Interesting chart about the Greek debt, via the NYT:

Banks and governments in these five shaky economies owe each other many billions of euros — converted here to dollars — and have even larger debts to Britain, France and Germany. Arrow widths are proportional to debt amounts.

>
click for larger chart

>

Hat tip Paul

Category: Bailouts, Credit

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

29 Responses to “Europe’s Web of Debt”

  1. steveplace says:

    I have a much more sophisticated diagram for those into chart porn:

    http://www.investingwithoptions.com/2010/05/05/the-global-debt-and-monetary-system/

  2. JSC says:

    is it shaped like a pentagram on purpose? where are the four horsemen?

  3. R. Cain says:

    Oh what a tangled web we weave,

  4. perra says:

    As Margaret Thatcher once said, the trouble with socialism is that you sooner or later run out of other people’s cash.

  5. AJB says:

    I’m not pretexting.

    Seems to me Luskin should get some advising folks to avoid unknown (or underappreciated risks) overseas. Even if just a ‘blind squirrel’ award.

    We can then return to giving him a much deserved bashing for the other 99% of his record.

  6. AJB says:

    Some ‘credit for’, that is. Sorry.

  7. If this were an ink blot session they’d be locking me up. Here’s why:

    That looks to me like a Star Trek battle scene.

    Then again that also looks like the economic equivalent of incest.

    I’ll bet if you gave that chart to a high school math student and told him to go all algebraic and cancel out the opposing numbers that we’d find they were all passing around a net of $1

  8. @ steveplace

    LOL! Very funny!

    That’s a Goldman printout of the high frequency trade

    Hey Barry,

    OT

    This might demand some action:

    OBAMA DECIDES TO CONTROL THE INTERNET

    If FCC Chairman Genachowski announces his intention to reclassify the Internet as a telephone system, he will be reversing 30 years of precedent

    As I have repeatedly warned and noted on http://www.ObamaChart.com, when Congress blocks the Obama administration, the White House always finds a way to get around the normal policy-making process and pursue its agenda by other means. Today’s reclassification assault on the Internet is the latest—and perhaps the most egregious—example.

    In its effort to imposing crippling net neutrality regulations on the Internet—an idea with very little support from the American public or Congress—the Obama administration first turned to the FCC simply to pretend Congress has given it authority to regulate.

    That effort suffered a major setback when the D.C. Circuit Court of Appeals emphatically smacked down the FCC’s regulatory proposals in Comcast v. FCC. President Obama and his close friend and FCC chairman Julius Genachowski, however, refuse to back down. Instead they’re escalating to the regulatory equivalent of a nuclear attack on the free-market Internet: Chairman Genachowski will announce today his intention to reclassify broadband Internet as an old-fashioned telephone system as a pretext for pervasive regulatory control.

    http://tinyurl.com/3ywork5

  9. PrahaPartizan says:

    Looking at that web of debt, I’m reminded of the loans the French had made to the Russians before WW1 to build infrastructure there and to finance the rebuilding of the Russian military after the Russo-Japanese War and the 1905 Revolution. France was totally screwed when the Soviets (the successors to Russia’s Romanov regime) repudiated the whole debt. It was one of the things which led to stagnation of the French Third Republic during the 1920s and 1930s. If one builds on the comment from the diagram that Italy’s portion of the debt equals 20% of French GDP, then the debt added from the other four nations in the web boosts that percentage to almost 35%. Everyone can talk about Germany being hesitant about the euro, but what happens when the French have to withdraw because they have to write off almost a third of a year’s GDP? Further, who does Germany expect to export to when their neighbors are begging in the streets?

  10. The Curmudgeon says:

    Change the names of countries to names of investment banks, and that’s about how things looked before the fall. Now there would not be as many arrows, and some would point back around to themselves, and undergirding the lot of them would be the US Treasury/Fedres.

    If all these countries are TBTF, who will insure they don’t? Where’s the one bank, sovereign or otherwise, that is too big to fail, not in that it can’t be allowed to fail, but rather that it is actually too big, i.e., that it could never fail?

    Right. There’s not one.

    And Ireland, country of about 5 million, really owes the world $867 billion? Amazing.

  11. X on the MTA says:

    Uhm, Barry, by my calculations the Greek debt is closer to EUR 260B, considerably more than this graph suggests ($330B at EURUSD=1.27). Check out the Bloomberg GGB/GTB screens.

    Is this supposed to be sovereign debt or what?

    By my calculations:
    – Ireland is closer to EUR 200MMM
    – Italy is more like EUR 1.05MMMM
    – Spain is EUR 339MMM
    – Portugal is EUR 97.5MMM

    I pulled all this from their respective Bloomberg government bond pages. what am I missing?

  12. Purewater says:

    @Steve Place: Is derivative exposure included in your chart? Might want to update.

  13. R. Cain says:

    @ X
    i was wondering the same thing
    NYT says ‘Banks and governments in these five shaky economies …’
    still the numbers look a little odd

    eg Ireland $867B/4.5 million population = $192,000 per capita
    whereas all the rest (total$/population)
    are in a range $21k – $26k per capita

    (there is a feedback option on the chart if anyone has time)

  14. mbelardes says:

    At least the Euros have the World Cup to look forward to.

    Except Ireland. Ireland is just massively in debt with a crappy soccer team. Sorry.

  15. Marc P says:

    @Curmudgeon makes a good point. Here’s the comparison. Population figures from the CIA World Factbook, debt from the chart above, math from Mrs. Simpson in 3rd grade:

    Debt Population Per capita
    (Bil.) (Mil.)
    Ireland 867 4.2 $206,429
    Portugal 286 10.7 $26,729
    Spain 1100 40.5 $27,160
    Italy 1400 58.1 $24,096
    Greece 236 10.7 $22,056

    US 11900 307.2 $38,737

    According to this, Ireland is in a world of hurt. The others are doing poorly, and the U.S. makes Greece look fiscally responsible.

  16. Marc P says:

    Let’s see if I can get the website to space this properly so it’s readable:

    @Curmudgeon makes a good point. Here’s the comparison. Population figures from the CIA World Factbook, debt from the chart above, math from Mrs. Simpson in 3rd grade:

    Debt Population Per capita
    (Bil.) (Mil.)
    Ireland 867 4.2 $206,429
    Portugal 286 10.7 $26,729
    Spain 1100 40.5 $27,160
    Italy 1400 58.1 $24,096
    Greece 236 10.7 $22,056

    US 11900 307.2 $38,737

    According to this, Ireland is in a world of hurt. The others are doing poorly, and the U.S. makes Greece look fiscally responsible.

  17. constantnormal says:

    I like steveplace’s chart better, but even it is still missing the debt tendrils that disappear through wormholes between dark pools … unseen until they snap taut, and then tear the very fabric of space-time itself to pieces …

    I suggest that NOBODY knows the true extent of the web of debt until they are ensnared within it and it begins its lethal constrictions ….

    How many lies are lurking within the books of the various players, lying dormant until the unwary party ventures too close, and then … GULP! They’re gone. Eaten by the Debt Too Big To Finance. (That IS what TBTF means, right?)

    But that’s just silly, players with ginormous bad debts would never lie about them, would they?

    WOULD THEY??!!

  18. The Curmudgeon says:

    @Marc P…excellent. I keep one of the CIA world fact books on my desk. Assuming its demographic figures are correct, things don’t look so good for the future of the developed world.

  19. mbelardes says:

    Hey, I was just thinking, if all of these countries use Repo-105 type off balance sheet transactions, then … uh oh.

  20. constantnormal says:

    WHAT WUZ THAT ??!!

    Suddenly I felt a great tremor in the force, as if a trillion contracts had cried out in pain, then were silent.

  21. flipspiceland says:

    @ Marc P

    Presumably, the death model for Ireland projects out to include Paddy O’Leary in County Cork who is now aged 95, is about a week away from dying, and “owes’ $206,000 Euros, but will pay that off in heaven.

    Or not.

  22. Dogfish says:

    Debt Population Per capita // GPD per capita // ratio
    (Bil.) (Mil.)
    Ireland 867 4.2 $206,429 // $60,460 // 3.414
    Portugal 286 10.7 $26,729 // $22,923 // 1.166
    Spain 1100 40.5 $27,160 // $35,215 // 0.771
    Italy 1400 58.1 $24,096 // $38,492 // 0.626
    Greece 236 10.7 $22,056 // $31,670 // 0.696

    US 11900 307.2 $38,737 // $47,988 // 0.807

    googles says the gpd per cap data is from world bank 2008. ratio data supplied by calc.exe

  23. constantnormal says:

    hey all you number-munchers, trying sticking the numbers for the UK in and see what its debt per capita numbers look like.

  24. rktbrkr says:

    Lets not forget that the Irish gov guaranteed all deposits in Irish banks during the Iceland meltdown – so they have some significant contingent liabilities too. A horrendously bad RE mkt, all bank deposits are gov guaranteed and a 200K per capita debt. Why is everybody worried about Greece – they’re the first, not the worst! Bejeezus…

  25. DeDude says:

    “As Margaret Thatcher once said, the trouble with socialism is that you sooner or later run out of other people’s cash.”

    And then it turned out that she was actually talking about capitalism not socialism, strange world we live in ?

  26. rktbrkr says:

    Maggie didn’t know about Helicopter Ben

  27. X on the MTA says:

    Hey guys, Bill Marsh from the NYT replied back to me and cleared it up, I posted his reply here: http://blog.morallybankrupt.org/2010/05/is-elite-liberal-media-instigating.html

  28. toeser says:

    Did these guys ever hear of netting? The world would still be scary, but at least the numbers would not be as big.

  29. oracle1967 says:

    Ireland numbers probably include liabilities of Banks operating in the IFSC, the offshore centre where lots of European players have domiciled funding conduits. None of this element is owed ‘per capita’