Oh Oh... Greece Raises The Reparations Claim
The Market Ticker ® - Commentary on The Capital Markets
Posted 2012-06-21 09:54
by Karl Denninger
in International
Ignore this thread
Oh Oh... Greece Raises The Reparations Claim
 

Now this has potential to get interesting...

"We don't owe the Germans money, they owe us," he told Reuters in an interview in his central Athens office, sitting in front of a line of campaign posters for his radical Syriza bloc, which placed second in last Sunday's Greek parliament election.

"The total they owe us is 162 billion euros without interest. If you add 3 percent interest, it's more than a trillion euros. But we can accept a haircut on the interest."

Actually, there's a problem here -- his accounting appears to count inflation twice.

See, he inflates the principal.  But you don't get to do that -- the reason you get interest is to cover the expected inflation and the risk of non-repayment.

So inflating the principal would be to demand to be paid for the expected event twice -- after the fact.

The figure he uses for money Germany owes is made up of war reparations awarded to Greece at an international conference in Paris in 1946 ($7 billion at the time, adjusted for inflation to 108 billion euros in today's money) and the forced loan Greece made ($3.5 billion, adjusted to 54 billion euros today).

No no no no no.  You can have inflation on the original sum or (if provided for) interest, but you can't have both since that is compounding on compounding and wasn't part of the original contemplated agreement.

Of course this is more of a political foil than a practical one..... but if it gets legs over there...

Discussion below (registration required to post)
 

Main Navigation
Full-Text Search & Archives
Archive Access
Get Adobe Flash player





Blogtalk 3:30 CT Mondays
Items To Look At


Discuss The Capital Markets along with daily technical analysis with our Gold Donor program.

Where We Are, Where We're Heading (2013) - The annual 2013 Ticker

Links and Blogroll
Our policy on reciprocal links: Send us an email with your information and why you think your blog or news site would make a good addition - in most cases reciprocal link requests will be granted.
Seeking Alpha Certified
Legal Disclaimer

The content on this site is provided without any warranty, express or implied. All opinions expressed on this site are those of the author and may contain errors or omissions.

NO MATERIAL HERE CONSTITUTES "INVESTMENT ADVICE" NOR IS IT A RECOMMENDATION TO BUY OR SELL ANY FINANCIAL INSTRUMENT, INCLUDING BUT NOT LIMITED TO STOCKS, OPTIONS, BONDS OR FUTURES.

The author may have a position in any company or security mentioned herein. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Looking for "The Best of Market Ticker"? Check out
Ticker Classics.

Visit the forum to discuss this and other investing-related topics; see the FAQ on the forum for information about Gold Donor status including access to our technical analysis video server.

Market charts, when present, used with permission of TD Ameritrade/ThinkOrSwim Inc. Neither TD Ameritrade or ThinkOrSwim have reviewed, approved or disapproved any content herein.

Market Ticker content may be reproduced or excerpted online provided full attribution is given and the original article source is linked to. Please contact Karl Denninger for reprint permission in other media.

Submissions may be sent "over the transom" to The Editor at any time. To be considered for publication your submission must include full and correct contact information and be related to an economic or political matter of the day. All submissions become the property of The Market Ticker.

Leads on stories of current economic and political interest are always welcome. Our fax tip line is 850-897-9364; please include contact information with your transmission.

 
Comments.......
User: Not logged on
Login Register Top Blog Top Blog Topics FAQ
Showing Page 1 of 2  First12Last
User Info Oh Oh... Greece Raises The Reparations Claim in forum [Market-Ticker]
J0nx
Posts: 3066
Incept: 2008-08-12
Green
The trashcan of the nation
Report This As A Bad Post Add To Your Ignored User List
They are starting to sound like the blacks now demanding reparations for **** that occurred decades/centuries ago by people who are no longer alive. Give it up man.

----------
The fraud and lies are only allowed to continue because the people allow it. Either through apathy or ignorance, they still allow it.
Jinxx0r
Posts: 4230
Incept: 2007-08-10
Silver
Report This As A Bad Post Add To Your Ignored User List
Vitchilo
Posts: 4568
Incept: 2011-04-27

Report This As A Bad Post Add To Your Ignored User List
Quote:
his radical Syriza bloc

Yeah radical... how dare they want Greece for Greeks and want to get out of that devil pact called the EU.

----------
"Every normal man must be tempted at times to spit upon his hands, hoist the black flag, and begin slitting throats." -- H.L. Mencken
Debtpie
Posts: 534
Incept: 2009-12-17

Report This As A Bad Post Add To Your Ignored User List
Germany still owes from WWII? Holy cow, after the coming war, Greece better send the knee busters out a lot sooner to collect from Germany this second time around.

From 40,000 ft, as Obama likes to say, I see more and more fingers pointing to Germany and the USA as the villains in this tragedy...Just wait until rich Uncle Bundesbank cuts off his rotten nieces and nephews...

With Socialists/communists in charge of the Europe for so many decades, does anyone have an army to invade with?...or are we back to knives and sharp sticks...even so, can you see the typical German youth rushing out to battle...lol...maybe, through internet gaming, facebook, etc., we have abolished real physical war?

~~~~~~

On the "recovery" topic of the last post. I'm in Iowa which is basically a giant farm...so we've held together very well through all of this (5.2% unemployment rate)...yet I'm starting to see more store closings...a major home interior/remodel store (tile, carpet, etc.) folded up yesterday..,probably the biggest in town and stores in the wealthiest areas...so much for the housing recovery; here anyway...

~~~~~~~~~~~~~~

Jinx ""If you voted for Obama in 2008 to prove you’re not racist, you’ll have to find someone else to vote for in 2012 to prove you’re not an idiot.""

Nice comedy, but what about those that voted for Mac & Sarah...did they prove they were idiots and racists?...wasn't the bulk of that vote the Christian Right...I'll say no more...

----------
A Leader, or an Opportunist? "A leader has the capacity of vision, the ability to see where things are headed before people in general see those things." Mitt Romney --- DebtPie's definition: a leader decides where "things" should head and "leads" us there.

Ghopper
Posts: 2297
Incept: 2011-06-11

Staten Island, NY
Report This As A Bad Post Add To Your Ignored User List
Ask France how demanding war reparations from Germany works out in the end.
Paulanderson
Posts: 99
Incept: 2010-09-26

Report This As A Bad Post Add To Your Ignored User List
IIRC, reparations was one of "Mr. Panos'" points (language NSFW):

----------
Let me be the first to welcome our new blythe masters.

Reason: language warning
Swingtrader
Posts: 9108
Incept: 2007-08-12
Green
United Oligarchic Goldman Sachs States of America
Report This As A Bad Post Add To Your Ignored User List
funny

----------
Swing said "Well, it is collapsing as we watch.This is what it looks like." Australian federal judge Jayne Jagot, doing what US judges need to do!
Ribbit
Posts: 1779
Incept: 2007-09-10
Green
Wales, UK
Report This As A Bad Post Add To Your Ignored User List
"but you can't have both since that is compounding on compounding"

Well, as that seems to be standard practice for German, Austrian, and French Banks, "what's sauce for the goose, is sauce for the gander"?

{ok ok very tongue in cheek 8p }

----------
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.
Jimg
Posts: 180
Incept: 2009-02-04
Green
Dunedin, FL
Report This As A Bad Post Add To Your Ignored User List
The magic word is "offset".

Mr. Panos is tsenius, tsenius, tsenius!
Randy123
Posts: 5767
Incept: 2008-09-24
Green
Earth
Report This As A Bad Post Add To Your Ignored User List
Love it.

----------
China is the Enemy. Wake Up.

New Normal. Same As The Old Awful.
Djloche
Posts: 3268
Incept: 2008-07-07
Silver
In the Mountains
Report This As A Bad Post Add To Your Ignored User List
Contrary to what you might think J0nx, there are people in greece from early post-ww2 still around and are extremely bitter and angry about never being paid what was owed to them (among other things).

the guy quoted in the article might be mathematically deficient (or just trying to aim for the highest number he could rig up, math be damned), but having SOME cash in the bank -even just- 162 billion euros in the bank would help them in a 'default all debts and balance the budget based on prior year's tax collection' scenario (current is ~ $50B/y) - if they're actually repaid, it gives them over 2 or 3 years worth of '2 hots and a cot' money to get through the rest of the depression as the debt clears.

all this said, i don't expect greeks or the greek government to see a single cent repaid because no one in europe has spare $billions sitting around, and even if they did get it, it'd just be transferred direct to the banks that are owed money. I don't expect any government in power to actually default and NOT print because the temptation to ignore basic math and run the printing presses is very strong

----------
"If we wish to be free, we must fight! I repeat it, sir, we must fight! An appeal to arms and to the God of Hosts is all that is left us! Gentlemen may cry, "Peace! Peace!" -- but there is no peace. The war is actually begun! Our brethren are already in the field! Why stand we here idle?"
Aliveh
Posts: 4042
Incept: 2008-01-18
Gold
Los Angeles
Report This As A Bad Post Add To Your Ignored User List
it'd be awesomely hilarious if greece got the reparations, then left the euro & defaulted on sov debt.

Winstonsmith2009
Posts: 1060
Incept: 2009-08-05

Report This As A Bad Post Add To Your Ignored User List
Being someone who has been for many years fascinated with the WWII Eastern Front (which, by the way, was civilian and military casualty-wise the vast majority of WWII), the Greeks resisting the Italians may very well have cost the Germans the entire war in which case it would be the Germans who could counter-sue for their loss:

http://en.wikipedia.org/wiki/Greco-Itali....

"Some historians, such as John Keegan, argue that it may have influenced the course of the entire war by forcing Germany to postpone the invasion of the Soviet Union in order to assist Italy against Greece. This led to a delayed attack and subjected the German forces to the conditions of the harsh Russian winter, leading to their defeat at the Battle of Moscow."

Just kidding about the countersuit, BTW, but not about the possible effect on the outcome of the war.

Debtpie
Posts: 534
Incept: 2009-12-17

Report This As A Bad Post Add To Your Ignored User List
<This led to a delayed attack and subjected the German forces to the conditions of the harsh Russian winter>

"Hey!, I've got an idea! Let's invade Russia (with 3.9 million foot soldiers, 600,000 motor vehicles and 750,000 horses) in the dead of winter!" FAIL! They should have shot Hitler right there...

This is why you never put a Meth addict in charge of a country...

"By April 1945, Hitler was taking 28 different pills a day, along with numerous injections (including many of glucose) every few hours and intravenous injections of >>>methamphetamine<<< almost every day."

http://en.wikipedia.org/wiki/Theodor_Mor....

----------
A Leader, or an Opportunist? "A leader has the capacity of vision, the ability to see where things are headed before people in general see those things." Mitt Romney --- DebtPie's definition: a leader decides where "things" should head and "leads" us there.
Bertdilbert
Posts: 2650
Incept: 2008-12-22
Gold
CA
Report This As A Bad Post Add To Your Ignored User List
Quote:
They are starting to sound like the blacks now demanding reparations for **** that occurred decades/centuries ago by people who are no longer alive.


Yes, this is "white guilt" for Germans... But hey, they said they were willing to take a haircut on the interest..

----------
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.
Bagbalm
Posts: 4248
Incept: 2009-03-19
Green
Just North of Detroit
Report This As A Bad Post Add To Your Ignored User List
Germans might as well say "**** it, we got the blame, finish the game." And loot and burn Greece like WWII was a friendly card party.
Drb
Posts: 195
Incept: 2011-01-02

TX
Report This As A Bad Post Add To Your Ignored User List
Why not ask for reparations from Turkey (Ottomans), they killed orders of magnitude more Greeks than Germans did...heck why not demand reparations from Iran because Persia attacked Greece as recently as 500 BC!!!
J0nx
Posts: 3066
Incept: 2008-08-12
Green
The trashcan of the nation
Report This As A Bad Post Add To Your Ignored User List
DJ, I'm not doubting they feel that way as plenty of blacks here still do too. I'm saying it's ridiculous is all and it's time to let 100 year old bygones be bygones.

----------
The fraud and lies are only allowed to continue because the people allow it. Either through apathy or ignorance, they still allow it.
Themortgagedude
Posts: 8841
Incept: 2007-12-17
Green
saint louis
Report This As A Bad Post Add To Your Ignored User List


As Judge Schmales says - I owe you nothing!

----------
I'm already visualizing you with duct tape over your mouth.
Mcmwest
Posts: 133
Incept: 2009-04-06

Western Kansas
Report This As A Bad Post Add To Your Ignored User List
Statemet of intention as far as Syriza is concerned? Payment in kind.

----------
According to NBER the recession ended in June 2009 so if you're broke and out of a job its all in your head.- Jay Leno
Winstonsmith2009
Posts: 1060
Incept: 2009-08-05

Report This As A Bad Post Add To Your Ignored User List
"Hey!, I've got an idea! Let's invade Russia (with 3.9 million foot soldiers, 600,000 motor vehicles and 750,000 horses) in the dead of winter!"

You should have noted the invasion date when you looked up those stats. They didn't invade "in the dead of winter."

The point is, the Italian fiasco in Greece delayed Barbarosa which resulted in them not taking Moscow because of winter weather. Of course, Hitler also made the fatal mistake of declaring war on the US later in that same year after the US had declared war on Japan thinking, incorrectly, that that would inspire the Japanese to attack Russia on its eastern front. They didn't. At that point Stalin withdrew troops from there to significantly increase manning around Moscow. Had Barbarosa been able to have been implemented earlier in the year, neither winter nor Pearl Harbor and Hitler's mistake in declaring war on the US would have been a factor on the eastern front.

Here's an apocryphal story I've heard about a guy shooting a WWII Italian Carcano rifle at a gun range. An Italian couple took notice and the owner decided to show them how the bayonet was typically used. He mounted it on the rifle, attached a white handkerchief to it, and waved the rifle in the air.

The Italians have never been the same militarily after the fall of Rome. In WWII, they were more of a liability to the Germans than anything else.

Uwe
Posts: 6422
Incept: 2009-01-03
Gold A True American Patriot!
19446
Report This As A Bad Post Add To Your Ignored User List
Quote:
Why not ask for reparations from Turkey (Ottomans), they killed orders of magnitude more Greeks than Germans did.

Several centuries of Ottoman occupation is actually part of the reason Greece is broke today. Greece has the highest military spending in all of Europe (as a percentage of GDP), primarily because they still view Turkey as a mortal enemy.

BTW, the Germans contend that they paid all reparations due Greece in full, long ago.

-Uwe-


----------
“Whenever the legislators endeavor to take away and destroy the property of the people, or to reduce them to slavery under arbitrary power, they put themselves into a state of war with the people, who are thereupon absolved from any further obedience.” - John Locke
Djloche
Posts: 3268
Incept: 2008-07-07
Silver
In the Mountains
Report This As A Bad Post Add To Your Ignored User List
J0nx wrote..
DJ, I'm not doubting they feel that way as plenty of blacks here still do too. I'm saying it's ridiculous is all and it's time to let 100 year old bygones be bygones.


how many people in the united states alive today were legally owned slaves at one point in their life?

I think i am safe to assume that number is zero.

the german occupation and destruction of greece is remembered by people that survived it and are still alive today.

edit: the person being quoted in the original article is none other than 90 year old Manolis Glezos, someone who was personally tortured by the german occupying forces. He's still alive and active in the political scene today.


----------
"If we wish to be free, we must fight! I repeat it, sir, we must fight! An appeal to arms and to the God of Hosts is all that is left us! Gentlemen may cry, "Peace! Peace!" -- but there is no peace. The war is actually begun! Our brethren are already in the field! Why stand we here idle?"

Reason: added in 'legally owned'
Uwe
Posts: 6422
Incept: 2009-01-03
Gold A True American Patriot!
19446
Report This As A Bad Post Add To Your Ignored User List
Quote:
The Italians have never been the same militarily after the fall of Rome. In WWII, they were more of a liability to the Germans than anything else.

There's an old joke: In a meeting between the Brits and the Germans prior to WWII, the Germans tell the Brits: "If another war starts, we will win this time; after all we have Italy on our side now!" To which the Brits responded: "That's only fair, after all, we had 'em the last time!"

-Uwe-

----------
“Whenever the legislators endeavor to take away and destroy the property of the people, or to reduce them to slavery under arbitrary power, they put themselves into a state of war with the people, who are thereupon absolved from any further obedience.” - John Locke
Login Register Top Blog Top Blog Topics FAQ
Showing Page 1 of 2  First12Last