Leaderless in Seattle

August 10, 2011 By Hermann Observer in Heconomy, Helplessness Tags: Berlin, Debt Crisis, EU, Euro, German, Germans, Germany, Humor, Obama, Satire 1 Comment

No, I mean in Europe.

Gee, this sounds just like back home. The president of the Federal Association of German Banks has strongly criticized European leaders in general and German leaders in particular for their lack of leadership in all things debt crisis.

They just let things drift along and then get driven themselves, he says. Like I said, just like back home.

“If the euro really does end up in trouble then it won’t be because of Greece, the EU’s weakest member. The monetary union will then fail because Germany, its strongest member, won’t fulfill its leadership role and says what needs to be done.”

“Wenn der Euro tatsächlich Probleme bekäme, dann nicht wegen Griechenland, dem schwächsten Mitglied. Die Währungsunion würde dann scheitern, wenn Deutschland als stärkstes Mitglied seiner Führungsrolle nicht gerecht wird und sagt, wo es lang geht.”

PS: Speaking of leadership, or the lack of it, the yes we cans seem to be dropping like flies these days.

Debt Expert Deutschland

June 22, 2011 By Hermann Observer in Heconomy, History, Hypocrisy Tags: Berlin, Debt, Economy, EU, Euro, German, Germans, Germany, Greece, Humor, Satire 1 Comment

SPIEGEL ONLINE: Mr. Ritschl, Germany is coming across like a know-it-all in the debate over aid for Greece. Berlin is intransigent and is demanding obedience from Athens. Is this attitude justified?

Ritschl: No, there is no basis for it.

SPIEGEL ONLINE: Most Germans would likely disagree.

Ritschl: That may be, but during the 20th century, Germany was responsible for what were the biggest national bankruptcies in recent history. It is only thanks to the United States, which sacrificed vast amounts of money after both World War I and World War II, that Germany is financially stable today and holds the status of Europe’s headmaster. That fact, unfortunately, often seems to be forgotten.

SPIEGEL ONLINE: What happened back then exactly?

Ritschl: From 1924 to 1929, the Weimar Republic lived on credit and even borrowed the money it needed for its World War I reparations payments from America. This credit pyramid collapsed during the economic crisis of 1931. The money was gone, the damage to the United States enormous, the effect on the global economy devastating.

SPIEGEL ONLINE: The situation after World War II was similar.

Ritschl: But right afterwards, America immediately took steps to ensure there wouldn’t be a repeat of high reparations demands made on Germany. With only a few exceptions, all such demands were put on the backburner until Germany’s future reunification. For Germany, that was a life-saving gesture, and it was the actual financial basis of the Wirtschaftswunder, or economic miracle (that began in the 1950s). But it also meant that the victims of the German occupation in Europe also had to forgo reparations, including the Greeks.

“He warns the country should take a more chaste approach in the euro crisis or it could face renewed demands for World War II reparations.”

Über Euro Über Alles?

June 10, 2011 By Hermann Observer in Heconomy Tags: Berlin, EU, Euro, Euro Zone, German, Germans, Germany, Greece, Humor, Satire 2 Comments

Time for a new European currency yet?

“The real threat to the euro isn’t that a weak peripheral country like Greece might withdraw in an effort to devalue its way to competitiveness, but rather that Germany might want to pull out.”

This guy makes a very interesting point. He goes into what he defines as the three main problems that have led Greece, Portugal, Ireland and Spain (not yet, but soon) to the dismal position they are now in and suggests that because of the coming bailout fatique, the only way to save the union is, well, to divide it. This could best be done by introducing an Über Euro in the non-bailout nations.

“Germany’s incentive to leave grows with each bailout, and Berlin could ultimately make a simple calculation that extrication will be less costly than continuing the sacrifice needed to keep the euro.”

To avoid this, one could strike a grand bargain by creating this new currency. “These nations then announce that all obligations between their citizens will henceforth be denominated in the new currency, the Über Euro, which would eventually be managed by the Bundesbank. The Über Euro would initially be set at a value of perhaps 1.3 euros, setting the stage for an export boom for countries that continue to use the euro. This would allow the remaining eurozone members to restore their competitiveness without having their financial systems go bankrupt; it also would allow Germany to sell the plan as saving Europe without breaking up the EU.”

“Should the remaining euro countries continue irresponsible fiscal policies, the European Central Bank (which would continue to be their central bank), would slowly monetize their debt. The euro would continue to depreciate against the Über Euro and perhaps end up as junk currency. …The ECB’s stature would be diminished and its balance sheet probably trashed.”

Sounds like a good plan to me (for world domination?). But I’m not very good with money, either.

There is no inherent reason the European project cannot proceed with two currencies and the citizenry may force this outcome.

PS: Beware, Greece. As the Wall Street Journal puts it, there’s a Wolfgang at your door.

My Big Fat Greek Bailout II

May 31, 2011 By Hermann Observer in Heconomy Tags: Berlin, Debt, Debt Crisis, Euro, German, Germans, Germany, Greece, Humor, Satire 1 Comment

Certainly not back by populist demand, the German government now seems prepared to stop the bitching and moaning long enough to support funding for the sequel to the first Greek Bailout box office flop and enable the EU to wrap up a second package of aid loans to help a struggling Greece or, to be more exact, the German banks that are now terribly exposed to a possible default there.

“Germany is considering dropping its push for an early rescheduling of Greek bonds in order to facilitate a new package of aid loans for Greece, according to people familiar with the matter. Berlin’s concession that it must lend Greece more money, even without burden-sharing by bondholders in the short term, would help Europe overcome its impasse over Greece’s funding needs before the indebted country runs out of cash in mid-July.”

But if you want any popcorn, you’re going to have to bring it yourself.

Größter Garant der griechischen Zahlungsfähigkeit nach dem IWF mit 30 Mrd. ist Deutschland mit 22,4 Mrd.

Germans Go Home!

May 26, 2011 By Hermann Observer in Heconomy, Helplessness, Hypocrisy Tags: Berlin, Debt, Debt Crisis, Euro, German, Germans, Germany, Greece, Humor, Privatization, Satire 1 Comment

“To Save the Euro, Germany has to Quit the Euro Zone”

“When the euro was launched, leading German politicians used to argue, with evident relish (and much to the chagrin of the British in particular), that monetary union would eventually require political union. The Greek crisis was precisely the sort of event that was expected to force the pace. But, faced with a defining crisis, Ms Merkel’s government is avoiding airy talk of political union – preferring instead to force harsh economic medicine down the throats of the reluctant Greeks, Irish, Portuguese and Spanish electorates. This is becoming both economically and politically unsustainable. If the objective is to save the currency union, perhaps policy makers are looking at this from the wrong end. In the end, paradoxically, to save the European Monetary Union, the least disruptive way forward would be for the Germans, not the periphery countries, to leave.”

And in a related story…

Everything must go! The Greek government is selling everything it still has its debt-ridden little fingers on so guess who is now interested in buying Athens International Airport? Fraport AG (Frankfurt Airport).

“Die Noch-Supermacht”

April 20, 2011 By Hermann Observer in Heconomy Tags: Berlin, Crisis, Debt, EU, Euro, Finance, German, Germans, Germany, Greece, Humor, Satire, USA 6 Comments

Like S&P, Germany ITSELF believes that it’s time for “the yet superpower” to start saving big time and pronto. And I for one would listen (you know, like listening to E. F. Hutton when they used to talk?) because the Germans have had a whole lot of experience in giving good advice like this as of late. Just look at how their recommendations have helped Greece, for instance.

“The danger is that the Americans are still lulled into a false sense of security.”

“Möglich, dass Obama dann (nach der Wiederwahl) wirklich anfängt zu sparen.”

Germans in Davos: We’re not close-fisted because we want to be

January 26, 2011 By Hermann Observer in Habitudes, Heconomy Tags: Davos, Euro, German, Germans, Germany, Humor, Satire 3 Comments

We’re close-fisted because it’s one of our defining national obsessive compulsive disorders and the one over which we have the least control.

When it comes to the euro crisis, Germany is about to be slapped around a bit by some folks at the Davos World Economic Forum for not being willing to make more money available than it already has. There is not enough money in circulation in Europe, they believe, yet this is necessary for certain ailing economies to be able to crawl back out into growth again.

Germany’s critics also believe that more money needs to be set aside for the European “safety chute” fund, something Germany steadfastly refuses to do. This extra capital would convince financial market investors that the euro is properly “covered.”

Needless to say, the Germans will listen politely and refuse to budge an inch, their fists tightening automatically, close-fistedness being one of their defining national obsessive compulsive disorders and the one over which they have the least control.

What can I say? This is New Europe, people. Germany does what it wants and everybody else here has to like it.

Für die deutsche Delegation geht es in diesem Jahr nicht so gemütlich zu wie üblich.

Remember when it was European Germany?

December 21, 2010 By Hermann Observer in Heconomy, History, Hypocrisy Tags: Berlin, EU, Euro, Europe, German, Germans, Germany, Humor, Satire Leave a comment

Now it’s German Europe.

Huh? Where did this come from all of a sudden? Out of the blue like that?*

It was another “good day for Europe” when, as usual, nothing was actually resolved during the latest EU summit the other day, other than the fact that that nothing had a big Made in Germany stamp on it. The times they are a changed. The country that used to moan about being the paymaster for so long (and still does, of course, don’t get me wrong) is now “the taskmaster of the entire community” and doesn’t even have the decency to make a secret about it anymore.

But don’t complain about it, my (as in Germany’s) fellow Europeans. This is only what the “fathers of Europe” had envisioned right from the start. Think of what Jean Monnet had to say about the plan, for instance:

He wanted to guide European countries into a super-state “without their people understanding what is happening. This can be accomplished by successive steps, each disguised as having an economic purpose.”

I admit that this wasn’t quite the purpose he had envisioned but, well, now you “have the salad,” as the Germans like to say (the fat is in the fire). It doesn’t really matter that Berlin has a lack of vision when it comes to dealing with the current euro crisis, Germany calls the shots now and doesn’t need a vision if it doesn’t want one. So get used to it already.

“This is all about Germany, and it’s all about the end of the German appetite for writing checks to the periphery of Europe.”

*Have any of you ever read Philip K. Dick’s The Man in the High Castle? Germany and Japan win World War II. This is kind of like that.

You’ll do it my way

December 16, 2010 By Hermann Observer in Heconomy, Helplessness Tags: Berlin, EU, Euro, German, Germans, Germany, Humor, Satire 4 Comments

Or it’s the highway. Does that summit up enough for you, Freunde?

Let us sing.

And now, the end is here
And so I face the final curtain

No, wait. This verse is better.

Regrets, I’ve had a few
But then again, too few to mention

No, maybe this one instead.

Yes, there were times, I’m sure you know
When I bit off more than I could chew
But through it all, when there was doubt
I ate it up and spit it out
I faced it all and I stood tall and did it my way

“The defiant stand came as Moody’s issued a downgrade warning on Spain owing to “high refinancing needs in 2011″ and the risk of further bank bail-outs.”

“Deutschland macht dabei auch ein gutes Geschäft”

November 30, 2010 By Hermann Observer in Heconomy Tags: Berlin, Crisis, EU, Euro, Eurozone, German, Germans, Germany, Humor, Satire Leave a comment

Germany is also getting a good bargain in the deal.

What deal you ask? You know, the one the Germans love moaning about so much at the Stammtisch (regulars’ table) these days: How poor Germany has to bail everbody out in Europe (Greece, Ireland, who’s next?) and how said poor Germans are poor victims yet again and blah, blah, tra, la, boo, hoo, hoo.

But there’s always a rest of the story.

Sure, the Germans have to “contribute” the most to this way cool European rescue parachute that keeps getting pulled these days, but they also have the most to gain if everything goes right.

How so? Some call it, I don’t know, refinancing. They borrow the money on the bond market for 3 percent and then loan it to the Greeks and the Irish (and the next folks to come along) for 5.8 percent. If these countries die Kurve kriegen (turn the corner), then the money comes rolling back in–and a big sweet profit to boot.

So dry your eyes over there at the Stammtisch already and take a deep breath after you order your next beer. Es wird alles gut. Everything will turn out good in the end. Maybe even real good.

“Wer sich selbst am Anleihemarkt für knapp drei Prozent refinanziere und an Krisenländer wie Griechenland und Irland Kredite zu einem Zinssatz von 5,8 Prozent ausreiche, könne selbst ordentliche Gewinne einstreichen.”

Observing Hermann

“Was interessiert mich mein Geschwätz von gestern?”

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