Greece to hold referendum on debt deal

[jbg]

You can certainly delay it. Picture a person who has maxed out all his credit cards, and is unable to even make big enough payments to cover the interest. Hes in trouble. Now... if he got another card, he could stave off insolvency for a while by using that new card to make the payments on all the old cards. But when all is said and done, hes pretty much in the same place.

That in my mind is essentially the problem. The idea of lending money to refinance old debt is based on the idea that times will get better, and that Greece will be able, eventually, to service the old and new debt. I view this hope as unrealistic. The other leaders and bankers prefer to kick the can down the road, so that later politicians and bankers get the fun of dealing with the problem. In this case, the issue is what productive activity can Greece engage in to make all these payments.

Greece, in my opinion, is no Japan.

[dre]

No no, you literally get to enjoy high interest rates because you will be rewarded more for saving money in the bank, by the bank paying out higher intererst to encourage people to save. Not to mention the falling prices of things because other people will have a harder time borrowing money to pay for said things.

The problem is rate increases will be small, and they wont come for a long time because the government is utterly committed and devoted to the investor class, the owners of all that property, and financial realestate speculation sector.

And the problem is that the way the system works the only way the economy can operate is if people are constantly borrowing, because there isnt enough dollars in existance to settle all the outstanding debts.

And that is why the government/banks are responding to all these economic problems by cutting interest rates, and practically begging people to borrow money. If people stop borrowing the whole house of cards comes tumbling down.

The very last thing the banks want is for people to save. They wake up at night in a cold sweat dreading the day when people stop accepting fake credit.

Edited November 2, 2011 by dre

[Shady]

It's very simple. Greece needed to do what we did in the late 90s. Cut spending. They decided not to, so now they face the consequences of the inaction.

[bush_cheney2004]

...And that is why the government/banks are responding to all these economic problems by cutting interest rates, and practically begging people to borrow money. If people stop borrowing the whole house of cards comes tumbling down.

Then why is it so much harder to get a bank loan? Have you really thought this epiphany through?

[Wilber]

carney has to say that because of his position he can't take a political stance critical of any government...

Course he can. It is his job to set monetary policy independent of government. To provide monetary policy without political spin. In practice, he is like the Auditor General, appointed by government but government messes with him at its peril. Technically the Minister of Finance can over ride the governor but doing so would likely result in a political s*%# storm that no government would willingly provoke.

Carney has served as deputy minister for both Liberal and Conservative finance ministers.

[olp1fan]

France and Germany should take over Greece by force... cannot let Greece take down the whole union

and the rest of the world with it

This is action I'd be good with

[Wilber]

Where do the non Euro EU members stand in all this? Are they part of the bail out package? There are 27 EU members but only 17 use the Euro.

[maple_leafs182]

Then why is it so much harder to get a bank loan? Have you really thought this epiphany through?

Cutting interest rates gives banks access to easy credit from the Fed. What they do with that money is up to them. It looks like they are using that money to buy Government bonds instead of loaning out money to the public.

[bush_cheney2004]

Cutting interest rates gives banks access to easy credit from the Fed. What they do with that money is up to them. It looks like they are using that money to buy Government bonds instead of loaning out money to the public.

The banks were mandated to increase reserves and tighten up on lending practices. The bank's are offering low interest loan products to individuals and clients who meet much more stringent qualifications. The days of so called 'NINJA' loans are over. Banks are still failing as a higher rate than before 2008.

[maple_leafs182]

The banks were mandated to increase reserves and tighten up on lending practices. The bank's are offering low interest loan products to individuals and clients who meet much more stringent qualifications. The days of so called 'NINJA' loans are over. Banks are still failing as a higher rate than before 2008.

You will see many more small banks fall because of operation twists. The rate at which they get loans has risen and the rate at which the loan out has fallen.

[Argus]

You must mean socialism. That's why Greece has its unsustainable debt in the first place.

No. Stupidity is why they have that debt.

[Argus]

Unsustainable debt in the US too.

Larger than the Greeks. Again, blame stupidity.

[blueblood]

Larger than the Greeks. Again, blame stupidity.

Indeed, it takes a great deal of people with rocks in their heads to drink that increased govt spending kool-aid.

[Argus]

I hope Greece defaults. They should follow icelands example and tell international bankers to go ____ themselves. The sooner that the international monetary system collapses the sooner we cant started building a functional and honest credit system.

I certainly agree that the bankers were dumb in lending too much to Greece. But really, the bulk of the responsibilty here lays with the Greek government and the Greek people. For decades they kept borrowing money to finance a social system lavish beyond the belief of most North Americans. Oh what a wonderful life it was and is! But it was all financed by borrowing money! The Greeks love their comfortable social systems but don't love paying for them and never have. That's why half the country's economy is underground, so the Greeks who revel in all those wonderful government services don't have to pay taxes to fund any of them.

And now, faced with their debt becoming so huge they can't even pay the interest rates you think the Greeks have a right to be indignant at 'international banks"?

You know, when you run up debts and can't pay them and declare bankruptcy then your debtor gets to take whatever they want that's of value, right? So maybe the Greeks have to have a number of their islands and territories seized and sold on the auction block to help pay off their debts. Hell, maybe the world can seize Athens and sell it off to tour companies.

If this sort of thing had happened a century ago we'd be looking at war, as the nations impacted by Greece's selfishness and incompetence invaded and took whatever they wanted in order to pay back those debts.

[bush_cheney2004]

You will see many more small banks fall because of operation twists. The rate at which they get loans has risen and the rate at which the loan out has fallen.

Not sure what you mean by this...we play fast and loose around here with the term "bank(s)" when there are many different kinds of lending and financial institutions. Commercial banks are not the same as small business or consumer products banks, credit unions, or thrifts.

Edited November 2, 2011 by bush_cheney2004

[Argus]

We should do that in Canada. We need to tell the BoC and its banking cartel to go ____ themselves.

The Vatican is calling for a world Central Bank to be ran by the UN...

I suppose it's occurred to you that most of the debt the Canadian state owes is to Canadians?

[Argus]

I'm stunned by the stupidity of this latest move by the greeks it's insane...spitting in the eye of the very people that are offering them help(the eu)...

what good do they think will happen by voting on this?...if they reject the bailout they're done, they'll wake up the next day with no jobs, savings vanish, pensions gone, worthless currency(drachma)and kicked out of the eu...total financial chaos...

This is not about what's good for Greece. It is about what's good for Papandreau and his political party.

[Argus]

but they're cutting their debt in half...you or I should be so lucky if our finances were in such a state...forgive half my debt? I'd take that in a heartbeat...

And also getting their costs under control by raising pension levels and taxes. Presumably they'll also downsize their massively redundant public work force.

[Argus]

Indeed, it takes a great deal of people with rocks in their heads to drink that increased govt spending kool-aid.

Nothing wrong with government spending so long as you make sure your income can pay for it.

[maple_leafs182]

Not sure what you mean by this...we play fast and loose around here with the term "bank(s)" when there are many different kinds of lending and financial institutions. Commercial banks are not the same as small business or consumer products banks, credit unions, or thrifts.

The point of operation twist was to flatten the yield curve. It pushed short term rates up and long term down. Smaller banks borrow at the short term rates and loan out at the long term rates. So now it costs more for them to loan and the get less back for the loans they make.

[blueblood]

Nothing wrong with government spending so long as you make sure your income can pay for it.

So if our economy is rolling, we should throw money at the government because we can afford it? By that logic I should travel around the world this winter instead of save my money. Brilliant!!!

[Argus]

So if our economy is rolling, we should throw money at the government because we can afford it? By that logic I should travel around the world this winter instead of save my money. Brilliant!!!

If we as a society want national services of some sort, ie medical care, pensions, roads, welfare, schools, police), we have to pay for them. That means giving money to the government in order to provide those services. As long as we're willing to fund the government at the level of cost of those services there's absolutely nothing wrong with that. The Greeks' problem was they wanted the services but didn't want to pay for them.

This is also the Americans' problem.

[blueblood]

If we as a society want national services of some sort, ie medical care, pensions, roads, welfare, schools, police), we have to pay for them. That means giving money to the government in order to provide those services. As long as we're willing to fund the government at the level of cost of those services there's absolutely nothing wrong with that. The Greeks' problem was they wanted the services but didn't want to pay for them.

This is also the Americans' problem.

So you believe that an increase in economic production automatically means ramp up spending because there is more money to pay for services. And they wonder why the USA is in financial straits.

[Shady]

So you believe that an increase in economic production automatically means ramp up spending because there is more money to pay for services.

Yep, it's that type of attitude that ruins countries. If anything, during good economic times, the government should spend less, and save for bad economic times, when it should spend more.

[blueblood]

Yep, it's that type of attitude that ruins countries. If anything, during good economic times, the government should spend less, and save for bad economic times, when it should spend more.

It shouldn't be spending "more" to begin with.