Creditors

Frontrunning: July 6

  • Greece Bailout Referendum: They Voted ‘No’. Now What? (BBG)
  • Varoufakis Quits as Greece Enters New Showdown With Europe (BBG)
  • Merkel to Meet Hollande as Greece Told to Make Next Move (BBG)
  • German line hardens after Greek referendum 'No' (Reuters)
  • BOJ keeps rosy view of regional Japan, watching markets after Greek upset (Reuters)
  • Oil falls on Greece vote, China stock market turmoil (Reuters)
  • China Urges U.S.-Iran Compromise 36 Hours to Nuclear Deadline (BBG)
  • U.S. and Iran: the unbearable awkwardness of defending your enemy (Reuters)

All The Latest Greek Headlines

With the only thing that matters in the hours ahead, at least until China reopens and the Pandamonium repeats, is the sheer chaos out of Greece which now literally changes the narrative by the minute, here is a convenient timeline of everything that has happened so far this morning starting with Varoufakis' unexpected resignation and going from there.

Tumbling Futures Rebound After Varoufakis Resignation; Most China Stocks Drop Despite Massive Intervention

More than even the unfolding "chaos theory" pandemonium in Greece, market watchers were even more focused on whether or not China and the PBOC will succeed in rescuing its market from what is now a crash that threatens social stability in the world's most populous nation. And, at the open it did. The problem is that as the trading session progressed, the initial 8% surge in stocks faded as every bout of buying was roundly sold into until every other index but the benchmark Shanghai Composite turned sharply red.

Greece Contemplates Nuclear Options: May Print Euros, Launch Parallel Currency, Nationalize Banks

According to Telegraph's Ambrose Evans Pritchard who quotes what appears to be a direct quote to him from Yanis Varoufakis, Greece will, "If necessary... issue parallel liquidity and California-style IOU's, in an electronic form. We should have done it a week ago." Hardliners within the party - though not Mr Varoufakis - are demanding the head of governor Stournaras, a holdover appointee from the past conservative government.  They want a new team installed, one that is willing to draw on the central bank's secret reserves, and to take the provocative step in extremis of creating euros.

More Sellside Reactions To The Greek Referendum

Today, Greeks sent a resounding message to Brussels, Frankfurt, and Berlin that they are not willing to acquiesce to further humiliation at the hands of creditors. Now, a stunned sell-side — which had, over the past three months, very carefully tweaked their base cases to reflect the growing risk of Grexit — is scrambling to explain to nervous clients what happens next.

The "Nightmare Of The Euro-Architects" Is Coming True: JPM Now Sees Grexit, Eurogroup "Split In Coming Days"

Perhaps the best summary - or epitaph, some would say - of the shocking events that took place in Greece this afternoon, and the resultant falling dominoes that are about to be unleashed, was given by Slovakia's finance minister Peter Kazimir, who summarized events as follows: "The nightmare of the 'euro-architects' that a country could leave the club seems like a realistic scenario after Greece voted No today."  So here is JPM's Malcom Barr with the bank's latest take on Greece which is that at this point, a Grexit is JPM's "base case"... and it only goes downhill from there.

Greek PM Calls Emergency Meeting For Bank Liquidity: MNI

Congratulations Greece: for the first time you had the chance to tell the Troika, the unelected eurocrats, and the entire status quo establishment, not to mention all the banks, how you really felt and based on the most recent results, some 61% of you told it to go fuck itself. Now comes the hard part.

A "No" Victory Appears Probable: What Happens Next According To Deutsche Bank

  • N1 – Soft deal: The most unlikely scenario is that the euro-area partners offer a much softer programme to Greece.
  • N2 – Default-and-stay: Moderately less unlikely is a scenario where Greece defaults but stays in the euro thanks to a direct recapitalisation of Greek banks by the euro-area partners, with the Greek government using only domestic resources for the country’s fiscal needs.
  • N3 – New deal: The third scenario is one in which the rising economic and political cost of a closed banking system results in the Syriza government being replaced by a new government of national unity and a new deal with creditors being reached.
  • N4 – Grexit: In our view, Grexit and Scenario N3 are the most likely – with about equal probabilities.

Will Greek Depositors Under €100,000 Be Spared In Case Of A "Bail-In"

"Could deposits below €100k be protected as it happened in Cyprus? The answer depends on the total amount of deposits above €100k. If there are enough of these large deposits above €100k, then most likely any required deposit haircut will be inflicted on these depositors only. There are no recent data on how big this universe of large deposits is. The most recent data from the European Commission suggest that at the end of 2012, covered (i.e. those below €100k) represented 75% of eligible Greek deposits. We suspect this number is now significantly higher leaving little room for depositors with less than €100k to be spared."