View Full Version : The Greeks vote No to a "Bailout"
FlyingHunter
07-05-15, 22:01
Monday morning stocks might be a roller coaster ride.
From US News & World Report:
Greece lurched into uncharted territory and an uncertain future in Europe's common currency Sunday after voters overwhelmingly rejected demands by international creditors for more austerity measures in exchange for a bailout of its bankrupt economy.
Results showed about 61 percent voted "no," compared with 39 percent for "yes," with 100 percent of the vote counted. The referendum — Greece's first in more than four decades — came amid severe restrictions on financial transactions in the country, imposed last week to stem a bank run that accelerated after the vote was called.
Thousands of jubilant government supporters celebrated in Syntagma Square in front of Parliament, waving Greek flags and chanting "No, no, no!"
Early trading on Asian markets indicated investors were alarmed, as stock indexes fell.
I guess beggars can be choosers.
Fallout from this one could be wild. Sorta of a global version of "40% of card holders can't pay off their balance so interest rates and fees go up accordingly for the other 60%."
Glad our economy is tied to the global market and we are mostly service oriented. That should shake out awesome when everyone is assessed according to true value contributions.
Maybe we can sneak across the border and get some of those cool NAFTA jobs.
I guess beggars can be choosers.
Fallout from this one could be wild. Sorta of a global version of "40% of card holders can't pay off their balance so interest rates and fees go up accordingly for the other 60%."
Glad our economy is tied to the global market and we are mostly service oriented. That should shake out awesome when everyone is assessed according to true value contributions.
Maybe we can sneak across the border and get some of those cool NAFTA jobs.
This has the potential to play out as a contagion much like Lehman in 2008. Having one country, Greece, default and exit opens the reality that Spain, Portugal, and Ireland suck and should be shown the door. Quickly the dominos can fall just like Wachovia and Merrill Lynch.
To be fair, we are on a very similar trajectory as Greece and what they are experiencing is a microcosm of our future. Look at their issues and see the similarities:
1) massive government spending on entitlements, social programs, and government pensions - a truly epic welfare state
2) massive illegal immigration
3) crumbling social institution such as the GOC
Granted, we may have a softer landing due to some advantages (dollar is the reserve currency, ability to print money). However, we also have a lot more guns which makes for good times when the militia become, shall we say "poorly regulated."
This has the potential to play out as a contagion much like Lehman in 2008. Having one country, Greece, default and exit opens the reality that Spain, Portugal, and Ireland suck and should be shown the door. Quickly the dominos can fall just like Wachovia and Merrill Lynch.
To be fair, we are on a very similar trajectory as Greece and what they are experiencing is a microcosm of our future. Look at their issues and see the similarities:
1) massive government spending on entitlements, social programs, and government pensions - a truly epic welfare state
2) massive illegal immigration
3) crumbling social institution such as the GOC
Granted, we may have a softer landing due to some advantages (dollar is the reserve currency, ability to print money). However, we also have a lot more guns which makes for good times when the militia become, shall we say "poorly regulated."
If it goes that way, I plan on having a fiefdom.
Sad testament of our global society when people have such an entitlement mindset that they blow all their money, get multiple loans, blow that, and get upset/offended that the people loaning them money have the audacity to tell them to cut back on spending.
If it goes that way, I plan on having a fiefdom.
I've already decided to declare myself the King of Kansas, or at least as much of it as I can grab. :big_boss:
Moose-Knuckle
07-05-15, 23:49
Good thing I have another shipment of dehydrated food coming in this week.
Leonidas24
07-06-15, 01:04
Sad testament of our global society when people have such an entitlement mindset that they blow all their money, get multiple loans, blow that, and get upset/offended that the people loaning them money have the audacity to tell them to cut back on spending.
I've already decided to declare myself the King of Kansas, or at least as much of it as I can grab. :big_boss:
Dibs on NW Wichita.
Business_Casual
07-06-15, 06:02
This has the potential to play out as a contagion much like Lehman in 2008. Having one country, Greece, default and exit opens the reality that Spain, Portugal, and Ireland suck and should be shown the door. Quickly the dominos can fall just like Wachovia and Merrill Lynch.
To be fair, we are on a very similar trajectory as Greece and what they are experiencing is a microcosm of our future. Look at their issues and see the similarities:
1) massive government spending on entitlements, social programs, and government pensions - a truly epic welfare state
2) massive illegal immigration
3) crumbling social institution such as the GOC
Granted, we may have a softer landing due to some advantages (dollar is the reserve currency, ability to print money). However, we also have a lot more guns which makes for good times when the militia become, shall we say "poorly regulated."
Who holds Greek debt, and are there credit default swaps in place to lead you to believe this to be the case? I haven't seen that and their economy is quite small. The rest of the PIIGS have already addressed their debt service issues - for instance Italy was given a new PM by Brussels and Ireland has reduced their borrowing drastically.
A majority voted to keep the gravy train going, even though it is painfully apparent that it is about to derail. Says something about human nature, and sadly that means us too: no one is gonna vote away that which is given to them and taken for granted.
50% +1 is all it takes folks........
Digital_Damage
07-06-15, 08:06
The funny part of this is there is no gravy train to derail. Banks have already started raiding personal deposits to keep cash flow going. After that is exhausted they will have to switch to a new currency which will be worth crap.
The PM is simply delusional, as of this morning he has fired the FM stating that the guy was antagonizing the negotiators when it is the PM the negotiators want nothing to do with.
Moose-Knuckle
07-06-15, 08:07
A majority voted to keep the gravy train going, even though it is painfully apparent that it is about to derail. Says something about human nature, and sadly that means us too: no one is gonna vote away that which is given to them and taken for granted.
50% +1 is all it takes folks........
Cloward-Piven at it's apex.
The strategy of forcing political change through orchestrated crisis. The "Cloward-Piven Strategy" seeks to hasten the fall of capitalism by overloading the government bureaucracy with a flood of impossible demands, thus pushing society into crisis and economic collapse.
http://www.americanthinker.com/2008/09/barack_obama_and_the_strategy.html#ixzz3f7GgkcQT
Digital_Damage
07-06-15, 08:08
Who holds Greek debt, and are there credit default swaps in place to lead you to believe this to be the case? I haven't seen that and their economy is quite small. The rest of the PIIGS have already addressed their debt service issues - for instance Italy was given a new PM by Brussels and Ireland has reduced their borrowing drastically.
Ireland is actually doing quite well as of today. They actually listened to the numbers guys and seem to be on the road to recovery.
http://www.bloomberg.com/news/articles/2015-07-06/greece-bailout-referendum-they-voted-no-now-what-
Socialists...watch and learn....
Who holds Greek debt, and are there credit default swaps in place to lead you to believe this to be the case? I haven't seen that and their economy is quite small. The rest of the PIIGS have already addressed their debt service issues - for instance Italy was given a new PM by Brussels and Ireland has reduced their borrowing drastically.
You are kidding, right? A much simpler question is who does not have a stake in the €315B that Greece owes. The lenders range from the IMF, European Central Bank, to various bond holders (which may includes some of your 401K).
The real question is will depositors in other countries try to avoid risk and withdraw their savings in other marginal countries. Once you open the possibility of an exit and the irrevocability clause is no longer credible, people start to get queezy. This is especially true for foreign account holders who start to think that a euro held in cash today might be different than a euro in a bank tomorrow. I'm not saying that it is going to collapse the EU, but the risks of a very hard European landing are real.
Digital_Damage
07-06-15, 10:04
You are kidding, right? A much simpler question is who does not have a stake in the €315B that Greece owes. The lenders range from the IMF, European Central Bank, to various bond holders (which may includes some of your 401K).
The real question is will depositors in other countries try to avoid risk and withdraw their savings in other marginal countries. Once you open the possibility of an exit and the irrevocability clause is no longer credible, people start to get queezy. This is especially true for foreign account holders who start to think that a euro held in cash today might be different than a euro in a bank tomorrow. I'm not saying that it is going to collapse the EU, but the risks of a very hard European landing are real.
Funny enough, thanks to the Greeks stubborn stance it has given them enough time to have things in place to mitigate their collapse. That is why the EU leaders tone have change on the subject the last 3 weeks. They honestly could give a shit if they exist now.
That is why the Greek PM is such a buffoon, it is armature hour at the negotiating table. The best offer they will receive was already on the table, they have no bargaining power left. As of this morning all the financial lenders have said they are making no offers, it is up to Greece to come up with an acceptable plan moving forward. If Greece does not act in a timely fashion and present an acceptable offer, the banks are now willing to let them implode. They will not be throwing good money after bad anymore.
Crow Hunter
07-06-15, 10:48
Personally, I see this as an opportunity to buy more VTIAX or as an opportunity to Tax loss harvest in a taxable account. If anything actually comes of it.
Actually VXUS (the ETF equivalent of VTIAX) is only down 1.66% as of 11:11am EDT. That isn't really that much.
Keep in mind that the total Greek GDP is less than .40% of the total world economy.
I think, like Sensei, the real threat is if other members of the EU decide that not playing by the rules is a better for them as well. If Spain, Portugal and Ireland decide to do the same thing, then you could start seeing some fallout.
But hey, even if that happens, a European vacation is probably going to get really cheap for holders of USD.
Without liquidity from the IMF or European Central Bank, the Greek banks will run out of money within a week. This will force the Greek government to issue a new currency as a stopgap to prevent mass hysteria. That will essentially remove the Greeks from the EU. Good riddance.
Funny enough, thanks to the Greeks stubborn stance it has given them enough time to have things in place to mitigate their collapse. That is why the EU leaders tone have change on the subject the last 3 weeks. They honestly could give a shit if they exist now.
That is why the Greek PM is such a buffoon, it is armature hour at the negotiating table. The best offer they will receive was already on the table, they have no bargaining power left. As of this morning all the financial lenders have said they are making no offers, it is up to Greece to come up with an acceptable plan moving forward. If Greece does not act in a timely fashion and present an acceptable offer, the banks are now willing to let them implode. They will not be throwing good money after bad anymore.
They've been throwing good money after bad for about 5 years now, and they're just now figuring it out? I see this as not all Greece's fault.. In the first place, Greece should've never been admitted into the E.U. Their economy was never stable enough or strong enough. The loans should've stopped a long time ago, when it was around say, $60-80 billion and much more manageable. The E.U. should've let Greece have a orderly default years ago and worked a payment schedule out that was manageable for both parties.. But instead, strict austerity was demanded.. and this is the result. I suspect this could be the start of the unraveling of the E.U. and it couldn't happen soon enough... The E.U. is, and always was a failure. There's a lesson here for all of us, whether you agree with me, or not.. What's happening in Greece now, could very well be the U.S. in the near future.. If you're not prepared, you'd better start..
Business_Casual
07-06-15, 10:56
No, I am not kidding. The Greek debt is IMF and ECB. This isn't a bunch of credit default swaps from Fannie Mae. The central banks are on the hook for this, and the Greek banks are going to do a bail-in to stay solvent. The bad thing here is giving the Cypriot model legs might temp others. The PIIGs collapse model is propaganda by ECB to scare you.
Digital_Damage
07-06-15, 11:03
They've been throwing good money after bad for about 5 years now, and they're just now figuring it out? I see this as not all Greece's fault.. In the first place, Greece should've never been admitted into the E.U. Their economy was never stable enough or strong enough. The loans should've stopped a long time ago, when it was around say, $60-80 billion and much more manageable. The E.U. should've let Greece have a orderly default years ago and worked a payment schedule out that was manageable for both parties.. But instead, strict austerity was demanded.. and this is the result. I suspect this could be the start of the unraveling of the E.U. and it couldn't happen soon enough... The E.U. is, and always was a failure. There's a lesson here for all of us.. What's happening in Greece now, could very well be the U.S. in the near future.. If you're not prepared, you'd better start..
It was not 5 years of bad decisions, they were showing improvement and starting to come within balance before they elected the current buffoon. The current PM lifted all the austerity measures they blew thought the bailout money, the current fight is Greece is demanding more money, removal of austerity conditions on that money and the elimination of having to pay back what they owe.
That is why this is such an f'ing joke, either this PM is truly the stupidest man on the planet or he has always had a back room dealing with China and Russia. Being able to park ships off Greece will give Russia a tremendous amount of leverage in their own plight with sanctions.
Socialists...watch and learn....
What are you talking about? We clearly aren't enough like the rest of the "developed"world! [emoji13]
Separate point: Does anyone here think this Country would vote differently?
Crow Hunter
07-06-15, 11:51
What are you talking about? We clearly aren't enough like the rest of the "developed"world! [emoji13]
Separate point: Does anyone here think this Country would vote differently?
To your second point.
Absolutely not.
That is why it is a good thing we are a Representational Republic and not a true Democracy. A true Democracy would implode in less than one generation. Mob rule is horrible.
Keep in mind that the average IQ might be 98 in the US, but that can mean that most everyone is near 98 or it is much more likely that there is a bell curve and their are LOTS of people that are "left tails" that both vote and breed.
I believe there are a very LARGE number of the US population that can't even balance their checkbooks much less make a decision like that.
Who would?
Imagine any pensioner being told they have to take a haircut. They planned on those pensions as part of their retirement. They can't go back in time and undo it. Everyone at or near retirement has no incentive to vote yes. Of course they voted no, if the alternative was poverty.
It's a classic Hobson's Choice.
SPARTAN HOPLITE ARMS
07-06-15, 12:36
I suspect our fall might be worse because we have a larger population and because we're the current reserve currency. This is a sign of bad things to come and it's upsetting watching relatives struggle there.
Digital_Damage
07-06-15, 13:00
I suspect our fall might be worse because we have a larger population and because we're the current reserve currency. This is a sign of bad things to come and it's upsetting watching relatives struggle there.
If we fall the whole world does... that is why the world community would never let that happen.
Several men much smarter than I have said that the 2nd stage of any financial crisis is the sovereign debt crisis. We have yet to hit the 2nd stage post 2008 but are probably rapidly approaching it. The Greeks were given the choice of choosing where to hurt via austerity or taking whatever hurt comes via default of which there will be a lot and it looks as if they've chosen the latter.
Once Greece goes down, the rest of the PIIGS aren't far behind and the entire EU along with the Euro stand a high probability of going with them. The physical logistics of trying to unwind a common currency stands to produce absolute chaos, much less the financial logistics.
No, I am not kidding. The Greek debt is IMF and ECB. This isn't a bunch of credit default swaps from Fannie Mae. The central banks are on the hook for this, and the Greek banks are going to do a bail-in to stay solvent. The bad thing here is giving the Cypriot model legs might temp others. The PIIGs collapse model is propaganda by ECB to scare you.
A Cyprus style bail-in will not help. Deposits up to €100,000 in Greece are garunteed by the Greek government but their deposit insurance (€3B) would not cover demand in case of a banking collapse. In addition, there are almost zero accounts more than €100,000 which means that the Greek government would be on the hook for essentially all of the losses from a bail-in. No matter how you cut it, the end result for the government is the same.
What are projections for how this wil effect the Euro to dollar exchange? and why?
Thanks
It was not 5 years of bad decisions, they were showing improvement and starting to come within balance before they elected the current buffoon. The current PM lifted all the austerity measures they blew thought the bailout money, the current fight is Greece is demanding more money, removal of austerity conditions on that money and the elimination of having to pay back what they owe.
That is why this is such an f'ing joke, either this PM is truly the stupidest man on the planet or he has always had a back room dealing with China and Russia. Being able to park ships off Greece will give Russia a tremendous amount of leverage in their own plight with sanctions.
The simple fact is. the money should have been cut off long before the debt level got this high. Let's face it.. what can't be paid back, won't be.. It is truly that simple. If what I've been reading is correct,the Germans are on the hook for about $70-90 billion, of the $315 billion. The Greeks played them like a violin, all these talks they had between the E.U. and IMF since January were just to buy time, time so that the average citizen could get his/her money out of the bank before capital controls were put in place. They had planned to default all along. Frau Merkel now has some 'splain to do.. This will probably be her waterloo as well. If the Greeks had a Gov't that understood what they were doing (I know they don't) they could use this as a opportunity to move forward, and with the right leadership, they could get this whole mess straightened out in about 5-10years, With a $315 billion debt that they no longer have to worry about, this could be possible, but it would take some drastic reforms on pensions, work rules, etc, something the Greeks don't seem to be interested in. As it is now they will probably decend into chaos.... God only know how this will play out.. ETA: I'll give the Greek PM credit.. He at least let the people decide their fate, Here in the U.S. I'm sure, the shitstain in chief would be more than happy to make that decision for us, since he knows best..
As I said before, everyone should watch what happens in Greece carefully. At some point, (and I think soon) the same thing is coming to the U.S. There a lot of parallels between Greece and the U.S. Lots of debt that can't be paid, An economy that shows less that 2% growth per year, full time jobs non-existant , only part-time minimum wage jobs are available, if at all. a huge growing entitlement class, and we the U.S. are about to sign on to a trade bill (TPP) that will effectively kill any future growth. And like NAFTA, cost us 100's of thousands, if not millions of jobs.. I'm sorry, but I don't see a real bright side here...
If we fall the whole world does... that is why the world community would never let that happen.
And what's the world community going to do about it? Look around the world just about every country is drowning in debt. China's stock market is on the verge of collapse, I can't think of a single country that has it's financial house in order, You're right, if we go down the tube so does everyone else, and it's looks like that could happen, soon. You can't keep printing money out of thin air, and backing it with nothing forever, sooner or later people will figure out that it's nothing more than toilet paper, and once confidence in it is gone, it can never be regained. At that point as we all know, the gig is up.
Digital_Damage
07-06-15, 16:10
And what's the world community going to do about it? Look around the world just about every country is drowning in debt. China's stock market is on the verge of collapse, I can't think of a single country that has it's financial house in order, You're right, if we go down the tube so does everyone else, and it's looks like that could happen, soon. You can't keep printing money out of thin air, and backing it with nothing forever, sooner or later people will figure out that it's nothing more than toilet paper, and once confidence in it is gone, it can never be regained. At that point as we all know, the gig is up.
If everyone goes down it is like hitting the reset button. There will be no disparity in wealth between countries. Economics 101
Business_Casual
07-06-15, 16:30
Once Greece goes down, the rest of the PIIGS aren't far behind and the entire EU along with the Euro stand a high probability of going with them. The physical logistics of trying to unwind a common currency stands to produce absolute chaos, much less the financial
I don't think that is true, if it ever was. I think that was ECB propaganda
If everyone goes down it is like hitting the reset button. There will be no disparity in wealth between countries. Economics 101
A lot of people worldwide would see that as a good thing, even something to be hastened, regardless of the cost in money, lives, and standard of living.
wildcard600
07-06-15, 17:11
And what's the world community going to do about it? Look around the world just about every country is drowning in debt. China's stock market is on the verge of collapse, I can't think of a single country that has it's financial house in order, You're right, if we go down the tube so does everyone else, and it's looks like that could happen, soon. You can't keep printing money out of thin air, and backing it with nothing forever, sooner or later people will figure out that it's nothing more than toilet paper, and once confidence in it is gone, it can never be regained. At that point as we all know, the gig is up.
Your being dramatic. The economy is booming and jobs are being created at record pace. Things are so good that now you only need an associates degree in business to be a cashier at Lowe's.
*rolleyes*
MountainRaven
07-06-15, 17:16
It was not 5 years of bad decisions, they were showing improvement and starting to come within balance before they elected the current buffoon. The current PM lifted all the austerity measures they blew thought the bailout money, the current fight is Greece is demanding more money, removal of austerity conditions on that money and the elimination of having to pay back what they owe.
That is why this is such an f'ing joke, either this PM is truly the stupidest man on the planet or he has always had a back room dealing with China and Russia. Being able to park ships off Greece will give Russia a tremendous amount of leverage in their own plight with sanctions.
Russia doesn't have any money to give Greece: Russia and Greece did meet openly, but the overwhelming response to the visit is that it was simply Greece trying to pressure the EU because - again - Russia doesn't have any money to give Greece. Although I'm sure Russia would love to do it to try and off-balance NATO.
China may have some money to give to Greece. But that would interfere with their ability to send money to countries in Africa and the Pacific where they stand to gain much more for much less - and, of course, their ability to send money to their number one trade partner, the US.
Separate point: Does anyone here think this Country would vote differently?
And I'd bet dollars to donuts that many self-proclaimed conservatives (on this forum and many other places) would vote thus out of patriotic fervor: We're Americans, we don't bend our domestic policies to please bankers in Berlin and Beijing.
Several men much smarter than I have said that the 2nd stage of any financial crisis is the sovereign debt crisis. We have yet to hit the 2nd stage post 2008 but are probably rapidly approaching it. The Greeks were given the choice of choosing where to hurt via austerity or taking whatever hurt comes via default of which there will be a lot and it looks as if they've chosen the latter.
Once Greece goes down, the rest of the PIIGS aren't far behind and the entire EU along with the Euro stand a high probability of going with them. The physical logistics of trying to unwind a common currency stands to produce absolute chaos, much less the financial logistics.
There's no guarantee that Greece is exiting the Eurozone. And even if they do, it is just as likely that the EU will strengthen its central systems of governance in order to maintain power. It might be illustrative to think of the EU as the US before 1860, with Greece as South Carolina - a South Carolina with few natural allies - seceding in slow motion, with the central issues being austerity, liquidity, and loans, rather than slavery.
Your being dramatic. The economy is booming and jobs are being created at record pace. Things are so good that now you only need an associates degree in business to be a cashier at Lowe's.
*rolleyes*
I guess I'm lucky I retired when I did.. I only have a H.S. diploma. But then again, I worked construction for 32yrs as a pipefitter. If I had to get a job today outside of that, I'd probably be screwed..
FlyingHunter
07-06-15, 19:10
THE Big Elephant in the Greece room no one has mentioned: China.
What’s the bigger risk? Greece leaving the euro zone in a messy debt default or China continuing to pump money into its faltering stock market while trying to boost the rest of the economy through cheap debt?
While Greece is probably ahead in the news headline count, the main impact from the weekend rejection by Greek voters of the terms of a new bailout is likely to be short-term market volatility. But the reality is that Greece is just 0.25 percent of the global economy, and accounts for a tiny 0.5 percent of the euro zone’s total exports.
The debt Greece owes is largely to multilateral institutions such as the International Monetary Fund and the European Central Bank, with only a small amount owing to private creditors.
Of far more importance to the rest of the world is China’s efforts to stabilize its equity markets after three weeks of declines wiped out some 30 percent of the value.
Amy Lin, senior analyst at Capital Securities said the main cause of the selloff was the earlier gains that “were too fast and too much.” At their respective peaks earlier this year, Shanghai’s market had risen 162% from its low in 2014, while Shenzhen was up 162% and China’s small-company index was up 233%.
“The government probably thought the bull had run too fast, but who would have thought that the bear runs even faster,” Ms. Lin said.
MountainRaven
07-06-15, 19:53
So China doesn't have any money, either?
That leaves Greece's sole hope as being... either themselves or the Eurozone.
http://youtu.be/I5QwKEwo4Bc
This all reminds of this skit.
Sent from my iPad using Tapatalk
So China doesn't have any money, either?
That leaves Greece's sole hope as being... either themselves or the Eurozone.
The sad fact is, the world (with very few exceptions) is pretty much broke or close to it.. It's going to be interesting to see what Greece does next..
FlyingHunter
07-06-15, 21:22
Stats from Dec. 2014 data:
The country with the lowest (Govt.Debt, not total debt) debt to GDP as a % is Saudi Arabia at 1.6%
The highest is Japan at 230% followed by Greece at 177%...
The USA is around 101%.
Source: http://www.tradingeconomics.com/country-list/government-debt-to-gdp
The United States recorded a Government Debt to GDP of 101.53 percent of the country's Gross Domestic Product in 2013. Government Debt to GDP in the United States averaged 60.81 percent from 1940 until 2013, reaching an all time high of 121.70 percent in 1946 and a record low of 31.70 percent in 1974. Government Debt to GDP in the United States is reported by the U.S. Bureau of Public Debt.
A great article below from the Washington Post; Is China's 1929 moment coming?
http://www.washingtonpost.com/blogs/wonkblog/wp/2015/03/05/is-chinas-1929-moment-coming/
And I'd bet dollars to donuts that many self-proclaimed conservatives (on this forum and many other places) would vote thus out of patriotic fervor: We're Americans, we don't bend our domestic policies to please bankers in Berlin and Beijing.
Heh, you read my mind, I resisted posting, "including many members here, perhaps including myself!" :)
Business_Casual
07-06-15, 21:57
The question isn't "do they have money" the question is does their economic output match their creation/use of money.
FromMyColdDeadHand
07-07-15, 00:20
"You f'ed up, you trusted us..." - Greece to the world.
"You f'ed up, you trusted us..." - Greece to the world.
Basically. (nice reference btw).
And didn't we just a few years ago have to bail out Wall Street because banks gave home loans to people who realistically couldn't afford to buy a motorcycle?
Lenders get greedy and see only the interest rates. And in the back of their minds, they know even if it goes to hell they can pass the costs on to everyone else. So in the space of a decade we went from anyone with a job being able to get a mortgage for 125% of the purchase price and credit cards at about 4% to nobody being able to get a mortgage (except for those who are in a position to buy a house outright if the liquidated their assets) and credit cards at 18%.
Bottom line, if you give fiscally careless people money - they will always take it. The EU knew Greece was a bad risk and here we are. Why would anyone imagine Greece might vote any other way?
Business_Casual
07-07-15, 05:50
E
Basically. (nice reference btw).
And didn't we just a few years ago have to bail out Wall Street because banks gave home loans to people who realistically couldn't afford to buy a motorcycle?
Lenders get greedy and see only the interest rates. And in the back of their minds, they know even if it goes to hell they can pass the costs on to everyone else. So in the space of a decade we went from anyone with a job being able to get a mortgage for 125% of the purchase price and credit cards at about 4% to nobody being able to get a mortgage (except for those who are in a position to buy a house outright if the liquidated their assets) and credit cards at 18%.
Bottom line, if you give fiscally careless people money - they will always take it. The EU knew Greece was a bad risk and here we are. Why would anyone imagine Greece might vote any other way?
The mortgage crisis was, in the main, created by Federal mandates for "affordable housing" and equal opportunity to credit.
FromMyColdDeadHand
07-07-15, 10:38
E
The mortgage crisis was, in the main, created by Federal mandates for "affordable housing" and equal opportunity to credit.
It would be interesting to walk around Wall Street and ask people what the lessons of 2008 where....
It would be interesting to walk around Wall Street and ask people what the lessons of 2008 where....
What happened and lessons learned:
Heidi is the proprietor of a bar in Detroit . She realizes that virtually all of her customers are unemployed alcoholics and, as such, can no longer afford to patronize her bar. To solve this problem, she comes up with a new marketing plan that allows her customers to drink now, but pay later.
Heidi keeps track of the drinks consumed on a ledger, thereby granting the customers' loans. Word gets around about Heidi's "drink now, pay later" marketing strategy and, as a result, increasing numbers of customers flood into Heidi's bar. Soon she has the largest sales volume for any bar in Detroit .
By providing her customers freedom from immediate payment demands, Heidi gets no resistance when, at regular intervals, she substantially increases her prices for wine and beer, the most consumed beverages. Consequently, Heidi's gross sales volume increases massively.
A young and dynamic vice-president at the local bank recognizes that these customer debts constitute valuable future assets and increases Heidi's borrowing limit. He sees no reason for any undue concern, since he has the debts of the unemployed alcoholics as collateral.
At the bank's corporate headquarters, expert traders figure a way to make huge commissions, and transform these customer loans into DRINKBONDS. These securities then are bundled and traded on international securities markets.
Naive investors don't really understand that the securities being sold to them as AAA secured bonds really are debts of unemployed alcoholics. Nevertheless, the bond prices continuously climb, and the securities soon become the hottest-selling items for some of the nation's leading brokerage houses.
One day, even though the bond prices still are climbing, a risk manager at the original local bank decides that the time has come to demand payment on the debts incurred by the drinkers at Heidi's bar. He so informs Heidi.
Heidi then demands payment from her alcoholic patrons, but being unemployed alcoholics they cannot pay back their drinking debts. Since Heidi cannot fulfill her loan obligations she is forced into bankruptcy. The bar closes and Heidi's 11 employees lose their jobs.
Overnight, DRINKBOND prices drop by 90%. The collapsed bond asset value destroys the bank's liquidity and prevents it from issuing new loans, thus freezing credit and economic activity in the community. The suppliers of Heidi's bar had granted her generous payment extensions and had invested their firms' pension funds in the BOND securities. They find they are now faced with having to write off her bad debt and with losing over 90% of the presumed value of the bonds. Her wine supplier also claims bankruptcy, closing the doors on a family business that had endured for three generations, her beer supplier is taken over by a competitor, who immediately closes the local plant and lays off 150 workers.
Fortunately though, the bank, the brokerage houses and their respective executives are saved and bailed out by a multibillion dollar no-strings attached cash infusion from their cronies in government. The funds required for this bailout are obtained by new taxes levied on employed, middle-class, non-drinkers who have never been in Heidi's bar.
SPARTAN HOPLITE ARMS
07-07-15, 11:41
It's painful to hear from my relatives that people are having a hard time finding food and basic supplies...runs on gas and water, etc. It's harder for the small islands farther away from the mainland that have been historically ignored by the government with regards to infrastructure and services. I haven't visited in a few years and it's making things sound like I'll be back in my old city stomping grounds patrolling what look like Third World streets. I understand people are dejected there but I think they put off the pain for too long. We will face the same problem and it's better to fix it early and feel pain than to bring it all crashing down by waiting until the end. I am not sure what will happen but I don't see how things will end well or even improve in the short term.
FromMyColdDeadHand
07-07-15, 12:55
What happened and lessons learned:
Heidi is the proprietor of a bar in Detroit . She realizes that virtually all of her customers are unemployed alcoholics and, as such, can no longer afford to patronize her bar. To solve this problem, she comes up with a new marketing plan that allows her customers to drink now, but pay later.
Heidi keeps track of the drinks consumed on a ledger, thereby granting the customers' loans. Word gets around about Heidi's "drink now, pay later" marketing strategy and, as a result, increasing numbers of customers flood into Heidi's bar. Soon she has the largest sales volume for any bar in Detroit .
By providing her customers freedom from immediate payment demands, Heidi gets no resistance when, at regular intervals, she substantially increases her prices for wine and beer, the most consumed beverages. Consequently, Heidi's gross sales volume increases massively.
A young and dynamic vice-president at the local bank recognizes that these customer debts constitute valuable future assets and increases Heidi's borrowing limit. He sees no reason for any undue concern, since he has the debts of the unemployed alcoholics as collateral.
At the bank's corporate headquarters, expert traders figure a way to make huge commissions, and transform these customer loans into DRINKBONDS. These securities then are bundled and traded on international securities markets.
Naive investors don't really understand that the securities being sold to them as AAA secured bonds really are debts of unemployed alcoholics. Nevertheless, the bond prices continuously climb, and the securities soon become the hottest-selling items for some of the nation's leading brokerage houses.
One day, even though the bond prices still are climbing, a risk manager at the original local bank decides that the time has come to demand payment on the debts incurred by the drinkers at Heidi's bar. He so informs Heidi.
They didn't have the ability to pay it back so the trigger is somewhat irrelevant, but I heard a presentation by DuPont's economist that high oil prices were the trigger. Higher and higher oil prices squeezed people's budgets directly and indirectly and that started the default bubble. He said that without the higher oil prices, we'd never have the GFC. I do agree that it was a trigger, but the whole thing was, as you have correctly laid out so clearly, going to fail eventually. So his analysis was that we won't have another 2008 because oil is low, and oil is a slow/generational riser. (It does rise quickly at the end of the cycle, but it doesn't jump up and down like other commodities. Since the Saudi's tanked the market, it won't get to the 2008 highs until around 2030. He might be right, that was his area of expertise.
It doesn't take into account other things that could trigger the collapse. Yes, my dog does knock the table when we play Jenga, but it is still going to come down eventually since it isn't structurally sound.
Heidi then demands payment from her alcoholic patrons, but being unemployed alcoholics they cannot pay back their drinking debts. Since Heidi cannot fulfill her loan obligations she is forced into bankruptcy. The bar closes and Heidi's 11 employees lose their jobs.
Overnight, DRINKBOND prices drop by 90%. The collapsed bond asset value destroys the bank's liquidity and prevents it from issuing new loans, thus freezing credit and economic activity in the community. The suppliers of Heidi's bar had granted her generous payment extensions and had invested their firms' pension funds in the BOND securities. They find they are now faced with having to write off her bad debt and with losing over 90% of the presumed value of the bonds. Her wine supplier also claims bankruptcy, closing the doors on a family business that had endured for three generations, her beer supplier is taken over by a competitor, who immediately closes the local plant and lays off 150 workers.
Fortunately though, the bank, the brokerage houses and their respective executives are saved and bailed out by a multibillion dollar no-strings attached cash infusion from their cronies in government. The funds required for this bailout are obtained by new taxes levied on employed, middle-class, non-drinkers who have never been in Heidi's bar.
E
The mortgage crisis was, in the main, created by Federal mandates for "affordable housing" and equal opportunity to credit.
I really do understand that.
What happened and lessons learned:
Heidi is the proprietor of a bar in Detroit . She realizes that virtually all of her customers are unemployed alcoholics and, as such, can no longer afford to patronize her bar. To solve this problem, she comes up with a new marketing plan that allows her customers to drink now, but pay later.
Heidi keeps track of the drinks consumed on a ledger, thereby granting the customers' loans. Word gets around about Heidi's "drink now, pay later" marketing strategy and, as a result, increasing numbers of customers flood into Heidi's bar. Soon she has the largest sales volume for any bar in Detroit .
By providing her customers freedom from immediate payment demands, Heidi gets no resistance when, at regular intervals, she substantially increases her prices for wine and beer, the most consumed beverages. Consequently, Heidi's gross sales volume increases massively.
A young and dynamic vice-president at the local bank recognizes that these customer debts constitute valuable future assets and increases Heidi's borrowing limit. He sees no reason for any undue concern, since he has the debts of the unemployed alcoholics as collateral.
At the bank's corporate headquarters, expert traders figure a way to make huge commissions, and transform these customer loans into DRINKBONDS. These securities then are bundled and traded on international securities markets.
Naive investors don't really understand that the securities being sold to them as AAA secured bonds really are debts of unemployed alcoholics. Nevertheless, the bond prices continuously climb, and the securities soon become the hottest-selling items for some of the nation's leading brokerage houses.
One day, even though the bond prices still are climbing, a risk manager at the original local bank decides that the time has come to demand payment on the debts incurred by the drinkers at Heidi's bar. He so informs Heidi.
Heidi then demands payment from her alcoholic patrons, but being unemployed alcoholics they cannot pay back their drinking debts. Since Heidi cannot fulfill her loan obligations she is forced into bankruptcy. The bar closes and Heidi's 11 employees lose their jobs.
Overnight, DRINKBOND prices drop by 90%. The collapsed bond asset value destroys the bank's liquidity and prevents it from issuing new loans, thus freezing credit and economic activity in the community. The suppliers of Heidi's bar had granted her generous payment extensions and had invested their firms' pension funds in the BOND securities. They find they are now faced with having to write off her bad debt and with losing over 90% of the presumed value of the bonds. Her wine supplier also claims bankruptcy, closing the doors on a family business that had endured for three generations, her beer supplier is taken over by a competitor, who immediately closes the local plant and lays off 150 workers.
Fortunately though, the bank, the brokerage houses and their respective executives are saved and bailed out by a multibillion dollar no-strings attached cash infusion from their cronies in government. The funds required for this bailout are obtained by new taxes levied on employed, middle-class, non-drinkers who have never been in Heidi's bar.
Yeah...pretty much.
There's no guarantee that Greece is exiting the Eurozone. And even if they do, it is just as likely that the EU will strengthen its central systems of governance in order to maintain power. It might be illustrative to think of the EU as the US before 1860, with Greece as South Carolina - a South Carolina with few natural allies - seceding in slow motion, with the central issues being austerity, liquidity, and loans, rather than slavery.
I don't think it's guaranteed, but the rest of the PIIGS have a pile of debt as well, and whether ze Germans cave or Greece walks, the rest of them are going to start wondering "well why can't we do that." One member walking is a manageable issue. 6 walking is a fiasco in the making....
Singlestack Wonder
07-07-15, 16:15
The Dow and S&P burped a little today and finished up.
Quote Originally Posted by Business_Casual: The mortgage crisis was, in the main, created by Federal mandates for "affordable housing" and equal opportunity to credit.
I really do understand that.
I'm not sure it is that simple:
It is clear to anyone who has studied the financial crisis of 2008 that the private sector’s drive for short-term profit was behind it. More than 84 percent of the sub-prime mortgages in 2006 were issued by private lending. These private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year. Out of the top 25 subprime lenders in 2006, only one was subject to the usual mortgage laws and regulations. The nonbank underwriters made more than 12 million subprime mortgages with a value of nearly $2 trillion. The lenders who made these were exempt from federal regulations.
The story of the 2008 financial crisis:
So let’s recap the basic facts: why did we have a financial crisis in 2008? Barry Ritholtz fills us in on the history with an excellent series of articles in the Washington Post:
•In 1998, banks got the green light to gamble: The Glass-Steagall legislation, which separated regular banks and investment banks was repealed in 1998. This allowed banks, whose deposits were guaranteed by the FDIC, i.e. the government, to engage in highly risky business.
•Low interest rates fueled an apparent boom: Following the dot-com bust in 2000, the Federal Reserve dropped rates to 1 percent and kept them there for an extended period. This caused a spiral in anything priced in dollars (i.e., oil, gold) or credit (i.e., housing) or liquidity driven (i.e., stocks).
•Asset managers sought new ways to make money: Low rates meant asset managers could no longer get decent yields from municipal bonds or Treasurys. Instead, they turned to high-yield mortgage-backed securities.
•The credit rating agencies gave their blessing: The credit ratings agencies — Moody’s, S&P and Fitch had placed an AAA rating on these junk securities, claiming they were as safe as U.S. Treasurys.
•Fund managers didn’t do their homework: Fund managers relied on the ratings of the credit rating agencies and failed to do adequate due diligence before buying them and did not understand these instruments or the risk involved.
•Derivatives were unregulated: Derivatives had become a uniquely unregulated financial instrument. They are exempt from all oversight, counter-party disclosure, exchange listing requirements, state insurance supervision and, most important, reserve requirements. This allowed AIG to write $3 trillion in derivatives while reserving precisely zero dollars against future claims.
•The SEC loosened capital requirements: In 2004, the Securities and Exchange Commission changed the leverage rules for just five Wall Street banks. This exemption replaced the 1977 net capitalization rule’s 12-to-1 leverage limit. This allowed unlimited leverage for Goldman Sachs [GS], Morgan Stanley, Merrill Lynch (now part of Bank of America ), Lehman Brothers (now defunct) and Bear Stearns (now part of JPMorganChase–[JPM]). These banks ramped leverage to 20-, 30-, even 40-to-1. Extreme leverage left little room for error. By 2008, only two of the five banks had survived, and those two did so with the help of the bailout.
•The federal government overrode anti-predatory state laws. In 2004, the Office of the Comptroller of the Currency federally preempted state laws regulating mortgage credit and national banks, including anti-predatory lending laws on their books (along with lower defaults and foreclosure rates). Following this change, national lenders sold increasingly risky loan products in those states. Shortly after, their default and foreclosure rates increased markedly.
[B]•Compensation schemes encouraged gambling: Wall Street’s compensation system was—and still is—based on short-term performance, all upside and no downside. This creates incentives to take excessive risks. The bonuses are extraordinarily large and they continue–$135 billion in 2010 for the 25 largest institutions and that is after the meltdown.
•Wall Street became “creative”: The demand for higher-yielding paper led Wall Street to begin bundling mortgages. The highest yielding were subprime mortgages. This market was dominated by non-bank originators exempt from most regulations.
•Private sector lenders fed the demand: These mortgage originators’ lend-to-sell-to-securitizers model had them holding mortgages for a very short period. This allowed them to relax underwriting standards, abdicating traditional lending metrics such as income, credit rating, debt-service history and loan-to-value.
•Financial gadgets milked the market: “Innovative” mortgage products were developed to reach more subprime borrowers. These include 2/28 adjustable-rate mortgages, interest-only loans, piggy-bank mortgages (simultaneous underlying mortgage and home-equity lines) and the notorious negative amortization loans (borrower’s indebtedness goes up each month). These mortgages defaulted in vastly disproportionate numbers to traditional 30-year fixed mortgages.
•Commercial banks jumped in: To keep up with these newfangled originators, traditional banks jumped into the game. Employees were compensated on the basis loan volume, not quality.
•Derivatives exploded uncontrollably: CDOs provided the first “infinite market”; at height of crash, derivatives accounted for 3 times global economy.
•The boom and bust went global. Proponents of the Big Lie ignore the worldwide nature of the housing boom and bust. A McKinsey Global Institute report noted “from 2000 through 2007, a remarkable run-up in global home prices occurred.”
•Fannie and Freddie jumped in the game late to protect their profits: Nonbank mortgage underwriting exploded from 2001 to 2007, along with the private label securitization market, which eclipsed Fannie and Freddie during the boom. The vast majority of subprime mortgages — the loans at the heart of the global crisis — were underwritten by unregulated private firms. These were lenders who sold the bulk of their mortgages to Wall Street, not to Fannie or Freddie. Indeed, these firms had no deposits, so they were not under the jurisdiction of the Federal Deposit Insurance Corp or the Office of Thrift Supervision.
•Fannie Mae and Freddie Mac market share declined. The relative market share of Fannie Mae and Freddie Mac dropped from a high of 57 percent of all new mortgage originations in 2003, down to 37 percent as the bubble was developing in 2005-06. More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions. The government-sponsored enterprises were concerned with the loss of market share to these private lenders — Fannie and Freddie were chasing profits, not trying to meet low-income lending goals.
•It was primarily private lenders who relaxed standards: Private lenders not subject to congressional regulations collapsed lending standards. the GSEs. Conforming mortgages had rules that were less profitable than the newfangled loans. Private securitizers — competitors of Fannie and Freddie — grew from 10 percent of the market in 2002 to nearly 40 percent in 2006. As a percentage of all mortgage-backed securities, private securitization grew from 23 percent in 2003 to 56 percent in 2006.
The driving force behind the crisis was the private sector
Looking at these events it is absurd to suggest, as Bloomberg did, that “Congress forced everybody to go and give mortgages to people who were on the cusp.”
http://www.forbes.com/sites/stevedenning/2011/11/22/5086/
I know of two families who had extensive medical debt, when the mortgage companies came knocking telling them, in one case: 'hey, the house you paid 64,000 for three years ago is now worth 125,000, let us loan you the equity' they jumped at the chance to use the equity to pay off their medical debt. Then work slowed down and they couldn't make the payments. You get enough of those and boom. Greed pure and simple.
Business_Casual
07-07-15, 18:46
@26Inf - the majority of the actors in your time line are either Federal regulators or Federally-owned businesses.
Predatory lending is a joke. People send me credit card offers every day, but I don't complete them and send them in. Do you know why? Because I don't have the money to pay all of them back. People in a free society are able to refuse to acquire debt, just as others are free to offer it.
Hey, I get what you are saying and it is true - but by your analogy if you dangled heroin in front of a junkie, you have no culpability, if he takes it. I don't buy that. Many loans were made to people who didn't have the financial acumen to make an informed decision.
Being in business doesn't mean you get to check your ethics at the door and completely absolve yourself of any responsibility for your actions. What caused the crisis was pure unfettered greed.
And while the government was involved in terms of deregulation, oversight, and setting interest rates, I don't see how the major bad actor was the government, it was the folks who were pushing paper onto folks they knew would not be able to fulfill their obligation.
If anybody is interested in reading a good book on the mortgage backed securities thing that crashed it all(or had a HUGE part in it) read a book called "The Big Short". In essence it was a handful of guys around the world that were betting the short end of the derivatives and betting on it to fail. I cant remember how much they were owed, but I think it was in the trillions when the whole thing crashed. They never got all their money.
FromMyColdDeadHand
07-08-15, 00:04
I'd take the cause even a step back further. We started to get stagnating growth in the 90s, the Dot Com bubble hid it for awhile, then the home loan/CDO stuff stepped in, and now we have zero interest rates. It is all because we need the economy to grow at 3-4% to get the wealth creation that we need to keep things moving forward. Add in cheap immigrant labor and and you get a pretty good perpetual motion machine. We hit a wall with demographics slowing our population growth, increasing regulations slowing innovation and business start-ups.
We try to fix the demographics by importing people, but it doesn't work the same as large families. We have the web, dot-com and service industries trying to skirt the issues of higher regulations to mixed success. We buy cheap stuff from overseas which keeps inflation in check, even deflates prices, but we lose a lot of manufacturing jobs.
Wall Street guys get irrational expectations of growth and do riskier and riskier stuff to get to alpha, or what they are pressured to meet.
Lots of reasons, but you can say the real issue is that enough monied guys didn't take it in the ass in 2008. Losing everything would have given a lot of hesitation to silliness in the future. The dirty little secret is that the 'money guys' are also to a large degree our insurance and pensions. They take a hit, we all take a hit.
ETA: Weren't Fannie and Freddy buying up a lot of the loans on the secondary market?
https://www.youtube.com/watch?v=C8xAXJx9WJ8
I thought this was a good basic explanation of whats happening.
Long way of saying currency union without political union is doomed to failure and political union will never happen due to all the cultural differences mentioned...
I love the depiction of Greek cultural differences. "Hey, I like to sit on my ass and drink booze all day." Steps slightly off the path of the systemic flaw to judgement of an entire people, but... eh, it's why I have said for years Greece is in trouble because all the good Greeks were sick of the crap and moved to the US.
FromMyColdDeadHand
07-08-15, 12:41
Long way of saying currency union without political union is doomed to failure and political union will never happen due to all the cultural differences mentioned...
So, they need a fiscal union- a United States of Europe- because the United States of America is such a good model of fiscal solvency, rationality and control....
France, England and Germany need to dump the rest of Europe and take a hit on it now but prosper long term. Otherwise they are just dragging dead weight. I would imagine England is pretty happy to have not adopted the Euro right now, at least some one saw this coming.
So, they need a fiscal union- a United States of Europe- because the United States of America is such a good model of fiscal solvency, rationality and control....
Not necessarily. It's just when you have control of both your monetary and fiscal policy, you can keep the house of cards propped up longer because you don't face the prospect of "running out of money" in the sense the Greeks have. The US will never run out of currency because the Federal Reserve will always be there to magic up more money and buy bonds. We're kind of in that situation now with the FR buying lots of gov't bond issuance, the only thing saving us being the fact that the rest of the world is more jacked up than we are.
Because the Greek currency control is out of their hands, they face the prospect of running out, as do all the other Euro member nations. If the ECB refuses to print, their only options are austerity, default or leaving the Euro, which is just another name for default as they'll redenominate their debts in some other currency worth a lot less than the Euro.
So, they need a fiscal union- a United States of Europe- because the United States of America is such a good model of fiscal solvency, rationality and control....
Anyone care to guess as to who would like to be in charge of this United States of Europe??? I'd hazard a guess and say it'd likely be the same folks who thought they could run Europe before...about 70-75yrs ago.... IMO, what the EU needs is to break up. Each country go back to their former currency's and the each run the economy's of their country's as they see fit. And, if they fail, well, that's their problem...
Business_Casual
07-08-15, 16:00
Does anyone remember the original justification for the Euro? It was to eliminate currency transaction charges. Ha ha ha, I'd say Greece has been a fairly expensive charge...
FromMyColdDeadHand
07-08-15, 16:50
The Bloomberg video touts a fiscal and monetary union as a solution, and I was point out that we have that in the U.S. And we can't control our debt either.
The Euro-philes answer to any integration problems is ---more integration. The ECB could manufacture money too if it wanted, they just haven't done as much QE as we have.
I never understood the EU pursuing a common currency at the same time Yugoslavia was falling apart- so much for European integration and collectivism. In some ways the EU is like Obamacare. It makes a lot of promises but is engineered structurally to fail- and the only answer is more of the same and a push away from people controlling things themselves.
FlyingHunter
07-08-15, 20:00
Does anyone remember the original justification for the Euro? It was to eliminate currency transaction charges. Ha ha ha, I'd say Greece has been a fairly expensive charge...
Interesting...I never knew that.
The Bloomberg video touts a fiscal and monetary union as a solution, and I was point out that we have that in the U.S. And we can't control our debt either.
We only have fiscal union on the federal level. Greece is a rough analog to one of our states right now, controlling their own fiscal policy but not their monetary policy. They type of fiscal union Bloomberg is talking about is one in which the Greek budget would be set by the EU parliament. The other side of that coin is that EU taxes would be explicitly backing Greek obligations.
Really it entails expanding the scope of the EU into a much more stringent political union, one in which the EU is very much closer to an overarching unitary gov't in it's own right with the individual nations only having the powers granted by the EU....
Which oddly enough, if there were able to convince all the nations to buy into that, something I see as a very slim probability, the Germans and French will finally have gotten control of the whole continent while working together...
eightmillimeter
07-09-15, 15:43
Which oddly enough, if there were able to convince all the nations to buy into that, something I see as a very slim probability, the Germans and French will finally have gotten control of the whole continent while working together...
Funny where things end up in the grand scheme of things.
FromMyColdDeadHand
07-10-15, 14:35
Just as an aside, the reason the Greeks can give the Germans fits is because of teh leverage that the Greeks have- the old, owe the bank a million dollars and they own you; owe them a billions and you own them. For similar, but not same reasons, the threat that China could 'dump' our debt are greatly exaggerated. When you get talking about such large portions of the money supply, the usual cause-effects get warped.
http://berlin.craigslist.de/for/5125648403.html
Craaaaazy deals! Everything must go!
Except from ad:
For sale are some recently acquired Greek Assets for sale:
Acropolis €4B OBO
Greek Parliament Building + Syntagma Square €8.5B OBO
Greek Island Aegina €10B OBO
Greek Island Mykonos €13B OBO
Athens International Airport €7B OBO
If interested, please contact:
Angela Merkel: : +49 (0)30 - 220 70-0
Wolfgang Schäuble: +49 (0) 30 18 682-0
I'd buy Mykonos if I could keep all of the ass on the island...
Now that's funny stuff right there.
http://berlin.craigslist.de/for/5125648403.html
Craaaaazy deals! Everything must go!
Except from ad:
For sale are some recently acquired Greek Assets for sale:
Acropolis €4B OBO
Greek Parliament Building + Syntagma Square €8.5B OBO
Greek Island Aegina €10B OBO
Greek Island Mykonos €13B OBO
Athens International Airport €7B OBO
If interested, please contact:
Angela Merkel: : +49 (0)30 - 220 70-0
Wolfgang Schäuble: +49 (0) 30 18 682-0
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