Newsnight - Sovereign default?

Part 1:

Part 2:


Looks like 2008 was just a trial run at a banking collapse…


So a sovereign default was the undoing of the De’Medicis. Didn’t know that.

I laughed at the professor saying “watch your language”! Preposterous must be a swear term in the States.

I have a question to ask. Is this a likely scenario in the event of…

  1. A Sovereign Default in a Euro state occurs, leading to…
  2. Investors & Unknown Euro Banks taking a hit, leading to…
  3. Interbank Lending (Credit Crunch Mk2) collapse, leading to…
  4. ECB supercharging the printing presses (ala the FED), leading to…
  5. (Hyper-)Inflation? Sky high Interest rates?

Why hasn’t 5) happened to the US yet, or have I just not been aware of it?


Sachs is a real heavyweight, put the others in their place.

I did not notice the sarcastic smiley…

He was a blowhard and a personification of the intellectual complacency that got us into the mess in the first place. Greece only a problem in the last 10 weeks? The problem of Greece et al was first discussed as a real problem by those who were paying attention back in 2005. The inherent structural defects of the Euro and ERM were extensively discussed in the professional literature 15 / 20 years ago. And sovereign debt default (restructuring) will be in full swing in the next year or two, no matter how much Sacks drones on.

Because the chinese and other trade surplus countries have been buying up US and euro sovereign debt (ie lending us money) for the last 15 years. That keeps interest rates low. And it keeps the cost of asian manufactured goods low, keeping inflation low.

But as the old saying goes, if something cannot go on forever, it wont. The question is when will it end, and how disruptive will be the transition to a balanced world economy.

There has never been a balanced global economy. There is only entropy as there is only universe.

Shock therapy anyone? That’s worked out a treat. And Bono’s favorite ‘economist’…buy a handbag with this sticker on it and…feed the world.

For one horrible moment there, during Mr. Hendry’s shockingly atypically mellow initial comments, I thought someone had sedated him!

I’m with him on the cathartic resolution. Purge. Purge. Purge. :sick:

Blue Horseshoe

From the vid…

Pretty much sums up why we need our ‘austerity’

From Sachs (with regard to Greece)

‘Normal’ meaning slave and servicing the market meaning his buddies in the fucking banks


and Sachs with regard to causes and solutions…

A bit late. Wheres your fucking free market now you CUNT

Regulation has nothing to do with our current mess. More regulation will only harm the market. What we do need, is less government interference in the market place.

Too much regulation got us into this mess and less is needed to get us out? Do you really believe that neo-liberal clap-trap?

Regulation - or more correctly - the lack of regulation, is precisely what caused this current mess: … 18568.html

More regulation will only harm us, the small fry. If the government looking after their own and vested interests had to stay out of the property market we would never be in this mess we are in now, coupled with the ponzi scam known as fractional reserved banking. If you go back over the centuries, time and time again it will show you that politicians (or the powers to be) and bankers have caused all the crashes.

Do you really believe that politicians with all their regulations will actually benefit the economy?

What a laugh.

Greenspan and Bernanke are also responible for this crisis. It was Greenspan who interferred with the market by keeping the interest rate too low an encouraging borrowing with cheap credit.

In theory, I agree with the cathartic resolution.
But you have to ask yourself, why the cathartic resolution wasn’t the path taken by ANY of the so-called western world governments? Why ALL of them spent trillions bailing-out the banks?
Very simple. It’s called social consequences. And I’m not talking about riots greek- style.
I’m talking about poverty levels soaring, infant mortality going through the roof, middle classes being decimated, and a level of civil unrest similar to what you can see in Kingston now. And the cathartic period would last much, much longer than 3 years.
Obviously, 10-15% of the population would enjoy a high standard of living. For them, the cathartic period, with the asset prices falling to the floor that would go with it, would be a blessing, and the best invention since sliced bread.

Glass-Steagall Act.
Repealed Nov. 1999.

Interest rates too low
Fractional reserve banking

Precisely javishka. The regulation put in place in the 1930s was designed to prevent the financial system gaining control over the economy, that is, a level of influence that automatically meant a financial crisis turned into an economic crisis, where financial institution failure cost little people their savings, where too-big-to-fail institutions dominated the economy. What was rolled back in the name of liberalism and the little people only benefitted those who were already wealthy. The existence of obscene amounts of credit built an industry whose sole raison was to push debt on anyone foolish enough to take it at a price they couldn’t understand. Those amounts of credit were permitted by unregulation of structured finance, abandonment of leverage ratios, excess margin, off-balance accounting.

The fractional reserve system you rail against Mossy is precisely the creation of this deregulation and unregulation. The Great Moderation? Hah, the great wealth transfer more like.

15th of August, 1971, “The Nixon Shock”.

The mother of all de-regulations.

Check mate 8DD