what are bond markets? What are markets as a matter of fact? Have you ever stopped for a moment to ask yourself?
The price finding in a particular market is only defined by supply and demand when there is clear information and choices and no emotions or herd effect.
The moment panic or euphoria is triggered (e.g. by ratings agencies) takes over the herd sentiment, then what you see is irrational panicky behavior from investors and aggressive speculation from banksters.
If you still don't understand this after the 2008 crisis, then there's nothing I can do for you and I wish you a nice holiday in lala land
If bond markets don't lie why was Lehman Brothers bonds rated as top quality assets until the eve of its bankruptcy?
Furthermore, if bond markets do not lie, why is that Greece was paying such low interest on its bonds until end of 2008 until it suffered a quick series of downgrades (self-fulfilling prophecies) from the wise ratings agencies leading the interest rate to suddenly skyrocket? Did Greek pile debt overnight?
And why is that bonds dont lie when Japan has almost 200% debt over GDP, a stagnant economy for 2 decades, price deflation further inflation the debt, a crumbling economy in which its giant companies like Panasonic, Sharp or Sony are all heading to collapse.
And you want to talk about Spain?
Spain's debt over GDP was one of the lowest in the euro zone for the past decade, it is still lower than Germany's in fact despite being subject to the German driven depression spiral.
You want to talk about banking? Go and check how extremely over-leveraged on toxic assets German banks were in 2008 until the ECB and Fed bailed them out for free.
Germany's attitude towards countries like Spain is purely driven by supremacist bias, (blatantly exposed in the fuehrer's lies claiming Germans work more than all southern Europeans) no serious economic analysis would ever explain the current German demagogue, hypocritical behavior of happily instructing the ECB to socialise their financial secotr toxic debt and provide cheap loans while now denying any basic help other high interest loans (profiteering) in exchange for impoverishment of the population.
And to further emphasize that this is pure ethnic politics not economy, how do you explain that this austerity recipe which has clearly proven to be extremely counter-productive leading to much faster piling of debt in every country where it was applied, and still keeps being pursued by the fuehrer at any cost? It only goes to show that this is intellectual masturbation for German electorate and zero economics.
It's rather exhausting to discuss with individual who write based on their believes rather than facts.
I know I'm not too smart in arguing as everyone knows you cannot convince someone not to believe in God because he believes in God aware of no scientific evidence of its existence.
So I'll just leave some hints, and I hope for the sake of knowledge you will do your own research and draw your own conclusions with an open mind.
- Portuguese exports for example, have been growing at double digits since mid 2000s with the exception of 2009 due to the crisis. If this is not regaining competitiveness what is it then? Merkel's supremacist stubbornness in insisting in the wrong diagnosis is completely counter productive, it is destroying the internal market and prolonging the credit crunch to Portuguese companies effectively drying their liquidity hindering production and in some cases causing bankruptcy of otherwise viable companies.
- Furthermore a lot of the current gov debt was piled because of the austerity induced recession leading to lower tax revenue and higher social spending with unemployment.
- The funny thing is , Portugal Italy and Greece's primary budgets are still some of the most sustainable in Europe. The problem is the debt itself, namely the interest, not the economy or competitiveness. All this can be easily confirmed.
- But if we look at the big picture, what we see is that all western countries have piled a lot of debt specially in the past 15 years, some more some less. And what is really interesting is that if you check the current account of countries like Portugal or Spain and even Germany, you see a very noticeable relation between the Euro exchange rate to the Chinese currency and euro zones trade current account balance.
The Chinese renminbi is still more overvalued today against the euro than what it was 10 years ago.. this despite all the doubts on the euro survival.. it's insane!
Obviously Asian countries are not only flooding western market with their subsidized products rendering European companies uncompetitive (solar panel companies Germany) but they are also accumulating unimaginable amounts of western foreign reserves in the process.
By the way, western countries should promote the rising of the commodity prices. Reason being, that, Asia shutting down the western productive sector with its ultra-low cost approach. If commodity prices go up, the most affected will be ultra cheap, long haul exports as the cost of producing and transporting will be significantly higher this reducing the relative advantage of Asian manufacturing.
In fact i believe that inflation in Asia in the past few years is already undermining their competitiveness and forcing them to let the currencies appreciate.
Can you tell me in which way Portugal or Spain overspend more than France? Have you ever seen any primary balance or deficit numbers for the past 5 years or are you just talking out of your rear behind like most Germans posting here?
Also can you tell me if BNP Paribas or Societe General speculated heavily on US subprime collecting handsome profits for the french tax payer (like Deutsche and Commerzabank)?
Can you tell me how many hundred billions did the ECB and Fed gave to French irresponsible greedy banks thus socializing French and German debt amongst european taxpayers and asking them to foot the bill for French, dutch, German financial systems greediness without being entitled to any of the speculative profits from previous years?
So in sum citizens of Portugal, Spain, Greece, Italy, Finland, Austria etc, whose banks had no role whatsoever in sub-prime, had to foot hundreds of billions for Dutch, French and German banks.
Once and for all to all arrogant German French or dutch, shove into your arrogant information deprived heads, that you have been heavily subsidized the past 4 years!
And all of that money came with no strings attached!
Had the ECB and FED let the corrupt, irresponsible greedy banks fail and now we would be in the exact opposite position with southern European having a healthy banking system hand Germany, France and Netherlands under harsh austerity due to the bankruptcy of their irresponsible banking system and subsequent collapse of their economy.
Here we go again, the German innocence theory. Germany was the most overleveraged banking system in Europe at the time of the subprime crisis as they happily engaged in subprime speculation. Deutsche Bank received the biggest bailout from the Fed of any banks
German financial system was bailed out by the Fed and ECB in hundreds of billions of Euros. Had not this happened Germany would have folded.
Germany has absolutely zero moral high ground specially when compared to the case of Spain.
Like you, many people ignore that spanish population increased 20% in 10 years thus of course causing property to get more expensive and a sustained (not irresponsible speculation like Germany) property boom