It's all Greek to me

Discussion in 'Economics' started by Ivanovich, Jan 28, 2010.

  1. So what do the folks here think? I give it a 50/50 chance now that the EU will cave and bail out Greece. Given that the cost of insuring Greek debt against default is now at a record high, the rumblings in the news are that Brussels is considering bailing it out. They may have learned the lesson from the Lehman episode of what happens when you don't bail out the dead weight.

    Of course then there's the issue of who else will line up for a bailout once you set precedence, AND the fact that Germans might be a tad put out about bailing out Greeks.

    It's one thing to see how mad the American public gets when it has to bail out American banks on Wall Street. But what happens when somewhat fiscally responsible Germans are faced with paying for Greek social programs? Sure, we're all one EU, but does Nationalism ever come into that?
  2. Good topic.

    Imo we are in uncharted territory and am curious to see how this plays out. I suppose if we had a strong leader in finance, he/she could make assistance palpable.

    I can't see Bernanke or Geithner as credible messengers although they may be qualified.

    Niether is Obama a good messenger, I think my kid could beat Obama in poker.
  3. most americans can't even find iraq on a map, Greece who??? LOL:D
  4. Greek CDS now at record.
  5. Agree wholeheartedly. None of these charlatans inspires any trust/faith whatsoever.
  6. The same has been going on for decades in the US. One state pays for the other:


    (granted this is old - 2004)

    States Receiving Most in Federal Spending Per Dollar of Federal Taxes Paid:

    1. D.C. ($6.17)
    2. North Dakota ($2.03)
    3. New Mexico ($1.89)
    4. Mississippi ($1.84)
    5. Alaska ($1.82)
    6. West Virginia ($1.74)
    7. Montana ($1.64)
    8. Alabama ($1.61)
    9. South Dakota ($1.59)
    10. Arkansas ($1.53)

    In contrast, of the 16 states that are "losers" -- receiving less in federal spending than they pay in federal taxes -- 69% are Blue States that voted for Al Gore in 2000. Indeed, 11 of the 14 (79%) of the states receiving the least federal spending per dollar of federal taxes paid are Blue States. Here are the Top 10 states that supply feed for the federal trough (with Blue States highlighted in bold):

    States Receiving Least in Federal Spending Per Dollar of Federal Taxes Paid:

    1. New Jersey ($0.62)
    2. Connecticut ($0.64)
    3. New Hampshire ($0.68)
    4. Nevada ($0.73)
    5. Illinois ($0.77)
    6. Minnesota ($0.77)
    7. Colorado ($0.79)
    8. Massachusetts ($0.79)
    9. California ($0.81)
    10. New York ($0.81)
    Two states -- Florida and Oregon (coincidentally, the two closest states in the 2000 Presidential election) -- received $1.00 in federal spending for each $1.00 in federal taxes paid.

    Recently Schwarzenegger asked for a bailout from the Federal Gov't and Obama refused. But look at that list above. California is a net loser when it comes to US Federal Expenditures.

    Back to Greece - Greece has the option to default, you know? They can bail out from the Euro and get back to the drachma. Does Germany prefer that? And back to California - that story is not over. It will get to the point, IMHO, that they will get a bailout... and then all the states will line up for $$$$.
  7. The EUR zone countries (aka "Germany/France and a couple of insignificant nations") will bail out Greece until the bitter end.

    The Brits must love it. Downing Street at night is echoing "told you so" and then a couple of laughs.
  8. It's different when it's Americans who happen to live in Idaho bailing out Americans who happen to live in California, isn't it? It's not the same as Germans bailout out Greeks.
  9. I live in New Jersey. We Lose A LOT to the Federal Gov't siphon. According to that chart - almost 40%!!!

    As a result, our property taxes are amongst the highest in the nation. Granted, a lot of that goes to NJ corruption. But you know what?

    It's still my money and yes, I'm pissed off about it. My town's main street suffers. Whether the money goes to another country or another state.... we lose.

    You're argument isn't completely without merit, but I don't give it that much weight either.
  10. dont


    A Rich Greek Guy walks into a NY bank and says he needs a $25 000 loan, the bank manger says do you have collateral, sure says our Greek Tycoon, you can have my Ferrari.

    The Man signs the papers and leaves the car in the banks care. In two weeks he comes in settles the loan and the $25 in interest and gets his car keys back.

    The bank manager says Sir it was such a pleasure doing business with you do you need another loan.

    The Man looks at him, and says listen moron where else in NYC can you park you car for two weeks for $25, and get a deposit of $25 000.

    I am Greek, this is the way Greek people think about things, the EU will bail them out, to big to fail, but not to big to save.
    #10     Jan 28, 2010