THE GREAT BIG FAT GREEK THREAD

[copydude]

http://uk.reuters.com/article/2011/07/22/uk-eurozone-idUKTRE76J7V120110722

Just a temporary default...

'Temporary' . . . too damn right. How long did it take them to blow the last 100bn? And this time around, Greece has double the debt to service.

The funny part is, Fitch has had to think up a new rating. They're going to call it 'RD' . . . restrictive default. Anything but B=Bust.

It's insane.

109bn just to buy time . . . maybe as little as six months.

Hope Eurozone taxpayers think it's worth it.

[interestrateripoff]

109bn just to buy time . . . maybe as little as six months.

Hope Eurozone taxpayers think it's worth it.

It may be less than that Spain / Italy will be next in the cross hairs read somewhere today bond prices are already going up, the junkie needs feeding.

[aa3]

I saw a picture of the prime minister of Greece in the Guardian today.. he was smiling ear to ear. A bunch of foreigners just gave his country $13,700 USD for every citizen in Greece. $54,800 for your average Greek family of 4.

Next year Greece will be back and they can play the same trump card. Greece really is the greatest country in the world. Incredible beaches, the mediteranian, Islands, hot olive skinned women.. and now they offcially don't need to bother working. The Northern Europeans have got the tab.

The first 10 years they just ran the credit lines up, now they are getting bailed out.

No wonder a lot of the interesting music I listen to is from Greece, along with interesting political thought. They've got time to hang out in the sun and think about things. Like the philosophers thousands of years ago. The Germans are happy to work hard in the factories, but need someone to buy their stuff. Which the Greeks are happy to do.

[pl1]

This today from CNBC

Greek Bailout May Not Be Cure-All That Europe Hopes

A second international bailout is likely to stop a sharp rise of Greece's public debt and prevent any disorderly default in the near term. But it may not be enough to avoid a painful debt restructuring sometime in coming years.

Economists said the steps announced by euro zone leaders on Thursday, including cheaper bailout loans and a contribution by private investors, would prevent Greek debt from surging to 172 percent of gross domestic product next year as the International Monetary Fund ( [cnbc explains] ) forecast earlier this month.

The debt is now at about 150 percent, having soared from 127 percent in 2009 to 143 percent last year.

But the second bailout is not the game-changer that some European Union policymakers have claimed, and Greece will probably continue to struggle with high debt for many years.

"A full-scale default is avoided, for now. A full-scale default with a proper haircut (cut in the principal amount) is still, in our view, inevitable," UBS senior economist Paul Donovan said in a report. "It may be next year, it may be the year after, but Greece will have to haircut its debt by around 50 percent at some point to have any hope of credibility."

On the day John Boehner walked away fom talks with Obama over tax rises. Boehner said: "The president is emphatic that taxes have to be raised. As a former small businessman, I know tax increases destroy jobs."

However, I predict YAEHD (yet another 11th hour deal) on the debt ceiling by around Tuesday of next week.

Edited July 23, 2011 by pl1

[aa3]

I don't think they can ever allow a default on Greek bonds, even a partial one. Because then it sets a precedent in the European Union. Even if Greek debt is 800% of GDP, they will still have to do the next bailout.

Its sort of funny the powers that be trying to spin this bailout as a game changer.

[winkie]

I don't think they can ever allow a default on Greek bonds, even a partial one. Because then it sets a precedent in the European Union. Even if Greek debt is 800% of GDP, they will still have to do the next bailout.

Its sort of funny the powers that be trying to spin this bailout as a game changer.

The problem is only being pushed further into the future......and all the while all they can realistically do is keep spending like everyone else.....

[interestrateripoff]

http://uk.reuters.com/article/2011/07/23/uk-eurozone-france-baroin-idUKTRE76M1JG20110723

France will not need to introduce austerity measures in response to increased debt exposure from the euro zone's new rescue plan for Greece, its finance minister said on Saturday.

Francois Baroin said in an interview with French daily Le Monde that the government would be able to maintain its deficit reduction targets and would not be "impoverished" as a result of the bailout.

Well thank god for that.

[aa3]

One thing that was impressive to me was how fast France surrendered in the game of chicken that was played with Greece. Remember back a few months ago when German politicians were saying no more bailouts and maybe Greece should sell some of those Islands to Germany? And Angela Merkel was saying there may need to be haircuts?

Then the Greek people were rioting and protesting, and their politicians had their own statements against austerity? And Greek politicians were saying maybe they should leave the Euro.

But then France joined the negotiations and on the first day Sarkozy said no defaults can be allowed period -whatever the cost. Insta-surrendering any position. Soon after Greece upped their demands from 70 billion Euros to 120 billion Euros.

My guess is the French banks are ridiculously exposed to the PIIGS. And also not well known is how huge France's big banks are. Germany has one big bank, Deutche bank. But Germany is rich enough to handle basically any conceivable defaults. France has a number of giant banks.. luckily France is a very rich and successful industrial nation, but even so there may be a level of pain they can't survive.

[theonlywayisdown]

so whens bailout number 3 happening?

[erranta]

so whens bailout number 3 happening?

I skimmed & read about the old 50 year debt Jubilees that they used to have in the middle ages - "All debts of the poor were cancelled"

Maimonides, a sage of the Middle Ages, explained that “the law of limitation, which cancelled all debts, was a provision for the poor, that they not be always enslaved to their rich creditors.”

You shall make the trumpet sound throughout all your land…

And you shall hallow the fiftieth year,

And proclaim liberty throughout all the land,

unto all the inhabitants thereof:

it shall be a jubilee for you:

and you shall return every man unto his possession

and you shall return every man unto his family

- Leviticus 25:9,10

Another 'hidden' meaning of "Old Hallows" - cos debt jubilees are a ghost of the past?

Although the phrase All Hallows is found in Old English (ealra hālgena mæssedæg, mass-day of all saints), All-Hallows-Even is itself not attested until 1556

A night of Apple BOBbing & Divination

Josephus, a Jewish historian of the first century, stated that “Jubilee means freedom”:

The fiftieth year is called by the Hebrews Jubilee, in which debtors are freed from their debts, and freedom is granted to slaves… and he (Moses) also restores fields to their original owners… this name (Jubilee), by the way, means freedom.

Iubely is of this Hebrew word Iobel,

which in English, signifieth a trumpet:

A yeare of singuler mirth and ioy,

and of much reste.

- Marbeck, 1581

The word “jubilee” comes from the Hebrew word yobel, the ram’s horn trumpet which was blown to inaugurate the year.

the 7th day = the sabbath

the 7th year = the sabbatical year

the 50th day (7 x 7)+1 = the day of Pentecost

the 50th year (7 x 7)+1 = the year of Jubilee

It was on this Day of Atonement that the actual release of slaves and cancellation of debt took place, although the Jubilee began on the first day of the year.

The 7th year Sabbatical

"Philo Judaeus, of Alexandria, an eminent philosopher and writer who was born about 20 B.C., pointed out that one effect of these fallow years was to deprive tax collectors and governors of most of their revenue:"

Maybe we should force these on the money lenders again!

[erranta]

One thing that was impressive to me was how fast France surrendered in the game of chicken that was played with Greece. Remember back a few months ago when German politicians were saying no more bailouts and maybe Greece should sell some of those Islands to Germany? And Angela Merkel was saying there may need to be haircuts?

Then the Greek people were rioting and protesting, and their politicians had their own statements against austerity? And Greek politicians were saying maybe they should leave the Euro.

But then France joined the negotiations and on the first day Sarkozy said no defaults can be allowed period -whatever the cost. Insta-surrendering any position. Soon after Greece upped their demands from 70 billion Euros to 120 billion Euros.

My guess is the French banks are ridiculously exposed to the PIIGS. And also not well known is how huge France's big banks are. Germany has one big bank, Deutche bank. But Germany is rich enough to handle basically any conceivable defaults. France has a number of giant banks.. luckily France is a very rich and successful industrial nation, but even so there may be a level of pain they can't survive.

le coq gaulois - no chikins

"Jesus predicted that Peter would deny him three times before the rooster crowed on the following morning. At the rooster's crowing, Peter remembered Jesus's words.

Its crowing at the dawning of each new morning made it a symbol of the daily victory of light over darkness and the triumph of good over evil. It is also an emblem of the Christian's attitude of watchfulness and readiness for the sudden return of Christ, the resurrection of the dead, and the final judgment of humankind.

That is why, during the Renaissance, the rooster became a symbol of France as a Catholic state and became a popular Christian image on weathervanes, also known as weathercocks."

[Vagabond]

One thing that was impressive to me was how fast France surrendered in the game of chicken that was played with Greece.

Indeed. After all, its not like the French to ever surrender quickly.

[wonderpup]

Just a thought- if everyone's now too big to fail, have we in fact created a free market version of perpetual motion? From now on it's pure profit all the way, with any loss shunted off into one of those nth dimensions so beloved of string theory.

When they talked about the city and the big bang, I thought it was metaphorical, but in reality we have a financial structure now that rivals quantum mechanics both in complexity and in the obscurity of it's structure- banking has become the new frontier of the improbable, where entire economies float free from the constraints of laws , both natural and man made- a world in which balance sheets seem to exist in one form only to be radically transformed should any direct observation take place. And where entangement effects prevail so that once this observation has taken place it instantly changes the state of other balance sheets in remote distant locations...

Now, where is that nuclear explosion picture....

[interestrateripoff]

http://www.telegraph.co.uk/finance/financialcrisis/8658331/Angela-Merkel-faces-revolt-in-Germany-over-rescue-deal.html

Frank Schäffler, finance chair for the Free Democrats (FDP) in the ruling coalition, said the summit deal threatened "the castration of Germany's parliament" by shifting budget power to Europe.

Jens Weidmann, the Bundesbank's chief, said the accord exposes Germany and other creditor states to "sizeable risks" and greatly alters the EU's constitutional landscape.

"The euro area has taken a big step toward a collectivisation of risks. This weakens the foundations of a monetary union where each is responsible for its own budget.

Looks like the bailout which has been agreed might not yet get German approval still I'm sure it's bought enough time to see us through the summer holidays.

[19 year mortgage 8itch]

http://www.guardian.co.uk/business/2011/jul/24/greece-seeks-money-held-foreign-banks?CMP=twt_fd

Greece urges citizens to repatriate money held in foreign banks

An estimated €15bn is believed to have left Greece as high-income earners moved their money abroad

[Guest spp]

http://www.guardian.co.uk/business/2011/jul/24/greece-seeks-money-held-foreign-banks?CMP=twt_fd

Greece urges citizens to repatriate money held in foreign banks

An estimated €15bn is believed to have left Greece as high-income earners moved their money abroad

[Ned Coates]

No wonder a lot of the interesting music I listen to is from Greece, along with interesting political thought. They've got time to hang out in the sun and think about things. Like the philosophers thousands of years ago. The Germans are happy to work hard in the factories, but need someone to buy their stuff. Which the Greeks are happy to do.

Yes they really are dreadful people as is evidenced by the terrible rates of greek child abuse and sexual murders when compared to the rates in northern europe and other outstanding nations like the usa. Oops.

Perhaps the difference is what happens when humans kick about reflecting on what is right or wrong rather than bending over as slaves to their 'masters'. Unlike others the greeks got out there and forced democracy on those that would otherwise shaft them even more than they had previously. A lot of english could learn from that.

And no they won't be paying that money back.

Edited July 25, 2011 by Ned Coates

[interestrateripoff]

http://www.telegraph.co.uk/finance/financialcrisis/8656572/Eurozone-debt-crisis-Europes-politicians-will-be-punished-for-a-deal-dripping-with-moral-hazard.html

Strange as it may sound, the first time I got up close and personal with George Papandreou was at the cinema. The Greek prime minister had a front row seat as James Cameron showed off his 3D blockbuster Avatar in Davos for the World Economic Forum last year. This was right at the start of the Greek economic crisis and I confess I originally assumed he was indulging in a bit of escapism.

In retrospect, this was wrong. What better way to prepare for an International Monetary Fund "rescue" than to watch a film about a people fighting off invasion by wealthy Westerners intent on plundering the country and making its people suffer? As we sat there goggling in our 3D specs, none of us clocked on to the fact that Papandreou was in fact on a research mission.

Yes making people suffer by giving them even more free money.

[JaneTracy]

It seems that the ratings agencies are now responding to last weeks official moves on Greece. From twitter.

Moody’s Investors Service has today downgraded Greece’s bond ratings to Ca from Caa1 and has assigned a developing outlook to the ratings

@notayesmansecon

[interestrateripoff]

http://www.guardian.co.uk/business/2011/jul/25/greek-default-almost-certain-moodys

Ratings agency Moody's has cut Greece's debt rating by three notches to Ca on Monday, leaving it just one notch above what is considered default, and said the chance of a default is now "virtually 100%".

Virtually 100%

[CrashInHand]

Looks like the bailout which has been agreed might not yet get German approval still I'm sure it's bought enough time to see us through the summer holidays.

Just as long as I get my euro summer holday this year.

Tho next year I am looking forward to a more madmaxesque journey.... to the shops.

[copydude]

http://www.wilmott.com/blogs/satyajitdas/index.cfm/2011/7/23/French-Connections--The-Greek-Bond-Exchange

French banks have exposures to Greece, including of around Euros 50-60 billion. German banks have exposures of around Euro 30-35 billion. These banks might result require new capital to absorb the writedowns.

If necessary, then the French and German governments would need to provide this capital. In effect, rather than lending to Greece, it would have to use the funds to recapitalise its own institutions. This would, in the final analysis, be more sensible than continuing with the farce.

Does anyone know enough to say if the math makes more sense in the above scenario? I don't think so, from a French or German point of view.

My reading is that, under the EU's new collectivisation of debt, all EU taxpayers contribute to bank bailouts, plus Greek taxes and asset sales, not just (as in the scenario above) French and German taxpayers re-capitalising their own banks. This is an indirect bailout of French and German banks after all, but paid for by many different nationals.

Now, having bought some time over the summer, are a few Eurozone countries (and taxpayers) going to ponder about the morality and fairness of it all?

]It's sort of funny the powers that be trying to spin this bailout as a game changer.

But it is, if you think about it, aa3. It is reinforcing the idea of the 'collectivisation of debt' and establishing the principle that banks now have not one but two backstops: first bailed at sovereign level - which many German Landesbanks have been already, and then at European level. Banks can't lose, however recklessly they lend.

So, now banks are not just holding individual countries to ransom, but the whole of Europe. Why should Latvians or Estonians pick up a tab for the profligacy of Societe Generale or Credit Agricole, never mind Greeks who don't bother filling in their tax forms?

When do EU taxpayers start kicking up about this? The EU is becoming like the old World War 1 coin, 'If you can't take a joke, you shouldn't have joined'.

Personally, I don't think Merkel could ever have sold recapitalising German banks to German taxpayers. If you ever see a copy of Bild, they never put the word 'banker' in a headline. It's always, 'Greed Banker'. (German version of Bankster.) See the headlines on the current Gribkowsky scandal at BayernLB, bailed once already for 15bn. By rescuing Greece (laugh) via the EU it kinda makes bailing seem more remote. Or less obscene?

This whole business of backstopping banks - now not once, but twice - has got to stop, surely. They're private, limited liability companies for heaven's sake. Reckless lending is their problem, not that of taxpayers in 25 other foreign states, who are mostly cash-strapped into oblivion anyway.

Is this whole thing insane and immoral, or is it just me?

Edited July 25, 2011 by copydude

[Bloo Loo]

Does anyone know enough to say if the math makes more sense in the above scenario? I don't think so, from a French or German point of view.

My reading is that, under the EU's new collectivisation of debt, all EU taxpayers contribute to bank bailouts, plus Greek taxes and asset sales, not just (as in the scenario above) French and German taxpayers re-capitalising their own banks. This is an indirect bailout of French and German banks after all, but paid for by many different nationals.

Now, having bought some time over the summer, are a few Eurozone countries (and taxpayers) going to ponder about the morality and fairness of it all?

But it is, if you think about it, aa3. It is reinforcing the idea of the 'collectivisation of debt' and establishing the principle that banks now have not one but two backstops: first bailed at sovereign level - which many German Landesbanks have been already, and then at European level. Banks can't lose, however recklessly they lend.

So, now banks are not just holding individual countries to ransom, but the whole of Europe. Why should Latvians or Estonians pick up a tab for the profligacy of Societe Generale or Credit Agricole, never mind Greeks who don't bother filling in their tax forms?

When do EU taxpayers start kicking up about this? The EU is becoming like the old World War 1 coin, 'If you can't take a joke, you shouldn't have joined'.

Personally, I don't think Merkel could never have sold recapitalising German banks to German taxpayers. If you ever see a copy of Bild, they never put the word 'banker' in a headline. It's always, 'Greed Banker'. (German version of Bankster.) See the headlines on the current Gribkowsky scandal at BayernLB, bailed once already for 15bn. By rescuing Greece (laugh) via the EU it kinda makes bailing seem more remote. Or less obscene?

This whole business of backstopping banks - now not once, but twice - has got to stop, surely. They're private, limited liability companies for heaven's sake. Reckless lending is their problem, not that of taxpayers in 26 foreign states, who are mostly cash-strapped into oblivion anyway.

Is this whole thing insane and immoral, or is it just me?

tanks on the Street didnt happen today in the US, as Timmy and Obama said they would need if they didnt do a debt ceiling deal over the weekend.

The promised crash in markets hasnt happened...down 1% maybe....but, the threat, as always, was empty.

[copydude]

The promised crash in markets hasnt happened...down 1% maybe....but, the threat, as always, was empty.

Of course. The real threat is to Eurozone taxpayers . . .

Big Fat Greek Fudge Still Waiting For Fat Lady

Interesting. The Netherlands Opposition parties have only just discovered that the Netherlands is coughing up for Greece 'should it default'. The ECB ain't riskin' nothin'.

Dutch opposition MPs have reacted with irritation to the news that the Finance Ministry has again given parliament misleading information about the new EU support package for Greece, website nu.nl reports on Monday.

Earlier it emerged finance minister Jan Kees de Jager had kept quiet about a loan guarantee included in the package because of fears about the financial markets' reaction.

The omission concerns a €35bn guarantee from eurozone countries to the European Central Bank.

Now about that E35bn guarantee. It is put up by the six (only six) out of 26 Euro member states who have a triple AAA rating. Well, better for their taxpayers to pick up the tab than anyone else's, okay? Oh, not okay? The funny part is that these countries have to vote on it, so . . .

ESFS May Not Be Ready To Lend To Greece

BRUSSELS(Dow Jones)--The euro zone's sovereign rescue fund may not be ready to pay the next batch of loans due to Greece by mid-September, euro-zone officials said, requiring Italy and Spain to lend directly to Greece even as both countries face alarmingly high borrowing costs themselves.

The issue was discussed by euro-zone finance officials in a conference call Thursday, including the possibility that Italy and Spain would opt out of making the next payment, one official said.

The Eurozone guarantors require a vote before guaranteeing an ECB loan, so the EU wants Spain and Italy to lend the Greeks some cash meantime . . .

Some mistake, surely?

[Deckard]

... requiring Italy and Spain to lend directly to Greece even as both countries face alarmingly high borrowing costs themselves.

In other words, Italy and Greece are expected to fork out so that Greece can borrow for 10 years at 3.5%., while they are paying over 6%?

gotta love the Eurozone