BRIEF THOUGHTS ON THE GREEK BAILOUT
Greece passed their austerity plan this morning in what should essentially solidify the next few steps for funding the country in the near-term. This is a positive for obvious reasons as it avoids the worst case scenario of default and contagion. But the situation is growing increasingly tenuous.
Rioters and activists are building momentum against future austerity in the country. The Greek people are doing what I said the Irish should have done long ago – they are beginning to rise. This is empowering in that the Greeks are attempting to voice their displeasure with the idea that they are forced to suffer in order for foreign bankers to survive. This is the core vs. periphery problem in real-time and the momentum is turning against the core as the citizens grow increasingly cognizant of what is going on. This is, in my opinion, the greatest risk to the situation and makes it highly combustible.
As I’ve long said, the longer Europe kicks the can and avoids an inevitable long-term solution, the more the situation will boil on the streets and the more combustible the situation will become. Ultimately, the people hold the cards here and if they truly want to they will eventually vote the sitting members of Greek parliament out and replace them with members who they know will vote against future austerity. Opposition leader Antonis Samaras has called for early elections. Papandreou is opting for a referendum this autumn.
In short, we’ve kicked the can one more time, but the situation is growing increasingly unstable. Equity markets can breath a sigh of relief for a few months. But expect the situation to re-emerge later this year. If we begin to see signs of a real parliamentary change this has the potential to become a very very unstable economic event.
Political leaders don’t seem to realize how this type of citizen action can spread rapidly. Fortunately for politicians here, young Americans are so consumed with their social media world that they can’t be bothered with standing up for their own future; which is far more important than building your farmville community or telling all your friends on facebook that you just had tuna fish for lunch.
I agree guys. The EU is really behind the curve by underestimating the reaction of the citizens there. This problem will persist and that means the odds of a true default and defection are on the rise because the EU leaders can’t agree on a long-term solution.
I think Cullen should stick to MMT rather than making absurd comments about EU and Euro of which his MMT does not have a clue.
Cullen’s comment :
“The EU is really behind the curve by underestimating the reaction of the citizens there. This problem will persist and that means the odds of a true default and defection are on the rise because the EU leaders can’t agree on a long-term solution.” is just hot air.
Can you say what is a long term solution?
What does long term mean in our world? 1 year, 5 or 10?
Who is to predict what will happen 5 years from now?
Making long term plans is a stupid thing and a waste of time because they will be wrong for certain. The soviets tried it with their 5 year plans and we know how that worked.
The EU is doing the right things under the circumstances,kicking the can.
When you cant find a solution to your problem, turn yourself to time, time will always bring a solution.
2 year greek bonds are a steal and those who buy them wont regret the investment.
How in holy hell are we going to start heaping blame on young people for this? Young people don’t run the banking system. Young people don’t run the government.
Why don’t you point the finger of decadence at your contemporaries that got us into this mess.
I get so f@#$%ing sick of listening to these generational squabbles from boomers who happen to be the most self-indulgent and narcisstic collection of Americans in the last two centuries.
You’re both right:
Young people are too interested in their stupid little LCD screens to do much in the real world and
Boomers are the most self-indulgent and narcisstic collection of Americans in the last two centuries
As a Generation Xer, I can tell you, wholeheartedly, that you both suck.
This will get interesting when the people vote all of them out of office and finally tell the EU to take a hike.
This is still not a done deal if all of the EU and IMF haircuts are not implemented. This could get even worse if Greece takes the money and does business as usual.
Get the poopcorn and soda and we shall see what happens.
With all due respect, your comments are a bit one sided and slightly Marxist. The Greek people does not suffer for the bankers’ sake, they suffer for their inability to be productive, for their inability to reform their economy and for their lack of willingess to pay taxes and accept the realities of lower government entitlement payments. The other option you mention (default) would result in a massive catastrophe for Greece which will extend decades into the future.
Actually, this whole problem really stems from the fact that they’re involved in an unworkable single currency system. There’s nothing Marxist about it. It just is what it is. I’ve never claimed that Greece played no role in this. They got themselves into the EMU in the first place.
Hey That guy
Turn off Fox News and do a little groundwork. Greek workers work more hours on average and get less time off then those Aryans you likely want to emulate. All this pro German work ethic propaganda being spread is getting ridiculous. Greeks are NOT unproductive. That is pure WASPY bullsh*t.
If German banks are going to play hardball they need to remember that they would be third world country if it wasnt for a little debt forgiveness by the USA and their other European brethrens back in the 20th century. How quickly they forget.
It is always helpful to understand that this is more than a battle between the European banks and overpaid Greek public sector workers. There are reports that Goldman Sachs like (yes, Goldman Sachs is now a verb) activity by the PM and others are undermining Greece sovereignty. Unlike Americans, Greek citizens are exercising democracy and willing to take to the streets to protect democracy.
As MMT demonstrates, America cannot go broke…she simply continues to allow the rich to rape her as has they have done over the past 30 years then nationalizing the debt and thereby pillaging the citizens of our country.
BELOW IS AN ARTICLE from Demetri Kofinas BLOG “COVERING DELTA”. Its worth the read.
Accusations of Treason in the Greek Parliament
May 29, 2011 Leave a comment Go to comments
[Note* A day after writing this article, I was provided with a press release from IJ Partners that denies any involvement on their part with the accusations made below by Mr. Kammenos against the Greek Prime Minister. The firm also denies ever having purchased credit-default swaps on Greek bonds. The release does not directly address the accusations of Dr. Tobras and Mr. Noulas.]
Leaving aside for a moment the obvious questions of criminality and treason that have arisin from the details of the Memorandum of Understanding between the Greek government and the Troika (IMF/EU/ECB), which concedes total sovereign authority of the Greek state over the fate of its own citizens to foreign banks, let us turn to recent allegations made in Parliament against the Prime Minister of Greece himself, George Papandreou.
Recently, in an interview on Greek television, Member of Parliament for New Democracy, Mr. Panos Kammenos, made allegations that if true, could very well constitute treason for the Greek Prime Minister, members of his staff and possibly members of his own family. These allegations were repeated by Mr. Kammenos on the floor of parliament and and an explanation for them demanded by the leader of LAOS, Mr. George Karatzaferis. These allegations are therefore, not made lightly, and have now been plainly put forth before the Greek people. They can no longer be ignored, and the Prime Minister is obliged to respond to them.
The gist of the allegations rest on the charge by Mr. Kammenos, that the Greek Prime Minister, Mr. George Papandreou and members of his team, presided over the sale of 1.3 billion dollars worth of credit default swap contracts (CDS on Greek sovereign debt) on or around December of 2009, shortly after coming to power. The 1.3 billion dollars worth of insurance protecting against a Greek default was bought during the spring and summer of the same year, by the Hellenic Postbank, a public banking arm of the Greek government. It is unclear what the intentions of the Postbank were when it purchased the credit protection. Clearly, the previous government that was in power at the time (New Democracy or N.D.) understood that Greece was headed towards a fiscal crisis, otherwise they would not have purchased the insurance. However, we do not know if the move was initially made with the intention of reaping private profit, or simply as a hedge by the government itself against it’s own default.
[*Note: There seems to be a discrepancy between the numbers cited by Mr. Kammenos and those cited by Mr. Tobras in his law suit. Specifically, the subject at issue is the notional value of the CDS purchased and then sold by Hellenic Postbank. The size of the bank's balance sheet would not warrant as large a hedge as the 60 billion in notional CDS (implied by Kammenos), which would imply that either the bank was net-short it's own government's debt, or that some mistake has been made by those looking over the books. After a bit of contemplation, I find the 1.3bn dollar notional number (the total amount insured against) more plausible, though this would suggest an accounting error on Mr. Kammenos' part. This would affect the profit potential for the position, but would not change the fundamental fact that insurance protection was sold from public to private hands. - i.e. it has no bearing on the allegations]
Leaving this uncertainty aside for now, we know that, so long as the credit protection remained at the Hellenic Postbank of Greece, the CDS contracts would function as insurance against the type of “credit events” that would transpire over the following twelve months. Indeed, the very insurance that was being held in public coffers by the Hellnic Postbank, is today worth approximately 27 billion dollars according to numbers cited by Mr. Kammenos on multiple occaisions. Considering that Greece is now under duress to raise collateral for its “bailout” money, 27 billion dollars would go a long way towards preventing the privatization and sale of the nation’s assets to foreigners (this figure assumes a partial default and subsequent payout). Unfortunately, the Greek government is no longer in possession of this 27 billion worth of CDS, because it sold them in December of 2009, for a paltry 40 million dollar profit. According the Mr. Kammenos, the contracts were sold to a private firm for “high net-worth individuals” founded in 2009, by the name of IJ Partners.
IJ Partners, based in Geneva, has a number of well-known Greeks who serve as either managing partners or members of the board, including former IMF economist Miranda Xafa (who intermediated Greece’s dealings with the IMF), former CEO of Piraeus Bank (one of the banks named in a law suit as shorting Greek government bonds during the period in question) and Theodore Margellos, the well-known exporter who was accused of falsely passing off imported corn from Kosovo as Greek produce. I should also note that according to Mr. Kammenos’ accusations, the firm’s Vice President, Mr. Jose-Maria-Figueres, shares board membership on a separate NGO with none other than the Prime Minister’s own brother, Mr. Andreas Papandreou Jr.
Unfortunately, the story gets much worse. Around the time that the Hellenic Postbank of Greece sold these CDS, the Prime Minister’s office was consulting with the International Monetary Fund about how to proceed with what eventually would become the notorious 110 billion dollar Greek bailout package. News of these discussions had not yet leaked, and the Prime Minister had yet to address parliament on the matter. In addition, credit markets had yet to uncover the extent of the impairment to Greece’s national balance sheet, as the country’s bonds were still trading at below 200 basis points spreads from German bunds. In practical terms, this meant that anyone fortunate enough to have bought Greek CDS during this period would be in a position to make an absolute fortune. It also means that anyone who owned, or had a stake in Greek CDS stood to benefit directly from either a Greek default, or the perception that a default was increasingly possible, since this would drive up the price of credit protection, and thus the value of Greek CDS.
Implicit in these most recent and quite damming accusations therefore, is that the Prime Minister not only arranged for, facilitated and possibly forced the sale of a national asset to a private firm that he or members of his family had a personal stake in, but that he also did so during a period where he knew that the value of this asset would rise substantially. In fact, his own words and actions had the potential to positively affect the outcome.
If you will recall, it was during this time that George Papandreou decried the role of speculators in driving up the yields on Greek debt, by trading the very CDS contracts that he has now been accused of selling (and possibly buying through IJ Partners). Rising bond yields caused by such speculation single-handedly pushed Greece into the clutches of the IMF. If it were not for being priced out of the bond market, Greece would not be in the position that it finds itself in today.
And yet, in addition to all the things that I just mentioned, during this period where Greek bonds were being sold short (in some cases using naked short selling in order to create an artificially high supply, thus unfairly driving down the price of the nation’s bonds) by the major banking institutions in Europe and the United States (including Goldman Sachs, JP Morgan, RBS, HSBC, UBS, Deutsche Bank, Societe General, etc.), the Central Bank of Greece quite curiously decided to change the legal settlement period for shorting government bonds from 3 days to 10 DAYS. This had the ostensible effect of aiding naked short sellers who were able to keep their positions against Greek national debt open longer, thus driving down the price of the country’s bonds, spiking it’s yields, and pumping up the price of Greek CDS.
The criminal implications of this accusation are so immense that I cannot begin to contemplate what the punishment should be if it were proven to be true. What I can say is that Mr. Kammenos, despite the fact that he has put himself in a very precarious position by exposing this fraud in the public domain, is NOT THE ONLY ONE MAKING THE ACCUSATION. In fact, I had first read about the role of the Central Bank of Greece in this entire affair from a legal document produced by Dr. Kiriakos Tobras and Mr. George Noulas over 1 year ago. Unfortunately, the allegations seemed so damning that, at the time, I had a hard time coming to grips with their implications.
Given the particular urgency of the moment (new terms are being negotiated as we speak that could lead to further destruction of the Greek Nation), I feel that an answer to these allegations must be provided. As I said before, this is not the first time that we have heard of these accusations, and in all that time, their substance has not once, to my knowledge at least, been addressed by the Prime Minister, George Papandreou. At the very least, something feels very wrong here. If Mr. Papandreou himself was not involved in these actions, then he should know who is. Transactions of this magnitude do not simply go unnoticed to senior members of government.
[*Note: A week after writing this article, evidence has yet to be presented in public by Mr. Panos Kammenos to support his allegations that the firm IJ Partners, was ever the party on the receiving end of these $1.3bn in Greek CDS contracts that were sold in December of 2009 by the Hellenic Postbank. Coupled with the firm's prompt denial, I believe it is only fair for us to now ask the question of why no evidence has been presented. I believe that if such evidence exists, it should have been made public by now, and in light of the fact that it has not been published in any media outlet thus far or presented by Mr. Kammenos, the focus should return to the larger issues raised by Dr. Tompras in his aforementioned lawsuit.]
This is a very urgent moment for the country. Terms of national surrender are being negotiated abroad as we speak that have existential implications for Greece herself. Her borders, her mineral and resource rights and the social and culture lining of her very womb are at stake. The Greek military budget is being gutted under the terms of the memorandum, just as Turkish ships are reportedly increasing their oil and gas exploration efforts off the Aegean coast and as the EU has moved to, yet again, challenge the national borders of Greece with the recognition of the European Federation of Western Turks of Thrace. The groundwork is being laid for the existential destruction of the Greek nation through diplomacy, debt, and who knows, even physical occupation at some point in the not to distant future.
Many of us Greeks are disillusioned, and rightfully so, with our own inertia all these years in addressing the structural weaknesses and faults of this country. The economic sclerosis that has hardened over the decades is more to blame than anything else for our current predicament. There is no guarantee that Greek society is prepared to accept responsibility for its own actions in this regard, but the extent to which it does will determine just how much progress we will be able to make when trying to exit this crisis.
Still, no one in this country has a right to sell off public assets in a fire-sale, liquidation, under a climate of fear generated and perpetuated by the current government, especially the rights to natural resources that could be exploited for massive profits at some future date. There is both a moral, as well as a national component to this story that cannot be expressed on a balance sheet. People who fought to create this country out of the previous Ottomon Empire, and helped to defend it during Nazi occupation have as much of a claim to this land as the rest of us. We do not have the right to sell it off for a few morsales of bread.
People are scared and they are angry. This is a very crucial time, and also a precarious one. Greeks are looking for answers, and what I fear most is that they will end up settling for that which provides them the least amount of pain, national history and sovereignty be dammed.
CR- I’m surprised how many times I’ve read the above piece. I wish I could do the same with my liabilities. Problem is I care about what happens to my sons future.
Maybe that’s the problem. Those in power arn’t directly affected. They benefit by kicking it as far away as possible.
Once again…. I don’t like it but I’ll invest accordingly.
The thing is that rebellion in the street is not an exercise of democracy to be applauded, but the tantrum of spoiled citizens. The fact that these austerity measures will not be taken lightly by the population is not anything governing bodies are not realizing, however it is encouraging to see that they have the political courage to go through with it (easy to have courage when you don’t have a real choice).
Additionally, the commenter above mentioning the abdication of sovereignty by Greece is spot on. This needs to happen, and not just there but in most EU countries. Citizens of such countries (I am one by the way) would be better served by a technocratic Brussels than by a corrupt Athens, Lisbon, Rome, Bucharest (and the list could go on). Yes there is change in Europe, and the change that could result in a “more perfect union” to use a classic American expression, can only come about in the wake of a significant crisis.
I agree that they need to move towards an autonomous state. I’ve been pretty vocal about the fact that Europe needs to move faster towards a US of Europe. The key to me is creating an autonomous state and making the EMU workable.
But I am not so sure that this autonomous state will result from defections or unity. I hope it is unity, but the situation looks combustible. In the end, Greece has to do what is in the best interest of its citizens. And the longer the EMU leaders decide to do what is in the best interest of bankers the more the people of Greece will boil.
An autonomous state will never work. The ECB should have absorbed all debts of the countries so they could start fresh.
That was the flaw from the get go.
That Guy…your comments are just Fascist rhetoric. oh never protest on the streets just let the citizens continue to bail out bankers, the politicians who are in bed with the bankers and corporations.
How is it “courage” to simply punish middle class Greek citizens instead of asking rich banksters and financiers to actually pay taxes or take a haircut? Unbelievable what passes for courage these days, bullying poor people and coddling rich people.
The Greeks ran up the credit card, they do NOTHING, has anyone here ever been to Greece???? It is no Germany, not by a long shot.
They have sucked on the public tit forever!!! So now what, they are supposed to get off the hammock and rise in indignation?
Give me a break. Ferret out the corruption and laziness, and then get rid of all the politicians who promised so much and put the country in shackles to debt, and then indict the bankers who allowed Greece to hide its true financial state,
And THEN AND ONLY THEN, will there be progress.
Cullen,
What is ‘unworkable’ about this currency union? Can you imagine transacting in each state with a different currency and be paying 3-4% exchange rate comission at the bank and 20% on the spot to take your NJ dollars at the NY state bridge and then again that much a CT rest area? Color currencies are loved by banks, they are an implicit tax just like VAT.
And the Greeks shall not be protesting austerity but the loss of sovereignty which is taken away by Brussels in the attempt to save foreign and Greek banks. They will have to be living much more modest lives and rely on no pensions if they were to return to the drachma. It seems like the right of cheap credit is unalienable to everyone and debt slavery is the only consequence of poor financial decisions. This EU is as feudal as it has ever been!
The reason it’s unworkable is the political dis-union. Here in the US, we have a federal government which can regulate laws and the economy of the entire union. Taxes are paid by citizens of each state to the union government, and states can’t leave. We identify first as as American, not as Floridian or New Yorkian or whatever.
Europe is completely different. Greece has a responsibility to Greek voters, not to the EU as a whole. There’s no real unity amongst the EU states, neither political nor patriotic.
The US didn’t start out w/the idea of being American, the states were very much the first idea of political belonging. The Civil War changed that feeling. Or, a crisis IOW. A crisis could cause the same in Europe. I’m skeptical b/c each country has a longer history than the states did, and much of that history is warring against each other, whereas US states only had 1 war.
@CyberWeez
That is an important observation and I don’t think its made enough.
Furthermore, even before some of the US sates grouped together to fight the other group of states, they fought a war together to be their own entity or entities.
It could be said simpler that because our monetary policy is controlled by an entity that is responsible for governing all citizens, regardless of their state of residency.
The Federal Reserve and the Treasury are apart of the United States Government.
The ECB is just the Central Bank of all the member states. It is not linked to an over-arching governmental body of those states, which (among other things) keeps those countries revenued constrained.
You are extrapolating the wrong differences. The political union has nothing to do with the workability of a common currency and/or a gold standard, it all comes down to having and strictly enforcing the same rules to all participants, having a level playing field. The U.S. states are not allowed to have budget deficits, but the nation as the whole has a deficit bigger than anyone else’s. Again, this deficit does not exist on the sole and false premise(subprime analogy?!?) that a broke bloke is a broke bloke but 50 broke blokes are 50% AAA, 30% other investment grade and 20% mezzanine tranche, it works because other nations have the will to accumulate dollars. For the very same reason, a unified tax collection system, common bond issues and fiscal policies cannot address the fact that all regions have varying needs and unique competitive advantages.
But no bailouts and working capitalist system where risk is always present and rewards are comensurate to the risk level is what can make the eurozone a long lasting and successful experiment. Money is simply a medium of exchange and policies targeting it cannot possibly have long lasting, durable effects because there is no mutual benefit between economic agents. Simple as this.
Baychev,
Are you saying that the US Government, a currency issuer, is revenue constrained the way Greece is?
And I agree that Greece is now forced to do something about its debt, but the point of the MMT conversation is that if the Euro wasn’t designed the way it was they wouldn’t have to because they wouldn’t be revenue constrained the way a US State is.
Note: I have no opinion on what Greece should do. I really have no idea what a solution would look like beyond default/defection or massive amounts of stimulus to help them pay their debts. Neither of those two alternatives are a positive outlook.
I just don’t see how they don’t exit the Euro.
The irony though is that if this happens and they devalue their obligations by reintroducing the drachma, it would nonetheless represent a default type event for global bank balance sheets.
In effect, default seems like the only outcome here, no matter what path is chosen with similar implications for bank capital cushions globally…
In regards to MMT and whether or not the government needs bond auctions at all, is it not true that the money spent is Federal reserve notes, and thus the government must borrow from the fed in order to spend? In borrowing from the fed the government must sell bonds to the fed and in return get dollars and pay interest to the fed on something backed by nothing? So, we still need bond auctions and need buyers to keep rates low. The fed could just give the government a fixed rate of say .5% on money borrowed and forget the free market all together, but isn’t that the same as something insane?
John, with this question:
“In regards to MMT and whether or not the government needs bond auctions at all”
you just pulled the away the curtain. I view MMT as a sort of Newtonian view of physics. It works in pretty much every respect, except when you get to the end of the spectrum.
Keep running trillion plus deficits every year, and the end of the spectrum will not be that far off….
Federal Reserve Notes are just the paper currency in circulation.
The treasury always spends first. It credits a bank account for something it bought. That rise in bank reserves (from the deposit the treasury just made) then can be swapped back by the treasury for a government bond if it chooses to issue debt.
The FED is primarily relagated to managing the liquidity within the system and hence interest rates.
Yes the FED does print up those Federal Reserve Notes, but it will just swap excess reserves (created by treasury spending) with a bank for the paper currency if a bank needs more paper currency on hand.
Adam,
I’m curious, do you have a link to the Treasury spending more than $2T since 2009 (separate and apart from discretionary and entitlement spending), which is what the Fed’s balance sheet has expanded to.
I would like to see that direct correlation. Thanks
Or is your point that the Fed can print money, but will eventually sop up that money through treasury spending that we haven’t seen yet?
The FED swapped $2T in reserves for other financial assets already in existence. The FED can only create net new financial assets when and if it over pays for an asset. Now in the past 2 years it’s bought an awful lot of more questionable assets so it is not out of the question that the FED did in fact “print money”.
http://greshams-law.com/wp-content/uploads/2011/06/Fed-Balance-Sheet-Graph-of-Assets.png
the world is bankrupt; perhaps not in the conventional sense but it is intellectually bankrupt. people would rather take a hit in the future than do something today.
greece needs to pay the amount of debts that it can (perhaps by privatising assets that it can get a genuinely good price for) but cut the rest and sort out problems for the long term. it needs an IMF which is genuinely there to help to do this.
if foreign banks get bailed out again then good. the most profitable lines of business seem to be those which squat on the law (land building laws, credit issuance etc) and these are the ones that have gone bust. private ownership of assets is best, but the law belongs to the people and so does the profit to be derived from it.
What the EMU has and continues to do for Greece has certain similarities to the US Public Educational system’s practice of social promotion.
Kids think that just because they move up a grade each year regardless of study efforts, test results or often even attendance, that they are all more or less equal.
As we all know, this practice is an affront to the good students and a massive disservice to the weak students who often are graduated without being either numerate or literate.
But as sure as the sun rises the day arrives when reality wins out. The game with Greece is not even on the level of pretense anymore.
The can they have been kicking is now the size of a dumpster. Everyone knows what is coming, but they don’t want to leave the table while they are all still winning.
The exit will be jammed when the game is finally up. The hour grows late…
The latest bailout of Greece offers the major holders of Greek bonds the opportunity to buy CDS protection from major US TBTF Institutions for their holdings not already covered. The US Government and its taxpayers will thus end up the lender of last resort to Greece.
Oh – you don’t think the US TBTF hold CDS on Greek debt (indirectly from European banks)? Then you need to talk to the Easter Bunny!
The common currency was supposed to foster European political unity and preclude the constant wars that have been the historical legacy of the region. That goal looks pretty remote at the moment. In fact, it is also bound to result in a resurgence of the dreaded “socialism” as the oppressed common people on whom debt is being crammed to rescue creditors from their imprudence if not fraud comes home to roost on the doorstep of the elite. What goes around comes around.
Look I don’t care what anyone says…
baychev has the coolest logo. B-Ferro likes to add color to comments(which I love) but baychev does it not only in words but in real terms. I think we all need logos. We all look alike and baychev just proved this.
We are a bunch of black and white pawns. It’s time we baycheved ourselves(sorry boatman and mediacritas…you both add color also. Mediacritas is better lookig than boatman..sorry boatman)
Lastly, Cassanova…..are you ok? you always seem upset. Almost postal in your comments. Cullen is not the messiah. He is just a guy helping all of us make sense of a crazy world. And from where I sit he’s one of the few who is helping the average person with quality financial, economic coverage. But if you want to complain your food sucks to the chef everytime that’s your right. The other patrons are starting to wonder why you keep coming to eat at his restuarant. Masochist????
hey V, we’ll take a picture of you after fishing n drinking on an island(no bridges) for 6 days n see what u look like…. i do agree on the blacknwhite no show.
i just like that pic ’cause that dog is gone now.
not so much interested in appearances at my age anyway….you’ll find out someday,hopefully.
Another interim Greek bailout in exchange for austerity targets that won’t be met. Sooner or later either Greece will default or the ECB will use its balance sheet to help forge a substantial resolution of the situation with a model that can also be used for Ireland and Portugal. If that happens the Euro will go to parity with the dollar but it will be an easier sell to the Germans than a fiscal transfer regime.
merkel will be history, let alone papadr_____
europe might unite someday, but not in my lifetime.
Hello
1. Greek problems were pointed out by OECD reports 2-3 years ago, search OECD page please. That story is old.
2. It was Goldman Sachs who helped Greece to hide a lot of debt.
3. Greece is really a small country in Europe. Check wikipedia for details.
4. Greece is lost, but noone in european financial institutions wants to loose a bonus this year, all want to postpone the default using taxpayers money. The good thing is: Greece ‘ll survive the storm. Check Greek history in wikipedia for details. But:
5. USA is not only bankrupt, it lost maybe all chances to return to the game: the rich and international US corporates betrayed the rest of US citizens. They still hide the fact, that the Globalization was a Big Betrayal, still is, and that there are Chineese and US billionaires on the one side, hand in hand, and poor to middle class US cizitizens on the opposite side, who ‘ll tend to reach Chineese living standards in the end …
CR: „One of the purposes of MMT is to show that logic does not apply to a govt balance sheet in a non-convertible floating exchange rate world. The govt is not a household. It does not have the same type of solvency risk.”
Of course, right, but using MMT the govt can ruin 97% of the ciztizens, swap cash to the chosen ones (3%) and let them fly abroad.
The New World is Asia and there is no future for the USA.
USA will slowly tend to resemble lationoamerican-african police state with ill educated and non-productive workforce with A LOT of debt. (nonexistent due to MMT theories)
All guns and security on the US boarder ‘ll prevent the last smart ones from escape, they must pay the debt first…
Is MMT an idea invented by Chineese secret service to convert American brains into watermelons?
Strange.
Terry Gross interviewed Fareed Zakaria today on Fresh Air, “What Does a ‘Post American World’ Look Like?
http://www.npr.org/2011/06/30/137522219/what-does-a-post-american-world-look-like
He points out that Greece’s economy is nothing like that in the US. Greece has a “basket case” economy, and he says, has been in default 50% of the time over the last 200 years. He underscores that to compare them to the US is just ridiculous–a point made in this forum quite often. He has some really smart things to say about the economy in general–the nearly “theological” manner in which our politicians approach the economy, and highlights the point (that I’ve seen elsewhere) that an actual choice of default here would be unconstitutional (see 14th amendment).
He also has wise things to say about economic growth in the US–government has always served as a catalyst in our most prosperous years–and our education system is perhaps a bigger concern than our infrastructure. His is not an anti-American rant by any means–our credit is still better than anywhere else in the world–but we are letting our theological politics in the country distract us while the rest of the world ramps up.
Dan