Tag: European Union

Greece Folds

Well, that didn’t take long.

It turns out that math is not subject to a referendum.

Greece and its European creditors announced an agreement here on Monday that aims to resolve the country’s debt crisis and keep it in the eurozone, but that will require further budgetary belt-tightening that Prime Minister Alexis Tsipras could have trouble selling back in Athens.

The agreement does not guarantee that Greece will receive its third bailout in five years. But it does allow the start of detailed negotiations on a new assistance package for Greece.

The total commitment of money has not been disclosed. But a document by the eurozone leaders noted that experts had estimated that Greece might need from 82 billion to 86 billion euros more — $91 billion to $96 billion — to shore up its economy, rebuild its banks and meet its debt obligations over the next three years. The document said Greece and its creditors should seek to “reduce that financing envelope,” if possible.

As part of Greece’s commitments, Ms. Merkel said, a fund will be created to use the proceeds from selling off assets owned by the Greek government to help pay down the country’s debt. That fund would be “to the tune of” €50 billion, she said.

Greece will also be required to seek assistance from the International Monetary Fund and to agree to let the organization continue to monitor the country’s adherence to its bailout commitments. The Greek government had resisted a continued role for the I.M.F., seeing the fund’s involvement as unwanted meddling.

The agreement will call for Greece to raise taxes in some cases, pare pension benefits and take various other measures meant to reduce what critics see as too much bureaucracy and too many market protections that keep the Greek economy from operating efficiently.

In other words, Greece has to do what they’ve always had to do: fix their broken tax system, fix their broken pension system, stop spending money they don’t have, sell off bloated Greek government assets and clean up the corruption.

It’s not clear that this will happen: the Greek parliament still needs to approve it. But it is clear that Greece’s left-wing government has accomplished very little other than making the pain worse for their citizens, all to the cheers and plaudits of comfy Western liberals who see this as some kind of experiment in economics and an opportunity to show those damned austerians what’s what.

The alternative for Greece in exiting the Euro. Virtually the entire American Left, who are apparently fine with the idea of a government weaseling out of its debt, thinks this is a better option. The BBC has a great summary of what a Grexit would mean:

The previous Greek Prime Minister, Antonis Samaras, warned that living standards could fall by 80% within a few weeks of exit.

Unable to borrow from anyone (not even other European governments), the Greek government would simply run out of euros.

It would have to pay social benefits and civil servants’ wages in IOUs (if it pays them at all) until a new non-euro currency can be introduced.

The government would not be able to repay its debts, which now amount to a total of about €320bn (£237bn), most of it owed to European governments and agencies and the International Monetary Fund.

The government would have to impose a freeze on withdrawals and on people taking money out of the country. This could lead to queues of ordinary Greeks trying to empty their bank accounts before they get converted into a new currency worth substantially less than the previous one.

In the longer run, Greece’s economy should benefit from having a much more competitive exchange rate.

But the devaluation would not solve underlying problems in the economy, including poor tax collection and a struggle to control government spending.

There is also a real possibility of a surge in inflation.
Tax receipts would probably fall as the economy contracted, so the government might finance spending by printing money.

The likely currency depreciation would also be inflationary. It would make imported goods – which in Greece includes a lot of its food and medicine – more expensive.

That’s just the effect on Greece. It might also encourage other countries like Spain to leave. And worldwide, the effects would be very unpredictable.

That’s what the people glibly talking about a Grexit are contemplating. Seems a steep price to pay so that you can side with the deadbeats against the Germans.

Greece Puts Up The Middle Finger

With the government restricting banking and capital, the Greek people voted yesterday against complying with their creditor’s demands. I’ve said this before and I have little to add: fuck Greece. If they want to leave the Euro, open the door for them. Call them a cab. Book them a flight. The only real concern is that they might drift into the Russian sphere of influence. But given that Russia’s economy is imploding, I don’t see that happening.

I was wondering if maybe the Greeks made the right decision but when I read that Krugman was in favor, I was reassured that it was a bad decision (among other things, Krugman describes the demands of Greece’s creditors as undemocratic. It’s apparently democratic for 2% of Europe’s population to demand free money from the other 98%). He doesn’t address Greece’s huge problems with tax compliance and massive pensions — the real causes of the current crisis. These problems will exist whether Greece is under the Euro, the Drachma, the Ruble or the Triganic Pu.

We Are Shocked, Shocked! To Find Out That There Is Spying Going On In Here

That European governments are shocked is literally the headline over at CNN:

European officials reacted with fury Sunday to a report that the U.S. National Security Agency spied on EU offices.

The European Union warned that if the report is accurate, it will have tremendous repercussions.

“I am deeply worried and shocked about the allegations,” European Parliament President Martin Schulz said in a statement. “If the allegations prove to be true, it would be an extremely serious matter which will have a severe impact on EU-US relations. On behalf of the European Parliament, I demand full clarification and require further information speedily from the U.S. authorities with regard to these allegations.”

The scale of the US spying operations is quite huge. EU buildings in the US and Belgium, millions of phone lines and data connections in Germany. But … on some level, I have to wonder if this is a bit of diplomatic kabuki. As I said before, I assume that our government spies on other governments, including friendly ones. And I assume other governments spy on us. And not always for security purposes. France’s intelligence agency used to conduct industrial espionage for French corporations.

I find myself agreeing with Michael Hayden:

“I’ve been out of government for about five years, so I really don’t know, and even if I did, I wouldn’t confirm or deny it,” he said. “But I think I can confirm a few things for you here this morning. Number one, the United States does conduct espionage. Number two, our Fourth Amendment, which protects Americans’ privacy, is not an international treaty. And number three, any European who wants to go out and rend their garments with regard to international espionage should look first and find out what their governments are doing.”

Spying on other countries is part of the President’s job description. To not do so would be a dereliction of duty. As I said in a previous post, even our allies keep secrets for their own reasons. And we zealously guard our secrets even from those allies (which is why Pollard is in jail).

Suppose a friendly country found out about a potential terror attack on the United States. And suppose that country did not want to reveal this information for fear of compromising a critical source. Would it not be the President’s duty to find this information out?

This is one of the problems I have with those embracing Edward Snowden. As time goes on, it seems that his problem isn’t just with spying on Americans but with spying at all. That’s not a purism I can embrace. Because spying is necessary.

Even on our allies.

Wealth redistributionists hit a tough spot?

The heroes of our American left, and have no doubt that the left here wants to reshape our country to be like this imploding European socialist morass they admire, seem to have reached an impasse. They can’t figure out how to get more of other people’s money.

European Union leaders failed to agree on the 27 nation bloc’s next seven-year budget, replaying the clash between rich and poor countries that has stymied the response to the euro debt crisis.

National chiefs plan another summit early next year, when northern countries including Britain and Germany may have the upper hand in seeking to cut subsidies to lesser-developed southern and eastern economies clamoring for EU investment.

Translated to simple English, what we have here is the original wealth redistributionists split, with the haves pissed that they are being told to pony up even more to cover for the have-nots, after realizing that no matter how much they pony up, it will never be enough or change anything for the better. Evil rich Europeans and their greed!


The Peace Laugh

It’s official. The Nobel Peace Prize has little more import than Time’s Man of the Year:

The European Union won the Nobel Peace Prize on Friday as it grapples with the worst crisis since its founding — devastating debt and the threat of disintegration.
The prestigious award was a salute to the struggling 27-nation union for its work in promoting democracy and reconciliation since World War II.

They’re pretty close to plunging us back into a global economic crisis over there. This isn’t as a giving to Barack Obama; the EU has actually done something. But it’s still rewarding someone in the hope that they will get their shit together.

Self immolation 101.

In a stunning display of how unconcerned and unrealistic the left really is, a too large majority of the people that live off the labor of the productive, voted to keep the gravy train speeding down the tracks towards the collapsed bridge. The winning ticket?

Sunday’s election capped a stunning comeback for Hollande, whose career appeared to be all but over after he left the leadership of the Socialist Party in 2008.

It also marked the end of a year-long campaign for the veteran politician, who won his party’s internal primaries in October of last year, establishing himself from the start as a moderate left-winger with the best chances of appealing to centrists and beating Sarkozy.

In an often bitter presidential campaign, Hollande promised to hire more staff to boost France’s state education system and to reduce the retirement age from 62 to 60 for people who have completed a minimum 41 years of work.

He also pledged to raise taxes on the wealthy and balance the country’s budget by 2017.

And while both the far right and Sarkozy adopted an anti-immigration stance during the campaign, the Socialist candidate stood by a promise to give foreigners the right to vote in local elections.

Short explanation: fuck reality, give us more free shit. I guess as a true collectivist he doesn’t even feel obligated to pretend otherwise when he points out that the only way for him to address the massive unemployment in France is to create more government jobs. If you are one of these idiots that believe government is the center of the world expanding the already bloated bureaucracy makes sense, I guess. The people that voted for more pork they can not afford sure as hell seem to feel that work is for idiots. While some might find that minimum 41 years of work requirement clever considering France’s unemployment amongst those 26 and younger is close to 25%, the fact remains that the retirement age of 62 itself was already draining the system. Just like the left in the has been pushing to give the ability to vote to people they know depend on their handouts, making a special effort to target illegal immigrants, it looks like Hollande believes the key to perpetual power resides with letting these moochers vote.

The problem that the moochers face however is that the real world doesn’t tolerate stupid and plans to ignore reality have a cost. But don’t you worry: the collectivists know whom the enemy is!

A Robert A. Heinlein quote that’s, if you will pardon my French, apropos for the situation is:

Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.

This is known as “bad luck.”

Why bother? Gimme what I want and let the other people pay for it! That’s social justice in a nut shell. C’Est la vie.

The problem is….. Not socialism!

Either Bush was one heck of a “Doctor Evil”, setting into motion plans long ago how to have the collapse of the EU come about, or I think that the German politicians are now no longer as enamored with the Organizer-in-Chief as they used to be, because they blame the US for the Euro downgrade.

Seriously? Socialist retards that are furiously rearranging the deck chairs while the band plays on the Titanic, now pretend the guy that wants to turn America into something very much like them, is why their entire “Rob Peter to buy Paul’s vote, while letting the new political aristocracy live in the lap of luxury” scheme is failing? No way the problem is that you have run out of “other people” whose money you can take because most people now are content to do as little as possible to get bye with the most “free” stuff?

EU Outlaws Reality

As bad as our government can get, at least it’s not the fucking EU:

EU officials concluded that, following a three-year investigation

Stop the press. I want us all to pause for a moment and reflect on what we could do with a three-year investigation. Three years. 21 scientists. God knows how much effort. All to find:

Brussels bureaucrats were ridiculed yesterday after banning drink manufacturers from claiming that water can prevent dehydration.

Producers of bottled water are now forbidden by law from making the claim and will face a two-year jail sentence if they defy the edict, which comes into force in the UK next month.

Last night, critics claimed the EU was at odds with both science and common sense. Conservative MEP Roger Helmer said: “This is stupidity writ large.

“The euro is burning, the EU is falling apart and yet here they are: highly-paid, highly-pensioned officials worrying about the obvious qualities of water and trying to deny us the right to say what is patently true.

“If ever there were an episode which demonstrates the folly of the great European project then this is it.”

I’m no friend of bottled water, but Jesus tap-dancing Christ, what in … I have … you can’t … what the … you’ve got to be kidding me. Two years in prison?!

Well, EU rules don’t bind me. Bottled water can prevent dehydration. Bottled water can prevent dehydration. Bottled water can prevent dehydration. It can also prevent heat stroke and heat exhaustion. If you’re doing any exertion in hot conditions, you should have water. And probably in a bottle, because that shit won’t stay in your pockets.

A meeting of 21 scientists in Parma, Italy, concluded that reduced water content in the body was a symptom of dehydration and not something that drinking water could subsequently control.

The article even quotes some guy who thinks the EU made the right decision, claiming the phrase “regular consumption of significant amounts of water can reduce the risk of development of dehydration” implies something special about bottled water, which it doesn’t, and that drinking water doesn’t reduce your chance of dehydration, which it does. The guy — Professor Brian Ratcliffe — is clearly one of these people who believes that government stating something makes it so — that authority has the power to change the laws of nature.

Hey, you know what? I think I’m going to celebrate that I’m not in the EU some more. Bottled water can prevent dehydration. Bottled water can prevent dehydration. Bottled water can prevent dehydration. Bottled water can prevent dehydration. Bottled water can prevent dehydration. Bottled water can prevent dehydration.

Damn, it feels good just to say it. This needs to be our rallying cry against idiot bureaucrats of all stripes. The next time Obama signs some law making us all say our prayers at bedtime or something, I’m going to respond with “Bottled water can prevent dehydration.”

Seriously, folks. You can’t make this shit up.

Not “If”, but “When”.

As I have pointed out, we are sooner than later going to have another economic disaster, because the politicians that caused it not only didn’t fix it with a massive expansion of their power to influence which companies are protected by government and which ones can be taken down, and only made it worse, and others seem to agree. In fact it seems even the LSM now is feeling forced to report on that.

“There is definitely going to be another financial crisis around the corner,” says hedge fund legend Mark Mobius, “because we haven’t solved any of the things that caused the previous crisis.”

What problem is that you ask? Well, it’s those shitty mortgages that never should have been issued, to people that were not qualified and thus couldn’t pay them back, which where issued, under threat of losing your FDIC insurance if you did not comply, as part of a 3 decade long attempt at social engineering a collectivist utopia.

Through quantitative easing efforts alone,” says Euro Pacific Capital’s Michael Pento, “Ben Bernanke has added $1.8 trillion of longer-term GSE debt and mortgage-backed securities (MBS).”

Think about that for a moment. The Fed’s entire balance sheet totaled around $800 billion before the 2008 crash, nearly all of it Treasuries. Now the Fed holds more than double that amount in mortgage derivatives alone, junk that the banks needed to clear off their own balance sheets.

“As the size of the Fed’s balance sheet ballooned,” continues Mr. Pento, “the dollar amount of capital held at the Fed has remained fairly constant. Today, the Fed has $52.5 billion of capital backing a $2.7 trillion balance sheet.

“Prior to the bursting of the credit bubble, the public was shocked to learn that our biggest investment banks were levered 30-to-1. When asset values fell, those banks were quickly wiped out. But now the Fed is holding many of the same types of assets and is levered 51-to-1! If the value of their portfolio were to fall by just 2%, the Fed itself would be wiped out.”

Get that? Our government now owns some $2.7 trillion of debt, much, if not all, of it bad debt, and has a measly $52 billion of capital behind it, leaving it leveraged by a ghastly 51–to–1 debt to asset ration. What is left out, to give you some perspective of how fucking insane and bad this is, is the fact that the Dodd-Frank bill capped banks at a 15-to-1 ratio. Our government carries more than three time the debt rated against their assets!

Worse yet, is the obvious fact that Dodd-Frank did nothing to deal with the fundamental problem that caused all this: being forced by government to give loans to unqualified people. The bill basically ignored this completely so the politicians could keep the same social engineering lending requirements that caused the problem in the first place, around. So in the current clime where there is pressure to make banks loan again, as soon as banks actually meet that 15-to-1 ratio, they open themselves to being forced to do more of the same or risk being accused of discriminating. And the whole game starts all over.

Now couple all of that with the horrible state of affairs of the European banking system, which is basically using buckets to drain water from a sinking ship with a gash the size of the one inflicted on the Titanic by an iceberg, and you can see that things look bleak. That’s why we get things like:

“Unless the euro zone debt crisis is resolved in a timely and orderly manner, the broad credit outlook for the U.S. banking industry could worsen,” the New York-based rating company said yesterday in a statement. Even as U.S. banks have “manageable” exposure to stressed European markets, “further contagion poses a serious risk,” Fitch said, without explaining what it meant by contagion.

Here is the scary part. None of the Eurocrats in Brussels have the foggiest idea on how to solve this. Don’t be fooled into thinking otherwise. All they are doing is more of the same Keynesian nonsense in an attempt to keep the doomed EU together. The French and German banks are stuck between a rock and a hard place, because they have so much money lent to the troubled members of the PIGS – Portugal, Italy, Greece, and Spain – that any one of those not paying back 100% of what they owe will send them into the abyss. And those that are honest don’t even believes that Greece, where the people have gone bonkers because they now have to wait till they are 60 to retire or are being told they will get less “free stuff” and are up in arms, can pay a fraction of what they owe, back. Those that play the odds favor the EU falling apart. The fall of the big European nanny state is going to hammer us.

Running out of other people’s money, sucks, but we better wake up to that reality or Team Blue, which thinks that they can recreate Greece here, but somehow magically without all the trouble that comes with that socialist utopia, will seal our doom. Maybe that’s the plan anyway. Nobody can be as inept as these people have been and continue to be on purpose, and survive this long. The universe can’t be that cruel.

Spoiled brats want parents to be hit by bus and die…

For those that wonder where that came from: it was an Eddie Murphy skit. Basically he is talking about how when he was a kid he got in big trouble – totally his fault – and then wished his mother would get hit by a bus and die. Something like that seems to be playing out in Europe, where the Germans, in the role of the parent, are imposing austerity measures of the Greeks that have been living well beyond their means and as spoiled brats, and coming the Greeks don’t like it and are reacting childishly:

(Reuters) – The dark shadow of German-driven austerity measures squeezing Greece has revived historical enmities and evoked comparisons to the massive destruction of the Mediterranean country at the hands of Nazi Germany over 65 years ago.

Cartoons have sprung up depicting the European Union’s “troika” as ferocious soldiers in World War Two German uniforms, and some Greeks are beginning to resent the German tourists flocking their ancient sites.

The staff cartoonist for the liberal daily Eleftherotypia has drawn dozens of such cartoons in recent months, often showing Greek Finance Minister Evangelos Venizelos giving the Nazi salute “Sieg Heil” (Hail Victory) to a soldier.

“I used the German uniforms symbolically,” cartoonist Stathis Stavropoulos told Reuters through an interpreter.

Yeah, the Germans are the bad guys here for sure. How dare they tell collectivist shitheads that believe German tax payers should just shut up, and pay up too, so their lazy ass, big government loving, do nothing selves can keep doing more of the same. And the sad thing is that the Germans will pay for all of it now and again later, because these Greeks do not plan to change anything. The Germans might be catching on. But if they stop paying the EU is toast. Score another one for the collectivists and their running out of other people’s money!