Not Greek to Them

[MulaMan]

Re: Not Greek to Them

I hope the German front holds.

and if they do, I do hope Goldman Sachs is on the wrong side of the Greece trade and gets taken down. Unless of course the AMERICAN FED bails out Greece...then you will know it is Goldman.

The great thing about the EU is that the "Federal" government is week in relationship to the individual "States" so you can have a well managed state such as Germany tell Greece to go F yourself and cut your public spending.

In theory, a large American state such as California can be progressive on issues such as health care, energy, ... against the christano-fascist Federal government...but I'm still waiting.

http://www.guardian.co.uk/theguardia...l-bailout-euro

[Jay]

Re: Not Greek to Them

A debt jubilee requires that the creditors, i.e., the Financial Elite, take a haircut. Do you think they will submit to that willingly? Of course not. The only way is to force them through governmental control.

The Politicians are in the pockets of the Financial Elite. Do you think they will willingly bite the hand that feeds them? Of course not. The only way is to force them.

And how can the Politicians be forced to act in the benefit of the People? The People have to force them, or they will suffer the consequences of their inaction.

If the People don't act, then we will have Debt Servitude or Dictatorship, both of which are forms of slavery.
So our choice is slavery or class warfare. I hear Goldman Sachs is long chains . . . .

You mistake Hudson's opinion for my own. My post was in clarification of where I happened to see the term debt jubilee first. There are likely others who have used and have advocated the concept before Hudson.

The issues you bring up are real. That is why I left the comment about an all powerful head of state needed to implement such a jubilee. That is obviously not our present situation. No pharaohs here, just a mess of a power grab.

[WildspitzE]

Re: Not Greek to Them

I love the way that Stiglitz and that Spanish finance minister laugh at Hendry when he suggests debt jubilee as the only solution to the debt crisis.

Ohhh the (rich) fool. When will he learn...

For those that follow Saville in his pay letters/updates... boy does he do a number on Stiglitz in his most recent piece. Ouch.

[don]

Re: Not Greek to Them

Oedipus wrecks
By Chan Akya

European Commission President Jose-Manuel Barroso, who also participated in the summit, said EU leaders didn't discuss a financial rescue for Greece because the country hasn't asked for help. He added that more formal decisions about financial matters normally are left to EU finance ministers. The bloc's finance ministers are due to hold their regular monthly meeting on Monday and Tuesday. Several EU diplomats said further contingency plans for Greece will be discussed then.

When one reads the above statement, it becomes immediately apparent that there is actually no government in Europe, leave aside any idea of an effective and coordinated government. Since the beginning of this financial crisis, I have maintained that whatever happened to the US economy, the Europeans would have it worse. This is now coming to pass.

Where does it the leave the next few major dominos? My view has always been that the biggest downside risk is presented by the United Kingdom market. Not being part of the euro has afforded the UK a degree of currency flexibility; however, much like Iceland discovered two years ago, it is also possible that currency crisis is conflated with a confidence crisis, thereby creating a dangerous downward spiral.

On February 10, barely a few days after the UK officially emerged from a recession with a 0.1% quarterly growth, the governor of the Bank of England Mervyn King issued the following statement:

The UK economy has continued to bump along the bottom, but a gradual recovery in output may now be in prospect. There are signs that many economies are on the mend, although much uncertainty remains about the likelihood of a sustained rise in real final demand in the world economy as a whole. At home, the tailwinds of an enormous policy stimulus and the depreciation of sterling are meeting the headwinds created by the balance sheet adjustment of the damaged banking system. Spare capacity will press down on inflation in the medium term. But the near-term outlook is for inflation to rise further as the restoration of the standard rate of VAT to 17-% and higher petrol prices impact on the CPI [consumer price index] measure of inflation. While the banking system reduces its leverage, there will continue to be downward pressure on the supply of credit to households and businesses and on monetary growth. The twelve-month growth rate of broad money, excluding intermediate financial companies, slowed further to around 1%.

Monetary policy can do little to affect these short-run movements in inflation. Rather it affects the path of nominal spending. And that, relative to the supply capacity of the economy, determines inflation in the medium term. The strength of both the headwinds and the tailwinds affecting spending is uncertain, so it is hard to be sure how strong or sustained the recovery in spending will prove to be. And it is perhaps even harder to judge the impact of the financial crisis and last year's downturn on the supply capacity of the UK economy both in terms of magnitude and persistence. Nevertheless, it seems clear that at present there is significant spare capacity in the economy that will act to dampen inflation.

Another way of expressing that sentiment, devoid of references to inflation, is to cast doubts on the possibility of ending the country's recession through a rebound in economic growth. Yet it is a rebound that is urgently called for if the UK government is to have even a ghost of a chance to recoup revenues that could help trim the country's yawning budget deficit.

Authorities in Europe - whether in the eurozone or the UK - must take heed of the symbolic shift in market price movements on Thursday as the European deal for Greece was being digested. On the day, despite volatility in the trading of the US dollar, there was a clear positive move in gold that signaled its continued appeal to anyone wishing to avoid the travails of fake reserve currencies such as the euro and the UK pound sterling.

The barbaric relic is back - and, unlike the euro, it doesn't have an errant son to kill it with too much affection.

http://www.atimes.com/atimes/Global_.../LB13Dj02.html

[sunskyfan]

Re: Not Greek to Them

We had a Jubilee for the top 10%. That was what the bailout was.

[don]

Re: Not Greek to Them

The Economic Velociraptors

By ANDREW COCKBURN
While President Obama has taken to making obsequious comments about the CEOs of JP Morgan and Goldman Sachs, and how he doesn’t “begrudge” them their enormous winnings, Wall Street has been hard at work doing what it does best: impoverishing people. This month has been the turn of the Greeks and other poorer Europeans. In a nutshell, governments in Athens and elsewhere are being told that they must slash social spending to the bone and shrink their economy or else they won’t be allowed to borrow any more money. Dutiful press reports have dwelled on the concern of “investors” that the Greeks might default on their bonds, with consequent crisis for the Euro and possible disintegration of the European common currency.

For “investors,” read Wall Street gamblers – banks, hedge funds and other players. Scenting blood in the water, they have been busily placing enormous bets on whether the Greeks would go belly up or be helped out by the Germans. They do this through the medium of “credit default swaps”, a form of insurance against default by Greek or any other bonds. Typically, this kind of so-called insurance protection will be offered by a pension fund or some similar institution looking to earn a nice income from premium payments.

The buys of the protection will be hedge funds looking to make fast money if the insured bonds lose value and the seller has to pay out. Sitting between them is Goldman, JP Morgan, Bank of America or some other big bank who broker the trade between buyers and sellers. Since this market lacks any transparency – the banks have effortlessly crushed congressional initiatives for reform in this area -- these spreads and consequent profits are huge.

Once everyone has made their CDS bets, the buyers will start beating down the value of the insured bonds – in this case the Greeks. The air has been thick with reports of imminent Greek default, the Greeks’ financial irresponsibility, etc etc. As the value of the bonds decreased, the CDS sellers had to pay out money to the buyers, “posting margin.” This is what Goldman Sachs did to AIG in 2008, thus ensuring the latter firm’s ruin.

With Greece “in play” the flow has ebbed back and forth. As the fate of Greece see-saws, both sellers and buys have been making money, as of course have the banks in the middle. None of this has much to do with the underlying condition of the Greek economy. There was no particular reason why Greece should have become a crisis just now, except that it was their turn. Joseph Stiglitz, one of the very few economists worth listening to, has been pointing out that the Greek economy is not in immediate crisis and that this has been a speculative attack, but most business commentators are not paid to report things that way. Instead, the Greeks have been admonished to pull their socks up, cut government spending by firing thousands of public employees (thus exacerbating the recession) and pay their debts.

In the hunt for the rich pickings offered by the situation, competition among major powers, ie Wall Street institutions, has been fierce. Someone, for example, told Der Spiegel this week, that Goldman-Sachs had nefariously helped Greece cover up the true depth of its debt situation through creative use of cross currency swaps, which involved “the Greek government issuing debt in yen and U.S. dollars which were than swapped for debt in euros over a specified period of time. After a period of years the currencies will be traded back to the original currency.” Though this would seem like a good deal for the Greeks in the short term, in the long term, reported Speigel it would cost them dearly.

The report was clearly inimical to the interests of Goldman. Asked to check whether it was nevertheless true, a former U.S. Treasury official told me that the story, “more smoke than fire,” had been leaked by a Goldman competitor, “Lazard, JP Morgan, Deutsche -- take your pick,” adding that “the velociraptors are ripping chunks of flesh out of each other in a fight to the death.” Such wholesome plain speaking is not of course current in the White House, where Obama prefers the term “savvy businessmen,” at least when referring to JP Morgan and Goldman CEOs Jamie Dimon and Lloyd Blankfein in a recent interview with Business Week, to anything redolent of fearsome, carnivorous predators.

(Blankfein, according to Andrew Ross Sorkin’s book “Too Big to Fail,” displays a framed Gary Larson cartoon on his office wall. It depicts a father and son looking over the garden fence at a line of wolves entering the house next door. “I know you miss the Wainwrights Bobby,” the father is saying “but they were weak and stupid people, and that’s why we have wolves and other large predators.”)

Just when other poorer members of the European family were thankfully watching the Greeks get it in the neck while they escaped, a rumor swept Wall Street that Stanley Druckenmiller, master of the mighty hedge fund Duquesne Capital, was moving on to give Portugal the same treatment. Instantly, credit default swaps, ie bets, against the hapless Portugeese shot up, giving the Greeks a breathing space, before the herd moved on again to mangle the Euro itself.

http://www.counterpunch.org/andrew02122010.html

[GRG55]

Re: Not Greek to Them

We had a Jubilee for the top 10%. That was what the bailout was.

That was no Jubileee...that was a group re-Coronation...

[raja]

Re: Not Greek to Them

You mistake Hudson's opinion for my own. My post was in clarification of where I happened to see the term debt jubilee first. There are likely others who have used and have advocated the concept before Hudson.

Jay, I wasn't actually responding to you in my post . . . I was just taking your post as a jumping off point for an opportunity to rant. :eek:
Sorry to be misleading . . . .