Comment by christop | Hacker News Reader

Comment by christop | Hacker News Reader

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> And it wasn’t just Spain, it was all of southern Europe and more. Even euro-area countries with sound finances, like Finland and the Netherlands, have suffered deep and prolonged slumps.

I hadn't heard of troubles in those two countries before before, though I'm sure like pretty much every country in Europe — or indeed the world — they didn't go entirely unscathed during a global financial crisis. Scotland, the UK as a whole and other western European countries aren't exactly in the depths of recession and unemployment that have been happening in Spain and Greece, for example.

Note the lack of mention of Norway (not that it's a eurozone country), which is in an incredible financial position with a $900bn fund made up primarily by saving a portion of oil revenue. While Norway has had 15 years to amass this huge fund, this is the model that Scotland would like to follow — as after independence it would have control of its north sea oil and gas revenue.

> In short, everything that has happened in Europe since 2009 or so has demonstrated that sharing a currency without sharing a government is very dangerous.

What happened was dangerous, though arguably the use of a shared currency and central bank helped countries support one another.

In any case, the most likely outcome in the case of Scottish independence is a currency union with the rest of the UK, in a similar manner to the Euro. If the Bank of England denies Scotland the use of its assets, it will also have to forgo Scotland's share of the liabilities, essentially wiping out Scotland's share of UK debt. So it's unlikely that Scotland's currency would be completely separate in any case.

All in all, while there are naturally unknown factors, there are plenty of reasons to seek independence and just in terms of economics — even excluding oil and gas revenue — an independent Scotland would appear to be in a good financial position.

The North Sea Oil paid for the 80's, the main income from it now is tax. The Norway government will still own a lot of their oil. It will be very expensive for both the UK and Scotland if its a yes vote. I just hope it isn't because I can't see it being beneficial to either party.

The housing market in NL all but crashed and is still just about limping along. In some provinces the situation is pretty dreadful. The funny bit is that the prices haven't dropped all that much (because people are psychologically much less likely to take a loss on a property than they are to cash in on a profit, a big factor in this is that they'll end up with a remaining debt to the bank after selling the house which is definitely not always an option).

So the market simply froze with asking prices holding relatively steady and sales dropping to near zero at some point. As of late there is a bit of a recovery depending on the area you look at.

The housing crash certainly affected many parts of the US. Overall, there has been good recovery of the housing market, though some areas less robust than others.

Judging by what I see in my region (Pacific Northwest), what has been a positive factor is in-migration from other parts of the country. It leads to a question or two.

I am wondering if within Europe migration is potentially less of a contributor to economic recovery. For example, to find cheaper housing or to go where more jobs are available, there would be a reason to move to another location. But how much is such a move inhibited by language or cultural differences? Is that a significant issue?

Boundaries can be a hazard or protection or both. All kinds of unnecessary barriers can be erected between countries which can make things harder than need be. Scotland needs to be careful about getting what it wants.

Europeans are much less likely to chase the Euro than their US counterparts are going to chase the buck.

Language is one part of the issue, another is that we have a completely different look at distance. I'm living in Romania right now, I don't even know a single other Dutch person that has moved to Romania.

In the US you'd be in the company of 1000's of people from 'out of state', but you're all Americans. In Europe the chances of getting a job differ greatly depending on where you're from and where you are applying for a job.

A Romanian in NL or France would have a harder time finding employment than a local (and would get paid substantially less when they do find a job), a guy from Michigan or even Canada in San Francisco would have roughly the same chance of finding employment as a local and would earn roughly the same amount of money (that's anecdote based, not 'data' based so correct me if you feel this is inaccurate).

Part of all this is culture, part of it is stigma, xenophobia, language, perceived quality over the last decade or so of hiring people from different countries and with different backgrounds.

The US is simply much more homogeneous than Europe will ever be, even though there are large differences between say California, Colorado, Florida, New York and Wisconsin the differences between the people from those places are not all that large mentality wise and so on. You participate in a single set of elections with parties that are present everywhere.

Compare that to Spain, France, NL, Sweden, Poland, Romania and Greece to select a few examples, and the people from those countries, each with a fairly unique cultural identity. No unified elections (some of the parties don't even have parallels across a border with a next door neighbour). There is no shared history, the history books are usually written from the perspective of the country where it will be used for teaching rather than from the perspective of Europe or something a bit more objective than the local country.

I don't think the 'Federated States of Europe' will ever feel as closely knit as the USA does.

Think of the differences between the groups of states on both sides of the American civil war, now multiply by 15 or so and then take all the possible interactions between those parties. That gives you an idea of what the shared history looks like for Europeans.

That tends to happen with housing, meaning people cant move but prices do not appear to fall.

(In the US you don't end up with a debt to the bank if the value is less than the loan, but thats not the case in the rest of the world)

> In the US you don't end up with a debt to the bank if the value is less than the loan, but thats not the case in the rest of the world

This varies between different US states (real property law is generally not federal law) and, IIRC, between first and second mortgages in some of those jurisdictions.

> In the US you don't end up with a debt to the bank if the value is less than the loan

Could you explain this a bit more. I think you are saying that in the US when you sell your house for less than the value of the loan, the banks takes the loss instead of you, which is not how I thought it worked. Does this have something to do with mortgage insurance?

> I think you are saying that in the US when you sell your house for less than the value of the loan, the banks takes the loss instead of you

This is generally the case with a voluntary sale at less than the loan value, but those are generally only possible with the consent of the lender (who has a claim on the property which must be extinguished for you to sell it.)

It is also sometimes the case in the event that the lender forecloses on the property for non-payment, and the foreclosure sale produces less than the amount owed on the loan -- but this differs between different states.

I think he means if you get foreclosed, the bank has no recourse beyond just taking your house. If you sell your house, then obviously you're responsible for the difference.

Sounds like a short sale.

http://en.wikipedia.org/wiki/Short_sale_(real_estate)

That seems odd. Why would anyone sell their house for less than their mortgage when they can just walk away and not owe anything?

> Why would anyone sell their house for less than their mortgage when they can just walk away and not owe anything?

Credit and taxes -- a short sale is, though damaging, less so to ones creditworthiness than a foreclosure, further, the entire amount of the unpaid principal (in either the short-sale or the foreclosure/surrender case, but foreclosure sales generally return less than a short sale with positive owner involvement would) is taxable as income.

> In the US you don't end up with a debt to the bank if the value is less than the loan

That's only in certain states. Most states are "recourse states" where the bank can sue you for the difference between whatever they sold the property for and the remainder of the loan.

Norway is not a member of the Eurozone, it controls its own currency.

    > If the Bank of England denies Scotland the use of its
    > assets, it will also have to forgo Scotland's share of
    > the liabilities, essentially wiping out Scotland's share
    > of UK debt.

The Bank of England's central asset is that people believe the UK economy will produce enough to make the UK government's promises in Pounds Sterling worth something.

Salmond Shekels may not carry the same weight, perhaps quintuply so if one of the first acts of the new government is to renege on their financial commitments.

Besides: anyone who doesn't think that France, Spain, and other EU members are going to extract their pound of flesh for EU membership for Scotland - in no small part to dissuade their own autonomous regions - is living in la la land. It'll be the Euro, or being locked out of the EU. That the best response to this so far is "No no, it'll all be fine, we're already part of the EU" serves to illustrate the degree to which the independence argument is based on really really really hoping it works out OK.

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