Economic Review **Current Euro and Greece Situation - 2012**

[RahmanSL]

So it boils down to kick or not to kick Greece out of the Euro union;right??

So, what should a bankrupt do in a situation like that??

I would say the best thing Greece can do now is to sit down with all their creditors and ask them what they want to do now that they know Greece is going to be a bankrupt. And pose the same question to the Greek people too.

Let the creditors and Greek people come to a solution which, in all likelihood, will both be extremely painful and unpleasant anywhere you look at it, and for many years to come.....and make damn sure the Greeks don't have a printing press for printing Euros.
But whatever measures that has to be carried out, they will have to be with general consensus.....and the UN peace keepers should be in place for any eventualities which will be bound to happen.

And to keep the Greeks reasonably happy, gather all those politicians who are and were responsible for the disaster and put them all in a steel cage at the town square....or turn these politicians into gladiators to entertain the Greek people so they don't go on demonstration and rioting too often.


As for the Euros...well, it will keep bouncing up merrily like its doing these past week or so without a care in the world.

 

[ultracat]

I don't see a trade alert for the LRTO tomorrow. Are we not trading it? Seems like it would be big news to trade.

 

[Pharaoh]

Rahman,

I'll happily move my solution to the back burner if those gladiatorial endings to the politicians and bankers can be implemented. The pay per view revenues alone would go a long way towards resolving the Greek fiscal crisis.

 

[Stavro D'Amore]

Looks like EURO has broken key support levels today.

 

[Oberon]

Hi PPls.

I have a simple take on the Euro. Good for Germany, Bad for just about everyone else.
Reason.. Survival of the fittest. If a countries' currency cant be valued/devalued they have to compete on a level(ish) playing field. The countries that can produce goods more efficiently will win.

eg. If a fiat a Peugeot and a Mercedes all cost around the same to manufacture which would you buy?
Also.. Mercedes factories are more efficient and their cars are higher quality.
Fiat and Peugeot's quality is getting worse because they have to try to cut costs.
That's just an example, but it is what's happening generally.
How can Greece or Spain,etc manufacture anything to compete?

 

[Stavro D'Amore]

Hi PPls.

I have a simple take on the Euro. Good for Germany, Bad for just about everyone else.
Reason.. Survival of the fittest. If a countries' currency cant be valued/devalued they have to compete on a level(ish) playing field. The countries that can produce goods more efficiently will win.

eg. If a fiat a Peugeot and a Mercedes all cost around the same to manufacture which would you buy?
Also.. Mercedes factories are more efficient and their cars are higher quality.
Fiat and Peugeot's quality is getting worse because they have to try to cut costs.
That's just an example, but it is what's happening generally.
How can Greece or Spain,etc manufacture anything to compete?

Greece has some of the largest shipping company's it has many natural resources many European companies run there freights through Greece

 

[Pharaoh]

What time is the final announcement on the bond debt restructuring scheduled?

tick. . . tick. . . tick. . .

 

[onenikos]

Dear Stavro and All
My personal oppinion on the situation is simply stated as follows: Greee is bunkrupt (and actually has been so for a long time). This means that the haircut should be at a 100% if there is any hope for Greece to recover and it is not only me saying this: Recently the German "Der Spiegel" said: "Greece is bankrupt and will need a 100 percent debt cut to get back on its feet. The bailout package about to be agreed by the euro finance ministers will help Greece’s creditors more than the country itself. EU leaders should channel the aid into rebuilding the economy rather than rewarding financial speculators for their high-risk deals. Indeed with more than a quarter of the bailout will go directly to the creditors, while another 30bl will be given as insentives to holders of GR bonds to convert to new bonds the about 100bln left will hardly be enough to keep the head of Greek economy above the sea of collapse. It is caluculated on the basis that a steady retention of debt to 120% of GDP through 2020, Greece will be able service its debts...just!!! This type of assumtion is an impossibility for even the most advanced economies. Even more, a condition for paying out the aid is a budget yearly savings of 3bln out of a forecasted 3.3 bln budget savings brings hope to the realm of psychedelic fantacies! The financial sector (read the Banks) is deliberately feeding the fear that the Greek bankruptsy would trigger a catastrophic chain of reaction and opted for buying time for such a time in the future that a Greek official default could be better weathered within the Eurozone. Such time will never exist and the only solution that could actually solve the EU problem would be, as you said, for the ECB to start finally being an EU central bank and Greece be treated with a type of "Marshal" plan following a 100% haircut. Otherwise the down path will continue if for no other reason that big mega moneys is currently being made out of this.
Best Regards to you Stavro and to All, Have a nice day!

 

[Jeffpark]

Yes Stavro - and perhaps even more fundamental is that the Drachma was steadily falling in value, because the Greek economy has low/declining productivity so per capita GDP falls compared with almost everyone else. Unless you can magically make all the Greeks more productive there is no chance. the Greek low productivity is partly low because there is a widespread civil service/nationalised practice of them having 2 jobs - they clock ibto the official job, then go home & do their black economy job, going back to sign out at the end of the day. With austerity this is getting worse of course.

Small issue with you over Spain where i lived for some years. They kave extra suffering because the building industry, which depended on English/germans et al buying lots of houses, which has stopped. Spain has taken the medicine, resulting in a rise to over 20% in unemployment. They are trying quite hard to genuinely do the right thing I believe.

Jeff

 

[paxforex]

ECB Rate Decision May Trigger a Muted Reaction
Thursday, March 08, 2012. Today the European Central Bank will assess the economic outlook of the region, including inflation after data showed the region’s economy contracting in the fourth quarter. With the ECB’s action in conducting the second round of lending of cheap loans to the European financial system, bringing the total of 1 trillion euro.
Yesterday, concerns over the Private Sector Involvement (PSI) on the Greek debt swap which expires on March 8. Thus, the ECB is not expected to propose any new stimulus measures or lower interest rates in its meeting. With the ECB’s balance sheet growing more than 3 trillion euro, costing the region more than it had bargain for, making the ECB’s power limited in scope in the sense that it has to wait for another acute crisis to present itself. Since, the ECB deposit facility is already 800 billion euro creating a big surge and that the President of the ECB is confident that the money lend will help household and companies used in carry trades to stabilize the sovereign bond market. Today, according to Bloomberg, optimism is building about the Greece’s debt swap as investors with a least 58% of the Greek bonds eligible for the nation’s debt swap have so far indicated that they’ll participate, putting the country on the verge if the biggest sovereign restructuring in history.
On the other hand, Mario Draghi who has played a pivotal role in pushing the LTRO which he credits as a success. The only question is whether Draghi opens the door for another round of LTRO loans. Thus, if the new conference offers little beyond Draghi hailing the LTRO successful it’s likely to trigger only a muted reaction in the market, however, if he makes a definite statement ruling out further lending operation it might help the euro to gain and curtail the ECB’s balance sheet from expanding.