It's all Greek to me!

[LegendKiller]

I don't quite understand this logic. Is it China's fault that the US is in huge debt just because they have bought much of our debt?

I know parents shouldn't give too much candy to their children, but we are talking about countries here. They should know when to say when and be able to manage their own affairs.

Absolutely it's China's fault, for almost the same exact reason that it's Germany's fault about Greece. China relies on a depressed Yuan to export cheap shit to the US. Germany depends on a strong Euro to export expensive shit to Greece. If the Drachma existed and such horrible economic conditions existed and Greece countered by interest rate reductions the Drachma would decline, to the point that their shit would become exportable while Germany shit would get too expensive. They'd have to fix their stuff.

 

[DucatiMonster696]

Its funny that large American companies can completely fuck up small countries all on their own.

The Greeks did this to themselves as it was they who sought out the advice of GS and GS happily offered it for a fee. Its what they do and as I've stated before GS isn't responsible for teaching ethics or morals to a foreign government and its leaders. Furthermore the Greek government has a long recorded history of spending beyond their means and burying their nation in debt with gimmicks and tricks. Even a cursory glance at Greece's economic history shows that it has been a nation of dead beats and crooked politicians for a very long time.

 

[Infohawk]

Germany depends on a strong Euro to export expensive shit to Greece

How does that make any sense?

 

[alphatarget1]

Bull. Fucking. Shit. The world can do simple math and the ECB and EU can do it better than most. It's simple. What's your budget and what's your income. Did Greece somehow hide that? The EU knew *EXACTLY* what was going on inside of Greece, the debt numbers aside.

Greece is full of tax evaders and people who want to retire at 58, compared to Germany's high tax collection rates and 7+ years longer work term. Greek politicians didn't do jack shit to cause this, Greeks people did.

The rest of Europe went along with it because times were good. The more you deny reality the easier it becomes to accept the denial. Same goes for you, shame on you for trying to place the blame where it only partially belongs.

don't bother trying to talk sense into craig. He'll never understand.

 

[halik]

FT says the referendum is on, sometime in january. Not sure what the fuck was he thinking and/or why did he wait until now to drop this bomb.

In related news, sold my treasurer position on monday... fuck

 

[Schadenfroh]

Nevermind, I better just go to sleep

 

[PingviN]

Absolutely it's China's fault, for almost the same exact reason that it's Germany's fault about Greece. China relies on a depressed Yuan to export cheap shit to the US. Germany depends on a strong Euro to export expensive shit to Greece. If the Drachma existed and such horrible economic conditions existed and Greece countered by interest rate reductions the Drachma would decline, to the point that their shit would become exportable while Germany shit would get too expensive. They'd have to fix their stuff.

Greece don't produce the stuff they import. That's why they import it. Greece can run it's currency to the ground and then have to buy medicine, fuel, machinery, transportation etc even more expensively than they do now.

 

[mshan]

Very interesting article on John Corzine from LTCM to MF Global: http://www.bloomberg.com/news/2011-...ns-of-long-term-capital-roger-lowenstein.html

"If 97 percent of your capital is borrowed, you can’t afford to make a trade that may be correct eventually, because in the meantime creditors will put you out of business."

"Time and again, otherwise canny investors fall for the salve that in a liquid market, they can always get out, therefore what’s the problem? At Lehman, in the mid 2000s, executives took comfort in the notion that that the bank was in the “moving business” not the “storage business.” Then, the mortgage market froze, and everyone was in the storage business.

Liquidity is a backward-looking yardstick. If anything, it’s an indicator of potential risk, because in “liquid” markets traders forego trying to determine an asset’s underlying worth - - they trust, instead, on their supposed ability to exit. Investors now in low-yielding U.S. Treasury bonds may, one day, discover this lesson for themselves.

It’s hard to overestimate the extent to which the siren of liquidity has seduced even ordinary Americans. During the housing bubble, anyone who took out a mortgage they couldn’t afford, upon advice they could always refinance, was tacitly assuming they could trade their old loan for a new one. They were counting on continued liquidity in the mortgage market--and so were the banks that lent them the money."

"Corzine’s bet may still prove correct; “these countries” -- Italy and Spain, for instance -- may emerge from the current crisis solvent. But if they do, MF Global will not be around to reap the gains. Because the firm was so highly leveraged, and because it was dependent on short-term financing, its liquidity dried up and it failed. This seems to be the lesson that Wall Street never learns."

:thumbsup:

 

[fskimospy]

Can you expand on that? Why would investors be insisting on higher interest rates if not for Italian risks?

It's a self fulfilling prophecy. Investors were generally worried about European debt levels, so they drove up Italy's interest rates. This makes Italy's debt more expensive for them to service, and makes it more likely for them to default, which makes their debt more expensive, etc, etc, etc.

Italy's budget is in the black outside of debt service. If you had an actually strong European backing of Italy's debt, (like having the ECB act like a lender of last resort) Italys debt servicing costs would return to normal and they would be fine.

It's one of those self reinforcing market cycles.

 

[BarneyFife]

Greece should have never been in the EU but their politicians coupled with the greed of Germany and France accomplished this. Now Germany and France want to impose the most ridiculous austerity and buy all their land and utilities etc... on pennies on the dollar. I would just bail out of the EU if I was them. Its not like they manufacture anything except yogurt. The last time I went there a few years ago, the prices on food and drinks was ridiculous. Remember, Greeks don't make nearly as much as Germans yet the EU inflated the price of food dramatically. A bottle of water that used to cost .40 jumped to $1. A bottle of coke that was .35 jumped to $1 euro. I hope they vote no and bring down all of Europe. Serves the rest of them well.

 

[mshan]

http://seekingalpha.com/article/303930-end-of-road-for-sovereign-cds

 

[Nebor]

Replace "lazy Greeks" with "lazy blacks" in all of these comments and then see how it sounds. .

Are you saying Africa is doing better than Greece?

 

[Baptismbyfire]

Greece should have never been in the EU but their politicians coupled with the greed of Germany and France accomplished this. Now Germany and France want to impose the most ridiculous austerity and buy all their land and utilities etc... on pennies on the dollar. I would just bail out of the EU if I was them. Its not like they manufacture anything except yogurt. The last time I went there a few years ago, the prices on food and drinks was ridiculous. Remember, Greeks don't make nearly as much as Germans yet the EU inflated the price of food dramatically. A bottle of water that used to cost .40 jumped to $1. A bottle of coke that was .35 jumped to $1 euro. I hope they vote no and bring down all of Europe. Serves the rest of them well.

But then what's the reason 70% of Greeks support staying in the EU? If the food price is so high, there must be something they are getting out of the deal? What is it?

 

[SamurAchzar]

No fucking way Greeks are going to vote for the austerity measures. They want the government to "just handle this", regardless of what reality says, and their public sector is simply vast, so vast that if you consider the effect on the vote of family members, the referendum is likely to be voted "no" just on the issue of job preservation in the public sector. Just MHO.

 

[the DRIZZLE]

No fucking way Greeks are going to vote for the austerity measures. They want the government to "just handle this", regardless of what reality says, and their public is simply vast, so vast that if you consider the effect on the vote of family members, the referendum is likely to be voted "no" just on the issue of job preservation in the public sector. Just MHO.

We'll see how they really feel after the vote. I actually the referendum is a good idea despite the disruption to world financial markets. I think the deal is much better for Greece in the long run than default and leaving the EU, but only if the Greek people really accept it make the necessary reforms. If the country isn't collectively on board with the austerity it is doomed to fail.

 

[Craig234]

Greece should have never been in the EU but their politicians coupled with the greed of Germany and France accomplished this. Now Germany and France want to impose the most ridiculous austerity and buy all their land and utilities etc... on pennies on the dollar. I would just bail out of the EU if I was them. Its not like they manufacture anything except yogurt. The last time I went there a few years ago, the prices on food and drinks was ridiculous. Remember, Greeks don't make nearly as much as Germans yet the EU inflated the price of food dramatically. A bottle of water that used to cost .40 jumped to $1. A bottle of coke that was .35 jumped to $1 euro. I hope they vote no and bring down all of Europe. Serves the rest of them well.

I haven't followed it that closely, but if that's the case, good post. Deutsche Bank has been a big part of the problem it seems. Funny how it's the same thing as usual, exploit.

 

[SamurAchzar]

I haven't followed it that closely, but if that's the case, good post. Deutsche Bank has been a big part of the problem it seems. Funny how it's the same thing as usual, exploit.

This is how it is with bankers eh, Craig? Damned if you loan the money, damned if you don't :biggrin:

 

[Craig234]

This is how it is with bankers eh, Craig? Damned if you loan the money, damned if you don't :biggrin:

There are good banking activities and good loans, and there are bad banking activities and bad loans.

 

[Nebor]

I haven't followed it that closely, but if that's the case, good post. Deutsche Bank has been a big part of the problem it seems. Funny how it's the same thing as usual, exploit.

If you read the Lords of Finance: The Bankers Who Broke the World you'll see that all the major central banks worked closely together during the booming 1920s, and likely caused the worldwide depression of the late 1920s. Not too dissimilar to what we're seeing unfold today.

 

[the DRIZZLE]

I haven't followed it that closely, but if that's the case, good post. Deutsche Bank has been a big part of the problem it seems. Funny how it's the same thing as usual, exploit.

I know that it conflicts with your worldview that the bankers are always screwing everyone (mostly true), the Greeks are really coming out ahead on this either way. Even if they accept the "brutal austerity" they still got to borrow money at rates far lower then they should have because they were part of the EU and now they are only paying back 50 cents on the dollar of that money.

 

[dmcowen674]

Greece don't produce the stuff they import.

That's why they import it.

It's a small Island that tried to run like it was a big continent.

They were only able to do that while Tourism was big with U.S. middle class that vacationed over there. That stopped when the U.S. middle class was wiped out by Bush.

The U.S. is now importing everything like a small Island.

It will suffer the same fate as Greece.

Enjoy

 

[PingviN]

We'll see how they really feel after the vote. I actually the referendum is a good idea despite the disruption to world financial markets. I think the deal is much better for Greece in the long run than default and leaving the EU, but only if the Greek people really accept it make the necessary reforms. If the country isn't collectively on board with the austerity it is doomed to fail.

Leaving the EU basically screws Greece in the long term. At some point in time after the default, they'll have to start borrowing money again. Rates will be high (as they should be, Greece were not able to pay the last time) and there will be no EU to help back them up. Leaving the EMU is bad enough, but bailing from the European Union will hurt for much, much longer than the time it would take to recover from the effects of crisis packages proposed to be able to default in an orderly fashion.

Greece has been living above it's means, this does not change just because they default and leave the EU. Somehow, money must be found or the public sector must be slashed. You think Greece will be able to keep it's bloated public sector as it is? Is that sustainable just because they default on it's loans now? No it's not. It's either massive tax increases or massive cuts (or both), there is no having your cake and eating it too.

I just don't get the argument as to how it will be good for Greece in the long term to leave the EU and/or the EMU.

 

[Ninjahedge]

dmc, in all fairness, lets not lump this all on Bush.

He was just teh spearpoint that drove it home, we could trace this back before Reagan if we wanted to. The problem is, Bush was not the one to pull the emergency brake (which should have been done right at the 9-11/Iraq war conjunction when his popularity was high enough for people to cal "traitor' on anyone who questioned him).

The problem was, he risked the same fate as his father, who had to go back on his "No new taxes" pledge in order to try and help get us out of our financial problems during his term.

Then Clinton, who DID get some things done, but was more a foreign policy friend than one that would revise our own domestic policy against a Republican controlled congress.

Now the task falls into the lap of Obama, and he is doing so-so. it is hard to tell a diabetic that you need to cut their foot off to save their leg. Even after doing it, they are somehow convinced that not only will it be replaced with a bionic one like Steve Rogers had, but that someone else will pay for it....


As for Greece? They are human as we all are. I don't think we are hearing the WHOLE story for many reasons, the biggest being, we don't WANT to hear the whole story and if we did, we would not understand it. I am just hoping we can reign in this volatility without freezing up all financial markets. Lack of flow will not help us any more than unregulated flow. Instead of money floating to the top, it will just stay frozen there.

 

[Munky]

But then what's the reason 70% of Greeks support staying in the EU? If the food price is so high, there must be something they are getting out of the deal? What is it?

The illusion that they're getting something out of the deal.

 

[the DRIZZLE]

The illusion that they're getting something out of the deal.

I don't think you understand how fucked Greece is if they default. They will be cut off from credit markets for at least 5 years, maybe longer. They are currently running massive deficits and without the ability to borrow from foreign investors they will have to impose austerity anyway to balance the budget or just print money leading to run away inflation.