[Non-US] News That Makes You laugh/cry/neither...

DSMatticus · Post by **DSMatticus** » Wed Jul 08, 2015 9:52 pm

maglag wrote:
erik wrote:Watch yourself be very wrong about China this next week. Start drafting your concession.
Until the end of next week? Challenge accepted!

Because China's middle class has actually been growing pretty fast.

And that's not mentioning that they've been investing pretty hard everywhere in the world they can, including my backwater country where they're building mandarin schools.

China's government hasn't been sitting in their asses just taking money from foreign investors, they've developed their country a lot and are also spreading their spheres of power.

I don't think you understand what you're saying or what you're linking.

Firstly, China's investment in foreign countries will not stimulate domestic demand. That's a complete non-sequitur, and bringing it up makes me wonder if you really have any idea what the fuck's going in China. China's domestic economy is driven by foreign investment, and that foreign investment is about to dry up. In order to prevent sudden mass unemployment, they need an alternate source for domestic demand. Building things in other countries does a piss poor job of that.

Secondly, the article you linked is making projections about what China's middle class will look like decades from now on the basis that it is always sunny in Philadelphia and that the current rate of growth will continue forever and ever. Well guess what? The sun has stopped shining and the current rate of growth won't - because it literally could not - continue forever. China needs a massive boost in domestic demand right now, in 2015, and right now, in 2015, people have been talking all year about how China's middle class wage growth has been badly underperforming expectations.

Username17 · Post by **Username17** » Thu Jul 09, 2015 6:16 am

The Chinese government is in full panic mode. They launched a ten point plan to stabilize things. If you're too lazy to read the report, I'll summarize:

Outright stock buying. The Chinese government "lent" $42 billion to state-owned investment firms for them to buy up stock in major companies.
Secret stock purchases. The Chinese government is also putting up a program to buy stocks of smaller companies, but won't tell anyone how much money there is or what they are buying because it's China and lol transparency.
Regional stimulus. The Chinese government announced a $40 billion stimulus package targeted at areas hardest hit by recession.
Infrastructure stimulus. The Chinese government has announced that they are going to do another big buy on roads and rails and shit this year, but haven't said how big it will be because lol transparency.
Indefinite Partial Bank Holiday Half the stocks on the market are simply frozen. You can't trade them at all, because it's China and they can just do that.
Capital controls. If you're a big stock owner, you are not allowed to sell anything for six months. Because it's China and they can do that.
No more IPOs. Exactly what it sounds like. There is a current ban on listing new stocks.
Central Bank rate cuts. The Central bank reduced both the prime rate (by a quarter of a percent) and the reserve requirements of banks (by half a percent).
Chinese investors can use their homes as collateral. Yes, fucking seriously. You didn't used to be allowed to mortgage your home in order to buy fucking stock, and now you can!
Devaluing the Yuan. Some more.

So basically, it looks like the government pumped about a quarter of a trillion dollars into the system to try to stop the falling knife, and that failed. And they declared a holiday on common sense by allowing people to become way more leveraged if they want to try to reflate the bubble. And that failed too. The Chinese market is still down by $3.25 trillion.

And while all these capital controls will doubtless slow the hemorrhaging, you have to ask how it's supposed to inspire confidence in foreign investors. I mean seriously, am I going to want to invest in a factory in China at the moment when I'm not allowed to sell stock in it at all?

-Username17

tussock · Post by **tussock** » Thu Jul 09, 2015 9:01 am

Firstly, China's investment in foreign countries will not stimulate domestic demand.

All China's outside investment has limits on it that requires you hire Chinese firms and Chinese workers using Chinese-sourced materials to do almost all of the work. That absolutely stimulates demand in China. It's not always useful in the long-term, unless you improve the ability of those other countries to buy something else from you, but that is the idea.

The problem they're facing right now is they've decided there was a lot of bullshit being built (cities in the desert for no people to live in, stuff like that) under the previous leader's big plan packages and so the new guy is executing people for that again and it's a worry because half of their economy has been capital investment: building things.

People living in China all suspect their leadership is insanely corrupt, and so if they stop building bullshit that no one needs they suspect the economy will collapse. That causes panic selling and automated stock market collapses, and all modern markets will ban share trading at some level to prevent that. But China obviously isn't Japan or Singapore yet and still actually has a very large number of things to build for many hundreds of millions more people. They can just keep on building capital, which is what they've said they're going to do.

I mean, when you say China needs foreign investment, most of the money for that is borrowed from China in the first place. What they need is a market for their exports, which means the US and Europe need to stop being assholes with austerity and budget cuts and go find something useful to build (like, say solar electric).

phlapjackage · Post by **phlapjackage** » Thu Jul 09, 2015 9:05 am

Article by the Economist (found on reddit): http://www.economist.com/blogs/freeexch ... rket-crash

The main points they try to make seem to be:
- that it's not a crash, but a "slowing", since the market is still above where it was last year
- that the recent panic by the gov't is for playing politics and saving face

Schleiermacher · Post by **Schleiermacher** » Thu Jul 09, 2015 6:55 pm

Fuck. The Greeks bit the bullet, the banksters win.

http://www.theguardian.com/business/201 ... deal-nears

Ancient History · Post by **Ancient History** » Thu Jul 09, 2015 9:20 pm

This is sort of relevant. I lol'd. This really should be Germany's coyote ugly moment: http://www.rawstory.com/2015/07/republi ... on-greece/

PhoneLobster · Post by **PhoneLobster** » Thu Jul 09, 2015 9:42 pm

Schleiermacher wrote:Fuck. The Greeks bit the bullet, the banksters win.

Variations of this story have been floating around for the entire grisis and even the Guardian seems to pick them up and run with them.

"Rumor has it someone somewhere in the Greek government has proposed something agreeing to most but not all of the creditors demands, no one knows which, or what most means, and it usually ends up meaning "not most", and even as it really is, let alone as it is depicted, it probably could never pass Greek parliament"

Then it turns out it was a much more mild compromise than depicted, and the trioka rejects it out of hand and demands 100% surrender, BEFORE the Greek parliament can reject it out of hand and demand at least 80% sanity (how ridiculous of them!). Again.

It certainly sounds like bad news, but it also sounds like the SAME rather questionable bad news that has been... conveniently? cycled through the press by someone somewhere for some reason EVERY time the Greeks go to the negotiating table.

Schleiermacher · Post by **Schleiermacher** » Fri Jul 10, 2015 2:40 am

On closer look I haven't found anything nearly as clear-cut in other places (like the BBC) so there might still be hope.

drdaiba · Post by **drdaiba** » Fri Jul 10, 2015 4:36 am

FrankTrollman wrote: And while all these capital controls will doubtless slow the hemorrhaging, you have to ask how it's supposed to inspire confidence in foreign investors. I mean seriously, am I going to want to invest in a factory in China at the moment when I'm not allowed to sell stock in it at all?

-Username17

Nothing in China should ever inspire foreign investors. Everything is set up to fuck over foreigners. But the increasing buying power of the average citizen (factory worker wages have risen from 1500 RMB/month to 2500 RMB/month in the four years that I've been here) is a huge draw for any company. And if you want to sell your products in China at any kind of scale, you have to build factories, set up localization R&D centers, etc. It's China.

The government panic is real. They're extremely worried that this will turn into an anti-CCP backlash with massive country-wide protests. The Chinese people have no representation in their government, which means that they also feel no responsibility for the actions of their government. They also feel that the government is responsible for making things "fair", so when bad shit goes down they'll blame the CCP even in the rare case that they weren't directly responsible...unless blame can be diverted to foreign entities.

MisterDee · Post by **MisterDee** » Fri Jul 10, 2015 1:58 pm

Schleiermacher wrote:Fuck. The Greeks bit the bullet, the banksters win.

http://www.theguardian.com/business/201 ... deal-nears

From what I saw in my local paper, this is rapidly turning into the July Ultimatum Reboot, with Germany stating clearly that they will be against any deal that isn't Greece completely and utterly capitulating.

DSMatticus · Post by **DSMatticus** » Fri Jul 10, 2015 9:10 pm

It turns out Greece actually has completely and utterly capitulated. The plan they proposed is in all ways important identical to the one offered to them as an ultimatum. It is unclear whether Tsipras will be able to rally his own party around it, and it is also possible that Germany will reject it anyway because reasons. In exchange for conceding every single thing, the troika is offering what it has been offering all along - that there might be negotiations concerning further haircuts and bailouts of an indeterminate size sometime in the future. Everytime the troika offers this, top German official can be seen in the background pounding the table and shouting "nein!"

It is possible that Greece has no intention of honoring any deal it signs, and is only trying to get liquidity flowing from the ECB in order to put its finances briefly back in order before telling everyone to fuck off, but I honestly doubt it. Tsipras has caved a lot over the course of these negotiations. No matter what happens now, there is no longer any remotely happy answer for Greece. If the deal succeeds, Greece continues forward with no path to recovery. If the deal fails, well... the Greek banking system has long since gone over the cliff. There simply isn't enough time to resolve an internal schism and manage an even remotely orderly Euro exit.

Lago PARANOIA · Post by **Lago PARANOIA** » Fri Jul 10, 2015 9:34 pm

Don't you fret, DSMatticus. Golden Dawn will be there to pick up the pieces.

DSMatticus · Post by **DSMatticus** » Sat Jul 11, 2015 4:34 am

The Greek parliament has approved the proposal, and now it is essentially up to Germany whether or not they want to kick Greece out or not.

Syriza expects their proposal to amount to ~13-14 billion USD in savings (read: austerity). Given the multiplier of 1.5 that most evidence currently suggests, that will amount to a further ~20 billion USD drop in GDP. Between that and the damage done during these negotiations - over the past few weeks in particular - I would not be surprised to see Greek debt-GDP tip over the big two-double-oh without a haircut.

German politicians have spent the past few days bouncing between being deliberately ambiguous about the possibility of a haircut and adamantly denying the possibility of a haircut, seemingly changing their stance based on whether they think Germans or Greeks are more likely to be listening. I suspect they have no intention of ever approving one, particularly now that Syriza has shown that they are not willing to leave the euro even when it offers no path to recovery.

DSMatticus · Post by **DSMatticus** » Sun Jul 12, 2015 12:55 am

Today's negotiations were amazing. Highlights:

[*]Finland's ruling party recently formed a coalition with hard right eurosceptics to stay in power. There will be no haircut. There won't even be a deal.

[*]Germany spent the entire day making completely different and entirely impossible demands, ranging from "even more austerity than proposed, implementation to begin with the week, also no haircut ever" to "Greece will cede public administration to Brussels, also still no haircut ever" to "Greece will transfer control of 50 billion USD worth of state assets to an externally-controlled fund for privatization, also still no haircut ever." These are political gestures, not serious offers; "we gave them an option, they refused it. Don't look at us. Also don't look too hard at the options we gave them; they were fucking insane."

[*]The IMF, France, Italy, and a number of other major players have broken ranks with Germany, but who gives a shit it basically only takes one to sink these negotiations. Of course, even the players who've broken ranks with Germany often find themselves wondering if Greece couldn't possibly just maybe squeeze a bit more austerity into the deal. But at least there's a debt haircut on the table as far as they're concerned.

Tsipras betrayed his people for nothing. He's not going to get the haircut - he's not even going to get the deal. He's going to have the luxury of presiding over a Grexit as the politician who told his people to take their votes and go fuck themselves. Good job, Tsipras.

Schleiermacher · Post by **Schleiermacher** » Sun Jul 12, 2015 12:57 am

Well, Grexit, as horrible as it is likely to be in the short term, is still better than caving to the minds that came up with the "give 50 bn of your choice assets to our friends in Luxembourg"-plan. So that's good.

DSMatticus · Post by **DSMatticus** » Sun Jul 12, 2015 1:22 am

Grexit has been the better option for a long time, but Tsipras had the opportunity to offer the terms voters unambiguously ordered him to and then be forced out through the creditor's intransigence - minimizing the political damage Grexit would inflict on Syriza. Instead he caved completely within days of a referendum he called in which voters told him - by a landslide - not to capitulate, and after that blatant betrayal he is exactly as empty-handed as if he had stood firm. Politically, smart money says Syriza are dead men walking, and the question now is what party will lead the government next. Will it be the centre-right austerians who helped engineer this clusterfuck? Will it be the far-right actual fucking Nazis who, did I mention, are actual fucking Nazis?

Username17 · Post by **Username17** » Sun Jul 12, 2015 8:26 am

Tsipras has been the only serious negotiator in the room for a long time. I'm pretty sure that Tsipras offered the bend over backwards deal as political theater because he knew that Germany would not accept even that. What's going to happen is default. Greece is going to stop payment to Germany on the bills for Germany's bailout of Germany's banks. If there's no haircut, there's no other option. Greece does not have the money, so they won't be able to pay it.

The thing is that Syriza does not have a mandate to leave the EU or the Euro. They do not have a mandate to create a Drachma. The people of Greece do not want to continue endless austerity forever, but they also do not want to abandon the Euro. The Euro was introduced simultaneously with the country clawing its way out of post dictatorship depression and into something vaguely resembling a liberal democracy. The Euro currency is a powerful symbol of hope to the Greek people even though it is toxic and fundamentally flawed. Even now, the Greek people fundamentally do not understand how fucked up the ordomonetarist system they signed up for actually is. They do not understand that the European Union is not going to perform the relatively simple actions to salvage the situation because it was founded by and for ideologues that insisted situations like this couldn't ever happen in the first place.

Tsipras cannot honor the will of the Greek people by unilaterally withdrawing from the Euro and introducing a new Drachma. Tsipras cannot honor the will of the Greek people by unilaterally stopping payments on Germany's bill for Germany's bailouts of Germany's banks. Tsipras can't even honor the will of the Greek people by offering farcical proposals or refusing to engage with the meetings. If Greece is to leave the Euro or the EU, it has to be thrown out, and it has to be thrown out unfairly and with malice. Anything less would be a betrayal of the Greek electorate.

So the reality is that Greece has to get a haircut. They were made to accept ownership of bills too high for them to repay and ordered to follow development plans that couldn't ever work in order to scrounge up the money to pay them. And previous governments accepted those terms, because they were hopelessly corrupt and also stupid. Merkel will not ever agree to accept that reality, because doing so tacitly admits that her economic theories don't actually work. But Tsipras has to keep bending over backwards to accommodate her because when the talks finally break down it has to be Merkel who flips the table over. That's what the Greek people voted for, whether they understand that or not.

-Username17

PhoneLobster · Post by **PhoneLobster** » Sun Jul 12, 2015 11:29 am

Meanwhile... back on the farm... (in Australia)...

OK so, blah blah blah, becoming global pariah on every policy front imaginable, but the whole "climate change" thing in particular.

So quick recap.

We HAD a carbon tax, it was working very nicely (things have turned around pretty bad since we scrapped it too).

We had a carbon trading scheme legislated, it wasn't happening yet, but was going to by law in, well, it was pretty much months to actually starting. But that had to be scrapped too. As part of the government policy of eventually instituting basically exactly that policy according to all their promises/white papers, only never actually doing it.

We had/have a renewable energy target scheme, we were going to overshoot it (and probably still will, even if you cut back the estimates to account for all the cheating we have been caught out repeatedly doing on the carbon emissions numbers).

We had/have a government backed renewable energy project financing scheme, it was running at a profit while investing in renewable energy projects and getting them off the ground. Oh yeah, also creating piles of jobs with far greater efficiency and quality than coal mining ever has, and little things like that.

Tony "no friends" Abbot campaigned against the "evil worthless" carbon tax so as to put $550 dollars back in the pockets of everyone each year (payment overdue).

But he campaigned claiming he was not going to touch the successful and highly popular Reneqable Energy Target (RET) or Clean Energy Finance Corporation (CEFC).

Then within like, what was it? A month? Of getting in attempted to abolish them both. Then tried it again. Then stopped before the senate rejections triggered an election he couldn't win on a policy that was unpopular and a bit of a sticking point on the whole "blatantly lied to the electorate about it" thing.

Now they've been sabotaging the RET and CEFC preeetty much any way they can since, their latest bits of slime have been INCREDIBLY remarkable.

So for instance, the RET now includes WOOD FIRED POWER STATIONS, because, fuck everyone else they pretty much stealth inserted that in a deal at the last minute. So yeah, our whole clean energy target thing, now not only reduced (Because fuck you no reason stop asking are you on team Australia or not), but now chopping down and burning our remaining native woodlands is somehow clean renewable energy that will help fight global warming.

But the absolute gems have just come through now.

Bypassing the senate using more administrative ministerial powers Tony "I don't even have a minister for science because scientists are the enemy and don't deserve a minister anymore" Abbot has managed to do this remarkable thing to the CEFC...

...it's now banned from funding Wind Farms...

...oh yeah, and most Solar projects too...

They've effectively done so by banning it from funding "proven technologies", then defining, well, EVERYTHING, as a proven technology.

The CEFC basically is left now with nothing to fund but the riskiest of "unproven" technologies. I'm prepared to lay a bet that those include WOOD FIRED POWER PLANTS.

Koumei · Post by **Koumei** » Sun Jul 12, 2015 2:40 pm

Don't worry though, he has made sure there will be none of those harmful, noisy and unsightly wind farms anywhere near the healthy, beautiful coal mines.

(Also, removing something due to it being "noisy and ugly" is not in his best interests. I mean, if the people of Australia did that, he'd be out of a job.)

DSMatticus · Post by **DSMatticus** » Sun Jul 12, 2015 5:19 pm

Getting Merkel to flip the table over would be exactly as easy without having caved completely, and it would not have been a betrayal of the voters who supported him in the referendum - voters he will need to stay in power.

The real story is more darkly hilarious than that, it seems: Tsipras has at no point in the past six months laid the groundwork for a Grexit and the return of the drachma, and Greece runs out of money sometime between yesterday and tomorrow. He's been bluffing all along, and now that the game is up he is faced with complete capitulation or complete collapse - it's simply too late to begin preparing for a Grexit at this stage that doesn't involve months of absolute bartering-shoes-and-food chaos.

Username17 · Post by **Username17** » Sun Jul 12, 2015 7:01 pm

I don't think you're fully acknowledging the delicacy of Syriza's dual mandate. Tsipras cannot be the man who takes Greece off the Euro. The Greek people did not vote for that. If he is the man who takes Greece off the Euro, his party is over and all the anti-establishment votes (which are now north of 60% of the voters, as per the last referendum) go to Golden Dawn or the KKE.

This means that Tsipras cannot hold a Drachma "Plan B" at this point in the negotiations, because if he did then when the negotiations inevitably break down he'll get the blame for the Plan B being secretly his Plan A. And then he's the man who took Greece off the Euro and Golden Dawn and the KKE fight over the rubble. Even when the finance ministers come in with their current "temporary Euro time out (of potentially unlimited duration)," Tsipras still has to say No. He has to say no to fucking everything.

If and when Greece goes off the Euro it has to be a unilateral decision made against the explicit wishes of the Greek government because it is against the wishes of the Greek people. When the negotiations break down (more than they already have), Tsipras is simply going to keep using the Euro. And when Greece goes into default, Tsipras is simply going to keep using the Euro. And when Merkel tells him that he can't use the Euro anymore, Tsipras is going to keep using the Euro.

There is no provision for kicking a country out of the common currency. And Tsipras is going to fucking make the countries in the northern bloc make one up and try and enforce it. Assuming they even can with the increasingly jittery Italians and French noticing that this is looking an awful lot like Germany, Holland, Slovakia, and Finland destroying the entire European Union just to refuse to admit that they done fucked up some Intro to Macroeconomics shit over the last 20 years.

Yes, Tsipras could have simply refused to negotiate and we'd be right where we are now back in February. But when the shit goes down, he has to be the person using the process and Merkel has to be the tyrant playing Calvin Ball. Anything less and half of Europe goes fascist inside of three years. Which it might do anyway, depending on how far Merkel is willing to push this.

Tsipras is, still, the good guy here.

-Username17

Stahlseele · Post by **Stahlseele** » Sun Jul 12, 2015 7:11 pm

@PhoneLobster and now we wait to see if anybody is ballsy enough to demand funding for fuzion power because of that.

Ancient History · Post by **Ancient History** » Sun Jul 12, 2015 9:23 pm

On a lighter note: http://www.thelocal.se/20150625/buzz-ov ... ester-post

Username17 · Post by **Username17** » Sun Jul 12, 2015 9:50 pm

After all that noise about demanding that Greece pony up a detailed plan, the Eurogroup's counter-offer is just Four Pages. It's blunt, it's unworkable, and it's laughable. They demand that the Greeks surrender their national sovereignty and transfer control of their fiscal decisions to an outside body while committing to pay the entire debt on time (which has already been established as impossible). They have to do all this by wednesday, in exchange for which the Eurogroup promises... nothing. They just say that their feelings will be less hurt if Greece sets itself on fire for them, and maybe they'll feel like negotiating for real after that (they will not).

This is actually what Tsipras needed. He needed Merkel to say explicitly what we all knew - that there was really honestly no deal she would actually accept. Hopefully this will be insulting enough to the Greek people that the Greek government can simply stop paying and go into default.

-Username17

DSMatticus · Post by **DSMatticus** » Sun Jul 12, 2015 9:55 pm

Greece will not keep using the euro. It is completely impossible for Greece to keep using the euro, because they do not have any euros. Businesses within Greece are already attempting to pay their suppliers and employees in company scrip, because there are not enough euros flowing through the economy to handle the volume of transactions that need to be handled. At some point during what is likely to be the next few days, the banks will declare that even with the bank holiday and ATM limits that they are completely out of notes to dispense. The Greek economy will be nothing but company scrip and barter in two weeks, tops, without a move by the Greek government to introduce a parallel currency. Their ports are already clogged full of idle imports because they cannot pay for them.