Category Archives: bailout

Craigslist for Greeks

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Greece’s Syriza Party Prime Minister Alexis Tsipras agreed to accept new conditions for a bail-out from Germany. The conditions are tougher than the ones Greek voters rejected in a referendum less than two weeks ago. The agreement also calls for a €50 billion investment fund to help Greece grow out of its mess. The fund is to endowed by the sale of Greek assets. Craigslist for Greeks.

The agreement requires approval of the Greek Parliament.

In a WSJ piece title “Another Greek Can-Kicking” Holman Jenkins thinks the deal will retard any return to health for Greece.

But if you still have money in Greek banks you might be willing, to sacrifice the economy’s return to long-term health to maximize your chance of reclaiming your life savings.

He also says the deal was less about Greece than preserving relations between France and Germany.

France stepped out as defender of Greece and promoter of fake plaudits… Germany likes to be seen deferring to France to quell any idea that Germany is becoming strident and imperialistic again.

It must be true – David Ignatius lays out the same notion in the Washington Post.

Greek Austerity

150506-greek-austerityLast week Greece defaulted on its debt to the IMF. On Sunday Greek voters said “no” to more austerity from the IMF.

Surging socialist candidate Bernie Sanders applauds the Greeks for rejecting austerity from the Euro ruling class. Economics writer Stephen Moore says Greece needs less socialism and more privitization. The banks are shutting down and withdrawals are restricted. He says what’s happening in Greece is the usual outcome of socialism – economic collapse.

Roger Cohen in the NYT says the euro zone isn’t all that much into democracy anyway: “A vote cannot undo a debt or obscure colossal Greek irresponsibility.”

The IMF had demanded more taxes on Greek businesses. Moore says the country is already overtaxed. His solution is a Detroit style bankruptcy where pensioners and Wall Street investors all take a “haircut”.

Robert Samuelson says the Greek economy accounts for only 1.8% of the euro zone and its collapse might not have much effect on the rest of us. Greece only has a population of 11 million. Hell, we have 94 million out of work.

But this WSJ analysis says if Greece does leave the Eurozone the risk of contagion to more important economies is high.

Greek Credit Swagger

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Greece is in default. On Tuesday the government missed a payment deadline on its IMF debt. On Sunday Greeks will vote in a referendum to accept terms from the IMF for more loans. The terms include tax increases and pension cuts.

Prime Minister Alexis Tsipras says he’ll step down if the referendum passes. Holman Jenkins in the WSJ says Greece has put a gun to its head saying, “Pay us ransom or the idiot gets it.”

The Greek economy is only 1.8 percent of the Eurozone. At 18 trillion in the hole, nobody has a credit swagger like Uncle Sam.

 

GM Bailout Airbag

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It looks like GM might avoid liability for some lawsuits over it’s ignition switches. The bankruptcy judge ruled the company can’t be sued for anything that happened before the government bailout.

Ben Bernanke’s Money

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What good is quantitative easing if Ben Bernanke can’t get a loan? The former Fed chairman confided last week that he was unable to refinance his $850,000 home mortgage. It’s true he’s out of a job but ex-government swells are never out of the money. Bernanke is still making the stuff from thin air (or hot air) by cranking out speeches at more than $200,000 a pop.

Helicopter Ben Bernanke

IBD notes that even Barney Frank now lays some blame on the government for the 2008 banking crisis. It forced banks to lend to risky home buyers and now Dodd Frank is overcorrecting by putting the clamps on the banking industry. Banks have been forced to close branches to pay penalties. They’re sitting on piles of free money but they’re reluctant to lend, even to Helicopter Ben.

In that same speech he also discussed how the government can always avoid deflation by printing more dollars and referred to a statement made by Milton Friedman, a Nobel Prize winning economist, about using a helicopter drop of money to fight deflation. Since then, Bernanke has had the nickname of “Helicopter Ben.”