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Germany Humiliates Itself By Conceding To A Second Greek Bailout(Zerohedge)

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"Germany is considering dropping its push for an early rescheduling of Greek bonds in order to facilitate a new package of aid loans for Greece, according to people familiar with the matter.Berlin's concession that it must lend Greece more money, even without burden-sharing by bondholders in the short term, would help Europe overcome its impasse over Greece's funding needs before the indebted country runs out of cash in mid-July."

http://www.zerohedge.com/article/germany-humiliates-itself-conceding-second-greek-bailout-eur-predictably-jumps-briefly

My comments: Greece has been negotiating very well. Greek hinted strongly they were willing to leave the Euro, the trump card. So now Germany looks to be caving and agreeing to give Greece any amount of money it wants. Well by giving, I mean the ECB will print up the number.

I honestly think that will be the plan, just keep bailing out and trying to get whatever concessions they can in a game of chicken. But at the end of the day the Euro can't handle a default by even one member. In the short run the Euro zone has a lot of capacity left to bailout. They could do giant bailouts every few months and be fine.

If the printed money got too great, all they would have to do is raise the base rate in the Eurozone a little to compensate.

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http://www.zerohedge...y-jumps-briefly

My comments: Greece has been negotiating very well. Greek hinted strongly they were willing to leave the Euro, the trump card. So now Germany looks to be caving and agreeing to give Greece any amount of money it wants. Well by giving, I mean the ECB will print up the number.

I honestly think that will be the plan, just keep bailing out and trying to get whatever concessions they can in a game of chicken. But at the end of the day the Euro can't handle a default by even one member. In the short run the Euro zone has a lot of capacity left to bailout. They could do giant bailouts every few months and be fine.

If the printed money got too great, all they would have to do is raise the base rate in the Eurozone a little to compensate.

and the next round of bail outs is when??.

You see, a bail out is supposed to be that....a cure, a fix to the leak.....this is the 3rd or is it 4th "bail out"? trouble with these "bailouts" is that they are adding to the water already in the boat, but the pumps havent got any faster.

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Those pesky protesters are still there in the centre of Athens again this morning. The roads to there are still closed. Both sides have been at this peaceful protest since last friday.

I wonder if they are helping to focus minds of those at the private meetings? It's a pity they weren't involved when the original crime was commited by the politicians and bankers really.

It might have prevented it happening in Greece at least.

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and the next round of bail outs is when??.

You see, a bail out is supposed to be that....a cure, a fix to the leak.....this is the 3rd or is it 4th "bail out"? trouble with these "bailouts" is that they are adding to the water already in the boat, but the pumps havent got any faster.

Next bailout is when Greece, Ireland and Portugal have blown through the first bailouts. So about 10 months from now. Or in Greece's case right now.

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Germany benefits too much from the Eurozone. So threats to leave by the likes of Greece, carry some leverage. At some point a limit will be reached, but that point could be years from now. Who really knows?

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It's nothing to do with how well Greece played.

It's a politicians versus ECB battle. ECB will not countenance any discussion of restructuring of any sort right now. So what are they left with - more loans and tougher, more invasive measures.

more likely, highly indebted banks in France and Germany have a pile of CDS that they couldnt possibly cover, on Greek debt.

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http://www.zerohedge.com/article/germany-humiliates-itself-conceding-second-greek-bailout-eur-predictably-jumps-briefly

My comments: Greece has been negotiating very well. Greek hinted strongly they were willing to leave the Euro, the trump card. So now Germany looks to be caving and agreeing to give Greece any amount of money it wants. Well by giving, I mean the ECB will print up the number.

I honestly think that will be the plan, just keep bailing out and trying to get whatever concessions they can in a game of chicken. But at the end of the day the Euro can't handle a default by even one member. In the short run the Euro zone has a lot of capacity left to bailout. They could do giant bailouts every few months and be fine.

If the printed money got too great, all they would have to do is raise the base rate in the Eurozone a little to compensate.

Well any printing of the Euro would be fiscal policy by the back door - it would be a hidden tax on all other Euro countries, to bail out Greece.

TBH though, I think Greece is too far gone anyway. It seems like a matter of time before it defaults.

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Germany benefits too much from the Eurozone. So threats to leave by the likes of Greece, carry some leverage. At some point a limit will be reached, but that point could be years from now. Who really knows?

or more the case, germany has worked hard , has a high domestic savings rate and a trade surplus.

a bailout means that the ECB will print money and give it to greece, diluting the value of the euro and germanys savings.

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Well any printing of the Euro would be fiscal policy by the back door - it would be a hidden tax on all other Euro countries, to bail out Greece.

TBH though, I think Greece is too far gone anyway. It seems like a matter of time before it defaults.

I just dont understand and bow to the inevitable. Greece is never going to be able to raise enough tax to pay its expenditure plans. Anyone who lends to it is just deluding themselves.

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This really is excellent news, for a moment there I thought we were fukced...

It takes a great mind to solve a debt problem with even more debt - so obvious when you think about it and nothing can possibly go wrong either!

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And of course the Euro's shooting up on the news over a percent against the dollar and a percent and a half against the yen. What a ******ing bunch of half wits - ITS NOT GOING TO SOVE ANYTHING :angry:

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or more the case, germany has worked hard , has a high domestic savings rate and a trade surplus.

a bailout means that the ECB will print money and give it to greece, diluting the value of the euro and germanys savings.

They also loaned a lot of money to Greece - oops!

Recycling surplus cash into countries running deficits, just so that you can accumulate a greater surplus is a fools game. China is discovering this, as is Germany.

http://online.wsj.com/article/SB10001424052748703798904575069712153415820.html

...

German and French banks carry a combined $119 billion in exposure to Greek borrowers alone

...

According to the sources I have read (http://www.housepricecrash.co.uk/forum/index.php?showtopic=164368&view=findpost&p=3004466), Greek broad money is about €200bn (about $290bn). This would suggest that German and French banks are on the hook for nearly half of this, if my conclusions are correct.

Edited by Traktion

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In the short run the Euro zone has a lot of capacity left to bailout. They could do giant bailouts every few months and be fine.

Yup. Get ready for $10 per liter gas and $20 loaves of bread. We're all in this together.

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More debt on top of endless unpayable debt until the back of the camel breaks or pull the plug now and set off a domino effect that sees the euro collapse? Golden.

This is now kicking the can down a very short cul-de-sac. Would a Greek exit trigger a domino? If it solved the problems (for the Greeks, I mean) then quite possibly.

More and more economists believe that this is a solution. This article - Why Greece Should Reject the Euro - is interesting.

It cites the case of Argentina:

“For more than three and a half years Argentina had suffered through one of the deepest recessions of the 20th century……Then Argentina defaulted on its foreign debt and cut loose from the dollar. Most economists and the business press predicted that years of disaster would ensue. But the economy shrank for just one more quarter after the devaluation and default; it then grew 63 percent over the next six years. More than 11 million people, in a nation of 39 million, were pulled out of poverty”

Currently, the bailouts only offer a very short term fix. All they can guarantee is years of austerity. The IMF calls Latvia 'a success story' but 90% of the impoverished population wouldn't agree. The Euro peg was largely responsible for creating the problem.

As the scenario in Europe becomes increasingly one of The Euro versus The People, politicians may have to change their ideas.

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This really is excellent news, for a moment there I thought we were fukced...

It takes a great mind to solve a debt problem with even more debt - so obvious when you think about it and nothing can possibly go wrong either!

You can almost smell the genius of Gordon Brown behind it :D

(Note: it wasn't easy typing the above, had to disconnect brain for a few seconds)

The only question left now is will Germany go for the 100th anniversary European tour on 2014?.

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they can bail them out however many times they need to

it's just numbers on a computer screen at the end of the day

If that is the case, then why bother bailing, as a default is just as meaningless.

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No it isn't

No, it isn't the same as numbers on a screen when creditors talk of forcing privatisation, a nice way of putting 'seizing assets'. Will six thousand islands be enough?

There's that, and the talk of 'outside tax collection agents' for Greece. Will they have blue helmets, a bit like NATO peacekeepers, or might they be more like those nice people from Blackwater, employed by the Coalition Of The Willing to be in the Euro?

All loan sharking ends in ugliness.

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more likely, highly indebted banks in France and Germany have a pile of CDS that they couldnt possibly cover, on Greek debt.

At what point are the Germans/French going to decide rather than give to the Greeks to give to the German/French banks why not just cut out the middle man ?

How long this continues is dependent on the will of the people. The Greeks seem to be in no mood to have the spending cuts imposed that the Germans demand. The Germans meanwhile see the Greeks living high on the hog at their expense. Sooner or later there will be enough political capital to be made out of opposing the bailouts in Germany to end this state of affairs. Or maybe the Greeks will give up their spendthrift ways first ? Who knows ?

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  • 312 Brexit, House prices and Summer 2020

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