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#198859 - 11/02/11 03:22 AM Re: Greece - The Domino Effect [Re: numan]
pdx rick Offline
Member
Carpal Tunnel

Registered: 05/09/05
Posts: 39470
Loc: Puget Sound, WA

Yup, who saw that coming? Hmm

Really? Let the folks who are causing the problem vote on a solution to their actions? Why, that's so democratic! coffee

Guess Merkel was drawing-upon her inner right-wing when she and Sarkozy foisted this austerity plan onto the Greek people.

Then again, when you allow people into your li'l private club, you really ought to vet them better - just sayin'. Hmm

Everyone knows that southern Europeans aren't so thrifty with their money - life is one big party! Pass the ouzo. Let's take a nap!

...and, besides, regularly buying replacement plates can be very expensive. coffee

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#198874 - 11/02/11 12:29 PM Re: Greece - The Domino Effect [Re: itstarted]
Ted Remington Offline
old hand

Registered: 07/09/08
Posts: 4936
Rick:

I don't get that last sentence. dinner ware plates, license plates, tectonic plates, dental plates? What did I miss?
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#198875 - 11/02/11 01:03 PM Re: Greece - The Domino Effect [Re: Ted Remington]
Joe Keegan Offline
veteran

Registered: 12/25/05
Posts: 8707

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#198877 - 11/02/11 01:15 PM Re: Greece - The Domino Effect [Re: Ted Remington]
Joe Keegan Offline
veteran

Registered: 12/25/05
Posts: 8707
Originally Posted By: churlpat lives
What did I miss?
The movie?

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#198881 - 11/02/11 03:00 PM Re: Greece - The Domino Effect [Re: Joe Keegan]
itstarted Offline
old hand

Registered: 01/27/03
Posts: 6375
Loc: Florida/Illinois
Just read a statement that makes any kind of rescue of the EU impossible.

"Sovereign debt cannot be collateralized."

I believe that.

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#198893 - 11/02/11 08:01 PM Re: Greece - The Domino Effect [Re: pdx rick]
numan Offline
veteran

Registered: 08/06/08
Posts: 10853
Loc: What! Me Worry?
'
Originally Posted By: california rick

Everyone knows that southern Europeans aren't so thrifty with their money....

Yes, why don't they follow the policy of the United States and "invest" in the War Machine! Manufacturing things in order to destroy them, and devastating whole countries and murdering, maiming and torturing their people is such sound economic policy!

By the way, Rick, the people of Greece did not create the problems there---the political and economic "leaders" did that !
_________________________
The ultimate result of shielding men from the effects of folly is to fill the world with fools -- Herbert Spencer

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#198901 - 11/02/11 10:05 PM Re: Greece - The Domino Effect [Re: numan]
itstarted Offline
old hand

Registered: 01/27/03
Posts: 6375
Loc: Florida/Illinois
LUCY Papandreou and the World


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#198903 - 11/02/11 10:50 PM Re: Greece - The Domino Effect [Re: itstarted]
numan Offline
veteran

Registered: 08/06/08
Posts: 10853
Loc: What! Me Worry?
'

I always did like Lucy better than wishy-washy Charlie Brown. · · ·
_________________________
The ultimate result of shielding men from the effects of folly is to fill the world with fools -- Herbert Spencer

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#198904 - 11/02/11 10:54 PM Re: Greece - The Domino Effect [Re: numan]
itstarted Offline
old hand

Registered: 01/27/03
Posts: 6375
Loc: Florida/Illinois
Article

Quote:
Guarantees provided by U.S. lenders on government, bank and corporate debt in those countries rose by $80.7 billion to $518 billion, according to the Bank for International Settlements. Almost all of those are credit-default swaps, said two people familiar with the numbers, accounting for two-thirds of the total related to the five nations, BIS data show.
The CDS holdings of U.S. banks are almost three times as much as their $181 billion in direct lending to the five countries at the end of June, according to the most recent data available from BIS. Adding CDS raises the total risk to $767 billion, a 20 percent increase over six months, the data show.

and
Quote:
“Risk isn’t going to evaporate through these trades,” Cannon said. “The big problem with all these gross exposures is counterparty risk. When the CDS is triggered due to default, will those counterparties be standing? If everybody is buying from each other, who’s ultimately going to pay for the losses?”
Reread the bolded text enough times until you have enough information to debunk the next time clueless advocates of Morgan Stanley and other banks scramble to say that the banks are hedged, hedged, hedged. No. THEY ARE NOT. And as the AIG debacle demonstrated, once the chain of bilateral netting breaks, whether due to the default of one AIG, one Dexia, one French or Italian bank, or whoever, absent an immediately government bailout and nationalization, which has one purpose and one purpose alone: to onboard the protection written to the nationalizing government, then GROSS BECOMES NET! This also means that should things in Europe take a turn for the worst, Morgan Stanley's $39 billion in gross exposure really is.. $39 billion in gross exposure, as we have been claiming since September 22.


That ain't hay.

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#199121 - 11/04/11 10:55 PM Re: Greece - The Domino Effect [Re: itstarted]
numan Offline
veteran

Registered: 08/06/08
Posts: 10853
Loc: What! Me Worry?
'
A Conversation About Greece

Quote:
Greek debt is largely held by German banks that made the loans. If Greece has been irresponsible, so were the German banks that happily loaned out the money. So if Greece defaults, the banks go kablooey. But they're too big to fail, which means the German government would be forced to bail them out. And guess where the bailout money comes from? Tax dollars.
This means that German taxpayers have a bleak choice. They can shovel lots of money to Greece to keep them from defaulting, or they can refuse, and then shovel lots of money into German banks to keep them from collapsing. Either way, German taxpayers are going to foot the bill. They just haven't quite accepted this in their gut yet, and it's hard to blame them. They're pretty badly screwed no matter what....
So why not just let that happen?
It's just too catastrophic to consider. German banks, of course, would collapse and have to be bailed out. Ditto for banks in other countries that have lots of exposure to Greek debt. But that's not the worst of it. If Greece exits the euro, it will become terrifyingly obvious that other weak countries might exit too. Portugal, Spain, and Italy are the obvious candidates. Investors, spooked at the thought of their money being stuck in a country that might exit the euro and devalue all its bank deposits, would start huge runs on banks in those countries. The ECB would have to intervene and provide liquidity without limit. It would be a disaster....
Everyone knows that somebody's going to lose a huge pile of money over this. What's really happening right now is a very high-stakes negotiation to figure out just how the losses are going to be parceled out. Stay tuned.
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The ultimate result of shielding men from the effects of folly is to fill the world with fools -- Herbert Spencer

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