that well ordered. Everyone I know in the City is panicking and desperate for things to get solved...are they all little people too?

Budgie said...

I see that Liam Halligan gives the deal two weeks, as I did in the last eurofudge post. It is nice to have an expert, and one I admire, coming up with a similar view.

What I do not understand is what will happen to shares, gold, the housing market and other assets. After all fiat money is being devalued as a matter of policy, so you would expect a flight to assets.

The whole economic system seems to be gummed up, and is becoming like the end of the western Roman empire when people converted their wealth into gold and hid it in the ground. Much good it will do there.

Nick Drew said...

The thing that surprised me last time around (08) was that the day-to-day mechanistics of the financial system never broke down

OK there were queues outside Northern Crock, and there was that Sunday evening when, so legend has it, if some or other deal hadn't been agreed the ATMs would have been switched off on Monday morning

but there was continuous trading and market-making in (almost) everything throughout the entire piece, in other words the System (banking, credit cards, money transfers, FX, share dealing, travel etc etc) didn't break down - at least at the level of the ordinary punter

and I rather assumed it might

again, some SMEs say they can no longer get finance & I suppose you can say that is a breakdown of sorts, although it could also be described as a rational tightening of credit terms

perhaps the next several weeks will bring some actual system failure ..?

andrew said...

On 'face the facts' on R4 last night, the hedge fund managers are buying the Greek debt and plan on not accepting the 'voluntary' haircut the banks have signed up to.
According to the greek dmo, over 2bn short dated (march '12) bonds have gone that way.
If I was a hedge fund person I waould also buy greek cdos(? - I think this was the term) and then if they refuse to cough up, you profit both ways.
This behavior was portrayed as immoral, but I dont think that using the rules to enforce a written contract can really be described as such.

what they did say was that whilst most of the greek bond debt is iin Europe (not uk) most of the cdos liability is in the UK / USA.

So, it seems like half the city is busy trying profit from the other half.

Business as usual?

CityUnslicker said...

Andrew great call. The hedgies have all read Liar's poker and know what to do. The name of the game is shafting Government's that make stupid decisions. Also the Hedgies don;t care if the banks go bust, although they have not probably thought about who their prime brokers are - to Nick's point - the strategies like this break down when the markets start to fail.

Ryan said...

Its all about dreams:

The EU dreams that it can create a united states of Europe. That would mean a single currency as a given. Greece cannot really survive within the Euro. It has taken less than 10 years to find that out. Many other European countries can't really survive with the Euro. The EU won't let its dream die.

The EU dreams that the Euro can be the worlds chosen reserve currency. To do that it can't print enormous quantities of Euros and inflate away the debt. The US can because som many $ are held in foreign reserves printing more cash in the US can pay off the debt without causing that much inflation. The EU won't let the dream of a strong Euro used as a reserve currency die.

If the EU leaders insist on holding on to those two dreams, the question is just how bad will the situation in Europe be allowed to get before the whole thing is forced apart by violent reaction to an unsustainable situation?

We are staring at Great Depression II and an inevitable European war as things stand, and the EU will be the cause of it.

measured said...

Prophetic words, Ryan.

Sean said...

Capitalism knows how to deal with all this, cull the banks, retrieve whats is worthwhile, take the pain and live within your means, and then lets all move on.

Capitalism surely is a system of pain"less" failure not pain"free"

dearieme said...

Mr Brown certainly played his part in abolishing Boom and Bust. It's going to be Bust, More Bust and Most Bust from now on.

James Higham said...

At least with immorality, they know they're doing wrong.

hovis said...

dearime - I do like a big bust but not of this sort ...

hovis said...


"the world is not that well ordered."

Indeed, was it ever?

"Everyone I know in the City is panicking and desperate for things to get solved...are they all little people too?"

IMHO yes, whilst being paid well they are often employees with an employee mentality even when nominally not ...