http://au.finance.yahoo.com/news/EU-leaders-reach-crisis-deal-aap-1240223067.html?x=0 ...Yet the bank didn't even earn the money it lent me in the first place! You've got the NAB raking in $5.5 billion, money that we paid to them as interest and fees, on money they didn't even have to give us in the first place. WTF, what a screwed up world!
It will be interesting to see what conditions are attached to this 'forgiveness' Can't be any worse than what the people of Greece have had to endure so far.... or can it?
I am pretty sure the 50% is what the bailout plan is telling the banks they have to lose on the Greek bonds for Greece to be bailed out. Greece will still be on the hook for the other 50%. otherwise Greece would have 100% defaulted and the banks would have lost the lot. An option I would have preferred.
Smoke and mirrors. The banks will do anything to keep the ponzi going and the politicians are doing what they've always done - what's possible, not what's right.
Money as debt. These big investment banks can just turn to the ECB or FED and pull a few trillion at 0% over the counter. Face it, all they are doing is compromising on the level of servitude they are claiming from the Greek people. It's all fun and games while they are just playing with ordinary people's livelihood, but as soon as someone demands gold from one of the Euro nations in exchange for their debt, the gloves will come off I reckon.
Banks will get 15% in cash and 35% in 30 years Greek bond with 6% yields My question is who will buy Greek bond in the future after that from the private sector?
Anyone still remember when the banks asked for credit card annual fees in exchange for lower interest rate on outstanding balances. Well reserve bank interest rate is lower now then it was that time, but credit card interest rate did not fall at all plus we have to pay the annual fees as well. Typical example how consumer screwed by the banks with the assistance of our federal government.
Zero Hedge has calculated the haircut at significantly less than 50%...closer to 28% http://www.zerohedge.com/news/here-how-50-greek-haircut-actually-just-28 Greece has 350 billion in total debt including about 70 billion in Troika "post-petition" loans; these are untouched. * Of the 280 billion, roughly 75 billion is held by the ECB: this, like the Troika loans, will be untouched. * This leaves just ~200 billion in actual debt to undergo a haircut. * Apply a 50% haircut to this debt (ignoring the fact that of this about 35 billion is held by Greek pension funds, and once the realization that Greek pensions have been cut in half dawns upon the population, the result will be the biggest riots ever seen in Athens yet). * Total debt to be cut: just about 100 billion. * Hence, of the total 350 billion, just 100 billion is eliminated, most of it used to backstop and service Greek pension and retirement obligations * 250, or the residual, of 350, the original, means 72%, or a 28% haircut. * Greek GDP was 230 billion on December 31, 2010 and declining fast. * And that is how a 50% haircut is "cut" almost in half
So true Julie. I think it will take a while for all this to sink in and then there will be real rioting!
The title of this thread says it all - everybody with debts should go to his bank and ask for the "Greek Solution" But seriously, isn't that the political message? "If you convincingly state that you can't pay your full debts, you only have to pay 50%"? Shouldn't it be expected that Portugal and Ireland (and potentially all other countries) will quote this as a precedent, and also expect a 50% debt forgiveness? There certainly are strict conditions attached to this forgiveness, so this may sound polemic at the first glance, but... can the conditions for a debt forgiveness be harder than the conditions (i.e. public saving programs) that these countries will have to undergo anyhow? Just wondering what should prevent them from going the Greek way...
Europe must do their part to contribute to the global fiction that the banks are "safe", that the debts incurred by governments are "safe" and that there is no situation in which holders of promises to pay might find themselves not getting paid. Governments can debase their currencies or, by simply defaulting on their debt. But as long as the debt paper exists, they do not admit that it is not worth the value which is printed on it. But by forcing to "accept" a 50 percent haircut, Europe has had the temerity to call this into question.
