GREECE: Not a tragedy or a marathon any more, just khaos and perispasmós*


Berlin’s anal retention of Greek debt is ridiculous in the context of broken China

Unusually for me (and it bounced back anyway) I sent an email to the EC this afternoon asking if Germany would be footing the bill for a Summit it kicked off by saying, “We are not budging a millimetre”. As the diktat – a carefully chosen German word – came from Berlin’s Finance Ministry, it represents a gross (another German word) dereliction of duty from Schäuble’s fiefdom of bile. It would have been courteous to the taxpayers he so often claims to represent, would it not, had the human wheelybin informed us all last week that this was to be their position?

The never-ending American joke about how many people it takes to change a lightbulb has unsurprisingly been applied to the Bundesrepublik in the form of “Ve are NOT changing ze lightbulb!” but in reality what we have here is the EU house heading for complete darkness and thus unable to read the data because the Germans refuse to replace the dead lightbulbs.

Let me try if I may to put all this prancing, preening, scheming, spinning and stamping of clay feet into some kind of context. In the last twenty four hours, the Shanghai index has fallen 8%. A 12th of its value. A lot.

In $US, the losses come to 600bn over that period…four times the real debt owed by Greece after five years of ‘bailout’. In the last fortnight, the Shanghai valuation loss has eradicated over $2.4 trillion in wealth—a figure roughly 10 times the size of the Greek economy.

The European Union – and the Commission specifically – has established since 2008 a reputation for one thing above all: being surprised by every eventuality. The North/South imbalance in the eurozone, the deflationary effects of embracing former Soviet satellites, the North African migrant disaster, the failure of austerity…all of them either surprised the amateur red-carpet thespians on the Great International Stage, or are still being denied as facts. These Amdrams are, in reality, like wannabe celebs pitching up to the Oscars having not gained a single good review in years.

So we can all rest assured that – when China Syndrome destabilises the world’s biggest economy by volume, and contagion charges headlong via Japan and Australia into the West – the EC/Eurogroupe/Creditors/Gangsters/Troika2 or whatever they want to be called this week will be….surprised.

This is not in any way to denigrate the Greeks themselves, whose population may be small but whose resolve deserves our unalloyed admiration. Rather, it is to remind all our listeners how the altered reality that put them on the sacrificial altar of the euro is coming home to roost: the amount the Greeks ‘owed’ in 2010 has gone up – some bailout, huh? – but it still represents a homoaeopathic 0.21% of what Shanghai alone will lose if the bourse nosedive there continues at its current rate.

That said, I must confess to finding myself confused as to what the post-Varoufakis Greek negotiation thinks it is at. After being elected, Syriza called out ‘no more bailout programs’ as a Red Line it would never cross. Now it transpires they’ve asked for three more years of the same. Am I missing something here – what is this going to achieve beyond making the improbable impossible?

On the other hand, perhaps Varoufakis replacement Tsakalotos has taken one look at (a) the Shanghai meltdown and (b) this morning’s hugely convenient ‘glitch’ on the NYSE to decide the Planet is screwed, so what the Hell, let’s just string this out.

But the New York bourse ‘event’ is just one more thing the Troikanauts need to have on their radar. Bear in mind that this time around, however, the self-styled ‘creditors’ are not, on the whole, savvy Wall Street bottom feeders: in this the sequel they are Belgian, German, Dutch, Italian and Finnish. So – more Tower of Babel than Street of Mammon.

Not a peep has come out of any media liaison EC group about the obvious China contagion that almost certainly played some role – however convoluted – in the NYSE trading problem today. The Exchange PRs themselves hilariously promised that it would be “open for the close” – perhaps the Freudian Slip of the year to date – and we’d all do well to note that prior to the glitch, China knock-on was depressing both stock prices and commodity futures.

On a broader canvas, it will no longer do to dismiss glitch events as conspiracy theory. As I’ve tried to point out endlessly over the last ten years, Gold prices, Libor rates, QE, Zirp (and US bullion holdings on behalf of others) all turned out to be blatant fact, not theory. I think we need, from now on, to see every claimed outage as a potential outrage.

* Perispasmos is a Greek word meaning distraction. While the khaos in Europe is distracting from Armageddon elsewhere, that is no conspiracy; rather, it is the triumph of ego over ergo.

Earlier at The Slog: Budget Day bollocks, bonkers bailouts and Beijing bust

30 thoughts on “GREECE: Not a tragedy or a marathon any more, just khaos and perispasmós*

  1. If you find the video of Farage berating the EU for flogging the dead horse that Greece now is, you will see Tsipras looking like he has just been told he has a terminal illness.

    Despite Nige’s rallying cry Tsipras continues to look like a particularly wet week in July, I think it is all getting to him.


  2. The NYSE probabley uses Tandem computer systems on the trading floor. These are also known as Non-Stop computers specifically designed for the task. If there was a ‘technical glitch’ then it must have been someone powering the system down. I used to work on these beasts, and a power down isn’t just a matter of flicking a switch, it takes a number of minutes to take out the entire array, giving plenty of time for the system monitors to have been alerted.


  3. IP thanks for the link…… Tsipras was definitely not looking happy when Nigel held the Euro door open and said what a brave leader it would be indeed to walk through it.


  4. As JW points out, Greece, although very sad and tragic is not the cautionary tale that Nobsore purports it to be. Boy George stood there at the dispatch box like some kind of deranged headmaster. He ignored the fact that China is ready to implode and probably take much of the global financial system down with it but he couldn’t mention this because the Chinese have been blowing property bubbles on an industrial scale – ones that George must be envious of.

    The right leaning press are treating him like some kind of messiah but he is nothing of the kind, he is still wedded to his neoliberal fantasy economics, he has just found ways of obfuscating the pain so that the already disenfranchised feel it worst and will die quietly in the gutter rather than making their point via the ballot box.


  5. A new bank, maybe called, Fiat unit common karma emergency credit bank of Greece a sort of hybrid credit /debit card issuer is called for, based on a bitcoin protocol. It should allow all resident Greek citizens a subsistence +?% credit to draw on, based on a daily allowance but available monthly in advance. Everyone who signs up must agree to pay the money back, and agree to the terms of credit. These would be a 2% transaction tax, a 5% charge for converting to cash or other currencies [+2% transaction] and a 5% charge on all credits/debits on the first day of the new financial year. To give the ‘currency’ credibility the gov. would accept them at par for euros as payment of taxes. This ‘money’ would remain totally hypothetical and electronic well maybe.


  6. So, one might reasonably conclude that the Shaghigh index is all f*cked upwards, fnar. Reckless money creation and it’s best friend misallocated capital have held sway for far too long and have been allowed to do so by a debased political currency. As has been predicted, gravity must at some point overtake depravity and it may be that time is now getting close. The progression of symptoms is all too visible: distortion leading to extortion followed by exhaustion and collapse. Not a pretty sight.


  7. This was threaded by TFS in the earlier post and I was struck by Tsipras’ obvious discomfort. However, Tsipras, being an honest socialist, is more inclined to remain within the EU/EZ and cannot, therefore, willingly deliver what many who wish Greece well would like to see, Grexit; he will only do this in the last resort. NF presents the issues in a cogent manner, not too difficult, and yet remains unattractive; he’s a bruiser, not a thinker, and his shallow intellect does insufficient service to an otherwise worthy cause.


  8. O/T
    I was wondering if John can enlighten us about the details of the budget on wednesday….
    If minimum wages are going to rise to a comparatively whopping £9/hour in the UK – is this due to sudden inflation in the forecast – or is it that employers will be increasing productivity and sacking workers – thereby increasing unemployment by an ever increasing amount??? Presumably the higher wage will attract even more foreign workers , and therefore increase pressures on the British infrastructure to breaking point – NHS, DHSS, etc.
    What’s going on here please?


  9. Uncle Rob, employers and shareholders could take less for themselves but you seem to have missed that option.


  10. “Homo homini lupus est”.
    This phrase is recurring at an alarmingly high frequency these days.
    I seem to have developed a slight Pavlovian syndrome.
    Every time I think of this phrase a screeching wheelchair storms in my mind.


  11. Yes, I too have had a wonderful holiday in Greece.
    Even learnt a few words. Bought a lovely plastic model of the Acropolis.

    I too have lots of hardworking honest Greek friends,and for a while, lived in the worlds second biggest Greek city (Melbourne).
    But my hardworking Aussie/Greek friends who came to Australia with nothing, have worked hard and made a significant contribution to Australia do not blame the Germans or the others such as the troika or Lagarde for the mess
    They ask (as they should), who really runs Greece?
    Who are the Greek power elite that got them into the mess in the first place?
    The Oligarchs? The couple of thousand families who exploit the system and do not pay tax?
    The Ship Owners? Ditto. No tax
    The Military? A significant part of the Greek debt to Germany is for military equipment bought on tick due to the supposed threat of Turkey
    The Greek Orthodox Church that does not pay tax either and has a significant part to play in Greek politics and society.
    If you have debt you are expected to repay it.
    What part did these groups have in the establishment of the debt and how have they profited?.

    Forget the school yard impersonations redolent of Hogan’s Heroes and ‘Ello, ‘Ello, and do something meaningful for those hard working ripped off Greeks and consider the power relations in Hellas and how some in that country who are exploiting others
    Have a proper debate with all the facts not just Sergeant Schultz impersonations.


  12. rb0161
    Pardon? Get real jackass.
    Employers don’t owe anyone a living – and would rather close the doors than work for nothing.


  13. Anon,
    It’s not the Greeks who should be doing this. It’s THE GREEKS- the power elite who have been ripping off their country and the people within it.
    The socialists were only elected because they allowed it. When it has all turned to custard (or proper Greek yoghurt), the socialists will be blamed, Greece will exit, and the power elite will establish another government and another economy either run by the military, the oligarchs, the ship owners, the church…They will do well out of it.
    To not repay the debts owed, will suit them Very Nicely Thank You.
    When Greece first entered the EU the oligarchs bought loads of wheat cheaply from the then Yugoslavia. They then sold it on through the EU and made a massive profit. This is only one small example of their mendacity and their lack of resect for other Greeks.
    Let’s have a proper debate.


  14. You may be suffering from a lycanthropic conditioned reflex neurosis. Try to imagine the wheelchair going over a cliff accompanied by the heavenly choir – or what we doctors call a flock of angelas.


  15. This is gonna be painful for far more people than the Greeks as the tsunami gathers up steam.

    And when it is all over………things will continue with the next round of political skullduggery and international fraud all sold to the ignorant public by the presstitute media.

    here we go again……nothing will change until political skullduggery is punished with treason. Cameron/Osborne have allowed our National Security and Democracy to be comprised by financial terrorists and by being a vassal state of Amerika. They should be in prison or facing a drone attack.


  16. And the truly sad thing is that probably don’t even realise it. As I keep telling people, politicians (particularly the modern ‘professional’ politicians) for the most part do not understand economics, science, education or any other discipline. The greatest catastrophe to beset the UK has probably been filling the Civil Service, the body supposed to supply the understanding and facts of all those disciplines, with Arts graduates who in truth know no more than politicians with their PPEs.

    So these people do not understand and have no expertise in these areas and the people supposed to advise them are the same. What do they do? Well what else can they do, they go to ‘friends’ and cronies they think follow the same ideals they think they believe in that they think have knowledge, understanding, success or experience in those areas for advice. Which those people are only to pleased to supply. The fly in the ointment of course is that those people are generally not politicians nor are they interested in good governance or the common good and the betterment of all. They are primarily interested in themselves, their success and their status and that is the basis on which they advise the politicians. Simple really.


  17. TFS
    YES. YES, and one more YES for the naïve (and stupid)
    Yes. Let’s have a proper debate other than naïve dislike of The Hun. It is wider than that. Who’s ripping off who.? The poor sod begging in Athens is the one being ripped off by a power elite made up of his own people.
    Let’s call Them to account and put the debate on track.


  18. As I warned months ago, there is no way forward for Greece under Tsipras. He is a compulsive liar and fantasist – a man who can still joke around at summits while the Greek people can’t even use the bank.
    Sadly, far too many people mistook his recklessness and stupidity for ‘courage’ , including the Greeks themselves (egged on by an American-dominated media that wants the euro to fail) – and Greece has paid a terrible price as a result.


  19. I note your surname is ‘Freund’. Something of a giveaway my little Schnitzel. If you don’t want to get personally abusive, then don’t. The house rules here are very clear.


  20. Oops, sorry. Couldn’t find the meaning among the ego and the silly German impersonations. Must be that silly PhD in logic and argument. Drat!


  21. Bit early for such attacks on Tsipras. He may, in fact, be making the very best of a very bad situation. He may be courageous. Greece was going to continue to pay a terrible price anyway, so do not accuse him of this, he asks for sacrifice from the people, let’s hope he makes the most advantageous deal leveraged on that pain. I support him.


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