Fx Thoughts : There Was A Young Lady of Riga
There was a young lady of Riga,
Who rode with a smile on a tiger.
They returned from the ride,
With the lady inside
And a smile on the face of the tiger.
Rest assured, no young ladies going to Riga for the Eurozone finance ministers meeting tomorrow, just a bunch of crotchety old men (maybe a woman or two) making decisions that will affect the world at large.
Enter Yanis Varoufakis, who is my idol, the Greek Finance Minister who specialises in game theory economics vs the rest of the Eurozone horde.
So fearsome is he that the Germans saw fit to make an MTV about him. http://i100.independent.co.uk/article/german-comedians-have-penned-a-glorious-song-about-yanis-varoufakis–lJqVqZhWpe
“But from off in the distance there comes a man!
Crazed, seeking vengeance against our peaceful land!
Jacket collar raised, on a black motorbike
He puts the “hell” in Hellenic and wants to take our pride!
Greek Minister of Awesome!
He’s the lost son of Zeus with a heart made of stone!
Go take all of our savings, but please leave us alone!
His looks burn like fire, his body screams of sex
Our Minister of Finance doesn’t even have legs!”
I think the world is looking for something different these days, tired of the populist leader trend that started with Obama which is currently exemplified in Egypt where populist former President Morsi was unceremoniously displaced shortly after coming into power and now to be jailed for 20 years. (Noting that US provides regular military aid to the nation)
I took time to speak to a decision theory expert with a Phd, who happens to be an economist as well.
As a rational decision for the Greeks, the best thing is to be given a break ! – debt forgiveness and a chance to work it out while staying in the Eurozone. 2012 was a mistake and profited only the hedge funds who had bought the debt to make their 1000 percent profits. But all it succeeded in doing was to extract a bunch of lies and promises from the previous government that they had no intention of keeping before throwing in the towel last December.
Yes, it is true that the country’s coffers has been pillaged for ages but creditors have spoilt them for the longest time by throwing in good money after bad, encouraging the nonsense to go on. And which was the bank that doctored the Greece accounts to let them pass the Eurozone monetary union test ? Errrrr, Goldman Sachs ? Is that why Obama came out in Feb to say that EU should give the new Greek administration a chance ?
As a rational decision for the creditors, the best thing to do is to get their money back – so Greece cannot be allowed to default. And if they do, cutting lines to them will drive them to the Sino-Russian consortium that is not such a bad thing, if I were mapping a long term strategy for the country to give the next generation a chance on a clean slate of no debt and cleaning their act in between.
So the best solution is to put up a good show of theatrics for the world stage, save some face, but to keep Greece in the fold and really give them a chance to return the monies that they owe, especially now when the ECB Q€ is taking off and the only thing standing in the way of Europe is just the Grexit issue.
Somehow, I think Varoufakis knows this.
It would do well to take a lesson from the limerick and its lesson in rationality or sensibility. I will be trading EURUSD from the long side on sell offs and I still think 1.10 is not a bad target.
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