Jul 102015
 
 July 10, 2015  Posted by at 11:04 am Finance Tagged with: , , , , , , , ,
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Wynand Stanley Ice-packed Buick motor stunt, San Francisco 1922

Stock Slide Ruins China’s Illusion of Control (Bloomberg)
Greece Seeks €53.5 Billion Bailout in Effort to Keep Euro (Bloomberg)
France Intercedes on Greece’s Behalf to Try to Hold Eurozone Together (WSJ)
The Big Achievement Of Tsipras’s Proposal Is To Sow Division (Münchau)
Galbraith: Greek Revolt Against Bad Economics Threatens EU Elites (Parramore)
The US Must Save Greece (Joe Stiglitz)
Greece Presents €2 Billion Russian Gas Deal (FT)
Germany Concedes Greece Needs Debt Relief, Greek Plan Awaited (Reuters)
Germany Failed To Learn From Its Own History-And Greece Pays The Price (WaPo)
Weidmann Warns Greek Banks Concerns Rising By Day (FT)
Greek Government Insider On 5 Months Of ‘Humiliation’ And ‘Blackmail’ (MP)
Swiss Poised To Support Greek Tax Amnesty (SI)
The Lesson for the World Coming from Greece (Martin Armstrong)
Varoufakis: Schäuble Wants Grexit, I Prefer Be an MP Known as Yanis (GF)
Max Keiser and Yanis Varoufakis Retrospective (2012 footage)
Darwin’s Casino (John Michael Greer)
Pope Calls For New Economic Order, Criticizes Capitalism (Reuters)

And that is nigh impossible to regain.

Stock Slide Ruins China’s Illusion of Control (Bloomberg)

The other, grander gamble that Xi has taken is to keep the Chinese economy growing. Of course, the Communist Party since Deng Xiaoping has staked its legitimacy on economic growth, so far to good effect. But Jiang Zemin and Hu Jintao governed through a broad-based consensus of senior party leaders, which meant that the risks of legitimacy and delegitimacy were spread across the group and the institution they represented. Xi, in contrast, has taken more power – and therefore the risks of economic growth – onto his shoulders. There are many tools central government can use to keep an economy growing, and China under Xi will use them all. State-owned enterprises may be less efficient in the long run than truly private companies, but they have the enormous political benefit of responding to centralized state directives.

With good economists advising him, Xi stands a reasonable chance of transitioning China into a more consumer-driven economy, thereby assuring a source of modest continued growth even as the export-driven economy slows down. But that task, too, depends on the individual purchasing decisions of ordinary Chinese – that is, success of China’s economy, and therefore of Xi’s presidency, ultimately depends on the domestic consumer market. This brings us back to the stock market. Sure, Xi has to worry that the correction will spook emerging consumers, encouraging them to sit on their cash rather than spending it. But the much bigger political problem is that ordinary Chinese, watching the market fall, will experience the certain knowledge that Xi can’t really do anything about it.

Short-term stopgaps like closing markets during sell-offs or ordering state-owned enterprises not to sell their shares won’t address market fundamentals – because they can’t. In confirmed capitalist societies, we long ago learned that the government can’t stop the market from going where it believes it must. The reason, of course, is that the market isn’t a single entity that can be forced to take collective action. It’s an aggregation of individual decision-makers, all of whom share a competitive interest in achieving gain and limiting loss. For that reason, governments in experienced capitalist countries know that the only meaningful, long-term way to respond to market declines is by trying to create economic conditions that will restore faith in the markets.

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A whole long weekend of this. And then votes on Mon-Tue in national parliaments.

Greece Seeks €53.5 Billion Bailout in Effort to Keep Euro (Bloomberg)

The government of Greek Prime Minister Alexis Tsipras sought a three-year bailout loan of at least €53.5 billion ($59.2 billion), in a last-ditch effort to keep the country in the euro. In exchange, it offered a package of reforms and spending cuts, including pension savings and tax increases, similar to the one presented by creditors last month. The proposal was submitted to European institutions late Thursday and will be presented to the Greek Parliament Friday. It is set to be discussed at a summit of European Union leaders Sunday to determine whether Greece gets a new bailout, or be forced to leave the single currency. Greece offered measures that almost mirrored a proposal from creditors on June 26, which was rejected by voters in a July 5 referendum.

In return, it asked for its long-term debt to be made more manageable to allow it to rebound from a crisis that has erased a quarter of its economy. It is unclear if the proposal is enough to clinch a deal with creditors amid signs of economic deterioration since banks were closed and capital controls imposed 12 days ago. “The Greeks appear to have made significant concessions, apparently accepting much of the most recent creditor proposal,” Chris Scicluna, head of economic research at Daiwa Capital Markets in London, wrote in a note. “It remains to be seen whether creditors will want even more austerity.” The Greek government said it would use the three-year loan from the European Stability Mechanism to cover debt repayments between 2015 and 2018, mostly to the International Monetary Fund and the European Central Bank.

It will then be left with debt owed only to European Union institutions. Greece’s proposal includes creditors’ longstanding demands for sales tax increases and cuts in public spending on pensions. Greece also proposes the restructuring of its debt and a package of growth measures of €35 billion. Pressure has been mounting on Greece’s creditors to make the country’s debt more manageable. “A realistic proposal from Greece will have to be matched by an equally realistic proposal on debt sustainability from the creditors,” European Union President Donald Tusk told reporters in Luxembourg Thursday. “Only then will we have a win-win situation.”

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“French leaders have waxed poetic in recent days about the special place Greece holds. Greek independence was celebrated by French writers and artists from Victor Hugo and to Eugene Delacroix..”

France Intercedes on Greece’s Behalf to Try to Hold Eurozone Together (WSJ)

The race to come up with a last-minute proposal to keep Greece in the eurozone began with a Sunday night phone call from Greek Prime Minister Alexis Tsipras to French President Francois Hollande, moments after Greece’s referendum dealt a near-fatal blow to the talks. If Greece wanted to remain in the eurozone, Athens must make ambitious proposals to its creditors quickly, Mr. Hollande told him, adding: “Help me help you.” That advice was part of an urgent French campaign to salvage months of negotiations from the wreckage of the Greek referendum. After long staying out of the fray, Mr. Hollande was scrambling to keep the discussions alive. His strategy: to press Mr. Tsipras for stronger economic overhauls while persuading Angela Merkel to give Greece more time and, ultimately, hope for debt relief.

The stance reflects a particularly French vision of the eurozone as a grand political project, with strategic benefits for Europe worth defending even at high cost. A Greek exit from the eurozone would set a dangerous precedent, French officials say, turning the currency bloc into little more than an arrangement of fixed currency exchange rates that governments could discard. French leaders have waxed poetic in recent days about the special place Greece holds. Greek independence was celebrated by French writers and artists from Victor Hugo and to Eugene Delacroix, Prime Minister Manuel Valls told lawmakers Wednesday in explaining why France refuses to accept a Greek exit from the euro. “Greece is a passion for France and Europe,” Mr. Valls said.

“The goddess that gave its name to our continent is at the heart of our mythology.” Domestic politics is also at work. Mr. Hollande, a Socialist, faces a rebellion from members of his parliamentary majority who accuse him of abandoning his 2012 election pledge to push for pro-growth policies in Europe. Standing up to Berlin on behalf of Greece is a chance to brandish his leftist credentials for party hard-liners, analysts say. It is unclear whether France’s triage will lead to a deal by Sunday, when European Union leaders are due to decide Greece’s fate. But France’s intervention has helped keep the talks on life support.

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“.. there is now the acute problem of an insolvent banking system..” A problem all of the Troika’s own design.

The Big Achievement Of Tsipras’s Proposal Is To Sow Division (Münchau)

I do not have the foggiest whether these latest Greek proposals will be enough to secure a deal. There are still very big obstacles to overcome. But Alexis Tsipras has achieved something that has eluded him in the past five months: he has managed to split the creditors. The IMF insists on debt relief. The French helped the Greek prime minister draft the proposal and were the first to support it openly. President François Hollande is siding with Mr Tsipras. And that changes the stakes for Angela Merkel. If the German chancellor says no now, she will stand accused of taking reckless risks with the eurozone and the Franco-German alliance. If she says yes, her own party might divide similarly to the way the British Conservatives divided over Europe. I have always predicted that the moment of truth for the eurozone will come eventually. It will come this weekend.

The financial markets seemed to have made up their mind that a deal will happen. But beware the many landmines on the path to a deal. Of those, only the first has been sidestepped with Mr Tsipras’ offer. What he is now proposing is, economically, not fundamentally different from what he, and the Greek electorate, rejected in Sunday’s referendum — but it works politically for him. The phase-in period of some of the harder measures is longer. And if there is a deal, there will have to be an explicit reference to debt relief this time. The IMF insists on it. And even Donald Tusk, the president of the European Council, says so. This is an important development, but it is not clear that all creditors will, or can, agree.

By tomorrow, the technical people and the finance ministers will need to discuss whether the Greek numbers add up. The answer is almost certainly no, not least because of the rapid deterioration of the country’s economy. The imposition of capital controls and bank withdrawal limits brought most economic activity to a standstill. Any macroeconomic adjustment programme will have to start with a realisation that the situation is worse today than two weeks ago. The Greek list takes account of this in terms of slower adjustment periods. This is economically sensible. But Ms Merkel has already said she wanted this problem taken care of through additional austerity. For a programme to be agreed, one side will have to back down here.

On top of this, there is now the acute problem of an insolvent banking system — one that is totally reliant on a special lifeline by ECB called emergency liquidity assistance. The ECB will find it hard to increase ELA. So apart from agreeing on a macroeconomic stabilisation programme, European leaders will this weekend need to answer the more immediate question of what to do with the Greek banks. This is possibly the single most complicated question because there are no easy and fast answers. What may have to happen is that the number of banks will have to shrink to three or two, and that depositors may have to be “bailed in”. I cannot see that the creditors would agree to a further bank restructuring programme, in addition to the €53.5bn in new loans currently under discussion.

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The superego paradox again.

Galbraith: Greek Revolt Against Bad Economics Threatens EU Elites (Parramore)

Lynn Parramore: What’s your view of the attitudes of the creditor powers?
Jamie Galbraith: What happened on the 26th of June was that Alexis (Tsipras) came to realize, at long last, that no matter how many concessions he made he wasn’t going to get the first one from the creditors. That’s something Wolfgang Schäuble had made clear to Yanis (Varoufakis) months before. But it was hard to persuade the Greek government of this because its members naturally expected, as you would when you’re in a negotiation, that if you make a concession the other side will make a concession. That isn’t the way this one worked. The Greeks kept making concessions. They’d present a program and the other side would say —as you can read in the press — oh, no, that’s not good enough. Do another one. Then they’d complain that the Greeks were not being serious. What the creditors meant by that was this: when you come around and agree to what we tell you, then you’re serious. Otherwise not. This is the way bad professors treat extremely recalcitrant students. You come in with a paper draft and they say, no, that’s not good enough. Do another one.

LP: Have the individual creditors differed on how to treat Greece?
JG: There are some divisions amongst the creditors that are well known. But they’re all variations on the theme of insular, sheltered, cloistered people who do not understand what is happening in Greece and do not know the economics. So, for example, the European Commission tends to be a little bit nicer, the IMF tends to be better on debt restructuring but worse on the structural issues, and the ECB was infuriated by the fact that its technocrats couldn’t walk into any ministry in Athens and make demands and be paid attention to. So there were different aspects of this that seemed to trouble different creditors, but it all amounted to the fact that between them there was no basis for arriving at anything other than the original Memorandum of Understanding (bailout program).

LP: What exactly triggered the breakdown that led to the referendum?
JG: What happened was that the IMF took the staff level agreement draft that the Greeks had presented, and marked it up in red ink and presented it back to the Greeks as an ultimatum— this is what we will accept. Or rather (EC president) Juncker presented it back to the Greeks as an ultimatum. And Yanis was told, take it or leave it. So they basically had no choice but to walk away from it, to leave it.

LP: How do you think the referendum has changed the situation? Has it given the Greeks leverage or not?
JG: That’s a difficult question. The recent Ambrose Evans Pritchard piece is very much on the mark. The Greek government, and particularly the circle around Alexis, were worn down by this process. They saw that the other side does, in fact, have the power to destroy the Greek economy and the Greek society — which it is doing — in a very brutal, very sadistic way, because the burden falls particularly heavily on pensions. They were in some respects expecting that the yes would prevail, and even to some degree thinking that that was the best way to get out of this. The voters would speak and they would acquiesce. They would leave office and there would be a general election. But civil society took this over in the most dramatic and heroic fashion. It was an incredible thing to see. The Greeks, amazingly, voted 61% no. That, momentarily, gave a jolt of adrenaline to everybody in the government. But the next morning, they were back where they were before. And that’s why, of course, Yanis left at that point.

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What’s the use with Spain and Italy waiting in the wings?

The US Must Save Greece (Joe Stiglitz)

As the Greek saga continues, many have marveled at Germany’s chutzpah. It received, in real terms, one of the largest bailout and debt reduction in history and unconditional aid from the U.S. in the Marshall Plan. And yet it refuses even to discuss debt relief. Many, too, have marveled at how Germany has done so well in the propaganda game, selling an image of a long-failed state that refuses to go along with the minimal conditions demanded in return for generous aid. The facts prove otherwise: From the mid-90’s to the beginning of the crisis, the Greek economy was growing at a faster rate than the EU average (3.9% vs 2.4%). The Greeks took austerity to heart, slashing expenditures and increasing taxes.

They even achieved a primary surplus (that is, tax revenues exceeded expenditures excluding interest payments), and their fiscal position would have been truly impressive had they not gone into depression. Their depression—25% decline in GDP and 25% unemployment, with youth unemployment twice that—is because they did what was demanded of them, not because of their failure to do so. It was the predictable and predicted response to the austerity. The question now is: What’s next, assuming (as seems ever more likely) they are effectively thrown out of the euro? It’s likely that the European Central Bank will refuse to do its job—as the Central Bank for Greece, it should do what every central bank is supposed to do, act as a lender of last resort.

And if it refuses to do that, Greece will have no option but to create a parallel currency. The ECB has already begun tightening the screws, making access to funds more and more difficult. This is not the end of the world: Currencies come and go. The euro is just a 16-year-old experiment, poorly designed and engineered not to work—in a crisis money flows from the weak country’s banks to the strong, leading to divergence. GDP today is more than 17% below where it would have been had the relatively modest growth trajectory of Europe before the euro just continued. I believe the euro has much to do with this disappointing performance. [..]

The U.S. was generous with Germany as we defeated it. Now, it is time for the U.S. to be generous with our friends in Greece in their time of need, as they have been crushed for the second time in a century by Germany, this time with the support of the troika. At a technical level, the Federal Reserve needs to create a swap line with Greece’s central bank, which—as a result of the default of the ECB in fulfilling its responsibilities—will have to take on once again the role of lender of last resort. Greece needs unconditional humanitarian aid; it needs Americans to buy its products, take vacations there, and show a solidarity with Greece and a humanity that its European partners were not able to display.

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“Greece is no-one’s hostage,” he said. “The Greek people’s No vote, and I am referring to all of the people, is not going to become a humiliating Yes.”

Greece Presents €2 Billion Russian Gas Deal (FT)

Greece has mapped out details of a landmark €2bn gas project with Russia, a scheme that could stir tensions with Brussels just as Athens seeks a third bail-out. Panayiotis Lafazanis, the firebrand leftist energy minister, presented the project to Greek energy executives on Thursday in a defiant speech, vowing that Athens would not be pushed around by EU institutions, writes Christian Oliver. EU policymakers are concerned that Russia could take advantage of the crisis to pull Greece deeper into its orbit and pipeline politics is critical to relations between the two nations. Athens and Moscow say their new project, the so-called South European Pipeline, will bring 47 billion cubic metres of Gazprom’s gas into Europe by 2018.

Mr Lafazanis promised that it would create 20,000 much needed jobs in Greece. This promised deal with Russia is a sharp rebuke to Brussels, which wants to reduce dependence on Gazprom and argues that southeastern Europe should diversify its supply by prioritising gas from Azerbaijan. Opening his remarks with pugnacious references to the eurozone crisis, Mr Lafazanis said that Greece was aiming to secure a deal with Brussels as quickly as possible. However, he then warned EU institutions that Athens was not about to roll over. “Greece is no-one’s hostage,” he said. “The Greek people’s No vote, and I am referring to all of the people, is not going to become a humiliating Yes.”

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Only 5 months late. Or is that 5 years?

Germany Concedes Greece Needs Debt Relief, Greek Plan Awaited (Reuters)

Germany conceded on Thursday that Greece would need some debt restructuring as part of any new loan programme to make its economy viable as the Greek cabinet raced to finalize reform proposals to avert an imminent economic meltdown. The admission by German Finance Minister Wolfgang Schaeuble came hours before a midnight deadline for Athens to submit a reform plan meant to convince European partners to give it another loan to save it from a possible exit from the euro. Greece has already had two bailouts worth €240 billion euros from the eurozone and the IMF, but its economy has shrunk by a quarter, unemployment is more than 25% and one in two young people is out of work.

Schaeuble, who has made no secret of his scepticism about Greece’s fitness to remain in the currency area, told a conference in Frankfurt: “Debt sustainability is not feasible without a haircut and I think the IMF is correct in saying that. But he added: “There cannot be a haircut because it would infringe the system of the European Union.” He offered no solution to the conundrum, which implied that Greece’s debt problem might not be soluble within the eurozone. But he did say there was limited scope for “reprofiling” Greek debt by extending loan maturities, shaving interest rates and lengthening a moratorium on debt service payments.

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Germany resists all real history. Inferiority complex?

Germany Failed To Learn From Its Own History-And Greece Pays The Price (WaPo)

One of the great paradoxes of our time is how Germany has done so exemplary a job in recent decades of understanding and accepting responsibility for the horrors of the Nazi era while continuing to entertain a willful ignorance of the economic policy errors that paved the Nazis’ path to power. The solution to this riddle is that Germans’ deep-seated debt obsession (in German, the words for “debt” and “guilt” are the same) has blinded them to the consequences of that obsession. You’d think, for instance, that Germans would have learned from John Maynard Keynes’s 1920 book “The Economic Consequences of the Peace,” which correctly predicted that the onerous reparations inflicted on Germany by the Treaty of Versailles were economically unsustainable and politically perilous to the prospects for German democracy.

You’d think they’d have learned from their own descent into Nazism that balancing budgets when unemployment is at record heights can undermine a democracy’s viability. You’d think they’d have learned from the London debt agreement of 1953 that debt forgiveness and reasonable repayment terms can foster prosperity and strengthen democracy in the debtor nation — which, in this case, happened to be Germany. That Germans have learned none of these lessons is now — tragically, for Greece — apparent. Germany’s insistence that Greece continue to slash services and social investment if it is ever to qualify for debt forgiveness remains unaltered, even though Greek unemployment stands at 25%, even though 40% of Greek children live in poverty, even though a neo-Nazi party (Golden Dawn) has come out of nowhere to win seats in Greece’s parliament.

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Weidmann is saying weird things, as always.

Weidmann Warns Greek Banks Concerns Rising By Day (FT)

Jens Weidmann, the president of Germany’s Bundesbank, has said doubts about Greek banks solvency are legitimate and rising by the day. Mr Weidmann also said the majority of Greeks who had voted ‘no’ in Sunday’s referendum had spoken out .. against contributing any further to the solvency of their country through additional consolidation measures and reforms. The Bundesbank president, a member of the governing council of the European Central Bank who has called for Greek banks ¨ 89bn liquidity lifeline to be scrapped, said in needed to be crystal clear that responsibility for Greece lay with Athens and international creditors, and not the ECB.

The Eurosystem [of eurozone central banks] should not increase the liquidity provision, and capital controls need to stay in force until an appropriate support package has been agreed by all parties and the solvency of both the Greek government and the Greek banking system has been ensured. The Bundesbank president hit out at Athens for causing economic ruin. [Eurozone member states] can decide for themselves not to service their debts, to collect taxes inadequately, and this is something I particularly fear in the case of Greece to lead their country s economy into deep trouble, he said in Frankfurt on Wednesday. The Syriza-led government had not only walked out on the previous agreements, but has been widely criticised as an unreliable negotiating partner. Mr Weidmann’s comments came as France s finance minister Michel Sapin, who is pushing for a deal that would allow Greece to stay in the eurozone, emphasised the greater cost of a Grexit.

“What s costlier? That Greece exits the eurozone and defaults on all its debt? Asking the question is answering it”, Mr Sapin told Radio Classique on Thursday. “A deal is the best solution for Greece and Europe.” “Greek banks have been closed for more than a week. Greece is already in a pre-chaos stat”e, he said. “How history will judge us?” However, Mr Sapin reiterated the need for the Greek government to present credible reforms as well as difficult decisions to balance the budget. “There are taxes to raise, it’s difficult,” he said. Mr Sapin saluted the good attitude of Greek Finance Minister Euclid Tsakalotos at the latest eurogroup meeting of finance ministers. “He came with a lot of modesty”, he said.

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“How much money do you want to leave the euro?”

Greek Government Insider On 5 Months Of ‘Humiliation’ And ‘Blackmail’ (MP)

A senior member of Greece’s negotiating team with its European creditors agreed to a meeting last week in Athens with Mediapart special correspondent Christian Salmon. Speaking on condition that his name is withheld, he detailed the history of the protracted and bitter negotiations between the radical-left Syriza government, elected in January, and international lenders for the provision of a new bailout for the debt-ridden country. The almost two-hour interview in English took place just days before last Sunday’s referendum on the latest drastic austerity-driven bailout terms offered by the creditors, and opposed by Prime Minister Alexis Tsipras, and which were finally rejected by 61.3% of Greek voters.

While the ministerial advisor slams the stance of the international creditors, who he accuses of leading a strategy of deliberate suffocation of Greece’s finances and economy, he is also critical of some of the decisions taken by Athens. His account also throws light on the personal tensions surrounding the talks led by former Greek finance minister Yanis Varoufakis, who resigned from his post on Monday deploring “a certain preference by some Eurogroup participants, and assorted ‘partners’, for my ‘absence’ from its meetings”. The advisor cites threats proffered to Varoufakis by Eurogroup president Jeroen Dijsselbloem, warning he would sink Greece’s banks unless the Tsipras government bowed to the harsh deal on offer, and by German finance minister Wolfgang Schäuble, who he says demanded: “How much money do you want to leave the euro?”

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“..amnesties generally favour wealthy people who can pay accountants to exploit loopholes..”

Swiss Poised To Support Greek Tax Amnesty (SI)

Struggling to pay off more than €300 billion in debts, Greece is banking on Switzerland to help it recover a treasure trove of undeclared assets that tax cheats have stashed in alpine vaults. But anti-tax haven campaigners are sceptical about “undemocratic” tax amnesties that are prone to loopholes, allowing many tax dodgers to wriggle out of their obligations. “The devil is always in the detail with these deals. If Switzerland can claim it is helping to clear untaxed assets out of its banks, this could provide it with a public relations service,” Nicholas Shaxson of Tax Justice Network told swissinfo.ch. “But amnesties generally favour wealthy people who can pay accountants to exploit loopholes, such as insurance wrappers and discretionary trusts.”

Such “slippery structures” render assets “technically declared”, allowing them to remain offshore under the radar of amnesties, Shaxson added. “Tax amnesties only make a difference if the public believe that, once they have ended, the government will assertively go after people who did not disclose,” Heather Low of Global Financial Integrity (GFI) told swissinfo.ch. “Tax cheats in the United States would be afraid of the authorities if they did not disclose during an amnesty. I’m not so sure this would be the case in Greece.” In April, former Greek Finance Minister Yanis Varoufakis announced plans for a global tax amnesty to repatriate overseas funds to Greece. It is believed the government has settled for a one-off 21% levy on those who come clean, pending parliamentary approval of the proposal.

Negotiations between Greece and Switzerland on how best to recover black money hidden in Swiss banks have been ongoing since 2012. But the two sides are reported to be edging closer to a solution that would allow banks to cooperate. While Switzerland would not be an official partner to a Greek tax amnesty, the approval and cooperation of the Swiss authorities would be integral to the scheme working. To this end, two meetings were arranged between the countries in March and April to discuss the practical details of persuading Greek tax cheats to sign up to the amnesty. While not yet concluded, Varoufakis felt encouraged enough to announce Greece’s intended global tax amnesty following a meeting with Swiss officials in April.

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“If Russia really wants to take Europe, all they have to do is be patient.”

The Lesson for the World Coming from Greece (Martin Armstrong)

The mainstream news is painting the Greeks as the bad guys, and the Troika as the savior of Europe. Quite frankly, it is really disgusting. Pictures of an elderly Greek pensioner have gone viral, depicting what the Troika is deliberately doing to the Greek people by punishing them for their own failed design of the euro in a system that is just economically unsustainable. The heartbreaking photographs circulating are of 77-year-old retiree, Giorgos Chatzifotiadis, after he collapsed on the ground openly in tears, driven to despair, outside a Greek bank with his savings book and identity card strewn next to him on the ground. This illustrates the horror the Troika is deliberately inflicting upon the Greek population.

This image illustrates the core of the issue: ordinary Greeks tormented by EU politicians who pretend to care about people. This is not a Greek debt crisis, this is a Euro Crisis and they refuse to admit that what they designed was solely for the takeover of Europe at the cost of the future of everyone, from pensioners to the youth. Chatzifotiadis queued up at three banks in Greece’s second city of Thessaloniki on Friday in the hope of withdrawing pensions on behalf of him and his wife. When he went to a fourth bank, he was told he could not withdraw his €120; the ordeal simply became too much and he fell down in tears in total desperation. His comments were simply that he “cannot stand to see my country in this distress”. He continued to say, “That’s why I feel so beaten, more than for my own personal problems.”

This is just the tip of the iceberg. We are facing terrible times ahead because socialism is completely collapsing. Government employees have lined their pockets, which is precisely the endgame and how Rome collapsed. It was not the barbarians at the gate. It was that the Roman army was not paid and they began hailing their various generals as emperor and they attacked cities who did not support their choice. Only after weakening themselves, then the barbarians came in for easy pickings. If Russia really wants to take Europe, all they have to do is be patient. They will self-destruct for the Troika cannot see any change in thinking for that means they must admit that they were wrong from the outset.

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“Schaeuble has a plan for Greece’s exit from the Eurozone,” and added, “this is his best chance to succeed.”

Varoufakis: Schäuble Wants Grexit, I Prefer Be an MP Known as Yanis (GF)

Former Greek Finance Minister Yanis Varoufakis admitted that Germany appears to have a plan to force Greece outside the Eurozone, even though while he was in office he insisted that Grexit scenarios were a bluff to push the Greek government to accept harsh austerity measures. Talking with reporters at the Greek Parliament café, Varoufakis noted that Wolfgang Schaeuble is the only Eurozone Minister with a specific plan. He also said that the German Finance Minister completely controls the majority of the Eurogroup except for French Finance Minister Michel Sapin.

“Schaeuble has a plan for Greece’s exit from the Eurozone,” and added, “this is his best chance to succeed.” When asked if he believes the Germans are taking into account the estimated cost of a Grexit, Varoufakis argued that Schaeuble believes losses can be controlled. Furthermore, the former Greek Finance Minister stated that it is possible that his exit from the Greek government was due to Schaeuble’s pressure.

As for whether he believes that a deal will be achieved in the next 24 hours, he initially said “no comment” but later added: “I would like an agreement to be reached but only if it is also a solution. At the moment, we cannot judge the outcome.” People at the café called him “Minister” but he always answered: “I’m not a Minister. I’m a member of Parliament.” “Once a Minister, always a Minister,” he said, adding that he prefers to be an MP and be called Yanis. Asked to comment on the recent referendum results, he stated that the outcome was epic and grandiose, although he avoided to answer the question about whether the citizens voted “No” but the government is following the “Yes” direction.

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Nice compilation.

Max Keiser and Yanis Varoufakis Retrospective (2012 footage)

Taken from Keiser Report episode 247 & 301 a look back at the dialogue between Max & Yanis in 2012 which should give some insight into the battle with financial terrorism unfolding in Greece.

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“There’s quite precisely no common ground between the two belief systems, and yet self-proclaimed Christians who spout Rand’s turgid drivel at every opportunity make up a significant fraction of the Republican Party just now.”

Darwin’s Casino (John Michael Greer)

Our age has no shortage of curious features, but for me, at least, one of the oddest is the way that so many people these days don’t seem to be able to think through the consequences of their own beliefs. Pick an ideology, any ideology, straight across the spectrum from the most devoutly religious to the most stridently secular, and you can count on finding a bumper crop of people who claim to hold that set of beliefs, and recite them with all the uncomprehending enthusiasm of a well-trained mynah bird, but haven’t noticed that those beliefs contradict other beliefs they claim to hold with equal devotion. I’m not talking here about ordinary hypocrisy. The hypocrites we have with us always; our species being what it is, plenty of people have always seen the advantages of saying one thing and doing another.

No, what I have in mind is saying one thing and saying another, without ever noticing that if one of those statements is true, the other by definition has to be false. My readers may recall the way that cowboy-hatted heavies in old Westerns used to say to each other, “This town ain’t big enough for the two of us;” there are plenty of ideas and beliefs that are like that, but too many modern minds resemble nothing so much as an OK Corral where the gunfight never happens. An example that I’ve satirized in an earlier post here is the bizarre way that so many people on the rightward end of the US political landscape these days claim to be, at one and the same time, devout Christians and fervid adherents of Ayn Rand’s violently atheist and anti-Christian ideology. 

The difficulty here, of course, is that Jesus tells his followers to humble themselves before God and help the poor, while Rand told hers to hate God, wallow in fantasies of their own superiority, and kick the poor into the nearest available gutter. There’s quite precisely no common ground between the two belief systems, and yet self-proclaimed Christians who spout Rand’s turgid drivel at every opportunity make up a significant fraction of the Republican Party just now. Still, it’s only fair to point out that this sort of weird disconnect is far from unique to religious people, or for that matter to Republicans. One of the places it crops up most often nowadays is the remarkable unwillingness of people who say they accept Darwin’s theory of evolution to think through what that theory implies about the limits of human intelligence.

If Darwin’s right, as I’ve had occasion to point out here several times already, human intelligence isn’t the world-shaking superpower our collective egotism likes to suppose. It’s simply a somewhat more sophisticated version of the sort of mental activity found in many other animals. The thing that supposedly sets it apart from all other forms of mentation, the use of abstract language, isn’t all that unique; several species of cetaceans and an assortment of the brainier birds communicate with their kin using vocalizations that show all the signs of being languages in the full sense of the word—that is, structured patterns of abstract vocal signs that take their meaning from convention rather than instinct.

Read more …

“Quoting a fourth century bishop, he called the unfettered pursuit of money “the dung of the devil”..”

Pope Calls For New Economic Order, Criticizes Capitalism (Reuters)

Pope Francis on Thursday urged the downtrodden to change the world economic order, denouncing a “new colonialism” by agencies that impose austerity programs and calling for the poor to have the “sacred rights” of labor, lodging and land. In one of the longest, most passionate and sweeping speeches of his pontificate, the Argentine-born pope also asked forgiveness for the sins committed by the Roman Catholic Church in its treatment of native Americans during what he called the “so-called conquest of America.” Quoting a fourth century bishop, he called the unfettered pursuit of money “the dung of the devil,” and said poor countries should not be reduced to being providers of raw material and cheap labor for developed countries.

Repeating some of the themes of his landmark encyclical “Laudato Si” on the environment last month, Francis said time was running out to save the planet from perhaps irreversible harm to the ecosystem. Francis made the address to participants of the second world meeting of popular movements, an international body that brings together organizations of people on the margins of society, including the poor, the unemployed and peasants who have lost their land. The Vatican hosted the first meeting last year. He said he supported their efforts to obtain “so elementary and undeniably necessary a right as that of the three “L’s”: land, lodging and labor.”

“Let us not be afraid to say it: we want change, real change, structural change,” the pope said, decrying a system that “has imposed the mentality of profit at any price, with no concern for social exclusion or the destruction of nature.” This system is by now intolerable: farm workers find it intolerable, laborers find it intolerable, communities find it intolerable, peoples find it intolerable … The earth itself – our sister, Mother Earth, as Saint Francis would say – also finds it intolerable,” he said in an hour-long speech that was interrupted by applause and cheering dozens of times.

The pontiff appeared to take a swipe at international monetary organizations such as the IMF and the development aid policies by some developed countries. “No actual or established power has the right to deprive peoples of the full exercise of their sovereignty. Whenever they do so, we see the rise of new forms of colonialism which seriously prejudice the possibility of peace and justice,” he said. “The new colonialism takes on different faces. At times it appears as the anonymous influence of mammon: corporations, loan agencies, certain ‘free trade’ treaties, and the imposition of measures of ‘austerity’ which always tighten the belt of workers and the poor,” he said.

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Home Forums Debt Rattle July 10 2015

This topic contains 12 replies, has 9 voices, and was last updated by  Raleigh 1 year, 11 months ago.

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  • #22294

    Wynand Stanley Ice-packed Buick motor stunt, San Francisco 1922 • Stock Slide Ruins China’s Illusion of Control (Bloomberg) • Greece Seeks €53.5 Billi
    [See the full post at: Debt Rattle July 10 2015]

    #22299

    Dr. Diablo
    Participant

    “The goddess that gave its name to our continent is at the heart of our mythology.”

    That’s a fascinating meme to draw upon in, what may be out of context, but seems a non-sequitor in that article. So “they” call upon the Goddess? Who is doing the calling? Who feels that the story of Europa is their guiding star? Who was Europa anyway? Isn’t she the one raped by Zeus, at least in the arcane meaning of “kidnapped and stolen”? So they’re calling on Europe to be raped and plundered, never to be seen again?

    The other angle of Europa is her quite likely association or equivalence to Ashtare, Ashteroth, Ishtar, the female god of sex and war from Babylon also related to the moon. So…what, again? “In these perilous times we call on the forces of sex and war”?

    Okay, my head hurts now. Let’s not try to make too much of it.

    #22303

    E. Swanson
    Participant

    The news from Greece is rather confused this morning. Consider this from AEP:

    Greek deal in sight as Germany bows to huge global pressure for debt relief

    “Germany is at last bowing to pressure as a chorus of countries and key institutions demand debt relief for Greece, a shift that could break the five-month stalemate and avert a potentially disastrous rupture of monetary union at this Sunday’s last-ditch summit. ”

    vs:

    Greek Plan Accepts Austerity to Get Debt Relief

    “As details of the new offer emerged, it appeared that Prime Minister Alexis Tsipras was capitulating to demands on harsh austerity terms that he urged his countrymen to reject in the referendum last Sunday, like tax increases and various measures to cut the costs of pensions.”

    So, which side “won” the standoff?

    #22304

    Ken Barrows
    Participant

    E Swanson,
    The Germans. I’ll change my mind if Greece gets significant debt relief. If it does, TAE will let us know.

    #22307

    jal
    Participant

    I’m sure that there will be some “elite” that will take a haircut.
    Can the sheeps escape the battle fields?

    #22308

    Greenpa
    Participant

    Nothing cracks me up more these days than when some pundit, or editorial board, uses the word “must” in their title. LOL!!!

    You keep using that word. I do not think it means what you think it means. 🙂

    #22310

    Professorlocknload
    Participant

    Greece is the center of the universe these days. It has become the default diversion of all these chicken little blogs that have been calling for some sort of deflationary catastrophe resulting in the demise of western civilization these last seven plus years.

    I’m sure the Fed appreciates all the ink (electrons?) being spilled over some irrevelant little province on the periphery of a larger geopolitical entity that is itself unsustainable in the long run. This makes it much easier for the political Fed to grease the skids for it’s favored candidates in the upcoming U.S. elections. Not to leave Goldman and company out of the equation, mind you.

    So, until Greece actually hard defaults, and the lights are found to remain on in NYC and Podunk, ID, the billions of kilowatt hours of media power consumption devoted to any distraction available will likely continue. For sure, in an election cycle, incumbent domestic political parties understand that any local news regarding social or economic “discordance” needs to be purged from media dialogue. I mean, even Gramma Janet says all is just peachy keen here at home.

    So, until common sense again prevails, has anyone heard what’s going on in Greece?

    #22313

    Professorlocknload
    Participant

    When all the grandstanding ends, there will be a debt jubilee. It just won’t be in a form most expect, originating from political committees meeting in smoke filled rooms. Packs of wolves and a couple sheep deciding what’s for dinner.

    It will end with the destruction of indebted currencies. Jim Rickards is likely right,,,just early.

    That will be when the .gov guns come out.

    Need to keep in mind, though, that it took Rome around 600 years to go full tilt. Then again, the USSR managed it in a couple three generations.

    And the Funny Buck has been on life support now since ’71, so, maybe there is some kinda “Moores Law” of economics that adds an accelerated exponential feature these days.

    #22315

    Professorlocknload
    Participant

    “If there is a deal, the U.S. Is behind it.”

    http://globaleconomicanalysis.blogspot.com/2015/07/obamas-time-machine-can-he-really-turn.html

    As I said earlier, NSA gets it’s “Man” installed in Greece. Europe is likely just a proxy battle ground between the U.S. and Russia/China. Need to beat back the “Hun”, no? Besides, a Greek bailout is only equal to a few months of QE for the Fed. Hell, the U.S. Taxpayer has plenty of money. Just look at the big spenders they elect to government office.

    Really, it’s all just denominated in electronic balance sheet entries. And electrons are cheap.

    #22317

    Nassim
    Participant

    Priests always like to describe money in a very critical way – “dung of the devil”

    At the same time, they want as much as possible of it as possible to come their way.

    The Catholic church has been in conflict with the Orthodox church since long before the fall of Constantinople, In fact, that is what the Fourth Crusade was all about:

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

    Currently, there is a massive Orthodox revival in Russia – a country they were hoping to convert to Catholicism. Their plans went out of the window. You can understand the war against Serbia in that light. Of course, they also got the blame for starting WW1.

    My point is that anything coming out of the Vatican ought to be seen in the light of this hidden agenda.

    “The Vatican against the Orthodox Church”

    http://www.reformation.org/vatican_against_the_orthodox_chu.html

    These people think in terms of centuries – very different from ordinary politicians.

    #22319

    Nassim
    Participant

    “Your moment has come, Mr Tsipras, take back control of your country – UKIP leader Nigel Farage”

    Tsipras is in the audience and Farage got cheering and clapping. Quite amazing!

    #22323

    Raleigh
    Participant

    Nassim – Farage is an incredible speaker. He not only makes good common sense, but the words just flow off his tongue – no “umms or aahs”. He’s also got a great sense of humor, and the place wouldn’t be the same without him. Hopefully he makes some of the other idiots think. I’m sure Tsipras enjoyed his support.

    #22324

    Raleigh
    Participant

    Good Matt Taibbi piece re Eric Holder:

    “Eric Holder has gone back to work for his old firm, the white-collar defense heavyweight Covington & Burling. The former attorney general decided against going for a judgeship, saying he’s not ready for the ivory tower yet. “I want to be a player. […]

    “The firm’s emphasis on pro bono work and being engaged in the civic life of this country is consistent with my worldview that lawyers need to be socially active,” he said.

    Right. He’s going back to Covington & Burling because of the firm’s emphasis on pro bono work.”

    And that’s what he’s been doing since he entered the revolving door (playing – playing the game of getting crooks – I mean his former clients – off with fines and wrist slaps). Who would have thunk it? Two blacks (Obama and Holder), riding in on “hope and change”, turn out to be as corrupt as the white crooks.

    http://davidstockmanscontracorner.com/eric-holder-wall-street-double-agent-comes-in-from-the-cold/

    And another great read by Matt Taibbi (from November, 2014) deals with a Canadian securities lawyer who was working for J.P. Morgan Chase during the time of the subprime garbage mortgages. She tried everything to get them to stop, spelled out that they were committing fraud, but she was shut up, then laid off. Very interesting read!

    “One of the ongoing myths about the financial crisis is that the government is outmatched by the legal talent representing the banks. But Fleischmann was impressed by the lead attorney in her case, a litigator named Richard Elias. “He sounded like he had been a securities lawyer for 10 years,” she says. “This actually looked like his idea of fun – like he couldn’t wait to run with this case.”

    She gave Elias and his team detailed information about everything she’d seen: the edict against e-mails, the sabotaging of the diligence process, the bullying, the written warnings that were ignored, all of it. She assumed that it wouldn’t be long before the bank was hauled into court. ]…]

    “Responsibility remains so diffuse, and top executives so insulated,” Holder said, “that any misconduct could again be considered more a symptom of the institution’s culture than a result of the willful actions of any single individual.”

    In other words, people don’t commit crimes, corporate culture commits crimes! It’s probably fortunate that Holder is quitting before he has time to apply the same logic to Mafia or terrorism cases.”

    http://www.rollingstone.com/politics/news/the-9-billion-witness-20141106

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