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Closed Door Meeting Discloses The Obvious: "Greece No Longer Able To Borrow From The Markets Nor The Banks"
Headlines from www.bankingnews.gr. Looks like its IMF-go time. The same source states that the "market situation will be aggravated by Greece's usage of the bailout mechanism 10-12 days from today."
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Yarly!
Goldman Sachs mission log: Mission success
As i said before; Greece has the leverage.
PS
Trichet if you are, by any chance reading this
YOU FUCKING PUSSY
Cheeky, I see Greece's leverage only extending one hand in this poker game. If they screw over Germany and France, would they not guarantee themselves future hyperinflation as they resorted back to super Drachmas after being booted from EU? Another possibility is German troops marching thru Greece making claims on stuff they didn't blow up. I also see Germany as able to easily survive outside of EU.
Thoughts?
REPOST from the previous thread:
OK, I missed that post. One thing that is uncertain in my mind is if Euro members, especially Germany and France, would allow a peg if Greece wanted to pay in Drachmas, which would be immediately suspect as soon as it hit the press. The hyperinflation scenario would be more likely, and I think that would be a negative result for Greece as the country would become destabilized. The same could be said for Spain and Italy. A pertinent question is what is Greece's net exports versus other EU countries, specifically those countries that have banks that hold Greek sovereign.
I agree that a "free economic marketplace" was the goal of the EU, but if certain countries should not have been in the EU in the first place (due to hidden debt), and are also not bringing a substantive exhange of goods to the party, then they should get booted IMO and the EU will just be smaller.
I have exactly 0 knowledge as to how Greek economy is structured sector-wise and how percentage-of-GDP runs trough the sectors. So i have no idea how to comment on that [i really dont want to read it, although i probably will] but regarding the monetary side of you argument i also tend to ascribe more value to the hyperinflation side [well at least as the first step in the whole process of Greece becoming monetary independent] than the peg side of the picture. Since i was stupid enough at did not notice that pegging the drachmas would achieve absolutely zero since all EUR denominated assets and liabilities would exchange only denomination and not value without providing much benefit a floating rate would. So yeah, i agree. If/When EMU kicks Greece out floating exchange rate mechanism would be more beneficial than pegging the currency to the EUR [remember Latvia did that and it royally fucked them in the ass] since it would allow Greek Central Bank do conduct at-will independent monetary policy, meaning hyperinflate the debt until it becomes serviceable and when debt is reduces by whatever percentage they think will provide them stability in the mid to long term peg the drachmas to the EUR and laugh all the way to the bank. If i was in position of doing so, i definitely would.
We are pretty much in agreement, the only difference being that my take on the result , ie hyperinflation in Greece, is more negative. In other words, I view their leverage leading to a self inflicted wound. My guess, without knowing the specifics of the Greece economy either, is that they import a fair amount of oil, and a floated, hyperinflated Drachma would lead to a death spiral of uncontrollable input costs. This would of course also hammer the average citizen, who would then be very unhappy that the Drachma they held at Noon only buys half the amount of bread or gasoline at 5pm. The endgame? Probably war, either civil, regional, or both.
As you know, the US can more easily treat its citizens like bitches (thru inflation and taxation) because we have a military that can essentially help control the price of oil. I don't think the Greek military measures up.
Some moderate inflation can be successful in the longer term in releiving the debt burden. Having a 3%-4% inflation rate will not cause massive problems and possibly can be overcome by economic growth.
Hyperinflation cannot work for the government. It is simply too obvious that it is happening. All govt payments will hyperinflate along with the borrowing costs. I would like to know of a successful implementation of hyperinflation as a road to economic stability and growth. Please provide details.
Hyperinflation is a circuit breaker.
Once a fiat pyramid begins to collapse, you get an endless cycle of deflation (decades long bankruptcy, liquidation, foreclosure, lawsuits, congressional hearings, lawsuits ..) Hyperinflation puts the system out of its misery and stops the jail parade.
Hyperinflation is a circuit breaker.
Once a fiat pyramid begins to collapse, you get an endless cycle of deflation (decades long bankruptcy, liquidation, foreclosure, lawsuits, congressional hearings, lawsuits ..) Hyperinflation puts the system out of its misery and stops the jail parade.
This is a good idea that would result in any valuables in Greece being bought for a song once their citizens have finished screwing each other over and over and over. Once this business is finished, Greece won't exist.
Sit back and let them consume themselves. The drachma would be hyperinflated to nothing. It sounds like 1923 all over again.
The Greeks are playing a good game. Very resourceful, clever and pragmatic are those people from that part of the Aegean. They will take the bailouts for as long as they are available, strengthen certain defences and if need be then default and return to the drachma. How the rest of Europe and America feels about the bailouts is another matter. There is a limit to the interdependence of the world oikonomia, (Ancient Greek for "management of a household, administration, community.") Globalised risk and reward also carries with it individual responsibility. It's fine to help and be concerned about the neighbour down the road who is going to rack and ruin but he has to do everything in his power to get his own house in order.
Gr can't borrow?? NO SHIT!!
Hey... I feel something tugging at my wallet.
You still have a wallet? Hey Barney, get over here, found a live one over here that has not been tapped out yet.
Market would love that news. If this comes to fruition market will rally pretty strongly I would guess.
MAN SHUT THE FUCK UP, ACCORDING TO YOUR LOGIS, WE COULD LAUNCH NUKES AND "HEY ONLY 5 WERE LAUNCHED, THEY SAID 6, MARKET IS GONNA RALLY"
SHUT THE FUCK UP
Dude!, do not shot the messenger, he is on our side, and he is probably right. Sucks but true.
Doelarr down, stocks up, where is your profit???
Yes right, IMF imposed austerity programs are great for equities, because spending has to be cut dramatically, taxes rise and state employed workers either lose their jobs or get their salaries cut.
Seriously, what medication are you on?
Pretty simple - the Street will look at it as a resolution to the problem. Every time there has been a hint of IMF getting involved, market moved higher. It's not rocket science.
I am loath to agree with you. But I am learning to loath.
.
Please, no feeding of the troll. Doing so will only encourage it to come back for some more. Ignore it and eventually it will move on to greener pastures, which for it means cow shit. Let it alone.
+1,000
Exactly right, stop feeding the troll FFS.
Are you a pimp?
can Zh translate the article and post it?
.
You know, there is a large internet company out there you may have heard of... Google, I think it's called...?
http://translate.google.com/translate?u=http://www.bankingnews.gr/&sl=el&tl=en&hl=&ie=UTF-8
At Ground Zero led the Greek economy and now it is clear that spread to 484 basis points in interest rates to 8% in Greece can no longer borrow long-term periods. However, long-term investors in Greek bonds require Greece to bring directly to the IMF to protect their capital to hedge funds want to keep uncertainty to reach spreads to 600 basis points or higher. ...
For Greece, the crisis is a crisis loan but rather credibility crisis. The markets considered unreliable country and leads the IMF.
Can the rate at auction of 3-month Treasury bills to 3.65% in developed but it was an auction of short-term risk that was covered because of the specificity of ekdosis.I Greece at rates of 8% can not borrow from the markets.
As an indication of whether Greece have adopted today a bond in dollars if the cover would pay 8.5% to 9%.
The real tragic circumstances prevailing in the country's borrowing costs are justified.
The increase in the spread and the corresponding increase in CDS is the result of market demand, not speculators to move by Greece to the IMF.
Some speculators bet appears to increase the spread to 600 basis points to achieve higher profits but most people who are long term investors require the solution of the IMF to ensure the funds are invested in the Greek public debt.
Long-term investors in Greece ordered to stop them now the IMF.
Speculation continues as though it wants to exploit the time between now and the formal appeal mechanism to support Greece in the IMF and the EU
It is 10 days is 12 days to request activation it is best to be triggered by hedge funds want the spreads above 500 basis points and 600 basis points just to finish the many speculators playing the investment game over for a few at 700 bps.
So the hedge funds want higher spreads even to gain complete the game.
Greece at the IMF, but the spreads will remain high
The cause and Greece will soon submit a request of using the support of the IMF and the EU
On the request of the spread will begin de-escalating to 400 to 350 base points.
But attention will occur two apparently unprecedented for the behavior of investors in Greece.
There are many funds that when a country is assigned to the IMF under the statutes of the Greek forced to sell debt. They are usually older and smaller funds have more flexibility.
Practically, when Greece entered the IMF will be selling just because some funds have legal clauses. One fund that has such legal terms are the Pimco and probably many others.
But if this parameter is strange that there will be another wave of selling bonds is even more surprising.
Long-term investors when it scaled back the spread and mitigate the accounting losses will sell and will not want to have Greek debt at a time when they do not know if there will be renegotiation of the debt.
Peter Leotsakos
news@bankingnews.gr
English Translation:
GREECE IS FUCKED I TELL YOU, THEY ARE FUUUUUUCKED. AND SO IS THE REST OF EUROPE. AND THE WORLD BANKING SYSTEM IS INSOLVENT. WE ARE ALL FUUUUUCKED.
How do you figger that bodes for the rest of the civilized world (assuming Greece is civilized).
Same sentiment on a longer time line? How long can which country hold it together long enough for the upper-crust to retreat to their villas?
what's that old saying? If I lend you $40,000 and you can't pay me back, you have a problem. But if I lend you $40 BILLION dollars you can't pay me back, *I* have the problem?
Something like that, anyway...
"If a man owes you a dollar, he has a problem. If a man owes you a million dollars then you have a problem."
What's the problem. I'd loan Greece $20 any time. Call me baby, who's yo daddy?
Trading advice: Short GRE bonds via CDS
When Bonds trade for 50%+ of your position unwind trade
When Bonds trading 20 cents on the dollar buy as
much as you can.
Unwind trade when bonds reach gain of 150-300 %
Leave a "Fuck you" notice to your boss and a thank you note to Kahn/Pap
Retire
Buy gold and silver
Enjoy
No match for domain "CHANNELBONDS.COM".
Lately, I have been camping in the "Inflation until the collapse of the doelarr camp". We do archery, boating, arts and crafts, and campfires. However, I have a direct route up hill that runs into the "Hyperinflation camp". There we do firearms training, farming and sustainability, and well digging. If the IMF bailout happens, and IMF bailouts become the standard for failed European nations, I may head up the hill, gold and silver coins in tow.
Well I guess the FED is left with no choice but to lower rates to absorb this body blow to USA busted out working class, oh wait they cant lower past 0%. Well Im sure they figure out some way, these Masters of the Universe!
Tyler...didn't know you spoke greek?
Sell in May and go away????
OK... So, it's a given that Greece defaults. It's also a given that after the default, other "Club Med" countries are likely going to be put under the microscope and taken out one by one by the bond market.
What's the end game? Spain, UK, Japan, US (a la California, NY, Illinois) are simply too big to bail out. They can potentially try to print their way out of their mess. But, that is not inflationary, it's suicidally hyper-inflationary. Other than the given gold/silver (& commodities), where can you park your capital? The government is closing off all the capital flight options. Raising taxes left and right. What can be done in terms of capital preservation? Is there a way for us "non-hedge" funds to actually profit from this?
Rich
But apart from the sanitation, the medicine, education, wine, public order, irrigation, roads, the fresh-water system, and public health, what have the Romans ever done for us?
http://www.youtube.com/watch?v=5kiUgr9dCrk&feature=related
Bravo...
Kids, I remember it like it was yesterday, first this freaking volcano in Iceland, then I think was Greece that went under - or was it Portugal - I forget, anyway, then it was France and England too, then California, anyway, that started the whole thing. . . . hey, are you finishing that can of cat food?
Goddamn.
Im so fucking jealous at those HFs with 20 bil. AUM.
I would make it rain like a motherfucking monsoon in March in Southeast Asia [as i am sure someone will] and top the forbes list next year.
" Hello Paulson *knocks cane on forehead*, anyone home Paulson"
A BRIEF REPRIEVE:
http://williambanzai7.blogspot.com/2010/04/brief-reprieve-brief.html
Looks like someone picked up your quote and added some color.
http://www.fmxconnect.com/fmxexchangeconnect/post/2010/04/20/Flowtrading...
Not that this contains much not already known, but Matt Taibbi has a new(ish) piece that was interesting mainly for its... pessimistic acceptance of the status quo? Resignation over the state of affairs?
Looting Main Street: How the nation's biggest banks are ripping off American cities with the same predatory deals that brought down Greece
http://www.rollingstone.com/politics/news/;kw=[3351,53763]#
The problem with the article, at least as it relates to Birmingham, is that the banks had very little to do with it. The Federal Government forced the city to agree to build a new sewer system. I expect they also had to fork over some cash to get that agreement. Now, under the gun to build something, the city spent about twice what the original budget was for the plant. Banks did not design nor build the project. The city then borrowed more money than they could repay so they were looking for any type of game that would makke a profit for them. They bet wrong. It was not the banks fault. Sure, several million in fees and kickbacks were paid. That was / is probably criminal but not the real source of the problem. Allowing dimwits to run a city of that size is certain to lead to disaster.
Somewhat similar corruption by a pol is the case of the Democrat Senate Majority lLader in NY State. He only stole $14 million from a publicly funded charity.
http://www.politicsdaily.com/2010/04/20/andrew-cuomo-accuses-new-york-senate-leader-of-bilking-non-profi/
When they are allowed to spend money that is not actually theirs, they can always find a way to make it theirs first.
I can't make any claims for the accuracy of the claims in the report (though you'd think JPM would have swung for a libel suit by now if completely baseless). My point was that for such a story, Matt is usually frothing quite heavily by the end, yet for this piece it was more of a bitter resignation.
That corrupt, inept dimwits led the city to disaster is not in question -- but (assuming the underlying deal/debt numbers check out) a disaster of such scale begs the question -- who benefited. And how/why they are allowed to benefit legally in such a way (the payola/corruption of public officials/conspiracy to subvert legal processes in finance and procurement/etc. aside).
Are you guys telling me my new 13 week bonds are worthless?
But they yield 3.65%!
Greece gets so much coverage in financial news.
Unfortunately, none of them can make the simple leap of realizing that Greece is just a tiny microcosm of what dozens of much larger countries eventually have to go through to get finished with this mess.
It's like there are dozens of pots pointing at a kettle and saying, "I'm glad I'm not black, like him."
My theory is the average American is so dead inside anymore that when the giant taxation and cut-backs actually take place, they will mostly just sit there and take it with a dead stare. Most will have to wait until someone makes an iPad app showing just how screwed they are.
We will see rioting in other countries, maybe even revolutions. In America, we will see quiet acceptance of whatever form of slavery is encumbered on them.
For those that are students of history, I know you can't directly compare ancient Rome with our American empire. However, if you replace the military of Rome with our financial banking system there are so many parallels. I'm starting to think of GS as the praetorian guard.
Wow.
If you think about the late Roman era, the economy and population began to shift east towards Asia, and the powers that be stopped giving a damn about the Western Empire and all of its problems, until Rome was nothing but ruins fought over between barbarian lords.
I think that gives us a glimpse of the future.
Especially true in the US as you can print the money and hand it back an 1/1MM the value... see stock market at 670 to 1200 for absolute clarity...
It sure is IMF time, and it won't be pretty.
Greek: someone who's stupid enough to use GS to hide their debt, and not expect GS to short their bonds to deep hell...
You know what is going on behind those closed doors? Probably this:
http://www.youtube.com/watch?v=4vuW6tQ0218
EURO continues to get a lot of support ...
But USD index weekly chart continues to give bullish warnings.
Euro chart:
http://www.zerohedge.com/forum/latest-market-outlook-0