Eddie Hobbs on TV3.

uncle_sam_ie

He's not A Doom and Gloom guy. What do you make of his comments?
http://www.youtube.com/watch?v=kzGJWtYnAdE

nesf

Irresponsible, but I'd be lying if I said I didn't know people moving money into Sterling etc.

The Euro faces a crisis definitely, the risk of a Euro break-up is higher than ever but do not mistake that as it meaning that there's an absolutely high risk of Euro break-up.

What we face is a problem economists have been pointing out for around 15 years. You cannot have a single currency area without some kind of fiscal central control. The EU have tried to do without this and are paying the price now. What we are faced with is some kind of central authority having some level of say over national budgets and national borrowing amounts and honestly I'd welcome this as such control would have prevented the give away budgets of the latter FF years that dug the hole we're in in the first place.

Crazy Horse 6

nesf wrote: »

Irresponsible, but I'd be lying if I said I didn't know people moving money into Sterling etc.

The Euro faces a crisis definitely, the risk of a Euro break-up is higher than ever but do not mistake that as it meaning that there's an absolutely high risk of Euro break-up.

What we face is a problem economists have been pointing out for around 15 years. You cannot have a single currency area without some kind of fiscal central control. The EU have tried to do without this and are paying the price now. What we are faced with is some kind of central authority having some level of say over national budgets and national borrowing amounts and honestly I'd welcome this as such control would have prevented the give away budgets of the latter FF years that dug the hole we're in in the first place.

How is it irresponsible? If he 's telling it like it is surely it's the right thing to do. I think the problem is we don't have enough people in the mainstream media being truthful with the average Joe or Jane.

amacca

nesf wrote: »

What we are faced with is some kind of central authority having some level of say over national budgets and national borrowing amounts and honestly I'd welcome this as such control would have prevented the give away budgets of the latter FF years that dug the hole we're in in the first place.

And I wouldn't......I dont want control of this country ceded to some faceless unelected bureaucrats in Brussels (I know, the irony given that is essentially what has happened)...who is to say they wont make equally as unsuitable decisions for this country as our own politicians have...who is to say they are not already as corrupt or on their way to being as corrupt as our own with the added problems that it may be harder to get rid of them should we want that and they may make decisions that are more suitable for other more powerful voices/economies in Europe rather than our own

maybe its a simplistic argument...but should we throw the baby out with the bathwater? better the devil you know....we lost control of our interest rates when we lost our currency

I'm not an out an out euro-skeptic but it will take a lot of convincing that giving fiscal control to ecb or some body like it via a binding treaty is in Ireland's best long term interests or my own personal ones for that matter despite the hash our gombeens have made of it on their own.

I didnt want us to join the Euro ..... I feel I have been vindicated (although as things stand our membership is keeping the wolves from the door - how long more though?) it may be academic but perhaps we would not need the protection of being in the euro if we never had it as things may not have been nearly as bad...the one size fits all low interest rate was never in our best interests and brought with it increased borrowings and massive inflation.......when we had the punt our gombeens as bad as they were controlled inflation through our interest rates which we had control of before the advent of the euro

I voted no to Lisbon twice (I still feel aggrieved I was asked to vote a second time and every time I'm told why it was such a good idea to do it because you either have a vote and you can use it and live with the consequences of your decision or else its not a vote imo)

Frankly I'm surprised at the amount of posters I see bandying about this idea that we would be better off with control taken out of our hands, it will take a lot to convince me that this is a wise direction to agree meekly to....I dont like being told to do at the best of times...I really dont like being told what to do by agencies/people I have no direct influence/power over...and I dont like the fact that we will essentially be electing representatives that will be able to palm off all responsibility for decisions on a central authority that told them what to do if fiscal control is ceded to a central authority...why bother with the middlemen at all then?

nesf

amacca wrote: »

And I wouldn't......I dont want control of this country ceded to some faceless unelected bureaucrats in Brussels (I know, the irony given that is essentially what has happened)...who is to say they wont make equally as unsuitable decisions for this country as our own politicians have...who is to say they are not already as corrupt or on their way to being as corrupt as our own with the added problems that it may be harder to get rid of them should we want that and they may make decisions that are more suitable for other more powerful voices/economies in Europe rather than our own

maybe its a simplistic argument...but should we throw the baby out with the bathwater? better the devil you know....we lost control of our interest rates when we lost our currency

I'm not an out an out euro-skeptic but it will take a lot of convincing that giving fiscal control to ecb or some body like it via a binding treaty is in Ireland's best long term interests or my own personal ones for that matter despite the hash our gombeens have made of it on their own.

I didnt want us to join the Euro ..... I feel I have been vindicated (although as things stand our membership is keeping the wolves from the door - how long more though?) it may be academic but perhaps we would not need the protection of being in the euro if we never had it as things may not have been nearly as bad...the one size fits all low interest rate was never in our best interests and brought with it increased borrowings and massive inflation.......when we had the punt our gombeens as bad as they were controlled inflation through our interest rates which we had control of before the advent of the euro

I voted no to Lisbon twice (I still feel aggrieved I was asked to vote a second time and every time I'm told why it was such a good idea to do it because you either have a vote and you can use it and live with the consequences of your decision or else its not a vote imo)

Frankly I'm surprised at the amount of posters I see bandying about this idea that we would be better off with control taken out of our hands, it will take a lot to convince me that this is a wise direction to agree meekly to....I dont like being told to do at the best of times...I really dont like being told what to do by agencies/people I have no direct influence/power over...and I dont like the fact that we will essentially be electing representatives that will be able to palm off all responsibility for decisions on a central authority that told them what to do if fiscal control is ceded to a central authority...why bother with the middlemen at all then?

Well, for technical reasons it's necessary in a single currency area but aside from that European politicians have for decades shown that without external pressure they refuse to make difficult political decisions that are in the economic interests of their countries. I don't want politicians in charge of the general shape of budgets because we don't want that to be a political issue.

Replace an EU body with the Irish Central Bank if you prefer.

nesf

Crazy Horse 6 wrote: »

How is it irresponsible? If he 's telling it like it is surely it's the right thing to do. I think the problem is we don't have enough people in the mainstream media being truthful with the average Joe or Jane.

It could cause a bank run. That's the issue there.

The_Honeybadger

nesf wrote: »

I'd welcome this as such control would have prevented the give away budgets of the latter FF years that dug the hole we're in in the first place.

Would it? We weren't running a deficit at the time and had little or no borrowing requirements, in fact we had substantial budget surpluses. How would a central control in Europe have stopped the vote buying budgets. Unless of course spending increases were capped to a certain % or something. I would actually welcome this measure also as we clearly cannot manage our own affairs though.

MungBean

nesf wrote: »

It could cause a bank run. That's the issue there.

He's not obligated to keep up appearances though, he's a financial advisor/commentator who gave good financial advice. The Euro may not be high risk as such but it is higher risk than other options available to people looking to secure their savings.

If he wants to give that advice freely instead of limiting it to people in the know then thats his prerogative.

amacca

nesf wrote: »

Well, for technical reasons it's necessary in a single currency area but aside from that European politicians have for decades shown that without external pressure they refuse to make difficult political decisions that are in the economic interests of their countries. I don't want politicians in charge of the general shape of budgets because we don't want that to be a political issue.

imo budgets should be a political issue.....we should elect the politicians to do this job and if they mess it up we will learn to elect more capable ones that is if we are not bailed out and have suffer the consequences of our decisions should they turn out to be poor ones

if budgets are not to be a political issue then I am not sure what other sort of issue or non-issue I want them to be...........

nesf wrote: »

Replace an EU body with the Irish Central Bank if you prefer.

The irish central bank would presumably in turn report to the European central bank so its just a similar thing by a different name

they just become anther cog on a wheel I'm not sure I want to be on

nesf

amacca wrote: »

imo budgets should be a political issue.....we should elect the politicians to do this job and if they mess it up we will learn to elect more capable ones that is if we are not bailed out and have suffer the consequences of our decisions should they turn out to be poor ones

if budgets are not to be a political issue then I am not sure what other sort of issue or non-issue I want them to be...........

Budgets should be a political issue but the broad parameters on how much surplus or deficit should be run and overall borrowing level should not be. Politicians should be given a target amount of spending to work with and form a budget from that in my view.

amacca wrote: »

The irish central bank would presumably in turn report to the European central bank so its just a similar thing by a different name

they just become anther cog on a wheel I'm not sure I want to be on

I'm proposing the ICB as an option if we weren't in the Eurozone. i.e. the Eurosceptic option for what I'm talking about.

nesf

mickeyk wrote: »

Would it? We weren't running a deficit at the time and had little or no borrowing requirements, in fact we had substantial budget surpluses. How would a central control in Europe have stopped the vote buying budgets. Unless of course spending increases were capped to a certain % or something. I would actually welcome this measure also as we clearly cannot manage our own affairs though.

Europe was telling us in the early 2000's that we were overinflating the economy and spending money that would not last. Our politicians didn't listen. What I'm saying is that they should be forced to listen.

nesf

MungBean wrote: »

He's not obligated to keep up appearances though, he's a financial advisor/commentator who gave good financial advice. The Euro may not be high risk as such but it is higher risk than other options available to people looking to secure their savings.

If he wants to give that advice freely instead of limiting it to people in the know then thats his prerogative.

Sure. It's still irresponsible. He isn't required to be responsible, he can preach whatever he likes.

MungBean

nesf wrote: »

Sure. It's still irresponsible. He isn't required to be responsible, he can preach whatever he likes.

He may see it that he's responsibility as a financial advisor is to people looking to secure their savings and inform them of the best way to do it.

thebman

Personally I think he just tells people to invest in what he has just invested in and by doing so on TV hopes to persuade enough to do it so that his own investment rises then gets out himself.

Just a hunch. He was telling people to invest in gold not too long ago too.

Debtocracy

nesf wrote: »

What we face is a problem economists have been pointing out for around 15 years. You cannot have a single currency area without some kind of fiscal central control. The EU have tried to do without this and are paying the price now. What we are faced with is some kind of central authority having some level of say over national budgets and national borrowing amounts and honestly I'd welcome this as such control would have prevented the give away budgets of the latter FF years that dug the hole we're in in the first place.

Do you really believe that is the key issue? If we exchange incompetence and corruption at the national level with incompetence and corruption at the European level the problem will be solved.

If this was the key variable then we would expect economies like the U.S. to be running smoothly. The U.S. is in a worse situation overall to Europe, it just has the potential to print its way towards solvency with the world’s reserve currency. I’m also irritated by these U.K. commentators focusing on the structural flaws of the Eurozone, when the U.K. is as worse off as the U.S. or the Eurozone.

The fundamental problem that Europe is faced with (and many other economies) is the debt saturation spiral. If it fails to take on more debt it falls into a depression but the new debt it takes on produces minimal growth. Regardless of the mechanism, dealing with this problem requires coordination between governments both inside and outside the Eurozone (e.g. Wall Street is on the hook for sovereign default in Europe). Centralised fiscal authority is completely unnecessary, though the political elites of Europe are salivating at the thought that the crisis could be used to bring it about.

Dannyboy83

nesf wrote: »

Budgets should be a political issue but the broad parameters on how much surplus or deficit should be run and overall borrowing level should not be. Politicians should be given a target amount of spending to work with and form a budget from that in my view.

I completely agree with this.

In my opinion, one of Ireland's biggest challenges is that it the economy is heavily controlled by politicians with way less input from economists, accountants etc.

For example, if Colm McCarthy had had a lot more control in 2009, I believe we'd at minimum be much further recovered, but I also believe that the decisions taken would have made more economic sense.

The problem with politicians having so much control over the economy is that they make politically beneficial decisions - not economically beneficial ones.
The kind of idiocy we are facing into now, with Vat rates due to climb to 25% and so on, yet still reams of wasteful spending, is a symptom of that, and the example given previously, the FF giveaway budgets of the Lynch era and the Ahern era, are yet another symptom.

RichardAnd

During the boom, Eddie gave out some very risky advise that was lapped up by amateur who didn't know what they were doing. Have a look at the following:


http://www.youtube.com/watch?v=riFSbr-TgTg

nesf

nesf wrote: »

It could cause a bank run. That's the issue there.

bad banks cause bank runs

nesf

Deleted User wrote: »

bad banks cause bank runs

No. A perfectly good bank can have a bank run against it due to a rumour and people spreading it. Was a relatively common thing to happen early last century with some examples in the Great Depression and so on. You're underestimating the power of mob action to bring down otherwise sound businesses.

pacquiao

nesf wrote: »

No. A perfectly good bank can have a bank run against it due to a rumour and people spreading it. Was a relatively common thing to happen early last century with some examples in the Great Depression and so on. You're underestimating the power of mob action to bring down otherwise sound businesses.

Banks aren't perfectly good.If they didn't act like magicians we would be fine.
Trickery and fraud are the problem.

nesf

pacquiao wrote: »

Banks aren't perfectly good.If they didn't act like magicians we would be fine.
Trickery and fraud are the problem.

Trickery, fraud, bad lending and bad risk management were the initial problems sure. But we're in a sovereign debt crisis now not a banking crisis.