Tuesday, August 04, 2015

Defaulto the Wonder Pup

Default is defined as "the failure to perform a task or responsibility".  In law it means to 'lose a case by failing to appear in court.' In computer terms it means the standard operation that occurs as programmed, barring a change by the operator.'  Lately however the world has been fixated on the financial application of the term: 'failing to pay one's obligations'.

 We watched in wonderment as the Greek 'default' loomed onto the horizon. The world drew bated breath as the Greek people hoisted the middle digit towards Berlin and then we gasped in relief when a 'revolutionary government' kowtowed to the bankers and apologized for ever dreaming of not paying a massive national debt.  They've now got an even larger national debt, but what they really wanted was the time to get another government elected before it all happens again.

 It's too bad the Greeks weren't like the gallant Ukrainians.  They aren't in the EU, yet, and so they can let their money sink to abysmal rates of exchange, or go as bust as they like. There are no Germanic banking laws to hold them back. Why, they've already voted approval for the President to declare 'a moratorium' on debt payments.   For this they're being lauded by the same banking community that was prepared to close Greece.

Ukraine has already had one small international loan fall due in July. No doubt they were able to make the minimum payment with some borrowed money, for they didn't have to do that 'default' thing.  Come the end of August there are more loans falling due, and a fairly hefty one (30 billion) coming up in September. For these loans the Ukrainians want the same thing the Greeks wanted - a 'principle trim'.  The Ukrainians want the debt holders to 'forgive',  or remit, 40 percent of the amounts owed and restructure the remaining debt.  They've already received a 'promising' reply from the Templeton Group of New York - who said they're willing to drop a 5 percent 'bonus' for terms on the rest.  That's, in Ukraine's eyes, like having someone admit she's  a hooker, and so now they are preparing to 'seriously negotiate' the price of the drop.  Templeton must be receiving some generous  tax considerations 'in lieu' - in short the US taxpayer will be paying the Ukrainian tab. The same situation should apply to the larger debts. Ukraine will not be 'forced into default' over loans owing to western banks.  And the Russian loan - 3 billion - due and payable in full in  October - will most likely get that Presidential 'ki-bosh'. Ukraine wouldn't give Putin the sweat of somebody's testicles,  even if he needed metabolytes.

Porko will need to be seen  'standing up' to somebody financial to make the masses proud to take reduced pensions and less 'free' government services than they've had since Leon was a Trotsky. They will need something about which to feel proud and neither the 'American School' of govvermint' nor the Governor of Odessa is it.

Hush!  Listen!  (SILENCE) 

That's the sound of the unvitation to become a 'real part' of Europe.

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