In a previous life, I was involved in M&A work for some of the largest energy companies in the World, granted from an environmental liability side, not strictly financial; albeit environmental liability is first and foremost financial. Its called "due diligence". In my cursory review of Greece entering the EU, I see "shoddy" due diligence. Glaringly shoddy.

BTW, I was involved in Disney acquiring, Marvel, Lucas and Pixar, among others. Greece wouldn't have gotten past the 1st smell test.

Absolutely Hugh! When Goldman Sachs gives their seal of approval backed by their own full faith and credit...things get overlooked. And you don't know how far Goldman cooked the books to pass any due diligence. That's the point. Since Arthur Andersen, the goal isn't to not commit fraud, it's to commit it so no one will find out.

Who better to get Greece into the EU than GS?

No one.

I was in M&A too, being part of the team that handled Gillette's purchase of Parker Pen. A ton of due diligence.

Those days are gone when talking about the global finance at the highest level. When a financial institution like GS can make billions off of a transaction like getting Greece into the EU, knowing how politics can and will cloud the future, all bets are off.

These are smart people. Smart, greedy people.

Good Night Shaun, hope to buy you dinner in Boston sometime soon.

This ain't just business, it is geopolitical strategy, protecting the German interests against the inevitable French default.

Munchhausen's by proxy....

Dennis

Now U know why I have been all doom and gloom all the time...

"Not be violent?" that is a joke isn't it?

OHHH U mean like the Chinese holding American debt and dollars?

Ummmm and who else is holding US debt and Benjamins? Why EVERYBODY is holding one or the other!

And I hear the building creaking....and groaning under the strains...

Hmmm Maybe from your perspective they are....But not from mine.

I got Warrens attention one morning on CNBC using just about that same analogy. The question I asked Mr B was....."If Nicholas II Czar of all the Russias knew in 1914 that by 1918 that he would be dead, his family would be all dead and Czarist Russia would be no more, would he have gone to war with Austria and Germany?"

As I have been saying as a leadership loses credibility they begin to lose power. Then as a matter of NEW PUBLIC POLICY the old leadership is declared to be ENEMIES OF THE PEOPLE and is summarily taken out and shot or hung. The French liked the Guillotine.

Also I have said, "That what the Germans couldn't do with military adventurism and conquest they have accomplished with a currency and a few loans." Now that the bills are coming due they have resurrected the STURMABTEILUNG to enforce their will.

Again as I have recently said the Greek solution is for the EU (Germany) to buy the Greeks out of the EU sending them on their merry way to poverty and want. Either that or keep sending them their welfare checks free and clear...

So who do you want to shaft today? The Borrower or the Lender?

It is ludicrous to think that this shell game of musical chairs can go on forever. The social stresses and strains are becoming immense. Are any of you so naive to think that from Ferguson to Baltimore to ISIS and Putin in the Ukraine that all of these flash points are not interrelated and linked to the borrow and spend regime that the world has become addicted to since the end of WW2? You see Russia, China, Iran and now ISIS trying to grab off as much geopolitical power as they can in the wake of the waning power of the USA and the West in general.

This is not a mere transitory problem as the bestest and brightest wanted to think after 2008. That the latest and greatest new round of Stimulus spending or QEing would put us all back on easy street. It is and has been wishful thinking that it could be so, and now the illusion that the old formulas that seemed to work so well are not only losing their luster but the reality is setting in that it can't be fixed as it is a moribund system.

Looking forward to it Hugh! :)

There is certainly a trial balloon aspect to the entire thing, yes. That's the biggest reason I'd let Greece go.

the hashtag #ThisIsACoup was born in Barcelona. It quickly shot to the top of trending lists around the world, including Germany and Greece, sparking a social media backlash against Germany and its finance minister, Wolfgang Schäuble, over the draconian list of demands being forced on the Greek government in return for a third bailout.

#ThisIsACoup: how a hashtag born in Barcelona spread across globe | World news | The Guardian


Tsipras rolled, but will he be able to sell it?

Word is Yannis was willing to take it all the way, but did not have wide support, and the structures for a independent Greece are not in place, nor was any plan for the creation of those structures.

One may consider the can kicked for another day.

There it is, the perfect, eloquent summation of Politics as we know it today.

Yeah, and what lifespan do those *****ty social media hashtag-crap-things have?
Tomorrow it is another trending hashtag-crap topping all lists and being THAT thing.

I have never understood that anyone (media, readers) do care about those hypes.
Most of the hashtagers just tag without knowing what they are tagging. Social media in a box.

So it will be the STURMABTEILUNG.

Ok, this just in.

Greece debt crisis: IMF attacks EU over bailout - BBC News

I am not sure if the IMF has gone nuts, whether this is an anti-Merkel thing or whether the IMF has, quite sensibly, said ENOUGH!

I mean, did they not ASK the IMF before the package got forced down Tspiras' anal orifice? Are these people on crack?

I think the market will have conniptions tomorrow.....and Greece probably will not pass the required laws and...the deal is toast.

Back to square Negative 350 billion...

Dennis

Maybe we should just wipe out all of the debt "Fight Club" style?

Which is why, gladly, we are (were) a Republic.

Debate really is how to deal with the sins of the past....and there were many and they were on both the lender and recipient side.

Here are Varoufakis' thoughts on the matter:

The Euro-Summit

I have to agree they read with a ring of truth, and in so many ways what is being played out in the extreme in Greece will play out in other countries, albeit without the "benefit" of an outside party.

Imagine when the US comes to this point, imagine the interest in its debt going up by 2% (roughly to $450 billion per year, up from current $222 billion), which is well within imaginable limits.

Then the creditors (about 1/3 of them being internal federal agencies) will demand their money to pay their bills, the remaining market held debt (including the 9% of the debt or $1.2 trillion that the Chinese hold) will either demand punitive interest rates or more likely demand payment when they are due....or.....sell at a discount to get whatever they can out of the deal.... aka US dollar not being reserve currency anymore

NO ONE has the pockets to deal with this, unlike in the case of Greece where the debt is a load for the EU but not unaffordable.

The US government (or any government in a similar position), will be stuck as the Greeks are with the choice of needing to allow the economy to grow (moderate taxation, loosen regulation) to create the wealth to pay the debt OR batten down the hatches, increase taxes, tighten regulation to extract more out of the existing economy. Middle grounds just achieve no real objective in this kind of thing.

The main issues to keep in mind are that the debt is always held by someone, ultimately an individual as either a recipient of social security, bond holder, or deposit holder in a bank and when the debt gets a haircut, however diffuse it be, some of THEIR money goes away, having been spent by someone else on "stuff".

Secondly, this madness about global warming, cutting emissions is exactly that...madness. Economies take energy, any plausible energy source will generate CO2 and waste, whilst minimizing energy consumption and waste are extremely good things, the crazy people who see humans as an infestation to be minimized and their undue influence on governments form a major block on any potential economic growth in the near to medium term.

Thirdly, it is time for us to realize that the earth is not one big happy family, sharing benefits and burdens with all joy. There are winners. There are losers. Your job is to make sure that your country is one of the winners, not to be your brother's keeper. Globalization to the degree envisioned by many is a shell game, driving all to the mean...which means that the higher standards of living will have to go down, with the lower going moderately upwards....until we are all at the level of the average Chinese.

This game is now in play, interested to watch....concerned about the outcomes.

Dennis

Nailed it- exactly what it is. I for one, have no desire to share the struggle with the average Chinese citizen.

rjp

Wow. That's some painful truth-telling.

Havn't U been paying attention to what I have been saying?

1. As far back as 09 I was talking about what would happen if Interest rates on US Debt went up to it's old high of 16%, as in it would clean out the US Tax revenues leaving virtually nothing to run the government.

2. In early 09 I was warning that the Chinese were concerned about US fiscal policy and how they would handle it...and that they would want to get away from it as fast as possible...to which they have done.

3. I have been saying for years that the USD and US Debt is a WMD...and that only God or Aliens could save you. You can ask Mr Bullard and Mr Buffet about that one.

4. Middle ground is called kick the can down the road.

5. Why does one think AIG and GM was bailed out...Pension Funds

6. I have long harped on the fact that Economies of scale create environmental degradation and that pollution is the trade off for the modern life style. You can not have your cake and eat it to. That is why I have always said if you are a for real treehugger you should have be living in Teddy Kaczynski's old cabin.

7. I have long said that the President of the USA job is not to save the world but to represent and protect the interests of the USA. The nation he was elected to govern.



Further I have said that;

1.The US economy would not grow at more than 1.5 to 2.5% year over year since at least early 2010, which is the rate of population growth.

2. That the US Equity markets would run to SP 500 2250 without worry because of the QE programs, as it is the only game in town. That was when the SP 500 was down around 1045. We have yet to reach SP 500 2250

3. In 2010 that by 2013 Mr Obama would be faced with a crisis (remember the Syrian Red Line) and that the Islamic world would likely be resurgent and be the beneficiary of waning US power. Remember the New Dark Ages thingy that I wrote about and got told to take a chill pill. Now we got ISIS spreading like cancer AND have Iran on the threshold of being a nuclear power.

4, In early 2009 that Obama does not do well in making real time decisions and that he is bound to the rock of his ideology.


Everything that I have said here is archived in the records.

Now the question becomes if no one listens then what is the use of saying one fking word?

Dennis:
The truly sad part is that we as a nation have a choice in the matter and most likely, given recent history, will ignore things till there is no choice. Just like stepping out of the stone age, to the agrarian age, to the industrial age, to the information age technology can continue to lift us as a nation. Unfortunately, technology takes time to develop. I firmly believe that magic bullets don't exist, that one size fits all...but nuclear power is damn close.

'Excess' energy opens so many doors in resource management (recycling) and manufacturing....and its CO2 neutral. Things truly get weird in economics if you have 'unlimited' energy! There is some interesting reading out there.

We as a country are only a decade away from being awash in electrical power if we choose to be.... but it takes time. Currently there isn't the ability to have a crash program in nuke design, because there just aren't the bodies trained to do so. Are we as a society picking several thousand of our brightest and sending them to school on a free ride to learn nuclear physics and chemistry (materials) so that the knowledge body pool is there when we need it? Hell no.

For whatever reason we cant see past next quarter...Or timeframes get shorter and shorter. I'm not quite sure why either...

Whose pension funds? Not pension funds that owned the stock. GM is dead. Dead. DEAD! The pensions of the Union workers?

Now here is a silly little fact of life, men can tolerate a lot of uncertainty so long as they have a modicum of clarity about what is happening around them. Once they lose clarity, they then are operating blindly, without knowledge of the lay of the land so to speak. Without knowledge fear begins to set in, as they have no idea of which way to turn. Fear then can very easily turn to panic.

The real issue is fear. First that the plants would blow up like bombs and then that the "waste" would poison us.

Anyone who understands fission power know that the waste is virtually non-existent, compared to what a coal fired plant produces. And most of the fission waste is political in nature, since politics are preventing breeding and reprocessing.

Don't get me started on Hydrogen Fusion...or we'll be here all day.

U fking didn't listen back then now did you as I said over and over....14 state governors were on the line to NY governor Patterson right before he called Bernanke to beg the FED to save AIG. Bernanke as we know saved AIG..

State Employee Pension funds is the answer. AIG insured the Bonds that so many (ALL) Pension Funds hold, if the Bond insurer failed the bonds in the portfolios would be illiquid as in worth nothing...and the dominos would have fallen..and bingo we are back to barter.

This is nothing to say about the value of State issued bonds and state credit ratings.

Obama saved GM because of 400,000 GM retirees. And the 1M Parts Suppliers jobs and if GM went the way of the dinosaur then so would have FORD. Adios Amigos...

GM went the way of the dinosaur. That corporation went chapter 7. It was subterfuge and theft on the part of the Obama administration.

I can't speak to AIG the way I can GM. But I agree it was a bailout. GM wasn't bailed out. It was shot dead and its corpse ransacked.

Tabs, your commentary has been in alignment with my own for some time. We have somewhat different viewpoints and bring some different perspectives, but on balance we agree.

Your last point is golden however....if no one is listening, what is the point of saying anything.

I am tempted to write what I think of the human race, the fact that about 90% of people just want to live their lives, on their block, with their toys and believe the story is what they hear from whatever their trusted information source might be. They actually do not want to think that hard about things that are difficult or which threaten their circle of life.

This leaves them then beholden to the 10%. And the difference between facilitation and manipulation is intent.

And the intentions of our political class are malevolent and mendacious and the Obama's, Pelosi's of the world are at the front of that class.

So speaking to the 90% is a low value activity, and the kinds of commentary that we both make are antithetical to a significant part of the 10%.

Dennis

I am a theoretical physicist by training. I have no issue with nuclear power. Build 'em big, away from population centres, on steady geology. Use DC transmission and we would be good.

Dennis

But the retirees are still getting paid, the parts suppliers are still in business and Ford is still breathing...

Now imagine where you would be eating lunch today if those things had not happened????

The retirees are not getting paid from GM. That stock is worth exactly zero. I know Union pension funds got a small piece of the "New GM" Stock, but not anyone else who owned the original GM. Part suppliers would have survived if GM had gone chapter 11.

The question becomes do the "Mendacious 10% value their heads? Certainly they can smell the smoke in the air and they should realize that the fire is being lit so that they will be the ones roasting over it. That group of people is losing credibility and is losing power as I speak.* It will only accelerate if they lose any semblance of clarity.

Point of edification: Mr Mack ex of Morgan Stanley was interviewed on CR, to which I posted on MR Rose's Board scathing comment and mentioned that he could be viewed by people as being an "enemy of the "people." Twentyone short days later one Mr J Gorman friend of John Mack and current CEO of Morgan Stanley was interviewed by Mr. Rose. To which his agenda was to state how Morgan Stanley was a good corporate citizen. Twenty one days as you well know in the corporate world is one of scheduling and booking. A similar story could be told of Mr Grantham in a very similar time frame. This story differed in that my comments had to do with the US GDP mirroring the rate of population growth. Mr Grantham it seems from his interview had come to similar conclusions. However you might want to research what MR Grantham thinks in an article he wrote about certain unique people having different cerebral wiring.


I am aware and as such I pay attention to the fking details. Also if Mr Grantham is to be believed, what I have can not be learned in a book, bought by a University degree nor even completely by experience. Exactly what it takes is being aware of detail, continually putting the pieces together analytically over a very long period of time measured in decades. Then as an apprentice becomes a craftsman the cerebral wiring changes. It also helps to be intelligent, have curiosity and have the will and determination to see it through.

*The proof is the ever accelerating and spreading of destabilizing events throughout the world. Can U imagine what Obama's historical misery index number will be if he is the harbinger of the world's collapse into chaos? Forget MT Rushmore and hobnobbing with Lincoln on Mt Olympus but rather welcome to the inner ring of He11 shared with the likes of Hitler and Stalin.

The question then is, Where is the money coming from to pay the GM retirees? The answer is from ownership of a big part of the new GM. I think about 51%

Ford said if GM went under so would they.

The Parts suppliers would have been buried as GM would not have to have paid their Accounts Payable to the Parts SUppliers in a full out BK. Say goodbye to the Suppliers.

ShareHolders in a BK get wiped clean, Bond holders get first call on assets, and this is where the GM story got funny in that the Bond Holders got wiped in favor of the Retirees and Accounts Payable Parts Suppliers. However the ripple effect on on the economy is really immeasurable if those two groups got wiped out ???

U are not dealing with the reality of it, rather a fanciful conservative interpretation.

I beg to differ. ONLY the union was bailed out directly. Anyone who owned stock in the original GM ended up with nothing. The bankruptcy court put together a sweetheart package deal at a price high enough that only the Federal Government could afford for the assets of the original GM, including the name. The bond holders ended up with that money. The "New GM" agreed to take "Original GM"'s AP, the retiree pensions and to warranty past cars onto their balance sheet as part of the package deal.

Chrysler's deal was similar, without the warranty.

I still believe that GM and Chrysler could have gone through Chapter 11 and survived. They should have tried this first. Instead they DID go through chapter 7.

Greed. Simple stupid greed. Greed that drives the preservation of the status quo - big oil in particular, and big grid-based power companies that don't want a glut of power because it might erode their profit margins.

I always said that during the height of the recent crash / recession (2009-2011/12) we should have implemented a "Manhattan Project" / WPA type of federal program with the goal of making the United States completely energy independent within ten years - we train and use the skills where possible of the millions of people that were out of work, incentivizing retraining or reeducation and letting people earn a better life than unemployment or welfare or McJobs or temporary / contract-only BS jobs.

I bet we could've pulled it off too - and maybe for less than the foolish "stimulus" and ensuing QEx initiatives / devaluation of currency will end up costing us - and we'd have something of value at the end of it. And we'd have a better trained workforce with new skills and better, more relevant education to support the newly-created industry and any new technologies derived via R&D. And we'd have had much lower unemployment and better workforce participation due to people actually getting a sense of self-worth back. Best of all we could finally tell the Muslim world to go suck it - we don't need you anymore. But instead we put half the country on EBT cards and UI or welfare to rationalize a democratic / socialist "government for all" vision. Politics uber alles I guess. Pathetic.

We should be halfway to wide-scale nuclear power and / or H2 fusion by now. Instead we're still sucking on the Chevron / Exxon-Mobil / Tesoro / BP teat. Short-sighted foolishness.

Fission yes, Hydrogen fusion, no.

And by my estimates, $2T would have been enough for 500 Gen IV fission plants, possible more if we went with a factory built standard design.

Woulda, coulda, shoulda

GM before the crash had the obligation to pay the retirees, this was dragging GM down. So the company and UAW agreed on a one time 30B payment to the UAW to assume the pension liability. However GM used the cash to stay afloat. Then came the 08 crash which sank the company into chap 11 BK with 83B in assets and 172B in liabilities.

The end result of the BK was that the US govt acquired a 60% stake in the reorganized company for 80B. The old share holders got wiped clean as is normal, the Union got a 17.5% stake in the company, the Bond Holders got 10% of the Stock in the new company and GM assumed a debt of 24B for the retirees pension and 15B assumption of Acct payable to the parts Suppliers, plus warranty obligations.

At the end of the day both the Retirees and Parts suppliers got made at least mostly whole. And do ya wana bet that a good portion of the old Bond holders were Pension funds? So in the end it wasn't the UAW that got bailed out it was the retirees and Parts suppliers

The CAR estimated that 1.23M US jobs were saved and some 105B USD were saved in not having to pay Unemployment bennies...to the not laid off workers.

It is one thing to stand in a bar and say how brave you would be when the bullets are whizzen past your haid, and quiet another when they actually are.