Financial News

[southsider2k5]

Top 1% responsible for 20%, and top 5% responsible for 47.5%, bottom 50% only gets 3% of total... Nope, not wealth, health care spending.

 

http://content.usatoday.com/communities/on...011/06/study-/1

 

A new survey on health care finds that a small percentage of very sick patients account for about half of all medical spending and are the driving force behind double-digit increases in insurance premiums, the National Journal reports.

 

The survey, by the non-partisan National Institute for Health Care Management Foundation, found that from 2005 to 2009, 5% accounted for 47.5% of all health care spending, and 1% were responsible for 20% of all medical costs. Half the population racks up only 3% of total spending.

 

In 2008, the average person's medical costs were about $233. For the top 1%, the average was $76,476.

 

Full study at link

 

http://nihcm.org/images/stories/NIHCM-CostBrief-Email.pdf

[Y2HH]

Top 1% responsible for 20%, and top 5% responsible for 47.5%, bottom 50% only gets 3% of total... Nope, not wealth, health care spending.

 

http://content.usatoday.com/communities/on...011/06/study-/1

 

 

 

Full study at link

 

http://nihcm.org/images/stories/NIHCM-CostBrief-Email.pdf

 

And I bet lifestyle choice contributes to more than half of those cases, with some simple changes/choices, they'd fall off those charts. I'm not one to talk about "lifestyle" choice, because I tend to eat what I want, however, I also eat relatively healthy most of the time. It's about moderation, and sadly, no matter how much educational material exists, and no matter how much you put it on the minds of people, they'll do what they want to do anyway.

 

The best and only true preventative care is NOT seeing a doctor, but making simple decisions of what you eat/drink and how much.

[Jenksismyhero]

And I bet lifestyle choice contributes to more than half of those cases, with some simple changes/choices, they'd fall off those charts. I'm not one to talk about "lifestyle" choice, because I tend to eat what I want, however, I also eat relatively healthy most of the time. It's about moderation, and sadly, no matter how much educational material exists, and no matter how much you put it on the minds of people, they'll do what they want to do anyway.

 

The best and only true preventative care is NOT seeing a doctor, but making simple decisions of what you eat/drink and how much.

 

Choice? They have no choice. They HAVE to eat crappy food to make them fat. Just like they HAVE to have a cell phone and premium cable to survive in this world.

[BigSqwert]

Choice? They have no choice. They HAVE to eat crappy food to make them fat. Just like they HAVE to have a cell phone and premium cable to survive in this world.

When garbage is marketed to people from an early age what do you expect the majority of people to gravitate to? It starts with sugar and HFCS infused cereals and goes all the way to fast food chains on every corner of every major street in America. The lobbies for meat, dairy, and corn have a ton of pull and they are able to offer that subsidized crap at a ridiculously low cost.

Edited June 29, 2011 by BigSqwert

[Iwritecode]

And I bet lifestyle choice contributes to more than half of those cases, with some simple changes/choices, they'd fall off those charts. I'm not one to talk about "lifestyle" choice, because I tend to eat what I want, however, I also eat relatively healthy most of the time. It's about moderation, and sadly, no matter how much educational material exists, and no matter how much you put it on the minds of people, they'll do what they want to do anyway.

 

The best and only true preventative care is NOT seeing a doctor, but making simple decisions of what you eat/drink and how much.

 

I figured that most of it would be from people with long-term or incurable things like cancer or something like that.

 

 

[Y2HH]

When garbage is marketed to people from an early age what do you expect the majority of people to gravitate to? It starts with sugar and HFCS infused cereals and goes all the way to fast food chains on every corner of every major street in America. The lobbies for meat, dairy, and corn have a ton of pull and they are able to offer that crap at ridiculously low cost.

 

I'm not buying this. You have a point, to a degree, however, this is exactly why they do it...you build an entire faction of people that hand them an excuse on a silver platter...and they run with that excuse.

 

I grew up with fast food, sugared cereals, etc...in an era of almost no care (the 80's) when commercials basically said whatever they wanted to say and there weren't many governing bodies watching them, and I turned out fine, because I don't lean on excuses to make poor decisions for myself, when I know they're poor decisions. A lot of people DO lean on such excuses, especially when society makes the excuses acceptable. Even stupid human beings know what's what...they're not animals, they're a step above, and they KNOW what they're doing is bad for them, they just don't care.

[Jenksismyhero]

When garbage is marketed to people from an early age what do you expect the majority of people to gravitate to? It starts with sugar and HFCS infused cereals and goes all the way to fast food chains on every corner of every major street in America. The lobbies for meat, dairy, and corn have a ton of pull and they are able to offer that crap at ridiculously low cost.

 

Lol, such a typical liberal response: "People can't think for themselves! They're all mindless zombies at the mercy of greedy corporations. Government must protect all!"

 

In reality I think there's a little truth to what you're saying, but it comes down to laziness. Why spend 45 minutes cooking a healthy meal when I can just go to mcdonalds and buy 4 mcdoubles? And even if what you say is true, that kids are brainwashed and are "forced" to eat these unhealthy foods, there's nothing stopping them from going outside to play and lose all that fat they're gaining.

[bmags]

I figured that most of it would be from people with long-term or incurable things like cancer or something like that.

 

This is likely the case.

 

I know we like to stigmatize poor people as being lazy and are at fault for making the wrong choices. But it should be said that it is much more difficult to make the right choice in low income areas with little access to fresh fruits and vegetables. It's no surprise that people with more money tend to eat healthier, with access and means to afford whole foods and the like. Being poor really, really sucks. And when you are constantly doing transaction costs in your head it's exhausting. I'm fine in conceding we shouldn't tax unhealthy foods, if you'll all consider that we shouldn't subsidize unhealthy ones.

[Y2HH]

I figured that most of it would be from people with long-term or incurable things like cancer or something like that.

 

I think about half would be, but I think the other half suffer from a lifetime of bad choices. People with incurable diseases tend to not last long, so even if they're expensive, it's a very short term expense. It's people who live in very poor health but stick around for 40 years that cost the system.

[BigSqwert]

I think about half would be, but I think the other half suffer from a lifetime of bad choices. People with incurable diseases tend to not last long, so even if they're expensive, it's a very short term expense. It's people who live in very poor health but stick around for 40 years that cost the system.

Refer to this post.

[Y2HH]

Refer to this post.

 

Well, we agree on this...but we don't agree on the why or how. You think it's because they're brainwashed and cannot think for themselves. I think it's because they're lazy and don't really care.

 

It's probably somewhere in the middle.

 

But I'd say I'm 1% more right than you are. So once again, I win.

 

Y2HH - 104, BS - 0

 

I.E. I'm the Yankees.

 

You are the Cubs.

 

Owned.

 

In hindsight, BS, you should have beat me up when you had the chance...since you're like 8 feet tall and I'm like 5'7".

Edited June 29, 2011 by Y2HH

[southsider2k5]

I figured that most of it would be from people with long-term or incurable things like cancer or something like that.

 

if I had to guess, I would imagine the very top expenses fall there, while the next chunk is more self-involved.

[Balta1701]

Top 1% responsible for 20%, and top 5% responsible for 47.5%, bottom 50% only gets 3% of total... Nope, not wealth, health care spending.

 

http://content.usatoday.com/communities/on...011/06/study-/1

 

 

 

Full study at link

 

http://nihcm.org/images/stories/NIHCM-CostBrief-Email.pdf

I think the answer to our health care problems are simple. Let the sick ones die.

[southsider2k5]

Doesnt mean that it wouldn't be a possible benefit.

 

And here is why the idea of speculation with the Strategic Reserves is a bad idea. It is easy to neutralize its effect.

 

http://news.yahoo.com/oil-rebound-weakens-...-172341994.html

 

NEW YORK (AP) — An attempt by the U.S. and other non-OPEC governments to sway oil and gasoline prices appears to have petered out in less than a week.

 

Benchmark crude settled at $94.77 per barrel Wednesday on the New York Mercantile Exchange. Over two days, oil has nearly recovered the loss from last Thursday when the U.S. and other oil-importing countries said they'd dump emergency oil supplies onto the market.

 

Brent crude, which is used to price many international oil varieties, also rebounded. Although at $112.40 per barrel, it's still about 2 percent below where it was last week.

 

Motorists anticipating a big discount at the gas pump will likely be disappointed. Gasoline futures recovered the 20 cents per gallon that were lost after the International Energy Agency, which includes the U.S., said it would make 60 million barrels of crude and other fuels available this summer.

 

Gasoline for July delivery, which jumped 4.2 percent Wednesday to settle at $3.01 per gallon on the Nymex, is now 3.7 cents more expensive than before IEA's announcement.

 

Initially after the IEA announcement, analysts were predicting a drop of as much as 25 cents in pump prices. Patrick DeHaan, a senior petroleum analyst at GasBuddy.com, said Wednesday the IEA's move cut no more than 2 to 5 cents off the price of retail gasoline in the last week.

 

"The rest was negated because of the increase in oil during the last 24 hours," DeHaan said.

 

The national average gasoline price fell nearly a penny overnight to $3.543 per gallon. But prices rose in some parts of the country, especially Rust Belt states, DeHaan said. In Ohio, for example, the average pump price increased 3.5 cents to $3.351 per gallon, according to auto club AAA, Wright Express and Oil Price Information Service.

 

Oil has this week as Greek lawmakers prepared for and passed financial reforms that were required for the country to receive the next installment of an international aid package. Without that money, the country risks defaulting on its debts. A bullish report on oil and crude supplies in the U.S. also boosted prices on Wednesday.

 

"The IEA did move the market, but the lesson is that many other things can move it too," said Cameron Hanover analyst Peter Beutel.

 

Tom Kloza, publisher and chief oil analyst at Oil Price Information Service, said the decision in Greece eased concerns about a spreading financial crisis in Europe.

 

"Nobody wanted a regional collapse that would affect western banks," Kloza said. "There is a sense now that this is going to go away for a few months."

 

The dollar lost ground to the euro and other major currencies, which boosted oil as well. Oil, which is priced in dollars, tends to rise as the greenback falls and makes crude barrels cheaper for investors holding foreign currency.

 

Meanwhile, the Energy Information Administration said U.S. oil supplies dropped more than expected last week, losing 4.4 million barrels to a total of 359.5 million barrels in storage. That tally doesn't include the 30 million barrels that the U.S. is expected to release from the Strategic Petroleum Reserve in August.

 

Gasoline supplies also fell unexpectedly by 1.4 million barrels, according to the EIA report. Oil demand in the U.S. fell by 1.7 percent while gasoline demand dropped 0.3 percent when compared with the same period last year.

 

In other Nymex trading, heating oil for July delivery added 9.45 cents to settle at $2.9202 per gallon and natural gas for August delivery dropped 0.39 cents to settle at $4.315 per 1,000 cubic feet

[southsider2k5]

http://www.reuters.com/article/2011/06/30/...E75T2MI20110630

 

U.S. caught China buying more debt than disclosed

 

By Emily Flitter

 

NEW YORK | Thu Jun 30, 2011 12:47pm EDT

 

(Reuters) - The rules of Treasury auctions may not sound like the stuff of high-stakes diplomacy. But a little-noticed 2009 change in how Washington sells its debt sheds new light on America's delicate balancing act with its biggest creditor, China.

 

When the Treasury Department revamped its rules for participating in government bond auctions two years ago, officials said they were simply modernizing outdated procedures.

 

The real reason for the change, a Reuters investigation has found, was more serious: The Treasury had concluded that China was buying much more in U.S. government debt than was being disclosed, potentially in violation of auction rules, and it wanted to bring those purchases into the open - all without ruffling feathers in Beijing.

 

Treasury officials then worked to keep the reason for the auction-rule change quiet, with the acting assistant Treasury secretary for financial markets instructing subordinates to not mention any specific creditor's role in the matter, according to an email seen by Reuters. Inquiries made at the time by the main trade organization for Treasury dealers elicited the explanation that the change was a "technical modernization," according to a document seen by Reuters. There was no mention of China.

 

The incident calls into question just how clear a handle the Treasury has had on who is buying U.S. debt. Chinese entities hold at least $1.115 trillion in U.S. government debt, and are thought to account for roughly 26 percent of the paper issued by Washington, according to U.S. government data released on June 15.

 

China's vast Treasury holdings are both a lifeline and a vulnerability for Washington - if the Chinese sold their Treasuries all at once, it could undermine U.S. markets and the economy by driving interest rates higher very quickly. Scenarios of this sort have been discussed in Washington defense-policy circles for at least a year now. Not knowing the full extent of these holdings would make it even more difficult to assess China's political leverage over U.S. finances.

 

The Treasury has long said that it has a diversified base of investors and isn't overly reliant on any single buyer to digest new U.S. Treasury issuance. Evidence that China was actually buying more than disclosed would cast doubt on those assurances.

 

THE 'GUARANTEED' BID

 

The United States sells its debt to investors through auctions that are held weekly - sometimes four times per week - by the Treasury's Bureau of the Public Debt, in batches ranging from $13 billion to $35 billion at a time. Investors can buy the bonds directly from the Treasury at auctions, or through any of the 20 elite "primary dealers," Wall Street firms authorized to bid on behalf of customers. The Treasury limits the amount any single bidder can purchase to 35 percent of a given auction. Anyone who bought more than 35 percent of a particular batch of Treasury securities at a single auction would have a controlling stake in that batch.

 

By the beginning of 2009, China, which uses multiple firms to buy U.S. Treasuries, was regularly doing deals that had the effect of hiding billions of dollars of purchases in each auction, according to interviews with traders at primary dealers and documents viewed by Reuters.

 

Using a method of purchases known as "guaranteed bidding," China was forging gentleman's agreements with primary dealers to purchase a certain amount of Treasury securities on offer at an auction without being reported as bidders in that auction, according to the people interviewed. After setting the amount of Treasuries the guaranteed bidder wanted to buy, the dealer would then buy that amount in the auction, technically on its own behalf.

 

To the government officials observing the auction, it would look like the dealer was buying the securities with the intent of adding them to its own balance sheet. This technicality does not preclude selling them later in the secondary market, but does influence the outcome of bidding in the auction, by obscuring the ultimate buyer. In fact, the dealer would simply pass the bonds on immediately to the anonymous, guaranteed bidder at the auction price, as soon as they were issued, according to the people interviewed.

 

The practice kept the true size of China's holdings hidden from U.S. view, according to Treasury dealers interviewed, and may have allowed China at times to buy controlling stakes - more than 35 percent - in some of the securities the Treasury issued.

 

The Treasury department, too, came to believe that China was breaching the 35 percent limit, according to internal documents viewed by Reuters, though the documents do not indicate whether the Treasury was able to verify definitively that this occurred.

 

Guaranteed bidding wasn't illegal, but breaking the 35 percent limit would be. The Uniform Offering Circular - a document governing Treasury auctions - says anyone who wins more than 35 percent of a single auction will have his purchase reduced to the 35 percent limit. Those caught breaking auction rules can be barred from future auctions, and may be referred to the Securities and Exchange Commission or the Justice Department.

 

The Treasury Department generally does not comment on specific investors but a source in the department said China was not the only Treasury buyer striking guaranteed bidding deals.

 

People familiar with the matter named Russia as being among the guaranteed bidders. But Russia's total Treasury holdings, while significant, represent 2.8 percent of outstanding U.S. debt, versus one-fourth for China's.

 

CHANGING THE RULE

 

Traders at primary dealers did not have the same diplomatic concerns about the level of Chinese buying. But they did have reasons to dislike guaranteed bidding, and they began clamoring for a change. One trader said in an interview he first brought the issue to the attention of Treasury officials in 2007.

 

Some primary dealers began expressing concern that the deals were opaque in a way akin to the Salomon Brothers Treasury trading scandal in the early 1990s. In that case, traders from the securities firm submitted false bids under other bidders' names in Treasury auctions in order to more closely control the results, and their bids altered the auction prices. The idea that unseen bidders were again influencing auction prices raised similar concerns among traders.

 

There were also commercial concerns: Dealers say that knowing that the practice was going on at other firms made them less confident they could see and understand overall patterns of buying in the Treasury market. Such visibility can be one of the greatest benefits of being a primary dealer, since the service itself often doesn't pull in big profits directly.

 

Some traders at primary dealers say they simply refused to do the deals and ended up turning away customers, including China. That irked sales colleagues who were promising clients guaranteed bidding deals.

 

At the beginning of 2009, Treasury officials began discussing the issue of guaranteed bidders, with a focus on China's behavior, internal documents seen by Reuters show. The culmination of their efforts was a change to the Uniform Offering Circular published on June 1, 2009 that eliminated the provision allowing guaranteed bidding.

 

Treasury Secretary Timothy Geithner was in Beijing that day meeting with Chinese government officials on his first formal visit to China since taking up his cabinet post. There is no evidence he discussed the rule change with Chinese officials there.

 

A spokeswoman for the Treasury Department said: "We regularly review and update our auction rules to ensure the continued integrity of the auction process. The auction change made in June 2009 eliminated some ambiguity in auction rules and increased transparency, which ultimately benefits taxpayers and investors."

 

The rule change had an immediate impact.

 

In the first auctions conducted after guaranteed bidding was banned, a key metric rose sharply: the percentage of so-called indirect bidders, those who placed their auction bids through primary dealers. Indirect bidders are seen as a proxy measure for foreign central bank buying, because foreign central banks most often bid through primary dealers. With the elimination of the guaranteed bidder provision, far more buyers were put in this class in reports to the Treasury Department.

 

The seven-year U.S. Treasury note, which was sold in sizes of between $22 billion and $28 billion once a month from February 2009 to September 2009, had an average indirect bid percentage of 33 percent from February through May. But from June to September the average indirect bid rose to 63 percent.

 

BIDDERS REACT

 

Shortly after the Treasury revised the auction rules, U.S. officials learned from dealers that some bidders were seeking to continue using guaranteed bids. According to a Treasury document, a large client asked one primary dealer whether the Treasury might make an exception to the new rule for them. Neither the client nor the dealer were named.

 

Deutsche Bank, Goldman Sachs, JPMorgan, RBS Securities and UBS all received calls from clients asking for secret bid arrangements immediately after the rule change went into effect, according to the internal Treasury document, a summary of inquiries received seeking guidance from dealers after the rule change.

 

Deutsche Bank, according to the document, said their client canceled a bidding deal. Goldman told Treasury that a large client would be going to other dealers who in the past had done the deals after Goldman turned them away, the document said.

 

JPMorgan asked if there were any exceptions to the new prohibition on guaranteed bids. RBS said it actually struck a deal with a customer for a guaranteed bid after the rule change, but it used a different structure and wanted to know what was legal. UBS told the New York Fed that its former guaranteed-bidder client would now change its behavior and buy Treasuries in the secondary market directly after an auction, according to the document.

 

Spokespeople for Goldman Sachs and UBS declined to comment for this story. Deutsche Bank, RBS, and JPMorgan did not respond to requests for comment.

 

The change came at a delicate time in U.S.-Chinese financial relations. China, long a major buyer of American government securities, was at the time snapping up huge amounts of debt as Washington was suffering a sharp drop in tax revenue during a crushing recession.

 

Almost all of the business of buying Treasuries on behalf of the Chinese government is conducted by China's State Administration of Foreign Exchange (SAFE), an arm of the Chinese central bank which manages China's currency reserves, which include large amounts of U.S. Treasury bonds.

 

SAFE, for its part, was facing heat in China over the extent of its U.S. holdings. SAFE was hit hard by the collapse of Lehman Brothers, the doomed investment bank that was SAFE's trading counterparty in the U.S. overnight-lending market. And the potential losses SAFE faced upon the collapse of the U.S.-backed mortgage titans Fannie Mae and Freddie Mac whipped up such a storm in China that Chinese officials publicly berated the Americans for lapses in financial stewardship. (For more, click on link.reuters.com/qec28r )

 

SAFE officials in Beijing did not respond to a request for comment.

 

After evidence mounted that China was disconcerted by the auction-rule change, U.S. officials moved to tweak the system, to offset some of the pinch of the stricter bidding rules. The move gave big buyers a way to maintain some anonymity, by increasing the amount of securities it was possible to buy at a single auction without having to declare the purchase in a letter to the New York Fed.

 

The old requirement stipulated that any purchase of $750 million in Treasury securities had to be declared by the buyer in a letter to the New York Fed. Officials increased the threshold to $2 billion.

 

'TECHNICAL MODERNIZATION'

 

The official explanation for eliminating guaranteed bidders did not mention foreign central banks at all. It focused instead on "technical modernization" of auction rules.

 

One government official warned others in a written message "not to include the words 'China' or 'SAFE' in email subjects." The Securities Industry and Financial Markets Association, the main trade organization for Treasury dealers, asked the Treasury in early June 2009 to explain the change. The Treasury's response: It had found that a detail in its auction rules no longer applied to the way auctions were conducted, and so the rule was changed, according to an internal Treasury memo.

 

Separately, the Treasury's acting assistant secretary for financial markets, Karthik Ramanathan, told subordinates in an email: "Please let's stick to the 'Modernization of Auction Rules' when outside requests come in on the (rule) change. Please DO NOT emphasize the guaranteed bid portion, or mention any specific investors."

 

Ramanathan, who left the Treasury in March of 2010 and is now senior vice president and director of bonds at Fidelity Investments in Merrimack, New Hampshire, declined to comment.

 

The Federal Reserve Bank of New York, which interacts directly with primary dealers on Treasury auctions, issued a strongly worded letter on June 23, 2009, dealers say, urging them to "comply with the spirit as well as the letter of this recent auction rule clarification."

 

"That was how we knew they wanted us to tell them who was buying what," said a trader at one primary dealer.

[southsider2k5]

I can't figure out where the post was now, but someone wanted to know about Greece. It is not pretty.

 

http://www.cnbc.com/id/43577308?__source=o...|&par=otbrn

 

If you think you’ve got it tough living in America, just be glad you’re not going to be in Greece as that nation begins to confront the true reality of austerity.

 

With the Greek Parliament’s approval Wednesday of measures designed to bring the country’s disastrous finances under control comes an array of measures that would make Zeus weep.

 

From a 15 percent cut in public wages to cigarette and alcohol taxes to Social Security reductions and means testing, the Greek measures will instill pain, necessary though it may be, for years to come.

 

It’s all being done for the sake of helping the country meet its 340 billion-euro debt burden.

 

Even with the stringent measures, Greece still will be in a heap of trouble, especially considering how much growth could be hampered by tax increases and sharp spending cuts.

 

“If prevailing is to be considered a success, then the Greek Parliament will prevail and will send tax receipts through the floor rather than skyward, and will prevail in spinning an already dizzy national spirit into a national spirit of economic despair,” Dennis Gartman, hedge fund manager and author of The Gartman Letter, wrote this morning.

 

“If that is prevailing,” he added, “we’d want no part of it.”

 

Gartman details the 30 or so measures taken in taxation and cuts in the public sector, defense and benefits, along with a slew of privatization measures, the government will be taking.

 

Here are 10 of the most onerous:

 

Taxes will increase by 2.32 billion euros this year and 3.38 billion, 152 million and 699 million in the three subsequent years. There will be higher property taxes and an increase in the value-added tax (VAT) from 19 percent to 23 percent.

Luxury levies will be introduced on yachts, pools and cars and there will be special levies on profitable firms, high-value properties and people with high incomes.

Excise taxes on fuel, cigarettes and alcohol will rise by one-third.

Public sector wages will be cut by 15 percent.

Defense spending will be cut by 200 million euros in 2012 and 333 million each year from 2013 to 2015.

Education spending will be cut by closing or merging 1,976 schools.

Social Security will be cut by 1.09 billion euros this year, 1.28 billion in 2012, 1.03 billion in 2013, 1.01 billion in 2014 and 700 million in 2015. There also will be means testing, and the statutory retirement age will be raised to 65 from 61.

The government will privatize a number of its enterprises, including the OPAP gambling monopoly, the Hellenic Postbank, several port operations, Hellenic Telecom and will sell its stake in Athens Water, Hellenic Petroleum, PPC electric utility and lender ATEank, as well as ports, airports, motorway concessions, state land and mining rights.

Only one in 10 civil servants retiring this year will be replaced and one in five in coming years.

Health spending will be cut by 310 million euros this year and 1.81 billion euros from 2012 to 2015.

[Balta1701]

I can't figure out where the post was now, but someone wanted to know about Greece. It is not pretty.

Do you honestly think that Greece will follow through with even a fraction of that in order to keep bailing out the German banks?

 

This "Agreement" is just kicking the can down the road another year. Just like the last agreement was. And the agreement before that. And however many others there were.

[southsider2k5]

Do you honestly think that Greece will follow through with even a fraction of that in order to keep bailing out the German banks?

 

This "Agreement" is just kicking the can down the road another year. Just like the last agreement was. And the agreement before that. And however many others there were.

 

This from the person who is worried that the Republicans are going to let the US default? Odd.

[Balta1701]

This from the person who is worried that the Republicans are going to let the US default? Odd.

I'm convinced that Greece will wind up defaulting eventually too. Or at least some version of a default...maybe set up in such a way that they won't call it a default.

 

The politics of this are even worse than those in the U.S. right now. Basically, the European banks loaned Greece a ton of stupid money that Greece will never, ever pay back. If they admit that they won't pay those funds back, then the European banks are in trouble and a run begins, probably hitting the other PIGS countries.

 

Instead, the Europeans have spent what, 4 years now, with successive Greek bailouts where they impose conditions on the Greeks that will never be met so that they can pay back the European banks. Then, when the conditions aren't met, they wind up having to figure out another way to bail out Greece, when what they're really doing is trying to prevent a bank run on the European banks.

 

At some point, a Greek Politician is going to get elected by saying "screw the European banks, we shouldn't have to suffer because they were stupid" and that will be that.

[southsider2k5]

I'm convinced that Greece will wind up defaulting eventually too. Or at least some version of a default...maybe set up in such a way that they won't call it a default.

 

The politics of this are even worse than those in the U.S. right now. Basically, the European banks loaned Greece a ton of stupid money that Greece will never, ever pay back. If they admit that they won't pay those funds back, then the European banks are in trouble and a run begins, probably hitting the other PIGS countries.

 

Instead, the Europeans have spent what, 4 years now, with successive Greek bailouts where they impose conditions on the Greeks that will never be met so that they can pay back the European banks. Then, when the conditions aren't met, they wind up having to figure out another way to bail out Greece, when what they're really doing is trying to prevent a bank run on the European banks.

 

At some point, a Greek Politician is going to get elected by saying "screw the European banks, we shouldn't have to suffer because they were stupid" and that will be that.

 

Can't you wait until it is us?

[Balta1701]

Can't you wait until it is us?

I'm not sure what this means.

[southsider2k5]

I'm not sure what this means.

 

Our debt crisis day.

[Balta1701]

Our debt crisis day.

I really don't want to see it happen. It'll screw me massively when I go to try to buy a house in a couple years.

[southsider2k5]

I really don't want to see it happen. It'll screw me massively when I go to try to buy a house in a couple years.

 

Think of how cheap the houses will be though!

[Balta1701]

Think of how cheap the houses will be though!

True.