European Central Bank

While Greek PM Alexis Tsipras is busy figuring out how best to go about pushing the "deal" he reached on Monday morning in Brussels through parliament, EU finance ministers are scrambling to put together billions in bridge financing that will hold Athens over until the activation of the ESM program which is likely at least four months away. Although it's as yet unclear which "least bad" option is preferable for Greece's external debt, Wolfgang Schaeuble has an idea for how the country might pay public sector employees.

• Greek lawmakers split over bailout as vote looms (Reuters)
• Greek Bailout Rests on Asset Sale Plan That Already Failed (BBG)
• Greece Needs $25 Billion to Get Through August, Scicluna Says (BBG)
• Tsipras Enters Parliament Den to Sell Aid Deal to Greeks (BBG)
• Greece makes samurai bond repayment (FT)
• Iran, World Powers Have Reached Nuclear Agreement (BBG)
• Janet Yellen’s Fed Flounders in Political Arena (WSJ)

One of the preconditions imposed on Greece for a deal is that it signs into law European rules that would put euro zone authorities at the ECB and in Brussels, rather than Athens, in charge of identifying and closing or breaking up sick banks. This in turn could lead to a shake-up of the sector that could see some banks close, with losses pushed onto bondholders and possibly even large depositors. In such circumstances, there would be little that Athens could do to prevent this.

The new Greek deal is "absolutely impossible, totally non-viable and toxic …[they were] the kind of proposals you present to another side when you don’t want an agreement." Speaking with The New Statesman, former Greek FinMin Yanis Varoufakis blasts Wolfgang Schaeuble's position which will lead to "a humanitarian crisis" for Greece and warns, regarding this latest creditors' proposal, "if anything it will be worse [for the Greeks]." His conclusion is succinct, "we were set up...," Merkel and Schäuble’s control over the Eurogroup is absolute, and that the group itself is beyond the law.

Me: How are the talks going?
EU source: "Shitty."
Me: "Getting more shitty or less?"
Source: "Pretty steady level of shittiness

There is democratic capitalism, and there is fascist capitalism. What we have today is fascist capitalism; and the following will explain how it works, using as an example the case of Greece. Simply out - The whole system is a money-funnel, from the public, to the aristocracy.

Facing abject humiliation at the hands of the German finance ministry, Alexis Tsipras arrived at Sunday’s Eurosummit a broken man. Still, the PM did his best to fight the good fight, debating both the IMF's role in the third Greek program and the treatment of the country's debt with German Chancellor Merkel late Sunday evening in Brussels. 

This weekend's events in Europe have clarified who is really running the show across the 'union'. Hans-Werner Sinn, Chairman of the Ifo Institute for Economic Research, vehemnt euroskeptic, and head of the so-called 'five wise men' advising the German government and specifically Angela Merkel, confirmed his call from 2012 for a "temporary grexit from the euro." The right wing economist previously explained "Greece and Portugal have to become 30-40% less expensive to be competitive again. This is being attempted through excessive austerity measures within the euro zone, but it won't work. It will drive these countries to the brink of civil war before it succeeds. Temporary exits would very quickly stabilize these countries, create new jobs and free the population from the yoke of the euro." Anyone positioning for more centrist union-supporting rhetoric, hope is no longer a strategy as the hardest conservatives are now in charge.

Next week's key events and data, if we can look beyond Greece and China.

It was a weekend in which, according to traders, Greece facing an "absolutely final" was going to be saved. Instead, it may go down in history as the weekend in which the Eurozone finally split and its long-overdue disintegration began.

Every nation has a right to defend itself against attack – financial attack just as overt military attack. That is an essential element in the principle of self-determination. Greece, Spain, Portugal, Italy and other debtor countries have been under the same mode of attack that was waged by the IMF and its austerity doctrine that bankrupted Latin America from the 1970s onward. International law needs to be updated to recognize that finance has become the modern-day mode of warfare. Its objectives are the same: acquisition of land, raw materials and monopolies. A byproduct of this warfare has been to make today’s financial network so dysfunctional that nations need a financial Clean Slate.

"With the drastic fall in share prices recently, social stability is clearly at stake," Credit Suisse says. With the bubble now finished it is only a matter of time before all the 'nouveau riche' farmers and grandparents see all their paper profits wiped out and hopefully go silently into that good night without starting mass riots or a revolution.

The global and European economies are increasingly dominated by bureaucrats taking arbitrary decisions on capital allocation, with little regard for rules or process. The decisions of the ECB to reject the applications of the Bank of Greece for additional funding under ELA could have only been politically motivated, and therefore in clear violation of the ECB’s independence as enshrined in Article 123 TFEU. It is time for EU bureaucrats to stop acting as autocrats.

When the going gets tough, the taxed get going and that is what Nobel Prize winning economist Joseph Stiglitz thinks should happen. In a Time op-ed, Stiglitz warns (likely correctly) that if Greece continues with austerity, it would be depression without end; and so his solution is simple... "The U.S. was generous with Germany as we defeated it. Now, it is time for the U.S. to be generous with our friends in Greece in their time of need, as they have been crushed for the second time in a century by Germany, this time with the support of the troika." Strawman much?