July 20th, 2015 — Banks, Economics and Investing, Government
If you haven’t read Robert Reich’s explanation in the July issue of The Nation of how Goldman Sachs engineered Greece’s downfall you really ought to take a look. And please note this isn’t the only country in the world in which Goldman Sachs has become a persona non grata.
Reich’s allegations regarding Greece
Goldman Sachs came to the rescue, arranging a secret loan of 2.8 billion euros for Greece, disguised as an off-the-books “cross-currency swap”—a complicated transaction in which Greece’s foreign-currency debt was converted into a domestic-currency obligation using a fictitious market exchange rate.
As a result, about 2 percent of Greece’s debt magically disappeared from its national accounts.
The consequences were severe:
By 2005, Greece owed almost double what it had put into the deal, pushing its off-the-books debt from 2.8 billion euros to 5.1 billion.
Continue reading →
June 19th, 2015 — Economics and Investing, Government
Are you wondering why the IMF is standing by Ukraine against Ukraine’s creditors, while the IMF is refusing to extend even a smidgeon of an olive branch to Greece?
Creditors have loaned Ukraine $70 billion dollars. To receive payment of $40 billion from the IMF, the IMF required Ukraine to convince its creditors to agree with a restructuring plan that would enable Ukraine to raise $15.3 billion out of the $70 billion it owes its creditors.
A committee of bond creditors came up with such a plan for settling with Ukraine. In response Ukraine: Continue reading →
June 5th, 2015 — Economics and Investing, Government
Today 25 distinguished economists from around the globe have issued a plea to the Eurozone to distinguish between reform and austerity. These are the top experts in the world; they include Joseph Stiglitz, Nobel prize winner in Economics.
What are these experts talking about?
For one thing, they are talking about the troika’s demands for Greek pension reform. Here’s the demand from the bailout monitors that seems least reasonable to me: “…the abolition of a special monthly stipend for pensioners receiving the lowest benefits”. Continue reading →