"Rather Cut Off My Arm Than Pay Back What Greece Borrowed".... Varoufukis

[fhl]

What Merkel should do is send in the storm troopers and collect that debt from Greece. Collect it at the point of a gun. After all, the Eurozone is a union. A legal union. Greece has no right, no right whatsoever to determine their own fate. They are prohibited by law from exiting and not paying their debts. They must do what the central authorities of the Eurozone tell them. The Greeks need to be taught a lesson. A very expensive lesson. Merkel should send one of her most loyal lieutenants to Greece and order him to march to the sea to terrorize those filthy Greeks and teach them in no uncertain terms what's in store for them or any other country with the temerity to rebel.

OH, I'M SORRY. I'M SORRY. I got a bit confused. I thought for a second we were talking about Lincoln and the south. Of course we all know that Lincoln killing everyone in sight to preserve the union and collect the loot was completely necessary. But Merkel, on the other hand, must realize that it's monsterous to attempt to impose her will on the Greeks and get them to pay the money back they borrowed. Doesn't she know anything at all about human rights? The Greeks should be allowed to come, go, pay, not pay.....anything they want to do. It's their lives.

How things change in 150 years.

 

[loyek590]

What Merkel should do is send in the storm troopers and collect that debt from Greece. Collect it at the point of a gun. After all, the Eurozone is a union. A legal union. Greece has no right, no right whatsoever to determine their own fate. They are prohibited by law from exiting and not paying their debts. They must do what the central authorities of the Eurozone tell them. The Greeks need to be taught a lesson. A very expensive lesson. Merkel should send one of her most loyal lieutenants to Greece and order him to march to the sea to terrorize those filthy Greeks and teach them in no uncertain terms what's in store for them or any other country with the temerity to rebel.

OH, I'M SORRY. I'M SORRY. I got a bit confused. I thought for a second we were talking about Lincoln and the south. Of course we all know that Lincoln killing everyone in sight to preserve the union and collect the loot was completely necessary. But Merkel, on the other hand, must realize that it's monsterous to attempt to impose her will on the Greeks and get them to pay the money back they borrowed. Doesn't she know anything at all about human rights? The Greeks should be allowed to come, go, pay, not pay.....anything they want to do. It's their lives.

How things change in 150 years.

if you loan somebody some money, the risk is all on you, and you should know that going in

your leverage is to somehow damage the debtor if he doesn't pay

loan sharks break legs
credit card companies damage your credit rating

Who knows what governments do

 

[Tsing Tao]

What Merkel should do is send in the storm troopers and collect that debt from Greece. Collect it at the point of a gun. After all, the Eurozone is a union. A legal union. Greece has no right, no right whatsoever to determine their own fate. They are prohibited by law from exiting and not paying their debts. They must do what the central authorities of the Eurozone tell them. The Greeks need to be taught a lesson. A very expensive lesson. Merkel should send one of her most loyal lieutenants to Greece and order him to march to the sea to terrorize those filthy Greeks and teach them in no uncertain terms what's in store for them or any other country with the temerity to rebel.

OH, I'M SORRY. I'M SORRY. I got a bit confused. I thought for a second we were talking about Lincoln and the south. Of course we all know that Lincoln killing everyone in sight to preserve the union and collect the loot was completely necessary. But Merkel, on the other hand, must realize that it's monsterous to attempt to impose her will on the Greeks and get them to pay the money back they borrowed. Doesn't she know anything at all about human rights? The Greeks should be allowed to come, go, pay, not pay.....anything they want to do. It's their lives.

How things change in 150 years.

I admit to not paying attention to this thread lately, but....huh?

 

[Frederick Foresight]

Ricter is right here. No one questions Greece's liability in this ordeal. But why are all the bankers being given an implicit pass? A bank's credit department should be more than just a rubber stamp administered by a group of lemmings. It was their job to initially assess, and then monitor on an ongoing basis, the creditworthiness of their borrowers.

Remember the Latin American debt crisis of the 1980s? Was that too far in the distant past to be a warning that sovereign debt is not risk-free and requires thinking bankers? Okay, then how about the few crises after that in other parts of the world? There is no free lunch. Had the banks conscientiously monitored their "client" regularly and on an ongoing basis, then they would have forewarned and been in a position to implement remedial action sooner when the problem was less critical. But they were asleep at the wheel.

And unless the banks plan to somehow foreclose on Greece (?!) then they had better work out a plan that keeps the country alive and operating so that there remains the possibility of repayment.

https://en.wikipedia.org/wiki/List_of_sovereign_debt_crises

 

[Tsing Tao]

The culpability lies on both sides. The EU has been lending to Greece to recapitalize it's own banks - NOT because of some goodwill to provide to the Greek people. A mere 19 cents on every dollar loaned to Greece actually goes to the people, and it's actually less than that because the government takes a large portion of that just to run (though admittedly pensions and salaries are paid from that portion). The rest, 81 cents on the dollar goes BACK to the banks and people who made the loans.

The creditors know exactly what they're loaning to. It's a backdoor bailout that allows the ECB to re-capitalize loans made by EU country banks and move the debt over to the IMF and the ECB. It is precisely to socialize the losses that will come with the debt loaned to Greece. Those banks bought Greek debt (and got the nice interest returns) without any risk - because they were bailed out from their potential losses. We've seen this before, right here at home.

 

[Frederick Foresight]

The culpability lies on both sides. The EU has been lending to Greece to recapitalize it's own banks - NOT because of some goodwill to provide to the Greek people. A mere 19 cents on every dollar loaned to Greece actually goes to the people, and it's actually less than that because the government takes a large portion of that just to run (though admittedly pensions and salaries are paid from that portion). The rest, 81 cents on the dollar goes BACK to the banks and people who made the loans.

The creditors know exactly what they're loaning to. It's a backdoor bailout that allows the ECB to re-capitalize loans made by EU country banks and move the debt over to the IMF and the ECB. It is precisely to socialize the losses that will come with the debt loaned to Greece. Those banks bought Greek debt (and got the nice interest returns) without any risk - because they were bailed out from their potential losses. We've seen this before, right here at home.

I only addressed the lenders' incompetence rather than the moral hazard you suggest. Your assessment adds to the lenders' culpability.

 

[Tsing Tao]

Puerto Rico is in the exact same situation right now. We have an island nation that has spent insane amounts of money on it's government (living there, the big joke was "who is the island's #1 employer? Why the government, of course! - it sounds funnier in Spanish for some reason), it's utilities - owned again by the government, spent way beyond their means and have massive piles of debt. But instead of being able to declare bankruptcy to clean out the attic and restart, Puerto Rico's creditors are lobbying Congress to NOT change the law and not allow the island to declare bankruptcy (it's unique commonwealth status prohibits bankruptcy).

So once again, bankers are buying up politicians in order to force a country to pay an un-payable debt just to squeak out every last penny from a population that is now teetering on mass poverty and exodus to the United States.

Here's a good article on the subject if you'd like to read a bit more to get perspective. No water every two days. Power outages coming soon. Mass layoffs, rampant unemployment and exploding crime. Sounds like the Isle of Enchantment, doesn't it?

Who is at fault? Sure, Puerto Rico is for living way, way beyond their means for so long and having the fiscal responsibility of a 17 year old who gets a credit card for the first time. But the lenders knew what was going on and lent anyway, knowing that they could influence government to make sure they got the interest AND the full amount paid back.

When you buy a bond, the interest rate is supposed to take into account risk (let's ignore QE and stuff like that for a second). If you know you can get repaid because of your political lobbying, then it's a bonus to go after high yield debt, because it's not high risk.

It's a scam on the people - of massive proportion. Just like Greece.

 

[Frederick Foresight]

...It's a scam on the people - of massive proportion. Just like Greece.

Except the US banks are much more heavily invested in Puerto Rico. This will get interesting.

 

[fhl]

Yeah, I get it. Merkel is supposed to be reasonable, write off the debt that Greece can't pay and then loan them yet more money on humanitarian grounds that Greece won't pay back. And if she doesn't, she should be treated as an international pariah.

This coming right around the same time that the southern confederacy is supposed to be once again roundly denounced and shamed for not doing exactly what Lincoln and the central authorities demanded that they do, namely pay their taxes and not leave the union. And if they wouldn't accede to those demands, he would have them killed.

Isn't it strange that after hearing non stop monologues about Lincoln's heroism for killing the people who wouldn't do things the central authority's way, we jump right over to how Merkel should be reasonable in dealing with the Greeks.

Merkel is being infinitely more reasonable with the Greeks than Lincoln was with the confederate states. No matter that she is attempting to socialize the losses, which I of course oppose, she isn't attempting to deny them the right to leave the Eurozone or have them killed if they don't comply.

 

[Tsing Tao]

Yeah, I get it. Merkel is supposed to be reasonable, write off the debt that Greece can't pay and then loan them yet more money on humanitarian grounds that Greece won't pay back. And if she doesn't, she should be treated as an international pariah.

Not at all. Greece is best served outside the EMU. They all know it but they're so invested in maintaining the illusion the the EU cannot be exited (and aware that if Greece leaves and eventually succeeds what this will mean for Spain, Italy, France, Portugal, etc) that reality is no longer relevant. Merkel should simply cut off the Greeks and be done with it. That's what you do when you lend someone money and they don't pay. You stop lending them money.

This coming right around the same time that the southern confederacy is supposed to be once again roundly denounced and shamed for not doing exactly what Lincoln and the central authorities demanded that they do, namely pay their taxes and not leave the union. And if they wouldn't accede to those demands, he would have them killed.

Isn't it strange that after hearing non stop monologues about Lincoln's heroism for killing the people who wouldn't do things the central authority's way, we jump right over to how Merkel should be reasonable in dealing with the Greeks.

Merkel is being infinitely more reasonable with the Greeks than Lincoln was with the confederate states. No matter that she is attempting to socialize the losses, which I of course oppose, she isn't attempting to deny them the right to leave the Eurozone or have them killed if they don't comply.

Allow me to clarify that I have nothing in my comments about Lincoln or it's similarity or differences to the Greek scenario. I've not done the research on that topic to be qualified to voice an opinion either way. I can only speak to the situation in the EU.