this wild
OH!
Deal?
Germans are the best - how the f can they pull off this is beyond me.
You have to watch her press conference this morning to understand where I’m coming from - tired of her 180 degree turns.
south germany has a good ring to it
Well, the results are in and Tsipras & Team are serious failures as strategists, so much for “game theory” and “brinkmanship”…seriously blew up in their face. 
Haha, I would feel bad for the Greeks…but my account is so money right now.
If anything, Germany has been the most transparent and objective party in this negotiation. The stricter terms of this new bailout agreement reflect the economic deterioration of Greece, and the Greek governments further loss of credibility in meeting reform targets. Compared to two weeks ago, Greece’s creditors just require more favorable terms now to achieve the same utility from the deal. Given the increased cost of the bailout and the difficulty of the negotiation, it is also reasonable that Germany has become more indifferent towards expulsion of Greece from the Euro Zone.
Looks like the Greeks are all squatters on German property now. Now it’s just a matter of sending force to enforce their property rights, and then borrow from the Greeks to cover the costs of supervising… Oh wait, they tried that once before.
An eye for an eye, and the wole world ends up blind. This is a case where what’s right and what’s good are in conflict. What’s right is to pay back borrowed money; what’s good is a functioning economy that has some chance of making repayments out of returns from economic growth. Germans have tended to feel that as long as you do what’s right, you don’t need to worry about what’s good, they assume that good takes care of itself if you are doing things right, but that turns out not to be true always.
purealpha, I think that if you push the game theory further, you’ll find that there are more plays. This is probably closer to poker than to chess.
Right, as Ohai said, this is what you would expect from creditors, and why Greek “strategy” was so strange.
There were two options, 1) put on a tie, act like grown ups, and try to work out revised terms, while simultaneously working back home on your revenue/risks, or 2) default.
Greece had some weird dream of not defaulting, but asking for better terms while being dicks, decreasing revenue and increasing risks…doesn’t make sense.
Of course, welcome to the lovely world of high finance.
This is what we do, we exploit clueless people. Same as we did with marketing the subprime loans in the states. Now the Greeks have nothing. They were hopelessly outgunned before, but now we even seize their house, plus the whole while they suffer brain-drain…so they just get dumber and poorer. Which in turn gets them exploited more and more, by the more savvy Northern Europeans. Hmm, it’s basically income inequality I guess, wealth concentrates geographically…and not in Greece!
If I were Greek, I imagine I would have rather left the Euro.
I wonder if Germany didn’t get too greedy and if this won’t come around to haunt Merkel when the Greeks take this deal to parliament following all of this press.
^ all roads lead to leaving the Euro. eventually, the Greeks’ support of the Euro and EU will fall along with their willingness to accept austerity. i mean, if you’re in a depression for 10 or 20 years, you’re eventually just going to become hostile. i see Golden Dawn support spiking, especially now that Syriza has bent, Syriza support remaining stable and potentially new left wing parties that wish to leave the Euro growing in prominence.
You’re right but I was just referring to how Merkel and her team behaved in the last 24hrs. They proposed a “time out” to (I think) freak the hell out of everyone - then she tells a BBC reporter tht “…talks are difficult, we won’t pay any price…”
Next morning, I wake up to a no deal situation and tweets mostly from the german side that there may not be a deal - by the time I’m in my office, they announce a deal. And her demeanour was as if these discussions and all the delays were no big deal - she said “…this is perfectly normal during course of negotiations, I’m quite alright with what’s happened so far…”. Whereas on the sidelines, her deputy and Jeroen are giving speeches to the media along the lines of “…this was really something, we have never seen anything like this - we’re in a very difficult position and we still don’t know whether Tsipras can get this through his parliament…”.
Definitely, why they want to continue along this path of dispair is beyond me. For awhile it was to save the Euro-region banks but now it just seems like a political circus.
Why would Greece accept the terms of this bailout? Because their fellow Euro members just gave them an aid package worth over 80 billion euros?
Plus, the path of exiting the Euro Zone will probably be even worse than what Greece is currently experiencing. For many years, the Greeks lived lifestyles that they did not have the resources to sustain. Greece allowed pensioners to retire early at 61 (Germans retire at 67). They paid over 17% of GDP to pensions (UK spends 14%). They tax corporations at 9% lower rate than the US. They lost over 30 billion euros a year to tax evasion (which Syriza said they would condone as part of their election campaign). They manipulated their balance sheet and lied when they applied for membership in the Eurozone.
This had to unwind at some point. A bankrupt Greece would mean people living on food rations. Today, Greeks can withdraw 67 euros a day from the ATM. When Greek banks are completely insolvent, the Greeks will withdraw drachmas worth less than toilet paper. The UN would be sending in medical assistance, because Greece would not have access to basic medical imports like insulin.
Call Germany and the other creditors harsh, but they are still helping Greece. Their willingness to give Greece a “no strings attached” package was destroyed when Greece elected Syriza and threw their previous bailout terms out the window. Now, the Euro region has still come together to prevent Greece from falling back to the third world. They even tolerated this “brinkmanship” and the downright disrespectful behavior of that Varoufakis guy. Show some gratitude that Germany and friends did not walk away to begin with.
I probably would, too, but sure as hell wouldn’t want to if I had personal debts denominated in Euros.
If the state of Illinois left the USA and had to adopt a new currency, my mortgage (in USD) would double or triple in the new currency terms. It’d financially ruin a lot of indebted people.
http://mobile.reuters.com/article/idUSKBN0P40EO20150713?irpc=932
“Merkel’s allies meanwhile defended the deal, with her chief of staff, Peter Altmaier, saying Europe had won and Germany ‘was part of the solution – from the beginning until the end!’”
German’s talking about solutions makes me anxious.
Maybe, but at the same time, I imagine the outcome given their current 170% debt load may be inevitable so it may be best just to move forward.
FTFY
I was leaving a step for the recipient.
Everyone who thinks this things is over is a fool.
a) How will Alex get this punishing deal approved by his “comrades” without risking new elections?
b) How will Angie sell this deal to the Bundestag, when a third of her own party, the entire communist party and the neo-stalinist portion of the Greens reject any deal?
c) How are countries with powerful pro-GREXIT mentalities going to sell the deal to their electorate and why should they take the hit for Greece’s sins?
d) Given they imminent worsening of the Greek depression, how is Greece supposed to pay back 2016’s principals, a large number of which are held by the unforgiving market?
