Greek Gov Ready to 'Shave' Bank Accounts

[Gilligan]

Greece is the poster child for the failures of what the Bernie Sanders of the world are so in love with.

Sooner or later..they run out out of other people's money.

 

[Larry Gude]

Greece is the poster child for the failures of what the Bernie Sanders of the world are so in love with.

Sooner or later..they run out out of other people's money.

No, they don't. There is the ECB. There is the Fed. There is PLENTY of other people's money.

One of the things we don't like about socialism is that, simply put, it CAN work. A properly functioning socialist economy is like a spigot that is attached to the drain; once you get it primed, the only thing that stops it from working is an obstruction somewhere(s). You sell me beer, I pay you, you buy more beer, you buy more beer you pay for it, the guy you paid for more beer pays for more ingredients to make more beer, the guys who get paid for more ingredients to make more beer pays me for more ingredients and...I buy more beer.

In that system, it is both capitalist and socialist and works if well balanced. Capitalism ####s it all up when a Carnegie or Rockefeller comes along with their OCD and wants to profit off all the efficiency and elasticity that makes the thing go, so, guys not operating in an obsessive and compulsive manner get killed off. Socialism ####s it all up when it allows the non obsessive/compulsive (aka 'Greeks") to operate TOO loosely.

 

[Tilted]

So, what do you propose, just start backing trucks up and repossess the islands one at a time until they relent?

You don't know any Greeks, do you? Next step; their new bestest buddy Uncle Vlad and ZILCH for the current creditors.

I hear you and then the next question; are you OK with them going to Russia and the creditors getting nothing? Or maybe a partial settlement from Putin?

I'm not one of their creditors, so yeah - I'm okay with total default.

For economies in general, and ours in particular, I think that's better than continuing to indulge their ingratitude and unreasonableness. I think continuing to play this game for another 2 or 4 or 8 years would do even more harm than them defaulting. By now the most impacted parties have had time to make preparations for and mitigate the potentially cascading effects of their defaulting. There's the possibility that the lack of confidence a Greek default would cause would quickly spill over into, e.g., Spain and Portugal and cause bank runs (or compel capital controls) which turn a Greek default event into a bigger problem for the global economy. But I think that's a risk we just have to accept at this point, and I think we'd most likely be able to isolate most of the worst effects and keep the bulk of the devastation local. You can never be sure with such things of course. They depend so much on collective confidence, which can be quite fickle and build momentum in who knows what direction fairly suddenly.

I understand that for certain parties - e.g. for certain creditors - the downside of a major Grrek default would be big, very damaging. That's why I'm left asking them to endure it, I'm not in their positions. But for the rest of ours sake, and for the global economy, we'd be better off I think if they would hold the line against Greece. At some point the message has to be sent that you don't get to do this - you don't get to live high on the hog with others paying for it, while you are highly unproductive yourself, and never get around to paying that imbalance back. Greece isn't the first or the only example of that, and in various embodiments the world has indulged such things - it hasn't sent the message that needs to be sent. But having let such things go so long, there's no time for the present to start handling them correctly and sending the needed messages. And though I'd tend to have compassion for the Greeks, their ingratitude in this situation - their being completely unreasonable in insisting that others continue to pay the price for their unrealistic lifestyles, rather than accepting that they have to pay a fair bit of the price themselves - has me in a less than compassionate mood. Their position is just... offensive. I'm not sure how else to describe it.

As for Putin moving in to be their new buddy: Okay. Without a major shift in their attitudes, and their willingness to be productive enough to support themselves - things they've steadfastly resisted heretofore - they'd likely be more of a liability than an asset to any new buddies they might make. If Putin wants to support them, to keep them afloat, so be it. I think it would be more of a drain on the Russian economy than anything. Really, what do they have to offer other than some historic sites and tourist traffic? What do they do other than borrow from others to finance make-work government jobs?

I guess I'm just feed up with the Greeks at this point, so maybe I'm not thinking completely rationally about the situation. But they've been bad actors here. They are not the only ones, but they are most responsible for their situation and yet they want to pretend that others are treating them unfairly. They greet helping hands extended in good faith (albeit self-interested good faith) with ingratitude and bad faith - essentially, economic extortion. To hell with them, they need to pay for their behavior and they're unreasonableness. They want to blow themselves up, I wish the interested parties would let them even though it would mean accepting some of the fallout themselves. They've held the European economy, and thus to some extent the American economy, hostage for too long. It's time to stop negotiating with economic terrorists.

I mixed the #### out of some metaphors, didn't I?

 

[Gilligan]

No, they don't. .

Yes..they did.

 

[Gilligan]

At some point the message has to be sent that you don't get to do this - you don't get to live high on the hog with others paying for it, while you are highly unproductive yourself, and never get around to paying that imbalance back.

Yep.

 

[Larry Gude]

I guess I'm just feed up with the Greeks at this point, so maybe I'm not thinking completely rationally about the situation. But they've been bad actors here. They are not the only ones, but they are most responsible for their situation and yet they want to pretend that others are treating them unfairly. They greet helping hands extended in good faith (albeit self-interested good faith) with ingratitude and bad faith - essentially, economic extortion. To hell with them, they need to pay for their behavior and they're unreasonableness. They want to blow themselves up, I wish the interested parties would let them even though it would mean accepting some of the fallout themselves. They've held the European economy, and thus to some extent the American economy, hostage for too long. It's time to stop negotiating with economic terrorists.

I mixed the #### out of some metaphors, didn't I?

Let's start with stuff we'd agree on, shall we? First, we ARE talking about Greece. Next, you start the EU and tell me that Germany and Greece are going to be in it and I will tell you who is going to be on top and who is going to be on bottom. In short order. You tell me you'll flip it and give Greece all the money and the Germans little or none and I will tell you who will be on top. Again. And in short order.

The question becomes not one of who 'wins' and who 'loses'. It's a given, period. The question is is it a game of winners and losers OR a game where everyone wants to keep playing? There is no way, shape or form Greece ever beats Germany. Or France. Or Spain or pretty much anyone. They were, are and will be bringing up the rear. So, knowing that going in, this situation was predictable at any point before the game started and at any point along the way AND when this gets 'fixed' it WILL happen again. If it is winners and losers, capitalism, Greece loses. You foreclose, take all their #### and...what? Enslave them? Jail them? Make them become Germans?

So, what if it is a question of just keeping the game going? Yes, that is socialism but, it removes the question of what to do with the losers; they just get to keep playing. Everyone benefited to some extent by them being in the game even if it wasn't purely economic gain. maybe it's cultural gain. Maybe it's as simple as peace. To be for sure, it has not been a bad peace. It has not been a peace that has caused ANY hardship to much of anyone BESIDES the Greeks. So, keep them in the game.

Now, my plan, write it off, loan them new dough at higher interest rates. Structure it so that the creditors hurt by the write off are first in line to benefit from the higher interest rates. Make it so they get made whole again over, what, 10 years? 7? Either way that is FAR preferable to "hey, guys, we need you to take one for the team so we can show them Greeks what's what!" In my view, the elimination of debt coupled to higher interest rates in EXCHANGE for the write off will be all the Greeks need to be more careful, more attentive to their own slackness. Heck, couple the deal to some level of repayment of the old if that makes people feel better, just extend it well out. I prefer cleaning it up and starting over but, that's just me. Or cap loan totals to something. Whatever. Just clean up and do new business.

Now, let's call me wrong and go with y'alls plan. As I understand it, your plan is to make them suffer. Make them get up and go to work. Make them spend less. Make them be more productive. Make them be more...German? That is the 'helping hand' they see. They're not going to become more German. They're not going to become more Spanish. Or Italian. Or Polish. And, bailing them out is not going to mean those other weaker nations are going to become more Greek. If you want the next weakest nation to become the next Greece, let Greece suffer and fail. Isn't that what would happen? Or do you think you can get Greeks to not be Greeks through all this?

That's the choice here; winners and losers or keep the game going. If they are forced out, dollars and sense isn't going to matter to Putin; rebuilding empire will. There is value far beyond money here. And all Putin would be doing, basically, is offering them my deal and reaping the benefits.

:shrug:

 

[Larry Gude]

Yep.

They're Greeks. Come on.

 

[Larry Gude]

Yes..they did.

No, they haven't. Y'all are proposing shutting off the spigot, a spigot that has PLENTY of supply. To suggest Greece is remotely close to running out of other people's money could not be more wrong in this day and age.

 

[Gilligan]

No, they haven't. Y'all are proposing shutting off the spigot, a spigot that has PLENTY of supply. To suggest Greece is remotely close to running out of other people's money could not be more wrong in this day and age.

pfft. when was the last time you decided to simply pump endless sums of money in to the bank accounts of others so that they could sit home and live large every day? With zero expectation of any return?

 

[Gilligan]

I just love this crap.

This:

“Any person who is able to think for themselves will vote ‘no.’ I did,” said Anna Stavrouli, a 46-year-old public-sector employee

Followed by this:

“The Greek people are sending the message that they are taking their lives into their own hands,” he said. “One can ignore a government’s will. Nobody can ignore a nation’s will.”

There is much irony in Greece.




http://www.wsj.com/articles/polls-close-in-greek-referendum-1436113280?mod=fox_australian

 

[PeoplesElbow]

So why would a creditor take a chance on a nation that could not pay off its debt and had it "written off"?

Fool me once....

Putin on the other hand could play the role of a loan shark, dont pay me back no problem, the Greeks want to be Russians just like the Ukraines.

 

[Gilligan]

So why would a creditor take a chance on a nation that could not pay off its debt and had it "written off"?

Fool me once....

Putin on the other hand could play the role of a loan shark, dont pay me back no problem, the Greeks want to be Russians just like the Ukraines.

The rates of return on the debt that some of the failing countries are paying will always entice somebody in to loaning them money. 10-12% returns are always going to bring out the gamblers. But it's a death spiral....eventually somebody loses big time.

I'm going to sit back and watch Larry loan out all his cash and then, when the loans default, ahma buy me some nice green houses and raise killer pot.

 

[Tilted]

Larry - So what do you think happens if the interested parties do what I'm saying I hope they do? If Greece's creditors and the ECB, e.g., hold the line in the face of this no vote - this middle finger that the Greek people are giving them?

Greek political leaders are counting on this no vote - which many of them advocated for - giving them more leverage with their creditors and/or the ECB. They're counting on creditors caving in and giving them a better deal, with more lenient conditions, or the ECB or IMF extending more financial aid. We say #### you, they say... well, in that case, you've got us by the balls so here we'll offer to let you take even more advantage of us. I'm saying they shouldn't respond to the Greek middle finger by bending over further, they should instead stand up, turn around, and say... well, you had your chance and you passed on it, apparently you'd prefer to #### yourself so we're gonna let you do just that.

So, if they did that, what do you think happens next? Let's start with a few understandings. Greeks have been withdrawing money form their nation's banks. They may be lazy, ungrateful thieves, but they aren't complete morons. They know that without ongoing aid their banks would run out of money pretty quickly. Capital controls are already in place. The only thing preventing a full-on bank run is the limitation on how much Greeks can withdraw from their bank accounts each day. Greece relies on imports for many things, there's just lots of stuff they don't do for themselves. Foreign parties won't extend them credit anymore, there's not enough reason to think they'll be good for it. And there are limits on what money can be sent out of the country to pay for the things that Greeks need.

Greek banks reportedly have a billion or so dollars worth of funds that they can, without ongoing outside help, pay out to depositors. That's for a nation of 11 million or so people. If they don't get some kind of new deal almost immediately now - if this no vote doesn't scare their creditors into offering better terms - the ECB won't be able to keep giving their banks loans to cover further withdrawals. It won't be allowed to (and this is part of the hard line I'm saying the other parties should take).

Further, just so we're clear, Greece doesn't control its currency - that's the Euro. It can't print more, it can't have a central bank extend emergency loans to its other banks. Their situation is much different than ours. And if they want to start using their own currency - the Drachma - it'll be worth less than it costs to print it (warning: slight exaggeration).

What all of that adds up to is: They're ####ed. Unless, that is, their creditors or the ECB or IMF cave, and quickly. They'd be a cash on delivery account with basically no cash on hand. Oh, and they rely on others - those that will only deliver for cash - for many of their essentials. If their creditors and the ECB do what I'm saying, they really will be on the verge of running out of money. Who is going to extend them the kind of credit they need if they default, in grand fashion with a huge middle finger, on their existing debts - and, as a nation that's not very productive and can't demonstrate a likelihood of future positive cash flow?

Now, maybe the Russians would step in and adopt them as you suggest - basically start supporting the whole nation. So be it, they get access to some nice tourist spots and historically (hugely) significant sites in return for further imperiling their own economy. They better hope energy prices breakout soon though, otherwise I'm not sure how long they could afford that particular kept lady.

 

[Larry Gude]

Larry - So what do you think happens if the interested parties do what I'm saying I hope they do? If Greece's creditors and the ECB, e.g., hold the line in the face of this no vote - this middle finger that the Greek people are giving them?

Greek political leaders are counting on this no vote - which many of them advocated for - giving them more leverage with their creditors and/or the ECB. They're counting on creditors caving in and giving them a better deal, with more lenient conditions, or the ECB or IMF extending more financial aid. We say #### you, they say... well, in that case, you've got us by the balls so here we'll offer to let you take even more advantage of us. I'm saying they shouldn't respond to the Greek middle finger by bending over further, they should instead stand up, turn around, and say... well, you had your chance and you passed on it, apparently you'd prefer to #### yourself so we're gonna let you do just that.

So, if they did that, what do you think happens next? Let's start with a few understandings. Greeks have been withdrawing money form their nation's banks. They may be lazy, ungrateful thieves, but they aren't complete morons. They know that without ongoing aid their banks would run out of money pretty quickly. Capital controls are already in place. The only thing preventing a full-on bank run is the limitation on how much Greeks can withdraw from their bank accounts each day. Greece relies on imports for many things, there's just lots of stuff they don't do for themselves. Foreign parties won't extend them credit anymore, there's not enough reason to think they'll be good for it. And there are limits on what money can be sent out of the country to pay for the things that Greeks need.

Greek banks reportedly have a billion or so dollars worth of funds that they can, without ongoing outside help, pay out to depositors. And that's for a nation of 11 million or so. And if they don't get some kind of new deal almost immediately now - if this no vote doesn't scare their creditors into offering better terms - the ECB won't be able to keep giving their banks loans to cover further withdrawals. It won't be allowed to (and this is part of the hard line I'm saying the other parties should take).

Further, just so we're clear, Greece doesn't control its currency - that's the Euro. It can't print more, it can't have a central bank extend emergency loans to its other banks. Their situation is much different than ours. And if they want to start using their own currency - the Drachma - it'll be worth less than it costs to print it (slight exaggeration warning).

What all of that adds up to is: They're ####ed. Unless, that is, their creditors or the ECB or IMF cave, and quickly. They'd be a cash on delivery account with basically no cash on hand. Oh, and they rely on others - those that will only deliver for cash - for many of their essentials. If their creditors and the ECB do what I'm saying, they really will be on the verge of running out of money. Who is going to extend them the kind of credit they need if they default, in grand fashion with a huge middle finger, on their existing debts - and, as a nation that's not very productive and can't in any way demonstrate a likelihood of future positive cash flow.

Now, maybe the Russians would step in and adopt them as you suggest - basically start supporting the whole nation. So be it, they get access to some nice tourist spots and historically (hugely significant sites in return for further imperiling their own economy. They better hope energy prices breakout soon though, otherwise I'm not sure how long they could afford that particular kept lady.

As I way, let's call me wrong. Paint me a picture of what happens your way.

 

[Larry Gude]

The rates of return on the debt that some of the failing countries are paying will always entice somebody in to loaning them money. 10-12% returns are always going to bring out the gamblers. But it's a death spiral....eventually somebody loses big time.

I'm going to sit back and watch Larry loan out all his cash and then, when the loans default, ahma buy me some nice green houses and raise killer pot.

Their economy is 250 bil a year. There is money to be made.

 

[Tilted]

As I way, let's call me wrong. Paint me a picture of what happens your way.

I thought I just did. At least, the beginning of it...

Greece would be ####ed. It wouldn't be long before they were saying... what did we do, what did our leaders do to us? Give us back that austerity stuff in exchange for ongoing credit, it sounds like an awful sweet deal right about now. Really, their options would be pretty darn limited. Economic collapse, national ghetto-ization (non-standard meaning). What can we sell to keep the lights turned on and the needed medical supplies coming? Please, please, please world.... Europe... Germany... whoever... we're sorry, help us. I don't think we'd be talking about a recession, I think we'd be talking about a great depression - hopefully a localized one. And without the kindness of some of those that they gave the middle finger to, I think it wouldn't be too long before they saw significant emigration.

 

[Larry Gude]

I thought I just did. At least, the beginning of it...

Greece would be ####ed. It wouldn't be long before they were saying... what did we do, what did our leaders do to us? Give us back that austerity stuff in exchange for ongoing credit, it sounds like an awful sweet deal right about now. Really, their options would be pretty darn limited. Economic collapse, national ghetto-ization (non-standard meaning). What can we sell to keep the lights turned on and the needed medical supplies coming? Please, please, please world.... Europe... Germany... whoever... we're sorry, help us. I don't think we'd be talking about a recession, I think we'd be talking about a great depression - hopefully a localized one. And without the kindness of some of those that they gave the middle finger to, I think it wouldn't be too long before they saw significant emigration.

Well I guess we'll soon see.

 

[Tilted]

Their economy is 250 bil a year. There is money to be made.

A make-work economy. Financed by foreign borrowing. Not entirely, of course; but to too great a degree.

Two key metrics that might help paint the picture - What portion of the population actually works? And then, what portion of them work for the government.

Greece does of course have some assets and some industry that matters - just not enough, they're just not collectively productive enough to not have continuous net assistance (in the form of lending or outright aid, not just trade) from the rest of the world.

 

[Tilted]

Well I guess we'll soon see.

If we're lucky.

If there are enough men in Europe to stand up and say - enough is enough, if you want to destroy yourselves by all means don't let us get in your way.

 

[Larry Gude]

If we're lucky.

If there are enough men in Europe to stand up and say - enough is enough, if you want to destroy yourselves by all means don't let us get in your way.

And then what? They become more productive producing what? So they end the excess government jobs and those people then have to go to work doing what and being paid by whom? Being more productive, by definition, means less people needed to do whatever, exacerbating their problem. I mean, do they have salt mines sitting idle or can they all go get paid to shovel #### in Siberia? What are they going to produce and for whom? I see them as last place and for a whole host of reasons that demands to get a hair cut and get a real job wont, can't fix.