Ich Bin Ein Athener

Tyler Durden's picture

Via Mark J. Grant, author of Out Of The Box,

The only relevant test of the validity of a hypothesis is comparison of prediction with experience
                                                  -Milton Friedman
It was on January 13, 2010 that I first predicted that Greece would default. The yield on their ten year was 4.38%. I took a lot of flak for that call at the time. Vindication was mine in the end and Greece may be the spark that lights the fuse by the time we all look back and marvel at the way the European Union played out. Yesterday as we all watched the Holland and Hollande Show; Greece was scarcely on the radar. That act was behind us now we think and we are off to different adventures. Not so fast my friends, a moment’s respite; nothing more.
The Greek Statistical Office released new data yesterday and the results were anything but positive. The official debt to GDP ratio now stands at 165.3%, a fourteen percent increase from last year’s numbers. Quite frankly, this is a disaster and hardly in-line with all of the fantasy projections that Greece will now be heading towards the mythical 120% number bandied about by both the EU and the IMF. The rest of the economics for the country continue to worsen with a 21.8% unemployment rate and more younger people without jobs than employed. Greece is in its fifth year of recession and estimates place the economic contraction for 2012 between 4.5%-6.9%. They have elections on May 6 and to get the next round of aid the IMF is demanding further spending cuts of 5.5% of their GDP or around $14 billion plus an additional $4 billion from better tax collection. In my opinion, if history is any guide, none of these fantasies will be actualized so that Europe will face Round III of bailouts in the not too distant future which is one ungodly exercise in futility with the Greek people bearing the whip of their Germanic Masters.
It is quite likely, in my view, that the Greek elections will amount to a material political push-back and may well result in either the IMF/EU refusing to provide more aid and/or the newly elected government, finding no more capital forthcoming, heading back to the Drachma and devaluation as the only real solution left. This, of course, would mean that the old Greek debt held at the EU/ECB/IMF will head south along with the new bonds that were jammed upon the previous investors. What is readily apparent now is that the last aid package for Greece is significantly deficient and that it will either be more aid or someone’s exit strategy that will have to prevail because the current situation is little more than a Greek farce. I think the “wink, blink and nod” strategy which has been employed by Greece is about to end either as a result of the will of the people or as a result of the till being closed by political forces in the funding countries. There will either be a conclusion or Berlin can absorb Greece as a welfare state and be done with it.
Ich Bin Ein Athener
To make matters worse; the banks in Greece are losing $344 million a day and have capital outflows of about $500 million per month. Even with the $32.2 billion in recapitalization funds it does not take a fiscal genius to see where this is all leading which is right down the Spartan rabbit hole. May 6 is hard upon us with elections both in France and Greece and the outcomes of both contests may result in a quite different Europe than we had the day before.
Elections are a good deal like marriages. There's no accounting for anyone's taste. Every time we see a bridegroom we wonder why she ever picked him, and it's the same with public officials. - Will Rogers

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WALLST8MY8BALL's picture

It should be a hot time in the German Riviera this summer!

CrashisOptimistic's picture

Oh for God's sake, another article writer who doesn't understand.

1) Greece has nothing to gain by leaving the EU.  That helps the EU enormously, but it doesn't do anything for Greece.  Besides which, there is no mechanism in the EU charter for member states to leave, voluntarily or involuntarily.

2) The debt that was semi defaulted on was all private.  Not a single euro of ECB or IMF holdings was expunged.  If Greece can't hit their GDP  targets, a refusal to give them another tranche of funding is somewhat pointless because the tranche is mostly to pay interest and repayment principal on the ECB and IMF money.  Very little of it goes to Greece, per se.  It's just the EU paying themselves and the IMF.

3) Socialism is ascendant.  The Greek elections will result in reining in austerity, but as such the maneuver will be to somehow get their greedy paws on that EU tranche so it doesn't all flow right back out.  That won't be easy.

So in general stop writing articles about returns to drachma.  That is not a choice in anyone's interests.  It would cut Greece off from the spigot and it would have the ECB and IMF find their loans defaulted on.  

Jack Sheet's picture

very probably true amd I agree, but you can't get around the EIB loan provisions now being made in former national currency.

Hard1's picture

You are not thinking Greek enough Tyler.  Zeus will send Euros to the sea, which Poseidon will pick up and deliver to Hades.  Hades will make a donation to the EFSF which will fund Artemis' coffers.  Inspired by the Muses he will deliver the money to Papademus who will promptly pay his dues.

sschu's picture

Greece has nothing to gain by leaving the EU.

Your points are good, but what does Greece gain from staying in the Euro that they would not gain by leaving?  Either way they will not be able to pay their debts.

Are oil or other imported commodities cheaper if they stay in the Euro?  

If they dump the Euro, they are on their own and will certainly print big time.  They could use this currency change to stabilize their economy, but are not likely to do so.

The EU is completely screwed, kick the can is the only option they have as the PIIGS are insolvent.


mayhem_korner's picture



Lot of folks are similarly deluded that the November elections might change the U.S.'s financial trajectory...

SheepDog-One's picture

For nothing. Whatever puppet the banksters want has already been decided. 

My belief is that want ObaMao out and Romney in, time to put a white republican face back in there so the media can attack and blame him for the sudden terrible downturn.

Nobody For President's picture

Depends, as the old saying goes, on who is doing the counting.

gaoptimize's picture

I expect a Romney victory will lead to 4 months of market irrational exuberance and rioting in the streets by the dependent population.  The desperation associated with the inevitable trajectory will strike all near the end of his first 100 days.

NotApplicable's picture

Sure, they prop will be released, and they'll deflect downwards at an ever increasing rate.

That's change I can believe in.

Buckaroo Banzai's picture

Race. To. The. Bottom.

HoofHearted's picture

Nothing to see here. Move along, citizen.

That, plus it's all priced in...

Drachma's picture

At your service Mr. Fukker.

Dr. Engali's picture

It would have been so much easier if they had just defaulted and started over. Now they have more debt ,more problems,and no gold.

Sandmann's picture

o much easier if they had just defaulted


Still waiting to find out who "THEY" might be ?

Jack Sheet's picture

no, no,  they (the political elite) got several hundred billions of € by teasing the Troika's cocks, and you can bet that a good slice of those funds  was siphoned off into party accounts.

Jack Sheet's picture

"the banks in Greece are losing $344 million a day and have capital outflows of about $500 million per month."

Similar statments are being made about all southern EUR zone states and  lately also France. Unfortunately no-one says who the depositors are /were and where the money is going.

NewWorldOrange's picture

Next European fad: People looking under other peoples' mattresses.

Jack Sheet's picture

Yeah, Giorgios goes to his local bank branch, closes his account, withdraws the balance in bricks of nice pink 500€ notes, stuffs them down his jockey shorts and makes for the border

Dick Darlington's picture

EIB, institution owned by the EU member states, put drachma clauses on the new loans they give to greek busineses. They also said they will add same clauses on the loans to irish and portuguese. EIB also said they aim to extend the clauses to all loans they give in the future. THAT is a clear clue what's really happening behind the curtains despite the MASSIVE propaganda by Brussels.

citta vritti's picture

with fiat, I suppose, it will work. Why not gold? U.S. and others had gold clauses and U.S. Supreme Court rolled over and said it was okay for them not to be honored

LouisDega's picture

Rosetta Stone bitchezz

JohnKozac's picture

'Where is the money going?'


I bet those Swiss bankers are living high on the hog as money pours in form those olive countries...fat bonuses and profits for them I am guessing. I hope to see ZH do a report on the flows of that money. I saw Deutsche Welle showing Greeks moving quite a lot of money to Bulgarian bankers who smile and greet them at the door and offer free coffee and pastries for them....what a strange world!

Sandmann's picture

I bet Lebanese Bankers have a big role in matters and of course London through its offshore networks. The destruction of Greece is being used as a threat to other countries by the Banker Elites but it will unleash Armageddon in Europe as France goes down this Summer in street violence with the new President lacking any popular mandate ....for anything

GeneMarchbanks's picture

That will happen right after London has its moment in the sun... finally. Unlike in England, French youth can leave metro areas and still feed themselves.


Sandmann's picture


There is the venue GeneMarchbanks.......there are 13,500 soldiers to make it a fun contest (only 9500 in Afghanistan) so you can see how dangerous London is !

GeneMarchbanks's picture

Last summer was a peek into the future. That city is a cage its inhabitants rats. Stick to poke with is for now an unknown. By the time it's known it'll be too late. Good luck to you sir.

rwe2late's picture

 That "loan" money is also going right back to weapons merchants in  Germany, France, and the USA.

 The Greek government has been on a spending binge purchasing costly and unneeded weaponry. (All without kickbacks to corrupt Greek officials we may be sure.) Naturally, Greek citizens must be made to pay for allowing their politicians to be cajoled, corrupted, threatened and bribed by the US "Sales Dept."  err.., State Dept. et al.


carbonmutant's picture

Looks like the banks are preparing for it to happen.

The European Investment Bank is inserting clauses in the loan deals it signs with Greek firms in order to renegotiate debts if the country exits the euro zone and reverts to the drachma, Kathimerini reported.


Vince Clortho's picture

As the Shizophrenic "Market" shrugs off any possible implications in the news coming out of Europe.

DJIA up 113+ because we're just feelin bullish today!

insanelysane's picture

220% is the new 120%; see Japan.

NewWorldOrange's picture

Seems the EU will soon either unify politically and fiscally, or it will disintegrate. I don't think any of the politicians over there want to see it disintegrate - they always want things to plod along so they best ensure they keep their power and privilege, and don't end up hanging from lampposts. If the EU disintegrates, so does the Euro. Where will THAT leave Europe (third world status.) And most every politician or career bureaucrat in Europe has staked his life and reputation and career on the socialist experiment. They're not going to let it go easily. The EU will form a complete political/fiscal union fast, and soon. Like when W. Germany absorbed E. Germany twenty years ago almost overnight. Then, CNTRL-P will continue to be the order of the day until they collapse anyway. That could be a number of years off. But full union will probably come much sooner, and probably this year.

Sandmann's picture

on the socialist experiment.


Oh that's what it was.......Socialist Bankers loaded us up with debt and Hank Paulson got the Socialist TARP Program through Socialist Congress so the Republican Socialists could rescue their Socialist Brothers like Jamie Dimon and Lloyd Blankfein........did they have Fidel Castro or Hugo Chavez advising ? 

OH but it's different now, they have Free market Obamatron with Timothy Geithner foreclosing homes and creating Hoovervilles to teach those Socialists the True Path of US Capitalism and JP Morgan has cornered Silver, Copper and Derivatives to show the world the US Motto is Capitalism or Bust ! 


Meanwhile in Europe it is Socialism as usual helping Bankers survive market turmoil with handouts secured on the assets of the Citizens. 


Remember Socialism is spelled T A R P

bank guy in Brussels's picture

Prophetic graffito that appeared in Brussels a couple of years ago:

« Le peuple grec devant nous »

The people of Greece are in front of us

I.e., their fate is what may happen to us all

This graffiti is on the bricks of a railway viaduct leading into Brussels Zuidstation - Gare du Midi, the main train station where the Eurostar chunnel trains travel to and from Britain, they tried to scrub some letters but it is still visible there, right by the Zweden - Suède tram stop.


Jack Sheet's picture

nice touch. Was there also an emblem of Murkle wearing swastika armbands?

carbonmutant's picture

"If Greece is kept in the eurozone, there will be ongoing mass unemployment. But if they exit, they will see a very sudden recovery, as lower prices boost competitiveness", Hans-Werner Sinn, president of Ifo, said in a luncheon speech in New York

Jack Sheet's picture

Sinn is right, but it's a pity he goes down like a fart in church with the German political establishment. Screwbli's 4th Reich is on the agenda, not breakup.


bobola's picture

yield on a 1 year Greek bond is still stuck at 1,143%

not allowed to go higher...?????

not part of the big plan...

q99x2's picture

Are the banksters successfully doing to Greece, US and the EU what they did to Central America and Argentina? Yes. So they are doing what they do best. As long as the problem keeps getting addressed the way the banksters would like economists to analyze it then they will continue to be successful.

Governments or any with the power to arrest and detain need to start arresting them and throwing them into prisons. Only a small number of banksters need to be made into examples and the way things are going will change.

Cost effective. Efficient. And, the right thing to do.

SheepDog-One's picture

You know we're living in total insanity when a projected holy grail number goal of 120% debt/GDP is what everyone is clinging in desperation to.

My Days Are Getting Fewer's picture

The author should have checked his German with a native speaker before titling the article:

"Ich bin ein Athener." At best, that means:  I am a citizen of Athens too.

If you hail from Athens, you would say in German:

Ich bin Athener.

This gets back to JFK's faux pas in 1963 at the Berlin Wall.  JFK said:

"Ich bin ein Berliner."  That means: I am a jelly doughnut.

Correct German is:  Ich bin Berliner.

Jack Sheet's picture

It depends where the emphasis is. It could be on "ein" meaning he is a particular Athenian among many. Then the grammatical construction would be correct.

minosgal's picture

Your post confirms the interpretation a German native explained to me in 1979. She said 'filled,' though, but did not specify 'jelly'.

dirtbagger's picture

Repetitive articles of speech?  Like "The La Brea Tar Pits".

theTribster's picture

Given the financial streeses on the Euro zone coupled with the growing nationalism in the constituent countries there isn't much hope of things holding together very much longer. The question is how will the unwind happen? Whether ist Greece, Spain or Germany first I don't think it matters much. After the first country gets out everyone will want out, like many other things because of manipulation this exist is spring loaded and will happen pretty fast.

The sovereigns are getting screwed by these deals, everybody knows it - with or without austerity. I wonder how the Brussels Eurocrats are handled after things are dissolved and much of the truth comes out visa-vie the plans of the central planners in Brussels and Germany? The end of the Euro zone is upon us, by the end of the summer I suspect there will be no more Eurozone and no more Euro currency.

It is clearly beneficial fofor the sovereigns to leave the union, bring back and devalue their currency, default on the BS debts they've accumulated, seize the assets of the oligarch and start over. It at least creates the possibility that conflicts that go beyond currency wars and escalate into war(s) as things implode and northern Europe goes after soutern Europe. Where will Britain fall out on this? Wherever America does.

We'll likely use Europe as the scapegoat for our troubles which should be in final escalation at that point, convenient for the then powers that be (Mittens or Obama). We'll have so many choices for war it will be hard to decide which ones to get involved in -:) Seriously, I expect the world to be in conflict by the end of the year and I suspect that only part of Europe is on our side.

These events will also present the last opportunity for mankind to change the paradigms by which we live, for the better obviously. It will be the most historic time in human history, I think. Maybe being a little dramatic but I don't think so...


Olympia's picture

Global Debt Crisis

The greatest private fraud of human history.
Who are the great fraudsters who are becoming the murderers of the human kind? How does the economy "illness" threaten Democracy and the freedom of people?

By knowing what happened in indebted Greece, where loan sharks created “bubbles” and the current inhuman debt, one can understand the inhuman plan in total ...understand where this plan started just to bring all states at the same end ...understand how this type of plans are established...