Joseph Stiglitz: Restructuring debt is not the end of the world

Joseph Stiglitz:

Joseph Stiglitz: “Restructuring debt is not the end of the world”

The Nobel Prize for Economics in 2001, Joseph Eugene Stiglitz, did not disappoint yesterday in Sitges warning, in the days of the Cercle d’Economía, about the vicious circle of fiscal austerity agreed by the governments of the euro zone. In less than half an hour, he makes a critical assessment of the management of the great recession under Obama while mocking the existing taboo about a restructuring of the debt of countries like Greece.

Obama began to disappoint since he entered the White House with Lawrence Summers as chief economic adviser and promoting Timothy Geitner … From “yes, we can (change)” to “no, we will not”. How powerful is Wall Street?

It is true that the profile of his economic team was not a good omen. These were those who, in the mid-1990s, fostered financial deregulation policies that allowed all excesses and favored rescues that nullified the notion of risk. So of course it could not be the team responsible for a new economic policy. From there you can analyze their performance in the face of the great recession. In the first place, a Keynesian stimulus plan was necessary and that of Obama was much better than that of Bush, but he fell short of the infrastructure costs. And this was because the old team, those who generated the financial and real estate bubble, had a hard time realizing the magnitude of the disaster. Obama was also wrong to let Congress amend his stimulus plan by giving too much emphasis to tax cuts and including favors to different sectors. The second priority was to help the states massively. All but one must balance their budgets by reducing spending in the same proportion that revenues decline due to the recession. As a result, today there are fewer public employees than in 2007, the public sector has aggravated unemployment instead of acting cyclically.

And the management of the mortgage crisis?

Insufficient. Obama rejected a law that would have allowed restructuring of mortgage debts. Result: seven million families have lost their homes and it is expected that two more will be lost this year. And the latest data show another acceleration of the price drop that already exceeds that recorded in the Great Depression. It is a total disaster.

Obama ended up pleading with Wall Street on financial regulation.

The main success was to avoid the collapse of the financial system. The downside was that of not demanding conditions in exchange for a rescue of 800,000 million dollars. It did not avoid the excessive premiums of the operators, it did not know how to combine incentives with sanctions. And that in terms of social cohesion has been a disaster, to rescue the bank and not worry about the foreclosed and unemployed … Another mistake has been not to prohibit the financial entities backed by the deposit guarantee fund to place their bets in the derivatives markets, risking the taxpayer’s money. Because the objective is to get banks to lend money again, to finance the real economy. The last omission was not to face the problem of banks too big to fail. The problem is even greater than before the crisis, few banks, very, very large.

With Mario Draghi, it seems that European leaders are inclined towards the American system. Going through Goldman Sachs, expert in creative accounting at the service of Greece, is a plus. Do you know him?

I do not know him very well but I know he is brilliant. I do remember that he was in charge of leading the Financial Stability Board after the crisis in Southeast Asia in 1997 and 1998. His mission was to propose regulatory and supervisory measures to prevent the recurrence of new financial crises. Judge yourself if you succeeded. As for Goldman Sachs, they have already been sanctioned, they are being investigated and it can be clearly said that they went overboard (designing incomprehensible products, using customer information for their own benefit, etc.). I do not know if the money makers or Draghi learned the lesson. In September, Ben Bernanke, one of the architects of the crisis, reiterated his faith in economic science!

The euro zone is going through difficult times.

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The central issue is the restructuring of the debt. The heads of the European Central Bank say it is unthinkable. They should have thought before, when they allowed the banks to borrow beyond the reasonable and operate with financial derivatives. The regulation could have avoided it and now exclude the possibility of a restructuring alluding to the enormous volume of the problem is an error. History shows that an orderly restructuring of sovereign debt is possible. Because, it must not be forgotten, that without economic growth it is impossible to return the debts. And both in the euro zone and in the United States, simultaneous policies to reduce the public deficit are tantamount to condemning their economies to five or ten years of stagnation. And with weak growth, few taxes are collected and the public deficit is not reduced.

And in the case of Greece?

I repeat: without growth you can not pay your debts. An orderly restructuring is possible. It’s not the end of the world. It is serious for shareholders and investors in sovereign debt. They lose money but they do not lose everything. It is about putting the taxpayers, the workers, the mortgaged owners, over the bankers. And, in the worst case, there is always the possibility of an exit from the euro to gain competitiveness.

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Denmark prepares the goodbye of cash

Denmark prepares the goodbye of cash

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From January 2016, many Danish shops will be able to sell to the customer in cash.

The Danish Central Bank will no longer produce bills or coins

Denmark prepares the goodbye of cashCustomers of a Danish supermarket pay for their purchases by card, through machines

  • denmark
  • Corruption
  • finland
  • iceland
  • norway

Denmark is preparing to take a decisive step towards the elimination of cash. The Government Announced a few days ago Specifically, from January 2016, clothing stores, gas stations and restaurants

In the moment, supermarkets and post offices, among others, will be excluded, and they should continue with the payment with physical money. In addition, before entering into force, the new norm. A procedure, however, that should not find special obstacles given the high popularity of electronic payment in Denmark.

According to last year, only 25% of purchases made in this country are made in cash, which is added to the use of mobile phones.

Almost a third of the population in recent years. A mechanism that shortens and simplifies the purchase process to the extreme. The trend is such that the Central Bank of the country has stopped producing notes and coins. From the end of 2016, they will take on much smaller amounts subcontracted companies. Thus, the body plans to save about 100 million crowns (about 13.4 million euros) until 2020.

Greater economic efficiency is the main argument for the future of the September elections. The gradual elimination of cash is seen as an effective way to reduce costs and increase productivity. Its defenders also emphasizes that it is a way to avoid unwanted thefts and reduce the possibility of tax evasion and corruption.

In Northern Europe, Denmark is no exception. Sweden, Norway, Finland and Iceland are moving to the elimination of cash. In all of them, they are accustomed to paying by smallest and cheapest items, such as chewing gum or snacks. Some bank branches, even, have stopped distributing tickets. In cities such as Copenhagen or Stockholm, for example, the machines to buy metro or bus cards do not accept metal either.

As the disappearance of physical money could be the most disadvantaged groups, as people without resources and indigent. On the other hand, hackers and computer security risks are other threats.

The TS condemns a car salesman who charged cash and simulated loans with customers without his knowledge

The TS condemns a car salesman who charged cash and simulated loans with customers without his knowledge

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The magistrates emphasize that he committed himself to crime of fraud

The magistrates emphasize that he committed himself to crime of fraud

He was collected in cash and then he with the exception of other people without his consent and using false documentation.

In addition to this, you will be able to finance the following transactions.

The Criminal Chamber of the Supreme Court has ratified the sentence handed down on November 25, 2016 by the First Section of the Provincial Court of Santander for which it sentenced Fidel SCB and Consuelo GA to three years and at the end of 840 euros and two years and four months plus at the end of 720 euros, respectively, for the continued offense of aggravated fraud in mediation with another of continued falsehood in commercial documents.

Fidel SCB to compensate the financier in the amount of 63,500 euros plus legal interest, as well as another 52,798.32 euros in solidarity with Consuelo GA to the concessionaire. the vehicles obtained illegally and not returned.

Fidel SCB took advantage of the fact that it was commercialized as a dealer of the Renault brand in Santander. 23.5, 19.500 and 21.000 euros, which could later be the same as your own or your own recognition.

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On the other hand, with the purpose of “illicit enrichment” and in agreement with the same dealer without paying the price of the same and without “intention to do so”. Fidel SCB worked, their amounts were financed using the same method. Some of these vehicles were sold, and the dealer could be recovered and returned to the Renault dealer.

Due to the delay of the procedure, which began in November 2005 and has been paralyzed on several occasions.

The high court recognizes that “periods of paralysis that are admissible and that have resulted in the accused – and also the injured – have been pending a final judicial decision for a long time, excessive and disproportionate” it is proportionate to the degree of culpability and the seriousness of the facts, so it does not accept the request for the reduction of the same as requested by the appellants.

Likewise, the sentence of which Joaquín Giménez García has been a speaker highlighting the evidence of the “direct intervention” of both convicts.


The Supreme Court emphasizes that the crime is justified because the deception is “enough to produce error in another (…) sufficient and proportionate for the achievement of the ends pursued.” It is a “series of insidious machinations through which the agent is attributed power, influence or supposed qualities (…) as a stimulus to trigger the fraudulent transfer of assets”, add the magistrates.

In this sense, the sentence is forwarded by Fidel SCB, which stated that “it is not strange” that a card was displayed in one of the commercials , therefore, it is “incorrect” to deduce that was part of the plot. In this line, he said that he was a member of the Board of Directors.

Finally, the condemned alleged that the financial institution did not fulfill its duty of self-protection and acted with “negligence” and negligently, since, in its opinion, it could have demanded chassis, including the price of the model. However, these claims to understand that this loan was meant to ensure that the loan was to be paid and therefore demanded for payrolls and guarantees, not the type of vehicle that was sold.

To be this, who is a worker of the financial, who is an important part of their performance and is based on trust. It was Fidel SCB “who took advantage of such confidence in the financier”, concludes the Supreme Court.