Greek exit [in the markets!]

[Aberdeen]

Before you make such bold statement, you better compare prices of these items to incomes of people in related time periods. Looks like you didn't do your homework. For example in 1965 average income in US was 6,000 and average car costed 3,000, now average income is about 50,000 and you can buy well equipped sedan for 25,000. Actually if someone manufactured these primitive cars from 1965 today, the cost would be around 6,000, remember Lada in Canada in 90s for 5,000? If it comes to smart phones, with video camera, GPS, computer and other goodies, you can't even find equivalent thing to compare in 1965, lol. Unless you compare it to military technology of 1965 worth hundreds of thousands if not millions. I'm not sure why you didn't notice that progress in technology and manufacturing makes things more affordable.

You know that argument doesn't work, LeBrok. First of all, a well equipped sedan costs closer to $50,000. Secondly, you're back to talking about the average income for all groups, when the point was that most of the income gain has actually been by the top 10%. The wage of the average labourer has been stagnating. In 1965, the average factory worker could afford to buy a new car every few years. Now, during the era of de-unionization, the average factory worker's wages are low enough that they have trouble coming up with the money for a ten year old Kia. And many people are part time service workers. Things may look fine for you in Alberta for now, with the average wage being lifted by well paying resource jobs, but here in Ontario we're going through the same kind of de-industrialization that parts of the U.S. have already gone through. The jobs have moved to Asian countries where there is no legal minimum wage and there are few health, safety or environmental laws. And that's the kind of world your children will live in right there in Alberta if we keep going down the same road.

 

[Echetlaeus]

Yeah, there is no future in the so called "Rust Zone" nor to the cold places of US and Canada. People vote with their feet after all.

 

[Aberdeen]

Yeah, there is no future in the so called "Rust Zone" nor to the cold places of US and Canada. People vote with their feet after all.

So where's the future? Merkel's Germany? I don't think they have room for all of us. Or maybe we can find work in a factory in Indonesia. Free PCBs in our lunch, because no environmental controls. The future looks so promising.

 

[bicicleur 2]

Ask Steven Jobs that question. He was the son of working class parents but managed to invent and market the Apple line of products and he died insanely rich, mostly because he produced something that Joe and Jane Average wanted, and he marketed his products in countries where people have the money to buy such things. I think a better question is whether Steven Jobs could have done what he did if he had been born and raised in a country that was too poor for him to be able to imagine average citizens buying computers and smart phones. Factories are useless unless people can afford to buy what they produce. America industrialized in the 19th century but didn't really become wealthy and powerful until after the rise of the unions in the 1930s - by the 1950s, the average American worker was much better off as a result of union activity and America had become the world's strongest economy.

with all due respect, i don't think Steven Job was a big inventor, i'd think of him as an excellent marketeer

 

[bicicleur 2]

Greece is a net-consumer and simply cannot produce enough to keep it's economy from borrowing. Start-up costs are high, labor is too expensive, local services are poor, there are many Holidays when public services are closed, there are even more days when public services shut down in strike action, transport and communication services are expensive and erratic, locals have no disposable income anymore, tourists are now increasingly from Russia and Russia is being sanctioned by the EU and the USA for it's policy in the Crimea.

Despite the high levels of debt Greece has cut spending and continues to streamline it's public sector. Politicians and public servants are being scrutinized and they are taking home much less than they use to. Universities are beginning to focus on research and publications but they still have a long way to go ...

The most important change is cultural. Greek society is slowly accepting the reality that the public service position is not a good option anymore. This will for the most part motivate Greeks to secure their own futures and stop relying on government for everything. Pensions will have to be supplemented by private retirement annuities etc. and land that is lying dormant will have to become productive in some way or be leased, renovated or sold-off. These changes will provide a new impetus in the property market and create some jobs but most importantly, with the proper incentives industry could increase exports and local businesses make a difference in general quality of life as labor becomes cheaper and education begins to improve. The tourism industry needs to be supplemented during the Winter months by SME's, industrial, property and financial markets. Telecommunications are improving due to increased privatization and competition; and transport will always be a problem as Greece has a large road network in rural areas with serious weather in the Winter months. The islands need more air-links with seaplanes and faster ferries.

Lastly, but most importantly ... Greece needs a stable government and people need to stop fighting the necessary changes that should have taken place twenty years ago.

I'm not a Greek, don't know much about Greece, I'm observing this from far with little knowledge, but this is exactly the image I had in mind.

 

[Echetlaeus]

So where's the future? Merkel's Germany? I don't think they have room for all of us. Or maybe we can find work in a factory in Indonesia. Free PCBs in our lunch, because no environmental controls. The future looks so promising.

Merkel's Germany is fine for someone to work.

 

[Sile]

Greece is a net-consumer and simply cannot produce enough to keep it's economy from borrowing. Start-up costs are high, labor is too expensive, local services are poor, there are many Holidays when public services are closed, there are even more days when public services shut down in strike action, transport and communication services are expensive and erratic, locals have no disposable income anymore, tourists are now increasingly from Russia and Russia is being sanctioned by the EU and the USA for it's policy in the Crimea.

Despite the high levels of debt Greece has cut spending and continues to streamline it's public sector. Politicians and public servants are being scrutinized and they are taking home much less than they use to. Universities are beginning to focus on research and publications but they still have a long way to go ...

The most important change is cultural. Greek society is slowly accepting the reality that the public service position is not a good option anymore. This will for the most part motivate Greeks to secure their own futures and stop relying on government for everything. Pensions will have to be supplemented by private retirement annuities etc. and land that is lying dormant will have to become productive in some way or be leased, renovated or sold-off. These changes will provide a new impetus in the property market and create some jobs but most importantly, with the proper incentives industry could increase exports and local businesses make a difference in general quality of life as labor becomes cheaper and education begins to improve. The tourism industry needs to be supplemented during the Winter months by SME's, industrial, property and financial markets. Telecommunications are improving due to increased privatization and competition; and transport will always be a problem as Greece has a large road network in rural areas with serious weather in the Winter months. The islands need more air-links with seaplanes and faster ferries.

Lastly, but most importantly ... Greece needs a stable government and people need to stop fighting the necessary changes that should have taken place twenty years ago.

For Greece or any other country in the EU to make themselves better is to work as hard as the hardest workers in the EU.
If the germans work like fanatics and madmen, Greece ( or anyone else) has to match that OR else they will fall by the wayside and die. That is the reality of the EU.
No slackers will survive.

 

[Echetlaeus]

Reminder: the common word for work that we use in Greek is δουλειά, which equals to quasi-slavery in English.

And the Germans do not work like fanatics. Far from it. They make quality products and the workers are not paid with their marginal product, hence there is a lot of room for the firms to have profits. However both of them agree to follow this pattern, so that they will continue to prosper. In a sense they practice unethical competition against the rest of the European countries. Their ability to sell has increased numerous times with the introduction of Euro. After all, this is why the Euro was created in the first place.

Yeah, I know some people will dislike this, but that's it bros. What can I say, that's the plain truth.

 

[LeBrok]

You know that argument doesn't work, LeBrok. First of all, a well equipped sedan costs closer to $50,000. Secondly, you're back to talking about the average income for all groups, when the point was that most of the income gain has actually been by the top 10%. The wage of the average labourer has been stagnating. In 1965, the average factory worker could afford to buy a new car every few years. Now, during the era of de-unionization, the average factory worker's wages are low enough that they have trouble coming up with the money for a ten year old Kia. And many people are part time service workers. Things may look fine for you in Alberta for now, with the average wage being lifted by well paying resource jobs, but here in Ontario we're going through the same kind of de-industrialization that parts of the U.S. have already gone through. The jobs have moved to Asian countries where there is no legal minimum wage and there are few health, safety or environmental laws. And that's the kind of world your children will live in right there in Alberta if we keep going down the same road.

It is really hard to compare apples to apples with cars, there are rarely continues models of same entry level from 1965 to 2014, though I'm going to give it a shot. Let's have a look at Ford Mustang, the only model in production now and then.

1965 model cost was 2,400 dollars, basic model (average salary in US 5,000 dollars a year)
100 HP,
backup lights optional not in base model
no seat belts, optional
manual 3- speed
disc brakes optional
AM radio
no air conditioning - optional
http://auto.howstuffworks.com/1965-1966-ford-mustang-specifications.htm

New 2014 Ford Mustang cost is 22,510 dollars for a basic model (average salary in US 50,000 a year)
http://www.ford.com/cars/mustang/trim/v6/
305 HP
power windows, locks, etc
6 speed manual transmission
air conditioning
stability control
4 dicks brakes
4 airbags
tire pressuer monitoring
SOS Post-Crash Alert System (whatever it means?)
Keyless Entry
Anti-theft system
HID headlamps
Computer (there is one in every car these days)
Lots more goodies, check the link above

When we compare prices of these cars to average incomes of 1965 and 2014 it is obvious that technology makes things cheaper, actually in practice prices stay the same (adjusted for inflation) but we receive upgraded products. Today's Mustang is like space technology compared to the first one, and soon will drive automatically by itself, it is like getting a chauffeur for free with one of next upgrades.
In short, for the same money we are getting so much more now with every product.

 

[LeBrok]

There is a new foreign investment framework in place that includes cash grants & municipal lease agreements, unfortunately Greece has a harsh tax system that seems to be easing slightly ... there are a few large scale investments for example Chinese investors have invested in port operations and port infrastructure but many of these large scale investments are problematic causing trade unions and government to clash heads on a frequent basis. Government often finds itself signing protection clauses guaranteeing certain rights over strategic assets but in order to close these deals it takes on political responsibility for any trade union adversity ... international companies would otherwise not consider entering Greece's volatile labor market.

That's too bad. Even if economy is positively reform the growth will be slow due to lack of big international investment capital.
So no chance for another Irish miracle?

Pensioners are being forced to start thinking about selling off their homes and other parcels of land located in the village to make up for decreases in monthly income from pension cuts. The irony is that progress will inevitably come at a high cost as Greece has maintained an outdated economic system for far too long. I predict a large number of family trusts being opened to safe-guard estates from needy family members who want to sell, problem is most individuals lack a decent education and struggle to comprehend the ever-changing legal and tax systems. Courts will be overrun by small-scale family feuds regarding land that hasn't been divided up properly for generations.

Unexpected side effect of recession.

There is a fear of government that is largely based on prejudice and political rhetoric coming from over-zealous journalists. Public participation in local government is low and people still vote along generations-old party lines that are family-specific. This is changing slowly but people tend to vote for ridiculous parties like Golden Dawn when they become disillusioned with their own parties ... helping little to improve international sentiments.

It was visible on forum that most Greeks loved to put blame on international community for maladies of Greek economy rather, than to look within for bad choices. Although it might not be Greek specific and most of us like to see our nations in peachy colours. Because of circumstances Greeks became very vocal about their unhappiness.

The media is to a large extent irresponsible and could do a much better job in improving the business climate and future prospects of Greece. It's disappointing to watch shouting matches every evening on TV ... does very little to alleviate public fears of a prolonged economic crisis.

Sometimes I wonder who is worse in confusing minds of ordinary folks, the skilful politicians or the eager journalists "just doing their job".