Greek exit coming soon

[pmbug]

...
Three key takeaway items from this development:

1. Greek leaders, no matter what party they belong to, are unwilling to get Greece's fiscal house in order (how many debt repayments and deadlines have they missed now?)
2. The current Greek Government is formed via a very loose coalition, which could very easily fall apart, resulting in yet another election.
3. Greece already wants a third bailout (note the additional €16 billion needed to cover the country's financing needs).

In simple terms, at this point things have become truly farcical: Greece threatens, begs, and even lies in order to receive bailout funds only to then turn around and complete renege on the terms of the agreement. Indeed, we now have evidence that Greece was hiring more Government workers at a time when it was supposed to be implementing austerity measures:

Greece breached bailout rules with staff hirings: report

Greece breached the rules of its EU-IMF loan agreement by taking on some 70,000 public sector staff in two years, undermining efforts to reduce the state payroll, a report said on Sunday.

To Vima weekly said the hirings in 2010 and 2011 were highest in local administration, health, the police and culture, where the number of employees actually increased.

http://www.france24.com/en/20120624-greece-breached-bailout-rules-with-staff-hirings-report

This is extremely problematic for several reasons.

For one thing, this sends a clear message to the EU as well as the ECB and IMF that Greece is lying to their faces every time it promises to implement reforms. This doesn't make for much political goodwill (note the survey quoted in the article below).

Greek PM cannot attend EU summit due to surgery

German Finance Minister Wolfgang Schaeuble repeated this view Sunday, in an interview to newspaper Bild am Sonntag.

"It must now be the most important task of Prime Minister Samaras' new government to swiftly and immediately implement the agreed program without hesitation or asking, yet again, what the others could do in addition for Greece," German Finance Minister Wolfgang Schaeuble was quoted as saying. "The ball is in Greece's field; it is in their hands to achieve that Europe's citizens can regain trust. But this will only be achieved through concrete measures and actions."

The Sunday tabloid published a survey on Greece that it had commissioned with Italy's Corriere della Sera, Spain's ABC and France's Le Journal Du Dimanche.

In it, 78 percent of the Germans polled, 65 percent of the French and about a half of the Italians said Greece should leave the Eurozone if it fails to pay its debt.

http://www.foxnews.com/world/2012/06/24/greek-pm-cannot-attend-eu-summit/#ixzz1yjbQVEOR

EU political leaders and their respective citizenry aren't the only ones realizing that Greek political leaders are a bunch of crooks; the Greek people are also beginning to realize that their political leaders are not looking out for their best interests or for Greece's: only 20% of the Greek bailout money went into the economy, the rest went towards paying off Greece's creditors (read EU banks) and the ECB.
...
European leaders will be meeting this Thursday and Friday to discuss Greece and other issues. As the above articles headline reveals, neither Greece's new PM nor its Finance Minister (they no longer have one) will be in attendance.

However, we already know from the headlines this morning that Angela Merkel will not agree to Euro bonds or any kind of shared deposit insurance if it means "joint liability" (read: Germany being on the hook for other EU members' bank losses).

We also know that the ECB is not interested in buying more government bonds (it hasn't for 14 weeks now). And the ECB has stated point blank that Greek negotiations will not begin with Greece "wish[ing] for more time."

So, there is a relatively high probability that a Grexit will be coming sooner rather than later. It all boils down to one simple fact: the second the money spigot from the EU to Greece gets turned off, Greece leaves.

Consequently, the real question is: "when does Germany and the rest of the EU stop picking up the tab for Greece?" Judging from the above survey in which even the French and Italians now think Greece should leave the EU if it doesn't start paying its bills, it won't be long: Greece will need another €16 billion in financing if the EU accepts its request for another extension (yes, this would be the third bailout).
...

http://gainspainscapital.com/?p=1855

 

[rblong2us]

dont know why everyone gets so excited about a little rule breaking

its the new normal and as you can see, everything is just fine.

Either change the rules or pretend to comply and know that there will always be enough fiats in the magic porridge pot ..........

what could possibly go wrong ?

 

[bushi]

(...) Greece threatens, begs, and even lies in order to receive bailout funds only to then turn around and complete renege on the terms of the agreement(...)

"dzeeniuus, dzeeniuus, dzeeniuus"

 

[pmbug]

"dzeeniuus, dzeeniuus, dzeeniuus"

Take that, Mr. Schitzel face!

 

[pmbug]

The International Monetary Fund has signaled that it
will not contribute to further financial aid for Greece, raising a
greater risk of insolvency in September, the German weekly Der Spiegel
reported Sunday.
...
The risk of Greece leaving the Eurozone is now seen as manageable,
Der Spiegel said. In order to avoid a contagion effect, Eurozone
governments want to wait until Europe’s permanent rescue fund ESM is in
operation. A first ruling by the German Constitutional Court on the ESM
is scheduled for September 12.

In the meantime, the ECB might bridge the gap, Der Spiegel wrote.
On August 20, Greece needs to pay back some E3.8 billion to the central
bank. Athens might sell that amount of T-bills to Greek banks, which
could then use the bonds as collateral with the ECB.

Meanwhile, German Economics Minister Philipp Roesler told German
ARD public television in an interview aired Sunday that Greece will most
likely not be able to meet the goals agreed with its international
lenders. “I want to say this here very clearly: if Greece does not meet
its obligations, there can be no further payments to Greece,” he
stressed.

In that case, Greece might come to the conclusion that it would be
better to leave the Eurozone, said Roesler, who is also vice chancellor
and head of the free market-orientated FDP, the junior partner in the
government coalition. “I think that for many experts, for the FDP, and
for me, a Greek exit from the Eurozone has long since lost its horror,”
he added.

http://www.forexlive.com/blog/2012/07/22/germany-press-imf-wont-contribute-further-aid-to-greece/

 

[benjamen]

http://www.forexlive.com/blog/2012/07/22/germany-press-imf-wont-contribute-further-aid-to-greece/

Ahh, this explains the USD gaining strength. I do not think PM prices, in terms of USD, will gain much through the end of this year. Despite the flaws in the dollar, it is simply a better alternative to the Euro at the moment.

I for one will not complain. The flat prices have already made reaching my last goal happen months in advance.

 

[pmbug]

On the inaugural day of the much-awaited holy grail of Europe - the ESM - DutchNews.nl reports that Dutch diplomats in Athens have been secretly planning for an eventual Greek exit from the eurozone ...

http://www.zerohedge.com/news/2012-10-08/dutch-prepare-awaken-sleeping-giant-grexit-plans-resume

 

[DSAbug]

Thus far, they are still saying all the right things to suggest it's no where near imminent. Merkel is doing her part...

I'm not convinced that Greek simply wont be the 1st country to completely lose sovereignty to the EU. I don't want that to happen, but it's starting to looking like that it might be happening.

 

[bushi]

Ireland has lost her sovereignty already, Troika dictates the cuts and budgets here, so Greece has no chance to become "the first" ;-)

Sent from my GT-I9100 using Tapatalk 2

 

[pmbug]

...
As European Union leaders prepare for a summit next week devoted to saving the euro, Swedish Finance Minister Anders Borg said Greece may quit the common currency within the next six months.

“It’s most probable that they will leave,” Borg said today on a conference call from Tokyo, where global finance officials have gathered for the annual meetings of the International Monetary Fund. “We shouldn’t rule out this happening in the next half-year.”
...

More: http://globaleconomicanalysis.blogspot.com/2012/10/swedish-finance-minister-expects-greece.html

It would appear that fecal matter is accelerating in a collision vector with the rotating metal blades.

 

[rblong2us]

weird how its all apocalyptic and everyones in panic mode then it all goes quiet and while nothing appears to have changed, something must have ........

i find it hard to treat any financial 'news' seriously these days as every aspect seems to be 'managed'
would we even know if the system had already collapsed ?

ooohh it has ??? ........... sorry short attention span (-;

 

[bushi]

I don't know guys, IMHO, announcing the inevitable (Greece exit from EZ), or indeed, breaking up the EZ into suitable "core" (eg, letting only countries which are suited for, and would be ECONOMICALLY better off, having a single currency union) altogether - would rather signal to the markets that the jokers in charge here are getting real & serious, and I think after some short & sharp correction in Euro, it would actually strengthen it significantly, shortly after that initial sharp dip. That I am quite confident would be the case.

I don't think that managed exit would start any chain reaction - actually, postponing the inevitable, and trying to bounce the dead cat at all costs, is what makes the whole thing more risky (increases the chance of some violent and uncontrolled unwind, to a near certainty, if played with long enough).

Managed exit is a rational thing to do, and markets in general like nothing more than rational governments. So sorry, we have so very little of the later, globally.

 

[mike]

It doesn't cost TPTB anything to hang on to Greece; it costs us slaves. So why would they let anyone go?

 

[rblong2us]

It doesn't cost TPTB anything to hang on to Greece; it costs us slaves. So why would they let anyone go?

yeah, i think this is whats probably happened to cause the panic to subside.
So we all sink together ........ ITS THE RULE !

until it isnt

 

[ADK]

I see that there's a little action over there today... I don't think it's going to cease anytime soon.

 

[ancona]

What we see in the headlines is not what is going on in Greece. There are scores and scores of people who cannot get their medicine because the government owes the pharmaceutical companies so much money they are no longer honring contracrts to deliver drugs. People are dying every day from illnesses that are easily treated, yet they cannot get the needed drugs unless they pony up cash. People are literally starving to death because they have been unemployed for so long and are unable to find a job. Kids are going to school hungry because the EU is forcing the slaves to pay for the mistakes and thievery of their government. This is the perfect picture of what happens when you run out of other people's money.

Socialism cannot work as the model is simply unsustainable. Just look at that idiot Hollande. He is chasing all of the wealth and talent out of France with confiscatory taxes so that he can provide largesse to those who would choose th either not work or those who cannot work.

 

[DCFusor]

Aren't they kind of hanging onto Greece since most of the "bailout" money they get just goes back to German banks anyway? I think I read on ZH sometime ago that something like 90% of the money went right on back to bail out other institutions in the core.

 

[pmbug]

Greece holds another election in a couple of weeks (Jan 25th). It's possible that Syriza will win and they favor exiting the Euro. Money flows are signalling fear:

...
According to initial estimates, Greeks withdrew €3 billion from their bank accounts in December. €600 million of that total came on December 29, when Greece failed to elect a new president, thereby forcing national elections on January 25.

In comparison, November when net outflows totaled about €220 million.

The risk of bank runs in Greece is reactivated. In this sense, just remember that since 2010, when the crisis hit the euro, the Greek bank deposits dropped 37% but even after the rescue by the troika, deposits never recovered. This data demonstrates strong distrust by Greek depositors of the monetary union.

The Greek financial system is artificially sustained by the ECB, the lender of last resort. It survives because the ECB accepts junk debt (including Greek state bonds) as collateral. If the ECB were to cut support, the Greek banking simply would close and the government would set strict limits on the withdrawal of deposits.

On Thursday, the ECB said that its funding to the Greek banking system depends on the success of the current bailout program and a subsequent agreement in Athens with the EU and the International Monetary Fund (IMF).

The rating agency Moody's also warned Thursday that the growing political uncertainty in Greece is damaging the liquidity of Greek banks, causing an outflow of deposits.

Investor Fear

Fear not only grows among depositors. Investors also show their misgivings by their rejection of the Greek public debt. The yield on Greek ten-year bonds has just surpassed the threshold of 10% for the first time in 15 months, while the risk of sovereign default is increasing, as reflected in the price of credit default swaps of Greek debt, now exceeding 1,500 points.
...

http://globaleconomicanalysis.blogspot.com/2015/01/another-run-on-greek-banks-begins-get.html

The Greek general election on Jan. 25 looks like a referendum on Greece's membership in the euro. If the Greeks vote for radical left-wing Syriza and its leader Alexis Tsipras, a new anti-austerity government could eventually take Greece out of the economic and monetary union. Alternatively, it could catalyze a series of anti-creditor steps that may lead to Germany and the main creditor countries leaving.
...
Greece could split itself off from the rest of the euro area with fewer repercussions than three years ago – as the German government now seems to admit. Private bondholders and foreign banks have largely got their money out of Greece. Greek government debt (more than 170% of GDP) is now overwhelmingly in the hands of European public sector lenders, whether the European Central Bank, individual governments or the myriad European rescue funds.

"Grexit" would lead to political turbulence, exchange controls and a concerted effort by the creditors to make life difficult for the Greeks ("pour décourager les autres"). But it would not bring a run on the banks and a financial crisis. Let's be clear. Whether Greece is in or out, the Germans and the other big creditors within EU, led by the Netherlands, will not get their money back.
...

http://www.usatoday.com/story/money...uropean-union-syriza-merkel-tsipras/21290883/

 

[ancona]

When Syriza wins, and I suspect they will, they will exit the Euro Zone and begin to use drachma again. They will also repudiate the "debt" owed to the EU core. When they do this, it will start a chain reaction. Spain, Portugal and Italy will soon follow. The EU will either stay together as a northern coalition or come completely apart at the seams, with all nations reverting back to self rule and national currencies.

 

[mmerlinn]

The EU will either stay together as a northern coalition or come completely apart at the seams, with all nations reverting back to self rule and national currencies.

Regardless of how things work out, the EU, in some form, though probably in a two-tier formula (with master and slave states), will continue to exist.

The Euro itself was doomed from the start. It is impossible to have a central currency without a central taxing authority, central monetary authority, and central political authority. And I suspect that the promoters of the Euro knew that from the start, knowing that after the Euro had raped all of the weaker states, that the stronger states would become the Masters and the rest the Slaves. Since there is currently only one strong state (Germany) it looks like Germany will become the central taxing authority for the Euro, or the Euro will be replaced by a NeuMark with Germany still the central taxing authority. The rest of the EU will then be either willing or unwilling slaves of the Master.

In a nutshell, Germany has done what Hitler could not do - conquered Europe without firing a shot. Now that Europe is in her pocket, watch for the horizons to be expanded worldwide particularly against the ancient nemesis of Germany, the English speaking world. You can already see it happening in the UK (due to the UK volunteering to be raped when they joined the EU), but the signs are already starting to show that the U.S. is a prime target, and our government is WILLINGLY going along!!! Latest indicator is normalization of Cuba/U.S. relations pushed primarily by the anti-free market Pope.

 

[rblong2us]

Dave Cameron was cheerfully talking about the UK leaving the EU.

Think it was just some scare stuff to get us all to want to stay in but the threat from Ukip is pretty serious.

 

[WilliamGates]

The German tax payer are giddy

When Greece drops the euro the Germans will hold a celebration. That would save Berlin or Frankfurt a ton of cash in bailout money.:clap:

 

[DSAbug]

When Greece drops the euro the Germans will hold a celebration. That would save Berlin or Frankfurt a ton of cash in bailout money.:clap:

Not sure.. It all depends how well german banks prepared for this.

 

[pmbug]

So the election is this Sunday. The SNB just dropped the peg to the Euro. The ECB just announced a 1 trillion euro money printing commitment. There is a lot of poo flying around at the moment. I guess we live in interesting times.

 

[bushi]

When Greece drops the euro the Germans will hold a celebration. That would save Berlin or Frankfurt a ton of cash in bailout money.:clap:

...and where exactly are the "bailouts" funds going, you think?

All the so called bailouts of the bankrupted entities, were actually bail outs of the CREDITORS of the bankrupted entities.
Paid by the taxpayers, of course.

 

[ancona]

Monday will prove to be quite interesting if the anti-euro groups take a clear majority.

 

[swissaustrian]

Syriza's intellectual leaders are a bunch of commie and progressive ivory tower economists, some from very wealthy oligarchic families:

https://translate.google.ch/translate?sl=de&tl=en&js=y&prev=_t&hl=en&ie=UTF-8&u=http%3A%2F%2Fwww.spiegel.de%2Fwirtschaft%2Fsoziales%2Fgriechenland-fuenf-oekonomen-fuer-syriza-a-1014655.html&edit-text=

smells like controlled opposition.

Add on to that Greek bonds are not part of the ECB QE program and you get the picture: Greece is gonna leave the Euro soon and Syriza will orchestrate the move. The EU governments already know it. Thats why Syriza is allowed to win now. Germany said they are prepared for a Grexit as well.

 

[bushi]

I am not sure to what degree it is controlled opposition, and to what, it is simply inept ideologically and philosophically, impotent intellectual& political leadership of today. Corrupted by cultural Marxism (the only successful branch of Marxism, unfortunately, so prominent and influential across the board in the western civilization today).

Remember, never assume a conspiracy, if it can be explained by the stupidity and lack of competence

In the long while, that I was away (from pm bug, lol), I've came to the conclusion, that our current problems run much deeper, than conservative/progressive, false dualism. Both sides of the aisle are equally inept and uprooted from the philosophical, rational foundation of the western society. Well, ok, progressives, are even more stupid that conservatives ;-), but that doesn't mean, that the latter are intelligent/rational/consistent enough, to do any good.

 

[swissaustrian]

EXIT POLL
SYRIZA 35,5-39,5 ND 23-27 Potami 6,4-8 Golden Dawn 6,4-8 KKE 4,7-5,7 PASOK 4,2-5,2 Ind.Greeks 3.5-4.5 Kinima 2,2-3,2

Syriza = Socialists
Golden Dawn = Nazis
KKE = Commies

together more than 50% of the vote

 

[swissaustrian]

Got to hand it to the socialists for their international networking abilities. The Greek socialists of Syriza who just won the general election by a wide margin probably received foreign funding.
In the video below you can see signs in Italian ("L'altra Europa..."), English and German ("Ich unterstütze..."). The English and German signs are showing the banner of "Die Linke" (the left), the German socialist party that inherited the assets of the Eastern German socialist party (SED) from the time before the iron curtain fell.

 

[pmbug]

...
Partial election results suggest Syriza has secured 36.5% of the vote, compared to 27.7% for the New Democracy party.

This indicates the party would get 150 seats in the 300-seat parliament - one short of an overall majority.
...
In his victory speech, Mr Tsipras said: "The sovereign Greek people today have given a clear, strong, indisputable mandate.

"Greece leaves behinds catastrophic austerity, it leaves behind fear and authoritarianism, it leaves behind five years of humiliation and anguish.

"The verdict of our people means the Troika is finished.

"The new Greek government will be ready to cooperate and negotiate for the first time with our peers a just, mutually beneficial and viable solution."

Mr Syriza's refusal to continue meeting the austerity demands placed on Greece by its creditors has sparked fears the country may be unable to repay its debts, which could force the country's exit from the Eurozone.
...

http://news.sky.com/story/1414691/greece-to-leave-disastrous-austerity-behind

 

[pmbug]

Tsipras meets with Russian ambassador and then visits WWII memorial where Nazis killed Greeks. Think that's just coincidence, or is a message being sent to Germany (and the EU)?

http://www.zerohedge.com/news/2015-...-germany-loud-and-clear-message-his-first-act

 

[ancona]

I vote that it's a message, and a clear one at that.

 

[swissaustrian]

Tsipras meets with Russian ambassador and then visits WWII memorial where Nazis killed Greeks. Think that's just coincidence, or is a message being sent to Germany (and the EU)?

http://www.zerohedge.com/news/2015-...-germany-loud-and-clear-message-his-first-act

No surprise that he met the Russian ambassador first. The oldtimers in his party were all Soviet spies / agents who openly received orders from Moscow. I wouldnt be surprised if Putin financed part of his campaign. The video I posted above is from R[ussia]T of all places.
Communist parties in Western Europe were controlled by the Soviets for decades during the cold war.

The memorial visit is a cheap to try to get bargaining power with Germany for a debt jubilee.

Note: My wife is Russian and she hates Putin.

 

[bushi]

Great write up/ summary of the situation by Molyneux:
=> via @Podcast_Addict

 

[rblong2us]

Cant watch it Bushi
Not enough bandwidth or data allowance with the satellite connection )-:

Can you summarise ?

 

[pmbug]

Greek markets crashing. Investors are GTFO while they can.

http://www.zerohedge.com/news/2015-01-28/greek-stocks-crash-bonds-plummet-banks-have-worst-day-ever

 

[ancona]

I fully sympathize with Greece. Her people finally got rid of the technocratic idiots that were really the tools of the EU, and not true patriots. These people are tired of the endless misery their tax burdens have created. They are also waking up to the reality that shit is going to get harder before it gets easier. Making nice with Putin will make sure they have access to financial assistance and an open market for their goods. The west is trying to strangle Putin with stupid economic sanctions over a country that on a relative basis, produces very little and provides nothing for the EU except a buffer zone between west Europe and the Russian border.

It is a grievous error to torture Greece in to submission, since history bears out that they are incredibly resilient and intolerant of those trying to impose their will upon them.

Sure, they'll be frozen out of most capital markets, but China and Russia should be able to provide them with help without really feeling it.

 

[mmerlinn]

The west is trying to strangle Putin with stupid economic sanctions over a country that on a relative basis, produces very little and provides nothing for the EU except a buffer zone between west Europe and the Russian border.

Greece does provide a stepping stone to the Middle East via Cyprus. Sooner or later the EU must do something about the Middle East and Cyprus provides the perfect military base to launch an attack if Iran shuts down the Hormuz Strait and the Red Sea/Suez Canal shipping lanes.

Russia and Iran can strangle the EU by shutting off the oil. Russia, with Chinese backing, is too big for the EU to attack, but Iran is not, so if Russia and Iran team up to shut off the oil to the EU, watch for fireworks to be launched from the EU military bases on Cyprus, the closest EU bases to Iran still within the EU.

 

[pmbug]

Tsipras open letter to Germany:

...
In 2010, the Greek state ceased to be able to service its debt. Unfortunately, European officials decided to pretend that this problem could be overcome by means of the largest loan in history on condition of fiscal austerity that would, with mathematical precision, shrink the national income from which both new and old loans must be paid. An insolvency problem was thus dealt with as if it were a case of illiquidity.

In other words, Europe adopted the tactics of the least reputable bankers who refuse to acknowledge bad loans, preferring to grant new ones to the insolvent entity so as to pretend that the original loan is performing while extending the bankruptcy into the future. Nothing more than common sense was required to see that the application of the 'extend and pretend' tactic would lead my country to a tragic state. That instead of Greece's stabilization, Europe was creating the circumstances for a self-reinforcing crisis that undermines the foundations of Europe itself.

My party, and I personally, disagreed fiercely with the May 2010 loan agreement not because you, the citizens of Germany, did not give us enough money but because you gave us much, much more than you should have and our government accepted far, far more than it had a right to. Money that would, in any case, neither help the people of Greece (as it was being thrown into the black hole of an unsustainable debt) nor prevent the ballooning of Greek government debt, at great expense to the Greek and German taxpayer.
...
Germany, and in particular the hard-working German workers, have nothing to fear from a SYRIZA victory. The opposite holds. Our task is not to confront our partners. It is not to secure larger loans or, equivalently, the right to higher deficits. Our target is, rather, the country's stabilization, balanced budgets and, of course, the end of the grand squeeze of the weaker Greek taxpayers in the context of a loan agreement that is simply unenforceable. We are committed to end 'extend and pretend' logic not against German citizens but with a view to the mutual advantages for all Europeans.
...

http://globaleconomicanalysis.blogspot.com/2015/01/alexis-tsipras-open-letter-to-german.html