Portugal & Greece downgraded on risk of debt default

[Zanza]

Either the German taxpayer will have to lend Greece a bunch of money that won't be repaid, or German banks will have to write off a bunch of Greek debt that's not going to be repaid, and the German taxpayer will have to recapitalize the German banks.

The private banks will long have disvested from Greek debt, that's all owned by the ECB nowadays. But some state-owned banks still have considerable investments in Greek debt, e.g. KfW. They might need a capital injection when they have to take considerable write-downs. But probably not on the scale as private banks would as the KfW can finance itself through massive leverage thanks to its explicit state guarantee. I am also not sure if state-owned banks have to fulfill the Basel III criteria.

However, the ECB would probably have to take considerable write-downs on the collateral posted by Greek banks and the Greek bonds they bought in the secondary market (however they bought it heavily discounted, so a 50% cut would maybe just be a 10-20% cut for the ECB). The member banks of the ECB have some 80 billion or so in capital, but they can't use all of that obviously, so they might need fresh capital injections. From the tax payer.

That said, Germany's and France's fiscal position aren't exactly stellar either. If Greece, Portugal and Ireland default, that might be something we can cope with. If Spain and Italy default, Germany and France are toast.

[Neil]

The longer that they keep stringing Southern Europe along with the notion that they can have lifestyles similar to those of their more civilized Northern European friends, the worse the crash is going to be.

[The Minsky Moment]

I am also not sure if state-owned banks have to fulfill the Basel III criteria.

They are supposed to I think b/c the Landesbanken were squealing about new capital requirements.

[The Minsky Moment]

Portugal, which has about 9 billion euros ($12.8 billion) of bond redemptions coming due in April and June, faces weeks of political uncertainty after Socrates resigned on March 23 in the wake of a parliamentary defeat on his austerity measures. Elections are expected in May or June.

Time to drink the hemlock?

[HVC]

The big mistake of the EU was in forgetting how corrupt mediterranian societies really are. It's not laziness or stupidty (it takes hard work to be successfully corrupt lol), it's just ingrainined and won't go away soon. They should not have been given free reign over monies borrowed.

[Ed Anger]

The big mistake of the EU was in forgetting how corrupt mediterranian societies really are. It's not laziness or stupidty (it takes hard work to be successfully corrupt lol), it's just ingrainined and won't go away soon. They should not have been given free reign over monies borrowed.

They are like children. Dark little children that steal the car keys.

[HVC]

The big mistake of the EU was in forgetting how corrupt mediterranian societies really are. It's not laziness or stupidty (it takes hard work to be successfully corrupt lol), it's just ingrainined and won't go away soon. They should not have been given free reign over monies borrowed.

They are like children. Dark little children that steal the car keys.

It's like if you gave detriot several billion dollars and then were surprised when they fucked up

[Caliga]

Hm, would you say any of the following societies are corrupt?

* Bulgaria
* South Korea
* Lithuania
* Vietnam
* Hungary
* Croatia

I have a sovereign debt fund and those are the top countries it owns debt from, in descending order (the Bulgarian holding is more than double the South Korean one).

[HVC]

Ya, you're screwed

[Ed Anger]

Bulgaria: Come for the computer viruses.

[Caliga]

They are like children. Dark little children that steal the car keys.

Was Northern Europe: rubbed on the bitch?

[HVC]

Bulgaria: Come for the computer viruses.

stay for the easy women who really seem to like anal. like like it a lot.

[Caliga]

Ya, you're screwed

Fund has been doing well lately though.

[Ed Anger]

Bulgaria: Come for the computer viruses.

stay for the easy women who really seem to like anal. like like it a lot.

Please tell me more sir.

[The Minsky Moment]

Hm, would you say any of the following societies are corrupt?

You might have a problem except for the fact that corruption is not really the source of the debt crisis.