But I thought bailouts worked?

Shouldn't this be labeled obvious? At least to anyone who has paid any attention to the situation?

2012 could be the year Germany lets the euro die (new window)

On NPR a couple months back they had some guy comparing the south american defaults of the late 90s? I think... Argentina and Ecuador handled their defaults in two different ways and Ecuador is still suffering where Argentina is doing much better. The greeks are going down the Ecuadorian road.

All things considered, I think it's mighty generous of the Euro to give Greece all the way until April. If they were in the dollar zone they'd have been kicked out months ago.

who cares, i have made a few thousand already today on shorting the euro...fark them.

Not exactly a huge blow to the system. They'll be broke and destitute either way, but leaving the Euro cuts the last remaining cords of a safety net they may have had.

TOO BIG TO FAIL!

So, will they bring back the drachma?

Drachma. Drachhhhhmmmaaaaaaaaa. Just rolls off the tongue.

Leave it to the Greeks to go down on the world economy. Somehow, regardless of what they do, there's another worldwide bank crash coming.

How is them leaving a bad thing? Seems to me the Eurozone at that point would be free of some dead weight.

As long as my Ameros are still good, who cares?

They weren't properly vetted or audited when they were allowed to join the Euro in the first place. Germany and France were so enthused about expanding the Euro, they turned a blind eye to Greece's shady accounting and cooked books.

Malakas...

They need to make Mamma Mia 2 and pump more money into Greece!

canyoneer: 2012 could be the year Germany lets the euro die (new window)

that was a very difficult article to read from a grammar perspective.

Lost Thought 00: Not exactly a huge blow to the system. They'll be broke and destitute either way, but leaving the Euro cuts the last remaining cords of a safety net they may have had.

If the Greeks are smart, they'll choose to default on all their debt. While this will prevent them from borrowing money, it will enable them to build a budget based solely off of what they can collect in taxes with the benefit of no interest payments.

The concern to the system is that all that defaulted debt will have to be written off by the banks that were lending to them, credit default swaps will have to be paid off (which will costs the banks even more), and other countries such as Portugal, Spain and Ireland that are approaching similar situations may decide to do the same thing. So it could end up being a much bigger deal in the end.

corn-bread: How is them leaving a bad thing? Seems to me the Eurozone at that point would be free of some dead weight.

If they let Greece go in the toilet everyone is going to yank their money out of all the other deadweight countries like Spain, Ireland, Portugal, etc. Greece in itself is worthless but the move will spook any European investors. Overall I believe it will be great for the US (money will come here) but they'll be fighting with sticks and rocks in Europe for the next twenty years.

Greece to Euro: "So long and thanks for all the fish!"

What happens to the money that already got pumped into Greece already? It seems that someone here got buggered.

This from the article Canyoneer linked.

"The second wave will hit with youth unemployment already at 45pc in Greece and 49pc in Spain; and with the US labour participation rate already at depression levels of 64pc. "


No... we can't be in a depression, Fox news says we aren't...

/Lies and the lying liars who sell them.

Greece leaving the Euro?



That might not be a bad thing.

xtragrind: Overall I believe it will be great for the US

To an extent, it already is. Despite our ongoing economic problems, the meltdown of the Eurozone has made us look that much better by comparison which boosts confidence.

It's like me running in a race full of fatties. I may not be all that fast, but I'm still faster than them.

Memoryalpha: This from the article Canyoneer linked.

"The second wave will hit with youth unemployment already at 45pc in Greece and 49pc in Spain; and with the US labour participation rate already at depression levels of 64pc. "


No... we can't be in a depression, Fox news says we aren't...

/Lies and the lying liars who sell them.

EVERYONE says we aren't, you farking retard. Congress, the administration, and the press are all in cahoots to make us believe we aren't.

/idiots and the idiotic idiots with their obsession about Fox News

I, for one, hope they solve their problems and see the light. They've got to plug and think; they've got to feed it right. There ain't no danger they can go to far, if they start believing now, that they can be who they are. Greece is the word.

fireclown: What happens to the money that already got pumped into Greece already? It seems that someone here got buggered.

Germany. That's why they're kicking Greece out

/didn't even give a reach around
//it's a good thing to let Greece fail without taking the rest of Europe with them

Jerkwater: They weren't properly vetted or audited when they were allowed to join the Euro in the first place. Germany and France were so enthused about expanding the Euro, they turned a blind eye to Greece's shady accounting and cooked books.

Well when tax evasion is a national pastime, and flagrantly done with little consequence, paying bills becomes hard.

roncofooddehydrator: Lost Thought 00: Not exactly a huge blow to the system. They'll be broke and destitute either way, but leaving the Euro cuts the last remaining cords of a safety net they may have had.

If the Greeks are smart, they'll choose to default on all their debt. While this will prevent them from borrowing money, it will enable them to build a budget based solely off of what they can collect in taxes with the benefit of no interest payments.

The concern to the system is that all that defaulted debt will have to be written off by the banks that were lending to them, credit default swaps will have to be paid off (which will costs the banks even more), and other countries such as Portugal, Spain and Ireland that are approaching similar situations may decide to do the same thing. So it could end up being a much bigger deal in the end.

Which pretty much f*cks us because you know the TBTF banks will be back to suckle more cash from the government teat, still going "b b but SOSHULISZM!," while paying out big bonuses. Not that I don't think Greece should pull an Iceland. I just think any bank or insurance company asking for a handout should get nationalized, all labor contracts voided (and that includes the C-levels), and broken into tiny pieces.

The hilarious thing is that Ireland went for the full austerity budget just like the banks wanted. The paper tiger raised taxes on the little people, cut services, et al., and their still f*cked. I guess Republicans will point to them as a success this election season!

The US 'recession' ended in 2009. We are well into 'recovery'.

...it's just a little slow.

I think we ate too much stimulus and thus it made us a fatty

Greece be going back to Drachma. Ya feelz me! (new window)

My Big Fat Greek Default

/Anyone use that yet?

Headso: On NPR a couple months back they had some guy comparing the south american defaults of the late 90s? I think... Argentina and Ecuador handled their defaults in two different ways and Ecuador is still suffering where Argentina is doing much better. The greeks are going down the Ecuadorian road.

Actually, Ecuador is in trouble because it uses the U.S. dollar.

The sucre lost 67% of its foreign exchange value during 1999, then in one week nosedived 17%, ending at 25,000 sucre = 1 U.S. dollar on January 7, 2000. On January 9, President Jamil Mahuad announced that the US dollar would be adopted as Ecuador's official currency. The US dollar became legal tender in Ecuador March 13, 2000 and sucre notes ceased being legal tender on September 11. Sucre notes remained exchangeable at Banco Central until March 30, 2001 at 25,000 sucres per dollar. (new window)

Ecuador can't recover using the over-valued (for them) dollar. They should reintroduce the sucre and devalue.

That is precisely why the Eurozone and Euro are in trouble: Economies like that of Greece are using a wildly overvalued (for them) currency. Greece (and at least some of the others) needs to dump the Euro, reintroduce the drachma, and inflate their debt away. Denominated in Euros, the Greek economy is hopelessly uncompetetive. Argentina rebuffed the IMF and its counter-productive austerity regime and devalued its currency, inflating away debt and regaining relative competetiveness. This austerity regime for underperforming Mediterranean economies will not help - in fact it is simply causing a downward spiral.

Currency unions without political union have always failed in the past. It's hard to imagine that the Euro in its current form will survive.

Memoryalpha: This from the article Canyoneer linked.

"The second wave will hit with youth unemployment already at 45pc in Greece and 49pc in Spain; and with the US labour participation rate already at depression levels of 64pc. "


No... we can't be in a depression, Fox news says we aren't...

/Lies and the lying liars who sell them.

I would say that it's lazy to compare labor participation rates of the 1930s - an era with dramatically lower life expectancy and with a much younger population median than with now where millions of people don't work simply because they're retired and/or on SS. That and you'd get a factory job at 16 in 1930, and now you're in school until your early 20s, but that would get in the way of jerking off to doomsday scenarios.

Sorry everybody, but the global economic booga wooga is not coming. Your life will remain as dull and repetitive as ever.

Voiceofreason01: Germany. That's why they're kicking Greece out

So Germany would get stuck with a whole mess of Greek bonds that will probably plummet in value like mad (or default outright) when Greece leaves the Euro. Wouldn't that give Germany an incentive to keep Greece in the Euro long enough for the bonds to retire?

Headso: Argentina is doing much better

Not really.

Argentina is messed up with runaway inflation, despite what the ultra corrupt government statistics say.

There are many goods, like clothes, it is cheaper for me to buy in the US & ship down via USPS then it is to purchase in Argentina.. despite the 4.5:1 currency exchange.

canyoneer: 2012 could be the year Germany lets the euro die (new window)

By Ambrose Evans-Pritchard, aka Little Mister Sunshine.

Memoryalpha: No... we can't be in a depression, Fox news says we aren't...

/Lies and the lying liars who sell them.

Oh, look, another person who doesn't understand basic, definable terms and thinks that makes him smart.

So, basically, you don't know what a recession is so you just think anytime the economy isn't in great shape that means recession. You're wrong - factually and indisputably wrong - and it doesn't serve any purpose to go about being so wrong since you'd have a perfectly valid point anyway if you chose to be smart about it and not intentionally misuse terms you don't understand, but whatever.

Why settle with just being right when you can be a flailing maniac instead, right?

And furthermore, this should be an object lesson for everyone about globalization. Globalization is causing the same sort of imbalances that are bankrupting Europe - credit bubbles followed by financial crashes. China is totally out of whack now - a gigantic bubble. Look at money supply and manufacturing indicies over the last 3 - 6 months...scary. Combine that with the current phase of the Kondratieff Wave, and there is likely big trouble yet to come. This new Great Depression is far from over, and it's doubtful we've seen anything near the worst of it. Odds favor a major war, to boot. The cycles are in phase, compounded by emerging relative scarcities of strategic resources. Potentially a perfect storm.

...a lesson about Globalization. I'll say.

The price of olives is sure to go up, And that will cascade to Martini prices !

....a perfect storm. War is coming.

I read somewhere that there is no mechanism for the breakup of the Eruozone. So if Greece wants to leave, the basic document will need all the countries to agree to an amendment.

Good luck with that...

canyoneer: 2012 could be the year Germany lets the euro die (new window)

I have an honest question about that: Everyone seems to think that the USA will, soon, no longer be the world's most powerful nation (and by extension the US President will be no longer the most powerful individual). Generally the belief is that China will overtake the importance the USA has. But does it make sense to say that this Euro struggle makes it seem like Germany has temporarily filled the power vacuum that China was supposed to fill, and that Angela Merkel is now more powerful than the US President?

It seems to me like our western world view is lagging behind the change in imperial power. Or what might be even more mind-blowing is that the USA is still the most powerful nation but the US Presidency is not that important anymore as the US government is unablewilling to act rationally against the threats to economic stability worldwide.


/Note: I am not blaming Obama for the collapse of US soft power, but someone probably could.

Rapmaster2000: Sorry everybody, but the global economic booga wooga is not coming. Your life will remain as dull and repetitive as ever.

I don't think it will be doomsday, but it won't be as nice as we've had it for the last 30 years either (and for many, that hasn't been all that great to begin with). For instance - I read somewhere that Medicare/Medicaid costs in the federal budget have increased 9% per year since 1980. That means it doubles every 8 years. Right now it takes up $800 billion and we get $2.4 trillion in tax revenue. So in 8 years it will take up $1.6 trillion and in 16 years it will take up $3.2 trillion.

Meanwhile, tax revenue has been relatively flat for the last decade. We're clearly going to have to change the Medicare/Medicaid system sometime within the next 16 years. The longer we wait, the larger the impact that change will have because not only will the government stop spending that money, but all the people whose jobs are paid by that money will stop receiving it.

fireclown: What happens to the money that already got pumped into Greece already? It seems that someone here got buggered.

mainstreet62: Greece never should have been in the Eurozone anyway, they didn't qualify with honest numbers.

Yeah, and then French and German banks loaned them billions and billions of Euros - a sort of Continental version of the subprime NINJA loan. Maybe they shouldn't have done that.

Bennie Crabtree: canyoneer: 2012 could be the year Germany lets the euro die (new window)

I have an honest question about that: Everyone seems to think that the USA will, soon, no longer be the world's most powerful nation (and by extension the US President will be no longer the most powerful individual). Generally the belief is that China will overtake the importance the USA has. But does it make sense to say that this Euro struggle makes it seem like Germany has temporarily filled the power vacuum that China was supposed to fill, and that Angela Merkel is now more powerful than the US President?

It seems to me like our western world view is lagging behind the change in imperial power. Or what might be even more mind-blowing is that the USA is still the most powerful nation but the US Presidency is not that important anymore as the US government is unablewilling to act rationally against the threats to economic stability worldwide.


/Note: I am not blaming Obama for the collapse of US soft power, but someone probably could.

You haven't adequately defined "powerful", You are also conflating personal influence (the bully pulpit) with law-making, treaty-making, and military power.

Here are some facts to consider.

The US can project and sustain much more military power than anyone else. More than Europe, Russia, and China combined. Angela Merkel really can't invade anyplace else; Barack Obama can.

The US dollar is still the world's biggest reserve currency, and US Treasury bills are still the last safe haven for investors. When the shiat hits the fan, DeutscheBank is buying T-bills; American Express is not buying euro-denominated German government bonds. China isn't even a blip on the radar.

The US economy (especially in regards to individual consumers) is larger than any other other under a single political and cultural umbrella. If you are an exporter with a widget to sell, the US is best place to do it.


Can those things change over the next 100 years? Certainly.
Will they change over the next 100 years? To some degree, most likely.
Is this the end of the world, OH NOES, Mad Max scenario? Not in the slightest.

FrancoFile: You haven't adequately defined "powerful", You are also conflating personal influence (the bully pulpit) with law-making, treaty-making, and military power.

Okee-dokee.

he US can project and sustain much more military power than anyone else. More than Europe, Russia, and China combined. Angela Merkel really can't invade anyplace else; Barack Obama can.

That "hard power" seems pretty damned useless. Go ahead, invade! Have fun paying for it. The US can't sustain its military projection because, frankly, military power depends on a sustained peace dividend.

The US dollar is still the world's biggest reserve currency, and US Treasury bills are still the last safe haven for investors. When the shiat hits the fan, DeutscheBank is buying T-bills; American Express is not buying euro-denominated German government bonds. China isn't even a blip on the radar.

The US economy (especially in regards to individual consumers) is larger than any other other under a single political and cultural umbrella. If you are an exporter with a widget to sell, the US is best place to do it.

Can those things change over the next 100 years ...

You speak sense. Thanks for the reply!