Let's fish the big mo Up, I got the perfect drift boat.
cantfishforshit wrote:Countries, like families, make budget mistakes. These countries that do make adjustments. Many EU countries have made adjustments and are doing well. You can remain hyperbolic if you would like. There have been adjustments for many. These smaller countries may end up out of the EU if they don't adjust. The EU will remain.Which is why smart people with money in their pockets are gulping down Greece bonds these days.
Shut out of international bond markets for four years, Greek Prime Minister Antonis Samaras wasn’t going to take any chances with his country’s return.http://www.businessweek.com/news/2014-0 ... 00-percent
He began months ago lining up investors for the April 10 debt sale, which proved irresistible to the likes of BlackRock Inc. and Invesco Ltd. The keystone for his pitch was a September meeting with investors at JPMorgan Chase & Co.’s headquarters in Manhattan hosted by Chief Executive Officer Jamie Dimon, according to two people with knowledge of the matter, who asked not to be identified because the event was private.
The charm offensive paved the way for a 3 billion-euro ($4.2 billion) offering that drew orders for almost seven times that amount. While the nation remains blighted by deflation and the highest unemployment in Europe, the sale underscored Greece’s strengthening ties across the euro area as it seeks to overcome the stigma of starting a region-wide financial crisis and carrying out the biggest-ever restructuring.
Greece is probably now close to the bottom of its economic slump, which started six years ago. Between 2008 and 2013 real GDP shrank by 23.5 per cent and investment by 58.4 per cent. The most recent labour force survey showed unemployment at 26.7 per cent in January. The rate of youth unemployment in 2013 stood at 60.4 per cent. Bank loans to businesses were down at an annual rate of 5.2 per cent in February. Non-performing loans have reached a level of 38 per cent of the total. Bank deposits are shrinking.Followed by the sales pitch!
More shocking than those relative changes are statistics that put the data in perspective. Yanis Varoufakis, a Greek political economist, recently produced a long list, of which I found the following most striking: of 2.8m Greek households, 2.3m have tax debts they cannot service; pensions are the main source of income for 48.6 per cent of families; and 3.5m employed people have to support 4.7m unemployed or inactive people. The Greek economy is not in recession. Nor is it recovering. It has collapsed.
But there is another story – that of the bond salesman – who says Greece is the biggest rebound story in modern times. Piraeus and Alpha, respectively the second and fourth- largest banks, managed to raise equity capital of almost €3bn between them. Last year, it was mostly the hedge funds who took a gamble on the country. More traditional investors have been piling in since. Last week’s five-year sovereign bond issue attracted €21bn in offers from more than 600 mostly international investors.And solid analysis...
If I can discern any strategy in the official eurozone policy towards Greece, I would describe it this way: let’s generate a massive financial investment bubble and hope some of the money trickles down into the real economy eventually. With a debt ratio projected to rise to 177 per cent of GDP this year, Greece does not attract much real investment on the ground from overseas right now. Nor can it generate domestic investment because of its broken banking system.http://www.ft.com/intl/cms/s/0/26f7a326 ... abdc0.html
If the government could auction off its stake in the banks, it could use the funds to create a “bad bank” to take over the non-performing loans. Once the European Central Bank has concluded this year’s stress tests, a reinvigorated banking sector could start lending to a lean and reformed economy. Problem solved.
But it would take quite a bubble to get to that point. The reason Greece was able to attract so much interest in last week’s bond issue was a combination of the promise of a high yield and the maturity profile of existing Greek debt. Official loans – from eurozone member states and the International Monetary Fund – make up 80 per cent of the total debt. Greece will not start to repay this until 2023. In other words the country is solvent in the short run. But long-run solvency is far from certain.
And this brings us back to the fundamental problem: who in their right mind is going to make a long-term investment in a country with unsustainable long-run debt? I find it hard to see how one could generate an investment boom unless and until that official debt is forgiven, or defaulted on. The cleanest way to do this would be through a debt conference, but the creditor countries do not want to hear about it.
cantfishforshit wrote:Greece struggling = The EU is a failure...Got it. Sound logic and reasoning. Good gawd.You are the one who jumped on the Greece bandwagon as soon as JW showed up on it; theyre just like a family going thru chp 11, right?
Upsetter wrote:cantfishforshit wrote:Greece struggling = The EU is a failure...Got it. Sound logic and reasoning. Good gawd.You are the one who jumped on the Greece bandwagon as soon as JW showed up on it; theyre just like a family going thru chp 11, right?
Moreover, you then project stupid reductive reasoning on me cause you don't know shit from shinola and cant respond effectively. Pretty lame really.
Macroeconomics is obviously beyond your pay grade and I don't care to draw you a map. Oh yeah, you suck at logic too. Stick to emotionally driven, factually spurious arguments. You're aces at those.
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