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post #16 of 1005 (permalink) Old 04-23-2010, 03:57 PM
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Re: Credit crisis in Greece, others to follow...?

You're saying Canada wasn't affect by the GFC at all?

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post #17 of 1005 (permalink) Old 04-23-2010, 04:45 PM
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Re: Credit crisis in Greece, others to follow...?

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I'm Irish. I'm a ''boarder'' in Canada. The US is not involved.
You hiring?

You're a pioneer. Half the population here wants to move to Canada. Not a whole lot of interest in the US anymore. It's seen as a closed shop.

You should set up some sort of recruitment firm or general middleman agency for Irish immigrants. You'd make a fortune.
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post #18 of 1005 (permalink) Old 04-23-2010, 06:16 PM
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Re: Credit crisis in Greece, others to follow...?

Global Financial Crisis, Rrrainer.
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post #19 of 1005 (permalink) Old 04-23-2010, 06:25 PM
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Re: Credit crisis in Greece, others to follow...?

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Originally Posted by Rrrainer View Post
okay, so according to the press the greeks are about to apply for imf/eu-money in the next few hours. i guess most of you have been following the story, for those who didn't, here's the short version:

the greek government has been spending pretty recklessly over the course of the last, say, decades. it was okay for them to do so because getting more and more credit used to be fairly cheap. the recession was hard on the people, it was harder on governments though, especially the ones with huge spending. due to the fact that the greek economy more and more relied on tourism (hit the most) and lacks any sort of major industries as of now, the credit default swaps went up since 2009. that means they will have to pay higher interest rates for the bonds they sell.

people were pretty sure greece wouldn't be able to cope with its financials unless external experts would take care of the mess. so brussels and washington came up with an umbrella if things were to get worse.

well, they did. as per usual, greek officials had been blatantly lying about the deficit(revised from 12,7% to ~14% in 09) - and the market place is having a field day. german bankers have warned merkel that greece is bound to end up like hypo real estate, a german banking conglomerate that swallowed billions and billions of cash just like a black hole due to its hidden accounts.

if the greeks were to default, it would have quite an impact on western europe as well: banks in france (~70 billion euros) or germany (~45) hold most of the greek debt - which is obviously why sarkozy was pushing a hellas-friendly agenda for some time now and keeps trying to get berlin to pay.

so here we are with greek basically bankrupt. the worst thing is that other countries are likely to follow: portugal's credit default swaps have been rising steadily, spain might be even worse, even france is getting some heat - and last but not least, the "last resort's", germany's, interest rates are higher than ever (still very low, but nonetheless).

do you believe we're gonna get out of this any time soon? will we see a major default in the euro-zone? and what about the u.s. or the uk?
The bolded part is not true, the goverment gave up control of the economic statistics service to Eurostat at the end of the year. This is a case of revision of economic data that pretty routinely happens. Of course the timing and the direction of the change were terrible for Greece and I do not expect accurate reporting on this issue after past distorions and lies from Greek goverments.

Why lie? First to score cheap points by revealing the other party's previous lies and second to conform with the "Maastricht criteria".

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From Isaac Asimov's "Foundation".
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post #20 of 1005 (permalink) Old 04-23-2010, 06:31 PM
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Re: Credit crisis in Greece, others to follow...?

I expect a full bailout of Greece, I mean the Eurogroup and IMF guaranteeing a fixed interest rate for Greek loans for a specific window of time, say 2010-2012. Then the market interest rates for Greek bonds will converge to the bailout interest rate. There will be political posturing and such obviously, negotiating the austerity measures for Greece. Eventually everybody is scared shitless about contagion and a chain of sovereign defaults so they will somehow agree.

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post #21 of 1005 (permalink) Old 04-23-2010, 06:33 PM
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Re: Credit crisis in Greece, others to follow...?

When push comes to shove, Europe will not let Greece, Portugal, Ireland or others go off a cliff into default-ville - it totally destroys the credibility of the Eurozone and the Euro would be badly damaged, impacting all the Eurozone economies. It's not in France or Germany's interest to allow that to happen, however frustrating they may find the alternatives.

Last edited by scoobs; 04-23-2010 at 06:38 PM.
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post #22 of 1005 (permalink) Old 04-23-2010, 06:36 PM Thread Starter
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Re: Credit crisis in Greece, others to follow...?

you're right about the revision thing, my bad.

so do you expect greece to come to terms with the harsh methods papandreou has proposed, saving tons of money but (maybe) crippling the economy until there's hardly anything left? will people accept it without rioting like mad?

btw are you in greece?
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post #23 of 1005 (permalink) Old 04-23-2010, 06:41 PM Thread Starter
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Re: Credit crisis in Greece, others to follow...?

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When push comes to shove, Europe will not let Greece, Portugal, Ireland or others go off a cliff into default-ville - it totally destroys the credibility of the Eurozone and the Euro would be badly damaged, impacing all the Eurozone economies. It's not in France or Germany's interest to allow that to happen, however frustrating they may find the alternatives.
brussels won't have problems with portugal or greece. however, spain or italy would be almost unbearable. i really don't know what germany, france or the uk could do if both of them were in major trouble.
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post #24 of 1005 (permalink) Old 04-23-2010, 08:05 PM
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Re: Credit crisis in Greece, others to follow...?

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You're saying Canada wasn't affect by the GFC at all?
Yes it was affected. Canada had no bad mortgages so house prices just kept on rising, and without toxic loans the Canadian Banks are now recognised as the most solid in the world. The stock index is getting back to where it was before the crisis and the Canadian dollar has moved ahead of the US$. Unemployment is still above normal, but has been falling since mid 2009.

So all in all, the USA and European financial crisis has been a boon for Canada. There is a highrise building going up on almost every block in downtown Toronto. Penthouse condos are going for $15-20 million

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post #25 of 1005 (permalink) Old 04-23-2010, 08:10 PM
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Re: Credit crisis in Greece, others to follow...?

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You should set up some sort of recruitment firm or general middleman agency for Irish immigrants. You'd make a fortune.
I was smart enough to get my Canadian passport in 1972.
These days Irish might still get in, but you would have to be Irish-Muslim or Irish-Sikh it seems.

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post #26 of 1005 (permalink) Old 04-24-2010, 01:41 AM
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Re: Credit crisis in Greece, others to follow...?

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Originally Posted by Rrrainer View Post
you're right about the revision thing, my bad.

so do you expect greece to come to terms with the harsh methods papandreou has proposed, saving tons of money but (maybe) crippling the economy until there's hardly anything left? will people accept it without rioting like mad?

btw are you in greece?
It won't cripple the economy. The exact opposite actually. The number of people living off the Greek government is incredible given the low retirement age, which if I'm not mistaken is one of the lowest in Europe. These individuals are just living off the country's producers (taxpayers). Raising the retirement age will not only save money but boost production since people that otherwise would have been living off others will actually be creating economic value (unless of course they work for the government). In turn, more producers means more tax revenue, which of course can be used to finance government spending that hasn't been cut (or pay off the debt). All in all, the Socialist party over there has actually done a decent job. Hell, you wouldn't even know they're socialists. They're more conservative than their "conservative" predecessors. Nevertheless, considering how much of an obstacle they face there's no way they'll be able to avoid a bailout. Just hope that it doesn't spread.

As for the US and the UK. Yes, we/they will face a similar crisis. Not in the next couple of years, though, at least in the US. In the US we'll be able to carry on for a while since our debt load is relatively small compared to most European economies (I believe it's about par with France and Germany). Additionally, since the dollar isn't in as imminent danger as the euro, if the Euro continues it's slide then investors will rush into the relative "safety" of US treasuries (especially if the other PIIGS get into trouble), decreasing our borrowing costs. The same holds true if the pound or yen have some issues. And in general, the US economy is a little more nimble than most places.

This, however, will only delay the inevitable. Our baby boomers are retiring soon, which will massively increase government spending. We have literally promised this generation (or more aptly, they have promised themselves on their children's behalf) more than younger Americans will even be producing, let alone what they're capable of paying in taxes without any major adverse consequences. This is the big worry, the GFC was only an appetizer. Hell, it was just afternoon tea and crumpets. I don't know much about European demographics, but I'm guessing the age makeup of the population isn't much different. Regardless of what happens, whether it's higher taxes, massive inflation, defaults, whatever, people will be forced to accept that the standard of living they have been expecting (and promised) won't be materializing. The fiscal condition of a few states (California, New York, and Illinois, are the big ones...go Texas! ) really doesn't help.

There are a few developed countries where this isn't nearly as much of a problem. Australia's constitution requires a balanced budget (i.e. it has a national debt of 0). I don't know shit about New Zealand, but my guess is that it's similar to Australia (because their accents sound the same to me ). Canada is in good shape too, although it'd be hard to imagine them bopping along just fine without feeling anything if the US economy takes a big hit. I don't know much about Poland, the Czech Republic, Lithuania, and Chile, but I think they're supposed to be in good shape, as well. I'm sure there are others. And no, I don't think China is going to rise up as some great economic engine anytime soon. There are a lot of skeletons in that closet that we don't know about yet.

I love discussing/reading about this stuff. Big hobby of mine, especially lately.
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post #27 of 1005 (permalink) Old 04-24-2010, 02:05 AM
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Re: Credit crisis in Greece, others to follow...?

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Originally Posted by Rrrainer View Post
so here we are with greek basically bankrupt. the worst thing is that other countries are likely to follow: portugal's credit default swaps have been rising steadily, spain might be even worse, even france is getting some heat - and last but not least, the "last resort's", germany's, interest rates are higher than ever (still very low, but nonetheless).

do you believe we're gonna get out of this any time soon? will we see a major default in the euro-zone? and what about the u.s. or the uk?
Dr Doom of MTF, do you really think the world will end?


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Who cares? let Germany pay, you've gained the most from that shit euro no one else needs, and you've bought most of the cheap summer houses too, after nearly obliterating Greece during 2WW.

So now shut up and pay out.
Exactly what the Greeks are saying.

No-one forced you to dump your Drachmas and Pesetas for Deutsche Marks.


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It was never in doubt that someday the richer countries would have to pay for the Euro beggars...
Indeed, socialism will always rule Europe. Wonder why Switzerland never joined this wealth-eating group.


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Originally Posted by scoobs View Post
When push comes to shove, Europe will not let Greece, Portugal, Ireland or others go off a cliff into default-ville - it totally destroys the credibility of the Eurozone and the Euro would be badly damaged, impacting all the Eurozone economies. It's not in France or Germany's interest to allow that to happen, however frustrating they may find the alternatives.
Lose-lose situation. It's very much in France and Germany's interest not to give false impressions that struggling countries can always lean on them for help. What's to stop Greeks from borrowing and spending more even after they get bailed out? They either lose directly by paying or indirectly by not paying.


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Originally Posted by Rrrainer View Post
brussels won't have problems with portugal or greece. however, spain or italy would be almost unbearable. i really don't know what germany, france or the uk could do if both of them were in major trouble.
There's the other problem. What happens when a larger country needs help? The only reason people expect the Greek bailout is because they know Germany can afford it. Why should small countries get preferential treatment just because they're small?
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post #28 of 1005 (permalink) Old 04-24-2010, 02:26 AM
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Re: Credit crisis in Greece, others to follow...?

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As for the US and the UK. Yes, we/they will face a similar crisis. Not in the next couple of years, though, at least in the US. In the US we'll be able to carry on for a while since our debt load is relatively small compared to most European economies (I believe it's about par with France and Germany). Additionally, since the dollar isn't in as imminent danger as the euro, if the Euro continues it's slide then investors will rush into the relative "safety" of US treasuries (especially if the other PIIGS get into trouble), decreasing our borrowing costs. The same holds true if the pound or yen have some issues. And in general, the US economy is a little more nimble than most places.

This, however, will only delay the inevitable. Our baby boomers are retiring soon, which will massively increase government spending. We have literally promised this generation (or more aptly, they have promised themselves on their children's behalf) more than younger Americans will even be producing, let alone what they're capable of paying in taxes without any major adverse consequences. This is the big worry, the GFC was only an appetizer. Hell, it was just afternoon tea and crumpets. I don't know much about European demographics, but I'm guessing the age makeup of the population isn't much different. Regardless of what happens, whether it's higher taxes, massive inflation, defaults, whatever, people will be forced to accept that the standard of living they have been expecting (and promised) won't be materializing. The fiscal condition of a few states (California, New York, and Illinois, are the big ones...go Texas! ) really doesn't help.
Indeed, in America it's the other way round to Europe. We've got big fat California (too fat - no wonder they want to split it in two) possibly needing a federal bail-out. Presumably means tax-payers from smaller states (like Kansas ) have to foot the bill.

Of course there's no speculation of California exiting the Dollar as there is of Greece exiting the Euro. But it would be funny if each American state did have its own currency. My guess is the Kansas Dollar would perform much stronger than the Californian Dollar atm.
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post #29 of 1005 (permalink) Old 04-24-2010, 02:41 AM
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Re: Credit crisis in Greece, others to follow...?

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Indeed, in America it's the other way round to Europe. We've got big fat California (too fat - no wonder they want to split it in two) possibly needing a federal bail-out. Presumably means tax-payers from smaller states (like Kansas ) have to foot the bill.

Of course there's no speculation of California exiting the Dollar as there is of Greece exiting the Euro. But it would be funny if each American state did have its own currency. My guess is the Kansas Dollar would perform much stronger than the Californian Dollar atm.
California being split up? I haven't heard of that. The last thing people from every other state need are two more senators from California.

As for states having their own currency, it's been proposed. Ron Paul is a huge proponent of that type of system. Some state senator from South Carolina also wants it. It's actually been proposed in a few states. Unfortunately, federal legal tender laws prevent it. Sure would be nice to have a backup for safety, though...

If California gets a bailout I'll eat my hat. It's not like they're innocent victims or anything. They've got no one to blame but themselves.
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post #30 of 1005 (permalink) Old 04-24-2010, 11:53 AM Thread Starter
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Re: Credit crisis in Greece, others to follow...?

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It won't cripple the economy. The exact opposite actually...
i'm not economics-savvy enough to debate you point by point but i've heard lots of people strongly disagreeing with your opinion, including well-known investors like jim rogers, george soros or bill gross. i guess we will just have to wait and see then.

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Dr Doom of MTF, do you really think the world will end?
well, i guess we'll be facing the same scenario as last time: the world would end if it wasn't for governments' / taxpayers' money. if we were to implement the libertarian policies you're so fond of, then yes, the world as we know it would end.

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Wonder why Switzerland never joined this wealth-eating group.
switzerland is actually the ultimate wealth-eater in europe, not brussels. do you remember the disc that some swiss banker offered germany, france and italy some months ago? turns out german citizens on that disc alone, with only a couple of hundred people on it and coming from only one branch of one bank, were hiding about a billion euros in swiss accounts. go figure. the swiss are easily europe's biggest parasites, living off hard-working people around them. it's not so much about the greeks or the portuguese. their millionaires have stashed away the millions in swiss accounts as well.

on topic:

http://www.bloomberg.com/apps/news?p...pO6Yud9Q&pos=4

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Papandreou Slammed by Unions, Opposition Over Bailout
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