At The Cafe Door: February 2012

Wednesday 29 February 2012

Elites Blow Up Greece on Purpose?

Can a return to the drachma save Greece as unemployment soars? ... The latest best-seller is the Greek translation of Heinrich Winkler's "Weimar 1918-1933: History of the First German Democracy", narrating how an indebted Germany pursued the same deflation policies under the Gold Standard as Greece is now pursuing under EMU – with the same results. The book culminates in the Reichstag elections of July 1932 when the Nazis and Communists between them won half the seats, and Weimar died. In November alone 126,000 Greeks lost their jobs in a country of 11 million, equivalent to three and a half million Americans in a single month. The unemployment rate jumped from 18.2pc to 20.9pc. This has not yet fed through into social breakdown. Greeks receive unemployment support for an average of thirty weeks, with a ceiling of €454 a month, according to Professor Manos Matsaganis from Athens University. Those with civil service tenure are placed on labour reserve for two years at half their basic pay, or a third of their actual pay."The voices of the desperate, the voices of Greeks are being provocatively ignored. Fear is giving way to rage and the risk of a social explosion can no longer be ignored by those who give orders and those who execute their lethal recipes," he said. – UK Telegraph

Greece really needs a year to prepare for total default

Greece really needs a year to prepare for total default
By Wolfgang Münchau

It was a deal nobody believed in – including those who negotiated it. We are now going to go through the motions but Greece will default, one way or the other. The question is when and how.

Paul Krugman observed in his New York Times blog that Greece was trapped between an austerity programme that forever aggravates the debt problem, and a default that will not be feasible until the country reaches a primary surplus – a budget surplus after payment of interest on debt. This is not expected to happen until 2013. As a result, he wrote, the Greek political establishment would have no choice but to wait and see.

Greece sinks to its knees

Greece sinks to its knees
The recent bail-out, which imposes strict new austerity measures on the Greeks, will deepen a crisis that has already driven up the suicide rate by 40 per cent. David Blair reports from Athens on a nation that eyes the future without hope.

If popular protest in the graffiti-stained heart of Athens is the most obvious sign of Greece’s burgeoning crisis, a handful of volunteers gathered inside a suburban office provides a quieter, but no less painful, symbol of the country’s agony. These restrained, dedicated people meet in the modest headquarters of Klimaka, a mental health and social integration charity serving as Greece’s version of the Samaritans.

8 Reasons Why The Greek Debt Deal May Not Stop A Chaotic Greek Debt Default

The global financial system is not a game of checkers. It is a game of chess. All over the world today, news headlines are proclaiming that this new Greek debt deal has completely eliminated the possibility of a chaotic Greek debt default. Unfortunately, that is simply not the case. Rather, the truth is that this new deal actually "sets the table" for a Greek debt default. When I was studying and working in the legal arena, I learned that sometimes you make an agreement so that you can get the other side to break it. That may sound very strange to the average person on the street, but this is how the game is played at the highest levels. It is all about strategy. And in this case, the new debt deal imposes such strict conditions on Greece that it is almost inevitable that Greece will fail to meet some of them. When Greece does fail, Germany and the other northern European nations may try to claim that they "did everything that they could" but that Greece just did not "live up to its obligations". So does this mean that we will definitely see a chaotic Greek debt default? No. What this does mean is that the chess pieces are being moved into position for one.

The following are 8 reasons why the Greek debt deal may not stop a chaotic Greek debt default....

DEDICATED TO THE GREEK EAGLES

ΘΕΜΗΣ ΑΔΑΜΑΝΤΙΔΗΣ - Σαν σημαδέψεις αετό

When the Eagle flies

his shadow is being planed

like a lord over the mountains

But he is afraid of the earth

When the eagle flies

Do not envy his mien

He seeks during his flying

his lost love

If you scar an Eagle

do not wound his wings

scar upons his heart

get together his dreams

As an Eagle falls on the earth

the sky falls with him

God sends this as a gift

to cover his body

when the Eagle is in pain

and he beats his wings

a love will tyrannize him

which is lost and has gone

He flies within the clouds

He is looking for her

he stumbles on the earth

and his spirit leaves

If you scar an Eagle

do not wound his wings

scar upons his heart

get together his dreams

As an Eagle falls on the earth

the sky falls with him

God sends this as a gift

to cover his body

The Greek Eagles

Ήλιος Θεός ~Βασίλης Σκουλάς

Dedicated to the Greek Eagles(our fighter pilots) who fly over the Aegean Sea every day

I'm leaving, I'm flying away like the cloud

I am a friend with the God of Sun

I'm getting drunk with the nectar of the air

I am hugging the earth and the sky

And without the wings I am not afraid

The blue (of the sea) is a warm hug

I will be sleeping in the glorious mountains

In Aegean I will be giving kisses.

I am looking for freedom in the air

I am no longer a mortal

I am going up and I m loving

Without a body, a golden eagle

Greece’s Lenders Have The Right To Seize National Gold Reserves

Greece’s Lenders Have The Right To Seize National Gold Reserves

Greece’s Lenders Have The Right To Seize National Gold Reserves

Gold’s London AM fix this morning was USD 1,776.50, EUR 1,334.41, and GBP 1,130.45 per ounce.

Yesterday's AM fix was USD 1,754.75, EUR 1,325.04, and GBP 1,116.32 per ounce.

The size of Greece's debt

EU Commission: Recession in Greece Deeper “Than We Thought! Sorry for the Incovencience”

EU Commission: Recession in Greece Deeper “Than We Thought! *Sorry for the Incovencience*”

This must be a joke. A bad joke. In fact, a very bad joke. Recession in Greece will lead within the EU with a massive 4.4 percent decline is the prediction of the EU Commission for 2012. This grim forecast comes just a few days after the new bailout was signed with the blessing of all Greece’s lenders. Also Spain and Portugal, that received bailout as well, will not see growth coming, but deeper recession.

Crisis Appeasement: The new Greek Bailout as a ‘Euro in Our Time’ moment

According to the official narrative, the euro was saved (again) by preventing a ‘disorderly’ Greek default and against the background of Mario Draghi’s Central Bank ‘activism’. So much for the official narrative. For in my estimation, the sight of our leaders proclaiming such victory against the Crisis has a strong whiff of the moment Neville Chamberlain returned from Munich, to tell a relieved British public that agreement had been struck and to promise them ‘Peace in Our Time’. All he had, of course, achieved, was to buy time for War to become stronger, more menacing, lethal beyond comprehension. Similarly, our European leaders only indulged in a form of Appeasement. Not of Germany (since our leaders are, for better or for worse, Germany) but of the Crisis. A Crisis that is, under the cover of inane celebrations of ‘resolution’ and ‘bailouts’, growing ever stronger, more divisive, efficient in the manner in which it eats into the very foundations of the eurozone.

How Greece could take down Wall Street

In an article titled "Still No End to 'Too Big to Fail,'" William Greider wrote inThe Nation on February 15th:

Financial market cynics have assumed all along that Dodd-Frank did not end "too big to fail" but instead created a charmed circle of protected banks labeled "systemically important" that will not be allowed to fail, no matter how badly they behave.

That may be, but there is one bit of bad behavior that Uncle Sam himself does not have the funds to underwrite: the $32 trillion market in credit default swaps (CDS). Thirty-two trillion dollars is more than twice the U.S. GDP and more than twice the national debt.

CDS are a form of derivative taken out by investors as insurance against default. According to the Comptroller of the Currency, nearly 95% of the banking industry's total exposure to derivatives contracts is held by the nation's five largest banks: JPMorgan Chase, Citigroup, Bank of America, HSBC, and Goldman Sachs. The CDS market is unregulated, and there is no requirement that the "insurer" actually have the funds to pay up. CDS are more like bets, and a massive loss at the casino could bring the house down.

The improbable Greece plan

The improbable Greece plan
By Felix Salmon

Greece is now officially a ward of the international community. It has no real independence when it comes to fiscal policy any more, and if everything goes according to plan, it’s not going to have any independence for many, many years to come. Here, for instance, is a little of the official Eurogroup statement:

Germany and Greece

Germany and Greece
Wolfgang's woes

WOLFGANG Schäuble is, in many ways, the strongest – perhaps even the last – Europhile in the German government. But open the pages of Greek newspapers and there he is, the German finance minister depicted in Nazi uniform. It is not just the inflammatory Greek press that dislikes him. The Greek president, Karolos Papoulias, lashed out at him last week: “Who is Mr Schäuble to insult Greece? Who are the Dutch? Who are the Finnish?”

Mr Schäuble is, first and foremost, the German finance minister. As such his job is to protect the interests of the German tax-payer, from both the demands of his fellow ministers and the begging bowl held out by his European colleagues. As creditor-in-chief, one would expect him to be toughest in imposing conditions on Greece before granting a second bail-out.

For Greece, "Tomorrow" Has Arrived

Tomorrow Has Arrived

The day dawns with a deal for Greece that is full of smoke and mirrors; lies and deceptions. It is a deal pretty much as expected and, as I have said before, now the realities are going to be confronted. Europe has spun the agreement and the Euro has rallied some and the S&P futures are up but the next few weeks, I am afraid, will hold some serious disappointments. The page turns today because now we are about to confront not what is told to us but the actuality of what has been presented to us and just what will happen as a result.

How many European Union officials does it take to change a light bulb?

None. There is nothing wrong with the light bulb; its condition is improving every day. Any reports of its lack of incandescence are an illusional spin from people that unfortunately know how to add and subtract. Illuminating rooms is hard work. That light bulb has served honorably, and anything Mark Grant says undermines the lighting effort.

Greek PSI Terms Leaked; Imply Greek Redefault Within 2 Years

Greek PSI Terms Leaked; Imply Greek Redefault Within 2 Years

The first details of the Greek bond deal are leaking out via Reuters, and we now learn the reason for the Greek bond sell off in recent days:
UNDER GREEK DEBT SWAP, PRIVATE SECTOR WILL GET 3% COUPON ON BONDS FROM 2012-20, 3.75% COUPON FROM 2021 ONWARDS [2021... LOL]
PRIVATE SECTOR WILL ALSO GET A GDP-LINKED ADDITIONAL PAYMENT, CAPPED AT 1 PCT OF THE OUTSTANDING AMOUNT OF NEW BONDS
GREEK BANK RECAPITALISATION NEEDS MAY NOW BE AS MUCH AS 50 BLN EUROS-DEBT SUSTAINABILITY ANALYSIS

Which in turn explains the sell off in pre-petition Greek junior triple subordinated bonds (i.e., those held by private unconnected investors, which are subordinated to the Troika, to the ECB, to the Public Sector and to UK-law bonds in that order). With the EFSF Bill "sweetener" amounting to about 15 cents (and likely less), the fact that bondholders will receive a 3% cash coupon, a cash on cash return based on Greek bonds of 2015 trading at just 20.7 cents on the euro, indicates that investors are expecting to collect 1 cash coupon payment, and at absolute best 2, before redefault, as buying a 2015 bond now at 20.6% yields a full cash return of 21% (15%+3%+3%), thus the third coupon payment is unlike to come. And since there is a substantial upside risk premium kicker to bond buyers,so in reality the investing market is saying that Greece will last at best about a year following the debt exchange (if it ever even happens) before the country redefaults.

Sunday 19 February 2012

Reform, support and trust in the eurozone Reform, support and trust in the eurozone

Reform, support and trust in the eurozone

About a year ago I was at a meeting addressed by Luxembourg’s Prime Minister and euro group spokesman, Jean Claude-Juncker, about the latest state of play in the resolving the Greek debt crisis. During his presentation Juncker came up with a phrase that has resonated ever since – to be honest, it is the roadblock that threatens to unravel the single currency and erode the basis of the EU: ‘support fatigue in the north, reform fatigue in the south’.

Greece is being destroyed by 'respectable' fanatics

Greece is being destroyed by 'respectable' fanatics

The EU, which boasts that solidarity is its founding principle, is forcing Greece into destitution and chaos

Homeless men in Athens. 'Europe is now offering to revive Greece by impoverishing it; to heal it by harming it.' Photograph: Oli Scarff/Getty Images

Nick Cohen

Greek democracy is being destroyed. Not by soldiers marching with insane slogans on their lips about the inevitable triumph of the German master race, international proletariat or global jihad, but by moderate men and women who think themselves immune to ideological frenzy.Greece's enemies are novel, but no less frightening for that: extremists from the centre ground; the respectable running riot.

Rescuing Greece Beyond the edge Whatever happens to Greece, the failings of the euro zone have not been addressed

Rescuing GreeceBeyond the edgeWhatever happens to Greece, the failings of the euro zone have not been addressed

BILL HICKS, a comedian, used to joke that there must be a “ledge beyond the edge”. How else could the survival of Keith Richards be explained? What goes for rock stars also appears to go for Greece, which has been on the brink of a second bail-out package for weeks.

Deadlines have already been missed. A meeting of the Eurogroup of finance ministers, scheduled for February 15th, at which the terms of a deal were supposed to have been endorsed, was postponed the day before. Euro-zone ministers wanted more details of proposed spending cuts as well as written assurances that Greek politicians won’t renege on the deal once a general election, pencilled in for April 8th, is over. Greece has consistently missed its targets to date; trust among its troika of rescuers—euro-zone governments, the IMF and the European Central Bank (ECB)—that it will stick to a new agreement is low.

Greece will be excluded from the Euro-zone after the French elections! This is stated by Russian Newspaper Izvestia

Breaking news! The Russian newspaper Izvestia (www.izvestia.ru) stated tonight that Greece will be expelled from the Euro-zone right after the French elections.

During the 7 years that I have been married to my wife Olga, I’ve learned to respect the journalism and scoops of the Russian newspapers. This might sound strange for Western readers, but many times news was published in Russian newspapers first that could only be read in the Western press hours or days later. Therefore I take this news message in the Izvestia very seriously and show an almost integral version of it.

We Are All Greeks Today — Or Soon May Be

In recent years, in the wake of some nasty bit of bullying by Russia or China, some American politicians sought to show empathy for the victims with phrases like: “We’re all Georgians today” or “We’re all Weegers today.”

Such statements were doubtless well-meant, but they never resonated with most Americans. There are few historical, cultural, political or economic links between Americans and Georgians in the south Caucuses, or Uighurs (pronounced Weegers), an ethnic minority in China.

Things are very different when it comes to the current agony of Greece. There are millions of Greek-Americans who play an important part in our national life, and often still have close ties with Greece. Many millions more Americans have visited Greece and come to love the country. This is one reason why it might be said, watching the news about its present agonies, that we are all Greeks today.

Europe’s black cygnets

Although the Greece default is the very obvious European black swan at the moment I thought it would be prudent to point out two other things happenning in Europe over the next 12 months that certainly have the potential for evolving from a cygnet into something bigger.

Elections

There a number of elections occurring across Europe over the next 12 months that have the potential to de-rail the current European status quo.

Greece itself is supposed to be having a national election in April which is adding to the current debacle. Greek party leaders have more than one eye on their electorates at the moment which means the bailout negotiations have politicking on top of all the other issues. The consensus appears to be that Greek politicians are playing to their electorates, but will fold at the last minute. The idea being that they will be able to say to their voters that they put up a strong fight, but will ultimately do what is demand by the rest of Europe. This is obviously a bet on a politician’s behaviour, so there is obvious downside risk.

Greece elections, however, are not the greatest concern in my mind. Greece will be defaulting in some form or another this year, the elections influence is simply a question of how ‘messy’ that default becomes.

Forget about preventing default in Greece, control it says Europe

Though Athens is still taking steps to contain the damage, most of Europe is skeptical that Greece will dodge a default.

By Michael Steininger, Correspondent / February 17, 2012

BERLIN

Greece’s European partners are increasingly skeptical that Athens can avoid default. The highly indebted country is working feverishly to secure a debt write-off to avoid default, but international investors see even that as a default of sorts.

With only weeks to go before a crucial bond repayment date, statements from European leaders reveal a growing mistrust in the Greek political class's ability and willingness to implement deficit cutting measures. Without those measures, Greece will not receive a necessary second bailout from international lenders, and without the bailout, it will likely default when its debt comes due in March.

According to some analysts, Europe is readying for a Greek bankruptcy.

Would there have to be chaos?

Would there have to be chaos?

Stephen Reid
Events Coordinator

Technocrats scaremonger about a Greek default, but to what extent does the country even need to rely on international trade?

"A disorderly default would set the country on a disastrous adventure. It would create conditions of uncontrolled economic chaos and social explosion. The country would be drawn into a vortex of recession, instability, unemployment and protracted misery…”

This was the warning delivered by Greek PM Lucas Papademos on Sunday as he and his technocratic cronies attempted to sell austerity by painting a picture of something even worse in the event of default. Finance Minister Evangelos Venizelos claimed “the social costs that come with these [austerity] measures are contained in comparison to the economic and social catastrophe that will follow if we don’t adopt them… We have to sacrifice a lot so as not to sacrifice everything”.

Europe and the euro A way out of the woods The euro may survive brinkmanship over Greece, but the road to recovery will be long and hard

Europe and the euroA way out of the woodsThe euro may survive brinkmanship over Greece, but the road to recovery will be long and hard

LAST year every new jolt in the euro crisis sent financial markets into a spin. This year they have become blasé. They barely even registered the torching of buildings in Athens, nor the last-minute cancellation of a meeting of ministers that was supposed to agree on a new aid package for Greece.

Although a calm is welcome, nonchalance is not justified. A deal probably will be done on Greece, and there are promising signs of reform all over the continent. But, the problems ahead for the euro zone remain huge. The crisis is, in effect, moving from an acute to a chronic phase.
In this section

Faith

The wind's not always at our back;

the sky's not always blue.

Sometimes we crave the things we lack

and don't know what to do.

Sometimes life's an uphill ride

with mountains we must climb.

At times the river's deep and wide

And crossing takes some time.

No one said that life is easy--

there are no guarantees,

so trust the Lord continually

on calm or stormy seas.

The challenges we face today

prepare us for tomorrow,

for faith takes our fear away

and peace replaces sorrow.

~Clay Harrison

Saving the Cancer: ‘Greece sacrificed in name of dying EU’

Saving the Cancer: ‘Greece sacrificed in name of dying EU’

RT
Thursday, February 16, 2012

Greek party leaders have sent written commitments to Brussels saying they will stick to the agreed austerity measures even after the general elections in April. There are still EU demands Athens failed to fulfill, which led to the cancellation of a key meeting of Eurozone finance ministers. Greece is still struggling to secure the second bailout from its international creditors, without which it’s due to default next month.

For more on that RT talks to MEP and leader of the UK Independence Party, Nigel Farage.

Charlemagne 1789 and all that The history of fiscal federalism may offer the euro zone some lessons

Charlemagne1789 and all thatThe history of fiscal federalism may offer the euro zone some lessons

TRYING to coerce a group of sovereign states to follow common rules is ultimately doomed. Leagues and confederacies are like feudal baronies: breaches lead to anarchy, tyranny and war. That was Alexander Hamilton’s case for a strong American federal government. After the adoption of America’s constitution, Hamilton became treasury secretary. The federal government assumed the war debts of the ex-colonies, issued new national bonds backed by direct taxes and minted its own currency. Hamilton’s new financial system helped transform the young republic from a basket-case into an economic powerhouse.

Decision on new bailout for Greece deferred

An employee of the state-owned Labour Housing Organisation (OEK) allegedly threatens to jump off the company building in Athens on February 15, 2012, after the government decided to shut down the organisation and lay off its staff. Greece is under pressure from the EU and the IMF to reduce state spending in order to qualify for loans and avert a debt default in March.
Photograph by: ANGELOS TZORTZINIS, AFP/Getty Images

BY HENRY CHU, LOS ANGELES TIMES

LONDON - Amid rising rancor and distrust, European finance officials held off Wednesday on approving a second bailout for Greece, saying that the nation's leaders had yet to fulfill all the requirements to receive the money.

The decision came despite a last-minute scramble from Athens and capped a day of escalating tensions between Greece and its eurozone partners, including unusually blunt remarks from top Greek officials, who accused other Europeans of trying to boot their country out of the eurozone.

GRECE. Une vielle dette nazie qui fait tache

GRECE. Une vielle dette nazie qui fait tache

Pascal Piedbois-Lévy

Une dette contractée de force par l'Allemagne nazie auprès de la banque nationale grecque et jamais honorée avive la rancœur des Grecs vis-à-vis de l'Allemagne.

A l'heure où la faim est redevenue une préoccupation importante pour certains Grecs, le nouveau plan d'austérité qui leur est imposé provoque la haine. Athènes s'embrase. Haine envers le gouvernement, qui semble prêt à tout accepter pour préserver sa crédibilité face à l'Europe "des puissants" et des "technocrates". Haine vis-à-vis de l'étranger, et en particulier de l'attitude du couple franco-allemand. Une attitude qui, aux yeux des Grecs, ressemble de plus en plus à du mépris. Et dans ce pays de "club med", comme on le murmure sournoisement à Berlin, certains voient dans cette situation une occasion de ressortir les vieux dossiers.

Russia Is Ready to Use Military Power to Defend Iran and Syria says Russia's Joint Chiefs of Staff

Brussels’ fatal therapy

The Euro Group has postponed its decision on whether or not to grant a new aid package to Greece, fearing that the austerity plan adopted by Athens will not be implemented. But rather than the brutal slashing imposed by Brussels, the country needs to be restructured. And rather than being stigmatised, it is in need of solidarity.
Ludwig Greven

UBS Counts The Nails In Greece's Coffin

UBS' economics research group do not believe that Greece is saved but hope that it is at best ring-fenced. In an excellent Q&A follow up, Stephane Deo and his team address the role of the EFSF, the IMF package and its austerity measures, the ECB's participation, and finally the likelihood of the PSI being successful and its fallout. As Greek 2Y yields break 200% (obviously price is the critical part but these yields are stupendous) and bridge loan discussions appear for the March 20th maturity, perhaps UBS view of the IMF 'walking away' is more credible if they manage to ring-fence a recap of the banking sector. We would be surprised if contagion was contained and, as we have seen before, that risk leaks out somewhere and unintended consequences (or unknown unknowns) tend to pop up just when we least expect them. Perhaps the FT's note this morning that deadlines are slipping rapidly is the bright yellow canary in the Piraeus coal-mine as'time is running out' for a solution here very quickly (as seemingly is the desire).

keep walking greece

EU Crisis: Will Greece wreck the Eurozone?

One European scenario shows Germany dominating Europe, forcing austerity on its southern neighbours as a price for staying in the eurozone. A second scenario suggests a eurozone break-up in protest against humiliating austerity.

Greece has just voted for a new austerity package after a heated Cabinet debate led to the exit of several ministers. Optimists see this as proof that, when push comes to shove, eurozone members will do what was earlier politically unthinkable. But pessimists argue that Greece is notorious for making promises that it does not implement, and this is just one more.

Despite pledges over a year ago to privatise massively and slim down the civil service, not a single significant Greek asset has been privatised, nor a civil servant sacked. Greeks view public sector assets and jobs as untouchable, and are furious at having to sacrifice these at Germany's behest. Strikes and agitations galore have erupted against the proposed austerity, which may imply deep recession for years.

EU urged to let Greece leave euro

EU leaders must plan for the "orderly withdrawal" of Greece from the single currency, the Conservative leader in the European Parliament said today.

Martin Callanan said the next EU summit, scheduled for March 1, should not seek more cures for the Greek economic crisis but should concentrate on preparing for the country to drop out of the eurozone.

Meanwhile the European Commission insisted that Brussels and the other member states still wanted Greece to stay in the eurozone, despite delays by Athens in agreeing strict conditions for receiving a second EU-IMF bailout in time to avoid looming bankruptcy.

Many euro leaders want Greece to leave (Surprised?)

MICHAEL BABAD

Greece says it's ready. Really
Greece's finance minister promises to meet all the conditions needed for fresh bailout funds by the time his colleagues in the euro zone hold a key telephone conference today. Honest.

Finance ministers of the 17-member monetary union originally planned to meet face-to-face, but decided it wasn't worth the trip and they'd just chat by phone because Athens wasn't ready as of yesterday.

Euro zone ponders delay of 2nd Greek programme

Euro zone proposal looks at delaying bailout

* Package could be put off until after Greek elections

* Central goal remains to move ahead in coming days

By Luke Baker and Jan Strupczewski

BRUSSELS, Feb 15 (Reuters) - Euro zone finance officials are examining ways of delaying parts or even all of the second bailout programme forGreece while still avoiding a disorderly default, several EU sources said on Wednesday.

Delays could possibly last until after the country holds elections expected in April, they said

WE ARE ALL GREEKS NOW says Iceland!!!

Tuesday 14 February 2012

Analysis: Greece heads for record books as economy slumps

Βy Alan Wheatley and Scott Barber

(Reuters) - Entering the fifth year of recession,Greece is writing its name in the book of unwanted records for one of the deepest economic slumps of modern times.

The Greek economy shrank 6.8 percent in 2011, leaving the level of output an estimated 16 percent below its pre-crisis peak. Unemployment has soared to more than 20 percent from 7.7 percent in 2008.

Europe’s Debt Crisis: Back from the Brink?

Europe’s Debt Crisis: Back from the Brink?

By MICHAEL SCHUMAN

So it looks like Greece will dodge a default, at least for now. The Greek parliament passed a new $4.4 billion austerity package on Sunday, which includes a painful 22% cut in the minimum wage and 150,000 public sector job losses. Greece’s euro zone partners were demanding the country approve these painful measures in return for a second, $170 billion bailout. The vote clears the way to finalizing that bailout – first approved way back in July – along with an arrangement between Athens and its private-sector bondholders to restructure some $265 billion of the nation’s sovereign debt.

This Is What An Economic Depression Looks Like In The 21st Century

Do you want to see what a 21st century economic depression looks like? Just look at Greece. Once upon a time, the Greek economy was thriving, the Greek government was borrowing money like there was no tomorrow and Greek citizens were thoroughly enjoying the bubble of false prosperity that all that debt created. Those that warned that Greece was headed for a financial collapse were laughed at and were called "doom and gloomers". Well, nobody is laughing now. You see, the truth is that debt is a very cruel master. Greeks were able to live way beyond their means for many, many years but eventually a day of reckoning arrived. At this point, the Greek economy has been in a recession for five years in a row, and the economic crisis in that country is rapidly getting even worse. It was just recently announced that the overall rate of unemployment in Greece has soared above 20 percent and the youth unemployment rate has risen to an astounding 48 percent. One out of every five retail stores has been shut down and parents are literally abandoning children in the streets. The frightening thing is that this is just the beginning. Things are going to get a lot worse in Greece. And in case you haven't been paying attention, these kinds of conditions are coming to the United States as well. We are heading down the exact same road as Greece went down, and the economic pain that this country is eventually going to suffer is going to be beyond anything that most Americans would dare to imagine.

Greece lies bankrupt, humiliated and ablaze: is cradle of democracy finished?

Greece lies bankrupt, humiliated and ablaze: is cradle of democracy finished?
The violence, looting and chaos engulfing the country underlines growing rift between the Greek people and their politicians

Greece got rid of its military dictators in July 1974. But almost four decades later, as the debt-stricken country endures a crisis that some might say is almost as bad as the long dark night of their rule, it is still impossible to protest in the cradle of democracy.

When tens of thousands of Greeks tried to demonstrate peacefully in front of the large sandstone parliament building on Sunday night, they were met almost immediately with volleys of teargas. The toxic fumes were the authorities' answer not only to the popular opposition unleashed by the prospect of yet more austerity but the fear that underpins it. For angst, like uncertainty, is now haunting Greece.

How Everything Changed When Greece Joined The Euro

How Everything Changed When Greece Joined The Euro

Joe Weisenthal

As mentioned earlier, the forthcoming edition of the NYT Magazine has a great feature on life in Greece today, and the human side of total economic collapse.

The following passage really stands out:

“This is a country with 300 days of sunshine per year,” he began, proceeding into a rambling, fast-paced discourse, the central point of which was that in buying into the euro, Greece tried foolishly to mimic other countries and in so doing shifted away from its natural advantages and way of life. “Working in offices is good in countries where there is lots of rain,” he said. “Greeks don’t need to be in offices. Athens has doubled in size in a couple of decades — it’s now half the population of the country! Two-hour traffic jams, man! After we joined the euro, the mentality totally changed. Suddenly it was like if you still live in the small village where you were born, you must be retarded. So Greeks left their islands and their villages and moved to the city, and they became maniacs. They started expecting loans and handouts.”

GREECE AND THE RETURN OF THE ECONOMIC ‘DEATH SPIRAL’

The lesson of 2008 was that stimulus prevented a new Great Depression. Without similar drastic help, Greece will now default.

During the latter part of 2008, central bankers around the world worried secretly that the death spiral was approaching. The concern was that it was too late to stop economies crashing. In the event, concerted international action on both monetary and fiscal policy prevented collapse – although they did get pretty darn close to the precipice.

Interest rates were cut to zero. Banks and even car companies were rescued. Massive amounts of liquidity were made available. There were tax cuts, cash for clunkers and even fridges, along with schemes to help the young unemployed. Plus the collapse came very quickly.

Germany Speaks: Not So Fast On The Greek "Deal"

Europe's now painfully transparent policy of demanding that Greece decide to default on its own is becoming so glaringly obvious, we truly fear for the intellectual capacity of everyone who ramps the EURUSD on any incremental "europe is saved" rumor. As a reminder, yesterday we said, in parallel with the Greek irrelevant MoU vote: "The only real questions are i) what the Greek population may do in response to this latest selling out of a population "led" by an unelected banker, which if history is any precedent, the answer is not much, and ii) how Germany will subvert this latest event, and put the bail [sic] back in Greece's court once again." We documented on i) earlier today - a couple of burned down buildings, a few vandalized store fronts, lots of tear gas and that's about it, as people still either don't believe or can't grasp the seriousness of the situation. As for ii) we now get the first indication that not all may be well on Wednesday.

Marshall Auerback: Greece – A Default is Better Than the Deal on Offer

By Marshall Auerback, a portfolio strategist and hedge fund manager

Pick your poison. In the words of Greek Finance Minister Evangelos Venizelos, the choice facing Greece today in the wake of its deal with the so-called “Troika” (the ECB, IMF, and EU) is “to choose between difficult decisions and decisions even more difficult. We unfortunately have to choose between sacrifice and even greater sacrifices in incomparably more dearly.” Of course, Venizelos implied that failure to accept the latest offer by the Troika is the lesser of two sacrifices. And the markets appeared to agree, selling off on news that the deal struck between the two parties was coming unstuck after weeks of building up expectations of an imminent conclusion.

“The secret of happiness is freedom. The secret of freedom is courage.”

Thucydides

Germany's Carthaginian terms for Greece

Germany's Carthaginian terms for Greece
The last time Germany needed a bail-out from world creditors, it secured better terms than shattered Greece last week.

By Ambrose Evans-Pritchard

The US, Canada, Britain, France, Greece, and other signatories at the London Debt Agreement of 1953 granted Chancellor Konrad Adenauer a 50pc haircut on all German debt, worth 70pc in relief with stretched maturities. There was a five-year moratorium on interest payments.

The express purpose was to give Germany enough oxygen to rebuild its economy, and to help hold the line against Soviet overreach. This sweeping debt forgiveness caused heartburn for the British - then in dire financial straits, themselves forced to go cap in hand to Washington for loans. The Greeks had to forgo some war reparations.

Greece’s parliament approves austerity measures

BERLIN — Greece’s Parliament approved far-reaching spending cuts early Monday in a bid to secure a bailout and stave off bankruptcy, as buildings burned in Athens, set ablaze by furious protesters who fear that European demands to reshape their economy will further exacerbate a crippling recession.

The measures, which will slash the minimum wage, trim a fifth of government workers and slash entitlement spending, are wrenchingly unpopular in a country already seized by 21 percent unemployment and dim prospects for the future. But European leaders say that Greece will eventually go bankrupt — even with the new $182 billion bailout — if it does not make the changes they are requiring.

As Greece stares into the abyss, Europe must choose

As Greece stares into the abyss, Europe must choose

The way out of the financial crisis faced by Greeks requires a choice about what kind of Europe we want

Six inches from the riot policeman's shield outside the Greek parliament last Friday, a tall, pale boy was shouting at a man who could have been his uncle: "It's your generation that brought us to this point, but it's mine that has to pay for it. You have to take responsibility for what's happening here." Across the road, a middle-aged woman roared at the line of cops: "Traitors! Collaborators! We're Greeks. You're beating up your mothers and your sisters." Another, her head wrapped in a pink scarf, screamed at the parliament: "They've drunk our blood, we don't have anything to eat. They've sold us to the Germans. My child owes money, they're about to take her house. I hope they all get cancer." All of them were in an ecstasy of rage, reluctant to go home and lose that temporary release.