Greece budget deficits miss bailout targets- Look out Wall St!

[njdevilsfan87]

Kind of unsettling to think about how this is all leading into 2012. 😛

 

[LegendKiller]

So the greeks cheated with the help of Goldman Sachs. Who do you have beef with? The bank who helped them cheat or the cheaters?

It really doesnt matter anyways, at the end of the day the problem is Greece spent too much and now cant pay its debt. The EU will have to do more dilligence before letting more members within their ranks. Greece provided the framework to dupe them and stick them with a revolving door of debt crisis.

Almost no country was following the deficit limits, with or without the swaps and many apparently knew about the swaps.

Greece's issue is that they gave everybody jobs and allowed a retirement age of 58 compared to mid 60s for almost every other country. They had no sustainable big industry and wanted everything.

Europe's big problem is that they allowed a currency union without a fiscal and political union. They put everybody in Europe on the hook for Greece's deficits without having a say in Greece's deficits. In the end, the Euro is to blame here.

 

[soccerballtux]

You should have stopped right there.

He was making a joke on how WWI started.

yes. it was pretty funny too.

 

[soccerballtux]

Thank you.

What few realize is that bankers mostly act as facilitators between borrowers & investors, do their dead level best to make each look good to the others so they can take their cut off the top, leave the principals to their own devices. They will, at times, hold some of the debt as assets for whatever reasons. Sometimes they get stuck with it in sudden market epiphanies because they float lending ahead of securitization. Like this-

http://1.bp.blogspot.com/-GJrHfLNrRzs/Til-TsyjbAI/AAAAAAAAAIs/KSjtprELuMU/s1600/2yr-greek-bond.png

Greek bonds end up the same as toxic mortgage securities did for US banks, but the bankers got their cut off the top, which was all that mattered.

In lesser venues, it's called creative bankruptcy. In banking, it leads to bailout or nationalization.

unless they're doing the investing themselves, like in the old days, in which case they invest in people they can trust in.
Just return us to the days of those regulations and we'll be fine.

 

[Greenman]

This was a good read. I actually learned something, and broadened my view of the issue.

Thank you gentlemen.

 

[Doppel]

The amazing thing about Greece is seeing all the people who at least claim to think it's not beyond repair, which it is. A very slow car crash.

 

[Jhhnn]

unless they're doing the investing themselves, like in the old days, in which case they invest in people they can trust in.
Just return us to the days of those regulations and we'll be fine.

Securitization has been with us for a very long time, and won't go away, nor should it. What we need more than anything is reasonable rules and enforcement for the process, and an environment where the worst conflicts of interest can't arise. We could start by partitioning commercial banking, investment banking, insurance and stock brokerage into discrete parts as with Glass-Steagal, outlaw synthetic derivatives entirely, insist that short sellers have the stocks in hand, not have a period of time afterwards to cover, and institute a transactional tax on the markets large enough to inhibit the kind of trading that makes money off of what is essentially market noise.

So long as there are sufficient numbers of Repubs and corporate Dems in the Congress, none of that will happen. Hell- we can't even get moving on a watered down financial reform act.

 

[Jhhnn]

On topic, it's obvious that the Greeks can't pay, at least not in a practical sense, something within the realm of political possibility. More money won't make it better, because they already can't pay what they owe. So it'll be default or some form of partial debt forgiveness, soft default.

Dunno where the big players have put their bets in the synthetic derivatives market, but there's probably more riding there than what Greeks actually owe, which warps the situation tremendously.

 

[Greenman]

What are the chances of the US bailing out the Greeks? I'm actually surprised the idea hasn't come out of the white house yet.

 

[DucatiMonster696]

What are the chances of the US bailing out the Greeks? I'm actually surprised the idea hasn't come out of the white house yet.

We won't be bailing out Greece directly. We may attempt to bail out EU banks AGAIN if they start slipping over that debt cliff they've preached themselves onto. This action of support in turn will help the PIIGS as a side-effect but we ourselves are not in a good position to be saving the world or the EU economically with constant bailouts to save them from their debt monsters when we ourselves have one big debt beast stalking us under our own roof. The Chinese have mentioned that they are very interested in bailing out the EU to keep the Euro afloat and to get rid of their stacks and stacks of US currency so as to keep the euro above the Yuan in value but we haven't gotten to that bridge yet it seems.


Anyways....Yay for the drama created by central banking, fiat currency, and Keynesian economic theory. Debts don't matter, the magic printing press and "Faith" will always save us and centralizing economic power via the banking system is oodles and oodles of happy joy, joy, bubble, bust, thud, damn were fucked, etc.

 

[freegeeks]

Almost no country was following the deficit limits, with or without the swaps and many apparently knew about the swaps.

Greece's issue is that they gave everybody jobs and allowed a retirement age of 58 compared to mid 60s for almost every other country. They had no sustainable big industry and wanted everything.

Europe's big problem is that they allowed a currency union without a fiscal and political union. They put everybody in Europe on the hook for Greece's deficits without having a say in Greece's deficits. In the end, the Euro is to blame here.

The other EU countries are keeping Greece afloat so that the EU banks can limit their exposure to the Greek bonds. EU, IMF is lending them money that is being used to repay all the bond holders (EU banks mostly). When the exposure is down to an acceptable level, expect Greece being dropped and probably kicked out of the Euro. For me all these emergency loans are nothing more then an indirect way to keep the EU banking system going until they can absorb the default of Greece.