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Wednesday, January 18, 2012

Can't have oxymorons without 'morons'

~ Greek drachma coins

The know-nothings who run the global financial world, and by extension, run and own the financial media, have recently been a wee bit more honest and forthright about Greece's economic situation than any time in the past few years.

Many are openly acknowledging that Greece will default.  But there's a catch isn't there?  Always seems to be one...

The new cool, kitchy-catchy catchphrase to be sweeping the globe on the Top 40 'Bullshit Double-Speak Phrases of the Week Countdown' IS ~drum roll~ :

'Orderly Default'

Of course this is an oxymoron, much like 'military intelligence' or 'sexy pig'.  And if this "orderly" destruction of a nation's economy was so easy or even possible, why wasn't it done two years ago before hundreds of billions of euros were dumped down Greece's drain and its corrupt leaders were so passionately determined to not go back to the drachma and sovereign autonomy?

But for laughs, here's how the scum who control global finance explain it:  Greece's creditors, bondholders, etc allow on its own for Greece to 'default' by taking very large haircuts and supposedly because this is all done "voluntarily", it will not trigger what the European banks and EU fears the most-  Credit Default Swaps
~ 1000 drachma note

CDS are a form of insurance bondholders take out when their investments pose a risk of not being paid back.  The insurance is offered and sold freely from institution to institution, but no one really expects there to be a day they'd have to be paid back.

Think of it like this- Let's say insurance companies sell tons of hurricane coverage policies for NYC and New England residents, never expecting a True Cat. 5 hurricane to directly hit.  So buying the policy is no biggie... the insurance company is happy to take your money.  But if the unforeseen becomes reality, the insurance companies can never cover even a portion of the total damage it would bring.

CDS are no different with one exception-  unlike acts of God, banks and other financials can easily manipulate economics and finance to suit their purposes.

Greece had to be propped up all this time to protect them, not the Greeks.   Now that the realization is upon everyone that Greece will default, the goal is to now perpetrate the investor 'confidence' con -- convince credit rating agencies, banks, and all vested parties the default is 'orderly' and essentially contained.

Will they succeed?  Probably.. unfortunately..   but Hopefully not.

Someone somewhere in global finance and investing-land Must take severe pain and hardship.  Someone somewhere must lose their shirt...

Sink or swim on your own, and if you drown, no one picks you up...  Could have sworn that was what Adam Smith Capitalism was all about...

~ Ancient drachma coins set as cufflinks

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PS.. Didn't feel like writing a new post when a couple sentences suffice..

Reuters headline today:  'IMF seeks $600 Billion more in funds'

Because the US runs/controls the IMF they supply 17.4% of its budget

17.4% of $600 billion is $104.4 billion.. that's how much More money in US taxpayer dollars is requested/needed to bailout Europe's national rots

It Never ends does it?   Perhaps economic capitulation and financial "reset" isn't such a terrible option in comparison..