The Other McCain

"One should either write ruthlessly what one believes to be the truth, or else shut up." — Arthur Koestler


Posted on | October 31, 2011 | 14 Comments

by Smitty

Tyler Cowen at Marginal Revolution points to something a little more important than a Herman Cain allegation. Greece was not supposed to have a confidence vote so soon, but:

Mr. Papandreou also said that he would seek a parliamentary vote of confidence in his administration, just four months after seeking, and winning, a similar vote to bolster his government before pushing an earlier batch of austerity measures into law.
Government sources said that the confidence vote was expected by the end of the week, with the referendum much later, in December or even January. Exactly what voters would be asked was not clear.

So, if I’m understanding this correctly, the Greek government is getting hit with the second confidence vote in 5 months, and has to get the Greeks to eat their end of the 50% haircut within a month or two.

In late October, after a series of delays, European leaders reached agreement on portions of a three-part plan to save the common currency.
They obtained an agreement from banks to take a 50 percent loss on the face value of their Greek debt. That would bring Greek debt down by 2020 to 120 percent of that nation’s gross domestic product, a figure still enormous but more sustainable for an economy driven into recession by austerity measures.

‘Reached agreement on portions’ was, according to Cowen, quoting FT, the verbal equivalent of a wardrobe malfunction:

the specific elements of the deal, that is to say the structure of the new claim on Greece, remains to be negotiated

In other words, any agreement purportedly reached by the EUrocrats is worth as much as Barack Obama’s college transcripts: you’d better see the deal in writing.

Is this the end of things? The Unreliable Smith Prediction is that the Greek people treat the German bailout with all the respect the Palestinians treated the Oslo Accords; Greece melts down; the Greeks start using their police cars for commodes by, say, January.


14 Responses to “#OccupyGreece”

  1. richard mcenroe
    October 31st, 2011 @ 7:52 pm

    Well, I’d rather sleep out on the sunny Aegean than Zuccotti Park…

  2. Anonymous
    October 31st, 2011 @ 8:00 pm

    I think they’ve had their own Donner Party for a while now, if the current party falls who takes over? The socialist party in charge is basically the same as the unions who are so pissed now.

  3. Charles
    October 31st, 2011 @ 8:01 pm

    There are two competing principles at stake here. One is that countries should pay their debts. The other is that bankers who loan money to socialist governments (or any other type of government) beyond a fair level of taxation for the debt servce should not expect to get paid back. We may have to avail ourselves of the second principle before this decade is over.

  4. richard mcenroe
    October 31st, 2011 @ 8:31 pm

    This is terrible!  Who did Panadreou molest?  Get Politico on the story!

  5. Adjoran
    October 31st, 2011 @ 8:32 pm

    Even the written agreement with Greece is worthless – they haven’t begun to comply with the austerity measures they promised to implement for the last bailout before the haircut.  And the reason for the confidence votes is that is the way in parliamentary systems the government reminds their party that if they don’t want to stay in line, there will be new elections and they may lose power. 

    But it doesn’t matter if they pass the austerity measures or not, really, because there is no way of enforcing them.  They get violent demonstrations in the streets at the thought of any reduction in benefits, but they expect us to believe they will not only cut all that and more, but also begin to collect taxes from retail establishments who’ve ignored tax assessments for decades?

    Sure, and I’m the bloody King of Siam, I am!

    A “50% haircut” for bondholders is a fancy way of saying “default.”  That’s all it is. 

    Italy and Spain and Portugal are on deck, their “austerity measures” are about as successful as Greece’s.

    The only reason our interest rate on Treasuries hasn’t jumped is because Europe has joined the Order of the Truly Boned.

  6. Anonymous
    October 31st, 2011 @ 10:55 pm

    Well that was a cheering read, Smitty.  I wish I wasn’t reading Steyn’s latest book.

    It’s like prosperity is an ant, and it’s just walked over the lip of the ant lion’s pit.  For the moment, it’s just a healthy little ant, wondering why the lip is kind of hard to reach.

    You’ve just anticipated the pelting with sand that is to follow.

  7. Anonymous
    October 31st, 2011 @ 10:57 pm

    We just need to get our man, Keynes, on the job!  He’ll know what to do!

  8. Anonymous
    October 31st, 2011 @ 11:11 pm

    If He saw what was being done in his name he’d sue for defamation of character.

  9. Edward
    November 1st, 2011 @ 9:09 am

    They already do this.  That’s why you have the World Bank, IMF and a consortium of USA, Europe and Japan. 

    The bankers won’t loan money in many cases without another country as guarantor of the loans.

  10. Bob Belvedere
    November 1st, 2011 @ 9:51 am

    ‘Greece’ is the word ? and that word is ‘DOOM’.

  11. Dodd
    November 1st, 2011 @ 10:59 am

    How about this little bit of unsupported assertion just tucked away on that article:  “an economy driven into recession by austerity measures.”

    I guess if you say it enough, it becomes true.

  12. Anonymous
    November 1st, 2011 @ 11:42 am

    That would make a good subtitle for Monty’s DOOM over at ACE’s.

  13. Bob Belvedere
    November 1st, 2011 @ 1:57 pm

    ‘Deed it would.

  14. ThePaganTemple
    November 1st, 2011 @ 3:45 pm

    Somebody needs to ask what would happen if this spells the end of the EU. That’s my main focus. I’ve been wanting that to happen, but just today somebody said it would have dire consequences for the US. I’m having a hard time seeing it. Anybody have any thoughts?