it was announced by the Fuhrer-country now in charge of continental
Europe. If we were personally holding Greek bonds they would be
asking us to take a 65% loss. We might have those bonds hedged via
CDS and be able to take 100% on this insurance should Greece default.
We might not decline the offer, but hedge funds like bought these
binds at discount and hedged via CDS. They will want a Greek
collpase. Standard and Poor has just announced it expects this.
Should we worry? I think so. The question is who 'owns' the
obligation to payout CDS and how much of that there is. Ridiculous as
it sounds Allan this is very much like insuring your house 100 times
over and being able to burn it down and collect 100 times value
(impossible with real insurance, but allowable in derivatives).
Sadly, loans have for long not been issued on ability to repay, but in
the hope of asset inflation. This started years ago when banks
started to loan to countries like Argentina. There are many questions
in this mess that defy your sensible thinking mate. It seems to make
no sense for banks to make loans they know are likely to fail - and
certainly not to kleptocrats like the ones who ran Argentina and still
run Greece. They piss the money up their own wall (Swiss bank
accounts etc.) - but what do the banks get in exchange. The answers
lie in knock-down prices in the fire sales and derivative hedges that
pay out on collapse. It's all to do with an excess of capital seeking
high returns. We need a return to high incomes related to work.
On Feb 25, 8:07 am, Allan H <allanh1...@gmail.com> wrote:
> Call it what you want. You can not loan money with out creating a way to
> repay the loan. And creating poverty is not a way to repay the loan.
> Allan
> On Feb 24, 2012 7:20 PM, "archytas" <nwte...@gmail.com> wrote:
>
>
>
>
>
>
>
> > It's a strange thing that there is no problem bailing out the banks
> > who caused most of this misery - but the kind of thing Allan puts
> > forward immediately falls foul as 'subsidy'.
> > Assets are now being seized from Greece - something that once took
> > force of arms. My guess is we will see a communist revolution there -
> > it was only the stationing of British troops that stopped this after
> > WW2.
>
> > On Feb 24, 9:39 am, Allan H <allanh1...@gmail.com> wrote:
> > > Bail out money well it is poorly spent and the banking panel is totally
> > at
> > > fault. the bail out negation is simple.. all loans are put on hold
> > > no interest and no pay back, a no gain no loss situation. the total
> > > bailout funds need to be used to create employment and permanent jobs..
> > > maybe manufacturing smart phones,, or other products.. now those holding
> > > the paper well they have a simple choice either wiat till Greece
> > > is economic stability or lose all of their money..
>
> > > As for the negotiators demanding austerity measures. they to should face
> > > the music also with wage cuts equal to those faced by the poorest, also
> > > that their shopping bills must meet the inflation they have created and
> > > they must pay equal tax rates.. no choice. They need to face first hand
> > > the hardship they have intentionally created. with their lives and cost
> > > based on the hardship they created and it ends when the hardship they
> > > created.. Let them hear and face the music they have composed.. Time for
> > > the banksters and negotiator to pay the piper.
>
> > > When bail out funds are used to create permanent employment and those
> > that
> > > have not paid their taxes,, collect them no matter where they hid their
> > > money. then the bail out will start working..
> > > Allan
>
> > > On Fri, Feb 24, 2012 at 3:17 AM, archytas <nwte...@gmail.com> wrote:
> > > > This situation has come about before. Prior to the Great Depression,
> > > > the Greek economy experienced years of growth, a healthy commercial
> > > > activity spree, and like today, a stark increase in (less-leveraged)
> > > > bank loans to finance it. When the Depression struck, banks and local
> > > > businesses faced unpayable loans and declining asset values. (Stop me
> > > > when this sounds familiar).Credit constricted immediately, choking
> > > > internal economic activity. In 1928, the Greek Drachma was tied to
> > > > the gold standard, but pegged to the British pound. When Britain
> > > > devalued its pound in 1931, the Greek government responded by raising
> > > > public investments and pegging the Drachma to the US dollar.
> > > > But by early 1932, central bank reserves had fallen so much that they
> > > > only backed 40% of Greek bonds. Even without the slow drip of rating
> > > > agency downgrades to highlight this leveraged debt situation (which is
> > > > nothing compared to say, today's US reserves vs. debt leverage), the
> > > > lack of reserves caused foreign speculators to fleece the Drachma/
> > > > dollar exchange rate. Bond yields blew out. Borrowing costs shot up.
> > > > So in March 1932, the League of Nations (the precursor bank bailout
> > > > entity to the ECB/IMF) agreed to provide a loan to service Greece's
> > > > debt in return for – wait for it - austerity measures. Unlike today,
> > > > the government said 'hell no.' Instead, in April, 1932, it floated the
> > > > Drachma - which devalued quickly. It also declared a public debt
> > > > moratorium, and increased infrastructure spending to strengthen its
> > > > economy. It negotiated repayment terms with creditors for overdue
> > > > interest. By 1934, agriculture and industrial production rose, the
> > > > currency was more stable, employment increased, and the budget
> > > > balanced.
>
> > > > Greece would have faired better if it had got out of this by default.
> > > > Don's point on the frustration we aren't doing enough generally is
> > > > what scares me. UK GDP has actually fallen more than that of Greece
> > > > since 2009! But what scares me is that I believe banks essentially
> > > > caused WW1 and its replay and seem even more in control now.
>
> > > > On Feb 24, 1:19 am, archytas <nwte...@gmail.com> wrote:
> > > > > Back to the Greeks, it appears they are being bailed out, but as far
> > > > > as I can see the money is going much like a version of TARP to
> > > > > European banks. Somewhere in all this some mighty big crooks have
> > had
> > > > > the original cash and we should be chasing them.
> > > > > I don't believe manufacturing can bring the jobs back though anything
> > > > > is welcome. We need new thinking on work and reward - though in the
> > > > > meantime we could introduce international service at decent wages to
> > > > > soak up the young and unemployed.
>
> > > > > On Feb 24, 1:08 am, archytas <nwte...@gmail.com> wrote:
>
> > > > > > What the banks did was lend money they didn't have - which perhaps
> > > > > > weirdly isn't wrong in-itself - if the demand for loans for
> > productive
> > > > > > purpose is there then why not make the loans in due diligence - we
> > all
> > > > > > benefit from the increased productive capacity produced. The
> > snag
> > > > > > was fraud and the banks were clearly incapable of resisting this
> > and
> > > > > > bribed politicians of all kinds to deregulate (the UK is worse than
> > > > > > the US on this) and allow massive leverage through fractional
> > > > > > banking. This happened everywhere once the ball started to roll.
> > It
> > > > > > all works if most of the investment is sound - but there is no
> > Black-
> > > > > > Scoles equation behind any of this. The problem with leverage was
> > > > > > well-known - the more fractional your capital (less of it in ratio
> > > > > > with what you lend) the more likely you end up insolvent if
> > anything
> > > > > > goes wrong. A few bad deals screw up your whole company. This is
> > the
> > > > > > truth - the rest is fraudulent accounting.
> > > > > > The idea stems from a business practice called 'discounting
> > cashflow'
> > > > > > - which is largely about talents story from the bible - you don't
> > just
> > > > > > bury your talents but employ them to purpose - good as far as it
> > goes
> > > > > > - but the ultimate source of 'talents' is the tax-payer and they
> > > > > > started to deploy our talents without asking. Indeed this was a
> > dodge
> > > > > > used to goldsmiths who lent money on the basis of other people's
> > gold
> > > > > > kept in their vaults. Fine as long as you never hit trouble and
> > have
> > > > > > to hand over the gold (tax-payers' money). At the micro-level I
> > can
> > > > > > tell you about companies so dumb they didn't bank money overnight
> > and
> > > > > > thus missed the interest this gleans. But all this went beyond
> > good
> > > > > > housekeeping.
> > > > > > The story would take a couple of pages to write even at this level
> > -
> > > > > > so I won't go on. At the heart if it banks were betting with out
> > > > > > money - the question we should now ask is who should own them -
> > and I
> > > > > > don't just mean the ones we directly bailed out.
>
> > > > > > On Feb 23, 12:29 pm, Molly <mollyb...@gmail.com> wrote:
>
> > > > > > > Sounds right to me. It is the current economic strategy in the
> > > > > > > Detroit region. Along with auto, there are medical, IT and
> > > > > > > alternative energy (won't mention defense) technologies being
> > > > > > > developed and manufactured. More and more of it. We have a
> > long way
> > > > > > > to go to come back but it has begun. going the distance will be
> > the
> > > > > > > challenge. A hall of fame basketball star for a mayor helps
> > foster
> > > > > > > that spirit.
>
> > > > > > > On Feb 23, 2:49 am, Allan H <allanh1...@gmail.com> wrote:
>
> > > > > > > > Am listening to the news, and have been thinking about china
> > an
> > > > apple and
> > > > > > > > their claim saying they own the IPad name or what ever .. but
> > I
> > > > listen to
> > > > > > > > a friend talk when he was employed by a chinese company was
> > just
> > > > how
> > > > > > > > dishonest they were in all areas.. Actually this claim by china
> > > > could
> > > > > > > > possibly really show this dishonesty and the effect or fall out
> > > > could be
> > > > > > > > bringing back manufacturing to out countries.
>
> > > > > > > > A manufacturing based economy can put the unemployed back to
> > work.
> > > > and the
> > > > > > > > unemployed working and buying national made products would make
> > > > for a
> > > > > > > > healthy economy. I am probably saying this wrong.
> > > > > > > > Allan
>
> > > > > > > > On Thu, Feb 23, 2012 at 8:39 AM, Allan H <allanh1...@gmail.com
>
> > > > wrote:
> > > > > > > > > I do think there is revolution in the air as people, some one
> > > > is going to
> > > > > > > > > overcome banking dilemma,, I do believe that the bail out is
> > > > just how to
> > > > > > > > > rip as much money out of Greece as possible,
> > > > > > > > > Allan
>
> > > > > > > > > On Thu, Feb 23, 2012 at 4:28 AM, Don Johnson <
> > daj...@gmail.com>
> > > > wrote:
>
> > > > > > > > >> Reminds me of an old Heavy Metal quote.
>
> > > > > > > > >> "He's nothing but a low-down, double-dealing, backstabbing,
> > > > larcenous
> > > > > > > > >> perverted worm! Hanging's too good for him. Burning's too
> > good
> > > > for him! He
> > > > > > > > >> should be torn into little bitsy pieces and buried alive!"
>
> > > > > > > > >> -Hanover Fiste
>
> > > > > > > > >> We share frustrations Neil. What little being done is either
> > > > wrong or
> > > > > > > > >> inadequate. You have a much broader understanding of the
> > > > banking bail outs
> > > > > > > > >> than I do. I resent having to bail them out as a tax payer
> > > > while at the
> > > > > > > > >> same time not being able to profit from buying property at a
> > > > much
> > > > > > > > >> discounted price because the bailouts
>
> ...
>
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