Archive - Jun 2012

While everyone else is focusing on the Greek elections, the REAL issues pertaining to the EU (namely where the funding for Spain’s bailout as well as future bailouts will come from) continues to be ignored. Indeed, no one seems to be asking THE key question regarding the EU: Just WHERE is the money for this bailout going to come from?

As reported in the previous post, the Greek PASOK party of former PM G-Pap may have thrown a grenade into coalition discussion, following an announcement by Katerina Diamantopoulou that Pasok will not join into a coalition government with ND unless Syriza also joins said coalition. Which Syriza stated moments ago it would not do. The question then comes whether ND can form a government (150+ seats) with any of the other remaining parties (up to and including neo-nazi New Dawn or the communists... why is there no Pirate party in Greece?). The answer is most likely not, but not before some serious horse trading shows that the second Greek elections has achieved nothing, and the world now has to look forward to a 3rd Greek election round, some time in August, and then another, and then another, until no more assets are left to be plundered from the state which will have no head for a long time. Incidentally, just as we predicted on May 3 in "Previewing The First Of Many Greek Elections"

While everyone is focusing on Greece, we have news from France:

• FRENCH SOCIALISTS WIN ABSOLUTE MAJORITY IN PARLIAMENT, CSA SAYS
• FRENCH SOCIALISTS WON 320 SEATS, CSA SAYS; MAJORITY IS 289
• FRENCH SOCIALISTS WON'T NEED TO RELY ON LEFT FRONT, GREENS: CSA

So... does that mean that the recently reduced minimum retirement age wil be cut again, thank you Germany?

Ignore the media spin of sampling error as definitive confirmation of this or that (because a 1% difference in exit poll terms is well within a 3% error sampling distribution, where a plurality lead incidentally gives the winner an automatic 50 seats), and follow the results for yourself as they come streaming in. Full visual real-time update below.

While the burning of a ballot box in Exharia, Athens remains the most unrest among the civilians we have seen so far (in which 2 policemen were injured), the second exit poll results are in and New Domcracy has a modest lead:

•     *GREECE'S NEW DEMOCRACY GETS 28.6% - 30%   IN EXIT POLL: NET
•     *GREECE'S SYRIZA GETS 27.5% - 28.4% IN EXIT POLL, NET SAYS
•     *GREECE'S PASOK PARTY HAS 11% - 12.4% IN EXIT POLL, NET SAYS
•     *INDEPENDENT GREEKS GETS 6.8% TO 7.8% IN EXIT POLL, NET SAYS
•     *GREECE'S GOLDEN DAWN GETS 6.5% TO 7.1% IN EXIT POLL, NET SAYS
•     *GREEK COMMUNIST PARTY GETS 4.8% - 5.6% IN EXIT POLL, NET SAYS

As a reminder (here and here), "The outcome will be too close to call if the difference between the first two parties is less than 2%-3% with strong precedent of exit polls failing to predict the outcome when the race is tight."

In the meantime, a friendly reminder from the Germans:

•     *GERMANY'S WESTERWELLE SAYS GREEK PACKAGE CAN'T BE NEGOTIATED

The long-anticipated first Greek exit poll is out. The results, per Greek Mega TV, are as follows:

• New Democracy 27.5-30.5,
• SYRIZA 27-30,
• PASOK 10-12,
• Ind Gr 6-7.5,
• Golden Dawn 6-7.5,
• Dem Left 5.5-6.5,
• KKE 5-6

In a word: very much indefinite, as the leader will get the bonus of 50 parliamentary seats, which makes any conclusive calculus impossible for now.

The battle fronts have been drawn out: it is literally the world against Germany.

Happy Father's Day!

With mere hours left until the first Greek exit polls are released, one group of the Greek population, perhaps the most important one if the country of 23% unemployment is to have any hope of not sinking into the Mediterranean, its business executives, has yet to express its opinion on the aftermath of today's election. And while we know that many local businesses have already transferred their money (whether or not taxed is a different question) abroad, it is after all they that will serve as the backbone of any possible future Greek renaissance, whether EUR or XGD denominated. So do they think? Recently Citigroup's European team met with executives from big Greek / Cyprus banks and several officials - independent parties. The key message is that the situation is critical but there is some optimism on the Day after the elections.

For Greece, this is an important election. Inside the euro, their heavily state-dependent economy will continue to suffer scathing austerity. Outside the euro, they can freely debase, and — as Nigel Farage has noted — enjoy the benefits of a cheaper currency like renewed tourism and more competitive industry. If Greeks want growth sooner rather than much later, they should choose life outside the euro (and by voting for Tsipras and trying tough negotiating tactics, they will be asking to be thrown out). But for the rest of the world, and the rest of Europe, this is all meaningless. As Ron Paul has noted, when the banking institutions need the money, central banks — whether it’s the ECB, or the Fed, or the BoE, or a new global central superbank — will print and print and print. Whether Greece is in or out, when the time comes to save the financial system the central bankers will print. That is the nature of fiat money, as much as the chickenhawks at the ECB might pretend to have hard-money credentials. Tsipras, though — as a young hard-leftist — would be a good scapegoat for throwing Greece out of the Eurozone (something that — in truth — the core seems to want).

Four months before the election. And yet, a horrendous migration across the Pacific

We don't need another Zero...

The most ironic moment in the Greek denouement will come when fractional reserve lending collapses onto itself:

"Stavropoulos and her friends have a new strategy to deal with their daily expenses. "We charge everything to our credit cards," she says. If the Greek banks fail, they won't be able to collect the outstanding debts, she argues. "If they want to mess me around, I will do the same to them."

In other words, Greece is now America, where the vast majority of people also live on credit alone, and have taken up the following motto when dealing with banks: "you pretend to be solvent, we pretend to have money." At the end of the day, it is all just one big global monetary circle jerk, only this time in reverse, as the snake of fractional reserve banking has finally started to eat its own tail. With people spending money they don't have, and in debt to their eyeballs to a banking system that itself is just as insolvent, is there any wonder that nobody really panics any more over daily threats the grand reset is finally coming?

All you need to know about today's prime time event.

A democracy of the fortunate is not a democracy at all.