Pure quality by John, as usual.

There are a few points I'd like to add, in order of appearance.

5:10 – Greek default or Grexit could be manageable by the rest of the EZ, economically. Italy looks a bit shaky and Spain still looks like shit, so things could spiral out of control, but chances would be better now than they were in, say, 2010.

However, Grexit would be a political nightmare. EZ membership is supposed to be irreversible, so Grexit would reduce the Euro from a common currency to a peg when viewed from the outside. That's open season on the rest of the PIIGS. If Greek then rebounds, other people might very well decide to give Germany the finger and leave as well. If Greece fails, you have a NATO member turn into a failed state, which not only gives NATO the shivers, but also buries any notion of solidarity within the EU. This union survives because of the promises it makes, which include increasing standards of living and solidarity among different peoples. Without it, we're left with... what exactly?

And nevermind the humanitarian catastrophe taking part in Greece. We've conditioned ourselves to block out the pain and suffering of people in Africa. We even manage to shrug at the cesspool of corruption that is Kosovo. But if we do that to Greece as well, what little moral authority Europe might still have left would be gone then.

5:32 – The last payment Greece received was in August, long before Syriza took over. The previous government was in disagreement with the Troika and therefore transfers were frozen.

5:57 – Troika payments are required to service previous debt obligations. They are separate from what the Greek banks require to maintain their liquidity. That would be Emergency Liquidiy Assistance (ELA) from the ECB, which is a different thing entirely, even though it comes from a member of the Troika.

The ECB is bound by law to maintain and ensure the stability of the banking system(s) within the EZ. If a bank runs into liquidity problems, support is provided by the national bank of the respective country, which funnels funds from the ECB to the troubled bank. That's ELA, and a limit on ELA is a limit on the amount of funds that banks can draw from through this process. If an illiquid bank is cut off from ELA, it goes belly up. Bad idea.

Some argue that the ECB should not provide ELA to those Greek banks anymore, since they are insolvent, and ECB rules forbid ELA to insolvent banks. But as Varoufakis said, even the ECB's own Single Supervisory Mechanism (SSM) department, which is the new banking oversight, declares the four large Greek banks to be solvent. So there is no reason for the ECB to cut ELA to Greek banks. It's all political, and the ECB is designed to be outside of politics. That's also a reason why its membership in the Troika is so controversial.

The political argument for cutting off ELA is that Germany et al. are on the hook for the total amount should Greece itself go belly up. Somewhere along the line, someone made the glorious decision to install the ECB as a currency issuer without providing it with the attributes of a regular currency issuer. If the Bank of Japan or the Bank of England racks up losses, noone cares. They issue their own currency, they cannot go bankrupt, whatever debt they have in their books is irrelevant, for this discussion anyways. But the ECB has to balance its books, it has to receive funds from its members to balance losses, and in proportion to their economic size.

They made sure that politicians can scare the demos by pointing out how they have to foot the bill for this shit, even though it's the one entity where debt truly doesn't matter at all.

By the way, the funds that Greece is hoping to acquire are meant, primarily, for two purposes: making debt payments and to provide financial room to convert ECB(?) debt into EFSF debt (4% interest down to 1%). That's all. No spending.

6:54 – "Printing" money is generating demand out of thin air. There is a shortage of demand throughout the entire continent. So yeah, if the folks at the ECB could type in a few numbers, that would be swell.

Even Germany has a shortage of demand. We are merely hiding it behind the €200b+ of demand that we steal from other countries, i.e. our current account surplus. But the infrastructure and investment spending over here is at all time lows. We'd need an additional €200b+ just to get the infrastructure back to the state it was in a decade ago.

There is no productivity growth in Europe. The UK actually lost a lot of productivity by its introduction of zero hour jobs and other forms of slavery. Without sufficient demand, there is no need to improve production capacities – they can't even sell what they could produce right now.

@charliem,

Energy is absolutely a better measure and marker of climate change than temperature. I started there since the video did. In reality though, everything in climate change is solely about the energy balance at the Top Of Atmosphere. More TOA energy in and temps go up in the long term, less and temps go down. It's the very foundation of climate change.

The climate models that your links look to for projections of things like methane thresholds are based on modelled temperature predictions. The IPCC notes the following on the state of the art in climate models:
For instance, maintaining the global mean top of the atmosphere (TOA) energy balance in a simulation of pre-industrial climate is essential to prevent the climate system from drifting to an unrealistic state. The Models used in this report almost universally contain adjustments to parameters in their treatment of clouds to fulfil this important constraint of the climate system (Watanabe et al., 2010; Donner et al., 2011; Gent et al., 2011; Golaz et al., 2011; Martin et al., 2011; Hazeleger et al., 2012; Mauritsen et al., 2012; Hourdin et al., 2013).
http://www.ipcc.ch/pdf/assessment-report/ar5/wg1/WG1AR5_Chapter09_FINAL.pdf
It's in Box 9.1

So, climate models currently FAIL to predict TOA energy accurately and hand tuning is required for modelling temperatures into the known past in order to avoid unrealistic states because the TOA energy is wrong. Maybe we aught not panic just yet on extrapolations from that base. I'm not calling climate models garbage, rather they are a learning tool for climate processes and one lesson is that we have a long ways to go in understanding the central component of TOA energy balance. If you go to google scholar and lookup the references from the IPCC assertions you'll find that the modellers acknowledge that most models still either leak or create energy from nothing. As in, even conservation of energy is imperfect in them still.

Your cursory glance approach is a problem, the devil is in the details.

Looking at energy further from NASA's numbers also tells us that the net contribution to TOA energy trapping from the CO2 we've added in the last 100 years is about 3W/m-2 globally. The global TOA energy imbalance is about 0.5W/M-2. In other words, if we could magically remove all the CO2 we've added to the atmosphere, we'd suddenly have a global energy imbalance at TOA of -2.5W/M-2. That brings two things to mind.
1.The enormous energy imbalance you want to call a catastrophe is 0.5W/M-2, but merely rolling back to 1900 CO2 concentrations today would yield a negative energy imbalance 5 times as large.
2.Of the 3W/M-2 that our actions have pushed on the planet, natural factors(warming and other unknowns) have already balance out 2.5W/M-2 of the imbalance, today.

You also might wanna check how much energy is in the oceans on the whole. If you take the increase in energy as a percentage of OCH instead of straight joules you'll find the trend is << than 1% annually.

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Everybody loses their shit over Sarkeesian et al because they are contentious. I think there is this perception that the attention that is generated as a result of all the frothing was somehow a cynical ploy to acquire fame, not for a cause, but for oneself. It's easy to feel how "SJWs" stole the limelight, that attention was diverted from rape to petty (in comparison at least) squabbles. I think it's a mistake to lay the blame on the originators of an opinion for the fact that it went viral. Fame is all our creation, not theirs.

@newtboy, et al. - It's not necessarily about specific visual content that would be embedded (though animated gifs and huge images are worth concern). It's more about the overall aesthetic of the page and the visual stick-in-the-eye of a bunch of big, ugly images strewn about filling up a comment listing like a bulletin board circa 1999.

@radx

The liquidity/insolvency line is just a fancy way of asking for more money than is being provided. As I said, I expect once structural reform is fully implemented, the ECB (tacitly instructed by Germany et al) will take a much more active role in buying the debt of these countries but it's not at that stage yet. The problem is they've been slow to sell off assets, reform government and reduce public employment to levels demanded.

Again what you propose is easing that eliminates the pressure to reform, which is the intent of the troika/Germany as I see it. I just don't see any of those things happening. As I mentioned before, Greece's debt has largely stopped rising and GDP has been edging upwards since 2010 and is now positive:

http://www.tradingeconomics.com/greece/government-budget-value
http://www.tradingeconomics.com/greece/gdp-growth

As far as running surpluses, I would argue if everyone was nearly as zealous as Germany, then the deficit/surplus gap between countries would narrow - which would be the best outcome globally. As you'd probably know Germany's attitude towards fiscal stability and inflation is fairly hawkish given its history with hyperinflation. But it has clearly served them well when their bond yields didn't spike during the euro crisis because of a shortage of funds.

I wouldn't characterise it as beggar thy neighbour, that's generally reserved for active measures to prevent trade from other countries (such as through tariffs or subsidies). Instead Germany from what I've read, has carved out a competitive niche for itself with it's Mittelstand. I don't know Germany history particularly here, but I assume it led to companies in industries like retail which can't compete globally reducing or being bought out.

I would compare it to what happened here in Australia with the car industry when government support for it vanished. In our case at least, the only reason the industry existed for the past couple of decades is because of that support and it should never have been propped up by the government in the first place. I don't see that really being any different to typewriters being replaced by computerisation, whale oil being replaced by fossil fuels or US manufacturing going to China (and now leaving to other areas of Asia).

Coming back to trade surpluses, for similar reasons to Germany, most Asian countries also run large trade surpluses because of their history with capital flight in the Asian financial crisis of 97. This is despite many of them developmentally being far behind Greece let alone Germany or France. There has been no Asian crisis this time around and investment into these countries (like Malaysia, the Phillippines, Vietnam and China) has hardly been low over the past 10 years.

I'm not a huge fan of QE as a policy either. Part of the problem is central banks like the ECB weren't designed with the intent of using QE, merely adjusting interest rates, let alone any direct purchases of bonds. I was a big fan of what they did here in Australia where they just gave a one off wad of money to everyone who is earning an income. We ended up avoiding a recession entirely, although our economy was doing quite well at the time.

In effect that's more fiscal policy and I can imagine it being difficult to implement in the EU across countries in an even way. Merkel is certainly too hawkish overall. Policy along those lines, unbiased investment via the EIB or let alone just implementing QE earlier (like the US did) would have helped everyone.

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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.

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