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Old 07-04-2015, 09:23 AM   #301
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At the risk... again... of being off topic, I believe that Greece is a microcosm of the broader problems of worldwide debt, bonds, and liquidity. The ECB and the IMF are coming under closer scrutiny and the leaders becoming much less definitive about their positions.
The timeline is the big question. Greece solvency has been on the table for years, and many current prognostication are for kicking the can down the road to September, or later. The window for international moments of truth, may be 2 to 5 years hence, though the interim may see reprises of situations like Argentina or Brazil.,.. or new resolutions that have never been seen.

Just an opinion, but a reminder that financial crises do not happen in a vacuum.
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Old 07-04-2015, 09:33 AM   #302
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Old 07-04-2015, 09:54 AM   #303
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My question, do the Greeks even know what the referendum is all about? What does it actually accomplish other than offer a cover for their political leaders? How do you put together a meaningful "referendum" in only a few days and expect a knowledgeable response from the voters?
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Old 07-04-2015, 10:31 AM   #304
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So you end up with people having to vote yes or no based on what they think the question probably is, and leaves them guessing what the outcome will actually do. All the confusion divides citizens and emotions take over.

This is not democracy, but an abandoning of duty by their leaders.
The referendum is pure democracy (the people making an important decision directly), and a great object lesson in the weakness in that type of decisionmaking. The Greeks have a representational democracy--they are supposed to elect people (well, parties) who they believe are competent and who share their values to make the decisions. The decisions themselves are too nuanced, to complicated, and require action too quickly to allow the people to make good decisions on them directly. Mr Popalopkus the cab driver can't hope to know the ins and outs of these negotiations and Eurofinance any more than Tsipras could be a successful cab driver in Athens. And the problem deserves much more than a Yes or No answer to a single approach. Heck, the offer the people are being asked to vote on is not even on the table any more!

I agree this is definitely an abdication of duty by the Greek leaders.
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Old 07-04-2015, 10:53 AM   #305
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I've read that the polls close at 7pm on Sunday in Athens and that the vote should be known by midnight. That means 8pm Sunday PST (11pm EST) in the US.

Either way, it's back to the negotiating table. My theory is that a "no" will force the troika to be even tougher in negotiations. They cannot be seen as weak and also sympathy (if there is much) for the Greeks will be reduced with a "no" vote.
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Old 07-04-2015, 11:39 AM   #306
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Early polling indicates 16% undecided and the remainder evenly split - a real cliff-hanger!
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Old 07-04-2015, 11:43 AM   #307
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Early polling indicates 16% undecided and the remainder evenly split - a real cliff-hanger!
I think that many of the "no" voters are just spouting off to the pollsters and will actually vote "yes".

Example: a pensioner gets a chance to express his indignation at being diss'd by the troika but in the voting booth he votes with his wallet, not his heart.
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Old 07-04-2015, 11:54 AM   #308
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One of the things I learned when I visited Greece is that the Greek Orthodox clergy are government employees and are paid by their Federal Govt. (Result of some political deal years ago). Also, a great deal of tax cheating and distrust of the Government. I think the political brinkmanship is pretty startling.
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Old 07-04-2015, 12:26 PM   #309
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This is not democracy, but an abandoning of duty by their leaders.

Exactly right. Abdication of leadership.
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Old 07-04-2015, 12:51 PM   #310
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As a EU voter and taxpayer, I am fed up with the ludicrous demands of the Greek government. The rhetoric out of Athens is just plain insulting at this point and I am fast losing any sympathy I might have had.
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Old 07-04-2015, 01:52 PM   #311
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I find this all very fascinating. Been following it daily, hourly, for a couple weeks, and my mind keeps changing. Still not sure how I would vote if I were Greek. The IMF's Friday report - confirming that Greece must have debt forgiveness or restructuring, a fact repeatedly ignored by the EU leaders - is very significant. The referendum really boils down to whom will the Greek people trust - Tsipras and Co. or the EU leaders? There is plenty of blame to cast on all parties.

At first I thought the referendum was a stunt and a failure of leadership; now I believe that it is brilliant and perhaps necessary. The Greek people are at a very critical moment; they have a chance to weigh in directly. Whichever way goes forward, because of this vote the Greek people themselves will bear responsibility for the outcome. Perhaps as it should be. Perhaps a lesson to us all. Tsipras may be crazy like a fox.
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Old 07-04-2015, 02:10 PM   #312
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I see parallels to having a young adult child that overspends and would go bankrupt except that the parents always enable the actions of the child by bailing them out with an admonishment to straighten up and spend less.

The Greeks just have not had Teutonic parents who really put their foot down and let the kid sink or swim until this month.
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Old 07-04-2015, 02:25 PM   #313
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If the Greeks default on their debt and exit the Eurozone and go back to using the drachma (highly unlikely, but let's pretend), they'll be in pretty much the same position they would have been in if they hadn't fraudulently gotten in to the eurozone in the first place--except they've had 10 years of cash infusions to spend however they like. It's those who loaned them the money who would be worse off.

Now, that's the "macro" case. Obviously, there will be lots of >>individuals<< who would have been worse or better off under each scenario.

The unfortunate part is that the attention of the Greek public and their efforts are pointed outside their country, to the "external oppressors". If they'd not been admitted to the eurozone and if the loans hadn't been made, the road to straightening up their system, growing their private economy, balancing their government finances, etc would have been much more obvious. Instead, they have a giant distraction from the more important and fundamental work to be done. And, they have someone else to be mad at and blame.

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From Shakespeare's Hamlet, 1602:
LORD POLONIUS:
Neither a borrower nor a lender be;
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry.
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Old 07-04-2015, 03:04 PM   #314
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Who is acting unreasonably here? Could it be the EU leaders who so far have refused even to discuss debt restructuring, which IMF has deemed necessary to Greek's survival? Not so clear cut that Greek leaders are the bad guys. Looking backwards, Greece probably didn't really qualify for Eurozone inclusion, given the significant cultural/fiscal differences. But, now here we are. Who is going to act like adults? So far, nobody, including the EU leaders.
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Old 07-04-2015, 03:11 PM   #315
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The EU, especially Germany, are wary of local electorates thinking that Greece is being given an undeserved break.

There are all kinds of anecdotes coming out of Greece, from blatant tax evaders, people living well on a "generous" pension to pensioners seeing their incomes halved and people not being able to find jobs.

Different people pay attention to different anecdotes.
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Old 07-04-2015, 03:39 PM   #316
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The EU, especially Germany, are wary of local electorates thinking that Greece is being given an undeserved break.
That is true. Local electorates were told that the bailout money would be paid back. If this turns out to be a lie, there will probably be a backlash at home for many EU leaders. Many of Greece's creditors have problems of their own (tepid economies, high unemployment, shrinking budgets, high taxes, welfare cutbacks, etc...). And those who don't do not want the fruits of their fiscal discipline to be used as a reward for the profligates. At a popular level, being soft on Greece would be damaging, I think, especially with the EU bashing coming out of Greece right now. We are already seeing the rise of Euro-skeptic parties all across Europe and it would probably make things worse. So debt forgiveness for Greece has its own set of consequences that do not get discussed much.
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Old 07-04-2015, 03:40 PM   #317
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Who is acting unreasonably here? Could it be the EU leaders who so far have refused even to discuss debt restructuring, which IMF has deemed necessary to Greek's survival?
Restructured again, right? The Greek debt has been restructured and the terms softened repeatedly. The Greek government agreed to abide by all of these, now they are saying they won't.
Do we believe the IMF is now competent to decide what is possible for the Greeks to repay, when many are claiming the same organization was incompetent to make these assessments earlier?
Lenders would be foolish to restructure the loans (again) or loan more money (again) until the borrower shows willingness to make the changes needed to repay the new larger debts. They have spelled those out.

Let's remember that the Greek government is free to seek funds on the open market to meet their obligations. That's where people decide to put their own money at risk (not money taken from other people). That's an environment relatively free of political coercion, and real risk/reward gets discerned rapidly and boiled down to a price. What terms do you think the present Greek government would get there? What does that say?

Greece, Puerto Rico, some US municipalities and states--teetering under unsustainable balance sheets while interest rates are at historic lows. What will happen when interest rates revert to the mean?
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Old 07-04-2015, 04:32 PM   #318
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Interesting to see the multitude of slants put on this situation by the world press.

If your up for some light reading here is a recent March 2015 paper on Tax Evasion
Tax Evasion Across Industries: Soft Credit Evidence from Greece by Nikolaos T. Artavanis, Adair Morse, Margarita Tsoutsoura :: SSRN
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Old 07-04-2015, 04:39 PM   #319
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Restructured again, right? The Greek debt has been restructured and the terms softened repeatedly. The Greek government agreed to abide by all of these, now they are saying they won't.
Do we believe the IMF is now competent to decide what is possible for the Greeks to repay, when many are claiming the same organization was incompetent to make these assessments earlier?
Lenders would be foolish to restructure the loans (again) or loan more money (again) until the borrower shows willingness to make the changes needed to repay the new larger debts. They have spelled those out.

Let's remember that the Greek government is free to seek funds on the open market to meet their obligations. That's where people decide to put their own money at risk (not money taken from other people). That's an environment relatively free of political coercion, and real risk/reward gets discerned rapidly and boiled down to a price. What terms do you think the present Greek government would get there? What does that say?

Greece, Puerto Rico, some US municipalities and states--teetering under unsustainable balance sheets while interest rates are at historic lows. What will happen when interest rates revert to the mean?
Fine. If there is no EU willingness to discuss debt forgiveness/structuring, then the Greeks should vote 'no.' Perhaps Greece should have been permitted to default in 2010, but now here we are. If Greeks vote 'no', default, and exit the Euro, sure, there will be a world of hurt for the Greek people, but the EU too will suffer a huge lose of credibility from which it may not recover, not to mention a loss of $1 trillion, the equivalent of the GDP of Spain.
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Old 07-04-2015, 04:44 PM   #320
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In the US, some states perform better than others. As a result, some states are more dependent on federal aid than others.

Imagine if the federal govt. or the more affluent states negotiated with the needy states for aid or loans or loan guarantees.

Wonder if Americans in more affluent states would be as charitable towards the poorer states as the EU are towards Greece.
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