interestrateripoff

THE GREAT BIG FAT GREEK THREAD

10,530 posts in this topic

Not really.

It was Merkel's, Germany and the EU's decision to spin this out for over 2 years and ultimately turn Greece into the Technokrat protectorate it is today.

Notwithstanding that it was recylcing of predominately German savings whilst the ECB in Frankfurt were setting rates to favour Germany (i.e. inflating the Piggies).

Under those circumstances one could easily argue Greece was acting 'rationally'. i.e. Spending the Germans savings. Without their own currency they didn't have a great deal of choice.

Savers are the real culprits here, though, since they also hold power, refuse to admit it.

Do they understand this yet? (Germany) It's not entirely clear that they do...............

they had all the choice in the world...but with EU politicians throwing money at them..why bother to do the "right thing"...admit their state and close up shop.

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they had all the choice in the world...but with EU politicians throwing money at them..why bother to do the "right thing"...admit their state and close up shop.

I think the choice put to the government workers was "spend less money or you will have to default*"

*default means a huge transfer of wealth from the private sector to government workers

So, spend less or be given billions, I think I can see why they chose the billions.

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http://www.zerohedge.com/news/all-greece-needs

Listen up muppet masters - if you have put in a bid for that Greek jewel of Santorini on Ebay, it may be time to quietly withdraw from the auction. Because according to Georgia Tech, things may get rather shaky soon. Literally: "After decades of little activity, a series of earthquakes and deformation began within the Santorini caldera in January of 2011,” said Newman, whose research is published by Geophysical Research Letters. “Since then, our instruments on the northern part of the island have moved laterally between five and nine centimeters. The volcano’s magma chamber is filling, and we are keeping a close eye on its activity.” Because the only thing that Greece, whose primary business is tourism, needs, is for the biggest Cyclades tourist attraction to go up in a pyroclastic cloud.

From GAtech:

Newman, a geophysicist in the School of Earth and Atmospheric Sciences, cannot be certain whether an eruption is imminent since observations of such activity on these types of volcanoes are limited. In fact, similar calderas around the globe have shown comparable activity without erupting. However, Newman says the chamber has expanded by 14 million cubic meters since last January. That means enough magma has been pumped into the chamber to fill a sphere three football fields across.

I'm sure nothing will happen.

Imagine the fallout if we do get a volcanic eruption...

http://en.wikipedia.org/wiki/Santorini

Santorini is essentially what remains after an enormous volcanic explosion that destroyed the earliest settlements, on a formerly single island, and created the current geological caldera. A giant central, rectangular lagoon, which measures about 12 by 7 km (7.5 by 4.3 mi), is surrounded by 300 m (980 ft) high, steep cliffs on three sides. The main island slopes downward to the Aegean Sea. On the fourth side, the lagoon is separated from the sea by another much smaller island called Therasia; the lagoon is connected to the sea in two places, in the northwest and southwest. The caldera being 400m deep makes it impossible for all but the largest ships to anchor anywhere in the protected bay; there is, however, a newly built marina in Vlychada on the southwestern coast. The principal port is called Athinias. The capital, Fira, clings to the top of the cliff looking down on the lagoon. The volcanic rocks present from the prior eruptions feature olivine and have a notably small presence of hornblende.[2]

It is the most active volcanic centre in the South Aegean Volcanic Arc, though what remains today is chiefly a water-filled caldera. The volcanic arc is approximately 500 km (310 mi) long and 20 to 40 km (12 to 25 mi) wide. The region first became volcanically active around 3–4 million years ago, though volcanism on Thera began around 2 million years ago with the extrusion of dacitic lavas from vents around the Akrotiri.

The island is the site of one of the largest volcanic eruptions in recorded history: the Minoan eruption (sometimes called the Thera eruption), which occurred some 3600 years ago at the height of the Minoan civilization. The eruption left a large caldera surrounded by volcanic ash deposits hundreds of feet deep and may have led indirectly to the collapse of the Minoan civilization on the island of Crete, 110 km (68 mi) to the south, through a gigantic tsunami. This theory is not, however, supported by chronology, in that the collapse of the Minoan civilization did not occur at the date of the tsunami, but some 90 years later.[citation needed] Another popular theory holds that the Thera eruption is the source of the legend of Atlantis.[3]

Still I'm sure there's nothing to worry about...

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Not really.

It was Merkel's, Germany and the EU's decision to spin this out for over 2 years and ultimately turn Greece into the Technokrat protectorate it is today.

Notwithstanding that it was recylcing of predominately German savings whilst the ECB in Frankfurt were setting rates to favour Germany (i.e. inflating the Piggies).

Under those circumstances one could easily argue Greece was acting 'rationally'. i.e. Spending the Germans savings. Without their own currency they didn't have a great deal of choice.

Savers are the real culprits here, though, since they also hold power, refuse to admit it.

Do they understand this yet? (Germany) It's not entirely clear that they do...............

Whatever Merkel has done to try to mitigate/aggravate things and whatever Greek did rationally/irrationally by delaying taking action on their profligacy the "huge effect on markets" has turned into a gargantuan, prodigious (and the rest) .........effect on their markets/economy and now possibly other economies.

Also compromising and risking control of their nation.

They're in default they're bankrupt and they're going to suffer the affects of their decision making for decades and decades.

Edited by billybong

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Whatever Merkel has done to try to mitigate/aggravate things and whatever Greek did rationally/irrationally by delaying taking action on their profligacy the "huge effect on markets" has turned into a gargantuan, prodigious (and the rest) .........effect on their markets/economy and now possibly other economies.

Also compromising and risking control of their nation.

They're in default they're bankrupt and they're going to suffer the affects of their decision making for decades and decades.

yes they are and they are just going to owe more and more cash to the imf and ecb.

The 700bn 'firewall' needs to be about 3 trn in the end.

All this debt will take decades to sort out, for a start, the various economies have to actually balance their budgets at some point. This is going to be an incredibly painful experience, unemployment will rise and rise, asset prices will fall, poverty will increase.

Consumption will have to slow right down.

For what it's worth, they did have a chance to sort it all out, but I think that time is fast running out.

Orderly defaults just give the debt to somebody else for a while.

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There's some dispute about where and when it all started, but Christos Kamenides, genial professor of agricultural marketing at the University of Thessaloniki, is pretty confident he and his students have made sure it's not about to stop any time soon.

What's sure is that the so-called potato movement, through which thousands of tonnes of potatoes and other agricultural produce – including, hopefully, next month, Easter lamb – are being sold directly to consumers by their producers, is taking off across Greece.

"It's because everyone benefits," said Kamenides, standing in a clearing in the woods above Thessaloniki in front of one 25-tonne truck of potatoes, another of onions, and smaller vans of rice and olives. "Consumers gets good-quality food for a third of the price they would normally pay, and the producers get their money straight away."

http://www.guardian.co.uk/world/blog/2012/mar/18/greece-breadline-potato-movement-farmers

Greeks on the first steps to building a closed economy ? How is the Euro tax man going to control this process ?

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http://www.athensnews.gr/portal/1/54197

A 70-year-old man has been arrested after opening fire with a shotgun inside an Athens tax office.

Shortly after 11am, the man arrived at the entrance of Agia Paraskevi tax office and started shooting, causing only material damage. He then entered the building but did not threaten any of the officials.

Police rushed to the scene and succeeded in arresting the man, about an hour later, after encouraging him to drop his weapon.

I wonder if he'll just get let off?

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Greece’s central bank warned in its annual report that the country’s GDP will contract by 4,5% this year. Greece is expected to enter a fifth straight year of recession in 2012, and the economic recovery is likely to start only in 2013. the GDP’s average annual contraction will stand at 4.5% in 2012, after Greek economy shrank 6.9% in 2011. The unemployment rate rose to 17.7% and is feared to exceed 19% this year. Moreover, despite the austerity measures passed by the government, public deficit rose to 10.6% of GDP in 2011, well above the 9% target. However, the central bank is confident that the economic recovery will start in 2013, which would lead to fewer dismissals and a lower inflation rate. My link

Everything gonna be a right.

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http://dealbook.nytimes.com/2012/03/19/in-greek-crisis-a-little-known-adviser-with-outsize-influence/?ref=business

ATHENS — In unmarked offices here on a dusty block choked with strip clubs and burned-out buildings, several dozen employees of a Wall Street firm spent months poring over bank loan portfolios as Greece struggled with its debt crisis.

They belong to what has become the go-to SWAT team in financial crises. Their employer, BlackRock, may be little known outside financial circles even as it manages a world-leading $3.51 trillion of assets, but the firm is exerting enormous influence as a behind-the-scenes adviser to troubled governments around the globe.

In Greece, BlackRock is helping determine just how much capital the country’s banks will need to raise in the coming months. It is a crucial step as Greece tries to fix its banking industry and its broader economy, but the task is a risky one.

BlackRock to the rescue..

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...but the firm is exerting enormous influence as a behind-the-scenes adviser to troubled governments around the globe.

In Greece, BlackRock is helping determine just how much capital the country’s banks will need to raise in the coming months. It is a crucial step as Greece tries to fix its banking industry and its broader economy, but the task is a risky one.

Sounds a bit like Squidy's role in 2002 when Greece wanted "behind the scenes" advice then.

Thank goodness lessons will have been learnt :rolleyes:

"...helping determine just how much capital the country’s banks will need to raise in the coming months" possibly means how much if they go Drachma but just as likely means how much bailout money to ask for the next time?

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Eurozone debt crisis: how Greece could exit the euro

..

Already into its fifth year of recession, more than half of Greece’s under 25s are now out of work. Yet the government is promising to cut another 150,000 public sector jobs over the next three years. With protests on the streets and an election in April, who knows how much austerity is even deliverable.

..

Hence the planning for an eventual Athens exit – not least by the Greeks. Some €16bn has been sent abroad since 2009, with Britain the favoured destination – as the mini-boom at the top of London’s housing market might testify. Meanwhile, bank deposits in Greece have fallen by €70bn over the same period.

As the country’s outgoing finance minister Evangelos Venizelos noted, while this is partly due to families or businesses raiding savings to cope with the crisis: “Many billions are kept in homes. They are, as we say, in mattresses or boxes.”

..

In the next month we should start seeing the first entries to the Wolfson Economic Prize, the £250,000 award for “the person who is able to articulate how best to manage the orderly exit of one of more member states from the European Monetary Union”. Many of the world’s top economists are sweating the numbers. In Greece’s case, it might go something like this.

It would start with a shock weekend announcement. First question: would it be an agreed or hostile exit? Assume agreed, as a hostile one would unleash chaos, with runs on eurozone banks, not least in Portugal, Ireland, Spain and Italy. But who would Greece agree it with – given the dangers of leaks?

Miles Saltiel, the lead author of the Adam Smith Institute’s entry for the Wolfson prize, envisages Greece holding a “relatively last-minute conference call with about a dozen people”. They might include ECB chief Mario Draghi, Germany’s Angela Merkel and whoever is then in charge of France – or, more likely in Saltiel’s view, their civil service representatives. The IMF would probably be in on the call too.

:lol::lol:

The danger of leaks I'm sure the Greek political elites have been very busy getting their cash out of the Greek system.

It will probably be the worst kept secret of all time. We'll have endless denials from the elites before it happens. I really can't see them swallowing their pride until the bitter end.

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The danger of leaks I'm sure the Greek political elites have been very busy getting their cash out of the Greek system.

It will probably be the worst kept secret of all time. We'll have endless denials from the elites before it happens. I really can't see them swallowing their pride until the bitter end.

I am bored with Greece now.

It keeps promising to blow up the global financial system but never delivers. A bit like those Greek waiters who promise to take British girls to Heaven and back, but who only make it as their hotel bedroom. :blink:

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I am bored with Greece now.

It keeps promising to blow up the global financial system but never delivers. A bit like those Greek waiters who promise to take British girls to Heaven and back, but who only make it as their hotel bedroom. :blink:

the thing about greece is that nothing has changed, just the loans extended and moved to a different lender, the lender of last resort, the question is can that lender support spain, ireland, portugal and italy.

what happens when greece needs another 130bn, and then the whole Greek national debt is covered by the ECB and IMF and is still growing.

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http://uk.reuters.com/article/2012/03/28/uk-markets-greece-imf-idUKBRE82R17J20120328

Greece must tackle its aversion to mandatory redundancies and the closure of public entities if it is to fully escape its debt crisis, the country's International Monetary Fund mission chief said in London on Wednesday

It won't escape the debt crisis until it defaults.

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Just when you thought it couldnt get any worse in Greece take a look at this.

Update: Greek retail sales

Just after I wrote this post these were released and what a grim tale they tell.

The retail trade volume index, including automotive fuel, decreased by 10.3% in January 2012 compared with January 2011. The Index in January 2011 recorded a decrease of 16.1% compared with January 2010 .

For those who follow the underlying index then it is now at 79.6 where the base is 2005=100.

http://www.mindfulmoney.co.uk/wp/shaun-richards/greece-has-shown-us-how-consumer-and-producer-inflation-combined-with-wage-deflation-is-a-toxic-mix/

Chilling isnt it? Where is the improvement we keep being promised by her government and the Euro zone.....?

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Just when you thought it couldnt get any worse in Greece take a look at this.

http://www.mindfulmoney.co.uk/wp/shaun-richards/greece-has-shown-us-how-consumer-and-producer-inflation-combined-with-wage-deflation-is-a-toxic-mix/

Chilling isnt it? Where is the improvement we keep being promised by her government and the Euro zone.....?

So if the base is 2005 and it's now 79.6, where does that place the Greek economy? 2000? Or earlier?

Edited by interestrateripoff

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So if the base is 2005 and it's now 79.6, where does that place the Greek economy? 2000? Or earlier?

Yes, it's being internally devalued back to the stone age.

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Just when you thought it couldnt get any worse in Greece take a look at this.

http://www.mindfulmoney.co.uk/wp/shaun-richards/greece-has-shown-us-how-consumer-and-producer-inflation-combined-with-wage-deflation-is-a-toxic-mix/

Chilling isnt it? Where is the improvement we keep being promised by her government and the Euro zone.....?

Fom the comments.

Hi Shaun a good analysis of the failings of current economic theories, as being implemented in the Eurozone. Theories are one thing, the reality is how it affects the lives of ordinary citizens. It seems a gratuitously cruel experiment with youths and pensioners playing the roles of the lead laboratory rats. I just wonder how long it is until the rats wake up and make good their escape?

Talking of inflation, I guess you've seen the excellent article on the subject this week from your blogosphere nextdoor neighbour Simon Ward?

"In a Guardian interview a year ago the MPC’s leading dove, Adam Posen, predicted that inflation would tumble to 1.5% by the middle of 2012 and stated that: “If I have made the wrong call, not only will I switch my vote, I would not pursue a second term.” Will Dr. Posen honour his pledge or try to shift the goalposts by appealing to economic weakness or claiming his forecast was blown off course by yet more “one-off” shocks?"

I like Simon's use of the term "economic weakness" meaning more inflation, I guess he sees things the same way as you! H But, has Posen got any "wriggle room" do you think, or will he be bidding us, the MPC and his index linked pension au revoir?

Edited by billybong

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Fom the comments.

Theories are one thing, the reality is how it affects the lives of ordinary citizens. It seems a gratuitously cruel experiment with youths and pensioners playing the roles of the lead laboratory rats. I just wonder how long it is until the rats wake up and make good their escape?

Jane T posts good stuff from that blog. It's nof theory anymore, is it. Portugal, Spain, Greece . . . not forgetting Latvia, where the economy shrunk 29% and 10% of the workforce left the country . . . kinda proves that internal devaluation is a self-defeating social holocaust.

But Merkel knows best.

Greek bailout 3 is coming sooner than anyone thinks. Along with total anarchy.

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You would think Stagflation had never occurred.

Producers cannot reduces prices below the level at which they are able to make a profit.

And if fixed costs are rising then prices will rise no matter how weak the demand is.

:blink:

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Jane T posts good stuff from that blog. It's nof theory anymore, is it. Portugal, Spain, Greece . . . not forgetting Latvia, where the economy shrunk 29% and 10% of the workforce left the country . . . kinda proves that internal devaluation is a self-defeating social holocaust.

But Merkel knows best.

Greek bailout 3 is coming sooner than anyone thinks. Along with total anarchy.

To be fair, the only way out of this is to dismantle everything that was done in the last 30-40 years

And none of the current crop of politicians is prepared or capable of doing this.

Whatever happens it isn't going to end well.

:(

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