About Mindful Money – 892

1st January 1999

Mindful Money is a social news and knowledge network for the investment community and It's published by the Social Business Group.

A social news and knowledge network – what's that?

Old wine in new bottles or something genuinely different? Lets break it down.

What's Social News?

Mindful Money's social news is editorial content that mirrors the viewpoints, interests and conversations of the online investment community.

It's editorial that's focused more on you and your interests and the things that matter to you.

And less on the comings and goings of fund managers, irrelevant product launches, banal industry awards and so on – unless of course we know they are important to you.

When it comes to Mindful Money, we look for new triggers for headline-breaking topics, the 'story behind the story' and new frames for investment news.

This way you get the whys and wherefores, as well as the facts and figures.

Social news is about new formats too: in the era of twitter, blogs, social networks and Wikipedia it's just not good enough to keep churning out content that was designed for another era.

So here you'll find new formats designed to work with the way that you consume the news that's important to you.   

Mindful Money also aims to help investors actually solve problems; whether that's through access to information or unconventional points of view.

In that respect it's a little bit like citizen journalism, but with an investment focus.

So, as well as adding value to the stories and issues you're discussing wherever we can we'll provide you with resources (step-by-step guides, videos, background stories) and links to others who are covering the same topics.

What's a knowledge network?

Knowledge about investing – why, how, where and when to invest –  is currently the privilege of a few.

Mindful Money's knowledge network is about sharing the knowledge and information of those in the know with those who aren't – yet

We're doing this so that more people can join the conversation.

This is the era of the DIY investor and the up-skilled IFA, so we want a bigger and more inclusive 'tent'; not just white middle class men in suits.

So when we say a social news and knowledge network for the ‘investment community' we mean the expanded investment community, which includes those who are currently excluded because they can't make sense of it.

Here's how our sponsors see it: "We're backing the creation of a unique online platform which will transfer our professional knowledge and expertise about investing – especially with regard to knowledge about how and where to invest – in the language that you use to talk to each other."

Mindful Money isn't just for people new to investing though.

Even if you're a seasoned investor it can still be bewildering with new jargon, regulation, products and services continually coming on stream.

CFDs, TCF, ETFs, naked short selling, the RDR, the list goes on.

We will be calling on some of the smartest minds both inside and outside the industry to help clarify, decode and demystify the investment scene.

So, in a nutshell, we're about knowledge, we're about news, we're about community and we're a bridge between the professionals and every other type of investor.

What's mindful about Mindful Money?

Mindfulness is about making the links that others don't, paying attention to history and voices from outside the industry, making the effort to speak in ordinary language, taking the long view, paying attention to contrarian insiders and keeping an eye out for black swans.

We're taking a stand against: fads, groupthink, short-termism, scape-goating, media bias and FS jargon.

A final thing about Mindful Money – we're not about advice – there's enough of that to go around.

We're about pulling focus on industry tunnel vision to give you the big picture.

We're about linking the people in the know with investors who want to know more, in such a way that everyone benefits.

Welcome to Mindful Money.

23 thoughts on “About Mindful Money – 892”

  1. r mcgrath says:

    Would someone out there please explain to me why it would be a bad thing
    for Greece either to leave the Euro zone, or even be asked to leave.
    This would, of course, apply to any country whose economy failed to
    measure up to Euro zone standards.

    If the Eurozone economies had a believable threat hanging over them of being fired out of the club maybe some responsibility by the various central banks would be exhibited.

    1. Anonymous says:

      I do not think that it is in Greece interests to do it unilaterally, First of all the debt would be in Euros and the new devalued drachma would mean that the debt as percentage to GDP would reach astronomical levels, In this respect it would be preferable that Germany leave or be asked to leave the Euro for the Mark, In this way the Euro could devalue and help the economy of the troubled nations. I think also technically it is very difficult to print (in secret) a new currency (new drachma) that would certainly devalue. Everybody would go to get the Euros from the banks: total catastrophe for Greece. So Greece won’t do it voluntarily or even if she was asked. Of course I believe that she could be made to leave if the other powerful countries so wanted. But then, it would be only time when other countries would follow (Eurozone standards are an illusion, the first countries to break them were Germany and France) and this would mean collapse of Eurozone, perhaps collapse of Europe and perhaps at some point new Europe wars. In my opinion we will either have United States of Europe and common fiscal policy sooner or later or total collapse. I thin we will have common fiscal policy in the end.

      1. James says:

        hi Vassilis. I think that you have been reading too much European Union propaganda.

        First, the EU has nothing to do with stopping European wars, let alone the Euro. I don’t see the UK, for example, declaring war because we are not in the Euro. NATO was responsible for keeping the Russians out of Europe after 1945.
        Secondly, as an Englishman, I can assure you that fiscal unions do not breed happiness. We have one with Scotland, but there is tremendous resentment in England about the transfers made to Scotland. You may have noticed that the Scots have just voted in a secessionist government, so neither side has achieved nirvana through the fiscal union.
        Thirdly, staying in the Euro, as Shaun points out above, does not result in any resolution of Greece’s problems. You are going to default one way or the other. If you default and stay in, you will have the same economic problems as today and will be bailed out every ten years or so. I don’t see Germany putting up with that, however hidden by a fiscal union.

        I don’t have any solution except a simultaneous default and withdrawal from the Euro.

        I am a great fan of Greece, by the way, and am going there this summer, so please don’t read any anti-Greek feeling here. I just feel that the debt cannot be overcome by staying in the Euro. I wish you luck whichever way it goes.

        1. Anonymous says:

          I dare say that the Scottish opinion is a bit different to the English one on the issues that you raise. In any case, the Scots vote for SNP as it puts its priorities on public services which are essential for the people (NHS, education etc.), but they won’t vote for full independence as in the current version of global casino-type capitalism does not pay off to be small. Small and in the periphery means bankrupt. Of course the English might try to renegotiate the Burnett formula or ask the Scots to leave the UK, but I do not see such appetite in the political establishment at this point in time. Cameron said that it will fight for United Kingdom in case of referendum. US states have been repeatedly bailed out by the Federal government. It costs to have an ‘Empire’.

          1. James says:

            Good points all.
            The question that you do not address is, however, who will pay for the essential services that you seek to retain. I am merely trying to point out that, at present, the Greek taxpayer is certainly not going to and that leaves others. English taxpayers resent terribly the fact that there are no university fees in Scotland (unless you are English), that prescriptions are free, that home care is also free, none of which applies to England.
            Are you suggesting that Germany will happily pay for these essential services?

          2. Anonymous says:

            The issue is the accumulated debt of the last 3 decades owed (and this is crucial point) mainly to German and French banks (not the substandard public services in Greece which of course have become even worse due to the lack of moneys). I do not suggest at all that they will pay happily, Grudgingly though they will pay one way or the other either in a form of a bail out or in a form of default as the moneys are owed to mainly German and French banks. There is no way out of it (and that’s why theer is this hugw debate, it is the realistation that they will pay one way or the other). Of course the substandard public services in Greece will become even worse as there are no moneys. I assure you that Scotland has superior public services to England as you suggest. Greece however has abysmal public services compared to Germany.

            Personally, I think that it is only fair the Germans who lend the money to Greeks to buy their products to share some of the pain. The Euro after all works nicely for the Germans they should pay. (they should also pay in due time, because they have not paid so far, or at least say thank you for the gold they stole from Greece during the occupation, the famine of one million dead and the numerous atrocities as they have done with others but not with Greeks).

          3. Anonymous says:

            German taxpayers are currently aged under 68 years old and therefore born after 1942. These people did not become responsible adults until the 1960s. Why should this generation pay for the sins of their ancestors ?

            War reparations from 1919 helped to cause the financial crisis in the Weimar republic which helped Hitler to power. We should not repeat the mistakes of history and demand unaffordable debt reparations from defeated nations.

            It is the current (and previous) generation of Greek taxpayers who have allowed a culture of tax avoidance and excess borrowing. It was the Greek government who used unreliable statistics to qualify for the Euro.

          4. Anonymous says:

            I agree on tax avoidance. Wrong decisions have been made by both the Papandreou government and troika. It is quite ironic what you say about generations: it was in the Greek news recently that Greece paid back at last a loan from the time of independence (1821, I think it was to England). The current generation of Greeks does not feel obliged to pay the old loans and quotes the Weimar republic experience for not paying what it won’t be paid back anyway whatever austerity it is imposed. Default here and now is the word among the young generations that do not have jobs anyway.

          5. r mcgrath says:

            Are Sweden, Norway,Finland and Denmark large? Are they on the periphery of Europe? Are they broke?

          6. Anonymous says:

            No, but Greece, Ireland, Portugal, Iceland (and if I dare say Scotland was independent, see RBS etc.) are. I will certainly concede other reasons also, but small and in the periphery does not help. In case of Greece, her neighborhood is the worse that you can have, costs a lot just to be there and defend Europe so that it can prosper.

        2. r mcgrath says:

          Just as a matter of interest: where would the N Sea gas fields lie if SCotland were to leave the union or be asked to leave?

      2. Anonymous says:

        Greece is spending borrowed money. A default will stop additional borrowing and result in painful austery. This will happen regardless of whether Greece redenominates it’s bonds into New Drachma or stays in the Euro. If the Greek people do not trust the new drachma, then the cash economy will use euro notes. Euro notes are widely accepted as an alternate to the official currency here in Bulgaria.

        I disbelieve the EC’s mantra that a Greek default will destroy the euro currency, because if I have a stack of euro notes I can still go to Germany and buy a BMW. In short they are still readily exchangable for goods.
        This might change if a national default causes insolvent European banks.

        The excessive costs of the bailout and the lies told by various officials might damage or destroy the euro and EU. In a football analogy Mr Juncker has scored a goal for Mr Farage’s team ….

        1. Anonymous says:

          I think the question was on leaving EZ not about the default. Of course these might be connected but I do not think that Greece would leave the EZ. I think it would prefer a negotatied restructuring within EZ. If it leaves the EZ unilaterally there is no hope for a favourable restructring. The Euro and the cheap borrowing might be the cause of some of Greece misfortunes but the Euro is now the ace in her sleeve. There is no point to throw it away. There is no way that Greece voluntarily will leave Eurozone.

          1. Anonymous says:

            I agree that Greece is probably better staying in the EZ. As you said, Greek people would rush to withdraw their savings in Euro notes creating a run on the banks. Leaving the EZ would cause chaos and bank failures.

            Maturity extensions and coupon reductions will reduce the interest bill, but Shaun’s expert opinion is haircuts are needed. Voluntary restructuring is dependent on the largesse of Eurozone taxpayers. The German voters want to stop the bailout wasting their tax money. The NPD will have noticed the success of the True Finns. At least 1 German party will offer a no bailout policy. If and when the EZ rescue is halted, the IMF and austerity beckons.

    2. Anonymous says:

      In the end there will be a federal Europe, with all the wealth transfer that implies. Brussels is after world power status and nothing will stand in its way. The UK will be paying up for all this, just as it always does.

  2. Anonymous says:

    Are there any additional implications for ECB repo and covered bond operations in the event of haircuts? Are these quantifiable. The weird logic of mark-to-maturity has resonance in the fact that EU stress test sovereign debt shocks are not being applied, apparently, to banking books on the assumption that the EFSF will head off default?

    1. Anonymous says:

      Hi Shire
      I believe that there will be yes but have not quatified them in the same way as I have for the Securities Markets Programme.Even with the SMP there are still some oddities as neither the German nor the Greek share I quoted are what you would expect if you used their shareholding in the European Central Bank.

      I do not know how many Greek (or Irish or Portuguese) government bonds were repoed with the ECB but I would imagine that quite a few were because their yields offered the best return and back in the day some investors still believed that Greece would be okay. The ECB did impose haircuts but if I remember rightly they were raised as time passed and credit ratings fell so they would be well short of levels likely now.So losses would appear in unexpected places and if some banks failed than the ECB would be left with them.

      I remember you raising the EFSF and it heading off default issue a couple of days ago but I feel that this is an ex-post justification for something they believed in ex ante. the Euro zone assumed there could be no sovereign default before the EFSF existed somewhat in the way of a King Canute.

  3. Richard Jones says:

    The ‘tax card’ has already slid from view. It will never get through the Voulis where Papandreou has now only an absolute majority of 6 (300 seats – far too many).

    Several wealthy groups also say the ‘tax card’ is a breach of human rights and the whole idea encourages reversion to the ‘no receipt = better price – fakelaki (little envelope) Byzantine commerce’

    1. Anonymous says:

      I know this is obvious, but Greece should never have been allowed into the Euro (or the EU) with such attitudes prevailing. As usual, the UK and other ‘rule abiders’ are paying the price for the sharks of this world.

  4. James Wright says:

    So if they had decided to restructure Greek, Irish and Portuguese debt a year ago only British, French and German taxpayers would end paying for it (assuming their governments wouldn’t let their banks fall) Now a year later all Eurozone taxpayers will be picking up the tab. Heh, French, German and especially British taxpayers must be pleased about this.

  5. Sovjohn says:

    You know, I have started to get tired from the apparent incompetence of EU leaders (in particular). Everyone wants to have their pie, and eat it, too. I understand the notion behind this behavior, but, um…

    Greece is not all about statistics misrepresentation and collective tax-evasion. These are resident problems, of course (and problems of the worst kind possible), however, EU *cannot* plead indifference to the situation of the past 10-15 years at least.

    When the first Greek Finance Minister, Alogoskoufis, attempted to talk Greece’s way out of deficit-to-GDP ratio by requesting Greece’s GDP to be officially raised by 25%, taking into account “the black market”, including prostitutes, drug dealing, and corruption…

    EU was “surprised and startled”. Really? They then allowed a GDP raise of 10%, if I remember correctly, attributed (among others) to these, very dodgy, sources?

    They COULD NOT IMAGINE (?) that things were working in a quite different way in the periphery?

    I find this hard to believe. I don’t think the EU is staffed by idiots. However, they appear too “rigid” for my liking.

    Then again, even in 2010, even in a bankrupt country, Sarkozy wanted to sell Rafals and frigates. Merkel wanted to sell military helicopters. Everyone wanted to sell Eurofighters.

    And this infamous “Schengen-Dublin II” agreements? Greece, Italy, Spain, Portugal (mainly) have to cope with immigrants from Asia and Africa.

    Luxembourg? The horror! Hordes of French, Germans, and Belgians will rush to immigrate there! – Well…no. Not really.

    But the periphery? Not quite the same ordeal…

    Sometimes, while I am a “federalist” and believe that a “US of Europe” would be truly a good solution for the continent, I lose all hope. Maybe we should reinstate USSR instead (…)

    1. Anonymous says:

      Well said!

    2. Anonymous says:

      “Back in the (E)USSR”? With apologies to Lennon/McCartney.

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