Greece defaults on its debts

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fuzzypickles said:
What do you make of this situation?
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It's was an avoidable clusterfuck.

There's so many reasons why the situation deteriorated. I'll give the TL;DR version

Greece is a country that's responsible for about 1% of global GDP. What's made it a possible trigger for another financial crash was bank interdependence due to bad management, corruption and greed. Basically- due to the qualities of several financial instruments nobody knows where anyone else's money is. This makes a default with bonds of any country/bank/company potentially toxic for the person who could be holding them.

With this context- Greece matters. European banks are still knowingly holding Greek debt. Many more people are unknowingly holding it and a massive quantity is held by the E.U itself (as part of it's bailout program). If a disorderly default happens (experts haven't decided yet) a 'credit event' would occur. this would make stockmarkets everywhere shit themselves. There could be a repeat of 2008.

Since the way the euro (E.U's disaster currency) is structured doesn't allow any of it's individual remembers to devaluate themselves, Greece was in trouble. (Short backstory- Greece hid the extent of their debt load prior to 2008)

A council of individual creditors, the IMF and the rest of Europe was called upon to create the 'troika'. They would sort out Greece's deeply inefficient economy and correct bad economic policy. An important side goal (argued by some as the main goal) was keeping Europe's banks afloat and protecting the periphery countries from economic contagion. The economic 'medicine' was a truckload of austerity, none of which brought the country back to growth. Greece currently has had 25% unemployment for 5 years and almost no help, since the bailout funds were being funneled to European banks to deal with their red balance sheets.

The trokia humiliated Greece because it was more convenient to keep Europe afloat. That was a massive error of judgement. Two technocrat government endorsed by the troika fell to SYRIZA: A coalition of the far left aka neo-communists. Unlike ADF, tumblr and a slue of western hipsters- these people are the real deal and every attempt to control them failed. After 5 months of wrangling, Tisparas (the president of Greece) had one last trick of his sleeve. At the last minute a referendum on the terms of the bailout was called- It would be decided by Greeks themselves. Due to the hilariously bad timing of this move Greece defaulted to the IMF and slid out of it's bailout program.

This whole farce is a testament to the arrogance of the E.U and how our financial system is built on sand.
 
I've read about it in the papers and I'd be horrified if something akin to the 2008 recession happened again. Moreso if another Great Depression kicked in shortly thereafter.

Then again, Europe and Greece have no one to blame but themselves if that does end up happening.
 
Okay now im worried,next 2008? Jesus:heart-empty:.
 
Anathe said:
So now would be a bad time to buy stocks, I should wait a month or so?
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actually if you have liquid funds this would be the best time to buy, if the market crashes you can make serious bank if, IF! you have the funds to buy. Most folks funds are tied up in RRSP which are directly linked to the market. So when the market goes down kiss your retirement savings good-bye.

This is why rich become richer during turbulence, they have the liquid funds to snap up stocks when the price is depressed, while the average Joe is sitting there watching the last 5 years of his sweat and toil vanish overnight.

The biggest winners of the last crash were the 1%'er who increased their net worth by 18% over 5 years at the expense of the average American who got hit to the tune of 7 trillion in debt.

I don't honestly know how the system keeps on going; is it blind ignorance or willful ignorance.


 
Default worked for Iceland. It successfully told its foreign creditors to go fuck themselves, instituted capital controls, and has a decent economy four years later.

Then again, Greece's economy has had to tolerate like five years of severe weakness (>25% unemployment) where Iceland essentially had one to two years of painful adjustment, as I understand it.
 
DawnMachine said:
Default worked for Iceland. It successfully told its foreign creditors to go fuck themselves, instituted capital controls, and has a decent economy four years later.

Then again, Greece's economy has had to tolerate like five years of severe weakness (>25% unemployment) where Iceland essentially had one to two years of painful adjustment, as I understand it.
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Yeah, they're just very different countries. For example, someone was saying when Argentina defaulted they could rebound because of their export economy, while Greece depends on a lot of tourism and has years worth of debt.
 
Ass Manager 3000 said:
It's was an avoidable clusterfuck.

There's so many reasons why the situation deteriorated. I'll give the TL;DR version

Greece is a country that's responsible for about 1% of global GDP. What's made it a possible trigger for another financial crash was bank interdependence due to bad management, corruption and greed. Basically- due to the qualities of several financial instruments nobody knows where anyone else's money is. This makes a default with bonds of any country/bank/company potentially toxic for the person who could be holding them.

With this context- Greece matters. European banks are still knowingly holding Greek debt. Many more people are unknowingly holding it and a massive quantity is held by the E.U itself (as part of it's bailout program). If a disorderly default happens (experts haven't decided yet) a 'credit event' would occur. this would make stockmarkets everywhere shit themselves. There could be a repeat of 2008.

Since the way the euro (E.U's disaster currency) is structured doesn't allow any of it's individual remembers to devaluate themselves, Greece was in trouble. (Short backstory- Greece hid the extent of their debt load prior to 2008)

A council of individual creditors, the IMF and the rest of Europe was called upon to create the 'troika'. They would sort out Greece's deeply inefficient economy and correct bad economic policy. An important side goal (argued by some as the main goal) was keeping Europe's banks afloat and protecting the periphery countries from economic contagion. The economic 'medicine' was a truckload of austerity, none of which brought the country back to growth. Greece currently has had 25% unemployment for 5 years and almost no help, since the bailout funds were being funneled to European banks to deal with their red balance sheets.

The trokia humiliated Greece because it was more convenient to keep Europe afloat. That was a massive error of judgement. Two technocrat government endorsed by the troika fell to SYRIZA: A coalition of the far left aka neo-communists. Unlike ADF, tumblr and a slue of western hipsters- these people are the real deal and every attempt to control them failed. After 5 months of wrangling, Tisparas (the president of Greece) had one last trick of his sleeve. At the last minute a referendum on the terms of the bailout was called- It would be decided by Greeks themselves. Due to the hilariously bad timing of this move Greece defaulted to the IMF and slid out of it's bailout program.

This whole farce is a testament to the arrogance of the E.U and how our financial system is built on sand.
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The analysis is lengthy but completly wrong. 1/10 for effort. Greece's debt do not matter as a figure. Europe could pay all of it for Greece without affecting their credit rating. The only reason it matters it's because it's a template for Italy, Portugal and Spain. Paying it's debt would send a very bad message. No one owns Greek debt but the central bank and the IMF. Even greek banks do not own greek debt.


DawnMachine said:
Default worked for Iceland. It successfully told its foreign creditors to go fuck themselves, instituted capital controls, and has a decent economy four years later.

Then again, Greece's economy has had to tolerate like five years of severe weakness (>25% unemployment) where Iceland essentially had one to two years of painful adjustment, as I understand it.
Click to expand...

That's not really what happened in Iceland, they bailed out the banks quite much, the situations are different, etc...

Greece will default at some point or another, or will get his debt forgiven because Greece keep borrowing to the people that already own much more that they can pay. Europe central bank is loaning money to Greece so it can pay back previous loans.
 
America is not that much better off then Greece in reality. But because it's working with such a larger GDP it just takes much longer.

This is problem was called Debit Crisis on Feb 17 2014. Remember that?

All that fussing and hubbub only delayed the problem by 3 years. Sooner or later the U.S. will have to default as well, at this sec the U.S. owes 17.4 trillion dollars in debt. It's income through taxes is 2.2 trillion.


Not too bad right? Well it gets worse: the U.S. Is currently paying almost 300 billion dollars a years in interest fees alone.

http://www.pewresearch.org/fact-tan...about-the-national-debt-what-you-should-know/

Now the icing on the shit sundae that is the U.S. Government currently owes the Federal Reserve bank 4.3 trillion dollars which amounts to interest payments of 1.68 billion dollars a year. Keep in mind now the Federal Reserve, despite its name, is a privately owned bank whose owners are protected by U.S. Law from disclosure or censor. Right now, no one not even your president, can ask who owns the Federal Reserve or audit it for violations of tax or industry law. The Federal Reserve prints all of the U.S. Currency as of 1923.

Nice set up eh?

The Western world will default sometime in the next 20 years unless changes are made, you cannot borrow money indefinatly, sooner or later the interest alone will eat up the countries GDP. The U.S. is getting close, damn close, too damn close really, but every other Western nation is walking the same line, Canada, UK and Europe.

A few more tidbits just for shits and giggles;

JFK's last act as president was to sign into law a executive decision to allow audits of the Federal Reseve bank with the public statement to eventually change the Federal Reserve into a government owned institutions. He was killed 18 days later. The first thing, the very first thing, his successor did was revoke this act and no president since has attempted to audit the Federal Reserve.

A single stock from the Federal Reseve is estimated to be worth over 2 million dollars a year but none of it has ever come up for sale nor has the bank ever issued a single stock since its inception, which means the same group that started the bank still hold control to this day.

Sadly this set up is followed by every Western nation around the world today so basically a small group of people has devised a way to skim money directly from your taxes. Of every dollar you pay into the IRS they get 7 cents.
 
Sweet and Savoury said:
Now the icing on the shit sundae that is the U.S. Government currently owes the Federal Reserve bank 4.3 trillion dollars which amounts to interest payments of 1.68 billion dollars a year. Keep in mind now the Federal Reserve, despite its name, is a privately owned bank whose owners are protected by U.S. Law from disclosure or censor. Right now, no one not even your president, can ask who owns the Federal Reserve or audit it for violations of tax or industry law.
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I may not be American, but the confidentiality is indefinite, correct?

And is Asia and Africa any better off? Or is the situation the exact same as it is in the western countries?
 
Sweet and Savoury said:
See now that just massive ignorance there folks.

They also produce Ouzo.

Without which I can't face daily life anymore...
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To my knowledge the only major products of Greece are olives and tourism. They can posture all they want, but the EU seems to be tired of their crap and Russia has no normal geopolitical reason to help them beyond fucking with the Europeans a little bit(I remember seeing somewhere that there is no way that Russia's answer to the IMF would be willing or able to provide a loan due to the fact that Greece doesn't have any real trade or holdings with China, Brazil, or Russia).
 
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