THE GREAT BIG FAT GREEK THREAD

[R K]

I think the rule that he was referring to was "you must pay your creditors". Sort of a universial one, not EU-only.

Not a rule anywhere, ever. If there's any "rule" it is creditors must restructure unpayable debt, always.

[slawek]

I think the rule that he was referring to was "you must pay your creditors". Sort of a universial one, not EU-only.

It is not a Eurozone rule, so you can't make a Euro membership conditional on complying with it.

When Eurozone countries bought Greece debt form their banks they knew very well that they were buying a toxic debt which likely wouldn't be paid in full.

They made rationally a bad decision and can't complain when a loss is being realised.

[wish I could afford one]

Anyone got an eye on Euro futures?

Currently £1 = EUR1.41185 Link

[Venger]

More like this as a rule.. drive down asset prices and allow creditors/savers in.

Debts are retired by paying them off, " restructuring" or default. In the first case, no value is lost; in the second, some value; in the third, all value. In desperately trying to raise cash to pay off loans, borrowers bring all kinds of assets to market, including stocks, bonds, commodities and real estate, causing their prices to plummet.

The process ends after the supply of credit falls to a level at which it is collateralised acceptably to the surviving creditors. Financial assets, and all other asset-classes of value, will be selectively repudiated by default.

[rollover]

Antonis Samaras, the head of the opposition right-wing New Democracy party, has just resigned - bringing more cheer to the No campaigners.

[Guest UK Debt Slave]

It is not a Eurozone rule, so you can't make a Euro membership conditional on complying with it.

When Eurozone countries bought Greece debt form their banks they knew very well that they were buying a toxic debt which likely wouldn't be paid in full.

They made rationally a bad decision and can't complain when a loss is being realised.

Exactly

But guess who is most likely to underwrite these losses?

CLUE

It will not be the financial institutions that took the gamble and lost

[bogbrush]

Exactly

But guess who is most likely to underwrite these losses?

CLUE

It will not be the financial institutions that took the gamble and lost

Quite. They got clear ages ago.

It's a great night, I hope the end of the beginning of the end of the Euro. C'mon, Club Med, join in!

Edited July 5, 2015 by bogbrush

[Bruce Banner]

I nearly bought a house from a "Bubble" in 2006. Nice chap, had lived most of his life in England but was keen to sell-up and move to Greece which he thought promised a better standard of living for his family. Most of his net worth was tied-up in his house, which he was selling to fund his move. I wonder how it's worked out for him.

[RDW]

http://www.ig.com/uk/welcome-page

[Guest TheBlueCat]

Exactly

But guess who is most likely to underwrite these losses?

CLUE

It will not be the financial institutions that took the gamble and lost

That's not entirely accurate. European and other banks have already taken a 50% loss on their 100B holdings remember:

http://www.theguardian.com/world/2011/oct/27/eurozone-crisis-banks-50-greece

No bank outside of Greece has bought any Greek debt for its own books since then either.

[BalancedBear]

What do you do as a German politician? Take a haircut and hope that Spain/Italy/Portugal don't come knocking, or write the whole lot off?

The fact that Greece has rejected a further bailout with conditions from the EU does not mean that debts are automatically written off. Greece will have to carry on defaulting and the debts will remain outstanding.

[Eddie_George]

The fact that Greece has rejected a further bailout with conditions from the EU does not mean that debts are automatically written off. Greece will have to carry on defaulting and the debts will remain outstanding.

I mean if they exit the Euro.

[bogbrush]

The fact that Greece has rejected a further bailout with conditions from the EU does not mean that debts are automatically written off. Greece will have to carry on defaulting and the debts will remain outstanding.

Leave the euro and pay it off in Monopoly money.

[Venger]

I nearly bought a house from a "Bubble" in 2006. Nice chap, had lived most of his life in England but was keen to sell-up and move to Greece which he thought promised a better standard of living for his family. Most of his net worth was tied-up in his house, which he was selling to fund his move. I wonder how it's worked out for him.

I really doubt Greece will be trigger for UK HPC (would happily accept it though - could be a trigger for eventual hpc if it feeds through... unless they later accept some creditor terms.

I do hope there is some adjustment though, so VIs such as these boomers with their London apartment (bought cheap ages ago), move into BTL landlording, and their Greek Villa..... find leverage over-expansion paradising it with forever HPI can crush as well as lift. (Boomer.. not you Bruce, just all the ones who don't have their minds grounded in hard reality as you do.. just used in a context like the boomers on Gardeners Question Time on radio today, having a love-in talk that nice gardens make house prices go up a lot in value).

In some cases, banks will simply turn away new investors similar to Simon and Wendy Lethem, pictured, who last month borrowed £400,000 using a buy-to-let mortgage on their flat in Wandsworth, south-west London.

..The dilapidated condition of the five-bedroom Victorian house that they wanted to buy in Kent, meant the couple could not secure a mortgage against it. They would either have to sell their London property or take out a buy-to-let mortgage against it and let it. "We fell in love with [the property], but didn’t know how we would get hold of it unless we were cash buyers," Mr Lethem said.

http://www.housepricecrash.co.uk/forum/index.php?/topic/201726-will-buy-to-let-investors-be-caught-out-by-eu-rules/

http://www.thegecko.eu/booking.htm

© simon lethem 2015

There is much evidence that human expectations tend to be linear. Most of the time, most people expect current conditions to continue for the indefinite future. Wherever prosperity exists, it is natural for people to expect prosperity to continue. For this reason, much of the history of human society is a record of astonishment.

Time and again, people have marginalised their affairs, rendering themselves increasingly crisis-prone. They have gone into debt, extending claims on resources to an extreme that could be supported only if current conditions were sustained uninterrupted into the future. Time and again these hopes have been disappointed.

[slawek]

That's not entirely accurate. European and other banks have already taken a 50% loss on their 100B holdings remember:

http://www.theguardian.com/world/2011/oct/27/eurozone-crisis-banks-50-greece

No bank outside of Greece has bought any Greek debt for its own books since then either.

You are right but that was only a part of the debt. Bank exposure to Greece was around 200bln so they got away with 25% loss. That was still a good deal for them.

[The Masked Tulip]

So the Germans and French are going to have a meeting to decide what to do - what about all the other EU countries' leaders?

[Peter Hun]

Leave the euro and pay it off in Monopoly money.

Debt will be repayable in Euros. The creditor nations will have to decide to write it off, which they don't have to. Ever.

[onlyme2]

[happy_renting]

So.... has the can just kicked back?

[workingpoor]

So the Germans and French are going to have a meeting to decide what to do - what about all the other EU countries' leaders?

I think the German and French banks have the most exposure it's more like a "shit what do we do now?" meeting lol

[thecrashingisles]

So.... has the can just kicked back?

Some idiot decided to try a can opener and now the worms are running amok.

[Silverfinger]

Merkel will respect the will of the Greek people.

[bankstersparadise]

But the polls predicted a dead heat

Deja vu or what?

Pollsters eh? After our own general election result, you'd have to be clinically insane to believe any polls anywhere in the northern hemisphere

They are all rigged

Humans are competetive and we like to win, I think it's a result of Darwinian natural selection a few thousands years before the profligacy of the welfare state, when resources were scarce. Therefore it is clear VIs want to make themselves look strong in the polls in the hope people back the (inevitable) winner.

This is what we have seen in Greece, "don't be mad, why go against the crowd and vote No?". It is also what happened in Brazil last year, in Russia every election and also Argentina right now.

The UK GE recently was different as the VIs had to frighten the English into thinking Nicola "braveheart" Sturgeon was coming for their wives and daughters.

[bogbrush]

Debt will be repayable in Euros. The creditor nations will have to decide to write it off, which they don't have to. Ever.

Offer what you can, creditors can take it or leave it.

I guess if it means the ECB won't lend them more in the future that's a price they'll have to pay

Edited July 5, 2015 by bogbrush

[long time lurking]

So the Germans and French are going to have a meeting to decide what to do - what about all the other EU countries' leaders?

Late-night talks

Posted at22:19

We are still waiting for the final result in Greece - just under 90% of the votes have been counted - but diplomatic talks are already under way.

A statement by the European Commission says EU chief Jean-Claude Juncker has already started talking with 18 Eurozone leaders - presumably the one left out is Greece.

On Monday morning, he will speak with Jeroen Dijsselbloem, the head of the Eurogroup, and Mario Draghi, the president of the European Central Bank.

You may have heard the term 'crucial talks about Greece's future' used in the last few weeks - it's fair to say these ones are pretty crucial too.

I take it Greece is not invited