Category Archives: Debt

Chart of the day: Mortgaging their futures


From Naked Capitalism comes a stunning graphic of the monster that is eating the futures of America’s young:

America’s banksters are consuming the wealth of a generation, to the tune of $4 trillion, according to a study by Demos.

Their key findings:

  • Our model finds that an average student debt burden for a dual-headed household with bachelors’ degrees from 4-year universities ($53,000) leads to a lifetime wealth loss of nearly $208,000.
  • Nearly two-thirds of this loss ($134,000) comes from the lower retirement savings of the indebted household, while more than one-third ($70,000) comes from lower home equity.
  • We can generalize this result to predict that the $1 trillion in outstanding student loan debt will lead to total lifetime wealth loss of $4 trillion for indebted households.
  • The wealth loss will be greater for households with larger-than-average levels of student debt: students from low-income families, students of color, and for-profit students.

Way back when we started college, tuition was either  cheap or non-existent, and an aspiring student could figure that a summer job and maybe some part-time work during the school year would cover all her costs.

But thanks to the combination of tax cuts at the federal and state levels and the GOP push for privatization, college has ceased to be a birthright for the middle class, much less the poor.

A country that feeds on its poor is headed towards collapse.

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The decline and fall of American journalism


Community newspapers across the U.S. are dying, slain by a combination of greed, changing public media habits, and indifference.

We begin with a story from Monday’s BBC News:

The New York Daily News, one of the city’s two tabloid papers, is halving its editorial staff, the latest sign of trouble in the local news business. The cuts will leave the newsroom with about 40 people, according to former employees.

They come less than a year after the paper was bought by Tronc, which has a reputation for low newsroom investment.

The New York Daily News started in 1919 and has won 11 Pulitzer Prizes, one of them last year.

Tronc faced backlash from staff at the Los Angeles Times, who formed a union and cast a spotlight on the cuts at Tronc-owned publications, despite high compensation going to top executives and other insiders.

Tronc is paying Merrick Ventures, a private equity firm led by Tronc’s biggest shareholder, $5m (£3.8m) a year for “management expertise and technical services”. The newspaper company, which also owns the Chicago Tribune and Baltimore Sun, subsequently sold the Los Angeles Times.

And it’s not just the Big Apple tabloid’s newsroom on the chopping block. Heads are rolling  today at the chain’s other papers,across the country, as reported by CNNMoney:

The newspaper publisher is laying off staffers at some of its other papers “today and tomorrow,” according to a Monday afternoon memo from Tronc CEO Justin Dearborn.

The announcement immediately spooked staffers at papers like The Baltimore Sun and The Chicago Tribune.

Dearborn said the cuts will not be as severe as in New York.

“The Daily News is unique in that local leadership determined a complete redesign of its structure was needed post-acquisition,” he wrote. “We do not expect reductions of this scale in any of our other newsrooms.”

“With that said, several newsrooms and business units are implementing much smaller reductions today and tomorrow to reduce expenses and contain costs,” he wrote.

But it’s not the gutting of papers that should concern a citizen in a deomiocrayc; it’s also the closing of papers by the giant chains that now control most of the nation’s community journalism.

From PBS’s Independent Lens:

In 1983, 50 corporations controlled most of the American media, including magazines, books, music, news feeds, newspapers, movies, radio and television. By 1992 that number had dropped by half. By 2000, six corporations had ownership of most media, and today five dominate the industry: Time Warner, Disney, Murdoch’s News Corporation, Bertelsmann of Germany and Viacom. With markets branching rapidly into international territories, these few companies are increasingly responsible for deciding what information is shared around the world.

There are also major news organizations not owned by the “big five.” The New York Times is owned by the publicly-held New York Times Corporation, The Washington Post is owned by the publicly-held Washington Post Company and The Chicago Tribune and Los Angeles Times are both owned by the Tribune Company. Hearst Publications owns 12 newspapers including the San Francisco Chronicle, as well as magazines, television stations and cable and interactive media.

But even those publications are subject to the conglomerate machine, and many see the “corporatizing” of media as an alarming trend. Ben Bagdikian, Pulitzer-prize winning journalist, former Dean of the Graduate School of Journalism at UC Berkeley and author of The New Media Monopoly, describes the five media giants as a “cartel” that wields enough influence to change U.S. politics and define social values.

Newspocalypse Now! in three easy graphics. . .

Three images capture the sad story of the decline and fall of community journalism.

First up is a graph by Clinton Mullins, a Twitter exec who formerly held a senior position at old school media legend Conde Nast, showing the steady decline in American newspapers:

Next, from a January Bureau of Labor Statistics report on the state of journalistic employment across all platforms:

And from the Pew Research Center, a global look at the percentages of folks who believe their media are doing very/somewhat well at reporting the news:

One could argue that new media journalists are filling some of the decline seen in print newsrooms, but we would argue that in one very critical respect they are not.

Once newspapers were mostly locally owned, and their journalists and their publishers live in the communities they served.

And most significantly , community newspapers served as platforms for democracy, since providing information for a broad range of the public reflecting wide diversity of activities and opinion and thus constituting m modern version of the ancient Greek agora, the marketplace where both business and democracy took place.

And that’s why the changing nature of media ownership is of such vital importance,

The worst of the  predators stake out their prey

There’s an increasing probability that if you’re reading a U.S. newspaper. It’s owned by that most rapacious of predators, an investment bank. One such outfit, New Media Investment Group, was created as a shell to control the assets of Gatehouse media, with 144 daily newspapers and 333 weekly newspapers in 27 states, with the New Media itself being, according to its website, “externally managed and advised by an affiliate of Fortress Investment Group LLC, a global investment management firm.” Fortress, in turn, owns everything from casinos and retirement homes to other investment firms, a mortgage company, and a railroad.

From The Rise of a New Media Baron and the Emerging Threat of News Deserts, a two-year study by the University of North Carolina at Chapel Hill’s Center for Innovation and Sustainability in Local Media:

Much attention has been focused in recent years on the country’s largest and most revered national newspapers as they struggle to adapt to the digital age. This report focuses, instead, on the thousands of other papers in this country that cover the news of its small towns, city neighborhoods, booming suburbs and large metropolitan areas. The journalists on these papers often toil without recognition outside their own communities. But the stories their papers publish can have an outsized impact on the decisions made by residents in those communities, and, ultimately, on the quality of their lives. By some estimates, community newspapers provide as much as 85 percent of “the news that feeds democracy” at the state and local levels.

This means the fates of newspapers and communities are inherently linked. If one fails, the other suffers. Therefore, it matters who owns the local newspaper because the decisions owners make affect the health and vitality of the community

>snip<

Over the past decade, a new media baron has emerged in the United States. Private equity funds, hedge funds and other newly formed investment partnerships have swooped in to buy — and actively manage — newspapers all over the country. These new owners are very different from the newspaper publishers that preceded them. For the most part they lack journalism experience or the sense of civic mission traditionally embraced by publishers and editors. Newspapers represent only a fraction of their vast business portfolios — ranging from golf courses to subprime lenders — worth hundreds of millions, even billions, of dollars. Their mission is to make money for their investors, so they operate with a short-term, earnings-first focus and are prepared to get rid of any holdings — including newspapers — that fail to produce what they judge to be an adequate profit.

Here in California, Alden Global Capital — another vulture — owns the great majority of Golden State newspapers [38], accounting for an equally large majority of the readership.

Alden runs them through a shell, Digital First Media, which in turn has no less that three other shells to run their California papers. And Digital First President Joe Fuchs has his priorities, as he told a recent press conference: “Alden or any of their peers, doesn’t get involved in something to lose money.”

Alden’s capture of the California Fourth Estate and the ensuing ruthless and repeated downsizings play a leading role in the decline of California print employment reflected in this stunning graphic from the Federal Reserve Bank of St. Louis:

Alden and its principal are so vicious in their attacks on the newsrooms that a 26 March Bloomberg News report on the company carried this headline:

Imagine If Gordon Gekko Bought News Empires

The reality is even worse: This raider sinks decimated newsrooms’ revenue into bad investments.

In an 17 October 2016 report, the Poynter Foundation charted the ownership types of the top 25 newspaper companies. Those gray malignancies dramatically illustrate the metastatic grasp of investment banks in the dramatically downsized dead-tree trade where we spent the most fulfilling years of our life:

The accompanying text reveals one of many things that happens when the hedge-funders seize control:

Because they own so many newspapers, they can absorb the loss if an individual newspaper fails. If investment firms cannot sell an underperforming newspaper, they close it, leaving communities without a newspaper or any other reliable source of local news and information.

As newspapers die, large areas of the country are transformed into news deserts, counties with few or no paid reporters covering the local communities in black and white.

From Columbia Journalism Review, a look at the news deserts in the contiguous 48 states, with the palest areas representing counties with no remaining papers:

One map reminded us of another, this county-by-county reflection [Wikipedia] of the relative proportion of the winning votes for Hillary Clinton [blue] and Donald Trump [red]. The reason for the blue in the news deserts of Atizona and New Mexico is accounted for by the presence of tribal reservations:

More from an 8 April Politico report:

President Donald Trump’s attacks on the mainstream media may be rooted in statistical reality: An extensive review of subscription data and election results shows that Trump outperformed the previous Republican nominee, Mitt Romney, in counties with the lowest numbers of news subscribers, but didn’t do nearly as well in areas with heavier circulation.

POLITICO’s findings — which put Trump’s escalating attacks on the media in a new context — were drawn from a comparison of election results and subscription information from the Alliance for Audited Media, an industry group that verifies print and digital circulation for advertisers. The findings cover more than 1,000 mainstream news publications in more than 2,900 counties out of 3,100 nationwide from every state except Alaska, which does not hold elections at the county level.

The results show a clear correlation between low subscription rates and Trump’s success in the 2016 election, both against Hillary Clinton and when compared to Romney in 2012. Those links were statistically significant even when accounting for other factors that likely influenced voter choices, such as college education and employment, suggesting that the decline of local media sources by itself may have played a role in the election results.

That gives new force to the widely voiced concerns of news-industry professionals and academicians about Trump’s ability to make bold assertions about crime rates, unemployment and other verifiable facts without any independent checks. Those concerns, which initially were raised during the campaign, were largely based on anecdotes and observations. POLITICO’s analysis suggests that Trump did, indeed, do worse overall in places where independent media could check his claims.

The White House declined to comment for this story, but Trump and his campaign officials have made no secret of their preference for partisan national outlets and social media to mainstream outlets of all types.

Newspaper closings lead to higher taxes

Close of local newspapers carries another cost for the impacted communities.

From “Financing Dies in Darkness? The Impact of Newspaper Closures on Public Finance,” by three finance professors, Pengjie Gao of the University of Notre Dame, and Chang Lee and Dermot Murphy of the University of Illinois at Chicago:

Newspapers play an important monitoring role for local governments. Other papers have shown that the loss of a local newspaper leads to worsened political outcomes in the region, and we illustrate that there are worsened financial outcomes as well. In particular, we show that long-run municipal borrowing costs increase by as much as 11 basis points following a newspaper closure, and we utilize several identification tests to show that these results are not being driven by underlying economic conditions in the region. We also show that government efficiency outcomes are substantially affected by newspaper closures. In particular, we find that government wage rates, government employees per capita, tax dollars per capita, and the likelihoods of costly advance refundings and negotiated sales all increase following a newspaper closure. From a finance perspective, our results suggest that local newspapers are important for the health of local capital markets.

For counties that have experienced local newspaper closures, we do not expect these newspapers to return, nor do we think that they should, per se. Online news outlets are fundamentally changing the way that people consume news, and they are very likely to remain the dominant source for news consumption. However, these paradigm-shifting news outlets do not necessarily provide a good substitute for high-quality, locally-sourced, investigative journalism. In the long-run, perhaps an equilibrium will be reached in which these online-based organizations contract out work to local reporters and tailor their news to the local areas. In 2009, former Baltimore Sun reporter and famous television producer David Simon stated the following: “The day I run into a Huffington Post reporter at a Baltimore Zoning Board hearing is the day that I will be confident that we’ve actually reached some sort of equilibrium.” We concur, and our evidence suggests that economic growth at the county level will be better off in that equilibrium.

Just how much a paper’s closure costs local taxpayers whe n their government seeks bond funding is summed up in a graphic from co-author Murphy:

BLOG News bonds

The Trumpster delivers a coup de grâce

And now the biggest beneficiary of the decline of community journalism is dealing Ameirca’s newspapers another deadly blow, forcing papers to cut back even more, writes veteran press-watcher Ken Doctor noted in a March report for the Nieman Lab:

Now the battle is heating up on Capitol Hill over tariffs that the Trump administration imposed on Canadian groundwood paper earlier this year.

The tariffs increase the cost of newsprint by as much as 30 to 35 percent, though the impact on publishers is highly uneven, with some chains in better shape and the dwindling independents most at risk. The predictable impacts already in motion: more newsroom layoffs, thinner (and reshaped) print products, fewer Sunday preprints, and an overall further diminishing of the value proposition newspapers are offering their readers.

The Pittsburgh Post-Gazette will reduce its printing days from seven to five next month. The Nevada Appeal in Carson City, Nevada, moves from seven to just two days, while its parent cuts frequency on three adjacent papers.

Within the industry, there’s talk of “dropping Mondays” and replacing print editions with e-editions on other days as well. It looks as if newsprint tariffs will force more publishers to take the path Advance Publications first took six years ago, swapping daily print for digital.

And so it goes. . .

We started in print journalism doing volunteer reporting for a Colorado mountain daily, beginning with a byline and photo on the front page banner story of the 9 November 1964 San Luis Valley Courier, heading next to Arizona for a $50-a-week gig in Arizona at the weekly Winslow Mail, moving next to Nevada and hitch as crime, civil rights, poverty, and radical politics reporter [the last three beats by our own devising and the first such beat assignments in the history of Silver State journalism] on the staff of the Las Vegas Review-Journal — then as now the state’s dominant newspaper.

Our next job was back in Arizona, where we’d spent 30 days covering schools and general for the Tucson Daily American, a newspaper with the temerity to close before we got our second paycheck.

After starting our journalism addiction at 7600 feet above sea level, our first California gig put us om the Pacific Coast, two blocks from the beach at the Oceanside Blade-Tribune. The town’s main industry was the Camp Pendleton Marine Corps Base, where Vietnam War-bound jarheads got their field training before they headed out to combat.

The next newspaper gig was in another coastal town at the superb family owned Santa Monica Evening Outlook, the finest job we ever held. Then it was on to the Sacramento Bee, the dominant and then only newspaper covering the capital city of the nation’s most populous state.

Our final newspaper job was at the Berkeley Daily Planet, the California city that gave rise to the legendary Free Speech Movement.

Of those newspapers, the Winslow Mail, Tucson Daily American, Oceanside Blade-Tribune, Santa Monica Evening Outlook, and the Berkeley Daily Planet were owned by families or individuals and have folded, vanishing from front porches and newsstands, their communities left without local news produced by committed journalists who, despite by their own inevitable personal biases, work hard to fairly and accurately report differing views.

Each of the communities they once served has become a news desert.

Chart of the day: Greek working class miseries


From the Hellenic Statistical Authority, the grim nrews about paychecks yunder the reign of the Austerians:

Kathermini adds some detail:

More than half of private sector employees in Greece are paid less than 800 euros per month, compared with just 11 percent in the public sector, while the real unemployment rate is more than 30 percent, the country’s biggest union claimed in its annual report published on Monday.

The Labor Institute of the General Confederation of Greek Labor (INE-GSEE) noted in its 2016 report on the Greek economy that crisis-induced inequalities among different groups of workers and the decimation of the labor market have had a negative impact on productivity. The increase in labor market flexibility last year translated into 51.6 percent of private sector salary workers receiving less than 800 euros per month at the same time as half of all civil servants were being paid more than 1,000 euros per month.

After processing the salary data in the private sector, INE-GSEE found that net pay was up to 499 euros per months for 15.2 percent of workers, between 500 and 699 euros for 23.6 percent, and 700 and 799 euros per month for 12.8 percent. Just over one in six (17.3 percent) received between 800 and 999 euros. Meanwhile, 38.5 percent of civil servants had net earnings of between 1,000 and 1,299 euros and 15.7 percent collected more than 1,300 euros per month.

The large decline in private sector salaries and the fact that the institute’s economists estimate that the unemployment rate is much higher than the official 23.1 percent are particularly ominous developments which could erode social cohesion and lead large parts of the population into poverty.

The report highlights the increase in the rate of households unable to cover some of their basic needs from 28.2 percent in 2010 to 53.4 percent in 2015. This is due to the major decline in disposable income and the drop in savings. A rise was also noted in the rate of households delaying loan and rent payments (from 10.2 percent in 2010 to 14.3 percent in 2015). Worse, households’ inability (or unwillingness) to pay utility bills soared from 18.8 percent in 2010 to 42 percent five years later.

Life is bitter under the dominion of the Troikarchs

The Wall Street Crash that triggered the Great Recession was followed immediately by the decisions of governments, central banksters, and the money lords of the International Monetary Fund to bail out the banks, and not the lenders.

Those decisions weighed hardest on indebted nations, and proved especially onerous in Southern Europe, where reckless lending by German and other banks had undergirded economic expansion during the boom.

To ensure repayment, the European Central Bank, European Commission, and the International Monetary Fund mandated ongoing wage cuts, pension and healthcare benefit reductions, new taxes, and sellff of large sectors of public infrastructure and resources, most notably in Greece.

The measures have brought no real relief, and Greeks are continuing to pay a high price.

Woman workers hit especially hard

From Kathimerini again:

Women, especially young women, have been hit particularly hard by Greece’s economic crisis, Labor and Social Insurance Minister Effie Achtsioglou told the Parliament in Athens on Wednesday on the occasion of International Women’s Day.

Of all the registered unemployed in Greece, 61 percent are women, Achtsioglou said, noting that although joblessness has dropped 3 percentage points over the past two years of the SYRIZA-Independent Greeks coalition, more needs to be done to curb unemployment generally, and in particular among women.

Cuts in social welfare spending over the years have fallen most heavily on the shoulders of women, Achtsioglou said, adding that the current government remains determined to ease austerity as soon as possible.

And a foreclosure epidemic rocks the nation

Because of lost jobs and smaller paychecks, many Greeks are faced with a hard choice.

From Kathimerini again:

The austerity measures introduced by the government are forcing thousands of taxpayers to hand over inherited property to the state as they are unable to cover the taxation it would entail. The number of state properties grew further last year due to thousands of confiscations that reached a new high.

According to data presented recently by Alpha Astika Akinita, real estate confiscations increased by 73 percent last year from 2015, reaching up to 10,500 properties.

The fate of those properties remains unknown as the state’s auction programs are fairly limited. For instance, one auction program for 24 properties is currently ongoing. The precise number of properties that the state has amassed is unknown, though it is certain they are depreciating by the day, which will make finding buyers more difficult.

Financial hardship has forced many Greeks to concede their real estate assets to the state in order to pay taxes or other obligations. Thousands of taxpayers are unable to pay the inheritance tax, while others who cannot enter the 12-tranche payment program are forced to concede their properties to the state. Worse, the law dictates that any difference between the obligations due and the value of the asset conceded should not be returned to the taxpayer. The government had announced it would change that law, but nothing has happened to date.

Charts of the day: A look at the Greek debt burden


We have two charts from the just-published edition of The Greek Economy, a monthly update from the Hellenic Statistical Authority.

Of the many charts in the document, we picked these two because they depict to loss of national financial sovereignty in a dramatic way.

Our first chart is straightforward, showing the dramatic rise in the ratio of Greek debt to the national GDP:

The second graph charts the radical change in the nature of Greece’s debt, a changed mandated by the financial overlords of the International Monetary Fund, the European Central Bank, and the European Central Bank — the Troika — as a condition of financial aid.

In the chart, debt in the form of securities such as government bonds is represented by the broken blue line, while second broken line represents debt in the form of outright loans. The radical shift was the result of the Troika’s demands on becoming the nation’s financial overlords.

The third and constant line in the graph represents debt in the form of cash and cash deposits:

Greek doctors stage an anti-austerity walkout


Physicians at state-owned hospitals walked off the job Thursday, protesting pay and benefit cuts imposed as the latest round of Troika-imposed austerity draws imminent.

From euronews:

Doctors in Greek state hospitals have walked out in protest against social security changes that will see their pensions reduced and contributions increased.

Hundreds of medical staff took to the streets in Athens as run down hospitals are cutting off vital drugs, limiting non-urgent operations and rationing basic materials.

In its seventh year of deep recession, Greece is trapped under Europe’s biggest public debt burden.

State hospital doctor, Afrodite Renviou, said: “We will not accept the notion that we lost what we lost. We will fight to claim back our losses, and furthermore we will remain alert and vigilant because the government is about to further escalate its assault on our incomes.”

Another doctor, Gerasimos Roubis, said: “We doctors are also victims of the havoc the economic crisis created with the country’s creditors demanding wage cuts. Our only option is to join forces with the rest of the society and fight back.”

Yet another update on the ongoing Greek Crisis


Greece, the European nation hardest hit by the Great Recession, continues to struggle, weighed down by massive loan debt, accumulated during the pre-crash boom and amplified by bailouts in the years since.

Much of the Greek debt is held by vulture funds, specializing in swooping in toe feed off the cheaply priced debt of stricken economies, then demand payment in full as the national economy struggles to recover.

Much of the Greek debt is held any Germans backs which financed Greek military purchases from German munitions companies — many of them induced by bribes from the German corporateers.

The Troika — the coalition of the European Central Bank, the European Commission, and the International Monetary Fund have insisted on full repayment, with the price of rebellion being the education of Greece from the common currency, a move that would force Greece to drop the Euro and go back to the drachma.

And while Germany booms, Greeks are subjected to pay and pension cuts healthcare reductions, and sell off of national power and transportation grids, as well as the sale of ports and islands.

The resulting deprivation has distorted the Greek economy, evident in these two charts from the Hellenic Statistical Authority.

First, a chart of the ten top-selling industrial products manufactured in Greece [click on the images to enlarge]:

blog-greeceNext, the top-sellers for the European Union as a whole:

blog-greece-2But more misery lies ahead, , ,

We begin with this from China Daily:

Greece will likely need a fourth bailout program, according to Cypriot economist and 2010 Nobel laureate Christoforos Pissarides.

“I am afraid there will be a fourth memorandum,” 69-year-old Pissarides said in an interview with local SKAI television’s program “Weekend with Action”.

“The crisis and austerity will end when Greece will be able to return to international financial markets,” Pissarides said, adding that in his view it was rather unlikely to happen before the end of the current bailout in August 2018.

The expert called for more reforms with no delays to attract investment in order to exit the seven-year debt crisis.

And Germany won’t stand for debt relief

There’s no relief in sight for the Greeks, as Germany, the dominant economic power in the European Union and chief player in the central bank, insists that all loans be paid in full.

From Kathimerini:

Greece must not be granted a “bail-in” that would involve creditors taking a loss on their loans, Germany’s deputy finance minister said in an interview broadcast on Sunday, reiterating the German government’s opposition to debt relief for Athens.

“There must not be a bail-in,” Jens Spahn told German broadcaster Deutschlandfunk, according to a written transcript of the interview.

“We think it is very, very likely that we will come to an agreement with the International Monetary Fund that does not require a haircut,” he said, referring to losses that Greece’s creditors would have to take if debt was written off.

The IMF has called for Greece to be granted substantial debt relief, but this is opposed by Germany, which makes the largest contribution to the budget of the European Stability Mechanism (ESM), the eurozone’s bailout fund.

Greece and its creditors agreed on February 20 to further reforms by Athens to ease a logjam in talks with creditors that has held up additional funding for the troubled eurozone country.

Continue reading

Greek misery continues, no crash recovery yet


We begin with a dramatic graphic from Kathimerini, dramatic evidence that despite three rounds of bailout loans an ever-harsher austerity measures, the European economy hardest hit by the Great Recession is showing no signs of recovery as yet still more austerity is demanded:

blog-greece

The Greeks were left holding the string when the bubble popped, unable to pay loans to foreign banksters a lot of them in Germany. And the lenders wanted their money, even though the economy had crashed, unemployment skyrocketed, and the Greek industrial machine had ground to a halt.

To enable Greece pay the loans back, a Troika formed of the European Central Bank, th European Commission, and the International Monetary Fund imposed harsh austerity measures perfectly designed to ensure that the Greek people were reduced to serfs, sacrificing layoffs, pay, pension, and healthcare cuts for those lucky enough to keep their jobs.

Then there was the massive selloff of national assets, ranging from transit and power grids to ports and islands.

And still the troika wants more in exchange for another round of bailout loans.

From the London Telegraph:

Greece will need a fourth bailout as its debts remain utterly unsustainable despite years of austerity and attempted reforms, according to George Papaconstantinou, a former Greek finance minister.

A “radical liberalisation of the economy” is also necessary as the country needs to attract foreign investment because Greece lacks the domestic resources needed to grow its industries, he told an audience at the London School of Economics.

“Pretty much everyone agrees that Greek debt is not sustainable,” he said. “Is there a prospect of a fourth bailout? Yes. Even in the best case… I doubt that Greece will be able to stand on its own feet.”

Mr Papaconstantinou, who was Greece’s finance minister from 2009 to 2011, said that these measures have to be accompanied by serious economic reforms.

“Radical liberalization of the economy”?

Translate that as “more misery for the average Greek.”

The IMF lays down the law

Before taking the helm at the IMF, Lagarde served as Finance Minister for French President Nicolas Sarkozy.

In December a French court found her guilty of criminal negligence in her old job for arranging a payout of more than $400 million for businessman Bernard Tapie’s share of Addidas under questionable circumstances — though the court declined to impose either a jail sentence or a fine, rendering the guilt verdict moot.

The affair didn’t seem to bother either the French government or the IMF, so Lagarde kept her job.

More on her stance on the latest Greek bailout round from Bloomberg:

IMF Managing Director Christine Lagarde signaled that Greek debt restructuring can wait and the country should focus on overhauling its economy for the duration of its latest bailout, which expires in 2018.

Speaking in a German television interview after meeting Chancellor Angela Merkel in Berlin, Lagarde said “the volume of restructuring will clearly depend on how much reform, how much progress, how strong the Greek economy is” when the aid program ends.

What will probably be needed is a “significant” extension of maturities on Greek bailout loans and a “significant interest rate capping,” Lagarde told ARD television on Wednesday. “That will have to be discussed in greater detail later on” and “implementation of the debt restructuring will have to take place at the end of the program.”

The Washington-based fund is demanding additional debt relief measures as a condition for participating in the Greek bailout. Its participation, in turn, is a condition set by Germany when it agreed to help underwrite the latest aid package in 2015.

So who benefits?

Therein lies the rub.

Because much of the money won’t go to the banks who lent it to Greece.

Any of those lenders sold off their delinquent funds at a deep discount to that unique breed of banksters called “vulture funds,” speculators who buy up sovereign debt, then set about collecting it using all the ruthless ploys they can martial.

From the Committee for the Abolition of Illegitimate Debt:

The experience of the Greek debt restructuring of 2012 serves as a good example to show how vulture funds operate and the costs they can impose in a country and its population. The Greek case is quite interesting as not only involved the first major debt restructuring in Europe since 1953 but also it was the largest operation of its kind. The remarkable aspect of this episode is that the country decided to continue paying holdout creditors, and specifically vulture funds, in full. This was the case even though the process was organized with the support of the official creditors of the country. In this regard, it created yet another damaging precedent regarding the viability of the profits by litigation strategy followed by vulture funds.

>snip<

Just a month after the debt restructuring was completed, the government made an initial payment of 436 million Euros to a group of holdout investors led by Dart Management. This hedge fund, which had a long story of suing governments to get paid in full going back to the Brady plan in Latin America in the late 1980s, made a massive profit as it had bought the bonds on prices estimated between 60 to 70 cents on the Euro. By making that initial payment, the Greek government set a negative precedent as the rest of the holdouts were now able to use that decision to claim for equal treatment under a foreign court. The payments to holdouts continued uninterrupted afterwards parallel to the implementation of harsh austerity measures. For example, during 2013 the country paid a total of 1.7 billion Euros to holdout creditors. To date, most of the holdout claims have been paid in full by Greece. It is estimated that private investors currently have a total of 36 billion euros in government bonds that were either issued under the debt exchange of 2012 or in the debt issuance that took place in 2014.

As the Greek population continues to struggle under the imposition of harsh austerity measures and the debt burden of the country remains “highly unsustainable”, as the IMF characterizes it, it is evident that the decision to continue paying the holdouts was a mistake. It represented nothing short of rewarding dangerous speculators while transferring the costs of their actions on to the Greek people. Even more troublesome is the fact that the relationship between Greece and the vulture has not ended yet. In the aftermath of the debt restructuring of 2012, it is estimated that hedge funds have bought nearly 15 billion Euros in government bonds. As a new debt restructuring, or even unilateral default, is simply a matter of time is worth nothing that the country can still set a precedent against the actions of vulture funds. The country could begin by enacting a law, similar to that adopted in Belgium in 2015, to limit the actions of vulture funds. Furthermore, given the dire social situation in the country, it should declare the non-application of the 3rd memorandum and non-payment of all illegal, odious, illegitimate and unsustainable debts. After all it is never too late to state that sovereignty and the respect of human rights will always precede debt.

So the troika is really all about making sure predatory speculators collect their pound of flesh.