A Few Thoughts

Do You Trust Greece?

Have you wondered why leaders of the EU, ECB and IMF have started to get cold feet with respect to bailing out Greece?  Well, read the quote of Antonis Samaras (leader of the conservative New Democracy party) – who is expected to be the Prime Minister in April.  This is what he said on Sunday night, before the Greek Parliament passed their most recent austerity measure:

“I want to avoid the jump over the cliff today, to buy time, to restore normality and to go to elections tomorrow. This is why I ask you to vote in favor of the new loan agreement today and to have the ability tomorrow to negotiate and to change the current policy which has been forced on us. But to change [the policy] we must exist as a country, as society and as a democracy. I’m not asking you to vote in favor of the wrong recipe. I was the first to reject it and I stand by that. But I’m asking you to walk away from the edge of the cliff and to fight together tomorrow.”

Who wouldn’t want to do a deal with someone who says, “lets tell them what they want to hear today, we’ll get the money and renegotiate tomorrow”?  Granted, Jenny would argue that this approach runs parallel to how I got her to marry me, but that only furthers the evidence that this is not the kind of guy most people would trust.

The Lesson of Portugal

An interesting NY Times article argued that Portugal has been the anti-Greece – they’ve done everything that EU and IMF officials have asked.  Yet, their debt-to-GDP ratio was 107% when they received their loan (last May) and it’s expected to reach 118% next year.  They’ve cut their deficit, but their economy has shrunk.

Here’s What I’ve Wondered

The plan with Greece anticipates that their debt-to-GDP ratio will be 120% again by 2020.  Currently, their ratio is 160%.  Unfortunately, 120% is nowhere near sustainable.  So, we know that these problems aren’t going away.  I wondered why there would be a plan that would be so impotent.  I read one article that argued that the EU, ECB and IMF needed to make 120% sound like an appropriate level – otherwise, they’d be calling attention to Italy’s problems.  You see, if we all act as if my hair is okay, no one will notice that Donald Trump also has hair problems.

For the Romantics Among You

Atlanta Fed President Lockhart gave a speech on Valentine’s Day and mentioned some posts on Twitter that used economic and monetary policy to deliver Valentine messages.  He listed some of his favorites:

1. I’d like to borrow you overnight and hold you to maturity.

2. You’re a systemic risk to my heart.

3. Hey girl, you’re the only number in my beige book.

4. Being with you hikes my pulse by several basis points.

5. It’s the economy, Cupid.

I was relieved to have evidence of these tweets.  It took the heat off of me.  Jenny didn’t seem to appreciate the card that I wrote for her that said, “you make more than my balance sheet swell.”  I don’t get why she didn’t like it.  It was just a reference to my heart.

Have a great weekend.

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