Which planet is Ritchie inhabiting?

Because German banks lent recklessly to Greece they have now, in effect, appointed the Troika to run the country to recover their debt.

The banks have just agreed to an over 70% haircut on the debts they are owned. 70% in NPV terms, not nominal….er, 53% in nominal?

This is evidence that Greece is being held to ransom to pay back the private banks in what manner?

It\’s the debt to the official holders that is to be paid back at par. Not to the private holders.

It\’s Ritchie\’s Courageous State that Greece is being forced to pay back.

11 thoughts on “Which planet is Ritchie inhabiting?”

  1. They lent recklessly to Greece? Reckless lending implies the borrower shod never have been given the money, yes?

    So Richie is arguing against deficit spending by States already deep in debt, i.e. nearly all of them, including us. All very sensible, but it does rather clash with what he has written before.

  2. I’ve already put a comment to that effect on his blog. Commercial banks and other financial institutions don’t benefit from this deal. They are being expected to take a whopping loss, particularly on banking books which are not marked-to-market. The institutions that will probably benefit are those that have sold CDS, of course – because even though this is by any standards a default, it is highly unlikely that ISDA will declare a credit event. American banks, not German ones.

  3. The German and other taxpayers are hosing money at Greece so that the German and French banks will take a huge hit, and to defer Greece’s implosion by a few weeks or months: to what end?

  4. Is it, just, possible that all the talk of ‘buying time’ is the heart of the matter? That Greece behind this smokescreen of solidarity, is preparing to jump? They will need time to crank up the printing presses, but can start afresh with decimal points moved to the left so as to look solid.
    And just who the hell do they think is going to holiday in Greece for the foseeable future? The flag burnt Germans? The cash strapped Brits? The Dutch ‘gauleiters’? Any one who has absorbed the pictures of devastation so gleefully promugated across the globe?
    So where is the first flush of new money coming from to kick-start the economy?

  5. German banks! Richie will demand that German banks lend money to Greece, five minutes after he condemned German banks for lending money to Greece.

  6. Obviously you read RM’s blog every day. From the comments on the post you refer to, it looks like Frances Coppola does, though maybe she was looking for references to Greek bailout. Same for Paul B, who I suspect is behind the plumbum blog. Mr Dillow, the new rockstar of economics bloggers. seems to read it sometimes. They used to say that chess and advertising were the greatest wastes of human intelligence…

  7. Luke,

    I confess, I do read RM’s blog. Partly for entertainment, and partly because he has been known to use his blog as a way of getting back at me when I’ve publicly criticised his ideas. I’d rather know what he’s saying about me behind my back.

  8. Yes, I am behind the plumbum blog. No, I do not read RM’s every day: I look at it occasionally when my attention is drawn to it by something I do read. Yes, I used to play chess. No, I have never worked in advertising.

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