Counterparties: Greece votes

June 15, 2012

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On Sunday Greece will hold yet another election, which is being widely portrayed as a referendum on whether it will stay in the euro zone – even if, among the main political parties, only the communists want to ditch the euro. The resurgent leftist Syriza party, which has vowed to reject the euro zone’s crippling bailout requirements, is the strongest opponent of the conservative, pro-bailout New Democracy party.

As the election nears, reports from the field in Greece are getting increasingly grim. The WSJ spoke to one writer whose friends are “hiding money in jars, under the bed, even burying it in the mountains” in the event of post-election chaos. This is more rational than it seems: In just one year unemployment is up 57%. Greece’s healthcare system is barely hanging on, as underfunded and understaffed hospitals struggle; some Greek diabetics have been unable to get insulin. Late last year, Greek suicides were found to have increased by 40% over the same period in 2010.

What can we expect to happen on Sunday? FT Alphaville has some concise answers (to the extent that answers exist). We won’t learn anything definitive about Greece’s membership in the euro zone on Sunday; expect an unclear result, which could open the door to a new government coalition that will try to keep Greece in the euro. Nearly 80% of Greeks, polls show, want to remain in the euro zone.

For cultural background on Greece’s crisis, turn to Nikos Konstandaras’s brutally frank, must-read NYT op-ed. Konstandaras, a top Greek journalist, holds out little hope for any of his country’s fractious political parties. A recent study, he writes, suggests that 7 out of 10 Greeks between the ages of 18 and 24 hope to leave their country for a better economic climate. This social catastrophe, which he likens to the fall of Constantinople, was at least partially self-inflicted:

What I want to remember from Greece in 2012 is how laziness and years of intellectual sloppiness can waste the gift of freedom and leave open the gates of the city – how we allowed our leaders to pander to us until we had no one capable of leading us, no one next to us at the barricades.

– Ryan McCarthy

On to today’s links:

EU Mess
The EU smiled while Spain’s banks cooked their books – Bloomberg
The man named international stock picker of the decade is betting $1 billion on European banks – Fortune

Why newspapers were doomed all along – Harvard Business Review

“The most interesting question in this whole saga is why they didn’t just lend those funds out” – FT Alphaville

What Obama could accomplish in a second term, as “cooperative idealism gives way to hard-nosed realism” – New Yorker

Data Points
Facebook knows your country’s “gross national happiness” – Technology Review

Consider Yourself Warned
The human impact of America’s latest drug hysteria, bath salts – Spin
Drug panics, bath salts, and face-eating zombies – Jack Shafer

Calling all Japanese college students with economic insights: The IMF is launching an essay contest – IMF

Right On
The Obama administration will stop deporting younger undocumented immigrants – Huffington Post

A map of NYC rappers’ neighborhoods of origin – Very Small Array

Old Normal
“The willingness of homeowners to carry housing debt has been radically altered” – Bloomberg


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I didn’t find that NY Times op-ed a “must read.” I found it quite hysterical. Things are bad, to be sure, but to compare this to the fall of Constantinople or the expulsion and murder of Greeks in Anatolia… that is just silly.

We need to get a grip. It will be grim if Greece leaves the Euro, but perhaps no grimmer than things are now, and almost certainly won’t be marked by mass murder.

Posted by f.fursty | Report as abusive

@RyanM – about this part -

“A recent study, he writes, suggests that 7 out of 10 Greeks between the ages of 18 and 24 hope to leave their country for a better economic climate.”

Wherever they go, they’ll just be bringing the malignant Greek mind-set with them, won’t they? If the HuffPo piece is accurate, look for them to end up Stateside – and up to their Greek eyebrows in student-debt in like no time at all. That should please quite a few posters on this blog-page.

Anyway – bet you 1 gram of Felix’ gold that Sunday’s election turns out to be almost as much of a yawner as Y2K – remember that? Game?

Posted by MrRFox | Report as abusive

(quote) “Greek eyebrows in student-debt”

not all EU universities charge tuition fees

it is repugnant to human decency to condemn all Greek people for the ugly, corrupt, mendacious (…. add your own vilification) behaviour of greek politicians and their fakelaki economy

there is a difference between criticising political governance in a country and stereotyping its ordinary inhabitants

the younger Greek population should find happier prospects in the EU single market – at least temporarily

the malignant mindset of global vampire g$ldman-sachs would be more accurate

Posted by scythe | Report as abusive

Nikos Konstandaras article was reflective and well-written

@ f.fursty – reference to the constantinople and asia minor in the penultimate article was a mere three lines – one sentence;

methinks you protest too much

Posted by scythe | Report as abusive

@Scythe – Oh please cut me a little slack, Scy, and then answer me one question about this –

“it is repugnant to human decency to condemn all Greek people for the … behaviour of greek politicians and their fakelaki economy”

Is it also repugnant, politically incorrect and un-Felix-blog-like to inquire if maybe – just maybe – the Greek political system is the way it is because the Greek poeple are they way they are?

Posted by MrRFox | Report as abusive

@MrRFox, the youth are rarely in charge of the political establishment. A common thread between the US, Egypt, and Greece perhaps?

Posted by TFF | Report as abusive

@TFF – youth are rarely at the power-position of anything. Last time I can recall something approaching that was in Cambodia with the KR. Even then, they were pretty much front-line only. What difference does it make, anyway? – unless you presume the young are more upstanding than their seniors. That hasn’t been my experience anywhere in the Third World over the past 20 years.

Posted by MrRFox | Report as abusive

What difference does it make? If you wish to criticize the power structure, don’t blame it on the young. That’s all. Sometimes the younger generation follows in the footsteps of their fathers. Sometimes they strike a new direction. Either way, the present situation is not their fault.

Posted by TFF | Report as abusive

We just made a video on the Euro Zone situation.

Get your Macro Right! Show is the third video of the Fun & Finance´s Second Season.

In this episode –recreating a television game show- we talk about: the role of Central Banks, the Euro Zone, Latin America, among other subjects.



Posted by Besanson | Report as abusive

The crisis in Greece is a reflection of the crisis throughout Europe. What happens is that a country is small and more vulnerable. But the problem is the same. I think we are witnessing one of the greatest crises of recent times. We must be prepared to withstand this crisis … and if possible, benefit from it. It may sound hard, but it is our personal responsibility and family.

Posted by Stocktipsinvest | Report as abusive

(quote) “the Greek political system is the way it is because the Greek people are they way they are”

fatuous logic – equally impossible to argue that all americans are war criminals because they elected two presidents convicted of war crimes

prejudiced, stereotyped thinking

we don’t need a comments board to argue that there are honest greek citizens frustrated by the fakelaki political system

similarly there are good israelis and rabbis opposed to the immoral activities of their government against palestinians – you don’t condemn all israelis/jews/rabbis on the basis of netanyahu’s government

george bush jnr come to mind?

you already know this – but you can have some slack in so far as change has to come from within greece and the greeks

Posted by scythe | Report as abusive

Couple of things, how did the Greek crisis come about? Greece was a poor debt risk prior to the EU Zone inclusion who suddenly they became AAA rated because they moved into a high class neighborhood. IMO the people that loaned them the money are more culpable than the borrowers. There was no change in the conditions, and the lenders had no reason to offer generous terms to a known risk. Now whether this will factor into debt negotiations is unknown; however, when the haircuts and Grexit come about, I’m leaning towards banksters and credit rating agencies for paying the biggest portion of the check.
BTW can someone inform me which US presidents were “convicted”? I am aware of two being impeached, but not being convicted by the Senate. I have heard of Chomsky’s famous claim about culpability under Nuremberg rules, but I am unaware of any brought before any tribunal, let alone convictions. Perhaps the reader thinks Charles Johnson was a US president.

Posted by OnkelBob | Report as abusive