Category: government

09:31 – Most of the news reports are celebrating Greece’s default as some kind of victory. It’s a “victory”, of course, only in the sense that the Dunkirk evacuation was a victory for Britain. The probability of chaotic default in the near term–possibly as early as next week, and almost certainly by summer–is still extremely high, and even the most optimistic observers don’t believe that this latest action has done anything to put Greece’s debt on a sustainable footing.

Almost no one believes that this default will improve matters for Greek citizens, who are doomed by this agreement to decades of extreme poverty and unimaginable suffering. The only sane action for Greece at this point is to default entirely on all of its debts, including those to the EU and IMF, and exit the euro, which almost certainly means also exiting the EU. Returning to the drachma means Greek citizens are still doomed to extreme poverty and unimaginable suffering, but only for perhaps 10 years rather than the 30 or 40 years under the current agreement. Greece must understand that the EU has already written it off, and simply doesn’t care what that means for Greece or Greeks.

Today will be a routine Saturday. I’ll do laundry, and we’ll work on the biology kits.

09:56 – This weekend, we’ll get started on building the restricted chemicals and small parts subassemblies for the biology kits, 60 sets of each. We may also make up 60 sets of the unrestricted chemicals, although one of those is still missing and will be until the backordered methyl cellulose arrives. The following weekend, assuming the methyl cellulose has arrived, we’ll start assembling full kits, probably two or three dozen to start with. There are already people on the waiting list, and I want to get those orders filled before the book hits the stores.

As expected, Greece has formally defaulted by announcing its intention to enforce the so-called Collective Action Clauses that it retroactively inserted in its debt contracts last month. The bad news for Greece is that, even after triggering the CACs, they’ve still come up at least $4 billion short of the Troika requirements for approving the new bailout. That means that, unless the Troika changes the rules that they’ve repeatedly insisted will not be changed, the new bailout will not be approved. Right now, I’m sure there’s a lot of scrambling going on behind the scenes to somehow get everything approved, but it’s by no means a done deal. Eleven days from now, Greece may or may not have the money it needs to redeem the $18 billion or so of debt that matures that day.

08:44 – This is crunch week for Greece, with Thursday the deadline for the “voluntary” debt-swap, in which it is hoped that private investors will agree to take a so-called voluntary write-down of about 75% in net present value terms. If those private sector investors who hold at least 2/3 of the outstanding debt do not agree to the terms, it’s game over immediately. Greece enters a disorderly default and the whole house of cards collapses. If more than 2/3 agree but not all of them, Greece has announced that it will enforce so-called collective-action clauses, which in effect force the hold-outs to comply against their will. If the CACs are triggered, Greece again defaults, and the whole house of cards collapses.

Germany is convinced, wrongly, that the mechanisms in place will prevent a Greek default from spreading to the rest of the periphery. When Greece defaults, the markets will immediately focus on the remaining weak euro members, starting with Ireland and Portugal and quickly spreading to Spain and Italy and eventually Belgium and France. Once that ball starts rolling down the hill, there’s simply no way to stop it. The other southern-tier euro nations will begin toppling like dominoes. Even if Germany were willing to beggar itself, it couldn’t stop the collapse.

In the Netherlands, politicians are now seriously discussing abandoning the euro and returning to the guilder. You can bet that similar discussions are going on behind the scenes in Germany, Finland, and the other northern-tier nations as well. Short of a miracle of biblical proportions, the euro is toast.

After making up the chemicals for the first batch of 60 biology kits, we’ve started to run short of bottles, particularly the 15 mL ones. I ordered a couple cases of the 15 mL bottles yesterday, this time from a supplier that carries US-made bottles rather than the Chinese-made bottles we had been using. The US bottles are a few cents each more expensive, but they’ll arrive tomorrow. Lead time on the Chinese bottles is 60 to 90 days, which is simply too long a window to allow us to manage inventory efficiently.

Rather than dropper tips and caps for the new bottles, I ordered standard ribbed PE-lined PP screw caps. The dropper tips have only one real advantage, and that’s when a chemical is normally dispensed drop-wise. Otherwise, a standard cap is more convenient. We may end up using a combination of dropper tips and standard caps in later batches of the kits, using the dropper tips for chemicals like pH indicators. Or we may just use standard caps on all of them. Another advantage to using standard caps is that they’re less likely to leak during shipping. We haven’t had a big problem with that, but it has happened a couple of times despite our efforts to secure and seal the caps.

08:15 – The biology kits include glycerol (glycerin), and I just realized that the only unopened bottle I have in inventory is only a pint (473 mL), which isn’t nearly enough for 60 kits. I got that bottle at Costco some time ago, but they no longer carry it. I’d intended to run over to Walgreens or CVS, but their glycerol is quite expensive. So I checked Amazon, where I ordered a half gallon (1.9 L) of 99.7% food-grade “vegetable kosher glycerin, USP” for $27. Kosher? I guess they killed the vegetable oil with a ritual knife before they saponified it.

The latest Greek deal is already starting to unravel, just a day after it was agreed. As a condition for participating, the IMF is insisting that the EU “firewall” be boosted. Germany refuses to do that, because doing so to the extent required by the IMF would increase its already-huge liability by 50%, a step that German voters would not tolerate. Without IMF participation, the rest of the EU, which is to say Germany, would have to increase their own participation to cover the absence of IMF funding, which again is a step that German voters would not tolerate.

The math just doesn’t work for this deal. The current numbers were calculated under ridiculously rosy assumptions about the Greek economy. A top-secret study commissioned by the EU was leaked during the negotiations, and makes it clear that the planned €130 billion bailout is nowhere near adequate. Under that study’s assumptions, which are themselves extremely optimistic, Greece will require about twice that much, €245 billion. Although the press is calling those assumptions “worst case”, in fact they’re nowhere near worst-case. They’re not even anywhere near realistic-case. Realistically, the EU is looking at a transfer of at least €400 billion and probably €500 billion to €600 billion between now and 2020 to keep Greece even marginally solvent.