The next time some pezzonovante talks about cutting off aid to Greece, find him and give him a...

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DeepValueLover Comments (5133)
 
The only way to save the euro is to destroy it. And by "it" I mean its value.

The ECB must (and I believe, will) print @ least €5 trillion and simply buy ALL Greek and Portuguese debt.

In exchange the Greeks would be FORCED to abide by a European budget of restrained spending and reasonable growth.

If they balk they are out IMMEDIATELY.

Meanwhile the ECB issues long-dated eurobonds to ring fence Spanish and Italian debt. In exchange Spain and Italy must buy back the bonds over a series of years (say, 20) much like the American "Maiden Lane" program.

The idea is that as Italy and Spain slowly emerge from recession they can run off both the bubble housing stock and (frankly) allow the WWII and Baby Boomer era retirees to die off so that pension obligations begin to get back in line.

It will be slow and not fun but your monetary union survives.

And if Italy and Spain decline to participate hey then they can take their chances in the open market with the bond vigilantes.

Good luck to them.
16 Jun 2012, 10:24 AM Reply Like

Mad_Max_A_Million Comments (1173)
 
"The ECB must (and I believe, will) print @ least €5 trillion"
That is sort of what Stewart Varney said yesterday.
That rumor now has legs.
So why would it matter who wins the election?
Either way, the banks get their funny money.
And Greeks are not going to cough up the rest of the cash no matter who wins.
Just saying....
16 Jun 2012, 12:13 PM Reply Like

sr1977 Comments (318)
 
Right, Greek pro-bail out party wins, banks win. Greek anti-austerity party wins, QE commences & banks win.

Heads the banks win, tails somebody else looses.

Same as it ever was.
16 Jun 2012, 04:46 PM Reply Like

dividend_growth Comments (2776)
 
It's not that easy.

If ECB really gets into QE mode and brings Euro to parity with Dollar, the Fed is going to flood the market with even more money, and the Japanese will be forced to follow suit.

That's the dream scenario for all gold bugs and silver worms.
17 Jun 2012, 09:05 AM Reply Like

tiger8896 Comments (363)
 
I am no expert but I have a hard time believing that article. Yes it might be true that direct infusion might amount to 15B but the payment of Greek debt rolling over and creating more debt to pay Greece's bills probably amounted to the bulk of the 410B.
16 Jun 2012, 10:55 AM Reply Like

newbietech Comments (183)
 
Helping someone to pay off their debt still counts as aid. The money received from selling the debt has after all been consumed by Greece and not their creditors.
And let's not talk about smacks, who knows where one will eventually land.
16 Jun 2012, 11:54 AM Reply Like

untrusting investor Comments (9879)
 
new,
But that's the point, almost all of the old debt has not been "paid off". It was simply rolled over into new debt, except for about 15 billion euros.

It makes no difference if the money from the old debt was spent into the Greek economy 2 or 5 years ago. It's gone. And likely into mainly non-productive expenditures at that.

If you brought a house for 1 million in 2007 and today it is worth 250K then the 750K of old value is gone. It's lost. How does rolling over your 1 million old mortgage into a new 1 million mortgage constitute paying off any of the debt or loss? It doesn't.
16 Jun 2012, 12:13 PM Reply Like

Jolly_Rancher Comments (525)
 
Bank deposits should be nationalized, i.e. completely held in a government banking institution -- in the US and the EU. Banks, or then more properly called loan originators, can then apply for reserves which they get only after meeting strict collateral requirements. Deposits would be guaranteed 100% with no limit, and banks would be put on a short leash. Fannie and Freddie should be shut down. I see no reason the government should be in the mortgage business.
16 Jun 2012, 12:10 PM Reply Like

Paul Price Comments (1471)
 
All the bailouts did was repay the old creditors (who made bad bets and should have lost their money) by substituting all citizens (who never willingly lent money to these spendthrift governments) as 'bagholders'.

This is the same process that made US citizens responsible for paying off the UAW and AIG's counterparties etc.
16 Jun 2012, 02:33 PM Reply Like

Herr Hansa Comments (2948)
 
Hate the banks if you want, but they didn't hold a gun to Greek politicians heads and force them to borrow beyond their ability to pay back the debt. After Greece entered the Euro, they became, in effect, the ultimate sub-prime borrower.
16 Jun 2012, 03:28 PM Reply Like

Paul Price Comments (1471)
 
The banks should be forced to write off the bad loans. The losses shouldn't be foisted on the innocent citizens of Europe.
16 Jun 2012, 06:05 PM Reply Like

Herr Hansa Comments (2948)
 
They already were, except the Norwegian Sovereign Wealth Fund and one in Finland. When the Greek government implemented Collective Action Clauses retroactively, they forced bond holders to take a 75% reduction. The remaining 25%, with only a few exceptions, was paid not in cash, but in more debt at a lower interest rate, that will not be fully paid until at least 10 years later, assuming that new debt ever gets paid back at all. So all bondholders already took losses in this.

It would not surprise me if Greece decides to simply default. While they would be locked out of debt markets, at this point I cannot imagine anyone stupid enough to loan them even more.

The only "losses" to the rest of Europe is to the value of the Euro. However, as that decreases it actually helps other countries pay their bills. There is an inflation cost, but considering the strength of the Euro now, that's a small price to move towards better growth.

The Greek government borrowed the money. Even though they have forced bond holders to accept less payment in return. If anyone stole from the innocent citizens of Europe, it was the Greek government, and not the banks.
16 Jun 2012, 06:24 PM Reply Like

kmi Comments (3847)
 
And that right there folks is why Greece will not exit the Euro.
16 Jun 2012, 03:39 PM Reply Like

lahru Comment (1)
 
just as the stack of champagne glasses displays, the top glass can only hold so much and the glasses on the bottom are getting fuller with each "Greek Bailout". They must have been very dry before this all started.
16 Jun 2012, 04:07 PM Reply Like

Herr Hansa Comments (2948)
 
This view from a prominent Greek news organization:

"The source of Greece’s problem and the reason it got into such trouble with its ever expanding public debt is a structurally clientelistic and profoundly inefficient, bloated state. With few exceptions over the last three decades, public resources have been largely used to satisfy individual or corporatist demands, above all by creating state jobs, and distributing all kinds of particularistic benefits and advantages."

http://bit.ly/KDfbem

Definitely interesting reading. Written by Greeks for Greeks.
16 Jun 2012, 10:11 PM Reply Like

Debutant Comments (1204)
 
So far in the past 2 years Greeks blamed their bankruptcy on :

- Angela Merkel
- Germany
- Nazis (for stealing Greece's gold in WW2)
- German companies (alleging that they have bribed "corrupt Greek politicians")
- "Corrupt" Greek politicians (alleging that they have been bribed by German companies)

The way it is going, in 5 years from now Greeks may come to the point where Greeks blame the entire Greek system of the past 30 years, which they collectively enjoyed, for their own financial and economic destruction. Then, and only then we may hear Greece working on a serious alternative plan on how to get out of this mess.

p.s.: As I'm typing, Greeks are voting to choose one of "their politicians" to lead Greece as from tomorrow.
17 Jun 2012, 08:13 AM Reply Like

rsswg Comments (20)
 
Pezzonovante - I love it!!
20 Jun 2012, 07:41 AM Reply Like