Goodbye Yanis

Yes….. Goodbye Yanis

Nice to have known you, for a short time.

In politics there are no friends, especially when one speaks the truth.
You see, Yanis has put forward a paper on how Greece can repay its debts. The problem is that a situation has developed, whereby the EU themselves have disinherited the Bank of International Settlements own recapitalization procedures.

So therefore the EU want to get rid of this cagey Greek, Aussie, Greek professor who has stated plainly that Greece is busted.

There are ways and means to repay debt, one is negotiating the interest rate to zero and paying back the principal first, over say 30 years, roll the fucker over to never never land. Then discuss the interest.

So Yanis proposed a simpler way in that Greece set up a “Bad Bank” to house the bad Greek loans and the EU response is that they are “baffled” since it doesn’t address the financing of the bad bank.

Mamma Mia, (yes there is a reason for this language, read my prior posts) the EU knows full well how these ‘Bad Banks’ are financed. They are not dumb, they want Yanis to disappear, simple.

The Bank of International Settlement’s Paper on “Weekend Bank Recapitalizations” published in 2013, states implicitly that these loans get marked to ‘market’ (as they are not worth human excrement). Yes a place where doubtful loans go to lose their smell, die a natural death, with a sell off to collection agencies to raise monies. That is to say pass the buck to a third party, cash in hand please.

And the creditors, who are plentiful, get equity in this bad bank. They get a dividend from whatever shit is sold, at the current market rate. In other words, the creditors are fucked.

Anyway ignoring the obvious the EU are fully aware of how bad banks operate, as Spain and Portugal have a few, so do the US. Their attitude and demeanor against Yanis is all due to the simple fact that he spoke the truth, Greece is bankrupt on current debt with interest payments to their capacity to repay.

Wow, hold on, Yanis must also be aware that there will be no German War Reparations nor will any of the prior loans to Greece be classified as odious and illegal…. So there is method in his madness, but when a politician from a bankrupt country stands on the EU bureaucracies toes, there are consequences.

So goodbye Yanis, nice knowing you. The seat at the University is still open, and yes you can finishing writing your book.

For reference, here is the most recent data on Greece’s debt:

EU130.9b of EFSF loans
EU52.9b of loans from euro-area member states
EU39.4b of privately-held bonds
EU21.2b of IMF loans
EU19.8b of bonds held by ECB under SMP program
EU14.9b of treasury bills
EU9.8b of short-term repo lending
EU7.3b of bonds held in euro area central bank investment portfolios, known as ANFAs
EU7.1b special multilateral loans from abroad (EIB)
EU5b of other lending from abroad
EU4.3b of Bank of Greece loans
EU0.1b of other domestic lending

Understand that all of these loans can be renegotiated, as the creditors; those bumbling idiots scrambling for a higher rate of return; want their capital back.

The IMF is a different story. A crude bank of last resort, with mandatory payments of principal and interest otherwise they dictate no trade with any other country. A real pariah of a bank, no negotiation whatsoever.

So, all things being equal (which they always are in economics) then technically all loans (other than the IMF) could be rolled over to infinity on low interest payments, or principal only repaid over next 100 years.

Should Greece then radically reform it’s domestic situation, the whole debt could be repaid. Mind you this would involve a drastic restructure domestically, which Yanis would puke over.

As the major item in their GDP is tourism, then cancel income tax and introduce a 20 percent Value Added Tax…. simple, the Greek islands hospitality would save the Greeks. But hold on .. I have had 11 beers this evening and too many trips to the toilet. That actually makes sense in my current frame of mind… Get the tourists to support the economy, where do they come from? …. Hehe Europe … 3 million a year…. what a blowjob.

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