Greece: Are we on like donkey-kong?

pmbug

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benjamen

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People in Europe are buying up more gold ahead of possible Greece/Euro problems:
http://money.cnn.com/2015/05/14/investing/gold-germany-europe-ecb/index.html

"The World Gold Council report released on Thursday said demand for total gold bar and coins spiked by 20% in Germany during the first quarter from the year before."

"Germans aren't the only ones in Europe stepping up their purchases of gold. Demand also increased by at least double-digits in France, Switzerland and Austria during the first quarter."

:popcorn:
 

ancona

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Germany basically told the Greeks to go ahead and hold an EU referendum. We'll see it the PM has the balls to call the vote or not. Problems always look easy to solve when you're not the one solving them. Now that he's got the PM seat, and he has looked through the accounts, seen the pension problems and counted the debts, he knows Greece will be irretrievably screwed if she leaves the EU without state support from a major player.
 

11C1P

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yea, getting hold of the tiger by the tail is generally the easy part. It's what are you going to do with it once you have it.
 

pmbug

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...
For the rest of this month, Greece should be able to cover daily cash deficits of around 100 million euros, government ministers say. Starting June 5, however, these shortfalls will rise sharply, to around 400 million euros as another I.M.F. obligation comes due. They will then double in size on June 8 and 9.

“At that point it is all over,” said a senior Greek finance official who spoke on the condition of anonymity.

On Sunday, the interior minister, Nikos Voutsis, said that there would not be enough money to pay the I.M.F. if there was no deal by June 5.
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http://www.nytimes.com/2015/05/26/b...is-all-but-bankrupt.html?ref=todayspaper&_r=0
 

pmbug

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Greece may have to default on its debts and impose curbs on bank withdrawals before reaching a deal with its creditors, according to Goldman Sachs, as a crucial payment deadline approaches.

Merkel calls in Draghi and Lagarde for Greek debt talks

The pressure on Athens increased on Monday as a senior German central banker warned that it was “five minutes to midnight” for a Greek financial system on the cusp of collapse.

Goldman Sachs broached the subject of a default in a note published on Monday, claiming that the country could be forced into drastic measures amid fears that it will miss a €305m (£220m) payment due on Friday to the International Monetary Fund.

It will be “very challenging” for Greece and its creditors to reach a deal to unlock the final €7.2bn of the country’s bailout aid, said the bank’s chief European economist, Huw Pill. Warning that Greek government cash reserves were nearly exhausted, Pill said new elections could be triggered in Greece, alongside a debt default and limits on removing cash from banks.

“Facing this reality, a new political mandate** and thus a new government, a referendum or new elections ** will be required in Greece,” he said. “Not only is it possible that we may need to see sovereign technical default and/or blocked Greek bank deposits in order to come to an accommodation between Greece and its official creditors, it may be necessary to do so in order to break the current impasse in negotiations.”

Greek banks, which have been surviving on emergency handouts from the European Central Bank, have seen massive outflows in the past week. Andreas Dombret, an executive board member of the German central bank, told the Bild newspaper: “The Greek government would be well advised to act quickly. For the Greeks banks, it is five minutes to midnight.”
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More: http://www.theguardian.com/business/2015/jun/01/greece-debt-default-elections-goldman-sachs-imf

tl; dr: bank runs intensify as it looks like a deal is not going to happen
 

ancona

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Greece is signing a memorandum of understanding with Russia for the gas pipeline. Check mate boyz!
 

benjamen

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http://nypost.com/2015/06/07/my-big-fat-greek-default-when-will-athens-realize-theres-no-free-lunch/

"It’s time for Greece to put itself out of its misery. It must stop hoping for a miracle, default on its debts and exit the euro."

"The only way for the euro to work, in the absence of massive, permanent handouts from Germany and other rich countries, is for member states to embrace free markets and radical labor market flexibility."

"Every depositor with any sense has been busily withdrawing cash from Greek banks, in anticipation of capital controls and a new, potentially almost worthless, currency."

"In desperation, some have splashed out on new cars (sales jumped by 47% in April, as better a useful depreciating asset than nothing) and those who can afford to have purchased property abroad and savers of more limited means have reverted to stashing the odd 500 euro note under their mattresses. Greek bank deposits have slumped to just 139.4 billion euro in April, compared with 145 billion euro in March, their lowest level since 2004."
 

ancona

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The Brotherhood of Darkness cannot allow Greece to leave. The precedent will be set and others will follow behind them, repudiating their debt and setting all fiat on fire and all bankers with it. The world will not be the same again for a very long time.
 

pmbug

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I took a short break from the internets and haven't been posting much lately. Anyone know if they made a deal yet to stave off the June 8/9 deadlines?
 

pmbug

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Ah... I see that they have not...

In attempt to bridge the gap between a proposal submitted by Greek PM Alexis Tsipras last Monday and a draft agreement devised by creditors the following day, Athens has reportedly submitted a new three-page plan focused on fiscal sustainability.
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In sum, it looks as though the Greeks have essentially submitted the same proposal they submitted last week. That is, the "red lines" on VAT and pension cuts have not changed and as such, creditors won't likely budge. This was to be expected given that Athens has bought itself a bit more time by going the so-called "Zambian" route with its June IMF payments.

Political discussions are reportedly "ongoing" in Greece, which presumably means Tsipras is attempting to negotiate with Syriza party hardliners in an effort to determine if any further concessions to creditors would be acceptable in terms of passing an agreement through the Greek parliament. In other words, this latest "proposal" is likely nothing more than a token submission in lieu of a more serious effort later this month.
http://www.zerohedge.com/news/2015-06-09/not-credible-europes-response-latest-greek-3-page-proposals

Within that write up is an answer to the question that was on the tip of my tongue - what is Greece doing about the early June payment?

Greece has asked to bundle its four debt payments to the International Monetary Fund that fall due in June so that it can pay them in one batch at the end of the month, Greek newspaper Kathimerini reported on Thursday.
http://www.zerohedge.com/news/2015-...ke-€300-million-imf-payment-requests-bundling
 

pmbug

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What a farce that markets jump because a deal might be reached. It doesn't matter if a deal is reached. Greece will just earn a few more months of time. They won't be able to enact sufficient reforms to plug the holes in their sinking ship. I don't see them ever running a fiscal surplus and being able to pay down their debts. In a logical world, the fiscal cancer would be excised.
 

pmbug

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Some speculation on the possible domino effect of a potential Greek default:
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If Greece defaults on its official-sector debt, Münchau calculates France and Germany stand to forfeit €160 billion.

And what about Spain? Portugal?

Münchau has numbers higher than my January 22, post Revised Greek Default Scenario: Liabilities Shifted to German and French Taxpayers; Bluff of the Day Revisited.

At that time, I had French exposure at €55 billion and German exposure at €73 billion (a total of €128 billion).

I also had Spain at €33 billion and Italy at €48 billion. Both of those numbers are likely way higher today. Even if my numbers are still accurate, where the hell is Spain going to come up with €33 billion? Where will Italy come up with €48 billion?

The answer to both questions is simple: they won't.
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http://globaleconomicanalysis.blogspot.com/2015/06/greece-walks-out-after-45-minutes-talks.html
 
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