Haven't a Greece thread lately...

[spacejamz]

http://worldnews.msnbc.msn.com/_new...-anger-boils-over-as-country-faces-bankruptcy

Wonder where these protestors think the money needed to sustain their current lifestyles and benefits comes from? And even better, if they leave the EU, what country would be foolish enough to accept any Greek currency?

How much longer before this story happens here?

 

[sandorski]

Heard a Stock Analyst yesterday suggesting that Greece will leave the EU in 6 months. His reasoning was that there was no way Greece could implement this plan.

 

[irishScott]

Because it's the same-old same-old. New round of austerity measures, riots, idiotic messages from both sides, a few editorials on just how fucked Greece is, and then the rest of the world keeps turning. At least over here across the Atlantic. I imagine the EU is paying more attention.

 

[senseamp]

They should leave the Euro zone, even if they decide to stay in the EU.
They need their own currency for their own domestic reasons, regardless of what value it will have relative to the Euro.

 

[sactoking]

I like how the woman with the completely unprinounceable last name left the gov't because she thought that Ze Germans were using economic warfare against Europe and Greece instead of Nazi stormtroopers.

 

[Doppel]

http://www.telegraph.co.uk/finance/...-watching-not-a-Greek-but-a-euro-tragedy.html

Greece unemployment at 20%, it's near 50% for youth.

The country will keep putting new austerity measures into place until the people finally just grind it to a stop. Then it will leave the Euro and try and restart things. They will never pay this debt down, it's just impossible. They are in a beautiful (for how picture perfect it is) debt spiral. Their economy is contracting at a breathtaking rate while their debt burden increases, and the two are running away from each other. There is no hope at all for them using the path they've been trying to date.

 

[walkur]

I like how the woman with the completely unprinounceable last name left the gov't because she thought that Ze Germans were using economic warfare against Europe and Greece instead of Nazi stormtroopers.

Just like some groups advocating a ban on Dutch and German products because they're not giving money with no questions asked.

I mean, were they expecting this kind of reaction?
"Oh gosh, the greeks are angy, it's scary, quick give them more money"

they got "WTF those ungrateful *%$#@! you want money... beg for it"

 

[Darwin333]

Heard a Stock Analyst yesterday suggesting that Greece will leave the EU in 6 months. His reasoning was that there was no way Greece could implement this plan.

Greece will eventually default, its pretty much a mathematical certainty. Frankly, I think they should have already done it and gotten it over with instead of dragging all of this out. They will get out from under the debt and the Greeks will be forced to live within their means whether they like it or not. Its actually the best course of action they can take right now, in a few years the markets will start loaning them money again and as long as they are reasonable this time around they will come out much better. About the only way they can avoid it is to basically give up their sovereignty and that kinda tends to eventually cause wars.

 

[fskimospy]

http://worldnews.msnbc.msn.com/_new...-anger-boils-over-as-country-faces-bankruptcy

Wonder where these protestors think the money needed to sustain their current lifestyles and benefits comes from? And even better, if they leave the EU, what country would be foolish enough to accept any Greek currency?

How much longer before this story happens here?

The answer to your second question is never. The US and Greece are nothing alike.

As an interesting side note, Argentina defaulted on its external debt a number of years back. People currently accept their currency just fine, and their economy has grown pretty well since the initial contraction caused by default.

 

[Darwin333]

I like how the woman with the completely unprinounceable last name left the gov't because she thought that Ze Germans were using economic warfare against Europe and Greece instead of Nazi stormtroopers.

Well, they sort of are. They have put forth a few plans in which Greece basically cedes their sovereignty to Germany in return for being bailed out. I wouldn't call it economic warfare because Greece doesn't have to take it but the results of Greece taking some of those deals are fairly similar to losing a real war.

 

[crashtestdummy]

http://worldnews.msnbc.msn.com/_new...-anger-boils-over-as-country-faces-bankruptcy

Wonder where these protestors think the money needed to sustain their current lifestyles and benefits comes from? And even better, if they leave the EU, what country would be foolish enough to accept any Greek currency?

How much longer before this story happens here?

It's more than just accepting Greek debt in the new currency. They need to be able to inflate their currency in order to become economically competitive again. Austerity without inflation will leave them ruined. If Greece is doing what's best for itself, it should leave the Euro. That said, Greece leaving the Euro may set of a chain of events that are really, really bad for the rest of the Euro zone.

 

[Broheim]

Because it's the same-old same-old. New round of austerity measures, riots, idiotic messages from both sides, a few editorials on just how fucked Greece is, and then the rest of the world keeps turning. At least over here across the Atlantic. I imagine the EU is paying more attention.

most of us are tired of the ungrateful whiny little bitches.

I stopped paying attention long ago because I know where this is heading... us in northern europe gets to pay for the mistakes of southern europe...

 

[1prophet]

http://worldnews.msnbc.msn.com/_new...-anger-boils-over-as-country-faces-bankruptcy

Wonder where these protestors think the money needed to sustain their current lifestyles and benefits comes from? And even better, if they leave the EU, what country would be foolish enough to accept any Greek currency?

How much longer before this story happens here?

It all ready has started, look at the municipalities and states instead of the country as a whole.

 

[Fern]

Heard a Stock Analyst yesterday suggesting that Greece will leave the EU in 6 months. His reasoning was that there was no way Greece could implement this plan.

I tend to agree with him, although I personally wouldn't place a timetable on exactly when Greece decides its unacceptable.

Looks like Greece will have elections in April. That will give us some insight into how the Greek people feel. Last I heard the two minority parties that were opposed to the bailout conditions were gaining popularity.

Fern

 

[Fern]

Greece will eventually default, its pretty much a mathematical certainty.
-snip-

It's a 100% certainty.

Greece cannot pay. All deals discussed so far involve paying the bondholders less than 50%. That's a default, no way around it.

Fern

 

[Fern]

I like how the woman with the completely unprinounceable last name left the gov't because she thought that Ze Germans were using economic warfare against Europe and Greece instead of Nazi stormtroopers.

I've expected this type of sentiment.

I fear if this feeling becomes wide spread it could lead to other consequences - fascist/nationalistic type government etc.

I don't see how this can turn out well.

Fern

 

[mshan]

My impression, at least from a stock market perspective, is that Greece was so last year and really doesn't matter anymore.

The creditors of Greece, not Greece itself, have been bailed out, and ample time has elapsed so that those with exposure to Greece can delever and derisk and appropriate firewalls to prevent contagion seem to be in place now.

Looks like everyone wants Greece out of Euro, they just don't want to appear to be the ones who pushed them out the door (make it appear Greece asked to leave of their own free will, though I remember reading somewhere that Maastricht Treaty may not have any provisions for any member to leave after the fact):


http://londonbanker.blogspot.com/2012/02/greece-cutting-out-middle-man.html


http://www.testosteronepit.com/home/2012/2/29/final-spasm-greco-teutonic-tax-wrestling.html

In Greece, three-quarters of the independent professionals, such as doctors, lawyers, and engineers, declare taxable income below the existential minimum, according to a leaked paper by the EU Commission. Tax fraud amounts to about €20 billion per year (8.5% of GDP), and unpaid taxes amount to €63 billion (27% of GDP). Only a series of bailouts keep the country afloat: first €110 billion, now €130 billion, plus the debt swap of €107 billion. In total €347 billion—150% of GDP! And Germany is by far the largest contributor. For this mindboggling debacle, read.... Greece, “The Bottomless Barrel,” As Germans Say.

I think if you look at what happened in U. S. in 2008 / 2009 and now what happened in Europe last year and this year, I think they were both essentially "financial stability" solutions, designed to maintain the status quo so that those who created this whole mess of leveraged speculation don't get completely wiped out and sufficient time elapses for things to be slowly unwound (shadow banking system?).

Whether it is the U. S., Western Europe and England, China, or Japan, as Mohammed El-Erian of PIMCO said of LTRO, it is (perhaps) a bridge to nowhere (all of this money printing is a temporizing measure that buys precious time, but ultimate solutions are political in nature - governments and voting populations have to make difficult decisions about what balance of austerity and growth they choose to ultimately try to get out of this dilemma).

 

[Doppel]

The answer to your second question is never. The US and Greece are nothing alike.

Of course there are many similarities between Greece and the US, the most obvious one being both nations reliant upon debt for growth, inexorably and without it they contract like mad. As I've oft said here, the US is not growing at the moment, not even close. It's using debt to paper over contraction and feign a mild growth indicator (GDP, which doesn't consider the deficit a liability).

I laughed out loud today, for on NPR it was reported that today was the last day Greeks could trade their drachmas into euros. That is hilarious, given that they'll shortly be recreating new drachmas again.

 

[spacejamz]

The answer to your second question is never. The US and Greece are nothing alike.

Are you sure about that? Many US cities are facing huge budget short falls and have huge pension liabilities that are not properly funded in addition the generous benefits packages (medical, time off, retirement, etc) that their government workers get. It is just a matter time before it is time to pay the piper. These cities won't be able to kick the can down the road for much longer. Just like Greece.

 

[fskimospy]

Are you sure about that? Many US cities are facing huge budget short falls and have huge pension liabilities that are not properly funded in addition the generous benefits packages (medical, time off, retirement, etc) that their government workers get. It is just a matter time before it is time to pay the piper. These cities won't be able to kick the can down the road for much longer. Just like Greece.

Yes, I'm 100% positive. The US can print its own currency, the US is not trapped in a pseudo gold standard, the US has a better debt/GDP ratio, the US has a far more dynamic economy, the US is experiencing growth instead of massive depression, the US' borrowing costs are among the lowest in recorded history, the US isn't facing intractable balance of payments issues enforced by treaty, etc, etc, etc.

People who compare the US to Greece do not understand the problems of either.

 

[The-Noid]

Yes, I'm 100% positive. The US can print its own currency, the US is not trapped in a pseudo gold standard, the US has a better debt/GDP ratio, the US has a far more dynamic economy, the US is experiencing growth instead of massive depression, the US' borrowing costs are among the lowest in recorded history, the US isn't facing intractable balance of payments issues enforced by treaty, etc, etc, etc.

People who compare the US to Greece do not understand the problems of either.

The ECB balance sheet is now about 33% bigger than the Fed's, how is that a 'pseudo gold standard."

NPV of pension liabilities + Total debt outstanding to GDP is actually higher in the US, not lower. They also have more debt on the Federal level, we would have to add in the states to make a good comparison between the two countries.

The balance of payments issue is an interesting one. Classical ideas would have said we were screwed a long time ago. More contemporary theories, seem to think you can carry current account deficits into infinity as long as there is willing financial/capital investment.

 

[spacejamz]

Yes, I'm 100% positive. The US can print its own currency, the US is not trapped in a pseudo gold standard, the US has a better debt/GDP ratio, the US has a far more dynamic economy, the US is experiencing growth instead of massive depression, the US' borrowing costs are among the lowest in recorded history, the US isn't facing intractable balance of payments issues enforced by treaty, etc, etc, etc.

People who compare the US to Greece do not understand the problems of either.

Broke is broke, no matter what language you speak...

Print our own money? How long can we keep doing this for? Pretty sad that you and Obama cannot see that this is just going to cause bigger headaches down the road if you don't cut spending now.

 

[fskimospy]

The ECB balance sheet is now about 33% bigger than the Fed's, how is that a 'pseudo gold standard."

NPV of pension liabilities + Total debt outstanding to GDP is actually higher in the US, not lower. They also have more debt on the Federal level, we would have to add in the states to make a good comparison between the two countries.

The balance of payments issue is an interesting one. Classical ideas would have said we were screwed a long time ago. More contemporary theories, seem to think you can carry current account deficits into infinity as long as there is willing financial/capital investment.

It's a pseudo gold standard because Greece does not have control over the currency it uses. Even if you counted all US State debt, Greece's debt/GDP ratio is higher. Greece's numbers do not include their regional debts, btw.

 

[fskimospy]

Broke is broke, no matter what language you speak...

Print our own money? How long can we keep doing this for? Pretty sad that you and Obama cannot see that this is just going to cause bigger headaches down the road if you don't cut spending now.

It sure isn't. Very few economists advocate spending cuts now because it is an exceptionally poor economic idea. The vast majority I have seen call for either holding current spending steady or increasing it in the short term, while enacting long term entitlement and structural debt reform.

For a good case study in what happens when you cut spending now, go look at the divergent economic paths of the US and the UK. Austerity in the short term not only creates additional economic problems, but it has proven to be self defeating by lowering GDP so much that it doesn't even end up closing deficits.

 

[The-Noid]

It's a pseudo gold standard because Greece does not have control over the currency it uses. Even if you counted all US State debt, Greece's debt/GDP ratio is higher. Greece's numbers do not include their regional debts, btw.

and how much is the regional debt? I know, do you? The regional debt is about 4% of GDP. It's around $4T in the US.

Greece like most Euros has more financial debt, compared to bonds so the 4% is harder to track down than the $4T US number.

Again, NPV of pension liabilities is much bigger. That is the killer.

Also, are you really arguing we are printing money to fund our deficit. In a sense the Fed is supposed to be independent on fiscal issues, in the same way the ECB is. The ECB has helped Greece via the SMP, LTRO and unlimited bank liquidity. There is no pseudo gold standard. Balance sheets that expand to 30% of GDP is not a pseudo gold standard.