Bailout Blues

Busted Bailout

The Bailout Bias

Why the Greek Bailout Failed

Regardless of the details of the ultimate deal, the risk is that the ghost of Russia s bailout of Cyprus in 2011 could provoke severe side effects across Southern Europe, both for governments borrowing costs and for small savers.

After a bank s shareholders are wiped out and its creditors take an 8 haircut, the European Fund transforms itself into a bailout fund, justifying some of Germany s fears. And there is no explicit prohibition of some form of national government bailout.

Spain like Greece is spiraling into depression, and may need a full scale bailout by the troika (the ECB, the European Commission, and the International Monetary Fund). Meanwhile, austerity fatigue in the eurozone periphery is increasingly clashing with bailout fatigue in the core.

Will the bailout work? We have national debt, Detroit, currency valuations, healthcare, all these issues facing us.

Investors do not know whether the Rosneft bailout is a one off deal and, if it is not, which companies can hope to receive similar treatment from the CBR. Thus, they do not understand how (and whether) Russian corporate debt will be repaid or refinanced or how much trust they can place in the ruble.

Despite the disappointments, private insurance is still the best way to deal with possible future disasters. Insurance policies that clearly specify the amounts that will be paid and the types of damage that will be covered are far better than the government administered, after the fact bailout that many people seem to have expected.

Chef Well, here's the deal. Let me tell you the deal.

To express guarded optimism about the Greek deal is not to condone the provocative arrogance of former Greek Finance Minister Yanis Varoufakis or the pointless vindictiveness of German Finance Minister Wolfgang Schäuble. Neither is it to deny the economic criticism of the bailout provisions presented by progressives like Joseph Stiglitz and conservatives like Hans Werner Sinn.

The fact is that only the US and the massively over represented countries of the European Union supported the Greek bailout. Indeed, the major emerging economies all strongly opposed it, with the Brazilian representative calling it a bailout of Greece s private debt holders, mainly European financial institutions.

This tendency to compare to the past is causing people to pass up the better deal. In other words, a good deal that used to be a great deal is not nearly as good as an awful deal that was once a horrible deal.

The IMF learned this in 1997, when an inadequate bailout of South Korea forced a second round of negotiations. In Greece, the problem is even worse, as the 86 billion ( 94 billion) plan now under discussion follows a 110 billion bailout in 2010 and a 130 billion rescue in 2012.

What a deal.

Deal more cards

Deal another round

Deal a card

Deal a row

Deal another card

Deal another hand

Deal the cards

No big deal.

No big deal.

Deal with them.

ATHENS The Cyprus bailout deal is a watershed in the unfolding eurozone crisis, because responsibility for resolving banks problems has been shifted from taxpayers to private investors and depositors. But imposing major losses on Cypriot banks depositors violates the deposit insurance guarantee that forms part of the proposed European banking union, while the imposition of capital controls further erodes the monetary union s foundations.

But here's the deal.

It's a good deal.

Deal a new card

What a bad deal.

Now here's the deal.

After the Iran Deal

The Real Lima Deal

Greece s Bogus Debt Deal

Deal us the cards.

It's no big deal.

That's no big deal.

Delaying bank restructuring is costly, in terms of both the eventual bailout costs and the damage to the overall economy in the interim.

Moreover, Greece could exit the eurozone in 2013, before Spain and Italy are successfully ring fenced Spain like Greece is spiraling into depression, and may need a full scale bailout by the troika (the ECB, the European Commission, and the International Monetary Fund). Meanwhile, austerity fatigue in the eurozone periphery is increasingly clashing with bailout fatigue in the core.

Skin displacement another big deal.

Chris Anderson It's a deal!

It's like a drug deal.

Not really a big deal.

A Fair Deal for Turkey