Greece Default Looming?

[HiTempguy1]

http://m.bbc.com/news/business-32335758

Some major issues worldwide have been kind of silent lately.

It appears Greece is going to become major news again. Oil has taken a big hit after its big rise, and S&P downgraded Greece's credit rating again which appears to be what has shaken investors convidence in oil.

I personally think Greece defaults. The EU is a bullshitty project anyways, meant to overrun the sovereignty of other nations, I think the world will be a better place if it crumbles.

[Sugarphreak]

...

[ExtraSlow]

I don't think there was any serious question if IF Greece would default, just WHEN and HOW. The Eurozone would love to be rid of them, but don't want to set a precedent where other countries seriously consider leaving.

[Canmorite]

The Euro won't crumble, and I highly doubt Greece will be kicked out. However, I think they should be kicked out instead of defaulting and leaving in a messy way. Sets a better precedent.

[flipstah]

Don't worry. Germany will cover our tab:

http://www.marketwatch.com/story/why-greek-demands-for-war-reparations-from-germany-make-sense-2015-04-16

[ZenOps]

Greece has islands FFS. Islands.

They can always sell em off if things got really that bad. Call it "New Germany".

[M.alex]

how has it not defaulted yet?

[HiTempguy1]

The political (not social or economic) will of many countries that benefit from the EU.

Greece should have defaulted long ago. As usual, this extended death is going to cause more pain in the long wrong but it is STILL being dragged out.

[Supa Dexta]

Originally posted by ZenOps
They can always sell em off if things got really that bad. Call it "New Germany".

Thats already in NS. How about we call it copper field. or Nickel Mines. oh wait.

[ZenOps]

Greece has copper and what is more rare, Marble.

The last mines of marble around the world are all low-quality. The Highest quality marbles were used centuries ago and are salvaged from buildings (An ancient greek prison may be more valueable than a modern five star hotel because of the marble valuation.)

Canada Russia and Austrailia have nickel.

I would definitely think it would be worth it to buy a Greek island just on the off chance that there might be a hidden marble deposit on it. Aside from living on it that is, but then you have to worry about a volcano wiping out everything.

As for rare rocks, I still prefer low-quality opal. Although, a holographic coated DVD looks astoundingly similar.

Side note: In Canada never use marble as a floor tile, only use it on walls and pillars, or for million dollar sculptures. We spread around rocks every winter, and an ill placed rock wedged into a boot can shatter a marble floortile.

[Cos]

.

[Arash Boodagh]

With this debt depression, which has been a long time in the making, it could be a plan to further build up its neo Nazi foot soldiers, aka Golden Dawn, and use them to indirectly attack Russia in Ukraine when needed.
We are already indirectly using ISIS.

[killramos]

Originally posted by Arash Boodagh


http://i2.kym-cdn.com/entries/icons/original/000/007/423/untitle.JPG

[Cos]

.

[Arash Boodagh]

Shadow bankers can create economic depressions with a flick of a switch... They also generate a countries debt up as an excuse of why the economy is broke.
In Greece's example I think it was billion of over spending on military hardware.


Originally posted by killramos
[B]

no World war 3 has already started... we cant disregard world events for whats going on in Greece.

[codetrap]

.

[Cos]

.

[ZenOps]

The biggest problem of all is that Greece produces nothing that the rest of the world wants.

Spain, at least you might get some olives. Germanys got cars and other industrialized goods. US has almonds and Hollywood. Canada has oil and water.

Where Greece is right now, they barely have the basic infrastructure ability to grow a handful of almonds, and as much as some would like to believe it would be possible to payback a million dollar debt with a wink, a dance, a song and a smile - Realistically its not going to happen.

[InRich]

Kick the fuckers out already. I felt bad for Germany giving these losers money in the first place. WE ALL KNEW, they weren't gonna get their money back. Why they felt they had to help these losers is beyond me. Fuckers barely work over there. Kick em out already!

[HiTempguy1]

So, what's the over-under?

I'm surprised everyone has played hardball like they have.

I'd honestly like to sit-in on the Greece Finance Ministers lectures. At least he has some balls, even though I thoroughly disagree with his cause!

[benyl]

Greece in numbers
€320bn
Greece's debt mountain
€240bn
European bailout
€56bn Greece owes Germany
177% country's debt-to-GDP ratio
25% fall in GDP since 2010
26% Greek unemployment rate
Source: ECB, IMF, Greek National Statistics Agency

http://m.bbc.com/news/business-32448638


1 May: Greece has to pay €200m of loan interest to the International Monetary Fund (IMF), although it may be given a few days grace owing to the long bank holiday weekend.
8 May: Greece has to roll over €1.4bn worth of maturing 6-month Treasury bills.
11 May: Crucial meeting of eurozone finance ministers in Brussels - Greece likely to be high on the agenda.
12 May: Greece due to repay €760m of IMF loan
15 May: Greece has to roll over €1.4bn worth of maturing 3-month Treasury bills.
End of May: the country needs to find about €2.5bn to pay salaries and pensions.
30 June: The €240bn bailout agreement between the eurozone and Greece officially expires.
June and July: €6.7bn due to be repaid to the European Central Bank.

[ZenOps]

http://www.theguardian.com/business/2015/may/08/tsipras-happy-ending-greece-crisis-talks-payment-to-imf-nears

Tuesday could be the day. €750 million "minimum payment" due.

[HiTempguy1]

Originally posted by ZenOps
http://www.theguardian.com/business/2015/may/08/tsipras-happy-ending-greece-crisis-talks-payment-to-imf-nears

Tuesday could be the day. €750 million "minimum payment" due.

They will default, if not this week then by June. I see no way that it is possible for them to move forward without massive societal changes there.

And I don't think EU voters would allow it. They've already had billions of their tax dollars spent on someone who doesn't want to change.

[ExtraSlow]

CBC News - Greece says it has no plans for capital controls as debt crisis deepens. (http://www.cbc.ca/news/business/greece-says-it-has-no-plans-for-capital-controls-as-debt-crisis-deepens-1.3086339)

Of course, they wouldn't advertise the plans for capital controls, because that would just speed up the flight of capital from the country. They've removed over $30 Billion euro from the country already. More is being moved every day.

Anyone want to bet on the date that Greece is out of the EU and has to stop using the Euro?

[ZenOps]

Greece can actually go quite a while without money per say.

They have islands. Government assets like ancient prison islands, abandoned monestary islands, and uninhabited islands.

All of which they can pledge as collateral to the Chinese, who would and are gladly buying them up, at least on paper..

China will bankroll Greece for far longer than I think the EU would normally consider possible. An island is like putting up a gold watch as money in a poker match, and Greece has got a lot of islands - which means they can keep the game going for a lot longer than reasonable otherwise.

I would not be surprised at all if China bought some coral reef off of Greece, and simply built an island themselves.

[HiTempguy1]

Originally posted by ExtraSlow
.

Anyone want to bet on the date that Greece is out of the EU and has to stop using the Euro?

Has to? I think they'll have a parallel currency at first. If they default, I say Dec 31/2015 is when the Euro is no longer allowed.

If you simply mean when they default, I say that the gov has no access to more euros as of June 31/2015.

I am also betting they default on June 5th... Or the EU politicians are surely crazy, and will continue to throw money after a company that has zero interest in reform.

Greece should never have been in the EU, and the corruption by their politicians in the early millenium... Its impossible to describe the corruption.

[Disoblige]

Originally posted by HiTempguy1

I am also betting they default on June 5th..
Sure, want to put some $ on it? :D

[01RedDX]

.

[Disoblige]

Originally posted by 01RedDX

I think you have a problem...
:rofl:

[HiTempguy1]

Haha I'd throw down $50. Are we talking technical default?

By default, I mean miss a payment because that is a default in my books. So $50 that Greece does not pay the IMF $300mil Euros on June 5th :)

[Graham_A_M]

Originally posted by HiTempguy1
Greece should never have been in the EU, and the corruption by their politicians in the early millenium... Its impossible to describe the corruption. hmm, how so? Or shall I ask how do you know about this? Sorry I just find this intriguing.

[HiTempguy1]

Originally posted by Graham_A_M
hmm, how so? Or shall I ask how do you know about this? Sorry I just find this intriguing.

I just read a lot :dunno:

You'll notice most of it doesn't get talked about/discussed in the current news as its not "politically correct" to suggest that the European Union, which currently is a FISCAL union but wants to be a POLITICAL union, may have allowed Greece to become a member due to the politics of the European Union.

At the end of the day, Greece was loaned untold BILLIONS with reckless abandon, and then used those billions to prop up false GDP numbers. It basically was like a governmental version of the sub-prime mortgage collapse in the US. Everything was all good until the economy hit the skids. The Greece government used said billions to fund everything under the sun, with little thought of the requirement to pay it back (its like free money!!)

Its fairly straightforward number-wise, the EU has set rules for a country to be eligible for membership. Greece did not (never has) met those rules. And the only reason the EU is struggling so hard to throw billions of tax payers dollars at Greece that they will never see come back is because if Greece leaves, the house of cards that is the EU crumbles.

Its political skulduggery at its finest. The proper solution is to kick greece the fuck out of the EU and ride it out and learn from their mistakes. But they won't, because we blame our governments out west here for never doing right by their constituents, but the cronies in Europe are 10 times worse as far as I can tell :whipped:

Not to mention the simple fact that Greece can't even do proper tax collection :rofl:

[kaput]

.

[01RedDX]

.

[HiTempguy1]

Originally posted by kaput


Why / how would this cause the EU to break apart? I've never understood how that works.

The EU is a fiscal union that masquerades as (and end goal is) political union. They want a United States of Europe.

If the fiscal union falters, the dream of a political union shatters. The EU relies on the Euro (the currency) to hold everyone together fiscally. If countries can utilize and then leave the union currency whenever they want, it completely defeats the purpose of the Euro. This will severely distort markets, as you start betting on whether the euro will succeed or falter. It would be like if the US could just start using cdn dollars whenever they wanted.

I'm explaining it poorly. I am trying to find an article that highlights the issues. Again, it is tough because being non-politically correct is so taboo in European news.

[ZenOps]

Its worthy of note that California did pay its goverment employees in IOU's instead of US digital dollars for a short period after the financial and local housing crash in July of 2009.

Technically, that avoided a default - because there were able to use the digital dollars that otherwise would have to be paid to the government employees right away to pay the creditors instead. Then a few months later, they just got the Feds to print more money - and it was all good.

Every govt worker in California knew the IOU's were not money, but that there was a good chance that the US govt would simply print more money in the near future to cover it. And thats exactly what happened. Playing chicken with an imaginary digital car, isn't playing chicken - because you can infinitely print as many US digital dollars as you might ever need.

Very few people would consider not paying a local government employee as a true default. Only if you do not pay the international bondholders is that a default (and has caused wars before, and probably will again)

[HiTempguy1]

An interesting, short, but insightful article by Macleans on Greece.

http://www.macleans.ca/culture/books/a-travelogue-of-greeces-economic-ruins/

I don't particularily like zerohedge, but I find it is a great aggregate to combine all news together and then presents an opinion on it:

http://www.zerohedge.com/news/2015-05-31/sunday-deal-deadline-dies-greece-prepares-desperate-draft-plan

Now, my understanding is the IMF has given them an extra 15 days past June 5th (something like June 21st) when they can make a lump sum payment on all their debts.

I count missing the June 5th payment as a default. Most say it isn't, but its semantics at that point. If there is any money left in Greece by the end of this week, I'll be shocked. They don't want to clean up their act, so let em burn! :dunno:

[ZenOps]

Yes, Greek viewpoint on paying taxes is clear to me.

Throughout their history, they have been occupied by foreign (other European nations) entities multiple times. It was very patriotic to not pay into the government, as it was oftentimes a despotic military ruler who would get the proceeds, namely Hitler and other occupiers.

Thus, when things get bad - Greeks know enough to transact in cash.

Its hard to think of being a patriot in not paying taxes for most countries, especially Canada - because we have never lost a war to the point where we had to pay yearly taxes to the conqueror.

The USA has technically had its most bloody war, because people called themselves patriots in refusing to pay taxation to the British monarchy a thousand miles away, instead keeping the wealth local for neighbors... So exactly who is right and wrong in that situation?

Its worthy of note, that many Greek banks close at 2 pm.

[HiTempguy1]

http://www.ft.com/intl/cms/s/0/b913c958-101f-11e5-ad5a-00144feabdc0.html#axzz3clq91RmZ

Here it comes boys and girls!

Unless there is a miracle, Greece is going to default. In my opinion, Greece already has since they bundled the payments which screams "we have no money".

Oil is all over the place, the stock market seems pretty up and down the past couple days.

[BigMass]

California has more debt and contagion than Greece. Greece defaulting would mean nothing in real terms. The biggest fear is psychological and how that would affect people's thought processes in terms of investing/lending.

[jdmXSI]

good time to buy gold?

[rage2]

Originally posted by BigMass
California has more debt and contagion than Greece.
I'll stop you right there.

http://www.theatlantic.com/business/archive/2012/08/5-graphs-that-show-how-crazy-it-is-to-compare-california-to-greece/260939/

[HiTempguy1]

Originally posted by rage2

I'll stop you right there.

http://www.theatlantic.com/business/archive/2012/08/5-graphs-that-show-how-crazy-it-is-to-compare-california-to-greece/260939/

Thanks for posting that, BigMass is usually off-base, but this time he's on the moon, I was going to post the same thing. It truly isn't even close or comparable. If he had said puerto rico, I'd have agreed with him.

[Feruk]

I don't see the point of wasting time trying to negotiate another deal with Greece's Syriza party. What they should do is tell Greece they either comply with demands or default. Similar anti-austerity parties are gaining ground in the other PIGS (in far more important countries to European stability). The citizens of the other PIGS can watch Greece destroyed on Euro exit as a lesson of what'll happen to them if they don't get their debt under control.

[Cos]

.

[HiTempguy1]

http://www.telegraph.co.uk/finance/economics/11700327/Greece-debt-crisis-creditors-proposal-live.html

Its happening. Greece defaults on Monday. The creditors basically gave them everything and the kitchen sink in that offer and they still rejected it.

[Milk2%]

Originally posted by HiTempguy1
http://www.telegraph.co.uk/finance/economics/11700327/Greece-debt-crisis-creditors-proposal-live.html

Its happening. Greece defaults on Monday. The creditors basically gave them everything and the kitchen sink in that offer and they still rejected it.

Best thing to happen to Greece. Might look bad for a few years but the EU needs to dissolve. Welcome back the drachma :clap:

[Milk2%]

Originally posted by jdmXSI
good time to buy gold?

Negative

[revelations]

Greece defaults, and life moves on.

Meanwhile, the highly productive and naive Nordic countries are suffering hard and drinking themselves stupid for jumping in on the same boat with countries like Greece.

[HiTempguy1]

Originally posted by Milk2%


Best thing to happen to Greece. Might look bad for a few years but the EU needs to dissolve. Welcome back the drachma :clap:

I agree. Of course, the whole EU will never work unless countries give up their sovereign rights. It'll never happen.

[cycosis]

So I see that the euro is down 1%. Anyone have an idea how far it could go? Im headed to Italy this fall and I'm, hoping for some good savings on the currency devaluation :)

[killramos]

So if i understand correctly at this point Greece has basically stolen somewhere around 240 billion dollars from the EU and is basically walking away at this point and saying:

http://media.tumblr.com/tumblr_l9fqjzTyW91qcikulo1_500.png

because their citizens basically want every kind of service under the sun but not to pay taxes?

I hope that every EU state puts Greek citizens on an applied visa list with a subsequent embargo. Fuck 'em.

[Canmorite]

I say let them go, but in a methodical fashion. It hasn't worked, it isn't working, and it's unlikely that it will. Greece needs to get their financial house in order.

There will definitely be some pain, but what's the upside to keeping Greece in the Euro in their current form? :dunno: As mentioned they won't give up their sovereignty, which is understandable, so let them go.

[Xtrema]

Originally posted by Canmorite
There will definitely be some pain, but what's the upside to keeping Greece in the Euro in their current form?

The facade that Euro is great in front of the creditors? So Spain, Portugal and Italy won't fall like dominoes?

That's basically what the Greek is counting on in negotiation.

[Canmorite]

Originally posted by Xtrema


The facade that Euro is great in front of the creditors? So Spain, Portugal and Italy won't fall like dominoes?

That's basically what the Greek is counting on in negotiation.

That's the underlying, non-talked about issue with Greece potentially leaving the Euro. If Greece exists, will Spain, Portugal and Italy default next?

I don't know the answer, but I'd be pissed if I was a German or French. Bailing out these other nations to constantly support them. The Swiss are laughing at the whole Euro issue :rofl:

[mazdavirgin]

Originally posted by cycosis
So I see that the euro is down 1%. Anyone have an idea how far it could go? Im headed to Italy this fall and I'm, hoping for some good savings on the currency devaluation :)

Markets are already priced with the risk of the default. You might see a bit of a blip but the thing is that Greece is such a small country and relative to the size of the EU it won't do much other than dropping the currency a little lower for a bit. Expect volatility but otherwise it's not going to have much impact. Greece is 1/3 the size of Canada per population and their GDP is 1/3 of Canada(That's a really bad metric for Greece...).

Anyways in the end if Greece leaves the EU it will be disastrous for the Greeks and their savings will all evaporate. Will be hilarious to watch though if they vote to shoot themselves in the foot.

[tirebob]

Heading to Europe Thursday morning... Thinking I should huy some currency last minute in hopes of a drop...

[Xtrema]

Originally posted by Canmorite
I don't know the answer, but I'd be pissed if I was a German or French. Bailing out these other nations to constantly support them. The Swiss are laughing at the whole Euro issue :rofl:

And the fact that they exited. Have a healthy crash like Iceland and return to normal in a decade or so. Then Spain, Portugal and Italy follow suit and default too.


Originally posted by mazdavirgin
Anyways in the end if Greece leaves the EU it will be disastrous for the Greeks and their savings will all evaporate. Will be hilarious to watch though if they vote to shoot themselves in the foot.

The expectation is the neutral/swing voters will come out and save the Euro as now stake are raised and something is on the line.

The government can say they are just following people's will to save face as they break their election promise.

[killramos]

Originally posted by mazdavirgin


Anyways in the end if Greece leaves the EU it will be disastrous for the Greeks and their savings will all evaporate. Will be hilarious to watch though if they vote to shoot themselves in the foot.

Its exactly what they deserve

[GotRice?]

https://ca.finance.yahoo.com/news/greeces-tsipras-defiant-banks-shut-markets-rocked-bailout-051536155.html

[suntan]

I think this is the third time the country's gone bankrupt.

[ZenOps]

Its all over, right on Canada Day too.

http://www.bbc.com/news/world-europe-33339363

Missed the €1.6 Billion "minimum payment", and of course once you've missed one payment there is more than a good chance you can kiss the lump sum of €180 Billion owed goodbye.

"Greek banks did not open this week after talks between Greece and its creditors broke down. However, up to 1,000 bank branches will re-open from Wednesday to allow pensioners - many of whom do not use bank cards - to withdraw up to €120."

"When a payment to the IMF is missed and managing director Christine Lagarde informs her board, the eurozone would have the right under the loan agreements to demand immediate repayment of more than €180bn they have already lent Greece, together with interest."

[ZenOps]

http://www.zerohedge.com/news/2015-07-01/heartbreaking-scene-unfolds-greek-banks-pensioners-clamor-cash

Leave it up to ZH to take the darkest stories.

Still, they are only serving people with last names A through K today, and maximum 120 euro withdrawl. Ouch pensioners.

[ercchry]

NBG is up 7% today :rofl:

[HiTempguy1]

Originally posted by ercchry
NBG is up 7% today :rofl:

Investors are fucking crazy.

Everything is up across the board because some of the news agencies said Greece was still seeking a deal.

There is going to be a No on the referendum. If nothing else, this is what Greece needs. The eurozone as a whole is trash to begin with, and is too far ahead of its time.

[ZenOps]

The Greek banks will be fine, the deposits they have can be outright confiscated at any time - but its not the banks money, its the peoples money when it comes to debts.

Thats why its always important to know that when you put money in the bank, you are investing in the bank - the money isn't actually yours to withdraw in most banks worldwide if things go bad (insolvency, war, recession, fraud, scams, theft by administrators, government collapse, natural disaster, act of god, solar flare)

[InRich]

Originally posted by ZenOps
The Greek banks will be fine, the deposits they have can be outright confiscated at any time - but its not the banks money, its the peoples money when it comes to debts.

Thats why its always important to know that when you put money in the bank, you are investing in the bank - the money isn't actually yours to withdraw in most banks worldwide if things go bad (insolvency, war, recession, fraud, scams, theft by administrators, government collapse, natural disaster, act of god, solar flare)

so what would you do? if you had alot of money in the bank?

at 100k at 200k at 300k 400+k

[revelations]

Originally posted by InRich


so what would you do? if you had alot of money in the bank?

at 100k at 200k at 300k 400+k

Dont you remember what happened with Cyprus?

http://www.usatoday.com/story/money/business/2013/07/29/bank-of-cyprus-depositors-lose-savings/2595837/

People with over 100k lost about 50%.

[mazdavirgin]

Originally posted by InRich


so what would you do? if you had alot of money in the bank?

at 100k at 200k at 300k 400+k

You don't want to hold cash over 100k in a bank. It's fine if you are invested in the markets since typically that is not held by the bank directly. So even if the bank becomes insolvent you don't lose your investments. Canada insures peoples saving accounts up to 100k.



The Canada Deposit Insurance Corporation (CDIC) is a Canadian federal Crown corporation created by Parliament in 1967. The CDIC insures Canadians' deposits held at Canadian banks (and other member institutions) up to CA$100,000 in case of a bank failure. CDIC automatically insures many types of savings against the failure of a financial institution.

[sabad66]

What good is a country-insured bank account when your country can't even cover an interest payment :nut:

[ZenOps]

Its pretty difficult to find a place to put a few hundred thousand without resorting to the banks or a bank by proxy.

Rich people tend to buy North American real estate, $2 million houses and up - as they know that the respective North American governments are unlikely to confiscate an asset that is constantly giving them an income (through property taxation). Thus by default, real estate is the "safest" asset in the case of a catastrohphic currency event, even if the value of the property diminishes in dollar terms, and you have to pay taxes on it every year - At the very least it is still worth something (whereas a bank deposit could be worth nothing)

Converting from bank traded stocks to directly purchased stocks from the issuing company is doable for larger blue chips. Its actually easiest to simply sell and rebuy even if a small loss in incurred.

Putting a small amount of cash bills at hand in a bank safety vault is also doable, but make sure you do not mention it to your banker. If everyone did this, it would create problems for everyone however. Only store as much as you might think you might need as an emergency buffer, as the banks could also do a safety box wipe at their discretion. Its also not anywhere near as safe an asset as having something in your name (like a property deed, or stock deed) in case of neighbor turning against neighbor.

As for liquid safety, moving to a swiss bank account is prudent. Although you will be losing -0.25% each year, the Swiss bank would arguably be the "last to fall" if the bank dominoes start falling.

BTW: North America is still relatively ok. I would re-assess that after Peurto Rico declares insolvency, and a couple more California cities. If Los Angeles declares, that would be a trigger to run as fast as you can to safety.

[ZenOps]

http://www.zerohedge.com/news/2015-07-03/greek-banks-considering-30-haircut-deposits-over-%E2%82%AC8000-ft-reports

This would make sense to me. Somewhere greater than $10,000 deposits of Greeks would take a 50% haircut.

If the Rupee were to collapse some day, I would say a 50% haircut on deposits over $200 would be about right.

[HiTempguy1]

So, this might seem like crazy talk... But is there any reason the creditors cant just change the loan terms to 0%? I mean, it is awful, but seems way better than taking an outright haircut in net dollars right this very second to get greece back to sustainability.

By putting the debt at 0% and paying it off around 2050, it seems sort of win-win. The citizens of the countries who lent greece money/bailed them out dont lose money, and the eurogroup still has leverage to insure proper economic reform takes place in greece. Maybe?

[Type_S1]

Originally posted by HiTempguy1
So, this might seem like crazy talk... But is there any reason the creditors cant just change the loan terms to 0%? I mean, it is awful, but seems way better than taking an outright haircut in net dollars right this very second to get greece back to sustainability.

By putting the debt at 0% and paying it off around 2050, it seems sort of win-win. The citizens of the countries who lent greece money/bailed them out dont lose money, and the eurogroup still has leverage to insure proper economic reform takes place in greece. Maybe?

TVM. 0% interest is actually losing lenders a TON of money over such a long period. "A dollar today is worth more then a dollar tomorrow".

[mazdavirgin]

Originally posted by HiTempguy1
So, this might seem like crazy talk... But is there any reason the creditors cant just change the loan terms to 0%? I mean, it is awful, but seems way better than taking an outright haircut in net dollars right this very second to get greece back to sustainability.

By putting the debt at 0% and paying it off around 2050, it seems sort of win-win. The citizens of the countries who lent greece money/bailed them out dont lose money, and the eurogroup still has leverage to insure proper economic reform takes place in greece. Maybe?

The whole problem isn't the debt itself it's that Greece needs to borrow more money to keep themselves afloat. So even if you drop the interest rate on the current loans to 0% who is going to loan them more money now? Think of them like a dead beat creditor. They don't want to pay back what they owe but they want to borrow more money to buy that new TV they saw last week.

The whole problem here is the people elected a government which promised them an impossibility. They elected a government that told them we won't have to spend less and we won't have to worry about paying back our loans. So the plan was borrow more so you can subsidize a whole bunch of social services and government programs without cutting back on spending. :nut:

Sounds a little like what the NDP promised in Alberta.

[HiTempguy1]

Originally posted by Type_S1


TVM. 0% interest is actually losing lenders a TON of money over such a long period. "A dollar today is worth more then a dollar tomorrow".

I understand that, but couldn't the argument be made lost dollars down the road are less of a hit than dollars immediately cut is what I am getting at?

If creditors (namely countries like Germany, France, etc) are asked to take 50% value loss right this very second, is that better than a 50% loss overall over the next XX years?

The money that was lent to Greece wasn't going to be invested by the respective governments (right?), so I don't know if it is fair to view this as a typical loan-type situation.

Its not like Germany had to make a choice between investing $50bil or loaning Greece $50bil. And arguably, not loaning Greece the money in the first place would have been much worse for Germany financially, as I understand it.

I guess my point is that as we all know, this has very little to do with economics and most to do with politics. So my question stands, does it really hurt more to extend 0% interest terms than to take a cut on what you will be paid? In a "family household" evaluation, I agree it would. In a country bailout, I'm not sure.

I'm not saying you are wrong, just interested in learning :)

[Type_S1]

Originally posted by HiTempguy1


I understand that, but couldn't the argument be made lost dollars down the road are less of a hit than dollars immediately cut is what I am getting at?

If creditors (namely countries like Germany, France, etc) are asked to take 50% value loss right this very second, is that better than a 50% loss overall over the next XX years?

The money that was lent to Greece wasn't going to be invested by the respective governments (right?), so I don't know if it is fair to view this as a typical loan-type situation.

Its not like Germany had to make a choice between investing $50bil or loaning Greece $50bil. And arguably, not loaning Greece the money in the first place would have been much worse for Germany financially, as I understand it.

I guess my point is that as we all know, this has very little to do with economics and most to do with politics. So my question stands, does it really hurt more to extend 0% interest terms than to take a cut on what you will be paid? In a "family household" evaluation, I agree it would. In a country bailout, I'm not sure.

I'm not saying you are wrong, just interested in learning :)

I think you need to do some more reading on the issue. Dropping to a 0% interest doesn't bail Greece out. They need someone else to lend them money which nobody will.

Greece also has no plans to actually pay back any of its loans. They are a deadbeat country with deadbeat people run by a deadbeat government. If you have ever been there you will realize unless they change the cultural values ingrained in them they will never step up and fix their economy. It is better to let them default then keep lending money. It's like the crackhead on the side of the road. There comes a point where you just need to say no more help.

[Graham_A_M]

Originally posted by Type_S1

Greece also has no plans to actually pay back any of its loans. They are a deadbeat country with deadbeat people run by a deadbeat government. If you have ever been there you will realize unless they change the cultural values ingrained in them they will never step up and fix their economy. It is better to let them default then keep lending money. It's like the crackhead on the side of the road. There comes a point where you just need to say no more help.

Word, they cant be helped from an outside source, everything needs to change with that country, which I very highly doubt it ever will in the foreseeable future. :nut:

[max_boost]

Originally posted by Type_S1


I think you need to do some more reading on the issue. Dropping to a 0% interest doesn't bail Greece out. They need someone else to lend them money which nobody will.

Greece also has no plans to actually pay back any of its loans. They are a deadbeat country with deadbeat people run by a deadbeat government. If you have ever been there you will realize unless they change the cultural values ingrained in them they will never step up and fix their economy. It is better to let them default then keep lending money. It's like the crackhead on the side of the road. There comes a point where you just need to say no more help.

:werd:

Cash society. Everyone wants to sit back and collect without paying anything into the system.

[mazdavirgin]

Today is a good example as to why democracy is not ideal in all situations.

Well as they the voters have gotten the government they deserve. It will be interesting to see if thed decide to continue with this stupidity and burn down their economy to the ground.

[16hypen3sp]

Greece is a socialists dream gone so awry it's frightening.

[rob the knob]

Originally posted by 16hypen3sp
Greece is a socialists dream gone so awry it's frightening.

can you explain? i am not full on economies and politics.

[ZenOps]

http://demonocracy.info/infographics/eu/debt_greek/debt_greek.html

[Xtrema]

Originally posted by rob the knob


can you explain? i am not full on economies and politics.

http://www.vice.com/read/the-history-of-greek-debt-and-bankruptcy-8876

[rage2]

Originally posted by rob the knob
can you explain? i am not full on economies and politics.
Just google up Greece socialism, there are tons of sites that talk about it.

I like this article: http://www.cnbc.com/id/102802577

[Sugarphreak]

...

[mazdavirgin]

:dunno: Markets today don't seem to be all that bothered by the Greece meltdown. As expected the markets are already priced expecting a Greek default. Now it will be interesting to see what happens seeing as Greek banks are still closed. :nut:

[Xtrema]

Originally posted by mazdavirgin
:dunno: Markets today don't seem to be all that bothered by the Greece meltdown. As expected the markets are already priced expecting a Greek default. Now it will be interesting to see what happens seeing as Greek banks are still closed. :nut:

Problem is already isolated. Losing Greece is like losing Iceland.

[vengie]

Originally posted by Sugarphreak
Greece is a good example of how letting socialism go too far ultimately hurts everybody

It also serves as a good warning of things to come if NDP ever get in at the Federal level with a majority. Socialism doesn't work, it never has, and never will. It is just a self destructive process that gains support by catering towards ideals of entitlement it can only fulfill temporarily.

This is what scares me the most. We are in the age of entitlement and immediate gratification. I can see the NDP being elected federally by all the entitled socialist people our society has bred... Scary times!

[Canmorite]

I'm not saying all socialistic governments work, but it's not as simple as saying "Greece is socialist, that's why they failed". Canada is socialist to some degree, as well as Norway, Denmark, Sweden etc. but they (and Canada) are doing alright.

Greece has a lot more issues besides 'socialism' that are dragging it down.

[ZenOps]

I don't know that this is all bad for Greece.

They are pretty much used to not paying into a government system, especially since WWII when they were forced to pay Hitler.

Their system is based around a certain degree of self-sustinence in financial aspects.

Now... The $360 Billion that is owed to the other nations that probably will not be paid back. Whos getting the shorter end of the stick?

[ZenOps]

And: Finance Minister Yanis Varoufakis resigns.

Damn, I really liked that guy. That is to say he had a really out of this world resume. Hes basically the guy who oversaw the Team Fortress 2 hat economy of completely virtual items that had no value other than what other people would pay for them.

Genius, man was pure genius.

[Xtrema]

What if Greece instead of introducing drachma, it introduce some sort of crypto currency?

[mazdavirgin]

Originally posted by Xtrema
What if Greece instead of introducing drachma, it introduce some sort of crypto currency?

Doesn't really matter since they are screwed at the moment. The Greek banks are insolvent. If they don't get their new loans then they can kiss their banks goodbye and all their savings with them.

[Sugarphreak]

...

[soloracer]

Originally posted by HiTempguy1


I understand that, but couldn't the argument be made lost dollars down the road are less of a hit than dollars immediately cut is what I am getting at?

If creditors (namely countries like Germany, France, etc) are asked to take 50% value loss right this very second, is that better than a 50% loss overall over the next XX years?

The money that was lent to Greece wasn't going to be invested by the respective governments (right?), so I don't know if it is fair to view this as a typical loan-type situation.

Its not like Germany had to make a choice between investing $50bil or loaning Greece $50bil. And arguably, not loaning Greece the money in the first place would have been much worse for Germany financially, as I understand it.

I guess my point is that as we all know, this has very little to do with economics and most to do with politics. So my question stands, does it really hurt more to extend 0% interest terms than to take a cut on what you will be paid? In a "family household" evaluation, I agree it would. In a country bailout, I'm not sure.

I'm not saying you are wrong, just interested in learning :)

No doubt there are politics at play here. However, if Greece continues to bleed money from the EU with no willingness to implement provisions to stop the excessive spending what should Germany do? Continue to give them money so that in future years the Germans can write that debt off too? Where do you think Germany gets it's money from? Taxes collected from it's citizens and corporations naturally. If you were a German and were being told your taxes have to go up to pay for the things that the Greeks are doing what would you think? Would that be a "political" problem or an "economic" one? How long would you be willing to let them keep taking from you and when do you say enough is enough? Then consider if Greece is successful in getting favorable terms what is to stop Italy and Portugal from demanding the same? Are the Germans the cash cow to be milked until they are dry?

At the end of the day this is a complicated matter and ultimately the greeks have to change their system to something that is sustainable. Without the reforms they will be back for a handout every year.

[themack89]

Someone needs to look up the definition of Economy and then think about why Greece is broke.

You need real productivity for an economy, 40% GDP from the public sector does not count as real productivity LOL.

[Feruk]

Originally posted by soloracer
Where do you think Germany gets it's money from? Taxes collected from it's citizens and corporations naturally. If you were a German and were being told your taxes have to go up to pay for the things that the Greeks are doing what would you think?

Only because the EU/IMF was stupid enough to give the Greeks a bailout back in 2010. Back then the debt was mostly privately held. Those creditors would've been wiped out and that would've been it. Now governments and central banks hold the debt... Reason 1 why the world should never do another bailout.


Originally posted by soloracer
At the end of the day this is a complicated matter and ultimately the Greeks have to change their system to something that is sustainable. Without the reforms they will be back for a handout every year.

Disagreed. Austerity has been a disaster. When you institute programs that see your GDP fall 25%, your debt/GDP ratio starts to look far nastier. Greece simply owes too much. They should default and leave the EU.

[ExtraSlow]

Yep, Feruk has it right, they took debts that were privately held by corporations and bought them with Government money, effectively spreading the risk of default among every EU citizen.

I don't understand why it's so important to shelter corporations from the consequences of their risky investment strategies. This is the path that QE1/2/3 have taken as well as Britain and many other countries in the last decade.

[soloracer]

Originally posted by Feruk




Disagreed. Austerity has been a disaster. When you institute programs that see your GDP fall 25%, your debt/GDP ratio starts to look far nastier. Greece simply owes too much. They should default and leave the EU.

Was it just the programs that caused the GDP to fall 25%? Cutting government spending shouldn't drop your GDP by that much, unless of course your government is your main source of revenue. Which is in and of itself the problem. Of course austerity is going to cause some short term pain - that is the nature of austerity. But the system needs a reset to get back on healthy footing. If you just forgive all their debt without any fundamental changes made to the system they will be back in the same predicament that they are in today. But what the Greeks are saying is they don't want to change the system.

My wife is half Greek and I visited her relatives in Corinth a few years ago. I asked them about the system and why they don't pay their taxes, etc. Here is part of what they told me:

1) When we pay taxes in Canada we expect our government to perform certain services. For example, I had a pothole in front of my place. So I phoned the MD and they sent a truck out to fix it. In Greece that is not how it works. You report a pothole needs to be fixed. You wait a month and nothing has happened. So you call again and the guy in charge says to you that if you give him a little extra cash he will see what he can do. So you pay him $100 and suddenly the pothole gets fixed. Then you wonder why should you bother paying taxes if you are forced to pay bribes to get anything done in the first place?

2) The Greek constitution guarantees jobs for life to all state employees. Once you are in you cannot be fired or laid off. So let's say you are head of a department in government. You have a useless brother in law who keeps borrowing money from you and can't find a job. But if you get him a job with the government he would no longer be a burden to you. So you create a BS position in your department and hire him to look after it. Problem solved! Plus you can both make a little extra money now charging citizens a fee to get stuff done with no worries of getting fired. How great is that!

Greece needs a reset on their debt, no doubt, but even more important is a change in their system.