- By Bill Bonner
The Dow rose 217 points yesterday, as Greece defaulted on another $450 million payment. A total of $8 billion in defaults to the IMF is scheduled for this month. And while an agreement was reached Sunday night that would - in theory - allow the money to flow, in practice there are two problems.
First, "Tsipras faces rebellion in Athens..." says the Financial Times.
Second, the parties involved need to come up with a 'bridge loan' to tide Greece over until the details of the larger funding project can be worked out.
This is likely to be a bridge to nowhere...
We are composing this on the streets of the Plaka district, the heart of Athens, with the Parthenon at our back and the Agora down below.
The sun is shining. It is getting hot.
On the sidewalk opposite, there is a tall, lean handsome waiter. He is a cross between George Clooney and Omar Sharif with salted hair swept back from a fine-featured face. He has found his calling. He stops middle aged women. He chats with them. He invites them into the restaurant. Smiling broadly, suavely... he escorts them through the door, where they are turned over to a plump colleague.
Down the street, two gypsy women - in long, dirty skirts - are smoking a joint. They pass it back and forth. Then, when a suitable tourist approaches they quickly put it away. They jump to their feet and offer to read palms.
You have no particular reason to care about what goes on in Greece. It is a small economy, with little impact on the rest of the world - especially not on North America. But it is part of the Zombie War too...and if it doesn't affect us directly, there are probably things we can learn from it.
Tsipras came back to town yesterday and was greeted either as a hero or a traitor, depending on how you looked at it.
He was certainly a hero to international bankers; he had just agreed to play their game by their rules, continuing to shuffle money from lenders to borrowers and back to lenders - and all the zombies along the way.
Many of the zombies, not to mention the honest, hard-working citizens of the Greek republic, saw him as a traitor. Hadn't they just exercised their right as democratic citizens just a few days ago? Hadn't they clearly expressed themselves? Didn't they say to the bankers loud and clear: Drop Dead!
To fully understand the Greek front you have to realize that this is mostly a battle between two zombie factions. On the one side there are the big, international zombies who want to continue to earn fees by lending money to bad credit risks. On the other side are the little local zombies, who hope to keep taking the money with no intention of ever giving it back.
"The Greeks peaked out in the time of Aristotle," said a companion at dinner. "It's been downhill ever since."
But you can't accuse the Greeks of not being clever. They happily take the Northern Europeans' money - whether from tourists or bankers. It's all the same to them.
"They've got a special retirement system in Greece, like your Social Security system," continued our friend. "And if you are in a career that is considered 'hazardous' you are allowed to retire with full benefits when you are only 53 years old. And guess what they consider hazardous work? All kinds of things...including being a hair-dresser. And they get so much money that we've seen three generations, all living on one retirement pension."
Last night, the retired hair dressers along with the overpaid hewers of wood and carriers of water - that is, the little, local zombies -- gathered in Syntagma Square to demonstrate their dissatisfaction with Tsipras and his government. They claimed he had sold them out in Brussels.
Tomorrow, the remonstrations will continue, with a 24-hour strike.
The banks were originally supposed to be closed for a day...maybe 2 days. Now, they've had their doors barred for the last 2 weeks. Originally, they were closed to slow the outflow of cash. Now they are closed because they are broke. That's the problem with not being in charge of your own money; you can't print more when you need it.
And if the voters desert Tsipras...or the bridge loan collapses...the Greeks may become desperate.
What a pity we have to leave, just when it was getting interesting!
Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.