@Dave: To me, it’s just another piece of proof of Voridis’ fas­cist sym­pa­thies. BTW, was this guy ever arrested for harass­ing peo­ple back then or did he just get off scot-free?

Who knows why the rat­ings agen­cies still have cred­i­bil­ity, but you have to give S&P credit for going against the “aus­ter­ity for­ever” group-think in their lat­est round of euro­zone down­grades. And I guess Merkel gets gold star for per­sis­tence in duplic­ity:

Jan­u­ary 14, 2012, 11:31 am
S&P On Europe
Paul Krugman

S&P’s down­grade of a bunch of Euro­pean sov­er­eigns was no sur­prise. What was some­what sur­pris­ing — and which went unmen­tioned in almost all the news sto­ries I’ve read — was why S&P has got­ten so pes­simistic. From their FAQs:

We also believe that the agree­ment [the lat­est euro res­cue plan] is pred­i­cated on only a par­tial recog­ni­tion of the source of the cri­sis: that the cur­rent finan­cial tur­moil stems pri­mar­ily from fis­cal profli­gacy at the periph­ery of the euro­zone. In our view, how­ever, the finan­cial prob­lems fac­ing the euro­zone are as much a con­se­quence of ris­ing exter­nal imbal­ances and diver­gences in com­pet­i­tive­ness between the EMU’s core and the so-called “periph­ery”. As such, we believe that a reform process based on a pil­lar of fis­cal aus­ter­ity alone risks becom­ing self-defeating, as domes­tic demand falls in line with con­sumers’ ris­ing con­cerns about job secu­rity and dis­pos­able incomes, erod­ing national tax rev­enues.

And today we read about the response:

Ger­man chan­cel­lor Angela Merkel has called on euro­zone gov­ern­ments speed­ily to imple­ment tough new fis­cal rules after Stan­dard & Poor’s down­graded the credit rat­ings of France and Aus­tria and seven other second-tier sovereigns.

Still bar­rel­ing down the road to nowhere.

ahh­hhh! need new shows!

@Mast: I’d like to see him back some­time, too. =)

Losses for Greek bond­hold­ers?! Oh the human­ity!

Hedge Funds May Sue Greece if It Tries to Force Loss
By LANDON THOMAS Jr.
Pub­lished: Jan­u­ary 18, 2012

LONDON — Hedge funds have been known to use hard­ball tac­tics to make money. Now they have come up with a new one: suing Greece in a human rights court to make good on its bond pay­ments.

The novel approach would have the funds argu­ing in the Euro­pean Court of Human Rights that Greece had vio­lated bond­holder rights, though that could be a mul­ti­year project with no guar­an­tee of a pay­off. And it would not be likely to pro­duce sym­pa­thy for these funds, which many blame for the lack of progress so far in the nego­ti­a­tions over restruc­tur­ing Greece’s debts.

The tac­tic has emerged in con­ver­sa­tions with lawyers and hedge funds as it became clear that Greece was con­sid­er­ing pass­ing leg­is­la­tion to force all pri­vate bond­hold­ers to take losses, while exempt­ing the Euro­pean Cen­tral Bank, which is the largest insti­tu­tional holder of Greek bonds with 50 bil­lion euros or so.

Legal experts sug­gest that the investors may have a case because if Greece changes the terms of its bonds so that investors receive less than they are owed, that could be viewed as a prop­erty rights vio­la­tion — and in Europe, prop­erty rights are human rights.

...

At the root of the dis­pute is a grow­ing insis­tence on the part of Ger­many and the Inter­na­tional Mon­e­tary Fund that as Greece’s econ­omy con­tin­ues to col­lapse, its debt — now about 140 per­cent of its gross domes­tic prod­uct — needs to be reduced as rapidly as possible.

Those two pow­er­ful actors — which con­trol the purse strings for cur­rent and future Greek bailouts — have pres­sured Greece to adopt a more aggres­sive tone toward its cred­i­tors. As a result, Greece has demanded that bond­hold­ers accept not only a 50 per­cent loss on their new bonds but also a lower inter­est rate on them. That is a tough pill for investors to swal­low, given the already steep losses they face, and one that would be likely to increase the cumu­la­tive hair­cut to between 60 and 70 percent.

...

But with their con­sid­er­able finan­cial resources, some funds may be will­ing to pur­sue such a route, and they point to sim­i­lar cases won by hedge funds in Latin Amer­ica. While the prospect of Greece pay­ing an investor any time soon is slim, the coun­try wants to avoid a parade of law­suits across Europe, which would restrict its abil­ity to raise money in inter­na­tional markets.

Argentina, which defaulted on its debts in 2002, still faces legal claims from investors that have made it nearly impos­si­ble for the coun­try to tap global debt markets.

“It can­not be Angela Merkel that decides who suf­fers losses,” said one aggrieved investor who was con­sid­er­ing legal action and did not want to be iden­ti­fied for that rea­son. “What Europe is for­get­ting is that there needs to be respect for con­tract rights.”

It is not just the legal cud­gel that investors are threat­en­ing to use. Some hedge funds have dis­cussed among them­selves the pos­si­bil­ity of demand­ing a side pay­ment, as they describe it, as a price Europe and Greece must pay if the two want the funds to par­tic­i­pate in the agreement.

...

[...] post by anti-fascist researcher and radio host Dave Emory is rem­i­nis­cent, as he points out, of the fas­cis, « a bun­dle of rods bound together with an axe head joined to it ». [...]