Greeks grow weary of "austerity enema"

As the Greek economy gets progressively sicker from this madness imposed on them by Frau Merkel and the IMF, the economic doctors supervising this slow-motion disaster have a prescription; more of the same.

Have you ever asked yourself why it is that when a private company collapses under an onerous debt burden, they are either bailed out by the public purse if they are deemed "too big to fail", or they are allowed to collapse, leaving the culpable to walk away from the wreckage?

But when a nation state is in the same straits, millions of people are expected to make sacrifices, for decades if necessary, to ensure that their creditors are repaid.

Mark Weisbrot has written an excellent article about the only reasonable solution to the Greek dilemma; an exit from the Euro.

If present trends continue, that's exactly what will happen, and it will be the left-tilting Syriza Party that leads the country out of the Euro.

Something that should have happened two or three years ago.

Oh no! Euro zone in crisis again!

My God! That is the crisis that just won't go away, isn't it?

I'm watching the BBC news on the TV, and those folks just can't get enough of their Euro-crisis.

It's pretty much the top story night after night. What will the Greeks do? What will the Irish do? What will the Spaniards do?

The crisis has apparently rotted the innards of every Euro economy except the German one, which I suppose is an object lesson for anybody who ever thinks they "won" a war.

Ya, we had them by the balls, but look at the bastards now.

So almost 70 years after the fall of the Hun, the BBC can spend night after night speculating about what Frau Merkel might do or not do next.

Greeks say 'nein danke' to latest German debt offer

And what a generous offer those crafty Germans have come up with.

Seventy years after loosing the Vermacht on the hapless Greeks, the Germans want to take the country over again, but this time with an army of smart guys in suits.

According to the Financial Times, this latest bandaid for the never-ending euro-crisis would  involve giving Greece new loans to pay off the old loans, thereby saving the banks who are too big to fail and the careers of the many bankers who are too smart to make mistakes.

The Greek "crisis" did not spring up overnight. Greek debt accumulated over many years as foreign banks routinely approved decisions to continue buying Greek debt. Such decisions are taken by well educated and very well remunerated bankers, who in a sane world would now be held to some measure of accountability for their decisions.

But in the too-big-to-fail world of international banking the smart guys never make mistakes, and the Greeks can continue to poke new holes in their belts as they cut back further and further to ensure that the bankers come out with their profits intact.

The new money will allow the Greeks to save the German banks, at least for the time being, but, as one would expect in a deal offered by the Germans, it comes with rather nasty conditions attached. Most onerously, it would oblige the government to pay it's debt obligations first before any normal government expenditures.

In other words, paying interest to German banks would take priority over domestic spending on frills like education, health care, pensions for the elderly, and whatever is left of the already strained social safety net.

What's in this for the Greeks? The right to borrow even more money down the road, to increase their indebtedness to the same too-big-to-fail banksters who have them in the corner already.

Good for the Greeks for saying no. It's time the smart guys in suits are held accountable for their mistakes.

Dr. Doom predicts more doom

We're doomed.

Thus spoke Nouriel Roubini in an interview with Canada's newspaper of record, which is not the National Post.

Roubini is famous as the guy who predicted the collapse of the US housing bubble. I predicted it too, but I guess it doesn't count when you're a retired welder in the back reaches of Bruce County.

But Roubini is a globe-trotting economist, so when he figured out that if you keep making loans to people who don't have a hope in hell of paying them back you'll eventually have a problem, people listened.

In today's interview with the Globe and Mail Roubini reveals that he is once again on the same page as the think tank here at Falling Downs. Has he been reading my blog? Fess up, Dr. Doom.

Roubini agrees that the Greeks will eventually have had enough of the IMF and will rise up and say "fuck you" to the austerity that their Euro-zone pals have imposed.

Goodbye euro. Welcome back drachma. And welcome back sovereignty. In the process maybe you can get rid of the Goldman Sachs flunky who you've got running your country.

Beer-swilling blogger scoops major media outlets again

Well we’re clinking glasses all round here at Falling Downs today. The more erudite readers will already recognize the prescient nature of the insights generated by our unique brain trust.  We had Libyan missiles going through the Gaza tunnels months before major Israeli media picked up the story.

We miss the odd one too… turns out Gadaffi wasn’t really having a chess tournament with Shalit after all. But overall, this blog has a pretty interesting track record of getting on a story long before the professional journalism community even catches a wiff.

Why is it? Well, for starters we’re smarter. Secondly, we have better weed. Thirdly, we’re already unemployed so we don’t have to worry about losing our jobs if we give offence.

Back in October we brought you The Eurocrisis: guaranteeing massive profits for the bond vulture funds.  Almost three months later a major alternative news aggregator brings you this story:

There is mounting evidence that some of these investment funds are not even original lenders, but have bought Greek debt cheaply after the economic crisis had already hit precisely in order to be able to blackmail the country. Elsewhere in the world Jubilee Debt Campaign has called these companies ‘vultures’ – funds which buy up the debts of a crisis-hit country for small amounts of money, in order to be able to make large profits.
German daily Der Spiegel estimates that ‘speculative investors’ could account for an enormous €50 billion of Greek debt. Bloomberg reported that a fund called Saba Capital Management bought Greek debt at a price suggesting a 75% chance of default. Reuters reports the likelihood that funds have been “building up their positions in the past months” buying debt for 40% face value, and that the “bet had already worked for some funds” as Greece has paid out on smaller debts to get rid of the claims.

Who knew those journalists at Der Spiegel read The View from Falling Downs. Now if we could just convince them and their huge budgets to follow up on some of our other stories. 

Was Jimmy Hoffa’s last ride really in a salami delivery truck?

A good-news bad-news day for the eurobaloney crisis

Funny thing was, it was all the same news.

Both Spain and Italy had government bond auctions this morning, and according to all reports in both cases the results were substantiallly better than expected.

Italy sold over 12 billion in treasury bills at an interest rate almost 300 basis points lower than the last auction, an unheard of drop. If rates are going lower, that can mean only one thing; bond buyers are growing more confident.

In Spain, the auction of three-year bonds was over-subscribed by a factor of almost two  while the interest rate came down almost two hundred basis points. Again, that's a vote of confidence by the markets for the Spanish economy and the Spanish government.

So far it's all good news. Break out the bubbly! Europe has turned the corner! We can bury this never-ending euro crisis once and for all...

Not so fast my little pointy-headed friend.

True, the first headlines on the business news wires were all about the Spanish Bonanza boosting  the markets and that kind of stuff. But that barely lasted an hour.

The first sign of negativity was a claim that the Italian sale had not "gone as well" as the Spanish. That's true, but it went exceptionally well in any case. How is it bad news that the Spanish sale went even better?

By the end of the day the editors at the business news outlets were comfortably back in crisis territory. Those un-credible purveyors of credit worthiness Standard and Poors were giving their official certificate of downgrade to virtually anyone and anything. It was the joy of uncertainty and doom and yes, the sky really is falling.

Whew!.... That was close!

First day of 2012 and sky still falling: NYT

First day of a brand new year, and oh my God, it's the same old same old all over the front page of the NYT.

The euro-crisis. It didn't quite sink us in '11, but for sure it's gonna get us in 2012. That she-beast of Berlin, Angela Merkel, spent her first day of the new year wagging her finger at the lazy Greeks and reminding them they need to make more sacrifices to save the German banks.

And if that's not bad enough, this will blow your socks off: IRAN SAYS IT HAS PRODUCED NUCLEAR FUEL ROD!!!

Oh my God, run for the bunker... they've got a nuclear fuel rod? Why, they must be, what, mere days from a nuclear weapon, and then they're going to start WIPING US OFF THE MAP OH MY GOD!!!

And remember, Ron Paul WANTS them to have nuclear weapons.

The never-ending save-the-Euro dog-and-pony travelling salvation show

This week they met in Paris

Next week they'll meet in Brussels. In the last six months it's been London and Berlin and Lisbon and Madrid.

Heads of state, their respective finance ministers and secretaries of various treasuries. Bankers galore. Deputy secretaries and assistants out the ying yang. Camp followers in their thousands.

They descend on the capitals of Europe. They rent the best five star hotels by the floor. They give the best eateries in Europe their best business ever.

All to save the Euro. All on the tax-payers' dime.

Because if we don't save the Euro, we'd have to go back to the Mark and the Guilder and the Lire. And you know how awful that was.

So the saviours of capitalism will convene another conclave of experts for another do-or-die conference every couple of weeks. They will emerge with pronouncements about how the garbage collectors and the nurses and the teachers and the factory workers will have to tighten their belts.

Or else.

Financial world trembles as Standard & Poor's threaten European debt downgrade

You remember Standard and Poor's, don't you? They were the rating agency that happily applied their AAA stamp of approval to the noxious stew of sub-par mortgage-based paper being churned out by the big investment banks right up until the whole scheme fell off a cliff in 2008.

Well, they're up to their old tricks, assigning ratings that have absolutely nothing to do with the security of the underlying assets. In this case though they're threatening downgrades instead of giving the triple A stamp to hundreds of billions worth of "liar loans". What are they downgrading? Sovereign debt. The stuff that's guaranteed by a nation state, as opposed to the triple A stuff a few years ago that was guaranteed by Joe Lunchpail when he refinanced his hundred thousand dollar bungalow in Cleveland for three hundred thousand.

S&P makes this threat while hundreds of EU technocrats gather in Paris to proclaim yet again that the sky continues to fall. It's been falling for quite some time now. Led by Merkel and Sarkozy, the assembled will somberly announce that Western Civilization faces a grave threat unless the public servants and the factory workers of the EU get serious about tightening their belts.

Those hundreds of EU technocrats will meanwhile be loosening theirs as they settle down for lunch in the finest Parisian restaurants. You won't find one of these Eurocrats earning less than the mid-six figures in salary. You won't find one without an expense account footed by the taxpayers. You won't find them spending less for lunch than the average working class family spends on groceries in a week.

And they'll proclaim that it's all for the greater good. The same gang of crooks who were profiting from the fraudulent AAA ratings a few years ago will be profiting from today's threat of a downgrade.

It's not that they're lying.

That's just how they define the greater good.

The Euro-crisis: guaranteeing massive profits for the Bond Vulture Funds

The regular folks in the streets of Athens haven't been too impressed with the "austerity measures" their banker over-lords have been shoving down their throats. Nor should they be.

Who owns Greece's debt and what did they pay for it? That is a question the public, and especially the Greek public, should be demanding answers to. Greece's public debt fiasco hasn't been a secret. Greek government bonds have been trading at a discount for years, and rightly so. If somebody consistently spends more than they take in, only an idiot would buy their promissory notes.

The big dogs in global finance may be a lot of unpleasant things, but one thing they're not is idiots. When they buy Greek debt they buy it at a steep discount because of the risks involved. Then they go on the 24/7 big-time propaganda blitz: OH MY GOD IF GREECE DEFAULTS IT WILL BE THE END OF THE FREE WORLD AS WE KNOW IT etc. etc. etc. It's on every news program and on the front page of every newspaper every single day.

The purpose of the propaganda blitz is to scare people until somebody somewhere guarantees the face value of the Greek government bonds they bought at a steep discount. Instant windfall for the Bond Vulture Funds. Years of austerity and deprivation for the people of Greece.

I say let them default. We'll sit back with an Ouzo and see what happens, and drink a toast to the people in the streets of Athens.