Tag Archives: Grexit

April 17, 2015 · 18:27

I read the news today, oh boy!

It was not today but, yesterday, all my troubles seemed so far away, this accountant is not here to stay, I hope we fear for yesterday!

It seems appropriate to use the words of the Beatles here. Even though many at times wonder whether London had remained British (it’s a foreign bankers thing), we all agree Liverpool is as British as it gets.

So, what brought this about? Well, it was another part in the Guardian (at http://www.theguardian.com/business/2015/apr/15/imf-forecast-uk-george-osborne-deficit-reduction-growth-fuel-tax). You see, I had an issue with all this right from the start. Perhaps you all remember how in April 2013, the IMF told Osborne to slow austerity and spend more, because that was good for the economy. George Osborne stood firm, ignored the IMF and he was right. Lowering debts as much as possible, tightening the belt was a solution. It was not a popular one, but behold, the UK economy went slightly better. So when we read ‘IMF forecast blows hole in George Osborne’s deficit reduction plan‘, I am faced with all kinds of doubts in the direction of the IMF. the subtitle gives us ‘Gloomy view on UK economy says government spending on welfare may need to be higher than Treasury plans, while lower tax receipts will undermine growth‘, two parts, the first part would be nice, because those on welfare are truly in a bad place. Yet, the UK treasury is less then empty, it is at minus 1.7 trillion and the dangers of Greece is adding fuel to that danger. Lower tax receipts do not undermine growth in my view, it starts spending to some extent and hopefully investments in business and staff to a better extent. Whether that is true remains to be seen, but raising tax receipts is definitely not going to work.

“The Washington-based organisation said the current prediction of a £7bn surplus in the last year of the next parliament would instead be a £7bn deficit” is an interesting quote! What was it based upon? You see, they imply an error of 14 billion, which is 1/3rd of the entire Defence spending. More apt, 14 billion is the budget of ‘protection’ for 2016, which covers: Police services, Fire-protection services, Law courts, Prisons, R&D Public order and safety, Public order and safety n.e.c., so how exactly can we see this 14 billion blowout? The quote “the IMF warned that its officials took a gloomier view of the UK’s growth prospects over the next five years” should be read carefully. Just like the initial mismanaged prediction the IMF made in 2013, what are they not telling us? Yes, we might ‘accept’ the harsh words from Christine Lagarde as given in another place where we read “The head of the IMF, Christine Lagarde, said delaying the payments would be an unprecedented action that would only make the situation worse“, in regards to the 1 billion Euro bill that Greece has to pay in the very very near future. Yet, Mario Draghi stated only a day earlier in regards to a Greek default “I don’t even want to contemplate that. And based on the Greek government leaders’ statements this option is not contemplated by themselves as well. So I’m not ready to discuss any possible situation like that“. So is Mario Draghi at this point utterly reckless or incompetent? There is clear indication that Greece cannot pay. Bonds for Greece are now set at well over 22%, which is almost unheard off, it also means that repackaging old debts could cost many billions extra. In addition we see the speculation from some economists “If Greece was unable to pay the IMF and is forced to default on payments to public sector staff, pensioners and welfare recipients, economists have speculated it may be forced to introduce capital controls to prevent a flight of funds out of the country“, so what do you mean prevent? Do you remember the Article by Kostas Vaxevanis? It was in 2012, where the journalist (not them tax evaders) was arrested for publishing that list of almost 2100 rich Greeks with well over 2 billion Euro in Swiss Bank accounts. This is less about money leaving and more about those who already filled their pockets (all Greeks) living somewhere else in luxury for a decade or two whilst Greece burns down.

So back to the British budget, yes when Greece defaults (which is a reality we could actually face) it will also hit the British budget. Consider the punch that Grexit will have on Italy and France, export to those two nations will lower considerably, their budgets will hit hard and anyone who financially supported Greece will now face the reality of losing out of that 300 billion means that the money comes from those underwriting those loans. Who and for how much I cannot tell at present, but it will be a distinguished list. So in all this, is the response from Mario Draghi reckless or incompetent? I let you decide!

The next part of the issue with the article is one that is an issue for me as well. The quote “Earlier this week the IMF warned that the UK’s stellar growth was due to slow from 2.7% this year to 2.3% in 2016. A judgment on the likelihood of a messy outcome to the election was behind that forecast, which it said would have knock-on effects for several years to come“. There is truth in it! You see, it should not matter too much, but the one party that could change it is UKIP. I guarantee you that if Greece gets any leniency whilst they have not done one thing to remain credible, there will be a push towards UKIP in a way we have never seen before. The people are angry! They have been cut to below a minimum and at the same time, the Greeks get to toss around 300 billion, unaccountable in any way. Timing is an issue here and I believe it had another part to play. If UKIP gets the infusion because others are going soft on Greece in the 25th hour, it will also push the power Marine Le Penn (France) needed. At that moment the push for National Front could result in a landslide victory, which means that the two largest players will walk away from the Euro, this pushes Germany as well, because it must protect itself. The fallout will be legendary.

First I must warn you that the last part is a personal view, so you should look at where you live and whether my vision has any reality, but if so, consider what would happen and how much it hurts your future!

But back to Britain we go! Those elements have an impact and that is why they had to be mentioned, but the reasoning of the IMF projecting it all 14 billion lower is still and issue. They were wrong before, but are they wrong now? Are they factoring in Greece? The IMF looks further, but now includes greenhouse gas emissions. It is stating a needed change (to some extent) to counter lower taxation due to collapsed oil prices into raised taxation based on energy usage. I am not sure if there is a case here, if the lower oil prices gets people moving, preferably into jobs, that that would also spike the Tax coffers as welfare goes down and taxable income increases. Pushing people into high energy bills is not a solution, especially if that stops a workforce from becoming mobile. So, I have issues with this article on several sides.

Beyond the budget, the first duty will be to lower to total debt. It will be a hard road and it will mean ongoing austerity, but if now, consider how Greece could be a factor in toppling the governments of France and Italy as their debt is maxed out, we must walk away from the walk softly approach, we must battle the debts if we want to come out on top, which relates again to the IMF and some of their statements, who are they representing stronger with their ‘status quo’ message? Japan? US? Or their own chance to survive?

The question there is too complex for me to see a solution in, but there is clarity that the first duty of the Commonwealth will be to get our budgets right and to get rid of the debts we have. Germany already showed the evidence a few years ago, now the Commonwealth must follow!

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March 16, 2015 · 01:10

In fear of the future

As elections draw near, we see an everlasting image of what was, what could be and what is. The last of the issues is then rejected in two directions. As the Tories will go from what is into what could be, we will see labour into the mesh of what was and what did not happen. They are elements we saw coming a mile away (at http://www.theguardian.com/politics/2015/mar/14/osborne-budget-speech-economy-growth-deficit).

War is constant!
The political face of warfare never changes!

Both true, both unconditionally an issue in this day and age.

You see, the one trillion in debt is bogging down the UK and the Commonwealth as a whole. We need to bring it down, yet when we see the more likely response as it is given in the Guardian: “Deficit reduction has been much slower than Osborne forecast five years ago. In his first budget, in June 2010, the chancellor predicted that he would need to borrow £37bn in 2014-5” and “that tax receipts would cover day-to-day government spending. The actual figure will be almost three times that“. Both are right, both are staring down the wrong rabbit hole! If we accept the generic statement that the UK faces a £43 billion interest bill every year, which is more than the spending of Defence, are we catching on? Bankers end up with a 43 billion payout, which is certain money, no risk and all very much fuelling a banking bonus. The interest is just a little shy of 50% of the allowance for Education. Getting rid of the debt must remain the highest priority. Apart from most of us regarding the interest bill as an issue, it is nothing compared to what happens if the budget is not properly managed. Yes, it sounds so nice that we see the quote “Vince Cable has warned that George Osborne has no room in next Wednesday’s budget for a substantial pre-election giveaway, but acknowledged that there was some headroom in the public finances for modest tax cuts or an increase in public spending” (at http://www.theguardian.com/politics/2015/mar/13/vince-cable-osborne-budget-no-room-pre-election-bonanza), but regard the Guardian image (at http://www.theguardian.com/news/datablog/2014/mar/21/budget-2014-tax-spending-visualised#img-1). Here we see that borrowing was still needed, at the amount of £84 billion, which means that the debt is not diminishing. At the same time, the Eurozone decided to go on a one trillion spending spree, which will hit the UK (as part of the EU) sooner rather than later, which is part of the problem too, because these spending sprees are only working for a drive of the people towards Ukip. To be honest, I am not sure if the premise has changed. I remained on the fence considering that leaving the EEC was too dangerous, but as we see irresponsibility and non-accountability (the sad comedy of a threesome involving a Greek, a credit card and a banker) is now fuelling a stronger drive towards Ukip, Whilst political Europe is wording bad management clauses and whilst they have no real solution, we see deeper dive into debt. The UK MUST AT ALL COST prevent this nightmare. It seems all too clear that Germany is now also ready to leave the Eurozone. Perhaps not the politicians in an outspoken way, but the German people seem to have had enough. Of all the crazy rock bands that Europe has, the Greek one, with at the microphone Alexis Tsipras, the drums are played by Panos Kammenos and as ever in style of Greek theatrics, the Bass is played by Yanis Varoufakis. The name of this band is Aite and it remains to be seen how long the band will remain in existence. You see, instead of addressing failures, the players of this band entered the blame game. A game played by many, yet always only illustrating their own lack of commitment.

In that we see a link to the UK, the UK, its MP’s and those in charge with a title of that what is (like Chancellor of the Exchequer), this person cannot relax, because if it was needed to borrow £84 billion, that means that the words of Vince Cable were poorly chosen, because there was never any headroom. Even if there had been no borrowing, the headroom was not there, the debt must go down, the faster it goes down, the better everyone will feel and the more the government can do for the People of the United Kingdom.

It is just that simple and yes, we will all feel the pain for many more years, because previous governments had not taken control of its spending. Now that the invoice is way past due, the bulk of politicians are all about pushing it forward about pushing away that what should have been dealt with by a responsible person (read a person elected into office). The Tories are trying to get that done and they have also faced backlashes and setbacks. No one can deny that, but the debt must be dealt with.

The issue is seen here: “The Lib Dems have been pressing for a further rise in the £10,000 a year personal tax allowance – the sum before which any income tax is paid – in an effort to press home his party’s ownership of the single biggest tax reform of the parliament. The allowance is already projected to rise to £10,600 from April. Every £100 annual increase in the personal allowance costs £500m. The alternative will be to align national insurance with the personal tax allowance, a measure favoured in the past by Cable as doing more to help those on low pay“. In view, I am willing to consider this as an essential option, but if we are to move forward, it should only be allowed in a balanced budget approach. So, helping those on low pay is fine, but only if we change Basic rate to 21% and higher rate to 42%, which means that above the £10,600, the basic income goes up by a maximum of £318 and in addition, high income get an additional maximum of £836. This allows us a balanced budget. If you wonder why not the highest toll? Well, they also get the 1% of the base and the 2% of high anyway, that group is dwindling down and to seek even more to that smaller group seems a little unfair (the non-bankers that is). The second premise here is that this extra collected fee can ONLY be used to balance out the lost revenue from the basic rate group that had their annual income between £10,000 and £13,000 per annum. The rest of the collected tax MUST go towards lowering the debt. If we can believe the 2014 article by the Guardian, this will hit 6000 people, which means that it only raise a few millions, so taxing the rich has always seemed like and always remains a hilarious act of pointlessness. It is the 1% from the basic rate that will truly make a difference. It will drive the debt down faster, it will lower the interest bill which will help lower the debt even more.

It is basic calculus, an abacus can give you the information and politicians at large have just been skimming the sidelines towards the premise of confusion. If you doubt these words (always a fair notion), than ask Vince Cable to clearly explain where he found the headroom to manoeuvre!

The only big issue I have with George Osborne at this point is the voiced idea “We will ease back on austerity while sticking to our deficit-cutting target“. The article states against this “Even after a trim, Osborne’s cuts programme will still look drastic. Labour will argue that he is taking too much of a risk with economic growth and jeopardising essential public services“, in my view, easing austerity remains dangerous, the fact that the interest bill exceeds defence spending should be a massive red flag over everyone’s budget. On a global scale, bankers grow rich whilst sleeping through the bad cycle, how is this ever a good idea? Sticking to deficit cutting remains a goal, but you endanger this premise by ‘easing’. That is not a premise or a guess, it is a mathematical certainty. Whomever is telling you a different story is (as I see it) lying to you. My evidence? The 1 trillion debt, which resulted in total into £43 billion in annual interest bills and still there were £84 billion in additional loans. Total fo5r last year would be £127 billion in money going somewhere else.

The final issue is the crackdown on tax evasion, these politicians all talk and talk, but this could have been settled in the simplest of ways 2 years ago, perhaps even longer. It only requires one simple change to be accepted ALL OVER EUROPE, in all EEC nations. That one line is: “A company is taxable at the point of purchase by the consumer“, the buyer is the point of purchase, he/she buys an item, it does not matter WHERE the sales server is, by forcing locality in taxation we now see a fair dinkum approach; where the consumer spends that nation also sees taxation. I wonder how quick the Americans will now protest. They have played a long game of possum and now as we act, they will suddenly fear a drop in economic revenue as it all shifts in the true directions of where the money had gone. The change is so simple, is it not weird that those European Big Wigs could not, or would not consider such implementation? It will not make friendly faces in Ireland, but at least many will see a fair adjusted sales taxation approach.

Now we get back to the linked items, Germany is at the centre of changes that will impact the UK. I kept an eye on Bernd Lucke in the past as he was trying to drive Germany out of the Euro and the Eurozone. It was laughed of as a non-issue on more than one occasion. Now we see that Hamburg 2015 is a game changer, you might think that +6.1% is nothing, it seems low against the SPD with 45%, but the AFD now has seats where it did not have them before, also as the SPD is no longer a majority party, the game now changes in Germany for many people. The German people have had enough, the events of last month whilst a nation with a mere 2% of the Eurozone GDP is an affront to many people, especially as Greece is not cleaning up its act. This matter will soon shift in stronger ways. Linked to this is the victory Front National booked in 2015. They won the first round in the by-election. Something also quite unheard of, but not by me as I have seen the premise change all over Europe. Now as we see escalations, whilst the damage that uncertainty brings in regards to the UK total debt is seen in the growth of Ukip (at http://www.theguardian.com/uk-news/2015/mar/07/ukip-100-second-places-may-election-nigel-farage). Now we see the title ‘Ukip on track for 100-plus second places across England‘. I believe the Greek issues will drive a walk towards the Nigel Farage party even stronger. And to more than a lesser degree it can be seen a result through the actions of Greece. Bringing up WW2 reparations was (as I see it) the worst they could have done. You see, we all have issues in that regard, but they are counterproductive. As I see it, the Germans still owe my grandfather a Bicycle (Dutch cultural joke), but that device will not do anything for any economy, now even my own and I guarantee you, the bike did not cost anywhere near €162B, even as special a bike as my grandfather had in 1943.

So I am in fear of future, because these escalations are mostly all due to non-accountability. As Greece shows the self-confidence and pride that seems to be self-destructive, we see this element of Aite the Greek band I mentioned earlier, named after the Greek goddess of folly, ruin and delusion, leading to the downfall of all Greeks in the end. Feel free to doubt my words, but only today did we see this in Reuters (at http://www.reuters.com/article/2015/03/14/eurozone-greece-italy-idUSL6N0WG08S20150314), Italy is now making clear that Grexit will not represent a risk for Italy. The Greeks allowed for a game of chance once too often, now we see: “a Greek exit would be ‘very negative’ but he was confident a solution would be found. EU executives warned on Friday that Greece abandoning the euro could lead to ‘catastrophe’“. One dark cloud does not make for Grexit, but Europe at large seems to have its fill of Greece and not facing consequences of THEIR actions. Does the Greek population realise the dangers and the hardship the Drachma will bring? The rich of Greece will get by, I reckon the rest as all savings are diminished by exchange rates a lot less so.

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March 10, 2015 · 22:48

Dante’s Greek tragedy

There are two issues currently in play, one is a local one that gives all kinds of ‘human rights’ vibes and I will get to that in the next instance. This one is all about Greece. There are more than two views. The first view is the one we see in the Guardian. The title “’Talk less and do more’, Greek PM urges finance minister Yanis Varoufakis” (at http://www.theguardian.com/world/2015/mar/08/talk-less-and-do-more-greek-pm-urges-finance-minister-yanis-varoufakis), seems apt, but the Greek PM needs to realise that he wanted a rock star, the visibility, the game. Did he forget that he needs to SHOW results? Guess what, I reckon that he did just that, because after the victory speech, when he needs to get the ball going, the Greek people might start to catch on that the only decent path Alexis Tsipras has is the one that Antonis Samaras had been on in the first place. The second story comes from the BBC called “Greece told to ‘stop wasting time’ over debt deal” (at http://www.bbc.com/news/world-europe-31793145), the two important quotes are “European creditors want to approve a detailed list of reforms before they release any loans to Greece” and “But, so far, Greece has only outlined a broad range of intended changes“.

This links back to the event where a ‘rock star’ is the Greek governments CFO.

The Dutch news (NOS) gives us “Grieken uiterlijk woensdag in gesprek met trojka”, meaning that the Greeks will talk to troika (IMF, EEC and the ECB) within the next 48 hours. Here is as I see it, where the ‘rock star’ will have to ‘earn’ his keep. You see, whatever deal the current government wants to achieve, if they do not make actual commitments, the money ends, Grexit becomes a reality and the Greek way of life will be the first civilisation that became extinct twice. It’s a whole new world!

Still, we must all realise and accept that Grexit is an extreme, one that bankers on a global level are trying to prevent as the consequences for many players will become the realisation that the Dutch SNS bank faced. When the idea ‘too big to fail‘ is replaced with ‘screw that, you’re done!‘ we see another mesh of consequences.

There is another side to all this. If we look at several sources, in this case the quote comes from Al Jazeera we see: “Varoufakis said in an interview to Italy’s Corriere de la Sera newspaper that if the creditors do not eventually approve the reforms, his government could call new elections or a referendum“, which get us to the wasting time part. You see, reforms were ALWAYS at the centre of it all and as such, from the moment they got elected, it was up to Alexis Tsipras and Yanis Varoufakis to lock themselves up in their office and work on actual possible solutions, even though in my mind, that path was (even though too harshly) walked by Antonis Samaras. You see, in all this, the non taxation, the Greeks with Swiss bank accounts and the lowering of revenue as a whole was the issue no one was willing to address at any time. Add to that previous irresponsible players with bond billions leaving repayment to the successors of government had no solution ever. It all viewed like an episode of comedy capers with the people at large taking the word of a junkie stating ‘trust me’, whilst the junk pointed at a highly mobile fence stating ‘he’ll check the numbers next week’ then the masses at large are surprised that the fence moved on, the junkie partied to death and no one is willing to foot the bill. And this seems to be a government based view.

At the heart is the fact that Greece could be seen as stumbling towards her end directly through inaction. Whilst plans could be presented in 48 hours, what happens when that is accepted and 94 days later a referendum rejects those? What then? Are we held to a new version of the Divine Comedy by Dantris Alighierakis in three parts, EEC, ECB and IMF? EEC is the part that could give us:

Greece enters the realm of indecisiveness

  • Here, the economists sigh as well, but not nearly as loudly or painfully as the tax payers
  • Suddenly, Greece sees a fire break up the darkness. The fire is the glow of a luminous castle and Jeroen Dijsselbloem is there.

And Greece enters the circle of Desire

  • She’s Pheme, a Greek girl and, in terms of blood, something like a princess. During her life, she was forced into a loveless political marriage. However, she fell in love with her husband’s younger brother and had an affair with his credit card. When the husband discovered her spending spree, he foreclosed them both, but ignored the unpaid invoices.
  • Greek, stirred to the deepest fibres of its soul stirred to the extreme by their emotion, sleeps it off and ignores it

And Greece enter the circle of Hunger

  • Greece incites political strife between the EEC and IMF. First the EEC will win a battle and drive the IMF out. But then the IMF will return with the help of the ECB and crushes the EEC, eventually driving many of them into destitution and deadly depression. Greece rallies as the other parties ignore reason so that Greece can continue “spending, ignoring and inaction”

I can go on but I might get way to close to replacing comic banter with plagiarism here, the message is clear, as we see the unfolding of another Greek tragedy, the people will be caught in the middle by inactive politicians, as they rely on their comfortable futures from those they need to deal with and a theatre is evolving where those getting the money are playing a game where the Greek people are left out in the cold. I wonder if Dante Alighieri ever envisioned that his epic work could end up being a metaphor for reality, I feel certain he did not.

Yet, as we look at the elements, will a serious deal be struck? Politicians must remain positive, but between the proposed plan and the actual implementation of it, years will pass, which means that money will be released on an academic whim that might not ever have been a reality. So are we watching the news, or are we watching a newscast presenting an episode of the Punch and Judy show?

This is at the heart of the matter. It also strikes on the next article that takes a harsh look on Human rights, refugees and the UN no less. Because we see the glittering neon presentation on how certain nations are ‘inhumane’, but those making the allegations (living on 6 figure incomes and higher) are very aware that the drive that propels forward humanitarian causes is defiled by the bulk of large corporations that have achieved non taxed status, which means that the coffers of governments are no longer able to foot bills. This links to Greece again as certain implied allegations (at http://www.aljazeera.com/indepth/features/2015/03/greece-outlines-radical-immigration-reforms-150302083444990.html), now we see the quote “Within Greece, Syriza intends to provide alternatives to detention to tens of thousands of asylum seekers and refugees, such as open shelters, assisted voluntary returns, and integration programmes“, the reality is that there is no viable way to get integration programs started, in addition, the Greek unemployment rate is around 25%, so one in four is without a job, so how do you think an integration program will work? Greece had to act on many levels to their ‘immigration’ process, whilst they all know that these people would go on towards ‘wealthier’ and ‘healthier’ waters, like Italy and Western Europe, see Reuters video (at https://www.youtube.com/watch?v=eC12vbuWKds), so as there is a report of change towards ‘open’ reception places, where do you think these undocumented people will go to after they have been there for a day or two (catching their breath). This part is all innuendo, but that is at the core. We understand that we need facts, but as we see another Reuters article (at http://www.reuters.com/article/2015/03/10/us-eurozone-greece-varoufakis-idUSKBN0M60MN20150310), where we see the title ‘Varoufakis unsettles Germans with admission Greece won’t repay debts‘ with the quotes ““Clever people in Brussels, in Frankfurt and in Berlin knew back in May 2010 that Greece would never pay back its debts. But they acted as if Greece wasn’t bankrupt, as if it just didn’t have enough liquid funds,” Varoufakis told the documentary”, with the added quote “It was unclear when the program was recorded“. Really? Are you the reader that dim, to believe that little line?

Any digital recording has properties, like ‘date filmed’ and ‘last date edited’ as well as who filmed it and so on. They are known as Meta tags, and now we see a lack of clarity in facts? This article less than 6 hours old is nothing less than an introduction to a dance of letting Greece (partially) off the hook, with the possibility that Jeroen Dijsselbloem end up eating some humble pie in public on failing to resolve the Greek ‘issue’. No one wants to hold Greece to account at present (least of all Greece) and all this is a new iteration for those on high incomes to remain to keep the status quo a little longer. The article was written by Madeline Chambers, most important it was edited by Noah Barkin. I am curious to what EXACTLY was edited, what will become part of a managed bad news cycle this time? I get that Reuters will wait for actual facts, as they are a news agency, so as such, the editing might be extremely valid. What is also a fact is that the truth is that less clever people were also aware that Greece could never pay its debt, but what is not acceptable is that we see a European rock tour by Greek Finance Minister Yanis Varoufakis whilst the newly elected government is another one that could end up being the next one in a line of several elected Greek governments that end up never doing anything serious to tackle a failed Greek tax collection system, a failure that has been around for way too long now.

 

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February 20, 2015 · 23:07

2500 years later

Yes, it seems such a long time that Peisistratos, father of the Greek tragedy has been active, this was all voiced into life during one of the religious festivals for Dionysus. Is it such a mystery that a place of wine and a sad story is the frying fields where politicians feel most at home? This is at the foundation when we see another round for some Greek event. More talks (more wasting money on flights and expensive hotels), whilst the people have no clue, that they are being told another story. Like any good sad story, this too is in three parts, even though within the foundation, no one would have a clue on this. Now there is Prokopis Pavlopoulos, who got in place in 2015, before that there was Karolos Papoulias, who got his place in 2005 and before that there was Konstantinos Stephanopoulos who started in 1995. This is the foundation of the Trilogy.

You see, I discussed this before, the premise, not the links. First is an article I mentioned in my blog ‘Whinging from a desperate left‘ from January 29th (at https://lawlordtobe.com/2015/01/29/whinging-from-a-desperate-left/). The article by Prokopis Hatzinikolaou gives us “The state collected less than half of the revenues it was due to receive last year as it appeared unable to ensure that taxes and fines found their way to its coffers, according to a State Audit Council report submitted in Parliament on Tuesday by its president, Ioannis Karavokyris“, this means that the Greeks themselves are basically sinking their own ship. In one year, Greece has been unable to address the outstanding part which is a lot more than the settlement. It actually adds up to almost 16% of the ENTIRE Greek debt, so why should Germany play nice, as they are not at fault, they were not the reason and the latest puppet in Greek politics is not addressing the issue at all. Consider the image (at http://www.theguardian.com/business/live/2015/feb/17/greece-bailout-talks-europe-deal-live-updates), where Greece’s finance minister Yanis Varoufakis smiles like a clown, stares like a Vulture and casually stating that “an “honourable agreement” was within reach for Greece“, yet no mention that they will clean up their taxation system. Is anyone at this point catching on that a nation cannot survive if it is not collecting on its taxation? There is a nice PDF available at (http://ec.europa.eu/economy_finance/publications/publication12298_en.pdf) which shows part of the problem. Now in addition consider this report from 2008, than consider the article ‘Greek Bond Sale Tops $4 Billion in Return to Markets‘ (at http://www.bloomberg.com/news/articles/2014-04-10/greece-readies-bond-sale-as-athens-car-bomb-reminds-of-upheaval), so when we combine the tax information that we got from Prokopis Hatzinikolaou, we add the fact that the Greek tax system is faulty at best (a disaster at worst), how was it that Greece was even allowed to go back to the markets? So if we accept the wiki definition “A government bond is a bond issued by a national government, generally with a promise to pay periodic interest payments and to repay the face value on the maturity date“, how can bonds be sold if your tax system is not functioning, meaning that repayment is not an option (50% loss in taxation leaves you with nothing to manouvre with). So again I ask, why were they allowed back on market and more important, why are the bulk of the newspapers not looking into this side? An additional part I also mentioned in my blog was “Of the 2069 Greek accounts in Switzerland (as mentioned in a Greek magazine), who besides the journalist has appeared in court?” the Journalist was Kostas Vaxevanis, now we see in several papers, including the Times with the headline ‘Greece shreds files on tax cheating by rich and powerful‘. So as this has reported to have happened just before the January General elections, we could argue that in light of the loud non-mentioning of these events by both Finance Minister Yanis Varoufakis as well as Prime Minister Alexis Tsipras, as well as his three predecessors, that there is a lot wrong in Greece, the fact that the Greeks themselves are creating their own mess, why be nice? Are they not accountable for their own mess? So when we see the ominous text on what Germany will do, and how their 80 billion plus part could be lost, we must wonder whether it is not a lot safer just to cut Greece away. Lets face it, it will take forever to clear the current debt, they have no intent of actually cleaning up their mess and the rest of Europe might like a vacation spot where their coin gets them 400% more. Is it wrong to think so exploitative? No, not when the political parties are all about talk and none of them are about resolving issues. This is a side the papers seem to ignore as well. You see, debt deals and GDP promises and talks on ‘futures’ sounds all so sexy, to plainly report that a nation is beyond salvage because their political leaders will not bow to responsibilities whilst allegedly catering to the wealthy and the corrupt is just to plain and too direct.

So after 2500 years, the Greeks are reinventing their own creation called a tragedy, they are now however willing to put it all on the line, hoping that they get the same response ‘they are too big to fail’, but is that true? a nation with 11 million, no true exportable resources, what value do they have apart from beach front property? In addition, property that cannot be serviced as there is almost no infrastructure left. it was all sold on the bondmarket at 9.95%, not as bad as the 11% they had at the beginning of the month, but with tax collection at an all time low and no plans to do something about the 2069 accounts that Kostas Vaxevanis reported on, where does the Greek population think it can go to? We can see part of this from CNBC (at http://www.cnbc.com/id/102439432), where we see the headline ‘Worried depositors rush to pull cash out of Greek banks‘, when we see the quote “On Thursday, by mid-afternoon, deposits had shrunk by about 680 million euros (US $773 million)“, we must wonder whether we see the bank in a similar situation as we saw the Cypriot banks move to. So as funds go into banks, the deposits are lower and lower which means that the banks will not survive, or the ECB would have to up the financial support by a lot more, money Greece cannot pay back, so Germany is now in a place where accepting the 87 billion loss would not be the worst part in all this. So as we return to the old story of Diogenes of Sinope, the Greek that made poverty a virtue, yet in today’s world, the participating parties are devaluating all Greeks into a life of poverty, I wonder if the Greek population sees the virtue in that side. Will they react in Cynical philosophical rhetoric (founded by Diogenes of Sinope), or will they see the Irony, laugh it off and let the next politician take even more from them?

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January 23, 2015 · 12:17

The danger topic

That is at the centre for me today. I have had a little dry spell, for some reason; I could not get the words coming from my fingers in a balanced way. Not sure if it was the news, or if it was the lack of news. Even as we are slowly strolling to new escalations when Israel was going after Hezbollah and got a free upgrade to a dead Iranian General. Just as I am still not convinced it was North Korea to begin with (that Sony event). We see additional escalations, escalations that are moving the prying eyes away from many small fields that are now on the verge of making rather large changes to all of us.

First there is Greece, we see an escalation of more and more ‘giving in’, all these professors, all about forgiving debt. Yet, when will we see the Greek officials in prison? When will we see ACTUAL prosecution of corruption? It is like a group of people, who keep on feeding the junk money for the train home, knowing it is spend on drugs, booze and perhaps a few hookers (I mean ladies with flexible morals). When we consider the Guardian (at http://www.theguardian.com/business/2015/jan/21/eurozone-exit-greek-grexit-germany-france), it seems to me that some statements like “Today a Grexit would weaken German and French banks, and cost the German government up to €77bn and the International Monetary Fund a slug of its loans, but would be unlikely to frighten global markets or undermine the 14-year-old currency bloc“, as well as “The Bruegal Institute in Brussels is not the only think-tank to believe the estimated €250bn cost of a Grexit, while covered by the bailout funds, would cripple the Eurozone and delay recovery for a decade“, give the taste that people need to avoid the Greek exit, but is that not at the foundation of the junk needing a fix? Those in power desperately want to stay in power. I am not talking about Greek politics, they want to skate on emotion and fairness, whilst not prosecuting, or holding to account those who were responsible for the current situation and it is about to get decently worse. You see, as America is close to hitting another debt ceiling, we will either see the raising of debt, or a reshuffle of numbers so that the debt will ‘conveniently’ seem like less. It is not just America, even though 18 trillion takes the cake and the icing. We need to look with the harsh light at the decisions the Europeans (through Italy) are now showing a new race. At The Bruegal Institute in Brussels is not the only think-tank to believe the estimated €250bn cost of a Grexit, while covered by the bailout funds, would cripple the Eurozone and delay recovery for a decade we now see that the ECB is about to spend 1.1 trillion for bonds. When we see “The Frankfurt-based bank will use electronically created money to buy the bonds of Eurozone governments – quantitative easing – to try to boost confidence, push up inflation and drive down the value of the single currency, helping to increase exports and kick-start growth“, can we agree that when an economy needs a trillion dollar kick-start, that the patient is not sick, it died and it is not going to live long, no matter how much money you pump into its cadaver shaped foundation. You see, we all need a little boost every now and then, but 1 trillion is not a little boost, it is the setting of a massive debt, whilst getting the continued revenue for those who are already well beyond rich. The last is not entirely fair or correct, but consider these statements we see all over the place that the richest 1% will own well over 50% of the planet by 2016. Yet we need to pump more virtual cash on the population? This is not just the continuation of a bad idea, it seems that the bulk of the governments are not holding themselves or others to account. So as we see “Today the ECB has finally arrived as a truly ‘European’ Central Bank. It has acted against political opposition to deliver what is by most measures an ambitious programme of quantitative easing,” he said. “The ECB has finally, if belatedly, done its part. Now it’s time for the Eurozone to relax the fiscal constraint“, we also see the dangers that the debt will change the curve of debt release for a lot longer, whilst the taxpayer deals with the debt of ‘spending’ now, the people will not see true new jobs,  or longer term employment. So how is this ‘easing’ a good thing for anything else than the non-accountability of the governments connected? This gets me to the second part, some state that it is fiscal constraint, can in equal measure not be stated that this is for temporary fictive fiscal restraint? It is just a point of view. If we see Fiscal constraint as: ‘a reasonable comparison of planned expenditures to expected revenues‘ and Fiscal restraint as ‘Fiscal restraint is used to reduce inflationary pressures. The strategy is to shift the aggregate demand curve to the left with budget cuts or tax hikes‘. So as we see the mention “push up inflation and drive down the value of the single currency“, why was the mention Fiscal constraint and not ‘fiscal restraint’? Perhaps it is as easy as two sides of the same coin, but the guardian does not elaborate on both sides at all. This might have a valid reason, but should the audience not get a ‘better’ picture, especially as an additional trillion in fictive currency gets added to the market. This all calls into additional account the Swiss actions of last week, perhaps they saw what was likely to happen and they are very concerned for the consequences of these implementations. In addition, the acts of the usually ‘extremus sobrium’ Swiss should pause us to question a few matters.

Now I am not talking some conspiracy theory, but the fact that we usually get confronted with some high end decision and we the people are left with the invoice, should the papers at large not educate us? And with that I mean educate us a lot further beyond the ‘column’ and a copy and paste part? Again the last part is not fair and not correct, but the information part is massively missing. Again, me is not of being an economist (bad grammar intentional), but that I share with a massive part of the audience of those reading a newspaper.

So now we get to the part of German Chancellor Merkel (at http://www.theguardian.com/world/2015/jan/22/angela-merkel-greece-debts-german-world-economic-forum-davos), I wholeheartedly agree with the quote “it must take responsibility for its debts, as the country heads into crunch elections that could reignite the Eurozone debt crisis“, we gave support again and again (in the way of extra funds), whilst again and again we see the Greek demand to be held non-accountable for it all. We see the need for the Greeks to renegotiate their loans, and payments, whilst striking with the decent regularity of someone getting new clothes. Now, I am not having a go at the Greek population, they have been handed a raw deal, but let us not forget, this raw deal was given to them by their ‘fellow’ Greeks. So, it seems that the anger at others is a simple variation of the blame game. It is an understandable one, but still not the correct actions as I personally see it.

So as we move towards whatever option we could get to, the ‘notion’ of a World Bank Chief making a climate action plea, is not a bad one, but fixing the economy before spending a ton on infrastructure, a massive amount that is not bringing Europeans any ‘debt relief’ seems a little beyond proportions. It is almost like reading on how we need new trousers, whilst the bank has cancelled all our bank cards and our pockets are empty. This is not an exaggerated example. The debts in Europe are for a significant side way beyond proportions.

Consider the following quotes: “Tsipras wants Athens to be forgiven some debts to cut the cost of repayments. This would allow Greece a partial default while staying inside the euro. Brussels has said this is naive politics, if only because Ireland and Portugal, which also have mountainous debts with the EU, would ask for the same” and “Zsolt Darvas, one of the institute’s economists said: “I am convinced that Greece will need new funding from European partners, but its volume should be a few dozen billion euros, say €20bn-€30bn”

So not only are the Greek introduced to more stories by ‘Mother Goose’ Tsipras and in addition they will need another infusion of a few dozen billions. So, that comes to well over $2000 for every Greek. What is this money used for? Paying debts? Paying more interest bills? The latter now shows the link between the richest 1% and their unequal growth. In my view it is the foundations and settings for legalising slave labour. How will the Greek population EVER get out of debt?

Which gets us to the final quotes from the Guardian: “A newly minted drachma would be low enough to attract holidaymakers, but without the investment in new hotels, the industry could barely cope. Likewise, investment in new industries would be unlikely unless Tsipras can honour his pledge to root out corruption, something that has eluded the right-wing New Democracy party“, the Greeks cannot rely on tourism as is, especially when they return on the Drachme and that will be valued at 35,000 Drachma to the Euro (just voicing a fictive exchange), and without removing the current implied levels of corruption there is no solution other than the fact that loads of these cash incentives will go towards those who need not benefit and the Greek population gets even less options.

So as we look at these dangers as it will hit Greece and the rest of Europe, one must wonder why these people remain on the spending horse knowing it has not made a decent difference and knowing that added debts will delay economic fortune for additional decades. How is this ever going to be a solution?

 

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December 12, 2014 · 11:44

Is it all Greek to you?

Let’s take a look at the issues!

First there is Bloomberg who on April 11th headlined ‘Greek Bond Sale Tops $4 Billion in Return to Markets’ (at http://www.bloomberg.com/news/2014-04-10/greece-readies-bond-sale-as-athens-car-bomb-reminds-of-upheaval.html), a nation with 11 million have notched up their debt by hundreds of billions, no options at present to repay it and again they are allowed to push new bonds into the market.

My first issue: I want to see a list of names of people that allowed for this. There will be no excuse, no non-clarity; they are to be presented by a panel of economists explaining the rationale for this and it should be presented live! (I wonder how long it will be until we hear ‘carefully phrased denials on lack of clarity‘ in regards to who drove this).

I already gave my view on May 18th on my article ‘Are we getting played?‘ (at https://lawlordtobe.com/2014/05/18/are-we-getting-played/), where I stated: “The investor relies on information like credit ratings (from places like S&P and Moody for example) to make an assessment on how realistic the investment is. The fact that almost a month later the quote ‘Greek lenders are likely to face large losses over the next two years’ is seen, gives rise to the question whether any upgrade to the credit rating was valid“.

It seems clear to me that Greece is unable to manage its economy, its debts and its options to repay the debts. Can we please have a vote whether Greek economic affairs should as per January 1st 2015 be managed by either Germany or Turkey (Turkey is not that great an idea, that’s just me being mean)? It seems clear to me, for a long time now, that pouring money into a hole, whilst people keep digging themselves deeper will not result in any resolution. There has been clear evidence of gross negligence for over a decade; as such other measures will be required.

The Bloomberg article states: “Greece today took one more decisive step toward exiting the crisis,” Samaras said. “International markets are now expressing in the most undoubted way possible their confidence in the Greek economy”, I state that this is not the case, Greece is nothing more than an upgraded vulture option, todays information clearly sees this, let’s just be clear, this is just a little over 6 months AFTER that so called vote of confidence.

The second part we see with “The government and European Union predict that the Greek economy will expand 0.6 percent in 2014 after six consecutive years of contraction that has cost about a quarter of the nation’s economic output and sent the unemployment rate surging” I believe we are being intentionally misinformed here. If we look at http://www.tradingeconomics.com/greece/gdp-growth-annual, we see that this year Greece’s GDP annual growth rate is growing by 1.9%, a growth of 1.5% in a year, whilst this nation is in such disarray, such debts and such levels of unemployment, there is, what I see to be an intentional attempt to misinform people. The standards used are no longer applicable. With a little over 1 out of 4 without a job, this nation is a mess; numbers are withheld, or misrepresented, not unlike the entire Goldman Sachs issue in 2010. If you doubt my word against that of those economic ‘boffins’, then look at today’s news.

 

We see ‘Grexit fears send Greek bonds and shares sliding‘, which the Guardian stated 10 hours ago. The quote “The Greek stock market is plunging to new depths, after the prime minister issued dire warnings of chaos ahead if his party were ejected from power“, as well as “Greek Prime Minister Antonis Samaras on Thursday accused opposition SYRIZA of bringing back Grexit fears and sending a message to the markets not to lend to the country by declaring its sovereign debt unsustainable“. By the way, in my view, the debt was never sustainable. When we consider 300 billion, over 11 million, we see that every Greek needs to bring 27,300 to the table, one out of four has no job, so that costs extra, as well as bring the cost per working Greek now to a little over 33,000. If the average Greek brings home a little less than 10,000, you can see that they come up short by a lot. By the way at 5%, the interest to be brought in would be 20% of a Greek income, whilst at present Greece cannot even properly budget its nations. So, as we look at these numbers, can anyone explain how Greece considers its debt to be sustainable?

Those who allowed Greece to fall in this deep hole should be made public and named, and we are talking Greek names here. Someone signed up for unrealistic debts, misrepresented presentations and the Greek government presented it. The Greek people have a right to know who were behind this titanic blunder. The fact that Austerity measures are not kept and the system is not cleaned up only helps to make a case that Greece should not be allowed to continue to be part of the EEC, because at present they are not in a small measure, the risk, which they could now enable the Euro to collapse completely.

If we consider the reasoning of a quickened election by PM Samaras and the message “Athens exchange has now tumbled by 7%, meaning it has shed 20% of its value since Samaras decided to accelerate the presidential election to next week“, we should wonder why this change is now being made. There are conjectures in play too (partially by me at this point). When we consider another (non proven source, at http://www.zerohedge.com/category/tags/greece), we see ‘Greece Suffers Biggest 3-Day Crash In 27 Years‘, here we see the quote “Did we just get a glimpse of the ugly reality hiding behind the veil of status-quo-maintaining central-bank-sponsored manipulation?“, I have written similar thoughts, but mine were not founded on economic knowledge, just on the data I looked at. One response there was “Central bankers have lied to a false prosperity and zero interest rates as if there is no risk remaining“, which is in line of what I have noticed with economies all over the EEC, I call it ‘managed bad news‘, which seems more apt, but when we see a 20% crater in what is laughingly called ‘Greek valued bonds’, my euphemism of carefully cautious labelling can be thrown out of the front door and perhaps it should be called ‘intentional manipulation for the profit of a few‘. Proving that part takes a little more time, yet those behind the curtain will not be held to account in any way, shape or form and legislating these events seems to be a large ‘No No!’ as well.

So where to look?

Well, if we look at the news CNBC gave us on November 19th, we see “Yields this week have not reached the 9 percent level hit in mid-October when negative sentiment surrounding Greece spread to global markets. However, rising debt yields do highlight that the country’s economic woes are far from over, with a crucial deadline in early December looming large on the horizon” (at http://www.cnbc.com/id/102198319), we also see the following quote “The country managed to exit recession this year and post a positive gross domestic product (GDP) figure last week, but political wrangling has continued nonetheless“, so ‘manage to post a positive…‘, positive by what standards, as well as the part ‘managed’, managed how? Through manufacturing or through manufacturing the books (aka cooking them) with possible assistance from Goldman Sachs or a like-minded institution? The lack of clarity as well as the lack of clear numbers give pause to consider how bad an idea it was to let them back onto the bond market last April.

The final part we get from the Guardian (at http://www.theguardian.com/business/live/2014/dec/11/russia-central-bank-interest-rate-hike-ecb-loans-live#block-54899bc7e4b09dc257b7f1fe), where we see “The 10-year Greek bond is now yielding over 9%, up from 8.7% last night. And the three year bond is now yielding more than 10%, as nervous investors demand a bigger premium for holding debt that matures sooner“, so from a mere 5% to almost 11%, doubling the dividends, is ‘sponsored manipulation‘ THAT far-fetched? I want to see names of those behind the curtains, they are no Wizard of Oz, they are what used to be called the ‘Gnomes of Zurich‘, yet in this day and age, they are virtual, and none of them reside in Zurich, that’s just too old school.

In the end where it their (and our) money, in the form of dividend going to?

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