Greece • Hacker News Board

Re: Greece

#101

Post by Spooky23 » Sun, Jul 05, 2015, 3:31 AM UTC

telepheron wrote: post #11

msabalau wrote: post #6

The entire thing is worth reading, but the key take away: "Regulatory mistakes and agency issues within banks encouraged poor credit decisions. Spanish banks lent into overpriced real estate, and German banks lent to a state they knew to be weak. Current account imbalances within the Eurozone — persistent and unlikely to reverse without policy attention — implied as a matter of arithmetic that there would be loan flo…

So we just ignore the fact that the Greek government misrepresented their economic state, failed to implement the necessary changes and then puts up a completely bogus referendum?

I remember Jim Cramer (not exactly an economic luminary) was able to identify on air that Greece was a joke a decade ago. Funny that the German and French bankers couldn't figure it out.

The responsible states in Europe all benefited from the excesses of countries like Greece, so they let the good times roll.

Re: Greece

#102

Post by visarga » Sun, Jul 05, 2015, 3:43 AM UTC

Shivetya wrote: post #91

giggzy wrote: post #22

Earlier quoted context omitted.

The creditors ( banks ) are part of "moral" game here too. If the Euro cannot handle Greek ( and Spanish , Italian, Portuguese , Irish ) default then members of the Euro must share the imbalance. As an american tax payer it hurt to watch bank bailouts here. In europe I keep hearing countries names, but this is a bank bailout fundamentally. Sticking the debt on national governments while also forcing austerity ( defac…

The EU was never to be a transfer union, this setup was required to get the large economic countries to accept the weaker countries being admitted. National pride would mean political suicide for any leaders who suggest sending money out in the form of welfare. While I am quite willing to lambast the banks in the states for the mess they got into I am not so willing to do so with regards to their lending to Greece. S…

Lending money is always a transaction between two parties. Both should be responsible. The financial state of a country is easier to evaluate than that of a person, they shouldn't have faller for the tricks of Goldman Sachs.

> According to investigative reports that appeared in Der Spiegel, the New York Times, BBC, and Bloomberg News from 2010 through 2012, Blankfein, now Goldman Sachs CEO, Cohn, now President and COO, and Loudiadis, a Managing Director, all played a role in structuring complex derivative deals with Greece which accomplished two things: they allowed Greece to hide the true extent of its debt and they ended up almost doubling the amount of debt Greece owed under the dubious derivative deals.

source: http://wallstreetonparade.com/2015/06/goldman-sachs-doesnt-h...

So, EU and IMF didn't catch that, they lent money in a stupidly criminal way and now they want it back at any cost to Greece. They lent Greece money when Greece didn't need it, and now request it back when they are down.

Of course Greece bears the brunt of blame here, but collective punishment at the level of a country is cruel. There are lots of innocents paying now for the financial dealings of the older generation.

It's sad to see EU reduced to this kind of relationships between us. Maybe EU isn't ready to exist as it is. They allowed countries into the union and Eurozone that didn't need to be there. Instead of having a corruption-reducing effect, corruption was allowed to go on without scandals for years. EU should have had a civilizing effect on its poorer and more corrupt countries. As it is now, it's a money-shark.

Re: Greece

#103

Post by rosser » Sun, Jul 05, 2015, 3:54 AM UTC

tacone wrote: post #56

mike_hearn wrote: post #24

Earlier quoted context omitted.

The reforms are the only long term solution. They're reforms like, maybe Greeks should retire at the same age that other people in Europe do. Maybe hairdressing should not be considered a 'dangerous profession', thus unlocking various benefits. Maybe Greek train drivers should not be paid $130,000 a year to drive near-empty trains. Maybe Greece should be able to grow its own food instead of importing more than half o…

> The reforms are the only long term solution. They're reforms like, maybe Greeks should retire at the same age that other people in Europe do. What's the retirement age of the other people in Europe, excuse me? 62 like in Germany? 67+ like in Italy? > Greece is hosed because, as the article points out, it is an incredibly screwed up and corrupt country. Japan is often ranked as the most corrupted country in the worl…

Japan is often ranked as the most corrupted country in the world...

[Citation needed]

I searched for "most corrupt countries" and pulled up the first dozen-odd resulting pages. Not one of them mentioned Japan.

Re: Greece

#104

Post by hartator » Sun, Jul 05, 2015, 3:56 AM UTC

snitko wrote: post #97

PhantomGremlin wrote: post #79

Earlier quoted context omitted.

half the population ... oblige the other half I'd love to see an experiment where democracy was modified. People should get multiple votes, proportional not to their income or their wealth, but to the amount of taxes they paid the previous year. There would need to be some sort of limit. E.g. nobody gets less than 1 vote nor more than 10. But something like that would create what some call "skin in the game". Those p…

Now, let's extend your idea. Everyone can vote with their dollars for what they want to have in their lives! That way, no one is forced to use products or services someone else imposes on them. Now wouldn't that be the fairest system of all?

How revolutionary! Will be cool to try it for real at least once! Pure capitalism is the form of government that haven't try yet. New Zealand is the closest. The US with 38% of the GDP being public spending hardly/halfly qualify.

Re: Greece

#105

Post by hartator » Sun, Jul 05, 2015, 3:58 AM UTC

dredmorbius wrote: post #31

Far better one that turned up in my G+ feed a few days back: http://faculty.chicagobooth.edu/anil.kashyap/research/papers... "A Primer on the Greek Crisis: the things you need to know from the start until now", Anil Kashyap, University of Chicago, Booth School of Business, June 29th, 2015 1) How did Greece get into such trouble?... To accompany that: "Greek Debt Crisis: How Goldman Sachs Helped Greece to Mask its Tru…

G+ feed? Are you a google employee?

Re: Greece

#106

Post by visarga » Sun, Jul 05, 2015, 4:00 AM UTC

Amezarak wrote: post #75

WalterBright wrote: post #57

Earlier quoted context omitted.

I would expect that austerity would shrink the GDP. After all, if a business is only viable if it receives constant infusions of cash, then shutting off that cash would shut down the company, and its output would no longer contribute to the GDP. But it was not a productive business, anyway.

> After all, if a business is only viable if it receives constant infusions of cash, The Greek government runs a primary budget surplus. http://www.wsj.com/articles/greece-misses-target-on-budget-s... Just not one large enough to satisfy creditors. That means, without the debt payments, Greece would be free and clear and wouldn't have any budget issues. The only reason Greece needs 'constant infusions of cash' is to…

Maybe there can be done restructuring instead of too much austerity.

Re: Greece

#107

Post by hartator » Sun, Jul 05, 2015, 4:02 AM UTC

misterbarnaby wrote: post #44

"They had knowingly and purposefully brought weak states into the Eurozone, because they genuinely, even nobly, wished to build a large, strong, United Europe." For folks who know Europe/Europeans well, is this true?

I am from France and I've lived in Bulgaria for a while. It's true fortunately/unfortunately. Ie., one of the condition of Bulgary entry in Europe Union was the shudown of two nuclear reactor that was the same model than Thernobyl ones...

Re: Greece

#108

Post by visarga » Sun, Jul 05, 2015, 4:09 AM UTC

westiseast wrote: post #92

tacone wrote: post #56

Earlier quoted context omitted.

> The reforms are the only long term solution. They're reforms like, maybe Greeks should retire at the same age that other people in Europe do. What's the retirement age of the other people in Europe, excuse me? 62 like in Germany? 67+ like in Italy? > Greece is hosed because, as the article points out, it is an incredibly screwed up and corrupt country. Japan is often ranked as the most corrupted country in the worl…

I think you're looking at corruption in a one dimensional way. Corruption generally acts as a tax on the economy, a drag factor. Most countries experience corruption, but mitigate it with dynamic economies, productive work forces, abundant natural resources or whatever. Greece hasn't really mitigated corruption, and has compounded it with a range of other problems. Corruption is prt of the Greek problem, not the sum…

Maybe they could put some islands up for sale? They have tons of them. That kind of restructuring would make it easier to maintain their living standards.

Re: Greece

#109

Post by parasubvert » Sun, Jul 05, 2015, 4:21 AM UTC

snitko wrote: post #96

josephlord wrote: post #69

Earlier quoted context omitted.

Reasonable points about democracy but as Churchill said: "Democracy is the worst form of government, except for all those other forms that have been tried from time to time." > This is what's going to happen sooner or later to every other country which has a substantial debt. Actually where the country controls its currency the effects are totally different and if the ECB could certainly step in for tiny Greece if th…

> Actually where the country controls its currency the effects are totally different and if the ECB could certainly step in for tiny Greece if there was a will. It's the same thing. If you don't have enough money in the bank to make creditors whole, you print more (thus devaluing what everybody has). If you can't print, you cut their deposits. Either way, creditors are robbed. There is no magical solution here. Mathe…

If the creditor is a bank, they're also creating money when they loan it out. Who is being robbed again?

In theory, it's either the shareholders, boldholders, or the broader citizenry that carry the risk in the banking system. So far Europe's governments have hung the risk on its citizens because either the banking system is too fragile to handle large defaults, or they want to preserve their bond holder and shareholder friends. probably a mix of both since they convinced €140b worth of bondholders to take a 50% haircut on Greece back in 2012. the hedge funds really were the main case of anyone getting "robbed" but that's what we call "credit risk".

The ECB can't handle Greece on its own because it has much stricter rules than a sovereign central bank would. It's bad financial architecture.

Per your last statement, there are MANY U.S. States, especially in the south, that have spent more than they earn at times during the financial crisis. I don't mean government spending, I mean taxes vs. transfers - wherein the Federal government is keeping the people in that state afloat. You don't read about those as much in the papers because we have a fiscal union and automatic stabilizers designed to help our neighbours out when they have problems. Europe lacks this.

Economics is not a morality play of evil debtors and angelic creditors or vice versa. Creditors can and should be wiped out when they make stupid loans. Debtors can and should be held to account but given forgiveness when they screw up (with limits on their ability and size of future screw ups). Failures to do either lead to systemic failures and/or revolutions. This has happened throughout history and will continue to happen regardless of your political system - monarchy, democracy, oligarchy, and anarchy.

Re: Greece

#110

Post by crdoconnor » Sun, Jul 05, 2015, 4:24 AM UTC

telepheron wrote: post #11

msabalau wrote: post #6

The entire thing is worth reading, but the key take away: "Regulatory mistakes and agency issues within banks encouraged poor credit decisions. Spanish banks lent into overpriced real estate, and German banks lent to a state they knew to be weak. Current account imbalances within the Eurozone — persistent and unlikely to reverse without policy attention — implied as a matter of arithmetic that there would be loan flo…

So we just ignore the fact that the Greek government misrepresented their economic state, failed to implement the necessary changes and then puts up a completely bogus referendum?

>So we just ignore the fact that the Greek government misrepresented their economic state

Not until the Goldman Sachs executives who helped misrepresent their finances are doing the perp walk, no.