Greek Banks On Verge Of Total Collapse: Bank Run Surges "Massively" As Depositors Yank €700 Million Today AloneSubmitted by Tyler Durden on 06/05/2015 22:49 -0400
While the Greek government believes it may have won the battle, if not the war with Europe, the reality is that every additional day in which Athens does not have a funding backstop, be it the ECB (or the BRIC bank), is a day which brings the local banking system to total collapse. And another day, or two, like today, and it may all be over: According to banking sources, the Greek bank outflows on Friday soared to 700 million Euros from 272 million Euros on Thursday.
Greek PM Alexis Tsipras is set to address the Greek parliament after a tense week of negotiations with creditors that ended with no agreement and a missed IMF payment.
Greek PM Alexis Tsipras is set to address parliament Friday as difficult discussions with creditors have reached yet another stalemate. In Germany, some reports suggest there's now tension between German Chancelor Angela Merkel and FinMin Wolfgang Schaeuble regarding how the EU paymaster should handle Greece going forward. Meanwhile, Tsipras and Putin will hold a phone call Friday to discuss "business and energy."
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After yesterday's unprecedented volatility fireworks across all markets and continents, today so far has been a modest disappointment, with no crashes and subsequent surges in China, where the Politburo's only achievement was keeping the bubble dream alive by pushing the Shanghai Composite over 5,000 for the first time since January 2008, closing the index 1.5% higher on the day - a very modest gain by China's recent blow-off top standards. Europe, too, has been relatively tame with the 10 Year Bund starting off on the wrong foot, the yield rising back above 0.91% before once again dipping to the upper 0.8% range, tracking the move in the EURUSD tick for tick, which also is a tractor beam for the US 10 Year. On the equity, front, things are just as muted, with futures at the Low of Day as of this moment, despite yesterday's last minute manic buying spree, the S&P set to open below 2100 as a result.
And just like that, after effectively defaulting to the IMF a month ago, Greece has just re-effectively re-defaulted to the same IMF on its payment due tomorrow, which now will not be made, just as we said it won't.
Update: GREEK FINANCE MINISTRY REJECTS CREDITORS' BAILOUT PROPOSAL
"Under severe capital controls, redenomination and nationalisation risk rises. The Greek banks would be most at risk, while the two largest non-financial issuers could potentially continue to service their external debt even after a redenomination of domestic liquidity and revenues. Such a scenario also poses major risks to GGBs and other EGB markets"...
While hope has long been dismissed as a strategy among the investing public, for game-theory expert (and Greek FinMin) Yanis Varoufakis, "hope" appears to be all he has left. Reflecting on James Byrnes 1946 speech, Varoufakis explains a “Speech of Hope” for Greece would make all the difference now – not only for us, but also for our creditors, as our renaissance would terminate the default risk.
Blockchain.com, which claims to be the maker of the most popular Bitcoin wallet, suffered at the weekend what the Guardian describes as a "total crypto breakdown", highlighting once again the vulnerability of electronic and digital currencies to human and technological errors and hacking.
"An early election would be possible, but the least likely: the PM will likely be able to pass an agreement through parliament with opposition support, in turn generating strong incentives for a shift to a more moderate coalition within the existing parliament rather than a new electoral campaign following a painful compromise with European creditors," Deutsche Bank says, laying out the likely outcome if and when Greek PM Alexis Tsipras does finally accept an unpopular deal with creditors.
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For once Mario Draghi was right. A day after the European central bank head warned of a spike in volatility, volatility did just that, with markets everywhere from China to Europe seeing volatility explode.
Rinse and repeat, rinse and repeat, that’s the story of the ongoing financial crisis that surrounds Greece.
Greece, once again, is staring over the edge into the abyss and is facing imminent financial default, possible collapse and a system breakdown. That is, unless they can once again pull a rabbit out of their hat and stave off disaster for just one more month.
Most commentary still appears predicated on the idea that there will be some last-minute deal - either because the creditors will back down and give Greece some more money without requiring it to be paid back or because the Greek government will back down if it understands that not doing so would ultimately mean leaving the euro. On the other hand, some believe neither side is particularly interested in achieving a deal.
Following this evening's "private" meeting with Jean-Claude Juncker and Jeroem Dijsselbloem, Greek PM Alexis Tsipras once again admits that there is no deal. Both sides issued statements - The EU's was a 3 sentence boiler-plate; and Tsipras was a brief press conference on Greek TV. In the interests of clarity we provide the statements (and their actual translations from "we have nothing to say" to "this is what we are trying not to say.")