Seeking Alpha


Send Message
View as an RSS Feed
View kmi's Comments BY TICKER:
Latest  |  Highest rated
  • Greek crisis talks head into day two [View news story]
    It is quite unfortunate that Greeks so wholly dislike the notion of leaving the Euro. Tsipras felt his mandate included never risking Grexit and thus walked back his agenda in deference to Greek desire to stick with the Euro.

    A Euro exit for 5 years is very high risk. Should Greece take control of its reform agenda, and successfully grow the economy - highly likely by all accounts - the Eurozone will be dealt a severe blow to its credibility.

    Also, a clear path will have been blazed to the method by which other countries may choose Euro exit. The Euro, already revealed as not much more than a glorified currency peg, will likely appreciate to reflect that reality, and bond yields across the Eurozone should continue to diverge.
    Jul 12, 2015. 09:22 AM | 5 Likes Like |Link to Comment
  • Greek crisis talks head into day two [View news story]
    Meh. Greece is where it is under the guidance of the creditor austerity programs.
    Jul 12, 2015. 09:11 AM | 3 Likes Like |Link to Comment
  • Greek crisis talks head into day two [View news story]
    Things scaring off creditors are on the one hand the understanding that even under the current deal another bailout may well be needed since it's really just more austerity and doesn't imply the economy will grow - while the debt burden quite explicitly will thus worsening the debt-GDP - and this also is going hand in hand with the fact that the agreement explicitly requests acknowledgement of Greece's debt as unsustainable and likely in need of restructuring.

    On the other hand is that although Syriza accepted the majority of the creditors proposals, they did so by crossing their "red lines," so they have requested creditors do the same on several key issues. It will be very hard to get the creditor side to do - or more precisely, it will be very hard to get the *Eurogroup* to do so. The EC and the IMF seem to be on board, it is the Eurogroup which is pushing back.

    Add to that the realization that having failed to force regime change on Greece, the creditors face the prospect of implicitly acknowledging Syriza's legitimacy and allowing Syriza to move forward with running the country for the next few years.
    Jul 12, 2015. 09:07 AM | 3 Likes Like |Link to Comment
  • Partial victory for bond insurers in Puerto Rico case [View news story]
    Fantastic comments here laterre.
    Jul 8, 2015. 07:34 PM | Likes Like |Link to Comment
  • Will Greece be in or out? [View news story]
    Every comment of yours that I debunk, you simply change topic, and make declarative statements as if they were fact.

    You clearly have a very tenuous grasp of what is going on outside of 'Greeks are profligate spenders!'

    Let me help:

    Their pre-2012 debt is important because, contrary to virtually every restructure in history, they exited the restructure owing more than when they entered it, in solidarity with EZ countries and in order to protect the EZ financial system.

    Greece already had an untenable debt to gdp (as a result of the treatment of its debt, which you can get a better handle on here:, and agreed to undergo Troika led reform to bring its ratio down, and in order to ensure repayment to Troika creditors. The austerity agenda subsequently failed by every metric, bringing its debt-gdp ratio higher as a result of a contracting economy and rising unemployment.

    And here we are, with your phenomenal comment that "Greece borrowed the money and they borrowed the money for a reason; they were broke."
    Jul 8, 2015. 09:47 AM | 1 Like Like |Link to Comment
  • Will Greece be in or out? [View news story]
    "My bad!! I thought this fiscal irresponsibility started 20 years ago!! Who knew this is a recent, 5 month old development!!"

    It's ok to be wrong when you can admit it.
    Jul 8, 2015. 09:26 AM | 1 Like Like |Link to Comment
  • Will Greece be in or out? [View news story]
    Rope a Dope, since you seem to be so well informed, please advise as to the total burden of debt before Greece's 'bailout/restructure' in 2012, and immediately after, thanks.

    Also, can you elucidate to whom and by what mechanism Greece came to owe 350b?
    Jul 8, 2015. 09:15 AM | 1 Like Like |Link to Comment
  • Will Greece be in or out? [View news story]
    Where have you been the last 5 months?

    The Syriza government took over with the existing bailout program already not working.

    From the IMF:

    " The 2014 primary fiscal balance fell short of the program target by
    1.5 percent of GDP. Moreover, the proposed reduction in the primary surplus targets from 3 percent of GDP in 2015 and 4.5 percent of GDP in 2016 and beyond to 1 percent of GDP in 2015, 2 percent in 2016, 3 percent in 2017, and 3.5 percent in 2018 onwards would add cumulatively about 7 percentage points of GDP to financing needs during 2015–18. Over the next three years, needs will be €13 billion more from this factor relative to the last review. "

    The Syriza admin proposed that with austerity failing, pro-growth policies would enable Greece to pay its debts, to which it encountered the intransigence of the ECB which force placed it into ELA. Which only made things worse.

    From someone more eloquent than myself:

    "The OECD estimate that the output gap in Greece is currently well over 10%. In plain English that means that those currently unemployed could be producing something useful and GDP could easily expand by at least 10% without generating any increase in inflation. (Greek inflation is currently around -2%.) That would not only be in the interests of Greece, but also in the interests of Greece’s creditors. It is a way of achieving the primary surpluses that the Troika wants without inflicting more pain. It is also absolutely undeniable that further austerity would tend to reduce GDP, just as past austerity has done. So everyone can be made better off by giving Greece the breathing space so that its economy can recover."

    There is no question that the Troika austerity policies caused the very budgetary shortfalls you discuss, and there is no question growth oriented policies would have - could have - very quickly fixed the problem.
    Jul 8, 2015. 09:06 AM | 2 Likes Like |Link to Comment
  • Will Greece be in or out? [View news story]
    "Austerity" is a word very common in economics. Let me help you, from Wikipedia:

    "In economics, austerity is a set of policies with the aim of reducing government budget deficits. Austerity policies may include spending cuts, tax increases, or a mixture of both."
    Jul 8, 2015. 08:33 AM | 1 Like Like |Link to Comment
  • Will Greece be in or out? [View news story]
    Rope a Dope:

    Feel free to enlighten us how it is "money previously borrowed."

    Also, please enlighten me as to where I am wrong in elucidating how Greece will be ejected from the EZ, outside of a blanket dismissal.

    Otherwise your comment is useless.
    Jul 8, 2015. 08:30 AM | 1 Like Like |Link to Comment
  • Will Greece be in or out? [View news story]
    "Europe’s leaders cannot show Greece the door because this is not stipulated in any treaty."

    Here is what will happen. No deal will mean no funds for Greece. No funds means Greece can't pay 3.5b Euro due the ECB July 20. Greece is in a liquidity crisis created by its central bank - the ECB - while the banks are still solvent. The ECB created the liquidity crisis by not increasing its mandated ELA based on Tsipras call for a referendum (a purely political motivation). That created the mess which ensured Greece was unable to pay the IMF 1.5b Euro July 30. But still, the banks are currently considered solvent.

    When Greece misses the payment to the ECB July 20, it will be insolvent.

    The ECB can use that as cover to cut off ELA entirely, which will necessarily end as a hard default.

    Let me repeat that:

    The ECB, cut off ELA in order to force Greece to miss a loan payment to the ECB, which will effectively end up forcing Greece into a hard default.

    That, friends, is what the Eurozone has come to. And therein lies the real drama: The Eurozone has shown that a politically unappealing nation state engaging in policy disapproved by the Eurogroup CAN INDEED BE EJECTED FROM THE EUROGROUP.

    Let that sink in.
    Jul 8, 2015. 08:15 AM | 2 Likes Like |Link to Comment
  • Will Greece be in or out? [View news story]
    "Greeks they have still 30% higher average pensions (833 EUR)"

    You have a recent (as in, circa 2014) link for the figure? I'd love to see it.
    Jul 8, 2015. 08:04 AM | 1 Like Like |Link to Comment
  • Will Greece be in or out? [View news story]
    " have never appeared to have any sort of 'in this together' posture "

    It was all about "in this together" when the European banking system was saved by the sacrificial lamb Greece in 2010 and again in 2012. Now that Draghi's bazooka (the 1 trillion Euro ESM) is in play and legislation has been developed to ringfence the EZ from financial crisis it's all about "profligate spendthrift lazy".

    The bailout in 2012 doubled the debt, imposed austerity that created a worse debt to gdp, blew up unemployment, and now Greeks are somehow 'irresponsible'. It's been an awesome rewriting of history.
    Jul 8, 2015. 08:03 AM | 1 Like Like |Link to Comment
  • Will Greece be in or out? [View news story]
    Greece is already in "huge trouble that will last decades". And its problem is an uncooperative central bank and misguided austerity programs which have contracted GDP to untenable levels. Greece is already living the reality of Grexit every day.
    Jul 8, 2015. 07:58 AM | 4 Likes Like |Link to Comment
  • Will Greece be in or out? [View news story]
    Here is the text of Tsipras speech, from Reuters

    "I find myself here only a few days after the resounding verdict of the Greek people, after a decision we took to give the floor directly, to ask the Greek people directly, for the their views and be an active part of the negotiations affecting their own future. A few days after these negotiations we've now been given a mandate to redouble our efforts to get a socially just and economically sustainable solution to the Greek problem, without repeating the mistakes of the past which condemn the Greek economy to a period of never-ending impasse of austerity which trapped our economy in a recessionary vicious circle.

    Let me assure the house that, quite apart from the crisis, we will continue with our reform undertakings. Let's not forget that for the past five years the Greek people have made a tremendous effort for adjustment but this has exhausted the resilience and the patience of the Greek people.

    We demand an agreement with our neighbors but one which gives us a sign that we are on a long-lasting basis exiting from the crisis, which will demonstrate that there's light at the end of the tunnel.

    The proposals we have made to our partners are credible reforms with an acceptable degree of burden sharing without recessionary effects. We need to ensure the medium term funding of our country with a development and growth program because otherwise we won't exit from this crisis. Our prime objective must be to combat unemployment and to encourage entrepreneurship.

    I am not one of those politicians who claim that those responsible for the woes of Greece have been wicked foreigners. Greece has got to the verge of bankruptcy because for many many years, the governments of Greece have been creating a clientelist governments, they have strengthened the hands of corruption, they have created and nurtured a nexus between political and economic power.

    They have allowed tax evasion to run riot and it's not right. In accordance with a survey by Credit Suisse, 10 percent of Greeks currently have 56 percent of the national wealth and 10 percent in a time of austerity, they have not shared the pressure.

    This is a major injustice and the programs, the bailout programs have not made things better. They were supposed to bring about reforms but those reforms have not made things better, on the contrary they have made things worse. We were supposed to bring about reforms but those reforms have not, and too, the tax collection mechanisms which collapsed under the excessive zeal of enlightened terrified national officials.

    None of the reforms have helped when it comes to the nexus between the political establishments, the oligarchs and the banks in that three-sided ring. None of the reforms have improved the functioning, the efficiency of the mechanisms of the state which have now become inured to working in the selfish interests, the vested interests rather than the common good.

    European history is a history of conflict but conflict leading to compromise, it's also a history of convergence and enlargements, it is a history of unity and not divisions, and this is why we talk about a united Europe and let us not allow it to become a divided Europe.

    At this time, we are called upon to produce a productive and fair compromise which will avoid a break-off in negotiations and this is in line with the traditions of European Union."
    Jul 8, 2015. 07:53 AM | 1 Like Like |Link to Comment