Also, I agree with the entirety of the IMF statement on the Euro area that I believe is also applicable to the UK, including the section I underlined:
Countries facing market pressures have no choice but to adjust forcefully and to prepare contingency plans to avoid any slippage jeopardizing the achievement of deficit targets. For all countries, additional efforts must be made to turn around unfavorable debt dynamics over the medium term. Comprehensive entitlement reforms should be a key ingredient of many consolidation programs, with an emphasis on large medium and long-term gains, such as from increases in the effective retirement age and healthcare reform. Attention should also be paid to the quality and the composition of adjustment to maximize support for growth and to measures to protect vulnerable groups during the reform and adjustment process.
Yea but this can be said of any industrialized country, not just the EU or UK. And the IMF miss a big point and that is military spending.
I'm still waiting to see the new government’s concrete proposals.
Exactly, there is a very lack of concrete proposals so far, and those that have come out are not exactly moral boosting but more like the old mean Conservative policy.
That is an area where reform can be helpful.
More than helpful. In Spain they made an analysis that stated that the Spanish healthcare system could save billions if the doctors were forced to use generic drugs instead of named brands when ever possible. And Spain already has some of the cheapest drugs in Europe due to regulation of the market. Just think of a market that is fully free in Europe on what that has done for telecommunications prices and other prices.
Of course it can't be done in a single year. Fiscal consolidation will be a multi-year process. A transition will be necessary to get from the current situation to the desired outcome so as not produce an excessively disruptive economic and social impact.
I agree, but markets want action now and results now.. and that is a problem. Look at Greece, they did not even get a chance to fix the problem before the markets pushed them over the edge.
IMO, one probably cannot alter human behavior, including market psychology very much. During periods of uncertainty, even modest bad news will lead to an amplified reaction.
You cant, but you can prevent harmful behaviour in the market place.. we do it all the time. We dont allow ponzie schemes and other harmful market actions, so going a bit further to prevent harmful actions like nakid short selling or requiring more capital and lower leverage.
I do believe journalists, including the financial press, need to be more rigorous in ensuring that the information they disseminate is credible, etc. That means either vetting information beforehand or filtering out analysts who have a consistently bad record, as many—even in the markets—are not sufficiently financially literate. At a minimum, those making estimates should have to spell out their assumptions and cite past examples where such assumptions led to the outcome they are forecasting.
There are analysts who are often quoted whose predictions have been consistently dismal, to say the least, yet their commentary still garners media attention. I highlighted one of them in the economics subforum (http://www.debatepolitics.com/econo...edicts-possible-1-300-s-and-p-end-2009-a.html
) as it is a real problem for which there is too little scrutiny.
In short, the media has a responsibility to provide credible information. Information of a speculative nature is not credible.
I agree fully. I dont know if you guys get CNBC Europe over in the US, but we get CNBC USA after our European version ends, and the difference is considerable. The US version almost goes out of its way to paint Europe as a hell hole and the US as a paradise, with the French as a favoured bashing point. They more than often have guests that promote this than a more balanced realistic view of things. During the Greece crisis they had daily commentators talking down the Euro, saying it would be disbanded and the EU would break up.
Even just yesterday or on Monday there was a guy promoting this view because of the Hungarian rumour and despite the rumour being disproved over here, he continued either out of ignorance or of malice to promote that Hungary was a new Greece. Or just yesterday the Squawk Box crew and guests talking about riots across Europe and social unrest. There has been one riot, in Greece. There has been peaceful protests and only a handful, but listening to the CNBC people it is mass battles in the streets all across Europe.
And all this was often with the support of the journalists/anchors who do not hide their political leanings one bit. CNBC is as fair and unbiased at times as Fox News these days and since it is the top financial news source out there, then it is rather shocking.
Now the European version often has more than one view on air, and rarely takes sides. In fact the main anchors, I can not tell what political view they have at all... that is not the case of the US anchors.
The media and their willingness to run with rumour and promote a certain angle over others has driven this crisis both before and after the recession started. CNBC had a huge part in the economic crisis we are in today because of its very close relationship to big business, so close that they were fooled big time.. being caught promoting stocks that crashed big time because of a bubble they had either ignored or shrugged off. . One would have thought they learned their lesson but no.