Economy
Related: About this forumThe Ultimate Moral Hazard: 70% of Greek Mortgages Are In Default
http://www.zerohedge.com/news/2015-06-23/ultimate-moral-hazard-70-greek-mortgages-are-default..."I still owe money on the car and motorboat I cant afford to use. Even a holiday loan Id forgotten about...Im living with my mother looking for work and waiting for the bank to come up with another restructuring offer."
But they have since been forced to make harsh adjustments. With their own savings depleted and the countrys immediate future so uncertain will Greece default on its debts and leave the euro? many have simply stopped making payments altogether, virtually freezing economic activity.
After six years of living in straitened circumstances, middle-class Greeks have also grown accustomed to shedding valuables inherited from their grandparents.
Ok, can somebody please explain to me how this qualifies as a "moral hazard?" They've lost their jobs. They've run out of savings. Their selling family heirlooms to eat. What are they supposed to pay their mortgages with? Blood?
Warpy
(111,333 posts)Who knew that could happen?
Honestly, the Germans have been morons about this from Day One.
Instead of punishing the Greek people, they should have insisted on tightening their tax code and installing some teeth in it. If the wealthy had been paying taxes, there likely wouldn't have been this severe a problem. Unfortunately, taxes are pretty much voluntary and on the honor system there and we all know how honorable the average rich guy is.
Demeter
(85,373 posts)Oh, wait! It's already here, isn't it?
dixiegrrrrl
(60,010 posts)"The risk that a party to a transaction has not entered into the contract in good faith, has provided misleading information about its assets, liabilities or credit capacity, or has an incentive to take unusual risks in a desperate attempt to earn a profit before the contract settles."
It means that due to moral hazard, a financial problem could arise.
In the case of the banks, they were dishonest about their solvency.
In the case of 70% pf mortgages are not being paid, this is a problem as far as Greece is concerned because it means there is no money/jobs available to the homeowner, and Greece wants to sign a deal where it can increase taxes.
Which is hard to do when so few people have any money.
mother earth
(6,002 posts)matter when there is money in the equation?
CUT, CUT, CUT...while the suicide rate rises...something is terribly wrong & this poison is global.
It is insanity, and there are solutions, that the enslavers don't care about.
dixiegrrrrl
(60,010 posts)mother earth
(6,002 posts)fear for this country when ordinary people can only see an R or D after a politician's name.
It is past time for people to wake the hell up. We've got one option to take us back from the brink in this upcoming election, and if he doesn't win, we are truly screwed. The coffin is open, the TPP nails are on hand, all that's lacking is the corporate candidate win which may already be in the fixing. There's going to be hell to pay if we don't realize that before its too late.
Response to magical thyme (Original post)
pscot This message was self-deleted by its author.
darkwing
(33 posts)About 8 years ago when I got a new car I sold my old one to a friend of my brothers on credit. Haven't seen a single cent. Could I eat the loss? Yes. Will I ever lend anything to him again? No. This is probably how Germany feels.
magical thyme
(14,881 posts)and telling us to all go shopping or the terrists would win.
3 governments ago screwed the Greek people over. And the Germans haven't been bailing out the Greek people. They've been standing on the throats of the Greek people, while bailing out their own banksters, because that is where their loans have gone.
We had our own criminal government to deal with. The only reason we're hanging by a thread is because we can print our own currency. If we couldn't print our own currency, we'd be Greece too.
Lenders have a responsibility too. There used to be risks to doing business, balanced by the ability to declare bankruptcy if a deal blew up. There was even a saying that we used to have, "no risk; no reward."