Greece Watch...

[Tarrel]

Greece's problem (whether they stay in the Euro or leave the Euro) is that they need to earn more as a country within the world.

If they leave the euro then Greece would become an extremely attractive tourist destination once again. Far more so than it is now, because it would be very cheap for western Europeans to go on holiday there.

True, however there may be a very ugly period during, and immediately following, the exit from the Euro. This could taint the country as a tourist destination, at least in the medium term. Hope not though.

[UndercoverElephant]

Greece's problem (whether they stay in the Euro or leave the Euro) is that they need to earn more as a country within the world.

If they leave the euro then Greece would become an extremely attractive tourist destination once again. Far more so than it is now, because it would be very cheap for western Europeans to go on holiday there.

True, however there may be a very ugly period during, and immediately following, the exit from the Euro.

Whatever happens now, Greece is heading for a very ugly period one way or another. There's no easy way out.

[UndercoverElephant]

That indeed is likely to be true, but the Greek pensioners would find life a lot more expensive.

That would partly depend on what sort of life the Greek pensioners chose to live. Imported cars and consumer goods would certainly be more expensive, but the very fact that far fewer people were spending money on expensive imports would help to balance Greece's books, and a lot of those imported goods do not bring people happiness anyway.

[adam2]

Agree, a yes vote will not only mean some unpleasant austerity, the president has stated that he will resign in the event of a yes vote. That presumably means fresh elections with all the uncertainty and delay that results.

A no vote will mean default and no more funding from the rest of Europe.

[raspberry-blower]

I agree with this.

Still no question - on the assumption you have read the article.

That article you linked reads to me like an internal document in an Investment Bank by the head researcher explaining why the latest investment moves have fared badly. This is because I have worked, Back Office, in Investment Banking and I have had the dubious pleasure of reading such articles.

There are some deliberately misleading interpretations of the events. For example, Greece did not receive a generous payment from the IMF - that payment instead went to Greece's creditors, who are mainly French and German banks.

However, that is not the major issue here. This is because the major issue here is that this is a systemic fault that was designed into the Euro.
Firstly, there is evidence that when Greece joined the Euro, Goldman Sachs cooked the books to allow Greece to circumvent the EU Maastricht rules. Where was the risk management strategy here? Why wasn't due diligence followed?

To compound the issue, French and German banks were keen to lend out Greece loads of money without taking due regard about Greece's ability to payback such loans. Again, where was the risk management strategy? Where was the due diligence?

There is too much debt in the system. A debt problem is never solved by adding more debt to it. Ever.

Greece should default and start making overtures to the AIIB instead.
The world will go back to a gold standard - but it will be a long painful road ahead..

[biffvernon]

Here's a more than interesting interview; Paul Mason and Yanis Varoufakis. I know who I like best.

http://link.brightcove.com/services/pla ... 6784507001

[biffvernon]

And what, pray tell, do you think of Pablo Iglesias, John H? Another academic with a cv as long as your arm pretending to be a politician?

Just because someone has a long CV does not mean they are right.

Not 'just because' of course, but there are associations that should not be ignored. Today the Guardian carries statements from people who no right-thinking person would describe as fools, calling for a 'No' vote tomorrow: Joseph Stiglitz, Paul Krugman, Thomas Picketty and Jeffrey Sachs. Are we to disregard their opinions in favour of John Hemming's?

[johnhemming2]

Are we to disregard their opinions in favour of John Hemming's?

This is another call for fallacy man.

Truth is truth because it is true not because it is the opinion of one or more individuals.

In the legal system, however, it is different and truth is based upon the opinion of senior lawyers (judges).

[vtsnowedin]

I have to wonder what "austerity measures" they are talking about that go beyond paying their bills on time? There is of course no reason to not have some borrowed money but the borrowers need to know how they are going to raise the cash to pay the loans back on time and the lenders should be pretty sure that they have a good plan and will deliver on it.
If the Greeks think they can borrow more then they can or intend to pay back year after year they need a reality check and at the same time if the banks keep lending with no legitimate basis to expect repayment there is no reason why any government or group of people should be expected to bail them out.

[raspberry-blower]

The Economist is making the call that the No vote will win

Zero Hedge: No camp at 60%

If they're wrong, it'll go down as bad a call as "Dewey beats Truman" in 1948..

[adam2]

"Greek banks nearly out of cash"

http://www.bbc.co.uk/news/business-33403008

Despite the strict limits placed on withdrawals it is stated that Greek banks only have enough cash for a very few days.

[raspberry-blower]

Today's must read:
Interfluidity: Greece

When the game was up, when the global house of credit cards collapsed in the late Aughts, European leaders had a choice. They had knowingly and purposefully brought weak states into the Eurozone, because they genuinely, even nobly, wished to build a large, strong, United Europe. When they did so, they understood there would be crises. A unified Europe, they had always claimed, would be forged one crisis at a time. The right thing to have done for Europe at this point would have been to point out the regulatory errors and misaligned incentives that encouraged profligate lending and enabled corruption and waste among borrowers, and fix those. Banks that had made bad loans would acknowledge losses. The banks themselves would have to be restructured or bailed out.

But “bank restructuring” is a euphemism for imposing losses on wealthy creditors. And explicit bank bailouts are humiliations of elites, moments when the mask comes off and the usually tacit means by which states preserve and enhance the comfort of the comfortable must give way to very visible, very unpopular, direct cash flows.

The choice Europe’s leaders faced was to preserve the union or preserve the wealth, prestige, and status of the community of people who were their acquaintances and friends and selves but who are entirely unrepresentative of the European public. They chose themselves. The formal institutions of the EU endure, but European community is now failing fast.

[Little John]

another key paragraph:

With respect to Greece, the precise thing that European elites did to set the current chain of events in motion was to replace private debt with public during the 2010 first “bailout of Greece”. Prior to that event, it was obvious that blame was multipolar. Here are the banks, in France, in Germany, that foolishly lent. Not just to Greece, but to Goldman’s synthetic CDOs and every other piece of idiot paper they could carry with low risk-weights. In 2010, the EU, ECB, and IMF laundered a bailout of mostly French and German banks through the Greek fisc. Cash flowed into Greece only so it could flow out to rickety banks. Now, suddenly, the banks were absolved. There were very few bad loans left on the books of European lenders, everyone was clean, no bad actors at all. Except one. There were the institutions, the “troika”, clearly the good guys, so “helpful” with their generous offer of funds. And then there was Greece. What had been a mudwrestling match, everybody dirty, was transformed into mass of powdered wigs accusing a single filthy penitent (or, when the people with their savings in just-rescued banks decide to be generous, a petulant misbehaving child). [antidote]

[johnhemming2]

I think the Economist is right (having looked at the early returns). The question now is what humanitarian aid can be arranged for Greece given the destuction of their payment system.

It may be that they go for the bail-in option.

[3rdRock]

The Troika and MSM are currently carrying out a successful hatchet job on Alexis Tsipras and the Syriza party.

Local difficulties in Greece are being screened across Europe in an attempt to undermine any remaining credibility he may have had, even with many of the Greeks who were initially supportive of his policies and prepared to vote 'No'.

I would now be amazed if Syriza succeeds in Sunday's referendum. Tsipras and his eloquent colleague, Yanis Varoufakis, will be consigned to history and the Greek people to a life of servitude and indignity.

A very sad end to what looked like a promising campaign to fight back against inequality.

19.20pm: The 'No' vote = 61% so far ..... 40% already counted.

Currently eating my own words - I'm delighted to say.