A Mega-Strike Aims to Challenge Austerity

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http://www.spiegel.de/international/europe/0,1518,792742,00.html


The Greek parliament is expected to pass painful austerity measures on Thursday in order to prevent insolvency. But as the cuts begin to affect an ever-larger number of people, the general strike called for two days this week promises to be massive.

Nikos Petridis has experienced plenty of difficult times in his life: a world war, the Greek civil war and the military junta. These days, the pensioner is consumed by fear yet again. On an unseasonably chilly mid-October morning, he sits with an acquaintance in a café in Athens' Kallithea suburb. They while away almost every morning here reading the newspaper, chatting and playing cards.

Petridis pours out his heart. "How on earth are things supposed to go forward?" he asks. "For two years we've heard nothing but bad news. I don't know if my pension is going to be paid in November. What am I going to live on?"

The existential angst that has gripped Petridis is widespread in Greece. For three years now the country has been gripped by recession, the worst since the end of World War II. Eighty-five percent of Greeks polled in a recent survey believe the country is headed in the wrong direction, with no sign of a turnaround anywhere in sight.

Since the government of Prime Minister Georgios Papandreou passed the country's first austerity measures in March 2010, Greece's 11 million residents have been confronted with one package of belt-tightening measures after the other. "When we wake up in the morning, we hear that the government has passed new measures," people in Athens lament.

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1. Greece unrest: Athens clashes amid general strike

http://www.bbc.co.uk/news/world-europe-15362678

Greek riot police have fired tear gas and fought running battles with protesters, amid a 48-hour general strike that has paralysed the country.

Some protesters hurled petrol bombs and stones at the police, as a march by tens of thousands of people in central Athens turned violent.

Many Greeks are furious at plans being discussed in parliament to cut thousands of jobs and raise taxes.

The government says the measures are needed to keep the economy afloat.

[truedelphi]

2. The Greek citizens in the streets look to Iceland - the only nation to

Tell the world's banking community to bugger off.

And as a result, the Iceland economy is truly recovering.

Unlike what will happen here when the real implications of the 75 trillions of US dollar backstop hits the fan of our economy.

But then, people in Iceland have a true democracy, and not the oligarchy that we have here.

[Lucky Luciano]

4. That's $75T notional - not $75T. Big difference. nt

[Hestia]

5. What is the difference between notional and dollar amount?

I have no idea what the difference is.

[Lucky Luciano]

6. Notional is the multiplier used to calculate the dollar value of a derivative contract.

An interest rate swap swaps fixed rate payments for floating rate payments for example. The amount of money that gets exchanged every 6 months is set based on the fixed amount versus Libor + some spread. On day one, both sides have cash flows with equal present values - ie the dollar value of the swap is zero. For a five year interest rate swap on $10MM notional, a 0.01% change in interest rates will change the value of the swap by about $4,500 or so. The point is that on inception the value of the swap is zero no matter how big the notional. More notional is obviously more risk though.

If you take out a floating rate loan and decide you would prefer the rate be fixed, you could trade zn interest rate swap where you receive floating and pay fixed. The your floating rate loans effectively becomes fixed. Search wikipedia for interest rate swaps for more info. Interest rate swaps have about 2/3 of all notional outstanding for derivs probably.

[truedelphi]

9. Thank you for that clear cut expanation and

Also for not being snarky about correction when correction was needed.

[marmar]

3. The Canary in the Parthenon........

Cities around the world will soon resemble Athens.

[bhikkhu]

7. Greek economic conditions are local and unique

They will resolve one way or another - hopefully in some way least harmful - but however they resolve doesn't necessarily say much about conditions elsewhere. Ireland, for instance, also has problems, but the economy there is quite different and the remedies are likely to be very different as well.

[truedelphi]

10. However When I heard one talking head describing all the closed shop fronts

Over in Greece, I couldn't help but think about all the closed shop fronts here in Lake County California.

And over the last three years, the biggest successful users of Real Estate have been the tattoo parlors and the Medical Marijuana clinics, which Obama is about to close down. Close down the clinics and the money for the tattoos goes away.

Oh and the taxation monies from the clinics were helping the local governments in Northern California to keep their fire officials and police officials employed rather than pink slipped.

[yurbud]

8. make the assholes who caused the problem pay.