Why are you surprised? I've said for a while that Germany inevitably will go bust if the country is asked to backstop the rest of the Eurozone's debt. It's blantantly obvious that this cannot work, neither through the EFSF nor through Eurozone bonds. Investors may now finally wake up to that, the Netherlands and Finland have been feeling this for a week or two now. In Brussels, Paris and Berlin though, people keep coming up with new pipe dreams....Germany...
Now we are starting on a low low low level of rates, but if we cannot even place our bonds anymore
Greece, Italy...Spain?
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Not surprised, doesn't make the thing easier to swallow though...
onedreamer
Dragon
your comments are silly nonsense. Apart from the fact that Germany is the european country that had more to gain from the EU and euro because most of its export is in Europe, apart from this the failure at the last auction is due to other bonds having higher yields and I don't see why it should be connected with Germany backstopping the EU. The 2 years bonds are the less risky because they end after only 2 years, so the investors evidently prefer to risk for a higher yield than the miserable ones of the deutsche bunds. Anyways when what is happening is that european bonds are sold to buy german long range bunds, effectively moving (virtual) money from the rest of the EU into Germany, you can't really whistle and look at the other side as if you yourself weren't living up thanks to the EU. Besides, if you don't like it then go the hell out of the EU already. Pure hypocrisy here.
more than half of that time period would lead me to be very optimistic about a potential lack of safeguards
Integral
Can't you hear it?
Germany failed a bond issue today. Europe, get your act together!
I'm now at a loss to what Europe should 'do' to get its act together.
Winner
Diverse in Unity
Close the bond markets and execute all the idiots who trade on them, to begin with.
You don't have debt paper in your investment portfolio?
innonimatu
the resident Cassandra
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Default on all debt. It still wouldn't "save" the euro project as a "strong currency" to facilitate the worldwide operations of European financial groups, but that is already dead seeing as all those financial groups are already unable to place new debt on the markets. Default might make the euro's continued existence possible for a decade more, an that might be enough for the countries inside the EU to undo the imbalances it created.
But they won't want to default, creditors are running the show and will do it until the EU itself collapses. The bankers don't want to default because the failure would stick to them, for a change. And many of the smaller people don't want a default because they are worried about keeping the (already fictional!) value of their own petty "investments".
And one other think: some of the politicians and bankers/economists may still be in denial, but I'm convinced that most already understand that defaults are inevitable. They are just to cowardly to carry them out because they know that the people on the losing side (though their losses are already inevitable, I even argue already realized considering that markers for many bonds are already nonexistent at face value and they can't be sold without a huge discount) will shoot the messenger of the bad news.
It may not even be exactly cowardly, but a sense of hopelessness of any head-on alternative. For a comparison, you know how governments sometimes refuse ultimatums from far more powerful foes and choose to fight a hopeless war, because only defeat will finally make what was impossible (the demanded concessions) acceptable to their own people? Some european politicians may be thinking themselves stuck in such a situation.
Winner
Diverse in Unity
I don't have an investment portfolio. Anyway, it was a sarcastic joke.
Right now, our only option seem to be to flood these morons with paper money. ECB can, if need be, lend an unlimited amount of Euros to any country, if only the Germans weren't dead-opposed to it.
Verbose
Deity
Would a spot of inflation hurt the German export industry much? I somehow just don't get that impression. At least not compared to some the alternatives here...
innonimatu
the resident Cassandra
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AH, but you do not live in an eurozone country. Virtually everyone who does has an "investment" in euros, at the very least in their savings account in the bank. Many actually have higher debts and would benefit from either default or devaluation, but you know how irrationally averse people can be to "losing" anything, even when they'd be net winners...
In the end it'll be a choice between default and losses to bondholders and other indirect "investors", or devaluation with that flood of euros and losses to savers. Neither necessarily requires ending the Euro, but the easiest way for either one does involve that.
Lack of any action at all, the default (pardon the pun) scenario now looking more likely, will be one of exit from the euro with devaluation (meaning an unacknowledged partial default on external debt) in the southern countries (and maybe Ireland and France), and cascading private and public defaults in all the others.
Winner
Diverse in Unity
It's largely irrational. The Germans have a tradition of strong anti-inflationary thought and I respect it, but in this case it's like refusing to extinguish a fire because you're opposed to wasting water.
The important thing now is to crush the panicky thought that the Eurozone is going to break up and that there isn't enough money to bail out other countries. Once the panic is gone, then we can do all the rest - reform the way Eurozone works, change the EU treaties, etc. But right now, we need a decisive action to beat the markets into submission.
I've already abandoned my personal resistance against printing money to throw at the problem until it goes away, as long as precautions are taken to make this a temporary measure and not our new way of keeping our economy afloat.
Now in times of crisis it's the only opportunity to change something. Afterwards only one apathetic or reactionary country is enough to stop everything.
It's just the fear that we patch together some rescue-measures now and when everything is over (hopefully) the problems persist because nobody cares anymore and it wasn't that bad after all, right? You know, how the EU works usually.Winner said:
Now in times of crisis it's the only opportunity to change something. Afterwards only one apathetic or reactionary country is enough to stop everything.
