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Post by jdredd on Jun 16, 2011 15:38:28 GMT -5
This is my latest attempt to find a home thread for the worldwide debt crisis, specifically Greece at the moment. I'm trying to find evidence whether investors are a good or bad influence on world politics, or both, which is more likely the case.
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Post by jdredd on Jun 16, 2011 15:40:53 GMT -5
www.bbc.co.uk/news/world-europe-13799099"Greece's debt was downgraded by Standard & Poor's ratings agency earlier this week, making it the lowest-rated of the countries it monitors. Wednesday's unrest destabilised markets, with major indexes witnessing the biggest drop on Wednesday since 1 June, and the euro sliding more than 1% against the dollar. Yields on Greece's 10-year bonds reached a record high of 18.4%." "Mr Papandreou faces the threat of a revolt in his socialist Pasok party over the controversial package, with two deputies resigning on Thursday in protest against the proposed austerity measures."
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Post by jdredd on Jun 16, 2011 15:53:12 GMT -5
It's interesting (and even nostalgic) the protestors in Greece are using the Spanish slogan "No pasaran!" from the Spanish Civil War. en.wikipedia.org/wiki/They_shall_not_pass"It was also used during the Spanish Civil War, this time at the Siege of Madrid by Dolores Ibárruri Gómez, a member of the Communist Party of Spain, in her famous "No Pasarán" speech on 18 July 1936. The leader of the nationalist forces, Francisco Franco upon gaining Madrid, responded to this slogan with "Hemos pasado" ("We have passed")."
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Post by Turk on Jun 16, 2011 20:51:10 GMT -5
You could’ve saved time and named the thread, “Do we need socialist?” Like your union thread the complete answer is “No.”
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Post by jdredd on Jun 16, 2011 23:31:19 GMT -5
Well, socialists have popped up, but I think they are just one part of the equation. My intent was to study the influence of investors on the world political scene. I don't know how often I read "Investors are worried about this" or "Investors are demanding that", but it's a lot, not to mention entities like the IMF. Of course, I may be the only one interested in what is happening in Greece.
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Post by jdredd on Jun 17, 2011 17:10:04 GMT -5
www.latimes.com/news/nationworld/world/la-fg-greece-bailout-20110618,0,5823625.story "Reporting from London— After days of increasing alarm among investors, the leaders of Europe's two heavyweights, France and Germany, reached agreement Friday on a key element of a second rescue package to help debt-ridden Greece avert a potentially catastrophic default." 'In Germany, Merkel appeared to back down from her insistence that private holders of Greek debt be forced to participate in a second bailout of the Mediterranean nation by extending the maturities on their bonds. Many Germans believe that such investors should not be given a free pass in the crisis while taxpayers are on the hook to rescue Athens. But the idea has drawn sharp opposition from the European Central Bank and countries such as France, which fear that ratings agencies would see forced participation as tantamount to a default by Greece. That, in turn, could trigger a worldwide financial crisis."Investors have that kind of power?
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Post by Turk on Jun 17, 2011 21:26:45 GMT -5
I was being flippant. The demise of Greece will hit France hard if not the hardest of any other Euro country. The problem in Greece is attributable to entitlements.
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Post by jdredd on Jun 17, 2011 22:07:18 GMT -5
I was being flippant. The demise of Greece will hit France hard if not the hardest of any other Euro country. The problem in Greece is attributable to entitlements. Trust me, I could never criticize flippant.
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Post by jdredd on Jun 19, 2011 1:23:45 GMT -5
www.bloomberg.com/news/2011-06-17/eu-prepares-new-greece-aid-as-merkel-backs-ecb.html"EU officials have discussed incentives for investors to reinvest the proceeds of their maturing bonds into new debt, according to people familiar with the situation. They include giving investors preferred status, higher coupon payments or collateral as inducements to buy bonds replacing Greek debt maturing between 2012 and 2014, they said." "Spanish Prime Minister Zapatero said in St. Petersburg yesterday that he expects investors to voluntarily contribute to a new Greek rescue in a “commonsense” way. Merkel said June 17 she is now willing to accept that the so-called Vienna initiative of 2009, which encouraged western banks to continue funding their eastern European units, may be a model for private-investor participation in the new Greek aid package."
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Post by jdredd on Jun 19, 2011 19:15:34 GMT -5
english.aljazeera.net/news/europe/2011/06/201161915150294785.html"Protesters call themselves the "indignados", meaning the "indignant" or "outraged". The political leaders of the euro zone's fourth largest economy have worked hard to convince investors the country will not follow Greece, Portugal and Ireland in needing a bailout." "Banks have cut off credit lines, consumer prices are rising faster than the regional average, investment has been slashed and house prices have plummeted. Meanwhile, the government has spent the last two years passing bills to keep wage rises to a minimum, raise the retirement age, abolish welfare payments and increase taxes."
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Post by jdredd on Jun 20, 2011 7:47:12 GMT -5
www.latimes.com/business/la-fiw-greek-debt-20110620,0,5634826.story " Investors had hoped that officials meeting in Luxembourg would approve the payout of about $17 billion in rescue loans to Greece, which desperately needs the money to pay bills that come due next month. But after several hours of talks, finance ministers from the 17 countries that use the euro said early Monday they would release the funds only if Greek lawmakers approve a controversial program of tax hikes and spending cuts to slash the country's mammoth budget deficit." "All eyes are now on Athens, where violent public demonstrations and a brewing revolt within Prime Minister George Papandreou's ruling Socialist party have thrown the fate of his proposed austerity measures into doubt." "If he fails, and if Athens cannot pay its bills next month, ratings agencies would declare Greece to be in default, a step that could set off a global financial earthquake." "Last week, Germany, the continent's economic heavyweight, dropped its insistence that private holders of Greek debt be forced to take part in a new rescue package. In Luxembourg on Monday, the finance ministers agreed that any such participation would be strictly voluntary. For example, private bondholders would be encouraged, but not compelled, to help by maintaining their exposure to Greek debt." Hmmm...investors on one side, a violent public on the other. Who will win?
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Post by jdredd on Jun 20, 2011 19:31:32 GMT -5
www.bloomberg.com/news/2011-06-20/papandreou-confidence-vote-looms-today-as-world-waits-for-delay-or-default.html"The International Monetary Fund, contributor of a third of the bailout money for Greece, Ireland and Portugal, has warned European leaders that a failure to take decisive action on the debt crisis risks triggering “large global spillovers.” At the same time, Papandreou is struggling to convince Greeks to accept a 78 billion-euro ($112 billion) package of state-asset sales and budget cuts, which include a “crisis levy” on wages. Papandreou, 59, now has 155 seats in the 300-seat chamber after one Pasok deputy on June 14 resigned from the party and declared himself independent in protest at the government’s economic policies. Two days later, two socialist lawmakers quit parliament, prompting Papandreou’s party to demand an emergency meeting and stoking investor concern that his grip was slipping and the chance of default growing." This could be as much fun as when the German Socialists had to decide whether to vote for or against funding for war in 1914. They chose war, with tragic results.
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Post by jdredd on Jun 21, 2011 13:11:45 GMT -5
www.bloomberg.com/news/2011-06-16/default-by-greece-almost-certain-greenspan.html"Alan Greenspan, former Federal Reserve chairman, said a default by Greece is “almost certain” and could help drive the U.S. economy into recession." "The chances of Greece defaulting are “so high that you almost have to say there’s no way out,” said Greenspan, who ran the central bank from 1987 to 2006. That may leave some U.S. banks “up against the wall.”
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Post by jdredd on Jun 21, 2011 18:20:12 GMT -5
www.bloomberg.com/news/2011-06-21/papandreou-wins-confidence-vote-raising-rescue-chances.html“If we give up in the middle of the road, history will judge us harshly,” Papandreou said as he wound up the debate in the legislature. “The impression the political class in this country gives is that it hasn’t understood the seriousness of the crisis.” "Elected in 2009, Papandreou first sought a financial rescue in April 2010 to avoid default as investors refused to finance a record budget deficit. The conditions attached to the aid have helped deepen a slump that has driven the economy into recession for a third year, lifted unemployment to 15.9 percent and fueled the popular discontent and unrest." See, even the Socialists bend over for the bankers when push comes to shove. What else is new? It's the Golden Rule: "He who had the gold, rules."
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Post by jdredd on Jun 21, 2011 19:58:30 GMT -5
www.bbc.co.uk/news/business-13853963"The Fitch credit ratings agency has said that if commercial lenders roll over their loans to Greece, it will deem the country to be "in default". "Last week, France and Germany reached a compromise over whether such investors should assume a greater burden, saying any such move should be "voluntary". But few think their help is by choice." "Fitch Ratings believes that any softening by commercial lenders would come only as a result of political pressure and therefore cannot be deemed voluntary. BBC business editor Robert Peston said: "It is simply taken as fact everywhere but the conclave of eurozone finance ministers that Greece has borrowed perhaps twice what it can afford. "There is therefore no banker, or pension fund manager or insurance executive anywhere in the world who, left to his or her own devices, would willingly lend more money to Greece." That suggests any lending will only happen under duress and therefore come under Fitch's default category."
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