4 ms·

I respectfully disagree. There are a lot of things, especially when you're dealing with market sensitive information, that's best done behind the scenes. If, f

by mixmax 15y ago

I respectfully disagree. There are a lot of things, especially when you're dealing with market sensitive information, that's best done behind the scenes. If, for instance, the Prime Minister of Spain calls the IMF and asks what kind of deal they would be able to make in a bailout of the country it's in all parties best interest to keep it secret. If this hypothetical phonecall was public everyone in the financial markets would short Spain, thus making it a selffulfilling prophecy. I'm fairly certain that a contingency plan exists if Greece defaults. I'm also fairly certain that there's a report somewhere in the IMF stating that the chances of a Greek bankruptcy are greater than 30 or 40%. If these plans were to be made public Greece would default within a week, and wreak as much if not more havoc on the world economy than Lehmann brothers. Some things are best negotiated out of the public view. In a few years these records should be made public though.

NHQ 15y ago
That's the problem with secrets. Who knows what is best kept from the public and what is being hidden at a cost to them?
- seabee 15y ago
  When the problem with secrets is the reversed equivalent of the problem with no secrets, perhaps you should stop thinking of it as a problem and start considering it a fundamental limitation of the ability to withhold information.
eliasmacpherson 15y ago
Having an open honest conversation in public stops people second guessing - the problem is timing the switch from secrecy to openness. The markets are currently overly sensitive to honesty. Hypothetically, the markets would adjust to whatever new speed at which the information would become available, if the markets smell a bargain or money to be made they will go for it. If the mad Mr Market is too dangerous to be told the truth he'll have to be put in handcuffs to some extent.
- mixmax 15y ago
  If people were rationel beings maybe you'd be right - but they aren't. A famous Harvard Business Review study actually showed that only economiste and pshychopaths (!) could be shown to be consistently rational. Normal people second-guess everyone and everything all the time, no matter how much information they have. Bubbles, panics, and all that stuff shouldn't happen but it does because people aren't rational. They're driven by emootions such as love, hate and in this case fear. You can be certain that if documents were released tomorrow showing that the IMF were preparing a Greek default there would be widespread panic.
  - rhizome 15y ago
    Well, that's democracy for you. Maybe if honesty wasn't so rare, we'd have the populace acting in concert with their representatives because they have the same information. It's may just be the secrets that exacerbate irrationality. Google "open-book management" for more in this direction. Furthermore, why is this "irrationality of the masses" more harmful than a leader keeping the secret that the country is asking about a loan from an organization that charges 50+% annual interest? After all, it's truly a rare thing that it's an economist who makes the final decision whether to go through with something like this or not. They're made by people receiving guidance from the economists you advocate secrecy toward those who pay their salaries. Why can't we all receive that guidance and information when it comes to matters of national concern?
nradov 15y ago
Those secrets are impossible to keep anyway; too many people know. If Greece and Spain default then things might get rough for a few years but in the long run everyone would be better off. Those countries would eventually have a fresh start, and the other countries would have to learn to live within their means.
nhaehnle 15y ago
> I'm fairly certain that a contingency plan exists if Greece defaults. I'm also fairly certain that there's a report somewhere in the IMF stating that the chances of a Greek bankruptcy are greater than 30 or 40%. If these plans were to be made public Greece would default within a week, and wreak as much if not more havoc on the world economy than Lehmann brothers. The markets are no longer involved in financing the spending of the Greek state. Therefore, whether or not such information is made public would make no difference to the solvency of the Greek state. Note, however, that such information can obviously affect the price of Greek bonds on secondary markets, and there are certainly major private players involved that are very interested in manipulating those prices. But democracy should not cater to such private interests. The truth is that Greece will become bankrupt if and only if the EU does not decide to support the Greek government financially or Greek decides to exit the Euro. Without prolonged EU support, there is no way Greece can dig itself out of the hole that it was pushed into - austerity does not work, but without exiting the Euro or EU support, that is the only option available to them. Whether Greece will go into bankruptcy or not is an entirely political decision, and a decision that is highly influenced by the IMF (although it is ultimately up to EU governments). So if the IMF were to compute odds for an event that they themselves pretty much directly influence, that would be pretty dishonest (or would demonstrate that somebody at the IMF does not understand the fundamental nature of the situation).

by mixmax 15y ago

NHQ 15y ago

That's the problem with secrets. Who knows what is best kept from the public and what is being hidden at a cost to them?

seabee 15y ago
When the problem with secrets is the reversed equivalent of the problem with no secrets, perhaps you should stop thinking of it as a problem and start considering it a fundamental limitation of the ability to withhold information.

eliasmacpherson 15y ago

Having an open honest conversation in public stops people second guessing - the problem is timing the switch from secrecy to openness. The markets are currently overly sensitive to honesty. Hypothetically, the markets would adjust to whatever new speed at which the information would become available, if the markets smell a bargain or money to be made they will go for it. If the mad Mr Market is too dangerous to be told the truth he'll have to be put in handcuffs to some extent.

mixmax 15y ago
If people were rationel beings maybe you'd be right - but they aren't. A famous Harvard Business Review study actually showed that only economiste and pshychopaths (!) could be shown to be consistently rational. Normal people second-guess everyone and everything all the time, no matter how much information they have. Bubbles, panics, and all that stuff shouldn't happen but it does because people aren't rational. They're driven by emootions such as love, hate and in this case fear. You can be certain that if documents were released tomorrow showing that the IMF were preparing a Greek default there would be widespread panic.
- rhizome 15y ago
  Well, that's democracy for you. Maybe if honesty wasn't so rare, we'd have the populace acting in concert with their representatives because they have the same information. It's may just be the secrets that exacerbate irrationality. Google "open-book management" for more in this direction. Furthermore, why is this "irrationality of the masses" more harmful than a leader keeping the secret that the country is asking about a loan from an organization that charges 50+% annual interest? After all, it's truly a rare thing that it's an economist who makes the final decision whether to go through with something like this or not. They're made by people receiving guidance from the economists you advocate secrecy toward those who pay their salaries. Why can't we all receive that guidance and information when it comes to matters of national concern?

nradov 15y ago

Those secrets are impossible to keep anyway; too many people know. If Greece and Spain default then things might get rough for a few years but in the long run everyone would be better off. Those countries would eventually have a fresh start, and the other countries would have to learn to live within their means.

nhaehnle 15y ago

> I'm fairly certain that a contingency plan exists if Greece defaults. I'm also fairly certain that there's a report somewhere in the IMF stating that the chances of a Greek bankruptcy are greater than 30 or 40%. If these plans were to be made public Greece would default within a week, and wreak as much if not more havoc on the world economy than Lehmann brothers. The markets are no longer involved in financing the spending of the Greek state. Therefore, whether or not such information is made public would make no difference to the solvency of the Greek state. Note, however, that such information can obviously affect the price of Greek bonds on secondary markets, and there are certainly major private players involved that are very interested in manipulating those prices. But democracy should not cater to such private interests. The truth is that Greece will become bankrupt if and only if the EU does not decide to support the Greek government financially or Greek decides to exit the Euro. Without prolonged EU support, there is no way Greece can dig itself out of the hole that it was pushed into - austerity does not work, but without exiting the Euro or EU support, that is the only option available to them. Whether Greece will go into bankruptcy or not is an entirely political decision, and a decision that is highly influenced by the IMF (although it is ultimately up to EU governments). So if the IMF were to compute odds for an event that they themselves pretty much directly influence, that would be pretty dishonest (or would demonstrate that somebody at the IMF does not understand the fundamental nature of the situation).