Why Greece's spillover across euro area will probably be contained this time

[Petertan]

once greece default on payment is not their problem anymore, the problem is the people holding on to greek ious, the bondholders themselves could already be leveraged to their eyeballs back stopping the greek debt will there be a run on them too?

You are wrong. If like that everyone can simply borrow huge amount of money and then declare cannot pay. Where got so simple?

If they do that, immediately the next morning when they wake up, they will find themselves in the toilet for the next 15 years. And their currency will be like unto toilet paper for the next 15 years.

If you think it is easy, try to borrow from the bank and do likewise, see what happen?

If you a bank or money lender lend money to a king, he play you out later don't pay you what you can do to him? sue him? arrest him? whack him?

For individual and corporate it applies but how you force a country a government or a king to pay if they play you out? Basically either take up guns go to war or "L L"

but then again in the case of greece the lenders are already very reluctant to keep lending anyway as seen by the quantative easing they been doling out recently in preparation in case something like this happen whether are these efforts are adequate to mitigate the fallout thats comes after or not.

Yes when greece default they go to the toilet and become a financial pariah - but only for a while, a few years ago I will agree with you but today not everybody will against them there's options once they regain their currency things will stabalise within 2-3 years the russians have need of new friends and new trading partners will welcome them with open arms, then there's also China's AIIB brics bank coming online quite eager to show they can be the alternative to IMF and world bank.

2 to 3 years? so easy, now you go to Greece and become their citizen. And you tell them this. I believe they will make you a foreign or Finance Minister. Because you can talk very well. LOL

[sgd]

once greece default on payment is not their problem anymore, the problem is the people holding on to greek ious, the bondholders themselves could already be leveraged to their eyeballs back stopping the greek debt will there be a run on them too?

You are wrong. If like that everyone can simply borrow huge amount of money and then declare cannot pay. Where got so simple?

If they do that, immediately the next morning when they wake up, they will find themselves in the toilet for the next 15 years. And their currency will be like unto toilet paper for the next 15 years.

If you think it is easy, try to borrow from the bank and do likewise, see what happen?

If you a bank or money lender lend money to a king, he play you out later don't pay you what you can do to him? sue him? arrest him? whack him?

For individual and corporate it applies but how you force a country a government or a king to pay if they play you out? Basically either take up guns go to war or "L L"

but then again in the case of greece the lenders are already very reluctant to keep lending anyway as seen by the quantative easing they been doling out recently in preparation in case something like this happen whether are these efforts are adequate to mitigate the fallout thats comes after or not.

Yes when greece default they go to the toilet and become a financial pariah - but only for a while, a few years ago I will agree with you but today not everybody will against them there's options once they regain their currency things will stabalise within 2-3 years the russians have need of new friends and new trading partners will welcome them with open arms, then there's also China's AIIB brics bank coming online quite eager to show they can be the alternative to IMF and world bank.

2 to 3 years? so easy, now you go to Greece and become their citizen. And you tell them this. I believe they will make you a foreign or Finance Minister. Because you can talk very well. LOL

It's already happen something like this in iceland. when iceland defaulted in 2008 this happened. In 2 years they stabalized internally basically when they didn't have to worry about being hounded by creditors they could focus other things and sort out their problems they went back to their fishing roots, iceland is just a tiny nation of population size of brunei I think greece bigger will take 2-3 years.

see this IMF article
http://www.imf.org/external/pubs/ft/surv...31315a.htm

to add

Argentina a big messy country 4 bigger than greece in terms of population defaulted in 2001 their currency went into the toilet but by 2002 there were already signs of recovery in their economy.

http://www.theguardian.com/business/2011...entina-imf

[Petertan]

once greece default on payment is not their problem anymore, the problem is the people holding on to greek ious, the bondholders themselves could already be leveraged to their eyeballs back stopping the greek debt will there be a run on them too?

You are wrong. If like that everyone can simply borrow huge amount of money and then declare cannot pay. Where got so simple?

If they do that, immediately the next morning when they wake up, they will find themselves in the toilet for the next 15 years. And their currency will be like unto toilet paper for the next 15 years.

If you think it is easy, try to borrow from the bank and do likewise, see what happen?

If you a bank or money lender lend money to a king, he play you out later don't pay you what you can do to him? sue him? arrest him? whack him?

For individual and corporate it applies but how you force a country a government or a king to pay if they play you out? Basically either take up guns go to war or "L L"

but then again in the case of greece the lenders are already very reluctant to keep lending anyway as seen by the quantative easing they been doling out recently in preparation in case something like this happen whether are these efforts are adequate to mitigate the fallout thats comes after or not.

Yes when greece default they go to the toilet and become a financial pariah - but only for a while, a few years ago I will agree with you but today not everybody will against them there's options once they regain their currency things will stabalise within 2-3 years the russians have need of new friends and new trading partners will welcome them with open arms, then there's also China's AIIB brics bank coming online quite eager to show they can be the alternative to IMF and world bank.

2 to 3 years? so easy, now you go to Greece and become their citizen. And you tell them this. I believe they will make you a foreign or Finance Minister. Because you can talk very well. LOL

It's already happen something like this in iceland. when iceland defaulted in 2008 this happened. In 2 years they stabalized internally basically when they didn't have to worry about being hounded by creditors they could focus other things and sort out their problems they went back to their fishing roots, iceland is just a tiny nation of population size of brunei I think greece bigger will take 2-3 years.

see this IMF article
http://www.imf.org/external/pubs/ft/surv...31315a.htm

to add

Argentina a big messy country 4 bigger than greece in terms of population defaulted in 2001 their currency went into the toilet but by 2002 there were already signs of recovery in their economy.

http://www.theguardian.com/business/2011...entina-imf

If anyone can suka suka don't pay, then IMF must be the greater fool. So is the world bank. Everyone is a fool except for you.

Then why not they declare it loud and clear now, why wait? I love to, i am too waiting to buy CES at 20c. LOL

[greengiraffe]

Greek debt crisis: euro exit panic as pensioners start bank run
BRUNO WATERFIELD THE TIMES MAY 01, 2015 9:33AM

Athens pensioners wait outside the National Bank of Greece to get their monthly payments. Source: AFP

Panicking pensioners queued at banks, raided their accounts and broke into a board meeting of the state pension fund as Greece struggled to pay its two million pension recipients.

Officials claimed that a “technical hitch” had delayed some payments as Greece braced itself to run out of money in days without a breakthrough from secret talks in Brussels.

The left-wing government in Athens indicated that it would still resist the economic reforms demanded by its creditors in return for more loans.

“My answer is simple: no, no, no,” said Yanis Varoufakis, the finance minister, before the talks. A majority of investors, analysts and traders responding to a Bloomberg survey said that they expected Greece to leave the single currency.

Elderly Athenians yesterday queued at branches of the National Bank of Greece, which pays out most state pensions - staggered over several days - after the country’s main social security fund delayed payments because of cash shortfalls.

Greece will have to declare that it is bankrupt if it has to repay 700 million euros ($993m) to the IMF on May 12 without first securing the eurozone’s agreement to unlock 7.2 billion euros in loans. An earlier payment of 200 million euros to the IMF is due on Wednesday.

“Greece has warned that it faces financial asphyxiation without a deal and wants the European Central Bank to ease restrictions on the Greek treasury,” an EU official said. “For that to happen, the Greek government must compromise on its so-called red lines this weekend.”

The country’s state pension funds almost defaulted after a shortfall of “several hundred million euros” delayed payments to pensioners this week. Many people panicked when they discovered that their pension payments were not in their accounts.

“Normally I only withdraw half the money at the end of the month but today I’m taking it all,” said Sotiria Zlatini, 75, a former civil servant. “There are so many rumours going round.”

In a sign of public discontent, pensioners broke into a board meeting of the state pension fund demanding that it stop transferring cash reserves to the government under an emergency decree to keep the country solvent.

Greece has been forced to rely on its own funds since last August because of a row with the eurozone countries. In a desperate attempt to stave off a cash crunch, a government decree ordered 1500 state entities, including the pension fund, local authorities, hospitals and universities, to hand over their cash reserves to the central bank. Some of the public bodies have been reluctant to lose control of their funds and have deliberately delayed cash transfers.

A new team of Greek negotiators began talks yesterday (Thursday) with officials from the IMF and the eurozone. The negotiations are expected to continue throughout the bank holiday weekend.

Alexis Tsipras, the Greek prime minister, is overseeing the talks after the eurozone forced him to remove Mr Varoufakis from the negotiating team.

A deal looked impossible yesterday as Syriza party left-wingers forced Mr Tsipras to block earlier plans to appease eurozone countries. “The government is sticking to its red lines,” a spokesman for Mr Tsipras said.

Greece’s credit rating has been cut further into “junk” status as the risk of default and exit from the euro is “rising”, according to Moody’s. The ratings agency warned that should negotiations fail, “the outcome is likely to be a disorganised default”.

The head of the eurozone group of finance ministers said yesterday that Europe was ready for any outcome to the stand-off between Greece and its creditors.

Asked if there was a plan B in case Greece defaulted or was forced out of the eurozone, Jeroen Dijsselbloem said: “Is the eurozone prepared for eventualities, the answer to that is, ‘yes’.”

Additional reporting: Philip Aldrick

The Times

[opmi]

How come these guys never withdraw their money earlier?

[BlueKelah]

How come these guys never withdraw their money earlier?

They must have thought their payments were secure with euro help always coming at the last minute.

sent from my Galaxy Tab S

[specuvestor]

How come these guys never withdraw their money earlier?

They must have thought their payments were secure with euro help always coming at the last minute.

sent from my Galaxy Tab S

It's pension money withdrawing on monthly basis

[opmi]

How come these guys never withdraw their money earlier?

They must have thought their payments were secure with euro help always coming at the last minute.

sent from my Galaxy Tab S

It's pension money withdrawing on monthly basis

The guy in article said he can withdraw half at beginning of month.
Why wait when possibility of getting pension payment in drachma at end
of the month.

[specuvestor]

The country’s state pension funds almost defaulted after a shortfall of “several hundred million euros” delayed payments to pensioners this week. Many people panicked when they discovered that their pension payments were not in their accounts.

“Normally I only withdraw half the money at the end of the month but today I’m taking it all,” said Sotiria Zlatini, 75, a former civil servant. “There are so many rumours going round.”

---------------------------

NORMALLY he only withdraw half end of month. But it is not normal now.

The money is credited monthly... there is little they can do which is why panic is spreading when pension funds failed to "show me the money". What would be dumb are people who actually leave money in the banks. Then again that is the seed of a bank run.

[grubb]

A good article IMO, that shows that countries like Greece are not solely to blame for their problems. Like the article says, if Germany continues to run a big surplus year after year, the Eurozone will continue to move from crisis to crisis.

http://www.telegraph.co.uk/finance/comme...reece.html

...Chronic surpluses are a way of stealing demand from elsewhere. They export unemployment to other countries. This matters in an era of "secular stagnation" and excess global savings. Societies are entitled to retaliate once this gets out of hand...