Debt Rattle January 28 2015

[Raúl Ilargi Meijer]

Harris&Ewing “Street scene with snow, F STreet Washington, DC” 1918 • Why Europe Will Cave to Greece (Bloomberg) • Can Europe Resist Greek Demands For
[See the full post at: Debt Rattle January 28 2015]

[V. Arnold]

I utterly fail to understand why Greece doesn’t just tell the EU, IMF, and World Bank to just go fuck themselves.
And claim their country/culture and deal with the savagery themselves rather than the savagery imposed.
Governments in general are just shit; why does anybody tolerate them?

[jal]

In my universe, the lenders always say, “pay me back, or else”.

[V. Arnold]

@ Jal

Or else what? Death?
The Greeks have plenty experience with death; IMO, they can no longer be scared; of anything…

[Raleigh]

V. and jal – “Instead, what most of these leaders miss is that it’s a bank bailout in plain view. What’s really happened is that since Greece ran into serious trouble repaying its debts four years ago, Germany, France and the EU have instituted what can only be described as a massive bailout of its own financial system — shifting the burden from its banks to taxpayers. […] This massive shift from private gains to public losses was done through the European Financial Stability Facility. Created in 2010, this was the European Union’s answer to the U.S. Troubled Asset Relief Program, the Treasury Department’s 2008 bailout program.”

And in answer to all the government officials and economists screaming that “the debt must be paid back,” the author of the article says:

“Those sound like very threatening words. And one wonders if these same officials made the same tough statements to Deutsche Bank, Commerzbank, Credit Agricole or SocGen when they were faced with potentially billions in losses when the banks were holding Greek debt. [..] Perhaps the move to shift Greek liabilities to state-owned banks (Germany’s export/import bank holds $17 billion in Greek debt) was necessary, but that doesn’t make it fair, or the right thing to do. Europe, like the United States, seems to be at the beck and call of its financial industry.”

https://www.marketwatch.com/story/how-wall-street-squeezed-greece-and-germany-2015-01-27

So the losses were shifted from the banks to the taxpayers, same as here. As he says, Europe and the U.S. are at the “beck and call of its financial industry”. Imagine having a great big, ten-year long party, racking up debt, enriching yourself, tucking your money away offshore, and then being able to transfer that debt into the names of your children. Of course, that wouldn’t be allowed for you, but it’s the same thing.

If taxpayers had been told “straight out”: Look, the banks were bad little boys and they got in trouble, but you’re good with taking on their debts and paying them off, aren’t you?” – well, I think there would have been a riot. Instead, the wording was carefully chosen (which no lay people understood, which is why they used those fancy words), and few were the wiser.

Greece is mainly dealing with the taxpayers, not the banks anymore. The banks offloaded their crap right quick.

[rapier]

I hate to have to go here again but the terrible Durable Goods report yesterday was inaccurate because of the Seasonal Adjustment and that’s the only number that gets reported. In fact December Durable goods orders not seasonally adjusted were 3.7% over Dec 2013 and that’s adjusted for inflation. They were 6.9% over November.

Durable Goods False and Misleading Headlines Bestow Gifts On Wall Street Dealers

It’s important not to get lead around by the nose with these silly numbers. While as the article says the long term secular trend is horrific, but like it or not the trend now is up. So too are withholding taxes.

[Author]

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