Posts Tagged ‘Debt Relief’
This should be good for Confidence, especially after Monti (Hall?) was running around telling everyone that Italy was “just fine” and “didn’t need help.”
LOS CABOS, Mexico, June 19 (Reuters) – Italy put forward a proposal at a G20 summit in Mexico on Tuesday for the euro zone’s rescue funds to start buying the debt of distressed European countries, and the idea is expected to be discussed at a meeting of leaders in Rome on Friday.
The Italian proposal foresees using the EU’s rescue funds, known as the EFSF and the ESM, to buy bonds of countries such as Spain and Italy in the secondary market to help bring down bond yields and lower refinancing costs.
So we’ve gone beyond “liar liar pants on fire!” to “and behind Door #1 we have….”
You know the jackass is back there too.
I’m well beyond the point where I register surprise — say much less shock — when “leaders” get caught lying like this by their own hand. We’re into this odd Kafkaesque realm where the bigger the lie the more it is believed, where Presidents of drunk nations prescribe cases of whiskey for the pounding headache and puke-fest taking place the next morning and where the citizens wave multi-colored flags pretending that John and Steve’s public expression of intent to screw each other in the ass or Jeff’s desire to smoke a joint on the courthouse steps is the most-important issue in the upcoming election.
Pass that whiskey please, it will make me forget that I’m broke and the only calories down my pie hole in the last 72 hours have been ethanol-based — and liquid! Oh, it will also make me forget the hemorrhoids from last night’s boffing too – and where did I put that joint?
Yeah. This is what passes for “political discourse” on the issues of the day. Blatantly unconstitutional usurpations of power by the President (under the guise of “prosecutorial discretion”) either garners no comment (from Romney) or worse, a plan to do even more unconstitutional things (by Wayne Root) in response. Nobody raises the quite-simple point that a person who’s first act upon entry to the United States was to break the law should not be rewarded, as whatever behavior you reward in the law you will get more of!
Never mind that the nation’s economy has collapsed (not “is about to collapse”) and is being propped up by explicit debasement of everyone’s wealth through government deficit spending — a path that will eventually lead to the collapse of the government itself if it continues for too long, and for every day it goes on it increases the economic damage that must be recognized to “detox” from our credit-induced craze.
As such the morning news flow, including this little tidbit from the G-20, no longer elicits even a wry smile from me. I do, however, take some solace in the fact that yesterday Bloomberg finally came around to the idea of sound(er) banking and had the audacity to publish it — a drum I’ve been beating on since The Ticker began publication.
It’s been a lonely five years, but this morning, as I sip my coffee in expectation of the heroin dealerextraordinaire, Ben Buttafackie himself, pontificating on how we shall all be fine if we just take another slug of that case of whiskey, I will ponder whether that tiny second drumbeat from Bloomberg yesterday might — just might — turn into a cacophony of sufficient volume to halt that which, at this point, appears inevitable.
Incidentally, if you are in the Orlando area I am speaking this evening at The 2012 Business Convention and Expo of The Deaf at 7:30 PM.
Think filing for bankruptcy is the only way to get debt discharge? Think again, at least in Greece. While previously we have reported that Greek courts had written off “untenable” debts of unemployed Greeks owed to local banks, Kathimerini describes a landmark case which may have profound implications for the indebted country, in which a fully employed woman has had the bulk of her debt written off. From Kathimerini: “In what could turn out to be a significant ruling for Greeks suffering from the economic crisis, a court in Hania, Crete, has become the first in the country to order that the majority of the debt owed to banks by someone still in full employment be wiped out. Sunday’s Kathimerini understands that the Justice of the Peace Court in Hania based its decision on a 2010 law that allows judges to give protection to people struggling to meet their financial commitments. Until now, the legislation has only been used to give debt relief to unemployed people or those with no substantial income.” This means that virtually every indebted person in Greece, regardless of employment status will rush into court rooms, demanding equitable treatment and a similar debt write down. It also means that the Greek bank sector, already hopelessly insolvent, is about to see its assets, aka loans issued to consumers, about to be written off entirely. And since the ultimate backstopper of the entire Greek financial system is the ECB, the creeping impairments will have no choice but to impact, very soon, the mark-to-market used by both the ECB and the various national banks. Finally, how long before other courts in Europe express solidarity with their own citizens and proceeds with similar resolutions?
On the specifics of the write off:
in the Hania case, the court ruled in favor of a full-time civil servant. The divorced woman, who has three children, asked to be given protection after her banks refused to offer her new terms for combined loans of 112,000 euros. The unnamed woman explained that she did not have any assets she could sell to pay off her debt.
In its ruling, the court deemed that the woman, who has moved in with her parents, needs 350 euros a month to cover her own costs but that the rest of her earnings could be distributed equally among the three banks she owes money to. The judge deemed that this process should last for four years, meaning the woman would pay back some 30,000 euros and the remaining 82,000 would be written off.
And the implications:
Thousands of people have already appealed to the courts for protection under the 2010 law but legal experts believe the decision in Hania may lead to a new wave of appeals by Greeks who still have jobs but are unable to repay their loans.
Needless to say, this simply means that as locals realize that a domino effect in which bank assets are written down will necessitate a collapse of bank balance sheets, and the asset side of the ledge will be unable to support deposits held by local banks. Which is unfortunate as December saw the first modest signs of a rebound in Greek deposits, which rose modestly from €173 billion to €174 billion following years of consecutive declines.