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| To Greece: Give Them The Finger in forum [Market-Ticker]
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Themortgagedude
Posts: 8853
Incept: 2007-12-17
saint louis
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I would guess the finger will be extended when the amount of interest paid exceeds the amount of new funds received. As long as the situation is cash flow positive for the Greek gov it makes little sense to quit taking the money.
Please correct me if I'm wrong about this and they've gone cash flow negative already.
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I'm already visualizing you with duct tape over your mouth.
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Widgeon
Posts: 13481
Incept: 2007-08-30
Region formerly known as the United States
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Time for the Troika to appoint another PM.
Just to get them through this rough spot.
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Mpilar
Posts: 5614
Incept: 2009-01-05
Nashville, TN
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Does Greece even see any of those loans? I thought the bulk of the loans they were receiving were going straight to the banks to cover their debts and Greece didn't actually see much if any of it.
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Every normal man must be tempted at times to spit on his hands, hoist the black flag, and begin to slit throats. H. L. Mencken
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Iou
Posts: 1027
Incept: 2009-03-16
The Twilight Zone
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This is getting old. Let's get on with it!
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"When plunder becomes a way of life for a group of men living together in society, they create for themselves, in the course of time, a legal system that authorizes it and a moral code that glorifies it."- Frédéric Bastiat
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Duc888
Posts: 7368
Incept: 2008-11-06
CT, the UNconstitution State
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....."smoking holes"....hahahaha, that is actually putting it lightly.
Crater Tycho would be a better fit.
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...burp
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Nevertoolate
Posts: 1222
Incept: 2007-08-26
San Antonio de Bexar de runover with illegals, Texas
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To that end it would take an immediate nationization of the banks. As soon as new capital is raised (with restrictions as to leverage and size) they would be given new charters. If the banks can only make loans to the extent of their capital, its impossible to screw it up again (or for at least a few generations and someone says, "those restrictions are old fashioned.")
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"Socialist never mind stealing, as long as they are the ones doing the stealing. They never mind lying, as long as they are doing the lying."-Mannfm11
Before you attempt to beat the odds, be sure that you can survive the odds beating you.
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Xqqme
Posts: 627
Incept: 2009-01-09
Ohio
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EFSF Bailout approves next traunch pay out 5.2B EU to Greece LOL
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Genesis
Posts: 130804
Incept: 2007-06-26
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They'll give 'em a month ;-)
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I don't care if it makes sense -- only if it makes money. -- Me
Bank (n): See scam, fraud and theft. Eat a bankster -- they're low-carb.
What part of "shall not be infringed" was unclear?
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Flappingeagle
Posts: 1229
Incept: 2011-04-14
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There are three paths to take for all of our countries, some countries like the USA just don't realize it yet. They are:
1) Keynesianism. All fine and dandy except that the extant debt load is already crushing the economies and the marginal benefit of an extra unit of debt is a unit of production at most. It could actually be less than one which is where I think we are thus, any extra debt has a net negative effect.
Krugman's plan to have 4% inflation falls in this category. Interest payments can barely be made now, how will they possibly be made with a higher interest rate and with extra stimulus having a poor marginal effect?
2) Austerity. Would work fine if there was only a little debt or the budgets of the troubled countries were only a little out of balance. The trouble is neither one of those two conditions is even close to being met. The reduction of GDP due to austerity would be crippling and would make it even harder to meet extant debt loads. Therefore, this can't work either.
3) Wholesale Default. This is the way forward. Unpayable loans and unmeetable promises need to be eliminated wholesale. Those who loaned their money into what turned out to be 'malinvestments' need to be losers. Those whose debts get wiped out need to go thru bankruptcy as we can't have borrowers walking away with no penalty.
This is the return to true Capitalism; unrestricted ENTRY and EXIT of the marketplace. There is a clip of Milton Friedman on youtube talking about how losses may be more important to capitalism than profits because losses remove the bad businesses from the marketplace and open up room for new businesses.
Folks we are headed to option 3, what is up in the air is how we get there. If we go 1, 2, 3 or maybe 1, 3, or 2, 1, 3 or heck even 1, 1, 3 it will matter very little in the end, we end up at 3.
Flap
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Here are my predictions for everyone to see:
S&P 500 at 320, DOW at 2200, Gold $300/oz, and Corn $2/bu.
"You can't build a house of cards on a shaking table." - Tony Johns
The January 2015 AMZN put at $130 (cost $4.25) will be a winner.
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Ribbit
Posts: 1782
Incept: 2007-09-10
Wales, UK
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You know, I'm beginning to see Greece in the role of Robin Hood. Stealing money from thieves to redistribute, has become difficult for me to condemn. The EU is looking increasingly like the Black Knight guarding the bridge: http://www.youtube.com/watch?v=zKhEw7nD9....
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If the State was a Nanny, it would have been fired for incompetence, unreliability, and having its hands in the till, a very long time ago now.
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Jal
Posts: 513
Incept: 2009-03-25
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Irigardless of the path taken by the Greek gov. .... 1,2,3
The Greeks are going to need a lot of support from their extended families that are living abroad.
Before its over, we will all be looking for Greek relatives.
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Ghopper
Posts: 2317
Incept: 2011-06-11
Staten Island, NY
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Quote:"EFSF Bailout approves next traunch pay out 5.2B EU to Greece LOL" The huge majority of that money goes to banks/bond holders, Greece is just the middle man. The last thing they want is Greece to say "No money, therefore we default." |
Curbyourrisk
Posts: 3596
Incept: 2008-08-19
Farmingdale, NY
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Take the 5.2 billion.....DON'T pay the banks with it. fill a helicopter and dump it like BEN. THEN GIVE THEM THE FINGER and say **** OFF.
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Time is up.
I hate to burst your bubble, but there is no Santa Claus, the tooth fairy does not exist and American justice does not involve the courts.
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Aztrader
Posts: 6650
Incept: 2007-09-10
Scottsdale, AZ
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Krs
Posts: 688
Incept: 2009-05-07
Colleyville, Texas
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Fog, smoke, and mirrors... perhaps those tin-foil-hat wearing digital dickweeds were on to something?
Tyler Durden on the Fed – Feb 28, 2013
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Steelhead23
Posts: 2043
Incept: 2008-09-09
Portland OR
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I'm with Flap and Gen - but there seems to be a substantial rub in actually doing this. The complication is that it appears that many in the FIRE industry have long perceived that large-scale default would be so disruptive to the global financial system that TPTB would do everything imaginable to avoid it and investors have discounted the possibility to zero, grossly modifying their risk models and leading to increased lending into the vortex. Thus, the longer the Ponzi is allowed to continue, the larger the potential catastrophe and the more corrupt governments will become. Nobody seems willing to administer the bitter medicine of massive defaults on the Masters of the Universe.
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"Give me control of a nation's money and I care not who makes it's laws" —Mayer Amschel Bauer Rothschild Benjamin Bernanke
For-profit commercial banks are a menace and should be eradicated
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Bertdilbert
Posts: 2666
Incept: 2008-12-22
CA
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Dear Euroland: Relax, Germany has a plan for your money!
Political Capital Defined: We are out of money but will tax our citizens for whatever it takes to "SAVE" the Euro.
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Landman
Posts: 58
Incept: 2011-05-26
D/FW
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Bert - Thank you for posting that....effing hilarious!
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Jubber
Posts: 14174
Incept: 2007-07-05
UK
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That's brilliant
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“The problem with socialism is that, sooner or later, you run out of other people’s money.” Thatcher
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Templar223
Posts: 779
Incept: 2008-04-28
Champaign, IL
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I give you Iceland as an example most appropriate.
Tell them to **** off, Greece.
Be the next Iceland... with a growth economy.
Sorry for the 'entitlement' class. Time for them to get busy or get hungry.
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Mdporter
Posts: 560
Incept: 2008-02-26
San Jose, CA
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Greece needs to tell them to **** off yes, but then the greeks themselves must somehow transform into an economy that is not based on fraud or heavy redistribution of wealth (government jobs/pensions).
How are they going to do this?
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Ghopper
Posts: 2317
Incept: 2011-06-11
Staten Island, NY
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I so home that Ireland is next with a NO vote on the referendum on May 31.
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Mannfm11
Posts: 3556
Incept: 2009-02-28
DFW, Tx
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Oh, the grind of credit money! Never forget this is a bankers game. Even when it is printed, it comes with liabilities attached and it is generally only printed when the bankers need it to be printed. Then, it is usually to benefit the banks and screw their customers. Payable on demand not only relates to the banks customers, but their flows to other banks as well, thus the arising of credit crunches. Foreign exchange is a combination of interest rate differentials and the need of bankers around the world to match liabilities in a given credit currency. Where is a new drachma going to create value? It will be toilet paper and the entire country will go broke over night. You really think the international banking community is going to take the finger lying down? They had better get used to using their grapes to make fuel. Greece is going to pay one way or another. Everyone's balance sheet is tied into the game. This is why the whole matter is so paradoxical. The banking system needs debits and credits to match or the money really doesn't exist. Everything is relative. The haircut of the assets has to be taken on the liability/capital account-credit side as well. Once the capital account reads zero, the only honest reduction is to come from the accounts at the bank, whether they be deposits or other debt instruments. Here we march onward from reason to absurdity. It is clear they can bail this out with government bonds, but are the bonds really nothing more than a draw on the cash already present? The haircut is coming either way, merely that the status quo can be preserved for a few more days, weeks or years. It has become a game of make believe. Being that everything is relative, a haircut on cash accounts to make up for a haircut on debts creates another paradox. The theory of debt deflation, being that less cash present then imperils the debts at inflated values already in the system. Then the misunderstood theories of Irving Fisher come into play. I might add that hyperinflation not only destroys debt, but destroys the savings of the entire spectrum of financial assets valued in the currency. Here is a Q/E comment of Lacy Hunt, which was put out by John Mauldin. The entire interview is one of the best pieces of economics I have found. Here he comments about Irving Fishers theory and what it really meant, as opposed to what is being done to combat debt deflation. Lacy Hunt wrote..Sure. Doesn’t your second chart, on the velocity of money [below], show how
none other than Milton Friedman was misled into thinking that it was a
constant because he only looked at post-war data?
That’s correct and, in fact, I was misled along with him because I was also doing
analysis based on the post-war data. Friedman’s period of estimation was basically
from the 1950s to the 1980s. Well, if you look at the velocity of money in that time
period, it’s not a constant, but it’s very stable around 1.675. So if you tracked money
supply growth then, you were going to be able to get to GDP growth very well. Not
on an individual quarterly basis, but even the individual quarterly variations were
not that great. Until velocity broke out of that range after we deregulated the
banking system. Now, velocity is breaking below the long-term average and it’s
behaving exactly like Irving Fisher said, not like Friedman said, absolutely.
What a perfect example of the difference your frame of reference can make.
Yes, Friedman even said Fisher was the greatest American economist, and I think
that is correct. Fisher had a broader understanding of the economy in a very, very
critical way and in a way that I don’t think either Friedman or John Maynard
Keynes understood it, and even a lot of contemporary economists, such as Ben
Bernanke. Keynes and Friedman both felt that The Great Depression was due to an
insufficiency of aggregate demand and so the way you contained a Great Depression
was by your response to the insufficiency of aggregate demand. For Keynes, that
was by having the federal government borrow more money and spend it when the
private sector wouldn’t. And for Friedman, that was for the Federal Reserve to do
more to stimulate the money supply so that the private sector would lend more
money. Fisher, on the other hand, is saying something entirely different. He’s saying
that the insufficiency of aggregate demand is a symptom of excessive indebtedness
and what you have to do to contain a major debt depression event — such as the
aftermath of 1873, the aftermath of 1929, the aftermath of 2008 — is you have to
prevent it ahead of time. You have to prevent the buildup of debt. http://www.johnmauldin.com/images/upload....There you have it. Just like Karl has said for years. They can't un**** the ****up. Either the credit or the purchasing power is going to deflate, leaving a smaller economy in the end.
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The only function of economic forecasting is to make astrology look respectable.---John Kenneth Galbraith
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Morla
Posts: 817
Incept: 2009-11-09
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Quote:Nobody seems willing to administer the bitter medicine of massive defaults on the Masters of the Universe. Their willingness is irrelevant, Flap summed the situation up pretty well. Massive defaults will/can not be avoided, not even by the king and all of his men. Austerity is self-defeating for obvious reasons, and "stimulus" based on debt is pure insanity given charts like this one:
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Fear of govt IS the government.. Statism is a pack of unbacked threats; If govt gets out of control, ignore it and go about life as you see fit. Where's your crown, King Nothing?
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