In Search of the Perfect Investment

Death by a thousand Greek lashes.

Down each day, as the Greek crisis festers.

I wouldn’t employ the European or the Greek politicians to organize a queue for an outhouse.

They seem to prefer everyone stand there, doing kaka in their pants.

For God’s and everyone’s sake, Greece please leave the Euro and get your life together.

My dear Australian friend, Rob Douglass emails me these precious:

“The problem with Socialism is that you eventually run out of other people’s money.” — Maggie Thatcher

“In the end, more than freedom, they wanted security. They wanted a comfortable life, and they lost it all – security, comfort, and freedom. When the Athenians finally wanted not to give to society but for society to give to them, when the freedom they wished for most was freedom from responsibility, then Athens ceased to be free and was never free again.” — Edward Gibbon

The National Review writes:

Take a good look, young people. This is where quasi-socialism, with unaffordably generous pension programs and early retirement, runaway borrowing and spending, and a kleptocratic unenforced system of tax collection leaves you: helpless, penniless, and crying in the streets.

The New York Times reviewed a new book, “The Full Catastophe. Travels Among the New Greek Ruins” by James Angelos and wrote:

Few countries on earth combine such a glorious past with such an inglorious present. The land of the Acropolis, Plato and Pericles — hailed by the French president Valéry Giscard d’Estaing in the 1970s as “the mother of all democracies” — was showered with cheap loans by European banks after it joined the European Union’s euro monetary zone on New Year’s Day 2001. But Greece’s ­overburdened ­patronage system, endemic tax fraud and widespread corruption were draining the treasury — a fact the government managed to keep hidden from both its citizens and its creditors. When the global financial crisis descended in 2009 and the cheap loans dried up, the country found itself $430 billion in debt. The European Commission, the International Monetary Fund and the European Central Bank, known as “the troika,” agreed to a $146 billion bailout, demanding in return that Greece implement sweeping austerity measures, including pension reforms, tax hikes and massive layoffs. The result was widespread suffering and political chaos. Today, after a second bailout in 2012, unemployment stands at roughly 25 percent, the gross national product has drastically contracted, the infrastructure is crumbling, suicides and homelessness are rising, and one hapless government after another has been forced to wrestle with a Hobson’s choice: Accept the stringent terms imposed by the troika or leave the eurozone and risk greater financial catastrophe.

To understand what led Greece to such a predicament, Angelos visits Zakynthos, off the western coast of the Peloponnese, mockingly anointed the “Island of the Blind” after nearly 2 percent of the population — nine times the estimated rate for most European countries — was found to be receiving benefit payments for sightlessness. Angelos discovers a scheme to defraud the ministry of health that extends from the single public hospital’s sole ophthalmologist to the former prefect who signed off on the payments, one of many such social-welfare scams that cost the Greek government billions of euros.

On the island of Hydra, Angelos tells of an undercover raid on a portside taverna that drew national attention to a common Greek pastime, tax evasion, and the halfhearted and inequitable attempts of the government in the post-bailout era to crack down on cheats. “The pervasiveness of the habit, and the government’s enduring unwillingness to do anything about it, was more than any other factor the cause of Greece’s financial troubles,” Angelos observes, citing one European Commission study in which uncollected consumption taxes were estimated at 10 billion euros a year. Another study, by two American academics, estimated that self-employed workers failed to report about 28 billion euros in taxable income in 2009.

For most Greeks, however, the fault lies not with themselves but with their creditors. Angelos profiles Manolis Glezos, a nonagenarian member of the far-left political party Syriza, who is revered in Greece for a singular act of defiance during World War II: As a teenager in ­occupied Athens, he crept up to the Acropolis one night and pulled down a Nazi flag from atop the ruins, then eluded capture. Seven decades later, Glezos became a leading figure in a new wave of “resistance” against Greece’s main creditor, Germany, demanding that Chancellor Angela Merkel’s government pay hundreds of billions of euros in ­reparations for the plunder of Greece and murder of its citizens during the war. Angelos ­develops a nuanced portrait of Glezos, regarding him as both a demagogue and a hero: “I found myself vacillating between revulsion over such populist disinformation and shedding tears of sympathy for him.” (The Syriza-led government, which came to power in January, has increased Glezos’s demands, threatening to seize German property — including the Goethe Institute and the German Archaeological Institute, along with German schools and vacation homes — if Berlin refuses to pay 341 billion euros in compensation.)

Angelos takes a nuanced view, as well, of the humanitarian disaster caused by the austerity plan. He devotes a large section of one chapter to the tale of ERT, the state broadcaster, whose thousands of employees were dismissed in a heavy-handed government effort to persuade the troika that Greece was serious about eliminating bloat. While sympathizing with the fired staff members, Angelos notes that most Greeks consider the broadcaster’s four channels unwatchably boring, and its anchors “political stooges.” He also notes the rundown state of one of Greece’s most prestigious universities, a campus festooned with slogans refusing to recognize the debt: “Not a Single Sacrifice for the Plutocracy.” “Though the colonnades of idyllic American colleges are modeled on the classical, Hellenic forms,” he notes with irony, “one doesn’t tend to find such eulogizing picturesqueness on Greek campuses, where communist and other far-left student groups reign and graffitists decorate accordingly.”

Angelos veers away from Greece’s ­economy with a lengthy riff on illegal immigration that lacks the wry and focused tone of the preceding chapters. But his final section, on Golden Dawn, a neo-Nazi party whose rise to prominence was the most sordid consequence of Greece’s implosion, provides a fitting coda to the book. Riding a wave of anti-immigrant hysteria, this gang of thugs perpetrated terror in Athens and other cities, then won 18 seats in Parliament in the 2012 elections.

Among the new lawmakers was Ilias Kasidiaris, “a man with a large swastika tattooed on his left shoulder,” who became infamous for slapping a female Communist Party parliamentarian in the face on live national television. Then there is his crony, Nikolaos Michaloliakos, a diminutive party leader known for denying the Holocaust and terrorizing immigrants. Golden Dawn’s parliamentary victory placed Michaloliakos, Angelos writes, “in the pantheon of short, dangerous men throughout history who, in their pursuit of power, had surpassed expectations of how much of it they could get.”

For a country that gave the world ­Socrates and Aristotle, it has been a depressingly steep descent.

 Where I stand:

I’m about about half in cash. I’ve been selling junk in recent weeks — especially when I’m down 8%. That’s my new stop loss level.

I’m really annoyed at Apple, my biggest holding. The thing is about to break down through $125. Yuch. Yuch. Yuch. Maybe it’s time to buy more? Maybe they’re on sale? Maybe it’s a good time to sit pat? Buy some “cheap” Chinese stocks? Good lesson there: Don’t borrow money to buy stocks.

Don’t do stupid (again)

+ A friend forgot he was old. He went to the gym and lifted heavy weights, just like his young friends were doing. He hurt his back. Months later he’s still hobbling.

+ Hold the railing when you walk up or down stairs. You fall. You break something. It will never heal. Especially at our ages.

+ Don’t always upgrade. Wait: Item; Apple “upgraded” my iPhone to 8.4, promptly destroying my ability to email photos I’d taken with my iPhone. Yuch. I wanted to show you photos of last night’s amazingly long lines to Shack Shake in New York’s Madison Square Park.

Fortune’s amazing cover story.

From Fortune,

A cyber-invasion brought Sony Pictures to its knees and terrified corporate America. The story of what really happened-and why Sony should have seen it coming.

Click here.

Harry Newton who’s eyeing opportunities in syndicated real estate .. and Greek bonds? They’re yielding 51.56% a year. A positive bargain.

Djoko nearly lost to Anderson. Wimbledon Tennis and the Tour de France bicycle race are on TV. ESPN for live. The Tennis Channel for re-runs.

Better to play tennis and not look at the disaster that is the stockmarket today.

Most everything I own is down today — excepting FIT, GPT, NKE, HAIN, RWT, SUNE, LEN and STWD. Go figure.