AuthorTopic: Greeks Get Souvlakied  (Read 70607 times)

Offline RE

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Greeks Get Souvlakied
« on: February 21, 2012, 02:30:15 PM »

The Greek Tragedy looks like it is inching ever closer to the inevitable
denoument going into the weekend. Of course, the Stock Market is giddy over all
the recent GREAT NEWZ that in fact all of us Doomers are totally WRONG here, and
the FSofA Economy is Booming! HAPPY DAZE ARE HERE AGAIN!

Over in Greece though, despite the Installation of Technocrat-Fascist L-Pap as
PM of Greece a couple of months back, it appears the coalition Goobermint will
take NO MORE of the "austerity". The latest round is to cut the Greek Minimum
Wage to 25% BELOW its current €750 level. Figuring say a 1.2 exchange rate
here, that means in Dollars the Greek Min Wage is around $900/mo. Around $225 a
week. No idea what Greeks pay on average for Rent, but I do know Gas in Europe
these days goes around $8/Gallon. Clearly, you ALREADY cannot live an
Industrial lifestyle on the current wages, and Greeks certainly cannot be buying
BMWs priced at $40K and up here either.

So, L-Pap's "coalition" Partners have all seemingly drawn a Line in the Sand
here and will not approve these cuts, despite the fact the Troika has ALSO drawn
a Line in the Sand and says it will not fork over more Funny Money to Greece if
they DON'T agree to more austerity. The credibility of the Troika is already
pretty low, but if they capitulate and hand over more Funny Money anyhow,
they'll lose anything they got left here. The Greek Gooobermint cannot back
down either, because if they agree to this latest "Plan", their Life Expectancy
will be measured in Days if not Hours.

Now, perhaps there are some Back Door methods of forcing the Greeks into Default
while at the same time Bailing out everyone with exposure here, except also
nobody really knows how much CDS is written on Greece, and of course if the
Greeks go Belly Up all the "collateral" the ECB now holds in Greek Bonds would
have to be marked to ZERO, which cannot be too good for its Balance Sheet.
If/When the Greek Default does come, this just has to produce a "Lehman Moment"
for the Eurozone.

TPTB have had a good couple of YEARS here to prepare for this moment, but
equally obscure and cloudy is exactly what those Preps might be here? All sorts
of Rumours flying about reintrodution of Legacy Currencies and so forth, but as
soon as somebody Floats such an idea, it gets just as quickly Shot Down as
pathetically unworkable on the pages of Zero hedge and every other Financial
Blog out there.

Anyhow, again if/when Greece goes Down, there just HAS to be an even BIGGER run
on Spanish, Portuguese and Italian Banks than already is underway here. Why
would ANYBODY stay in a Theatre so obviously Smoking Up with Flames already
shooting up from the Cheap Seats?

The Troika will Capitulate in some way, though it is likely to be Back Door and
not admitted to. That can slow the collapse some. The Greeks cannot capitulate
anymore than they already have to Austerity. Their society is collapsing.
Anyone who can leave Greece is doing so. They can't be Taxed to pay the Bills,
because they are not employed,and the few who are still employed already cannot
afford the price of Gas to get to work. There is NO SURPLUS in Greece, not in
Trade and probably not even in Olives to feed the current population Athens.

We are incrementally Closer now to Hitting the Wall. Europe is set for a
Firestorm, and for the Greeks, the Jig is UP here. They MUST Default, they MUST
Revolt or they MUST Leave if they can. All 3 are likely here depending on the
individual circumstances of the Peoples. If the Troika capitulates here and
funds them, even through the back door, it will Extend & Pretend the game a
while longer, but that will just put immediate pressure on the Bond Issues of
the rest of the PIIGS. The ECB will lose credibility, and a Hyperinflation of
the Euro would seem unstoppable at that point.

The next month should have some spectacular fireworks. Break out the Popcorn.

-- --------
Greece Draws The Line As Unity Government Leaders Refuse To Cede To Further
Troika Austerity Demands
Submitted by Tyler Durden on 02/03/2012 13:02 -0500

Bond default European Central Bank Eurozone Fail Finland George Papandreou
Germany Greece International Monetary Fund Italy Netherlands ratings

It appears that Greece will not even have to wait until the dreaded March 20
funding D-Day. As was earlier reported, Greek PM Lucas Papademos may resign if
he is unable to persuade his coalition unity government to agree to further
Troika demands for additional austerity. It now appears that there will be no
agreement, and thus the primary demand from the Troika for further cash
disbursement will not be met. The FT reports: "All three party leaders in
Greece's teetering national unity government have opposed new austerity measures
demanded by international lenders, forcing eurozone finance ministers to
postpone approval of a new €130bn bail-out and moving the country closer to a
full-blown default. Representatives of the so-called "troika" – the European
Commission, European Central Bank and International Monetary Fund – have
demanded further cuts in government jobs and severe reductions in Greek
salaries, including an immediate 25 per cent cut in the €750 minimum monthly
wage, before agreeing the new rescue. But representatives of all three coalition
partners, including centre-left Pasok of former prime minister George Papandreou
and the centre-right New Democracy of likely successor Antonis Samaras, said
they were unwilling to back the government layoffs." Now we have been here
before, and as a reminder the last time Greece threatened to pull out of Europe
with the G-Pap referendum threat back in the fall, G-Pap was promptly replaced
with the Trilateral Commission member and former ECB Vice President, Lucas
Papademos. The problem is that for him to obtain power, he needed to form a
coalition government. Well, that now appears to be in tatters, as not one party
is willing to break to the Greeks that the minimum wage of €750 will be cut even
further. The question is who will blink first this time, as it is quite likely
that neither the Troika nor Greece want an out of control default. Unless, of
course, this was Germany's plan B to the imposition of a Greek commissar all

More from the FT:

In addition, a Greek government official said the EU and IMF negotiators
rejected a counter-proposal that would have frozen Greek wages for three years
and cut social security contributions by 10 per cent.

Without approval of the new bail-out within a matter of days, Athens is at risk
of defaulting on a €14.5bn bond that comes due on March 20. Many eurozone
officials fear such a default could reignite panic in European bond markets,
pushing Italy and Spain back into danger.

The standoff in Athens has angered officials in eurozone creditor countries,
particularly in those that have retained their triple A credit ratings and will
be leant on most heavily to provide new Greek aid.

Finance ministers from the four remaining triple As – Germany, the Netherlands,
Finland and Luxembourg – met in Berlin on Friday where they agreed that Athens
must move quickly or they would withhold assistance.

"We want no further delays," Jan Kees de Jager, the Dutch finance minister, said
after the meeting.

Eurozone finance ministers had hoped to meet on Monday in Brussels to sign off
on the new bail-out, but officials cancelled the gathering on Friday.
Jean-Claude Juncker, the Luxembourg prime minister who serves as chairman of the
group, issued a statement saying only that the meeting "may be scheduled later
in the week".

Kathimerini with the pre-story:

Papademos is expected to meet PASOK's George Papandreou, New Democracy's Antonis
Samaras and Giorgos Karatzaferis of the Popular Orthodox Rally (LAOS) on
Saturday. The three politicians will have to agree on measures that will satisfy
Greece's lenders and pave the way for a new bailout.

However, a number of sticking points remain. One of the main issues on which the
party leaders are finding it difficult to agree is the private sector wage
reductions that are being demanded by the troika of the European Commission,
European Central Bank and International Monetary Fund.

Sources told Kathimerini that the troika is demanding that the minimum wage of
751 euros per month (gross) be reduced and that labor costs in the private
sector drop by 25 percent in a bid to help Greece regain competitiveness.

Labor unions and employers wrote to Papademos on Friday to inform him that they
cannot agree on a wage cut.

Papademos needs the agreement of the political leaders so the prospect of Greece
receiving a new bailout can be discussed at the meeting of eurozone finance
ministers on Monday.

Greece will have to set out the measures it plans to take over the next two
years to reform its economy and create a primary budget surplus as well as the
framework for the debt restructuring agreement with its bondholders.

Skai TV and radio reported on Friday that should the leaders fail to agree a
deal, Papademos will tender his resignation on Monday.

And so on. To say that by now the market may well surge, however briefly, out of
pure delight that Greece has finally defaulted, may not be a stretch. Of course,
the "however briefly" period will shortly thereafter end, leaving Europe with
few things to look forward to aside from complete disintegration of the union
and its currency. But at least US banks will be fully insulated to that
"contingency" which is increasingly looking like a "certainty."


Offline RE

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Re: Greeks Get Souvlakied
« Reply #1 on: February 21, 2012, 02:49:46 PM »
CLIFFHANGER! Will Fat Ass Evangelos strike a New Deal with the Troika this
weekend or not? Will L-Pap get Smeared all over the streets of Athens or not?

Essentially here, Greece is analogous to a Company which recently had a Hostile
Takeover by Mergers & Acquisitions Vultures, who upon bringing in the New
Management want to bring the company back to profitability by cutting wages and
laying off basically everybody except the top layer of management. While
eviscerating said company's productive potential (if it still had any), they
load up the company with still more debt so they can pay themselves still bigger

On the Corporate Scale when you do this, the end result of course is BK of the
Company, the Factories it runs shut down and then there is a Firesale of the
"Assets" of the company for Pennies on the Dollar. The last set of Managers
walks away free and clear with the Bonuses they took while loading up the
company with Debt.

When you Scale Up the same activity to the Nation State level, you get a whole
new level of complexity. You don't just put a few Factory Workers out of Work,
you put the WHOLE COUNTRY out of work!

When you put a whole country out of work, you don't just get a Detroit, you get
Detroit on Steroids! Everybody who can EVACUATES Detroit! How fast do you think
Greece can Depopulate here? Will they Evacuate as fast as the Irish did during
the 1800s, and are soon to do again?

Sadly for both the Greeks and the Irish (and the Ities, Spics, Roma et al),
there ain't no Statue of Liberty anymore welcoming all the Huddled Masses of
Poor Folks Yearning to be Free anymore. The Statue of Liberty is Closed for

Can Fat Ass Evangelos put off the Day of Reckoning one more day here? Can L-Pap
Kick the Greek Can down the road a piece more? Or is it Buzzer Time here?


Following "Very Difficult" Troika Teleconference, Greece Nowhere Near A Deal As
Sunday Night Deadline Approaches
Submitted by Tyler Durden on 02/04/2012 11:40 -0500

Bond Creditors European Central Bank Eurozone Greece International Monetary Fund

It is not shaping up to be a pleasant weekend for Greek finance minister
Evangelos Venizelos, who as a reminder until June 17, 2011 was the Greek defense
minister and likely the man responsible for buying up all that European military
equipment (with whose money nobody knows), or his boss, G-Pap successor and
former ECB VP Lucas Papademos. The reason is that Greece is scrambling to reach
a deal with the Troika that permits the €130 billion second bailout to be
disbursed (unclear how the €15 billion add on would be theater), yet a key
precondition of Troika demands is labor reform (a cut of the €750/month minimum
wage, and various headcut reductions across the nation), which however as
reported yesterday has seen all three coalition cabinet member throw up on. In
other words, Greece has about 24 hours to do the impossible, unless of course it
simply delays and does nothing once again. Alas, the real issue is that unlike
before, there is a hard deadline of a bond maturity cash outflow on March 20,
and absent resolution, which especially on the PSI issue should come far in
advance as an exchange offer takes at least 6 weeks to finalize, there will be
no deal. So while this weekend may come and go, without anything being resolved,
the days can kicking, as Zero Hedge said back in January, are ending.

Reuters' take:

Greece has agreed with euro zone partners on how to recapitalise Greek banks
after a planned bond swap, but has yet to resolve issues related to labour
reform and spending cuts in talks with lenders, the country's finance minister
said on Saturday.

Evangelos Venizelos described a conference call on Saturday with counterparts
from fellow euro zone nations as "very difficult" and said talks related to
Greece's rescue plan must be concluded by Sunday night.

"The Eurogroup teleconference was very difficult," Venizelos told reporters.

"There is great impatience and great pressure not only from the three
institutions that make up the troika but also from euro zone member states, each
of whom have their own criteria, their own problems, their own priorities." (

Some more from Kathimerini:

Greece's official creditors remain will not give in on their demand for changes
and wage cuts to the labor status in the private sector, Skai radio said on
Saturday afternoon citing an unnamed government official, as talks about the new
loan contract continue in Athens.

It followed a broad meeting of ministers who hold key posts in the government,
under Deputy Prime Minister and Finance Minister Evangelos Venizelos after his
lengthy talks with the mission from the International Monetary Fund, the
European Central Bank and the European Commission, known collectively as the

The ministerial meeting heard that there will be no further staff cuts in the
health sector, but there will be cuts in expenditure amounting to 1.1 billion
euros, out of which 1 billion will concern pharmaceutical spending.

The defense sector is set for cuts amounting to 400 million euros in the next
two years.

Finally, this is a translation of Venizelos last ditch attempt to pretend he
still has some control left:

After completion of the telephone conference Eurogroup and departing on his
meeting with Prime Minister, Deputy Prime Minister and Finance Minister
Evangelos Venizelos, made ??the following statement:

The teleconference of Eurogroup was very difficult. There is great anxiety and
pressure of three institutions that make up the troika, but also by Member
States of the Eurozone, each of which has its own criteria, its own problems,
its own priorities.

The distance that separates the successful completion of the procedures by which
an impasse may be a coincidence, or due to a misunderstanding, is too small. The
line is too thin. We are on the razor's edge. We hold, focusing here the
Ministry of Finance, a very tough and delicate negotiations.

Already, we have accomplished many things, we basically agree on issues such as
how recapitalization and reorganization of the Greek banking system,
privatization, many institutional reforms and structural changes, leading to a
characteristic example of the need to finally be in our country a effective
monitoring mechanism and pressure on prices, especially prices that make up the
basket of the poor and middle households.

Open are two major issues related to each other: industrial relations, and thus
their earnings in the private sector and financial measures to be taken to be
absolutely objective in 2012, given that we have recorded a good result, in
almost Our predictions as to the 2011 budget target. Here, we have managed to
reduce the too-trading. But there are still unresolved issues and need to
finalize the shape.

Now I go at the Maximos Mansion in order to inform the Prime Minister detail to
the point where we are for what was the Eurogroup and the spirit and atmosphere
of the discussions with institutional partners and Member States of the
Eurozone. It is very likely to take place later meeting with the Prime Minister
heads the troika, because now we are at those points on which they must decide
and commit political forces and thus the leaders of three parties involved in
government and support it.

It's time commitments. It should not just be engagement, but to place all the
prerequisite steps that we can stick to the schedule, make a public offer for
the PSI and get valuable money the first major installment of the new program,
not only for PSI not only to support banks, but also to breathe in terms of
market liquidity.

The time is very critical. We all have to be completed by tomorrow evening. We
have closed all the issues have been undertaken commitments, have initiated
procedures so that we can be on time, given the maturity of bonds in March.


Offline RE

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Re: Greeks Get Souvlakied
« Reply #2 on: February 21, 2012, 02:53:02 PM »
I am going here to analyze a very small and seemingly innocuous statement be Fat
Ass Evangelos regarding the "Delicate" Negotiations going on with respect to
keeping Greece on the Debtor Bandwgon here paying up:

"Already, we have accomplished many things, we basically agree on issues such as
how recapitalization and reorganization of the Greek banking system,
privatization, many institutional reforms and structural changes, leading to a
characteristic example of the need to finally be in our country a effective
monitoring mechanism and pressure on prices, especially prices that make up the
basket of the poor and middle households."

Hello. What FAE is admitting to here is that the process of finding a Balance
in an economic system is setting the Prices precisely so high as the Population
can afford to pay, so that they got ZERO left over here to save while they
Industriously work to pay the Interest on all the Bonds contracted out by the
previous generation of Greek Overseers.

The Troika cannot keep cutting Wages, because if they do they pass the point
where Greeks can be Taxed to pay off the old Bonds! THIS is the "Rock and Hard
Place" faced by the Illuminati. They need to Tweak the system JUST RIGHT so
that all the Prices and Costs of Living are exactly PERFECT, so J6P cannot save
anything but can JUST afford to Live inthe society and keep forking over any
excess income he might have to pay off on the Interest on old Bonds he never
actually signed for, only the Managers did!

In creating an Economic System based on Money, this has been the Game
practically since the day it was Invented! How MUCH can you charge for anything
the Peoples need or want? What can you MAKE them want through Advertising? As
evident in the Greek's situation though, the Game does have a limitation. You
cannot pass the point of what the aggregate population produces as a whole and
continue to sieve off profit from it. When the debt service becomes greater
than what the aggregate population can aford without itself starving to death,
the system collapses! Even Illuminati cannot extract Proft from Dead People.

The next Stage is to try to reduce the costs by shrinkage, aka producing lots of
Dead People in this case. Problem with this is when you work on a Global level
is that it is costly to produce Dead People, the Military requirements are
extraordinary to do that quickly. If your Demolition Costs are greater than the
actual capital you have, you go BK. THAT is the problem here faced by the
Illuminati. See, in all other prior collapses, the cost of destroying a
Civilization were LESS than they "Owned" outside the Civilization. When the
Civilization is Global that you are destroying, there IS no place to harbor your
Wealth unless you got a civilization going on Mars or some ExoPlanet circling

In the small statement by Fat Ass Evangelos, you can see why the Global Ponzi of
the Illuminati is DOOMED here. Its fresh OUT of capital that can be acquired at
positive EROEI and also incable of supporting the vast work force bred up here.
Many will DIE, but until the whole system is pay as you go it cannot continue
onward on the Global Level. Pay as you Go is not a route to great Wealth, so it
remains inevitable that the Elders of Zion are FINISHED here.

The Meek Shall Inherit the Earth. So it was written, so it shall be DONE.



Offline RE

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Re: Greeks Get Souvlakied
« Reply #3 on: February 21, 2012, 02:55:02 PM »
Its been over 24 hours since my last Greek PUKE post, so I am overdue.

Get a load of the numbers in Tyler's latest synopsis of the current Greek
implosion pasted below. What a JOKE! Yet reading the Newz Reports out of the
MSM, every day a Greek Solution is just minutes away, until it gets postoned
again to the next meeting and next "Deadline". The Euro is happily soaring
upward, becuase of course everybody is certain the the Troika will come through
in the Nick of Time to rescue Greece from the Abyss here. Or if they don't,
obviously the Euro Banksters are now convinced they are properly ringfenced so a
Greek Default will bounce harmlesly off their Shield of Invulnerability. Its
"Priced In" already.

Riots in the streets of Athens? Priced In. Wholesale Bank Runs through the
rest of the PIIGS? Priced In. Starving children rummaging through Dumpsters?
Also Priced In here.

One of the real Winning Suggestions I read being Floated today is some kind of
"conservatorship", where if the Greeks don't sign on the dotted line with all
the appropriate Austerity Measures, the Troika will disburse Bailout money to
pay on the bonds that need to be rolled over in March, but not fork any money
over to the Greek Goobermint to pay their local bills. You know, like the Light
Bill, the Worker's Paychecks, the Widow's Pensions, that sort of thing.

It's so fucking STUPID I think they'll probably do it. Its obvious of course
that if you stop paying everyone in Greece they'll then be able to pay off the
new Debt you load on them as Conservator to pay their Mortgage to the Banksters!

The Disconnect between the Technocrat-Fascists running this show and the REAL
economy of Greece is just astounding. The ONLY thing they are concerned with
here is On Paper coming up with a Hokey Plan so they can issue some more debt to
keep the Show going another day. They completely IGNORE the obvious fact that
the real Greek economy is already in complete collapse, and the Greeks can NEVER
pay off any of their old bills, and they can't even afford to pay the ones they
incur each day to keep the lights on.

In reality of course, everybody knows Greece is done for and OUT of the EZ
finance Ponzi here. Now its just a Political Game being played to see who
flinches first and then how the whole shithouse goes down after that.

Let's see here. The Greeks are due to pay up on their Bonds on March 20th.
Sounds like a real good day for Israel to Nuke Tehran or Tehran to set the whole
Ghanwar Oil field ablaze, wouldn't you say here?

Or perhaps a good day for Kim Kardashian to reveal she is really a Man trapped
in a Woman's Body and is getting a Penis Transplant donated by Charlie Sheen's
pet Shetland Pony and a Signal has been received from an Exoplanet circling
Betelgeuse with the decoded message revealing the Ferengi are on their way with
a Convoy of Starships loaded with Gold Pressed Latinum and enough Dilithium
Crystals for J6P to Happy Motor on the new Instellar Highway System in Mr.
Fusion powered Flying Deloreans.

ONE of these days, this BULLSHIT just isn't gonna keep people distracted
anymore. The sooner the better, because MAN, it's getting OLD and I am getting
damn tired of writing about ABSOLUTE STUPIDITY!

Greek Economy Implodes: Budget Revenues Tumble 7% In January On Expectation Of
9% Rise
Submitted by Tyler Durden on 02/07/2012 17:39 -0500

Eurozone Fail Germany Greece Gross Domestic Product Hank Paulson Hank Paulson
headlines Lehman Recession

While hardly surprising to anyone who actually paid attention over the past two
months to events in Greece (instead of just reacting to headlines) where among
those on strike were the very tax collectors tasked with "fixing the problem",
we now get a first glimpse of the sheer collapse in the Greek economy, which
also confirms why Germany is now dying for Greece to pull its own Eurozone plug
(predicated by a naive belief that Greece is firewalled as was discussed before.
As a reminder Hank Paulson thought that Lehman, too, was firewalled on September
15, 2008). And what a collapse it is: according to just released data from
Kathimerini, budget revenues lagged projections by €1 billion in the very first
month of the year. "Revenues posted a 7 percent decline compared with January
2011, while the target that had been set in the budget provided for an 8.9
percent annual increase. Worse still, value-added tax receipts posted an 18.7
percent decrease last month from January 2011 as the economy continues to tread
the path of recession: VAT receipts only amounted to 1.85 billion euros in
January compared to 2.29 billion in the same month last year." This it the point
where any referee would throw in the towel. But no: for Europe's bankers there
apparently are still some leftover organs in the corpse worth harvesting.
Unfortunately, at this point we fail to see how this setup ends with anything
but civil war, as the April elections will merely once again reinstate the
existing bloodsucking regime. We hope we are wrong.

Epic collapse:

The VAT revenue data represent a particular worrying sign regarding the depth of
recession for 2012, while even more painful measures are expected to lead to a
reduction in salaries and therefore a further drop in consumption. This is the
vicious cycle that the government will have to tackle by way of additional
fiscal measures this summer.

According to the current data, the 2012 budget will certainly have to be revised
soon, given that the original estimate for a contraction of 2.8 percent is now
raised to 3.5-4 percent of gross domestic product.

Finance Ministry officials attribute the slump in VAT receipt figures to the
major cash flow problems that enterprises are facing. Some of the latter are
choosing not to pay for their VAT in order to plug other holes caused by
liquidity problems.

At the same time the crisis is seriously hurting the competitiveness of Greece's
economy, resulting in a considerable drop in entrepreneurship. Finance Ministry
data showed that some 111,000 companies shut down in 2011, against just 75,000
new businesses being set up. In fact the majority of new start-ups are not
actual enterprises but newly self-employed professionals.

This is attributed to the dramatic fall in market turnover and the insecurity
that entrepreneurs feel, dissuading them from getting engaged in the local
business field.

And this is the background against which the Troika wants Greece to cut another
150,000 people, and to cut minimum wage even more? Does nobody realize that at
this point the entire Greek economy has frozen to a dead halt, and has joined
only its utterly insolvent banking system in the dumpster?

How much longer will doctors fret around the patient before they finally have
the decency to admit the patient has long since passed away?


Offline RE

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Re: Greeks Get Souvlakied
« Reply #4 on: February 21, 2012, 02:57:52 PM »
Go OPPOSITE the Flow of Traffic

As the extended and pretended JOKE of a Greek "solution" continues in its daily
stupidity, all I really can think of when I think of Greece right now is just
Detroit on Steroids.

It doesn't matter what sort of package the Bozo Techocrats put together here
even if they could get an agreement which they probably cannot. All that occurs
from ANY agreement here is that Greece Depopulates, just like Detroit has. The
Tax Base DISAPPEARS. All you get left with after eviscerating the economy and
lowering the wages is just a few people remaining in the neighborhood.

Wonder WHY Greeks aren't RIOTING any worse than they already are? Simple
answer, any Greek with half a brain and any money whatsoever isn't spending his
time figuring out where to throw the next Molotov, he's simply figuring out just
how to GTFO of Dodge! Where will I go? Germany? Do I got some Relatives in
Astoria Queens in NYC who will put me up for a few weeks? That is what the
"Middle Class" Greeks are figuring out now. The RICH Greeks are emptying their
accounts in Greece as fast as Humanly Possible and transfering the money into
Swiss Banks or into Gold Coins they are sewing into the lining of their shoes.
The ONLY Greeks who aren't doing either of these things got NO RELATIVES in the
FSofA or Germany and no money to even buy a Train Ticket out of Greece either.

Its a Diaspora, and it is happening in Greece just as it occurred in Ireland in
the 1800s, and many other neighborhoods that have been hung out to dry in the
economic system of the Illuminati over the millenia. Left in the Wake are
burned out shells of Human Habitation like Detroit.

Even if they DO get the Pols in Greece to accept the latest round of Austerity,
next year the Tax Receipts in Greeece will be still less, and there will be
fewer Greeks left in Greece to keep taxing. They'll all be sleeping on the
floor of relatives in berlin and in Astoria, Queens in NYC.

Next up, Portugal, then Spain, then Italy. Floorspace in Berlin is going to be
hard to come by pretty soon, even if you can make it over the Border somehow.
The Big Shities of the Industrialized West are analogues of Castles of the
Medieval period. The poluation that can get into them is heading that way,
sorrowfuly for them. They are heading into DEATH TRAPS.

Don't head that way when the Big Show comes to your neighborhood. Head out in
the OPPOSITE DIRECTION. The Big Shities are DEATH TRAPS. Do NOT go there.
Climb an anchor chain of a freighter going somewhere else with a lower
population like my Grandpa did, and hope you get lucky. At the very worst,
you'll at least Die with Dignity striving to be FREE.



Offline RE

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Re: Greeks Get Souvlakied
« Reply #5 on: February 21, 2012, 03:00:47 PM »
Submitted originally by Surly on Reverse Engineering with Hat Tip to CHS on Of Two Minds

Re: Go OPPOSITE the Flow of Traffic

Was reading the CH Smith blog this morning and found this in the point, with
plenty of echoes of past discussions in this forum. The writer, Zeus Y., is
someone whose work I have seen and appreciated before; a very perceptive guy.

The First Dominoes: Greece, Reality, and Cascading Default (Guest Essay)

February 13, 2012     (Mobile version)

I asked frequent contributor Zeus Yiamouyiannis to comment on the coming Greek
default. Here is his insightful response.
Greece is the epicenter of a drama that threatens to unwind with all the
intrigue and subterfuge of ancient Greek myths and tragedies. As with the legend
of Icarus, big, and now bigger, transnational banks provoked the gods with their
wax-and-feather financial fabrications to create the appearance of soaring
wealth. Now that they have flown too close to the sun and their wings have
melted, these banks are being brought to earth by the obligations and
consequences imposed by their fabrications.

Rather than take responsibility, these banks seek to appease the gods by
sacrificing taxpayers. In fact, if one looks closely, these banks aspire to be
gods themselves. They clothe themselves in their indispensability and shield
themselves from accountability with tales about how many innocent citizens will
be hurt if they don't get their next bailout. It is as if they say, "We are
above the law… We are the law." Mathematics, legal enforcement, restraint,
humility all must fall under the sword of their hubris.

In the end, just as with a Greek tragedy or a Yeats poem, this center cannot
hold and things fall apart. When one abuses the laws and principles of
mathematics and capitalism, claiming to be a faithful servant, consequence and
accountability eventually catch up. The breaking point inexorably nears.
Citizens are beginning to think, voice, and act: "We can do without the false
idols that call themselves banks. In fact, we need them to be dissolved for us
to survive and thrive."

Reality is the revenge of the gods.

Not just about fairness: Everything unwinds

This is not just about fairness anymore; it is about the exposure of central,
global illusions that affect everyone, not just banks. For the last three plus
decades, debt-fueled "growth" has instilled a life sense that everyone gets
rich, values always go up, and no one has to pay. If those illusions evaporate
than those citizens complicit in this failed fantasy may actually join forces
with the realists (those who knew it was a scam all along) to produce unified
citizen revolt. Hell hath no fury like the people spurned and lied to, even if
many had some responsibility in welcoming and fanning those lies.

The implicit deal was this: We will collude so everyone gets rich going forward.
We will collude so no one has to pay if there is any unwinding. (But, hey, it's
a new era, and that's not going to happen!) Open default breaks the illusion,
and austerity breaks up the collusion. This is why default has to be hidden,
deferred, restructured. It is not just about chaos around party/counterparty
risk (in particular, cascading claims that are not backed by anything). It is
not even just about finance. It's about all the other things that will unwind,
culturally, politically, and psychologically, if Greece defaults and sets into
motion the necessity of someone actually paying up. In short, recognition of
reality has disastrous consequences for the status quo and its control myths.

The infinite growth meme unwinds: The cancerous economic obsession with infinite
growth in a finite world is already unwinding, but will hit full force with
cascading defaults. It is one thing to have a "slowdown," and another to have
your economic brakes lock up on you and your gears slammed into reverse. About
the only thing that seems to be growing currently is the number of people
partially employed or permanently unemployed. As a humorous aside, the situation
is getting so pronounced that quality of life might actually have to replace
quantity of possessions as the cultural indicator of the good life, and what
would that do to the economy?

Politicians' power of the purse unwinds: Greek politicians, like many other
Western politicians, will do almost anything to get re-elected. The easiest way
to do this is to pay people off, particularly government workers and
constituents, in the form of generous benefits or pet projects. What happens if
your tax base will not support this? You sell your political soul, defer, and/or
hide the true costs of your largesse behind undisclosed derivative deals with
Goldman Sachs that eventually put your entire country's sovereignty in jeopardy.
As a result, Greece's former prime minister, George Papandreou, is now out after
a very short term in favor of a unity government. Shady deals funded
unsustainable perks that not only inflated popular expectations but created
catastrophic debt and risk.

Guaranteed entitlements unwind: So now that the illusion of infinite growth is
being exposed, the corresponding ballooning entitlements that enticed the larger
public to become complicit in the illusion are becoming unglued. It would take
almost a decade of gross national product to pay off the U.S. unfunded
liabilities for Social Security, Medicare, and Medicaid, which exceed the
staggering sum of 100 trillion dollars.

Retirement and health benefits cannot be paid out of fake prosperity and
"notional" (i.e. imaginary) values. They require real services and products and
an accepted public medium of exchange. (I will leave off the argument as to what
constitutes "real" and "accepted" since even fiat currencies are dubious in this
regard.) People will be forced to adjust their expectations and adapt their
realities. With public and private pension plans also complicit in derivative
scams to fund benefits, it will be no surprise if many pensions simply declare
themselves bankrupt in the next decade.

The maximum profit mandate unwinds: We have reached such heights in our hysteria
about growth and our psychological addiction to more-more-more, that we have
seen stock prices fall, even with record revenues, if the corresponding company
doesn't meet expectations of even higher growth and revenue. It is getting to
the point where a company cannot simply have a solid year and just pay out its
dividends and maintain its good health. Instead companies have to be ever
hopped-up on economic steroids and cost-cutting (i.e. shipping jobs to virtual
slave labor in China) so as to not fall short of expectations.

These steroidal practices are destroying the companies and the means by which
consumers can afford products and services. A relentless short-term focus serves
no one in the end. "Maximum" less and less corresponds with "optimum," because
present assets can be cannibalized or revaluated to give short-term boosts to
numbers, creating systemic and foundational deficits that destroy the health of
a company and its surrounding society. Hopefully the idea and practice of
optimum profit will replace maximum profit as the Great Unwinding continues.

The central question:

The central question, obscured by all the hand wringing and crocodile tears is
simply this: Why should public citizens who have no stake in private
enterprises, who received no profits or dividends, who had nothing to do with
creating losses, be forced to pay for private losses? The only legitimate answer
is, "They shouldn't." Anything that does not acknowledge this tenet is not
functioning capitalism, and if it is functioning capitalism it cannot violate
this tenet.

Yet we witness apologist expert after expert excusing this fatal breach in
capital practice as "regrettable but necessary to save the system." They seem
not to have noticed that the system has already killed itself by violating its
own foundational laws and principles. If anything, current conventional practice
might be accurately described as an all-out anti-capitalist assault on
democratic free enterprise.

So now the follow-up question is easy to answer: "Why are we paying for
something we did not buy and had no hand in creating?" The answer: We no longer
have functioning capitalism. Call it what you want— corporate socialism, crony
capitalism, cancer capitalism, plutocracy, kleptocracy, oligarchy, neofeudalism—
the system we have now is the equivalent of a private person going up to a
stranger on the street and extracting "protection money" to pay for that private
person's underwater house mortgage.

As this simple fact grips the population, and people wake up to the present
economic reality, there will be increasingly organized moves toward civil
disobedience and alternative economy. "Cannot pay" will merge with "will not
pay" since the only way to re-establish health and integrity in a corrupted
economic system is to starve the cancers that have taken it over. This has
already started with Occupy Wall Street, strategic defaults, and riots in

So if someone asks you, seeking to appeal to your fear, self-interest, and need
for approval, if you are willing to "be responsible for bringing down the global
system," your answer should be an emphatic, "Yes." "Are you asking if I want to
bring down fraud, theft, abuse and the cancer that global finance has become for
me, my neighbors, my children, and my children's children? Are you asking me if
I want to replace the current broken system with something that serves actual
people? Not only, `yes,' but `heck, yes.'"

By Zeus Yiamouyiannis, copyright February, 2012

If this recession strikes you as different from previous downturns, you might be
interested in my new book An Unconventional Guide to Investing in Troubled Times
(print edition) or Kindle ebook format. You can read the ebook on any computer,
smart phone, iPad, etc. Click here for links to Kindle apps and Chapter One. The
solution in one word: Localism.


Offline RE

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Re: Greeks Get Souvlakied
« Reply #6 on: February 21, 2012, 03:03:04 PM »
Banana Capitalism

Boy I wish my parents named me "Zeus". Or maybe Odin. Nothing quite so
imposing in a name as being named after the Top God of Gods in the pantheon. RE
pales in comparison. I was very disappointed my parents named me "RE". How
different my life might have been if I was named "Odin"? LOL.

Anyhow, Zeus is mostly correct I think in terms of the necessary unwind of the
Illusion here, but I take issue with an underlying assumption he makes, which is
that there ever WAS "Capitalism" where those running the system ever took the
losses of their bad bets.

Capitalism is a sham, an artifice and a Ponzi all rolled into one. It provides
the ILLUSION of "fairness" that all can succeed if they are Industrious Savers,
while in fact the Industrious Saver once he starts deploying his "Capital"
becomes a leech off everyone else in the society through the Interest he demands
on the use of his money he loans out in the form of Bonds he buys or the
Dividends he expects from the company he invests in. The Money supply and the
population MUST keep increasing for the Industrious Saver to be paid off on all
these "Investments".

Some folks, as most of the Conspiracy Theorists in the group are aware, got
control over this system LONG ago, not 30 years ago when this particular
iteration of the system started to go down the toilet. The meme you read on
Zero Hedge and other blogs is "Gee, if we just didn't have the Maestro blowing
Bubbles in the Economy, it all would have Self-Corrected by the POWER of the
"Free Market".

Hello. The "Free Market" never existed except in some fantasy of an expanded
Farmer's Market where Buyers and Sellers of Bananas would find the Price at
which bananas would sell at. Right AFTER that, somebody takes control of banana
production and starts dictating the price. The OWNER of the Banana Plantation
always seeks to get the highest Profit from his bananas, extracting just as much
wealth as he csn from the Banana Buyers. Everybody has to keep looking for new
things to do to earn more Bananas and the Money Supply has to keep increasing as
they find new things to do. Then the Investors in the Banana Plantation can be
paid off as the Banana Plantation continues to expand idefinitely until it
consumes the entire Rainforest of Brazil!

Goodbye. The Banana Plantation cannot expand forever and you can't breed up
ever more people to fling about ever more money to invest in new Banana
Plantation schemes when you run OUT of good land to grow Bananas on. When the
population starts decreasing as result of too few Bananas, ALL the "investments"
based on more people buying more "things" like I-phones begins to collapse.

"Capitalism" even in its Fantasy Form is always just a Ponzi. To "return on
investment", there must always be growth in the population and the money supply.
A few folks who got in very early on this scheme have done very well indeed,
becoming Rich beyond all measure, To do that though, they raped the Earth of
its resources as fast as they could and subjected MOST of the world population
to debt slavery.

It cannot be sustained idefinitely obviously, there ARE Limits to Growth on a
Finite Planet. if yu cannot get OFF the Planet to Trek the Stars, growth
finishes at some indeterinate point, although it seems to me that point has been
reached already and the Die Off has begun,

Capitalism even in its Fantasy Form is not equipped to handle Die Off on a
Mathematical level,. It is founded in Growth and Return on Investment. The
paradigm has to be abandoned, and it is ALREADY being abandoned, just not in the
way J6P would like. It is being abandoned in such a way as to keep those at the
top of the food chain still Rich beyond Measure while J6P Starves to Death.

J6P will not go quietly into this Good Night. There will be Hell to Pay here.
Capitalism as it has been pursued here for these last 500 years or so is already
finished. It remains to be seen what form of workout to a new system will be
undertaken. Many Bad Outcomes are possible, but a few Good Ones are also. Work
towards the Good Outcomes and you will be rewarded with Everlasting Glory in the
Kingdom of Heaven. Act as a Soldier of Evil in this final battle, and you will
Burn in Everlasting Torment in the Fire and Brimstone of HELL.

The Meek Shall Inherit the Earth. Right AFTER the Meek get very, VERY Angry.



Offline Surly1

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Re: Greeks Get Souvlakied
« Reply #7 on: February 22, 2012, 04:26:46 AM »
Have you seen this? (From ZH, today--)

Apropos of J6P not going quietly.

Anonymous Hacks Greek Ministry Website, Demands IMF Withdrawal, Threatens It Will Wipe Away All Citizen Debts
Submitted by Tyler Durden on 02/21/2012 18:31 -0500

Greece International Monetary Fund

If there is one war that Greece could not afford to join, that is with the global computer hacking collective known as Anonymous. Yet as of minutes ago, that is precisley what happened, after Anonymous, as part of what it now calls Operation Greece, took down the Greek Ministry of Justice ( While the pretext for the hacking appears to have been an arrest of the wrong people, is seems to have angered Anonymous to the point where they have left an extended message of demands on the Greek website, warning that unless the IMF withdraws from the country and the government resigns, all debts of Greek citizens will be wiped clean.

Translated from the Greek:

     Citizens of Greece

     We are Anonymous.
     We watch every day your government abolishes the constitution and institutions of the country.
     We see them leading you closer and closer to poverty.
     We see them pass laws that deprive you of any right to dignity.
     We see them and deliver the country to the IMF and the bankers.
     We know about the soup kitchens in schools,
     for people who are left jobless and now wait in queues for a plate of food.
     We know that your country voted ACTA in your effort to silence and other Greeks.
     We know everything ...
     The Republic in Greece has died.
     He died while a government that has not been elected by the people.
     And for this reason that the time for discussion came and went.
     Not negotiating anything with any of those who murdered him.
     Can you hunt as you like, you can even capture some of us,
     When you attempt to silence us ...
     But for every one that will capture 3 others will spring up. There are 5 or 10 or 100.
     Now the Greeks are all Anonymous.
     We are millions against you and the 300 in this war tear gas will not help you.

     Occupying Government of Greece
     These days are going to vote for a bill that will be the last nail in the coffin of the Greek.
     A bill to return the country to a totalitarian rule.
     To bring the country and its people in absolute poverty.
     We will not allow another misery to the Greek people.
     We demand your resignation immediately, and elections.
     We demand not paid a cent to moneylenders 'friends' you.
     We demand the immediate withdrawal of the IMF from Greece.
     The Justice Department was only a small sample of what we're capable of doing
     Even you have not seen the full wrath of Anonymous.
     For each article of a bill that would shame the vote,
     we will shut the system and deleting an Inland Revenue debts of Greek citizens
     Debts which requires them to fascist pay.
     Can the demonstrations of the Greeks to their encounter with incredible violence,
     anexelekta hitting, but the internet is our field. And I love this war.
     We are many and we will be brief.

     Citizens of Greece, Anonymous is now fighting on your side ...

     Government of Greece, let us wait ...

     E X P E C T  U S !

     J U S T I C E  I S  C O M I N G !
"It is difficult to write a paradiso when all the superficial indications are that you ought to write an apocalypse." -Ezra Pound

Offline RE

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Re: Greeks Get Souvlakied
« Reply #8 on: February 22, 2012, 11:30:10 AM »
Anonymous talks big, but so far besides some DDoS attacks they haven't pulled off major disruption like emptying bank accounts or taking down important networks.  For instance, if they took out everybody's Bloomberg terminals, this would completely screw the markets.  Eventually some real Super Hackers will surface, but the stuff done to date is mostly just annoyance behavior, like mosquitos buzzing around.


Offline RE

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Re: Greeks Get Souvlakied
« Reply #9 on: March 08, 2012, 10:51:33 PM »
Big Day for the Greeks today.  According to Bloomberg 14 minutes ago, the Debt Swap out  of Greek Debt for some other kind of Debt issued by the Illuminati has a 90% or so acceptance amongst all the folks seeking to make their Books *look* "Balanced" and also not trip any CDS.

JOY in the Markets there, at LAST the Greek Problem is SOLVED!  For a few days here maybe?  This nutty swapping out of worthless Toilet Paper clearly is not going to help the Greeks, who STILL are so far underwater that they will run through the few Euros that actually make it to them (just about all goes to service the debt that still remains after the haircut anyhow) in probably a month or two before they will need another Transfusion of Kraut Taxpayer Money.

Meanwhile, Geert Wilders, our favorite Dutch MP/Neo-Nazi Aryan is asking for a referendum for the Dutch to drop out of the Euro and start printing up Guilders again.  How long the Krauts will keep playing this game also remains a big Question Mark ?

For today though, it seems our Bankster Overlords are Happy Again, so a good Market Ramp Job seems likely for tomorrow.

Pass the Ouzo!


Investors Agree to Swap About 85% of Greek Debt

 By Christos Ziotis and Maria Petrakis - Mar 8, 2012 2:22 PM PT

Greek police demonstrate on March 7, 2012 against the participation of pension funds in an upcoming debt-swap deal between the Greek state and private bond holders. Photographer: Louisa Gouliamaki/AFP/Getty Images
With Greece again the focus of the euro-area debt crisis now in its third year, the goal of the exchange is to reduce the 206 billion euros of privately held Greek debt by 53.5 percent. Together with a 130 billion-euro second Greek aid package, the writedown is a key element in European leaders’ efforts to turn the tide against the crisis that has roiled Europe, forcing Ireland and Portugal to follow Greece in requiring bailouts.

The euro and stocks gained before the offer’s close at 10 p.m. in Athens as Prime Minister Lucas Papademos told his Cabinet ministers he looked forward to “the maximum possible participation of the private sector,” according to an e-mailed transcript of his comments.

90 Percent?

The offer went very positively and a final result will be released today at 8 a.m. in Athens, a government official said. The number of bonds tendered in the swap is still being tallied, said the official, who declined to be identified.

Finance Minister Evangelos Venizelos will hold a press conference at 1 p.m. Athens time, the Finance Ministry said in an e-mailed statement.

“Unofficially we’ve been hearing that the acceptance rate has crossed 90 percent,” Hans Humes, president of Greylock Capital Management, said in a Bloomberg Television interview. “The deal is done and we’re going to have to see how the market reacts.” Humes is a member of a committee of private bondholders that negotiated the deal with the government.

Greece’s largest banks, most of the country’s pension funds and more than 30 European banks and insurers including BNP Paribas (BNP) SA and Commerzbank AG (CBK), agreed to the offer.

While Greece would prefer a voluntary deal, the government has said it will use so-called collective action clauses to force holders of Greek-law bonds into the swap if the private sector involvement fell short and it got approval from investors to change the bonds’ terms. The Greek government had said it wanted participation above 90 percent and was seeking a minimum level of 75 percent.

Risk ‘Too High’

“Ideally we get above 90 and it doesn’t need to be done,” said Geoffrey Yu, a currency analyst at UBS AG (UBSN), said in an interview with Bloomberg Television’s Caroline Hyde yesterday.

Compelling holdouts to take part would likely trigger insurance contracts on the debt known as credit default swaps.

“We don’t see the Greeks failing to get a deal because the risk for everyone involved is just too high,” Tobias Basse, a cross market strategist at Norddeutsche Landesbank, said yesterday in a telephone interview.

The 17-nation euro strengthened the most in two weeks against the dollar before the deadline, gaining 1 percent to $1.3278 as of 8:51 p.m. in Berlin. European stocks rallied the most in a month, with the Stoxx Europe 600 Index (SXXP) advancing 1.6 percent to 264.16 at the close in London.

Time to Prepare

“The markets had a very long time to be prepared for this,” Janet Henry, chief European economist at HSBC Holdings Plc (HSBA), said in a Bloomberg Television interview. “There’s a lot more optimism in markets relative to where we were at the end of last year.” She cited the “breathing space” provided by the European Central Bank’s liquidity offer for banks.

In the exchange, investors will receive new bonds with a face value of 31.5 percent of the old ones together with notes from the European Financial Stability Facility. The new debt is governed by English law and comes with warrants that will provide extra income in years when Greek economic growth exceeds thresholds. The net present value loss for investors is more than 70 percent.

The swap is meant to help reduce Greece’s debt to 120.5 percent of gross domestic product by 2020, from about 160 percent currently. Greece is now in its fifth year of a recession.

The amount of the country’s bonds that is under other than Greek law totals 29 billion euros, or 14 percent of the amount eligible for the swap, Frankfurt-based KfW said. Those bonds are governed by different rules and aren’t subject to the collective action clauses retroactively added to the Greek-law debt.

To contact the reporter on this story: Christos Ziotis in Athens at Maria Petrakis at

Offline RE

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Greeks Get Souvlakied: Send in the Clowns
« Reply #10 on: May 16, 2012, 12:28:44 AM »
Here we go again, for Round 12 or so of the 15 Round Thrilla in Athens & Brussels, as the Greeks will now rev up for yet ANOTHER round of "elections".  See, they were too fractured to form a Goobermint that could agree on anything, so  NEW round of elections which likely will see entirely NEW parties emerge outta NOWHERE should be better, right?

Now, probably at this point most Greek Spiros Retsinas all oppose the "Memorandum" and further "austerity", but no Political Party really has Clue 1 on a "Solution" to the GSR's problems here.  This for the fairly OBVIOUS reason that there IS no solution that won't leave Pensioners, Widows and Oprhans starving in the streets of Athens.  Who wants to be part of a Goobermint "responsible" for THAT?

So in this round, you probably will get still MORE "radical" Left Wingers and Nazis winning some Parliament Seats, and even LESS chance in the next Go Round of this farce that various "parties" winning 10-20% of the vote will be able to join in any type of "unity" Goobermint.  So what happens after the NEXT round when 9 days after the election nobody can agree on forming a Goobermint?  Do they schedule ANOTHER election for ANOTHER Month Later here?  Maybe they do that, meanwhile you get thes so-called "Caretaker" Goobermints.  While said Cartakers flail around tying to figure out how to pay da bills with no money coming in, Kind and Generous Fat Asses from Brussels offer to send in a Team of "Technocrats" to help them out.  Sort of like Kindly Kraut Officers during the Nazi Occupation who would "help" the 12 year old daughter of the mother they so kindly "helped" also.  That from a highly respected Historical source, the film "Von Ryan's Express" with Frank Sinatra in the role of Von Ryan.

<a href="" target="_blank" class="new_win"></a>

In this case, as least so far the Greeks have demurred from being "Helped" by the Technocrats.  However, eventually here this "Democratic" process will break down and some Strongman from the the Right or Left will get enough internal support from the Greek Military and Police forces to take control, regardless of what is happening in "Parliament".  Looks possible the neo-Nazis will fill this role, since apparently more than half the Greek Police Force voted for the Nazis in the last go round of elections.

Sadly for Greek Nazis, they are not German Nazis.  They don't have the industrial infrastructure in place the Krauts did prior to WWII, and the idea that the Greeks could set up a 5th Reich here and take over the world is pretty ludicrous.

Also sorta ludicrous though is the idea NATO might roll Tanks into Greece to bring this all under control, like the Krauts did with the Sudetanland.  Does NATO really NEED control of a lot of Olives and Goats?  What do the Greeks have that NATO wants?  NOTHING!

NATO Commandants are VERY busy beavers down in MENA where the peons there ARE sitting on stuff NATO really wants, namely BLACK GOLD, Texas Tea, OIL THAT IS!  So why go into Greece to fight for anything?  Let them Twist in the Wind here and solve their own problems!

Main problem of course remains all that nasty EXPOSURE Eurotrash Banks  have to Greek Debt, not to mention all those nasty Derivatives set to EXPLODE as soon as Greece finally does miss a Bond Payment.  So regardless of the fact Widows and Orphans might be starving in Greece, the ECB or IMF or ESM or some other cockamamie vehicle will pay off on Bonds FOR the Greek "People", to "Help" them.  No Euros will cross the Greek Border, but plenty will cross into the Vaults of JPMC, Goldman and Deutche Bank!

Anyhow, the nonsensical idea that the Euro problems or even the Greek MINISCULE ones were solved at any point in this long charade of Extend & Pretend is OFFICIALLY squashed here now, NO MEETING of Von Rumplestiltsking, Kukla, Fran and Ollie Rehn, Francoise Hollandaise Sauce or any other newly elected Eurotrash Pol is going to convince ANYBODY that ANY problems have been solved.  They are SOL on Political and Economic Cards to play here now.  The Clown Show has run its course here, so unfortunately the NEW Clowns will be sent in.   The next bunch of Clowns are unlikely to be quite so funny as this last bunch.

Send in the Clowns.


Caretaker government will take Greece to risky repeat vote

Greece to hold new election, jolts euro markets
Tue, May 15 2012

By Ingrid Melander

ATHENS | Wed May 16, 2012 1:22am EDT
(Reuters) - Greek political leaders meet on Wednesday to form a caretaker government that will lead the country into its second election in just over a month, with Greece's euro membership at stake in a mounting crisis rocking world markets.
Parties deeply divided over an unpopular EU-IMF rescue plan threw in the towel on Tuesday after nine days of failed attempts to put together a coalition, hitting heavyweight financial stocks as investors worried at the prospect that the euro zone weakling would remain in limbo for at least another month.

Opinion polls show that voters enraged with five years of recession, record unemployment and steep wage cuts are likely to elect a parliament as fragmented as the one they chose on May 6. But the vote, probably in mid-June, may well tip the balance of power toward leftist parties opposed to the bailout conditions.

Policymakers from European Union states and at the European Central Bank have warned that they would stop sending debt-choked Athens the cash it needs to stay afloat if a new government tears up the bailout and backs out of commitments to cut the public debt which are blamed by many Greeks for misery.

But many cash-strapped Greek voters shrug off the threat and see no contradiction between their deep-rooted wish to stay in the euro and their opposition to conditions imposed to obtain the bailouts that have staved off bankruptcy but have dragged the nation into its deepest economic crisis since World War Two.

"There is a bit of schizophrenia in our society right now. People want to stay in Europe - have the cake - but they also want to eat it - by attacking the creditors," said Theodore Couloumbis at Athens-based think-tank ELIAMEP.

"Much depends on whether the Greek people in this repeat election are going to vote with anger and passion or if they will cool off, reflect and see in effect what the real choices are. The choice is between bad and worse."

Party leaders will meet President Karolos Papoulias at 1 p.m. (6.00 a.m. EDT) to put together a caretaker government. It was not clear on Tuesday who would be part of that emergency cabinet, whose main task would be to organize the repeat election - the third in Greece in as many years.


Many in Greece pin their hopes on newly elected French President Francois Hollande, who campaigned on a pro-growth platform. Socialist Hollande offered some hope for more flexibility towards Greece on Tuesday, saying after his first meeting with German Chancellor Angela Merkel:

"I hope that we can say to the Greeks that Europe is ready to add measures to help growth and support economic activity so that there is a return to growth in Greece."

But despite encouraging comments from the conservative German leader about wanting to see growth, differences remain over how far austerity programs might be relaxed.

IMF chief Christine Lagarde had earlier in the day joined a string of EU policymakers who have over the past days lifted the taboo of the possibility of an exit of Greece from the euro zone. She said it was important to be technically prepared for that possibility and warned that an exit would be "quite messy".

European shares fell to their lowest closing level since the start of 2012 after attempts to form a government collapsed. Traders said markets could slump further in the coming days, with fears of a contagion to other crisis-hit EU states including Spain and Italy sending the euro below $1.28.

Patience is also wearing thin among a number of EU policymakers exasperated by the fact that a country which accounts for barely two percent of the euro zone's economy should drag the bloc back into a deep crisis yet again after over two years of roller-coaster crisis.

"The 16 other governments in the euro zone really are at the end of their patience with Greece. There isn't room or any willingness to move," said one official involved in talks over Greece at the European Commission. "The decisions are really in Athens' hands. But it doesn't look good."

The lack of a deal after the May 6 election has also angered many Greeks, making widely discredited politicians even more unpopular.

"They should go to hell," said Giouli Thomopoulou, 59, an unemployed office clerk. "Only God knows what's waiting for us now. I'm very scared about the future.

"I don't think elections will solve anything because in a month we'll be in the same situation."

Alexis Tsipras, the untested ex-Communist youth leader whose Left Coalition party (SYRIZA) wants to tear up the bailout deal, is now leading in opinion polls but analysts said this election, possibly on June 17, is as unpredictable as the May 6 one.

"Public opinion is in total flux, in my 30 years of polling experience I have never seen anything like that before," said political analyst John Loulis. "Everything can change until the last minute. On the May 6 election, the mood swung towards SYRIZA in the last 24 hours before the vote".

(Additional reporting by Harry Papachristou and Karolina Tagaris in Athens and Luke Baker in Brussels; Editing by Alastair Macdonald)

Offline RE

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Greeks Get Souvlakied: WSJ Weighs In
« Reply #11 on: May 16, 2012, 02:53:41 PM »
WSJ take on returning to Drachma for the Greeks.  I the WSJ is talking about it publicly, it ca't be too far away.


Unknowns Loom If Greece Exits Euro BRUSSELS—Returning to a national currency after more than a decade of using the euro and having its money managed by the European Central Bank would catapult Greece into a financial, legal and political no-man's land.

Countries have defaulted, devalued, or even withdrawn from a broader monetary union in the past. But none has done it all at once— and certainly not an economy so deeply integrated into global financial markets.

In Greek Drama, 4 Potential Endings
Heard on the Street: Europe's Missing Contingency Plan
Greeks Appoint Caretaker Premier
Greeks Pull Bank Funds | Draghi: Greece Should Stay in Euro
Greece Teeters as Talks Fail
Bank Withdrawals Fuel Messy Exit Fears
FAQs: Greek Exit Scenarios
Live: Europe's Debt Crisis
Greece would have to remake its monetary system and rebuild its economy after a likely sharp devaluation that would have delivered a severe confidence shock to the population, undermined its banks and triggered likely defaults on debts to foreigners.

The consequences of an exit from the euro for Greece and the rest of Europe would likely be so tumultuous that policy makers have been reluctant even to speculate on how it could work. And even though the taboo of mentioning a euro exit has fallen away in recent months, going back to the drachma would likely be messy, with many steps having to be improvised overnight.

For the first year and a half of the crisis, policy makers usually smothered any questions on a potential euro exit with a simple answer: It's impossible to leave the common currency under European Union law. There is no provision in the EU treaties for exiting the euro zone without also dropping out of the broader 27-country bloc.

Euro Zone by the Numbers
The 17-nation euro zone is a collection of countries with vastly different economic profiles. See how they stack up on the major measures.

View Interactive

Key Players in the Debt Crisis
View Interactive

More photos and interactive graphics
Leaving the EU would also mean an end to billions of euros in farm and development subsidies, as well as easy access to a large internal markets—a threat that Austrian Finance Minister Maria Fekter voiced Monday.

"It's impossible to leave the euro zone—one can only leave the European Union," she told reporters at a meeting with her counterparts in Brussels. "After that, Greece would have to apply for re-accession and we would hold accession talks and look very closely whether Greece actually fulfils the accession requirements."

Ms. Fekter's comments reflect mounting frustration in some European countries with Greece, but also the idea that if a clear exit route is established, other countries may be encouraged to take the same course.

"Too much policy clarity on the questions raised by a Greek exit could be counterproductive," says Mujtaba Rahman, an analyst with Eurasia Group. "If too smooth a pathway were designed, it could encourage other struggling sovereigns to contemplate a similar fate in the medium to longer term."

On the other hand, making things difficult could heighten the strains on the Greek economy, and increase the economic fallout on other members of the EU. "It would be in the interest of the others to make sure that things aren't absolutely dreadful," says Roger Bootle, managing director of Capital Economics in London who has written a 150-page paper on the practicalities of a Greek euro exit.

Some legal experts have come up with work-arounds for the lack of a euro exit clause under EU law.

For instance, citing a fundamental breach of the euro's basic criteria like debt and deficit levels, the euro zone could engineer a "reversed entry" into the currency union, turning Greece into a "member state with a derogation," says Alexander Türk, a law professor at King's College London. That would group Greece with countries like Sweden, which legally are required to adopt the euro but put off that process by deliberately failing to fulfill core requirements.

"If it's politically opportune, then lawyers will find a way to make it happen," says Mr. Türk.

Greece would need to keep its decision to exit a secret for as long as possible to avoid even more money fleeing the country. Ordering new drachma notes could take several months and could leak, encouraging Greeks to increase euro withdrawals from banks, accelerating the exit timetable.

Mr. Bootle suggests bridging that period by moving to electronic payments and using euros for cash transactions. Alternatively, Greece could quickly print money-like vouchers, says Guntram Wolff, deputy-director of Brussels-based think tank Bruegel.

The actual switch could happen over a long weekend, during which banks and automated teller machines would be shut down and other capital controls would be enforced. At the same time, bank accounts would be converted from euros to "new drachmas," and domestic debt and other contracts would change to the new currency.

For simplicity's sake, the internal conversion rate should be one-to- one, says Mr. Bootle. Foreign-exchange markets would take care of devaluing the drachma relative to other currencies.

Economists say that to become competitive, Greece needs to devalue by at least 40%. That means imports such as oil or cars would suddenly become almost twice as expensive, while a German tourist could vacation on Crete for half the price. "At a stroke, Greece can lower its real exchange rate and therefore be more competitive," Mr. Bootle says.

But many pitfalls await before Greece would find itself in that position. Even stripping out debt and interest payments, the Greek state is not taking in enough taxes to pay its bills. That means it either has to cut pensions and other benefits more quickly than under its bailout program or print more money. The latter option would risk pushing up inflation already high from increases in import prices, quickly eliminating some of the benefits of devaluation.

Debt contracts denominated in euros would suddenly be a bigger burden to repay, raising the likelihood of defaults to foreigners by companies and banks. It would also raise questions about whether the country could service its recently restructured bonds and the bailout debts it owes to other governments and the International Monetary Fund.

At the same time, the economic disruption would likely pummel Greece's private sector, with companies having to renegotiate contracts with businesses abroad.

"In the short term, everyone would be suffering," says Mr. Wolff.

—Stephen Fidler
contributed to this article.

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Greeks Get Souvlakied: Chris Martenson Version
« Reply #12 on: May 16, 2012, 05:11:41 PM »
Chris Martenson predicting Imminent Doom
Submitted by Chris Martenson

         Get Ready: We're About To Have Another 2008-Style Crisis

         Well, my hat is off to the global central planners for averting the next stage of the unfolding financial crisis for as long as they have. I guess there&rsquo;s some solace in having had a nice break between the events of 2008/09 and today, which afforded us all the opportunity to attend to our various preparations and enjoy our lives.

         Alas, all good things come to an end, and a crisis rooted in &lsquo;too much debt&rsquo; with a nice undercurrent of &lsquo;persistently high and rising energy costs&rsquo; was never going to be solved by providing cheap liquidity to the largest and most reckless financial institutions. And it has not.
         Forestalled is Not Foregone

         The same sorts of signals that we had in 2008 are once again traipsing across my market monitors. Not precisely the same, of course, but with enough similarities that they rhyme loudly. Whereas in 2008 we saw breakdowns in the credit spreads of major financial institutions, this time we are seeing the same dynamic in the sovereign debt of the weaker European nation states.

         Greece, as expected and predicted here, is a right proper mess and will have to leave the euro monetary system if it is to have any chance at recovery going forward. Yes, all those endless meetings and rumors and final agreements painfully hammered out by eurocrats over the past year are almost certainly going to be tossed, and additional losses are going to be foisted upon the hapless holders of Greek debt. My prediction is that within a year Greece will be back on the drachma, perhaps by the end of this year (2012).
            Greek default spectre turns material

            The weekend Greek revolt against the austerity measures imposed on its economy in return for eurozone funding has elevated the prospect of a Greek default on its debts or a chaotic exit from the eurozone.
            The collapse in support for the mainstream parties that had reluctantly accepted the austerity program and the vehement opposition to the measures by the radical left party that finished the runner up in the weekend&rsquo;s elections has made it almost impossible for a coalition to be formed that would persevere with the program.

            It is likely new elections will have to be held next month but given the degree to which Greeks have protested against the harsh eurozone prescriptions &ndash; and the 20 per cent shrinkage in GDP and 20 per cent-plus unemployment that has accompanied them &ndash; it is improbable that Greece will continue with the reforms it agreed in return for the next $300 billion tranche of eurozone funding.

            If it does walk away from that commitment there will be chaos in Greece and, to a lesser extent, elsewhere. Greece would inevitably default on its debts and could be forced to quit the eurozone.


         There really is no choice for Greece but to leave the euro, and the sooner, the better. Even then, there is a lot of hardship coming their way. But in my estimation, that&rsquo;s better than the imposed austerity that is a guaranteed torture chamber. The institutions that avoided taking losses on their Greek debt on the first pass through, due to their preferred status in the process (the ECB among them), are almost certainly going to eat big losses this time, perhaps a full 100% of them.

         Leaving the euro is going to be quite a process, and the ripple effects are going to be large and somewhat unpredictable. I found this description of what will happen within Greece and its banking system to be well on the mark:

            The instant before Greece exits it (somehow) introduces a new currency (the New Drachma or ND, say). Assume for simplicity that at the moment of its introduction the exchange rate between the ND and the euro is 1 for 1. This currency then immediately depreciates sharply vis-&agrave;-vis the euro (by 40 percent seems a reasonable point estimate). All pre-existing financial instruments and contracts under Greek law are redenominated into ND at the 1 for 1 exchange rate.

            What this means is that, as soon as the possibility of a Greek exit becomes known, there will be a bank run in Greece and denial of further funding to any and all entities, private or public, through instruments and contracts under Greek law. Holders of existing euro-denominated contracts under Greek law want to avoid their conversion into ND and the subsequent sharp depreciation of the ND. The Greek banking system would be destroyed even before Greece had left the euro area.

            There would remain many contracts and financial instruments involving Greek private and public entities denominated in euro (or other currencies, like the US dollar) that are not under Greek law. [&hellip;] Widespread defaults seem certain.

            Euro area membership is a two-sided commitment. If Greece fails to keep that commitment and exits, the remaining members also and equally fail to keep their commitment. This is not just a morality tale. It has highly practical implications. When Greece can exit, any country can exit.

            As soon as Greece has exited, we expect the markets will focus on the country or countries most likely to exit next from the euro area. Any non-captive/financially sophisticated owner of a deposit account in that country (or in those countries) will withdraw his deposits from banks in countries deemed at risk - even a small risk - of exit.

            Any non-captive depositor who fears a non-zero risk of the future introduction of a New Escudo, a New Punt, a New Peseta or a New Lira (to name but the most obvious candidates) would withdraw his deposits from the countries involved at the drop of a hat and deposit them in the handful of countries likely to remain in the euro area no matter what - Germany, Luxembourg, the Netherlands, Austria and Finland.

            The &lsquo;broad periphery&rsquo; and &lsquo;soft core&rsquo; countries deemed at any risk of exit could of course start issuing deposits under English or New York law in an attempt to stop a deposit run, but even that might not be sufficient. Who wants to have their deposit tied up in litigation for months or years?


         The Greek banking system will be destroyed immediately upon Greece&rsquo;s exit from the euro, but the banking system there is already all but dead anyway. Best just to sweep the floor clean and start over. &nbsp;The idea is easy enough to understand; if your bank is about to go under, it is best to get your money out before that happens.

         The only mystery to me is why so many people have left their money in the Greek banks this long. I suppose they were waiting for a clearer signal? Well, it would seem that the signal has now been sent and received:
            Greek Depositors Withdrew $898 Million From Banks Monday

            Greek depositors withdrew &euro;700 million ($898 million) from the country&#39;s banks on Monday, fueling fears of a bank run amid the growing political disarray.

            With deposits falling, Greek banks become even more dependent on the European Central Bank to meet their funding needs, exposing the central bank to potentially huge losses if Greece leaves the euro area.
            Monday&#39;s deposit withdrawal far outpaced Greek banks&#39; steady decline in deposits since the start of the country&#39;s debt crisis in 2009, as depositors withdraw cash and transfer funds overseas. In the past two years, deposit outflows have generally averaged between &euro;2 billion and &euro;3 billion a month, though in January they topped &euro;5 billion.

            The latest data from the Greece&#39;s central bank show that total deposits held by domestic residents and companies stood at &euro;165.36 billion in March.


         Again, the real mystery to me is who still has 165 billion euros in Greek banks at this stage of the game?&nbsp; Also a mystery is why Greece has not yet imposed a withdrawal moratorium and capital controls?&nbsp; It is only a matter of time, perhaps days, before they do.&nbsp;&nbsp;

         Of course, it is the contagion effect that most worries the market, because the same dynamic of utter insolvency leading to the intractable nature of Greece&rsquo;s dilemma applies to Spain, Portugal, and Italy.

         Indeed, the market is already adjusting to this possibility, as evidenced by the spikes in the yields of those country&rsquo;s bonds:
            Contagion Fears Hit Markets

            LONDON - Investors battered European stocks, dumped the bonds of Spain and Italy, and bid the euro down against the dollar Monday after the collapse of weekend coalition talks in Greece edged that country closer to an exit from the euro zone.

            The sweeping market action dealt a blow to hopes that the damage of a Greek exit, should it occur, could be comfortably contained.

            In the market carnage, Greek stocks fell to two-decade lows, and Spanish bond yields leapt to levels not seen since the panic of last November. Shares of a big Spanish lender dropped 8.9% on the Madrid bourse, pulling the benchmark index down 2.7%. The Italian market also fell 2.7%, and the euro slid to $1.2845 late Monday in London, its lowest level in four months.



         The worry and the carnage are both running deep. And they should. Everything is now interlinked to such a degree that there is no possible way for a run on Greek banks or continued declines in the value of sovereign debt to be anything other than exceptionally destructive.

         Everybody owes everybody, and there&rsquo;s not enough productive economy to mask the insolvency of the system any longer.

         We saw this as Spain&rsquo;s sovereign yields vaulted, Spanish bank shares plunged, a not-so-happy linkage courtesy of the LTRO funding which enabled (and encouraged) Spanish banks to load up on Spanish debt. A virtuous circle morphed into a vicious spiral, each element weakening the other all the way down.

         That the US stock market is only down less than 5% from recent highs is a testament to the power of the liquidity that the Fed and US banking system have directed at keeping things elevated. However, this cannot last, at least not without another big quantitative-easing (QE) injection from the Fed. Without such an infusion, I am calling for another 2008-2009-style market rout of at least -30% but possibly as much as -50%.
         QE, stat!

         The reason we need another QE injection is that the same dynamic of debt destruction is again stalking the markets. As expected, the Fed has been waiting for a clear signal that it is time for more thin-air money, and again they are going to wait too long to prevent more damage from occurring.

         This time I am expecting a coordinated central bank action that will involve most or all of the major central banks of the OECD: Japan, UK, US, and Europe.

         One day, we will wake up to find some global message about the need for a coordinated response to a major crisis, and each of the central banks will be issuing some massive new amount of thin-air money. Of course the programs will be called something fancy that will require shortening to an acronym and will involve buying some form of debt (sovereign debt, but maybe also bank debt), and we&rsquo;ll track this via central-bank balance-sheet expansion.

         Perhaps we'll see this line go up a little steeper, or perhaps the same trajectory will be maintained a little longer:


         Regardless, more printing is on the way, because the alternative is the utter collapse of the entire Western banking system. And quite probably a few governments, too.

         To me, that is an unthinkable outcome, and one that I have every faith will be avoided at any every cost. It is the main reason that I am quite content to hold onto all of my gold at this juncture. Anybody selling physical gold here is either broke (and needs the money) or is just not paying attention.

         To drive the point home, consider this picture posted on Zerohedge taken from a German television production purported taken of the Ministry of Finance in Athens. A picture is worth a thousand words:



         By the time the Ministry of Finance is storing records in garbage bags and shopping carts, perhaps, just maybe, one might become a little concerned about loaning money to the Greek government. One hopes.
         If You Think Greece is Bad

         Greece, of course, is tiny compared to Spain or Italy. The situation in Spain -- which is big enough to matter -- is truly dire, very large, and getting worse.

         Spain has been playing fast and loose with the numbers, and that fact has now been revealed to the world. It&rsquo;s not a pretty picture.
            Spain Underplaying Bank Losses Faces Ireland Fate

            May 10, 2012

            Spain is underestimating potential losses by its banks, ignoring the cost of souring residential mortgages, as it seeks to avoid an international rescue like the one Ireland needed to shore up its financial system.
            The government has asked lenders to increase provisions for bad debt by 54 billion euros ($70 billion) to 166 billion euros. That&rsquo;s enough to cover losses of about 50 percent on loans to property developers and construction firms, according to the Bank of Spain. There wouldn&rsquo;t be anything left for defaults on more than 1.4 trillion euros of home loans and corporate debt.

            Taking those into account, banks would need to increase provisions by as much as five times what the government says, or 270 billion euros, according to estimates by the Centre for European Policy Studies, a Brussels-based research group. Plugging that hole would increase Spain&rsquo;s public debt by almost 50 percent or force it to seek a bailout, following in the footsteps of Ireland, Greece and Portugal.
            &ldquo;How can you only talk about one type of real estate lending when more and more loans are going bad everywhere in the economy?&rdquo; said Patrick Lee, a London-based analyst covering Spanish banks for Royal Bank of Canada. &ldquo;Ireland managed to turn its situation around after recognizing losses much more aggressively and thus needed a bailout. I don&rsquo;t see how Spain can do it without outside support.&rdquo;


         And this is just the losses that Spanish banks face on their real-estate portfolios. They are also now facing losses on all the Spanish sovereign debt that they bought with their LTRO funding as well. Very simply, Spain now needs a massive rescue, and soon.

         Meanwhile German citizens are all done with helping their southern neighbors. Merkel has used up all of her political capital on the rescues performed to date, and it is far from clear that any more help is politically doable here. The only way that I can see such help coming is under some terms other than drawing upon the savings of Germany&rsquo;s citizens. Printing, perhaps, but even that is a dicey political proposition here.

         If Spain drops here, then you can just set an egg timer for when Italy will go. And then France. The dominoes will rapidly fall from there.
         Why I Am Nervous These Days

         In describing JPMorgan&rsquo;s recent $2 billion (or is it $20 billion&hellip;or more?) trading losses and Jamie Dimon&rsquo;s (the CEO of JPM) awkward explanation of how certain hedging operations went wrong, the author of this next piece asks the obvious question:

            Does Jamie Dimon Even Know What Hedging Risk Is?

            But wait a minute? If you&rsquo;re hedging risk then the bets you make will be cancelled against your existing balance sheet. In other words, if your hedges turn out to be worthless then your initial portfolio should have gained, and if your initial portfolio falls, then your hedges will activate, limiting your losses. That is how hedging risk works. If the loss on your hedges is not being cancelled-out by gains in your initial portfolio then by definition you are not hedging risk. You are speculating.


         We still don&rsquo;t know the exact dimensions of JPM&rsquo;s losses here (my expectation is that more bad news will follow soon enough), but we can be sure that the big banks have not learned from the mistakes of the past and are still engaged in risky practices involving derivatives.

         Whatever JPM was up to (and I am still not entirely clear on what that was), it was not classic hedging, which serves to minimize losses, but something far more speculative.

         The reason this gives me such cause for concern is that it once again exposes a small portion of the derivative monster that will certainly be awakened when the European situation goes into full meltdown over the Greek, then Spanish, the Portuguese, then Italian situations.

         While derivatives are, in theory, a zero-sum game, and therefore could, in theory, be forgiven and forgotten in a pinch, the reality is that they&rsquo;ve been used to pretend that risk did not exist and therefore losses don&rsquo;t exist.

         The ugly truth here is that we are at the tail end of a most unfortunate credit bubble -- four decades of global excess by the OECD countries -- and there are massive losses to account for. Just as the offsetting counterparties involved in the subprime CDO and CDS mortgage crisis did not zero out because the losses they were allegedly papering over were all too real, the same will prove true of the derivative paper allegedly covering sovereign and corporate debts.

         Remember, the biggest holder of derivatives is the company that just demonstrated that it doesn&rsquo;t really understand the concept of hedging.



         Overall derivatives, especially interest-rate-linked derivatives, have increased by over $100 trillion since the crisis began. As JPM just evidenced, and as hinted at by the interminable hand-wringing over allowing Greece&rsquo;s paltry $78 billion in credit-default swaps to be triggered, real dangers lurk here.

         I wish I could analyze the situation better than the rest of the crowd that either screams catastrophe looms or coos that everything is safe, but I cannot. The situation is too opaque, too convoluted, and too complex to tease apart. I simply don&rsquo;t know what the true nature of the risk really is -- and the truth is, nobody really does. You might as well ask these analysts to tell you the exact size and shape of the first ten waves that will hit Laguna Beach exactly one year from now beginning at 12:05 p.m.

         Instead, what I can offer to you is the idea that instead of reducing (let alone eliminating) risk, all that derivatives have done is mask risk. This means that whatever losses are resident in a system with four decades of debt-fueled malinvestment and overconsumption are still there just waiting to be realized.

         It is this certainty that the losses remain, the risk is masked, and the bets have only grown larger that makes me very nervous these days as I contemplate the possible implications and repercussions of a Greek exit from the euro.
         To Sum Up Part I

         Given this environment of massive, rapidly-accelerating, and obfuscated risks, the prudent among us are undoubtedly wondering, How the heck is this going to play out? And how do I prepare for it?

         In Part II: What To Do When the Central Banks Blink, I lay out my forecast for how low asset prices will sink before the central banks once again attempt to ride to the rescue with gargantuan liquidity measures.

         But this next time won&#39;t work as it did in 2008, in my estimation. I see central banks being near the end of their ability to influence developments at this point. More liquidity will affect different asset classes differently, and for the first time raise real (and valid) concerns about the widescale debasement we are witnessing across the world&#39;s major fiat currencies.

         Putting your capital into those resources best positioned to appreciate most as the result of money printing and hold or increase their purchasing power in such an environment should be a top priority for every concerned investor.

         Click here to access Part II (free executive summary; paid enrollment required for full access).


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Grexit: RE Prays to the Porcelain God
« Reply #13 on: May 24, 2012, 12:51:14 AM »
Subtitle: Greece, the Gift that Keeps on Giving for the Doomer

All over the Kraut and FSofA MSM press now you are getting Speculation on the heretofore province of only Bloggers, which is how it will play out once the Greeks finally Grexit the Euro.

Despite the protestations that the problems can be "contained" and are already 'priced in' by the Market, that doesn't seem to true given that each day that a Grexit becomes more likely, the markets take ever bigger Hits here.  So at this point the LTRO of the ECB was all for naught, the DAX and FTSE are now negative YoY, despite the theoretically Hyperinflationary diareah of Euros a few months ago.

If TPTB can't keep the Stock Market Inflated by pitching out Funny Money to TBTF Banks, it doesn't seem to likely they can inflate the Real Economy either.  That does not mean an HI won't happen once all faith is lost in the system as a whole, just that it seems more likely right now we will get another 2008 style deflationary crash in many asset values.

The markets are reacting now just to the IDEA that a Grexit is forthcoming, it has not HAPPENNED yet.  The question here is what occurs when it DOES  happen, like with Lehman.  Like with Lehman though also, it does appear that at this point TPTB have lost patience and are psychologically prepared to call it Quits on the Greeks and just see what happens.  The Greeks aren't meeting any of the Austerity Targets, and of course they never will.  Their economy is imploding so fast that no tax hikes or Gobermint Layoffs can bring that economy into balance anymore.  So now they seem ready to let them GO and see how well all the preps they have made for this will hold up once TSHTF in earnest.

For their part in the new "elections" scheduled for mid-June, apparently 80% of the Greek population would like to stay in the EZ and on the Euro (since they are likely vicerally aware that a reissue of Drachma will give them only worthless Toilet Paper as a "Salary" or "pension").  When Economista Ph.D.s make statements like a 40% Devaluation will make Greeks "competitive" in the marketplace again, generally speaking it's once again time for me to Pray to the Porcelain God and heave the Technicolor Yawn.  In truth, the Greeks have never had a competitive economy druing the Industrial Era, they were always a Client State being funded through Debt and Vendor Financing, primarily of course by the Germans.  The Krauts need markets for their Carz, so they finance up Greek dependence on this paradigm and the Greeks promise to pay them back someday for it.  Someday is now TODAY, and the Greeks don't have the cash or the means to earn the cash, and they never will.

For their part, the Krauts blame the whole mess on the Greeks as Profligate Spenders who did not live within their means, but the fact is the Krauts ENABLED the Greeks to do this for their own self-aggrandizement.  At ANY time in the last 40 years the Kraut Banksters could have looked at the Greek Balance Sheet and said "Hey, they can't AFFORD this Loan", but they never did that.  If they did, then they would have lost the Konsumer Base of Greeks buying BMWs.

Clearly, the Greeks have to get out from under this insanity, but sadly such a rapid exit off the Industrial Economy is more or less the Social Equivalent of going Cold Turkey off Heroin after 40 year long addiction to the stuff.  Not pleasant.


Downturn And A Dead-End Greek Resolution
Submitted by Tyler Durden on 05/22/2012 21:33 -0400

Just when one thought it was safe to come out of hiding from under the school desk after the latest nuclear bomb drill (because Europe once again plans on recycling the Euro bond gambit - just like it did in 2011 - so all shall be well), here comes David Rosenberg carrying the launch codes, and setting off the mushroom cloud.

From Gluskin Sheff

Growing Tensions

Anti-austerity demonstrations in Frankurt. Massive emigration out of Spain. Student bombings in Italy. Suicides in Greece, along with a run on the banks. Camp David discord with Germany. Unusual nuclear war talk out of Russia.

The euro area fiscal and banking crisis is taking on a certain destabilizing geopolitical tone. One reason why gold — as a hedge against instability — is starting to stage a comeback. After touching a four-month low last week and moving into official correction mode of a 20% decline from the highs, the yellow metal then went off and enjoyed its best day since January on Thursday and posted a nice follow-through to finish off the week.

Spreading Global Downturn

Italy, Spain, Portugal, Greece, the Netherlands and Brazil are now facing economic contraction (Brazil is the world's seventh largest economy and despite a huge 350 basis point rate cut from the central bank, the country has suffered three straight months of declining economic activity). France is stagnating. China is slowing down rapidly. The only two countries I see that have managed to surprise to the upside are Germany and Japan (the latter just saw the government actually raise its assessment of the economy).

Beyond Greece, two areas of concern are clearly Spain's woefully undercapitalized banking system where bad debt ratios have hit all-time highs (the banks received a Moody's downgrade late last week too), and China's property market which continues to deflate — average prices in 70 major cities fell in April for the second month in a row (-1.2% YoY versus -0.7% in March ... maybe this is one of those events that we're supposed to assume will somehow stay contained). On a MoM sequential basis, prices declined 0.3% and have fallen now for seven consecutive months (Chinese policymakers over the weekend verbally hinted of a coming round of additional monetary stimulus along with a fiscal boost ... and the market bulls desperately needed to hear that).

It's not just the economies, either, but also stock markets. The likes of Greece, Spain, Italy, Russia, Brazil and even Canada have seen corrections of 20% or more from the cycle highs. The U.K. FTSE has corrected more than 10%. As the Financial Times reports, euro area banking stocks are actually lower now than they were at the panic troughs after Lehman collapsed nearly four years ago. The S&P 500 has given up two-thirds of its 2012 gains and is now below its level of a year ago. The VIX index is at a new high for the year and copper touched a four-month low to finish off last week. The FX market is consistent with this downbeat global growth assessment, underscored by the Aussie slipping to its lowest level since November and the NZ kiwi sliding to its lowest level since December. The winners have generally been the more defensive units — like the U.S. dollar, the yen, and sterling as well.

Greece is the Word

Well, look at the bright side. At least we'll know whether Greece decides to stay or go within the next month since the second-round election in June is being widely viewed as a referendum on continued euro area membership. Incredibly, the polls show that 80% of Greek citizens want to stay in. The problem is that they also want more bailout money with fewer stipulations.

What was considered unthinkable just a few months ago is apparently an event that now seems inevitable. The editorial in the current Economist runs with The Greek Run: It is Not a Good Idea for Greece to Leave the Euro, But it is Time to Prepare For its Departure. The weekend WSJ went with this on page All — Europe Weighs Exit Scenario. There's even a new name being bandied about over this departure prospect — a "Grexit". Surreal. All the more so since the Maastricht Treaty contained no provisions on any exit — there are no ground rules!

There are no clear winners from a Greek exit unless you are long confusion, turmoil and uncertainty. The country faces a depression no matter what it does or doesn't do — though reclaiming control over its currency and monetary policy could end up having long-run competitive benefits. The country would likely need a 30-40% devaluation to put its economy on a more competitive footing. The financial disruption, based on many estimates I have seen, would cost Europe something in the order of 2-2.5% of lost output. Greek's total public and private external liabilities amount to $540 billion U.S. dollars — the ECB, the IMF, banks and a swath of other foreign creditors would suffer deep losses.

Offline Surly1

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Re: Greeks Get Souvlakied
« Reply #14 on: May 24, 2012, 08:18:18 AM »
"There are no clear winners from a Greek exit unless you are long confusion, turmoil and uncertainty."

right in the DD wheelhouse.

"Grexit," eh?
"It is difficult to write a paradiso when all the superficial indications are that you ought to write an apocalypse." -Ezra Pound


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