Greece

[redduck]

The time-honored Greek tradition of never working on Sunday is captured in this link:

 

[NW-Bound]

Yes, it's a classic movie, same as Zorba the Greek. And I knew the theme song back from that time too.

 

[redduck]

...It's hard in one's old age to have youngsters with placards outside the nursing homes chanting "Down with geezers" because they are fed up with SS and Medicare costs.

My children are currently forcing me to make them placards that say, "Down with Geezers!!!". But, it's not all that bad, as they are letting me select the crayons I want to use.

 

[NW-Bound]

That sounds like a fun project for you. Will you post a photo of the results?

And to go with the mood while you make the placards, here's the song from the above movie, covered by Petula Clark.

PS. I just looked it up, and indeed this song won an Academy Award for Best Song. Hence I knew the song from childhood though I did not get to see the movie on DVD until recently.

 

[RAE]

So a few years from now, we'll probably be facing this crisis again.

Actually, there is no clear end in sight to this mess. The Greek debt is so large now that it's almost certainly "unpayable", similar to the Puerto Rico situation. And, with the Greek economy now in shambles, and the country having to submit to foreign control of many state assets, the misery will only get worse, and stay bad for years and years to come. So, at some point it is probably best for them to leave the Euro and the EU. But, none of the European leaders wanted that to occur on their watch, so it didn't happen (for now, anyway).

 

[MichaelB]

A humorous view of the Greek crisis
.
.

 

[RAE]

Interesting summary of the long meeting between Tspiras and the European leaders yesterday, with a lot of details. From reading this, you can see just how incompetent and overmatched Tspiras was/is.

http://finance.yahoo.com/news/insight-darkness-dawn-fragile-plan-171530653.html

 

[Lsbcal]

The euro is up against other currencies this morning, I think the markets believe that the recent announcements make it more likely an agreement will be reached.
So, is the euro up because:
1) The traders always bid it up by force of habit anytime an agreement with Greece is reached?
2) Traders believe that the terms are onerous enough that it will provide a disincentive for fiscal irresponsibility among other eurozone nations?
3) Traders believe the euro will be a stronger currency with Greece aboard than if Greece drops the euro?
4) Something else?

I doubt it is number 3.

Interesting observations and questions. I guess the Euro swings depend on the other currency too, i.e. it is not just what is happening in Europe. Also all those world traders are operating second to second and I picture them as generally young, testosterone overdosed males.

Here is a chart for the last 5 days for the Euro versus the dollar:

Here is a link discussing the Euro move this morning:
Greece deal reached: Euro rises and falls

Too many gears for me to ponder.

 

[imoldernu]

When dealing with "What it is", the starting point might be "Why it is".

Here's a site that associates the "Why" with Socialism...
Greece Disaster Shows Unavoidable Consequences of Socialism | CNS News

Excerpt:

There are no “good” options for now to end this Greek tragedy. A lot of people are going to get an involuntary financial haircut—pensioners, bond holders, welfare recipients, government workers, the IMF. By voting “no” on the latest referendum, the Greek voters rejected outside help, and the conditions that come with it. That means the responsibility for resolving the crisis now rests clearly with the Greeks themselves, as it should have all along.

Greece is now sitting on $350 billion of debt. It’s unpayable and the international monetary experts are deluding themselves if they believe that by some magic stroke this nation of 11 million citizens will sometime in the future come up with the funds to repay it.

Greece is already overtaxed, and adding more taxes on the few businesses that are still functioning is only going to ensure their eventual demise too. Meanwhile the Greek citizens have come to the conclusion that fat pensions and cradle to grave welfare benefits are a human right that can never be taken away. That is what they declared in the referendum. But those benefits are going to be lost. Socialism has radically reduced the standard of living of the citizens.

All of the conventional EU and IMF solutions have been designed to give Greeks time to adjust and stop their profligate ways. That hasn’t happened. The Greek citizens are simply living way, way beyond their means. This is a nation with an average retirement age of 60. This is a nation that has one in four adults unemployed and half of its young people out of work. With such countrywide levels of idleness, who is there that is working to pay for these super-extravagant benefits? Are the hard-working German citizens going to pay more taxes to pay for lavish benefits to Greek retirees? Almost certainly not. And they would be fools to do so.

Default will force everyone to take a hit. Creditors may get 50 cents on the dollar owed depending on how bleak the finances really are in Athens. Welfare benefits will have to be slashed. Pensions for retirees will be cut based on the new reality of Greece’s finances. This may seem “unfair,” but how is it fair to require young Greek citizens to pay exorbitant taxes to pay for the sins of their fathers and grandfathers. And default, at least, may provide the opportunity for a fresh start.

The full background of the reasons for the crisis needs more explanation. "Never on a Sunday" is just a small part of the larger problem.

from the same article:

One implication of this solution is that investors may start to view sovereign debt as risky, not risk free. They will charge nations—especially those that have massive unfunded liabilities—higher interest rates on their debt. Making it harder for bloated governments to borrow would be a positive development. More money would flow to private sector borrowing, and less to governments.

Ya think?

........edit to add... from the Motley Fool March 2015:

The average retirement age for American men and women
The average retirement age for men in 2013, the most recent year for which data are available, was 63.9. For women, the average retirement age was younger, at 61.9 for 2013.

 

[NW-Bound]

No, it's not really about not working Sundays, but on any other days including weekdays. Not everyone can be like us ERs. Some people will have to keep on working.

I think redduck was implying that the Greeks will soon have to make up for their slack by working Sundays too.

Welfare benefits will have to be slashed. Pensions for retirees will be cut based on the new reality of Greece’s finances. This may seem “unfair,” but how is it fair to require young Greek citizens to pay exorbitant taxes to pay for the sins of their fathers and grandfathers.

Redduck's children appear to be well informed of the Greece situation, compared to my own ignorant children. Hence, being apprised of the same possibility here at home, they are taking precautionary steps already. See:

My children are currently forcing me to make them placards that say, "Down with Geezers!!!". But, it's not all that bad, as they are letting me select the crayons I want to use.

PS. I have been trying to appease my children. On the recent Father's Day, I cooked for them instead of letting them take me out to dinner. So far, it seems to be working. No placard making for me yet. I like cooking more anyway.

 

[imoldernu]

Not verified, but understand that as part of the agreement, Athens will give up control over Greek Banks, to ECB authorities, which would mean that regulating or closing banks would be out of the hands of Greece. Estimates of underfunded banks range from 25B to as much as 60B...
If true, this would means that haircuts for depositors could be as much as 50%.

As details become better analyzed and into the regular news domain, the actual effect of Greece's problems will be more evident. With continued restrictions on withdrawals, the effect could well result in proportionately greater losses for large depositors.

As of now, doesn't look as if this is the way the financial community sees the results of the "agreement", so maybe this is not a valid worry. Time will tell.

 

[robnplunder]

Greek banks have been closed for 2 weeks, so the economic damage will be severe. Hopefully it will not be catastrophic and activity can recover to close to previous levels. The challenges ahead are still enormous and the Greek people have a long and hard road ahead.

And I am not convinced they are up to it. The referendum vote of overwhelming "no" said it all. Greek government utterly failed its people with the referendum move. All it did was confuse the Greeks more. Frankly, I am surprised that there aren't riots in the streets.


Time for the Greeks to LBYM.

 

[clifp]

And I am not convinced they are up to it. The referendum vote of overwhelming "no" said it all. Greek government utterly failed its people with the referendum move. All it did was confuse the Greeks more. Frankly, I am surprised that there aren't riots in the streets.


Time for the Greeks to LBYM.

One of the brilliance of the Soviet system was that people spent so much time queing for the basics that they didn't have time to riot.

I suspect that too many people are waiting in ATM line to withdraw their 60 Euro they may not have time to riot.

 

[NW-Bound]

The referendum vote of overwhelming "no" said it all. Greek government utterly failed its people with the referendum move.

But it is the government that they wanted. Tsipras won in a landslide election 6 months ago. The people had spoken. Up until 2 days ago, Tsipras has been doing exactly what he promised to do.

A Bloomberg article shows that within the next month, Greece is scheduled to pay more than $7.3B in debt. This does not include the most recent payment that it already missed.

It looked really bleak. They have been trying to sell some assets, but there were no takers, or the price was just too low.

Frankly, I am surprised that there aren't riots in the streets.

Speaking of riots, there used to be more, but I think the people have realized that rioting does not bring in money. And they are too tired and hungry to riot any more. Rioting just makes you even more tired and hungry. And they would have to travel to Germany and other countries to riot for more money. There isn't any in Athens.

Time for the Greeks to LBYM.

Too late to LBYM. They have no means left! The equivalent for an individual is when you find yourself pushing a shopping cart looking for the nearest bridge. Gosh, it must be desperate over there.

 

[karluk]

Tsipras has inspired other European leaders to practice abrupt reversals of position, agreeing to terms they had absolutely ruled out only the previous day. The way it's going, any publicly stated categorical refusal by a European leader will be considered the same as an enthusiastic endorsement.

Case in point:

Osborne Considers Approving EU Funds For Greece
The Government supports the use of UK-backed emergency cash the day after the Chancellor said British help was a "non-starter".

Osborne Considers Approving EU Funds For Greece

 

[karluk]

Naturally I am excluding all high ranking German officials, who have made it abundantly clear that "nein" really does mean "no".

 

[Texas Proud]

Tsipras has inspired other European leaders to practice abrupt reversals of position, agreeing to terms they had absolutely ruled out only the previous day. The way it's going, any publicly stated categorical refusal by a European leader will be considered the same as an enthusiastic endorsement.

Case in point:

Osborne Considers Approving EU Funds For Greece

I actually do not see this as the same... IOW, he basically said you can use the funds, but the UK will not pony up any money in case of default...

Not the same as agreeing to help fund the Greek bailout....


BTW, watching the rioting going on as the vote is supposed to be going on right now.... and all the talk is will Greece actually do what they say they will do if they vote to accept the deal... still looks like trust is going to be hard to come by....

 

[ERD50]

While all of this may be difficult to understand, there IS a simple explanation:

Explanation of the Greek Bail Out



It is a slow day in a little Greek Village. ....

[see the quoted post for the whole story - I didn't want to copy/paste the whole thing here...]

No one produced anything. No one earned anything. However, the whole village is now out of debt and looking to the future with a lot more optimism.

....................................And that, Ladies and Gentlemen, is how the bailout package works.

I think this version is probably closer to reality:

http://www.zerohedge.com/news/friday-humor-unspinning-€100-bill-or-how-european-bailout-really-works

It is a slow day in a little Greek village, planet earth. The rain is beating down and the streets are deserted. Times are tough, everybody is in debt, and everybody lives on credit.

On this particular day a rich German tourist is driving through the village, stops at the local hotel and lays a €100 note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one to spend the night. The owner thinks about maybe beating the tourist to death, but decides to give him some keys and, as soon as the visitor has walked upstairs, the hotelier grabs the €100 note and shoves it in his pocket.

He owes Piraeus Bank down the street €100,000 but has little intention of repaying it as his business has been contracting for several years. That bank also has claims of €10,000 on a butcher's business, €50,000 on a pig farmer, €75,000 to a supplier of feed and fuel, but in turn owes €100,000 to EFG Bank which itself has fractionally reserved claims on a pub owner and a prostitute who bought two homes on 105% LTV among many others.

At that moment the traveler comes down the stairs, states that the rooms are not satisfactory, and asks for his €100 note back. The Greek innkeeper asks "what €100 note?" The German threatens to call the police. The innkeeper says "go ahead, ask for my brother who's a Lieutenant down at the precinct, he'll help you out." The German storms out back into the night, €100 poorer.

No one produced anything. No one earned anything. However, the whole village is still buried in debt and looking to the future with a lot more optimism at the thought that maybe the Germans really are that gullible.

And that, Ladies and Gentlemen, is how the bailout package works.

-ERD50

 

[JoeWras]

The rioting looks fairly civil, as far as riots go. They blocked off the street and traffic is still whizzing by at the intersection. Kind of strange. The police kind of let them have a "sand box."

Anyone notice the Pharmacists are striking?

Pharmacies in Greece are, well, restrictive. Lets just say they are heavily controlled by laws. Everything from hours, to density of pharmacies is regulated.

I know a lot of Europe controls over the counter goods so this isn't too different in Greece. But it is really, really strict in Greece.

You have to ask for an aspirin or tylenol or antacid. Nothing is in the open except make up. And make up is the only other good sold there. Not even a bottle of water is available. Got to make sure to keep the pharmacists in the loop. I understand the reason for the strike is part of the agreement is to slightly loosen some of this, and to also allow what the USA would call "techs" into pharmacies. Hence, they strike.

Meanwhile you can ask -- and get -- antibotics without a prescription. Good way to contribute to super bugs, Greece.

 

[ERD50]

On a more serious note, that original parable only applies if Greece was owed as much money as it had borrowed (or owed it only to other Greeks), and liquidity was the problem. Then I guess that sort of applies?

Of course in the real world, they'd still need to pay for the use of that money while it worked its way through the system. And what are the odds no one would pocket some? How many people deep in debt would really be fine for the next 10 years if you paid off their debt? They'd likely be right back in debt in short order.

But with an imbalance, it just doesn't work at all - there is no circle for the money to move around in. The German traveler would not get his deposit back.

-ERD50

 

[robnplunder]

And I am not convinced they are up to it. The referendum vote of overwhelming "no" said it all. Greek government utterly failed its people with the referendum move. All it did was confuse the Greeks more. Frankly, I am surprised that there aren't riots in the streets.


Time for the Greeks to LBYM.

Oops, I spoke too soon. There are now riots in Athens - CNN report, videos of burning stuff and all. Greek is hopeless.

 

[NW-Bound]

As early as 1990, Margaret Thatcher, UK's Iron Lady, already said the common euro currency would not work because it could not accommodate the difference between economically strong and weak countries.

She was joined by several others who also cited other reasons, as listed in the following article: Nine People Who Saw the Greek Crisis Coming Years Before Everyone Else Did - Bloomberg Business.

 

[explanade]

It's worked great for Germany.

Look at their trade surplus.

 

[samclem]

It's worked great for Germany.

Look at their trade surplus.

Greece wanted into the euro to get all the aid she could. So, it worked for Greece, too. For as long as it lasted.

 

[Sunset]

I was in the center. We stayed in the "good neighborhoods" and found them troubling. Buildings decaying everywhere. Only the hotel would take a credit card.

I have spent time world wide. I personally found Athens to be very run down and i was on edge. We went several places outside of Athens that were lovely.

Just my personal experience and it happened to be before the banking issues.

I was there 35 years ago, and I saw the decaying buildings too, they are considered the historical artifacts like the acropolis

Seriously, even back then there are buildings in a bit of disrepair, I also stayed in the center about a mile from the acropolis. Lots of the hotels seemed worse than ours.

I missed finding the prostitutes