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Art Cashin On The "Greek Tragedy Playing Out As A French Farce"
The chairman of the "Friends of the Fermentation" committee dives into the two topics preoccupying the world: Bernanke and Greece, and as usual, deconstructs both with his laser-focused pragmatic perspective. That both of these are closed loops that only get worse as they "get better" is becoming increasingly clear to everyone even remotely interested in events away from the top 20 items in Google Trends.
Greek Tragedy Playing Out As French Farce - Somber faced correspondents pop up on TV screens throughout the day to report on the negotiations going on to validate the next tranche of the Greek bailout package. They convey a sense that the process is being conducted in an almost laboratory-like fashion.
Most of my veteran trading friends believe that the situation is hopeless. Greece must default. It is inevitable.
The Greeks gave us democracy, geometry, the building blocks of western philosophy and even the word austerity itself. The trouble is that while they can pronounce austerity, they can’t seem to practice it.
Here, thanks to my pal, Jim Brown, over at Premier Investor (himself a multi-decade veteran of the trading arena), we’ll take a look at some of the zanier snippets of this process.
The troika is demanding that Greece privatize large sections of the government and fire up to 100,000 government workers. Greece has already laid off 20,000 but hired 7,000 back, which is also in violation of the agreements not to hire more than one person for every ten fired. Another problem is the termination rules. Greece may be laying off workers but thanks to the Greek civil service plan they continue to pay them at 60% of the salary even though they are not working.
Jim further notes:
More than 250,000 private jobs have disappeared in Greece over the last year out of a population of 11.2 million and labor force of 4.9 million. If the government cuts another 100,000 as the troika wants and halts payments to terminated workers the unemployment rate will rise to nearly 20% on an official basis and even higher unofficially. Currently 42% of those under 24 are unemployed and 22.6% of those from 24-35 are out of work. Now you know where all the protestors come from when they televise the riots.
He points to the unbalanced nature of the “bailout”.
The German side of this equation is getting worse. Germany is responsible for 27% of any funds paid out on behalf of the EU. The election losses for Merkel's party over the weekend make it less likely the vote on the EFSF fund will fail (sic…pass?). That vote has been postponed until the 29th because of a visit by the Pope.
Jim touches on the imminence of critical time frames.
Greece said it may have to start issuing IOUs instead of checks for payment of some government expenses and some employees. Greece will run out of money in October if it does not receive the 8 billion euros in the next tranche of the bailout.
The inevitability of default is also the conclusion of my very good friend and fellow trading floor veteran, Dennis Gartman. Here’s a bit from today’s “The Gartman Letter”.
Once the Greek government actually moves to reduce public employees… something that heretofore has been anathema in Greece but which is inevitable and may come sooner rather than later… we shall move the odds of default up materially. Once the streets are again filled with Greek protesters, marching more and more often behind the red flags of the Socialist and Communist parties there, we shall move the odds of default up materially. Once the teachers go on strike; once the transportation unions go on strike; once the sanitation workers and the doctors and the nurses go on strike…and they will, mark our words… we shall move the odds of default up materially. As we have said all along, it really is not a matter of if but a matter of when Greece shall finally say that enough is indeed enough; that austerity imposed from without the country upon those within is too severe to continue; that the country shall be better off with a drachma it can devalue rather than a too strong EUR it has little if any power over. Greece’ only power is its power of default and eventually it shall wield that power. It really shall have no choice.
And a few quick thoughts from Cashin on the Twist:
Waiting For The Twist. Will We Get The Hokey Pokey? - This afternoon at 2:15, we will get a chance to gauge the language skills of the FOMC staff and Chairman Bernanke. Expectations are high since the chance of fiscal stimulus is just about zero in today’s political environment, so pressure on monetary policy may be enormous. That having been said, the toolbox is nearly empty and internal dissent at the Fed is growing. That raises the chance of the Fed kicking the can down the road. A mild proposal today and a program review in thirty days.
Put your right hand in. Take your right had out. Put your balance sheet in and shake it all about.
Lastly, Cashin's brainteaser du jour: "What is the only known common food that never spoils - ever."
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CNBC: Qatar now buying a stake in French banks, rumor based market...
As for Cashins brain teaser... honey.
it's Quite Simple, and I'll use a #@$#$# word for once:
FOMC : Fucking Over the Middle Class
And there you have it.
Now Cashin your Art.
ORI
Misfits All
I'd just like to add that I didn't need Google for the teaser, Grandparent was a beekeeper, he wore the suit & all, which is weird cause it made him look like a devout Muslim. No offense of course.
Fat Free IPads.. they are tasty too.... Cashin that's your answer...
Peanut Butter? That never seems to spoil. Honey may not spoil but it turns all crystalline, which makes it inedible.
Warm it up a bit, goes right back to er... honey.
Maybe you're right. Wasn't Alexander the Great buried in honey to preserve his body? I wonder what happened to his body. They should have done the same with Lenin, who I hear is looking a little ragged these days.
He's right. To reliquify honey place the honey container in moderate to very warm water and wait.
I don't reco putting the honey container in the microwave.
Fuck honey. Twinkies bitchez. And they'll mummify you to boot.
Isn't crystalline honey how powdered honey is made?
Making your own peanut butter is super easy and its 1000 times better than even the "fancy" boughten stuff.
Add lots of honey too it and you have the best of both worlds - although it's so good spoilage is never an issue.
I must have missed out on the facination with Cashin? Must be a inside joke.
He's one of those fellas who knows the score and tells it in a sideways manner. He's a subtle Santelli. Art has been in the business since they used an abacus to calculate P/Es. When heads roll on Wall Street his should be spared.
When you owe EUR330 billion, it's the banks' problem.
and in response to the 330 billions, the EUR keeps rising
maybe maestro Bernankes response will be worse
Cashin, the answer is gold ... bitchez
The real money of central bankers (gold) is lower on the day everyone is expecting money printing. Does the saying, keep it simple stupid apply here ?
Naah - just the CB's doin' a bit of Eddie's staring into the abyss and reacting as usual....
A bubble is a bull market in which the user of the word "bubble" has not fully participated. You can think of gold as a stock that went from 2 5/8 to 18 in a dozen years. I'm not sure that's a bubble... What I do think is gold is simply the reciprocal of the world's faith in the institution of managed currencies. It is one divided by T, where T stands for trust. And trust is a shrinking number and will continue to shrink. Therefore, I am still bullish on gold. Jim Grant
Twinkies
Are you suggesting that the movie Zombie Land lied to me?
Have you learned nothing from Zombieland?
The NYFRB says, "iPads".
Food that never spoils... is chocolate food?
Chocolate is one of "the" food groups and yes it can spoil.
Hey, darlin'. Lookin' good as ever!
Art should check his own language skills - Hokey Pokey was a name for ice cream in bygone days - so he actually means to refer to the "Hokey Cokey" - a sort of antic to musical acconpaniment where there was much more putting in of feet and legs and all....
Flamesuit on
Don't take
Cashin with a grain of salt...
But is that really food?
The EU is toast(keeps pretty well too?) the real question is what comes next
That's it...... TOAST!
You win by default.
Honey!
You silly person. Everyone knows it's Twinkies!
My thought exactly. Great minds think alike.
Or maybe that's (junk food) poisoned minds think alike. :>)
McDonalds French fries
I wasn't going to put my right hand in and shake it all about.
honey
White sugar - hungry mice will try soap or salt(!), but they will not touch sugar.
I don't think that we're going to have to wait for the streets to heat up again because the government will fall before that. There are investigations now into how truthful this whole story was about the new government, which assumed power in late 2009, suddenly discovering that Greece had a huge deficit. As they say, "He who smelt it, dealt it." Funny things have been going on with the statistics that may have led to an artificial swelling of the deficit as a way to justify austerity. I used to think that street protesting was the best way to change the government but I don't know now. The people in Greece know that if a protest draws a large crowd ,the police will send in the agents provocateurs to stir up trouble and justify a massive police response. More effective tools are economic ones such as strikes. Investigations can be good, assuming the justice system is not corrupt.
Even if it's part of a song title how perfect is it that the word "jejune" in a top Google trend?
Honey never spoils and can be "uncrystalized".
SALT
The only food that never spoils is food for thought.
you're all wrong the answer is cannon fodder as any fule no
"What is the only known common food that never spoils - ever."
coma toast - it comes in a can, lots eat it for breakfast
Is it honey
or money?
Judging from CNBC, it is the Money Honey.
Dog Food. The Fed and the banking cabal can eat it forever as far as I'm concerned.
Alcohol.
revenge
honey may not spoil, but over time, it embalms -- honey is how people kept a variety of things fresh prior to refrigeration -- and you can't eat that.
maybe he knew that and was discounting it, or maybe he didn't know.
another answer is: water.