May 15, 2012

Chaos reigns in the slow-motion train wreck that is Greece

Greece has nothing going for it, except tourism but that is overshadowed by close to €300 billion in known debts, the financial equivalent of a black hole that could suck the rest of Europe and global finance into it.

Glenn Dyer — <em>Crikey</em> business and media commentator

Glenn Dyer

Crikey business and media commentator

What are the chances of Greece surviving bankruptcy, and can it depart the euro? Talks tonight between incoming French president Francois Hollande and German Chancellor Angela Merkel may help answer the questions that are dominating global markets and worrying bankers, central bankers and governments.


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24 thoughts on “Chaos reigns in the slow-motion train wreck that is Greece

  1. twobob

    ” … look at the chain of consequences for banks … ”

    That is the real problem here and exactly why this will be so very bad not only for Greece but for the entire worlds economy.
    Who knows which banks will fall? They are so interconnected with their CDS that this will cause an almost never ending round of default and CDS payouts triggering yet more defaults and payouts. It will be musical chairs with 100 players and only 5 chairs.
    The worlds economy teeters and it won’t only be the Greeks who’s retirement funds are wiped.
    Where are your funds? What if the worlds stock markets tank as some in the know expect? Will you even get cents on the dollar for your super?
    Letting other people manage your money is lazy and foolish leaves you so very exposed. There is very little that any individual can do but collectively that is not so. To act you need to understand whats going on, and that takes considerable time and effort. It’s well past time that you as an individual gave up listening to economists and started to work out where your money is and exactly how it is being used. Or if that is too hard convert it all to cash and hide it in a very safe spot indeed. You will be glad that you did.

  2. Andybob

    “I spent 90% of my money on women, drink and fast cars. The rest I wasted”.
    – Georgie Best

  3. Apollo

    My friend and I have just talked about this. We reckon Greece can sell the public assets to the ECB to raise fund for additional spending to create jobs and the ECB should guarantee to hold the assets until the Greek are ready to buy them back and not selling the asset to anyone else.

    That way their economy can recover while they can still meet obligation with the loan.

    What’s disturbing is the impost on Spain. They had the housing market crash which has nothing to do with government spending, now they nationalize the debts because the risky capitalists don’t want to lose their money, and they follow draconian austerity directive from Brussels when what they need is stimulus and the citizens who have nothing to do with the debt have to suffer the pain.

  4. Apollo

    imposition, their public assets.

  5. PeterS

    In historical times Greece (well, Corfu, anyway) supplied Italy (well, at least Venice) with all its oil requirements for lighting, heating and cooking. Olive oil, that is.

    With the Middle East bumping against Peak Oil, perhaps there is an opportunity here. How many olive trees would be needed to keep the world’s transport in motion?

    It would be Green Power, too!

  6. Suzanne Blake

    Greece is 1.5% of Europe’s economy, let them sink and learn

  7. gerard

    The Hoodwinking of idealism.
    Another big fall in world markets, billions will be wiped off and Greece is tottering on the brink of total economic collapse. Good morning!

    Some European countries which were supposed to be examples of how society ought to distribute wealth more equitable are now being lined up to fall like a row of dominoes set up on the dining table of good and well intentioned but un- equitable sharing of the rich Euro baked pork dish with crackling good social security till the grave.

    What went wrong? Was it the apple sauce?

    The answer might well come from the dining table itself. The excessive ladling out of all those goodies without balancing it to an equal generous increase in taxation revenue was always dodgy. The expenditure didn’t match the income. A classic case of economic delusion that one can live beyond means was always a premier lesson at the kindergarten of economics. If you keep scooping the sand out the sandbox will finally be empty.

    The lure of getting more with less income seemed to have overtaken the world of capitalism. Election after election the sound economic principles of setting expenditure to income was eroded away. The voters swallowed it like marsh-mellows on a stick held above the fire of greed and avarice. Right wing governments took over with the promise of more for less and we were all seduced by this ugly Judas kiss. And look at us now? Will there be blood on the streets once again?

    With Portugal and Spain queuing up after Greece with youth unemployment at a staggering fifty percent it seems to be hovering on a similar precipice into economic collapse.
    In Australia we keep rubbing hands together with glee in how we seemed to have escaped the GFC turmoil with our scooping up of mineral resources. In the process we seem to forget that this is due to luck much more than sound economics. Take out China, and we too would be lining up at soup-kitchens.

    Are we too taken in by the lure of more for less? Notice the upheaval in the suggestion of raising taxation on our resource mining companies. Notice how the Three hot headed Musketeers of our resource companies have taken on Australia and its citizens daring to utter getting paid a fair share of the economic resource pie. Notice too, how the principal of taxing those that defile our environment is fought against tooth and nail. Millions are being spent in advertisement opposing this very sound and principled way of making the environment spoilers pay for it. We too are cruising for a bruising being taken in by the fairy floss of more for less.

  8. twobob

    In addition Gerard, it should be noted of the disdain that many individuals now feel toward all politicians and politics in general. This disdain leads to a disconnect from all government and adds mighty to calls for small government. Small government leads to less government intervention which inevitably results in less oversight. Less oversight is exactly what the big time entrepreneurs wan’t. Less oversight means that they can get away with more. It’s not really in anyone’s interest to let this happen but it is an inevitable result of the media led assault on politics and their own shabby dealings to gain or retain power.

  9. jaywhar

    A question – didn’t the ECB lend around $1 trillion to the Euro banks at around 1%? Wouldn’t it have been quicker / easier / cheaper just to lend Greece say $400 billion at the same rate? Gives Greece room to get its house in order / grow, means no CDS trigger…?

    Moral hazard, yes; but isn’t lending it to the banks just as bad (and apparently less effective?)

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