Better for whom? They are not unlike any profit driven company and will not act for the benefit of the mortgage holder, but for their own bottom line. At a certain point, govts did step in and made this more widespread but it was up to the individual holding the mortgage to calculate if they could afford to buy a particular house at s particular price. It's not as if the interest rates went up randomly, the increases were clearly stipulated in their mortgage contracts.
"Michael Coburn" wrote
Tee hee!
This is correct! I challenge anyone to show me *ONE* time (not many times, just *ONE*!) when in the time of drachma:
1) devaluation favored Greek exports 2) people lived better after that!
Most of the US Sub Prime purchasers didn't think that way at all. The increase in rate was presented to them in a way that was designed for them not to notice so that the salesman could sell a mortgage at e.g. 4.5% pa, walk away with his commission and the bank could wrap the loan up in a CDO selling it on to someone else who would have to mop up the mess.
tim
This is common sense. A 10 year old would grasp it. If Greece had a thriving export market and was able to manufacture the goods that could make the economy rollover into growth, it may be a plan. Just imagine if Greece had *not* adopted the Euro. Do you think for
*one* minute that the Big Boys in the EU would so much as move their little finger to attempt to see us through this? Even with the facts staring them straight in the face (the exposure of their banks to Greek external debt) and the potential catastrophic domino effect of the collapse of the imminent collapse of the Euro itself (it would take long to have China dump all its interests in the Euro at bargain basement prices, i.e. a fire-sale, they were still reticent to do anything to help a EU partner in distress.
Exactly! But we don't have much of the above so devaluation was always nothing but another failure for our economy, (almost) no gain at all! Just the people in Greece became poorer!
Nope! Look what's happening in hungary, Romania and so on!
Obviously "BRIDGES". tee hee!
.org...
They did not move their fingers to help us. Not at all. They move their fingers to help their banks. If Greece had decided to restructure, German and French banks would have suffered immensely. They would have helped us only if they had "paid" part of our debt. As is, they gave us some very short term loans at high interest rates and forced a stern austerity. The Greek people would have now to come up with an additional 132 billion euros in the next 5 years to pay off these additional debts (and keep on paying for the rest of the debt).
The press was quite adamant that this was not a "rescue" for Greece but for the major economies of the Eurozone and the market reacted in the same manner, pushing interest for Greek bonds to 12%. If the market was convinced that this is was a rescue, the "spread" for Greek bonds would have declined and so would have the price of the CDS. The exact opposite has happened (in fact, the cost of Greek CDS has skyrocketed) simply because the market knows that this is not a "rescue" and that Greek debt must be "restructured".
When there is a real rescue that would convince the markets that Greece can actually pay these humongous sums (where would Greece find an additional 132 billion euros in 5 years?) then you would see that the bond market and the bond vigilantes would respond appropriately. For the time being, the market has issued its verdict. (The French banks are so "convinced" of this "rescue" that they are dumbing Greek bonds at an amazing rate). In fact, the Eurozone is moving Greek bonds to the ECB so that when the Greek debt is restructured, it won't take down the banks. The ECB can be "recapitalized" by the governments.
***You two blockheads should examine the much better terms for other economies in the EU rescue fund****. The 750 billion fund on which other countries can draw on (Spain, Italy, Ireland, etc) includes far more lenient provisions than those offered in the 110 billion rescue of Greece. If you want to check how "Greece got the shaft", you should be checking the difference between these two packages.I knew that you have no word of honor but I thought this time you would keep it! You said you will no bother answering me anymore but I see you can't keep your word at least for once! What was I exepcting from someone like you?!... As for the rest...insults and again insult as per your habbit! Nothing new here! Sad little man...
gogu wrote: ....
Please stop plagiarise and find something original to call your opponents. "Sad little man" has been designed to describe *you*.
PIMCO's el Arian put it nicely by distinguishing between structural misallocation of funds and countercyclical stimulus. Wasted funds will not help, and will further the perception of iniquity.
- = - Vasos Panagiotopoulos, Columbia'81+, Reagan, Mozart, Pindus, BioStrategist
Counter-cyclical stimulus??? What is that?? How would waste increase the perception of inequity??? The only way that this can happen is if funds go to selected few.
In any case, there is no stimulus in Greece. There is no money for a stimulus. There is just downhill.
That is actually incorrect as regards proper policies to address the problems. Greece should follow the Lead of Argentina in 2001 and shoot the rod at its creditors, additionally reverting to asset taxation (primarily land taxation) for its government revenue.
I agree. What is happening now is that instead of the bankers taking a hair cut, this is taken by the wage earners and pensioners. Indirect taxes (mostly paid by low paid persons) have gone up and no wealth tax has been introduced. None of this restores the competitiveness of the economy. These measures only guarantee that the bankers would take their money while the country enters a long recession with rising unemployment. There is no guarantee that any of these measures would make the budget deficit much smaller as the Irish experience illustrates. However, as in Argentina, there are no credible political forces to champion an alternative in the beginning of the crisis.
No, what they are hiding is that fact that concentration of wealth and unregulated business destroys an economy.
No business like regulations simply because they change the fundamentals that they are used to. However, regulation has been good for the banks and it would continue to be so
On the other hand, the UK is not skirting a recession, it is heading straight into one. In the US, the expiring Bush' tax cuts would not have any effect on consumer behavior because they mostly benefit very rich taxpayers. Their expiration should actually help the deficit without damaging the economy.
BINGO!!!
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