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(Associated Press)
Poul Thomsen, the International Monetary Fund mission chief in Greece, met with Greek Finance Minister Evangelos Venizelos in Athens, Friday. European Union and International Monetary Fund representatives start new round of talks with officials in the Greek capital on the course of Greece's austerity program and pledged reforms.
Though a long-awaited deal between Greece and its investors might buy Athens some time, it will do little to fix the financially crippled government's problems.
Representatives for Greek bond holders were reported to have made progress Friday toward a deal that would cut the value of their holdings by as much as 70 percent as part of a "voluntary" debt swap aimed at avoiding a disorderly default.
The deal reportedly involves swapping existing bonds for a new package of cash and paper worth about half the face value of the outstanding debt. Bondholders are also being asked to accept a lower interest rate on the new bonds, possibly tied to Greece's future economic growth, which would cut the value of the offer even further.
The pressure to finalize the agreement increases with every passing day. The European Union and International Monetary Fund are insisting on a bondholder "haircut" before releasing the next round of bailout payments from a 130 billion euro ($167 billion) rescue fund set up in October. Without those funds, Greece won't have enough money to meet a 14.5 billion euro ($18.7 billion) bond payment due March 20.
Because the paperwork for a bond swap is expected to take weeks to process, time is rapidly running out. Without a bondholder agreement, failure to make full payment would produce a disorderly default, with what could be dire consequences for the global economy just as the U.S. recovery is picking up.
A deal would buy the Greek government some time to try to right its listing financial ship. A successful bond swap would cut some 100 billion euros ($129 billion) off Greece's total debt load of more than 350 billion euros ($452 billion). That would help Athens steer a course toward a debt load of 120 percent of gross domestic product in 2020, down from the current level of 160 percent.
But the financial lifeline from European officials comes with painful conditions that include more spending cuts and tax increases. That will likely plunge the Greek economy even deeper into recession. Greece's economy has already shrunk 13 percent from its pre-crisis peak. Unemployment is at record highs. Frequent protests and strikes against austerity measures have further deepened the economic contraction.
The shrinking Greek economy is cutting further into the tax base, forcing more spending cuts and tax hikes in downward spiral. Over the long term, the current rescue plan isn't sustainable, according to Ben May, an economist at Capital Insight who has been following the debt talks.
"Sooner or later we expect Greece to conclude that the conditions attached to the bail-out deal are simply too onerous and that its best option may be to terminate any rescue package, carry out another debt restructuring deal and abandon the single currency," he said in a note to clients.
Even if Greece and the banks reach a deal, it remains to be seen just how many bondholders will go along with the "voluntary" swap for new paper. If too few investors agree to take losses, the savings may not be large enough to stop the clock on Greece's debt bomb.
Greek Prime Minister Lucas Papademos has threatened to introduce a new law to force holdouts to take the deal. Some of those investors have threatened to sue if the government tries to force them to take losses, arguing the change in the bonds' terms violates property rights.
Other investors, who bought so-called credit default swaps, are hoping Greece can't reach a deal and doesn't pay bondholders. Some $70 billion worth of those investments, which pay off like an insurance policy if Greece defaults, are outstanding.
The potential impact of such a disorderly default is difficult to predict, much like the chain reaction that swept through the global financial system in 2008 in the wake of Lehman Brothers' collapse. European regulators have told eurozone bankers they need to raise more capital to withstand such a financial shock, but the ongoing debt crisis has made that difficult for many of them.
Even if they reach a deal and enough investors accept it, the precedent will likely spook investors in other debt-burdened countries like Italy, Spain and Portugal, further raising their borrowing costs.
"Portugal is obviously the next in the line of fire," said Michael Cirami, a portfolio manager at U.S. investment managers Eaton Vance. "Portugal is unlikely to go unnoticed whether they strike a deal or not (on Greek debt restructuring)."
Lowering Greece's debt burden with a bond swap could avoid the financial chaos of an outright default. But it wouldn't blunt the impact on its bond rating and its future cost of borrowing.
"Greece is insolvent so it will default," Edward Parker, head of bond rater Fitch's sovereign debt group for Europe, told Reuters this week.
"We have said for a long time that we don't think this (swap agreement) is the way to go, and we would treat it as a default," Parker added. "It clearly is a default, however they try to spin it."
CNBC's Michelle Caruso-Cabrera has the latest details on Greece closing in on a debt deal and whether it could trigger a credit event.
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Any attempt to buy Greek bonds by banks is just another exercise in can-kicking. The outcome is inevitable. They need to stop throwing good money after bad.
John
I agree !! Just to many holes in the bottom of that boat . Let it sink , then claim salvage wrights to IT.
bob
The fundamentals are very simple.
If the problem is a liquidity problem, you loan more money to carry them until their funds are available to pay back the loan and move on. Businesses do this all the time. Farmers do this to borrow money until their crops are in.
However, if the problem is a solvency issue, then loaning more money only means there is going to be an even larger default. If the borrower is already insolvent, meaning existing debts can not be repaid, when then would any sane person (or bank or country) loan them more?
The answer lies in how the default is going to be structured. What the world banking powers (the banksters) are doing is structuring a deal so that taxpayers suffer the default by socializing the loans and therefore the losses to come through central banks and IMF funding sources. When these loans are not repaid, it is the taxpayers that will feel the pain because it is their currencies that will suffer lost purchasing power (a hidden tax) due to the central bank write offs, or it will be the taxpayers of the donating countries that donated the funds to the global funds like the IMF.
The IMF has no money of its own and lacks the ability to create revenue through some form of taxation because it is not even a governmental entity. It only has money because taxpayers in other countries have had their earnings confiscated and transferred (usually against their will) to these funds, so it is not the funds that lose money when these loans fail, but the taxpayers of the countries that funded the funds.
In the US, we have witnessed the Federal Reserve force interest rates to near zero wiping out the earning power of savers to the tune of nearly 2.5 trillion dollars of interest that has been avoided by the banks in the last four years. This is money removed from discretionary income and has a direct bearing on lost jobs due to the decreased demand caused by the reductions in spending power caused by reducing discretionary income by artificially taking interest rates so low. No elected official or officials voted to do this. This was done by a few powerful money czars at the Federal Reserve.
Why are they doing this? To save their member banks from what their member banks did to themselves. Again, it is the people that are being forced to bear the pain and in this instance, the pain is being forced on the entire country by non-elected money czars accountable to no one.
Ron Paul has it about right when he says we need to get back to a sound currency and end the Fed. On that, I agree with Ron Paul completely.
Finally, someone calling it what it is; a default. It's like, OK, I'm going to pay you with half dollars and pretend they are dollars and if that doesn't do the trick, I'll do it again, and again, and again. I ought to include a note with the next check I write, that they can consider themselves lucky to get what I happen to feel like sending. If the government can do it, why can't I? Oh, I forgot, our government just printed more money to cover its debts. The Fed bought US government bonds to keep the interest rate low. Where did the Fed get the money?
Good analysis ,Glenn. Ron Paul is the only one that makes sense.
This is coming too late to help the EU. A complete failure or unwillingness to accept the inevitable and "kick the can further down the street" has weakened the EU and will result in a considerably different union than what we see today. If things could go well we may see a "North/South" sort of EU but that is on the basis of strength somewhere within.
Greece will fail just prior to the March payments. This will allow some posturing of the Greek government to position for a softer fall. The EU has made no public outcry and for that it will cost dearly as it will appear weak and drag other survivable countries into the fray of no growth or negative growth. You have some countries with great commerce but so over-burdened with "Government Coasters" doing all they can to avoid any act of work and playing the system while sucking the breath out of Capitalism.
With Europe buying less from China, China buying less from the US, the US buying less from China, and so on, it will be a long road to recovery and we are headed for a Depression. It's too hard to avoid. The real question is how bad and how long. For the US, it may be too late for a new government with a conservative approach and view of the economy. In the best case scenario, the economy is expected to be sluggish and flat for several years. Imagine something even worse like the Iranian ggovernment flogging it's senseless mind and closing the Straight. What effect would $150-$200 oil have on the growth prospects of all economies?
Hang on for the ride!!!
Any chance of Corzine getting ahold of more of other people's money in some other account? He could always plead ignorance of where the money went and if push comes to shove, plead guilty and get his buddy to pardon him. He gets a clean slate and starts anew in another endeavor....just a thought.
John: It would be good if Obama read your comment, but he's in Oblivion !!!
Thank you Glenn for your insightful observations.
What we are seeing in Greece is the future of France, Germany and the entire "rogue's gallery" of high minded, empty headed,pie-in-the-sky, ivory towered socialist states, that might, might have had some inkling of actual concerned for human beings in their minds when they decided it was okay to - take from the thrifty and give to the shifty and create their nanny states, but are now running into a nasty little fact of life known as reality.
Yet, this is the direction our own great, powerful wiz... - I mean President has chosen as captain of our ship of state to steer America toward in the hopes of making it the kinder, gentler nation he would have it be so that we can then be admired by countries that presently don't like us very much.
Little does he realize that he too is going to run head long into reality; a reality known as being voted out of office.
Coming soon to America?
Did you know that the Federal Reserve is placing I.O.U.'s in Uncle Sam's pocket all the while the money printing press is running full steam. Why else do you think gold and silver has been skyrocketing.
Who will bail out the U.S.? Greece is a relatively small country in comparison to America.
It is good to see this being called what it is, a default. The plan for Greece is nothing more than a controlled, pre-negotiated default. This not unlike when a company goes through a pre-packaged bankruptcy where deals are struck with all of the creditors prior to the bankruptcy filing so that things go smoothly and the company can continue to operate with minimal disruption. The problem in the case of Greece is that this controlled default will not do enough to correct the fundamental problems with the Greek economy and financial system. All it will do is kick things down the road a ways. The Greek economy is in a death spiral that there is very little hope of arresting. As they implement more austerity measures their economy contracts further, causing the loss of even more tax revenues and a further reduction in GDP. This means that this controlled default will not do what is needed to reduce the debt to GDP ratio down to even a sustainable level, let alone one where they can actually start to reduce that ratio.
At the rate they are going, why don't they just tell their bond holders that the Greek government will pay what it can, when it can on all existing debt. That way, they don't need a bailout and if you look at what they are negotiating that is in essence what is happening anyway. The default would be orderly in the sense that everybody would be treated the same and end up getting pennies on the dollar for what is owed them. Failed corporations do this all the time, returning even less money. The one thing that would happen right away is that Greece would have a balanced budget because no-one would lend them a cent.
well said Glenn,time to put my money "back in the coffee can"!!
around 50% of the IMF funds come from the American Federal Reserve, so social security takes another hit, since the credit default bonds are only valued at 50% of face value, we are being screwed royalty.
I do not believe the worry is a Greek default. The worry is how the financial markets have been betting against Greece. The package described in the article is a default that avoids allowing those that bet against Greece to collect on their bets, apparently.
If Greece simply defaults - the $350 billion debt is written off PLUS paying off another $70 billion in credit default swaps PLUS whatever else the financial markets have been betting on, assuming the betters can collect. Paying off those other bets is what will collapse European banking - not the amount of the Greek debt.
The smart move for Greece would be to simply default. The other European economies will then fall to their level and Greece will be competitive. The US would need to aggressively deflate its economy to remain competitive. China would drift closer to recession since both the European and US markets would be deflating rapidly.
The banks/super-wealthy and the institutions that serve them (EU, IMF, etc) are the new Nazis of Europe and they are raping the continent just as the original Nazis did only this time not with tanks and bombers but with forced austerity and privatization programs.
The government officials of the various countries who are going along with these programs and helping to push them on their own people, whether on the Right or Left, are quislings just the same as the turn coats and traitors that ran things for the Nazis in the occupied countries.
They are doing the same thing here but since we are the big imperial country we are being spared the worst of it...SO FAR.
Even at that we have the worst unemployment and foreclosure rate since the Great Depression and I doubt it will get better because the same people are in charge as before the crash in 2008 and they are pushing the same "Free-Market" policies.
Think of it as Laissez Faire 2.0.
The same economic philosophy that caused the crash in 1929 updated and given a fresh coat of paint, frauds and scam artists like Milton Friedman and Thomas Friedman of the NY Times sold it to U.S. and world policy makers and politicians and to a lesser extent the general public.
These people are economic flat-earthers. Like Medieval "doctors" they think they can bleed the patients to health but they are killing them instead.
Until something really changes and they go in a different direction with different people directing the economy we are going to continue going down the tubes.
Greece should do what Iceland did right in the beginning... They told their banksters to take a hike and defaulted on their debt and left the Euro and started reprinting their own soverign currency. Their peoples do not have a debt hanging over their collective heads and their economy is growing. Basically a win/win for themselves.
There is only two things you can do with debt. Pay it off or default it. There are NO other options.
Perhaps you should get your facts straight before dispensing economic advice. Iceland never used the Euro.
Right on , bullet.
Telling the holders of your debt to stick it is tempting, no doubt. Makes it a little tricky to borrow money in the future, though. You WILL be wanting to borrow in the future.
tbats a joker vic. Its like saying if I file bankruptcy I can never borrow again. Hell, there are credit cards in the mail the next day after default. People want to make money and their is always risk involved. Greece should tell them all to take a hike. I wouldn't give them a nickel. This is all about big money not wanting to lose their billions and credit default swaps on the other side. WHo cares, let them go under. If us stockholders get dinged, than its their problem. People have known for years that these socialist bums have no intention of paying their bills. Oh, the down is down today on european news about greece! Ya think after 5 years of negotiating and continueing to write checks with no bottom to the pit that investors would get a clue! The game is to keep getting the checks.
It's all Greek to me.
Greece needs to get out of the Euro and go back to the Drachma. It will be very hard on them but it would be the best outcome for their country. Get back to the basics Greece!!!! This entire thing is only to help the Banks, just like in the USA regarding the bail-outs.
This is NOT news. Anyone with half a brain has known for over two years that this scheme would not resolve the underlying problem. Still, however, they have continued to try to put lipstick on a pig. The inherent problem underlying all of these European social democracies is too many wagon riders, too few wagon pullers and far too much government spending resulting in chronic deficits and huge accruals of government indebtedness.
Greece need to declare bankruptcy. It is not the first time a sovereign nation has gone BK so why is this such a big deal; apart from the mistaken and on-going belief that this ill-advised currency union was a sound idea in the first instance.
Well that would sure make the Germans happy. They think that Greece cooked the books to get into the EU and ought to be kicked out.
Some banksters need to go to jail for fraud, Bassai, like Goldman Sachs shysters.
Rick m I fear you first paragraph describes our nation!!
Joe, those banksters lent money to help. This is purely the problem of an inept government and a greedy population.
The United States is in line to get our country foreclosed upon, just like what’s happening to the European countries. The debt of any nation under a central bank can never be resolved. The entire banking system is corrupt, rigged and the rating agencies are insignificant.
I think most people have figured out that Wall Street is one of the most corrupt and ethically deprived institutions on our planet. I think most people also know the media is bought and sold just like most politicians. We also know that Wall Street is one of many tools of the elite but not the main tool. What is very clear is that our financial system has an architect and carefully designed plan that is playing itself out in Europe.
The International Monetary Fund (IMF) is very brazen in its fear mongering that we have lost a decade economically. Especially since the IMF has been one of the biggest contributors to perpetuating the instability of the European crisis. The dominoes are beginning to fall in what is an orchestrated attempt by the banksters to consolidate Europe and eventually the rest of the world’s economies under one umbrella that is to be controlled by those that have always controlled currency and money. The most egregious aspect of this contrived extortion is that they are blaming the people who are the backbone of any economy instead of their greedy corrupt political and business leaders.
George Papandreou was pressured to quit because he lapsed into a morally and ethical responsible position by trying to give the people of Greece a say in their economic future through a referendum. This vote would have given the Greek people the choice to stay in the Euro zone and allow their country to be foreclosed upon by the banksters or leave the Euro regain their sovereignty and coin their own currency once again. The IMF bullied the smallest country as a litmus test for what is going to be a much more challenging foreclosure process when it comes to the larger economies. Italy is now in the cross hairs. This dilemma you are watching unfold goes to the core of the rotten apple that is the world’s financial system.
Folks, you are witnessing the death throes of a desperate corrupt financial system where the stock markets and the fractional reserve banking system are at its core. The volatility in the stock markets are a microcosm of the greed, theft and corruption that has perpetrated all aspects of our and other countries economic systems. In the United States, It doesn’t matter who’s in office. Our political system has turned into a two headed one party system with both parties serving their masters, Wall Street and the banksters/Federal Reserve. The stock market is just another ponzi scheme whose intent is to fleece the gullible at the bottom of the pyramid. The stock market is a rogue element of a financial system that is meant to funnel the wealth to the elite/banksters who soicopathically control our financial lives. It is reaching a point where there is nothing anymore to take from the 99% of the world. The banksters would separate you from your rainy day fund if they could gain access to your shoe box or secret compartment in your purse or wallet. The stock market isn’t the main problem; it’s the fractional reserve banking system that has set the foundation for outright theft. We are experiencing the biggest bank and investment robbery in history and the banks and financial institutions are doing the robbing. When you blame one political party or another they have you right where they want you, in fear, divided and distracted to the theft that is going on right in front of your eyes each and every second of the day.
When you have people on Wall Street day trading and speculating making half a million dollars a year in their twenties betting on people being foreclosed on, you need to ask yourself what is the true purpose of our banking system? At the moment it is largely a theft on the American public. MF Global CEO, ex Goldman Sachs CEO Jim Corzine knows this and knows that nobody with his connections have served any time for stealing the investor’s money (1.2 billion at last count). The financial system’s main mission should be to allocate capital to areas of greatest growth in the real world economy. Yet they allow all kinds of broker speculation and financial gimmicks such as the derivative markets which are based on non-realistic side bets which are now in the quadrillions. The derivatives market was illegal for most of the 20th century.
The European banking crisis is a prime example of what is going to happen to all economies associated with stock market fraud and the Federal Reserve banking system. The financial strife in Greece is the model that will befall most countries. Greece is but a symptom of a cancer that has attached itself to the world’s economies. The Federal Reserve (which is neither federal nor a reserve) has been creating money (monopoly money) out of thin air and charging interest on it insuring a debtor economy for anyone who chooses or is forced to get involved with the Federal Reserve and their fractional reserve banking system. That is why this whole European or any countries current debt crisis will never be resolved and will be preyed upon by the stock market vultures. The Federal Reserve System is designed to cause economies to fail.
If someone loans you two dollars to run your economy and expects three back for the loan and interest how are you going to pay the third back? You can’t unless you borrow more dollars which puts you in perpetual debt and in a constant borrowing cycle to pay off the debt. This is designed not accidental.
Here’s the kicker, once the Federal Reserve/banksters have you struggling to pay off your interest, they send in their loan sharks the International Monetary Fund (IMF). The IMF will loan you money to cover your ever burdening interest payments but they attach a provision that if you default, you will have to give them your assets in what they call privatization (foreclosure).
Since the interest is exponential, you will default and the banksters will come in and try to foreclose on your country, like Greece. They are being told to sell off their own country to pay back the people who caused the mess to begin with. This allows the elite to steal your intrinsic valuable assets because they gave you paper (loans/debt) and the interest on the debt that is systematically impossible to pay back. This also allows the parasitic stock speculators to profit from this designed theft. They not only know the outcome of an economy, they can gamble on the economic bubbles at the investor’s expense. This cancer goes all the way down the food chain.
In the United States case, it doesn’t have to be that way. In our constitution, in Article 1, Section 8, it stipulates that we can “coin money” as a nation and avoid the Federal Reserve’s interest (fee charged on loans) black hole.
So don’t be fooled that the Europeans have come to grips with their financial debt, it’s impossible, it’s a virus that has spread around the globe. The Europeans are now replacing their leaders with technocrats/ex Goldman Sachs banksters. These people haven’t been elected by anybody. The stock market vultures will continue to contrive “financial instruments” (credit default swaps/credit derivatives) to defraud the people of the world.
Banks, Central banks, World Bank, BIS, IMF = Federal Reserve = Debtor economies, Debtor Nations (economic slaves) and carrion for the stock market derivative heist.
WOW!!!! Thank you!
Amen. Ron Paul is right and I knew this for a long time. Most people are brainwashed by our media that serves the banksters.It is truly an American Tragedy.
Good article, to bad the journalists don't report like this!!! I learn much more from the comments than I ever do from the news articles!! Thanks for taking the time to explain it so well.
Joe, Ron Paul is so nuts, squirrels chase him wherever he goes.
Too long...didn't read....
of coarse they just want to kick the can!! they are trying to allow the rich banksters to collect as much small debt as poss.... then run off to another country to start over again
Hilarious this is even news.... Next up, the United States of America defaults. Welcome to the 1% N.W.O....
All we hear is Greece and the Euro-zone are in trouble, day in and day out, every day the same thing for the last 6 months. What about the people? Why don't we hear or read anything about the Greek citizens and their plight? It's obvious there is little care for their losses and the suffering they are going through.
Six months, Henry? They've been at this for well over two years. Had it only been six months this might have been "news" kinda sorta but this has been going on for a very long time now.
Newsflash: Restructuring debt like this is a default. Not only is this the kicking of the financial can down the road, it's also the kicking of the terminology can down the road. Perhaps the European leaders should have a few dozen more meetings to discuss that, with the final one sometime well after the Euro is a goner? Oops, that's what's already happened.
I look at it like this, the more time they get the more time the United States gets to do a Ron Paul and isolate themselves from the Euro Zone (as far as banking wise) until things start looking up. That's why the FED is feeding them because they trying to give those banks and subsidaries like Morgan Stanley time to cut and run. I read saw yesteday they were (Wall Street tycoons) were expecting Morgan Stanley to lose 57 cents per share because of there exposure to Europe. Instead they only lost 14 cent a share and it was because they had time to shut down some subsidiaries in Europe before they became exposed. So let them handle there business as slowly as they want as long as WE won't go down with it I'm good.
The wholesale theft of countries through debt creation is backfiring. Long time ago I wrote that Greece should default ASAP so that they can start on a new path. The banksters and Soros are probably still hoping to steal Greek treasures including their islands. I think Ireland needs to default ASAP as well ( I have a soft spot for the Irish )-they suffered so much in the past, were blinded by false prosperity in the EU and now are paying the piper. Why no one from Wall Street or IMF have gone to jail for their criminal activity ?
It has only taken less than 10 years for the central banks euro to destroy and enslave Europe. The central banking system is designed to enslave / such the financial life out of any nation it gets it's hooks into. The federal reserve has nothing to do with the federal government.
The federal reserve act was introduced in congress in 1913 the day before Christmas, there were only 3 congressmen present when they passed it. The president who could have vetoed the bill received most of his campaign money from the backers of the bill (Rothchild, Rockefeller, Warburg). Later on his death bed the president said "I have betrayed my country and stolen the future of Americans". Warburg was quoted saying "I care not who governs or rules a country as long as I control the money I control the country". In America it is the private bank call the Federal Reserve.
Our only hope is to go back to printing our own money. Ron Paul is the only political candidate who says he wants to remove the Fed. If he could do that it would give all americans back their financial freedom. That is enough for me to vote for him!!
The global financial system is way over-leveraged if a small nation default can bring it all down. Whoever put this mess together should be fired.
All nations need to reduce their debt significantly. The world can't borrow into success nor into prosperity.
Nobody can reduce debt without declaring that they are not going to pay. This is because in debt based monetary system money is created when we borrow. Yes, when you to to the bank and borrow money to buy a home, the bank does not give you existing money. They create it out of nothing. Thus, entire money supply is interest bearing debt: Either created by regular banks or by the central banks. It cannot be paid back. The only way to pay the debt is to borrow more and pay the old debt, and then keep borrowing indefinately. This is not possible in a limited world since the interest load gets higher and higher and the economy cannot carry it. Google for "Web of Debt Kondratieff Wave" to understand the problem with debt based monetary system. This is the modern day slavery. The matrix is real. Entire world is a slave of the banking cartel.
WHAT?
Glenn-974637 - Good input. Let me add one more thing. The US is the largest player in the IMF. In fact, we finance provide (give) 19 - 21% of the IMF budget. That means "we" are providing $1.00 for every 4 dollars the rest of th entire world gives.
What worries me is how many times Fed Reserve personnel have flown to Europe (in secret) recently. In my opinion this can only be bad for America. I am sure "we" are obligating billions more in un-funded obligations.
Other investors, who bought so-called credit default swaps, are hoping Greece can't reach a deal and doesn't pay bondholders. Some $70 billion worth of those investments, which pay off like an insurance policy if Greece defaults, are outstanding.
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I want to know who's on the hook for 70 Billion Dollars if Greese defaults. These credit default swaps are done here in the USA is it a big bank here say B of A or A.I.G. the FED? So then the US taxpayer will be on the hook when the default takes our banking system down like it did in 2008?
It's better to engineer a controlled crash landing where some one may have a chance to walk away rather than an outright slam into the ground. Either way, the Greek economy is going down and the current lenders will incur pain. Lenders always assume a risk when they lend and in most cases their loans are paid. In some cases they are not. This is one of them. My experience is that with time, those that made the initial decision to make the loan are less likely to accept a restructuring. Their replacements are more likely and as time goes on and the faces of the decision makers change completely, the decision to cut losses are more easily made. That is why it is better to buy time and let the "emotions" melt away.
I hate to say this, but wasn't this solved once before with a nice big war, I don't know about you but I am just a teeny weeny bit concerned.
Obviously you guys are pretty informed about how the financial world works. I am not. But what I do know from a faith-belief stand point is this. I belive very strongly in the words of Jesus Christ. He said that all of this would come to an end. And I believe that the reason for this is GREED & CONTROL by a very corrupt and powerful entity. Jesus said that satan is the ruler of this world, the prince of the air. And his only objective is to take what he believes is rightfully his, namely this world. He got booted out of heaven for wanting to take over. Remeber that one of the temptations who tried to use on Jesus was that if the Lord would bow down to him he would give him all of the material riches of this world.($$$$$$) So if he would try this on Jesus, certainly he would try and seduce men & woman the same way. And this is exactly what is going on. Through lies, deceit, corruption, wanting more & more, vanity, selfishness, and the list just goes on. We have brought this on ourselves. The U.S. government was set up so that they would be of help to the citizens of this country. But the real outcome is that the citizens would take care of them. They vote themselves pay raises when we are all struggling and there is nothing we can do about it. They call the shots, and in some cases if you don't comply, they will make your life miserable. All I'm saying is this. There will NEVER be a substantial increase in jobs ever again. It's only a matter of time before this whole economic system collapses. My position is that at some point people will need to gauge when to pull their money out of banks and the stock market. Cause if they fail to do this, it will be just like it was back in 1929'. except when people start jumping to their deaths, it's gonna' be a longer ride to the side walk due to taller buildings. And a much bigger mess when they go SPLAT!!!!!
Socialism works so well doesn't it?
Hello navyvet, you do know that the largest recipients of social welfare in the history of the world are the "Free Market Capitalist" financial agencies in the USA, right? Remember the bail outs (plural)? They are still ongoing and are in the tens of trillions (thats trillions with a T). The banksters are now bailing out Europe as well. You know the banksters motto, privatize profits and socialize losses. Guess who gets to pick up the tab for anything that isn't paid back?
What a bunch of "takers". Gimmee Gimmee Gimmee then I won't pay back.
You just defined the US Gov't and Social Security.
proamerica-114...; Social security was well funded, until the bonds were put into the general fund to pay for LBJ, great society, Vietnam war, SSI, all the money earned as interest on the government bonds ,brokered by the federal reserve has not been paid to the Old age and disability fund (which is the real name of social security), but instead has been rolled over into the general fund; our government has taken all the money's in all the set aside funds, even the federal civil service retirement funds have been exhausted, military retirement funds exhausted, and medicare funds go also to support medicaid, since medicaid has no separate source of funding, in plain words we are in deep sh..t !
Social Suckurity was bled out by the leaders of the 1960's who deystroyed the fund, and then invented national debt. Forward 40 years, and now that debacle looks like child's play. The only new currency with a president's face this decade will be the Food stamp, with Pres Bo Bo,s smiling mug, and Jo Jo on the back, stealing money out of Bo Bo's pocket....................
I hate to say it but most average citizens are clueless to the fragility of our current economic state and that the national debt is really the biggest threat to the average citizens well being. I hear people saying 'oh the economy is getting better and will really take off after the next election cycle' but they don't realize how the national debt is going to do us in if it is not tackled sooner rather than later. I believe in 10 years or less we will be like Greece is now unless measures are implemented soon to cut spending at all levels (federal/state/local) and increase payroll taxes to fund the Social Security or cut Social Security benefits and/or raise the retirement age. Medicare is in even worse shape and needs to be completely overhauled.
A recent article in 'The Economist' magazine about Greece's economic crisis worsening states, " the unemployment rate is 19% and rising. GDP has contracted by 12.5% since '08 and is expected to fall by another 3% this year. Property prices and rents have plunged. But property taxes have tripled which means even middle-class Greeks are being driven into poverty." We can avoid this fate if our elected officials in all parties take action now rather than later. Not talking about the national debt and not doing something about it will not make it go away.
To the US and due to its longevity, the European debt crisis seems like a tempest in a teapot and we are QUITE sure by now that they can go on kicking the can down the road FOREVER. Wolf! Wolf! Wolf! -- gets old!