tag:blogger.com,1999:blog-5882645467378797266.post3238786974826457916..comments2023-07-17T11:55:51.363+02:00Comments on ObservingGreece: Bail-Out of Greece or Bail-Out of Banks?kleinguthttp://www.blogger.com/profile/12491174042954678023noreply@blogger.comBlogger16125tag:blogger.com,1999:blog-5882645467378797266.post-20704613901664702392015-02-19T16:57:35.984+01:002015-02-19T16:57:35.984+01:00My haunch is that the Greeks would crucify you for...My haunch is that the Greeks would crucify you for A, that is for monetizing art treasures. And B is, as far as I know, 'work-in-progress'.kleinguthttps://www.blogger.com/profile/12491174042954678023noreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-36869345186906984992015-02-17T14:50:49.407+01:002015-02-17T14:50:49.407+01:00I do not wish to pretend to be an economist. But I...I do not wish to pretend to be an economist. But I submit two ideas. A ) could the Greek government use their vast natural art treasures as an item to joining a Lloyd;'s of London syndicate. I am told that British Nobles with castle,s art, and jewels have done this for years. it becomes almost an annuity. With such money coming in then Geeks can get a new line of credit. or B) if that is not possible can they hire a top notch geology firm to scout natural wealth,e.g. oil,natural gas, and then if this is present use this new money to amortize the debt and get a new line of credit. EXPERThttps://www.blogger.com/profile/17201102694682576633noreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-31265281098409682322015-02-10T07:15:23.634+01:002015-02-10T07:15:23.634+01:00Of cause they need a hair cut. New car registratio...Of cause they need a hair cut. New car registration only increased 12,8% in Jan as opposed to 69,3% in Dec. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-72869570609095222032015-02-09T14:38:25.828+01:002015-02-09T14:38:25.828+01:00Your son is right Klaus, it's not cheap to buy...Your son is right Klaus, it's not cheap to buy Christmas presents, the trade deficit widened by 27% in December 2014.<br />LennardAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-52369442918137492942015-02-08T20:15:47.668+01:002015-02-08T20:15:47.668+01:00You're omitting very important details such as...You're omitting very important details such as the fact of the change of the governing law from Greek to British/English. Even the very fact that now the lenders are the official sector makes things much more difficult for Greece; such devilish details are paramount in cases of e.g. defaults/restructurings...<br /><br />You're also omitting that the loans, be it just to roll-over the older ones or the much smaller part that went to cover various deficits etc., were given with the necessary condition of austerity, i.e. for all practical reasons, of inter alia a dramatic fall of GDP, increasing dramatically the debt/gdp ratio.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-79787576306433112822015-02-08T13:52:19.121+01:002015-02-08T13:52:19.121+01:00The bracketed M is because legally no country can ...The bracketed M is because legally no country can exit the euro. And as I have repeatedly stated, if Greece is forced out of the EU this will create a political crisis not only of the EU but also globally. The USA is very concerned about the situation, and is obviously not going to allow the EU to commit suicide because of some stupid German pigheadedness. Russia is waiting in the wings, and everyone knows it.<br /><br />At this time, Germany has never looked so isolated since 1945. I wonder if the arrogant politicians there have worked it out yet.Guest(xenos)http://www.mmo.grnoreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-65092188751677217322015-02-08T10:52:06.860+01:002015-02-08T10:52:06.860+01:00I stumbled upon an interesting text "The Cost...I stumbled upon an interesting text "The Cost of Servicing Greece’s Debt: A Sisyphean task? by Cinzia Alcidi and Alessandro Giovannini of CEPS.<br /><br />It comes to about the same financial conclusions as the owner of this blog, and it supports my opinion expressed on this blog before:<br /><br />"The current stance taken by the new Greek government may underestimate the EU’s reaction and the fact that the EU’s position vis-à-vis the country will have repercussions that go far beyond the country’s borders."<br /><br />And everybody thoroughly thinking about these consequences must come to the conclusion that the authors also mention: Default and "exit from the E(M)U". That M in between brackets "(M)" is very elegant ;)<br /><br />http://www.ceps.eu/system/files/CA%20and%20AG%20Greek%20Debt_0.pdf<br /><br />H.Trickler<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-5472149950113045232015-02-08T09:35:59.654+01:002015-02-08T09:35:59.654+01:00o__O
I bet the son followed his father working in...o__O<br /><br />I bet the son followed his father working in finance...<br />H.Trickler<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-50434451909515265432015-02-08T00:21:26.484+01:002015-02-08T00:21:26.484+01:00Now you are parsing with phrasing, and you contrad...Now you are parsing with phrasing, and you contradict yourself in your own response! I also do not need a lecture on Greece's history, as I am well aware of Greece's dire financial record. ☺<br /><br />On your third paragraph, this is just musical chairs. Instead of proceeding with a "restructuring/rescheduling" as you suggest a paragraph later (and what should have happened, with some sort of haircut as well), the Troika pursued a policy that substituted insolvent banks as the creditors with official sector creditors. In order to pay these official creditors off, the Troika enacted a series of policy measures that were masked as a bailout (and in the process painted Greece as the villain for its own ends), but merely insured that these monies would be never repaid (way to go Troika!). This created moral hazard as these incompetent financial institutions never had to reckon with the poor financial decisions they made. In addition, these policies destroyed the Greek economy, and dashing any hope of a recovery.<br /><br />You say that the private sector would have negotiated more stringent terms for Greece than the official sector did. I find it hard to imagine simply due to where the world was at that point. These institutions, due to their incompetency, were thinly capitalized, dependent on central banks, and following any edicts issued to them. Varoufakis is obviously correct in his assessment that Greece is bankrupt. Unfortunately for people like yourself the Austrian Taxpayer, it is not the Greeks who do not recognize this, but their creditors. <br /><br />Eventually these institutions will be forced to reckon with this reality, and a set of policies will be implemented that will be fair to all parties. The Troika clearly did not institute such policies, and it appears that it will not happen just yet. I urge you to read those two prior posts I noted by Pettit (who is excellent, with a novel take), and Mouzakis, who effectively lays out a lot of these matters. I think you will gain from these different perspectives. <br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-61401171761409445832015-02-07T22:33:09.507+01:002015-02-07T22:33:09.507+01:00I think the reference to the Nuremberg Trials is i...I think the reference to the Nuremberg Trials is in rather poor taste, considering the sorts of crimes that were dealt with during those trials. The rescue loans of 2010-2012 could certainly have been handled in a better way, but in the end they were agreed upon by democratically elected governments, so I strongly disagree with your call for some sort of trial.<br /><br />The mistake, in my opinion, was that the tax payers of the financing countries didn't get anything in return for assuming the debt exposure of the private lenders. I remember the Finns were originally demanding Greek collateral. They got a lot of criticism for that demand, but one should remember that it was not the Finnish banks that had lent money recklessly to Greece pre-2008. Perhaps they should have demanded equity in the private lenders that were bailed out instead.<br /><br />Comparing the exposure to Greek debt before and after the rescue loans, it's quite interesting to see how France and the UK are now much less exposed, whereas Germany has become more exposed. Finland and the Netherlands barely had any exposure pre-2008, so one would think a bit of gratitude towards those nations would be called for. Right?<br /><br /> "Who are these Dutchmen, who are these Finns?", President Karolos Papoulias, Feb. 2012.<br /><br />/Stockholm observerAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-72489445084968792742015-02-07T21:39:48.845+01:002015-02-07T21:39:48.845+01:00Allow me to tell an anecdote which is meant to bri...Allow me to tell an anecdote which is meant to bring some lightheartedness into the discussion and NOT to blame or make fun of anyone.<br /><br />Our son arrived from Zurich last evening to spend the weekend with us. Both of us set out to explain the new iPhone 6 to my wife. My wife suddenly remembered that her niece had told her that, in Greece, 10.000 iPhones 6 were sold on the first day and more than 50.000 in the 4th quarter of 2014.<br /><br />My son looked at me with a smile and said: "They obviously need a haircut".kleinguthttps://www.blogger.com/profile/12491174042954678023noreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-36322187170171842572015-02-07T21:32:35.229+01:002015-02-07T21:32:35.229+01:00The first commentator above said: "You can re...The first commentator above said: "You can repeat it as often as you like, use bold or hugest letters ;)". You just proved him correct.<br /><br />If banks write-down loans on their books (i. e. they make loan loss provisions), that has no bearing whatsoever on what the borrowers owe them. The borrowers owe them the full amount of the loans unless the banks make a debt-forgiveness. To think that private creditors would have agreed to a debt forgiveness back in 2010, only a few months after the crisis broke out, is an illusion. In fact, the private creditors could have made life for Greece much more miserable than the EU did (see Argentina).<br /><br />"The whole point is that the European nations transferred the onus of a bailout of their banks who were exposed to Greece onto the Greek taxpayer" --- this is proof that you didn't understand my article and that you do deny reality. The EU transferred the cost of the bail-out's on to the tax payers of the countries which financed the bail-out. I as an Austrian would have a right to bitterly complain because I now have a minute part of the risk which previously banks like Deutsche had.<br /><br />What should have happened back in 2010 was a "restructuring/rescheduling" of the debt, i. e. an extension of maturities, a lowering of interest rates and some interest moratorium. That is the standard package for a sovereign financial crisis. For a nation of the First World (and as an EU member Greece IS a nation of the First World), it is inconceivable to expect a haircut after only a few years of crisis and without one-time destruction. Greeks should read up a bit on financial history, particularly its own history. Prior to this present crisis, Greece has - I believe - defaulted 5 or 6 times since independence. The greatest such default was in 1893 when the Greek PM had the honesty to declare in parliament that "regrettfully, we are bankrupt". The current Finance Minister has told everyone outside of Greece that Greece is bankrupt but no one in the present government has had the nerve to tell the Greek people "please understand, we may be a proud nation but we are also a bankrupt nation". Adding up all the years which Greece has been in default, one comes to the conclusion that, since independence, Greece has spent almost half the time in default. During the 19th century, there were years when Greece had to spend up to 50% of its budget on interest. Today, Greece spends about 4-5% of its budget on interest, a percentage which is about the same as in countries like Germany and Austria. <br /><br />Just google a bit and you will find confirmation of the above.kleinguthttps://www.blogger.com/profile/12491174042954678023noreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-26426633718094261992015-02-07T21:26:40.584+01:002015-02-07T21:26:40.584+01:00I fully agree with Kastner's analysis of the c...I fully agree with Kastner's analysis of the causes for the whole mess. However, neither the bankers who were silly enough to lend too much money to Greek debtors nor the politicians who aggravated it by their policy will have to feel juridical harm.<br /><br />The reason is that the most extreme ignorance even when done fully knowing the consequences, is not punishable.<br /><br />Remember: With stupidity the gods themselves struggle in vain.<br /><br />H.Trickler<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-63796557786631403652015-02-07T20:02:43.235+01:002015-02-07T20:02:43.235+01:00I am sorry, but this post does not make sense. Th...I am sorry, but this post does not make sense. The whole point is that the European nations transferred the onus of a bailout of their banks who were exposed to Greece onto the Greek taxpayer (who those banks willingly lent to; has there been any reform of the German banking system for its gross incompetence in lending billions of euros to generally unproductive uses? No. Why is Greece only vilified?). Nobody is in any doubt that the Greek governments were incompetent and generally squandered the German Banks largesse on wasteful investment.<br /><br />But the reality is that if at the start of the crisis there had been an honest assessment, the debt would have been written down, and Greece would have started with a fresh slate. Instead, we have this current situation, where by moralizing the issue, everybody makes it seem like Greece is only at fault, when the reality is two parties entered into contracts. <br /><br />I would recommend reading this post: http://blog.mpettis.com/2015/02/syriza-and-the-french-indemnity-of-1871-73/<br /><br />This as well: http://www.macropolis.gr/?i=portal.en.the-agora.2080<br /><br />The IMF has also admitted that their projections for the troika plan were woefully off, and should not have entered into the program as it violated IMF protocol. <br /><br /><br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-30553163807976443592015-02-07T18:59:40.491+01:002015-02-07T18:59:40.491+01:00I feel deeply ashamed for what is obviously the ba...I feel deeply ashamed for what is obviously the base/part of the base of what is going on now between Europe and Greece. If this what you write, Herr Kastner, is true, and I do believe that, then I understand and support your idea for "a Nuremberg Trial of EU elites for having committed this prodigal sin". <br /><br />Do the EU elites of the present KNOW this? WHO knows this in fact? <br />Those EU elites who know about and/or are/were a part of 'the prodigal sin' are responsible for all what it caused, and have to pay for it, or to cancel the debts that this criminal act has created. <br />May those who know about this stand up and raise their voice, to take their pen, to inform the world. "Je suis Charlie" goes on and does not stop in Paris.<br />Antoinette Janssenhttp://multerland.com/noreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-5375001641636952432015-02-07T17:05:52.997+01:002015-02-07T17:05:52.997+01:00You can repeat it as often as you like, use bold o...You can repeat it as often as you like, use bold or hugest letters ;)<br /><br />The international opinion made by the international opinion leaders for obvious reasons prefer to neglect clear facts and make a story that serves their agenda.<br /><br />H.Trickler<br />Anonymousnoreply@blogger.com