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Well Greece and the Greek people have benefitted handsomely since it joined the Euro. Unfortunately they have gone too far and now its time to pay the piper. Given the desire not to default then austerity is required. If austerity is too far, then Greece can simply default and challenge the European constitution (such that it is) drop the Euro and bring back the Drachma. Once one devaluation will come into play and the debts can be inflated away in time honored tradition.
Mistake: Goldman Sachs Threatens Taki | April 25, 2010 | EconomicPolicyJournal.com
Back in February, Greek-born, international playboy and wordsmith, Taki Theodoracopulos, (He has probably had more women than Goldman Sachs has billions) gave his readers his view on the advice that Goldman Sachs had been giving the Greeks:
"Bravo Goldman Sachs. You’ve done it again. As in the U.S. subprime crisis, this house of ill repute created a deal which helped the Greeks obscure billions in debt from the budget overseers, then charged the Greeks hundreds of millions of Euros for helping them hide the debts. Classic Goldman Sachs policy, says the great economist Taki, the house of shame having been and being as I write the poster boy for banks behaving badly—exploiting whatever the situation, or rules that it helped to write. The man who led the Goldman Sachs team which helped Greece lie and cheat for so long is Goldman’s president, Gary Cohn, whose mentor is the chairman of Goldman, Lloyd Blankfein."
Now, Taki reports that Goldman sent their lawyers after his online publication, Taki's Magazine:
"Only a month ago, the Goldman fraudsters had some shyster London lawyer threaten the sainted editor because I had called them crooks for teaching the Greeks how to cheat even better than the Greeks already knew. The sainted one sent them to hell. Now the U.S. government has discovered what the Speccie and the poor little Greek boy knew since time immemorial. No one makes money investing with Goldman except those whose rooms are at the top. Goldman misled their investors and had them put their moolah in things they were shorting, taught the Greeks how to cook the books—like teaching Ali Baba how to steal—and now has their PR machine working overtime. The case will most likely be lost by underpaid government lawyers facing the crème de la crème defending the fraudsters."
Taki, one of the few men left with serious balls (Perhaps that's why he keeps winning, or at least placing, in the 70 and over world judo championship), couldn't have just a one paragraph shot at Goldman, he threw this in also (not bad from the 70 plus bracket):
"The Bagel is a luxury city, a place for the very rich and those who fiddle the system. Theaters and restaurants are filled by the rubes from the backwaters who come in and stare at the tall buildings. Working class people and the middle classes were marginalized long ago. Most of them have moved to the burbs. New businesses are hard to start because of punitive taxes. The ghastly midget mayor Bloomberg has cut 6000 cops, hence the crime rate has shot up by 28 percent. Still, the place is the only city I can have fun in nowadays. It’s a place where one can rub shoulders with crooks in fine suits—none of those gaudy, double breasted heavy striped ones favored by gangsters of old—as I did last week in the Boom Boom room after dining at the Waverly Inn. The Boom Boom was full of Goldman Sachs people, fresh from being indicted for something everyone but the government has known since a very long time: That Goldman Sachs is to fraud what Paris Hilton is to vulgarity. One thing is for sure. Heads must roll but they won’t. The small fry will get the axe, as is always the case."
That looks like a major league spit in your face, Goldman. Come on, send your lawyers again! I would love to see this go another paragraph or two. Or, Lloyd, if you have the balls, why don't you and Taki settle this like men, in the judo ring. You like to take advantage of those less nimble, Taki's over 70, your 53, what are you waiting for?
"Greece is just a snap-shot of the future for everyone."
It certainly is, but we are too immersed in our fantasies to see this economic reality.
If it wasn't so tragic it would be comedy. What part of the house of cards founded on bullshit like that by the IMF don't we yet understand? Hmm, let's see the only way we can bail out Greece is by getting deficit countries with higher borrowing costs than the interest rate set on on the subsidised loans to Greece? wtf! and whil we are at it, let's make those countries who are lending money to Greece who have similar problems get into more debt they can't afford even now? OK here's my deal, let's all pool our credit card debt and option ARMS into a pool and get Paulson to sell it via ACA (is that bankrupt, hmm) so that we can default on the pool and pretend we never owed anybody anything! Better still, lets create a new country with limitless credit call it IMFland and all switch our national currencies to that. The experiences of Greece, Latvia and Estonia and all those in the past relate to a banking system predicated on lending money to do things that aren't necessary and take a few percent of the capital in fees and a few percent per annum in the interest rate. It is a flawed model, once capacity (debt saturation) is reached. The current baning model is a tax on the economy and not a disinterested facilitator of flows between those with ideas now and those who had ideas in the past. Bleh!!!!!!!!!!
I love LEO weekends... Some of the best back-and-forth happens here. Greece will be a slow burn (no pun intended) - Greece is just a snap-shot of the future for everyone. In Canada the future belongs to the public sector and I'm sure that's true in most countries. Why work or risk for the table scraps the public sector leaves behind. We live in a world now built on fraud (government allowed, led and encouraged) - the problem is if we stop it everything will collapse all at once. The big scam now is telling you that inflation is 2% when most major items seems to be going up a whole lot more.
Leo -good luck to your friends and family in Greece.
Very good post. Debt piled up without full disclosure to the people bearing the burden is illegal. There is no need to pay it at all. The well connected who ripped off the people in fees while piling debt on them should have their assets seized and disposed off to pay the debt and hung out to dry. that will teach them and those aspiring to be like them
Greece agrees bailout package with EU.
A moment of truth for Greece. Either they reform their society and country or fall back to 19th century and stay there forever. I root for them.
Gosh, If half the people wo posted on this took the time to discover the relevance of Bonds in Investor Portfolios a lot more pith could be discussed. ..for example, if it has been historically the case that default in small-nation debt is possible -how long has the debt crisis been unfolding- do you not think that would be accounted for by an institution which has the resources to allocate some billions towards that investment. Secondly, the CDS market... when they bought the bonds, does anyon think that insurance wasn't taken out on it..! Just selling the CDS back to the market would turn a tidy sum... you're barking up the wrong tree if you think the bondholders are in the last concerned about going south on the GGB.
Whose idea do you think it was to throw money at Greece, to bloat the public sector, lowr the interest rate, create a housing bubble? To do the sam with E'stonia (great name), Latvia, Italy, Spain. The Bond Investors.
Personally, I ignore the riots, yeah it's wrong. But what to do, everyon gets their pay slashed, credit freezes up, everyones in debt. When it happens to whole country it ceases to be the problem of an individual and becomes the problem of the banks, let them sort it out. When the riots are over hunger and crime- that's when it's time to go into the streets.
Arent underfed people weaker than the same well-fed people?
I can only say to Weisbrot that in Estonia the government has shown somewhat more common sense during the last years than in most of the other countries. It is a rare case when at the beginning of current crisis a finance cabinet minister acknowledges publicly that economy had artificial boom and must come back down to earth. Boom years high GDP was an illusion where many people spent a lot of borrowed money on things they really did not need and everyone who could hold a trowel rushed into construction business because of unreasonably high wages there. Banks offered(called your phone, sent mails etc.) cheap credit and even consumer loans. Healing these imbalances and distortions created during boom will take time, but you cant resolve it with more debt and government spending. Amazing is that Weisbrot compares year 2015 predictions with 2007 when economy had still much air in it. Spending over your limit today means less capital available for future. As for unemployment - does Weisbrot suggest government to hire all these people? I do not think so having seen Soviet time when everyone had a job. The inefficiency and corruption of it was unimaginable compared to today, stealing from your employer - government - was considered a deed of honor among people. At this point employment figures have shows better signs and biggest obstacles here are too much regulations(many originating from EU) and high hiring expenses. I know quite some people who intended to start own business, but the complexity and high costs of complying with all the rules has prevented them.
lucid, balanced and welcome post.+++
Times reports on Greece rescue deal:
GREECE is today expected to finalise the terms of a €120 billion (£104billion) rescue loan from governments in the eurozone and the International Monetary Fund.
Talks between the Greek government, the IMF and German and French officials ended yesterday. An official announcement on the bailout is expected after a meeting of the Greek cabinet today.
Josef Ackermann, chief executive of Deutsche Bank, is co-ordinating a private sector contribution to the package that could raise up to €2billion.
Crowds protested in Athens yesterday against the austerity measures attached to the loan. These include an increase in the retirement age from 53 to 67, and cuts in public-sector salaries. A national strike has been called for Wednesday.
Central bankers are also working on a separate scheme to stop Greek banks from succumbing to a run on their funds.
The European Central Bank plans to introduce a new emergency liquidity scheme as part of the wider bailout of the country, said sources close to the talks.
Greek banks have suffered a huge outflow of corporate deposits in recent weeks, reducing their financial strength, according to senior bankers.
The scheme would allow the banks to post junk-rated Greek government bonds as collateral in exchange for emergency loans. It will require a change in the European Central Bank's rules: at present it allows only government bonds with a high credit rating to be used in its emergency lending facilities.
Leo, you lie about "riots" and stuff.
Totally directed scenes of "riots" that socialist propaganda shows so that the Greeks must not express their feelings about the non-typical coup d'etat that the Socialist Gvnt does by offering the governance to non elected people. It's democracy that is beeing abused.
The majority of the Greek people does not want IMF as they realize that there are other ways for Greece to be credible. The socialist gvnt is so corrupted that rumors about gvnt speculation with debt are now spread.
No riots today in Athens. Few members of the so called "antiauthoritarians" create confussion in a well directed scenery of "rioting" gining the excuse to the gvnt to acusse the demonstrators (working people that care about peace and prosperity but know that IMF leads to extreme poverty). Greek people love peace and prosperity. The only one who does not want Greece to prosper is the corrupted Gvnt of the socialist that care all about how to steal money, even if IMF arrives.
Λεο, λες ψεματα και παραπλανεις τους αναγνωστες. Σταματα την αθλια προπαγανδα των σοσιαλιστων, που καταστρεφουν μια πλουσια χωρα. Ειναι διεφθαρμενοι.
Were you across town at the fashion show with Ms. Pappas? Perhaps holding her aperitif while the streets were burning?
for some reason i think your funny.
This feeling is mutual
There was no street burning. I was down town and saw the theatrical acting of supposed "riot". The reports are propaganda to scare people from demnstrating. Read what i write. Dont be in a rush to make a conclusion by just reading the media.
How 'bout now?
So those scenes were manufactured? I know there isn't widespread rioting (yet), but there are riots going on. Yes, most Greeks are peaceful and they want to find a non-violent way to protest these austerity measures. And just so we are clear on one thing, I am neither PASOK or Nea Democratia. I do not care about corrupt Greek politicians from both parties. They are all pathetic. But the worst PM in Greece's history was Kostas Karamanlis. This guy and his crooked cabinet did more damage to Greece than all the fools that preceded them. And that is not a lie.
So I see. Totally socialist propaganda is what you are doing here. It was more than obvious.
You also know that in the socialist spectrum acts of violence are very common and justified for those who do them. But who told you that the few terrorists that performed so nicelly directed acts of violence represend Greek people?
You mislead all the readers with vile socialist propaganda that tries to form a scheme that Greeks don't care about law and order. That totally unrealistic. Greeks know that the present socialist Gvnt of Papandreou (he is not Greek) is corrupted, against the national interests, lied to be elected, and blaims every Greek as corrupted while the only corrupted is the Gvnt and the few ones that interweaving with it (media, construction companies etc).
At least the previous Gvnt didn't took the 4 month salaries out of the workers, didn't taxed everything with 25% VAT and was not against National Interests.
So don't lie anymore. Papandreou was the one who said when gained power that "now antiauthoritarians (the self claimed rioters) are in power".
I'm no fucking Socialist, and would probably make the right wing parties in Greece blush. I would fire all the politicians as a first act of Greek patriotism. I guess you can call me a fascist. One thing I do know, however, is that Karamanlis was by far the worst Prime Minister in Greece's history. They did absolutely nothing for Greece while in power except squander billions and collect kickbacks. Corrupt fools, I'd throw their asses in jail!
Fascism is socialism. Read history and philosophy before you answer.
You are totally irresponsible and vile propagandist of fascism. Greece is thw birthplace of Democracy and will continue to be. Tyrranic regimes like socialism always fall. Greeks will show no mercy to traitors of Democracy. They did it in the past. They will do it once again with the socialist regime.
The "gains of the past twenty years" were unearned.
Greeks are overpaid vis-a-vis their productivity levels.
Standards of living are unsustainably high.
What are you proposing to do about it, Leo? Stiff the creditors? I'll have to repeat what I say about the U.S. mortgage-holding middle classes: It's NOT Goldman, it's NOT the banks - they are only part of the enabling mechanism.
It's an individual's choice to BORROW and spend. It's a government's CHOICE to borrow and to spend.
WHERE has personal (or national...) responsibility gone?
Oh please, many good small businesses are going under in the US because of the stupidity that Wall Street did. Collateral damage! Yes, many people did run up their debt levels but banks were out peddling these loans in the good years, happy to hook suckers for life. At the end of the day, the banksters get away with bailouts and bonuses, while the working poor have to bend over and accept austerity measures. You call this fair and equitable?!?
That is sure pretty silly.
The businesses are failing because they depended, directly or indirectly, upon the premise that acceptable housing was a 5,000 sf. dwelling with six bathrooms, gold plated plumbing fixtures, and marble counter tops. Note also that swimming pools are not the problem in the US as in Greece so that adding one using a HELOC was a common practice even though it added little to the value of the property. Blaming those poor decisions upon a New York bank is nonsense.
The New York banks are no more responsible for the housing bubble than they are for the "dairy farm" bubble. Those businesses are also going broke because they are operating unprofitably. The real cause for that is over expansion as a result of excessive optomism brought on by several years of abnormally high milk prices. It has nothing to do with a New York bank.
Augustus, thank you for moment of sanity in the mad race to find villains and be seen as victims...
It doesn't matter how devious the lenders were.
It doesn't matter how high housing prices were.
It doesn't matter how much one "needed" the money.
It doesn't matter that the fine print is long and unreadable.
Borrowers should not be turnips. In the end, the responsibility for a business finding itself in a position where it needs revolving credit just to stay open - or an individual taking out a mortgage loan or a HELOC - lies with the borrower.
If you don't understand the fine print, or future interest rates, or the future job market, or compounding, don't borrow the money!
to you and caesar above: Agreed, 100%+ that turnips who took debt and couldn't float the payments have no sympathy with me. Just because the Ditech homo can broker a loan doesn't mean he should. I mean, a $450K loan to someone making $14K? Leo is talking collateral damage. If you think the "banks" didn't enable and exploit this I suggest you read Michael Lewis's The Big Short. I am collateral damage. The "banks" and insurers have been made whole; I'm now on the hook for nearly $2T of garbage. My savings (10-15% annually) for many years went to hell with the market. ZIRP has stolen from retirees and the risk averse savers. The dollar is devalued and that is a 'silent' thief. On and on and on.......the can has been kicked down the road and the "banks" (crooks, thieves) are off scot free. So are the turnips.
Catching some of the Greek black money evading taxes might be a good start
Step One: apply a tax on land rental values - no escaping that.
Step Two: divide the resulting Greek 'Rental Pool' into proportional Units, (say) billionths.
Step Three: either sell the Units to investors and repay debt with the proceeds, or simply swap all the fragmented and disparate classes and tenors of debt for Units in a single homogeneous pool of quasi-equity.
Result - a new form of Sovereign Equity - as advocated by an FT editorial a few weeks ago.
Goldman will find a way to create a synthetic CDO of that arrangement!
Let's see, how 'bout: ACROPOLIS 2010-AC1
Why not divide it up based upon cell phones? It makes about as much sense as deciding that anyone who owns land has to pay it.
BOK- The Greek politicians are NOT suddenly going to stop spending money they don't have. They are the original problem, not any part of the solution. They will not change their stripes. They simply must go! If the socialist don't accept their own philosophcal failures, they will implode eventually. Margaret Thatcher said correctly 30 years ago, the thing about other peoples money! Reality has not and will not change no matter how stupid people are. They simply will incease their suffering for another day. I cannot see any possibility Greece can continue their folly and their day of reckoning has simply arrived., although it is only the beginning of their angst.
So you think they need a tax cut or something? Your kettle is whistling.
It is not a tax cut that is necessary. It is a spending cut. Thatcher got rid of the propped up, money losing, state controlled industries. Council housing sold off. Lots of reduction in state obligations. It worked very well for moving the economy and country foreward.
The problem is that Ms. Thatcher only made it easier for England to attack its own people. Socialism continued in spite of her.
She just happened to have a couple of scapegoats (BL, mining unions) to take the fall.
Leo K., or anyone else here, ever been to Mt. Athos?
No, but my dad has been several times. He says it is amazing.
that's a long video.
my daughter was just in greece for a while.
her boyfriend is from Slovenija, and they really really liked athens.
of course, she is even more brain dead than me, when it comes to politics.
says, she didn't really notice any problems, that she could see¿
junked, i give up.
It’s good to hear from you, velobabe. If we were deprived of your unique viewpoint, I’m sure Zero Hedge would not be the same. I’m so disgusted with the system of “junking” where unidentified people can take some action without explanation. And I’m looking forward to the day when the process is discontinued.
Personally, I’ve learned to ignore the junking procedure. And I hope you’ll do the same.
yeah i suppose so.
your feisty as ever, cheers, babe†
Greece will be destroyed! Never say that I can't change my tune.
The personal suffering of most a nation aside (which is a rather large thing to put aside), Greece has only one solution: DEFAULT.
This will lead to great suffering and social unrest. However, it may teach the rest of Europe (and maybe even the US) that there are consequences to actions.
If you spend like a drunken sailor, you wake up in a ditch, broke and hungover.
The world as we have known it is over, we just don't get it yet. No one owes the Greeks (or Americans) a living, a good pension, or a nice place to live.
The rich always screw the poor (literally and figuratively). Politicians have been ruining their countries for their own benefit since time began.
Only an politically active working and middle class that keeps the government thoroughly in check and keeps society from getting too kind can maintain a society that works.
Harsh, but true.
I was born poor (no indoor plumbing), was lucky enough to have academic skills and benefited from the most prosperous time (in the most prosperous country) in the world.
Young people starting today, as smart as me and as hard working, will never achieve 1/10 of the wealth I have. Bad luck but it is a fact.
You get the life you get, not the one you deserve. If you think life's unfair (it is), go riot and see what that gets you (nothing but a broken head).
All of mankind are going to have to work harder and longer for less. Not their fault, not mine. If I could trade places and start over again, I would. Being rich isn't what makes life worthwhile, work, love and building something (no matter how small) is what makes for a rich life.
The Greeks may as well quite whining. No one (outside of Greece) cares what their pensioners get. Soon we'll worrying about our pensioners starving (or at least our family members) and it will be our responsibility to see that the people we care about are OK, and we won't be able to help the rest.
It has always been a hard, cruel world and we have forgotten that and think that God, the government, or our neighbors owe us something. Take care of your families and friends, that is how the world has always worked and soon will again. Give charity as much as you want to but it is owed to no one. Charity has always been given to win favor with neighbors and God. A man that gives all he has to help his neighbors and lets his own children starve is a fool.
The world is changing as we speak. We have been lucky enough to live in a world where we could afford to be generous to everyone, deserving or not, without noticing it. That time is over. We will get hard or we will die. That is man's history and his future. I hate it but I hate many things about this world.
If the Germans are wise, they will take the money being discussed for Greece and rebuild their military. Soon the USA won't be there to defend them and if they can't defend themselves they will be destroyed.
A new world is dawning. No more handouts, no more free lunches for Greece, Spain, UK or USA. Work hard, conserve and save and you may get to eat tomorrow. Get used to it!
i liked reading your words, very nice.
me, born rich (not wealthy), living poor today.
someone gave me a lifeboat.
it is great, very liberating in mind and body†
ironic, how wealth creates poverty.
The IMF is calling for an lowered standard of living for Americans.
(don't be fooled by the 'tennis forum' thing)
The IMF must go, its a corrupt organization anyway tied at the hip to the international banksters.
Great analysis, Leo and you got it exactly right! Argentina repudiated the IMF's Article IV consultations with its punitive and crippling economic structural adjustments and toxic package of debt service in 2001, defied the bond holders, creditors and speculative predators, and simply walked away from its onerous and unpayable debt.
To this day the issue is lodged firmly in the enormous and devouring craw of the IMF and was brought up in a press conference with Dominique Strauss-Kahn recently in London.Three years after default on a debt of $100 billion Argentina had weathered the crisis and was on the road to recovery. GDP grew by more than 8% for two successive years as Argentina simply issued its own money and credit through its own central bank rather than appealing to foreign investors.
This radical departure reverse 25 years of failed IMF policies. Argentina turned its own resources inward offering health care and minimum wage to anyone wanting to work. While not an ideal situation by any means, Argentina survived and emerged as one of the few nations not answering to the International MF'ers who contrive to coerce and wreck economies with their "fiscal consolidation" policies and economic shock therapy.
Your alternative of an economic liaison with Russia and China is not only a real and viable prospect, but stands as probably the most immediate solution to the Greek economic malaise. Chinese economic involvement is an increasing reality in Greece and across the developing world as well. Unfortunately the present government will need to be toppled and for that to happen, nothing short of a bloody revolution will have to take place. Hopefully, Greece will lead the way in throwing the IMF and the banker predators off their back.
Argentina has done so well since they screwed the international lenders that the only ones left to screw were any domestic asset holders. That forced conversion of the pension accounts was just a wonderful way to spread that social justice. The suitcases of cash from Hugo were so very helpful in allowing the socialists to continue living as comfortably as possible.
Who will they screw next?
Thanks for your comments; what an excellent roundup on how the IMF poison pills operate and how progress could be achieved by refusing to swallow them. The detractors who would suggest that Greece citizens took on the debt and are to blame in this crisis are greatly mistaken. If the US should continue on its current path to increasing debt, because of the wealth transfer from its citizens to the banks and the public sector, then Americans could well find themselves staring into the muzzles of the IMF criminals. Would the detractors then say that it was the fault of the American citizens who took on the debt? In other words, if we would just throw out one political party and bring in another, the debt would drop like a rocket? Obviously, not.
The Greek dilemma was brought on by the secret manipulations of its financial reporting and debt load by socialist politicians working with Goldman Sachs officials. Does the Obama approach to finance ring a bell?
Speaking of socialist politicians, Greek Prime Minister George Papandreou is president of the Socialist International, a combination of socialist governments around the world whose stated goal includes working toward a world government.
The IMF is the United States banking cartel. The World Bank is the United States banking cartel. The Federal Reserve is the United States banking cartel.
All the obtuse borrowing throughout the world has led to asset value perversions. The Greeks have consciously borrowed themselves into a financial trap, relying on continuous rollovers.
I believe the responsibility falls equally on the dealer and the drug addict.
And ultimately the Greek calamity is coming to a country near you (and me).
And don't forget the mantra "ZIRP leads to ZIG" Love it.
Very clear, Kayman, and well said as usual—the picture in a nutshell-- who did it, who’s in charge, and why did they do it. Life on Planet ZIRP, a whodunit coming soon to a country near you (and me).
Onerous debt? They took it on!
Pay your mortgage lately?
Crush Greece like the bug it is, and maybe foreigners will be able to buy land there.
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