Thursday, July 2, 2015

Deriving Hope From Chaos

When I read good books, my ageing brain tends to recall only one thing --- that it was a good book! One such book was "Modern Greece: What everyone needs to know" by Stathis Kalyvas. I don't remember many of the details but I do remember a couple of overriding themes.

When Modern Greece embarked on major new projects, the goals were set unrealistically high and the result was often complete failure. And yet --- Greece managed to come out of such ventures in better shape than it had been before.

And, secondly, when Modern Greece got into financial trouble, a new period of prosperity was built on the ruins of default and/or bankruptcy. Financial trouble, if not to say chaos, typically lead to responsible government; austerity brought the government's household in order; creditworthiness returned; foreign money started to flow again; and that foreign money was used wisely for investments. The only element which was in place then but is missing now is a local currency which could be devalued.

When looking at the present Greek government, it is hard to see how that government - even if the debt crisis were resolved at once and forever - would be able to lead Greece into a period of prosperity on the ruins of default and/or bankruptcy. At the same time, a good alternative does not appear in sight.

The only thing which is certain is that Greece will not cease to exist as a country and chances are great that, when the grandson of Stathis Kalyvas writes a book about Modern Greece in a century from now, he will once again describe the present period the same way that his grandfather described Greece after its total financial collapse in 1893.


  1. SYRIZA will bring hope, by striking the oligarchy and forming a Venezuela in the mediterranean.

    While the elderly, for which so much SYRIZA cares, are waiting for hours to take their 60 euros, the new SYRIZA appointed ELPE president (greek oil state refineries), a personal choice of minister Lafazanis, managed to raise his own annual salary from 170.000 euros to 280.000 euros on June 25.

    I have recently wrote "there is no bad thing, without something good coming out of it". SYRIZA's incompetence, will help some Greeks to lose their illusions about the left. Not all, as some will shout to the scandal. But some will... A country can't go on, while half of the political world, was calling for years the other half as traitors and quislings. Or as ruthless butchers that almost enjoy impoverishing the population. Now SYRIZA has shown its own ability to "enrich" the population. Myths can't be fought with arguments, they can only shatter themselves.

    1. Yeah - Everybody has been waiting for Venezuela in the mediterranean and during that high life time spent the money lent by silly northern banksters.

      Why the hell did they regularly continue making huge gifts to that poor country far away?


  2. The Bolivarian Alliance for the Peoples of Our America-Trade Treaty (ALBA-TCP) issued a communiqué to support Greece due to the financial measures “aims to overcome the democracy of the Greece people.”
    “The Bolivarian Alliance for the Peoples of Our America-Trade Treaty (ALBA-TCP) expresses its firmly support and solidarity to the people and government of Greece due to fierce attack of the worldwide financial capitalism and its European representatives which want to end with a dignify life in that country.”
    ALBA-TCP also expressed through its communiqué that “ALBA peoples and governments convince in Commander Hugo Chavez’s words the history call all of us to the union and the struggle, we send a message to the brave Greek people for historic battle for the salvation of all mankind for life freedom and self-determination of people.”

  3. Funny!:))

    ian bremmer ‏@ianbremmer 1 jul

    Sorry, Schäuble. You can't get rid of Greece that easily.
    Schrodinger's Referendum

    Melissa Eddy @meddybln
    German Fin Min Schäuble tells reporters in Berlin Greeks can't accept or reject offer because it no longer exists.

    1. We await the day when Schaeuble no longer exists. It will be a cause for much celebration across Europe.

    Funny cartoon in Ekathimerini today...
    Music to it.

  5. Tsipras's fatal mistakes

    Prime Minister Alexis Tsipras made three major mistakes. He rushed to come to power. He was blinded by the allure of power and ended up falling into a pit full of snakes. If he had been a little more patient, that would have been much better for him, his country and – most importantly – for the beleaguered citizens that voted for him.

    If Tsipras became prime minister this September, rather than in January, he would have inherited a country in good running order that would have got through its most difficult challenge, which is the one the SYRIZA leader is facing now.

    His second mistake was his absolute lack of any plan and the absence of a serious technocratic team that could handle crucial issues. Where in heaven’s name did he think he was going? Geopolitical threats, game theories, defaults, closed banks and, above all, a plan B need adequate planning and serious people.

    His third fatal mistake was that he made enemies of everyone, burned bridges and did not create any serious alliances.

    Now, though, we have reached a complete dead-end. Regardless of what will happen today or tomorrow, it is clear that the prime minister dug himself into a deep hole. He dragged his country down with him.

    We are living through a significant moment in the country’s history. I think they can easily be compared with the summer of 1974 or other turbulent periods for Greece. Tsipras and his team cannot get out of this mess on their own. They are unprepared, inexperienced and deeply divided.

    1. Is it really necessary to plagiarise this right wing English language Greek newspaper? We all know their opinion, which is not very original or clever. These are the guys who support ND and all the corruption around it. They have no ethics and quite happily plagiarise copyrighted material (I speak from personal experience).

  6. Are We on the Edge of the Economic Abyss?
    The War on Cash: Old and New

    New York Area Mises Circle 2015

    May 7, 2015Joseph T. Salerno

    The William H. Peterson Lecture, sponsored by Robert L. Luddy. Recorded at the New York Area Mises Circle in Stamford, Connecticut, on 7 May 2015.
    30:12 min lecture
    1:30 - 6:30 Cash Point Charge in Greece

    This was kind of interesting and connects to Greece.
    It is about war on cash but in the beginning he talks about the Cash Point Charge in Greece. You pay a surcharge to use the ATM or to take out cash.
    He describes it as a systematic campaign to get rid of cash.
    Is it true..?
    We don´t have any Cash Point Charge here. I just guess it is not common in EU - but I don´t know.
    One thing is for sure - war on cash is real and it is in full swing!


  7. Heavy stuff from Zerohedge... (kind of leftleaning)
    (In this present situation I can only agree - even if I would recommend to quit the Eurozone under different circumstances in the future)

    Meanwhile, Wall Street continues to speculate on what happens in the event of a “no” or worse, a tie. The following is excerpted from Credit Suisse "Greece: A Thread In The Labyrinth."

    * * *

    The Result Of A "No": A Live Test

    We believe that in the case of a ”No” vote in the referendum that the creditors will reject any further deal with near certainty and the only outcomes are either a systemic crisis or a contained idiosyncratic crisis.

    A particularly bad scenario for Greece would be some sort of split vote, e.g., 51% voting “No”. We think Tsipras would likely claim to have won the backing of his policy by the electorate – assuming he campaigns for a “No” till the end – while nearly half the population would have voted in favor of the creditors’ deal. This could cause unrest domestically in Greece, while the creditors would probably be less inclined to acknowledge Tsipras’ “victory” under such circumstances. A relatively low participation rate would further reduce the credibility of a marginal “No” vote, in that regard.

    We again want to be clear: “leaving EMU” is not a policy choice and, if enforced by referendum, materially reduces Greece’s freedom of action. Introducing a new currency is a pipe dream and the likely result is a broken financial system reliant on a neighbor’s currency (the euro) and banking system.

    If the result of the Greek referendum is a “No” and the situation is not immediately remedied (which we would not expect), the Greek people will probably have taken the opportunity to illustrate how illusory the whole idea of “exit” actually is. How that unfolds determines whether the situation systematizes immediately. This is because the choice is not “do you accept the core’s terms your government has rejected?” Rather, it is “do you want Greek banks to function independently?” and, de facto, do you want to be able to use the cash machine tomorrow? This is the nature of “Grexit”; it is not a choice to circulate a shiny new devaluation mechanism, it is a decision to reject the (local, to begin with) financial system and start again.
    Summing up, Credit Suisse believes a "no" vote is effectively a vote for economic catastrophe. The banks would, for all intents and purposes, have to be nationalized by Germany (which, given the Greek banking sector's complete reliance on the Eurosystem for funding, and given Berlin's TARGET2 position relative to the rest of the EU, would simply be to make official what has already been going on for years), and the (re)introduction of the drachma would not only be a disaster, but is in fact an unworkable "pipe dream."

    In short, the bank says that if Greeks were "properly informed", they would not, in their right mind, vote "no."

    So perhaps we have a new way to characterize Sunday's vote: a sanity check for the Greek populace.