Is it When or If?

What happens when Greece defaults

By Andrew Lilico

Financial markets merely aren’t sure whether it’ll be tomorrow, a month’s time, a year’s time, or two years’ time (it won’t be longer than that). Given that the ECB has played the “final card” it employed to force a bailout upon the Irish – threatening to bankrupt the country’s banking sector – presumably we will now see either another Greek bailout or default within days.

What happens when Greece defaults. Here are a few things:

- Every bank in Greece will instantly go insolvent.

- The Greek government will nationalise every bank in Greece.

- The Greek government will forbid withdrawals from Greek banks.

- To prevent Greek depositors from rioting on the streets, Argentina-2002-style (when the Argentinian president had to flee by helicopter from the roof of the presidential palace to evade a mob of such depositors), the Greek government will declare a curfew, perhaps even general martial law.

- Greece will redenominate all its debts into “New Drachmas” or whatever it calls the new currency (this is a classic ploy of countries defaulting)

- The New Drachma will devalue by some 30-70 per cent (probably around 50 per cent, though perhaps more), effectively defaulting 0n 50 per cent or more of all Greek euro-denominated debts.

- The Irish will, within a few days, walk away from the debts of its banking system.

- The Portuguese government will wait to see whether there is chaos in Greece before deciding whether to default in turn.

- A number of French and German banks will make sufficient losses that they no longer meet regulatory capital adequacy requirements.

- The European Central Bank will become insolvent, given its very high exposure to Greek government debt, and to Greek banking sector and Irish banking sector debt.

- The French and German governments will meet to decide whether (a) to recapitalise the ECB, or (b) to allow the ECB to print money to restore its solvency. (Because the ECB has relatively little foreign currency-denominated exposure, it could in principle print its way out, but this is forbidden by its founding charter.  On the other hand, the EU Treaty explicitly, and in terms, forbids the form of bailouts used for Greece, Portugal and Ireland, but a little thing like their being blatantly illegal hasn’t prevented that from happening, so it’s not intrinsically obvious that its being illegal for the ECB to print its way out will prove much of a hurdle.)

Sometimes they 'Fall' but they never break

Lawmakers Concerned About Ex-IMF Director's 'Golden Parachute'

By Judson Berger

The former head of the International Monetary Fund accused of sexually assaulting a New York hotel maid will receive a $250,000 severance payment -- paid in part courtesy of the American taxpayer -- unless U.S. lawmakers can stop the "golden parachute" from landing in the French politician's bank account.

The IMF claims it has no discretion in the matter of Dominique Strauss-Khan, who was already pulling down nearly $500,000 as managing director when he resigned after being arrested in New York. The one-time severance, along with a much smaller annual pension, was part of his contract.

But considering the heavy financial stake the United States has in the global lender, some lawmakers are trying to exert pressure on an organization that has come under increased scrutiny over how its vast international resources are being used.

"The scandal at the IMF is putting that organization in the public eye again and American taxpayers -- who pay the largest share of the IMF's bills -- are raising a lot of important questions," Rep. Cathy McMorris Rodgers, R-Wash., House Republican Conference vice chairwoman, told FoxNews.com in a written statement.

"What does it say about the IMF that its managing director has a higher annual salary than the president of the United States, that he stays at $3,000-per-night hotel rooms, and that he gets a quarter of a million dollars in severance pay while awaiting charges for [attempted] rape?" McMorris Rodgers asked.

Jim Specht, spokesman for House Appropriations Committee member Rep. Jerry Lewis, R-Calif., said his boss will request hearings in the Subcommittee on State, Foreign Operations, and Related Programs on the IMF directorship, and review what leverage the U.S. might have over operations. Lewis is a member of that subcommittee.

"He definitely wants to look at whether or not something can be done. If not now, certainly in the future," Specht said, adding that Lewis wants to know more about other perks enjoyed by Strauss-Kahn. He said Lewis doesn't want to cut off U.S. support for the IMF, but said the U.S. should have some control over the "behavior" of the agency’s leaders.

"

I would bet on spontaneous order on this one

There’s something about marriage

by DAVID HARSANYI

When an actress — no, an artist – the caliber of Cameron Diaz weighs in on the future of social institutions, America has an obligation to listen.

And listen we did. In a widely discussed interview with Maxim magazine, Diaz offered America a peek at her body, her relationship with Yankees slugger Alex Rodriguez (which, needless to say, is “awesome”) and her views on the future of matrimony. Does she think marriage is a dying institution? “I do,” she explained. “I think we have to make our own rules. I don‘t think we should live our lives in relationships based off of old traditions that don’t suit our world any longer.”

Let’s for a moment pretend that we share a world with Cameron Diaz. Does marriage suit this domain? It should be noted that this ancient ritual is at the center of an emotional national debate. There is one side claiming that exclusion from it is discrimination and another claiming that the very sanctity of the institution is at stake. I‘d say lots of folks are expending a ton of energy and angst arguing over a ritual that’s on its last legs.

We all know why men marry. Love, yes. I’ve been married to a wonderful woman for, like, 10 — or maybe it’s 11 or 12 (somewhere in that area) — years. But men are irresponsible and forgetful. The evolutionary need for companionship is a need to moderate childishness and bring a basic moral order to lives that would otherwise revolve around sports highlight shows. Women? Love, of course. But historically, as Diaz implies, it’s also been somewhat of a necessity.

Things are changing. A new Pew study says that Americans are postponing marriage and that fewer of us are getting hitched. But those who do marry stay together longer. “Three in four couples who married after 1990 celebrated a 10-year anniversary,” according to a Washington Post story on census statistics. “That was a rise of three percentage points compared with couples who married in the early 1980s, when the nation’s divorce rate was at its highest.” Researchers are also finding a connection between marriage and education. In 1996, only 21 percent of brides had a college degree, but by 2009, it was 31 percent. It seems to be growing.

Women with higher education levels are increasingly marrying. These are also presumably women who are likelier to have the economic freedom not to be married. So why do they do it?

Chicken little can be lethal

Teen kills herself ahead of foretold rapture

by Russian Times

A 14-year-old girl from the Republic of Mari El in Central Russia has committed suicide, allegedly because she was afraid of the upcoming doomsday, predicted by the American radio preacher Harold Camping.

Nastya Zachinova believed the news that the world would end on May 21, her family told the tabloid LifeNews. The once lively teenager became angsty and withdrawn. On the Saturday in which the rapture had been predicted to start, she committed suicide after returning home from school.

Her personal diary shows she was terrified of the perils of the apocalypse, which she believed humanity was about to endure.

“We are not righteous; only the righteous will go to heaven, and we’ll stay on earth and face terrible suffering,” one of the entries says.

A farewell text message says she didn’t want to die with everyone else and would take her life in advance.

“She took this date too close to heart,” Nastya’s mother Lyudmila told the tabloid.

Police are currently gathering reports from Nastya’s friends .They believe somebody may have been behind the terror which haunted the girl in her final days.

Harold Camping and his supporters launched a world-wide campaign to inform humanity about the upcoming rapture, the date of which he predicted based on a series of convoluted calculations taken from the bible.  A few ads promoting his message were put on billboards in Russia as well.

After the prediction proved false, Camping recanted his original claim, stating that the end of the world will now come in October.

Some pigs are more equal ...

More ‘Do as I say, not as I do’ from our betters

by MEREDITH JESSUP

U.S. Transportation Secretary Ray LaHood unveiled new fuel economy labels for cars today, noting how they are “a win for automobile consumers and for the nation’s energy independence.”

As for Mr. LaHood himself, he reportedly arrived to the ceremony in this 12mpg Chevy Suburban SUV:

Liberal control freaks in action

If you want to see the future of American (or Greek) cuisine under ever-encroaching soft totalitarianism, have a look at Denmark, where they have just banned a British delicacy called Marmite:

The strongly flavoured dark brown spread made from brewer's yeast has joined Rice Crispies, Shreddies, Horlicks and Ovaltine prohibited in Denmark under legislation forbidding the sale of food products with added vitamins as threat to public health.

Many well known breakfast cereal and drink brands have already been banned or taken off supermarket shelves after Danish legislation in 2004 restricted foods fortified with extra vitamins or minerals.

But Marmite had escaped notice as an exotic import for a small number of ex-pats until the Danish Veterinary and Food Administration telephoned Abigail's, a Copenhagen shop selling British food, to ban the famous yeast spread.

"I don't eat it myself, I don't like it but Marmite was one of our best selling products. Not a day goes by without someone coming in and asking for it," said Marianne Ørum, the shop owner.

"All the English people here are shaking their heads in disbelief and say that it is insane. I agree but it is the law. It's becoming impossible to run a business in this country. We are not allowed to do anything anymore. It is the way Denmark is going."

As New York's nanny state dictator Michael Bloomberg constantly reminds us with his bizarre jihads against basic food staples like salt, it's the way the whole Western World is going. Once bureaucrats have gotten away with claiming authority over what we eat, they will incrementally ban everything imaginable until we are left gnawing on bark like North Koreans.

This is why it is crucial to never yield a single inch to liberal control freaks.

It's not a joke. Really.

Oil-Rich Venezuela Still Suffers From Energy Shortage

by Dave Blount

As the great counter-moonbat Milton Friedman observed,

"If you put the federal government in charge of the Sahara Desert, in 5 years there'd be a shortage of sand."

What would happen if you put a socialist of similar stripe in charge of Venezuela, a founding member of OPEC that is floating on oil? Naturally, the result would be an energy shortage:

Venezuela will ration power again this year, planning steps similar to those taken in 2010 amid an energy crisis, Electricity Minister Ali Rodriguez said.

"We're going to reapply the measures we applied in Caracas last year nationwide, which punishes the wasting of electricity and encourages energy savings," Rodriguez said in an interview on state television….

The USA also has massive fossil fuel reserves. But unless we overthrow our leftist kakistocracy, this won't do us any good.

"Managing the poor. Part II

A Nation of Takers, Not Makers

More Americans work for the government than in manufacturing, farming, fishing, forestry, mining and utilities combined

By STEPHEN MOORE

If you want to understand better why so many states—from New York to Wisconsin to California—are teetering on the brink of bankruptcy, consider this depressing statistic: Today in America there are nearly twice as many people working for the government (22.5 million) than in all of manufacturing (11.5 million). This is an almost exact reversal of the situation in 1960, when there were 15 million workers in manufacturing and 8.7 million collecting a paycheck from the government. It gets worse. More Americans work for the government than work in construction, farming, fishing, forestry, manufacturing, mining and utilities combined. We have moved decisively from a nation of makers to a nation of takers. Nearly half of the $2.2 trillion cost of state and local governments is the $1 trillion-a-year tab for pay and benefits of state and local employees. Is it any wonder that so many states and cities cannot pay their bills?
Every state in America today except for two—Indiana and Wisconsin—has more government workers on the payroll than people manufacturing industrial goods. Consider California, which has the highest budget deficit in the history of the states. The not-so Golden State now has an incredible 2.4 million government employees—twice as many as people at work in manufacturing. New Jersey has just under two-and-a-half as many government employees as manufacturers. Florida's ratio is more than 3 to 1. So is New York's.
Even Michigan, at one time the auto capital of the world, and Pennsylvania, once the steel capital, have more government bureaucrats than people making things. The leaders in government hiring are Wyoming and New Mexico, which have hired more than six government workers for every manufacturing worker.

"Managing" the poor

Government vs. Production

By Ben Stein

Impose the world's highest corporate income tax rate, and we can expect the result will be too few corporations and too much government.

"The United States may soon wind up with the distinction that makes business leaders cringe -- the highest corporate tax rate in the world," wrote New York Times reporter David Kocieniewski last week.

"Topping out at 35 percent, America's corporate income tax rate trails that of only Japan, at 39.5 percent, which has said it plans to lower its rate," reported Kocieniewski.

Include additional taxes imposed at the state level, and the corporate tax rate in the U.S. jumps to more than 40 percent in 19 states.

Leading the pack are Iowa and Pennsylvania with corporate income taxes, respectively, of 12 percent and 9.99 percent, creating the nation's highest barriers via taxation to new corporate investment and associated new jobs.

Similarly in relation to obstacles to business expansion: Create an education system that produces four times more college graduates in social science and history than in engineering and computer science, and we can expect to see too many American firms unable to compete in the global marketplace and too many academics writing papers on America's lack of competitiveness.

In "We've Become a Nation of Takers, Not Makers" Stephen Moore, senior economics writer for the Wall Street Journal, reported that in the U.S. today, "there are nearly twice as many people working for the government (22.5 million) than in all of manufacturing (11.5 million)."

In short, we got better at expanding bureaucracies than manufacturing cars, better at making rules and regulations than producing clothes or oil.

It wasn't always this way. The world's first automatic transmission was invented in 1904 in Boston. The year before, Orville Wright became the first person in history to be a passenger in a machine that had raised itself by its own power into the air in full flight.

In 1960, the aforementioned 2-to-1 ratio between government employees and manufacturing workers in America was weighted precisely in the opposite direction, as Moore reported, with "15 million workers in manufacturing and 8.7 million collecting a paycheck from the government."

Utopia-land and the negation of economics

Red Ink and Upward Redistribution

By Ralph R. Reiland

After doing nothing during his first two years in office to deal with the debt tsunami that's clearly visible on the horizon and heading our way, President Obama delivered a 2012 budget plan that, asInvestor's Business Daily accurately editorialized, "proposed spending $252 billion more in 2012 than the feds spent in 2010 -- at the height of the stimulus spending spree."

Longer run, worse than doing nothing, Obama's projected budgets over the next decade add enough trillions in red ink to double the size of the incoming tsunami.

The federal government's current $14 trillion debt averages out to approximately $50,000 per American, $200,000 for a family of four. For the half of U.S. households who still pay federal income taxes, that averages out to $400,000 per family for those are getting stuck with the tab.

Add to that the next decade's proposed red ink and each of those taxpaying household ends up, on average, $800,000 in the hole. That could become an unworkable $80,000 a year in interest payments per taxpaying household, on average, if the U.S. credit rating drops and lenders require 10 percent interest payments.

Unfortunately, even this $800,000 per family scenario is based on some very rough and overly optimistic guesswork. Politicians projecting out a decade and more have every incentive to paint a rosy scenario, plus a clear incentive at every election cycle to buy more votes via additional trillions in red ink.

Nothing succeeds, as planned.

The third-world Cuba the Castro revolution saved us from

By Alberto de la Cruz

Here is the third-world country the Castro revolution saved Cubans from. Notice how primitive and uncivilized the capital of Havana was in the 1950s, while today, thanks to the Castro revolution, it is a clean, well-maintained modern mecca.

"Most Californians are undoubtedly feeling dread today"

Jailbreak

by Heather Mac Donald

If the real-world consequences for individuals and communities were not so potentially dire, the mass release of inmates from California prisons just ordered by the Supreme Court would carry considerable interest as a criminological experiment. For decades, academics and advocates have argued that the U.S. is over-incarcerating its criminal population. Driven by irrational fear and political cowardice, the anti-incarceration lobby maintains, we are locking up harmless sad sacks who should never have been sent to prison in the first place. Recently, academics such as Columbia law professor Jeffrey Fagan have gone one step further: Not only are the country’s incarceration policies unnecessary, they’re positively harmful to communities. Sending convicted offenders to prison breaks apart stable families and prevents other families from forming in the first place. High rates of incarceration tied to certain communities are not the result of high rates of crime, in this view; they are, rather, the cause of those high crime rates.

With regards to California in particular, anti-prison advocates argue that the state enforces draconian policies with parole and probation violators: it sends them back to prison far too frequently. Missing a parole appointment, or being found in gang territory in violation of your conditions, the advocates say, shouldn’t be treated as such a big deal. Anyone can slip up.
In fact, we have already lived through this coming experiment. During the 1960s and much of the 1970s, America had a very low rate of incarceration, even though crime was blasting through the roof. In 1967, James Q. Wilson wryly observed in The Public Interest: “Other than drunks, the average criminal or delinquent will so rarely be sent to jail that the large numbers of inmates can be explained only by assuming that they were born there or wandered in by mistake.” It was precisely because our lax incarceration policies seemed to be contributing to, rather than lessening, America’s crime problem that states gradually began decreasing judicial discretion in sentencing offenders to probation or issuing lax sentences. Starting in the late 1970s, states began imposing mandatory sentences and three-strikes felony laws and requiring that offenders serve most of their sentences. The prison population unquestionably grew: the per-capita rate of imprisonment tripled from 1973 to 2000; the number of state and federal prisoners grew fivefold between 1977 and 2007, from 300,000 to 1.59 million. During the 1980s, national crime rates were variable even as the prison population inexorably rose. But in the 1990s, as the incapacitative potential of prison reached its maximum “throw weight,” in UC Berkeley criminologist Frank Zimring’s phrasing, crime nationally began a long, unprecedented drop, when the greatest number of criminals was off the streets. Coincidence? California may find out.