European Central Bank
This is what peak bluffing looks like. Moments after there was much hope for a deal, suddenly ze Germans yanked the carpet from under any potential leverage Greece may have though it had when the Maltese foreign minister said:
- GERMAN-LED BLOC WILLING TO LET GREECE LEAVE EURO, SCICLUNA SAYS
- "I think they’ve now reached a point where they will tell Greece if you really want to leave, leave"
This in turns follows minutes after a Spigel article said that the ECB prepares for Greek euro exit.
Official Greek deposit data began tumbling in December (outflows around EUR3bn), and accelerated in January in the run up to the Syriza election (proxied by JPMorgan at over EUR 12bn). During the last two weeks, however, the absence of ATM lines and visible bank runs has been curiously lacking as, at least on the surface, there appears to be no panic. However, as Dody Tsiantar reports, sources in the Greek banking sector have told Greek newspapers that as much as EUR 25bn euros have left Greek banks since the end of December with outflows surging this week. Perhaps they are getting anxious that authorities will take Cypriot advantage of the Bank Holiday that is planned in Greece on Monday.
Very few, it seems...
While the ECB is responsible for determining the euro-zone's supply of bank notes, it doesn't actually print them; instead it outsources the work to central banks of a few euro-zone countries (one of which is Greece). As WSJ reports, the Greek central bank's bank-note printing facility is called IETA. Built in 1941, the Attica plant today is outfitted with "state-of-the-art machinery," and has been responsible for printing batches of €10 notes, according to the ECB. One wonders how tempted the Greeks will be to take matters into their own ink-stained hands, should the ECB/Germany/Eurogroup pull the plug without acquiescing to their non-ultimatum "take it or leave it" offer...
In its role as global hall monitor, Washington appears to have jabbed its nose into the Greece-EU talks:
*LEW SPOKE WITH SAPIN, DIJSSELBLOEM, VAROUFAKIS TODAY: OFFICIAL
*U.S. URGES SIDES IN GREEK TALKS TO TONE DOWN RHETORIC: OFFICIAL
Treasury Secretary Lew "urges compromise" and explains he is in touch with Eurogroup, IMF, and Greece putting the onus back on Varoufakis' shoulders by urging them to reach a deal of face additional hardhsip.
Here's a plan where the drachma will be more desirable than the euro after Greece defaults on anything euro denominated and backs its redeemable drachma with fractional gold. Upon default euros drop, drachma pops!
- Greece requests euro zone loan extension, offers big concessions (Reuters)
- Germany Rejects Loan Request Saying Greece Must Meet Conditions (BBG)
- Did the Fed Just Enter the Currency Wars (BBG)
- French consumer prices fall for first time since 2009 (Reuters)
- Oil falls sharply after U.S. crude inventories rise (Reuters)
- High-Speed Firm Virtu Revives IPO Plans (WSJ)
- Fed Tiptoes Into Rate-Hike Debate (Hilsenrath)
- Rajoy’s Nemesis Is Back: Anti-Graft Editor Targets Vote (BBG)
With the world's oldest central bank - Sweden's Riksbank - taking the plunge into negative rates, there have been 19 'eases' by central banks this year, Morgan Stanley warns of "ghosts of the 1930s." With competitive 'easing' stoking fears of international currency wars, The Telegraph notes however that looser monetary policy is not the order of the day everywhere in the world, and herein lies potential danger for the world economy.
One thing is becoming clear: Greece will almost certainly not last until the proverbial D-Day on February 28 before it either i) runs out of money, ii) is forced to sign a "bailout extension" deal with the Eurogroup thus crushing its credibility with the people, or iii) exits the Eurozone. Needless to say, two of the three above options are very unpleasant for Greek savers, assuming any are left. And it is those savers that the Eurozone is directly targeting when it does everything in its power to provoke a bank run with statement such as these: "The situation of the banks is getting more and more difficult every day," said a European official. "In the end, in order to safeguard the banking system, capital controls will probably have to be imposed."
Here comes the strawman we've all been waiting for: "Greek deposit withdrawals picked up after talks between Greece and its euro-area creditors on extending its bailout ended in acrimony in Brussels Monday night, said the people, who asked not to be identified because the information is private. The ECB will likely provide ELA to Greek banks as long as there is a chance of an agreement between Greece and its creditors to extend the current bailout, economists at Barclays Plc including Antonio Garcia Pascual and Thomas Harjes wrote in a client note after the meeting ended Monday. If Greek authorities don’t take up euro area finance ministers’ offer this week, ELA funds to Greek banks would likely be shut down, they wrote."
The chances of Greece being forced out of the euro zone have risen but a compromise agreement between Athens and its European partners is still possible, Greek media and investment banks said on Tuesday.
In case anyone didn’t get ISIL’s message from their latest video in which 21 Egyptian Coptic Christians have their heads sawn off, here it is: “We’re executioners, not warriors.” The Big Prize, of course, is the grand fortress of Saudi Arabia. The kingdom is surrounded by Islamic maniacs now and if Saudi Arabia falls apart, it’s game over for modern life as the West has known it (and much of Asia now, too). But Europe is a gigantic debt minefield that no one can really walk across. Other parts of it than Greece are just waiting to blow up, and will, and it’s unclear whether Europe is even paying attention to the blood-red welcome mat that was laid out in Libya last weekend.
There is a saying: "strike while the rehypothecated iron is hot", and nobody is better at it than Germany, which hours after the latest disappointing Eurogroup summit failed - again - to reach a solution on the third iteration of the Grexit dilemma, has decided to pour even more gas on the fire in the form of infamous Euroskeptic, the president of the Ifo Institute for Economic Research, Hans-Werner Sinn who in an FT op-ed beckons someone, supposedly Europe's federalist, if non-existant, powers which in the mind of the German have control over Greek sovereignty, to immediately 'impose capital controls in Greece or repeat the mistake of Cyprus."
"European leaders resolved a bitter financial dispute with Greece today, paving the way for Spain and Portugal to join the Common Market at the start of next year. Prime Minister Andreas Papandreou of Greece had threatened to veto an agreement reached this week on Iberian membership unless the other nine members gave Greek farmers $2 billion in special subsidies to help them compete with Spain and Portugal. But after two days of negotiations at a European Economic Community meeting here, Greece was persuaded to accept about $1.4 billion in new agricultural aid in return for lifting its veto threat."
- March 31, 1985
Straight-forward discussion of the international climate.