{"id":2822,"date":"2011-01-11T16:09:59","date_gmt":"2011-01-11T23:09:59","guid":{"rendered":"http:\/\/www.jasonapollovoss.local\/?p=2822"},"modified":"2018-08-16T17:20:35","modified_gmt":"2018-08-16T21:20:35","slug":"eu-crisis","status":"publish","type":"post","link":"https:\/\/jasonapollovoss.com\/web\/2011\/01\/11\/eu-crisis\/","title":{"rendered":"EU crisis?"},"content":{"rendered":"

According to the Wall Street Journal this morning the European Union governments are meeting privately.\u00a0 The subject?\u00a0 Increasing the size of the Eurozone’s bailout fund.<\/span><\/p>\n

The reason is that both Portugal and Spain have\u00a0made it onto the radar screens of investors.\u00a0 Naturally, these investors are concerned that both governments may default on their debt or that they have burgeoning\u00a0solvency issues.\u00a0 Is this a crisis?<\/span><\/p>\n

Perhaps my understanding of the word crisis is not in step with the modern understanding of the word.\u00a0 But I think of crisis as something that is about to happen, or has already happened, that was unexpected and has caused a lot of damage or has the potential to cause a lot of damage.\u00a0 Inherent in my understanding is the word ‘unexpected.’<\/span><\/p>\n

For example, I wrote about the potential for the Great Recession to be more damaging in the EU than in the United States back in early 2009 – a full year before it happened.\u00a0 So when investors began to unravel when the Greek financial crisis unfolded, I was certainly surprised.\u00a0 The data were out there for any old reader to turn into actionable information.\u00a0 One of the problems that was obvious in the lead up to the “moment of truth” in the real Greek tragedy, was the fact that the EU charter had no mechanism in place to deal with such a situation.\u00a0 So there was a problem, Greece, without an apparent way to solve the problem.\u00a0 That was a crisis.<\/span><\/p>\n

What is not a crisis is the state of the EU as I write this post.\u00a0 The potential problems now have the scrutiny of both European governments and of investors.\u00a0 So nix the unexpected component of any generic crisis.\u00a0 Not only that, but should a ‘crisis’ unfold – the unexpected default of a European nation – there is no a known and significant response mechanism built into place, the European Financial Stability Facility.\u00a0 Blow two to a ‘crisis.’<\/span><\/p>\n

That the EU is anticipating problems ahead of time is something that is very important.\u00a0 In my 2011 Predictions post, https:\/\/jasonapollovoss.com\/web2010\/12\/13\/what-my-intuition-tells-me-now-2011-predictions\/<\/a>, I stated the following:<\/span><\/p>\n

“Europe \u2013 The debt storm that is passing through Europe right now (Portugal, Ireland, Italy, Greece and\u00a0Spain)\u00a0will subside with not much consequence in terms of the economy.”<\/span><\/p>\n

What I was looking at was the same data everybody else was looking at.\u00a0 But critically my intuition let me know that Germany’s back stopping and underwriting any future problems was the end of the ‘crisis.’\u00a0 Investors just needed to know someone understood, was taking responsibility for the situation, and that they had the power to do something about it.\u00a0 Everything else after that is details.<\/span><\/p>\n

So I am sticking to my prediction quoted above: the debt ‘crisis’ in Europe is going to blow over without much of an economic result.<\/span><\/p>\n

Jason<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

According to the Wall Street Journal this morning the European Union governments are meeting privately.\u00a0 The subject?\u00a0 Increasing the size of the Eurozone’s bailout fund. The reason is that both Portugal and Spain have\u00a0made it onto the radar screens of investors.\u00a0 Naturally, these investors are concerned that both governments may default on their debt or […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[3],"tags":[],"class_list":["post-2822","post","type-post","status-publish","format-standard","hentry","category-the-blog"],"_links":{"self":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/2822","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/comments?post=2822"}],"version-history":[{"count":0,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/2822\/revisions"}],"wp:attachment":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/media?parent=2822"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/categories?post=2822"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/tags?post=2822"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}