Posted on 05/02/2010 7:55:54 AM PDT by TigerLikesRooster
Faber: Greece Needs 50 Percent Debt Writedown
Friday, 30 Apr 2010 03:15 PM
By: Julie Crawshaw
Economist Marc Faber, publisher of the Gloom, Boom and Doom report, says Greece needs a debt writedown of as much as 50 percent.
“They would have to pay back 30 to 50 cents on the dollar,” and the banks would have to take the losses, Faber says.
“If it’s bust, doesn’t help to extend loans or increase loans,” he says, comparing Greece to a corporation that has gone bust.
Those who lent money to Greece and bought its bonds should have looked more carefully, says Faber and should bear the brunt of the losses, Faber says.
“There was excessive consumption (in Greece) and when you have excessive consumption, the level of debt goes up substantially and one day you just can’t pay,” he told Bloomberg.
Faber says he’s not sure that Greece’s problems signal the beginning of the end of the euro zone, but stresses that the bailout Greece package currently on the table is “simply postponing the problem.”
“In a democracy, no problems are solved — they are just postponed until the ultimate crash will destroy everything.”
(Excerpt) Read more at moneynews.com ...
P!
California is a fine example. The public sector unions are trying to force a bill through that will make it near impossible for cities and counties to declare bankruptcy. Because this would lead to re-doing union retirements and union contracts
The best thing they can do is write down their debt. Pay 50 cents on the dollar. That will prevent this from happening again in the future. Same with California. If no one trusts you to pay your debt, they won’t loan you the money, and you won’t incur the debt.
Did I hear Rush correctly state the CA teachers union pension is underfunded by $500 Billion? If so, the US taxpayer will bail out these socialists. Again.
Hey, talk like that might get China looking too closely at the United States's situation.
The nations pensions are underfunded by about $3.35 trillion, and CA is $500 billion of that amount.
Greece needs reality to hit, more than they need money.
The United States needs the same...
We need to clean these liars and pols in denial out of office.
If we don’t, look at Greece, people... and get ready.
YEP....I’m getting ready.....the DRUGS our Pols have been on are too good for them to give up....(OUR MONEY + Debt = DRUGS to POLS)
And/Or: go back to their old currency with it's own valuation.
Greece’s problems will be a huge blessing for the UK. It has (probably only temporarily, alas) silenced the europhile fools in the UK who are constantly pushing for monetary and political union with the EU.
The Germans will end up picking up the tab,EU will destroy their economy.
Will the Greeks still get their summer holiday?
Eventually...the folks looking at the teacher’s profession in California...will laugh, and then turn to other states for a job. There’s virtually zero chance that a guy who is 45 today...will ever collect on his pension. What’s even more amusing is that he’s likely a math teacher and ought to be smart enough to figure out the mess in front of him.
Socialism .... no matter how well you conduct your own affairs, you’re still forced to share the problems of other losers.
Sort of the political equivalent of sharing heroin needles with other people you don’t know or like.
Isn't that our plan? Bailouts on borrowed cash, extending unemployment checks for two years, making work pay tax credits to those that dont pay taxes (and some don't even work) free health care...ever see that Marxist show "Democracy Now "??
I know, once we give voting rights to all those poor illegal Mexicans they will put in politicians that will understand why all this spending wont work. right?
And future Greek borrowers will pay 40 to 60% interest, as lenders factor in whether they in turn will have to "take the losses".
“silenced the europhile fools in the UK who are constantly pushing for monetary and political union with the EU.”
Completely wrong. More and mopre people in the UK are begging germany and france to bail’em out like greece. The UK debt is sheer horror. An island with a society based on services without any real economy is deemed to fail. A nation can’t exist on a economy that is based on cutting each others hair.
“They would have to pay back 30 to 50 cents on the dollar,” and the banks would have to take the losses, Faber says.
It seems the writedown would be as much as 70% and as little as 50%.
Another case of optimistic journalism.
It is interesting that it took the rating agencies so long to add up the risk in the Greece economy. Just goes to show..once again that the rating agencies are bs.
CA is running and it’s cities are running on only one thing now..to big to fail. The faith that the USG will bail them out or underwrite their debt.
If I held any CA Bonds I would be dumping them. I started warning friends 5 years ago to dump their CA tax frees.
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