Eco+Nomics

"Populist" parties, such as the euro-sceptics, euro-critiques and euro-implacable-foes, are likely to form a coalition for the EU Parliamentary elections of May 2013. You can guess why, I presume. They are rallying their troops in order to hinder - if not to demolish - the European integration. And the oxymoron: the "populists" unite to halt European Union. I was casually browsing news websites when the "Europe: United by hostility" , by Joshua Chaffin of FT, drew my attention. It  that was a bolt from the blue!  In Greece, media have not yet covered this issue at all, at least to my attention.   I had earlier read a less dismal essay, "Watch out for the rise of a European Tea Party" , by Gideon Rachman, again of FT; but I was not that concerned.  Joshua Chaffin initially unveiled the oxymoron: " While the group [the European Alliance for Freedom, a "populist" alliance]  opposes the EU, its principled stance has not prevented it f...

It has not been a very long time (at all) since I begun my undergraduate studies in economics and from what I remember there were only a few (conventionally) risk free assets: cash, government bonds, deposits. At this moment we really need to focus on the Euro-zone. Government bonds, i.e. debt issued by government, although involving some risk this is low- currently a little higher; cash is the bills and coins in circulation and is totally riskless, unless in cases of over-inflation; and deposits which... used to be risk-free. That is because European Commission is thinking of de jure haircutting savings when the firm that accommodates them is at stake. If that is approved, Euro will never be much of a  hard currency  and hence there is no point at all calling upon low inflation exclusively.  In addition, we have to start thinking of our deposits as risky and, as a matter of fact, the probability that we lose a given fraction of our deposits equals the probability of b...

A while ago, I read an article of WSJ written by  Katie Martin  concerning the market tranquillity with respect to what happens in Cyprus; the probable bank deposits haircut and the non-attainment of any agreement among EMU member countries. Among the explanations of this calmness reported by apparently successful analysts I found one, that of Mr.  Beat Siegenthaler, a UBS analyst, who more or less states that the risk of diffusion of a crunch in Cyprus is perceived to be low. I really do not know if that is indeed a general sense- although several other rather interesting interpretations are listed- but that is not the case at all and claiming the opposite is naive especially in the aftermath of Lehman Brothers collapse. The risk of contagion following a crash in the Cypriot financial system is high and most certainly non negligible. I shall elaborate. After doing some trivial digging I found an article that matches my needs; Billio et al. (2012)[1], concerning the es...

Earlier today I received a text from a friend of mine reporting that none of the commercial banks in Greece accept cheques issued by Cypriot credit institutions and I got really concerned for "the day after tomorrow"- it is either a signal that they fear the worst or perhaps just the fact they they cannot "liquefy" these cheques at the moment. Although I am really confident that depositors may not inundate the Cypriot banks to withdraw their funds, such a risk is still lurking...  While we are focusing on restoring (via government debt and haircuts) the regulatory capitals we seem to  ostentatiously exhibit our negligence for the bank-run risk; even of the slightest probability that that scenario might actually occur.  If someone had € 100,000 of deposits and suddenly the government decided to levy a 10% tax on their value how this depositor would react? First of all, he does not know whether this tax is collected once and for all or not and, even worse, his neig...

The term "economics" goes way back to the ancient Greek civilization; one may find this term in most, if not all, etymology dictionaries. Economics derives from oikos , i.e. the house, the household; and nemein, i.e to manage, to allot (alternatively from oikos and nomos , i.e  the law). Conclusions are up to you... I created this blog to communicate my thoughts on this magnificent and rather fascinating science- to whoever is interested- as well as on all of its aspects and implications. Ecoplusnomics was born by the seed of  my economic instincts and concerns and the ova of the post-2008 era. That is not to say that I shall stop posting as soon as the international economic scene returns to prosperity. Why in English? To be honest, I would rather write in Greek. However, language is both the root of a civilisation- and hence an inseparable part of the native speakers' culture- and an instrument of communication among native and non-native speakers; a common...