“Clinton Son-in-Law’s Firm Is Said to Close Greece Hedge Fund” says
It was a hedge fund portfolio pitched by Hillary Clinton’s son-in-law, Marc Mezvinsky, as an opportunity to bet on a Greek economic revival.
Now, two years later, the Greece-focused fund is shutting down, after losing nearly 90 percent of its value,
Where is the dead cat bounce for Greece at least? And why have they faded from the media? Has Facebook sent them into a memory hole? It used to be an urgent question as to whether this country (population a little smaller than Illinois, which is probably just as insolvent on an actuarial basis) would stay in or leave the EU. Why is it no longer urgent? They have been successfully bailed out?
Greece is still a hot news subject. Less so than a few months ago because there is more competition (Puerto Rico, Brexit…etc), and because, as many have said, Greece is just the West in fast forward.
It is important to note that “the news priority” do not always reflect the real importance of the events and in many cases are not accurate. As an example, Spain is often portrayed as a basket case (and it is one, just for different reasons than the ones commonly described). However, it has had GDP growth of more than 3% for several years (while losing population due to immigrants returning to homelands and natives emigrating). In many ways the Spanish economy is one of the best in the EU (and the GDP of Spain is about 1.7 trillion dollars).
Greece will not be able to pay its debts, who can doubt that. Nevertheless, there are many American cities and states that are in the same predicament and nobody seems to care much.
The main issue in Greece was the “preservation of the system.” “You are going to play by the rules and we are going to tell you what are the rules.” That has been accomplished; case closed. Greece remains a mess but no longer treats the stability of the EU.
The stability of the EU (and US) will be in danger when the current “government Santa Claus machine” stops working. Current politics are just a cargo cult (https://en.wikipedia.org/wiki/Cargo_cult).
We have much more important things to talk about than Greece, such as transgender bathrooms.
I see that Mezvinsky Jr. has the same Midas touch with money as his dad did. Perhaps antimalarial drugs affected his mental stability as well, because nobody sane would invest in Greece – they rank just above Nigerian scammers, gypsy fortune tellers and Puerto Rican bonds in terms of a sound place to put your money. I’m sure that those investing in Marc’s hedge fund relied on his own long and successful track record and were not influenced by the possibility of gaining influence with his mother-in-law.
Re: Spain I visited this January and it looked very good for a place that was “depressed”. A lot better than most of the US . No boarded up buildings or closed shops, no homeless on the streets, etc. Lots of Chinese and Japanese tour groups (the Japanese are better dressed). I really didn’t get that vibe of desperation that you felt when I visited Ukraine or Greece. And I wasn’t just in Madrid but in a number of cities and towns. Madrid itself looked more than good, with all sorts of cute boutiquey shops and all the usual international suspects – Estarboocs, etc.
I’ve read that one of the factors of George Soros’s investment success was not so much overarching theories or theses, but his willingness to change his mind on a dime. Perhaps something to consider when your positions are not working out.
Well, I’m sure the Clinton boy will be okay either way.
I have to admit I haven’t followed any of the news about Greece for the last year; since 2009 I think had pretty much enough of hearing the same story all over again.
The conclusion/impression I had since last year’s events, some I mention below, was that:
Greece appears, and is most probably, not a destabilizing factor to Euro/zone anymore.
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Questions:
Relative to (4), how does US distribute newly printed money? does it give to troubled states without criteria?
What makes debt restructuring for Greece so troublesome? What effect would have to the rest of the EU/zone?
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I have no clue if they will get that money (6.a), or if they went successfully through their obligations/deal or whatever, or if I am completely right about these facts –as they are from my recollection of last year’s events–
1. Greece was and still is in a need of debt restructuring, that was being denied even for discussion.
2. EU wouldn’t let Greece go back to a new drachma (or an electronic or cryptocurrency alternative).
Who would pay their debt if they did. Somehow the previous Greek government made some kind of deal to pay around 40% (not sure about this number) of that debt, even if Greece went bankrupt and returned to drachma. The idea to continue to be in Eurozone and issue another local currency at the same time I think had been rejected by Greek government.
3. the apparent solution to EU/zone problem was ECB to be able to print money, in a way to inject it into the local economies, where needed but with economy performance criteria.
a. also it would not be applied recursively, so, Greece wouldn’t get any of that money.
b. during the months Greece was in the news, this was still in the making, so, EU/zone was probably facing really some kind of systematic ‘threat’.
4. a referendum that appeared to have no real immediate effect, other than improving the lending terms Greece would get, and some kind of future debt restructuring that previously was completely out of question.
a. a referendum which I remember, Bloomberg was showing it would be in favour of Greek government preference, whereas all local media (which appear to owe loads of money in taxes), appeared to favour the fear.
5. A referendum rendered somewhat useless, with ECB cutting off help through the Emergency Liquidity Assistance, ‘ending’ all the agony
6. with a deal that would be agreed, Greece to go to another austerity measures program (apparently branding plays role also in politics), and also get 20 bln from that printed money in a span of some years (not sure how many), otherwise if everything fall apart 3.(a) would apply.
To answer Jackie’s question, the stories you see in the news about whether an economy is doing well or poorly is about whether the economy is doing well or poorly to investors. That is who the stories are written for. This used to be somewhat related to what is happening to the standard of living, but that hasn’t been the case for awhile. The US business press doesn’t have many Spanish readers, but it has lots of readers who might be interested in investing in Spanish businesses.
About half of a country’s economic growth is simply derived from population growth, which starts to mean something different in a world which has developed but become overpopulated. A country can lose population, or not grow as fast, but the standard of living of the people it does have will increase. Economic growth numbers will be terrible because they are too tied into population growth numbers. Japan, which probably has the highest standard of living in the world, is the ultimate example of this.
Ed – How do you measure standard of living? GDP per capita adjusted for purchasing power? Median household income?
“How do you measure standard of living? GDP per capita adjusted for purchasing power? Median household income?”
This doesn’t answer your question, but these statistics -and it was GNP then, GDP was adopted later- were thought up during the Great Depression, when economic growth stalled, and the objective of economic policy was to get growth again by any means possible (and every possible means has really been tried over the next eighty years). So something like GDP/ GNP measures economic growth.
However you get to a standard of living statistic, I don’t think GDP can even be part of the process. You might be able to start with median income, and then back out various rents that people have to pay, and make some adjustment for purchasing power and for non-availability of goods (not an issue in “the West” but it has been an issue historically).
The Human Development Index (HDI) (“http://hdr.undp.org/en/content/human-development-index-hdi”) that statisticians at the UN game up with is a not bad attempt to measures something like standard of living. You don’t see it get cited much in American media. It tells you nothing about where the good/ bad investment opportunities are, and historically the U.S. has performed with a fair amount of mediocrity on this index.
“Growth” to an economist basically means growth of debt. Equity markets are tiny compared to debt markets, and debt markets must be inflated over time to avoid “stagnation” (no net new debt). Greece, parachuted into a union with actual productive economies, was able to expand its debt rapidly with no hope of servicing it, but plenty of banks eager to pile it on and view it as commingled with more robust Eurozone debt. Greece was the subprime debtor of the EU and faced the same prospects as a California crop picker with a million dollar home mortgage. Adding color was the cultural aversion to paying taxes that welled up into a sovereign aversion to paying debt service.
DeKalb County GA is a fair imitation of Greece, as is Illinois and Detroit. All ungovernable, so just thrown to the bankers for rendering out. You won’t meet many bankers there in person outside of fortified enclaves, and those are just deployed to negotiate interminably with the hapless governments seeking one more rollover.
Bernie and Warren may be onto something, give these TBTF banks a haircut and cut them in shreds, then call the shreds local credit unions and make them deal eye to eye with debtors and depositors, not politicians. Make New York a theme park where we go to see “Hamilton” or the MMOMA. And by the way, don’t fly there unless you enjoy Venezuela-grade queing complete with uniformed TSA nags and minders.