The Greek PM George Papandreou kicked Europe's power brokers in the nuts yesterday by announcing that he was going to hold a referendum on the future of austerity measures in his country. It would finally take the matter out of the hands of the politicians and return the power to the people, and boy are Europe's big wheels pissed!
WRAPUP 4-Greece risks meltdown after bailout vote bombshell | Reuters: "ATHENS, Nov 1 (Reuters) - The Greek government faced possible collapse on Tuesday as ruling party lawmakers demanded Prime Minister George Papandreou resign for throwing the nation's euro membership into jeopardy with a shock call for a referendum.You couldn't make this up, it's so ludicrous. The Greek nation is suffering from the same malady as homeowners here in the US whose mortgages are "underwater" -- who owe more than their home is worth. Greece, which is a small and relatively poor country, is so saddled with debt that it can't possibly pay it all back, but as in so many other venues around the West, the solution to Greece's woes is to simply pile more debt upon already bad debt. And this is done not for the sake of the Greek nation or the Greek people, but for the sake of banks in Europe and the US.
Caught unawares by his high-risk gamble, the leaders of France and Germany summoned Papandreou to crisis talks in Cannes on Wednesday to push for a quick implementation of Greece's new bailout deal ahead of a summit of the G20 major world economies.
The euro and global stocks were pummeled on financial markets after the Greek move threw into question the survival of crucial efforts to contain the euro zone's sovereign debt crisis."
Without the steady flow of interest payments, the banks would collapse, triggering a cascade of sovereign defaults the likes of which has never been seen. The amount of financial exposure that banks and governments have to swaps and derivatives is so immense that there isn't enough money in the whole wide world to cover the losses should the house of cards come crashing down. TARP and the trillions of dollars that the FED lavished on the banks in 2008 to keep them afloat would not even be a drop in the bucket on the scale of these losses -- and the strip of duct tape holding the edifice together is at this point nothing but the willingness of Greek politicians to pander to their masters and sell out their people.
Every week for months, we've been watching this back-and-forth drama of negotiations over what sort of deal the European nations could work out with the Greek politicians to prevent a default, which would be a "credit event" triggering the payment of the derivatives contracts held on the Greek debt. So long as the fiction of an arrangement existed, the can could be kicked down the road, and the other countries teetering on the brink of insolvency would be salvageable, too. Now that there's the distinct possibility that the Greek people will be allowed to walk out on pacts demanding more austerity, the entire edifice is looking shakier by the day.
It's sad that it had to come to this, but whose fault is it that these fantastic sums of debt were allowed to accumulate, and whose fault is it if undisciplined politicians along with deceitful and insatiable bankers colluded to make these impossible financial arrangements to gradually bleed the nation dry?
The debts of Greece are too onerous for the people to bear, and it should not be laid on the backs of the common folk to prevent bankers and their investors from taking a loss. This is where the financial crisis took a wrong turn to begin with: instead of prosecuting the deal-makers with fraud and writing off the bad debts, anything and everything is being done to bleed working people in order to preserve the wealth of the wheeler-dealers responsible for creating this fiasco.
It's about time someone asked the Greek people how they feel about how they've been treated, instead of how investors in foreign countries feel about their prospects for profiting in spite of their failure to do due diligence before investing. We are entirely too submissive and subservient to the investing classes, rather than the working people whose lives and futures are most jeopardized by the ill-conceived machinations of big Wall Street firms and the international banking cartel.
Lets restore some balance and some sanity to this financial system, before it sucks us all down a whirlpool.