From The Register
There’s a chapter of the UK organization Council of Registered Ethical Security Testers (CREST) opening in Australia. From the article, it looks like it’s a certification organization for ethical hackers. I did a quick web search, and there is a similar certification in the U.S, as a Certified Ethical Hacker (abbreviated CEH or C|EH), available from the EC Council (which stands for the much longer International Council of Electronic Commerce Consultants).
Eeewww . . . Corporate Human Resources departments might want to start looking at your Facebook page to determine how good a fit you would be for a job. A study in the Journal of Applied Social Psychology argues that posts on social networking pages can be a good (or at least decent) indicator of how an applicant would score on the “Big Five” personality traits of Openness to Experience, Conscientiousness, Extroversion, Agreeableness and Neuroticism.
How someone scores on these measures determines their fit for particular jobs. For example, if someone skews towards the easy-going/careless side of the ‘conscientiousness’ scale, they’re probably not the best choice to fill an air traffic controller opening. The better the match between the Big Five scores and the requirements of the job, the better employees typically perform.
Researchers analysed Facebook posts from 500+ subjects and found that they were able to reliably indicate how job candidates scored on the Big Five factors above. It wasn’t flawless, and these are subjective measures anyway, but it compared favourably with subject testing and with the opinions of others about the subjects.
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Interesting. Lawsuits, court decisions, and legislation in Europe saying that companies using web trawlers to scan and aggregate links to — or snippets of — news stories are subject to copyright claims from the original source. The more I read of the article though, the more confused I am and the more it sounds like it covers more than just web trawlers. The companies who do the aggregating don’t have to source copyright fees, but the users of the aggregating service have to pay if they want to click a link, and what they pay is based on copyright fees, not subscription amounts . . . not sure how that would work in billing, or if the aggregator services would just pay for some type of subscription to the source publisher, or what. The article says that European Court of Justice has ruled it’s not just titles that are copyrightable, but even individual sentences or parts of sentences could be considered something covered by a copyright if it communicated “to that reader an element which is, in itself, the expression of the intellectual creation of the author of that article”. Soooo . . . I’m still confused. If I just cite a statistic that is cited in a dozen other articles, I’m guessing that is not “in itself, the expression of the intellectual creation of the author of that article,” but if I cite it in a characteristic way of writing or speaking, does that make it copyrightable? It sounds like this creates a lot more problems than it solves.
In a roundup of this week’s tech news, an article in The Register mentioned some white-hat hackers (meaning hackers that work to find flaws so they can warn users and programmers about them, not exploit the flaws themselves) had broken into an electronic voting machine after the Washington D.C. election board issued a general challenge for the thing to be hacked. The full story of the hacking is here in an earlier article on The Register, and it’s a pretty good story to read even if you’re not into computers that much. The team that hacked the voting machine was from the University of Michigan, and in addition to adding Skynet & Bender as candidates, adding the word “owned” to the final signoff screen, and shutting out some other hackers they detected were also trying to break in, the University of Michigan team set the final signoff screen to play the University of Michigan fight song. That was what finally clued in Washington D.C. election administrators there was a problem, another tester (who was of the opinion the system was secure after his own testing) mentioned to administrators that they should get rid of the music on the signoff screen. A full 18-page writeup of what they did & how they did it can be found here. The Register‘s article from March 1 is a good read, but it has a more sober warning too:
The attack demonstrates several of the flaws in electronic voting systems, and at numerous sessions at the RSA 2012 conference in San Francisco, experts have consistently warned against the dangers of this technology. In the US, there are 33 states that have introduced some kind of electronic voting systems – and none of them are secure enough to resist a determined attacker said Dr. David Jefferson from Lawrence Livermore National Labs.
“The states are in the habit of certifying voting systems, typically without testing them or seeing the source code,” he said. “In many cases the voting system uses proprietary code that government can’t legally check, and the running of the systems is outsourced to the vendors. This situation is getting worse.”
E-voting was a national security issue, he said. Financial attacks by hackers are relatively easy to detect – because at some point money has to leave the system. But if an election is hacked then we may never know, because it’s a one-time action that typically isn’t checked after the results have been announced and officials elected.
It will be decades before we have the technology to vote securely, Jefferson said, if indeed it is even possible. At stake is democracy itself, but politicians don’t seem to understand the problems of electronic voting, and both Jefferson and Halderman expressed fears for the future if current systems become more popular.
And going back to Google, remember when there was a big to-do about their company motto being “Don’t be evil”? Yeah, me too. Don’t hear them say that as much anymore. They’re threatening to strongly enforce some terms & conditions in the contracts for app developers who sell apps on the Android Marketplace (just recently renamed Google Play). The terms & conditions in question state that developers must process payments through a system that Google owns — a system which conveniently keeps 30% of the payment as a processing fee. Competing systems such as PayPal are no longer acceptable. Although the change in enforcement hasn’t been announce publicly by Google, The Register says Reuters claims to have some strongly-worded e-mails sent to developers recently telling them to switch over in 30 days if they want to keep selling Android apps. On a side note, I currently use an Android phone — and the technology is nice. But reading stories like this don’t make me very fond of Google itself. I don’t plan to switch to the iPhone as Apple is just as domineering in its marketplace. But this does make me wish there was a non-********* smartphone provider out there.
Wow. Hadn’t heard about this before — and I wonder why that is, this should have been more than newsworthy enough for U.S. news outlets to cover, even mainstream ones. A huge computer virus scam known DNSChanger would infect computers, replace the addresses they used for contacting DNS servers about how to access other computers on the internet with bogus addresses, and the bogus addresses sent web browser to bogus DNS servers which then rerouted the computer request to other bogus websites. In addition, DNSChanger would prevent infected computers from receiving anti-virus software patches & operating system patches that would have disabled DNSChanger. (As a side effect, blocking those updates also left infected machines open to infection by other computer viruses.) The scheme was only broken up in November 2011. The current story on The Register that currently the infected machines would have been cut off from all internet access on March 8, but that has been extended to July of this year to give users more time clean up their machines. According to the article, currently 94 out of the 500 companies in the Fortune 500 have at least one infected computer or router — and that’s a decrease from a few weeks ago when 250 out of the Fortune 500 companies had an infected machine or router on their network. Also, currently three out of 55 government agencies have at least infected router or computer. That’s a pretty broad-ranging virus to have not been mentioned AT ALL in the U.S. news. (I just did a quick search on “DNSChanger”, and didn’t see any links on the first couple pages that came from news sites — it was all government sites or anti-virus software sites.)
And a really good article about the Kony video going around on Facebook. The article references an even more damning article in The Atlantic. Short version of both articles: quit patting yourself on the back for sharing that video; it’s old news, the information in the video isn’t all correct, you should be a bit skeptical about the finances of the organization who made the video, and most importantly of all, hitting “share” on Facebook and leaving outraged comments does not actually achieve anything. Excerpts from the article on The Register — and please do go check out the entire article, there’s references to other articles as well as a link to a list of organizations you can donate to if you really want to help in Africa:
There’s little doubt that Kony is a very bad person, or that he has been involved in child slavery and other crimes against children and adults alike. However, this isn’t exactly news, as he has been a well-known problem throughout eastern and central Africa for more than 20 years. Which is probably why the US has been involved in fighting Kony and his cronies for years, though that complicated story never hit Facebook.
What is news is that an American filmmaker has made it a cause celebre among the social-media set, with the intention to “make Kony as famous as George Clooney,” so that the US will raid Uganda and “stop Kony” (which presumably is a call for state-sponsored assassination). As a social media exercise, it is brilliant. As an exercise in intelligent policy, it’s not so brilliant.
First of all, many Ugandans themselves think this is bad policy, and likely to exacerbate the problem. Secondly, Joseph Kony and his Lord’s Resistance Army left Uganda six years ago and are now depleted and scattered throughout remote regions.
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There are plenty of problems much closer to home, including poverty (rising), hate and extremist group proliferation, and other such matters. They don’t come with a bracelet, and fixing them isn’t as easy as clicking “share” on Facebook, but they’re big problems, and we have much more power to impact these issues in our local communities than by posting a video to Facebook.
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Scanning the web for stories on the phenomenon, it appears to have been intentionally targeted at the 13- to 24-year-old female demographic.
A survey of adults using the internet find a large majority (2/3 or more) do not want their search results or overall internet experience personally tailored to their past browsing or search histories. This is a big deal, because “tailoring the internet experience” is the excuse Google & Facebook keep using for more and more tracking of internet users. But the surveyed users don’t seem to be particularly dedicated in keeping their histories private, in my opinion, as the same survey showed 83% use Google as their search engine. That is lunacy if you actually care about privacy, since not only does Google track your search history if you allow them to set cookies on your browser, but they also will report the area you live to the government if they detect too many searches for terms the government might be interested in. So far it’s been reporting an increased number of searches for flu symptoms to the Centers for Disease Control, which was excused as being okay because they’re just concerned about public health and helping the CDC identify outbreaks of the flu sooner. But more than a few minutes’ thought should show how such a policy could be warped into constant surveillance — all for the public good, of course!!! (For myself, I run one browser that accepts Google & Facebook cookies, and try to use it only to check Facebook & follow links found on Facebook. I run a different browser with both Google & Facebook cookies refused for general internet browsing. In both cases, I try set all cookies so that even if I accept them, they are kept for that session only — and if I don’t recognize where they’re from, I don’t accept them. Go ahead, erase all the cookies & cookie settings on your browser, then set your browser so it has to ask you before accepting cookies, and do some web browsing. You will be appalled at how incredibly many cookies most websites are trying to set on your browser.)
I can’t do any better than this article’s sub-headline, “ICANN manages to lose one-horse race.” For a bit more explanation: ICANN is the Internet Corporation for Assigned Names & Numbers. It currently sets the names of more internet websites, and decides what type top-level domain name extensions (such as .com, .net, .org, etc.) can be used. They’re a U.S. company and have had a monopoly on the name setting for over 14 years now. They originally got the monopoly because the internet started in the U.S. and the Department of Commerce wanted someone to oversee keeping track of website names. That ICANN has a monopoly on it and is a U.S. company has created some international tensions at times, with other countries saying it should be a multinational entity — that idea usually fizzles out, I’ve never seen official reasons but I’m guessing the real reason is once people look at how much cronyism, favor-exchanging, backscratching, and political correctness takes place at other international entities like the United Nations, the World Bank, the International Monetary Fund, etc., everyone says “yeeeeaaaahhhhh . . . okay, I think I’m more comfortable dealing with ICANN as it is than risking getting some power-tripping and politically untouchable bureaucrat who expects kickbacks for everything they do.” (And yes, there are places in the world where bribes are an expected part of business. You can read lots of news stories explaining how much bribery is part of the Greek underground economy, and I once worked with a man who was a native of India who said bribery was rampant there too.) But despite being the only one currently doing it and the only one who submitted a proposal the U.S. Department of Commerce for a new contract, the Department of Commerce withdrew the request because they had no applicants who met the requirements.
Some of those requirements, according to the NTIA’s notice issued on March 10, included “the separation of policymaking from implementation, a robust companywide conflict of interest policy, provisions reflecting heightened respect for local company laws, and a series of consultation and reporting requirements to increase transparency and accountability to the international community”.
ICANN has been under growing criticism over key policy decisions; in particular, the processes that make both the .xxx domain and the creation of gTLD “brand” domains look like nothing more than protection rackets designed to extract cash from brand owners either fearful of having their brands polluted by smut-peddlers or squatted by bigger companies.
And from ZeroHedge:
If you only read one thing from ZeroHedge for these three days, PLEASE read this post: An open letter to Jamie Dimon, head of JP Morgan Chase, from James Koutoulas, President, Commodity Customer Coalition and CEO, Typhon Capital Management. Since I only started writing these posts last week, I haven’t touched on MF Global, which blew up at the end of October 2011. Some brief facts:
- MF Global’s bankruptcy was the eighth largest in U.S. history, and the largest since Lehman Brothers.
- MF Global was one of the largest commodities futures brokers in operation when it went bankrupt. It had some stock business and some other types of trading business, but the vast majority of its business was commodities futures trading.
- Commodities futures brokers help facilitate customers’ futures contracts. They may have their own positions in the futures markets but they do not bet customer money on their own positions. At the end of each day, all the money in the customer accounts has to be accounted for.
- This didn’t happen with MF Global, even though it is regulated and was being overseen by U.S. regulators.
- When MF GLobal went bankrupt, somewhere between US$1.2 and US$1.6 billion of customer commodity account money was missing.
- No one has been charged criminally in this.
The bankruptcy was handed to a U.S. bankruptcy overseer who had little experience with commodity futures rules. The bankruptcy — for reasons that are still unclear — was filed as a stock brokerage bankruptcy, in which case counterparties (such as banks) get first crack at the remaining money. It should have been filed as a commodities brokers bankruptcy, in which case customers get first crack at the remaining money.
There were some very odd transactions with JP Morgan shortly before the end of MF Global.
The mishandling of customer funds, the lack of prosecution, the lack of experience with futures’ markets in the people appointed to oversee the bankruptcy, and the inability of regulators to detect just how far MF Global was bending and flat-out breaking the rules prior to its bankruptcy, have all badly damaged the confidence in the rule of law when it comes to U.S. futures markets and possibly U.S. markets in general.
The Commodity Customer Coalition is one of the brokerage customer groups (the main group, as far as I know) pushing for the bankruptcy to be handled as an actual commodities brokerage bankruptcy, with first priority being return of customer money. This is an uphill battle, as aside from financial publications, agricultural publications (agricultural products comprising many of the commodities traded, and a lot of farmer place contracts through the futures markets), newspapers from agricultural areas, and other commodity publications (such as precious metals), this has gotten almost no media coverage, and no statements that I am aware of from anyone in the current presidential administration or Federal Reserve.
The head of MF Global when it went bankrupt was Jon Corzine, former Goldman Sachs member, former Democratic governor of New Jersey, and former Democratic Senator from New Jersey. He became head of MF Global in March of 2010 — at the time, his ties to government and his ties to the head of the CFTC (Commodity Futures Trading Commission, one of the regulatory agencies overseeing commodities futures brokers), also a former member of Goldman Sachs, were considered to be things that made him a stronger candidate for head of MF Global. He was also one the top Wall Street fundraisers for the Barack Obama presidential campaign in 2008, being mentioned by Vice-President Joe Biden in 2010 or 2011 as the Obama administration’s go-to guy for questions about Wall Street and Wall Street fundraising. That he had such close ties to the current administration — which has said very little to nothing at all about a bankruptcy that should be getting a lot of public comment — has been noted several times. There have been congressional hearing into the MF Global bankruptcy — again, covered very little in the general media — which were noteworthy not just for the seriousness of the issue but also because it is thought to be the first time ever that a former U.S. Senator had to be subpoenaed to testify at congress.
How do you add 33 million people to the workforce while the number of full-time jobs hasn’t budged in 12 years and claim “job growth is on a tear”? First you arbitrarily subtract 20 million people from the workforce. Call them “discouraged” or “marginally attached,” whatever, just don’t call them what they really are which is jobless.
A very good post about how Credit Default Swaps (CDSs) function as insurance contracts, and some speculation that if they are like insurance contracts, perhaps they should start to be tracked and regulated like insurance contracts.
Charles Biderman explains why it is driving him nuts that not only is the stock market being almost entirely manipulated by the Federal Reserve (core economic indicators are not nearly high enough to justify the rises in stock prices that we’ve seen), but it seems to be an open secret that everyone is okay with. Which is insane, because eventually all this printed money the Fed is shoveling out is going to have consequences somewhere.
Speculation that China has quite accumulating foreign reserves in U.S. dollars and instead trading its trade surplus from the U.S. (in U.S. dollars) for oil.
A different view of events in the Middle East. Not sure I agree with it, but at the same time I am noting a lot of chest-thumping and eagerness to use military action from a U.S. President who based his campaign on how he intended to end U.S. military adventures and who received the Nobel Peace Prize early in his term as president, presumably based on his campaign promises (presumably, because prior to becoming president the current U.S. Commander-in-Chief had not been active in world politics or in setting U.S. military policies).
Subtopic: Greece . . . . ah, Greece. For a quick overview, Greece has more debt than it can pay back. It was under so much debt, it couldn’t even afford to make the required interest payments on its bonds, let alone actually pay off the principal. Most countries (or households) that find themselves so deeply in debt they can’t even pay the interest on the debt have to default — or sell something valuable to come up with enough money. Greece as a country wasn’t really happy about selling itself off piece by piece, so they were talking about default. But since they are part of the European Union, other European countries were a bit upset about that.
So two years and billions and billions of bailout dollars later, Greece just forced its creditors (or rather, some of its creditors) to take a writedown in the value of their bonds. They did this by retroactively adding Collective Action Clauses (CACs) to their bond contracts, which means that if 2/3 or more of bond holders of a specific bondagree to a change in bond terms (keeping in mind a “bond” is basically a loan, I buy your bond and you pay me a certain amount of interest for the life of the bond before you buy the bond back from me, or I roll the bond over into a new bond/loan), then all the holders of that bond have to go along with the change. Except if you are the International Monetary Fund (IMF) or European Central Bank (ECB) and then you’re exempt from the CACs. And the CACs only apply to bonds issued under Greek law (which was not true of all Greek bonds, and yeah I know that doesn’t make a lot of sense the first time you read it — some Greek bonds were created and sold under the laws of other countries, such as the United Kingdom, which doesn’t allow CACs or retroactive one-sided rewriting of contracts in general).
So, the CACs got applied, everyone to whom they applied just saw 70% of the principal of their bonds disappear, and that’s where things stand right now. Articles about Greece:
2) As a result of the bond haircuts, Greece has many pension plans that can no longer even pretend to be viable, at least according to the original contracted scheme, but pensionholders still working can take heart in the fact that their current wages will be cut, too.
3) CDS buyers will have to sweat bullets, jump through hoops, and be forced to endure every cliche known to man, but they might end up getting something for all their trouble, provided their counterparty is solvent and that counterparty itself is not heavily exposed to an insolvent party or a NTBTF institution, otherwise known as a Lehman Brothers. Expect the legal profession to be the prime beneficiary of this “event”, as any new CDS contract will be at least a hundred pages of boilerplate longer in the future.
4) Good luck to any less than AAA rated sovereign who wants to issue debt from now on out. That contracts can now be unilaterally abrogated, as Greece’ bonds were with the retro-CACs, bodes ill for attractive pricing from here on out. Peripherals in the EU will suffer most, as they face the added indignity of being subordinated to the ECB at any point the ECB chooses to exercise its divine right of seniority.
And here’s an article from Peter Tchir of TF Market Advisors, the first of many about what a truly cruddy deal this was. (Regarding the actual article title: yes, ZeroHedge can be a crude place at times. I’d rather have truth with crudity than fairytales that are excused by people prudishly pointing out “at least they don’t swear“.) To sum up the post, if you held Greek bonds issued under Greek law and you were not a senior debt holder such as the IMF or ECB, all your old Greek debt got wiped out and is being replaced by new debt that about 20% of the old debt. But there is so much doubt about the ability of Greece to pay off even the lower amount of new debt, people trying to get rid of the new Greek debt are finding the market will only pay them about 22 cents on the dollar for it. If you’re bad at math, that means if you had 200 million in Greek debt and were not the IMF or ECB, you just got told that 200 million got cut down to 40 million. And if you’re thinking “okay, you screwed me once, I’m not sticking around for this a second time, I’m getting rid of this turkey”, the only people willing to buy that new 40 million of debt will only pay you 8.8 million for it, because they think it’s a turkey too.
And a post by OpenEurope about how this is not only a cruddy deal today, but will sow even more dissension in the future. About that ISDA / CDS thing that got mentioned a couple paragraphs ago: Credit Default Swaps (CDSs) can be thought of as insurance policies. I buy some bonds but am worried that they might not turn out, so for some small percentage (usually very small) of the amount I bought, I buy insurance from another company. I keep up my insurance payments and if my bond defaults, the other company pays me the amount of the bond. This sounds really risky, but up until recently bonds issued by sovereign countries were seen as among the safest of investments (obviously by people who don’t have a very good grasp of history, but that’s another rant for another day), so lots of companies were happy to sell CDSs on sovereign bonds. However, CDSs are not traded on open exchanges so nobody really knows how many CDSs are out there, on Greek debt or anything else. The standard CDS contract is written by the International Swaps and Derivatives Association (ISDA), and they have a committee that determines if a credit event (default) has occurred that could trigger the CDS contracts. They already said once that a 50% writedown of Greek bonds was not a credit event — and got heavily criticized and mocked across the internet for it. This time, they decided the Collective Action Clauses were a credit event and CDS contracts have been triggered. To summarize OpenEurope’s post:
- Greek banks are in deep trouble — they held a lot of Greek bonds and were already in trouble, seeing that investment evaporate didn’t help them any.
- Same thing for a number of Greek pension funds that held Greek bonds. Greek citizens were already rioting about cuts to public wages and pensions even before this latest hit to their pension funds.
- Of the next amount of bailout and ECB money to go to Greece, only 57% actually goes to Greece, the rest passes through to people who hold Greek bonds. And this is one of the recurring criticisms of the entire Greek deal — was it really to bail out Greece? Or was it a stealthy way to pass European taxpayer money to banks in the rest of Europe who shortsightedly bought too much Greek debt (Greece has a long history of selling too many bonds and then defaulting on them, this is not a new thing even in recent history, they were almost constantly in default on their bonds from the end of WWII right up until they get accepted into the Eurozone) and would have gone bankrupt without the bailout money passing through Greece to the banks?
- Further bailout money is set to be dispersed, but only if Greece continues with budget cuts that will amount to 20% of gross domestic product. There’s no country that survived doing that without also devaluing their currency, which Greece can’t do because the rest of Europe also uses the Euro and won’t devalue it.
- All of this may be a moot point anyway, there are Greek elections coming up and the current political parties are losing a lot of ground to far-left and far-right parties, many of whom are gaining popularity because they say they won’t vote for further budget reductions if elected.
- Here’s the worst part: Greece’s economy has already taken such a hit from all this that it’s almost guaranteed they’ll have to go through another default in the next two to three years. But between new debt being issued, non-Greek-law Greek bonds still being around, ECB/IMF Greek bonds not being reduced, and various scheduled bailouts occurring, by 2015 85% of Greek bonds will be owned by various European government (meaning taxpayer) entities. So when Greece has to default again in a few years, it will be a much larger mess than this was because the rest of Europe’s taxpayers will be explicitly at risk.
A trio of posts from Mark Grant explaining how this whole business of writing down Greek debt actually increased Greek debt. Yes, that’s right!! In exchange for causing European bond investors to wonder exactly what is the point in buying bonds if the contract terms are written on the wind, Greek is more in debt than it was before. Yay!
The somewhat amusing part of this entire transaction is that the debt of Greece has been INCREASED. Greece and the EU handed private holders $138Bn in write-offs but with the addition of the new loan, $171Bn, the gross debt for Greece increased by $33Bn and this is if all of the legal challenges favor Greece. The total debt of Greece (sovereign, municipal, corporate and bank) has just increased from $1.20 Trillion to $1.233 Trillion and all accomplished by this brilliant plan that did nothing except to tag investors and ramp up the debt load for the country. Take this and add in the austerity measures and perhaps demands for more coming later today as the EU has its summit and an economy that is quickly sinking into the sea and unemployment that is surging and then you can visualize that the absurd has become the impossible and quickly conclude that more Greek loans will have to be forthcoming; or not with some form of Greek exit. The much bandied about notion that all of this will reduce the Greek debt to GDP is little more than a joke. For the past two years there has not been one, one, accurate projection for Greece concocted by the IMF/EU/ECB and I see no end to this now. Some quick math on my part indicates, in 2020, a debt to GDP ratio exceeding 170% and that is being kind and using optimistic assumptions. Just this morning the new numbers released for Greece showed a 7.50% deficit increase as opposed to the projected -5.50% number.
Allow me to now present to you the “OTHER” Greek debt that is outstanding and will have to be accounted for as the country defaults. Detailed below are some of the “OTHER” sovereign obligations of the Greek government which have now been submitted to the ISDA and I list some of them below. You will note that there are bank bonds, Hellenic Railway bonds, Urban Transportation bonds et al that are guaranteed by Greece. You will also note that there are bonds tied to Inflation, Floating Rate Notes, Asset-Backed securities and a whole mélange of other structured products with a Greek sovereign guarantee. What we all thought was fact is now clearly fiction and default will now bring “Acceleration” one could reasonably bet in all kinds of these securitizations and in all kinds of currencies. This could come from the ratings agencies placing Greece in “Default” or it could come from the CDS contracts being triggered depending upon each indenture and you will also note that a great many of these off balance sheet securitizations are governed by English Law and not Greek Law. You may also wish to consider the fallout to the banking system as the lead managers of all of these deals could find themselves behind the eight ball as various clauses trigger and as the holders of these securitizations line up at the judicial bench
A Dose of Reality:
- If Greece borrows money from the IMF/EU which means that they have more debt now than they did before they defaulted then they are worse off and not better off as they have a larger debt.
- If Greece has an additional $107 billion in debt that has not been accounted for because it is not in the name of the Hellenic Republic but is guaranteed by the Hellenic Republic then how are they going to pay off this debt?
- If the goal of this entire exercise was to reduce Greece’s debt to GDP ratio to 120% then how will a larger debt accomplish this as it is fiscally impossible.
- If the “real REAL goal” was to pay off the European banks so they wouldn’t default then Europe has accomplished this goal but at a terrible cost to Greece and to the Greek people.
And if you were wondering about Europe in general:
Video of Daniel Hanna, Minister to European Parliament for South-East England, stating that “in any crisis, the first instinct of the Eurocrat is to reach for his wallet — or someone else’s wallet.” He asks the question asked a zillion times on ZeroHedge, how do you solve a debt crisis by issuing more debt?
Chart showing unemployment of those under age 25 is above 50% in both Greece and Spain, and around 35% in Portugal. A previous version of this was dubbed “Europe’s Scariest Chart” since a majority of young people not being able to find work usually leads to a lot of unrest.
European banks have so much collateral loaned to the ECB in return for various bailout funds, some of them are going to start running out of things to post as collateral. The average amount across European banks as a whole is already 21% of their assets encumbered by being promised to the ECB as collateral.