October 04, 2011 at 21:28 PM EDT
Greece Cuts Off Leg to Feed IMF Bear
do not feed the bearsGreece’s latest bit of austerity has been noted for its real estate tax tie, but it also includes the involuntary pay reduction of 30,000 public sector workers, and other cuts to pensions and wages. It could even lead to the early retirement or layoff of many at a time when family income has few sources. As a result, Greeks have fired up their torches for more protests, and the latest will close the country, as all transportation will be shut down (except for buses shuttling in protesters). Similarly, there is a great disconnect between austerity and economic restoral, and the plans of peripheral politicians and the wishes of Greeks on the streets of Athens.

Greece consultantOur founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Greece Cuts Off Leg to Feed IMF Bear

When Greece embarked on this EU/IMF prescribed austerity, I immediately objected, and said it was a serious mistake that totally ignored the lessons of the Great Depression. Now, as Greece nears bankruptcy in a state of hobbled morale and with a busted bank book, I suppose some in government wish they had considered other options. Greece needed to also think about sustaining GDP along with the implementation of digestible systemic adjustments, not tax hikes, job cuts and creative missteps like the 25% tax on alcohol. How Greek politicians could not foresee that measures like these would fail is beyond me, but the failings of politicians are a universal norm these days. At least, though, the Greeks should have seen that taxes on alcohol and tobacco would lead to a black market boom. This oversight clearly illustrates how disconnected many Greek decision makers are from their countrymen on the street level.

Ronald Reagan is often considered an engineer and example of capitalistic perseverance and triumph through difficult times. He would not have given austerity even a second thought today. While he would have closed tax loopholes and addressed tax evasion, he would also have cut taxes and provided more incentive for business development, including in this case foreign driven. And while faced with pressure to oblige, he would have united Europe, in spirit and in government, so that the euro could withstand trouble, at least within its smaller constituents like Greece.

The reason this issue is so hard to solve is because of the disunity of this so-called European Union. Forcing swift acting austerity down the throats of recession burdened Greeks is the result of the impatience of Europe’s constituents. The EU/IMF required fast payback will be what finally does them in though. A true union would look toward a feasible and phased in reorganization that would not push Greece into depression, and its trading partners with it. But without one government, European leaders must return home to ask for the permission of their own angry taxpayers, and while political rivals stir up fodder for firestorm. Thus, the euro and the European Union were premature in devise and predestined to fail.

Another problem working against crisis mitigation today is the process the IMF and EU are so married to. Their public reviews of Greek progress have best served market speculators, and mostly resulted in higher borrowing costs for nations on the brink, but not yet fallen off the cliff. For as long as these firefighters approach the inferno in this manner, we all will get burnt.

Over the next several weeks, I will offer creative solutions to the Greek government and the European PIIGS-pen. But these ideas will only prove more useful than criticism, based on the ratio of readership, from decision-makers to revolutionaries.

This article should interest investors in National Bank of Greece (NYSE: NBG), Hellenic Telecommunications (NYSE: OTE), Coca-Cola HBC (NYSE: CCH), Teekay Corp. (NYSE: TK), Navios Maritime Holdings (NYSE: NM), Navios Maritime Acquisition (NYSE: NNA), Navios Maritime Partners L.P. (NYSE: NMM), Tsakos Energy Navigation Ltd. (NYSE: TNP), Overseas Shipholding Group (NYSE: OSG), International Shipholding (NYSE: ISH), Excel Maritime Carriers (NYSE: EXM), Safe Bulkers (NYSE: SB), Claymore/Delta Global Shipping ETF (NYSE: SEA), Genco Shipping & Trading (NYSE: GNK), Diana Shipping (NYSE: DSX), Danaos (NYSE: DAC), Tsakos Energy Navigation (NYSE: TNP), Ship Finance Int'l (NYSE: SFL), Nordic American Tanker (NYSE: NAT), Seaspan (NYSE: SSW), General Maritime (NYSE: GMR), DHT Maritime (NYSE: DHT), Brunswick (NYSE: BC), Marine Products Corp. (NYSE: MPX), DryShips (Nasdaq: DRYS), Top Ships (Nasdaq: TOPS), Eagle Bulk Shipping (Nasdaq: EGLE), Sino-Global Shipping (Nasdaq: SINO), Paragon Shipping (Nasdaq: PRGN), K-SEA Transportation Partners (NYSE: KSP), Euroseas (Nasdaq: ESEA), Star Bulk Carriers (Nasdaq: SBLK), Omega Navigation (Nasdaq: ONAV), Knightsbridge Tankers Ltd. (Nasdaq: VLCCF), TBS Int'l (Nasdaq: TBSI), Golar LNG (Nasdaq: GLNG), Claymore/Delta Global Shipping (Nasdaq: XSEAX), American Commercial Lines (Nasdaq: ACLI), Deutsche Bank (NYSE: DB), ITA (Nasdaq: ITUB), Banco Santander (NYSE: STD), Westpac Banking (NYSE: WBK), UBS (NYSE: UBS), Lloyd’s Banking Group (NYSE: LYG), Barclay’s (NYSE: BCS), Credit Suisse (NYSE: CS), Allied Irish Banks (NYSE: AIB), Banco Latinamerican (NYSE: BLX), Bank of America (NYSE: BAC), Citigroup (NYSE: C), Goldman Sachs (NYSE: GS), JP Morgan (NYSE: JPM), Morgan Stanley (NYSE: MS), European Equity Fund (NYSE: EEA), Vanguard European Stock Index (Nasdaq: VEURX), Powershares FTSE RAFI Europe (NYSE: PEF), Europe 2001 (NYSE: EKH), S&P Emerging Europe (NYSE: GUR), Ultrashort MSCI Europe (NYSE: EPV), Vanguard Europe Pacific (NYSE: VEA), Wisdomtree Europe SmallCap (NYSE: DFE), Wisdom Tree Europe Total Div (NYSE: DEB), iShares S&P Europe 350 (NYSE: IEV), Morgan Stanley Eastern Europe (NYSE: RNE), DWS Europe Equity A (Nasdaq: SERAX), DWS Europe Equity B (Nasdaq: SERBX), Fidelity Europe (Nasdaq: FEUFX), Fidelity Europe (Nasdaq: FIEUX), ICON Europe A (Nasdaq: IERAX), Pioneer Europe Fund (Nasdaq: PBEUX), ProFunds Europe 30 (Nasdaq: UEPIX), Putnam Europe A (Nasdaq: PEUGX), Rydex Europe 1.25x (Nasdaq: RYAEX).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

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