Greece's Debt Crisis
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pietillidie
Joined: 07 Jan 2005
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| Mugwump wrote: | If you really meant to say that "it's a social science not a natural science and thus not perfectly predictive", then that's true. That woudl be obvious, and it's not what you wrote. You wrote that "microeconomics doesn't scale in any useful fashion". And any serious professional would say that's untrue.
Keynesianism to Monetarism are all based on microeconomic insights and assumptions, because they do indeed scale "usefully". When a national treasurer changes interest rates, or tax policy, or sets industry policies, they do so not because magic happens in some wildly unpredictable way, but because rational agents will respond in ways that are directionally predictable at scale. It's not perfectly predictable, because - like any social science - many things, from behavioural factors, to information asymmetry, and many other uncontrollable variables, all impact on the economic system. But at scale, microeconomics is useful indeed, It's why about 40% of most economics courses are spent on this "failed project".
Anyway, if you helps you to paint Syriza's critics as heartless and delusional austerity mongers grinding the face of the widow and the orphan for pleasure, and your team of cartoon Che Guevaras as brave heroes standing against "the banks" (aka the EU), then carry on. They'll cause a greater nightmare for the Greek people, but their cheer squad will surely find someone else to blame. |
Oh for god's sake how really dumb can you be for a smart bloke? Do you really think, say, expectations associated with tightening economic activity by raising interest rates are based on a science of first principles and careful experimental work? You mean in the same way that knowing the killing of individuals reduces the population makes you a demographic scientist? 
Even the finest-grained calculations of expectations associated with monetary policy are still not based on laws or first principles corroborated by valid empirical evidence. Instead, calculations based on macro data from lots of different places are used to approximate what is likely to happen, refined by heuristics to try to make them as accurate as possible. But they're just best guesses; they're not laws or even anything approaching the scientific definition of a strong theory.
As explained, what you're describing is engineering, not science; just because you can fly a paper plane more accurately than last year doesn't mean you now understand general relativity and aeronautics!
In the context of this discussion, your use of "not perfectly predictive" is PR speak for not scientific and only occasionally somewhat reliable in some more intuitive areas. You should take up PR yourself! More accurately, we might say the intuitions and experience of professionals in the non-scientific practice of economics are useful for achieving a few ends. But they're not useful because of anything related to the meaning of the term "science". Not even "soft science".
To put this back into context, this whole conversation started because you claimed to know that individual Greeks could be blamed for the Greek economy as if they were conscious moral agents who signed contracts with other conscious moral agents who were being hard done by. I riffed on that because it's the same old libertarian nonsense, and dated rural 18th-century liberal nonsense, that misleads folk time after time.
Individuals tell you almost nothing about the physics of countries, and the physics of countries tells you almost nothing about individuals. Thus, the moral personification of nations is a placeholder for avoiding delving into an irritatingly complex problem. I can see the libertarian slogan now: "But countries are people, too!"
Again, as with Iraq, or as with any socioeconomic policy, when it comes to making decisions concerning the lives of other human beings, you don't get to avoid the complex problems and pretend the bits and pieces cobbled together and ambitiously called "social science" are scientific. On the contrary; you diligently face the complex problems, and work through them as systematically and responsibly as you can, with full disclosure, as a matter of very serious human ethics.
Economics is a grossly flawed and misunderstood practice which is used to bamboozle people into accepting such ridiculous ideas as the moral personification of countries time and again. As explained, it doesn't even have a scientific theory of individual economic agents, and when it does by way of the new field of behavioural economics, that field throws rational agents overboard like they've got the plague! You do have to feel sorry for the honest, sane economists who must cringe at the nonsense carried out in the name of their professional practice.
The Trokia's failed program has been a dangerous, dogmatic disgrace. It's exactly the kind of thing pretentious ascientific economics is used to justify repeatedly: "Hey, look, we wear nice suits, sign things with Montblancs, and talk in sophisticated tones: Believe us when we say only tough austerity will get Greece back on track!" Forget the commonsense expectation of declining revenues on declining GDP; we can do sophisticated differential equations!
And, of course, Greece's GDP declines so far it falls even further into debt despite massive, high-risk suffering. Rather than having a profound insight into the world and the differential equations and Bayesian models to prove it, the Troika has demonstrated it is really just a bunch of captured wankers making up any old nonsense to grab what it can for its sponsors.
The Troika has no science and no justification even at the most basic level of commonsense; instead, along with its sponsors, it far more likely has a giant sense of self-entitlement, and the narcissm to indulge it at everyone else's risk. Europe is the last place on earth which needs instability and the idiotic, and frequently racial, personification of economics, and they ought to know as much.
In sum, your worry about Syriza being the lone irrational party here is so misplaced that you too seem to have had your ability to broach the matter carefully and responsibly captured somewhere along the way.
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Mugwump
Joined: 28 Jul 2007
Location: Between London and Melbourne
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| pietillidie wrote: |
In sum, your worry about Syriza being the lone irrational party here is so misplaced that you too seem to have had your ability to broach the matter carefully and responsibly captured somewhere along the way. |
You, er, do read what other people write before you post, don't you ? Or is it a kind of amnesia ? I think my comments about the irrationality of all actors above are pretty clear.
| pietilidie wrote: |
In this thread, you've regurgitated such nonsense and attempted to con us into thinking that you know, on the basis of some logic you can't show, or empirical data you don't have, that millions of economic decisions as evidenced in the complex dynamics and flows between countries and regions, miraculously leads us to the received conclusion that the nice suit wearers are right, and the shabby communist-types are wrong. You can't show why, you just know it to be true.
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(....ptid picks up opponent's king, moves to a square it doesn't occupy and shouts "checkmate!")
Leaving aside your thunderstorm of smoke grenades, it's pretty clear that Greece has been cruelled by a pace of austerity which was self-defeating (as I've said many times), and that Greek governments have continued to show a surreal inability to lead their desperate people. The highlight of this has been a referendum "in the name of democracy" which voted for someone else's taxpayers to pay the mortgage, while claiming that foreclosure was not on the table.
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Last edited by Mugwump on Thu Jul 09, 2015 9:03 am; edited 1 time in total |
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HAL
Please don't shout at me - I can't help it.
Joined: 17 Mar 2003
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| Some people think it is. |
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pietillidie
Joined: 07 Jan 2005
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Well, for someone who knows just how bad Troika policy was, and just how ridiculously it failed, and therefore presumably knows just how risky its perpetuation of the same approach must be, you're doing your damnedest to avoid pinning the tail on the right donkey, which is precisely why you resorted to silly national personifications to start with and necessitated a detour into the philosophy of science and economics to explain that particular misnomer.
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Help Nick's: http://www.magpies.net/nick/bb/fundraising.htm |
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HAL
Please don't shout at me - I can't help it.
Joined: 17 Mar 2003
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| How about that. Your purpose is someone who knows how bad Troika policy was and how it failed and knows how risky its perpetuation of the same approach must be you're doing your damnedest to avoid pinning the tail on the right donkey which is why you resorted to the silly national personifications to start with and necessitated a detour into the philosophy of science and economics. |
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Tannin 
Can't remember
Joined: 06 Aug 2006
Location: Huon Valley Tasmania
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| HAL wrote: |
There must be Grexit this weekend. It is light at the end of the tunnel, the best possible outcome from Greece’s agony and, in truth, the only one. The admission of Greece into the eurozone in 2001, tying its economy to that of Germany (and its reckless bankers), was a disaster waiting to happen. The error was so great that even this tiny economy – just 1.3% of the EU’s – has contrived to traumatise Europe’s leadership for the past three months. The only catastrophe now would be no Grexit.
Talk of Greek bankruptcy and its dropping the euro as “an abyss … a nightmare … chaos … unthinkable anarchy” is bankers’ drivel. It will be tough to handle – made vastly more so by being delayed, unplanned and enforced. But handled it must be. Greece is bankrupt. It cannot pay its debts, let alone any more forced on it by “bailout”. There must be a managed default and a restarting of the engine of recovery. That is the only “deal” that should be discussed this weekend.
Sometimes the small voice of economics should rise above the shrieking hysterics of politics. The laws of bankruptcy were invented by the Victorians not to stick plaster over capitalism’s wounds. Insolvency and limited liability lay at the core of commercial enterprise. Borrower and lender alike had to accept risk for capitalism to thrive. Greece within the eurozone was allowed to borrow riskily and was lent to riskily. Any fool (except a eurofool) knew it would end in disaster.
The IMF last week admitted Greece’s debts were “unsustainable”. But such is the political arthritis now afflicting Europe’s “technocratic” rulers that they ignored the fact. They concentrate on their one concern: somehow extending Greece’s repayments so German, French and British banks could have even larger loans underpinned. It is bankers, not Greeks, who are being “bailed out”. They want Greek taxpayers to go on paying interest even if the principal is as beyond reach as a tsarist bond.
Denying an entire nation the benefit of bankruptcy imprisons its citizens. The most famous debtor in literature, Dickens’s William Dorrit, could never repay his creditors as long as they kept him in the Marshalsea jail. But they kept him there because it suited them, as it does Greece’s bankers, to have his debts on their books rather than admitted as unpayable.
Even if Greece were this weekend to win some debt relief, this would not set it on the road to recovery. Austerity has already impelled the Athens government to curb its madcap public sector. It has begun the “restructuring” that justified similar austerity in western countries (notably Britain) in the 1980s. It can now reasonably argue that austerity’s basic job is done. It is now running a primary budget surplus, spending less than it receives in taxes.
Austerity economics was always meant as a short, sharp shock, not a coherent economic policy. For Greece it has been about as productive as prisoners sewing mailbags. Growth has been stifled, demand suppressed and investment stalled. National output since 2008 has fallen by a quarter, unemploying 25% of its workforce. It is simply crazy. Greece cannot grow and cannot service future borrowings, let alone past ones. It is seeing Europe’s worst recession since the war – a deliberate, manmade recession.
The eurozone’s managers care more about their loans and their beloved currency than they do about Greece
Greece’s competitiveness is way out of kilter with the powerhouses of the northern eurozone. Even the EU’s more moderate flat-earthers argue that Greece’s debts should merely be rolled over while it “rebalances” to German levels of efficiency. It must stay shackled to an overvalued rate of exchange lest the great European cause suffer and ever closer union be tarnished. In this spirit a group of leftwing economists, including France’s Thomas Piketty, wrote to the Guardian on Wednesday, lauding the euro as “a beacon of hope, democracy and prosperity”. It is as if Keynes had never lived.
The idea that a floating currency within the EU is “anarchy” or “the abyss” is nonsense. Britain’s pound sterling has fluctuated by as much as 30% against the euro in the past 15 years, to the benefit of the country’s economy, and probably to Europe’s as a whole. Fluctuating currencies may be a nuisance, but they reflect the fact that nations are socio-political entities. They make different democratic choices and are subject to different market disciplines.
Greece could never have brought itself into line with Germany overnight. Athens was never going to be Hamburg. Its savings fled north along with its skilled labour. It was crippled by the 2004 Olympics and tried to borrow its way out of collapse. Like Britain for much of its recent history, it needed the shock-absorber of a flexible exchange rate.
Today Greece’s biggest export earner and job creator, tourism, would hugely benefit from a 30% devaluation of a “new drachma”. Devaluation would equally raise the cost of imports, but such market discipline is politically preferable to the discipline inflicted by technocrats at distant summits.
Devaluation can also lead to hyperinflation, but it has not done so in Britain or in other European economies outside the eurozone.
The reality is that the eurozone’s managers care more about their loans and their beloved currency than they do about Greece. They should have seen Greece’s budgetary indulgence as a looming catastrophe long ago. They should have admitted their error and negotiated an orderly Grexit. As it is, they have proved unfit rulers of their new Europe. They have harmed its prosperity and endangered its south-eastern flank.
Historical parallels are always dangerous. But the past month’s Brussels comings-and-comings, the bluffs and counter-bluffs, the deadlines missed and ultimatums spurned, recall the twists and turns of Europe in 1914. Today’s continental wars may not be bloodthirsty any more, but they display the same chauvinist intransigence. It is not Grexit that threatens Europe’s security, but blind resistance to it.
Had Greece slid out of the euro after the crash of 2008, it would now be on the road to recovery. Its debts would have devalued. It citizens would be in work. Investors would be investing. Tourists would be flowing in. Perhaps Italy and Spain might be wondering if they too could be better off with a sovereign currency, leaving a tighter deutschmark zone to the north. They would probably be right. But for the time being, the priority is Grexit.
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Well, OK, it wasn't HAL. It was a chap named Simon Jenkins and you can read it here: http://www.theguardian.com/commentisfree/2015/jul/08/greece-catastrophe-eurozone-grexit-default
It seems to me to be making a very great deal of sense. I think he soft-pedals a bit too hard on Greece's cronyism, corruption, and appalling mismanagement of tax collection, nevertheless, I find it hard to fault his overall conclusion.
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�Let's eat Grandma.� Commas save lives! |
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HAL
Please don't shout at me - I can't help it.
Joined: 17 Mar 2003
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| Better go catch it. I can keep a secret. |
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stui magpie 
Prepare for the worst, hope for the best.
Joined: 03 May 2005
Location: In flagrante delicto
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| Tannin wrote: | | HAL wrote: |
There must be Grexit this weekend. It is light at the end of the tunnel, the best possible outcome from Greece’s agony and, in truth, the only one. The admission of Greece into the eurozone in 2001, tying its economy to that of Germany (and its reckless bankers), was a disaster waiting to happen. The error was so great that even this tiny economy – just 1.3% of the EU’s – has contrived to traumatise Europe’s leadership for the past three months. The only catastrophe now would be no Grexit.
Talk of Greek bankruptcy and its dropping the euro as “an abyss … a nightmare … chaos … unthinkable anarchy” is bankers’ drivel. It will be tough to handle – made vastly more so by being delayed, unplanned and enforced. But handled it must be. Greece is bankrupt. It cannot pay its debts, let alone any more forced on it by “bailout”. There must be a managed default and a restarting of the engine of recovery. That is the only “deal” that should be discussed this weekend.
Sometimes the small voice of economics should rise above the shrieking hysterics of politics. The laws of bankruptcy were invented by the Victorians not to stick plaster over capitalism’s wounds. Insolvency and limited liability lay at the core of commercial enterprise. Borrower and lender alike had to accept risk for capitalism to thrive. Greece within the eurozone was allowed to borrow riskily and was lent to riskily. Any fool (except a eurofool) knew it would end in disaster.
The IMF last week admitted Greece’s debts were “unsustainable”. But such is the political arthritis now afflicting Europe’s “technocratic” rulers that they ignored the fact. They concentrate on their one concern: somehow extending Greece’s repayments so German, French and British banks could have even larger loans underpinned. It is bankers, not Greeks, who are being “bailed out”. They want Greek taxpayers to go on paying interest even if the principal is as beyond reach as a tsarist bond.
Denying an entire nation the benefit of bankruptcy imprisons its citizens. The most famous debtor in literature, Dickens’s William Dorrit, could never repay his creditors as long as they kept him in the Marshalsea jail. But they kept him there because it suited them, as it does Greece’s bankers, to have his debts on their books rather than admitted as unpayable.
Even if Greece were this weekend to win some debt relief, this would not set it on the road to recovery. Austerity has already impelled the Athens government to curb its madcap public sector. It has begun the “restructuring” that justified similar austerity in western countries (notably Britain) in the 1980s. It can now reasonably argue that austerity’s basic job is done. It is now running a primary budget surplus, spending less than it receives in taxes.
Austerity economics was always meant as a short, sharp shock, not a coherent economic policy. For Greece it has been about as productive as prisoners sewing mailbags. Growth has been stifled, demand suppressed and investment stalled. National output since 2008 has fallen by a quarter, unemploying 25% of its workforce. It is simply crazy. Greece cannot grow and cannot service future borrowings, let alone past ones. It is seeing Europe’s worst recession since the war – a deliberate, manmade recession.
The eurozone’s managers care more about their loans and their beloved currency than they do about Greece
Greece’s competitiveness is way out of kilter with the powerhouses of the northern eurozone. Even the EU’s more moderate flat-earthers argue that Greece’s debts should merely be rolled over while it “rebalances” to German levels of efficiency. It must stay shackled to an overvalued rate of exchange lest the great European cause suffer and ever closer union be tarnished. In this spirit a group of leftwing economists, including France’s Thomas Piketty, wrote to the Guardian on Wednesday, lauding the euro as “a beacon of hope, democracy and prosperity”. It is as if Keynes had never lived.
The idea that a floating currency within the EU is “anarchy” or “the abyss” is nonsense. Britain’s pound sterling has fluctuated by as much as 30% against the euro in the past 15 years, to the benefit of the country’s economy, and probably to Europe’s as a whole. Fluctuating currencies may be a nuisance, but they reflect the fact that nations are socio-political entities. They make different democratic choices and are subject to different market disciplines.
Greece could never have brought itself into line with Germany overnight. Athens was never going to be Hamburg. Its savings fled north along with its skilled labour. It was crippled by the 2004 Olympics and tried to borrow its way out of collapse. Like Britain for much of its recent history, it needed the shock-absorber of a flexible exchange rate.
Today Greece’s biggest export earner and job creator, tourism, would hugely benefit from a 30% devaluation of a “new drachma”. Devaluation would equally raise the cost of imports, but such market discipline is politically preferable to the discipline inflicted by technocrats at distant summits.
Devaluation can also lead to hyperinflation, but it has not done so in Britain or in other European economies outside the eurozone.
The reality is that the eurozone’s managers care more about their loans and their beloved currency than they do about Greece. They should have seen Greece’s budgetary indulgence as a looming catastrophe long ago. They should have admitted their error and negotiated an orderly Grexit. As it is, they have proved unfit rulers of their new Europe. They have harmed its prosperity and endangered its south-eastern flank.
Historical parallels are always dangerous. But the past month’s Brussels comings-and-comings, the bluffs and counter-bluffs, the deadlines missed and ultimatums spurned, recall the twists and turns of Europe in 1914. Today’s continental wars may not be bloodthirsty any more, but they display the same chauvinist intransigence. It is not Grexit that threatens Europe’s security, but blind resistance to it.
Had Greece slid out of the euro after the crash of 2008, it would now be on the road to recovery. Its debts would have devalued. It citizens would be in work. Investors would be investing. Tourists would be flowing in. Perhaps Italy and Spain might be wondering if they too could be better off with a sovereign currency, leaving a tighter deutschmark zone to the north. They would probably be right. But for the time being, the priority is Grexit.
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Well, OK, it wasn't HAL. It was a chap named Simon Jenkins and you can read it here: http://www.theguardian.com/commentisfree/2015/jul/08/greece-catastrophe-eurozone-grexit-default
It seems to me to be making a very great deal of sense. I think he soft-pedals a bit too hard on Greece's cronyism, corruption, and appalling mismanagement of tax collection, nevertheless, I find it hard to fault his overall conclusion. |
First bit of straight out sense I've seen in several pages on this thread. Thank you.
_________________
Every dead body on Mt Everest was once a highly motivated person, so maybe just calm the **** down. |
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HAL
Please don't shout at me - I can't help it.
Joined: 17 Mar 2003
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| Better go catch it. I can keep a secret. |
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Morrigu
Joined: 11 Aug 2001
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So those that know - what do you think will happen come the deadline Sunday????
_________________
“The greatness of a nation and its moral progress can be judged by the way its animals are treated.” |
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Tannin
Can't remember
Joined: 06 Aug 2006
Location: Huon Valley Tasmania
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Well, I don't know but I'll take odds on it. What will happen when the deadline is past?
Ans: they will set another deadline.
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�Let's eat Grandma.� Commas save lives! |
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stui magpie
Prepare for the worst, hope for the best.
Joined: 03 May 2005
Location: In flagrante delicto
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The bankers will take some serious convincing to back off and let Greece either default or come up with an alternative. Don't see anything happening in a hurry, prepare for negotiations to drag out for 12 months or more. In the mean time, Greece will do what it needs to do. I'm not convinced that this government has what it needs to rebuild but it seems to have what it takes to do what's needed right now, which is push back and stand up.
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Every dead body on Mt Everest was once a highly motivated person, so maybe just calm the **** down. |
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pietillidie
Joined: 07 Jan 2005
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| The sane Simon Wren-Lewis of Oxford Uni wrote: | Why Germany wants rid of Greece
When I recently visited Berlin, it quickly became clear the extent to which Germany had created a fantasy story about Greece. It was an image of Greeks as a privileged and lazy people, who kept on taking ‘bailouts’ while refusing to do anything to correct their situation. I heard this fantasy from talking to people who were otherwise well informed and knowledgeable about economics.
So powerful has this fantasy become, it is now driving German policy (and policy in a few other countries as well) in totally irrational ways. In particular, Germany refuses to discuss debt relief with Greece, yet seems quite happy to see Greece leave the Eurozone, the inevitable consequence of which would be that Greece would obtain much greater debt relief through default. Talk about cutting off your nose to spite your face. What is driving Germany’s desperate need to rid itself of the Greek problem?
One possible answer is that Germany finds the truth about Greece too upsetting, too challenging. This is because since 2010 Greece has done most of what the Troika asked of it. In particular, changes in its government’s underlying primary budget balance (i.e. the degree of austerity enacted) have been greater, by a long distance, than any other European economy. For many outside Germany what has happened to Greece as a result is hardly surprising: austerity is contractionary, and austerity on steroids is ruinous. Yet Germany is a country where the ideas of Keynes, and therefore mainstream macroeconomics in the rest of the world, are considered profoundly wrong and are described as ‘Anglo-Saxon economics’. Greece then becomes a kind of experiment to see which is right: the German view, or ‘Anglo-Saxon economics’.
The results of the experiment are not to Germany’s liking. Just as ‘Anglo-Saxon economics’ would have predicted, the results for Greece under the Troika have been a disaster. After dutifully taking the medicine for years, and seeing the collapse of their economy, finally the Greek people could take no more. Confronting this reality has been too much for Germany. So instead it has created its fantasy, a fantasy that allows it to cast its failed experiment to one side, blaming the character of the patient.
The only thing particularly German about this process is the minority status of Keynesian economics within German economic policy advice. In the past I have drawn parallels between what is going on here and the much more universal tendency for poverty to be explained in terms of the personal failings of the poor. These attempts to deflect criticism of economic systems are encouraged by political interests and a media that supports them, as we are currently seeing in the UK. So much easier to pretend that the problems of Greece lie with its people, or culture, or politicians, or its resistance to particular ‘structural reforms’, than to admit that Greece’s real problem is of your making. |
http://mainlymacro.blogspot.nl/2015/07/why-germany-wants-rid-of-greece.html
_________________
In the end the rain comes down, washes clean the streets of a blue sky town.
Help Nick's: http://www.magpies.net/nick/bb/fundraising.htm |
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pietillidie
Joined: 07 Jan 2005
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For those interested in economics as a discipline, and why ideological fanatics of different stripes gravitate toward certain economic theories and not others:
http://equitablegrowth.org/2015/07/07/paul-krugman-notices-students-milton-friedman/
| De Long et al. wrote: | At the level of economists’ ideology it is clear what is going on: If significant macroeconomic failures exist that can only be remedied if the central bak via fancy footwork adjusts and readjusts outside financial asset stocks to make Say’s Law true in practice [supply-driven economics], then the argument that the market always does well has one big huge counterexample. Friedman finessed that question by presenting fancy footwork adjusting and readjusting outside financial asset stocks to make Say’s Law true in practice as a “neutral” monetary policy. And via fast and aggressive talking he could carry the day as long as he was around. But once he was no longer around to talk faster than his interlocutors could think, those whose principal allegiance was to market perfection came under enormous psychological pressure to find a way to get rid of the anomalous macroeconomic edge case, and so fell into Hayekism.
At the level of economists’ nationality it is equally clear what is going on: German (and French) economists grew up and lived in a world where somebody else–the benevolent Kindlebergian hegemon of the United States–took on the task of maintaining a stable level of aggregate demand in the North Atlantic as a whole. With the possibility of large hemisphere-wide demand shortfalls ruled out, it made intellectual, pragmatic, and policy sense to focus on the “structural”.
But at the level of economic technocracy? Eppur si muove: Keynesianism, broadly defined, helps understand the world. Ordoliberal Hayekianism does not. The technocrats of the eurozone have a lot of explaining to do–to themselves, to their political masters, and ultimately to the continent’s worth of people whom they have failed. |
Personally, my preference is indirectly towards Keynesianism as a matter of management for balance and stability (which it is in these cases), not due to any pretenses of it or any kind of economics approaching the status of a science. It's basically good politics through economic metaphors: If you don't like chaos and revolution, then don't freaking well cause it through soul-crushing economic oppression. Back off and reset.
Or, in religious metaphor, you can't wait for Jesus to return for all sins to be accounted for because confession is voluntary, and sin a matter of religious argument. Thus, we have to offset the fanatics who think the Lord has chosen them to carry out judgement now by wrecking the joint.
For people like Stui who think everything written should be first approved by the Abbott/Brandis Fit for Public Consumption Speech Committee:
| My actual view despite the long detour wrote: | [The current situation] is nothing like [family debt] in any useful sense; [that's] quite a major distraction from the market reality we are observing.
The devaluation of a chaotic exit will damage the creditors, the EU and beyond far more than the Troika stopping the ideological chest beating and negotiating a workable deal. That doesn't happen when the Smiths can't repay money and need to borrow more, though it happens all the time in commercial markets.
Greece defaulting, floating a currency and resetting will be very painful of course, but once you've crushed the life out of people they quickly move well beyond those concerns.
In terms of ranking of who has got more to lose, Greek folk must be LOLing [because they've just suffered incredibly for five years]. Such nonsense posturing from the EU is precisely why things are written down and written off as standard practice in business; there are always churlish fools willing to cut their noses to spite their faces.
Syriza's test is to negotiate a balance between incentive and stability, and to take no more than that, starting a reform process along the way.
Meanwhile, expect the bank muppets to jump around like crazed baboons a while longer until the right PR opportunity to save face emerges. Again, it's Syriza's test to give them that out and to take a few public slaps along the way towards finding a workable position. The first of those, of course, was Varoufakis. |
_________________
In the end the rain comes down, washes clean the streets of a blue sky town.
Help Nick's: http://www.magpies.net/nick/bb/fundraising.htm |
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Morrigu
Joined: 11 Aug 2001
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^ I repeat - what do you think will happen?
And please don't quote pages of stuff that will ensure that the will to live is gone after 30 secs - just YOUR opinion of what you think will happen - please!!!
_________________
“The greatness of a nation and its moral progress can be judged by the way its animals are treated.” |
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