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Yard Sale for the Rich
Which Way Wednesday - Yard Sale for the Rich
![[GREECE]](http://si.wsj.net/public/resources/images/WO-AG006_GREECE_G_20110621194734.jpg)
Greece is fixed - now what?
Well, Greece isn't really fixed, of course, but look how fast it all turned out to be nothing and this morning hardly anyone is even mentioning it. The crowds protested but this vote wasn't in their hands - it was in the hands of their corrupted officials and they voted 100% along party lines to keep Prime Minister Papandreou in power, which will now allow him to push through another $40Bn in budget cuts (14% of GDP or $2.25Tn if applied to the US budget - in a single year) that will pretty much turn the Government of Greece into nothing more than a debt collection service for Banksters - as they no longer have the money to provide any Government services to the people.
Yes, it's a Republican wet dream and it will be a fun experiment to see if we can truly strip a government down to the singular function of taxing the citizens to give money to banks - consider it a practice run for their vision of the US as soon as they can get a couple of more seats in the Senate and Michelle Bachmann is President. On the condition that the Greek Parliament agrees to sell their people down the river, the EU and the IMF agree to give them MORE MONEY. Well, not GIVE them, of course, they will lend it to them at 5.2% - which is a very nice profit for the lenders and more money than a US 30-year mortgage (but Greece is only given 7.5 years to pay it all back - an impossible task with their debt to GDP ratio).
This will plunge Greece another 25% of their GDP further into debt while the cuts in Government services are projected to lower their GDP by another 15% so we first add 25% to the 135% debt the already have, which is 160% and then we multiply that by the 15% that the GDP will drop and we get a debt to GDP ratio of 184% - isn't that special? So about $600Bn in debt at 5.2% interest is $31.2Bn a year (10% of GDP) JUST IN INTEREST - that would be like the US carrying an annual $1.6Tn interest payment while cutting Government spending down to $1.6Tn - isn't this a fun game?!?
That's the "fix" that Greece can now look forward to. Also conditioned in the loan is the forced sale of state assets. This is the real coup-de-gras for the Capitalists as they turn a nation's assets into nothing more than items in a very exclusive yard sale that only the already-rich can participate in.
Already, DT has picked off a 30% chunk of OTE, the state telecom company, which employs (employed) 30,000 people and Athens News Agency reports that tenders on a host of other state properties for full or partial sale -- including the ports of Piraeus and Thessaloniki and Hellenic Postbank, one of the country's best-capitalised lenders -- would be launched in coming months. "Greece has to take new commitments. Greece has to enlarge the ambition of its privatisation programme," leading eurozone policy-maker, Luxembourg Prime Minister and master of evil, Jean-Claude Juncker said on Tuesday. "Muhahaha!"
Again, to put this into perspective, this would be like the US being forced to sell off the Post Office to DHL, our Ports to Dubai (we didn't like that last time, did we?), the Smithsonian could go to a private Japanese collector of Americana, etc. Oh wait a minute, isn't privatizing our government services part of the Republican plank already? Gosh, I get so confused between what bankrupt Nations that are hopelessly in debt are FORCED to do by their creditors as a last resort and what the American people are being asked to vote for voluntarily...
Oh well, at least "fixing" Greece is good for our markets... What? It's not? No, our futures are, as we expected, not particularly thrilled because PIIGS was Portugal, Italy, Ireland, Greece and Spain so, even if Greece is out of the equation, we still have PIIS and that's not really better, is it? We'll have to work a U or an A into that acronym soon because a Bloomberg National Poll finds that 44% of Americans are worse-off than they were two years ago with two thirds feeling this country is on the wrong track.
“Gas prices are higher, grocery prices are higher, transportation prices are higher,” says poll respondent Ronda Brockway, 54, an insurance company manager and political independent who lives in a suburb of Harrisburg, Pennsylvania (where the Mayor is PRAYING for a solution to the budget crisis). “The jobs situation nationwide is very poor.”
The gloom covers the immediate future, with fewer than 1 in 10 people expecting unemployment to return to pre-recession levels within the next two years, and it extends to the next generation. More than half of respondents say their children are destined to have a lower standard of living than they do, upending a traditional touchstone of the American Dream. “Unless you limit the actual money coming in to the government and give businesses a break, I don’t think you’re going to have a bounce-back in the economy,” says poll respondent Michael Jefferys, 37, a business analyst for a building supply manufacturer. Yes because that's working so well for Greece, isn't it?
$15Bn in POMO did wonders for the US Markets in the first two days of the week. Already we're climbing back to our Must Hold lines on the Dow and the S&P while the -2.5% lines have been retaken on the Nasdaq, the NYSE and the Russell. Wasn't that easy? Keep in mind that our prediction was that "THEY" would attempt to run the indexes back to the +2.5% by June 30th - in order to dress those windows for the end of the Quarter. We covered yesterday, in case the Greek thing fell apart, but now it's up to Uncle Ben to give us the push we need to keep the ball rolling into Friday - ahead of the big end of quarter push next week.
Bernanke will hold a press conference after the Fed meeting at 2:15 and the FOMC announcement is pushed up to 12:15 so they are looking to move the markets this afternoon. If this doesn't work, perhaps the Fed can start doing what the BOJ does, which is jump in and start buying Topix ETFs anytime their markets drop more than 100 points in the morning session.
BOJ Governor, Masaaki Shirakawa, warned on March 9th in a lecture in Germany that “there is an increasing possibility that Central Banks will no longer be seen as neutral institutions, partly due to their stronger intervention in resource and capital allocation at the micro level.” Gee - ya think?
FDX gave us a good report this morning, saying demand is up and costs are coming down, which earned them a spot on the front page of the on-line WSJ and should give the markets - or at least the Transports - a lift today. PHG, on the other hand, who are the same size as FDX but deal with consumers, warned that weak demand in Western Europe will hurt results at its lighting and consumer lifestyle units. Margin pressures and higher marketing spending will result in Q2 EBITA for the lighting unit of $122M, down sharply from $277M in Q1. Fortunately, Wall Street Journal readers are spared from that bad news on the front page but you can find the report buried in the bottom half of the Europe Section, where it rates a single line that says "Philips Warns on Profit." Won't WSJ readers be surprised when PGH opens down 12% this morning?
Just like parent company Fox News - the WSJ has become famous for reporting "all the news that fits" (in with the overall propaganda). Something Jon Stewart noted over the weekend when he was a guest on Fox News Sunday:
| The Daily Show With Jon Stewart | Mon - Thurs 11p / 10c | |||
| Fox News Channel - Fair & Balanced | ||||
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Well, our portfolios are, at least, fair and balanced at the moment and we're strapped in for a wild ride today as we head into the last Fed meeting of the QE2 error (not a typo) with no additional meeting scheduled until after the US defaults on their own debt on August 2nd. We've been cashing in our bullish winners and leaning a bit more bullish but, if we pop our Must Hold lines on the Dow (12,200) and the S&P (1,300) then we will just have to go with the bullish flow for the duration. Our last trade of the day was a bullish flip on oil into today's 10:30 inventories but we also went long on UUP (July $21 calls at .43), which is bearish for the markets and took bearish spreads on the Nasdaq with SQQQ and the Russell with IWM so, on the whole - we'd be happier with a little dip.
Either way - be careful out there!
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Phil does such excellent work. And then...
When I need to know the truth let's ask Jon Stewart? Phil. Why not get David Axelrod on the horn? Wouldn't it be better to go straight to the horse's ass?
Watch the YouTube video...
Fallen Man: The Road to War & End of America
http://www.youtube.com/watch?v=bCjYx5kZ7EU
BRILLIANT!!!
Question ... How much has Greece paid the bankers in interest? I remember several African nations being put to the torch by bankers even though they had repaid the loans several times over but still had the principle to pay.
That usurious 5.2% interest rate!!!
The Greek government deserves the 20%+ rate established in the open aftermarket, if they want to borrow.
"beware of Greeks seeking gifts"
Great call Phil. All would be wonderful if only the Democrats were in charge. Keep those brilliant insights coming...
There is a huge difference between capitalism and what we actually have, crony capitalism, which is a product of statism. This article just doesnt get it.
This article is typical of the drivel out of phil. He has a one track mind: Republicans (conservatives) =evil; Democrats(libs) = a giant pot of butterflies and lollipops. It's amazing, but the guy does have subscribers. I just don't know who would pay for this kind of junk. Wall Street goes with whomever they think will send the most $$ their way... Eventually, even phil will figure that out.
Greece can never pay back anything. There only purpose is to sell their assets and islands to private companies and countries for pennies on the dollar. We may see revolution in that country sooner than we think.
People pitched a fit when the Japanese bought the Pebble Beach golf course.
Don't remember the details of what happened next, but certainly it involved a default and foreclosure.
Selling Yellowstone... brings visions of Rodney Dangerfield buying the countryclub.
More likely some Russian oligarch.
The statue of liberty going once, the statue of liberty going twice.....
SOLD to gentleman from Hong Kong.
Wow, talk about a Communist tilt to reality. What a load of garbage.
IMF saviour at Greek yard sale: 'And the Parthenon? How much?'
'Well, obviously it's priceless and the thought of selling it makes me absolutely sick. But, I suppose I could let it go for . . . . 200 million.'
'Yeah, right. Listen--lemme tell you how this is gonna work. I'm gonna give you this twenty dollar bill and your gonna give me the Parthenon. Capiche? You keep jerkin' me around and you'll get nuthin' for this shit and you'll be cuttin' my grass and washin' my Bentley for your ouzo money . . . . although that second part was already a given. Hah! God, I love a good yard sale!'
Assuming the Greek government owns the Parthenon, it should sell it off.
I don't see how the Greek government benefits from owning it or maintaining it. It doesn't seem to be a useful tool that assists them in protecting people's property rights, which is the only function of theirs that can possibly be construed as being legitimate (even though they contradict themselves by collecting taxes). Those who are heavily indebted should not keep hold of expensive gewgaws.
Of course, there was some silliness in my post, but it would seem to be a slippery slope when national treasures are considered marketable assets. Would, say, Yellowstone Park be fair game if it was us?
>"national treasures"
Socialism is government owning the means of production, in this case the production of pleasurable experiences of visiting a historic Greek temple. If the government being in this business can be legitimized, than so can its involvment in every other aspect of life.
The property should go to the highest private bidder, which might be a private charity seeking to preserve the historic property. They might outdo the government in maintaining and protecting the property. Or, if people lose all interest in its historic nature, then perhaps it will serve the public better if it is demolished and turned into a brothel. Only entrepeneurs competing and experimenting in a free market, and facing financial gains and losses as decided by the market, can determine how the property can best serve humanity.
The conflation of goods and services is one of the great confusions in our economic thinking. To say that experiences are "produced" is a metaphor; no one makes an experience in same sense that one makes a chair or a crowbar. In terms of GDP as it's currently defined and measured, goods and services fit into the same box, but don't we all understand that that's an oversimplification that's only useful for certain purposes?
Markets are responsive, but they are for that reason neither wise nor foresightful. There are some things that are valuable in ways that a market, as such, cannot value. What if a developer who bulldozes a big part of Yellowstone for a resort just turns out to be wrong. His project fails. Is it possible to replace what was lost? On whom do such costs fall? Markets are just as easily tools for evil as goverment is--and perhaps more so these days since everyone seems to think they're somehow naturally good (the best possible façade for evil-doers).
The property should go to the highest private bidder, which might be a private charity seeking to preserve the historic property.
That's a bit much Ayn. A country's government (at the least) should protect their national treasures from being "demolished and turned into a brothel" as you put it. Milton was only right in theory, not practice. Ask the chinese how their air tastes or how many suicides their company had this month. Government protects the sheep from the wolves.
So would it be OK with you if the gov't sold Yellowstone Park to pay the interest on the debt? The transaction would actually be nothing less than trading something of actual, immense value for something intangible and abstract. Because what we're talking about here isn't so much government's role, of which I believe we're in agreement, but what level of capitulation we're willing to accept in order to appease the money cartel, who deserve fuck-all but a stretched rope.
Excellent article.
For those who believe toll roads run by the local mob is our future. Think!
>toll roads run by the local mob is our future
That's basically what we have now.
Except you pay the toll even if you don't use the roads.
Roads are maybe the best example of why it's crucial to mandate universal support. I used to live in Boston, where shoveling the sidewalk in front of one's house was good manners, but not strictly required--so although most people did shovel their section of sidewalk, lots of people didn't. Walkers were guaranteed to need several detours into the slush-filled gutter on every trip. A few bad sections wrecks the value of the whole sidewalk.
I now live in Montreal, where the city plows the sidewalks. Everyone contributes through taxes (even those who drive to work and use sidewalks but rarely), and all the sidewalks get fully plowed. In this particular area, Montreal's system is better for everyone, even the ones who rarely use sidewalks.
I almost never drive, but I want the whole road to be ready for me when I do. I also recognize that services like local delivery and moving are made possible by good roads. There are a number of instances when mandatory universal participation is in everyone's interest, beacuse those who would rather not could spoil it for everyone.
Wouldn't it be great if the Greek government didn't spend itself into oblivion by paying civil servants of its telecom companies, shipyards, transportation entities, etc. for 13 months of work every year? Even better if it didn't operate these "vital government services" at all? That it didn't allow hairdressers to retire after short careers with nearly-full pensions due to the hazardous nature of the materials they deal with? The problem with Greece, like the US, is that the government inserts itself everywhere, and then, with no thought to at least balancing its income and expenses, wonders why conditions deteriorate, and why, even with a near-ZERO cost of capital, it cannot coax entrepreneurs into business. Those that understand the restoration of government to its proper, limited role, are laughed at by the likes of this author, who produces such astounding drivel that it is amazing such can get published. Some day the government will lay claim to the "vital service" that you provide. I suspect that at such time, your chortling and wisecracking will subside, if anyone remains free to look or listen for it.
"this would be like the US being forced to sell off the Post Office to DHL, our Ports to Dubai (we didn't like that last time, did we?), the Smithsonian could go to a private Japanese collector of Americana, etc. Oh wait a minute, isn't privatizing our government services part of the Republican plank already? Gosh, I get so confused between what bankrupt Nations that are hopelessly in debt are FORCED to do by their creditors as a last resort and what the American people are being asked to vote for voluntarily..."
It sounds like the writer wants unfree markets (government ownership and government monopoly services protected by violence) rather than free markets (private ownership and and the buyer buying from the seller offering the lowest price and mutatis mutandis the seller selling to the buyer offering the highest price). Enemies of freedom don't realize or don't care that enforcing their edicts comes at everyone's expense: ultimately it means means murdering people with guns, violating individual rights, and hampering the economy and human progress.
No ideology or political party has cornered the market on irresponsibility. And to adapt an apt phrasing of Charles Hugh Smith's (http://www.oftwominds.com/blogjune11/manufacturing-finance6-11.html), there's no such thing as a "free market"--there are only various permutations of managed markets. The opposite of "free market" is "mismanaged market." And since we the people are the boss (assuming Jefferson was right when he observed that governments derive their just powers from the consent of the governed), it's OUR mismangement that's the problem. Until we the people stop blaming anything and anyone but ourselves, we can't solve the real problem, which is dumping the incompetents, prosecuting the fraudsters, and hiring good managers to keep things on track for us.
Well, the Post Office looks like it's heading for it's next free market solution-- not making pension contributions:
http://news.yahoo.com/s/ap/20110622/ap_on_re_us/us_postal_problems
I believe the Constitution insists that the US government provide a postal service.
This failed business will surely be bailed out, unlike a failed private business that would be liquidated and whose factors of production would be auctioned off to people who hopefully use them more effectively.
It's a shame that this engine of wealth destruction has to be propped up at everyone's expense, including that of Fed Ex and UPS.
To be more accurate, I think that the constitution gives congress the power to establish a postal service and post roads, but does not require it to do so. It also does not give it a monopoly on this service. That was specified by additional legislation.
It's easy to look at something like the USPS as a profitable endeavor, but it was never meant to be such. Old Ben Franklin had a vision of fostering trade and communication in a country that had so little infrastructure. It brought news, commerce, information, and family cohesion to areas of the country that would never have been settled otherwise. Today the USPS delivers a letter for 44 cents to the wilds of Alaska, etc. The mission may be outdated but there is no way that a commercial enterprise would take up the deliveries to areas not "financially viable". I'm not fer ner agin the entire concept, but it does a disservice to the argument to forget the role that the mails have played in history. Blaming it for not making money is not the issue. The real discussion should revolve around a replacement of the service with a private enterprise which would take under their wing the areas that would otherwise be neglected. Sorta like insurance companies have to take the bad with the good to provide a civil good. There ya have my 2 cents worth.
http://www.ushistory.org/franklin/philadelphia/postoffice.htm
"Yes, it's a Republican wet dream and it will be a fun experiment to see if we can truly strip a government down to the singular function of taxing the citizens to give money to banks - consider it a practice run for their vision of the US as soon as they can get a couple of more seats in the Senate andMichelle Bachmann is President."
The irony and total cluelessness of this statement is enough to rip a hole in the fabric of space and time.
If the government of Greece had not become so socialist, bloated and irresponsible in their spending they wouldn't be in their current predicament. But corrupt politicians and the parasite class (at the top and at the bottom) that owns them simply cannot control themselves. If anything, what's going on in Greece is a case study on what happens when you give corrupt politicians more and more money and power -- they inevitably hurt the very people they claim to want to help.
And fwiw Republicans (the base, not the politicians) were strongly against bailing out the banks. But I guess that fact doesn't fit the narrative that anyone who believes in a limited government is evil and a shill for the Wall St. and the mega-corps.
"If anything, what's going on in Greece is a case study on what happens when you give corrupt politicians more and more money and power -- they inevitably hurt the very people they claim to want to help. "
Replace "Greece" with "the US" and that seems to be startlingly accurate too.
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+1
Harrisburg Pa. is preparing to file bankruptcy. California won't be able to meet their payrolls any
day now. And many other cities and states are raiding their retirement funds to meet their
financial obligations. So why are we focusing on Europe when our situation here seems at least
to be just as critical? California alone outweighs all the piigs. Shift the printing presses into high
gear.
Harrisburg Pa. is preparing to file bankruptcy. California won't be able to meet their payrolls any
day now. And many other cities and states are raiding their retirement funds to meet their
financial obligations. So why are we focusing on Europe when our situation here seems at least
to be just as critical? California alone outweighs all the piigs. Shift the printing presses into high
gear.
Wow, talk about a Communist tilt to reality. What a load of garbage.
John Stewart thinks he's telling a joke, but accidentally he's telling it exactly how it is
The media has come full circle it has started telling jokes about it's self telling jokes, you know like when you put 2 mirrors against each other you get infinite tunnel vision
And in this tunnel vision captured every1 who neglects to get a honest alternative news source like ZH or Al Jazeera or Russia Today any other 'non-mainstream' source
Strapped in? Yeah, me too.
Ready for the strap-on it appears.
Bachmann is 1 of only a few small chances for a return of the constitution. any other takes are just wrong.
You forgot the /sarc...
I'll assume you were joking.