Archive - Feb 2015 - Story

While the ECB is responsible for determining the euro-zone's supply of bank notes, it doesn't actually print them; instead it outsources the work to central banks of a few euro-zone countries (one of which is Greece). As WSJ reports, the Greek central bank's bank-note printing facility is called IETA. Built in 1941, the Attica plant today is outfitted with "state-of-the-art machinery," and has been responsible for printing batches of €10 notes, according to the ECB. One wonders how tempted the Greeks will be to take matters into their own ink-stained hands, should the ECB/Germany/Eurogroup pull the plug without acquiescing to their non-ultimatum "take it or leave it" offer...

First, the US openly allows potential Jihadist elements (don't worry, the answered "moderate" on the questionnaire) to call in B-1B strikes, and now in all its Sun Tzu-esque brilliance, the Pentagon is handing out not only issuing press releases on its military invasion calendar, but its troops deployment numbers as well. According to Reuters, the United States sees an Iraqi military offensive involving 20,000-25,000 troops to retake Mosul from the Islamic State of Iraq and Syria in April-May, a U.N. military official said on Thursday.

In its role as global hall monitor, Washington appears to have jabbed its nose into the Greece-EU talks:

*LEW SPOKE WITH SAPIN, DIJSSELBLOEM, VAROUFAKIS TODAY: OFFICIAL
*U.S. URGES SIDES IN GREEK TALKS TO TONE DOWN RHETORIC: OFFICIAL

Treasury Secretary Lew "urges compromise" and explains he is in touch with Eurogroup, IMF, and Greece putting the onus back on Varoufakis' shoulders by urging them to reach a deal of face additional hardhsip.

In typical European fashion, today's Greek negotiations have ended in a Schrodingerian fashion: on one hands reports are now trickling in that the Greek Eurogroup working group has concluded their meeting after 7 hours without a result while on the other, Market News is reporting that Eurozone deputies have "drafted a statement that could well serve as a basis for a compromise between Greece and the Eurozone, to be examined by finance ministers Friday."

When you owe someone $340, it is YOUR problem.
When you owe someone $340 BILLION, it is THEIR problem.

If Greece gives in, Germany will have won, but its bully status will come to bite it in the face. European nations don’t accept bullying, and certainly not from Germany. It’ll be a Pyrrhic victory: the beginning of the end. If Greece however stands firm in its demands, it’s also curtains for the EU. If Greece leaves, it won’t leave alone. Only the third option, Germany caving to Greek demands, can save the EU. But Merkel and Schäuble have prepped their people to such an extent with the wasteful lazy Greeks narrative that they would have a hard time explaining why they want to give in. The EU may thus fall victim to its own propaganda

"Is it possible, in a global economy in which the United States' principal competitors are experiencing slow growth, disinflation or deflation, wage stagnation or slowing of wage growth, and slumping currencies relative to the US$, that the U.S. economy can be an island of relative prosperity unto itself?" (Spoiler Alert: No!)

It turns out that the next best thing to Greek contagion in this bizarro, centrally-planned world is... anti-contagion.

As leaked by Reuters moments ago, here is the text of a document that describes Germany's position on Greece's letter requesting an extension of its bailout facility as nothing short of a Trojan Horse.

The totalitarian arm of the ever-growing government appears to know no limit. In today's "oh no they didn't" moment, the US Government's diet panel has dictated proposed one more oppression of American's freedom to choose:

*GOV'T PANEL PROPOSES SUGARY-FOOD TAX TO FUND NUTRITION PROGRAMS, CURB OBESITY

On the bright side, the government approves of "lean meat" as compatible with healthy eating. The bill, introduced by Rep. Juan Candelaria, D-New Haven, would impose a tax of 1 cent per ounce on soft drinks - including sweetened teas, energy drinks and soda - and candies that are high in sugar and calories. So, expensive non-refined foods are good? And the poorist people - who can't afford to eat the way the government dictates - will pay all the taxes?

After spending the past year deteriorating with each passing month, as global acceleration dipped decidedly in the negative camp, the only thing that kept the Goldman Global Leading Indicator "swirlogram" somewhat buoyant was that "Growth" measured in absolute terms had remained slightly positive. Not any more: according to Goldman's latest global economic read, the world is now officially in contraction, following a sharp plunge in both acceleration and growth in February.

"We’re more leveraged today than in 2006-2007," warns Thomas von Koch - managing partner at EQT, the largest buyout fund in the Nordic region, adding that "there are financial bubbles being built up and how they’ll be solved, I don’t know." As Bloomberg reports, von Koch concludes, an unprecedented era of monetary stimulus is inflating asset prices across markets to extreme levels, with history offering little help in predicting how it will all end - "The problem is global, not just for Europe. It’s the asset bubbles in general that concern me. It’s wherever we look."

Back in January, the FOMC surprised many when in its statement is noted that in addition to financial it was also keeping tabs on "international developments" making many wonder just whose central bank the Fed is. Why Yellen's obsession with all things international? The answer may lie in Yellen's 2014 calendar, which the WSJ has parsed and found that of her 950 meetings from February to December (one wonders just when does the Fed chair actually do work outside of meeting rooms of course), the Fed chair spent more time conversing with foreign officials (68 meetings) than with members of the White House (51 meetings).

UPDATE: *GREEK GOVT WON'T ACCEPT ULTIMATUMS, WON'T GIVE ANY: OFFICIAL

After days of repeated ultimata from The Eurogroup, as Germany (bad cop) and the rest (good cop) make optimistic sounds, this morning's rejection of Greece's latest plan (following Greek comparisons of Germany to Nazi surrender demands) has prompted something new:

*EU HAS 2 CHOICES, APPROVE OR REJECT GREEK REQUEST; EUROGROUP MEETING TO SHOW WHO WANTS A SOLUTION: GREEK OFFICIAL

Markets are stumbling on this news as Germany and the rest come to terms with not just the billions in debt on ECB and various bank balance sheets but the 49 billion other reasons to avoid Grexit that have mounted in TARGET2 liabilities.