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mises
Joined: 05 Nov 2007
Location: retired
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 Posted: Sat Feb 27, 2010 8:32 am Post subject: |
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Greece wants Nazi gold returned as 50,000 strikers take to streets
Premium Article !
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Deputy prime minister Theodoros Pangalos criticised Germany's attitude towards the Greek debt crisis and said Athens had not received adequate compensation for the impact of the Nazi invasion of Greece in 1941.
"They took away the Greek gold that was at the Bank of Greece, they took away the Greek money and they never gave it back. This is an issue that has to be faced sometime in the future," he said. "I don't say they have to give back the money necessarily but they have at least to say 'thanks'."
The German foreign ministry dismissed the remarks and said bringing up the past would not help Greece solve its problems.
"I must reject these accusations," a spokesman said. Germany had paid Greece 115 million Deutsche marks in compensation by 1960 and made further payments to forced labourers of the Nazi regime, he said.
"Finally, I'd like to mention that, parallel to this, since 1960 Germany has paid around 33 billion Deutsche marks in aid to Greece both bilaterally and in the context of the EU," he said.
Mr Pangalos also claimed Italy, France and Belgium had used the same techniques as Greece to mask their true deficits to qualify for the eurozone. "You simply put some amounts of money in the next year � it is what everybody did and Greece did it to a lesser extent than Italy, for example," he said.
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Greece has already imposed broad spending cuts but says it is under pressure from the EU to cut salaries in the civil service. |
http://news.scotsman.com/world/Greece-wants--Nazi-gold.6102255.jp
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| One banker said the situation was surreal. "How can they call the Germans incompetent Nazis and still expect a bail-out?" |
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/7309861/Greek-rescue-in-danger-as-deputy-prime-minister-attacks-Nazi-Germany.html |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Mon Mar 01, 2010 6:41 pm Post subject: |
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| mises wrote: |
As a side note, a CDS does not require the possession of the underlying asset. In other words, with a CDS I can take out a life insurance policy on you, which creates some uncomfortable incentives. No? Think Bear/Lehman. |
http://www.ft.com/cms/s/0/7b56f5b2-24a3-11df-8be0-00144feab49a.html?nclick_check=1
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Time to outlaw naked credit default swaps
By Wolfgang M�nchau
I generally do not like to propose bans. But I cannot understand why we are still allowing the trade in credit default swaps without ownership of the underlying securities. Especially in the eurozone, currently subject to a series of speculative attacks, a generalised ban on so-called naked CDSs should be a no-brainer.
Naked CDSs are the instrument of choice for those who take large bets against European governments, most recently in Greece. Ben Bernanke, the chairman of the Federal Reserve, said last week that the Fed was investigating �a number of questions relating to Goldman Sachs and other companies in their derivatives arrangements with Greece�. Using CDSs to destabilise a government was �counter-productive�, he said. Unfortunately, it is legal.
CDSs are over-the-counter contracts negotiated by two parties. They offer the buyer insurance on a bundle of underlying securities. A typical bundle would be �10m worth of Greek government bonds. To insure against default, the buyer of a CDS pays the seller a premium, whose value is denoted in basis points. Last Thursday, a CDS contract on five-year Greek bonds was quoted at 394 basis points. This means that it costs the buyer �394,000 per year, for five years, to insure against default. If Greece defaults, the buyer gets �10m, or some equivalent. What constitutes default is subject to a complicated legal definition.
A naked CDS purchase means that you take out insurance on bonds without actually owning them. It is a purely speculative gamble. There is not one social or economic benefit. Even hardened speculators agree on this point. Especially because naked CDSs constitute a large part of all CDS transactions, the case for banning them is about as a strong as that for banning bank robberies.
Economically, CDSs are insurance for the simple reason that they insure the buyer against the default of an underlying security. A universally accepted aspect of insurance regulation is that you can only insure what you actually own. Insurance is not meant as a gamble, but an instrument to allow the buyer to reduce incalculable risks. Not even the most libertarian extremist would accept that you could take out insurance on your neighbour�s house or the life of your boss.
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I do not want to exaggerate the case for a ban. This speculation is neither the underlying cause of the global financial crisis, nor of the eurozone�s underlying economic tensions. But naked CDSs have played an important and direct role in destabilising the financial system. They still do. And banks, whose shareholders and employees have benefited from public rescue programmes, are now using CDSs to speculate against governments.
Where is the political response? The Germans want to bring it to the Group of 20, but they hesitate to do anything unilaterally. Christine Lagarde, the French finance minister, was recently quoted as saying: �What we are going to take away from this crisis is certainly a second look at the validity, solidity of sovereign [credit default swaps].�
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Removing the most ridiculous "innovations" would move us towards a more stable system. I doubt it will happen. |
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caniff
Joined: 03 Feb 2004
Location: All over the map
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| Posted: Mon Mar 01, 2010 7:20 pm Post subject: |
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Below is from the comments section:
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Why was my post about the psychological impact of hyperinflation (past and future) removed? Too close for comfort for British readers?
GermanDude
on February 28, 2010
at 12:48 PM |
Know anything about that (other than that the impact would be negative)? Sounds like it would make for an interesting study, if properly researched. |
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The Happy Warrior
Joined: 10 Feb 2010
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bucheon bum
Joined: 16 Jan 2003
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| Posted: Tue Mar 02, 2010 6:40 am Post subject: |
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Good article, thanks for posting it. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Sun Mar 07, 2010 10:09 am Post subject: |
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http://www.guardian.co.uk/business/2010/mar/05/bild-open-letter-greece-papandreou
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After yesterday's call by two German politicians that Greece sell off islands, historic buildings and artworks before receiving aid, the German tabloid Bild has written an open letter to the Greek prime minister George Papandreou:
Dear prime minister,
If you're reading this, you've entered a country different from yours. You're in Germany.
Here, people work until they are 67 and there is no 14th-month salary for civil servants. Here, nobody needs to pay a �1,000 bribe to get a hospital bed in time.
Our petrol stations have cash registers, taxi drivers give receipts and farmers don't swindle EU subsidies with millions of non-existent olive trees.
Germany also has high debts but we can settle them. That's because we get up early and work all day.
We want to be friends with the Greeks. That's why since joining the euro, Germany has given your country �50bn. |
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mises
Joined: 05 Nov 2007
Location: retired
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Wed Mar 24, 2010 5:20 pm Post subject: |
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Portugal downgraded today. Dollar heads north. Euro goes south.
So the order looks like Greece then Portugal then Spain or Italy. Could change.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ae3iqkaDuoEk
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�The rise in sovereign risk we�ve seen, heightened by Portugal�s downgrade today, has definitely raised the tension being paid to the risk of government debt and appetites for it have waned,� said Brian Yelvington, head of fixed-income strategy at Knight Libertas LLC, a Greenwich, Connecticut-based broker-dealer. �The increased sovereign risk is pressuring Treasury yields higher and creating investors� preference for riskier assets like corporate debt, which causes demand to receive fixed in swaps, all of which work to compress swap spreads.�
Default Speculation
Swap rates serve as benchmarks for many types of debt often purchased with borrowed money, including mortgage-backed securities and auto-loan securities.
France and Germany are nearing agreement on International Monetary Fund involvement in any aid package for Greece, burdened by the European Union�s biggest deficit, according to a finance ministry official in Berlin. The Portugal downgrade spurred concern that more European nations will struggle to fund swelling deficits.
Greece �is going to default at some point,� and Europe�s failure to answer that challenge will hurt the common currency, UBS Investment Bank�s London-based deputy head of global economics, Paul Donovan, said in an interview on Bloomberg Radio. |
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