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Old 07-05-2015, 03:05 PM   #341
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I was wrong about the Greek vote outcome. I hope the markets will not go down badly starting tomorrow.

Now I wonder how Tspiras will manage to give his European creditors the political coverage to reach a compromise. So far he has tried to make them look evil. Nobody wants that image and no politician wants to loose so much face. He has won with his people but failed with the people who have to give Greece money.

Here is how the BBC shows the debt (and it is not a trillion but is big):

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Old 07-05-2015, 03:17 PM   #342
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Fresh off the referendum, Tsipras has even less domestic political "cover" to ask the Greek people for sacrifice (something he was already reluctant to do). He's hoping to use the result to extract concessions from Greek creditors, but they'd be foolish to do it with Span and Italy--with much bigger debts--watching on. But, they have done foolish things before.

Tsipras, or his successor, will be in a better position to ask the electorate to make concessions after more people have suffered for a longer period of time. Another few weeks of currency controls, business shut downs, etc will probably fill the bill. Very sad.
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Old 07-05-2015, 03:20 PM   #343
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Its hard to see how Greece fixes any of its problems when people are refusing to pay taxes and Greece doesn't seem in a hurry to collect them...very odd way of running government. Its gotten out of hand where the "why should I pay when others don't" becomes the norm not the outlier. Add to that the pension..and you have an unfixable problem without new leadership and someone stepping in to play parent.. the we are all in this together, its going to be tough but we will get through it by doing A, B, C.




I had thought about buying Greece bonds a few years ago but even at the ridiculous interest returns, I couldn't bring myself to as I never trusted they could pay it back as they have a horrid track record. Honestly I don't know who is going to lend them money..I think they are foolish unless you were paid first. Maybe is about raffling off some really nice properties in the Greek isles that are behind on their tax payments
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Old 07-05-2015, 03:28 PM   #344
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I had thought about buying Greece bonds a few years ago but even at the ridiculous interest returns, I couldn't bring myself to as I never trusted they could pay it back as they have a horrid track record...
Good you didn't bite. Apparently several hedge funds are going to loose a lot of money.

Here is a link to Greek bond rates which I think were last traded on Friday:
Greece Govt Bond 10 Year Acting as Benchmark Analysis - GGGB10YR - Bloomberg Markets
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Old 07-05-2015, 04:03 PM   #345
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Good you didn't bite. Apparently several hedge funds are going to loose a lot of money.
As far as I know no retail investor ever received a haircut from Greek bonds.

Only institutionals were "volunteered" to haircut. Do you have information it will be different this time?

I looked into buying Greek bonds a while ago too, couldn't even buy them.
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Old 07-05-2015, 04:10 PM   #346
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I only buy US bond funds. Safety and capital preservation plus maybe a small real return over time.

I've only looked at the Greek bond prices as a way to discern market sentiment.
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Old 07-05-2015, 04:10 PM   #347
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As best as I can see there are two groups of folks mainly affected: the Greek people and speculators.

The Greeks are voting and will have to live with what they choose.

Anyone holding Greek debt at this point is basically a speculator. Either that or really stupid.
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Old 07-05-2015, 04:16 PM   #348
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The Greeks do not like the austerity measures imposed from the outside. Well, guess what? They voted themselves even more austerity measures from the inside.

But there are some lessons here. For instance, what would you do if you could not get money out of your bank account for a few weeks? That did happen to me, but I could just use a credit card for awhile. I'm not sure how long I could go without a credit card and without cash.
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Old 07-05-2015, 04:20 PM   #349
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62% "No", Glad to see the Greek people stick it to the Troika! It is always better to die swiftly than to suffer the death of a thousand cuts ( a Greek saying).
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Old 07-05-2015, 04:22 PM   #350
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So what happens if Greece goes back to the drachma?
Does the Greek government even have the wherewithal to print & distribute new Drachmas? (Presuming that they've long since destroyed all the previously obsolete ones.)
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Old 07-05-2015, 04:30 PM   #351
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Does the Greek government even have the wherewithal to print & distribute new Drachmas? (Presuming that they've long since destroyed all the previously obsolete ones.)
There was some mention that they do have a printing press in Athens which is used to print Euros.

I predict what will happen is the Greek government will establish a one for one exchange rate of New Drachmas to Euros. The Euro will still be used everywhere else in Europe and will be the real coin Greeks want. The black market exchange rate will be a lot lower than 1 Euro for one New Drachma...probably more like 10 Drachmas get you a Euro on the black market.

The government will pay pensions in Drachmas, so essentially everyone has voted themselves a 90% cut in pensions.
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Old 07-05-2015, 04:51 PM   #352
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62% "No", Glad to see the Greek people stick it to the Troika! It is always better to die swiftly than to suffer the death of a thousand cuts ( a Greek saying).
I learned about this today due to this comment:
https://en.wikipedia.org/wiki/Lingchi

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Old 07-05-2015, 05:13 PM   #353
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...The government will pay pensions in Drachmas, so essentially everyone has voted themselves a 90% cut in pensions.
Interesting thought. Probably worse than a good workout deal with the European financiers would have resulted in.

I suspect they have cut off their nose to spite their face.
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Old 07-05-2015, 05:17 PM   #354
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The government will pay pensions in Drachmas, so essentially everyone has voted themselves a 90% cut in pensions.
This is one possible outcome.

I read that the pensioners voted strongly "yes" and the young voted "no". Many of the pensioners are apparently supporting some of their young.
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Old 07-05-2015, 05:44 PM   #355
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I read that the pensioners voted strongly "yes" and the young voted "no".
I fear the young, in their nescience, (as they so often do), have inflicted an unpleasant life lesson upon themselves.....whether or not they'll be capable of comprehending the outcome of their actions, (as opposed to blaming 'the other', and/or developing conspiracy theories), remains to be seen.
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Old 07-05-2015, 05:50 PM   #356
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It appears that the Greeks have played their gambit... I do not think it will work... IMO they fail to see that there are others that have debt and the creditors do not want to give them any idea...

If this were a stand alone problem, this might have worked... but it isn't and I do not think it will....

I also do not see how the Eurozone is going to be able to get it by their own citizens... sure, Greece showed that there is 'democracy', but they fail to think that other countries get to also vote... and since Greece is the ones who need money...... well.....
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Old 07-05-2015, 06:16 PM   #357
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Democracy comes from the Greek word dēmokratía (rule of the people) and the people have spoken.

Someone earlier asked for comments from some of the Europeans on the board. As an EU citizen I have been amazed at how long the Eurozone countries have let this drag on and think that they should not have let Greece join the EMU in the first place and should cut them loose now.

I remember listening to Sandi Toksvig on the BBC, 2 or 3 years back. She said she had been at a dinner where the quest speaker was an ex-finance minister from Greece and she said that she could summarize his speech by him saying that when Greece joined the Eurozone they were given a load of money which they spent on a big party and now have a huge hangover. And if they got a load more money they would do exactly the same again.
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Old 07-05-2015, 06:50 PM   #358
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Loved my trip to Greece. Loved the people. But man, this is frustrating.
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Hilarity ensues...
Old 07-05-2015, 07:07 PM   #359
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Hilarity ensues...

Here we go again.

Attachment 21980

So here's a country with total debt of about 1% of the EU's annual output, an economy about the size of Alabama, already in a deep depression. Why is this a surprise to anybody?

And of course, the markets are shocked, Shocked!, by the current events; at least if you believe the talking heads that want to tell you more, after this brief message. Stay tuned. Folks will flush many times the total Greek debt out of the market at the open tomorrow.

This is what cash reserves are for. Buying hand over fist once the panic-prone have done their thing and the market is washed out.

Remember the Rules, folks:
  • Once you have their money, you never give it back.
  • Never spend more for an acquisition than you have to.
  • Even in the worst of times, someone turns a profit.
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Old 07-05-2015, 07:12 PM   #360
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I am an EU citizen, though I don't live, vote or pay taxes there, and I have never visited Greece. My home country (Ireland) recently lent Greece 350 million Euro, which will now have to be written off. That's contributing to austerity in Ireland, too, but at least the Irish economy is recovering.

Everybody knew that the data were massaged to allow Greece to join the Eurozone in the first place. Over the years, Greece overspent wildly while making no serious effort to address its growing deficits or to get people to pay income taxes. There is lots of blame to go around.

It has been pointed out (notably by Margaret Thatcher decades ago) that the common currency was doomed to fail in the absence of central government, which is a nonstarter in Europe. Small economies lose the option of currency devaluation, which can help to get them out of a jam. Better to avoid such eventualities. The Greeks, whose current misfortune is to a large extent their own making, have voted "against austerity". Fine. Let's cut the cord, Greece can return to the drachma, and let things settle where they will. The EU and IMF can write off some of the debt, but let's not spend good money after bad.
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