February 22, 2012
I keep asking myself, when is a deal not a deal? Every time I hear the words “Greek debt deal” or “Greek bailout” in the same sentence, I wonder if, this time, they really have a deal. Yesterday, I was thinking that again when it was announced there was a new Greek debt deal. The headline from Reuters read, “Europe seals new Greek bailout but doubts remain.” My favorite paragraph in the story said, “An opinion poll taken just before the Brussels deal showed that support for the two mainstream parties backing the rescue had fallen to an all-time low while leftist, anti-bailout parties showed gains. Anastasis Chrisopoulos, a 31-year-old Athens taxi driver, saw no reason to cheer the deal. “So what?” he asked. “Things will only get worse. We have reached a point where we’re trying to figure out how to survive just the next day, let alone the next 10 days, the next month, the next year.” (Click here for the complete Reuters story.) There are elections in Greece in April. What do you bet one of the “anti-bailout parties” wins? There may be a deal today, but not in the not-so-distant future.
Another headline read, “Greece secures bailout to avoid debt default.” Why should headlines be so misleading and give false hope? Buried in the story was this nugget, “But despite those unprecedented efforts, it was clear that Greece, which kicked off Europe’s debt crisis two years ago, was at the very best starting on a long and painful road to recovery. At the worst, the new program would push the country even deeper into recession and see it default on its debts further down the line.” (Click here for the complete story from MyWay.com.) The headline should have read, “Greece secures bailout to avoid debt default for now.”
Let’s be frank here, Greece is going to default. In the end, it will be the best choice–not for the bankers but for the people. The bailout is really more debt put on the backs of the Greeks to help the bankers who made very bad loans. You want to see what I call a true headline that tells the real story? It comes from Graham Summers of Phoenix Capital.
This article was posted: Wednesday, February 22, 2012 at 3:20 am