It’s the greatest Greek tragedy since Oedipus Rex. Except in this case, the only incest occurs between bankers and politicians.
We’re broke. So in reality we borrowed $780 million from China to give to Greece which has no hope of ever repaying it. If there’s any rational thought in that sequence of events it totally escapes us.
The IMF is delighted to announce that it just approved a €3.2 billion disbursement of cash for Greece, its fifth, as part of the €12 billion in money that Greece needs in order to continue operating in the months f July and August. And just for what purpose will this money be used, one may ask?
Well, as explained a few weeks ago, in Greek Math: €12 Billion In, €18.2 Billion Out the entire amount will be promptly recycled by global financial institutions in the form of debt maturities and interest payments, which amount to €18.2 billion in the months of July and August. Simply said ECB, EU and IMF money in, money owed to bankers out. The kicker: 17.09% of the money coming from the IMF, comes from, that’s right dear US taxpayer, you (and since 21% of the quota contributions allocated to the IMF are deemed “non-usable”, the actual number funded by the US is likely much higher).
But this plot has a bonus kicker: as we reported on Wednesday, the actual Greek debt is no longer owed by European banks to the extent it had been previously expected: a development that threatens to scuttle the entire second Greek bailout plan as currently proposed.
So as the banks have been selling Greek debt, who has been buying? Mostly hedge funds, such as everyone’s favorite John Paulson. So to recap: US taxpayers have just paid out about $780 million of the $4.6 billion in order to fund interest owed to… hedge funds.
On second thought, there is sex involved in this Greek tragedy. Unfortunately, it’s the American taxpayer that’s getting screwed.
The Greeks are not happy that they’re being asked to live within their means. In fact, as far as they are concerned, such a request is tantamount to torture.
Debtocracy is a documentary that gives Greek artists and activists – two groups never known for their attachment to reality – the chance to say that the bailout is a scam designed punish the Greek people in order to protect French and German banks.
Pity the poor Greeks, forced to work until the age of 50 and then expected to scrape by on their meager $100,000 a year pensions while their German counterparts continue working into their dotage to make it all possible.
Torture, indeed.
Here’s the entire 75-minute documentary, complete with English subtitles.
Remember the old Dire Straits song “Money For Nothin’”? I think it should become the official Greek national anthem.
As you can see in this chart, the Greek Parliament is dominated by socialists, communists and other leftists who seem to think it’s possible for every Greek citizen to get their money for nothing’. No word on whether they also get their chicks for free, but we wouldn’t be surprised.
Maggie Thatcher said, “The problem with socialism is that you eventually run out of other people’s money.” In this case, the money Greece is running out of is French and German.
PIMCO has an unparalleled record predicting bond movements. They didn’t get to be the world’s largest bond fund by being wrong.
Mohamed El-Erain, PIMCO’s Chief Executive, is now predicting that Greece will be the first, but definitely not the last, European to attempt to solve its problems by default on its debts.
CNBC reveals El-Erain’s thinking:
“For the next three years, we’re going to see different economies work out different problems. For European economies, especially Greece, it would be through default,” Mohamed El-Erian, chief executive of PIMCO, told reporters in Taipei on Wednesday via a video conference.
This isn’t the first time El-Erian has predicted that Greece would default. He thinks the other European nations (read: Germany) are pounding billions down a rat hole by putting more money into the wastrel nation.
And on an even less cheerful note, El-Erain said it was “unlikely but not impossible” that a Greek default would trigger another global financial crisis.
Listen carefully to what El-Erain says. Betting against him and Bill Gross is not a wise investment strategy.
The EU’s inability to control the Greek debt situation (“situation” being a euphemism for “crisis”) is sending tremors through the world’s currency and equities markets.
Problem is, the world’s markets fear that the Greek debt problems may spread to other countries. For example, Moody’s has already hinted that it may downgrade BNP Paribas SA and two other large French banks as a result of their exposure in Greece.
“The probability of a eurozone Lehman moment is increasing,” said Neil Mackinnon, an economist at VTB Capital in London and a former U.K. Treasury official.
Today’s forecast: Early morning doom followed by gloom. Bill Gross, the guy known as the Warren Buffett of bonds, the guy who runs PIMCO, the world’s largest collection of bond funds, says the United States is worse off than Greece.
Add it all up, says Gross, and it ain’t a pretty picture: The $14.3 trillion national debt. Medicare. Medicaid. Social Security. A few other trifles. Next thing you know, we owe close to $50 trillion. Add in liabilities from the 2008 and 2009 bailout and what do we have?
We paraphrase. That’s not quite how the President worded his offer to bail out the Greeks, but that sums it up in language that’s been stripped of all the political gobbledygook.
CNBC reports on the President’s generous offer to bail out the Greeks by digging our own hole a little deeper:
Greece has spent itself right up to the edge of the abyss, yet Greeks don’t want to give up their cushy jobs, extravagant perks and early retirements. No, they think that someone else should continue to pay so that they can continue to play.
Now they’re protesting in the streets to protect their lives of leisure, but we’re pretty sure that none of the protesters were willing to protest any harder than they work:
You know how you sometimes see an event unfolding in what seems to be slow motion and yet you remain frozen in place and unable to react? That’s exactly how the EU is now reacting to the Greek fiscal fiasco.
Unlike its recently deposed leader, the International Monetary Fund is impotent. They’re pretty sure something needs to be done but no one agrees on what. So the Eurocrats have worked up a dandy selection of equally unworkable plans.
Do you remember when the housing decline first appeared on the radar screen a few years ago, and all the “experts” told us that it would be contained to certain states? Then, when the subprime loan crisis hit, these same experts told us that the it would be contained to only subprime loans. Later, when Lehman fell, the experts again told us the banking problems would be contained as well.
The “experts” are once again dead wrong on another issue about to be “uncontained.” Now we’re being told that the Eurozone sovereign debt issues will be contained to the problem countries like Greece, Portugal and Ireland. Not only will Europe as a whole be just fine and dandy in the end, but so will the United States (which is quickly becoming a synonym for Greece).
Endgame author John Mauldlin, one of my favorite reads on Europe’s problems, begs to differ. Here he is in this video with Aaron Task of The Daily Ticker.
Alex Jones has a message for Greece, and you can hear it in this video of an interview of Jones on Russia Today. He pleads with the Greeks to remove their government of thugs and take back their nation.
Don’t get bored by the first minute and stop the video. The interview begins around 1:10.
Here’s the majority of the “message” he is sending to Greece, roughly transcribed:
You have a puppet government engaged in treason against the nation of Greece. And Greece is being financially captured, through economic conquest, and you must take back your entire government, and remove the gangster thugs at every level of your government who have been aiding this tyranny. Because when you give in to this tyranny, it will destroy you. And things are only going to get worse unless the Greek people take back their nation. The whole world is looking at what is happening in Greece right now. Just like 300, like what happened in Marathon, if you can hold back the banking dictatorship here, it will literally save the entire planet from a designed global depression and implosion. So Greece is the tip of the spear, on the front lines for western civilization that is fighting the private banks that openly say they want an end to the the industrialized society, they want to bring in a program of austerity and a new dark ages with a fake environmental, neo-feudalistic carbon tax overlay. This is high-tech scientific slavery and we have all the globalist documents. Greece is the test case, if Greece falls to this it is a great victory for the enemy. So Greece, I’m sorry you are in this position, but you are on the very front lines…
Hot on the heels of the riots in Italy yesterday, comes Greece again, where hundreds of protesters clashed with riot police across central Athens, smashing cars and hurling gasoline bombs during a nationwide labor protest against the government’s latest austerity measures. The former Minister for Development Kostis Hatzidakis was attacked by protesters outside a luxury hotel. He was escorted, bleeding from the scene as his attackers yelled “thieves” at him.
I have a question: why aren’t the police shooting as they get firebombs hurled at them? At least rubber bullets would be warranted. I have no sympathy for the Greeks. The government overspent and the people, who get to retire at 57 by the way, dodged paying their taxes more than any other western country. Whiners.
You heard leader of the UK Independence Party Nigel Farage’s wonderful rant against the Euro on the floor at the English Parliament. Now, listen to him interviewed by RT, about the Eurozone’s bailout troubles. Another Eurozone country, Italy, might need a financial bailout soon. The third largest economy that uses the Euro currency has started plunging in the same direction as Greece and Ireland, who he says couild be kicked out of the Eurozone. It comes as fresh protests sweep across Europe — with people angry at facing tough cuts to pay for it all.
Pimco’s CEO Mohamed El-Erian is one of the brightest guys around. In this video he comments on the Irish bailout, telling viewers on CNBC that the Eurozone has not met the first rule of crisis management: get ahead of the crisis; be seen as proactive, rather than reactive. He says “as long as they are being reactive, they are going to have a slow motion wreck going on in Europe and we are going to wake up and it’s going to be a new country that you are talking about.”
He calls the order of the problematic countries, following Greece and Ireland, as Portugal, Spain, Belgium, Italy.
Listen to the whole interview to hear his recommendations for navigating the coming devastation.
R. Arthur Beckles: Barack Obama is President of all Americans, not just of African-Americans! It’s difficult for all working class Americans – black, white, brown, etc. African-Americans who don’t want to vote for Obama, can feel free to do so. But do they think that their lot...
keith: wow. Whos got the bigger stick, My @!(k is bigger than yours, your country my country, my countries poor is richer than yours. the truth of it is that in the end the civilians are going to feel the brunt of this economic downfall. i live in the U.S. and there are over 200 multi...
Anonymous: I agree with many of the above. I know people from both the US and Europe that are on disability because of health problems and the one person in Europe is receiving much more help than are the US citizens.
Sunday: BTW, before you ask why two adults only received $240 a week for unemployment, just remember that you can only receive unemployment if you were laid off. If you were fired or quit, you cannot receive unemployment. In my case, I got ill, and FMLA only applies to people who have worked at a...
EriktheRed: I like how it’s “fortunate that the crisis is confined to the E.U.”- what’s unemployment in the U.S. right now? How about the millions of foreclosures you’ve had already? Tent cities, anyone? Deficit spending at $3.5 bn a DAY? HMM!
David, Self Defense Retailer: Really? Why in the world are they doing that for Gitmo detainees? A whole soccer field? Outrageous! Maybe the EU really won’t last.
David, Stun Gun Supplier: It’s the next bubble. I wonder what Romney has to say about this. Obama’s made himself clear in his typical way. It’ll probably be worse than housing when it does.
See I told you: Who didn’t see this coming . Put a communist organizer in the White house and just wait. To bad the American populace lacks true intellect or is it just that the dummies out number the smart 20 to 1. Probably the latter. Obvious who controlls the vote with those kind of...
James: After a seriously obese person has had fat removal procedures, his/her flesh sags where excess fat used to be. World population should never have risen this high. It will be reduced. Through lower birth rates; or by more traditional means: war, disease, famine, cannabalism. I’m not a...
JoAnn: I have a real problem with Obama borrowing money to send to Greece when so many people in this country who have lost long term jobs,lost homes,living on the street, little or no food. I vote to take Obama and his family if they want to go and DROP them on a desert island some where just so...
Arkansas Slim: Update. Oil hit 105 per barrel yesterday, 2 20 12. Gas US Avg => 3.50 per gallon. Cloward Piven Theory of Economics: Tipping point of US Electorate => 51%. Nevada odds for Obama RE Election 6/10 on thier sport boards. EU/Greece set to collapse, dominos arranged. Socialistic...
kkl: America is now turning mediocre no more fun no more trips or vacations 100 bucks to fill gas tank and pasta and ramen noodles for life for usa there is no more hope no more fun just work go home work go home fill up gas tank eat shit and work no more fun thanks for nothing nobama i hope you...
Chris Marshall: Hi Janice, I just wanted to know, how would you be able to get a good investment out of the Whole Life Insurance if it costs really high? The projections usually given out by “Financial Advisors” that 12% is the usual earnings specially if it is invested in TSX or NYX...
Agent: Walt Disney funded Disney World by using the cash value in his whole life policy. You can’t say that was a mistake. Buy term for a specific need/period and buy whole for a permanent need or if you need your life insurance past age 65.
Forex Agent: As a financial advisor what I tell clients is that the main purpose of a life insurance policy is to provide a death benefit. Whether term, some sort of permanent life insurance, or a combination of the two is most appropriate depends on a number of factors including the...
Cindy: Before long they will, if not already, invade and keep track of everything you do including the privacy of your own home exploiting you and demanding that you worship them. You will be powerless to control it so you will have two choices…… ;kiss butt or commit suicide.
Space Cadet: don’t be rediculous. Glass Steagall is a red hearing. This problem is much farther reaching, from before the Nixon Administration. He took the US off the gold standard which was the pillar of the US dollar, and the reason it is the world currancy. He did that because the US...
Hervy: Very good advice, same as I give when talking to people. Clark Howard and Dave Ramsey are both good sources of information that is inline with what is written here at EC. Another good website that i tell people to go to in order to get an easy calculation of how much insurance to buy is...
BenP: This is part of the cannon fodder that will be used against Obama in 2012 and his administration. It’s not that he is horrible (he is) or worse than any other President (about the same), its that examples like these can be used to show the devil you know has got to be worse than the...
Lauren: Personally I think you sound like an idiot. The NIH spent 55,000 to promote a vacine that does not exist and, one of which, they would not fund to discover in the first place(yes, it’s ture look it up). If someone lives in an area with a lot of storms they already understand the...
Matt USA: I know I’m a little late to this discussion, but I think that the economic collapse scenario has changed somewhat in recent weeks. It appears that Europe will go first, followed by the United States who has gambled and lost on a TARP style European bailout. The real question for...
Kim: Marcy, Rep. Alan Grayson said in the attached youtube video in 2010 that Fannie Mae and Freddie Mac both own stock in MERS. How much stock and when did they own it? Would this explain their current actions? Did they move loans out of MERS and into Fannie Mae for the tax payers to bail out?...
China: @Serban Enache , You Are Wrong We are In Lot Of Trouble and you Know This , Starting In 2012 We will have Many Many Different Problems , We The Government Is Paying For All This Building , We Know Our Own Citizens Can’t Afford This Type Of Live Style , but we are building it Any way...
City On a Shining Hill: “The problem with socialism, i.e., the failed economic system being adopted by so many nations in the world today, is that in funding entitlement programs voters want in their politicians and having governments fund retirement, health care, education, etc, is that...
Rider I: How the US has historically used mineral rushes to get it out of Deficits and stop foreign economic take over. In the US’s historical past the Druids have used and impressed upon the US leadership to use mineral resources to stop economic warfare, along with military take over....
Financial Collapse: Everyone needs to get this correct… (REPOST ON TWITTER, FACEBOOK) America is controlled by the 3 privately owned states (district of columbia, the city of london, and the vatican.) Each has it’s own flag, pays no taxes and has it’s own laws. All 3 are part of...
Tm Newman: I graduated with my B.A. in psych/soc a year ago. Interned teaching math and English to fourth and seventh graders. The school shut down due to lack of funding. All the kids got shipped off to public school. I can’t find a position in my field, and there are no teaching jobs in...
hefsmaster: Been a slow couple weeks since the downgrade. News wise that is. But it gave me more time to coin a phrase. You’re a true libertarian when you piss everybody off. Which explains why everybody thinks were nuts and relegated to being a third wheel in politics. Well call me and...
PeacefulPatriot: The worst is yet to come in the realm of austere measures to keep up appearances on the global markets. The truth though is quite obvious to the sane members of society, we have reached a break point and it is the Systemic collapse of the post-industrial globalization bubble. All...
Serban Enache: Pearl Harbos was orchestrated as an operation years before WW2, by the British empire in conjunction with Imperial Japan. The japanese elite didn’t surrender even when they did not have any hope of wining, let alone after Hiroshima, though I don’t agree with the two...
hefsmaster: No, despite these guys obvious failings. He is exactly right. You think japan would have attacked us without any allies. Pearl harbor is an effect from a cause. Without hitler, point is mute. By the way lee, you haven’t copied anything in a while. You a congressman?
Serban Enache: This Larry Summers has some nerve. Is he trying to say that Hitler attacked Pearl Harbor?
Gordon Shumway: Two questions: 1. Why is it a felony for an individual to print money, but evidence of a keen insight into the arcane world of macroeconomics when a bankster does the same thing, only on a vastly greater scale? 2. Since those who are running the Fed and Treasury are supposed to be...
tim: i for one will not pay a single dr bill my sickness is caused by our government let’s take it back already raped and brusied lady liberty is not what she stood for so many years lets scrap the statue that means so little any more freedom is prison in america try being disabled for 20...
tim: well about time someone in power noticed what wool us seniors have to face daily after food shopping go to my drug store same tricks and and cost is up 25 percent then dr co-pays up another 20 % what will we do when money social security doesnt go far enough to keep us healthy
Space Cadet: Does it matter how we got here? The people in charge ‘think’ they are so smart that they will finesse our way out, while staying in power and making a ton of money for their pals. We will be left to pick up the tab and clean up the mess, as usual. My neighbors just got...
