Europe

[acej]

It's more common however for them to use Orwellian Newspeak.

Francois Hollande's 'emphasis on growth' is just another way of saying 'let's not stop public spending and let's do away with Merkel's austerity measures' - once 'growth' goes into the budget then there's no need for cuts any more, the debt issue will be resolved by some sort of mysterious optimistic future income whose sources remain unidentified. It's basically the same as putting a future lottery jackpot win into the budget - just dressing it up to sound more believable. 'Spent to Save' reminds me of this old American phrase: http://tinyurl.com/cug6jtmhttp://thinkexist.com/quotation/fighting_for_peace_is_like_****ing_for/164315.html

Back on topic and I agree spend to grow is very different from invest to grow and the austerity measures are needed to reverse the debt culture of the past few decades which have become part of our culture at a personal, institutional and governmental level. But there has has to be a place for growth in any good plan but as in everything a good balance is key and that doesn't always mean 50/50.

 

[acej]

It's a matter of perspective.

I don't agree. I always prefer to revisit my opinions based on information that improves my understanding. Your statement is you opinion from your perspective but still has no relevance to my post.

If onlly that were possible. But sadly the 'q' word was noticed.

Maybe this will help. quantitative ;-)

 

[Dryce]

Maybe this will help. quantitative ;-)

That q word doesn't seem quite so bad - goes down a bit easier.

 

[acej]

That q word doesn't seem quite so bad - goes down a bit easier.

Lol

 

[markjay]

Back on topic and I agree spend to grow is very different from invest to grow and the austerity measures are needed to reverse the debt culture of the past few decades which have become part of our culture at a personal, institutional and governmental level. But there has has to be a place for growth in any good plan but as in everything a good balance is key and that doesn't always mean 50/50.

Of course growth is important, this was what my comment indented to demonstrate - a politician using positive terminology to mask a message that most will not agree with.


Debt is great if (a) it is reasonably-sized and manageable, and (b) it's in aid of economic expansion.

Debt isn't that great when (a) it disproportional massive, (b) it keeps growing very rapidly with no end in sight, and (c) it is used to finance expenditure that has no relation to growth or to subsequent future ability to replay the debt.

Why is the latter bad? Because eventually there will come a time when the country will not be able to borrow any more - usually after it is forced to default on older bonds when they mature - and then it has to either print more money, or stop paying salaries to it's public workers.

The former (printing money) is catastrophic to the economy as it brings with it massive and uncontrollable inflation leading to loss of all state financial control - people simply trade through bartering goods or by using third-party currency in cash such as the US Dollar - which in essence means no tax collection for the government. Also, there is no investment - investors like to be able to calculate their future returns through extrapolation, and in a climate of complete uncertainty about currency exchange rates and taxation it is simply not possible to work out if any business will actually be a financial success.

The latter is equally damaging - without the ability to pay its law enforcement agencies, e.g. police and army, no government will stay in power for long, with anarchy looming and the country being ripe of dictatorship or military take over (I have seen this happen in Africa, when the government of a certain very peaceful country I worked in didn't pay its soldiers - they left their barracks and went on to raid petrol stations and supermarkets in the city looking for cash saying they have not been paid - and within days the country descended into a 10-year long civil war with violent power shifts).

 

[grober]

Big loss but. This is not a greed based investment strategy gone wrong, this was a quant based model that was designed to reduce risk and market exposure for the bank itself that was I'll conceived or more likely short of accurate data. JPM hedge over $200b a day to mitigate market risk and these strategies are crucial in minimising the risk of a failure in a banks investment portfolio That could have a knock on effect to its clients or a the wider economy. Risk management is critical for large scale banking groups that look after 10's of trillions of our money. Risk models and tighter regulation on how hedging is used has been a focus of central banks and regulators since the collapse of Lehmans and questions will be levied at JPM about its internal controls in managing it's risk mitigation strategies. The bank will take the hit which will equate to around 6w revenues but will be under increasing pressure to increase its capital reserves due to inadequate control to insure for future losses.

Sorry for the Rant but this is not a greed or political issue just crap controls and poor management in my view!

Goes to what some might term classic "offender profiling".

JP Morgan trader 'London Whale' blows $13bn hole in bank's value | Business | The Guardian

The reality--- this guy took enormous risks with other people's money but he made a lot of money for J P Morgan over the year's so his behavior would be " tolerated" even handsomely rewarded. Risk reduction and market exposure ha ha ha that's like saying to minimise expose at the Roulette tables I'm going to play Blackjack instead. The defense put up -- that he was very good at Blackjack -----News flash--- its still gambling and not very good gambling at that.

 

[davethemus]

I am no Gandhi but a seem to be going left and down in my old age

there are pills for that now.

 

[acej]

Goes to what some might term classic "offender profiling".

JP Morgan trader 'London Whale' blows $13bn hole in bank's value | Business | The Guardian

The reality--- this guy took enormous risks with other people's money but he made a lot of money for J P Morgan over the year's so his behavior would be " tolerated" even handsomely rewarded. Risk reduction and market exposure ha ha ha that's like saying to minimise expose at the Roulette tables I'm going to play Blackjack instead. The defense put up -- that he was very good at Blackjack -----News flash--- its still gambling and not very good gambling at that.

Not really. He was using recognised wait for it quantitative hedging strategies to minimise JPM's book not it clients. The strategies although not full proof are a mixture of derivatives that are designed to reduce risk. The modelling and the strategy was floored and the management controls not good enough. These strategies are used by every large company not just financial services to minimise their exposure to to credit and fx risk the JPM book is jut bigger.

The only people impacted by this were JPM the bank and those who invest and believe in the quality of their management. He and the bank took steps to reduce risk and got it wrong....

 

[acej]

there are pills for that now.

Have you got any for sale?

 

[davethemus]

Have you got any for sale?

I don't I'm afraid, haven't reached my dotage yet.