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Old 06-29-2015, 01:13 PM   #121
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Perhaps it's better to "enforce" austerity at a much earlier phase, rather than to keep throwing money at a dysfunctional system. Though it's a bit late for that now...
Yes, it is late. But "enabling" the Greek system to go on in its present state for even longer will be worse yet. This should have stopped a long time ago.

Reading the comments from "man on the street" interviews in Athens is not encouraging.
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"We can't take any more of this, so we have to keep saying no to the EU masters."

"The EU can't afford to let us fail so we should continue to say no and they will blink and give us a better deal."
The sooner the public starts directing their anger and disgust at their own pols, the faster the healing will begin. And, Tsipras (or, more likely, his successor) probably needs for the public to feel the pain, see the situation as it really is, in order to have a mandate to fix their problems. Giving the Greeks a fresh needle and a fix ain't the road to prosperity. And it sure wasn't "austerity" that is the root cause of their present woes--quite the opposite.
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Old 06-29-2015, 01:19 PM   #122
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Kick the can down the road? They have been doing it for a few years. They are now at the dead end.
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Old 06-29-2015, 01:29 PM   #123
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The Greek people have suffered. Look at the unemployment numbers and the figures for how much the GDP has shrunk, during these past 5 years when they abided by the troika's terms.

Do they deserve to keep suffering? Maybe but really the question should be more what would be the most economically effective way to make Greece close its deficits and return towards growth?
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Old 06-29-2015, 01:38 PM   #124
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Yes, it is a tragedy when people who want to work cannot find a job. It's a shame that human resources are wasted, as young people stay idle when they could be doing something productive to help themselves.

I do not know the full story, but the fact that the political system can be so destructive to a nation had been seen with the communist countries. Perhaps the populace was just naive, but it shares the responsibility for voting or keeping their leaders in the office.

PS. By the way, in 2010 Greece was talking about raising the legal retirement age from 61 to 63. At the same time, Germany was raising its own from 65 to 67. In Greece, a civil servant was able to retire with 1/2 benefits after working only 17.5 years. If you work 35 years and are 58 yr old, you can retire with 80% of pay. That's a lot more than Germans get. No wonder Germans are mad.
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Old 06-29-2015, 01:46 PM   #125
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The Greek people have suffered. Look at the unemployment numbers and the figures for how much the GDP has shrunk, during these past 5 years when they abided by the troika's terms.

Do they deserve to keep suffering? Maybe but really the question should be more what would be the most economically effective way to make Greece close its deficits and return towards growth?
They should be allowed to default and go their own way. If they do it right, they could follow Iceland's path.
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Old 06-29-2015, 01:46 PM   #126
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Dow down 275.

Somewhere a 60 year old's 401K in this country just dropped.
Now he can't RE because someone in Greece still wants to collect SS at 50.
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Old 06-29-2015, 01:48 PM   #127
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Everybody can RE. You just cannot insist on eating and consuming as much as if you do OMY.

I keep sayin' I have that small RV just in case. One tank of gas, and I am under the open sky of NM, camping for cheap on state land. Heh heh heh...
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Old 06-29-2015, 01:50 PM   #128
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Everybody can RE. You just cannot insist on eating and consuming as much as if you do OMY.
I should have said "someone in Greece wants to collect SS at 50"....
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Old 06-29-2015, 02:00 PM   #129
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Look at how much the markets went down today, especially the EU markets.

Then look at what happens if Greece defaults on its debts to EU creditors. Talking about hundreds of billions there.

Then what kind of measures will they have to take to reassure the markets that it won't spread to other countries like Spain, Italy and Portugal? If they have to give more generous assistance to those countries.

All this may add up to way more than it would have cost them to give Greece better terms.
You have good points but I am not convinced of the bold above. Market overreacts to news like this but will recover over time once things are played out.

Greeks need to get themselves out of the situation. When Korea was in IMF/financial trouble in late 90s, it was the people who were united to fight the crisis together. They didn't look for continuing handouts. Instead, they tightened their belts and cooperated fully with government policies/measures to recover from the brink of disaster. People sacrificed for the good of the nation's recovery. Looking at Greek's attitude/behavior (continuing tax evasion, trying to stop austerity measures), they don't have the will or desire or unity to pull themselves out of the crisis. It's my humble opinion from afar and I hope Greeks all the best.
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Old 06-29-2015, 02:05 PM   #130
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They should be allowed to default and go their own way. If they do it right, they could follow Iceland's path.
+1

Do you know of any country in the post-WW2 era that defaulted or successfully renegotiated without a major currency devaluation.
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Old 06-29-2015, 02:24 PM   #131
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+1

Do you know of any country in the post-WW2 era that defaulted or successfully renegotiated without a major currency devaluation.
None come to mind. I imagine they would have to revert to the drachma and deal with a plunging currency for a while.
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Old 06-29-2015, 02:24 PM   #132
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Oh Greece certainly deserves its share of the blame.

But the medicine imposed on Greece has caused a depression in the country and they were imposing things like higher taxes on tourist services -- tourism is the #1 industry in Greece -- and taxes on food and medicine.

How does that help the country regain it's economic footing?

There are accounts of families seeing their incomes drop by over 50% over the past 5 years, not to mention all the job losses as the unemployment rates indicate. It's no wonder they're unwilling to continue with the same terms.

If there are sound economic reasons for imposing more austerity, the creditors would be more defensible. But a lot of it looks punitive as well as greedy. The loans Greece gets go straight to German and French banks, to pay off interest. So the country is continually stuck with paying interest on growing debt and then on top of that, they want to increase taxes on its number one industry, making Greece as a tourist destination less competitive.

But Greece has not done much to fix their problem...

Their pension system is still better than a number of small EU countries whom Greece wants money from.... They do not collect taxes that are already on the books...

If they just write down the debt without Greece doing anything about their problems it is like giving drugs to a drug addict...

The problem is not with austerity... but with Greece wanting to continue with their spending ways and have someone else pay for it...

If this were a family issue, and Greece was a person who was spending more money than they should... and came to one of us to help them out... the major response on this board would be not to help them.... I just do not see why it being gvmts make any difference...

BTW, they already wrote off over $100 billion of Greek debt... but since Greece did nothing to really fix the problem it has reared it's ugly head again... writing off the current debt without them fixing the problem will mean it will come back again....
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Old 06-29-2015, 02:25 PM   #133
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Well, at 10:50 EDT the Dow is down 135. Just a typical 'down day' IMO. Futures were down 300 last night so I was expecting Armageddon today...but it's still early.
3:30. Dow down 290.

I stand corrected!
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Old 06-29-2015, 02:28 PM   #134
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Old 06-29-2015, 02:30 PM   #135
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Look at how much the markets went down today, especially the EU markets.

Then look at what happens if Greece defaults on its debts to EU creditors. Talking about hundreds of billions there.

Then what kind of measures will they have to take to reassure the markets that it won't spread to other countries like Spain, Italy and Portugal? If they have to give more generous assistance to those countries.

All this may add up to way more than it would have cost them to give Greece better terms.

Well, the creditors say they will not forgive the debt even if Greece drops the Euro...

But, there is already hundreds of billions of euros that Greece owes... and I would assume that the markets are repricing them to a lower level... hundreds of billions will be lost...

So, what is the difference if they forgave the debt and kept Greece in the euro Greece would not change and the problem would occur again..

But if they do not forgive the debt and Greece just does not pay it... they are out of the euro and Greece will have to make the tough changes to their systems that is being recommended by their creditors...

Why would the creditors want to continue to pay for Greece not doing what they need to do
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Old 06-29-2015, 02:35 PM   #136
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Maybe not if they were bonds held by Greece or Puerto Rico!

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Old 06-29-2015, 03:18 PM   #137
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DJ closed down 350. Whoo Wee! For being a self-proclaimed market timer, I did not sell everything out at market open today. Well, I did not wake up until almost 1 hour into market open and the market already sank, but could still have saved meself a 4-figure sum.

Oh well! Hanging on for the ride. Have not had a big one-day drop like this for a while. Still got some cash. Will buy when it feels right.
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Old 06-29-2015, 03:27 PM   #138
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DJ closed down 350. Whoo Wee! For being a self-proclaimed market timer, I did not sell everything out at market open today. Well, I did not wake up until almost 1 hour into market open and the market already sank, but could still have saved meself a 4-figure sum.

Oh well! Hanging on for the ride. Have not had a big one-day drop like this for a while. Still got some cash. Will buy when it feels right.
Definitely a coming buying opportunity in the making.
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Old 06-29-2015, 03:57 PM   #139
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I tend to look at market differentials on this.
US market - Europe market = SPY - VGK = -2.07% - (-3.50%) = +1.47%

So the US market outperformed Europe today. Now don't you feel better?

But also the Euro rose today by 2.5% as I write this. Curious. Maybe the currency market knows something the equity market does not? Or maybe the currency market had priced in a German capitulation to Greece and this didn't happen? or ... ?
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Old 06-29-2015, 03:59 PM   #140
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Definitely a coming buying opportunity in the making.
I suspect the opportunity is going to get better. I don't think they "get it" yet. But they're going to.

Defiant Greeks rally behind rejection of creditor terms


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Many banners declared simply "No!" Others said, "Our lives do not belong to the lenders" and "Don't back down".

"I left Greece two years ago because I couldn't get a job," said Thanos Tsapelis, 37 and newly married on Sunday to Eleni, a teacher at a Greek school in Britain. "We want austerity to end so we can return to Greece and find a job."
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