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Greek Digest: Summary Of The Latest Blow By Blows In The Greek Drama/Tragedy/Comedy
Title of today's episode in the neverending soap opera: The Taking Of Stalingrad...er, Santorini - the Propaganda behind the scenes. From Goldman's Erik Nielsen (not his title - you see he would be fired for a joke as off-color as that).
The various factions of the European game re Greece have taken their cases - and negotiations positions - ahead of Thursday-Friday's EU summit into the public domain overnight.
-1 Commission president Barroso gave an interview to the FT (which runs today). As always in search for a workable compromise, Barroso tries to differentiate between "bail out" and "financial assistance"; the latter apparently better and more acceptable than the former. He says that he knows Merkel and that "she is a committed European and I have no doubts that she will, if needed, be in favour of providing financial assistance to Greece".
-2 Meanwhile, Westervelle, the leader of the German government junior partner, reiterated Merkel's view from Sunday that there is no need for a decision yet.
-3 News wires reported this morning that the Greek finance ministry says that Greece is fully committed to fund itself in the market, but that they expect positive results from the summit - although they will not be "going as a beggar to the summit".
-4 Trichet said last night in the European parliament that his assumption is that Greece will not be downgraded to an extent where the Greek bonds lose eligibility as collateral at the ECB, but if that assumption turns out to be "too optimistic ... then we would look at the situation". This is the first time that Trichet has acknowledged the absurdity of having the ECB's present collateral requirement regime. As you may know, I have been arguing this for years, and its coming home to roost now. Regardless of whether or not Greece gets downgraded, I expect the ECB to change their system, most likely towards a sliding scale of increasing haircuts.
-5 In one of the more unusual interventions, the Bundesbank said in its monthly report yesterday that the IMF cannot be brought to help Greece because "the IMF's mandate stipulates" that it finances temporary current account deficits. The short answer is: Look at what the IMF has been doing for the last 10-15 years - there is no serious problem for the IMF in financing a budget deficit.
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Nothing I see here of any real concern, other than some temporary instability that will settle out once the hangman's noose is seen swinging on the Gallows Pole.
http://www.youtube.com/watch?v=R1kxb1FC3Vg
Hangman, hangman, hold it a little while,
I Think I see my friends coming, Riding a many mile.
Friends, you get some silver?
Did you get a little gold?
What did you bring me, my dear friends? Keep me from the Gallows Pole.
What did you bring me to keep me from the Gallows Pole?
I couldn't get no silver, I couldn't get no gold,
You know that we're too damn poor to keep you from the Gallows Pole.
Hangman, hangman, hold it a little while,
I think I see my brother coming, riding many a mile.
Brother, you get me some silver?
Did you get a little gold?
What did you bring me, my brother, to keep me from the Gallows Pole?
Brother, I brought you some silver, yeah.
I brought a little gold, I brought a little of everything
To keep you from the Gallows Pole.
Yes, I brought you to keep you from the Gallows Pole.
Hangman, hangman, turn your head awhile,
I think I see my sister coming, riding many mile, mile, mile.
Sister, I implore you, take him by the hand,
Take him to some shady bower, save me from the wrath of this man,
Please take him, save me from the wrath of this mad, man.
Hangman, hangman, upon your face a smile,
Tell me that I'm free to ride,
Ride for many mile, mile, mile.
Oh yes, you got a fine sister, She warmed my blood from cold,
She warmed my blood to boiling hot to keep you from the Gallows Pole,
Your brother brought me silver, Your sister warmed my soul,
But now I laugh and pull so hard, see you swinging from the Gallows Pole
But now I laugh and pull so hard, see you swinging from the Gallows Pole
Swingin' on the gallows pole!
Ah-ha-ha
Swingin'
Swingin' on the gallows pole!
See-saw marjory daw
See-saw knock at my door
States better wake up very quickly. They will all be bellyup in a few years with the mandates coming down the pike just like Greece.
States need to cancel all SSA and Medicare agreements with the Federal government. The State then needs to tell people receiving benefits through any Federal government program ran under the State's plan to file a claim in or from a close neighboring State. Last State out will be the biggest loser.
All these Federal programs run from approval of the state government. No State can afford to pay the bill coming down the pike. Of course the mandatory insurance things is kind of funny..
This is what happens when all you guy promote a ponzi scheme which is using a system based on compounding interest on the your medium of exchange.
Europe is a mess. There is absolutely no way they will get anything together. The IMF is almost guaranteed to come in and for good measure, because the Europeans clearly cannot deal with their own problems...
The Macro View
http://themacroview.wordpress.com
Gotta like the way the head of the EU Commission flatters Merkel as being a ' committed European'. Does that mean the Greeks are not? Afterall it is not Germany that is in breach of the Maastricht Covenants.
These Eurocrats are aghast that a German politician is , for once, looking out for German interests and putting in danger Brussels dreams of a unitary state.
The Europe is a mess, I agree and the mess was born because of the politicians who pushed to create an EMU. I believe it was made to create something like a counterweight to Russia (they really did not have to do this by the way). The political purposes came in front of the economic feasibility. As always when politicians intervene to Economy nothing good happens. It was clear from the beginning – the Europeans in their Union can not agree virtually on anything significant – they fail to agree on Common Constitution, they have this stupidly short (6 month) rotating presidency. I am sorry but it looks like I don’t know what…
I don't think it was to counter Russia, but the US. Many in the EU (and unfortunately, the US as well) were convinced that the social democrat style cradle-to-grave welfare state was the wave of the future, and if the EU was as economically powerful as the US, they could shape the future of the world. Inexplicably, many still are convinced.
desperated times = desperate measures...and you still end up swingin'
Look and learn America, your economy has been prostituted in an even bigger way
No, its not "an even bigger way". Remember, most of Europe already has tax rates of 40% - 50% of GDP. They have no headroom to raise more money. Plus the government benefits of the EU are far more deeply ingrained in the culture than over here, so the ablilty to scale back spending is greater in America.
Don't misunderstand me... I ain't claiming America's in great shape... just not as far gone as Europe.
It time for Luke & Laura!
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