Apparently Goldman Sachs has helped Greece hide the true extent of its debt for some time, using currency swaps stuffed with hidden debt.
Yay banksters!
A couple points not mentioned by the article:
- For all the huffing about the Maastricht deficit and debt/GDP limits, it has to be said that France and Germany have periodically flouted these limits too, on a "we're Gumby, dammit" basis. The limits are polite fiction.
- The fact that GS sold the swaps on to a Greek bank in 2005 may be good news. Greek banks depend on Greek government bonds; some forebearance or rescheduling might be obtained by persuading the banks not to blow off their own feet.
How to know you're a finance/geopolitics weenie: you can spell "Maastricht" correctly without looking it up.
ReplyDeleteI avoided "hopeless" finance/geopolitics weenie status only by being sufficiently unsure of the spelling that I looked it up anyway.
Sheesh Lewy, I'm sick of all this financial mess.
ReplyDeleteWhen do you see a return to normal?
And colour me maassifly impressed at your spelling prowess!
And colour me maassifly impressed at your spelling prowess!
ReplyDeleteI was reading the Economist regularly in the late '80s / early '90's, when a) the Maastricht treaty was big news, b) the Economist didn't suck, and c) I was young and my brain still worked.
As to when we return to normal... depends on what you mean by "normal"... we've been living in a world of ever lower inflation, ever lower interest rates, and ever expanding credit since a ways back.
(I talked to a bond analyst from a large institution at a Super Bowl party; he remembered the exact day the bond market bottomed and the interest rates peaked in November of '81).
We aren't going back to that normal, because interest rates are zero, inflation's close to zero, and everyone's broke.
So it will be a "new normal", like it or not.
Oh and happy upcoming anniversary Matt and Fay!
ReplyDeleteYay love!
Thanks Lewy, for the answer and the wishes.
ReplyDeleteGoldman Sachs seems to have their sticky little fingers in every mess, don't they?
ReplyDelete"The bank declined to comment on the controversial deal. The Greek Finance Ministry did not respond to a written request for comment."
ReplyDeleteSurprise!
"it has to be said that France and Germany have periodically flouted these limits too, on a "we're Gumby, dammit" basis"
lewy, LMAO!!