Greece exit appears inevitable

[jsgr79]

If the key to the cure lies in the diagnosis, then a solution to the euro zone crisis may be close at hand.

This week - thanks to research by the hedge fund manager Boaz Weinstein - an uncanny correlation has been established between the percentage of Greek men still at home with their parents and the price of five-year credit default swaps.

These swaps are derivative instruments that insure the holder against a nasty credit event such as being chucked out of the euro zone in the aftermath of an irretrievable breakdown in political negotiations.

As you can see from the accompanying chart, the percentage of men between the age of 25 and 34 living at home with their parents is also high in Portugal, Italy and Spain. In fact, it more or less mirrors the economic plight of each nation: the more men still living with their parents, the higher the risk of that country's sovereign debt.

 

[editec]

Interesting correlation but let's not confuse an association with the causation


Men staying home with their parents is more likely a symptom of a stressed economy than the cause of it.

.

 

[Neotrotsky]

Greece

The failures of 20th century progressivism,
coming home to roost

 

[JimBowie1958]

Interesting correlation but let's not confuse an association with the causation


Men staying home with their parents is more likely a symptom of a stressed economy than the cause of it.

.

Hmmm, could it possibly be that 'bad economy' = 'high unemployment' = 'men at parents home'?

Greeces problems got out of hand when the government agreed to assume the private bankers debts. The bankers deliberately misrepresented what they knew would be growing debts as static obligations that got so bad so fast that each time they asked for a bailout the numbers they used to pitch the bail out were already out of date.

The private banks ruined Greece's budget which exploded with debt and now people who dont know any better are blaming lazy Greeks?

And dont laugh at them too much because we have it about to happen here as JP Morgan and BoA both have together more than $154 TRILLION in dirivitive contract exposure in Europe. If the EMU collapses, these two banks will be out of business. A few months ago they both moved their bank operations that run the dirivitive contracts over to their FDIC protected portion of their bank, and this was with Federal Reserve approval.

http://www.bloomberg.com/news/2011-...-moving-merrill-derivatives-to-bank-unit.html

The reason that commentators like Chris Whalen were relatively sanguine about Bank of America likely becoming insolvent as a result of eventual mortgage and other litigation losses is that it would be a holding company bankruptcy. The operating units, most importantly, the banks, would not be affected and could be spun out to a new entity or sold. Shareholders would be wiped out and holding company creditors (most important, bondholders) would take a hit by having their debt haircut and partly converted to equity.

This changes the picture completely. This move reflects either criminal incompetence or abject corruption by the Fed. Even though I’ve expressed my doubts as to whether Dodd Frank resolutions will work, dumping derivatives into depositaries pretty much guarantees a Dodd Frank resolution will fail. Remember the effect of the 2005 bankruptcy law revisions: derivatives counterparties are first in line, they get to grab assets first and leave everyone else to scramble for crumbs. So this move amounts to a direct transfer from derivatives counterparties of Merrill to the taxpayer, via the FDIC, which would have to make depositors whole after derivatives counterparties grabbed collateral. It’s well nigh impossible to have an orderly wind down in this scenario. You have a derivatives counterparty land grab and an abrupt insolvency. Lehman failed over a weekend after JP Morgan grabbed collateral.

But it’s even worse than that. During the savings & loan crisis, the FDIC did not have enough in deposit insurance receipts to pay for the Resolution Trust Corporation wind-down vehicle. It had to get more funding from Congress. This move paves the way for another TARP-style shakedown of taxpayers, this time to save depositors. No Congressman would dare vote against that. This move is Machiavellian, and just plain evil.

http://spiritofjubilee.com/debt/rec...-75-trillion-of-bank-of-as-derivatives-trades

Professor Black provided a “bottom line” summary in a separate email:

1.The bank holding company (BAC) is moving troubled assets held by an entity not insured by the public (Merrill Lynch) to the Bank of America, which is insured by the public
2. The banking rules are designed to prevent that because they are designed to protect the FDIC insurance fund (which the Treasury guarantees)
3. Any marginally competent regulator would say “No, Hell NO!”
4. The Fed, reportedly, is saying “Sure, no worries” by allowing the sale of an affiliate’s troubled assets to B of A
5. This is a really good “natural experiment” that allows us to test whether the Fed is protects the public or the uninsured and systemically dangerous institutions (the bank holding companies (BHCs))
6. We are all shocked, shocked [sarcasm] that Bernanke responded to the experiment by choosing to protect the BHC at the expense of the public.

So what you are seeing in Greece today is the US in 2014 unless something happens PDQ to set things right.

And just as an aside:
http://www.ktradionetwork.com/tag/bank-of-america/

Romney Collects More in Donations From the Five Biggest Banks Than All Other Candidates Combined
Mitt Romney has been leading the way in the 2012 presidential race when it comes to donations from Wall Street, pulling in millions from the financial sector since he launched his campaign. And the industry’s favor for Romney comes across even more when looking at just the five biggest banks in the U.S.: JP Morgan Chase, Bank of America, Citigroup, Wells Fargo, and Goldman Sachs

 

[Neotrotsky]

Of course, Leftist policies with their nanny state programs
have prolonged Adolescence and delayed the need to "grow up"

 

[JimBowie1958]

Greece

The failures of 20th century progressivism,
coming home to roost

More like the 'Failures of the People to Monitor the Thieves in Charge'.

 

[JimBowie1958]

Of course, Leftist policies with their nanny state programs
have prolonged Adolescence and delayed the need to "grow up"

That is the core principle of most Democrat domestic programs today.

My grandfather was a Union shop steward and life-long democrat and he told me before he died that the success of the unions depended on everyone doing their jobs to the best of their ability.

Obviously that spirit died along time ago.

 

[iamwhatiseem]

Wait...I thought Greece was OK again?
Monday they were on the brink of collapse, but then Tuesday they were better...Wednesday was bad again...I don't remember what shape they were in Thursday...but then I thought Friday the news said they were OK again?

Or was that last week.

 

[konradv]

Interesting correlation but let's not confuse an association with the causation


Men staying home with their parents is more likely a symptom of a stressed economy than the cause of it...

...or long-standing cultural tradtion, where people stay home until they're married.

 

[bitterlyclingin]

Funny, we have almost the same chart of unmarried men still living at home with their parents in the US of A, and Barry O is telling everyone that the three worst years out of the last fifty have been exactly the same years as he has been president. Correlation there, or coincidence?

Weasel Zippers » Blog Archive » Obama: The “Toughest Three Years This Country Has Gone Through” Over Last 50 Years Just Happen To Be The Same Three Years I’ve Been President…

Bonus: Barry O complaining about the high price of gas under GWB;
Weasel Zippers » Blog Archive » Flashback: Obama Complains In 2008 Campaign Ad About Paying $3.50 For Gas…

 

[konradv]

Funny, we have almost the same chart of unmarried men still living at home with their parents in the US of A, and Barry O is telling everyone that the three worst years out of the last fifty have been exactly the same years as he has been president. Correlation there, or coincidence?

Weasel Zippers » Blog Archive » Obama: The “Toughest Three Years This Country Has Gone Through” Over Last 50 Years Just Happen To Be The Same Three Years I’ve Been President…

Bonus: Barry O complaining about the high price of gas under GWB;
Weasel Zippers » Blog Archive » Flashback: Obama Complains In 2008 Campaign Ad About Paying $3.50 For Gas…

Defintely a correlation, the three years following Bush.