Feb 11, 2012
CHAN AKYA
Debt, cash and bonfires
By Chan Akya
So we have a deal. Do we have a deal? We have a deal. Well, kind of, but the finance ministers haven't signed off on it as yet. It may therefore change before you read this. It most certainly will change after you read this, irrespective of whether you read this on the intended publication date (February 10) or many months later. Welcome to the evergreen world of European sovereign debt restructuring.
This week's deal may or may not have been agreed? You see, here's how it is supposed to work. We give the Greeks 130 billion or so - no need to put a currency sign in front of the 130bn because it doesn't really matter. In return, the Greeks agree to 3.3bn of austerity - that is, budget cuts to that extent. No need to put a currency sign in front of this 3.3bn either, because it could be in baklava for all the good it will do for you anyway.
In any case, the 130 billion will be given to people to whom the Greeks owe money, not to the Greeks themselves. So it will be transferred from the European Central Bank (ECB) offices in Frankfurt through the clearing system in Frankfurt to banks in Frankfurt, and perhaps to the odd bank or two that dare to have branches in Paris or London instead. So to be clear, nothing will go to Athens anyway.
The Greeks also get some book entry adjustments. Instead of owing debt that looks like Mount Everest (this being an Asian publication), they will instead owe debt that looks like Mont Blanc. Even that mountain of debt will be worth, in terms of intrinsic purchasing power thanks to the below-market coupons they have to pay on it now and the next round of defaults, about the same as a pile that is as high as the average speed bump in Singapore but that is the denouement in the next act and one shouldn't rush to it quite yet.
http://www.atimes.co...y/NB11Dj01.html
 0
4 replies to this topic
#2
Slipnslide
Grizzly Bear Posted 12 February 2012 - 08:59 PM
Of course we have a deal. We've already had 10 or 12 deals in the past 18 months --don't you think we know what a deal looks like by now?
One thing that does not keep me up at night is worry that the Greek citizenry is going to get the short end of the deal. Sure, all the money is going to the banks, but that's a problem for the German taxpayers. Am I going to shed a tear because Greeks might have to start paying taxes and working into their 60s? I am not. It's not really austerity when you have what could be called a blivet economy = $10 worth of unnecessary govt. largess on a $5 GDP. #3
HYPERTlGER
Grizzly Bear
Posted 12 February 2012 - 11:54 PM
The top of the hierarchy lives off the yield from the bottom of the hierarchy.
The EU is bailing out Germany...sustaining Germany...has been since the the wall holding back all the desperate to sign on the dotted line East Germans was opened. Hi welcome back...Now after a brief training program...We will show you how to borrow money created out of thin air using your current income that was created out of thin air as collateral to make your wildest dreams come true by creating new money out of thin air. before the Euro was introduced...the largest consumer of german exports was the USA...the USA is still the largest consumer of EU exports...they dropped to the number 2 consumer of German exports... France is now the largest consumer of German exports...and Germany is the largest consumer of French exports. France is running a trade deficit...so they need to keep "borrowing" to sustain Germany...they consume 20% of German exports...the USA was doing that 10 years ago... Eventually France will be collapsing and the EU will be "lending" France 100's of Billions or Trillions of Euro's to support the continued existance of the fake German economy. Spain...is hopelessly depandant upon France and Germany for imports...And Germany and France on Spainish exports...and running a trade deficit. Italy...same...Germany and France and running a trade deficit...Just like Greece...running a deficit. EU decouple from the USA...EU caves in... because all those countries or now States of the United states of Europe...Are all net consumers of oil...and the 120 Billion Dollar trade surplus of Germay bascially comes at the expence of all it's trade deficit partners...who have to defict spend to support Germany... They all quit and poof...game over...Greece is on fire and they are still sucking them dry...and you all believe it's because the Greeks are tax dodgers... Top sucks from the bottom...and Germany is going to suck all their trade partners dry...and they are going to collapse subsidizing Germany and then Germany is going to implode. #4
SuperCycleBear
Grizzly Bear
Posted 13 February 2012 - 02:36 AM
The top of the hierarchy lives off the yield from the bottom of the hierarchy. The EU is bailing out Germany...sustaining Germany...has been since the the wall holding back all the desperate to sign on the dotted line East Germans was opened. Hi welcome back...Now after a brief training program...We will show you how to borrow money created out of thin air using your current income that was created out of thin air as collateral to make your wildest dreams come true by creating new money out of thin air. before the Euro was introduced...the largest consumer of german exports was the USA...the USA is still the largest consumer of EU exports...they dropped to the number 2 consumer of German exports... France is now the largest consumer of German exports...and Germany is the largest consumer of French exports. France is running a trade deficit...so they need to keep "borrowing" to sustain Germany...they consume 20% of German exports...the USA was doing that 10 years ago... Eventually France will be collapsing and the EU will be "lending" France 100's of Billions or Trillions of Euro's to support the continued existance of the fake German economy. Spain...is hopelessly depandant upon France and Germany for imports...And Germany and France on Spainish exports...and running a trade deficit. Italy...same...Germany and France and running a trade deficit...Just like Greece...running a deficit. EU decouple from the USA...EU caves in... because all those countries or now States of the United states of Europe...Are all net consumers of oil...and the 120 Billion Dollar trade surplus of Germay bascially comes at the expence of all it's trade deficit partners...who have to defict spend to support Germany... They all quit and poof...game over...Greece is on fire and they are still sucking them dry...and you all believe it's because the Greeks are tax dodgers... Top sucks from the bottom...and Germany is going to suck all their trade partners dry...and they are going to collapse subsidizing Germany and then Germany is going to implode. You would garner much greater support and maintain the illusion of authority you seem to so desperately need, if you could spell correctly and use proper English grammar.
There is symmetry in most things. In the markets, the greed on the way up is equal to the fear on the way down.
SCB #5
HYPERTlGER
Grizzly Bear
Posted 13 February 2012 - 03:42 AM
I click "add reply"...and that's all the support I need.
0 user(s) are reading this topic0 members, 0 guests, 0 anonymous users |
|
