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Old 07-01-2015, 08:04 AM   #241
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I don't think this has been referenced in the thread, on the subject of cutting pensions, and the lack of support for Greece from the smaller economies in the EU:

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When Greece’s finance minister, Yanis Varoufakis, in an early round of negotiations in Brussels, complained that Greek pensions could not be cut any further, he was reminded bluntly by his colleague from Lithuania that pensioners there have survived on far less. Lithuania, according to the most recent figures issued by Eurostat, the European statistics agency, spends 472 euros, about $598, per capita on pensions, less than a third of the 1,625 euros spent by Greece. Bulgaria spends just 257 euros. This data refers to 2012 and Greek pensions have since been cut, but they still remain higher than those in Bulgaria, Lithuania, Latvia, Croatia and nearly all other states in eastern, central and southeastern Europe.
http://www.nytimes.com/2015/06/30/wo...neighbors.html
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Old 07-01-2015, 08:23 AM   #242
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I don't think this has been referenced in the thread, on the subject of cutting pensions, and the lack of support for Greece from the smaller economies in the EU:

http://www.nytimes.com/2015/06/30/wo...neighbors.html
The Greeks are not particularly fond of some of their near neighbors to the North. Greek maps list their middle north neighbor as "FYROM". They will not call it "Macedonia" because they stole their name. The point being that Greeks won't give a flip about the Bulgarian situation.

That said, this is complicated. If you lower the pensions for the retirees, they may have to do like the Bulgarians and eat in more. Less eating at the Tavernas. Tavernas will fail. Working people go unemployed. Etc.

This whole unfunded pension situation is crazy stuff. The world over needs to pay attention. It is too easy for current politicians to kick the can to the next generation. This has to stop. (Illinois? Hello?)
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Old 07-01-2015, 09:38 AM   #243
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Old 07-01-2015, 09:45 AM   #244
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I don't think this has been referenced in the thread, on the subject of cutting pensions, and the lack of support for Greece from the smaller economies in the EU:



http://www.nytimes.com/2015/06/30/wo...neighbors.html

Cost of living is very different in these countries, which makes comparing fixed Euro amounts between countries next to impossible.

This would be the same as somebody in the Midwest saying that 100k in NYC is too much money, but in the U.S. it is easier to relocate. I doubt Bulgaria would be happy if all these Greeks suddenly showed up to live there.

I can understand the poorer members frustration with Greece, especially since they have to help out with their bailout. It would really suck if you had to bailout your spendthrift richer sibling.
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Old 07-01-2015, 10:07 AM   #245
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Not sure how accurate the data is on this website, but it allows you to compare cost of living between two different cities. Here's a comparison between Athens, Greece and Sofia, Bulgaria.

http://www.numbeo.com/cost-of-living...a&city2=Athens

It looks like Athens is about 50% more expensive than Sofia.

Based on this, it looks like pensions are more generous in Greece than in Sofia, but I suspect smaller cities in Bulgaria have cheaper cost of living than equivalent cities in Greece.
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Old 07-01-2015, 11:32 AM   #246
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While the Greek pensions may be more generous than other countries, this was known for years, to cut pensions once a person is unable to work is wrong. That is why US and states should insure they can meet their pension obligations when they promise them. The creditors who lent money when they knew there were these obligations in my mind are the ones who should bear the brunt of the bankruptcy they enabled and the cutting of benefits for people who cannot get a job should not be cut in Greece or anywhere, bondholders should have to bear the price, I realize that will never occur.
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Old 07-01-2015, 11:41 AM   #247
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... bondholders should have to bear the price...
This may be what will happen. The 370B euro existing debt gets cancelled. That helps, but what's the source of new money to pay pensions? I think they are still short.
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Old 07-01-2015, 11:56 AM   #248
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This may be what will happen. The 370B euro existing debt gets cancelled. That helps, but what's the source of new money to pay pensions? I think they are still short.

EU rules prohibit the use of these loans to finance governments. The loans are only being used to re-finance the debt.
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Old 07-01-2015, 12:36 PM   #249
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This may be what will happen. The 370B euro existing debt gets cancelled. That helps, but what's the source of new money to pay pensions? I think they are still short.
The following quote is excerpted from an excellent summary of the Greek situation in lay language by Prof. Anil Kashyap (originally referenced by ronin in Post 206 of this thread):
http://faculty.chicagobooth.edu/anil...sis_june29.pdf

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By late 2014, Greece was finally spending less than it was collecting, although the interest payments on debt meant there was still an overall deficit. So for the first time since Greece adopted the euro it had budget position that
was solid.
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Old 07-01-2015, 02:48 PM   #250
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While the Greek pensions may be more generous than other countries, this was known for years, to cut pensions once a person is unable to work is wrong. That is why US and states should insure they can meet their pension obligations when they promise them. The creditors who lent money when they knew there were these obligations in my mind are the ones who should bear the brunt of the bankruptcy they enabled and the cutting of benefits for people who cannot get a job should not be cut in Greece or anywhere, bondholders should have to bear the price, I realize that will never occur.
So bonds are only held by people who have jobs? Interesting.

I always thought some people had bonds in their retirement account. Some people only have retirement accounts and don't have access to a pension.
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Old 07-01-2015, 03:01 PM   #251
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The following quote is excerpted from an excellent summary of the Greek situation in lay language by Prof. Anil Kashyap (originally referenced by ronin in Post 206 of this thread):
http://faculty.chicagobooth.edu/anil...sis_june29.pdf

Very good article. So it sounds like the IMF will get paid back many years from now (I wonder they'll get back both principal and interest) and the ECB will take a hit.

In some ways the Greeks are lucky, in the old day when countries defaulted, a fleet of ships (generally British, but sometimes American or French) would show up at the largest port and the money often seem to be found.
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Old 07-02-2015, 10:03 AM   #252
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In Italy, some businesses will shake their head if you try to use a card, especially on a small transaction, or say their terminal is broken, or just ask for cash...
I've gotten to asking restaurants before I sit down or order whether they will take credit cards. I think they get the hint that if they say no, I may go elsewhere or not order as much.
When we had finished our lunch seaside in Sitges, the waiter apologized that their CC machine was not working. I said I was in the business and wanted to talk to the manager. The next moment he showed up with the handheld machine and accepted our card!

But I agree that it is safer to ask before eating. Displaying the Visa/MC sign is no assurance of acceptance. But it does require them to process the charge manually if their system is broken. I always follow my card wherever it goes.
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Old 07-02-2015, 10:35 AM   #253
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Oh, I forgot about I-bonds. We have 30k of those which are paying a generous 0.0%. I could definitely afford the 0% penalty to convert those to stock if offered a great deal...
I just looked at my I-bonds last night, which I neglected for the last 3 months. A whole bunch of them is earning 0%. Darn! Since when did that happen?

So, I looked and found out that there was deflation the last 4 or 5 months of 2014. Must be due to fuel prices dropping.

Deflation continued in Jan 2015, but then inflation comes back and ran as high as 0.6% month-to-month or 7.2% annual in March 2015. In May 2015, it ran 0.5% month-to-month (6% annual) again.

Exciting time ahead?
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Old 07-02-2015, 11:47 AM   #254
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Old 07-02-2015, 01:39 PM   #255
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Old 07-02-2015, 02:21 PM   #256
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After having just been on one of those busses, I have to say this is possibly the funniest thing I've seen in weeks!

Still, my condolences to the Greek people who were wonderful. Sorry for laughing at this cartoon.
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Old 07-02-2015, 02:36 PM   #257
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At the risk of being off topic, I'll refer back to my post on bond rates:
Greece

While the current discourse is about Greece, whatever happens in the neartime will be less important that what will happen in the longer time frame. those looking for a market correction will probably see it, but the underlying stability of the world markets depends on the value of bonds, and following this will likely project the opportunities, risks and failures of the world markets.

Bonds underlie the perception of strength on international markets. Both actions and perceptions by market makers establish the "agreed" safety factor.
Whether bond rates or the views of "experts" establish the strength of a nations finances. High rates, or percentages to GDP, or perceived future prospects establish the desirability factor. Current world-wide bond values are in excess of $100 Trillion, but this is but the tip of the iceberg, as bonds are the base for determining the strength of banks.

The second part of this enigma, is that those same bonds that supposedly establish stability.... are being used as collateral for leveraged investments in hedge funds and derivatives. This raises the at-risk stability factor by three to five times.

The risk perception between the major countries may well be the driving force for fixing bond rates, and within some short years, could be the driver of our economy and our personal financial status.

Assuming that this kind of a major change might take place, the time element would likely be measured in a few years, rather than weeks or months.

Just one opinion.
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Old 07-02-2015, 03:06 PM   #258
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Somebody calculated that a 3-Euro donation from everybody in the European Union would pay off the Greek debt. Crowd-funding. The website keeps crashing from the overwhelming response.

https://www.indiegogo.com/projects/g...ut-fund#/story
Way off. The pop. of the EU is a little over 500 million and the Greek Debt is said to be approx 370 Billion. A wag would be about 600 euro per EU citizen. I bet the website was just a scam, and got shutdown.
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Old 07-02-2015, 03:13 PM   #259
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The site now says: €1,532,513 raised from 88,205 people in 5 days. That's €17 average per donor.

Their goal is to raised €1.6B, just for some interest on the 370B debt that was due a few days ago.
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Old 07-02-2015, 03:22 PM   #260
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The Italian stock market index took a dump today, most of the other European markets stable.

Greece is full of antiquities. Sounds crass, but what would A billionaire or consortium pay for the Acropolis ?
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