[mike777]

"Here our banks are chartered. This means that they are regulated such that the shenanigans of the US are much less possible and deleterious for our financial system. This stopped our banks from over-leveraging and limited their losses back in 2009."


Again this myth is repeated


It may, repeat may be true, but again you present zero evidence of cause...zero evidence of effect. Zero evidence of any secondary harm.

For the umpteenth time factors that prove cause and effect is very hard....show it.

Correlation is not causation.

You may be correct but at this point you prove nothing

btw many banks in the usa are chartered.
All banks in USAn all banks are heavily regulated....even in 2007.
the myth is zero regulation or close to zero.
much closer to the truth is one I have discussed here for a decade....regulator capture.

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From aN sec view point...I note one...only tiny regulator when it comes to banks

Banks fail inspection....next inspection...and next....regulators expect failure...banks expect failure.
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btw banks spend over 25 billion just on one regulation...just one law.

[Al_U_Card]

What myth is that, Mike?

The cause is human greed, expediency and enforcement.

The effect was that our banks were not allowed to mix "regular" banking (straight fractional reserve 9/1) with the leveraged practices of US banks. Some of ours actually bought US banks to get into the action and they paid for it after the crash. But those US banks were "investments" in the currency casino of swaps and obligations and not part of their regular banking business.

The harm resides only in the requirement of taxpayers to accept (banking) gain for profit and loss for subsidization. All those dollars have to go somewhere because for every loss there is a gain and it was definitely not accrued to the lender of last resort (us by default).

It seems to me that the Keating Five and the S&L crisis of the 80s was just a matter of bad loans causing some of those institutions to fail and the subsequent cover-up resulting in increased regulation (if not increased enforcement). Were banks limited to S&L or even just the ability to charge for services and interest on the reserve (not on the full amount) then there could even be speculation banks for investors (gamblers?) to try their hand. That harm could then be limited to participants and not to the public.

[y66]

Guest post by Yanis Varoufakis: My Experience With Wolfgang Schäuble.

I wish guys like Mr. V. would post more often in the WC.

[kenberg]

y66, on 2015-September-12, 08:10, said:

Guest post by Yanis Varoufakis: My Experience With Wolfgang Schäuble.

I wish guys like Mr. V. would post more often in the WC.

That is an absolutely great interview. Varoufakisgave, I believe, a pretty straight-forward presentation of his views. I wish he would have addressed the followiing:

Imo,the Greek referendum was a huge error. It was presented to the people as: Dou you wish to remain in the EU and get a better deal in the negotiations. Of course the vote was yes. A more honest question would have been: Suppose we are not able to strike a better deal. Should we then stay or leave the EU? This revised question is realistic, it announces the choices and asks for a vote on those choices. The question that was actually presented made no allowance for the choices that were to follow, and could be expected to follow. The result was a premature celebration and lots of stuff about how democracy is winning. Democracy made a choice there without taking into account that the choice being voted on was not the choice being offered.

[blackshoe]

You can fool all of the people some of the time...

[helene_t]

y66, on 2015-September-12, 08:10, said:

Guest post by Yanis Varoufakis: My Experience With Wolfgang Schäuble.

I wish guys like Mr. V. would post more often in the WC.

Is it just me or does this guy appear as if he is lying his arse off?

[kenberg]

helene_t, on 2015-September-12, 15:04, said:

Is it just me or does this guy appear as if he is lying his arse off?

Myself, I did not think of him as lying. I did think that he put the matter in an unrealistic light, as I noted above.

He distinguishes between calling someone a terrorist, which ha says that he did not do, and saying that closing banks terrorized Greek citizens. Fair enough. At the least I am sure that it made then extremely anxious.

But he was being disingenuous. Let's go back to the Krugman post in 397:

Quote

Tsipras and Syriza have won big in the referendum, strengthening their hand for whatever comes next. But they're not the only winners: I would argue that Europe, and the European idea, just won big — at least in the sense of dodging a bullet.

I know that's not how most people see it. But think of it this way: we have just witnessed Greece stand up to a truly vile campaign of bullying and intimidation, an attempt to scare the Greek public, not just into accepting creditor demands, but into getting rid of their government. It was a shameful moment in modern European history, and would have set a truly ugly precedent if it had succeeded.

But it didn't. You don't have to love Syriza, or believe that they know what they're doing — it's not clear that they do, although the troika has been even worse — to believe that European institutions have just been saved from their own worst instincts. If Greece had been forced into line by financial fear mongering, Europe would have sinned in a way that would sully its reputation for generations. Instead, it's something we can, perhaps, eventually regard as an aberration.

And if Greece ends up exiting the euro? There's actually a pretty good case for Grexit now — and in any case, democracy matters more than any currency arrangement.

Tsipras and Syriza have won big in the referendum??? Krugman is not an idiot, but he really thought that if the people of Greece voted that they wanted a better deal then this would be sufficient to bring about a better deal? There seemed to be a great deal of wishful thinking.

The banks got closed because negotiations were suspended pending the results of a pointless referendum. Time ran out. I imagine that he understands this, he simply prefers a different formulation.

[y66]

Lying his ass off Helene? I don't think so. Varoufakis and Tsipras got the mandate they wanted to negotiate better terms for an IMF+EC+ECB bailout. Yes, this was a high wire act that may have failed anyway but it was Greece's only chance for a better deal. The pressure of Syriza's "now what?" moment was too much and Tsipras was forced to capitulate by members of his own party.

Varoufakis hinted in the interview that Christine Lagarde understood perfectly well that the Troika's terms which Greece rejected are not workable. Indeed, she said as much in August:

Quote

However, I remain firmly of the view that Greece’s debt has become unsustainable and that Greece cannot restore debt sustainability solely through actions on its own. Thus, it is equally critical for medium and long-term debt sustainability that Greece’s European partners make concrete commitments in the context of the first review of the ESM program to provide significant debt relief, well beyond what has been considered so far.

Varoufakis was all in. I love that guy.

[kenberg]

y66, on 2015-September-13, 07:25, said:

Lying his ass off Helene? I don't think so. Varoufakis and Tsipras got the mandate they wanted to negotiate better terms for an IMF+EC+ECB bailout. Yes, this was a high wire act that may have failed anyway but it was Greece's only chance for a better deal. The pressure of Syriza's "now what?" moment was too much and Tsipras was forced to capitulate by members of his own party.

Varoufakis hinted in the interview that Christine Lagarde understood perfectly well that the Troika's terms which Greece rejected are not workable. Indeed, she said as much in August:



Varoufakis was all in. I love that guy.

I am skeptical of "only chance".

Compare with the UK/EU negotiations.

First, I acknowledge I only follow this in the large.


As I understand it, the UK is not satisfied with the terms that it has with the EU and plans to either improve those terms or else back out of membership. This may be a good idea or it may be a bad idea, I have no opinion about that. But it is an understandable position. To me, the Greek approach was like this: I go into the Honda dealer, point to the car I want, tell the dealer that I have polled my family and they are in full agreement that the seller should give me a better deal than he is offering. I make it clear that I intend to buy the car whether or not he lowers the price, but I really would like it if he did and all my family agree so of course he should do that.

I don't think that this would work.

The possibility of a Greek exit was always on the table or at least not far from the table.. Here is what I think would have been best: The Greek negotiating team make it clear that whatever agreement is reached would be, after and not before it was reached, submitted for referendum The Greek people would decide whether to accept the negotiated terms or to leave the EU. I have no idea where that would have led, but I would see it as far more of a reasonable approach. Krugman, in the same quote you had up and I copied, views a Greek exit as a plausible course. He was clear about that, and so were others.

So they could have negotiated the best deal possible and then submitted it to the nation to approve or reject, where reject meant an exit. That makes sense to me. Having a referendum about whether or not they would like a better deal, with no realistic plan for what happens if they are not offered a better deal, sounds like a mistake and I think it was. They wasted precious time, with the Greek economy in a tailspin while waiting for a meaningless vote.



I am not any sort of expert in international negotiations but I came away with the conclusion that neither is Tsipras, nor any of his group. Not even close.