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Greek December Aid Tranche Delayed Until January - Charting Europe's Slow Motion Train Wreck
Some more on the second biggest piece of Euro-news from yesterday. After Austria surprisingly announced it would delay its contribution to the Greece bailout fund until such time as Greece actually stopped lying and did what it had promised (i.e., never), it seems that more of the Eurozone is starting to get cold feet over how to proceed with this classical defection from a game theory set up. As a result, the entire EU has delayed the December tranche of the Greek payment until January. Presumably this is to teach Greece a lesson, although it is unclear what it will actually end up achieving. As Greece can not fund itself outside of the ECB framework, as its banks are insolvent, and as it does not have the capital to exist in isolation, this action is comparable to the EU pointing a gun at its head and telling itself it has to stop lying or else. Yet with the entire continent subsisting on nothing but lies, this is nothing but a pure exercise in surreal tragicomedy - yesterday's question to Ollie Rehn during the EU press conference by a WSJ reporter about how the Stress Tests confirmed all is good with Austrian banks, and how he would comment on this, which was followed by an awkward silence, captures it perfectly.
From Reuters:
Adding to peripheral unease and pushing German Bund futures up half a point at one stage, Austria said December EU payments to Greece would be postponed until January after euro zone finance ministers told Athens on Tuesday to cut its spending more.
"It's illustrative of the divisions in, and the inherent weakness of, the euro zone due to the policy makers' priorities ultimately being domestic rather than for the common good of the euro zone," said Credit Agricole strategist Peter Chatwell.
Ireland pledged to work with a EU-International Monetary Fund mission on steps to help a stricken banking sector -- a process that could lead to a bailout which Dublin has so far baulked at asking for .
"While there remains uncertainty over this, it doesn't look good for the peripheral markets," said Nomura rate strategist Sean Maloney.
And here are some pretty charts from Reuters.
1. Markets:
2. Debt
3. Economy
4. Ireland
»
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This is SPAARTTAAAAAA......
...AAAAAA!
Exactly.
My thoughts are the EU has to back 'back up' and actually give Greece the funds and credit. A failed Greece is a failed EU (at least partially) by association.
Are we missing something? A trick up Trichet's sleeve?
That is the trick.
There is no trick.
[Ha! Ha! - bet you didn't see that coming!]
I nominate this for "sentence of the year": This action is comparable to the EU pointing a gun at its head and telling itself it has to stop lying or else.
Such a useful sentence - applicable in so many global economic cirumstances...
always facinating, but still, when does it matter?
Speaking of misrepresentation..
Seems Carney is looking for a flame war saying ZH are making unfounded accusations about Tepper CNBC appearance....
Quote from his cnbc blog: ( not linking out to keep the hit rate down) but you know where to find it....
"Fortunately for Tepper, this appears to be an unfounded accusation".
Well that's why he was hired by CNBC. Zero Hedge has made CNBC irrelevant aside from the occasional peek inside the propaganda desperation levels. I suppose they thought they could hire him and put him in the MKULTRA indoctrination machine like they did with Hobbs and they could use him to attempt to discredit ZH.
Tyler is too swift for them and they are only wasting time and money which is fine with me. The world doesn't need more captured zombies parroting for the elites. We have heard enough of them to fill the ark over the last 20 years it needs more red pillers.
Tepper seemed to think it was impossible for things to go down in the face of QE. Seems like he has been wrong thus far. Nothing is impossible.
Paging Milo....paging Milo Minderbender....
Where is party boy Leo K? Dancing in the Greek isles probably, until the music stops. Soon.
I think the problem is not the EU or the euro itself, it's the banking system and the colossal black hole of debt they created during the last 60 years (in complicity with governments). A system without debt creation is perfectly imaginable as long as it's based on hard assets.
Solution for Greece is simple:
1.default
2.kick out
+1, and the Euro goes UP when this happens. There are some busted bonds but the currency is stronger.
not so fast. they will prop it up as long as possible. when it is no longer possible, the dominos fall. slow or fast, debt deflation everywhere. there are multiples in USD to debt deflate compared to EUR. Bernanke would have to print tens of trillions to offset.
USD goes up from here on out.
compared to EUR
Still no talk of Italy just yet. I give it a few months at the most.
Disagree.
Negligible deficit and no property bubble (so relative to Ireland & Spain healthy bank balance sheets). Lots of debt sure, but serviceable.
Besides, Silvio has yet to seize Ethiopia
Great post TD. All that jibes with the great chart Bill Marsh/The New York Times put up in May.
http://www.nytimes.com/interactive/2010/05/02/weekinreview/02marsh.html?...
Looking this over, it appears to be a covert way to allow Greece to default without the ECB or other EU members being blamed. If the fingers are pointed at Austria et al after a Greek default they will reply, "We gave them an option to fulfill their austerity obligation and they did not. We did our part." This also give insiders the chance to dump bonds and load up on CDS before the SHTF moment occurs. Very clever.
Create the itch to sell the scratch.
Same old shit-selling to fools.
Does anyone really believe that the European Union will survive? Have the guys in Vegas come up with the odds yet?
Does anyone really believe that the European Union will survive? Have the guys in Vegas come up with the odds yet?
Tyler you correctly note that Greece can not fund itself. This is also the case for Portugal, Italy, Ireland, and Spain — they have lost their seigniorage authority. Their fiscal needs are provided for by the ECB which buys their bond issues, as well as debt from their banks. The ECB is the sole lender to these nations. Currently the ECB is The European Seignior.
The word Seignior comes from Old English and means top dog banker who takes a cut.
Ambrose Evans Pritchard in a recent Telegraph article, used the word “Götterdämmerung“, and that sure got my attention as that is an apt word to describe the apparent fatal wound to the world’s financial, economic and political systems which is coming soon, as bond traders continue calling interest rates higher, such as the US mortgage rates, and the Interest Rate on the US Government 30 Year US Treasury bond; and as currency traders continue a global sell off of the world’s currencies, as both conduct a war for sovereignty against the world central bankers and world leaders.
God was gracious to provide Revelation 13:3, which reveals that the soon coming apparent fatal wound to the world’s economic and political systems will be healed.
But that it will come at the cost of the rise to power of a world Sovereign and also a world Seignior.
Yes out of the coming investment “flame out”, a global Leader and a global Banker will rise to establish order.
Perhaps Herman Van Rompuy will rise to be The Sovereign as the Afteramerica website relates that he has called for global governance: nation states are dead … The EU chief relates the belief that countries can stand alone, is a ‘lie and an illusion!’
And perhaps Tony Blair, because of his business connections, will rise to be The Seignior … Or perhaps the Seignior will be Olli Rehn, one known for calling for calm as related by Ambrose Evans Pritchard in article Telegraph article Greek Rescue Frays as Irish Crisis Drags On .... And yet again, it might be the co-chair of the Council on Foreign Relations, the CFR, Robert Rubin, who was Treasury Secretary.
All seigniorage will come and go through The Seignior: all sovereign wealth funds, and banks will report to him, as there will be unified regulation of banking globally.
Soon there will be no national seigniorage anywhere as sovereign debt interest rates will explode to the point where there will be no buyers.
Sovereign nations and their constitutions will be history, as principles of global governance working through regional economic and security pacts and leaders’ agreements will serve as the basis for regional currencies or a global currency.
The Seignior’s financial and economic power will complement the military and political power of the Sovereign; and between the two they own the world “lock, stock and barrel”.
Perhaps one might enjoy reading my article: Götterdämmerung Is About To Happen, It Is Foretold In Bible Prophecy
I wish good investing to all.
last chart. obvisous question - who is "other" - is that BankofAmerica?
They are running scared because essentially the EU is acting like whack a mole. When i reality it should take the hit. They won't because it would destroy the EU and the euro, maybe some countries are truly thinking about their old currencies again.
Hobson's choice illustrated.
Allowing Greece to collapse might have dire
consequences for Europe's banking and financial status quo; throwing money
at the problem risks seeing it end up in black holes such as
http://www.spiegel.de/international/europe/0,1518,729492,00.html
A major part of the corrupt belong to the party currently in power; they
hark back to the times and deeds of the PM's late father, Andreas Papandreou,
and events thereof.
How do you eat your own flesh?!
From the land of the banquet of Atreus.