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Archive for the ‘Greece’ Category

Greek Option: NOT Growth vs Austerity

Posted by Larry Doyle on May 8th, 2012 8:07 AM |

Growth vs austerity.

Who would not choose to increase economic growth as the path to future economic prosperity.

The election results in France and Greece over the weekend were a clear repudiation of the austerity packages negotiated earlier this year as the precursor for further German support and the European Central Bank’s LTRO (long term repo operation). That financing directed at European banks was little more than another version of the shell game that has been orchestrated by Bernanke and Geithner on this side of the pond.  (more…)

The ISDA Emperor Also Has No Clothes

Posted by Larry Doyle on March 2nd, 2012 7:42 AM |

Writing down sovereign debt by over 50% and subordinating one class of bondholders from another –those being the royalty ensconced within the European Central Bank — would not qualify as a “credit” event, now would it? No way! Of course not! Why would it?!

Not when those compelled to pay out on the supposed “insurance” within derivative contracts are the royalty within other large international banks, and they sit in the positions of judge, jury, and counterparty in the case.

Welcome to the world of international finance circa 2012.  (more…)

Central Bankers’ Favorite Games: We’re Being Played

Posted by Larry Doyle on February 21st, 2012 10:30 AM |

War. Street hockey. Hide the belt. Kick the can. Flipping cards.

The games of my youth growing up in my neighborhood section of Boston provide very fond memories. The best part of these games was the simple fact that everybody was included, the rules were clear cut, and the older kids looked out for the little guys.

In a manner of speaking, the central bankers of today are similarly engaged in a few different games. What are the games being played on both sides of the Atlantic? Kick the can and charades. Regrettably, the central bankers are not playing by the rules as we defined them.


Athens Today. London Tomorrow? Washington Next Week?

Posted by Larry Doyle on May 5th, 2010 8:20 AM |

With social unrest increasing in Greece, anxieties skyrocketing across the EU, and the Euro making new 12 month lows, the question begs as to whether this crisis within the EU can be contained. Is the EU, with the support of the IMF, willing to collectively underwrite the fiscal disaster currently focused within Greece? The German citizenry is showing very little appetite to subsidize this Greek tragedy.

While the EU’s political fortitude is a critical question, ultimately the reality of the mountainous debt levels must be faced. Global government stimulus has been able to mask, if not outright disguise, these debts for a period, but the debts themselves are not going away. How will the EU address this debt?

1. Devalue. That’s a given. It’s only a question of how and when.
2. Restructure. Look for more on this.
3. Default. Do not discount this reality. (more…)

Greek Bailout Needs Triple

Posted by Larry Doyle on April 28th, 2010 10:44 AM |

Just how big is the financial sinkhole swallowing Greece? Bloomberg just reported that the hole is likely three times the size previously reported. Where does it end? This breaking news is a MAJOR curve on our economic landscape. (more…)

Greek ‘Drama’ Only in First Act, or ‘Beware of Greeks Bearing Gifts’

Posted by Larry Doyle on April 6th, 2010 1:42 PM |

Prior reports that Greece’s financial problems are now in the rear view mirror are exceedingly premature.

As we navigate ‘across the pond,’ we learn that the Financial Times’ Wolfgang Munchau believes Greece Is Going to Default but Not This Year:

Greece will not only have to make an extremely large public sector deficit reduction effort but it will also have to do this under a condition of disinflation, and possibly deflation, which would push its nominal growth rate to negative levels during the adjustment period. That, in turn, would jeopardise the debt reduction programme of both the public and private sectors. Under those circumstances, there is no way that Greece could ever stabilise its debt-to-gross domestic product ratio, no matter how hard the government of George Papandreou tries.

To get out of this mess, one of five things will have to happen. (more…)

Greek Financial Crisis>Political Crisis>Social Crisis

Posted by Larry Doyle on February 25th, 2010 8:35 AM |

I would equate the forces at work underlying our global economy akin to shifts in the earth’s tectonic plates. There is no doubt that we experienced a sizable financial earthquake in 2008. The question now begs whether that seismic shock was the culmination of events or merely the precursor for greater political and social shocks over the next period of years.

We see evidence of further tectonic slippage and resulting instability out of the Euro-zone overnight as rating agencies are threatening to downgrade Greece’s sovereign credit. (more…)

Goldman’s Gerald Corrigan: Best Defense is Good Offense

Posted by Larry Doyle on February 23rd, 2010 11:15 AM |

$300 million is a lot of money.

Was it enough for the preeminent firm on Wall Street, Goldman Sachs, to risk its reputation? Apparently it was because that is the reported figure Goldman earned from transactions it structured and executed with the nation of Greece to help hide that nation’s fiscal woes. I do not discount that Goldman took risk in these transactions, but $300 million is a lot of money.

Believe me, every firm on Wall Street would sell its soul for a lot less than that. Goldman Sachs was not the only firm on Wall Street to enter into derivative transactions with Greece or other nations to cover declining fiscal positions. Goldman is merely the highest profile firm.

What does a firm like Goldman do now that it is being besieged by regulators, central bankers, and national leaders, primarily Angela Merkel of Germany, for structuring and executing these transactions?  (more…)

Goldman Sachs: ‘The Great Enabler’

Posted by Larry Doyle on February 17th, 2010 2:28 PM |

As more details are released about Goldman Sachs’ derivative transactions that allowed Greece to disguise its overall financial health, the question begs as to the integrity of this very storied Wall Street franchise. In short, I would define Goldman Sachs as ‘The Great Enabler.”

How did ‘The Great Enabler’ operate? Recall that Goldman CEO Lloyd Blankfein indicated a few months back that Goldman Sachs was doing “God’s work.” He failed to mention that the deity to which Goldman prayed bleeds green. Additionally, the prayer which Goldman offered was nothing more than ‘maximize revenues now, worry about problems later, and keep your mouth shut.’

For a peek inside Goldman’s prayer book, let’s review a recently released report from Bloomberg,  Goldman Sachs, Greece Didn’t Disclose Swap Contract:>>>> (more…)

Greece Facing “Titanic” Problem

Posted by Larry Doyle on February 16th, 2010 10:38 AM |

April 15, 1912. Early in the morning of this fateful day, the unsinkable Titanic went below the waters of the icy Atlantic and sank to its eventual berth on the ocean floor.

In the process of hitting the iceberg that dealt the Titanic its fateful blow, the air of invincibility surrounding this greatest of ships became an air of inevitability.

With all due respect to those who perished that cold night in those icy waters, are we witnessing a similar dynamic playing out on our global economic landscape for the once proud nation of Greece?

Were derivative transactions executed on behalf of Greece by Goldman Sachs mere band-aids covering massive holes in the hull of this once proud nation? No doubt. (more…)

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