Look What You Can Buy in the Greek Liquidation Sale!

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Sorry if you were looking for listing of the various Greek assets on offer. You need to be a really heavyweight investor (and have been verified as such) to get a real viewing. And you are late if you are taking interest only now. The Guardian last week visited a road show of sorts in London (note that the properties were being hawked BEFORE the Greek parliament had approved the sale). The potential bidders were very cool:

Up for sale are 39 airports, 850 ports, railways, motorways, sewage works, a couple of energy companies, banks, defence groups, thousands of acres of land for development, casinos and Greece’s national lottery. George Christodoulakis, Greece’s special secretary for asset restructuring and privatisations, said the sell-off would raise €50bn (£44bn) to help pay back the country’s €110bn bailout debt.

The private equity bosses gathered in the hotel’s ballroom for the parade of Greece’s national treasures showed little interest in buying anything.

Nikos Stathopoulous, managing partner of BC Partners, which has invested more than €3.5bn in Greece, said investors are put off by bureaucracy, strong unions, corruption and a lack of transparency. “Even in the good times Greece is not a country that attracts investment. Foreign investors don’t want to invest in a country where there is no flexibility in hiring and firing people,” he said. “You don’t want to invest in a country in which you wake up and a new law has been passed which totally undermines and destroys the value of the investment you’ve just made.”

But I have no doubt there are properties for sale to suit all budget, apparently including lots of beachfronts. From Aljazeera (hat tip the Economic Populist):

It is pretty clear that this is all going to end badly. The asset sales have been budgeted to fetch €50 billion; experts expected them to yield at most €15 billion. And as the video clip suggests, a lot of what is being put up for sale is white elephants. Moreover, the good properties are de facto sale-leasebacks, with the attractiveness of the investment dependent on the income it produces from Greek nationals (and maybe tourists). With infrastructure investors’ practice of “sweating the asset,” meaning increasingly increasing charges to users, that just sucks more income out of the Greek economy, making it less able to service other debt.

Greece is clearly going to suffer some pain regardless, but this stripping of the country when a restructuring is inevitable isn’t sound policy, it’s looting, pure and simple. It reminds me of a video Richard Smith sent me about stoats hunting rabbits (reader alert: I actually do have a certain fondness for members of the weasel family, I think they get a bum rap, but this video is not for the fainthearted. You need to view it at YouTube, since embedding is not permitted)

The striking thing isn’t simply the distress of the rabbit being hunted, it’s the complacency of the other rabbits as one of their own is being taken down. With banks in the US licking their chops at the prospect of “privatizing” state and municipal assets, the example of Greece is more germane than many of us would like to believe.

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56 comments

  1. SD

    When the IMF demanded the assets of Iceland,
    I remained silent;
    I was not an Icelander.

    When the IMF demanded the assets of Greece,
    I remained silent;
    I was not a Greek.

    When the IMF demanded the assets of Spain
    I did not speak out;
    I was not a Spaniard.

    When the IMF demanded the assets of Italy,
    I remained silent;
    I was not an Italian.

    When the IMF demanded the assets of my country,
    there was no one left to speak out.

    1. Valissa

      Touche! Sovereignty is such an old fashioned concept. What’s all the concern about a little sovereignty grabbing between friends? The ‘New World Order’ marches on, and we all watch the parade.

      Euro zone finance ministers have approved a 12 billion euro ($17.4 billion) installment of Greece’s bailout, but signaled that the nation must expect significant losses of sovereignty and jobs.

      Fucking incredible… how far will this trend of neo-feudalism go before there is some osrt of significant backlash?

      1. Francois T

        It’ll go as far as people will tolerate. By “tolerate”, I do mean willing to apply the Sharron Angle remedy to its ultimate consequence.

        It’s actually extraordinarily stark and simple: the finance ministers, puppets of the banks and money people, just couldn’t be bothered to care about the suffering they shall impose on people, that are, after all, beneath them. They have their moral rationale in place, (Greeks shouldn’t have lied, shouldn’t have borrowed etc., it’s tough noogies you REMFs!) they strongly believe that finance is the only strong sector remaining that provides the Western World some “superiority” and they sure do not want to jeopardize their personal opportunities to strike it filthy rich once their “public” service stint is done.

        In a word, ordinary people can and must be sacrificed if need be. They don’t know it, but it is for their own good anyway.

        Faced with such an ethos backed by prodigious amounts of wealth and access to power, what can ordinary people do? Their representatives just won’t listen to them, police will provoke them into violence just to create crisis opportunities so that “Law & Order” can be “restored” and voila! Suck it up, bitchez!!

        If the principle of the First Amendment does not work, try the Second one. Or, as Kennedy wrote: “Those who make peaceful revolution impossible will make violent revolution inevitable.”

  2. Mogden

    These countries seem to hold all the cards by virtue of their ability to default. I really do not understand why they keep the extend and pretend game going. Corruption of the leaders?

    1. /L

      They are deeply invested in the EU project and its exorbitant bribes of politicians and civil servants, no austerity in Brussels where the money flows as they use to with exorbitant salaries and benefits.

      Now the order to the lackeys is the big European (French and German) banks is to be saved, buying time is essential to make room for ECB to buy up as much junk bonds as possible from the banksters.

  3. Richard

    Not too much sympathy here, except maybe a little schadenfreude at Greece’s inability to sell government assets due to paralyzing bureaucracy.

    The Greek government spent like a drunken sailor during good times (just like how the US is doing today). Sure, terms may have been good initially, but one has to borrow sparingly and only with an eye to whether future income will be sufficient to pay it back. This is as true for companies as it is for governments and individuals.

    For individuals, I would caution to save, save, and save. Live below means and buy only with cash in the bank. Do not eat from the tree of credit, lest it poison thee. If one has no debts, no one else may lay claim to one’s liberty, property, and happiness.

    1. ambrit

      My Dear Richard;
      That last line of yours is getting battered around a bit right now in the U.S. Consider all those MERS Zombie Mortgages and the unmortgaged houses sold at auction just because some servicer claims it to be fair game. Greshams Law for the modern age is alive and well.

    2. Anon

      The “schadenfreude” argument on the spurious ground that the Greeks are getting their just desserts is getting a little tired, frankly.

      The meta game here I’m convinced is an attempt by the US to total the euro as a potential alternative to the US dollar as a global reserve currency.

      We know that for years Wall St cooked up a whole load of fraudulent “securities” in order to pass off the “assets” of the unsustainable US/global property boom onto dupes, including the Greek government, in the form of CDS/other new-fangled, “risk-tempering” instruments.

      Sure, the Greeks should have been wary about Goldman & friends bearing gifts, but if Greece was such a known deadbeat, why didn’t banks/investors exercise more carefully their ability to be prudential in their lending?

      It smacks of the sub-prime debacle all over again. Sure, caveat emptor, but what about caveat lender for once?

      The benefit to the US/US institutions of the handy deadbeat borrower was having a place to dump all those toxic securities outside the US. Additionally, once the crisis blew up, when boom became bust, it would create the possibility of a breach in the Eurozone itself.

      The problem of a unipolar world dominated by US economic interests has long been recognized in a number of spheres, particularly among the BRICS, and as long as euro-denominated assets are available, holding these is an option in portfolio diversification.

      Noises have also been made, however faintly, regarding the possibility of trading oil in euros, not just US dollars, as with the present cartel arrangements under OPEC since 1971. A move from trading oil in US dollars is something the US would seek to avoid at all cost, since once countries are no longer forced to hold US dollars to purchase the black stuff, all bets would be off for the US economy.

      So this was never just about Greece, there was always a wider agenda. And if the euro isn’t totalled over Greece (hell, the vultures still get a load of Greek assets dirt cheap, it’s win-win), then the pony show will move onto the next debt-striken EU member – and there’s so many to chose from: Eire, Portugal, Spain. Until the euro is no more.

      The clue that all this might actually be the case is that Italy isn’t generally mentioned in all the “shape up or sell out” sermons.

      1. Psychoanalystus

        Good points. However, I personally don’t think the US is much of a unipolar economic superpower anymore. Much of this country is now resembling the third world, and the middle class has largely disappeared. Not only is the country finished economically, but the human quality here is almost zero at this point. The majority of Americans are so ignorant, so unable to think rationally, so strung up on drugs, so entitled, and so unhealthy (obese and chronically ill due to a predatory health care system), they simply cannot compete with almost any nation on earth. If I were an owner of a large company, I would move my business to China too.

        I see aspects of the US that most people do not know exist. For example, as part of my work I now travel across the country to basically help large employers calm down employees who are scheduled to be laid off. Entire factories and huge state and federal facilities are being closed down. I don’t think that people realize that what is being reported about governors such as those in WI or MI “trying” to accomplish, has already taken place. The corporate-controlled media in this country is not reporting this, or is reporting it months after it had occurred. By the time you hear about it on MSNBC, it’s already history.

        1. kievite

          However, I personally don’t think the US is much of a unipolar economic superpower anymore

          Often people claim that China is emerging superpower, right? But the level of powerty in China is much higer, and the percentage of people who belong to middle class is much lower.

          I think it’s to early to bury the USa as an economic superpower.

    3. scraping_by

      “Not too much sympathy here, except maybe a little schadenfreude at Greece’s inability to sell government assets due to paralyzing bureaucracy.”

      Or, perhaps patriotic sabotage. Simply by delay, the number of willing buyers decreases as the amount of trouble goes up. Most capitalists are cowards, anything that smacks of hassle will chase them running to the hills. If the end result is no foreign ownership, it matters little if the defense is a line of soldiers with rifles or a clerk losing the file.

      “The Greek government spent like a drunken sailor during good times (just like how the US is doing today).”

      There is no moral duty in repaying debt. The money changers made a cold-blooded calculation buying Greek government bonds, so repayment should be a cold-blooded calculation. And at the moment, since it’s the Greek nation that’s paying with no noticeable benefit gained from the borrowed money, default seems a good alternative.

      And, at present, the USG is giving large amounts of money to support the financial elite. We have no moral obligation for this debt, and certainly, not this debt. Barry didn’t run on a platform of crawling for the bankers, nor did anyone vote for him hoping he would. Each day passes makes defaulting on UST bonds seem wiser and more reasonable.

      “Sure, terms may have been good initially, but one has to borrow sparingly and only with an eye to whether future income will be sufficient to pay it back. This is as true for companies as it is for governments and individuals.”

      It’s not true for sovereign governments: they issue their own currency. It’s a measure of Greek loss of sovreignty that this question even comes up. Individuals and companies are different, but again, it’s a financial question not a moral one.

      “For individuals, I would caution to save, save, and save. Live below means and buy only with cash in the bank. Do not eat from the tree of credit, lest it poison thee. If one has no debts, no one else may lay claim to one’s liberty, property, and happiness.”

      Good ideas in any time or place. However, it’s no solution for the Greek people, nation, or government. Just as American corporations have learned you can’t cut your way to profitability, nations are going to learn you can’t impoverish your way to solvency. If there were Greeks starving in the streets, it would not lower the debt one bit.

      The Irish were nearly extripated from their island home by the English not through the use of force, or interbreeding, or cultural imperialism, but by impoverishing them through legal/financial trickery. The Greeks have the choice of avoiding that but they can’t if the mythology of a moral obligation to repay debt keeps them in chains.

    4. Dan The Man

      I think you are missing an important point and that is that the only reason Greece is in a worse situation than the U.S. is that greece cannot manufacture its own money as we do. Don’t think for one minute that we have ever acted responsibly in reference to debt. Also an individuals frugality once hyper-inflation hits(and it will hit the U.S.)will be meaningless.

  4. Cedric Regula

    I was just thinking I could use a new pair of sandals. But I imagine those will show up EBay.

    A defence group might be cool to have, but those sound kind of expensive.

    The beach looks nice, but a tad large and probably pricy as well. Plus they say after you buy it you still have to let anyone that wants go there. I think it’s cheaper to go that route.

    Sure you can buy a government building and rent it back to them. But if they don’t collect taxes, that’s like having a renter with no job. They aren’t suckering me into that one.

    And who wants the liability of owning an airport where the employees can do whatever they want?

    But that is quite a dilemma. How does one expect to invest in a broke country and make any money?

    1. ambrit

      Mr Regula;
      That one’s easy. As has been done here in the U.S., you also break the social contract. (Plus, bring in all sorts of low wage Rumanians, Hungarians, H—, why not some Chechens too!)

      1. Cedric Regula

        Sure, that goes without saying. But I was worried about the revenue side of the biz. I’d of course pick something tourist related so I didn’t need local cash. But as the place degenerates into a war zone and/or beggars swarming over my beach resort like in Acapulco, that’s not going to be good for the tourist trade. Then I need to buy the defense groups too plus advertise the fact globally and my costs go up.

        See my reservations about the biz model?

        1. ambrit

          Mr Regula;
          Yes, I do see your dillemna. However, I feel you’re not being creative enough. You could, for instance, link up with other like minded Euro Rentiers and establish an in country private ‘security’ force to police the ‘tourist’ areas. Not only would you preserve the illusion of stability, but you would also employ ‘idle’ state security personnel. Like ‘Dim’ says in “Clockwork Orange: Big jobs for big boys!” As for beggars on the beach, do like we do it here in America, make being poor a crime again. Nothing says good old Conservative Values like chain gangs and debtors prisons! As they did once before, the Greeks can point the way for Western Civilization. And you can be part of it! The bragging rights alone will guarantee you a stelae in the stoa.

          1. ambrit

            Mr Regula;
            Why not. They’re becoming profit centres here in America. Just try to think of them as ‘captured’ assets.

          2. Cedric Regula

            But that’s because, at this point in time, America is only half broke.

            In Greece, I would need to use the 17th Century English Jail Model. Here, the jail proprietor charged the prisoners daily room and board. Of course they didn’t have the money, or a job, so the jail proprietor credited their account and the money was due before the prisoner could leave (after serving his court mandated sentence).

            Now keep in mind this is partly a debtors prison, and here I am extending credit to debtors prisoners.

            Jeez, how dumb is that?

          3. ambrit

            Kind Sir;
            Think outside ‘the box.’ A new form of ‘indentured servitude’ could be established. Oh, how about ‘in house training regieme?’ Then you could ‘rent’ them out to Scarlett O’Hara Industries, (you know her, “the red earth of Terra,” etc.) Modernise the lingo a bit, “monitering bracelet gang,” and call it ‘Patriotic’ and for the ‘good of the Nation.’ Remember, you might not be able to squeeze blood out of a turnip, but you sure can do so with prisoners.

          4. Cedric Regula

            Yes…I guess I could have them make Greek sandales, and then sell them on Ebay. That’s probably where this is headed.

            Hmmm.

            Or, I could just wait for the sandales to show up on Ebay, and get that new pair I wanted.

      2. Psychoanalystus

        Actually, at this point, the Greeks earn about the same or slightly less than the Hungarians, Bulgarians, and Romanians. Other eastern Europeans, such as the Polish, Checks and Slovaks earn more than the Greeks. Which is why there aren’t many workers from those countries in Greece anymore. Most foreign workers in Greece now are Albanians or from Africa.

        Since the austerity programs were started in Greece, the average income dropped by about 30 percent.

        1. ambrit

          Dear Psychoanalystus;
          Ah ha! Things are worse than I thought. Given the near parity in earnings for the region, what’s the purchasing power of those wages like between nations? Also, as I like to ask, what’s the median wage comparison like? I’m assuming the austerity package is as regressive as H—. Finally, if conditions deteriorate more, what’s the chance of Greek Macedonia doing a Kurdistan on them? This could be much more fun than any of us can imagine.

  5. Sundog

    The golf courses in Yosemite Valley probably won’t officially require that reservations be made in Mandarin.

  6. Fifi

    It will end very, very, very badly.

    I can easily see an authoritarian gov taking hold in Greece, the kind that settles claims with an axe rather than a court of law.

    1. ambrit

      Dear Fifi;
      Mid level officers could just as easily stage a ‘populist’ coup and then repudiate external debts. “A goat in every barbecue pit, and a Fiat 500 in every garage.”

  7. appointmetotheboard

    I dunno, there’s quite a lot of nice little earners on that list. But it is a fire sale – obviously, you don’t want to look too keen to drive the price down.

    You’d be looking at services ordinary Greeks can’t ovoid using like water and sewage. Try getting out of the jacked up bill for that one. And if you can buy a too big to fail bank, well, thats just a fabulous meal ticket.

    And then there’s the lottery – everyone knows that it is the poor who tend to buy tickets, and if you are unemployed or your wages have been slashed by 30% +, then you probably want to buy a lottery ticket for the faint hope of escaping penury.

    No, this (along with saving Spain) was the end game for the bailouts. There will be buyers for Greek assets. Not that it’ll do Greece any good.

  8. Max424

    The Hellenic Armed Forces motto (from Thucydides): Freedom Stems from Valor!

    The stated mission of the Hellenic Army:

    1) Defend the nation’s independence

    2) Safeguard the nation’s sovereign territory

    3) Contribute to the nation’s policy objectives.

    That third one it a tad ambiguous, isn’t it?

    It is well-nigh impossible to be valorous, if you are contributing to the pillaging of the country you are sworn to defend.

  9. Psychoanalystus

    Sooner or later the brainwashed masses will wake up and realize that debt is not sacred, rather it is a contract just like any other contract that can only be kept in force if and only it the terms AND current conditions are serving both parties. At that point the demands for a global debt forgiveness jubilee will succeed. All the bad debt that has been floating around for the past few years will then be erased, and societies will be able to move forward again.

    Privatizations are always followed by nationalizations. I suspect this transition is around the corner.

    Psychoanalystus

    1. ambrit

      Dear Psych;
      Sorry, but no, the ‘brainwashed masses’ do not ‘always wake up.’
      ‘Global debt forgiveness’ could also be secured by a general Depression with massive deleveraging and wealth ‘creative destruction.’
      I also suspect that ‘prosperity’ is around that same corner.

      1. Psychoanalystus

        Well, the masses have already awoken. The protests in Africa and Europe are just that. The Greek “I will not pay” movement is likely to grow. Globalization is already dead, capitalism is fully discredited, and its main defender (the American Empire) is now in full multilateral collapse mode. As the price of “bread” doubles and triples, the “circuses” will lose their magic power, and there will be nothing to keep the current order of things in place.

        1. Birch

          I like your optimism Ps. Just a matter of how bad things get before they get better.

          I wonder how many times some of those properties have been privatized over the past few thousand years.

  10. looter

    Is the Parthenon available? I’ve always had a keen desire to own an authentic Greek temple. It sure would look swell in my back yard.

      1. ambrit

        My Dear Mr Sucotash;
        You haven’t been hanging around with Barth lately, have you? One of the best ‘hidden’ puns I’ve seen in quite a while. Sort of a ‘Pythonessesque’ utterance, (nudge nudge, wink wink.)

    1. ambrit

      See Credit Lyonnaise for Greek Cultural Heritage sites. As long as you don’t try to pay with gold painted bricks, we can deal.

  11. RW

    It used to be that nation’s had armies to protect themselves from this kind of thing. Is the Greek army being sold off too?

        1. Cedric Regula

          Goldman-Sachs may make a secret, unsolicited bid for the greece Army…but I’m not real sure about that. Depends a lot on whether GS thinks they can securitize all of Greece’s assets and sell General Obligation CDOs to the ROW. These would be asset backed securities, of course, with a low yield to indicate their low risk nature. Some CDS to go along with them too so institutions with AAA investment charters and banks needing Tier 1 assets can buy them.

          1. ambrit

            Mr Regula;
            Minos must be spinning in his grave. Excuse me, bit that’s a tranchaunt observation.

  12. jcb

    “The complex bill to carry out the austerity measures passed Thursday, with all 154 of the governing Socialists plus one conservative deputy voting in favor. There were 136 votes against it, along with 5 blank ballots and 4 abstentions.”
    (NYT, 7/1/11)

    A unanimous Socialist Party in Greece voted for an austerity plan (including the sale of national assets) imposed by international banks, while the center-right opposition voted one-vote-shy-of-unanimously against.

    And the Democratic base in America thinks that Obama disses them?

    This is the most devastating indictment of European democratic socialism’s betrayal of its base since the end of WW2.

    1. Leverage

      There is no such thing as democracy in Europe (or most of it, except Switzerland). The rule by parties and private interests is what there is.

      So if party says “vote yes to austerity and foreing aid” that’s what everyone inside the party will follow without exception. That’s why the bill passed.

    2. Jean

      Has Merriam Webster been notified of the current definition of a socialist? How long can we expect before the post-2011 definition of socialist really catches on?

  13. Susan

    Kinda curious about that Greek cruise Gingrich took in the middle of his announcing he was running for president. He’s such a clown. My god, what a clodhopper. I bed he jetted right over there to see if he could buy up a few villas on the cheap. And nobody asked him about it. Why would he drop everything in such a rush for a “planned vacation.” Or rather, why announce your latest pontification and then sneak off to Greece?

  14. ToivoS

    from the guardian: nvestors are put off by bureaucracy, strong unions,

    Yes the Greek workers will protect Greek sovereignty. The most important players in any bureaucracy are the lower level workers. Greece has a very old tradition of strong left wing unions. They can subvert any operation that is against their interests. At least the finance capital types understand this reality.

    In the 1980s there was a mini hysteria here in the US that Japan was buying up all of our real estate. At the time my reaction was let them over-pay, then we can impose rent control on their properties.

  15. MinDC

    Just like Britain and France stripping Egypt of its wealth because of debt. Same story, same players, and same ending.

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