Greek Bond 'Haircut' of 50% Appears Set: Sources

[Winehole23]

left-right alliance faces off against Brussels and the IMF. if Greek debt is written off, who's next?

Tsipras’ victory presents the troika—a consortium consisting of the European Central Bank, the European Commission, and the International Monetary Fund—with a series of unappetizing options. If the troika gives in and writes down Greek debt, then other, larger countries—such as Spain—will have an incentive to negotiate a similar deal, triggering a major financial headache in Brussels and Frankfurt. If the troika refuses, then Greece is likely to default on its debt obligations this year and be forced to exit the eurozone—a fate that neither Tsipras nor the European leadership say they want.


Either way, the events in Greece signal that Europe’s long, failed experiment with austerity is cracking. In addition to Syriza, anti-austerity parties have grown popular in Spain, where opinion polls show Pablo Iglesias’ Podemos with 20 percent support. And Euroskeptic parties gained heavily in last years’s European parliament elections, particularly Marine Le Pen’s National Front Party, which has campaigned against fiscal austerity in France.

http://www.theatlantic.com/internati...e-over/384813/

[boutons_deux]

Ending Greece’s Nightmare

Why were the original projections so wildly overoptimistic? As I said, because supposedly hardheaded officials were in reality engaged in fantasy economics. Both the European Commission and the European Central Bank decided to believe in the confidence fairy — that is, to claim that the direct job-destroying effects of spending cuts would be more than made up for by a surge in private-sector optimism. The I.M.F. was more cautious, but it nonetheless grossly underestimated the damage austerity would do.

And here’s the thing: If the troika had been truly realistic, it would have acknowledged that it was demanding the impossible. Two years after the Greek program began, the I.M.F. looked for historical examples where Greek-type programs, attempts to pay down debt through austerity without major debt relief or inflation, had been successful. It didn’t find any.

http://www.nytimes.com/2015/01/26/op...2Fpaul-krugman

[Winehole23]

Al of that aside, terms is no doubt the gop wants to practice their version of austerity and is selling it as a pathway to economic growth.

Preaching water, drinking wine. Austerity wasn't our pathway to economic growth, gold-plated socialism for TBTF banks and financial firms was.

[boutons_deux]

"austerity ... as a pathway to economic growth."

for which strategy, Repugs have NO evidence, but, Repugs NEVER have evidence, facts, ONLY blind ideology.

[CosmicCowboy]

The elephant in the room is that we all understand that there is a point where continuing to increase the deficit has a tipping point where there is nothing left but bad outcomes.

We can argue where the money gets spent from liberal/conservative perspectives but what do you do when there isn't any more money and dollars are as worthless as drachmas?

[boutons_deux]

The elephant in the room is that we all understand that there is a point where continuing to increase the deficit has a tipping point where there is nothing left but bad outcomes.

We can argue where the money gets spent from liberal/conservative perspectives but what do you do when there isn't any more money and dollars are as worthless as drachmas?

that's all bull .

check Barry's budget for 2015, it will drive y'all rednecks crazy.

[CosmicCowboy]

Seriously boo. Are you really that stupid? Get off your Whacko Internet feeds and join the real world.

2015 budget

[CosmicCowboy]

And yeah, whitehouse.gov is a propaganda source only believed by idiots like you.

[boutons_deux]

Obama Budget to Seek to Stabilize Deficit and Address Income Inequality

President Obama will propose a 10-year budget on Monday that stabilizes the federal deficit but does not seek balance, instead focusing on policies to address income inequality as he adds nearly $6 trillion to the debt.

The budget — $4 trillion in fiscal 2016 — would hit corporations that park profits overseas, raise taxes on the richest of the rich and increase the incomes of the middle class through new spending and tax credits. Mr. Obama will challenge the Republican Congress to answer his emphasis on wage stagnation, according to congressional aides briefed on the details.

The central question Mr. Obama's budget will pose to Congress is this: Should Washington worry about what may be the defining economic issue of the era — the rising gap between the rich and everyone else — or should policy makers primarily seek to address a mountain of debt that the White House hopes to control but only marginally reduce as a share of the economy?

Mr. Obama’s spending-and-taxes plan foresees a $474 billion deficit, which would be 2.5 percent of the gross domestic product, a level most economists see as manageable, according to budget do ents obtained by The New York Times. The deficit number would creep up each year, to $687 billion by 2025. But measured against the economy, the deficit would remain stable.

The debt, while growing every year, would creep down from 75 percent of the gross domestic product this year and next to 73.3 percent in 2025. Those levels are higher than at any time in the nation’s history except for World War II and its immediate aftermath.

http://www.nytimes.com/2015/02/02/us/obama-budget-to-seek-to-stabilize-deficit-and-address-income-inequality.html?partner=rss&emc=rss

Dems' tax and spend is a of a lot better than Repugs borrow-and-spend (increases the deficit under Repug Prez since 1980)

[xrayzebra]

"Greece will be isolated from the rest of Europe"

Letting Greece in, with its corruption and lax tax collection among many other major issues, was a mistake, and many knew it back then.

boutons you should be happy now that the commies have the power. And we know how good they are at running governments.
Remember the USSR.

[Winehole23]

The elephant in the room is that we all understand that there is a point where continuing to increase the deficit has a tipping point where there is nothing left but bad outcomes.

is the deficit out of hand now? compared to when?

[Winehole23]

and compared to whom? we're the ing USA.

[CosmicCowboy]

and compared to whom? we're the ing USA.

Why the even have a budget? Lets just give everyone everything they want. What does it matter? We're the ing USA!

[boutons_deux]

Why the even have a budget? Lets just give everyone everything they want. What does it matter? We're the ing USA!

ah, the old "balanced budget" canard, saying the sovereign USA budget MUST balance like a household or company (the vast majority of both are IN DEBT constantly)

[FuzzyLumpkins]

Why the even have a budget? Lets just give everyone everything they want. What does it matter? We're the ing USA!

This is stupid and a strawman to boot. This is a common stupidity you hear on Fox and AM radio. I imagine you understand that corporate and home accounting operate on completely different basis. Why is it so hard to fathom that a similar difference exists as pertains to nation states? Particularly this one.

[CosmicCowboy]

This is stupid and a strawman to boot. This is a common stupidity you hear on Fox and AM radio. I imagine you understand that corporate and home accounting operate on completely different basis. Why is it so hard to fathom that a similar difference exists as pertains to nation states? Particularly this one.

Arrogant little prick.

Of course I understand the difference.

[angrydude]

This is stupid and a strawman to boot. This is a common stupidity you hear on Fox and AM radio. I imagine you understand that corporate and home accounting operate on completely different basis. Why is it so hard to fathom that a similar difference exists as pertains to nation states? Particularly this one.

Because there isn't one when it comes to the fundamentals. Nations are just bigger, have armies, and can spread the pain out to many more people over a much longer period of time.

YEA POVERTY!

[CosmicCowboy]

So you arrogant little prick do you understand the relationship between GDP and deficits? Do you understand that when deficits grow faster then GDP forever it's not a good thing. ing little prick.

[FuzzyLumpkins]

ing little prick. I'm going to double down and repeat myself. If your debt grows faster than your gross forever it's not a good thing.

EN usually takes you to task over your simpleminded fiscal accounting but you are nothing if not pigheaded.

Once you start looking at national debt as not being held by ins utions with authority like in your personal life, and instead look at it as a sovereign debt traded on the open market on a take it or leave it basis you will start to get it. If anything, your scare tactics undermine the confidence that creates the market. It's against US interests to do so. Of course it is a make believe human construct but so is most of law and finance inclusidne what you deal with in your personal life.

You lack nuance. Your not bad like TSA and WC but ffs I hope you have someone do your accounting for you.

[FuzzyLumpkins]

Because there isn't one when it comes to the fundamentals. Nations are just bigger, have armies, and can spread the pain out to many more people over a much longer period of time.

YEA POVERTY!

Who does the US borrow money from and what is the nature of the agreement? fundamentals in an arbitrary construct being applied to a different construct.

[ElNono]

The major (huge) difference between the US and other states is that the US only owes in USD. IIRC, only the US, UK and Japan have what it's called 'sovereign currency'. That is, they only owe obligations in it's own currency and don't need to 'backup' their currency emission against another currency (which is important to have flexibility in spending, and don't fall into the hyperinflation trap mentioned below).

The household accounting trivialization is terrible because nations, whether they have a sovereign currency or not, emit their own money (except rare exception, where the country already decides to use another country's currency, ie: Ecuador).

The worst case for a nation with emission out of control is inflation. It doesn't mean they'll go bankrupt, it means devaluation of the currency, erosion of salaries, etc, all the bad stuff that inflation, at a high enough level, does. This is particularly harmful for nations that have obligations in a different currency, as the inflation makes converting currency to pay more expensive, normally causing more emission, which turns into a vicious cycle that normally ends up with hyperinflation, bank runs, etc.

[ElNono]

But, to answer the question of why have a budget, etc? Well, because you don't want to spend too much if your inflation level is already high, as it does all the bad stuff I mentioned on my previous post.

I think the US does need to be fiscally conservative during the "good times". That is, when deflation isn't on the radar and growth looks sustained. I don't think we're there right now, but we've been there before and we haven't really cutted down on spending, and that's really a problem.

[boutons_deux]

the balanced budget VRWC bull is propaganda hiding the VRWC truth:

increase tax expenditures for 1% and BigCorp and "pay for" the "spent" taxes by destroying the social welfare spending.

iow, balance the budget on the backs of the 99% or even better on the backs of Bishop Gecko's 47% who are lazy, frauds, have easy, simple lives that the 1% pays for, are criminals, moochers, takers.

same old VRWC, predatory, greedy, sociopathic bull .

[ElNono]

I think having a balanced budget is a noble goal... the problem is nobody ever agrees on where to make the cuts or how to increase the revenues.

[boutons_deux]

I think having a balanced budget is a noble goal... the problem is nobody ever agrees on where to make the cuts or how to increase the revenues.

it's useless goal used by the VRWC to enrich the wealhty and screw the poor.