In my recent article at the Wall Street Greek blog, entitled Buy Gold on the Fed Fiddling, I referenced the ongoing weights against the economy. For one, I noted that the European financial crisis has not yet subsided, detailing the many poor economic data points and events that occurred last week. In late March, the head of Standard & Poor’s Sovereign Ratings, Moritz Kraemer, said he believes Greece will probably have to restructure its debt again, involving needed aid from its European partners. European leaders are on record saying the latest bailout would be the last for Greece; now they may be put to the test at a time when their word will be measured. Moritz noted the risk posed by upcoming elections across Europe and Greece.
Our 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.
The poor fellow who took his own life in Syntagma Square this past week tragically illustrated the ongoing plight of Greeks, who have been blindsided by the degree of change swiftly forced upon them through the austerity devised by a weak set of governors and their equally clueless European masters. From the very start, I have publicly offered a voice of warning regarding the poorly advised austerity plan.
Before the crisis was even born, in a private dinner with a mid-level ranking Greek economic sub-minister, I asked how Greece would handle the upcoming economic storm approaching it. This was early, before former Prime Minister Papandreou had even announced that Greece’s preceding government had cooked its books, which remained in bad shape. It was before the crisis developed, when most people, especially the politicians were still ignorant to the existence of this economic devil. The representative, who will remain nameless because I like him personally, said Greece would be fine, that it had a different type of economy than the rest of the developed West. I cringed inside, but I overlooked his naiveté, as it was (and remains) so widespread across the political sphere.
Around the same time, I sat in on a Washington D.C. meeting of Greek representatives, large telecom companies like Verizon (NYSE: VZ), AT&T (NYSE: T) and Hellenic Telecommunications Organization (OTC: HLTOY.PK), and several high net worth individuals and smart men representing large investment pools. Greece was seeking capital investment to expand its broadband network to the 50 largest towns within the country. Among a group of wide-eyed, highly enthused Greeks, I asked the highest ranking representative how he could be sure the money Greece planned to supply over time to match foreign investment ($5 billion if I recall correctly) would still be available in one year’s time. The proud man looked at me with disdain, wondering who I was, as he answered, “Of course it will be available,” looking away before he had even completed his response.
I wonder if either of the two men is still employed and how they got their jobs in the first place. Of course, we cannot blame them, as they simply drank the Kool-Aid supplied by their higher ups, and sang the song yes men sing so well. A similar chorus sings a different tune today, as they blame Goldman Sachs (NYSE: GS) and Germany for their ills.
I fear that the first shot fired in Syntagma Square will not be the last, and that the next could be a burst which may be directed outward this time. The Greek government should see the sad event as a warning shot across its bow. If the government does not get creative in its economic restructuring and focus on economic growth stimulating actions, it may not enjoy a resurrection this spring. And even if it finds more aid, its death could still come by revolution, if not by election. I remain available to Greece for consultation.
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