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Ah Asmo, this is humorous. Not in a way that has me thinking less of you, but due to the fact that even the smartest people make the most indefensible arguments. Stewart always has a joke when Republicans (and sometimes Democrats) do the same thing Chaos just did and which you defended--which is to ignore the "implied" in a statement. Usually Republicans use hate speech or such, but they just don't say the hate literally (Often when Obama's policies were compared to Nazi Germany's policies, for example.)

I.e, "Hey, I'm not saying Obama is like Hitler, but look at the smoke stacks coming from the White House?! They look like Jew smoke to you?!"

Another, but this one in more relation to our conversation.

I.e., Hey Lawdeedaw, when you have dick in your mouth does it taste good? WOAH, I DIDN'T SAY YOU SUCK DICK! YOU IMPLIED THAT! I just asked, you know, when dick is in your mouth...

See how utterly indefensible that above statement is? Or why Stewart gets so pissed, rightly so, when people make that argument? People can hide behind the most obvious statements and it's bullshit. Or people can be ignorant of the statements you make, and it's just as bullshit.

If you can't see the sense that makes, don't respond to this post please. I don't argue with ideology that blinds people to clear points and I have agreed with my fair share of points over the years when I have been wrong...so I expect it returned in kind.

Second, you do have a point about me being judgmental. I am jaded because every marriage I observed growing up was toxic. "Dad can't divorce mom, even tho she abuses us kids." Was a wonderful house I lived in. My wife was beaten for years by her husband, until she took poverty and destitution over that, and then met me. The list goes on and on, yada yada, no more need to explain my own life history because it isn't necessarily what happens in all of America. So I look at the worst aspects of marriage. Aspects that are as universal as the fact that we eat, breathe, shit and die.

Of course I also use history and stats to back up my judgment. So; marriage is a civil contract based on liberty and property (At least the part of marriage that matters to the government insofar as the rights they give you.) If the world's population of homosexuals is around 2.5% or so, depending on the estimates, then cheating (seeking out more than one relationship at a time) is much more naturally inherent to humans than sexual orientation by far. This is also natural in regards to the homosexual relationships as well. Cheating causes so much grief, repercussions, and yet it is only one bad aspect of being tied into a contract that many societies make difficult to break either through legal means or cultural taboos. Furthermore, abuse, divorce, long-term separation for business matters, much of these things kind of lend credence to the fact that marriage is created by society and has nothing to do with the "apparent" definitions we apply to it.

And Asmo, naughty naughty Asmo, you implied something...I am in no way shape or form telling other people what "their relationship is about." Just because I say something is inconvenient for damn near everyone (For some it is not) doesn't really mean much of anything. Shoes are inconvenient because you have to tie their laces. Is that me telling you how to shoe? No. How about kids? Kids are a hell of an inconvenience, but if you said I was degrading parenthood, especially my own, I would tell you to fuck yourself with that bold-faced lie.

If you are focused on the "property" aspect of that comment, well, you have an issue with my definition of the government's hand in marriage.

So, Greece borrowed more money than they could pay off and had a bad economy.

Part of the problem is with something like the united states sharing a dollar is that spending on social programs and taxation are still centrally determined. Setting up the same assistance for the poor and retirees across the states is a given. In the Eurozone though, Greeks were retiring earlier and with better benefits than the Germans, for a long time too. It is kind of hard to blame Germany for being reluctant to keep lending money to Greece when Germans are working till much older and getting much less in return.

Last week Tsipras put out a rather dejected sounding press release that I thought meant they were ready to raise the white flag, but just after that thing returned to normal

I think there are two factors at play over the primary surplus, firstly the creditors are in no mood to lend more money to help Greece's recovery, and secondly the primary surplus promised by Greece is, at least to start with, so small that any possible contraction would be more of a rounding error.

I was a little bemused to read this http://gu.com/p/49h6n/stw article on the UK's voluntary austerity. If you look at where they're spending money (tax cuts for the rich, who don't spend money) and where they're saving it (taking from the poor, who do) you have almost guaranteed an economic slowdown.

That leads to the thought that, as not all government expenditure is equal, surely a Greek government with more than usual amount of economic nous could surely come up with something.

Or, alternatively, agree to kick the can down the road for another 9 months.

I'd really like to think that the former is possible, no matter how unlikely.

NC's collection of interesting links yesterday brought us this paper by the Bank of England.

The summary upfront is somewhat interesting, the rest gives you cancer.

But here's something, page 3/61, second paragraph:

Furthermore, if the loan is for physical investment purposes, this new lending and money is what triggers investment and therefore, by the national accounts identity of saving and investment (for closed economies), saving. Saving is therefore a consequence, not a cause, of such lending. Saving does not finance investment, financing does. To argue otherwise confuses the respective macroeconomic roles of resources (saving) and debt-based money (financing).

Unless my brain truly did take same damage from reading the first ten pages of the paper, this paragraph is basically saying that the mainstream theory of crowding out is a load of shit. It's probably just a minority position within the BoE, but still...

The last paragraph of the summary also states that reserve positions have little to no effect on a bank's ability and willingness to lend. Any claims that a shortage of savings is responsible for a lack of credit are thrown out of the window right then and there. It's a lack of credit-worthy customers, end of story.

The BoE folks responsible for this paper still don't go all the way, but these two issues alone are devastating enough to mainstream economics and the policies that result from it.

I really wish people who have important things to say, hired people who can convey them well. I know having the actual researchers/activists doing the talking lends to authenticity, but sometimes you need people to pay attention. "Preaching to the choir" never needs diction or charisma, but this topic in particular needs to reach more ears than those who are knowledgeable already...

None of them were the tiniest bit suspicious that someone with no driving experience showed up in that car?

"It's my brothers"

Yeah, right, like anyone in the world would lend that car to their sister for here first driving lesson....

From my investigation, that's incorrect.
The places in China where hand pollination is used still have bees. The reason they do hand pollination is they switched to a very few varieties of apples and pears...and apple and pear trees need a DIFFERENT apple or pear tree to pollinate, so if you only have one apple variety (the norm there) it won't self pollinate, no matter how many bees there are. Also, climate change is putting the bee cycles and the tree cycles out of synch, making natural pollination even more difficult or impossible. By hand pollinating, they are able to have less than 10% 'pollination' trees to 90% 'fruiting' trees, and pollinate on the tree's cycle. THAT'S why production was better with hand pollination, not because people could do it better, but humans could target which pollen to use on which flower/tree. Also, commercial beekeepers won't 'lend' (rent) their hives out, or require high payments for them pricing most farmers out, because farmers there still use pesticides that kill bees through the pollination seasons.

Other areas that used to do hand pollination have stopped thanks to education. Now they plant more variety (so the bees/insects/birds CAN pollinate for them) and use less pesticides (that they actually didn't realize would kill bees) and are getting better yields for less money than the Chinese.

EDIT: These 'studies' always seem to ignore the incalculable cost of removing all the natural food pollinated by bees, and the collapse of many food webs caused by the loss of that food base. If people are spending cash to do the pollination work, you can be certain they'll go to great lengths to NOT share that produce with any wildlife.

Also, human hand pollination doesn't work for crops like certain grains and smaller vegetables and nuts, main human food sources. It only works for foods where a single pollinated flower will produce something worth the cost of pollination...grains simply don't, and neither do most vegetables, fruits, or nuts. Only large fruits or vegetables could use this economically. So while you're correct, it CAN be done, doing it across the board would probably quadruple the cost of average foods, if not worse.

WIKI-" If humans were to replace bees as pollinators in the United States, the annual cost would be estimated to be $90,000,000,000.[4]"

http://www.wired.com/2014/05/will-we-still-have-fruit-if-bees-die-off/

Odd how the show lends itself to puzzle based gameplay...

@newtboy
while i agree that shagen tends to get downright biblical in regards to psychedelics,i have never seen him suggest taking them irresponsibly or in an abusive manner.

in fact,i have seen him on multiple occasions lay out proper procedure to have a safe and enjoyable trip.

i actually agree with shagen the positive benefits psychedelics can have on a person,having experienced them myself on multiple occasions,over a span of decades.

the difference between shagen and i,is that i see trying to sway someone who has never ingested psychedelics into taking them in the very same vein as trying to sway an atheist into believing in jesus.

it is never going to happen,so why would i waste my time?

it is like trying to teach a blind man the color blue,or a woman what it is like to have a penis.

certain people have certain personality traits that may lend them to experiment with psychedelics.other people do not.one should not be judged greater or lesser than the other,because both represent personal choice.

personally i love psychedelics,for many of the reasons shagen posts.you may not,for your own reasons.totally fair in my book.
you will never see me at your door asking "having you found the joys of chemically induced hallucinations yet?"

maybe i should.....
i shall call it the "cult of acid".
let the doorknocking BEGIN!

Wall of text incoming. Again.

Sorry. Again.

tl;dr:

Debt relief right away was proposed, was neccessary, and was skipped to protect the European financial system.



You are 100% correct, we both are as convinced as one can be that a disorderly collapse would have been much worse for Greece. Might have turned it into a failed state, if things went really bad.

But the situation in Greece at the time the Troika got involved suggested a textbook approach would work just fine. Greece was insolvent, no two ways about it. A debt restructuring, including a haircut, was required to stabilise the system. Yet it was decided against it, thereby creating an enormous debt bubble that keeps growing to this day, destabilising everything.

Why?

People in Brussels, Frankfurt and Berlin knew in May of 2010 that Greece cannot service its current debt, nevermind pay it back. I remember rather vividly how it was presented to us, as it stirred up a lot of dust in Germany. They pretended as if the problem was a shortage of liquidity, even though they knew it was in fact an insolvency. And to provide an insolvent nation with the largest credit in history (€110-130b) is... well, we can all pick our favorite in accordance to our own bias: madness, idiocy, incompetence, a mistake, intent. They threw Greece into permanent indebtedness(?), and also played one people against another. People in Germany were pissed, still are. Not at the decision makers, but the Greek people.

Again, why?

Every European government, pre-crisis, drank the Cool Aid of deregulation, particularly with regards to the financial sector. When the crisis hit, they had to bail out the banks, a very unpopular decision in Germany, given the scandalous way it was done (different story). Like I pointed out before, when Greece was done for, German banks were on the hook for €17b+, and the French for €20b+. So no haircut for Greek debt.

It gets even better. The entity most experienced in these matters is, of course, the IMF. But IMF couldn't get involved. Its own regulations demand debt to be sustainable for it to become involved in any debt restructuring. Strauss-Kahn had the rules changed in a very hush-hush manner (hidden in a 146 page document) to allow the IMF to lend vast sums to Greece, even though they knew it would not be payed back. Former EC members are on record saying the Strauss-Kahn decided to protect French banks this way as a part of his race for President in France. So they changed IMF rules and ignored European law to bail out German and French banks, using the insolvent Greek government as a proxy.

Several members of the IMF's board were in open opposition. The representatives of India, Russia, Brazil and Switzerland are on record, saying this would merely replace private with public financing, that it would be a rescue package for the private creditors rather than the Greek state. They spoke out in favor of negotiations of a debt relief.

And if that wasn't bad enough, there's an IMF email, dated March 25th, 2010, that was published by Roumeliotis, formerly IMF. They put it very bluntly:

"Greece is a relatively closed economy, and the fiscal contraction implied by this adjustment path, will cause a sharp contraction in domestic demand and an attendant deep recession, severely stretching the social fabric."

Even the IMF, who chose parameters according to their own ideology, thought the European program to be too severe. That's saying something.

All that is just about the initial decision. The implementation is another story entirely, with unelected and unaccountable bureaucrats telling a democratically elected government what to do. There are former Greek ministers on record, telling how Troika officials basically wrote legislation for them. Blackmail was common, bailout money held as leverage. The Memorandum of Understanding was to be followed to the letter, and the Troika program was as detailed as a government program, so they really had their hand in just about everything.

The specifics of the program are a discussion of their own, with all the corruption going on. The Lagarde list (2000+ Greek tax dodgers) was held in secret by order of an IMF official – that alone should trigger major investigations. The nationalisation and sell-off of the four largest Greek banks, or the no-bid sale of the Hellenikon area to a Greek oligarch – all enforced by Troika officials.

The haircut of 2012, ~€110b wiped out, came two years late. As a result, it didn't hit any German or French institutions in a serious way. Most of the debt was in the hands of these four largest Greek banks -- NBG, Piraeus, Euro, Alpha – who subsequently had to be recapitalised by Greece to the tune of €50b. Cut by 110, up by 50 right away. Banks were nationalised and shares later sold again, at 2/3 the price. Lost another €15b, because the Troika demanded the sale to appease the markets.

The legal aspects of all this are nightmare-inducing as well. They violated numerous European laws, side-tracked parliaments, used governmental decrees, etc.

Let me just say this: when they forced Cyprus to give away two banks' branches in Greece for a fraction of their worth, Cyprus lost €3.5b, at a GDP of €17b, and those two banks went belly-up. It was pure blackmail, do it or you're out. Piraeus Bank received those €3.5b, and its head honcho had €150m of personal bad credit wiped clean right then and there, all at the command of the Troika. Those €3.5b had to be taken from ordinary folks by "suspending" the deposit insurance, perhaps the most stupid decision they had made so far.

Why did they do it? Because Greece was more important than Cyprus, and Cypriot banks were involved in shady deals with Russian oligarchs. Still illegal, and massively so.

Edit: I cut my post in half and it's still too long.

@oritteropo

There is a long history of Latin American currency crises which I would refer you to as examples of disorderly collapse. That Tsipras would break most of his electoral promises in his recent 4 month extension agreement should tell you that he knows how catastrophic it would be. You can't quantitatively approximate these kinds of events but qualitatively* (TYPO) the following is likely to occur:

1) Bank run - You saw significant withdrawals even leading up to the meeting with the Troika because of the possibility funding will abruptly stop. A stop to euro lending will see mass outflows with the expectation of bank collapse which will itself likely lead to the collapse of multiple banking institutions.

2) Foreign flows of currencies will dry up - Greek bond yields will spike, in effect no one will lend to the Greek government from overseas. Since like any economy, Greece needs to pay its public sector workers and requires foreign capital for imports, to preserve what it has, it will rapidly convert back to using the Drachma which it can issue and print/create. It is likely the banks will follow in turn and convert deposits to Drachma (another reason why people will withdraw money from banks as soon as they think euro support is over).

3) Drachma collapse - The Drachma will then depreciate rapidly. Again, the expectation of depreciation pretty much causes the depreciation. If people expect their currency to be worth less in the future, they will sell it, causing it to be worth less. Any existing savings accounts remaining will be decimated in value. Wages will fall drastically for everyone. Suddenly the cost of anything that relies on imported products (hint, a lot in any economy, especially Greece) will rise several-fold. This will lead to further job cuts, collapse of industries, which will precipitate further job loss, unemployment, output loss etc etc etc.

The tl;dr version of this is that government funding crises whether caused by debt or currency collapse in the first instance are self reinforcing and the consequences of an unmanaged collapse are all but guaranteed to be much worse than austerity but order. There is some evidence that countries who have a massive collapse and see their currency depreciate are then about to recover faster afterwards (a cheap currency boost exports, tourism etc) but the human toll is much more sudden and much more severe.

As far as IMF estimates being unrealistic, sure. All I'm arguing about is what is likely to happen and which outcome Greeks should prefer.

Sure Syriza has talked about the good kind of reform, but he's also promised the rest of what I talked about. None of which the Troika will let him do if he wants retain their funding. Anyone following this should have known he would not be allowed any of these promises he made in his election. Surely Tsipras himself knew this. It was either posturing/bluster or pure politics. Now the stability of his government is going to depend on how he can manage down his unrealistic expectations.

http://www.theguardian.com/world/2015/jan/28/alexis-tsipras-athens-lightning-speed-anti-austerity-policies

Everyone knows what has to happen but everyone has his own fancy angle on how and why and when and whose fault it is.

A country has spent all the money it could possibly borrow and then some, and has just voted not to stop spending.

Hey Greece, you will have to stop spending one day, the only thing that is not certain is how long this mess can be drawn out. While stopping spending may not look like it can help restart your economy, not getting any further external economic props might just make something happen.

It will be interesting to see how the political bits and pieces will work themselves out.

Its like your cousin borrowed some money from you and leased a fancy car like you have. He cant start paying you back just now, in fact he cant afford the downpayments anymore and now you either have to lend him more money or he has to go back to riding on the bus and the whole car is lost. You hate him because he lied to you about his income and he hates you because you cant really afford to "lend" more money right now.

PS: my bet is Greece gets to keep the car somehow.

@radx

I think the problem with say a 20 year time frame for Greece, is that same lack of trust and political inability to essentially prop up these governments with cash, year on year, for a period of that kind of time frame. I don't see Merkel being able to support this and not get pushed out of government. Functionally money has a time value so in essence, a long time frame is just more money. Rumour is Merkel is considering extending time frames on Greek loans (because most people don't understand that last point) but that will only come with a greater commitment to reform.

As far as collective punishment, it's more an issue that none of the other EU countries are responsible. I wouldn't characterise anything as being forced upon Greece, although I'm sure many feel that way. If they were to leave and reject aid they would be far worse though. The majority of Greece rightly wants to stay in. The Syriza win was about 'dignity' and basically getting better terms. But they won't get it because it would lead to parties in Portugal/Spain emerging and demanding the same thing. Morality doesn't really come in to it, I'm just looking at what's likely and/or possible.

As you mentioned, Germany went through its own period of austerity. It certainly constrained wage growth (which contributed to making its exports particularly competitive and put it in a good position to weather a downturn in the eurozone, when it can export to foreign markets) but I don't believe its inflation rate was vastly off. It was 1-2%, not vastly different to France for example. Either way politically, I don't see the German people being willing to pay these countries out of their troubles in effect.

I certainly agree though that eurozone rules were broken before the euro crisis, e.g. both Germany & France ran budget deficits in excess of agreed terms. Really it came down to the structural weakness of the eurozone's design. You can't have a monetary union (shared currency and central bank policy) without a fiscal union. What they had at best were fiscal guidelines and those weren't followed.

I don't see the eurozone collapsing though. Parties that want to leave are generally still fringe parties (excluding in the UK but it is the least integrated). France doesn't need bailouts, it just lacks growth (due to lack of the reforms Germany went through). The ECB's QE and the loose banking union for bailing out banks that they've developed will mean if Greece collapses these is unlikely to be any serious bank collapses or Lehman moments (or so the theory goes).

I don't really agree at the end with your characterization of a high German savings rate being culpability for inflating bubbles. That fault falls on the lack of domestic bank regulation within the respective countries, the lack of regulation to curb bad lending. In the same way I wouldn't blame China's saving rate for encouraging sub-prime US loans. Cash/liquidity is globally mobile and fungible. It's the responsible of the borrowers and their regulators to ensure they don't dig themselves into a hole. The lenders already stand to lose their investment if the loan goes bad.

Nothing is good about this situation and there is no reason to think this will end in anything but Greek default.

Greece's government, elected by its citizens ran up a large and unsustainable debt which was masked by easy credit before the GFC and fraudulent accounting.

There were many contributors. Corruption, hugely wasteful state owned enterprises, joining the euro zone before they were ready to lose the ability to devalue their currency and lower interest rates, and flagrant tax evasion.

But as a country they're collectively responsible for not demanding the necessary reforms of their politicians to ensure they were not vulnerable to a credit crisis when the GFC hit and lenders began to look more scrupulously at individual European countries rather than Europe as a whole. Equally, Italy is responsible for voting Berlusconi into power for every year their economy recorded negative growth under his government. Spain is responsible for not providing sufficient oversight to bad bank lending leading a huge indebting bailout package.

Some of Syriza's reforms are reasonable. Tackling corruption and trying to break up oligopolies are worthy ideas, but they are unlikely to be easy and yield any immediate benefit. Raising the minimum wage and planning to hire back state workers as they have already promised will almost guarantee they will cease to receive EU funding/ECB assistance and later IMF funding.

The simple truth from the point of view of Germany and other austerity backing Nordic countries is if they buy their loans (and in effect transfer money to Greece) without austerity stipulations, there will be no pressure or guarantee that structural reforms that allow Greece to function independently will ever be implemented. These lender government and by extension its people have no interest in transferring wealth to Greece if it stalls its reforms.

Yes fire sales of state owned enterprises suck but the likely alternative at this point if the Troika lending is stopped is that all other lending stops and Greece defaults. At that point there would be mass loss of state sector jobs and sky-rocketing unemployment relative to what is now being experienced. It would take years of reform for the Greek government to be lend-worthy again. There is simply no trust for any alternative to austerity on the part of north Europe.

Currently Greece has reported positive growth in the past quarter and excluding debt repayments is running a budget surplus. Realistically, yes they cannot pay back the 180% of GDP. The likely way forward is after several more years of real reform they (+ Spain & Portugal) would get better terms from the EU as politically, leaders in Germany and elsewhere will be able to make the case that their objective has been achieved.

The ECB's QE package is in some ways already part of this. What I guarantee won't happen is electing Syriza to oppose bailout terms helping to secure that. Germany et al will quite rightly see that if they acquiesce to Greece they will encourage other populist parties in Spain, Portugal, Italy and France and stall reforms.

Could Germany and others in theory provide a huge cash infusion to Greece, Spain and Portugal now? Sure. And those parties would be voted out in the next election and the terms reversed. Even with the relative stinginess of current loan terms, the likes of UKIP and the National Front with their anti-EU stance, have gained political standing in the EU parliament and will likely see huge boosts in upcoming domestic elections.