As IF Times

link Fitch Says 50% Greek Bond Haircut Would Be Default Event – Businessweek.

After months of hand-wringing and warnings of dire consequences, an 11th hour deal was inked to help Greece avoid an unknown but certainly ugly financial scenario.  The E.U., headed principally by Germany, agreed on a rescue plan to halt the crisis.   Angela Merkel of Germany is being hailed as a triumphant hero for solving the debt impasse.  The collective action of stock markets worldwide was to explode higher in a frenzied stampede of buying as the boiling crisis appears to have been averted.

But was it?  It’s not as if someone stepped in to magically make the fiscal problems of Greece go away.  The agreement to support Greece’s ailing government and financial system was for all intents and purposes a default event.  A default event for those not versed in financial lingo is the arid description of someone not paying their debts.   According to articles such as the one linked, creditors of Greece’s debt holdings will take a 50% write off of their face value.

Imagine if someone owed you $1000 and after a series of unpaid interest events, he came to you and said he’d pay you $500…maybe.  I’m not sure many would be doing cartwheels and flips on that news.  In the case of Greece, the many banks, institutions and investors who are owed money on those bonds have been cajoled to write off their investment by half.  So, these investors are out of luck on their bad investment.  By extension, shareholders of these banks and institutions get haircuts on their investments.  Since some of the holders are governments, the taxpayers wind up subsidizing the loss.

But it’s not only greedy banks and investors who suffer as may be portrayed by the vapid media.

Some of the parties getting financial haircuts are Greek pension plans  themselves since they are big owners of government debt obligations.  In essence, the pool of money represented by those bonds available for paying future retirees etc will have shrunk by a half.  It’s as if you removed wood from the roof of a house to block up the leak in the basement during a heavy rain.

Whether in the case of Greece, or that person who borrowed $1000 from you and now only wants to pay back half, what is the likelihood that someone else will lend money to them based on this default record? As likely as flying pigs, unless of course a usurious rate of interest was applied… which ironically makes the likelihood for repayment more unlikely.

Greece is not alone with their fiscal problems.  Governments paying out much more than they take in is a common affliction to many nation-states.  What they faced is an issue that many other nations such as Italy and Portugal are grappling with as well.  Of course the country that faces this problem on the grandest scale is the United States.   If the process of lending money to nations gets iffier and iffier with many taking the route of Greece by defaulting, the cost of borrowing any money skyrockets.  When that happens, nobody gets loans because no one gets paid back.  I’m not so sure people will be cartwheeling then.

Personally, I feel that letting debtors off the hook is too easy.  If there are no real consequences, what’s to change the behaviour?  The classic method to enforce repayment of debt as practiced by such as the Mafia, was to break various body parts such as legs in order to enforce their creditor contracts.  Of course this only works on a small scale and the staffing problems associated with it would be difficult in today’s labor climate.   The other part was to assume ownership of whatever asset the debtor may have as collateral such as houses, cars or businesses.

Imagine if we applied this on the international scale.  Entire stretches of scenic beaches and resorts could be taken over as compensation for non payment of debt.  The entire face of a nation’s culture could conceivably change.  At the moment, the Germans and Chinese are rumored to be large holders of foreign debt.  What if they took over all the resort areas of Greece and changed the complexion of their culture?  Souvlaki Chan’s Taverna.  Or Octoberfest with Uzo instead of beer.  Hmm…

link Chaz Bono blasts disrespectful Dancing with the Stars judges for picking on his weight.

Meanwhile, back in the real world….

The unabated plunge of society downhill into social conformity and political correctness continues.  Mr. Bono feels hard done by the judges on his performances on the pop reality show, Dancing With The Stars.  Like many people who tune into this show misguidedly expecting to see a contest, Mr. Bono is actually clueless that the show is in fact, populist entertainment.  In populist entertainment, you either get the adoration of the fans, or you get the hook.  It’s like the old Roman Colosseum only with virtual thumbs.

A large part of the audience watches because there is just something in human nature that makes watching a ‘car crash’ compelling.  A substantial part of the audience would disappear if on-air body blows were’nt handed out every week.  Simon Cowell does this for his new show, X factor and Gordon Ramsay assumes that acidic role for his cooking reality show.   People go on those shows with the expectation of possible and likely verbal abuse.  If you want to play football, you’d have to expect that 1000 pounds of men will crush you every 2 minutes or so.  That’s the price of entry.

If Mr. Bono doesn’t think his appearance on the show has any angle other than showcasing his lightness of feet, he is as delusional as his mother.  When the show picks performers for their seasonal line-up, they are not expecting to find hidden Nureyevs among football players, comics and centerfolds.  While it’s  always amazing when such unlikely performers rise to the challenge and show real talent, it’s purely for amusement that celebrities offer themselves to the public altar of judgement.  I mean come on, Emmet Smith in a tutu?

If you’re in the entertainment business, you’d better be used to personal insults. One of the best lines ever uttered was when Bruno accused Kate (of Kate plus 8 fame), of being “like a shopping cart” pushed around by her professional  partner.  Or when Kirstie Alley inadvertently body slammed her partner Maksim Chmerkovskiy in mid lift. 

Trying to frame his ouster from the show as some kind of personal attack on him isn’t going to wash.  There are no zaftig professional dancers.  In real life, people don’t get paid for effort, only results,  (lawyers of course being the notable exception).   With all due respect to the unspoken undercurrent to Bono’s participation in the show, there really are big differences in the way people perform in life.  Chaz may be transformed, but on the inside, he may still carry vestiges of his former persona.  News to Chaz, calling men fatso is not hurtful.  That’s what guys do, they insult each other.  It’s not all I’m ok, you’re ok.  If nothing else, these shows demonstrate the reality that differences do matter.  Life is cruel and unfair and your mother can shield you from only so much.   You can’t force people to like you,  be a man and get over it.