Thread: Europes web of debt, in one nice and easy to understand diagram.

Despite the best efforts of the International Monetary Fund, the financial crisis in Europe seems full of suspense. Will Germany and the European Union actually cough up the money to help bail out Greece, which is on the edge of a financial meltdown? Will the contagion spread to other vulnerable countries, like Portugal and Spain?

But like some mystery novels where the ending is telegraphed in the opening pages, the denouement will probably be unsurprising. For all the hand wringing, the reality is that the Germans, the French and the rest of Europe have little choice. In the decade since the introduction of the Euro, the economies on the continent have become increasingly interwoven. With cross-border banking and borrowing, many countries on the periphery of Europe owe vast sums to one another, as well as to richer neighbours like Germany and France.

Like the alliances that drew one country after another into World War I, a default by a single nation would send other countries tumbling. If that message was lost on anyone, there was a reminder last Tuesday when Standard & Poor’s downgrade of Spanish and Portuguese debt hammered stock markets everywhere, including in the United States.

The first domino is Greece. It owes nearly $10 billion to Portuguese banks, and with Portugal already falling two notches in S. & P.’s ratings and facing higher borrowing costs, a default by Greece would be a staggering blow. Portugal, in turn, owes $86 billion to banks in Spain; Spain’s debt was downgraded one notch last week.

The numbers quickly mount. Ireland is heavily indebted to Germany and Britain. The exposure of German banks to Spanish debt totals $238 billion, according to the Bank for International Settlements, while French banks hold another $220 billion. And Italy, whose finances are perennially shaky, is owed $31 billion by Spain and owes France $511 billion, or nearly 20 percent of the French gross domestic product.

“This is not a bailout of Greece,” said Eric Fine, who manages Van Eck G-175 Strategies, a hedge fund specializing in currencies and emerging market debt. “This is a bailout of the Euro system.”

Solutions are also not easily forthcoming. “In the end, we’re all saying we don’t know how to deal with it,” said Dirk Hoffmann-Becking, a bank analyst with Alliance Bernstein in London. “We don’t know how the channels work, or where the problems will pop up next.”

NY Times

Sorry that the article is in U$D, give it a few days and the EUR - U$D will be at par anyway

no wonder markets have gone into freefall

Originally Posted by Spin

Europes web of debt, in one nice and easy to understand diagram

... Do they have an even nicer and easier one than that?

Err, it's for this guy I know... Who is completely useless with numbers... And who still doesn't understand.

My God! It's a pentagram. 'Tis the Devils work

Originally Posted by AntRobertson

Do they have an even nicer and easier one than that?

I think I missed one of these off the end of my title >>>>>>>

greece is but small potatoes

france is the one they should really have the heebie jeebies about

Originally Posted by AntRobertson

... Do they have an even nicer and easier one than that?

Its a web.

Its debt.

Its all messy.

What more does one need to know ?

That diagram pretty much proves that the so called "Eurozone economic growth" of the last 10 years hasn't been due to innovation & production, but rather debt leverage & asset inflation.

There are charts that prove the same is true for the USA

A complex web of lies, deceit and ponzi, and it's all about to blow up.

Originally Posted by Spin

Originally Posted by AntRobertson

Do they have an even nicer and easier one than that?

I think I missed one of these off the end of my title >>>>>>>

Waahoo! I'm not as big a finance moron as I thought... Err, I mean my friend isn't!

Originally Posted by baldrick

greece is but small potatoes

france is the one they should really have the heebie jeebies about

I am more worried about Italy.

Originally Posted by Spin

Sorry that the article is in U$D, give it a few days and the EUR - U$D will be at par anyway

that will be good, I can rush out and buy myself a Portuguese palace soon

if that map real ? how was it built ? it's easy to draw charts but getting accurate data might a bit more difficult

one thing for sure is that the PIGS are in it, which would seem quite natural for pigs

Originally Posted by Spin

That diagram pretty much proves that the so called "Eurozone economic growth" of the last 10 years hasn't been due to innovation & production, but rather debt leverage & asset inflation.

There are charts that prove the same is true for the USA

A complex web of lies, deceit and ponzi, and it's all about to blow up.

So why don't the Dollar fall, when that situation is just as bad, some analysts claim there is a gameplay going on here with some players having an interest in blowing the Euro problem up high and thus averting interest from the Dollar.??

This chart is after all only 5 (interestingly England is left out) of the 16 eurozone nations with the rest of the 27 EU member-states more or less pegged to the Euro as-well

http://upload.wikimedia.org/wikipedi...3d5c35cf05.png GDP.

It is after all the world's largest economy, and all this has not cropped up in the last 3-4 month's this has been known for a long time, in december 2009 the euro was resonably high but has fallen sharply since, since the Dollar got in trouble this euro problem suddenly became an big issue and the talk about the weak dollar have more or less vanished. ???

The OP is a well laid out diagram that makes things easy to see and the post is very good but I can make it easier.

The Euro is fucked.

Did that work for you?

Edit. Green added to OP.

Originally Posted by mr Fred

The OP is a well laid out diagram that makes things easy to see and the post is very good but I can make it easier.

The Euro is fucked.

Did that work for you?

Edit. Green added to OP.

shouldnt greened him., he didnt write it, cut n paste from that NY times

Originally Posted by kingwilly

Originally Posted by mr Fred

The OP is a well laid out diagram that makes things easy to see and the post is very good but I can make it easier.

The Euro is fucked.

Did that work for you?

Edit. Green added to OP.

shouldnt greened him., he didnt write it, cut n paste from that NY times

Maybe not but I happen to think the Euro and the whole EU is a pile of horse shit so anything anti is good news in my book.
Besides that, his avatar has nice tits.

Originally Posted by mr Fred

Originally Posted by kingwilly

Originally Posted by mr Fred

The OP is a well laid out diagram that makes things easy to see and the post is very good but I can make it easier.

The Euro is fucked.

Did that work for you?

Edit. Green added to OP.

shouldnt greened him., he didnt write it, cut n paste from that NY times

Maybe not but I happen to think the Euro and the whole EU is a pile of horse shit so anything anti is good news in my book.
Besides that, his avatar has nice tits.

That is fine, but apart from your biases, do you also have some concrete knowlegde on the subject you want to share

Originally Posted by Belepheron

My sister is going to Greece in June should she take Euros, Dollars, Sterling or a bag of brightly coloured beads?

Don't worry about the cash. With the crap that's going on over there at the moment just pack this.

Originally Posted by baldrick

greece is but small potatoes

Indeed, but they are the small domino that can cause a lot more bigger ones to topple.

Originally Posted by Butterfly

how was it built ? it's easy to draw charts but getting accurate data might a bit more difficult

Most of the data is sourced from the Bank for International Settlements, their data is pretty accurate and available to subscribers.

The chart is simplified though, for example, Switzerland are not mentioned on the chart but they are owed 79 Billion Dollars by Greece.

Originally Posted by larvidchr

So why don't the Dollar fall

The dollar isn't falling because there is an orderly move into the (ill) perceived safety of the dollar. Its an easy trade, not based on any fundamental strength in the underlying the dollar, merely because its the best option on hand at the moment.

All fiat paper is trash right now, just place your hat on the one that you think is not the next one to blow up. The Aussie was looking pretty good but that could get punched in the balls if numbers out of China continue to weaken.

Originally Posted by mr Fred

The Euro is fucked.

Right now it is fucked. I don't have have skin in the game but can see that the markets are going after the rotten apples. The maths for the Greek bailout still don't add up, lending them more money will put their overall debt at 180 billion Euros, government spending being slashed will slash 20% of the GDP and that will send them into a deflationary spiral.

Like I noted earlier, I'd rather be in Chad than Greece right now

jesus fucking christ, that could make the Subprime mess look like a kiddie game

there is something missing in those charts though, it is the underlying assets matching all those loans, so at the end it's not entirely that bad,

of course we are only seeing one side of the picture, that is the liability side

also, are those loans the gross amount or net amount ? could be the loans at origination, not their carrying value.

Also with maturity not being in the chart, it is all a bit misleading.

So basically, the UK, France & Germany should've done this EU thing alone and told the lazy gits in the other countries to naff off?

Originally Posted by Marmite the Dog

So basically, the UK, France & Germany should've done this EU thing alone and told the lazy gits in the other countries to naff off?

maybe Spain also, they are a good party crowd