naked capitalism Sun 2010-07-25 16:28 EDT

The Irish mess

Richard Smith

The Irish banks got in a big mess with duff RE loans. The government swapped discounted bad loans for government-issued bonds...the whole thing is the usual dump onto taxpayers...loans to no more than ten or a dozen of these developers account for EUR 20Bn of the EUR70Bn face value of the debts exchanged...The extra national debt incurred (so far) equates to EUR25,000 per taxpayer. And EUR6,500 of that goes to repair damage inflicted by just a dozen well-placed spivs. Then go for some fairly brutal austerity to sort out the new debt/GDP ratio (Irish unemployment was 13.5% the last time I looked). You will have some pretty discontented citizens, and the debt/GDP ratio will stay the same, or get worse, so you cut again...

Irish mess; naked capitalism.

naked capitalism Thu 2010-04-22 18:57 EDT

More Evidence of Lack of Competitiveness of Many Chinese Exporters

...From Bloomberg: The profits of China's makers of household appliances, automobiles and cell phones may plunge by between 30 percent and 50 percent if the Chinese currency were to strengthen by 3 percent, according to a state media report. Small and medium-size exporters with low price-negotiating powers will face losses and may even go out of business, according to the Xinhua News Agency's Economic Information Daily newspaper, citing the results of a ``stress test.'' ... Richard Kline: ...Not that it matters at all for US manufacturing whether the renminbi notches up or not. Because wealth enterprises in the US don't really give a damn about their host country. Low-value added assembly will simply flow to Vietnam, Bangaladesh, back to Mexico, or the like. An industrial policy presupposes a political policy. And the malefactors of great wealth have complete control of US governmental policy, as we see, and not the least interest in investing in their host country. Great wealth here is parasitical, in a word. Fuddling about with currency rates won't change the political equation at all.

Chinese exports; competitions; evidence; lack; naked capitalism.

Bruce Krasting Fri 2009-09-04 19:11 EDT

Debt Repudiation -- On the Table

Bruce Krasting

In the Week in Review section the NY Times had a piece by David Streitfeld titled ``When Debtors Decide to Default''. I thought it was an important story. The NY Times put the issue of Debt Repudiation on the table. Exactly where it belongs. The author also contributed a new adjective to describe many of America's troubled borrowers, ``Ruthless Defaulters''. This definition comes to us from the ``lending'' side of the equation. I think that is a misguided definition by the industry. I don't think they know what they are up against. Yet...Debt repudiation is the biggest systemic risk we face...the default rate on mortgages in excess of $500k is going to explode this fall...the CC numbers would follow. Broad based debt repudiation is a distinct possibility.

Bruce Krasting; Debt Repudiation; table.