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(Reuters)   With austerity vote approaching, Greeks convert bank deposits into more stable currency: pasta   (reuters.com) divider line 7
    More: Scary, deposits, Greeks, New Democracy, Spanish Banks, EIB, money market funds, currency, wire transfer  
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2223 clicks; posted to Business » on 13 Jun 2012 at 12:46 PM (2 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-06-13 05:17:48 PM
2 votes:

ablank: Leaving the Euro would crush the Greek banking sector to powder and cause massive disruption, but the Greek banking sector is already getting crushed by capital flight and not leaving the Euro basically guarantees that Greeks live in misery for the next 20 years.


This is the part Fark EconomistsTM don't seem to get. They're demanding that Greek must suffer to atone for their fiscal irresponsibility. On principle, I get that. But anyone who thinks there's a hope of this happening has absolutely no idea how the world works. So, in other words, an economist.

Greek is suffering now. Regardless of their sins, the country is broke, the economy is in shambles, the people are rioting, the government is not in control and there's no relief in sight. That's not to say they don't deserve their fate, but the question is, how do you threaten a dying man? The banks are putting pressure on Germany to put pressure on Greece to pay back its debts. Or. . . what? They'll get booted out of the Eurozone? They won't lend Greece any more money? What incentive does Greece have to play nice when they're already getting shiat on?

Don't get me wrong; I'm not absolving Greece of responsibility in any way, shape or form. I'm asking how you get a bankrupt government with no control over its citizenry to pay back loans with money it doesn't have using threats that aren't any worse than what's coming anyway. The answer is, you can't. The banks can use their PR departments to demonize Greece in the US media all they want, and yes to clarify Greece deserves no sympathy, but things can't get any worse for them so what the fark do they care? It's like threatening a tenant who just slit his wrists with eviction for bleeding on your carpet. You realize how stupid that is? He's gonna die anyway; even if you did nothing wrong -- fark principle, you realize you have no leverage, right? He might as well just keep bleeding on your rug until you drag him out, just to spite you, and that's pretty much what Greece is doing.

"You're only making it worse for yourself"
"It can't get any worse! Jehovah, Jehovah, Jehovah!"
2012-06-13 03:22:06 PM
2 votes:

WTF Indeed: It's pretty much over. The Germany and France will use the money for Greece to bailout French banks holding the bad debt. Greece will vote in super socialists that will destroy the economy.


well actually, their economy is already pretty destroyed. Greece is experiencing a depression and has been for a few years. Currently unemployment in Greece is 21.9%, about what it was at the peak of the Great Depression in the US.

The economy has been destroyed by the people currently running it. If the socialists win, will things get worse? Yeah probably for the next year, but Greece NEEDS to be unteathered from the Euro so it can return to competitiveness (they need to devalue their currency vs europe, but they can't if they're on the Euro). They also NEED to default on their debt. All these "rescue" packages are just the ECB sending money to Greece so they can pay the money they owe to banks in Germany and France. Leaving the Euro would crush the Greek banking sector to powder and cause massive disruption, but the Greek banking sector is already getting crushed by capital flight and not leaving the Euro basically guarantees that Greeks live in misery for the next 20 years.
2012-06-13 01:38:02 PM
2 votes:
You just don't understand high finance.

You're not rewarded for making a profit.

You're rewarded for making massive loans and gutsy risky investments. Better to lose $100 million and be thought a high roller than make a couple of measly million in secured loans and be assigned a desk in a cloakroom or basement washroom reserved for the guy who maintains the oil furnace. This is how banking, investment banking, hedge funds and derivative trading work, as well as the stock market and commercial loans.

Never lend money to anybody who has a good use for it, much less a need for it.
2012-06-14 09:39:51 AM
1 votes:

Corporate Self: Remember what happened when Europe put punishing austerity on Germany after WW I? A return to Greek fascism is a real possibility.

Once established, it can easily spread to other troubled economies like Spain and Italy.


Fascism is on the rise in Greece already. Really all forms of extremism. Why? because BOTH the center left and the center right endorsed the bailout deal and the austerity. There's no credible alternative other than more extreme parties.

Debeo Summa Credo: What you "austerity is killing the Greeks" folks don't realize is that the only alternatives to austerity are the northern europeans literally giving money to greeks, or the Greeks leaving the euro, with all the terrible implications of that for the Greek economy.


I absolutely realize that. Look, West Virginia is a relatively unproductive area of the United States. The United States has transfer programs (Medicaid, Medicare, Social Security, Title I money for schools, etc...) that prop up the economy of West Virginia. People in New York and New Jersey could go around decrying the profligacy of West Virginians and demand that they get their budgets in line, but they don't, because we're all Americans. We don't tell the less productive areas of the US just to suck it. The issue here is Europe either needs to be united in one economic unit (and YES have transfer payments) or it needs to split up (and have separate currencies), but the idea we'll have one economic policy for the whole continent and not have any transfer payments and set economic policy according to what makes Germans and the BeNeLux countries happy is not sustainable.

They could either a) send direct cash to Greece and other less productive countries, or b) the ECB could set monetary policy according to the needs of the PIIGS, or c) you break up the Euro. Like, your choice, but those are the real choices. Oh, I guess there's also possibility d) German dictatorship which can over-rule the democratic process in any non-French, non-German country. But German dictatorship has not historically been a good option for Europe.
2012-06-13 03:33:15 PM
1 votes:
Remember what happened when Europe put punishing austerity on Germany after WW I? A return to Greek fascism is a real possibility.

Once established, it can easily spread to other troubled economies like Spain and Italy.
2012-06-13 02:40:21 PM
1 votes:
i.imgur.com
2012-06-13 01:16:42 PM
1 votes:

moothemagiccow: Someone explain to me why I'm a farking idiot.


You knew Greece was a turd with money management and you made the loan anyway.
 
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