Is the end nigh for the Euro? [vol. 3]

[LongQ]

Welshbeef said:

You know very well as has been discussed previously that it is eye watering how much actual % eventually of all money the govt ends up with.

All of it. We only borrow it to grease the wheels of inflation.

In the case of the Euro the public are second level borrowers (at best).

[Steffan]

Borghetto said:

Thanks for the graph Gargamel; interesting reading. Poor old Greece has got an 'Everest' of a mountain to climb to get income into line with expenditure. How Syriza thought they could reverse the austerity program beggar's belief. Their new policies regarding tax collection and anti smuggling/corruption will take German levels of efficiency to achieve - we haven't seen that quality in any Greek Government ever, so the chances of even a modest improvement seems highly dubious. I stand in awe that this pantomime horse continues to stagger on.

I must echo Borghetto's appreciation of Gargamel's contribution which undoubtedly crystallises the fundamental hopelessness of any recovery within the Greek economy in an exceptionally clear and graphic way. The detail in Gargamels's contribution is significantly better than most of the worlds Media can manage. They prefer to offer easy quips and regurgitated hand outs from the spin doctors employed in large numbers by the EU. Unsurprisingly.

That exposition identities, with clarity, the outright lies in any suggestion that Greece can actually function effectively within the EU and using the Euro as a currency. Greece cannot afford to achieve this in any way whatever. Just look at the figures! The EU are simply pushing this on in the hope that Greece will miraculously recover. Never going to happen.

These figures show, with crystal clarity, there simply are not enough workers and therefore not enoughoutput and therefre not enough income or taxation within the Greek economy to possibly enable remaining within a currency which value is set by the industrial might of Gemany. Greece never could afford to belong to this grouping, never will be abe to afford to belong to this grouping and inevitably therefore Greece will default.

The only question now is how long will that take? Difficult to determine that since the EU politicians and bureaucrats are only concerned with their personal positions, gravy train membership, lavish expenses, and stage strutting lifestyles. There will be no recovery of Greece within the Euro and EU. That is certain and that is why three years into the EU "Solution" the Greeks are in a far worse mess economically than they were when this nonsense first started. I would be interested to hear what others think is now likely to happen, given that wasting taxpayers hard earned money has become a way of life in the EU. Particularly with the timescales because the EU are clearly trying to blag this and push the crunch on for a long as possible.

[Walford]

Have never really understood how much relevance GDP has,if a chancellor decided to sell gold, most likely to foreign buyers then buy paper clips from China for some jobs worth new gov department this would increase GDP

[Blackpuddin]

I suspect that for all their insistence on meeting deadlines and producing a credible plan etc etc the troika would have accepted something written on the back of a Greek tax return form (blank of course) by a schoolboy. Which is exactly what they've been given.
The thing that makes me smile the most in all this is why a Greek opposition party would want to even stand for election when all they were ever going to inherit was this hopelessly poisoned chalice. Shows you the sh*t people will tolerate in exchange for power. Every Greek MP knows that the political system will feather his or her nest irrespective of the state of the nation, and of course proportionately more so if they're in power and sharing the trough at an international level.

[Wills2]

Using GDP as a measure against debt and extrapolating ability to pay from that does seem rather odd, but the major media outlets do bandy that comparison about.

From the figures I could find Greece collected 65 billion euros in tax in 2014 vs. owing 330-340 billion, roughly 5x income.

UK debt IIRC is around 1.5 trillion vs. 500 billion (approx.) in tax receipts or 1.5x income.

Of course the major issue is the interest rate you have to pay on that debt and its maturity.

Edited by Wills2 on Tuesday 24th February 15:46

[Blackpuddin]

Old banker chum of mine once told me that investing in Greek businesses was about as productive as repeatedly poking yourself in the eye with a stick. Don't know if things have changed now, doubt it somehow, but he said that closing down even rotten companies was almost impossible because of the generous redundancy arrangements which, irrespective of your age, paid up the full amount of salary you would have received right up to retirement.

[Welshbeef]

Wills2 said:

Using GDP as a measure against debt and extrapolating ability to pay from that does seem rather odd, but the major media outlets do bandy that comparison about.

From the figures I could find Greece collected 65 billion euros in tax in 2014 vs. owing 330-340 billion, roughly 5x income.

UK debt IIRC is around 1.5 trillion vs. 500 billion (approx.) in tax receipts or 1.5x income.

Of course the major issue is the interest rate you have to pay on that debt and it's maturity.

That is interesting as a comparison.


Only solution though - assuming stay on EU and no default - take 150-200year debts. Sell them to Greek pension funds etc. Job done.

Exiting then could result in major impact to all the other countries.



Yes I am hopeful that they can fix it - its worth trying anything over default but not ripping apart the country.
Maybe sell half of Cyprus to Turkey?

[LongQ]

And with one leap .....

http://www.bbc.co.uk/news/world-europe-31606986


The show goes on.

More twists and turns than a rollercoaster.

[Claudia Skies]

Claudia Skies said:

Andy Zarse said:

Great analysis from Andrew Lilico:

"Next week’s story seems likely to be the bank runs and queues into the Greek streets. Syriza will tell the Greeks they tried everything and the wicked Germans still said no."

That's odd, we don't seem to have heard from AZ for a few days.

[Borghetto]

Welshbeef said:

That is interesting as a comparison.


Only solution though - assuming stay on EU and no default - take 150-200year debts. Sell them to Greek pension funds etc. Job done.

Exiting then could result in major impact to all the other countries.



Yes I am hopeful that they can fix it - its worth trying anything over default but not ripping apart the country.
Maybe sell half of Cyprus to Turkey?

Greece doesn't own Cyprus, it's an independent EU state.

With regards to Greek Pension funds - do they have them?

[LongQ]

Borghetto said:

Greece doesn't own Cyprus, it's an independent EU state.

I bet between them Greece and Turkey could find a way around that little problem.

Where there's a vanity project and a big debt there will be a way.

[Andy Zarse]

Claudia Skies said:

Claudia Skies said:

Andy Zarse said:

Great analysis from Andrew Lilico:

"Next week’s story seems likely to be the bank runs and queues into the Greek streets. Syriza will tell the Greeks they tried everything and the wicked Germans still said no."

That's odd, we don't seem to have heard from AZ for a few days.

Indeed you haven't. And for a number of reasons.

Firstly I was in Rotterdam with our Dutch customers. Secondly TYE approaches fast and is making me extraordinarily busy. And last but not least, I have absolutely no regard for your pathetic childish opinions.

The article from Lilico was absolutely spot on. Tsipras and Varoufakis have been royally butt-fked by the Troika, their abasement gambit failed entirely as predicted by AL. Not only that, the politics played out absolutely as he said it would. They did try everything and the Germans said no.

Greece has capitulated utterly, and as I said a couple of weeks ago, Syriza was elected on a lie. Read the whole article again, it's bloody spot on.

As to the dead horse you're flogging, there has been, and continues to be a terrible bank run in Greece Money leaching away at a horrendous rate and I fully expect capital controls soon. The important thing you need to realise is this bank run is happening electronically. Obviously, there are always going to be credulous dimwits who might think a modern bank run means actual queues outside the banks. So I suppose the only bit you can criticise AL on is him not making the metaphor clearer so such halfwits might be less inclined to misunderstand. Still, I don't think he goes in for such dumbing down.

Perhaps you can tell us what the Daily Mirror has to say about it...

Meantime, drip drip drip, Grexit is coming.

Edited by Andy Zarse on Tuesday 24th February 18:22

[Gargamel]

I think I heard it was around a Billion euro a week....

[Walford]

Borghetto said:

Welshbeef said:

That is interesting as a comparison.


Only solution though - assuming stay on EU and no default - take 150-200year debts. Sell them to Greek pension funds etc. Job done.

Exiting then could result in major impact to all the other countries.



Yes I am hopeful that they can fix it - its worth trying anything over default but not ripping apart the country.
Maybe sell half of Cyprus to Turkey?

Greece doesn't own Cyprus, it's an independent EU state.

Greece also doesn't own Greece, the EU banks do

when you own somthing you can do what you want with it, not keep asking

.

,

[Axionknight]

Blackpuddin said:

Old banker chum of mine once told me that investing in Greek businesses was about as productive as repeatedly poking yourself in the eye with a stick. Don't know if things have changed now, doubt it somehow, but he said that closing down even rotten companies was almost impossible because of the generous redundancy arrangements which, irrespective of your age, paid up the full amount of salary you would have received right up to retirement.

Surely not?

[loafer123]

First impressions from Athens are that it seems like many southern European cities. A few more street hawkers than some, but equally less beggars than some. Some streetlights switched off, but nothing major.

Central shopping district and surrounding bars relatively busy for a Tuesday evening, with few vacancies, but that could easily be down to their rent reduction law and impossible imsolvency legislation.

Probably what stands out most for a PHer is the lack of new cars.

People watching gives the perception that they are people who are going through a tough time, but are getting through it through reliance on family and friends.

I don't get the feeling of any panic, or that they fear a GREXIT, more that they just want to know what the next stage is.

More tomorrow.

[anonymous-user]

Andy Zarse said:

...there are always going to be credulous dimwits who might think a modern bank run means actual queues outside the banks...

Oh they still happen. The morning after the last SWIFT transfer.

[turbobloke]

loafer123 said:

First impressions from Athens are that it seems like many southern European cities. A few more street hawkers than some, but equally less beggars than some. Some streetlights switched off, but nothing major.

Central shopping district and surrounding bars relatively busy for a Tuesday evening, with few vacancies, but that could easily be down to their rent reduction law and impossible imsolvency legislation.

Probably what stands out most for a PHer is the lack of new cars.

People watching gives the perception that they are people who are going through a tough time, but are getting through it through reliance on family and friends.

I don't get the feeling of any panic, or that they fear a GREXIT, more that they just want to know what the next stage is.

More tomorrow.

Thanks.

In Spain not long ago and the new-ish car syndrome was alive and well.

That's evolution for you.

[Welshbeef]

turbobloke said:

Thanks.

In Spain not long ago and the new-ish car syndrome was alive and well.

That's evolution for you.

Yep I remember that - back in the 80's and 90's it was all old tat which was charming and what you'd expect then in the early to mid 2000's loads of very new cars everywhere felt like Spain had caught up with the UK in that sense but all they did was tourism and hiked prices due to the Euro being adopted.

[911Gary]

Welshbeef said:

Given its just in surplus now the debt is no different to 1.75x income for a mortgage multiplier. Given we've had 3x for decades and now up to 6x and can easily afford a 25yr then 1.75x is perfectly fine for what 8-10year mortgage.


Dead simple.
Too many get drawn into the while ohh its too big nonsense. Compare it to an individual and frankly if you'd say anyone with a 1.75x mortgage in the UK was insolvent is boneless.

Yes but that against an asset!