Trimming Our Bonds, Redeploying To Equities

While on vacation with my family, I ran across a New York Times story entitled "Greek Wealth Everywhere except Tax Forms." It should have hit me harder, but perhaps the sun was baking my brain that day or perhaps I just needed to turn off for a while… but it all comes back to me now

Salient observations by the Times: Just 324 Greeks admitted owning a swimming pool, despite an actual count of almost 17,000. Thirty four doctors in a "trendy" Athens neighborhood claimed income of less than $13,300, a figure which exempts them from paying any taxes at all, period.  Apparently Greeks with tax problems, according to the Times, have found that the way to solve those problems was to use, say, a third of their obligation to actually pay the government, a third to bribe the tax collector, and keep the other third in their pockets. (We're sure it's much different nowadays.)

Apparently the shadow economy in Greece is about 25% of annual GDP, costing them almost $30 billion a year in lost revenue. This means lying about your assets to Greek tax collectors is a game played by many and often at surprising levels. I guess the appeal of hanging outdoing on the Mediterranean trumps all.

So now we have seen the war of words continue and demonstrations in the streets before the actual austerity reforms are even approved or the pension funds have agreed to anything.  We are just not too terribly convinced that any consistent actions will back up these words.

It reminds us of Groucho Marx and his comments about not willing to join a club that would have him as a member. Are we to believe the Greeks will wake up one morning and agree to work 40 hours a week, retire at 65, and pay their fair taxes in the meantime?  Somehow we just don't think so.

Are we nuts or does the constant refrain of the "save the US and Europe" crowd have some eerie similarity to the cry heard before the Great Depression began: raise taxes, cut spending, and inflate the dollar. Didn't that turn Deutsche Marks into fire starters and turn a recession in the US into a depression? Well, thank goodness Mr.