Even Greek Socialists Advance V. GOP "Let's Be Haiti" Agenda & Advocacy!

[mascale]

Wall Street likely knows an international, economic policy, loose cannon when it spots one. The Rudderless Boehner/Tea Party Republican Party has clearly descended to that. S&P noticed it first last summer, in the downgrade. Colorado, Minnesota, and Missouri Republicans noticed it all: Just this week.

Socialist Europe and Greece, in comparison: Came to a deal on Greek Austerity.

Greece Officials Reach Austerity Deal; Stock Futures Yawn - MarketBeat - WSJ

Socialist, Regulated, USA got new jobless claims down to nearly the 350,000 per week level.

The Republicans are opposed to regulations, spending, credit, and even to disaster relief. Anyone easily compares their kind to what there is in Haiti and in East Africa in Drought.

"Crow, James Crow: Shaken, Not Stirred!"
(Loose cannon even not helpful to Yellow Hair, even at Little Big Horn!)

 

[waltky]

What to do?, what to do?...

How Rescuing Greece Could Destroy the World
Friday, 10 Feb 2012 | Yesterday Standard & Poor’s warned that even if Greece’s private sector creditors agreed to a 70 percent reduction in the value of their bonds, Greek debt will still be unsustainable.

The problem is that so much of Greece's debt has left the private sector. The European Central Bank owns a substantial portion of the bonds—and so far has insisted that it will not accept anything less than full payment at maturity. "But because only a small subcomponent of investors are actually taking the haircut and the official sector is not, or only partially, then the reduction... is probably not sufficient to make the debt sustainable, given the outlook for GDP itself," an S&P analyst explained.

It’s more than a bit ironic that the ECB’s bond purchases may make it more difficult for Greece to bring its debt down to sustainable levels. You can expect that there will be a lot of pressure on the ECB to accept some haircut on its Greek assets. As I’ve explained here before, repaying the ECB at par for bonds it bought at a discount is actually a monetary contraction. The ECB will be taking more euros out of circulation than it injected by purchasing the bonds.

But an ECB haircut may be even more dangerous than the effective monetary tightening. Warren Mosler points out that letting Greece off the hook for its debt will immediately prompt other debtor nations to ask: “If Greece doesn’t have to pay, why do I?” This, Mosler warns, would trigger a “financial crisis rivaling anything yet seen.”

More specifically: … the catastrophic risk I’d highly recommend immediately hedging is the risk that Greek bonds are formally discounted, rapidly followed by a global discussion of ‘so why should we have to pay?’ Possible immediate consequences of that discussion include a sharp spike in gold, silver, and other commodities in a flight from currency, falling equity and debt valuations, a banking crisis, and a tightening of ‘financial conditions’ in general from portfolio shifting, even as it’s fundamentally highly deflationary. And while it probably won’t last all that long, it will be long enough to seriously shake things up.

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Greek premier: Default would lead to "chaos"
February 10, 2012 - Greece's future in the eurozone came under renewed threat Friday as popular protests again turned violent and dissent grew among its lawmakers after European leaders demanded deeper spending cuts.

The country's beleaguered coalition government promised to push through the tough new austerity measures and rescue a crucial euro130 billion ($170 billion) bailout deal after six members of the Cabinet resigned. Prime Minister Lucas Papademos promised to "do everything necessary" to ensure parliament passes the new austerity measures that would slap Greeks with a minimum wage cut during a fifth year of recession. He also promised to replace any other Cabinet members who did not fully back his efforts. "It is absolutely necessary to complete the effort that began almost two years to consolidate public finances, restore competitiveness and economic recovery," Papademos told an emergency Cabinet meeting.

Draft legislation for the new austerity measures was submitted to parliament after the five-hour meeting ended. In central Athens, clashes erupted outside Parliament between dozens of hooded youths and police in riot gear. Police said eight officers and two members of the public were injured, while six suspected rioters were arrested. The violence broke as more than 15,000 people took to the streets of the capital after unions launched a two-day general strike that disrupted transport and other public services and left state hospitals running on emergency staff. Scores of youths, some in gas masks, used sledge hammers to smash up marble paving stones in Athens' main Syntagma Square before hurling the rubble at riot police.

Debt-stricken Greece does not have the money to cover a euro14.5 billion bond repayment on March 20, and must reach a vital debt-relief deal with private bond investors before then. Papademos said the bailout and the deal with private creditors would return Greece to growth next year, and deliver a 4.5 percent primary surplus in 2012 -- better than an earlier official prediction of 1.1 percent of gross domestic product. "A disorderly default would cast our country into a catastrophic adventure. It would create conditions of uncontrollable economic chaos and social explosion," he warned. "Greeks' standard of living in the event of a disorderly default would collapse, and the country would be swept into a deep vortex of recession, instability, unemployment and penury. These developments would lead, sooner or later, to exit from the euro."

He also warned that, "Either we will achieve an agreement that will set the country on a new course, or, if we backtrack, in yet another historic display of cowardice, we will head for collapse. I want to be clear. These are not just crucial moments, they are dramatic for the country." Earlier Friday, the small right-wing LAOS party in Papademos' coalition said it would not back the new measures and four of its officials in the cabinet resigned, including the country's transport minister. Two Socialists cabinet members have also quit. LAOS leader George Karatzaferis said rescue creditors had humiliated Greece. "Of course we do not want to be outside the EU, but we can get by without being under the German jackboot," he said. "I would rather starve."

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