Thursday, July 28, 2016

Ambrose Evans-Pritchard — IMF admits disastrous love affair with the euro, apologises for the immolation of Greece


This is the Torygraph, not the Onion.
The report said the whole approach to the eurozone was characterised by “groupthink” and intellectual capture. They had no fall-back plans on how to tackle a systemic crisis in the eurozone – or how to deal with the politics of a multinational currency union – because they had ruled out any possibility that it could happen.…
Same story the US with the lead to the 2008 financial crisis. The FBI had warned of massive fraud in the mortgage market in December, 2004.

Impossible to write this off to sheer ignorance. Too much money was made for it to have been completely accidental.

The Telegraph
IMF admits disastrous love affair with the euro, apologises for the immolation of Greece
Ambrose Evans-Pritchard

8 comments:

Ignacio said...

because they had ruled out any possibility that it could happen

End of History? Am I right?

Stupid is as stupid does.

Matt Franko said...

"massive fraud in the mortgage market in December, 2004"

So the latency of the fraud factor is 48 months then?

Matt Franko said...

Not 40? Not 52? But exactly 48?

Brian Romanchuk said...

They knew there would be problems, but they fell for the "crises will accelerate unification" line. And if you ask the top eurocrats, they think it is still working. The IMF has more American influence, and is relatively sane.

Matt,

Something like that. Mortgage failures start after a delay; the people just got the money. You can't use default models with smooth probability of default over time, even though that is more convenient mathematically.

Ignacio said...

Still there is a huge distance between IMF executive branch and its research department. This internal audit will probably suffer the same end as its research department: being obliviously ignored by the management.

Tom Hickey said...

Wasn't just the mortgage fraud either. It was the securitization of it that almost brought the edifice of finance down. With derivatives, it goes exponential. The systemic risk was based on a lot more than mortgage fraud.

Then the "fix" included foreclosure fraud on top of the mortgage fraud.

Adding up the absolute numbers instead of percentage of population, it's likely that at least as many were adversely affected in the US in Greece.

Kristjan said...

Absolutely argree with Brian. Guy Verhofstadt for example says that euro is incomplete and we can't go back now, we have to integrate more. He says that everyone knew this about the euro from the start but It was hoped that along the way more integration was going to follow. He says that when the crisis hit, it was a reminder then that absolutely nothing had been done about the "euro incompletness". The euro was sold to the people on the grounds of not having to exchange currency while traveling, this was the main selling point. And the reason nothing was done "to complete the euro", was not because politicians had amnesia, but people of Europe never signed up for United States of Europe. They didn't want it. In these guys' minds, independent nation state is an illusion any way. Some nice words have to be spoken about democracy, otherwise you'd become a bad guy. For guys like Verhofstadt mass unemployment is a very small price to pay compared to the dreams they have. If you think he is stupid and he thinks really that Greeks have lived beyond their means, then you are wrong. In their booklet Manifesto for postnational revolution in Europe https://www.amazon.com/Europe-Guy-Verhofstadt/dp/1479261882
Guy Verhofstadt and Daniel Cohn-Bendit say that US has high debt and Japan has high debt, yet Japan is able to borrow at zero rates. They understand that euro crisis has nothing to do with unsustainable finances. They think that Euurope has to be big to compete with global powers. China, India and other newcomers from Asia will have all the power if there is no Federal Europe and our values will perish. They go on and on about this.

One might say that not all liberals support this idea of building Empire of Europe? They might not suupport It openly in their rethoric but Verhofstadt is the leader of Group of the Alliance of Liberals and Democrats for Europe (ALDE), the biggest group in Europarlament and the group where liberals belong when they get sent to Europarlament from member states. It is hardly believable that liberal MP-s don't know what he is all about. Not that these MP-s really matter much but this comes to show you how far these MP-s are from the electorate. People who voted for them, never know what they are doing there, you'll hear about them again before the next elections.
The situation in Europe will not get resolved before EU disintegrates. There are people with federal dreams and they won't give up, they use whatever propaganda against their opponents: racist, bigot, uneducated retard, simpleton etc. But don't be fooled, they are not stupid.

Tom Hickey said...

They understand that euro crisis has nothing to do with unsustainable finances. They think that Euurope has to be big to compete with global powers. China, India and other newcomers from Asia will have all the power if there is no Federal Europe and our values will perish. They go on and on about this.

This is the crux of it for the Europeanists: Neoliberal globalization plays to size. Without a United States of Europe, the nations of Europe will be colonized economically.