Showing posts with label euro. Show all posts
Showing posts with label euro. Show all posts

Wednesday 17 June 2015

And the band played on.

and the band played on
Fresh calls for capital controls in Greece have met with frantic activity in the markets. As the game of brinkmanship plays out between the Euro 'institutions' and Alexis Tsipras' SYRIZA government, the only certainty in Greece today is the weather. So much money has left the country's banks over the last few years that they are only being maintained by emergency liquidity assistance, which itself is reliant on compliance to the ECB's terms. The country has already defaulted on one payment to the IMF under the guise of a forgotten clause in the loan agreement. The only question is whether the next will have any disguise or not.
Twitshot

A queue of bleary-eyed commuters wait at the bus stop to make their way to school or work. A car horn vents frustration at a driver taking a slim opening in the traffic.

The Greek economy has been in a shit blizzard for years now. A raft of new, often backdated, taxes and seemingly daily revisions to existing ones has made financial planning almost impossible for all but the biggest enterprises. In an attempt to extract blood from a stone, the government has raised VAT, imposed 'objective' taxes on the self-employed's receipt books and levied new taxes through energy bills.

A group of teenagers chat nervously as they walk into school for their final exams while another hits 'pay' to book his ticket to the UK to study advanced mathematics.

Tsipras has stood firm against the Eurogroup negotiators, refusing to cross the red lines of his mandate from the people to ease austerity. His economists recently presented a new set of proposals in order to release bailout payments, borrowed money that will go straight back to the creditors without touching the Greek economy.

A mother phones round her friends to reschedule her son's birthday garden party after hearing the weather forecast. Another packs her kids up for a day at the beach, now that they are on summer break.

According to Paul Mason, there is an option whereby the situation is put on suspension for nine months during which the IMF/ECB pay themselves, yet another default by another name. This may, however give time to work out a more tenable and long term solution or maybe give Tsipras time to prove his commitment to making reforms. But as GDP shrinks quicker than Levi's on a boil wash, there really isn't much more to tax. Greek HNWI have been squirrelling their assets far away from the greek economy for years now. VSBs and one-man-band enterprises have faced such aggressive taxation in a shrinking market that many just cover costs hoping against hope for things to change.

The owner of a car dealership goes through the week's sale figures. He is focused on improving turnover. He has a sizeable nest-egg in a foreign bank. He calls in his sales team, who do not. 

The high drama being played out in Brussels and the telephone-number sized debts have ceased to have any relevance to the Greek people. They know that nothing will change, the fear of falling has long passed. The colour of the notes in their pockets has lost any bearing on reality. Parents hope for a better future for their kids while their eye darts to this week's deals on the supermarket shelf. Few talk about it anymore, life has no penalty time, each day lost fretting over it will not be added to the end.

A man digs coins from his pocket to pay for his tobacco. Some teachers sit restlessly through a seminar on bullying in a stuffy school hall.

Greek capital will return home, when falling asset prices make Greece the biggest church bazaar in Europe. When land and real estate and any surviving businesses can be bought up and new empires built.

The Greeks are now the refugees with nowhere to go. They are already in Europe, they have no hazardous journey across the Mediterranean and no one to ask for asylum.

...and the band played on.

Sunday 18 August 2013

Right all along!

The failing Greek economy has been a tragedy played out on the world stage for what seems like forever. Europe’s moustached loafers, once the envy of all hard-working northern Europeans and the subject of many an incredulous holiday-maker’s anecdote became the lazy, feckless swine who were endangering the stability of the noble Euro. Then as they began to protest against the austerity imposed for their own good by the wise Troika, they became the petulant children who were obviously never mature enough to have economic sovereignty in the first place.  

Now the Eurozone is finally starting to show signs of growth and the Greek economy’s contraction is slowing despite the austerity, It is time for another renaissance because it’s occurred to me that Greece had it right all along.

Monday 7 November 2011

If we all stop believing, will it cease to exist?


There has been a lot of talk of contagion during this Euro crisis. Contagion is the domino effect of a falling economy taking its less stable creditors over the edge, which in turn causes larger and larger economies to fall, unable to resist the infectious debt. Such is the incestuous nature of finance that this could feasibly take down the majority of the world economies; starting with one little trip. There is another contagion that worries the Eurozone, however, that is not spoken of, the contagion of faith.

The Euro is a fiat currency, which means that it has no substantial commodity (usually gold) underpinning it. This means that its value is derived from the faith in the issuing nation and the belief of the financial markets. Were Greece to be excommunicated, or worse, walk out during mass it would spend more than 40 days in the wilderness but it may just learn a thing or two, or at least appear to have. This is the most infectious idea that could be spawned. If Greece survived exile, and ultimately but painfully, it would, this would send a clear message to other suffering members to cut the cord.

The world's financial markets are run by some of the most sharp, aggressive and secular intellects on the planet. They form long and short term strategies and know how to make the market move in their favour but a hint of a rumour of an idea from someone who knows the right people and all hell breaks loose. If traders believe something will happen, it happens because they will make it happen. Have you ever noticed how the news that someone is leaving a company or political position sends the markets into turmoil. For the last two years the markets have gone wild every time Steve Jobs looked a bit peaky or adversely when he was looking well. The markets draw conclusions from omens that are interpreted by the high priests to mean up or down.

The markets don't know what to believe about the Euro, their fates are too closely linked to what everyone else believes, but their minds can easily be made up. If Greece and one other Eurozone economy lose the faith it could be more than the central bank can support.


For the time being, the big players in the Eurozone have faith that they can carry the currency and the market is willing to have faith in them. 



So, if we stop believing in the Euro, will it cease to exist?...




...that depends on who we are.    

Wednesday 5 October 2011

Feel the love

At last someone has been prepared to say what we knew all along. The Emperor's arse is on show and it ain't pretty. 



THEY REALLY DON'T CARE!
Nice tie

...and these people run your world. 

Monday 3 January 2011

10p for a cuppa tea, Guv?

Total bail-out package for Greece = € 110 billion
Population of Greece = 11,000,000

simple maths gives us €10,000 per head

Anyone lend me €40,000 before the interest kicks in?

Thursday 15 July 2010

LONG AFTER THE HONEYMOON

Greece is a country with a troubled history with Turkish occupation and a Fascist Junta but the last 30 years have been the most insidious of all. The boom in tourism and international trade and Greece's entry in the European union has brought in huge amounts of revenue that the management had no understanding of how to use. Wastage of public resources, corruption and jobs for votes went, not only unchecked but accepted as the natural order of things. With no accountability in the authorities people learned to look after their own and lost sight of any national common goal. This mentality has infiltrated every facet and strata of the country with builders and tradesmen botching jobs to make a quick buck to doctors receiving gifts to ensure their diligence up to public servants taking too much "work" home with them.


When they joined the EU and eventually the EURO they did it the only way they knew how. A new source of income was tapped to the full and squandered, offices that did nothing were established, roads were built badly and on a diet of nepotism and cooked books some got fat and apathy gained a greater hold over the Greek people.

Last year an ad campaign called for "tax conscientiousness" a risible concept given the actions of the governing parties over the last 30 years. The misappropriation of public funds have been nothing short of criminal and yet the leaders still rest on rhetoric and pointing the blame at others. Until the people at the top are publicly held accountable the public will have no change to rally around, no common goal and will eventually fracture under the strain of too much energy in too many directions. If Europe is to remain a union it needs to take its responsibility in overlooking the details of Greece's entry into an economic partnership it had no intention of contributing to.

Greece's economy has become a Hell's kitchen of badly cooked accounts and Europe needs to send in Its Gordon Ramsay to put some more Fs in office. Some backs need to go to wall otherwise the Greek people know that next time, and there will be a next time, there will be no more to bleed from this stone.

From Under Dark Clouds

The Century of DIY