Sunday, May 29, 2011

The leveraged buyout of Greece

Break-up of the Eurozone?

Politics is financialised, economies are privatised and economic policy is centralised in the hands of financial mangers, as under Mussolini's 'corporatism'. In essence, you borrow in order to asset-strip a country, take the money and run. Here's how it's done. It can't last, but what does that matter if you're the one with the money?

Posted by icarus @ 01:30 PM (2560 views)
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21 thoughts on “The leveraged buyout of Greece

  • The bankers are doing a “good job” of asset stripping many countries. Mostly they like dim politicians or film celebs to help them “work the magic”, in my view.

    An interesting editorial too from Merryn Somerset Webb in Moneyweek looks at financial repression (trashing of savers). This talks about the endgame for politicians who won’t stand for default and people who won’t stand for austerity.

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  • clockslinger says:

    At this rate Merryn will be up there with Thyucidides as a respected reporter of historic struggles. Last week she was a rather squeezable financial advisor and journalist. Much as we can be entertained and informed about NS&I By Ms Somerset Maughn I think the bigger issues are probably better covered by someone with a bit more reach and a longer historical view though…so I’ll re-read my Marx first!

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  • The international banksters are as good at stripping countries as Argentina and Africa are at playing football.

    Only difference is, it goes largely ignored. Heaven forbid the leader who fights for his countries independence, for cold blooded murder is

    now legal in our Orwellian world. All hail Obama, Obamah, Obaamaaahaaah!

    Peace.

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  • @ Clockslinger,

    Read Marx if you wish. The Greek people don’t want to pay taxes, or pay as little as they can. In the UK there are those companies who pay relatives based on tax haven islands for supposed “consultancy”.

    In the end, everyone wants benefits, nobody wants to pay. The politicians take the easiest route – financial repression. Senior editors have a way of making difficult topics more easily understood by the masses (like me).

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  • alan – tax/regulatory havens aren’t islands – they are very much onshore; the islands and smaller jurisdictions merely legislate loopholes in order to start a deregulatory/low-tax race to the bottom that spreads to the bigger jurisdictions, to the benefit of finance in those jurisdictions. The heavy lifting – sorting out the accountancy, sorting and shifting loadsamoney, putting deals together – is done in London, New York etc.

    And you have to distinguish between different sections of ‘the Greek people’. Take Latin America in the ’80s and ’90s. Government bonds of the bigger countries were yielding 25 – 45% in some cases. The biggest investors in those bonds turned out to be members of the oligarchies of those countries using offshore accounts. They would buy up the distressed debt at massive discounts then make enormous profits when the bonds were paid in full. The bonds were paid because those bondholders were political insiders and central bankers in those very countries pushing for full debt repayment by those countries. As you can imagine US and other western bankers got their share of the loot too.

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  • Thanks Icarus,

    I’m aware that if the eurozone does fragment, there will be a lot of people “in the know” making a massive fortune out of their knowledge, just seconds after the decisions become public….and of course, the little people pay.

    I’ve been following Michael Moore’s exploits for some time. he is always being rubbished, but tries to do something. His website is always interesting.

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  • letthemfall says:

    And of course, countries in such a state as to be unable to repay the debt were supported by international capital, which in effect gave the bankers their money, to be repaid by the populace – as pointed out by the machines of loving grace programme last week. So why do they get away with it, especially now it is becoming as plain as the noses on our faces? Because loads of people cannot apprehend it, or so it would seem.

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  • I wish someone would apprehend you, lol.

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  • Michael Moore, the overweight lightweight, who still hasn’t even got his head round the left/right paradigm.

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  • 7. alan_540 said…I wish someone would apprehend you, lol.

    ~ The sentence could never be long enough.

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  • There are plenty of us who understand we are being fleeced in “the greatest heist in history” but what can we do about it?

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  • 8. greenmind said…There are plenty of us who understand we are being fleeced in “the greatest heist in history” but what can we do about it?

    ~ Position oneself accordingly and be grateful for the knowledge that you have attained and assimilated, that’s it.

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  • markj69 str05 says:

    @8… The population has to have a change in mind-set. Too much credit and debt. What ever happened to earning the money to buy teh things you wanted? Too easy to put it on the plastic and pay later (for a small fee!).
    Everyone should tighten their belts, and only spend the cash they have. easier say than done i know, but every little helps. A journey of a thousand miles starts with just one step.

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  • @8… Operation Mayhem? Where is our British Tyler Durden?

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  • @ Greenmind,
    While the “heist” goes on, everyone else helps themselves…For example, Zuma has systemmatically looted South Africa for his mates’ benefit. Zuma allegedly took cash from Gadaffi regarding his fraud & rape trial….and guess who is now in Tripoli to broker a NATO deal for Zaif and the Gadaffi family..yup, its Zuma! If the guy had a heart for the nation he’d stay in Joburg to try and fix his broken nation – but I think he smells cash. Personal cash.

    A safe haven for cash is top class London property. Most of the big deals over the past year are foreign buyers using cash – that should continue to move house indexes the way the EAs like, shouldn’t it?

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  • markj69 – if prices rise faster than wages there are many who have to put it on plastic just to keep going, and many believed that they just had to get on the housing ladder with inadequate incomes lest they miss out and end up paying more for accommodation in the form of rent. Better to look at the other end of the telescope and ask why the financial services firms were pushing the home-ownership message so hard to the ninjas. One answer was that securitisation was such a good deal for the pushers because of tax avoidance that was a core element of it and banks couldn’t generate enough of them.

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  • “them” = securitised mortgages.

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  • These are dark forces, described in the article, and very real. The irony is that we won’t escape in the UK even though we are not in the same mess as Ireland, Spain and Greece as we still have a form of monetary sovereignty. We are being told ‘look at the PIGS, we will go the same way if we do not slash public expenditure, wages and benefits, and privatise everything in sight.’
    N

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  • clockslinger says:

    Nickb, I thought we were in the same mess, if not worse, than Spain and Ireland but for the time being we’ve got longer to pay back because of the vigorous cuts in public spending our betters have promised our owners. That means our problems, although of equal or greater size, are just not as pressing. The big bad bailiffs knock on the door is twice as far off…but will arrive just the same. In the meantime the tab is extended further. Now, is that right or not?

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  • clockslinger says:

    Alan, I mean that the “endgame” runs right through what passes for democracy based on market capitalism. The end of welfare states, an exponential increase in the gap between the rich and poor within societies, a growing loss of belief in fiat currency and exploring the limits of fractional reserve banking …all connected yet any one of those is a pretty big deal. Add in the globalised nature of capitalism and speed at which these changes are happening in once rich western countries and there is a historical shift of major proportions taking place. Inverse socialism would be a fair summary of what we have just been through courtesy of the banks and their governments, and I think Marx and Marxist writers are always more likely to give some perspective and fairly sound analysis of how those conflicts will play out given that “conflict” is the motor for Marxist analysis. Now, whatever your politics, we are not talking about dreaming up an impending socialist utopia here, far from it. Marx does economic Darwinism well and just now we are quite likely living through the economic equivalent of when the big volcano did for the large lizards and the small furry things got a bit of a run. The consequent “endgame” concerns so many factors and is so all encompassing in it’s social and political implications that envisging what kind of society might ultimately result requires a bit of historical and political perspective. I don’t think even Merryn herself would claim to have that kind of reach.

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  • Cockslinger
    The difference between us and the PIGS is that we are the sovereign and monopoly issuer of our own currency. There will always be a demand for government bonds issued in pounds, since debt denominated in sterling can always be met, and there is always a demand for pounds because UK based businesses and the UK population use them to pay taxes. The PIGS on the other hand can only issue bonds or Euros with the agreement of the ECB, in effect their national debt is equivalent to external debt. Look at Japan – for decades it has been able to support levels of national debt well in excess of 100% of GDP, nay over 200% of GDP, higher than the debt levels of the PIGS. Why? It is the sovereign and monopoly issuer of the Yen. Don’t believe the hype about the UK deficit; who benefits from this scaremongering? It’s true that our economy is in a mess, but for different reasons – it isn’t meeting the needs of most of the population re health, housing, education, employment and social services.
    Nick

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