Euro debts: “Purge the rottenness out of the system” – Hugh Hendry channels Andrew Mellon

An interesting discussion on the problem of, and solutions to, sovereign debt default on Newsnight. Everyone’s favourite, um, “clinker-bag” is back, this time being rude to Columbia University’s Professor Jeffrey Sachs, Gillian Tett a journalist at the Financial Times also in attendance.

Kent Brockman, from the Simpsons said it best in Homer the Vigilante.

Kent Brockman reports on the situation.

Kent: Hordes of panicky people seem to be evacuating the town for
some unknown reason. Professor, without knowing precisely
what the danger is, would you say it’s time for our viewers
to crack each other’s heads open and feast on the goo inside?
Professor: Mmm, yes I would, Kent.

The preceding report, also below

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  • DC

    Well I did like Hugh Hendry’s bit about regulation at 7m 26secs.

    No one either in the banks or government / regulatory agencies are giving a consistent lead. So if cuts are to come and recessionary policies are put place the fatty cash should be cut off to the banks whose balance sheets have been propped up by taxpayers money.

    In a political system where everyone talks a lot about values it is apt to ask the question what of money, what value does it has in the scale of these values?

    For example, Blair went to war on a war of values, of freedom, of liberty and of trade – so too Bush and America and those western democracies that ascribe to it in the end. Yet juxatpose this with the action and behaviour of the banking sector / financial services (much of it due to loose structures and poor oversight encouraging it all the same) and then ask yourself what did more damage to western society and values – 9/11 and the war on terror?

    Or, the many trillions blown by this sector right at the core of democracy permitting it all to happen?

    Where are the big political boys now and why aren’t they fighting domestically using a repetition of the ‘war on terror’ for such values now?

    Basically resources have been squandered meaning joblessness and ultimately less food to eat, or in the developing countries less aid and no food.

    It is a joke, which Hendry through his cut throat hard-headedness realises at least, at least on the banks wanting to carry on regardless while others still must pay their way. And these banking bonuses, dividends etc.

  • Kevin Barry

    Usually Hugh is quite jovial and disparaging; now he’s just disparaging, and quite rightly so.

    What we have seen is a massive case of pass the parcel instead of dealing with the problem. What I, and I am sure most people can’t get over, is how few strings where attached to the various banking bailouts. We pretty much saw legalised theft back in 2008/2009 with the banks being nationalised and the subsequent funds gave to the guys at the top for

    i) making record gains AFTER record losses (to make stock market gains then was like shooting fish in a barrel) or

    ii) the restructuring guys were still charging pre crash rates on bond sales and corporate restructuring work which they mostly helped create thanks to their insane gambling policies and also betting against the very clients they acted for.

    The deficits European countries have are clearly a massive problem but what compounds it is not only the policies put in place that will not help growth but more importantly the inability of the markets to value what the premium should be paid on the toxic debt held.

    Since nobody has come out and actually said to the markets ‘this is the debts we have, this is what the assets are’ and then allow the markets to value them accordingly it means that governments will have to pay a massive premium on their bond issues.

    Also, as a committed Europhile, the national pettiness rearing its head between each country that is coming to fore increasingly shows not only how hollow the Union actually is but the dream of the EU becoming an effectual big player on the world stage is only that.

  • HeinzGuderian

    Kent: Hordes of panicky people seem to be evacuating the town for
    some unknown reason. Professor, without knowing precisely
    what the danger is, would you say it’s time for our viewers
    to crack each other’s heads open and feast on the goo inside?
    Professor: Mmm, yes I would, Kent.

    Kent Brockman,the finger on the pulse.

    Today I shall be taking my hard earned Sterling,(you know…REAL MONEY),and strolling around the local market. A lb of sausages please,my good man. An Ounce of your finest tobacco. Ah yes,a pint of your finest brew landlord,and do keep the change.

    Throw away your plastic Euros,and join us here in The Kingdom. We have plenty of GBP for all!! :O)