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5 Things To Ponder: Greek Dressing
Submitted by Lance Roberts via STA Wealth Management,
Greece has once again taken center stage as the recent elections put a pro-Greek/anti-austerity party in charge of the country's future. The good news for the Greek population is that the government will raise minimum wages, increase government spending and cut taxes. The bad news is that Greece is broke.
The worse news is that, for the Eurozone, the risk of a Greek debt default has risen sharply.
"So, let them default, it just Greece. Better yet, just kick them out of the Eurozone entirely."
Simply put, neither of these options are palatable. If Greece defaults, considering that banks and hedge funds have loaded up on Greek debt assuming Central Banks will always bail them out, it would lead to a potential credit crisis on the magnitude of the 2008 event.
Secondly, if Greece is allowed to exit from the Eurozone, which means they go back to printing the Drachma, they can deflate their debt by printing currency. The risk is that France, Italy, Spain and every other country in the Eurozone realizes that being a sovereign currency issuer is a way out of their debt problems without changing their spending habits. The end of the ECB and the Eurozone "dream" would shortly follow with those in positions of power would be quickly dethroned.
In the end, I fully expect that after a great deal of stress over the weekend, the Eurozone will eventually cave-in to the demands of Greece and provide additional funding. However, I also highly expect that we are in the final stages of the life the Eurozone as "anti-austerity" groups are rising in power. It is likely only a function of time before the ECB, and its demands for debt-deflation, are eradicated entirely.
This weekend's reading list is a selection of articles discussing a variety of angles on the situation in Greece and what the potential outcomes for investors might be.
1) Germany Faces Impossible Choice by Ambrose Evans-Pritchard via The Telegraph
"The EU elites themselves have run their currency experiment into the ground by imposing synchronized monetary, fiscal, and banking contraction on the southern half of EMU, in defiance of known economic science and the lessons of the 1930s. It is they who pushed the eurozone into deflation, and thereby pushed the debtor states further into compound-interest traps.
It is they who deployed the EMU policy machinery to uphold the interests of creditors, refusing to acknowledge that the root cause of Europe's crisis was a flood excess capital flows into vulnerable economies. It is they who prevented a US-style recovery from the financial crisis, and they should not be surprised that such historic errors are coming back to haunt."
2) A Greece Default Would Unleash A 1930's Event by Steve Forbes via Forbes
"Europe’s troubled economies will continue to stagnate. As the elections in Greece demonstrate, these troubles are leading to ugly political repercussions. France’s xenophobic, fascistic National Front has gained immense new support. Radicals are set to dominate Spain’s elections later this year. May elections in Britain could set in motion a train of events leading to the Sceptred Isle’s withdrawal from the EU.
A collapse of the EU and the euro would be disastrous, putting the world on a chaotic course not seen since the 1930s."
Read Also: How Fast Would A Greek Contagion Spread via Zero Hedge
3) 7 Reasons To Pay Attention To Greece by Mohamed El-Erian via Business Insider
"In sum, this country’s inclination to ignore Greece is very understandable. It is also not a good idea; and not just because high frequency fluctuations in the Greek drama add to volatility in US markets. It is chiefly due to what a possible recession in Europe would imply for a US economic recovery that is yet to attain escape velocity."
Read Also: What Are The Odds Of A Greece Exit? by Jason Karaian via Quartz
4) The Greek Austerity Myth by Daniel Gros via Project Syndicate
"To be sure, one can reasonably argue that austerity in the eurozone has been excessive, and that fiscal deficits should have been much larger to sustain demand. But only governments with access to market finance can use expansionary fiscal policy to boost demand. For Greece, higher spending would have to be financed by lending from one or more official institutions.
For the same reason, it is disingenuous to claim that the troika forced Greece into excessive austerity. Had Greece not received financial support in 2010, it would have had to cut its fiscal deficit from more than 10% of GDP to zero immediately. By financing continued deficits until 2013, the troika actually enabled Greece to delay austerity.
Of course, Greece is not the first country to request emergency financing to delay budget cuts, and then complain that the cuts are excessive once the worst is over."
Read Also: Could Greece Derail The Bull? by Chris Ciovacco via Ciovacco Capital
5) ECB Raises The Pressure On Greece by Renee Maltezou via Reuters
"After euro zone finance ministers failed to agree on a joint statement on the way forward on Greece's debt crisis, the ECB's Governing Council held a short-notice teleconference to discuss how long it could continue to keep Greek banks afloat.
The ECB declined comment, but two sources familiar with the matter said it concerned the provision of Emergency Liquidity Assistance (ELA) by the Greek central bank, which the ECB authorized as a temporary expedient when it stopped accepting Greek government bonds in return for funding last week."
Read Also: Eurozone Ministers Brace For Crunch Talks With Greece via The Guardian
Conspiracy Theory: Is Russia Trying To Pry Greece Out Of The Eurozone by Rob Garver via CNBC
"Ma, Dad is so stubborn. What he says goes. 'Ah, the man is the head of the house!' / 'Let me tell you something, Toula. The man is the head, but the woman is the neck. And she can turn the head any way she wants.'" - My Big Fat Greek Wedding
Have A Great Weekend
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Would appear to be bullish actually.
This whole thing is a waste of time. Split the EU into north/south and get over it.
Why argue about the inevitable?
No nail gun?.
Fortunately, he drank the contents of the shot glass, removing the drowning threat...
Greece would be better off with no Euro/EU and the Euro/EU would be better off with no Greece.
Nuff said on the entire topic
It is my understanding that Greece has already suffered a GDP loss of 26% because of their budget cuts and 'austerity'. And after all that how much of those EU loans have been paid down? I suspect the answer is close to ZERO.
Would it really have been that much worse to simply default and exit the EU?
Hell no, Cog!
On target. Defaulting, exiting the EU and Euro back then?
Hell, just like Russia, half of S America, etc., they'd already be borrowing again, reliving the prior bazillion times they've already done this.
Remember, Greece has been a serial defaulter and has spent about as much time (historically) in default as money good.
Nuffin' new!
'Nuffin' new under the sun, unlike many would have us believe. Keep on trudgin' the road of happy destiny.
My hubby, just flew back from a short trip to Greece to get his 200 euros from the bank. Yes he flew on Friday the thirteen and the plane was empty.
Here are some facts that he gathered from his Greek friends:
1. Tsipras have visited the US for discussions with officials 3 times
2. Yes others from his administration have talks in the Russian embassy, but not him. Russia has invited, but nothing yet.
3. Tsipras has appointed many ex PASOK officials to high positions dispite competent ones from his party.
4. In local elections PASOK received a very high % and way ahead from any other party and only 3% on the general elections
5. The mnimum salary raise while true, does away with mandatory 40 hr week and full benefits including the Easter and Christmas traditional 13th and 14th month salary as it's known.
6. The lagard list, names the oligarchs who have taken assets out of Greece, where they are and how much, and yet no mention from Syriza.
7. The proposed taxation will be using subjective non traditional real estate valuation and will be taxed at high rate at their value not the profits out of use or rental.
8. many others but you get the picture with these.
You can draw your own conclussions but don't be surprized of a possibility of a US central planning gambit. As Zhedgers know it is never what it seems.
Is it that Greece may be played to threaten Merkel, who knows?
Fire away with your opinion
If I may correct some of the above
1.Visited the US once two years ago
2.While Tsipras was in the Eurogroup, the Greek Foreign Minister was in Moscow talking with the Russians.Tsipras official visit to Moscow is due May 15th.
3.Some former PASOK officials have joined Tsipras when they disagreed and didnt vote for the first mnemonium in 2011.
4.PASOK received about 4.5% of the general elections.As for the local elections PASOK was part of a coalition with mediocre performance, e.g. in the Region of Attica SYRIZA got 50.82%.
5.The benefits you refer to have been done away with since 2011.The minimum pay raise is from 480Es to 751Es, as a first step.
6.Simply false.
7.What you refer to is what currently and since 2011 holds.SYRIZA proposes using current market values (much lower than the subjective being used util now).It also proposes a minimum value of about 200.000Es for property to be taxed.No tax for property value below that.
8.Yes many others aiming at shifting the burden from the lower incomes to the oligarchs.
If the EU/ECB/IMF dont want to compromise, let it be.
We have nothing left to loose.
I thought 'greek dressing' was someting Obama shoots over Ben (Dover) Finkenbindrer along with a side of Femunda cheese. For some reason the socialist hebrew media plays cover-up when the taxpayer flies three twinks out to Hawaii with Obama to play 21 holes of 'golf'. 21 holes? How queer is that?
Thanks for the clarification.
While not sure if what you say is correct, I take it at face value and it appears that you know these in such detail which makes it more believable.
I hope that there is no conspiracy with the US as was implied on the information gathered by my hubby.
I wish good luck to Syriza and I know that the Greeks desrve better.
Nos vemos
No it is not a conspiracy.On the other hand it is naive to believe that the US will not try to manipulate the situation to its advantage, whatever this may be, but if this means a strengthening of the Greek demands vis-a-vis the EU, it is more than welcome.
Thank you for your support.
white sauce
Extremely bullish
My father-in-law on the day of my wedding:
The man wears the pants in the family, and she'll let you know when you can take 'em off.
The Greek answer is to take the day off, enjoy the sunshine and have a drink.
Life is to short to think about being responsible.
Somebody is making you look foolish.
"If Greece defaults, considering that banks and hedge funds have loaded up on Greek debt assuming Central Banks will always bail them out, it would lead to a potential credit crisis on the magnitude of the 2008 event."
I doubt that. The Central banks ARE committed to bailing them out.
"A Greece Default Would Unleash A 1930's Event"
Yes, it would probably look like the period from Early 1933 to 1937. DJIA from 50.16 up to 194.40.
Greece will not default anymore than when it gave a haircut of 95% to bond holders several years ago. Like rape, its only default unless she says its default. Greece can't leave and EU won't let them leave. They will simply argue and fight and have continued talks until everyone forgets about it once the next crisis arises. They will simply invent new terms to rename technical but unproclaimed default something less destructive. We may actually discover another time/space dimension where they can bring in scientists to calmly explain how this new thinking, this revelation of financial physics has shown them that the debt isn't really of this dimension, it has actually migrated to the Ponzi dimension where reality no longer exists and unicorns shitting heart shaped candies are eating all the unpayable debt, only turning their nose up at private debt, the most distasteful of all, returning banks and sovereigns to solvency for ever and evermore.
Or it could all just blow up tomorrow and we all burn in the fires of hell....just sayin.
Imagine the rioting and carnage if Syriza comes into power on the anti-austerity vote and then cuts the budget. LOL
Tsipiras will be hanged by his nutsack. If anything, the Germans will back down and continue to kick the can down the road until their citizens riot.
"It is likely only a function of time before the ECB, and its demands for debt-deflation, are eradicated entirely.
...
A Greece Default Would Unleash A 1930's Event"
From your lips to God's ears. Just let the world be shown reality for a change, instead of the myths and veneer that have been in place for the past 15 years. Until we admit the true nature of our problems, no real solutions can be discussed.
15 years? More like since the dawn of fiat currency. The Romans did the same. The difference is, today the fiat/debt fraud is worldwide, and the over - leveraging combined with computer trading speed will bring the house down very fast when the triggering event happens.
I stand corrected. You are right. The symptoms just became so obvious after the end of the "computer revolution" of the 90s, that I used 2000 as my starting point. My mistake. Cheers.
I wasn't trying to correct or debate, and I liked your post. I just was opining, really, that the underlying problem I see as the unlimited greed of TPTB, and the invention of fiat currency, and the fractional reserve banking system, was to the oligarchs of the world, as heroin is to junkies.
Super bullshitish.
Ah, but copious amounts of Ouzo help the short-term pain of the two options.
Opa!
p.s. If you use the gun, be sure to point it at a non-critical part of the body, from which the Recovery is most promising. It's therefore best if Greeks do the aiming, not the Troika: Aim for the Troika. ;-)
Happy New Year Greece
If Greece defaults, considering that banks and hedge funds have loaded up on Greek debt assuming Central Banks will always bail them out, it would lead to a potential credit crisis on the magnitude of the 2008 event...
what a bunch of bs. central banks will always bail them out. always. the banks and billionaires will never be allowed to suffer.
I'd rather get it over with quickly than bleed out slowly. Your choice Greece!
Opening the Berlin Wall wasn't just the end of East Germany, it instantly destroyed the entire concept of the communist prison state.
Letting Greece go insolvent wouldn't be the end of Greece (what's it going to do, merge with Turkey?), but it would shatter the concept of the democratic social welfare state. All bonds and currencies issued by such states would go bidless, and their governments would be promptly deposed by whoever's willing to pay the troops in gold coin.
Thus the other democratic welfare states must, for their own survival, keep Greece on life support as long as they possibly can.
Can't wait for Greece to stop paying. Spain will follow in autumn.
Spain has already proclaimed that if Greece defaults on $270 Billion they owe EU central bankers and other member states, then Spain insists on being repaid $39 Billion they are owed by Greece first. The dominoes will fall rather quickly.
There is another way out for Greece, the EU and the Euro:
.
1. Debt Jubilee
2. Re-index the EUR to [drum roll]... REAL ASSETS.
3. Tell NY (Fed, GS!) to take a long hike off a short cliff
But since that would kill the USD and its Reserve status, instead of sacrificing the EUR at the altar of the Mammon demi-gods, this is one thing that won't be allowed by these miscreants an bastards* who are pretending to do the work of a Higher Power.
* An illegitimate offspring
Maybe Greece should get together with Portugal, Spain, Italy, and Ireland and take the leap together.
So... PIIGS will fly?
https://www.youtube.com/watch?v=GmCKvY684WI
psst. calling j perkins for advice. plan b-hide for your life...
Malaka
Are they going to use the knife or the gun on the Troika?
Decisions, decisions....
Edit:
LOL From FT: " The term Troika, which comes from the Russian meaning 'group of three',"
No wonder they want to drop the term
Groups of three for Greek sex seems very awkward.
Need many many more
Especially in Turkish bathhouse
In Chicago
No, Hilda, those are not worry beads he's pulling out his bung, honey. Maybe we should go now. No, you don't need another glass of Ouzo, Hilda.
No.
It depends on ECB QE.
On the day ECB QE starts, Greece can go... because the ECB will buy up those Greek assets.
At some point soon Europe will have the choice of either Greece leaving the Euro...or Germany.
At some point Germany will understand that they have to let the ECB buy up the bad Greek debt so Greece can leave, or they will have to leave the Euro themselves and go back to a Deutsch Mark.
The devil and Greeks will have their due either way, and the search for a painless solution is a search for El Dorado and the Fountain of Youth.
Greek bonds are held at the ECB, Lance. Don't you read Zerohedge? No credit crisis larger than 2008 looming anywhere on the horizon.
You are correct in stating if Greece left, it would be the end of the Eurozone "dream", which is the ONLY reason they won't be ALLOWED to leave.
12
Vote down! 0
Varoufakis in 2013: https://www.youtube.com/watch?v=A3uNIgDmqwI
El Vaquero posted this on another thread earlier today, fast forward to 1hr:7mins and let Yanis Varoufakis explain how he envisioned this situation almost 2 years ago.
Please stay tuned until 1hr:18mins and listen to the answer to the 2nd question, you will have a greater understanding of the situation. Thanks El Vaquero! h/t yeah!
Yeah good part 1:33 Minutes.
Eurozone has gigantic amount of capital just sitting there doing nothing. Corporations have $3.5 Trillion Euros. Because holders are afraid to invest since the 2008 Financial Crisis. This is partly behind NIRP.
I've been saying much the same thing about the USA for years. Often it seems that foreign investors bring in more money than the Domestic Private Investment as well.
Yanis states that the EU Financial System is broken, never was democratic, and the likelihood is that from a broken non-Democratic EU will rise an Authoritarian System.
When Financial Systems are broken, and this is the primary instrument of power of course,... politicians have to use power to hold everything together and protect the Bankers.
Sounds like 2009, Exactly like 2009-2015.
In the picture i noted that theres a knife a gun and a cup of vodka, Id recommend to take the Russian vodka.
It's ouzo not vodka...though that may soon become the national drink
???? ???!
In Americanized form, Ya sou!
Cheers
"... printing the Drachma, they can deflate their debt by printing currency." WRONG! - They don't have to because they wouldn't have any debts anymore.
They only have to defend the Drachma from the wall street hyanas in which Russia and China may be of help.
There is an alternative.
What's really going on (Part 1/4)
https://www.youtube.com/watch?v=bkQQM61XaAY
Well I haven't digested this article or your link yet. Some stuff doesn't make sense to me on Greece & Bailouts when you compare the USA to Greece they are much the same financially.
We have 5 Guys saying that Capitalism can't stand up to the real finances of Greece. Maybe this is just like TBTF Banks saying youngsters Lehman and Bear Stern should be the Losers in the mess created by Derivatives and Sub-prime Mortgages.
"In sum, this country’s inclination to ignore Greece is very understandable. It is also not a good idea; and not just because high frequency fluctuations in the Greek drama add to volatility in US markets. It is chiefly due to what a possible recession in Europe would imply for a US economic recovery that is yet to attain escape velocity."
WTF??
USA has steady 2.8 Million Federal Workers, but has been contracting out at exponential rate since 2002. And it is mostly the costs of these big contracts for the MIC and for computers, computer services in general... And lots of this is understated due to Black Programs.
USA is more of a risk than Greece if you look at Debt & GDP and household debt & household income in the mode.
Plus you think Greece has a lot of Derivatives they produce?? No way, what kind of asshole would by derivatives from Greece.
You think Greece is more corrupt than the US Politicians who raise records amounts for each campaign and all year in between elections.
Are Greek Stats worse than USA Stats. Yes, then lest look at US War Spending for Iraq and you tell me the official numbers make sense to you after $10 Trillion spend on DoD.
People afraid of Greece, who has 1% of EU Economy, are really gaming the system or are afraid of capitalism and the USA's Financial System.
Go to Systems Training School, and try the "There is only one Alternative" line. Yeah, right. And we had to give TARP Money to the people who caused the Crisis to manage their own bailout and pay them to do it too.
Yeah Right.
The agenda's totality is Reductio ad absurdum. The agenda is radical, beyond most people's cognitive dissonace thresholds & indolence. UN's Agenda 21, ENMOD Terra Forming, Capitol Controls, NATO used as occupying army for political agenda's, EU sanctions to other EU's 28 members that are essentially self imposing financial APOPTOSIS in esscence since they damage themselves to "fall on the Spear" for Obozo's lead panarchy. It boogles the mind that the EU would not see this more clearly other than the coterie of BIS / IMF / UN corruption & hegemonious ogliarch's. Greece has to splinter & other's will follow. Whether or not they joing BRICS or exit NATO it's all necessary or else it's more austerity by shear default.
The BIS / IMF / Fed Reserve / HSBC / LIBOR et al is a bank. Their objective isn't to control the conflict, it's to control the debt that the conflict produces. The real value of a conflict, the true value, is in the debt that it creates. You control the debt, you control everything. This is the very essence of the banking industry, to make us all, whether we be nations or individuals, slaves to debt.
"Quite an experience to live in fear, isn't it? ... That's what it means to be a slave"