My Fat Greek Wedding

In the latest event of this Greek drama, U.S. Treasure Secretary, Tim Geithner met Euro Zone finance ministers in Poland to discuss monetary policy to get europeans off from the edge of what lately have been called the “Abysm”. The consequences of contagion have global economic powerhouses gathering forces to jump start the greek economy.

The greek economy? why? This small country with a messy marriage with the European Union policy makers, has battled one of the most extenuated fight against speculators in the aftermath of the financial crisis. A bit of corruption, foreign banks and the always infalible International Monetary Fund (IMF) intervention; provided a lethal mix.

At the core of the problem, we have the lack of leadership from europeans policy makers to come up with a solution to end this greek episode. However, there are at stakes a couple more things than greeks in this story, french and german banks have a greater exposure to greek bonds than any bank from any other country in the EU.

While Merkel and Sarkozy were trying to figure out, how to save their banks from the siege, and their advisors tried to gain some time against the inquisitive eyes of the speculators, many EU partners showed reluctance to extend their aid to an ever indulgent group of nations with long records of fiscal mismanagement.

In the meantime the markets started to grow anxious about the resiliance of the greek economy to recover, and the default became more inminent among investors and speculators. Their only way to recoup the losses was to place their eyes into another peripherical country with ill managed fiscal accounts. 

From that point on, the domino effect dragged Ireland and Portugal into economic dispair with Spain and Italy waiting to be next in the agenda from international financiers. The lost of competitiveness among some peripheral countries due to the appreciation of the euro, depleted their abilities to tax exporting industries as consumers were demanding less beause of uncertainty.

With the third and fourth EU's economies at stake, european regulators realized that was only a matter of time for Greece to default, with a hesitant IMF negotiations kept going as to contain unwanted damages to the comunitarian economy. A fiscal reform in Europe is at the top of the international pleas, along with a global intiative against speculators.

Through a magnifying glass, the greek marriage with the euro have left them with an unemploymet rate between 16% to 22%, a projected recession for the next two years (-5% in 2011 and -3,8% in 2012) and a very bleak future to access money in the markets to finance their expenses. Masses of greek youngs are packing to move out of their country seeking for a better future in this advantegous marriage.

In memoriam: 9/11

Living in Manhattan in late 90's was an accelerating experience that i will never forget, the technology bubble created overnight millionaires, making NYC a very expensive place to live. At the time, the rent for one bedroom apartment in the West Village went for 2,400 US$ a month, and the streets were filled with the latest cars ridden by the hottest creatures.

That was the picture of a young inmmigrant from Venezuela, bedazzled by the glitter and fast life of the “Big Apple” and trying to make it happen in a tough environment for newcomers. Memories keep coming back of myself walking down Avenue of the Americas and having the latter WTC twin towers putting a smile on my face.

Besides, no date in New York was worth be called romantic without a sunrise snuggle on top of the Empire State building looking southward and contemplating the skyline of Lower Manhattan with the twin towers crowning the view. My best date ever!!!

By the end of summer of 2001 while living in Boston i decided to spend labor day weekend in Fire Island, unfortunately my companion and i lost the evening boat with no other choice but going out in Manhattan. The following day was the last time i had the opportunity to see the WTC towers standing up, no knowing the dreadful days to come.

September 11th, after being woke up by a roommate on a day off, screaming histerically around the apartment “we've been invaded”, we sat in front of the TV paralized with no words coming out of us and running around to get more coffee. Consternation set the tone, by the falling of the first building we were all chills and the uncertainty reigned.

My neighborhood was full of inmigrants mostly from distant places from Cambodia to Cape Verde, there were few people wondering around on the streets, but the ones out were dusting things off from their basement. Next morning all the houses were displaying american flags as a sign of patriotism and outrage against the terrorist attack.

The following day i went to work, at the subway suspicious eyes were searching for objects were to put their hatred upon, i did not blame them perhaps i would have done the same back home, but this time was affecting me. My persecutory paranoia took over me with my apparent resemble with people from the middle east and people staring.

A week later i flew to San Antonio for a trainning, i went through the airports like everyone else, of course the random theory of selecting people gets broken with me, because i am always chosen when it comes with the portable metal detector. Since then i've never felt frighten of being racialy profiled again, at least for now.

I write this lines to celebrate the wonderful city of New York and to remember the iconic majesty that used to represent the twin towers for every person who lived in the city that never sleeps.

Mea Culpa

Common Knowledge tells you when a moment of crisis arises, the rich is the one who makes the most money, they are the ones holding inventories of any kind, any inflationary move would make them richer and when it comes to speculate, they have the resources and the information to make the most of it. In conclusion, big money never loses.

No wonder a group of millionaires in different countries from Italy to Germany, U.S.A to France; are coming forward with initiatives to raise taxes to the rich in order to “contribute” with fiscal deficit. It sounds morbid having to wait for them to offer the money instead of being already taxed by law.

Apparently, based in a Boston Consulting Group study, patrimonial taxes throughout OCDE are indeed very low with the U.S. at 12.1% in tax average per fiscal entry, France with 7,8%, Italy 4,3% and Germany only 2,3%. Considering the average European citizen is being tax 30% o more, with patrimonial assets represented by one house.

The irony of situation is the wide publized PR campaign starting with the Italian super rich led by Luca di Montezemolo vowing to buy Italian bonds if the pressure persists. How much are they willing to contribute “voluntarily”? Let´s speculate 10 to 20 billion dollars that would be around 1% in comparison with the 1, 2 trillion of Italy sovereign debt.

As for their German counterpart the story is similar, with expectation a bit higher as far as collection purposes with numbers around 100 billion dollars to relieve the public coffers. Then my next question it would be, for how long this initiative would prolong? Knowing that recovery is a long and painful process.

Underlying is the legislative failure from congress and similar institutions around the globe, for not being capable of demanding to the rich bigger contributions as they are the biggest beneficiaries of most governmental subsidies. No wonder the streets around the world are getting filled of discontent masses asking for better government.

The special spotlight is taken by President Obama, who in 2008 with both houses under democratic control could not produce efficient policies that would prevent republicans to block any agreement in raising the cap on fiscal spending; as a consequence of such poor strategy debt rating was downgraded, affecting the sum of money pay in interests to speculators.

In the same token European leaders have been waiting for private lenders to share the losses in debt related cases in Greece, Portugal and Ireland. However, the same altruistic spirit shown by some business leaders in Europe has not spoken up in paying for the mismanagement and corruption while assigning contracts to big business in peripheral countries.