Alan Greenspan: "Greece Will Leave The Eurozone" And "There Is No Way That I Can Conceive Of The Euro Continuing"Submitted by Tyler Durden on 02/08/2015 12:03 -0500
"Greece will leave the Eurozone. I don't see that it helps Greece to be in the Euro, and I certainly don't see that it helps the rest of the Eurozone. It's just a matter of time before everyone recognizes that parting is the best strategy.... The problem is that there there is no way that I can conceive of the euro of continuing."
Update: And now this: "Moody's places Greece's Caa1 government bond rating on review for downgrade"
Europe has an unpleasant habit of dropping tape bombs at the most inopportune of times, like at 3pm or later a Friday. And while on Wednesday it was the ECB yanking repoable Greek collateral for local banks, today it was first S&P, which downgraded Greece 5 months after upgrading it, and moments ago it was none other than the Cyprus bail-in man himself, the Eurogroup's Dijsselbloem who just have Greece a 10 day ultimatum to fall into place or risk a terminal bank run and capital controls (both hinted at earlier by the post-DOJ settlement political "rating agency')
- GREECE MUST APPLY FOR BAILOUT EXTENSION ON FEB 16 AT THE LATEST TO KEEP EURO ZONE FINANCIAL BACKING -EUROGROUP CHAIRMAN DIJSSELBLOEM
This means that Greece now has 10 days, or until the Monday after next to decide whether it will stay in the Eurozone or Grexit.
Deflation remains the enemy thanks to debt, deleveraging, demographics, tech disruption & default risks. US aggregate debt is today a staggering $58.0 trillion (327% of GDP); the number of people unemployed in the European Union is 23.6 million; Greece has spent 90 of the past 192 years in default or debt restructuring. 7 years on from the GFC... The massive policy response continues. Central bank victory means that lower rates, currencies, oil successfully boosts global GDP & PMI’s in Q2/Q3, allowing Fed hikes in Q4. Bond yields would soar in H1 on this outcome. Defeat, no recovery, and currency wars, debt default and deficit financing become macro realities.
When the illusion that the Status Quo can fulfill all its promises to everybody dies, the Status Quo starts the terminal slide to effective collapse.
That didn't take long: just hours after Greece entered the ECB countdown mode, with now just 23 days until midnight on February 28, when the ECB is set to yank the final pillar of liquidity support, the ELA - as it has warned before - it is time to start contemplating Plan B, or rather plan Z. A plan, which as described by Nordea's analyst Jan von Gerich, would be quite unpleasant for that nearly extinct class of Greeks, bank depositors, because the "plan", or rather blueprint, is a well-known one: capital controls.
With an increasingly vitriolic tone, the new Greek government has come out swinging today with leader Alexis Tsipras making it clear that he will implement the election pledges the people of Greece voted for:
A NEW GREEK GOVT WILL BARGAIN TOUGH, AND PUT A FINAL END TO THE TROIKA AND ITS POLICIES, WE MANAGED TO DECONSTRUCT THE EUROPEAN STATUS QUO THAT WANTS MORE AUSTERITY AND LESS DEMOCRACY
"We will make the impossible, possible to turn things around in Greece" It took one week, Tsipras chides, to get European leaders to talk about the real problems and Greece will negotiate hard to "put an end to Troika," and "rebuild the country from the beginning."
And so another central bank admits defeat to the forces of market supply and demand.
SNB Said To Be Buying EUR Crosses In Aftermath Of ECB's Greek Fiasco; Europe Boosts Its Own Growth ForecastSubmitted by Tyler Durden on 02/05/2015 06:33 -0500
It becomes easier and easier to translate the propaganda of the One Bank (delivered by its messengers in the Corporate media) because the patterns of behavior of this crime syndicate continue to become more blatant/obvious.
The One Bank does not want to see any ‘defections’ amongst the member-states of the EU (i.e. any splintering of this totalitarian entity). The obvious reason for this is that the EU has morphed into a monetary straitjacket, as a single banking entity (the ECB) controls the printing presses of all EU states. To grasp the significance of this; we need merely refer back to the words of Mayer Amschel Rothschild (1744 – 1812), the original patriarch of the Rothschild clan, and architect of the One Bank.
The overnight session had been mostly quiet until minutes ago, when unexpectedly WTI, which had traded down as low as the mid $46 range following the weakest Chinese manufacturing data in two years, saw another bout of algo-driven buying momentum which pushed it sharply, if briefly, above $50, and was last trading about 2.6% higher on the day. In today's highly correlated market, this was likely catalyzed by a brief period of dollar weakness as well as the jump of EURCHF above 1.05, within the rumored corridor implemented by the Swiss National Bank, which apparently has not learned its lesson and is a glutton for a second punishment, after its hard Swissy cap was so dramatically breached, it hopes to repeat the experience with a softer one around 1.05. Expect to see even more FX brokers blowing up once the EURCHF 1.05 floor fails to hold next.
Tsipras already tipped his hand a few weeks ago...
Amid 'turmoiling' stock markets on Friday, CNBC's Simon Hobbs summed up the status quo's thinking on the new Greek leadership when he noted, somewhat angrily and shocked, "The Greeks are not even trying to reassure the markets," seeming to have entirely forgotten (and who can blame him in this new normal the world has been force-fed for 6 years) that political leaders are elected for the good of the people (by the people) not for the markets. Yesterday saw the clearest example yet of Europe's anger that the Greeks may choose their own path as opposed to following the EU's non-sovereign leadership's demands when the most uncomfortable moment ever caught on tape - the moment when Eurogroup chief Jeroen Dijsselbloem (he of the "template" foot in mouth disease) stood up at the end of the EU-Greece press conference, awkwardly shook hands with Greece's new finance minister, and whispered..."you have just killed the Troika," to which Varoufakis responded... "wow!"
At 30 basis points yield, a short on this German Bund via the futures market is basically a call option on the utter destruction of this Massive Yield Chasing Strategy on behalf of financial institutions...
Less than a week ago we warned, "today Athens, tomorrow Madrid," and sure enough, emboldened by the success of Syriza in Greece, the people of Spain have turned out in their tens of thousands in Madrid at a demonstration called by the insurgent Spanish leftist party Podemos. As The Independent reports, Podemos, which means "we can", has surged into first place in opinion polls in the few months since it was set up in the summer of 2014. It is now ahead of the centre-right Popular Party and centre-left Spanish Socialist Workers’ Party in many opinion polls. Podemos’s policies include a universal basic income, increased democracy, crackdowns on tax avoidance, and increased public control over the economy. Most worrying for the status-quo huggers in Brussels, Podemos has also wants to reform the European Union, describing the current euro arrangement as a "trap."
Rather than be a problem, Syriza may well be a solution, if it plays its cards right, but that still leaves politicians and investors denominating Tsipras et al as a problem, if not a menace. The world’s major banks got rich off the back of the Greek population at large, and when their wagers got so absurd they collapsed, the banks saw to it that their losses were transferred to European -and American – taxpayers. And those taxpayers are now told to vent their anger at 'those cheating, lazy Greeks'. The Troika, the EU, the IMF, and the banks whose sock puppets they have chosen to be, are a predatory force that has come a long way towards wiping Greece off the map. And that’s what Syriza has set out to remediate. And for that, they deserve, and probably will need, our unmitigated support.