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The author mentioned that. Did you really read it?Quote:
Originally Posted by Hazir
If you started this to talk about Greece in particular, and not troubled debt and bail-outs in general, then I apologize for bringing up the Bigger Picture and will post this stuff elsewhere.Quote:
While analysts focus on Greece, they are missing the rhinoceros in the flower garden.
Yes I did read it, and it also explains why the piece is rubbish. The problems of Greece can't be made into a proxy for the problems of California. It could only be used as a very lopsided example of the risks the entire USA is facing.Quote:
Originally Posted by GGT
That is why the piece is rubbish.
We sure as hell better stop bailing out California. Declaring CA insolvent and getting rid of the overpaid lazy bureaucrats would be great. Sadly as long as Democrats are running things in this country and utterly under the the thumb of unions we won't see that.
Hmm, so it's the article you don't like and find to be rubbish? What Greece (and CA) are facing IS lopsided, when compared to the larger groups who will do their bailing (EU/US).
But like I said, if you want to keep this thread pristine for Greece only, then okay!
You seem to missing the fact that the EU is not a country and Greece is not a part of another country. Sovereign debt is not the same as municipal debt.
(IMF) No, I'm not missing those facts. The parallels are ideological or conceptual. :bored:Quote:
Originally Posted by Loki
But hey, let's keep this to Greece! How about those strikes?
Quote:
Feb. 24 (Bloomberg) -- Greek police fired tear-gas and clashed with demonstrators in central Athens after a march organized by unions to oppose Prime Minister George Papandreou’s drive to cut the European Union’s biggest budget deficit.
Hooded youths threw rocks, marble and other objects at riot police after the march today to the country’s Parliament building. At least one person was detained.
“People on the street will send a strong message to the government but mainly to the European Union, the markets and our partners in Europe that people and their needs must be above the demands of markets,” Yiannis Panagopoulos, president of the private-sector union GSEE, told NET TV yesterday. “We didn’t create the crisis.”
Half a million civil servants, who held a one-day strike on Feb. 10, today joined forces with GSEE, which represents 2 million workers, after EU warnings that Papandreou’s government needs to bring in new taxes and make more spending cuts if it fails to rein in the largest budget gap of all 27 EU member states.
Air-traffic controllers, customs and tax officials, train drivers, doctors at state-run hospitals and school teachers walked off the job to protest government spending cuts that will freeze salaries and hiring and cut bonuses. Journalists also joined the strike, creating a media blackout.
The only thing coinciding is that we are talking about debts in both cases. Other than that Greece and California have nothing in common. Greece is the canary in the mine for other countries, not for subdivisions of other countries. For a default of Greece all the rest of the EU needs to do is swallow hard. For a default of California you'd need a complete rearrangement of the way things are done in the USA. You'd have to make several steps back in the process of federalisation that your country has went through.
The Greeks can protest and strike all they want; it's not going to get them the money or help they need to not default. For the people who would need to provide that money strikes in Greece counts for next to nothing. Seriously pissing off German, French and Dutch voters does. Greeks may whine all they want about the proposed austerity being unfair (actually a majority of them actually think it's necessary), German and Dutch voters have got a much better case claiming that they don't see why they should accept raising their retirement age to 67 in order to pay for the Greeks to remain able to retire well before they are 60.
No you don't need to do much if CA defaults. People don't lend money to CA expecting the Federal Government to back it. Otherwise CA would enjoy the same credit rating as the United States.
Sounds like it's getting tougher now, at least from Germany's stance. (?)
Both sides, but if you look at the bigger picture the Greeks are simply doing what is demanded of them. They just make it sound as if they are not willing to do so, which is a bit stupid. It only gains them short term internal political gains and it prolongues the most harmful period of insecurity. The more robust they behave in their efforts the less help they will actually need and the sooner they can start their road to recovery. On a sustainable basis even.Quote:
Originally Posted by GGT
Things that stun me about this, but don't actually surprise me:
1) How, whenever reporters approach random Greeks in Athens to comment about this, a high proportion say something like "We invented Democracy, the world owes us" or "The Germans still owe us what the Nazi's stole" or some inane remark about thieving bankers.
2) Goldman Sachs and other banks are being investigated for lending money to Greece that amounts to about 1/10th of 1% (IE 00.01%) of the debt their took out over the past decade.
Well, even the Greek PM at one point started to play on German guilt, so it shouldn't surprise you people in the street do it. Anyway, we're used to this Greek nonsense and typically it gets ignored.Quote:
Originally Posted by Dreadnaught
The issue is not the amount of money borrowed but the way in which it was accounted for. On the one hand I was a bit surprised by this investigation. To me it seems clear that the real culprit is the Greek government of those days. But maybe the rationale is that the banker made it possible for Greece to cheat and therefore should be held accountable too. As far as I know nobody really knows if the cooking of the books was, besides dishonest, also illegal. We'll see.
Yes, I should have clarified -- the Greeks are the ones who cooked the books. I don't see what is so terrible about lending [relatively] small money to governments. But alas these are the times.
Hazir, are Dutch and Germans expecting Greece to raise retirement age up to same as theirs? If not, why not? :noob:
I think most Dutch and German people simply think they shouldn't pay at all for anything Greek. The retirement age is just another thorn in the side for them. People really don't think part of their retirement should go towards paying for people who cheated their way into the club.
It makes life difficult for the leaders of nothern nations; they don't want to help Greece, and their voters will punish them if they do but the fall out of a sovereign debt default in Greece will cause more damage to their economies than pulling out their checkbook will. Actually, I'm not certain who has the problem here; Greece or it's rich creditors.
Greece has an entitlement attitude that seems to bother everyone.
To Dread, GS is supposedly the financial wizard of the world, with teams of attorneys and people who should know better. Helping Greece hide debt violates at least the spirit of regulation law. I wouldn't be so quick to give them the banker's pass around the board....
Banks do not lose money.Quote:
Originally Posted by RandBlade
Banks create money out of thin air and then they lend it.
Unlike loses in productive companies where losses represent real assets, in the banking industry a loss is failure to fulfill repay promises of money that was created out of thin air, a broken promise on money that did not exist.
Imagine this. Someone deposits $10 in my bank. The current reserve requirement ratio allows me to create $100 out of $10 of deposits. Then I create $100 in my accounting books and now I can lend $100.
You come and borrow $100 and then you default. How much money did I lose? Nothing. I only would need to reduce $100 from the assets, but since they were never backed by real assets, but merely a promise to repay money that did not exist, the loss is not real.
Nope. Greek politicians cooked the books. Population pays the price.Quote:
Originally Posted by Dreadnaught
But in a world in recession, Greece is likely to attract foreign European jobs as conditions of Greeks get worse.
German and French workers, for example, enjoy conditions that should not be applicable to greek workers.
Companies may see moving to Greece as a source of profit.
So the rest of Europe will pay the price of what Greek politicians (not greek population) did.
This is the same dynamics that caused US jobs to go to China.
Well, we still don't know if it was admissible back then and if not under which rules. It could be that GS will be casted as the bank that helped the villains, but that is by no means certain yet.Quote:
Originally Posted by GGT
They may also just be a service provider for a debtor who needed a creative way to roll over his debts. It wouldn't be the first time.
None of this has any bearing on how the actions of the Greeks are viewed by the way, everybody is seriously but seriously pissed at them and their whining isn't making it any better. It's about time we start pointing out they were on the wrong side too during the Kosovo crisis. Based on the same ridiculous notions of how the world functions.
The pissed-off element is fairly clear. Greece has had government corruption for a long, long time. They need to get their house in order before expecting other countries to bail them out.
(That's the reason my sister's in-laws left Greece in the first place. Those who were whistle blowers became targets.)
Bank loans are registered in books as "CDO" or "Collateralized Debt Obligation", which is some sort of a collateralized account receivable, and in case of borrower default the inexistent, for the bank the promised CDO asset (money created out of thin air) becomes a real asset with a foreclosure. Where is the loss there? Well, interests were not collateralized so it is recorded as a loss, unlike productive companies where losses come when assets are physically destroyed or when expenses exceed revenue, so the repay promise on inexistent money is not a real loss.
...and EU allowed it...Quote:
Originally Posted by GGT
You're an idiot.Quote:
Originally Posted by ar81
Even in your insanely simplistic model, the banks did lose money. The banks lost the $10. Then how much did the banks pay the employees who dealt with your loan every step of the way, lawyers to try and enforce it from start to chasing it up unsuccessfully at court to finish it, the buildings the bank owns where you went into to borrow the money etc, etc, etc
Yes there's a multiplier, but you can't multiply nothing - the banks had their own money involved, and they spend their money every step of the way. Besides you should know that multiple banks have been reporting massive losses in recent years while some banks have failed - while more would have without state support. So you're ignorant too.
I do not think I am ignorant or idiot, perhaps someone else is.Quote:
Originally Posted by RandBlade
First, the bank did not lose the $10. When you deposit money in the US it goes to the FDIC. Banks are not risking "their" money. They just lose money they created out of thin air. But accounting tricks allow to disguise many things. The amount of money paid, compared to the amount of money that the bank creates and lends is insignificant. Banking is not a manpower intensive activity.
You may like to read this: I want Earth plus 5% It explains finances in a simple way. Or you may want to watch: Money as debt and Money as Debt II Promises Unleashed
Or if you do not believe those source, you may read the book "Agenda for a New Economy: From Phantom Wealth To Real Wealth" by David C. Korten where he wrote:
Korten earned his MBA and PhD degrees at the Stanford University Graduate School of Business. He served for five and a half years as a faculty member of the Harvard University Graduate School of Business, where he taught in Harvard’s middle management, MBA, and doctoral programs and served as Harvard’s adviser to the Central American Management Institute in Nicaragua.Quote:
It seems a bit odd that we have experienced economic collapse because of a credit crunch, an inability to borrow, at a time when the world is awash not only in debt but also in money. Business Week’s July 11, 2005, cover story shouted “Too Much Money” and spoke of a savings glut. Its June 11, 2008, European issue reiterated the theme, “Too Much Money, Inflation Goes Global.”
Most discussion of the financial crisis focuses on the details and misses the big picture. The problem is twofold. The economic system is awash in money, but it is in the wrong places. Second, virtually every dollar in the system is borrowed, because we rely on banks to create our money by lending it into existence. No debt, no money.
As wages fall relative to inflation, the bottom 90 percent of the population is increasingly dependent on borrowing from the top 10 percent to put food on the table. But when the less fortunate can’t repay their loans, the rich people stop lending. Most loans continue to be repaid, but because the default rate is rising and the crazy system of derivatives trading makes it impossible to separate good debts and responsible borrowers from bad debts and deadbeats, banks are afraid to lend to anyone. As the good loans are repaid, the supply of money shrinks because new loans are not being issued.
The demand for real goods and services begins to fall because people don’t have the money to pay for them. Businesses lay off workers, who consequently cannot afford either to repay their debts or to put food on the table. The problem appears to be a lack of money, even though the total money in the financial system is far more than enough to cover real-wealth exchanges in a rational real-wealth economy.
It all traces back to a money system that issues money as debt and seeks economic expansion for the sole purpose of generating new demand for debt to create the money to pay the interest on existing debt in an ever-escalating spiral to a never-never land high in the clouds.
He was regional adviser on development management to the U.S. Agency for International Development.
Korten’s publications are required reading in university courses around the world. He has written numerous books, including the international best seller When Corporations Rule the World, The Great Turning: From Empire to Earth Community, and The Post-Corporate World: Life after Capitalism.
So if Banks aren't risking their own money why have several failed recently? Including some big names.
It seems like Alberjohns has made a convert? I advise everybody not to waste time with the sources offered in AR's post. The time you watch that nonsense is time you will never get back.
Because of the methods used for accounting that define losses in a certain way and bankruptcy is defined by certain parameters of "solvency" which of course does not mean the same for banks as for productive companies.Quote:
Originally Posted by Lewkowski
Banks create so much money in accounting books that the amount of real money is so small that it could never repay all the debts it has. Bankruptcy is issued before it becomes evident, because if people knew that bank losses are only promises of repayment that were not fulfilled on money that did not exist, the whole financial scheme would colapse and financial people would have to produce something real, instead of leeching people's pockets. Watch the videos about "Money as debt" and you will see it more clearly.
You may say it wold be illogical that in a time of crisis a factory would stop selling, just like banks stopped lending. But since banks losses are defined by promises not fulfilled, and there is no real loss of a real asset, they do not lend because they do not want to have more promises people can't fulfill. By not lending, they turn their money created in the books into real assets when people repay the loan or when foreclosures take place.
When banks have losses, since people default, it means that money they created in the books will never become a real asset, so it is money not backed by real assets, an inexistent asset, "toxic asset", "troubled asset" or just fake money. TARP program is aimed at covering toxic assets with real assets, and it of course causes no losses but profit, and this is how banks recovered so fast. The banking scheme is so different than the normal business considerations for productive companies that people hardly understand it, and of course bankers do nothing to help people to understand it.
What they call "products" are not such. One clear example is the Synthetic CDO.
Look how the financial scam works:
VIDEO: Synthetic collateralized debt obligation (synthetic CDO)
With Synthetic CDOs you invest, thinking that they will pay interest, but indeed they use your money to cover defaults and you end up paying for those who did not pay their loans. And of course, banks created the money and ended up with no loss. This is how investment banks passed losses from the housing crisis to Wall Street.
You also may like to read these news about "bank ethics"
BBC: US bank reports $3.3bn profits
New York Times: Bank Earns $11.7 Billion in Year
New York Times: Bankers Without a Clue
New York Times: Wall St. Ethos Under Scrutiny at Hearing
New York Times: Banks Bundled Bad Debt, Bet Against It and Won
New York Times: Bankers in Their Own Words
Among the proposed solutions, one interesting one is Sharia banking, a concept that came 40 years ago. It is some sort of islamic way of banking that collects no interests, but a share of profit, so risk is shared between lender and borrower. However, sharia banks were tempted by the juicy profits of western banks that used "risky practices" (creating money out of thin air) and this is how you have the Dubai scandal.
Notice that sharia banking as originally conceived, creates no money in accounting books, therefore causing no inflationary pressures. Under islamic religion, collecting interests is a sin called "Riba" (usury). By the year 1300 AC collecting interests was also seen as a sin. This is why in Europe, jewish lenders were sent to the Frankfurt ghetto, an idea that Hitler used later.
But Medici family in Italy came with the word "comission" to disguise interests and since then we have the immoral lenders turned into respectable bankers.
Indeed many jewish during WWII deposited their money in the banks and when they died their sons did not receive the money. In 1932 bankers gathered in Düsseldorf to finance Adolf Hitler. The financial crisis caused by the bankers after the crisis of 1914 that led to the Great Depression in 1929 and the 1923 hyperinflation in Germany in 1923 caused by deficit and easy money policy, was not repaid by bankers, but by the jewish who became scapegoats of this crisis. So bankers caused the crisis and turned fake money into real assets, they took the money from jewish and on top they financed Hitler who blamed jewish.
Righteo... so WW II had nothing to do with the big reset?
I was mentioning several moments when "respectable bankers" were stars who "guided" humanity.Quote:
Originally Posted by Hazir
Today it is the first time in which they are shown as the ones who caused the problem.
Oh, I see. So this is just another Jewish conspiracy. Did you read the 'Protocols of the elders of Zion' to obtain this knowledge or did you just watch the crap you promoted above?
By the way, do you mind if we go back on topic and leave your drivel for what it is?
But they didn't do anything wrong. :confused: They made a series of debt deals, and the Greeks hid them in their budget. It would be as if I gave you $50,000 but you didn't report it to the IRS.Quote:
Originally Posted by GGT
It would be as if I gave you $50,000 but I didn't report it to the IRS. Whoops, I broke the law.Quote:
Originally Posted by Dreadnaught
You don't have to report personal expenditures to the IRS. Ultimately, the Greece political establishment cooked the books on those deals.
How is that Goldman's fault? They don't detail every trade in their income statements.
Any transaction $10,000 or above you are required to report to the IRS. Yes, and the IRS uses that info to check up on the person you gave it too because they are the ones who have to report the income.Quote:
Originally Posted by Dreadnaught
We can stretch this in any direction you like. At the end of the day, Goldman made a fairly normal loan in exchange for an uncertain future revenue stream from things like the airport operations in Athens.
And the Greeks decided to count the money as revenue and not mention what they were trading for it in their budget numbers.
Who is being shadier here? Goldman or the Greeks? Please explain how Goldman somehow crossed the line. Curious what you're going to squeeze out.
A little snippet I read about GS is that the current stance isn't that they necessarily did something wrong. The Greeks though did, so now it's investigated if its bankers stayed on the right side of the law.Quote:
Originally Posted by Dreadnaught
It's not that strange really.
:bulb:Quote:
"Greece still needs to raise 20 billion euros ($27.2 billion) by the end of the year. And if the EU decides to give debt guarantees to banks willing to buy Greek bonds, that will be a bailout and will firmly hurt the Lisbon Treaty", says a lawyer based in Brussels.
"The problem is that, once the EU doesn't respect its own rules, how can it keep fining companies for not respecting them either? It creates a huge authority problem for the Commission", he says.
This is because of the so-called "no bailout clause" of the Lisbon Treaty, which states that "the Union shall not be liable for or assume the commitments of central governments".
The only way around this article would be another one, which says: "when a member-state is in difficulties or is seriously threatened with severe difficulties caused by natural disasters or exceptional occurrences beyond its control, the Council (...) may grant Union financial assistance to the member-state concerned".
If the European Commission manages to state that the CDS market amplified the Greek crisis beyond Greece's control, maybe then the EU as a whole will be able to give Greece a hand without loosing its authority.
http://www.cnbc.com/id/35721306
Greek reported a loan using derivatives as if was just a money exchange transaction, the gain and huge debt came from money exchange comissions and overestimated currency value. It seemed to come when EU did not have proper regulation on derivatives.
Now who's to blame? If I John makes a "deal" with a US politician to cause problems to US government, who is to blame?
Here it comes the concept of law and also ethics.
That whole 'can't bail out' angle is a bit silly in my eyes. The clause is one that protects members from irresponsable peers. It's intention is to not have an obligation to bail out, not to bind the member's hands if he wants to bail out.Quote:
Originally Posted by GGT
The 'external factors' angle (speculators) would enable politicians to say that they have no other choice than to bail out Greece. But I think they are keeping that in reserve just in case Greece really is going to default. So far that's still not happened.
Also AR, the legality of the deals at this moment no longer is in question. The legality question is of limited relevance anyway, because this is a crisis of trust.
:bulb::bulb::bulb::bulb::bulb::bulb::bulb:Quote:
Originally Posted by Being
For the record, that is not my post. Dread must have mistakenly edited my post instead of replying to. :haha::haha::haha::haha:
The first sentence is mine. And I stand by it. Any transaction of $10,000 dollars or more you are required to report to the IRS.
Ah, do you mean the secret plan to use their psychotronic influence on us, to poison and kill us all?Quote:
Originally Posted by Hazir
I have some news. What they are trying to attempt is to pretend to be God and be above nature.
Unfortunately God is good to screw human plans, and nature can't be tamed.
They will fail miserably. There are laws of life that are above them. Unlike Timmy at AtariCC, the elders are not the rules.
I refuse to judge all Israelis and Jewish as a block, let alone to think that what their politicias do represent them.
It would be like saying that since Bush caused this global crisis, all Americans should bailout the rest of the planet.
It would be like saying that since Greek politicians and bankers cheated, Greek population should pay for it.
There is a human rights group called B'Tselem, a watchdog that cares about abuse in occupied territories that are subject to apartheid.
I strongly disagree with violations of human rights, but I have no feelings against jewish. They are just like you and me.
And there is a jewish among us (not me, of course).
As for the Greece issue it is clear that transparency and ethics are scarse nowadays.
Refusal to bailout seems fine in my eyes, since it would open a door so one country may want to be bailed out by another.
Ok, so now let's assume I understood what you wrote above and think you try to tell us that you are not an anti-semite per sé; why then are you promoting blatantly anti-semite desinformation?
No. Human rights is not antisemite.
People can do right or wrong. I support the right and I condemn the wrong.
I have mexican friends and still I disagree with the actions of mexican politicians.
Same happens with anyone on Earth.
Israel is just an administrative jurisdiction, like US or Spain.
I do not care about taking sides in futile administrative wars.
If someone does something right, that's good. If someone does something wrong, I can't support it. But it does not make people good or bad, because people are not their actions. Actions can be changed.
The problem is that people use to have binary perception: Friend or foe, 0 or 1, black or white, semite or antisemite.
The color of truth is grey. I do not like binary labels.
Bytes allow 256 ways of seeing the world, and truecolor allows 16 million.
16 million can't be understood with a single binary bit.
I recall that in september 2008 I said elsewhere that US unempoyment would become a problem.
I was labeled "socialist" by people with binary views.
Who is the socialist now?
For binary people, antisemite means everything that doesn't read "jewish are perfect".
I am not perfect. Does it make me "anti-me"?