If Greece Exits, Here Is What Happens

Tyler Durden's picture

Now that the Greek exit is back to being topic #1 of discussion, just as it was back in the fall of 2011, and the media has been flooded by groundless speculation posited by journalists who have never used excel in their lives and are merely paid mouthpieces of bigger bank interests (long live access journalism and the book sales it facilitates), it is time to rewind to a step by step analysis of precisely what will happen in the moment before Greece announces the EMU exit, how the transition from pre to post occurs, and the aftermath of what said transition would entail, courtesy of one of the smarter minds out there, Citi's Willem Buiter, who pontificated precisely on this topic last year, and whose thoughts he has graciously provided for all to read on his own website. Of course, take all of this with a huge grain of salt - these are observations by the chief economist of a bank which will likely be swept aside the second the EMU starts the post-Grexit rumble.

From Willem Buiter

What happens when Greece exits from the euro area?

Were Greece to be forced out of the euro area (say by the ECB refusing to continue lending to Greek banks through the regular channels at the Eurosystem and stopping Greece’s access to enhanced credit support (ELA) at the Greek central bank), there would be no reason for Greece not to repudiate completely all sovereign debt held by the private sector and by the ECB. Domestic political pressures might even drive the government of the day to repudiate the loans it had received from the Greek Loan Facility and from the EFSF, despite it having been issued under English law. Only the IMF would be likely to continue to be exempt from a default on its exposure, because a newly ex-euro area Greece would need all the friends it could get – outside the EU. In the case of a confrontation-driven Greek exit from the euro area, we would therefore expect to see around a 90 percent NPV cut in its sovereign debt, with 100 percent NPV losses on all debt issued under Greek law, including the debt held, directly or directly, by the ECB/Eurosystem. We would also expect 100 percent NPV losses on the loans by the Greek Loan Facility and the EFSF to the Greek sovereign.

Consequences for Greece

Costs of EA exit for Greece are very high, most notably the damage done to balance sheets of Greek banks and nonfinancial corporates in anticipation of EA exit.

We have recently discussed at length what we think would happen should Greece leave the euro area (Buiter and Rahbari (2011)), so we shall be brief here. Note that we assume that Greece exits the euro area and does not engage in the technical fudge discussed in Buiter and Rahbari (2011), under which it technically stays in the euro area but introduces a second, parallel or complementary currency.

The instant before Greece exits it (somehow) introduces a new currency (the New Drachma or ND, say). Assume for simplicity that at the moment of its introduction the exchange rate between the ND and the euro is 1 for 1. This currency then immediately depreciates sharply vis-à-vis the euro (by 40 percent seems a reasonable point estimate). All pre-existing financial instruments and contracts under Greek law are redenominated into ND at the 1 for 1 exchange rate.

What this means is that, as soon as the possibility of a Greek exit becomes known, there will be a bank run in Greece and denial of further funding to any and all entities, private or public, through instruments and contracts under Greek law. Holders of existing euro-denominated contracts under Greek law want to avoid their conversion into ND and the subsequent sharp depreciation of the ND. The Greek banking system would be destroyed even before Greece had left the euro area.

There would remain many contracts and financial instruments involving Greek private and public entities denominated in euro (or other currencies, like the US dollar) that are not under Greek law. These would not get redenominated into ND. With part of their balance sheet redenominated into ND which would depreciate sharply and the rest remaining denominated in euro and other currencies, any portfolio mismatch would cause disruptive capital gains and losses for what’s left of the Greek banking system, Greek non-bank financial institutions and any private or public entity with a (now) mismatched balance sheet. Widespread defaults seem certain.

As discussed in Buiter and Rahbari (2011), we believe that the improvement in Greek competitiveness that would result from the introduction of the ND and its sharp depreciation vis-à-vis the euro would be short-lived in the absence of meaningful further structural reform of labour markets, product markets and the public sector. Higher domestic Greek ND-denominated wage inflation and other domestic cost inflation would swiftly restore the old uncompetitive real equilibrium or a worse one, given the diminution of pressures for structural reform resulting from euro area exit.

In our view, the bottom line for Greece from an exit is therefore a financial collapse and an even deeper recession than the country is already experiencing - probably a depression.

Monetising the deficit

A key difference between the ‘Greece stays in’ and the ‘Greece exits’ scenarios is that we believe/assume that if Greece remains a member of the euro area, there would be official funding for the Greek sovereign (from the Greek Loan Facility, the EFSF and the IMF), even after the inevitable deep coercive Greek sovereign debt restructuring, and even if NPV losses were imposed on the official creditors – the Greek Loan Facility, the EFSF and the ECB. The ECB probably would no longer engage in outright purchases of Greek sovereign debt through the SMP, but the EFSF would be able to take over that role following the enhancement and enlargement of the EFSF later in 2011.4 If Greece remains a member of the euro area, the ECB would likewise, in our view, continue to fund Greek banks (which would have to be recapitalised following the Greek sovereign debt restructuring), both through the regular liquidity facilities of the Eurosystem and through the ELA.

In the case of a (confrontational and bitter) departure of Greece from the euro area, it is likely that all official funding would vanish, at least for a while, even from the IMF (which would, under our most likely scenario, not have suffered any losses on its loans to the Greek sovereign). The ECB/Eurosystem would, of course, following a Greek exit, cease funding the Greek banks.

This means that the Greek sovereign would either have to close its budget gap through additional fiscal austerity, following its departure from the euro area, or find other means to finance it. The gap would be the primary (non-interest) general government deficit plus the interest due on the debt the Greek sovereign would continue to serve (the debt issued under foreign law other than the loans from the Greek Loan Facility and the EFSF, and the debt to the IMF), plus any refinancing of this remaining sovereign debt as it matured. We expect the Greek General Government deficit, including interest, to come out at around 10 percent of GDP for 2011, while the programme target is 7.6 percent. General government interest as a share of GDP is likely to be around 7.2 percent of GDP in 2011, which means that we expect the primary General Government deficit to be around 2.8 percent of GDP. We don’t know the interest bill in 2011 for the IMF loan and for the outstanding privately held debt issued under foreign law. If we assume that these account for 10 percent of the total interest bill on the general government debt – probably an overestimate as interest rates on the IMF loan are lower than on the rest of Troika funding – then we would have to add 0.72 percent to the primary deficit as a percentage of GDP to obtain an estimate of the budget deficit that would have to be funded by the Greek government, say 3.5 percent of GDP. We would have to add to that any maturing IMF loans and any maturing privately held sovereign debt not under Greek law. This is on the assumption that even those creditors under international law that continue to get serviced in full, would prefer not to renew their exposure to the Greek sovereign once they have been repaid. In addition, future disbursements by the IMF under the first Greek programme would be at risk following a Greek exit. This would create a further funding gap.

Assume the Greek authorities end up (very optimistically) having to find a further 5 percent of GDP worth of financing. This could be done by borrowing or by monetary financing. Borrowing in ND-denominated debt would likely be very costly. Nominal interest rates would be high because of high anticipated inflation – inflation that would indeed be likely to materialise. Real interest rates would also be high.

Although the Greek sovereign’s ability to service newly issued debt would be greatly enhanced following its repudiation of most of its outstanding debt, the default would raise doubts about its future willingness to service its debt. Default risk premia and liquidity premia (the market for ND-denominated Greek debt would be thin) would raise the cost of borrowing in ND-denominated debt. Even if the Greek authorities were to borrow under foreign law by issuing debt denominated in US dollars or euro, default risk premia and liquidity premia would likely be prohibitive for at least the first few quarters following the kind of confrontational or non-consensual debt default we would expect if Greece were pushed out of the euro area.

So the authorities might have to finance at least 5 percent worth of GDP through issuance of ND base money, under circumstances where the markets would inevitably expect a high rate of inflation. The demand for real ND base money would be very limited. The country would likely remain de-facto euroised to a significant extent, with euro notes constituting an attractive store of value and means of payment even for domestic transactions relative to New Drachma notes. We have few observations on post-currency union exit base money demand to tell us whether a 5 percent of GDP expected inflation tax could be extracted at all by the issuance of ND – that is, at any rate of inflation. If it is feasible at all, it would probably involve a very high rate of inflation. It is possible that we would end up with hyperinflation.

The obvious alternative to monetisation is a further tightening in the primary deficit through additional fiscal austerity (of something under 5 percent of GDP), allowing for some non-inflationary issuance of base money. Because Greek exit would be in part the result of austerity fatigue in Greece, this outcome does not seem likely.

A collapsed banking system, widespread default throughout the economy, a continuing non-competitive economy and high inflation with a material risk of hyperinflation would make for a deep and enduring recession/depression in Greece. Social and political dislocation would be certain. There would, in our view, be a material risk of a downward spiral of dysfunctional politics and economics.

Consequences for the remaining euro area and EU member states of a Greek exit

For the world outside Greece, and especially for the remaining euro area member states following a Greek exit, the key insight would be that a taboo was broken with a euro area exit by Greece. The irrevocably fixed conversion rates at which the old Drachma was joined to the euro in 2001 would, de facto, have been revoked. The permanent currency union would have been revealed to be a snowball on a hot stove.

Not only would Greek official credibility be shot, the same thing would happen for the rest of the EA member states in our view. First, monetary union is a two-sided binding commitment. Both sides renege if the accord is broken. Second, Greece would only exit from the euro area if it was driven out by the rest of the euro area member states, with the active cooperation of the ECB. Even though it would be Greece that cuts the umbilical cord, it would be clear for all the world to see that it was the remaining euro area member states and the ECB that forced them to wield the scalpel.

It does not help to say that Greece ought never to have been admitted to the euro area because the authorities during the years leading up to Greek membership in 2001, knowingly falsified the fiscal data to meet the Maastricht criteria for EMU admission, and continued doing so for long afterwards.6 After all, what Greece did was just an exaggerated version of the deliberate data manipulation, distortion and misrepresentation that allowed the vast majority of the euro area member states to join the EMU, including quite a few from what is now called the core euro area7. The preventive arm of the euro area, the Stability and Growth Pact (SGP) which, if it had been enforced would have prevented the Greek situation from arising, was emasculated by Germany and France in 2004, when these two countries were about to be at the receiving end of its enforcement.

Euro area membership is a two-sided commitment. If Greece fails to keep that commitment and exits, the remaining members also and equally fail to keep their commitment. This is not just a morality tale. It has highly practical implications. When Greece can exit, any country can exit. If we look at the austerity fatigue and resistance to structural reform in the rest of the periphery and in quite a few core euro area countries, it is not plausible to argue that the Greek case is completely unique and that its exit creates no precedent. Despite the fact that both Greece’s fiscal situation and its structural, supply-side economic problems are by some margin the most severe in the euro area, Greece’s exit would create a powerful and highly visible precedent.

As soon as Greece has exited, we expect the markets will focus on the country or countries most likely to exit next from the euro area. Any non-captive/financially sophisticated owner of a deposit account in that country (or in those countries) will withdraw his deposits from banks in countries deemed at risk - even a small risk - of exit. Any non-captive depositor who fears a non-zero risk of the future introduction of a New Escudo, a New Punt, a New Peseta or a New Lira (to name but the most obvious candidates) would withdraw his deposits from the countries involved at the drop of a hat and deposit them in the handful of countries likely to remain in the euro area no matter what - Germany, Luxembourg, the Netherlands, Austria and Finland. The ‘broad periphery’ and ‘soft core’ countries deemed at any risk of exit could of course start issuing deposits under English or New York law in an attempt to stop a deposit run, but even that might not be sufficient. Who wants to have their deposit tied up in litigation for months or years?

Apart from bank runs in every country deemed, by markets and investors, to be even remotely at risk of exit from the euro area, there would be de facto funding strikes by external investors and lenders for borrowers from these countries. Again, putting under foreign law (most likely English or New York) all cross-border (or perhaps even all domestic) financial contracts and instruments could at most mitigate this but would not cure it.

The funding strike and deposit run out of the periphery euro area member states (defined very broadly), would create financial havoc and mostly like cause a financial crisis followed by a deep recession in the euro area broad periphery. The counterparty inflow of deposits and diversion of funding to the ‘hard core’ euro area and the removal (or at least substantial reduction) of the risk of ECB monetisation of EA sovereign and bank debt would drive up the euro exchange rate. So the remaining euro area members would suffer (at least temporarily) from an uncompetitive exchange rate as well from the spillovers of the financial and economic crises in the broad periphery.

As noted by the new IMF Managing Director, Christine Lagarde (Lagarde (2011) and confirmed by Josef Ackerman (Ackermann (2011, p.14)), the European banking sector is seriously undercapitalised. It would not be well-positioned, in our view, to cope with the spillovers and contagion caused by a Greek exit and the fear of further exits. Ms Lagarde was arm-twisted by the EU political leadership, the ECB and the European regulators into a partial retraction of her EU banking sector capital inadequacy alarm call.10 However, this only served to draw attention to the obvious truth that despite the three bank stress tests in the EU since October 2009 and despite the capital raising that has gone on since then both to address any weaknesses revealed by these tests and to anticipate the Basel III capital requirements, the EU banking sector as a whole remains significantly undercapitalised even if sovereign debt is carried at face value. In addition, the warning by Ackermann that “… many European banks would not be able to handle writing down the sovereign bonds they hold on their banking books to market levels…” (Ackermann (2011), see also IMF (2011, pp. 12 -20)) serves as a reminder of the fact that Europe is faced with a combined sovereign debt crisis in the euro area periphery and a potential banking sector insolvency crisis throughout the EU.

A banking crisis in the euro area and in the EU would most likely result from an exit by Greece from the euro area. The fundamental financial and real economy linkages from the rest of the world to the euro area and the rest of the EU are strong enough to make this a global concern.


Ok, now we get it...

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markmotive's picture

Sooo. Not a good time to go long, eh?

Jim Rogers says so. He also says gold and oil going much higher.


Colombian Gringo's picture

More fearmongering from the bankster shills. Bottom line is Greece and Europe are broke, and  and more debt will only exacerbate the problems and delay the inevitable while guaranteeing the final collapse will be even worse.  The Greeks get to choose from an immediate devaluation, restructuring and recovery, or a slow burn, a long steady decline that will eventually relegate Greece to 3rd world status. 


Either way, the Greeks are going to get it good and hard so better to be first in line, spread the cheeks and plan to exit the debt prison before the vaseline runs out. Once all of their debt is reputiated, they can start anew. Plus the Greeks enjoy the added bonus of seeing their banksters and elites destroyed, watching them circle the toilet bowl as they are flushed away.

LawsofPhysics's picture

Spot on!  The paper-pushers are getting desperate and stink of fear.  Many "Hank Paulson" moments to come. Fuck the paper pushers, restore the fucking rule of law and prosecute the god damn fraud already.

Nage42's picture

Well, what did Iceland do?  They seem to have exited past the stink of fear and are progressing along fairly well (all things considered...).

No mention of "going the way of Iceland" and reviewing what national debt is considered to be odious and what is public debt in good faith.


Just curious.

The Big Ching-aso's picture



Forget New Drachma. Let's quit beating around this redolent Greek bush.  They should just print the New Debtma & call it an indefinite indentured tourist trap and not expect anything else.   It's hopeless.

redpill's picture

Greece is already in a deep recession/depression. The only difference is whether they will suffer now and forever by agreeing to be perpetual debt slaves to international banking interests, or suffer now and live free again some day by resetting their economy. Pain is inevitable either way, it's only a question of whether the bankers feel it too.

Would you like to suffer a long and painful death by gangrene, or do you cut off the leg and endure short term pain in order to survive as a sovereign people in the long run?

CPL's picture

The greek government is non existant.  It's running off a TEM transaction system of barter.


There is no recession/depression in Greece.  That is exactly what happens in society when credit is non-existant. When the goods are received first and the credit for it is zero.  What is happening in Greece is the population decided that the status quo blows goats and shifted their attention to reality, instead of the drivel western culture seems to produce so much of.


Here's something history teaches.  The culture stays, the language stays, the people adjust the banking/currency schemes always collapse...over and over and over and over again.  Since all central banks are part of the same problem.  Once the concept of the central bank is gone, something else will pop up.  In the case of Greece anyone outside of Greece that want to do business in Greece better have done the work on Greek soil.


That's what the TEM represents if you weren't clear on what a TEM is.  You have to work first or have something of value first before the exchange is made.  Much like no John has met a whore that allows credit, the same can now be said of the Greek people on the ground level.  You have to show up with something of value.  Its a weird variation of mercalitism and privateer with barter.  It's worked for 6000 years until someone hijacks the system with central planning and it starts all over again...then central planning fails, rinse and repeat.


Cadavre's picture

If a Citi "owned" economist concludes "this is where the fallout will spread"  when Greek exits the EZ, would prudent investors be best advised to bet against what those conclusions imply?

Is this yarn rhetorical laxative to help Citi dump it's Greek paper? Maybe it be time for a deep six CIti short binge?

Inquiring minds want to know!


CPL's picture

That's the situation.  The value of a Greek paper backed anything before the first TEM was exchanged was worth something.  After the first TEM traded hands...


You ever gone to a horse race and lost because the horse didn't make it out of the gate.  It's really that simple.  Any investment material in Greece prior to that tiny action of value reassetment and a new currency leave anyone holding stocks, bonds, currency, IOU's, children's finger paintings...doesn't matter.  

I'll correct myself, the finger painting will still maintain it's intrinsic value to Mom/Dad/Friends as long as it hangs on the wall or the fridge.


...again does not matter, the value and return on those investment is zero.  As in nothing.  Nada.  Zip.  Empty.  No half full, no half empty...just all gone.  And that is why when we all buy, trade, sell, barter, whatever.  We all sign agreements that state something that simply says "good luck, watch your ass when you place your bets/investments".  I know I signed one with my trade accounts.  The bank and government has nothing to do with my shitty stock picks or losses.  I am culpable for my own crappy decision making.


That is the long and the short of it.  People are mystified why this happened.  Why is easy.  Live a life on credit and you eventually have to pay up.  If you can't pay...on an individual level assets are seized.  On a national level, nobody knows where to begin, that one is easy as well.  You don't loan more money to someone that can't pay back what they owe. 


I know there were shocking news stories on Greek islands being sold and other ruins being used as collateral, even then, do the people that bought the assets really even own them with a complete absence of central bank bucks in the Greek system. 


If that doesn't frame the situation all EU investors are about to face I'm not sure what would.  It is one of the primary reasons I've been asking people to stay out of the markets.  It is different, the math is all wrong, the players are all wrong...there was only one direction it could all go.  The wrong direction.  Here we are.  What options are on the table.  Will the central banks of Europe invade Greece?  No, the Greeks know how to deal with occupation, the watches are set to glacial service delivery and paper work gets lost.  Greece has dealt with countries issuing proclaimations for 2500 years since Ancient Rome.  They simply do not give shit, nor should you, unless you've got some money in this market...any market really.


For long term if you want some safety.  Gold, silver and Oil if you can store it.  Relearn all your ancestors abilities like cooking, gardening, repairing.  Get to know your neighbors.  If you read the first chapter of the Scouts handbook, it has the truth of the matter printed right there in black and white on how to survive anything, anywhere, anytime and at any age.  Be friendly, be useful and be on time.  ;-)



Cadavre's picture

...shocking news stories on Greek islands being sold and other ruins being used as collateral, even then, do the people that bought the assets really even own them with a complete absence of central bank bucks in the Greek system

Sounds like Robocop nemesis,  OMNI Consumer Products, hostile takeover strategy. OMNI floods old Detroit's black market with dope and violence. Property value, followed by lost tax revenues and city "fathers" default on the city's OCP note. OCP gets old Detroit and pennies on the dollar. Checkmate.

While all this is going on, Average Joe old Detroit residents are on a continuous 'nod' because they spend all their time "spooning up" "I'd buy that for a dollar!"  hypno-tube commercials. Something like that is happening in the US right now. Can't say it's a bad thing.

... still confused about this whole "who won the cold war thing",

Greece may have a law similar to US Eminent Domain (didn't see a refer to Greece). A legal process that transfers asset ownership to the public. No way around it.

Greece - like the US and others - has been financially gentrified. And Citi was in on the Frenzy - Citi knew what Goldman knew. Goldman engineered a structured transaction to hide Greek debt. Now Goldman will say they just "doing go's work", but to my neighbors dog, it looks "god's work" is another way of saying "defrauding bond holders". Like said before, Citi knew what Goldman knew, and both of them were on the other side of the falsified "ability to pay" shtick, They were betting against the bond buyers that relied the GS "doctored" or "cooked" Greek prospectus.

Is that f*cking fraud, or god's work? I'm a' asking ya?

Can't see where  USD denominated gold or oil will be heading. All the money is in refined products now. Oil is in oversupply - and thats with Iranian sanctions and a zillion price-scare-up wars and wars chest beating going on in global oil patches. They may be a non-USD play in gold and oil - USD direction is fuzzy. Always good to stack silver - not so much as a play - more like "provisions" to hedge against hurricanes or floods disrupting supply lines.

The Big Ching-aso's picture



It's hopeless.   Because it's deep-seated cultural.     Greeks especially don't like dealing in fiat when taxes get tied to it.   That's why they hardly pay taxes now.   Bartering when necessary to avoid it.        Whether it's the Euro, the New Drachma, the New Debtma, whatever, it doesn't matter.   They aren't gonna pay taxes in any fiat denomination to carry their load.    Ever.  You can 'reset' their economy with a new currency all you want.   It doesn't matter.   Debt schmett.    They'll be back to square one today in no time.   It's a tourist stop.   It'll never be Stuttgart.

It's not a matter of getting rid of gangrene or being dead.   To them fiat's gangrenous because taxes equals death.  And they could care less if government has to borrow more if it kills them.       To them it's just another piece of paper.    Short term comfort trades over long term stability.    Without taxes they can live with fiat though.        They know that being a tourist mecca means tourists bring in other currencies.    They can exist pretty much without their own currency if they had to.   If they had a new currency they would get rid of it asap for tourist Marks, Dollars, Swiss Francs, anyway - in fact they'd demand payment in other currencies first and foremost assuming the ND was worth crap which it would be.    So much for supporting the New Drachma then.     

It's hopeless to expect them to play the fiat-tax game.   They've never played it and never will.    And even if they did play it they'd play to screw the tax gamemaster even if it meant screwing themselves longterm.

StychoKiller's picture

May 15th is just a short time away...

Oh regional Indian's picture

Re-dole-ant did you say TBC? 

I have a feeling Greece or Ireland might be test countries for a cashless transaction system as the "ONLY" way to make sure the SCROUGE OF BLACK MONEY is rooted out of the system as it is that which is root of the problems... not the baker-pols.

BLACK MONEY. No shame in these *uckers either. First off, taxing income should be illegal world over. At least int he US, the very basis of it is illegal (IRS).

Then said *uckers make it a crime to dis-obey a criminal construct int he first place.

Ireland seems to have rolled over....will greece fight before spain ignites?

I think Greeece is in till Spain implodes.... then it'll be a run for the exits. Till Spain holds (not to much longer perhaps, it's all very ominous and there has been no mention of Santander in the press for all the time the Spain question has come up).

Again though, these Olympics are meant to proceed in a spirit of enforced harmony. I'l presume that all major action will happen during of just after them.

Till then, drama, drachma, Debtor, queen.





Gully Foyle's picture

"I have a feeling Greece or Ireland might be test countries for a cashless transaction system as the "ONLY" way to make sure the SCROUGE OF BLACK MONEY is rooted out of the system as it is that which is root of the problems... not the baker-pols."

Yeah, I can see Greece going all hightech overnight.

Scrooge of Black Money?

Scourge of Black Money?

Scrounge of Black Money?

( What the fuck do they serve at an Indian McDonalds instead of burgers?)


CPL's picture

It's sunday and rented fingers are fashionable?

Oh regional Indian's picture

Hey Fick-face, everyone has a cell-phone. Capiche? It's enough. They'll give them out, no problem.

Google and others are not pushing their wallets for no reason.

The cell phone, which may as well be surgically attached to most people, or a pad ironed on... is the way. All manner of recog systems in  he chapest phones now. Geo-location, bio-metrics, "secure" payment gateway, currency...

And scrouge, scrooge....whatever.

Gald to note your morning got started to a typically sour one. It's those donuts and coffee asshole. Throw up, cheer up and then come back and say something meaning-ful.


LongBalls's picture

A cashless society is coming. Don't let the tards convince you otherwise. It's a promise.

Gully Foyle's picture


Yes, but it isn't gonna be Greece or Ireland.

You have Bitcoin.

You have Canada, who already disgarded the penny.


No Money, No Problems: Canada Considers Completely Digital Currency

And some island off either New Zealand or Australia testing a form of Carbon credit currency. They have been doing that for a couple of years now.

So who the fuck would pick Greece or Ireland, when you have higher tech nations like say Great Britain. Since both Canada and Australia are still under the Brit umbrella, where do you think digital currency will be ushered in in Europe?


CPL's picture

Rented fingers aren't something to be ashamed of.  Just means the mind is moving faster than the fingers.  Gully is just being a dick as usual, I swear he's Trav777 in a new suit by his writing style.


To combat that mind moving faster than the fingers, Voice diction software is fairly useful.  And yeah cell phones are brutal typing on and the only platform right now with anything useful is Android 4 which is pricier than the top end iPads.


Otherwise Microsoft has a "free" package, it's as good as the Dragon Dictate system and it's "free", as in if you own XP, Vista or Windows 7 it comes with your license.  I had to train it for a couple of hours because of my accent.  For some reason their is no setting for Ottawa Valley Hick on there where the vowel sounds are swapped with consonants regularly, closest I could point out is the language known as Piker English with some French and Mohawk thrown in for good measure.



Once you are done training, it's around 90 words a minute, 150 if typing while dictating.  Took a while to figure out the rhythm...plus you can set system commands like "open word" "go to zerohedge" "run backups"...whatever.  Very handy tool to improve speed and accuracy. 


Also incredibly handy if managing multiple servers at the same time by Bawxing terminal sessions for those times you need a server farm to assist in any practical endevour that requires many computers acting on your behalf.  Mostly for on line bedlam, but also useful for fixing Exchange servers because it's a finicky product designed by product managers or running maintenance on a SQL farm.  Any case...million and one purposes for voice dictation, like this post.



Gully Foyle's picture


"Rented fingers aren't something to be ashamed of."

Yes Mr Gore, or is it Mr Travolta?

You people and your happy endings.

CPL's picture

Well if you've got a strong grip, I'll let you turn the knob as long as your tits are big enough.


I'll be expecting an egg roll and a mop up too.

Gully Foyle's picture

Oh regional Indian

Wow, someone suddenly realized what a shithole his country is.

Run out of acid?

How is that untouchable issue by the way?

Oh regional Indian's picture

Troll, get smart, it's not enough to put the addressee in bold atop and type in full caps.

Your tone/style/content is painful to read and painfully meaningless to boot.

Fuck off.

Unless thereis a GUlly on Meds and a Gully off them. Who knows anymore.

Regardless, fuck off.


smb12321's picture

A new devalued drachma would greatly increase the price of imported goods but for the everyday things Greeks use - clothes, food, etc - nothing would change.  The best reason to convert is the enormous boom in tourism that would engender.  Think of it  - the cheapest vacation site in the civilized world.

AldousHuxley's picture

You do lose your financial sector and private markets and exchanges....stocks in Icelandic companies are pretty much worthless.





LawsofPhysics's picture

Yes, but funny how their products aren't.  Real producers in the real world will be just fine.  The paper world, not so much.

LawsofPhysics's picture

Don't forget, Iceland also prosecuted the fucking fraud at all levels.  Nothing will change so long as there are no real  consequences for bad behavior.  And FYI-having your fucking bonus cut from 50 million to 25 million is not a real fucking consequence.

resurger's picture

"bonus cut from 50 million to 25 million"

Fuck, thats a lot!! It's not fair



Griffin's picture


Justice is a important issue. Geir Haarde, former prime minister of Iceland was prosecuted by a special court called Landsdómur, where he was found guilty of the most serious charge of those brought against him.

According to the constitution he was bound by law to hold regular meetings to inform other people  in the govt about things that consern them, like one minister of commerce and banking who was totally left out of the loop, not being in the "inner circle" as it was called.

Geir, like all members of parliament swear to uphold and defend the constitution when taking office, so this is obviously a serious matter.

It could be said that the court wiped their asses on Geirs political legacy, and his response reflected that, he went ballistic, red in the face, making threats against the court, declaring victory and screaming about appeal to a international court for justice, about his human rights being violated.

I am amazed by his reactions, as he should have known this could go this way and should have been prepaired, but he showed everyone what kind of a leader he was.


I think there is only one politician already in prison, Baldur Gudlaugsson, he was the permanent secretary for the ministry of finance, he got 2 years for insider trading and a 200 million isk fine.

There are a few bankers in prison already, and a few on the way.




CrashisOptimistic's picture

There is way too much ZH flinging about of Iceland as a precedent.

Iceland had Brit and Dutch private deposits in their banks.  Those banks went under.  There were FDIC-like guarantees of the money but this was not sovereign debt.  The Iceland Event Was Not About Government Spending Generating Decades Of Deficit / Debt.

In other words, it was not the same thing at all.

Iceland's FDIC-similar situation had limits on the guarantee, just like the FDIC does.  And they have negotiated repayment.

It's not a good example of what is happening elsewhere and it's not really a default precedent.

LawsofPhysics's picture

The end-game will be the same.  Banks  will  go under and just like Iceland, people will have to renegotiate and re-learn what "wealth" really is.  Moreover, another big difference is that Iceland put the perps on trial.  In other words they had an honest judicial system, probably not the case in Greece (or the U.S.S.A.).

Max Fischer's picture



Agreed.  The Iceland comparison is ridiculous.

While the doomer goons continue to call for the abolition of the Fed and the removal of government interference in the marketplace, they don't realize that Iceland was SAVED by all sorts of government responses to the crisis and by their central bank jacking up interest rates to artificially high rates (18%) to attract capital. 

When the libertardians use Iceland as an example of a successful response to the financial crisis, they are unwittingly promoting the influence of central banks and central governments.

It only proves - once again - that most libertarian goons have absolutely no clue what they're talking about or calling for.   


LawsofPhysics's picture

"Iceland was SAVED by all sorts of government responses to the crisis and by their central bank jacking up interest rates to artificially high rates to attract capital. "

Imagine that max, their government prosecuted the fucking fraud.  Is this not what you meant?  Where is John Corzine max? - FAIL. 

Raise interest rates in America?    Go ahead, I DARE YOU.  Who has no clue MAX?   LMFAO

Max Fischer's picture



Imagine that max, their government prosecuted the fucking fraud.  Is this not what you meant?

No. That's NOT what I meant.

Iceland wasn't saved because some people went to jail. It was saved due to specific government actions that kept capital in their banks, and I used this example to demonstrate the importance of having a central bank and a central government.  Furthermore, the repetitive use of Iceland by anti-government libertarians as a succesful precedent only demonstrates the ignorance of these babbling goons.  

The Icelandic government did FAR MORE than prosecute some people.  That's NOT what I was refering to.  A simple Google search will educate you.  

Raise interest rates in America?

Interest rates don't need to be raised to 18% in America to attract capital.  There's an endless bid for our debt at world record low rates. My point was that the central bank of Iceland raised rates, and without having done this, the krona would have collapsed. Again, it was specific government responses that saved Iceland.

Besides, the economy of a small island in the north Atlantic with a ~$14billion GDP really isn't comparable to the world's largest economy, 1000X its size.


resurger's picture

Hi Max,

I love your thoughts, you are so fucking amazing! i will talk to my boss to hire you at our investment desk.

BTW: am $10 Million short the US10Y paper at 99.06 - %1.84 (http://www.bloomberg.com/markets/rates-bonds/government-bonds/us/), will that make me rich? your thoughts please.

Am so glad that you told me that the US Government will raise interest and the bond will yield  %1000 .. Thanks

oh btw, the bidders are the U.S. Treasury’s Exchange Stabilization Fund right?

bid-unlimited FTMFW

MsCreant's picture

I know you can't believe the shit you post but I feel like nibbling some troll bait this afternoon. You are a talented troll.

Why do you trust any group of people to, without accountability, oversight, etc. make decisions for all of us? Do you see them as having passed some kind of altruism test to get their positions? Or do you like the idea of a king?

You are not so passsive as to just trust them with it all, are you?


Bring the Gold's picture

Yay MsCreant, maybe my favorite ZH poster, one of them anyways. Just wanted to say hey and give you a big +1

FrankThinkTank's picture

@ Max Fischer

....failing the word game Max Fischer; btw you look dashingly stalwart composed over that chalkboard in your avatar, ...too wrapped up in the "government" mantra.

They didn't raise interest rates under a keynesian regime:

"In late September 2008, it was announced that the Glitnir bank would be nationalised. The following week, control of Landsbanki and Glitnir was handed over to receivers appointed by the Financial Supervisory Authority (FME)"

That is the only merit being debated here, and you've failed miserably. 


CPL's picture

We hoping for something from Iceland? 


Iceland for those that haven't been is as about as sophisticated as St John's Newfoundland.  It might be clean as an Ikea showcase room, but it's still a tiny island of inbred hillbillies that fish.


The fact their government stepped in was a good step, the fact that they kept most of the entitlements as if they were real is silly.  Pensions, government workers and the subsidies that bind them...who fucking needs it?  Did you notice that all you are discussing is what the government grabbed and seized and raised.


They certainly didn't change what they were offering to their people...which is nothing.  Nothing changed in Iceland, they are literally waiting for the next fiscal fuckup coming down the pipe and like good ostriches they'll stick their collective white heads in the snow and pretend it's fixed.


Tell you what Max, you name anything in Iceland that has improved or changed I'll put at least one plus in your junk bucket.  Name a single thing.  Hospitals are still half staffed.  People aren't paid if at all.  The government tire wheels are spinning into oblivion...for what?  To pay interest on imaginary numbers in a server in another central bank computer.  That's all...this has nothing to do with Libertarian ideals, it has to do with the fact you love central planning.


You always have, you couldn't imagine a world that you have a choice and are responsible for your actions.  You need a bad parent to complain about if you fuck up.  An excuse.  An out.  A mother's apron to hide behind because you are so completely unsure of your decisions that your need the mental safety net to operate.


Somehow I doubt all of that is true, you are coherent and write some interesting stuff.  You know which way the sun sets and rises.  You can put on your pants one leg at a time.  But at what point did you agree to have complete strangers access to 50% of your salary to deliver some undefined service and dictate terms on how your assets are managed.


From any angle, central planning is well past it's due date and has come to it's predictable corrupt end, now it's time to swing the other direction and that just drives you crazy doesn't it.  This is as far as we get to go this turn of the wheel.  If we don't manage to blow ourselves up in the meanwhile, we'll get another crack at the can when people forget and the current annoyances become history.

Things like central banks and planners are forgotten, the descendants oblivious to the harm caused by their ancestors if they survive the current situation and manage to procreate.  As kids we had Nazi hunters that would bag old Nazi party members hiding in Argentina.  In twenty years I'm sure we'll hear of Prop Desk hunters hunting down and wiping out the family lines of Dimon, Greenberg, Corzone, Bernake to the last person.  So good luck to them, they'll be ducking and hiding for a hundred years from someone pissed off that their pension was emptied or inflated away.

LongBallsShortBrains's picture

you name anything in Iceland that has improved or changed I'll put at least one plus in your junk bucket.

.....the price of Icelandic female company.......?

Western's picture

Your talent lies in misdirecting financial discussion into political bashing on all sides.


You're a maggot.

piliage's picture

Argentina in 2001 is a better example.

James_Cole's picture

Beat me to Argentina, worth adding that Argentina told the IMF to take a hike, but of course if Greece did that it would be the end of the world!

Max Fischer's picture



No. Argentina is NOT a better example - and I've said this MULTIPLE times.

The difference between the US and Argentina is that 90% of Argentina's stock of debt was issued in a foreign jurisdiction and denominated in a foreign currency.  This makes them entirely dependent on the FX markets and the whims of FX speculators to service that debt.  Same was true for Weimar and Zimbabwe.

Not true for the United States.  Our debt is denominated in US dollars, and we've got 100% rights on the printing press needed to service that debt. Moreover, if any country foolishly decided to take hostile action against our bonds by dumping them en masse in the market, we've got the world's most sophisticated military to persuade them otherwise.  Luckily, Ron Paul is NOT president, so we've also got a Federal Reserve which is the economic equivalent of being fully armed against economic attacks.  

In the future, please don't make the US/Argentina comparisons.  I've said this before, so it's your last warning.


James_Cole's picture

Argentina / Greece, not US. US doesn't really have anything to do with this article.

tocointhephrase's picture

Don't need a Dollar, Dollar, cos the Dollars gonna bleed!

Going to zero baby!

mcguire's picture

i thought the most interesting thing was the analysis on the exchange rate, with the euro going up!!  

The counterparty inflow of deposits and diversion of funding to the ‘hard core’ euro area and the removal (or at least substantial reduction) of the risk of ECB monetisation of EA sovereign and bank debt would drive up the euro exchange rate. So the remaining euro area members would suffer (at least temporarily) from an uncompetitive exchange rate as well from the spillovers of the financial and economic crises in the broad periphery.

makes sense, i guess... anyone else calling the reaction of the euro xr this way???  any thoughts on this??  

piliage's picture

Um...Argentina vis a vi Iceland. US didn't enter into the discussion.

By the way, part of the reason Argentina needed to default was their currency was tied to the US Dollar and was too strong for their economy, just like the Euro is for Greece... just saying...

resurger's picture

Hello Max, do you have a twin brother?!! I wish the world had more people like you

I love your analysis ... if i was a girl i would fuck you for the great stuff your write...