Syrzia Won!

antrobus

CLAPTON wrote: »

there would probably send in the trioka

To allow for state bankruptcy, Congress would need to amend the federal bankruptcy code to add state governments to the list of entities who may apply for bankruptcy. In addition, a state would need to amend its own state laws to authorize it to make application for federal bankruptcy. Finally, the United States Supreme Court would need to rule on whether the contracts clause of Article I, Section 10 of the United States Constitution prohibits states from declaring bankruptcy even if authorized to do so by Congress, or imposes any restrictions on the terms, conditions or circumstances under which state governments might declare bankruptcy. If it chose to do so, Congress could require the Supreme Court to rule expeditiously on these questions.

http://www.csg.org/pubs/capitolideas/enews/issue65_3.aspx

antrobus

Generali wrote: »

States aren't allowed to go bust in the US, it's unconstitutional. That's why only cities do.....

Technically, any "political subdivision or public agency or instrumentality of a state" or municipality, as in a city, or a county, or a township, etc.

Generali

antrobus wrote: »

To allow for state bankruptcy, Congress would need to amend the federal bankruptcy code to add state governments to the list of entities who may apply for bankruptcy. In addition, a state would need to amend its own state laws to authorize it to make application for federal bankruptcy. Finally, the United States Supreme Court would need to rule on whether the contracts clause of Article I, Section 10 of the United States Constitution prohibits states from declaring bankruptcy even if authorized to do so by Congress, or imposes any restrictions on the terms, conditions or circumstances under which state governments might declare bankruptcy. If it chose to do so, Congress could require the Supreme Court to rule expeditiously on these questions.

http://www.csg.org/pubs/capitolideas/enews/issue65_3.aspx

So just a couple of impediments!

Funny isn't it that a city can go bust but a state can't. The economy of Miami, LA or NYC must be bigger than that of the smaller states. I wonder why they have the difference.

I know that the idea of bankruptcy at the time the US was getting going was highly controversial but gaining acceptance. Ultimately if you're insolvent then you can't pay what you owe.

I guess the Federal government steps in to bail them out with austerity conditions rather like Greece. It wouldn't surprise me to hear that New Orleans was insolvent after Katrina without Federal money for example.

antrobus

Generali wrote: »

....I guess the Federal government steps in to bail them out with austerity conditions rather like Greece.....

I'd imagine that if a US state was in the position where its expenditure exceeded its income and it could no longer borrow the money to make up the difference, then either

(a) the Federal government lends them the money on conditions, or
(b) the State government takes action to reduce its expenditure, and/or increase its income

And normally the conditions imposed would amount to much the same as (b), except on a different time scale.

antrobus

Interesting piece in Spiegel;

The result is that officials in Berlin and Brussels no longer subscribe to the so-called "domino theory," which held that a Greek collapse would be followed by others. It has been replaced by the "chain theory," which holds that the entire chain would become stronger were its weakest link to be eliminated.

Germany Open to Possible Greek Euro Zone Exit
http://www.spiegel.de/international/europe/merkel-and-germany-open-to-possible-greek-euro-zone-exit-a-1011277.html

CLAPTON

antrobus wrote: »

Interesting piece in Spiegel;

The result is that officials in Berlin and Brussels no longer subscribe to the so-called "domino theory," which held that a Greek collapse would be followed by others. It has been replaced by the "chain theory," which holds that the entire chain would become stronger were its weakest link to be eliminated.

Germany Open to Possible Greek Euro Zone Exit
http://www.spiegel.de/international/europe/merkel-and-germany-open-to-possible-greek-euro-zone-exit-a-1011277.html

extraordinary how the immutable laws of economics change so quickly

must be something in the ouzo

michaels

antrobus wrote: »

Interesting piece in Spiegel;

The result is that officials in Berlin and Brussels no longer subscribe to the so-called "domino theory," which held that a Greek collapse would be followed by others. It has been replaced by the "chain theory," which holds that the entire chain would become stronger were its weakest link to be eliminated.

Germany Open to Possible Greek Euro Zone Exit
http://www.spiegel.de/international/europe/merkel-and-germany-open-to-possible-greek-euro-zone-exit-a-1011277.html

The negotiations continue.....

vivatifosi

The excellent Philip Atticus blog has a piece on the potential impact of a Syriza victory. It splits actions into multilateral (e.g. dependent on Troika) and unilateral. It highlights that a big problem is that the promises are front end loaded.

Philip Atticus forecasts a default in May
http://www.philipatticus.com/

Please note, article was written last Friday, so before victory, and is based on manifesto promises, not anything announced since. Nevertheless his blog posts over several years have always been insightful.

Generali

vivatifosi wrote: »

The excellent Philip Atticus blog has a piece on the potential impact of a Syriza victory. It splits actions into multilateral (e.g. dependent on Troika) and unilateral. It highlights that a big problem is that the promises are front end loaded.

Philip Atticus forecasts a default in May
http://www.philipatticus.com/

Please note, article was written last Friday, so before victory, and is based on manifesto promises, not anything announced since. Nevertheless his blog posts over several years have always been insightful.

Very interesting. Note that conclusion #1 is wrong: as a sovereign body, Greece can redenominate its debt regardless of what other people think. Despite the fact that the restructured debt is issued under English Law, Greece can default entirely or via shifting the debt into New Drachma as long as they maintain pari passu AIUI.

antrobus

Generali wrote: »

Very interesting. Note that conclusion #1 is wrong: as a sovereign body, Greece can redenominate its debt regardless of what other people think. Despite the fact that the restructured debt is issued under English Law, Greece can default entirely or via shifting the debt into New Drachma as long as they maintain pari passu AIUI.

Sovereign states can always do what they like, it doesn't necessarily mean that people not subject to their jurisdiction will take any notice.

P.S. Shifting the debt into New Drachma won't actually change the amount outstanding unless you somehow 'fiddle' the exchange rate.