THE GREAT BIG FAT GREEK THREAD

[winkie]

[Traktion]

Borrowing is at the heart of banking.

BTC does NOT eliminate bankers.

Unless you can find someone willing to accept promises of Bitcoin instead of actual Bitcoin, it doesn't matter what the banks do.

The ruise of the bankers is to hoodwink people into thinking promises of cash is the same as actual cash. Through a monopoly of digital money transfers and state support through deposit guarantees, this is achieved.

I suspect that if people could easily keep their cash safe without banks and could transfer digitally to anyone directly, banks would have a much harder time.

[gf3]

I would love to know what the other PIGS are doing. Now the cat is out of the bag and they know their money is not safe in the banks.

Where Germany went wrong was when Yanis came to them with his solution they should have given him a french kiss and thanked him and let him get on with it. Now they have just made a bad situation worse.

[copydude]

Could it be that there was a tourist boom because it was cheap/good value for money?......maybe self catering will be the best way now to go.

.....It would be an even more popular tourist destination if not for the euro.

The Euro was overvalued at introduction. Essentially, that lost Cyprus 250.000 plus British tourists . . . we won't talk about the rertirees. It was more of a problem in the past . . . as you know, GBP Euro was almost 1:1 after devaluation by QE. But now it's 1.4 Euro to the pound, Cyprus is relatively cheap again for Brits. But nearly twice as expensive for Russians since last year.

As far as retirees go, the bail in cost a few people a great deal of money . . . the media story that it was just naughty Russian launderers was complete nonsense. Up to 2014, Russian tourists were replacing Brits, but the hit on the rouble after Ukraine finished that . . . as it did for Greece. Cyprus has a population of around 1 million, so you can imagine the effect on GDP when half a million tourists suddenly don't turn up.

Dijsselbloem, as you know, thought the 'bail-in' was a huge success and a model for bank resolution. But now I don't know any Brits who keep their money in local banks . . . not a penny.

[cock-eyed octopus]

The debts of the Greek state could not be paid because the Greek state was bankrupt- so repayment was not an option in this case.

Fine- I have no problem with the EU bailing out it's banks- my problem is that they then handed the bill to the people of Greece- who had no legal liability to pay that bill.

Had the EU not interfered the banks would have lost their money and the debts would have been wiped out- this is how the system is supposed to work.

No- it was the EU who chose to save the banks at the expense of EU citizens- they could have let the banks lose their money- as they deserved to do- but they didn't.

The choice to make the citizens of the EU take the hit instead of the banks was a choice made by the EU itself- but lets not pretend this choice had anything to do with helping the Greek people- very little of the money ended up in Greece- most ended up paying off French and German banks.

So a bank bailout is dressed up as an aid programme to the Greeks who are then driven into destitution even more deeply by a vicious 'austerity' regime that killed off any chance of a recovery.

And all the subsequent bailouts of Greece were needed in order for the farce to continue- so we have the absurd spectacle of the EU and IMF lending money to a failed state so that that same money can be used to pay back loans they themselves have made to that same failed state in the past.

This isn't economics- it's stupidity on a continental scale.

So, the banks take the default, are now crippled, the EU is consequentially damaged, the Greek state is an undischarged bankrupt & thus incapable of borrowing more money. What happens next?

[happy_renting]

Greeks eagerly queue to deposit their life savings in trustworthy banks

[gf3]

So, the banks take the default, are now crippled, the EU is consequentially damaged, the Greek state is an undischarged bankrupt & thus incapable of borrowing more money. What happens next?

My take on this s that Germany must realise that the euro is a complete disaster and not what it wanted and leave the euro..

[wonderpup]

So, the banks take the default, are now crippled, the EU is consequentially damaged, the Greek state is an undischarged bankrupt & thus incapable of borrowing more money. What happens next?

The EU does what the US and the UK did and recapitalizes it's broken banks. As for the Greeks- well they would of course still need a bailout- but with their debts much reduced this bailout would actually go toward helping the Greeks instead of saving idiot bankers from their own folly.

The aim of this entire game from the beginning was to avoid admitting that the EU banks were broken- and the people of Greece were made to suffer to maintain this fiction.

Only a fool would imagine that a person or a state drowning in unsustainable debt could be helped by lending them even more money- and the EU apparatchiks are not that foolish. So why did they choose to lend money to a bankrupt Greece back in 2010?

Simple- they wished to cover up the degree to which their banking system was broke- so they cooked up a scheme where they would bail out their banks indirectly by forcing the Greeks to take on a massive loan which was then used to pay off those banks behind a smokescreen of 'helping' the Greek people. But the money did not stay long in Greece- it went back out almost immediately to the banks.

So the next time you hear someone talking about how the Greeks were bailed out by Europe consider the fact that from another point of view it was Europe that was bailed out by the Greeks- had they not agreed to take on the loans from the EU that were then used to save the banks the cost to the whole EU might have been a whole lot higher.

[cock-eyed octopus]

The EU does what the US and the UK did and recapitalizes it's broken banks. As for the Greeks- well they would of course still need a bailout- but with their debts much reduced this bailout would actually go toward helping the Greeks instead of saving idiot bankers from their own folly.

The aim of this entire game from the beginning was to avoid admitting that the EU banks were broken- and the people of Greece were made to suffer to maintain this fiction.

Only a fool would imagine that a person or a state drowning in unsustainable debt could be helped by lending them even more money- and the EU apparatchiks are not that foolish. So why did they choose to lend money to a bankrupt Greece back in 2010?

Simple- they wished to cover up the degree to which their banking system was broke- so they cooked up a scheme where they would bail out their banks indirectly by forcing the Greeks to take on a massive loan which was then used to pay off those banks behind a smokescreen of 'helping' the Greek people. But the money did not stay long in Greece- it went back out almost immediately to the banks.

So the next time you hear someone talking about how the Greeks were bailed out by Europe consider the fact that from another point of view it was Europe that was bailed out by the Greeks- had they not agreed to take on the loans from the EU that were then used to save the banks the cost to the whole EU might have been a whole lot higher.

Europe bailed out by the Greeks you say? Interesting.

So, you're proposing that the EU gives the banks money, & then gives the Greeks more money (which they would of course have repaid, just like they did the banks).

That sounds like the EU stumping up an awful lot of money to me. And where does it get its money from? Why, its member states of course. Some of which are a lot richer than Greece - but some are poorer.

Under your scenario the Greeks are paying nothing. Zilch. They have their bank debts written off (stupid banks, shouldn't have lent them the money, hah!) Now they're being lent more money to restructure their economy & turn it into the powerhouse that it always could have been, if only it had had the money. No chance of it coming back in a year or two asking for more money. Absolutely none

Meanwhile, all the other EU states are worse off. Some, like Germany, can take it, but you can bet their citizens will be asking some questions; others, the poor ones, will be that much poorer. Through absolutely no fault of their own. Except, perhaps, for not taking on unsustainable loans from the banks.

Sounds fair to me.

[200p]

If debt is written off, that mean the old creditors are being eaten up by the new creditors with the new loans. That's one way to displace ownership of the asset. A loan is an asset to the creditor as it pays a regular income.

[cock-eyed octopus]

If debt is written off, that mean the old creditors are being eaten up by the new creditors with the new loans. That's one way to displace ownership of the asset. A loan is an asset to the creditor as it pays a regular income.

Only if the debtor pays.

[Bloo Loo]

My take on this s that Germany must realise that their eurobanks isare a complete disaster and not what it wanted and leave the euro..

fixed.

It wasnt the Euro that needed Greek Assets purchased by the ECB, it was Banking Assets.

The currency is irrelevent.

[TheCountOfNowhere]

Ongoing Greece Deposit Run Forces ECB To Boost Greek ELA Ceiling Yet Again

Despite the imploring of Greek bankers for Greeks to "take your money out of your chests and houses – which are not safe in any case – and deposit at banks," it appears the Greek bank deposit run continues. As The ECB just announced another €900 million increase in Emergency Liquidity Assistance, strongly suggesting that in the 2 days since the last increase, banks are once again insolvent facing a liquidity crunch as the "banks are trustworthy" propaganda falls on very deaf Greek ears.

Clearly the Greeks don't trust the banks or the politicians. Rather than solving this problem by debt reduction and reforms it seems they want total system collapse.

Why did no one see this coming ?

[TheCountOfNowhere]

Greeks eagerly queue to deposit their life savings in trustworthy banks

[Damik]

My take on this s that Germany must realise that the euro is a complete disaster and not what it wanted and leave the euro..

Yes, we need to go back to Italian Liras and Greek Drachmas, which were devaluated every year by printing paper to cover government deficits. So the governments could win next elections by promising freebies. So all the savings and pensions were devaluated and pensioners lived in poverty.

Good old days when ice cream cost 1500 Liras ...

[Damik]

So the next time you hear someone talking about how the Greeks were bailed out by Europe consider the fact that from another point of view it was Europe that was bailed out by the Greeks- had they not agreed to take on the loans from the EU that were then used to save the banks the cost to the whole EU might have been a whole lot higher.

Again are you suggesting that Germany should somehow forbid Greek government to issue and sell bonds to EU banks/investors? In EU/Russian case it was called an act of war.

It was Greek government who was selling junk to EU banks and pensions funds. It is as simple as that. If Germany should be blamed for anything it should be for the acceptance of Greece into EU. It seems they are not yet evolved to run an economically self sustainable country without lying.

Every single EU country finance minister is telling Greece to reform, cut state spending and boost tax income. There is no other way.

[DungBeetle]

So was the second Greek Bailout a "private bank bailout"?

Yes and no.

Yes, a large amount of Greek Government debt disappeared off the books of the Banks around the period of the 2nd bailout, and yes the EU / ECB bailed out the Greek nation. However, much of the privately owned Greek government debt had matured and was rolled-over, so the EU / ECB became the buyer of last resort and purchased the majority of newly issued debt to cover the short-fall.

Things are never that simple.

[DungBeetle]

Again are you suggesting that Germany should somehow forbid Greek government to issue and sell bonds to EU banks/investors? In EU/Russian case it was called an act of war.

It was Greek government who was selling junk to EU banks and pensions funds. It is as simple as that. If Germany should be blamed for anything it should be for the acceptance of Greece into EU. It seems they are not yet evolved to run an economically self sustainable country without lying.

Every single EU country finance minister is telling Greece to reform, cut state spending and boost tax income. There is no other way.

+1

[copydude]

How we can already see the debt deal killing Greece

Well, this didn’t take long.

Before the ink is even dry and all the conditions agreed to, there are signs that the deal to “restructure” Greece’s debt in exchange for “reforms” is killing the economic goose that in Greece lays what are increasingly toxic fiscal and macroeconomic farts.

The evidence is data released by Booking.com, the largest travel agency in Europe, owned by Priceline Group.

As the chart below shows, the chaos surrounding the debt deal slashed the number of people willing to book vacations in Greece nearly to zero. Even now, with the situation ostensibly resolved, the number of cancellations is up nearly 20% from a year ago.

More at the link on headline

[copydude]

Every single EU country finance minister is telling Greece to reform

And tell me, how many of those FinMins are running a surplus or planning a 77% VAT hike that would crash their economy? Not one.

[Damik]

And tell me, how many of those FinMins are running a surplus or planning a 77% VAT hike that would crash their economy? Not one.

The economy is crashed when your spending is higher than your earning. You need to boost earning or cut spending. Anything else is just a left wing socialist lie ...

You can not have both without printing paper and devaluing your currency, savings and pensions. There is no other way ...

Greek economy is on the same level as Eastern European one, but with 3x bigger salaries and pensions. Something has to give and Eastern Europe is not going to subsidise Greek unsustainable life style.

Edited July 23, 2015 by Damik

[Damik]

Nice summary from BBC:

http://www.bbc.co.uk/news/business-13798000

Greece was living beyond its means even before it joined the euro. After it adopted the single currency, public spending soared.

Public sector wages, for example, rose 50% between 1999 and 2007 - far faster than in most other eurozone countries. The government also ran up big debts paying for the 2004 Athens Olympics. And while money flowed out of the government's coffers, its income was hit by widespread tax evasion. So, after years of overspending, its budget deficit - the difference between spending and income - spiralled out of control. Moreover, much of the borrowing was concealed, as successive Greek governments sought to meet the 3%-of-GDP cap on borrowing that is required of members of the euro.

Comedy gold ...

Edited July 23, 2015 by Damik

[Damik]

Nice summary from BBC:

http://www.bbc.co.uk/news/business-13798000

Greece was living beyond its means even before it joined the euro. After it adopted the single currency, public spending soared.

Public sector wages, for example, rose 50% between 1999 and 2007 - far faster than in most other eurozone countries. The government also ran up big debts paying for the 2004 Athens Olympics. And while money flowed out of the government's coffers, its income was hit by widespread tax evasion. So, after years of overspending, its budget deficit - the difference between spending and income - spiralled out of control. Moreover, much of the borrowing was concealed, as successive Greek governments sought to meet the 3%-of-GDP cap on borrowing that is required of members of the euro.

Comedy gold ...

Greek debt write offs of EU money, which could be used for more useful stuff; like social programs:

As well as these two loans, which are made in stages, the vast majority of Greece's private-sector creditors agreed to write off about three-quarters of the debts owed to them by Athens. They also agreed to replace existing loans with new loans at a lower rate of interest. In the latest agreement, Greece's lenders have found ways to shave an extra 40bn euros off Greece's debtload.

Edited July 23, 2015 by Damik

[macbeth79]

http://www.bloomberg.com/news/features/2015-07-23/how-berlin-s-futuristic-airport-became-a-6-billion-embarrassment

"Greek" has become the new word for fiasco.

[TheCountOfNowhere]

Nice summary from BBC:

http://www.bbc.co.uk/news/business-13798000

Greece was living beyond its means even before it joined the euro. After it adopted the single currency, public spending soared.

Public sector wages, for example, rose 50% between 1999 and 2007 - far faster than in most other eurozone countries. The government also ran up big debts paying for the 2004 Athens Olympics. And while money flowed out of the government's coffers, its income was hit by widespread tax evasion. So, after years of overspending, its budget deficit - the difference between spending and income - spiralled out of control. Moreover, much of the borrowing was concealed, as successive Greek governments sought to meet the 3%-of-GDP cap on borrowing that is required of members of the euro.

Comedy gold ...

Sounds strangely familiar !!!