Friday 15 June 2012

Squeaky Bum Time - Grexit on the cards

Ok, no one knows what is going to happen. However, the signals are coming fast and strong now. The Chancellor George Osborne's announcement last night of another type of credit loan to the Banks shows they know perhaps a little more than they let on.

(As a quick aside, its a balance sheet recession, the issue in an acute crisis such as this is demand not credit. For once I'd be in favour of some big Govt capital spending increase, without actual economic activity we could have a 2008 recession rerun. Credit supply is only a part of the problem so this seems to me to be half an answer - this is not long-term keynesianism I am advocating, its a crisis response).

I see events unfolding thus:

Sunday - Inconclusive Greek general election, a total rerun of last time (the polls are almost identical). So no new Government on Monday and Syriza getting a chance next week to try and form a Government. Loans and market confidence in Greece evaporates.

Monday - Some chaos on the markets, Spain and Italy find funding hard - but no October 2008 crash, yet. G20 meeting will avoid this as traders and investors wait and see

Tuesday/Wednesday - Now what? Does the Troika give more money to Greece and will it matter? With bad policy management this could see some very sharp drops if policy response is not forthcoming from the G20.

All in all, shaping up to be a very interesting week - clogging will be heavy here in contrast to the lightness of the past week due to heavy workloads being endured by your contributors.

PS  And can England even beat Sweden tonight...

17 comments:

James Higham said...

Squeaky or lubricated?

Richard Elliot said...

I'm going to Turkey in two weeks and some of the hotels charge in EUR.

When to get my currency?

Raedwald said...

I've predicted the denoument for July; next week will see a lot of faffing about and a big reassuring announcement (they'll have this sorted in reserve) that will last a few days, but w/c 25th will be when it starts to tumble out of control I think.

Sean said...

end Sept/Oct for me. Euro and american debt election collide.

lilith said...

Sweden will win.

Demetrius said...

The picture of Fergie reminds me that the owners are going into swapping debt for equity and doing it in New York rather than Singapore. This maybe to do with new UEFA rules about clubs with high debt being banned from Euro competitions. But is may be to do with something else. I'm flagging offide.

Sebastian Weetabix said...

I may be a bitter Jock, but frankly if this England side were playing the blind school, I would fancy a flutter on the blind school.

And yes, I know Scotland are shit. But at least we know we are. The endless misplaced optimism of the tabloids concerning the white-shirted oafs does grate after a few decades.

Anonymous said...

Sebastian - what do you mean, "may be"?

Anonymous said...

Sebastian...ha ha ha ha, Ha Ha Ha Ha, HA HA HA HA........

Timbo614 said...

@Lillith & the bitter jock

Hah hah hah hahahahahahahahah Hah!

TheFatBigot said...

These things take an eternity, there is always one final rescue scheme available because the Europowers have a huge amount of other peoples money to throw at anything that undermines the masterplan.

Signs are that one day soon Greece will be forced to be the first Euro country to have to recognise the most obvious fact in life - if you live beyond your means the day will come when you have to make a painful adjustment.

My guess is that it will occur when normal parliamentary business across europe is taking a breather, so that other national interests won't be whipped to a froth by their superannuated politicians, I'll say mid-August.

Sebastian Weetabix said...

Lucky people. They won't get much further.

lilith said...

Ah, but I am a football Jonah!

Bill Quango MP said...

close call moment. started to give the ball away as usual. Terry's lost his legs but can still tackle perfectly.

Not bad. Not bad at all.

Anonymous said...

The solution to this problem is for the Euro currency to be abandoned, and for all of its members to revert overnight to their original currencies.

Then they can all play against each other, under a financial equivalent, known as EUFA rules.

Respective team (or country) currency values will then be determined through competition, as
with the football.

investment in bamboo said...

Greece just beat Russia - maybe that will boost morale there and prevent a meltdown.

Timbo614 said...

@iib: I really, really hope it does not have to come down to the outcome of a game of footie. On the other hand, nothing would surprises me any more!