Wednesday, May 16, 2012
Thank you for the many votes from various quarters and first we apologise for a lack of graphs and charts. We have some of the results but are struggling with uploading at the moment but will try to update later tonight ( if you haven't already done your own). So here are the words, if no pictures.
Though of course it is still a low sample size to draw many conclusions from, by eyeballing our charts the underlying trend was that most of you think the market is perceiving the date of an exit to be one notch earlier than you are. Trends by segment had the "buy side" putting their own views and market expectations at much about the same, which would make sense as they effectively ARE the market. The "e's and d's" are most skewed to things happening much later than where they think the market is pricing. To be honest we expected the "non-financials" to be more "sooner than market" rather than the other way around. Oh, and perhaps the most important voter, the one proclaiming to be a Greek Politician, says 2013. But then how much do we trust a Greek Politician.
We also half expected prices to start moving in to "earlier" as time wore on in the survey as the noise levels in the real world grew deafening. But not really so. You are a principled lot who stick to your views! We really will have to try and dig out some good survey widgets that not only do simple polls or surveys but can also let you all play with the results. If so we'd start running regular surveys.
Right .. onwards and downwards. TMM are coping with a severe "Edward the Seconding" (see Glossary) at the hands of a markets that are.. well.. as a friend descibed them - "The financial markets are like a strapless bra. Half the people are wondering what's holding it up whereas the other half are waiting for it to drop so that they can grab the opportunity with both hands".
TMM have been thinking and wondering. With the market effectively pessimistic of any workable solution being found TMM think its time to think "outside the blx". and come up with some may be not so mad ideas of their own:-
"Rotten borough" short term fix - Offer each voting Greek say 5,000 Euros to vote in "the right way"? How many voters are there? A guess of 8 mil? So E40 billion cost? Worried about the morals? Well they can always say no! Surely a bargain compared to the trillions that would be wiped off global markets and debt foreclosures on a complete mess up? Yeah yeah .. we know, it doesn't fix the long term problems etc.
Longer Term - In the UK the BBC was moved up to Manchester from the expensive costs of real estate and living in London, to the economic benefit of their new home. This was after the government had already moved state run administration for similar reasons to the likes of Cumbernauld and the economically suffering North East. Now TMM propose that the EU do the same and move all EU parliamentary, administrative, legal and regulatory functions from their homes in Brussels, Strasbourg, Frankfurt and wherever else they are squirreled away in "core countries" to Greece. On top of the benefits to Greece of the huge cash injection of all that EC admin budget, placing the ECB and EU Parliament in Athens and the EIB and European Court in Thessaloniki might just focus a few minds. We could even rename the Acropolis the Troikopolis. They can also keep the move of Parliament between two centres, how about Athens to Rhodes to give the Greek Ferry services a boost? On top of it all, just as Gordon Brown knew, creating more jobs paid for by the state overlord makes that overlord a lot more likely to be supported in the polls. We see Greece's benefits to be huge and the cost savings on current process would also be significant.
But joking aside, it is still fascinating that the true cause of the current failure of Europe is the half-cock nature of its unity. Much as some are more equal than others, some areas are more "unified" than others. Unified monetary system, unified trade, open borders, BUT and the big BUT - There is still no real unity and freedom through mobility of workforces and until Greeks exodus to Germany to freely take German jobs for less pay the rot will continue. Perhaps we need cultural union before monetary union (oddly perhaps via the English language).
We are still convinced that printing money is the solution that needs to be arrived at as fast as possible. What's the problem with that? The currency moves lower - well that's helpful. You can use the newly printed money to fill in the bank debt holes and sovereign funding issues. Inflation? On imported goods via fx moves yes, but the export and global competitiveness function is of greater importance. So what about that imported inflation feeding through to wages? Looking at the UK and Switzerland that is not a problem. In fact the UK's management of the crisis so far is, despite non-financial sector sniping, is remarkably robust and though we have been huge critics of Mervyn King in the past, maybe its time we put him in charge of the ECB.
The problem is that policy response is, by its very name, rarely policy pre-empt and is always reactionary with a lag and as we have seen in Europe so often - A lag that just makes things worse.