Greece, the birthplace of the second wave of the GFC
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“Damn, no wonder the country’s in such dire straits,” I thought this morning. It was a Monday and half the city was shut down. The other half all seemed to be in restaurants, taking a long brunch. The morning had the feel of a “St Monday”, the old medieval holiday, when an entire village would simply declare that Monday was a saint, that this Monday happened to be her day, and that was that. In Psirri, the fashionable inner-city district, done in faux pastel and earth tones, everyone appeared to be hovering in slow motion over a tiny coffee. Ask a city of Germans to do the same thing during a financial crisis and they would be drumming their fingers on the table with anxiety and invading Poland again. Turned out it was kathari deterai, the first day of Orthodox Lent, variously translated as clean Monday, pure Monday, ash Monday and a bunch of other names. The event is marked with float parades, and whole towns pelting each other with coloured flour, in clown costumes. One of the other names is Green Monday, and this year it is, of course, all about the green. The holiday coincided with the revelation that Greece’s dodgy financial accounting had been assisted by the kind offices of Goldman Sachs, who had arranged a complex series of currency and debt swaps with the Greek government as a client in the early 2000s, right at the time that Greece (belatedly) joined the euro. This managed to keep whole chunks of Greece’s debt off the books by… well, let’s let Risk.net’s Nick Dunbar explain it:
I mean, duh. The crucial facts are these: the move kept the debt entirely off Greece’s books at the time, it projected a mega payment from Greece in to the future, GS wasn’t the only bank Greece was doing it with, and Greece wasn’t the only country doing it. As the date on the report above indicates, these deals have never been a secret — they’ve simply been hidden in plain sight, waiting for an intern to find them in the thicket of past high crimes and misdemeanours that constitute the whole of the global finance system for the past decade. Their rediscovery has created further embarrassment for Eurostat, the EU agency ostensibly devoted to ensuring compliance with EU standards, and which has effectively acted as an enabler and co-conspirator in fudging the books. Indeed, there is something pretty funny about the tut-tutting that the EU continues to make about Greece’s accounts, since the Union has been, in relation to its poor southern member, like the stereotypical Greek revenue inspector looking around a 50-table restaurant, and accepting that its revenues fall below the tax threshold. The EU has given Greece until the end of February to tell it what it already knew — that its accounts are Swiss cheese. The rediscovery of the swaps has come on the day that EU finance ministers meet to put some flesh on the bones of last week’s vague promise to back Greece as it heads towards a default. Funny that. At this point, one could start to feel like a history teacher trying to explain Anglo-Saxon crop rotation to a year-six class on a summer day. So let’s try and make it as clear as possible — the second wave of the 2008 GFC has begun, and Greece is where it started from. The first wave was prompted by the collapse of a series of private investment banks, starting with Lehman Brothers. The second is starting with the deep problems occasioned by the indebtedness of sovereign nations using the broad security of the euro, to be entrepreneurial with their budgets. That’s entrepreneurial in a political sense — thus Greece’s centre-right New Democrats left the nation’s finances unreformed as a way of giving the illusion that the wave of post euro-entry prosperity was solidly backed. Instead the country has simply wildly over-borrowed from its future. That much is Greece’s problem primarily, and Europe’s secondarily. It becomes a global matter when the degree of exposure of the global banking system becomes clear — hot on the heels of the last crunch, and with nothing resembling a real recovery in-between. Clean Monday indeed. The day itself is preceded by a special service of “Forgiveness vespers”, and a Ceremony of Mutual Forgiveness. In the week to come, everyone is supposed to attend confession, and clean house thoroughly. You couldn’t make it up. Unless you were a banker. Or a finance minister. Or a regulator. Or … |
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Crikey's Guide to Julia Gillard
20 Comments
And the EU didn’t do any due diligence and discover this deal? Hmmm.
Just like all the other Rundle missives from distant Europe: old news. This time with a soupcon of travelogue colour.
Frank, can you please shut up. You’ve made your goddamn point. I’m sick of reading the same comment under every single Rundle piece.
It may be old news to you but not everyone has the time to scour European newspapers for opinion pieces.
Scott: no need for newspapers- quaintly old-fashioned, like having a roving reporter.
Read it online or see it on TV.
Presumably this pointless rundlewander costs impecunious Crikey money.
You criticise Guy, and then admit to having the bad judgement to watch TV? I bet you think ACA is hard-hitting journalism.
BBC World and Al Jazeera for starters, Meski. Even the ABC manages some eurocomment. As for ACA, you jest, surely…
ACA defines hard-hiting as when some travel resort or battling small businessman refuses to advertise in one of their stupid glossary advertorials masquerading as current affairs…TV?..turn it off.
“hidden in plain sight,”watch France, perfidious Albion is carved in granite by comparison. An Oz greek friend went back to the old country for a wedding four years ago and said that everyone, from waiters to the sunglasses in hair crowd, agreed on one thing - the euro was hollowing them out. Nothing cost 10 or 20 drachma anymore, everything was a euro or multiples thereof except wages.
Frank, go away. I try not to watch TV and only have time for so much online news. I choose to make Crikey part of that. Yes we’d all read elsewhere about Greece’s troubles.
Personally I think it’s great that Crikey pays for a “quaintly old-fashioned” roving reporter. A well-written colour /comment piece can put readers in the picture much better than hundreds of other “straight” news reports. As this one does.
Pull your head in Frank.
Goldman Sachs seems to have its hands in every nasty bit of economic terrorism across the world. The time has come to declare them as a terrorist organisation.
We could instigate control orders on leading members of the group…ohhhh that would mean a number of leading lights in the liberal party and one or two in the labor party….no no no not a good idea then.
Widow Wankey: “Personally I think it’s great that Crikey pays for a “quaintly old-fashioned” roving reporter.”
Not while Crikey is run on a shoe-string. Not for content that is all over the net. Not for pedestrian rehash of foreign news.
Frank, well of *course* I jest. As for BBC and Al Jaz, last I saw they weren’t FTA, and the idea of paying for 95% cr*p cable doesn’t appeal.
Meski: Fair enough, but the Beeb etc are all online anyway. You appear to have an internet connection.
And what is Crikey’s role (n.b. Widow Wankey of Clunes)? This from the website:
“The Crikey mission
Crikey’s aim is very simple: to bring its readers the inside word on what’s really going on in politics, government, media, business, the arts, sport and other aspects of public life in Australia.”
Not forgetting: “Crikey must also operate as a business.”
I do, but I probably shouldn’t stream video whilst at work. Do Al Jaz stream?
Meski: Al Jaz does stream…they have several Greek debt stories running at the moment. No nude Macquarie Bank models so safe to watch at work…
I’d rather read a story filed from an “on the ground” reporter anyday compared to the vast majority of drivel that passes for journalism which is just a paragraph or two taken off the wires by a work experience student and posted straight away as “breaking news”.
Nothing beats seeing what is going on for yourself. For us Crikey subscribers chained to the desks here at work the next best option is to read something written by someone who is there.
Throughout all of the reporting of the Greek trainwreck I’ve not once read about what it looks like on the streets in Greece. Now I have.
Good piece Guy - keep it up!
Oh dear!
FC is again demonstrating his beliefs that he, alone, should be the sole judge of that which is acceptable to Crikey! and its readers.
Fair enough, I suppose, for one hollowed out prune driven by preconceptions and malice to say once that he has not enjoyed a particular column very much. Once is enough.
I have a suggestion for this would-be editor in chief. Start your own parallel online news magazine. Show us all how successful your myopic, narrow view of the world is, as you quaintly preach to the converted. Show us your successes and stop trying to rip into the broad fabric of Crikey! and its readership.
Unlike you, some of us are happy to read and to consider opposing and fresh views; to revisit previously held opinions and to absorb new facts.
Now, please leave us alone to enjoy our subscription news and current affairs magazine.
Remember: One comment on a topic = OK.
Continual repetitious affirmations as above = Not OK.
It is simple good manners, sir.
JB: “one hollowed out prune driven by preconceptions and malice”
Gorgeous. Such”good, simple manners…”. Actually, I’m driven by my chauffeur.
“trying to rip into the broad fabric of Crikey!”: I’m just stating the obvious. Do you think Crikey will survive if it indulges rambling poseurs like Grundle?
And “Broad fabric”? That broad fabric consists of Crikey contributors, who are paid $100 apparently (note that one contributor wrote on Margaret Simons’ blog the other day that he/she wasn’t paid for two pieces published last year, so never bothered again). Crikey contribs. write on what they know, exposing the, ummmm, shortcomings of Australian society. Read the Crikey “mission” statement.
Engineer: “the next best option is to read something written by someone who is there”. What makes you think the Beeb or any other media aren’t there? (I clearly saw the Tossopolis in the background of one report.) Is Greece off limits to the Euro media?
And many of them know far more about Greece than Trundle, who knows absolutely nothing.
FC I have to admit that I get more enjoyment from reading your analysis of GR’s articles than the articles themselves but I wonder if you have some kind of personal grudge against him or do you sincerely believe what you are writing?
Having said that I like the idea of GR’s on the ground type coverage it’s just I’d like him to go deeper. My wish would be for him to take a risk and get in with the anarchists, I don’t care how much they hate the media I want to know who they are and what they really stand for.
Gusto: No personal grudge. Never met him or anyone else in Oz cultural/political circles…they never leave Fitzroy or its analogues (except to go to the airport). We never go near Melbourne. In fact one of my criticisms of the Australian cultural scene early in my brief career as a commenter on Crikey was its incestuousness. It’s tiny. With tiny magazines (virtually all on permanent life support) etc. The cliques and circles intersect. About the first point I made replying to a Rundle piece was that essentially all the relationships of the inner-city culturati are conflicts of interest. One degree of separation. They’re bonded by school, propinquity, a ragged ideology. Everyone is either an enemy or friend. Many have been both. It’s impossible for them to be objective. Skewering turncoats (like Windschuttle, C.Pearson et al) is one way to mark the tribal boundaries. (Rundle is the keeper of this flame, and does it superbly.)
Rundle treated this sociologically obvious observation with derision. Understandable, because tribalism-mateship etc is inimical to original thought and action- something the caferati find impossible to admit. They are self-referential. It’s peer review, and they’re very strict on deviation. This affects matters of consequence, such as the AGW “debate”: the left has been colonised by the now decaying climate orthodoxy. Not a trace of journalistic or intellectual wariness did they exhibit. The culturati backed real-world policies which have already done much harm. Knowing virtually nothing about the empirical world, they are easily led. They wouldn’t know a roof space from a dead possum. As so often, the Left’s myopia plays into the hands of the Right. The vile Bolt is just one beneficiary. As the climate cult disintegrates, Bolt looks like a prophet and Mad Monk emerges from the wilderness trailed by Howard’s living dead. We need an independent, detached intellectual class to ruthlessly analyse Australian society and public policy. What we have is a self-indulgent, ill-informed, demoralised and introverted support-group clinging to a lifestyle.
So that’s what it’s all about.