Greeks having a referendum on bailout

cyberhog wrote: »

Oh look another disingenuous poster enters the fray.

There is no "somehow" about it. It was the people's democratic right to have a say on the bailout. It is clear the EU overlords did not share that sentiment and coerced the Greeks into abandoning the referendum. Any honest observer would say the action the EU overlords took to crush the opportunity for the people to have their say was most definitely an "abomination against democracy".

Right then, so basically the EU should have handed over the bailout funds and then if the Greeks voted no, asked for it back.

Okay then.


Backs slowly out of thread nodding politely.

For what its worth, I'm sympathetic to the realpolitick arguments for why Germany and the ECB can effectively depose governments by presenting incentives that amount to "Do that, and I'll hurt you. Bad". Theres a *perceived* power imbalance between the indebted periphery and the creditor core (I say perceived because the periphery have the money, the core have the IOU slip....). Its not surprising that the perceived power imbalance is exploited when the weaker party does something that the stronger power views as being against its own interest. And its presumed this power is being used responsibly to cajole and guide the weaker party into a course of action that is in its own interests.

Which may be true, at least some of the time.

But what exactly prevents the stronger parties leaning on the weaker countries whenever it suits the stronger group? Why exactly was Noonan for example paying out the unguaranteed dead debt of Anglo Irish recently, when even he admitted he didnt want to do it and didnt agree with it? Theres no requirement in any treaty, and its completely inexplicable, but its been heavily hinted that we're under tremendous pressure from core interests (The ECB, with Germany lurking behind them?) that it had to be paid or there would be uncertain, unspecified retaliations. We know that Irish policies can be dominated by interested parties - are we quite sure that German corporate interests, especially those of state owned banks, arent guiding the threat of retaliatory action if we dont pay out on dead debt at taxpayer expense?

Like I said, Im sympathetic to the realpolitick argument - but whilst we assume the Irish "insiders" are the lowest of the low, we cant presume that being dominated by the interests of the various European "insiders" will lead to better outcomes for the average Irish outsider.

Also, at this point, its looking like things are spiralling far out of the control of the Eurozone "leadership" - essentially Merkel, her bumbling sidekick Sarkozy, and the German constitutional court. The chaos in the Eurozone is affecting our trade partners both within Europe and in America and Asia. The Eurozone crisis is a global issue which will affect a lot of people who are not represented in the decision making process - Sarkozy and Cameron had a minor bustup on this point back at Cannes when Sarkozy was furious that Cameron wanted input on the policymaking. All along, the responsible, moderate, non-crazy view has been Ireland should bet the entire house on a double or nothing gamble that the Eurozone would come up with some magical plan. Its still possible I suppose, but its increasingly likely that the various political tensions mean that such a grand bargain is too much to expect to be delivered within our lifetimes. And we dont have the time to wait anymore - the idea that sovereigns just roll over debt without hassle is looking increasingly ridiculous.

Much like Greece is incapable of solving its own problems, and how its various trading partners are affected by its failure to solve its own problems is it time for the UK, US and China to send in a monitoring team to run the Eurozone with reviews of programmes, targets and penalties for failures to adhere to those targets? Perhaps an imposed, objective solution free of local politics is the best solution.

This is a pretty good summary of what will happen when Italy defaults. I say "when" not "if" because the ECB will not intervene as lender of last resort and print money. In fact they have stepped down their Italian bond buybacks which makes you wonder if they are doing this deliberately.

I say "what will" happen instead of "what might" happen because Edward Harrison makes it pretty clear that civil unrest and nationalism are maybes but you can guarantee default will trigger credit events in the CDS market, making all major Italian banks insolvent and trigger a run on the rest.

About the only thing that I think is wrong in that article is the tradition of precious metals as an investor safe haven. Silver futures are a slow trainwreck due to JP Morgan and HSBC price manipulation. Apparently sanctioned by the CFTC since neither institution has been penalized to date.

Hell the whole commodity futures market is a stupidly leveraged wild west, gamed by large institutional market participants to screw everyone else. If you ain't large and institutional, you want to be walking away while forming your fingers into a crucifix. There are good reasons why CTFC has taken on a double meaning in recent years. On places like Zero Hedge, Commodity Futures Trading Commission is often used interchangeably with Customer? F**k The Customer.

The US and UK have been quantitative easing like crazy so that makes sense. I don't think anyone knows how thats going to work out going into the future.

Either way, they are only seen as low risk because the Fed and Bank of England provided an unconditional backstop to their sovereign bond issues. Sovereign debt market likes assurances like that. I guess Germany and pals think that dancing to the tune of the debt markets has gone on long enough and that if the PIIGs don't ween themselves off the green heroin now, they'll never do it? Shrugs. I don't understand people anymore.