Uncontrolled greek default - effect on UK banks

marms

dealer_wins wrote: »

I am going to start stockpiling BS as from now. Ive got my printer switched on and will start printing out all the nonsense posts I can find, starting with the one above LOL

I hope you've got a stockpile of ink cartridges lol

Sparky47

john_k wrote: »

I have noticed another board on this site entitled 'Debate House prices & the economy' where similar topics are being discussed in a more considered manner. However for some reason I am not even able to see that other board unless I log in.

See Martin's post on that board for the reason you have to log in (5th post from the top).

Masomnia

oldvicar wrote: »

Anyone with economic theory to explain any impact on our (UK) inflation if the economies of some neighbouring countries collapses?

I'd've thought deflation/lower prices if anything.

Lack of demand as they enter recession should push down commodity prices, and the £ getting stronger against the Euro should make imported goods cheaper.

competitionscafe

"Who owns that Greek debt? As I've said, mainly French and German banks. Yes, but banks insure their debt via the use of complex financial instruments. Insure it with whom? Don't know: some of it is insured with British banks as counter-parties to the risk, but that risk will be insured in its turn, so that the identity of the person holding the parcel when its last layer of wrapping comes off is a mystery."
Source: http://www.guardian.co.uk/world/2011/jul/13/eurozone-greek-debt-crisis-euro / http://www.lrb.co.uk/v33/n14/john-lanchester/once-greece-goes

mr_fishbulb

john_k wrote: »

I have noticed another board on this site entitled 'Debate House prices & the economy' where similar topics are being discussed in a more considered manner.

Hahahahaha - you're new around here aren't you?

That board is a flamers delight.

john_k_5

My own view is that I don't think it would be considered acceptable by government for there not to be a functional banking system. If things got that bad then banking systems would be nationalised so that savers would not lose money and society could continue normally. That system works well enough in some other countries.

Also I don't see too many people on this board worrying about it, there are still lots of posts asking about where best to put savings money for safe keeping and obtain the highest rate of interest. The release of a new £50 note has also generated a lot of interest in the news today.

Also I recall reading an article yesterday by the popular bbc economist robert peston who was writing about the possible consequences of italy defaulting (following on from greece). Peston said that in a worst case scenario, a few european banks might 'fall over'. That to me does not indicate a belief that a complete collapse in the european banking system could occur.

celtic123

in a nut shell a full default would cause european banks to encur massive losses. it may also trigger a bank run forcing banks to sell securities. this would ofc cause a stock market crash. as european banks through complex derivatives invest in the uk daily, this would reduce dramatically causing the uk economy to shrink.there is also a risk of very high gov borrowing costs. as the banks would be even stricter about who they will lend to,businneses will fail and employees cant spend. the net result would be possible stagflation, as currency depreciates and the boe tries to print its way out of it.as businnesses in europe would be in trouble there would also be reduced economies of scale. net result the worst depression since ever poss imo due to contagion as the finance system is more interconnected than its ever been

celtic123

short selling gold would be a good speculative move should things get worst.

celtic123

sorry i meant a future option, not short sell.

celtic123

must add tho thats worst case scenario.the market is irrational, who knows for sure. i think a world wide recession is guranteed tho