07/06/2015 archive

On Sunday Greek voters went to the polls to vote on a simple referendum on a bail out deal proposed by the country’s international creditors, which demanded new austerity measures in return for emergency funds. A simple yes or no. The voters gave a resounding NO to the deal.

The win for the “no” camp constituted a major victory for Greek Prime Minister Alexis Tspiras, who had campaigned heavily against the deal put forward by the European Central Bank, the International Monetary Fund and the European Commission. But it also raised uncertainty about the country’s financial future and its place in the eurozone.

“Even in the most difficult circumstances, democracy can’t be blackmailed — it is a dominant value and the way forward,” Tsipras tweeted on Sunday night, adding that Greece intends to restart negotiations with Europe next week.

A final tally of votes indicated that 61.31 percent of voters decided against the bailout deal. More than 60 percent of Greeks participated in the vote, well over the 40 percent turnout needed for the referendum to be valid.

Needless to say the responses to the vote and PM Tspiras’ decision to attempt to negotiate better terms cams fast and furious. First, Greece’s radical and outspoken Finance Minister Yanis Varoufakis resigned, stating that he had been made aware that his “style” was considered disruptive:

Mr. Varoufakis, an academic with no political experience before he joined the leftist Tsipras government, had consistently argued that Greece desperately needed debt relief more than anything else. While that view was shared by many economists, he quickly became a lightning rod among Greece’s creditors for his aggressive negotiating style and heated language. Before the referendum vote, he had publicly accused the creditors of “terrorism” against his country.

With Mr. Varoufakis gone, Greece’s eurozone creditors may be more willing to continue negotiations on a further aid package. His departure, apparently at the urging of Mr. Tsipras, could be seen as a concession to the sensibilities of other eurozone leaders. But the next few days could determine whether the gulf between Greece and its creditors is now too wide to bridge.

You can read his resignation statement here. He has been replaced by Euclid Tsakalotos, another academic economist, but not as vocal as Mr. Varoufakis and, apparently, more acceptable to Eurogroup participants.

Next came the markets’ reactions, not drastic but not good, either:

Global stock markets mostly dropped on Monday but did not plunge, as investors reacted with muted dismay to the results of the Greek referendum and showed nervousness about steep declines in China’s stock market over the past three weeks. [..]

At midday in New York, stocks were just below break-even. The Dow Jones industrial average was down 0.2 percent, while the Standard & Poor’s 500-stock index was off 0.3 percent.

The euro ticked down 0.4 percent to $1.1033.

Oil prices also fell on Monday, as traders placed bets that recent events could lead to slower global economic activity and weaker demand. [..]

In Asia on Monday, the Shanghai market jumped sharply in early trading as the Chinese government poured money into brokerage firms to help them and their customers buy shares. The market leapt 7.8 percent at the start, but it surrendered half of those gains in the first 10 minutes of trading and closed 2.4 percent higher. The smaller Shenzhen stock market also started strongly but fell 2.7 percent by the end of trading.

And the vote has only served to harden German Chancellor Angela Merkel’s stand:

The German government signaled a tough line towards Greece on Monday, saying it saw no basis for new bailout negotiations and insisting it was up to Athens to move swiftly if it wanted to preserve its place in the euro zone.

With opinion towards Greece hardening in Germany’s ruling coalition following the landslide rejection of European bailout terms in a Sunday referendum, the government indirectly raised the prospect of a Greek exit from the currency bloc.

Chancellor Angela Merkel’s spokesman said it was up to Athens to act so that it could remain in the currency bloc, and Vice Chancellor Sigmar Gabriel went further by saying the Greek government needed to improve on its previous proposals. [..]

Pressed on what concessions Berlin might be willing to make to Tsipras, a finance ministry spokesman dismissed the idea of a debt restructuring sought by Athens and favored by the International Monetary Fund (IMF).

Economic and political pundits responded as well:

Thomas Piketty: Germany Shouldn’t Be Telling Greece To Repay Debt

Thomas Piketty isn’t mincing words when it comes to the Greek debt crisis.

In an interview with German newspaper Die Ziet last month (and translated recently by business analyst Gavin Schalliol), the leading French economist pummeled Germany for its hypocrisy in demanding debt repayment from Greece. [..]

Greece on Sunday voted a resounding “no” on a bailout plan proposed by its creditors, making its continued membership in the eurozone more tenuous. German Chancellor Angela Merkel and French President Francois Hollande will hold an emergency summit on Tuesday to discuss the crisis.

But Piketty, who penned the blockbuster 2013 book on income inequality Capital in the Twenty-First Century, slammed conservatives who favor the economic austerity measures Germany and France are demanding of Greece, saying they demonstrate a “shocking ignorance” of European history.

“Look at the history of national debt: Great Britain, Germany, and France were all once in the situation of today’s Greece, and in fact had been far more indebted,” Piketty said. “The first lesson that we can take from the history of government debt is that we are not facing a brand new problem.”

Germany, Piketty continued, has “no standing” to lecture other nations about debt repayment, having never paid back its own debts after both World Wars (pdf).

Nobel Prize winning economist and New York Times columnist, Paul Krugman, also “cheered” the vote:

The truth is that Europe’s self-styled technocrats are like medieval doctors who insisted on bleeding their patients – and when their treatment made the patients sicker, demanded even more bleeding. A “yes” vote in Greece would have condemned the country to years more of suffering under policies that haven’t worked and in fact, given the arithmetic, can’t work: austerity probably shrinks the economy faster than it reduces debt, so that all the suffering serves no purpose. The landslide victory of the “no” side offers at least a chance for an escape from this trap.

Renowned dissident Noam Chomsky spoke with [Democracy Now! ]’s Amy Goodman back in March aboutGreece and Spain the “savage response” to taking on austerity calling it a “class war.”

The “what next” is still very unknown. From Yves Smith at naked capitalism

After the momentous “No” vote in support of the Greek ruling coalition Greece’s lenders and most important, the Eurozone leaders of the countries that have made 60% of Greece’s outstanding loans, are officially still figuring out what to do. Merkel is going to Paris to confer with Hollande today. The Eurogroup has set a meeting for tomorrow at 1:00 PM

However, despite the responses of media outlets and many pundits that the Eurocrats will have to beeat a retreat and offer Greece concessions, it’s not clear that this event strengthens the Greek government’s hand with its counterparties. Remember, Tsipras enjoyed popularity ratings of as high as 80% and has always retained majority support in polls. And it’s all too easy to forget that “the creditors” are not Merkel, Hollande, Lagarde and Draghi. The biggest group of “creditors” are taxpayers of the 18 other countries of the Eurozone. The ugly design of the Eurozone means that the sort of relief that Greece wants most, a reduction in the face amount of its debt (as opposed to the sort of reduction they’ve gotten, which is in economic value, via reductions in interest rates and extensions of maturities) puts the interest of those voters directly at odds with those in Greece. Our understanding is that a reduction in principal amount, under the perverse budgetary and accounting rules of the Eurozone, would result in those losses showing up as losses for budget purposes, now. They would need to be funded by increased taxes. Thus a reduction in austerity for Greece, via a debt writeoff, simply transfers austerity from Greece to other countries. It’s not hard to see why they won’t go for that. And Eurozone rules require unanimous decisions.

Even though the ruling coalition had said it wanted to restart negotiations immediately upon getting a “no” vote, the lenders have asked Greece to send a new proposal, apparently deeming the one it submitted on June 30 to be out of date. It’s doubtful anything will happen before the Eurogroup meeting tomorrow.

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Paul Krugman: Ending Greece’s Bleeding

Europe dodged a bullet on Sunday. Confounding many predictions, Greek voters strongly supported their government’s rejection of creditor demands. And even the most ardent supporters of European union should be breathing a sigh of relief.

Of course, that’s not the way the creditors would have you see it. Their story, echoed by many in the business press, is that the failure of their attempt to bully Greece into acquiescence was a triumph of irrationality and irresponsibility over sound technocratic advice.

But the campaign of bullying – the attempt to terrify Greeks by cutting off bank financing and threatening general chaos, all with the almost open goal of pushing the current leftist government out of office – was a shameful moment in a Europe that claims to believe in democratic principles. It would have set a terrible precedent if that campaign had succeeded, even if the creditors were making sense.

New York Times Editorial: The Activist Roberts Court, 10 Years In

What is the most useful way to understand the direction of the Supreme Court 10 years into the tenure of Chief Justice John Roberts Jr.? After a series of high-profile end-of-term rulings that mostly came out the way liberals wanted, it is tempting to see a leftward shift among the justices.

That would be a mistake. Against the backdrop of the last decade, the recent decisions on same-sex marriage, discrimination in housing, the Affordable Care Act and others seem more like exceptions than anything else. If they reflect any particular trend, it is not a growing liberalism, but rather the failure of hard-line conservative activists trying to win in court what they have failed to achieve through legislation.

And even when a majority of the justices rejected conservative arguments, the decision to hear those cases in the first place showed the court’s eagerness to reopen long-settled issues. [..]

Through it all, Chief Justice Roberts, who during his confirmation hearings promised judicial restraint above all else, has presided over a court that has been far too willing to undermine or discard longstanding precedent. Among the biggest examples of this are District of Columbia v. Heller, which upended the long-accepted meaning of the Second Amendment; Citizens United, which overturned decades of rulings and laws to allow unlimited campaign spending by corporations and unions; and Shelby County v. Holder, which gutted the core of the Voting Rights Act.

His votes to protect President Obama’s signature health care reform law showed he was not willing to leap into the deep end of conservative activism. But that just means he was doing his job.

Welcome to The Breakfast Club! We’re a disorganized group of rebel lefties who hang out and chat if and when we’re not too hungover  we’ve been bailed out we’re not too exhausted from last night’s (CENSORED) the caffeine kicks in. Join us every weekday morning at 9am (ET) and weekend morning at 10:30am (ET) to talk about current news and our boring lives and to make fun of LaEscapee! If we are ever running late, it’s PhilJD’s fault.

This Day in History

John Lennon and Paul McCartney meet for first time; Baseball’s first All-Star Game; Outbreak of the Biafran War; Painter Frida Kahlo born; Althea Gibson wins at Wimbledon; Singing cowboy Roy Rogers dies.

Breakfast Tunes

Something to Think about over Coffee Prozac

“I can’t go back to yesterday because I was a different person then.”

Alice, “Alice in Wonderland” By Lewis Carroll

Stupid Shit by LaEscapee

Eat a Dog

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

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July 6 is the 187th day of the year (188th in leap years) in the Gregorian calendar. There are 178 days remaining until the end of the year.

On this day in 1917, Arabian troops led by T. E. Lawrence (“Lawrence of Arabia”) and Auda ibu Tayi capture Aqaba from the Ottoman Empire during the Arab Revolt.

Background

Lawrence, sent by General Archibald Murray, commander of the Egyptian Expeditionary Force, to act as a military advisor to Emir Faisal I, convinced the latter to attack Aqaba. Aqaba was a Turkish-garrisoned port in Jordan, which would threaten British forces operating in Palestine; the Turks had also used it as a base during their 1915 attack on the Suez Canal. It was also suggested by Faisal that the port be taken as a means for the British to supply his Arab forces as they moved further north. Though he did not take part in the attack itself (his cousin Sherif Nasir rode along as the leader of his forces), Faisal lent forty of his men to Lawrence. Lawrence also met with Auda ibu Tayi, leader of the northern Howeitat tribe of Bedouin, who agreed to lend himself and a large number of his men to the expedition. Lawrence informed his British colleagues of the planned expedition, but they apparently did not take him seriously, expecting it to fail.

Aqaba was not in and of itself a major military obstacle; a small village at the time, it was not actually garrisoned by the Turks, though the Turks did keep a small, 400-man garrison at the mouth of the Wadi Itm to protect from landward attack via the Sinai Peninsula. The British Royal Navy occasionally shelled Aqaba, and in late 1916 had briefly landed a party of Marines ashore there, though a lack of harbor or landing beaches made an amphibious assault impractical. The main obstacle to a successful landward attack on the town was the large Nefud Desert, believed by many to be impassable.

Prelude

The expedition started moving towards Aqaba in May. Despite the heat of the desert, the seasoned Bedouins encountered few obstacles aside from occasional harassment from small bands of Arabs paid off by the Turks; they lost more men to attacks by snakes and scorpions than to enemy action. During the expedition, Auda and Lawrence’s forces also did severe damage to the Hejaz Railway.

Auda and his men reached the Wadi Sirhan region, occupied by the Rualla tribe. Auda paid 6,000 pounds in gold to their leader to allow his men to use Wadi Sirhan as a base.

Abu el Lissal and Aqaba

The actual battle for Aqaba occurred for the most part at a Turkish blockhouse at Abu el Lissal, about halfway between Aqaba and the town of Ma’an. A group of separate Arab rebels, acting in conjunction with the expedition, had seized the blockhouse a few days before, but a Turkish infantry battalion arrived on the scene and recaptured it. The Turks then attacked a small, nearby encampment of Arabs and killed several of them.

After hearing of this, Auda personally led an attack on the Turkish troops there, attacking at mid-day on July 6. The charge was a wild success. Turkish resistance was slight; the Arabs brutally massacred hundreds of Turks as revenge before their leaders could restrain them. In all, three hundred Turks were killed and another 150 taken prisoner, in exchange for the loss of two Arabs killed and a handful of wounded. Lawrence was nearly killed in the action; he accidentally shot the camel he was riding in the head with his pistol, but was fortunately thrown out of harm’s way when he fell. Auda was grazed numerous times, with his favorite pair of field glasses being destroyed, but was otherwise unharmed.

Meanwhile, a small group of British naval vessels appeared offshore of Aqaba itself and began shelling it. At this point, Lawrence, Auda, and Nasir had rallied their troops; their total force had been quadrupled to 2,000 men by a local Bedouin who, with the defeat of the Turks at Lissal, now openly joined Lawrence’s expedition. This force maneuvered themselves past the outer works of Aqaba’s defensive lines, approached the gates of Aqaba, and its garrison surrendered without further struggle.

Ok.  So I haven’t been very sanguine about Team USA’s prospects in the World Cup but in my defense though they came through the ‘Group of Death’ they didn’t look all that impressive against Colombia and China is what we Mets fans charitably call “rebuilding”.

And then they thumped Germany, the #1 team in the World.

Umm… that was a convincing victory, it convinced me.

We will beat Japan and avenge our loss in 2011.  They are committed to a ground/passing game and we have many more tools.  No 2 – 2 Penalty Shoot Out this time, we will crush them like bugs.