Why do I feel bad for the Spaniards, but not the Greeks?

[giblets]

1) "The next six weeks"? WTF investment is complete and paid back in the next six weeks? That is ridiculous
2) I completely agree with the second statement. That is one (actually, two) of the transmission mechanisms I explicitly mentioned earlier. In no way does this have anything to do with interest rates (except that the CB signals monetary policy with interest rates at the extreme short end). Interest rates serve only as the language they use to communicate, not the transmission mechanism. And the only interes rates they work with (again, in normal times) are the short rates, not the rates companies/people actually care about.

Wait, so if short term interest rates go down there isn't a much smaller decrease in the longer term interest rates?

[KrazyHorse]

Please tell me why you think there should be, other than the fact that the yield curve is a yield curve rather than a forward rate curve.

[Hauldren Collider]

Okay, reading over this conversation I'm getting the impression that Kuci and KH are claiming that it isn't what the CB actually does that affects rates and such (not really clear which rates everyone is referring to) but it is the interpretation of what people think the CB will do. This is strange to me. What am I missing? If something doesn't make sense to me here I'm going to go with the safe assumption that I am the one who is mistaken about something and not KH or Kuci.

[Kuciwalker]

Okay, reading over this conversation I'm getting the impression that Kuci and KH are claiming that it isn't what the CB actually does that affects rates and such (not really clear which rates everyone is referring to) but it is the interpretation of what people think the CB will do. This is strange to me. What am I missing? If something doesn't make sense to me here I'm going to go with the safe assumption that I am the one who is mistaken about something and not KH or Kuci.

Imagine that it was suddenly discovered that Saudi Arabia's oil reserves were a tenth the size previously estimated. The oil wells could continue pumping at the same rate for now, but they would run out much sooner. What do you think would happen to the price of oil?

Similarly, if the Federal Reserve indicates that it will print a trillion dollars in one year, what do you think would happen to inflation right now?

[Hauldren Collider]

Ah, I get it. Good analogy. Thanks!

[DanS]

I imagine that by blonde they mean people like Emilio Butragueño

That's nowhere near blonde. I'm skeptical that there are any real blondes in Spain.

[Zoetstofzoetje]

Greece has now said that they would do whatever it takes to stay in the Euro zone. At the same time, Germany is taking steps to protect its banks from the looming Greek default.

In the Netherlands we had this bank called the Rabobank, which was the exact opposite of a normal bank: customer-friendly, local, non-hierarchical. It was a cooperation of small banks for farmers (the "bo" in Rabo = boer, means farmer), that grew into something bigger and better. Everybody loved that bank. I've had an account there since before I was born.

When the MBA's started to mess with it, it became a mean machine, like any other bank. More efficient, sure. Institutionalized processes, absolutely. Better international service, perhaps. But I can't get anything done without filling in 21 forms, passing by 3 desks, and sending 7 letters.

Before, I could call the director, make my request, inquire about the health of his children in passing, and receive whatever I wanted the next day in the post. Local banks have local people. They know their neighbours. Whom to trust. When to extend credit. It works both ways. Now that the director is some random jerk that was posted there by headquarters; Glad not to have been downsized in the last sweep, he's more than eager to serve his bureaucratic overlords so that his mortgage payments are secured. Which means more crap and less effectiveness.

In a way, this is similar to the crisis at large - standardization and procedure have been introduced to reduce risk, and increase efficiency. Instead, because any kind of local resolution, interactive understandings, trust, and perspective has been lost, we've reduced the world to 'facts', 'numbers', and other things that at best represent some form or perspective of reality. It means Asher doesn't get his Toyota car loan, and subprime mortgages are sold at AAA status.

What we need is more local and less global. Believe me, I'm no treehugger, but if somehow the world is so tightly interconnected that a few million lazy Greeks have a significant impact on what happens on the other side of the world, something's wrong.

[Bugs ****ing Bunny]

Local banks have local people. They know their neighbours. Whom to trust. When to extend credit. It works both ways.

Do you have any idea how many of those "local banks" went to the wall as a result of policies every bit as stupid as the larger ones?

[KrazyHorse]

I think if you look at the numbers from the us you will find that in general local banks fared much worse...

[ZEE]

.

[Zoetstofzoetje]

thanks, i appreciate the compliments!

[ZEE]

.

[Zoetstofzoetje]

[Zoetstofzoetje]

i just wondered what you look like, am i close with picture?

[Dinner]

Did you get into a fight with a fan and lose?