Prime Minister Alexis Tsipras broke the news Sunday evening that banks in Greece would be closed Monday, as a result of failed debt negotiations. Greece’s creditors began making good on the collections while politicians began circling the wagons in Washington, Brussels and Berlin. The European Commission began hedging their bets in a unique way on Sunday. Jean-Claude Juncker released a statement inferring that creditors had been willing to discuss Greece’s debt load; however, in a rare move the Commission published details of the offer made to Greece. In all due candor, everyone realizes that Greece is not going to make good on their debt; Greece could give two shits about it, and if Greece leaves the European Union (EU), the EU will be in a world of shit.
Finding a compromise between the Tsipras Government and creditors is key and Christine Lagarde, shot caller at the International Monetary Fund, may be the one to part the proverbial Red Sea. Lagarde released a statement which indicated she was committed to the process.
Irony is not lost in the Lagarde matter. You see, Christine Lagarde is a French lawyer and Union for a Popular Movement politician who has been the Managing Director (MD) of the International Monetary Fund (IMF) since 5 July 2011. Previously, she held various ministerial posts in the French government: she was Minister of Economic Affairs, Finance and Employment and before that Minister of Agriculture and Fishing and Minister of Trade in the government of Dominique de Villepin. Lagarde was the first woman to become finance minister of a G8 economy, and is the first woman to head the IMF.
In an interview with The Guardian in May 2012, Lagarde was asked about crisis-stricken Greece and replied:
“Do you know what? As far as Athens is concerned, I also think about all those people who are trying to escape tax all the time. All these people in Greece who are trying to escape tax.”
Even more than she thinks about all those now struggling to survive without jobs or public services? “I think of them equally. And I think they should also help themselves collectively.”
How? “By all paying their tax. Yeah.”
It sounds as if she’s essentially saying to the Greeks and others in Europe, you’ve had a nice time and now it’s payback time. “That’s right.” She nods calmly. “Yeah.”
Christine Lagarde is a woman whom knows a thing or two about the Financial Crisis which predominately US Financial Institutions created. Lagarde had cautioned Hank Paulson, then US Secretary of Treasury, that he had to bail out US investment bank Lehman Brothers or face a global financial collapse not seen since the Great Depression. Paulson, a member of the Good ‘ol Boys Beltway Club told Lagarde to, in essence, go fuck herself. As a direct result, Lehman Brothers rolled craps; a coordinated £2 trillion bank injection package into financial markets in Europe forestalled what we are encountering now, vis-a-vis Greece, and Bretton Woods II was born. Whether Gordon Brown, the UK Prime Minister, or Nicolas Sarkozy, the French President drafted it, is up for debate. My money lies on Brown’s Camp having put forth the legalese, but that should not reflect badly upon Lagarde.
Christine Lagarde is a fairly attractive woman which, when combined with her intellect, places her at the top of the list for the epitome of a perfect women in my book. I mean that; Lagarde is hot for her age and
both a brilliant jurist as well as economist. Look, French dirigisme has always been the hallmark and cornerstone of Lagarde’s repertoire. US laissez-faire policy — no pun intended using a French term to castigate the US while previously praising its meritocratic technocracy— has always been its undoing. While Goldman Sachs has always publicly scorned the debt burden in developed nations, the fact of the matter is that they have privately heavily encouraged such. Paulson is one whom made fortunes in this arena. I mean common sense tells you that too much debt is a hell of a risk to the economies of any nation, not just developed nations. Japan now has a government D-GDP ratio of over 200%. The challenge is that even while there is an enormous demographic shift afoot globally, policy changes are few and far in between.
The fact of the matter is that Greece has been living on the dole for far too long. In fact, Lagarde has merely put to words that which those in the European Union have believed for years now. A good indicator that this has miffed some whom feel that welfare is an entitlement; that paying taxes is for those whom additionally provide the welfare, is that the Cour de Justice de la République has decided to further investigate Lagarde with respect to her role in bringing to an end a financial matter in France. Wall Street Journal laid it out pretty well by stating,
The court is looking into the role Ms. Lagarde played in the resolution of a two-decade-old melodrama known in France as “L’Affaire Tapie.” The affair has pitted Bernard Tapie, a French entrepreneur and former politician, against the French state.
The court is focusing on Ms. Lagarde’s decision, soon after she became finance minister in 2007, to refer the dispute to an arbitration panel. In 2008, the panel awarded Mr. Tapie more than €400 million ($527 million) in compensation.
Lagarde was asked by The Guardian, if she is essentially saying to the Greeks and others in Europe that they have had a nice time and it is now payback time, she responds: “That’s right.” This, alone, would tend to piss off even the most liberal of those involved in the fray. The question that is on everyone’s mind, though, is what type of impact is this going to have upon the global economy.
Since the financial crisis began in 2008, approximately 5.7 million properties have completed the foreclosure process, and stories like this begin to answer the critical question of what happens to all those homes. While many are resold, too often they fall into disrepair, creating blight that drags down property values and turns communities into potential deathtraps, attracting not just mosquitoes and mold, but crime and tragedy.
The reality is that what is going on in Greece is going to impact the United States. Everyone may believe otherwise; while the pundits may be stroking each other off in the same way which Sue Bunnell, Senior Vice President and Senior Counsel of Contracts and Technology at Wells Fargo did her telephone when she stated she would look into her Client committing Sherman Act Violations, in the end we are going to all be right back at square one. With a lack of real fiscal policies in play, at some point-in-time we are going to have systemic failure. Make no mistake whatsoever that I stand by my prediction that the Mortgage Field Services Industry is going to screw the wrong Contractor and that Contractor is going to leave a pile of dead bodies in their wake. It will be similar in Greece. And all the while, people like Sue Bunnell lay supine in a way which only a Catholic Priest is capable of doing after tending to the altar boys.
