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Review of “Adults in the Room” by Yanis Varoufakis

theguardian.com

31–40 of 133 posts

Re: Review of “Adults in the Room” by Yanis Varoufakis

#31
post #19
post #13

Earlier quoted context omitted.

As a Greek I consider him a jerk. He enforced capital controls due to his incompetence and his ideological approach to financing. Furthermore, he's a pathological liar. While in many occasions he had admitted the faults of the Greek economy he never took specific actions in correcting them. If it wasn't for the group of clowns that constitute the current government and gave him the keys to the economy, nobody would g…

> While in many occasions he had admitted the faults of the Greek economy he never took specific actions in correcting them. By doing what, exactly? The country was bankrupt. In such a situation, the only sensible thing to do is default. Instead, Greece will be a 3rd world country with almost no public assets, and mass unemployment for decades. Regaining competitiveness through decades of internal devaluation is, to…

> only sensible thing to do is default

The problem here was cashflow; defaulting might save you from more loan payments, although actually doing it is quite painful under international law (see Argentina). But Greece needed to take out further loans in order to meet immediate public funding needs - and defaulting would have prevented that, or made it much more expensive.

I've turned this over in my head a number of times. None of the options are particularly pleasant, but it's not a good idea to pretend that defaulting would have been trouble-free.

Re: Review of “Adults in the Room” by Yanis Varoufakis

#32
post #5
post #4

Earlier quoted context omitted.

Didn't Greece falsify data for years? That would explain the AAA ratings.

Were the banks truly deceived, or just hoping that they could cash in and be bailed out?

Yanis describes in The Weak Suffer What They Must? that the situation was very simliar to the subprime crisis in the states. Giving a lot of risky loans that then could be split and re-packaged.

Re: Review of “Adults in the Room” by Yanis Varoufakis

#33
post #19
post #13

Earlier quoted context omitted.

As a Greek I consider him a jerk. He enforced capital controls due to his incompetence and his ideological approach to financing. Furthermore, he's a pathological liar. While in many occasions he had admitted the faults of the Greek economy he never took specific actions in correcting them. If it wasn't for the group of clowns that constitute the current government and gave him the keys to the economy, nobody would g…

> While in many occasions he had admitted the faults of the Greek economy he never took specific actions in correcting them. By doing what, exactly? The country was bankrupt. In such a situation, the only sensible thing to do is default. Instead, Greece will be a 3rd world country with almost no public assets, and mass unemployment for decades. Regaining competitiveness through decades of internal devaluation is, to…

[deleted]

Re: Review of “Adults in the Room” by Yanis Varoufakis

#34
post #25
post #12

Earlier quoted context omitted.

Varoufakis fought to find solutions that would allow Greece to actually be able to repay their debt. When that proved to be impossible, he refused to sit by and lend his name to a deal he didn't believe was in Greece or Europe's best interests.

> Varoufakis fought to find solutions that would allow Greece to actually be able to repay their debt. Default is not a solution to repay a debt. You can choose to default, but you can't expect any credibility later. The message Varoufakis sent to Greeks was: "Let's just say we don't want to pay and everyone will forget about in a couple of years."

Just like Iceland did?

Re: Review of “Adults in the Room” by Yanis Varoufakis

#35

Varoufakis is a hero to the international working class. His most recent book before this one is also excellent.

Quite a statement. What does it take one to become a "hero" nowadays? And how is he in any way connected to the working class?

Re: Review of “Adults in the Room” by Yanis Varoufakis

#36
post #26
post #5

Earlier quoted context omitted.

Were the banks truly deceived, or just hoping that they could cash in and be bailed out?

Probably both. I still remember a full-time ad in The Economist around 2006-2007 by a German Landesbank, where they were promoting themselves as the coolest of things when it came to banking and managing clients' money. Not 2 years passed and that same Landesbank was by then in very serious trouble because it had invested heavily in US mortgage derivates, I think there was also talk of its general manager doing priso…

AFAIK the only guy who did jail time for crashing the world's economy and wiping out retirement savings of millions of people was a guy who copied some utility code to dropbox when he quit Goldman Sachs.

Re: Review of “Adults in the Room” by Yanis Varoufakis

#37
post #2

"The first revelation is that not only was Greece bankrupt in 2010 when the EU bailed it out, and that the bailout was designed to save the French and German banks, but that Angela Merkel and Nicolas Sarkozy knew this; and they knew it would be a disaster." The treasury departments of the French and German banks had loaded up on GGBs - Greek Govt Bonds because they yielded more basis points than eg German Govt bonds,…

We only provide ratings, they are in no way a suggestion about investing. That is what Moody's et al always said. We are useless but you make us profit freely! Good for you, all you stupids!

Yes, and they paid by the issuers of the securities they're rating. Surely a conflict of interest...

Re: Review of “Adults in the Room” by Yanis Varoufakis

#38
post #4

Earlier quoted context omitted.

Didn't Greece falsify data for years? That would explain the AAA ratings.

Greece has been cooking the books for a long time, even their entrance into the EU was fradulant. Greece is the blame here via its decades of fraud that finally caught up with it. As a Greek-American with an interest in Greece being successful I think all the finger pointing at Wall Street or Germany is asinine. Greece is horribly corrupt and tax dodging is like its national sport. Its like someone turned Chicago int…

Yes, the constant bailouts are disrupting a necessary mechanism for markets to function, price discovery. Subsidize the losses, privatize the profits, so why bother pricing risk appropriately (which may also include not pricing it at all because it's impossible to predict 10, 20, and 30 years into the future, see pensions).

>The difference is Chicago and Illinois can raise taxes and make appropriate cuts over the long term

Chicago, Illinois, New Jersey, federal, and most of the other governments will also be defaulting, just not by name because of course you have to prop up the bond markets. What has been happening, and will continue happening, is under investment in infrastructure, education, cuts to promised benefits (which is a default in and of itself), and inflating away a portion of it. Basically a continuous erosion of quality of life to keep the game going.

Re: Review of “Adults in the Room” by Yanis Varoufakis

#39
post #13

Varoufakis is a hero to the international working class. His most recent book before this one is also excellent.

As a Greek I consider him a jerk. He enforced capital controls due to his incompetence and his ideological approach to financing. Furthermore, he's a pathological liar. While in many occasions he had admitted the faults of the Greek economy he never took specific actions in correcting them. If it wasn't for the group of clowns that constitute the current government and gave him the keys to the economy, nobody would g…

Greece had stopped getting any bailout funds way before Varoufakis or the current Government were in power. The IMF had already said that the program had failed.

Re: Review of “Adults in the Room” by Yanis Varoufakis

#40
post #22

Earlier quoted context omitted.

Morally it's on those who give out loans to make sure that they can be repaid. Maybe when dealing with an unsophisticated or under-informed borrower which the sovereign states in question are not.

And you are proved wrong by the fact Greece's government clearly was (still is?) "an unsophisticated or under-informed borrower". I mean the outcome of this borrowing speaks for itself. When I take out a loan a bank usually asks for collateral but these loans to Greece are unsecured and not worth paying back. The banking system should have been left to fail but instead we live in this world where governments bailed t…

No, the fact someone takes out loans they can't repay doesn't 'prove' they don't understand the terms of the loan. I don't think any of the major actors in this look particularly great but it's not like the Greek government found a giant bag of money on their doorstep one day and nobody told them it came with terms.
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