With the ghost of a smile on his face

Having recently been focusing on accounting, I read an interesting article yesterday regarding the ‘creative accounting’ practices that were used by American banks in order to hide the extent of Greece’s debts. With the upcoming spring payment of over twenty-five billion Euros to be made by Greece to various debt holders, fears of default are now rising. Even with the likely bailout from the European Union (despite Merkel’s opposition) the market appears to be demanding interest rates of nearly seven percent in order to buy bonds. With this level of interest and a stagnant, at best, Greek economy, even without the massive (12% of GDP) annual debt Greece’s debt ratio may lead to great instability and further devaluation of the Euro.

It was interesting to investigate manners in which American banks – notably Goldman and Sacks as well as JPMorgan Chase hid Greek debt from EU authorities in recent years using derivatives that allowed debt to be accounted for as a form of currency trades – allowing them to not be disclosed as liabilities. As such investors in Greek bonds have been propping up the state without accurate knowledge of its true financial position.

Imogen Heap: Hide and Seak

“Where are we,
what the hell is going on,
the dust has only just begun to fall”

Greece playing hide and seek with its debt and the EU.