It's all Greek to me!

[Jaskalas]

...
They have tried to address the problems onthe backs of the people, with 'austerity'.

The people don't care for that solution and it's being resisted.

As usual there are the wealthy interests and there are the people's interests and they are at odds.

Oh I'm dying to hear the alternative if you think they're addressing the problem on the back of the people.

 

[Ninjahedge]

Because of this vote, interest rates went down again.

I am locking in 3.75% on a 30 year (no points) as we speak.

The Greeks may be fools, but I would be more of one if I did not take advantage of the unfounded paranoia.

 

[crownjules]

Reports out of the Greek Parliament session are saying the referendum is basically dead.

 

[theeedude]

It's not immediately clear if they are better off staying in the Euro with a huge (even after the haircut) debt or defaulting on the debt, getting out of Euro and gaining ability to devalue their currency to make their exports and tourism more attractive and their pension liabilities smaller in real terms. Also, they may get a better deal with a bigger haircut on the debt if they turn this one down.

 

[quest55720]

The rest of Europe is basically a bunch of suckers. They are basically willing to burn money. It is like giving a crack addict money over and over. Greece is addicted to social spending and evading taxes. The rest of Europe should cut their losses and let Greece out of the EU. Once they default no one will give them a dime for decades and force them to get clean and sober. To cut the social spending and actually collect taxes from people. This is the path America is on if we don't get spending under control and change the tax system.

 

[theeedude]

You are confusing Eurozone and EU.

 

[Darwin333]

Please, someone explain this whole Greek fiasco to me.

Now, the Prime Minister is saying that he will have the people vote on the issue (of course he's trying to dodge the bullet),

But...

if people vote to not agree to the whole deal, and get kicked out of the EU, doesn't that essentially make their economy whole lot worse?

I understand how your Greek grandmother doesn't want her pension cut, when it's not her fault the government mismanaged the budget and lied about it, but if they can't pay off their debt, the nation's credit rating would plunge, and wouldn't that make their currency essentially useless?

Isn't it just better to accept the deal?

Current rate on Greek 10 year bond is around 25%. Hard to get much shittier credit than that.

Basically it would force a default because there is no way they can afford to refinance their debt at current rates. The default means that they get out from existing debt payments but it also means that they must live within their means for a while.

Basically they are fucked either way, long term I am not really sure which way is the worst for them specifically but I do know that their default will seriously hurt the EU (and global) economy. We have already seen one HUGE US institution go under because of their debt, I bet that a lot of other big institutions bet big that the EU would successfully bail them out.

 

[Darwin333]

Short version? Greece's leaders wanted in the EU. Goldman Sachs had a plan for them to profit from that would misrepresent Greece's debt and help them get in the EU.

(Sound familiar with Wall Street demanding bad mortgages they could profit from?)

It worked. Before long it was clear about Greece's problems.

They have tried to address the problems onthe backs of the people, with 'austerity'.

The people don't care for that solution and it's being resisted.

As usual there are the wealthy interests and there are the people's interests and they are at odds.

Are you serious? Have you seen what it costs Greece to refinance its debt? I highly doubt that a simple tax hike on the wealthy will solve this AND the wealthy are (and are going to) taking huge losses on their debt right now.

The bottom line is that Greece ran out of accounting games and the math caught up with them. It is that simple.

The exact same thing would be happening here (minus the other countries trying to bail us out) if our bond rates exploded like theirs have. We simply couldn't afford to refinance our debt and when we defaulted we could not afford our existing budget regardless of how much we raised taxes on the wealthy.

 

[Ausm]

You should not be listening to a liberal who hates America on why this happened.

I have to respectfully say that you really have your head up your ass.

With that said, I think it's safe to say when the World crawls out of this mess some heads are going to roll. I am really looking for to Financial fallout Report from the AG's of both NY and Delaware.

 

[alphatarget1]

Because of this vote, interest rates went down again.

I am locking in 3.75% on a 30 year (no points) as we speak.

The Greeks may be fools, but I would be more of one if I did not take advantage of the unfounded paranoia.

Damn. That's a good rate.

 

[Infohawk]

And what's really messed up is that there is zero reason for Italy to default on its debt in normal circumstances. It has a primary budget surplus, but the poor European response to the crisis has their bond levels spiking so high as to make it impossible for them to afford debt rollover.

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

 

[bfdd]

The best thing for the Greeks and Greece is to get out of the EU and get out from under the Euro, take governmental control of their currency and restructure from there. They need to have some China like controls over that shit going forward, fuck the rest of Europe.

 

[PingviN]

Weak leadership on Papandreou's behalf. He and his government should take the time to make sure the Greeks know their options and the consequences - both long and short term - these choices will bring with them.

 

[Ninjahedge]

Damn. That's a good rate.

Got it at round point mtg... Don't want to advertise, but hey....

 

[alphatarget1]

The best thing for the Greeks and Greece is to get out of the EU and get out from under the Euro, take governmental control of their currency and restructure from there. They need to have some China like controls over that shit going forward, fuck the rest of Europe.

Yeah, I'm sure the rest of Europe deserved to be dragged down by those lazy fucks called Greeks.

What we need to do is threaten to kick Greece out of NATO if they don't pay their debt. I'm sure they have no money to spend on defense by now and can't afford to be kicked out of NATO. That'll get their house in order.

 

[Munky]

Yeah, I'm sure the rest of Europe deserved to be dragged down by those lazy fucks called Greeks.

What we need to do is threaten to kick Greece out of NATO if they don't pay their debt. I'm sure they have no money to spend on defense by now and can't afford to be kicked out of NATO. That'll get their house in order.

Do you realize that one of the major reasons the Greeks defaulting is such a huge deal is because the big banks in Europe and US made all kinds of risky bets on Greece using money they don't actually have? Kind of like AIG insured all kinds of CDS in 2008 using money it didn't actually have.

The European fucks are now getting exactly what they deserve if Greece defaults.

 

[wirelessenabled]

Italy, Greece, and Spain are the laziest and most useless of the EU countries. Have been for a long, long, LONG time. Don't get me wrong, I love the atmosphere as a tourist of those countries. I love Italian and Greek cooking (Spanish food is mostly bland in my opinion though). The majority of their populace for each country needs a wake up call though. What's worse is most of their government is corrupt as heck too. Italy has had a massive corruption in their government for a long time. When whole cities are practically run by the "family" the government just does nothing.

Only other country I am surprised to this day that isn't in bad shape is France. Half their people are lazy as fuck, but the other half are actually fairly productive. Their government is fairly corrupt; although not as bad as Italy. They at least produce things that are exported and don't rely exclusively on tourism. Although the majority of their exports are food or fashion oriented.

Yup lazy bastages:\ Too bad the US can't seem to get workers to produce "as bad" as the average French worker.

Here is a listing of worker productivity per worker employed: see
http://www.eupedia.com/forum/showthread.php?24193-Real-productivity-of-European-countries

Real productivity of European countries

The value of all final goods and services produced within a country in a year is its GDP. The GDP per capita indicates the average share of the economy per person, if every single individual (from babies to the elderly) was working. Naturally this never happens, and salaries are never equal, although some countries have narrower gaps than others (see Gini coefficient). A more accurate "average" of the income in a country can be obtained by dividing the GDP per capita by the employment rate (see Employment vs unemployment rates in the EU).

For example, in 2005, Denmark had a GDP per capita (PPP) of US$ 34,740. Divided by 75.9% of the people in employment, each worker produces an average of US$ 46,381. If we now take Belgium, which has a much lower employment rate, we obtain : 31,244 / 61.1 x 100 = US$ 51,135. This means that the productivity per worker is higher in Belgium than in Denmark, in spite of Denmark's higher GDP per capita.


If we further divide by the average number of hours worked in the country, we get the productivity per worker per hour. Another way to calculate it is to take the GDP (PPP) per capita per hour and divide it by the employment rate, which should give exactly the same result, if the stats used are the same.

Here are the numbers I obtained (US$ produced per hour per worker ):

Luxembourg : 57.5
France : 56.6
Belgium : 55.9
Ireland : 51.8
Italy : 50.3
Austria : 46.4
Germany : 45.0
Netherlands : 44.5
Sweden : 42.6
Finland : 42.6
UK : 42.0
Denmark : 40.4
Malta : 35.7
Spain : 34.2
Estonia : 34.0
Greece : 33.1
Slovenia : 30.7
Slovakia : 27.8
Cyprus : 27.3
Portugal : 25.6
Latvia : 23.9
Hungary : 23.1
Poland : 22.4
Lithuania : 21.5
Czech Republic : 18.6
Bulgaria : 17.8
Romania : 10.0
------------------
Iceland : 29.4
Norway : 53.0
Switzerland : 35.6
Turkey : 28.5
Japan : 37.3
USA : 49.6

 

[mshan]

Short version? Greece's leaders wanted in the EU. Goldman Sachs had a plan for them to profit from that would misrepresent Greece's debt and help them get in the EU.

(Sound familiar with Wall Street demanding bad mortgages they could profit from?)

It worked. Before long it was clear about Greece's problems.

Agreed!!!

I think there is basically a war going on regarding whether the Euro will survive as a single currency, over time (vs. kicking Greece out of EU, Northern and Southern Euro, or true greater fiscal union of EU members to complement current currency union).

Greece may be the immediate focal point, but contagion to systemically important countries such as Italy (too much debt to bail out) and Spain is really the intermediate term concern.

Bears I have seen on tv before were calling for worse case scenario of SP500 950 - 1000 retest, before moving forward in markets, so barring a true Black Swan event that the market has not to some extent anticipated or already priced it, I personally don't think we are going to see the type of declines we saw in 2008 (intraday low of SP500 666).

I also don't think this is a repeat of Lehman 2008 (palpable fears of end of Western civilization as we know it). I think main fallout concern is whether this crisis puts the whole global economy into recession, or if there is a recession limited to Europe alone.

It seems like there were a lot of cross-currents today (Greek referendum, data questionably suggesting some risk of China hard landing, MF Global bankruptcy), unfortunately all negative.

Finerman and Najerian on Fast Money both seemed to think it was mainly about Greece today, and Terranova (he seems to have really good trading instincts if he is not spewing talking points given to him by someone else looking to profit from what he says) seems to feel it is primary MF Global (forced liquidations?) driving today's action.

My gut instinct (it is just a gut instinct, nothing else) is that MF Global bankruptcy represented a mini-Lehman moment (?) where clients feared that they can't get their money back from MF Global while a protracted bankruptcy takes place, and were panicking to some extent today.

 

[Craig234]

Are you serious? Have you seen what it costs Greece to refinance its debt? I highly doubt that a simple tax hike on the wealthy will solve this AND the wealthy are (and are going to) taking huge losses on their debt right now.

The bottom line is that Greece ran out of accounting games and the math caught up with them. It is that simple.

The exact same thing would be happening here (minus the other countries trying to bail us out) if our bond rates exploded like theirs have. We simply couldn't afford to refinance our debt and when we defaulted we could not afford our existing budget regardless of how much we raised taxes on the wealthy.

Oh, I pretty much agree.

The bond market has been called 'the most powerful entity in society'.

The story almost everywhere though still includes the most wealthy using these issues, these financial crises, in the long run to shift wealth their direction.

Greek leaders and Goldman Sachs conspired to defraud here. if you think all the benefit of fraud has gone to the people... 'austerity' needs to be balanced.

 

[mshan]

Very interesting segment on PBS News Hour just now (Ray Suarez interviewing Joe Nocera regarding MF Global).

Seems like John Corzine didn't learn the lessons of 2008 (dangerous 40x leveraged speculation using borrowed money), and, like AIG, failed due to short-term liquidity issues (their overnight funding dried up?), rather than concerns about the long-term solvency of the firm).

Hopefully that video segment is on PBS website some time later today or tomorrow (http://www.pbs.org/newshour/bb/business/july-dec11/corzine_11-01.html)

Highly recommended viewing. :thumbsup:

 

[shortylickens]

Short version? Greece's leaders wanted in the EU. Goldman Sachs had a plan for them to profit from that would misrepresent Greece's debt and help them get in the EU.

(Sound familiar with Wall Street demanding bad mortgages they could profit from?)

It worked. Before long it was clear about Greece's problems.

They have tried to address the problems onthe backs of the people, with 'austerity'.

The people don't care for that solution and it's being resisted.

As usual there are the wealthy interests and there are the people's interests and they are at odds.

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

 

[LegendKiller]

Oh, I pretty much agree.

The bond market has been called 'the most powerful entity in society'.

The story almost everywhere though still includes the most wealthy using these issues, these financial crises, in the long run to shift wealth their direction.

Greek leaders and Goldman Sachs conspired to defraud here. if you think all the benefit of fraud has gone to the people... 'austerity' needs to be balanced.

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.

 

[rchiu]

The EU deal *is* a default, despite the contortions of the politicians and the media - a major aspect of it is 50% write-down for private holders of Greek debt.

I think the referendum is a great idea - the prime minister did the what he thought was best - massive austerity and reform, but also debt relief - but saw incredible protests and opposition. Now the people can choose - take the deal or leave the EU. A lot of Greeks have been bemoaning the loss of sovereignty, the loss of the drachma etc. Well, they get choice now, a choice they did not have 12 years.

Maybe the EU deal is a default, but it is an ORDERLY default. There is an arrangement with banks, there is a facility to cover the losses and provide time to recover, and most importantly, there is a structure in place, maybe bitter medicine, but medicine to help Greek to recover from the debt crisis with the backing of EU and keep EU intact.

Don't forget that there are Greek politicians looking to put fuel onto the fire in order to gain power out of this mess. People can certainly choose but it adds lots of uncertainty. For example, EU is looking for China to back/buy the bonds that is suppose to back this stabilization effort. With all these uncertainty, who in the right mind would want to put money in this highly politically charged mess?

Greek cannot have the cake and eat it too. They want the benefit of EU membership, they want the socialist program and the great benefit, but when it's time for them to make tough choices, they want an easy way out, disregarding their EU allies, and the financial market that would be in a mess if there is not an ORDERLY default/stabilization effort.

 

[Balt]

Replace "lazy Greeks" with "lazy blacks" in all of these comments and then see how it sounds. The Greeks are the same as other Europeans - with the exception of being taken advantage of by the Germans [no surprise] and the French.

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.

 

[bfdd]

Yeah, I'm sure the rest of Europe deserved to be dragged down by those lazy fucks called Greeks.

What we need to do is threaten to kick Greece out of NATO if they don't pay their debt. I'm sure they have no money to spend on defense by now and can't afford to be kicked out of NATO. That'll get their house in order.

What happens when a Union member doesn't pay their dues? The Union drops them and kicks them out. The EU could have taken these measures earlier, but didn't due to their OWN GREED. So waah. I don't take either side in this mess, both are idiots, but if the Greeks want what they want, they need to say fuck the rest of Europe and take control of their own currency.