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A Dose of Reality:
- If Greece borrows money from the IMF/EU which means that they have more debt now than they did before they defaulted then they are worse off and not better off as they have a larger debt.
- If Greece has an additional $107 billion in debt that has not been accounted for because it is not in the name of the Hellenic Republic but is guaranteed by the Hellenic Republic then how are they going to pay off this debt?
- If the goal of this entire exercise was to reduce Greece’s debt to GDP ratio to 120% then how will a larger debt accomplish this as it is fiscally impossible.
- If the “real REAL goal” was to pay off the European banks so they wouldn’t default then Europe has accomplished this goal but at a terrible cost to Greece and to the Greek people.
Delaying Greece’s debt restructuring by more than a year reduced banks’ potential losses as firms trimmed their holdings and most of the risk shifted to European taxpayers.
“This is a horrible deal for the EU taxpayer,” said Raoul Ruparel, chief economist at Open Europe, a London-based research group. “The longer we wait for these restructurings, the worse the deal gets for the public. There’s an ongoing risk transfer from the banks to the taxpayers.”
The new borrowing -- in effect, replacing private with public debt -- will amount to 78 billion euros, according to the EU, leaving the actual relief from the swap at 59 billion euros. Greece also will need to draw money from a second, 130 billion- euro EU and IMF rescue fund to repay other private debt and finance the government’s budget deficit.
That will leave Greece’s debt at 161 percent of gross domestic product at the end of the year, 4 percentage points less than the current level, according to a March 11 report by the European Commission. The ratio probably will return to 165 percent in 2013, the commission said.
When all IMF and EU loans promised to Greece are disbursed, 66 percent to 75 percent of the country’s debt will be held by the public. In 2010, before the first bailout and before the European Central Bank started buying its bonds, Greece had about 310 billion euros of debt, all held by the private sector.
If Greece has to restructure again, or defaults, taxpayers will be on the hook.Anyone that can't see the European Monetary Union is a Kleptocracy and in full self destruct mode [whilst its citizens get royally screwed], deserves what's coming to his/her investment holdings.
“The swap doesn’t achieve debt sustainability for Greece,” said Nicola Mai, an economist at JPMorgan Chase & Co. in London. “Debt relief going forward will have to come from the public sector.”
The reality is starkly different: Australia has a very vulnerable economy where upcoming bad news has not been "priced in" at all. The country suffers from an epic real estate bubble that greatly exceeds those of US, Ireland, and Spain. The average Australian consumer is completely tapped out. Take out a "consumer credit" punchbowl and reduce the Chinese voracious appetite for iron ore and coal, and the Australian economy will collapse like a house of cards.
Australian manufacturing has been declining in relative and absolute terms at a faster rate than it is in the USA and Europe. Today, it imports most of its manufactured goods.At first glance, exports are only a modest 21% of GDP compared to over 30% for other G20 countries such as Germany, China, and Canada. About 57% of all exports are minerals and agriculture, a highly sensitive sector prone to wild supply/demand and price fluctuations
“If you look at the Chinese data, you should stop debating about a hard landing,” Mowat, who is based in Hong Kong, said at a conference in Singapore yesterday. “China is in a hard landing. Car sales are down, cement production is down, steel production is down, construction stocks are down. It’s not a debate anymore, it’s a fact.”
US Jobs added in 2 years 2,283,000 (Great!!)
US National Debt added in 2 years $3,066,000,000,000 (Whoa!!)
Borrowings per job $1,083,392 (See a problem?)
Average US wage is $47,000 so by borrowing $1,083,392, the US Govt has borrowed 23years wages per job.
US National Debt increase in 2 years 25%
US National Debt increase in 4 years 64%
US National Debt in January 2000 $5.774 Trillion
US National Debt in January 2008 $9.257 TrillionUS National Debt in January 2012 $15.201 Trillion (tripled in 12 years!!)
US National Debt in January 2015 $23.920 Trillion (estimate based on current growth!!)
12 years as a percentage of the USA's 235.5 year history is 5.1 % of the said nation's illustrious existence and in that short period the debt increased 163%. (Congratulations Dubya and Barack!).
Recovery my arse.
House prices are continuing to freefall with average homes now up to 59% cheaper than during the height of the boom, latest figures show.
In January alone, average prices dipped 1.9% around the country, bringing the overall drop in house values down nearly a fifth (17.4%) since the start of last year.
In Dublin, where the plunge has been even sharper, prices came down another 4% during last month.
Prices of both houses and apartments in the capital have now plummeted more than 21% over the past year, and are down 57% since the peak of the property boom. Apartments alone have fallen by 59%.
With average prices in Dublin around 431,000 euro in February 2007, widely held to be the height of the bubble, which translates to around 246,000 euro wiped off house values.
Delighted. A €3.85m loss or 85.6% 'haircut' after the bubble burst and he is delighted. Where will we see 85% haircuts in in Oz in 2016? Who in Australia will we be delighted?A 55-bedroom hotel overlooking Donegal Bay, which was once on the market for €4.5 million, has sold at an auction of distressed property for €650,000.
The Sandhouse Hotel in the popular seaside resort of Rossnowlagh had been billed as the star lot in today’s Allsop/Space auction in Dublin’s Shelbourne Hotel.
However, the hotel, which was put on the market by direction of its liquidator KPMG, attracted considerably less interest than expected.
After a short bidding race, the property sold for its reserve price of €650,000, a fraction of what its former owners thought it was worth at the height of the boom.
The picturesque property was bought by the hotel’s current manager Paul Diver, who has managed the hotel for the last 20 years. “I just can’t believe it. It’s a total adrenaline rush. It’s been a long, long road but we’ve made it.”
When asked if he was surprised by the lack of interest, Mr Diver quipped: “No, I was delighted”
