Archive - Jun 2015

• EU in last-ditch bid to Greece, urges "yes" vote to bailout (Reuters)
• In? Out? In between? A Greek legal riddle for EU (Reuters)
• Tsipras Says EU Won’t Eject Greece as Cost ‘Immense’ (BBG)
• Empty Greek ATMs Force Tourists to Stiff Santorini Cabbies (BBG)
• Anti-austerity protests in Greece as bank shutdown bites (Reuters)
• Puerto Rico governor calls for bankruptcy; adviser says island 'insolvent' (Reuters)
• Puerto Rico Urges Concessions From Creditors (WSJ)
• Hilsenrath - For Fed to Delay Rate Hikes, Global Tumult Would Need to Infect U.S. (WSJ)

GREEK FINANCE MINISTER SAYS GREECE WILL NOT PAY IMF ON TUESDAY.

Regulators across Europe are beginning to curtail trading in Greek assets as the country’s stock market remains closed and Greeks grapple with capital controls and prepare for a default to the IMF at midnight.

In our overnight market wrap, we said that with the Greek D-Day doubling as quarter end for countless hedge funds most of which are now suddenly underwater, there would be a plethora of rumors designed to spark buying momentum algos which would provide brief selling opportunities. Alas, Germany appears to have crushed that particular option, when moments ago a German made it clear that at this point the only catalyst will be the now virtually certain Greek default to the IMF at midnight (+/- 1 leap second) Greek time. To wit: TOO LATE TO DISCUSS GREEK PROGRAM EXTENSION: GERMAN OFFICIAL

The Greek D-(efault) day has arrived, and with it so has quarter-end window dressing for many underwater hedge funds (recall the S&P is now red for the 2015) which means the rumor mill today will be off the charts. And sure enough, less than an hour ago, futures exploded higher as did the EURUSD, following another "report/rumor" of a last minute detente between Greece and the Troika when Greek Ekahtimerini said that  "Tsipras is reconsidering the last-ditch offer made by European Commission President Jean-Claude Juncker, sources have told Kathimerini."

On Friday morning, at around midnight PDT, the price of silver had a mini crash, dropping more than 10 cents in one second. This is our forensic analysis.

For years there had been speculation, rumor and hearsay that JPM had cornered the US commodities market. Now, finally, we have documented proof.

"There have been some people that worry that the military may actually get involved. It wouldn't surprise me - there are some people in Greece that have raised the whole prospect of potential civil war."

How do you change the way people think? You start by changing the words they use.

In the last 2 days, PBOC has thrown everything at the ponzi-fest they call a rational market. An RRR cut, a Benchmark rate cut, a rev repo rate cut, a CNY50 Bn rev repo injection, a stamp duty cut, IPO halts (cut supply), and last but not least permission to speculate with a reassurance that shares on a solid foundation. The outcome of all this policy-panic - CHINEXT (China's Nasdaq) is down another 6% today (down 25% in 3 days) and aside from CSI-300 futures, all other major Chinese indices are in free-fall. Add to that the fact that industrial metals are collapsing with steel rebar limit down and it appears Central Bank Omnipotence is under threat.

The shining future that America once had is all but a page note in the history books now. Record numbers not in the workforce, failed foreign policies and domestic strife is the new normal. And how is the brain trust in DC going to solve these problems? National service for all 18 - to 28-year-olds!

Moscovici who served as French finance minister until 2014 and then became European commissioner for Economic and Financial Affairs, Taxation and Customs, used some very colorful language, i.e., the French economic situation was "worse than anyone [could] imagine and drastic measures [would] have to be taken in the next two years”. 

"Millions of people in ex-Communist Bulgaria, Macedonia, Albania, Serbia and Romania have deposits in banks owned by Greek lenders, putting this corner of south-eastern Europe in the frontline if there is contagion from the Greek crisis."

Earlier today, as the exchange between Greece and its creditors got increasingly belligerent, Estonian Prime Minister Taavi said that "Greece’s debt would still remain outstanding and creditors would expect this money back." So did this latest antagonism change the Greek mind? According to a flash headline by the WSJ released moments ago, not all. In fact, Greece just made it official that it would default to the IMF in just over 24 hours: "Greece won't pay IMF tranche due Tuesday, government official says"

Late Friday night a solid blow was struck for sound money, free markets and limited government by a most unlikely force. Namely, the hard core statist and crypto-Marxist prime minister of Greece, Alexis Tsipras. He has now set in motion a cascade of disruption that will shake the corrupt status quo to its very foundations.