Crazy Nut Job
They must have realized that a small, indeed a tiny, country like Greece, one with no industrial base, would never be in a position to pay back [€350] billion worth of debt. … Without a “haircut,” a partial debt waiver, it cannot and will not ever happen. So why not immediately? That would have been one alternative. The European Union should have declared half a year ago — or even earlier — that Greek debt needed restructuring. … It was about protecting German banks, but especially the French banks, from debt write offs. On the day that the rescue package was agreed on, shares of French banks rose by up to 24 percent. Looking at that, you can see what this was really about — namely, rescuing the banks and the rich Greeks.
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Karl Otto Pöhl, former German central bank head, in a Der Spiegel interview. (via zero hedge).

Even Ambrose Evans-Pritchard has reversed his stance on the Greek bailout:

Personally, I have changed my mind on Greece. My initial reaction earlier this year was that it had to be saved to avoid a sovereign Lehman. Many posters on this blog cried “shame”, saying it was just another moral hazard rescue for bankers. They were right. I flagellate myself and wear a dunce’s hat.

The correct policy would have been – and still is – to help Greece out of its debt-deflation death spiral through an orderly “pre-emptive debt restructuring” along the lines of the IMF package for Uruguay. In Greece’s case it would require a haircut of 50 per cent or so for foolhardy creditors, ie your bank and mine, your pension fund and mine. This would not do much good unless Greece also devalued by 30 per cent to 40 per cent to retrieve competitiveness and put the whole fixed-exchange nightmare behind it.

Good times ahead.
Posted 2 years ago from bookmarklet
3 notes • view comments
  1. jessarmentrout reblogged this from crazynutjob
  2. mills said: That is more or less precisely what I said; AEP owes me more than a dunce-cap photo-op. I demand a written apology, as I wrote quite lucidly on the necessity of a prenatal doubt reconditioning like what happened in Paraguayana. NO ONE LISTENED.
  3. crazynutjob posted this
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