Help, explain this to me..bonds 17%??

[deziloooooo]

As on other threads I have put up, I will add new articles on already posted threads that deal with the same topic where possible and feasable. This one deals with Greece, it's financial woes...scroll to last aticle posted, will have same header as shown on the posted thread.
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For those who might have not been following, Greece has really fallen into the deep doo doo of nations with bad financial problems.

They have a loan of Euros that is contingent on their making drastic cuts in services and expenditures which are naturally hurting the Greek populace. More cuts will be needed or they will not get any more loans which will be needed to see if they can get through this crisis.

The populace have taken to the streets in anger and demonstrations to protest the cuts..saying the loans should be renegotiated.
What if the EU does not want to renegotiate..just walk away if they don't clean house and make those concessions, is what I was thinking.

The PM has offered to step down, yet the opposition doesn't seem keen on taking him up on that offer, at least yet.
I wonder if it isn't because they don't have a clue what to do either..thus better to let him stay in power , take the brunt of the criticism and for them to stay on the side lines joining the demonstrators in saying No, No..to the cuts..but not having to offer any ideas that would be a improvement on his plans to meet the EU demands.
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english.aljazeera.net/news/europe/2011/06/201161572136449774.html
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Europe

Greek PM offers to quit amid protests

Papandreou pushes for unity government as protesters clash with police in capital Athens over austerity measures.

15 Jun 2011 14:21

George Papandreou, the Greek prime minister, has offered to step down to facilitate the formation of a unity government to pass austerity measures, state TV reported.

His offer on Wednesday came hours after protesters angry over sweeping spending cuts clashed with riot police in the capital Athens.

Papandreou said the new unity government must support the EU and IMF bailout, and should not seek to overhaul it.

"Prime minister Papandreou talked with Antonis Samaras [head of the conservative opposition] today and proposed that if the two agreed on a framework of specific commitments for changes in the country and the political system and specific targets, he would be willing to stand down from his office," a government source told the Reuters news agency.

The opposition conservatives responded to the premier's offer by stating that a unity government was only possible if Papandreou resigned and if the bailout was renegotiated.

Street clashes

The day's political developments came as the government debated fresh austerity measures that would extend beyond its term in office amid violence on the streets of capital.

Protesters rallied outside parliament chanting "thieves, traitors" and asked "where did the money go?" as they demonstrated amid a 24-hour national strike organised by major labour unions which saw hospitals, transport and other public services crippled.

Small groups of youths threw stones and petrol bombs at police cordons, and smashed the windows of a luxury hotel on Syntagma square, outside the parliament building.

Police responded to the violence with tear gas.

"I feel rage and disgust," Maria Georgila, a 45-year old public sector workers and mother of two, told the Reuters news agency.

"These are very tough measures and they won't get us out of the crisis. I can't believe they have no alternative."

Alan Fisher, Al Jazeera's correspondent in Athens, said: "There is undoubtedly anger on the streets ... we've also seen people wearing entirely black, putting on masks and goggles."

According to police, 20,000 people turned out for the demonstration, organised by two major unions, although local media put the figure at 40,000.

Another 20,000 people demonstrated in Greece's second city of Thessaloniki, authorities said.

Steep cuts

Greece has to pass a 2012-2015 austerity programme worth $40.5bn by June-end or face being cut off from rescue funding by European countries and the International Monetary Fund (IMF).

The measures including a five-year campaign of tax hikes, spending cuts ans sell-offs of state property.

However some politicians in the governing party have publically criticised the new cuts, with one of them defecting on Tuesday, reducing Papandreou's parliamentary majority to five.

With its credit rating deep in junk status, Greece is being kept afloat by a $159bn EU-IMF rescue loan program and will need additional support to cover financing gaps next year.

To meet its commitments, Papandreou's Socialists abandoned a pledge not to impose new taxes and drew up a four-year privatisation programme worth $72bn. This has fuelled ongoing protests against austerity by public utility employees and other affected groups.

US-based financial services company, Standard & Poor's, slashed Greece's rating to CCC on Monday, dropping it to the lowest of 131 states that have a sovereign debt rating.

This indicates that Greece's creditors may have less chance than Pakistan, Ecuador or Jamaica of getting their money back.

This is a surprising low for Greece as the country still had a stellar A-rating despite a hefty debt burden in January 2009."
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I remember seeing a interview with "Papandreou", the Greek PM, with Fareed zakaria when he first took office.

He explaines the problem and what I remeber most about the interview was his acceptence of the possibility that the cuts and decisions he was going to have to make because of the Financial crisis might not be acceptable to the greek populace, and if not..and he would have to step down, then so be it.

He was not that concerned about having to be politically correct to satisfy the populace if it meant he would have to offer less then was necessary to get the country back to a normal situation and if he had to leave power , he had been here before, then he had to leave power, but to just do the political correct steps to stay in power was not his thing...

Looks like he meant what he said back then, which wasn't that long ago as these things go.

From what I see and read , it doesn't seem that the opposition and even some of his own party members in some cases are being honest with the populace , possible more concerned in staying in power, for what ever that means, and just doing the political correct things to satisfy the populace .

The Greek populace, who really, probably , have no clue as to how things really are , how bad, and are not being told by all those in leadership positions that they , Greece, IS between the Rock and the Hard Place, they have no choice, not to agree to these draconian measures , by not doing so will only make it worse on them and their country.

Naturally that is IMHO , .

[wyouser]

Couple additional articles, Finance.yahoo.com/news/Greeks-Socialists-in--apf-1851936530.html?x=o "State TV Greek Socialists in power sharing talks." also refence 2nd article, Stocks slide 1% as Greek crisis turns violent. The Eu story that wont go away.

[wyouser]

You have to wonder if we will see any tumoil here as state austerity measures kick in (reference the thread on the Wisconsin Supreme court decision on unions in that state)

[deziloooooo]

Jun 15, 2011 11:48:57 GMT -5 wyouser said:

Couple additional articles, Finance.yahoo.com/news/Greeks-Socialists-in--apf-1851936530.html?x=o "State TV Greek Socialists in power sharing talks." also refence 2nd article, Stocks slide 1% as Greek crisis turns violent. The Eu story that wont go away.

--------------------------------------
Thanks for the link wyouser, good article to bring up to date, appreciate it. I did pick this up[ see below in " ]..and wonder if it is being told to the People straight out, by all parties, ..also, will they be able to negotiate a better deal..I would think they bargained hard in the first go around....

"But the new austerity package must be passed if Greece is to avoid bankruptcy. The country has been dependent for the past year on a euro110 billion package of bailout loans from other European Union countries and the International Monetary Fund to prevent it from defaulting on its debts"

That above has to be conveyed to the people by ALL parties,..which when you think about it...political parties agreeing on anything, not trying to one up the other..think here in our little corner of the Globe is my thinking..Good luck to them.

[Deleted]

I just heard the Dow JUST dropped 200 points, and that it is about Greece....

[deziloooooo]

Jun 15, 2011 14:02:08 GMT -5 @krickitt said:

I just heard the Dow JUST dropped 200 points, and that it is about Greece....

For those who are active traders, 200 point drop, may be a good time to buy.

[wyouser]

perhaps, but it also shows how interconnected we are in this global economy. Lot of nervousness if the Greek thing cant be contained that we could see much higher interest rates required in order to attract buyers for the debt. Just a thought.

[deziloooooo]

Jun 15, 2011 16:05:00 GMT -5 wyouser said:

perhaps, but it also shows how interconnected we are in this global economy. Lot of nervousness if the Greek thing cant be contained that we could see much higher interest rates required in order to attract buyers for the debt. Just a thought.

Good thought..also, can you imagine the fall out if WE do NOT increase our cap...the results , world wide..here ...Compared to the Greek situation....

[thyme4change]

The populace have taken to the streets in anger and demonstrations to protest the cuts..saying the loans should be renegotiated.

They would be better off actually working and getting their economy started again.

[deziloooooo]

It seems opposition partys have no interest in trying to solve this mess, so Papandreou will form a new governemnt and ask for a vote of onfidence thursday...

stay tuned for the next chapter...he is not backing down as to what he will do as PM...
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PM, George Papandreou , to form new Government..

George Papandreou, the Greek prime minister, has in a televised address said he will form a new government on Thursday and seek a vote of confidence from his PASOK parliamentary group.

His announcement on Wednesday came shortly after the opposition turned down his offer to stand down to facilitate the formation of a unity government for passing tough austerity measures.

"I will continue on the same course. This is the road of duty, together with PASOK's parliamentary group, its
members, and the Greek people," Papandreou said.

"Tomorrow I will form a new government, and then I will ask for a vote of confidence," he said.

He had earlier said the proposed new unity government must support the European Union and International Monetary Fund (IMF) bailout, and should not seek to overhaul it.

But opposition conservatives insisted a unity government was only possible if the bailout was renegotiated. Greek opposition leader Antonis Samaras called for early elections after talks to form the unity government failed.

"It is clear that the only one who can deliver a solution now is the Greek people," Samaras said in a televised statement on Wednesday

[deziloooooo]

Just read the latest on the Greek financial crisis and as I read the article , while it seems a complete melt down has been averted, for now, I couldn't believe my eyes when I saw Greek Government Bonds return is going to be just shy of 17 %.

To this untrained financial shlub, that seems nuts and unsustainable , almost like the obligation the Germans had after Versailles , WW1 armistice, where the victorious Allies, less the US on that one, put such a bind on the Germans , well ..we know how that turned out..impossible to meet , currency , inflation went to levels unsustainable, terrific unemployment and no production by Industries, and finally Herr Hitler showed up with a solution and away they went.

I realize the risk for the loans but still..17 % , Government Bonds, compounded itnterest..year after year..the people who are objecting, possible they have it right, to me unsustainable, just a matter of time complete cahos..

Possible that's the idea from the lending nations..get as much back as they can from the loans as fast as they can, as they just feel that in the long/short run, Greece will default..just hoping when they do, others are in power and position to catch the back lash and they are retired in their villas on the Mediterranean or some other nice retirement area out of the line of fire.

Passing the buck so to speak.

Naturally, IMHO.
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news.yahoo.com/s/ap/20110617/ap_on_bi_ge/eu_greece_financial_crisis
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[Click on link to read the article]
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Greece steps back from prospect of debt default


By ELENA BECATOROS and DEREK GATOPOULOS, Associated Press Elena Becatoros And Derek Gatopoulos, Associated Press – 45 mins ago

ATHENS, Greece –

"Greece appeared to step back from the prospect of a devastating debt default Friday after its prime minister quelled chaotic political infighting and Germany softened a contentious demand that the private sector participate in a European bailout.

After two days of dissent inside his Socialist party that threatened to bring down his government, Prime Minister George Papandreou named his main internal rival as finance minister. The move is expected to solidify the support from lawmakers Papandreou needs to pass a 28 billion euro ($39.5 billion) package of steep tax hikes and budget cuts so despised inside Greece that riots exploded outside parliament this week.

European donors and the International Monetary Fund require Greece to pass the austerity measures before releasing the next 12 billion euro ($17 billion) loan from a 110 billion euro package agreed on last year to keep Greece afloat until it reins in spending and increases government revenue.

A Greek default could set off an unpredictable chain reaction that would badly hurt European banks, roil markets and make it harder for other indebted countries to cope with their debts, hiking borrowing costs for eurozone countries"
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"Markets welcomed the developments in Athens and Berlin. Yields on Greek 10-year bonds dropped more than a percentage point to the still sky-high level of just under 17 percent, while the Athens Stock Market closed up 3.8 percent at 1,254.02"

[maui1]

dez- didn't they say the same thing about lehman, just before lehman went under? i am never comfortable with what gov'ts tell their public, as they have many reasons to lie. the 1st that comes to mind is..........."we didn't want the public panic"

[Deleted]

17% bonds based upon a probabilty of 82% default

Kind of tells you the problem in a nutshell

And yes....if we dont get our act together here, this is where we will be in a few years

[maui1]

And yes....if we dont get our act together here, this is where we will be in a few years

i hope the rest of america sees it the way you do

[deziloooooo]

Jun 17, 2011 15:23:33 GMT -5 @gdgyva said:

17% bonds based upon a probabilty of 82% default

Kind of tells you the problem in a nutshell

And yes....if we don't get our act together here, this is where we will be in a few years

Ok , correct but on this one..they are not giving these loans because they enjoyed the Olympics the Greeks put though a few years ago or that they held off the Communist in a bitter fight after the war, or
the Partisons fought the good fight against Herr Hitler and friends, or they really like Greek food that much..they gave the loan because if Greece defaulted, the euro , who knows what and where it would go and all the other fall out financial that would happen , beyond my knowledge to be honest with you , so a interest rate, say 10/11 %...still great return , possible then a default percentage , possible to the 60 percentile with that much less going out as interest, and still a hell of a return on Bonds?? Just my IMHO..thoughts..

[jarhead1976]

I think you should invest everything in Greek bonds. IMO

[Savoir Faire-Demogague in NJ]

Here is an article from Bloomber/Newsweek. Some of this is interesting. The Greek population thinks the rest of Europe is obligated to bail out their profligate lifestyle.

www.businessweek.com/news/2011-06-17/greek-bailout-leaves-french-unruffled-while-germany-seethes-2-.html

Greek Bailout Leaves French Unruffled While Germany Seethes (2)
By Gregory Viscusi

(Adds Merkel and Sarkozy comments from fifth paragraph.)

June 17 (Bloomberg) -- Greece’s bailout, which has provoked popular anger in Germany, leaves neighboring France cold.

Europe’s two largest economies, which were on opposite sides of a deadlock on enrolling investors in a second Greek rescue without triggering a default, said today in Berlin that they’ve found common ground. German Chancellor Angela Merkel’s room for maneuver has been limited by opposition at home. French President Nicolas Sarkozy has faced no such pressure.

“France is a Latin country that feels closer to the Greeks; they also feel it could happen to them,” said Philippe Moreau-Defarge, a researcher at the French Institute of International Relations, or IFRI, in Paris. “In Germany, it’s the classic tale of the ant and the grasshopper, with the ant furious about having to pay for the grasshopper’s profligacy.”

In the face of turmoil in currency and credit markets, Merkel signaled willingness to compromise on German demands that bondholders shoulder a ‘substantial” share of a Greek rescue, saying she’ll work with the European Central Bank to resolve the crisis. France, like the ECB, had sought a “voluntary” rollover of Greek debt by investors, warning that a compulsory move might constitute the euro area’s first sovereign default.

“We would like to have a participation of private creditors on a voluntary basis,” Merkel told reporters at a joint press conference with Sarkozy in Berlin today. “This should be worked out jointly with the ECB.”

Sarkozy called the accord a “breakthrough.”

Unification

German politicians and media have voiced anger at having to come to the aid of what some of them say are profligate Greeks.

“The Germans digested unification and then went through an austerity cure,” said IFRI’s Moreau-Defarge. “They feel they’ve set a good example.”

In France, aiding Greece draws little angst in radio or television programs and in the press. In a poll in March last year by Greece’s Sunday newspaper Ethnos, before the first bailout plan, 69.6 percent said the southern European country had French support compared with 2.7 percent for Germany.

“Helping Greece is very unpopular among German public opinion, so Merkel has made many populist comments to assure the public that she’s looking after their tax money,” said Henrik Uterwedde, deputy director of the French German Institute, based in Ludwigsburg and Paris. “The comments are aimed at her base, but they get projected across Europe. The problem is the German government cries scandal, and then ends up helping the Greeks. So they’ve angered their own public and the rest of Europe.”

Taxpayer Protection

On May 18, Merkel was cited by news agency DPA as saying: “It’s not about whether people in Greece, Spain, Portugal can’t retire earlier than in Germany; it’s about everyone pulling their weight equally. We can’t have one currency, and one gets a lot of vacation and the other very little.”

France doesn’t have the same culture of defending tax payer interests as Germany, Maurice Levy, chief executive officer of advertising company Publicis SA, said in an interview.

“We don’t even have a word in French for ‘taxpayer’,” he said. “We call them ‘contributors,’ which has a nice positive sound. There’s a sense in France that we can always add to our obligations.”

Protests in Greece against austerity measures have drawn angry opinion pieces in Germany. Writer Dirk Hoeren noted in Bild Zeitung, Germany’s most-read newspaper, on May 18: “Germany’s economic boom didn’t fall from the sky. It was paid for through hard work and austerity. That’s why it cannot be that some people practice frugality and foot the bill, while others go easy on themselves and cash in.”

With Creditors

France, is “a country with a lot of protests, so they aren’t shocked or surprised to see the Greeks protest against the austerity measures,” said IFRI’s Moreau-Defarge.

When the euro was created, the Germans insisted on the need for continuing with the Deutsche Bundesbank’s culture of price stability, while French attention was on the potential of a common currency to boost economic growth, he said.

Coverage in France of the Greek crisis has focused more on process. In an editorial in Le Figaro yesterday, Gaetan de Capele wrote that “wisdom lies in finding an exit from the crisis with the creditors rather than against them.”

German lenders were the biggest foreign owners of Greek government bonds with $22.7 billion in holdings last year, according to data compiled by the Bank for International Settlements in Basel, Switzerland.

Debt Holders

French banks led the group of Greek creditors with overall claims amounting to $56.7 billion, trailing their German peers on sovereign debt with $15 billion, according to the June report from the BIS.

The figure for French banks was inflated by $39.6 billion in lending to companies and households, mainly because of Credit Agricole’s Greek unit, Emporiki Bank SA. German lenders have no major units in the country.

“The Germans are more worried about public accounts,” said Philippe Marini, secretary of the French Senate Finance Committee. “The French always think a solution will be found, that the money will come from somewhere. Public accounts aren’t something that keep the French up at night.”

Pressure on euro-area governments to craft a rescue plan intensified this week after Standard & Poor’s slapped Greece with the world’s lowest credit rating. Moody’s placed the ratings of BNP Paribas, France’s biggest bank, and local rivals Societe Generale SA and Credit Agricole under reviews that will focus on their holdings of Greek public and private debt.

Pragmatism

The euro reversed a decline against the dollar after Merkel and Sarkozy announced their accord. The European currency had been sliding amid speculation the Greek crisis is deteriorating, damping demand for the region’s assets.

The euro was roiled by the impasse over the aid formula and speculation that a government shakeup in Greece will disrupt passage of 78 billion euros ($110 billion) in austerity measures needed for a new bailout from the European Union.

With agreement between Germany and France a prerequisite for forging a European Union consensus behind the second bailout of Greece, the two sides have needed to strike a balance between German principles and French pragmatism.

“Greece is in trouble, we have to help them because otherwise it would undermine the euro zone, so we just choose to overlook the background, which is that Greece cheated and previous Greek governments mismanaged the situation,” said Publicis’s Levy.

The German reaction has been more like a family “that instead of putting out the fire in their house, sits around and fusses about the terms of their insurance contract,” said Uterwedde at French German Institute.

--With assistance from Maria Petrakis in Athens, Chris Malpass in Frankfurt and Boris Groendahl in Vienna, Editors: Vidya Root, Angela Cullen

To contact the reporter on this story: Gregory Viscusi in Paris at [e-mail]

To contact the editor responsible for this story: Vidya Root in Paris at [e-mail]

[deziloooooo]

Jun 17, 2011 15:54:27 GMT -5 @jarhead1976 said:

I think you should invest everything in Greek bonds. IMO

LOL, if I was 25 years younger..possible drop say 5 grand in for the return...17 %..I could live with that..the risk, but today, nope under the pillow.... ;D

[Savoir Faire-Demogague in NJ]

Hey Dez, I am very curious about your position. You lean left and like big govt social programs. I am surprised you would not invest more then $5000 in Greek bonds? I surely would think you support a country like Greece and all of its public give aways and public benefits.
Just saying.

[deziloooooo]

Jun 17, 2011 18:01:45 GMT -5 Savoir Faire-Demogague in NJ said:

Hey Dez, I am very curious about your position. You lean left and like big govt social programs. I am surprised you would not invest more then $5000 in Greek bonds? I surely would think you support a country like Greece and all of its public give aways and public benefits.
Just saying.[/quote
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As a middle to the left, I understand social programs, believe they are necessary and glad we have them, for those in need.

Even the abuses in them because of fraud, burocracy..waste..it is there admittingly, yet know there are a lot of folks in dire need..so accept the waste as one of those unfortunate things that there will be some, inevitable with all big programs, small ones to if the truth be known.


I believe, through no real fault of their own, the majority of them, these unfortunates , jobs gone through no fault of themselves , just that s happens.

They are just being average folk, not that sophisticated, not saying I am, and lead their lives just trying to provide for their families..and at times getting caught up in things, while they have control, still there is a trust there too toward institutions that they just believe if they say it's fine, it is fine.

I am thinking the housing blow up, and the collapse.

I saw and was asked..my condo went up in worth say four plus the best it had ever been, and the question was , sell, get some thing better and bigger, and some here did.

For me..why? I like it here, it wasn't going to make me a millionaire..it was paid for, fine for me, the community was well kept up, shopping and the retail amenities were all I could ask for, restaurants, on a nice public 18 hole course, nice view over the 15 th hole..at my stage in life who was I to impress some one plus who needs the hassle of finding new, moving all th BS..

Yet others did , or bought in here with no money down, got caught up...some bought and fixed up, and then sold, made some $, thought they found heaven in a new industry.

Lasted what, a year?...then blame...Zap over and so many, found the owned something that in 20 life times will never come close to being worth what they had invested in.

You will say they should have known better, and in a way your right..

Back in 2000 or so, when Dot com was going through the roof..I sat down, did some figuring and found I had been averging 28 % return on investments for a few years and knew it was unsustainable.

I wasn't that smart or clever.
I knew that , so with in a month I was out , cursing myself for about six months as I was in steady 4/5 % returns..all others cashing in, and real unhappy till all of a sudden ...not so unhappy anymore.

A lot of those folks, good ones trusted those your suppose to trust, attorneys, accountants, and most important BANKERS...

So what I am trying to say, I feel for these folks, so many, my fellows, don't believe they are the dredges of humanity. I am comfortable, so their needs being met in a way by social help..doesn't really affect me directly. Ok, 14 tillion in debt, a bit much, have to do something about that, but i pweersonally feel, it ddin't get that way over night so if it takes a bit longer to get back to acceptable levels, for me that is the correct way to do it, and am willing to let the process, the political , let them bluster and yap, and hope by compromise come up with a consensus of how to do it in the best way for the country and hurt, there will be hurt, the least.

As far as the social help and doings of our POTUS , bail outs, banks, stimulus, our wars..his decisions..only historians down the road will know who is right or not..he did what he felt he had to, if it proves out it was wrong call, then it was a wrong call, though I believe what he did, was necessary.

I believe many of the talking head experts , especially when I see them all pretty much on the same page calling for certain actions by the government and they are representing all the political sides and in many ways all saying the same thing..they all couldn't be wrong..at least I hope not.

and as far as the Greek Bonds..it's that one shouldn't be that greedy and look for the killing of a life time..spread the risk, and if you get a nice return, be happy and don't think, "Damn, if I had only gone all in.,.then I could.."because if you did, then that's the time the balloon breaks and you are standing there with squat...wondering what the hell did I do, and calling out in tears..Mommy...

[ameiko]

Jun 15, 2011 16:47:57 GMT -5 deziloooooo said:

Jun 15, 2011 16:05:00 GMT -5 wyouser said:

perhaps, but it also shows how interconnected we are in this global economy. Lot of nervousness if the Greek thing cant be contained that we could see much higher interest rates required in order to attract buyers for the debt. Just a thought.

Good thought..also, can you imagine the fall out if WE do NOT increase our cap...the results , world wide..here ...Compared to the Greek situation....

What is the point of a cap if you keep raising it though?

I say do not extend the cap but instead CUT CUT CUT. Of if you must increase the cap because we have run out of time, cut 2 dollars for every dollar increase of the cap.

Uncle Sam needs to go on a diet: it is the ONLY way. Tax increases, especially on the rich, have NEVER worked because history has shown either no increase or actual decrease in revenue. The only exception I can remember was the Clinton/GOP Congress tax hike and that was on the back of an unprecented but ultimately unsustainable tech boom which burst and took much of its supposed wealth with it. Also, one can make an arguement based on history that without the hike that even more revenue would have been raised.

Tax increases also can not work since no matter how much government steals, it will only spend even MORE! An income tax of only a few percent on the most wealthy morphed into what we have now and grew government on all levels from about 5% to 40% of GDP! The SS trust fund was raised and, again, government still can not pay its bills!

Giving it more money is like giving a crack head more drugs: it doesn't work.

Nope, we need to slash like it's going out of style because our nation is going down the drain.

[handyman2]

The major problem with Greece is that they do not have the infrastructure nor raw material base to build a modern day economy.
I can see why other countries are skittish about another loan or low priced bonds. They really have no way of repaying them. Odds are that no matter what the bond rate they will never see it repaid.
It appears that the whole EU project is going to implode just as some economists predicted several years ago.

[deziloooooo]

Jun 17, 2011 19:16:02 GMT -5 ameiko said:

Jun 15, 2011 16:47:57 GMT -5 deziloooooo said:

Good thought..also, can you imagine the fall out if WE do NOT increase our cap...the results , world wide..here ...Compared to the Greek situation....

What is the point of a cap if you keep raising it though?

I say do not extend the cap but instead CUT CUT CUT. Of if you must increase the cap because we have run out of time, cut 2 dollars for every dollar increase of the cap.

Uncle Sam needs to go on a diet: it is the ONLY way. Tax increases, especially on the rich, have NEVER worked because history has shown either no increase or actual decrease in revenue. The only exception I can remember was the Clinton/GOP Congress tax hike and that was on the back of an unprecedented but ultimately unsustainable tech boom which burst and took much of its supposed wealth with it. Also, one can make an argument based on history that without the hike that even more revenue would have been raised.

Tax increases also can not work since no matter how much government steals, it will only spend even MORE! An income tax of only a few percent on the most wealthy morphed into what we have now and grew government on all levels from about 5% to 40% of GDP! The SS trust fund was raised and, again, government still can not pay its bills!

Giving it more money is like giving a crack head more drugs: it doesn't work.

Nope, we need to slash like it's going out of style because our nation is going down the drain.

Cut yes but in a Draconian way, and there are areas we may need to increase...

I am thinking the flooding going on still..there are unprecendated costs there, do we say to those Americans.."here's some shovels, best we can do now, you know the financial problems we are in.."

or the areas hit by the Tornadoes, whole communities/towns..no longer..

"I understand bad luck, look, heres some Bus tickets, I hear Oregon is nice this time of year..good luck . Wish we could do a bit more but..yep, you got it , 14 Trillion , plus..thanks for understanding, your good folks you are, some other time but now...yep, GreyHound , they still are up and running, good luck., Vaya con Dios my friends.."




why. it took us a long time to get here, don't blame it just on a few, not so, just political BS...and if there are tax increases..there is no guarantee to have to spend more especially under the situation we all, both parties understand now...we are looking to get the house back in order..those who want o spend, there will be plenty who will call them to account ..publicly, this I believe..there will be plenty of pain, why make it to the point of even worse if we can help it..

[rovo]

I'll defer to the following message by toughtimes.

[deziloooooo]

Jun 17, 2011 21:00:51 GMT -5 @toughtimes said:

No, the $100 dollar value bond will not sell for $17.65. Your math is terrible. That would be a haircut of more than 80% of the value of the bond. For the discounted bond to be paying only 17% under those circumstances would mean the original interest rate was a fraction of a percent.

Here is how the math actually works. Suppose you had a bond originally issued at a par value of $1000 for one year that paid a coupon of 4%. That means that at the end of the period, you would get your original face value of $1000.00 plus an additional 40.00 during the year for a total of 4%.

To turn this into a 17% interest rate, you have to have the $40.00 interest plus an additional $130.00 to give you the 170.00 in interest. So the new face value is 1000-130.00 (more or less, coupon frequency of payment is being ignored here and the haircut will be worse on longer term bonds). The original par value has been reduced $130.00 to make the bond sell for $870.00.

I think I see and understand..I never bought bonds as a investment..so really don't know how they work..thank you for the explanation..

I was thinking that the loan was guaranteed by Greek bonds andd they, the ones giving the loan were looking for a 17 % return because of the poor quality of the possibility of not being able to pay back the loan..the Billions..still not quite sure as to what it means but I realize the Greek populace are going to see a lot less services..less public workers, dirtier streets and garbage collection and on and on..also harder to get loans for them I am sure and businesses to borrow , much more expensive which means less borrowing, less growth, possible less jobs..and possible less social services what ever they get now.

Not good for them and it will be a while before it gets better..seems a five year time line from reading between the lines if all goes WELL, and if not who knows what ..