Thursday, 16 July 2015

Does the IMF care more about Greece than the Germans do?

But that is the impression being created.
Germany is the cruel step-mother and IMF is the good fairy saying 'Poor old Cindy really can't do all the household chores as well as stitch beautiful ball-gowns for her ugly step-sisters.'
Nothing could be further from the truth.
The IMF is supposed to be a hard-ass which only lends when it can get its money back.
The World Bank is supposed to be the 'good cop' to its 'bad cop'.
But the IMF has to do what Washington tell it to. Since Greece is in NATO, America has ordered it to lend to Greece.
To get out of this jam, the IMF has to tell stupid lies.
First time round, it pretended Greece could dig itself out of its hole by carrying out sensible reforms.
Greece still defaulted because the Greeks went and voted for a bunch of jokers- some of whom had seemingly impressive Academic Credentials.
The IMF is now pretending that previous debt is what will prevent Greece defaulting on the loan Washington will force it to make. This is silly. Greece is a sovereign country. It can pick and choose who to pay. Unless its Govt. does a 180 degree turn- i.e. fulfills not just the Eurozone conditions but goes many steps further- it won't be able to repay any fresh loans except from even bigger loans which no one will provide.
The IMF has provided itself with a tiny fig-leaf but no one is fooled because it is just a giant a-hole being plowed by Washington's dick.

Still, surely writing off Greek debt at this time is a good thing no matter who suggests it or what their intentions are?
The answer, once again, is Oxi.

Suppose you owe me a £1000 and want to persuade me to take pennies on the pound.
What should you do? Well, that depends. Suppose you want to borrow more money- in fact are desperate to do so.
Should you
1) Claim to be utterly crap at making money
2) Say that even thinking about repaying debt to us will cause you to ring me in the middle of the night to rant and rave at me for having sexually abused you as a child, though I'm 20 years younger than you, and that you will get a Doctor's certificate to say I have to turn up for 'recovering from incest' sessions in his office where you can vent your anger at me and, if I tell you to fuck off, you will spread your lies about me all over the neighborhood.
The answer is no. What you need to do is say
1) Listen I've got a plan to turn my business around. I'm gonna use this money you're lending me to get a new machine which will make me the cheapest producer and so I'm gonna bag all the orders and in a few years time I'm gonna be on top. Tell you what, why don't I pay you back everything at that time?
2) Guys I owe money to a lot of you and that's keeping me up nights. I'm determined to repay all of you even though I did some stupid things with the money you lent me before. This is because I've turned over a new leaf.

Yannis Whatthefuckis takes a different approach.
This is from his blog-
For the first time, the IMF recognised that, in its fifth review assessment, there was a low probability that Greece’s public debt would prove sustainable.
Here is an extract from the IMF’s own report confessing that, to portray Greek public debt as sustainable (without substantial debt relief), its researchers had to make the assumption that “…Greece would go from having the lowest average total factor productivity (TFP) growth in the euro area since it joined the EU in 1981 to having among the highest TFP growth, and that it would go to the highest labor force participation rates and to German employment rates.” Pigs would, of course, sooner fly!
PIGS can raise TFP. Ireland was a PIGS country. It showed rapid TFP growth in the past and might well re-emerge as a Financial Services/Tech hub whose strength is directly linked to that of the Euro. Spain is a much bigger country but it's industrial woes won't last for ever. The Portuguese and the Spanish and the Irish aren't saying 'our people are lazy and stupid and will always be so. We will never work as many hours or as efficiently as the Germans. We are pigs. We can't fly.'  This is because they think their people are smart and can work harder than the Germans and that is why their living standards will converge and fiscal harmonization will seem natural. Greeks aren't stupider than Irish people. They may well be smarter than Germans. But electing Yannis Whatthefuckis was a dick move. He says Greeks are shit. He thinks some foreigners turned up in tanks in 1967 and conquered Greece and that the same thing is happening again except Greek banks are gonna start rumbling down the streets of Athens shooting at people coz some evil foreigners have worked bad mojo on them.

The IMF has been under pressure to lend to Greece coz its part of NATO. It did so once saying 'heck, the Greeks aint stupid. They will raise productivity and boost growth to get out of this jam.' This optimism proved embarrassing to them coz Greece elected fuckwits who said 'hey, we're Greek. Greeks are shit. Didn't you know?' and defaulted.
Still, the IMF is under renewed pressure from Washington to hand over more cash. Just as they once pretended that Greece might boost TFP by electing smart people not worthless fucktards, now they are pretending the new loan they will be forced to make could be sustainable provided the E.C.B takes a massive haircut.
The problem here is that Yannis has already told the world that Greece is a pig. It can't fly. It will need to borrow more and more just to carry on rolling in its own shit. In Real Estate jargon, there is no point playing the game of 'Extend and Pretend'. There's a fucking pig living in the McMansion. It smells like a sty, it looks like a sty, it is a fucking sty coz that's a fucking pig living in it.
Send your best realtor round with fresh baked cookies. It's not gonna help.
This isn't a desirable property- it is a pig sty.
Send in the bailiffs and you are no better off,
This pig has sovereign immunity.
What's more this pig blogs all its incontinent thoughts. It says 'Greece can't play 'Extend and pretend' because Greece smells like a pig, looks like a pig- it's a fucking pig and Greece is a pig sty. Trust me, they appointed me Finance Minister. It doesn't matter if the pig's creditors write off all its debts. It doesn't matter if they lend even more than they already have. Pigs don't return money lent to them. Sorry, IMF, America may force you to lend to us again. You won't get the money back. We are pigs. We can't fly.

Is Greece genuinely a pig, as opposed to a PIGS country, which is why it alone can't straighten up and fly right?
There is only one Greek- or Greek-Australian- who likes eating his own shit and calling it chocolate cake- who is genuinely a pig. But he is no longer in the Govt. Hopefully, he soon won't be in Parliament.
If Greece shows it can repay future loans, then it can pay some small percentage of past loans. It is in no one's interests to write off those past debts because Greece has non Eurozone creditors. The IMF is worried lest its money ends up in the hands of private Vulture Funds. The way to prevent that is to increase not decrease Greece's liabilities.
If you come to me to ask me to take pennies on the 10,000 you owe me- it is better for you to say you owe other people 10 billion. If you say you owe nothing, I won't take a haircut.

Greeks are smart. Sooner or later they're going to fulfill their destiny as a financial/R&D hub for their Region. They're gonna want to show larger not smaller debts at that time (hopefully, by then, the U.S Supreme court would have quashed the Vulture Fund vs Argentina ruling which so terrifies the IMF) so as to get everybody to agree to the biggest possible hair-cut.

As for Whatthefuckis, send him to Donald Trump as an Economic Adviser. Those two deserve each other.

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