cwericb Posted November 1, 2011 Share Posted November 1, 2011 This is simply a political power play. Papandreou is a politician trying to cover his own political ass at the expense of everyone else. He holds a referendum and if he can convince the Greek people that they have no choice, then everyone probably benefits. If he can’t, than the consequences are their own fault. Either way, he can say that it was the people’s decision, not his, and he can attempt to hold on to power. What else would you expect of today’s politicians? Surely one would think that the other EU leaders would have anticipated this? Link to comment Share on other sites More sharing options...
Packer16 Posted November 1, 2011 Share Posted November 1, 2011 If you look at the parallels between 1931 and the European currency crisis it is interesting. At that time Austria and Germany owed the debt (reparations and rebuilding debt) to US, UK and France. The UK and the US kicked the can down the road and France wanted to push Germany in default. In the end, when Austrain and German banks failed, the UK had to go off the gold standard becuase of the run on the pound due too much bad debt held by the Bank of England. If the EU continues to kick the can rather than kick So. Europe out of the Euro (or at least suspended them), the same may happen to the Euro. When a run starts, it is hard to stop. I can see why China would not want to touch this situation with a 10 foot pole. Packer Link to comment Share on other sites More sharing options...
alertmeipp Posted November 1, 2011 Share Posted November 1, 2011 I figure he is playing trick or treat like a kid. Link to comment Share on other sites More sharing options...
Cardboard Posted November 1, 2011 Share Posted November 1, 2011 How do you put that genie back in the bottle now? The Greeks will now demand a referendum. Then how long does it take until the vote is counted in? 2, 3 months? Crazy... The Eurozone now needs to make an example of Greece and make them pay for their arrogance. This country does not seem to get that they are the ones who put themselves under that situation. If Europe bends, then the other PIIGS will ask for more too. You have to be responsible for your acts at some point in life. Cardboard Link to comment Share on other sites More sharing options...
Santayana Posted November 1, 2011 Share Posted November 1, 2011 Meanwhile, Italian bond yields keep climbing. Over 6% on the 10 year now. Link to comment Share on other sites More sharing options...
Liberty Posted November 1, 2011 Share Posted November 1, 2011 Mr. Market's playing with us, as usual. Link to comment Share on other sites More sharing options...
DCG Posted November 1, 2011 Share Posted November 1, 2011 It's ridiculous how short-sighted 99% of the people who trade stocks (as well as the entire media) are. CNBC is unbearable to watch. Everyone's time frame and attention span is about 1-2 hours. People just sell every stock they own just because other people are. Are these people also selling their homes, cars and everything else they own today? Link to comment Share on other sites More sharing options...
Santayana Posted November 1, 2011 Share Posted November 1, 2011 Yeah, it's pretty crazy when you can have trillions of dollars of stock value disappear in a couple of trading hours based on the days rumors....errrr I mean "news". Link to comment Share on other sites More sharing options...
Kraven Posted November 1, 2011 Share Posted November 1, 2011 CNBC is unbearable to watch. Nothing new about that. It's been unbearable since the mid 90s. Everything about it make me cringe. The whole "it's 4 pm, do you know where your money is?" is like fingernails on a chalk board. Link to comment Share on other sites More sharing options...
DCG Posted November 1, 2011 Share Posted November 1, 2011 Except for now they have Cramer on the air about 10 hours a day spewing out B.S. in addition to all the other morons. What I might hate even the most about these idiots is that they never refer to companies as companies or businesses. They're all 'names' or 'situations' and everything is a game. CNBC really treats the market like a casino (as do so many investors and fun managers). There is no acknowledgement that there are actual businesses with lots of employees behind the stock ticker. Link to comment Share on other sites More sharing options...
scorpioncapital Posted November 1, 2011 Share Posted November 1, 2011 I'd do the same thing as the Greeks - take the money and run. If somebody gave you free money and it was a question of forgiving 50% vs 100%, why not go for taking off with all the money? You've already been painted as a "criminal" why not go all the way? You have to admit it was pretty stupid for the givers, regardless of how much fudging the takers were doing. Link to comment Share on other sites More sharing options...
alwaysinvert Posted November 1, 2011 Share Posted November 1, 2011 The referendum might be the only way of avoiding a coup or an even further deterioration into anarchy. If his reforms cannot garner enough support, they won't get pushed through anyway. Now what will the greeks prefer when they stand by the ballot? An uncontrolled state default or austerity measures? I don't think the answer is as clear-cut as some of you do. And if the austerity measures didn't have support by the majority, given no referendum, what makes you think they would have a positive effect if looting public money is acceptable behaviour? Link to comment Share on other sites More sharing options...
ERICOPOLY Posted November 1, 2011 Share Posted November 1, 2011 Polls show that 70% of Greek voters are against leaving the Euro. http://www.guardian.co.uk/business/economics-blog/2011/nov/01/greek-referendum-papandreou-canny-move Trouble is, the same polls show that 60% are against terms of the bailout. What do the other 130% of Greek voters think? Link to comment Share on other sites More sharing options...
Viking Posted November 1, 2011 Share Posted November 1, 2011 This looks to be a great example of one of the flaws of the Euro model. Pappy is likely being a rational politician: to implement this deal the Greek government is going to have to make draconian changes to Greek society and these changes will be fought tooth and nail for years and will cause a great deal of suffering (likely leading to violence). Pappy perhaps understands that it will not be possible to drive the requiured reforms into Greek society. His solution: put it to a referendum 'and let the people decide'. This really demonstrates how difficult things are. The collateral damamge is Pappy's actions may actually now take down Portugal, Ireland and Italy and ultimately the Euro. Does Greece care? A little bit but not much. And that is why the Euro is likely a doomed currency. I will have to read up on how things are in Iceland... if they are getting back on their feet a few years after their default (like Argentina did) the Greeks are likely thinking they are better off to have a few brutal years and then the opportunity for thing to get better than have 20 years of continuous pain. Interesting. Link to comment Share on other sites More sharing options...
rjstc Posted November 1, 2011 Share Posted November 1, 2011 How do you put that genie back in the bottle now? The Greeks will now demand a referendum. Then how long does it take until the vote is counted in? 2, 3 months? Crazy... The Eurozone now needs to make an example of Greece and make them pay for their arrogance. This country does not seem to get that they are the ones who put themselves under that situation. If Europe bends, then the other PIIGS will ask for more too. You have to be responsible for your acts at some point in life. Cardboard Sounds a little like what caused our housing mess. No one could say no to the people who wanted to borrow money but never could have paid the loans back in the first place. But the lenders in the interim were making some money and hoped to kick the can down the road to someone else. Link to comment Share on other sites More sharing options...
Parsad Posted November 1, 2011 Author Share Posted November 1, 2011 Sounds a little like what caused our housing mess. No one could say no to the people who wanted to borrow money but never could have paid the loans back in the first place. But the lenders in the interim were making some money and hoped to kick the can down the road to someone else. Don't forget the $20B+ they accumulated hosting the summer Olympics! Like that was a necessary expense to run the country and generate economic growth. Cheers! Link to comment Share on other sites More sharing options...
rjstc Posted November 1, 2011 Share Posted November 1, 2011 Sounds a little like what caused our housing mess. No one could say no to the people who wanted to borrow money but never could have paid the loans back in the first place. But the lenders in the interim were making some money and hoped to kick the can down the road to someone else. Don't forget the $20B+ they accumulated hosting the summer Olympics! Like that was a necessary expense to run the country and generate economic growth. Cheers! Exactly! Link to comment Share on other sites More sharing options...
original mungerville Posted November 1, 2011 Share Posted November 1, 2011 Just another "unforeseen" event driven by the mountain of debt in the developed world. I am betting that a string of these unforeseen events are fairly likely to take place, and could compound each other into a downward deflationary spiral then forcing central banks to monetize. I think we are past the point of no return: low underlying growth constantly reduced by confidence shocks stemming from unforeseen events. There is too much debt and the best we can hope for is very very low growth. Link to comment Share on other sites More sharing options...
original mungerville Posted November 1, 2011 Share Posted November 1, 2011 Even Bill Gross recently stated that his New Normal was too optimistic (and is more predisposed to treasuries) and now El-Erian is buying gold of all things. Link to comment Share on other sites More sharing options...
alertmeipp Posted November 1, 2011 Share Posted November 1, 2011 So much swing. I see I need to put in much more work to get sub-par result. Teaching me to turn off the quotes and just focus on the companies! Link to comment Share on other sites More sharing options...
nwoodman Posted November 1, 2011 Share Posted November 1, 2011 I will have to read up on how things are in Iceland... if they are getting back on their feet a few years after their default (like Argentina did) the Greeks are likely thinking they are better off to have a few brutal years and then the opportunity for thing to get better than have 20 years of continuous pain. Interesting. Seems to be working out OK for Iceland. It will be the right thing for Greece to do too http://www.businessinsider.com/what-the-world-can-learn-from-icelands-default-model-2011-8?op=1 Hopefully this will assist in bringing about some real changes to the banking and financial system. As Taleb said it is basically just an issue of remuneration. Link to comment Share on other sites More sharing options...
alertmeipp Posted November 1, 2011 Share Posted November 1, 2011 I will have to read up on how things are in Iceland... if they are getting back on their feet a few years after their default (like Argentina did) the Greeks are likely thinking they are better off to have a few brutal years and then the opportunity for thing to get better than have 20 years of continuous pain. Interesting. Seems to be working out OK for Iceland. It will be the right thing for Greece to do too http://www.businessinsider.com/what-the-world-can-learn-from-icelands-default-model-2011-8?op=1 Hopefully this will assist in bringing about some real changes to the banking and financial system. As Taleb said it is basically just an issue of remuneration. Know your facts - Greece is not Ireland. Ireland got hit by growth and asset bubble. Greece got hit by over-spending and entitlements. In short, Ireland is at least productive, Greece is... Link to comment Share on other sites More sharing options...
DCG Posted November 1, 2011 Share Posted November 1, 2011 He didn't say anything about Ireland. Link to comment Share on other sites More sharing options...
Packer16 Posted November 1, 2011 Share Posted November 1, 2011 I think the issue with Iceland was the banks and speculation. Otherwise, the country had a stable economy - taxes versus expenditures. Greece on the other hand has a spending problem and has been a serial defaulter versus Iceland which has not been. I think comparing the two is appropriate for a short term solution but in the long term Greece needs to decouple from the Euro unless they are willing to become German. Packer Link to comment Share on other sites More sharing options...
alertmeipp Posted November 2, 2011 Share Posted November 2, 2011 He didn't say anything about Ireland. My bad. Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now