Greece...

Generali

chucknorris wrote: »

Thanks the one I am in at the moment is Vanguard's VUKE (ftse 100 tracker), confession time, I chose that one because of its volatility, I've been selling it when it gets high and buying it back when it dips. I'm no expert, and if trying to time the market in that way, goes wrong, then its a fair cop, but it is working out OK so far, and it has been quite interesting.

Ultimately I will be investing mostly in Vanguard's Vhyl with a long term passive approach https://www.vanguard.co.uk/documents/portal/press_releases/vanguard-etf-launch-key-facts.pdf because it is quite diverse (both geographically and sector wise).

Have you thought about CFDs instead? You save the stamp duty and you can use leverage so you don't need to put in so much money to get the same return/loss.

To trade the index, I'd definitely be using some sort of derivative product: CFD or future perhaps.

ETFs are for LTBH not trading.

TheBlueHorse

what is the "humiliation" for Greece? The real humiliation is they are thieves that have basically stolen billions of Euro from other European mugs and now won't/can't pay it back. The IMF should be shot for their continual lending of money to people that can't afford to pay it back. They are lending them more money to pay the interest. If Wonga did this, everyone would be up in arms.

Look Greeks,YOU spent the money, now pay it back in full with interest OR cut them off for good.

Lets see real humiliation as they scramble in the streets looking for food.

antrobus

Graham_Devon wrote: »

Personally I believe both the debtor AND creditor can have some "blame" (for want of a better word) laid on them.

Greece borrowing money is not like us borrowing too much on credit cards. There is far more involved. The EU, the Euro just for a start. ..

I'm not so sure about that. The immediate consequences are pretty much the same; once you hit your limit, you have to stop spending.:)

Graham_Devon wrote: »

...It's unfair to blame Greece (and certainly unfair to blame individual greek citizens) for the loans taken on. ........

No it isn't. Greek governments borrowed the money, and Greek citizens voted in those governments.

Graham_Devon wrote: »

...There have been numerous threats from the EU should they choose another path. ........

What threats?

Graham_Devon wrote: »

....Greece should be blamed for everything they did before joining the EU etc. They have their issues. But their issues were compounded by their fudged entry into the EU and the dictat from the EU ever since. .....

Greece joined the EU in 1981. I suspect you mean entry into the Euro which was 20 years later in 2001. The only 'dictats' imposed on Greece as a result of joining the Euro were primarily those requiring it to run a deficit of less than 3% GDP and not to issue bonds in excess of 60% of GDP. Had Greece actually obeyed those dictats it wouldn't be in the hole it is today.

Graham_Devon wrote: »

...If you are a lender and you continually lend to someone who you know is undergoing serious financial issues....who really is to blame? The lenders should know better. ....

As previously noted on this thread, in 2009 Greece claimed they were running a deficit of 5% of GDP. After the EC sent in the auditors they concluded that it was actually a 15% deficit. Had the lenders been aware of the true extent of the "serious financial issues" they might have had second thoughts. But as it was they didn't, because the Greek government lied about the true state of affairs.

Graham_Devon wrote: »

....In this case, the important part in all of this isn't Greece, it isn't the debts, it's the face of the EU.

I'm not sure what that sentence is supposed to mean.:)

HarryDentJr

If someone foolishly kept lending to a business that was year after year making a bigger loss every year, then that would be one very foolish lender.

What do they do? Well for the last few years this foolish lender just keeps increasing the amount they lend, maybe hoping they get some boost and the debtor could start to pay them back?

But no the debt keeps going up, until the debtor is relying on new larger loans to live on, eventually they cant even pay the interest, and there is no way they can keep paying out their expenses for their business. They have to cut back on all their outgoings ( austerity) they keep putting off the date the interest is due, but after being postponed many times they still cant afford to even pay the interest payment that they are so late with.

The even larger problem is that this business, (Greece) is only one of many, others are in similar situations and cant pay back either. Italy, Spain, Portugal, and Ireland will all want to default when Greece eventually does.

The debts have all been repackaged and sold into the derivative time bomb, that will collapse the entire world monetary system.

If this were true then there would be record number of bankers killing themselves? Oh wait a sec, there are record numbers of bankers ending up dead!!!!!!!!!!!!!!

chucknorris

I didn't realise until a few moment ago that betfair have a market on Grexit, they are currently betting approx.:


3/1 They leave on or before 31st Dec 2015
1/3 They are still in on 31st Dec 2015

antrobus

mwpt wrote: »

Well, if you watch Varoufakis speech he talks about Germany running a surplus, requiring some other country (Greece in this case) to run a deficit. He makes out as if it was inevitable that Greece would run a deficit if Germany ran a surplus. Which makes sense at some level, but surely he is talking about a trade surplus/deficit?...

Yes, I believe he is talking about the balance of trade.

mwpt wrote: »

...I would have expected a country could run a trade deficit but still retain a budget surplus through smaller state spending and better tax collection? Am I wrong?

No.

Besides, the requirement isn't so much for a government to run a budget surplus; simply that a government runs its affairs with annual deficits that are below trend GDP growth.

HarryDentJr

Graham_Devon wrote: »

That reads to me that the plan is to hopefully write off some of the existing debts as Greece simply can't pay them.

Which is great etc.

But the plan is to then simply replace the debt that's been written off with new debt, and that solves the current issues?

I can't be reading this right?

Anyway, it's another month where Greece wil go bankrupt next month if they don't get their next tranche of funds. So of course, they will get their funds regardless, but is this honestly how they are "fixing" things?
]

What will happen to all the derivatives that this debt was repackaged and sold on to around the world, when Greece eventually either defaults or has the debt written off one way or another?

antrobus

HarryDentJr wrote: »

What will happen to all the derivatives that this debt was repackaged and sold on to around the world, when Greece eventually either defaults or has the debt written off one way or another?

What derivatives?

michaels

antrobus wrote: »

Greece joined the EU in 1981. I suspect you mean entry into the Euro which was 20 years later in 2001. The only 'dictats' imposed on Greece as a result of joining the Euro were primarily those requiring it to run a deficit of less than 3% GDP and not to issue bonds in excess of 60% of GDP. Had Greece actually obeyed those dictats it wouldn't be in the hole it is today.

You mean like France and Germany have done every year

chucknorris wrote: »

I didn't realise until a few moment ago that betfair have a market on Grexit, they are currently betting approx.:


3/1 They leave on or before 31st Dec 2015
1/3 They are still in on 31st Dec 2015

I wonder if they pay out on an announced exit timetable that for example has the New Drachma coming into effect on 1st Jan 2016...

michaels

TheBlueHorse wrote: »

what is the "humiliation" for Greece? The real humiliation is they are thieves that have basically stolen billions of Euro from other European mugs and now won't/can't pay it back. The IMF should be shot for their continual lending of money to people that can't afford to pay it back. They are lending them more money to pay the interest. If Wonga did this, everyone would be up in arms.

Look Greeks,YOU spent the money, now pay it back in full with interest OR cut them off for good.

Lets see real humiliation as they scramble in the streets looking for food.

People see this all in terms of the normal monetary system forgetting that money, interest rates etc are all just a set of rules that cover interactions that are best modeled as game theory.

Sure there are some pieces of paper which says Greece owes billions of Euros but Greece is in a position where (A) they cab obviously not pay back the full value so any threat not to pay back is credible; and (B) In this game there are potentially some strong externalities for the other players meaning they attach a positive value to Greece not defaulting.

Thus when Greece come to play their hand they can offer a settlement somewhere between the maximum that is affordable (their bottom line, any settlement offering more than this is obviously a lie) and a figure where they take all the value that the other parties attach to the EUR remaining fully intact. This later sum is of course difficult to judge, what is it worth to Germany that the EUR remains 100% intact - in theory not that much if it is only the Greek default that matters but in reality they can not be sure that a Greek default might destabilise the whole edifice which would be extremely costly to Germany. SO this give us two extremes for the negotiation and then it is just a matter of who blinks first.

The Greeks need to make out they have nothing to lose by defaulting in order to exert maximum pressure on the others and vice versa.