France

As Stalin said, “Those who vote decide nothing. Those who count the vote decide everything.”

"Merkel's fear was that Athens would be unable to overcome its problems even with an additional haircut, since it would not be able to handle the remaining debt... Within the German cabinet, Finance Minister Wolfgang Schnaeuble alone continued to strongly back another haircut... with IMF Managing Director Christine Lagarde described as undecided on the issue."

It appears the sovereign peoples of Europe would not go gently into a Federal States of Europe night. Investors need to prepare for the inevitable political solution: referendums across Europe on the constitution of the Federal States of Europe needed to sustain the Euro. Events this weekend will trigger the search for the democratic legitimacy for the single currency and the centralised constitution it requires... or the demise of the unelected 'king Juncker' and 'queen Lagarde' of the Federal States of Europe.

It would appear the most transparent administration ever is in trouble with an 'ally' once again. Following its wrist-slap from France last week, and its previous quasi-admission of spying on Merkel and her senior officials (which we are sure President Obama said would never happen again - better to ask for forgiveness than permission?), The Guardian reports Angela Merkel’s chief of staff has asked the US ambassador for a meeting to discuss the latest reports of alleged US spying on Germany.

If it was Greece's intention to crush the Chinese stock market instead of Europe's, well - it succeeded.  Because despite the PBOC and politburo throwing everything but QE at the stock market, China stocks closed down sharply on Thursday after another wild trading day as investors shrugged off regulators' intensified efforts to put a floor under the sliding market, by cutting trading fees and easing margin rules, which has now crashed 25% in about two weeks wiping out $2.5 trillion of the peak $10 trillion in Chinese stock market cap as of June 14. This ultimately resulted with the Shanghai Composite closing under 4000 for the first time since April.

"...won’t a successful Greece show others that — much as many young people who cannot afford to pay their rent return home — they, too, can return to the way things used to be?..."

Simply put -  Europe can't 'afford' anything positive to come of Greece...

So much going on that by the time an article is prepared, everything has changed and it has to be scarpped. But, in any event, here is an attempt to summarize all that has happened in another turbulent overnight session.

The EU is blowing up itself by trying to exert far too much influence on the very member nations that made its existence possible. Brussels is a blind city. It will take a lot of pain, and probably even the very wars the EU was originally founded to prevent, to figuratively burn it to the ground.

With massive strikes in France and now drivers shooting passengers, Uber is making headlines everywhere. While some might say any publicity is good publicity (and any disruption is good disruption), for the firm valued at $50 billion (with a stunning operating loss of $470 million and revenues of only $415 million) perhaps there is a limit to both press and disruption...

Europe is imposing capital controls…  next up will be border controls.

• EU in last-ditch bid to Greece, urges "yes" vote to bailout (Reuters)
• In? Out? In between? A Greek legal riddle for EU (Reuters)
• Tsipras Says EU Won’t Eject Greece as Cost ‘Immense’ (BBG)
• Empty Greek ATMs Force Tourists to Stiff Santorini Cabbies (BBG)
• Anti-austerity protests in Greece as bank shutdown bites (Reuters)
• Puerto Rico governor calls for bankruptcy; adviser says island 'insolvent' (Reuters)
• Puerto Rico Urges Concessions From Creditors (WSJ)
• Hilsenrath - For Fed to Delay Rate Hikes, Global Tumult Would Need to Infect U.S. (WSJ)

Moscovici who served as French finance minister until 2014 and then became European commissioner for Economic and Financial Affairs, Taxation and Customs, used some very colorful language, i.e., the French economic situation was "worse than anyone [could] imagine and drastic measures [would] have to be taken in the next two years”. 

It seems Goldman Sachs' conspiracy theory was right all along...

ECB'S COEURE SAYS ECB IS EVEN READY TO USE NEW INSTRUMENTS, WITHIN ITS MANDATE
GREECE COULD EXIT EURO, COEURE SAYS IN LES ECHOS INTERVIEW

This is exactly what The ECB wanted all along (and their leaders overlords) - all they needed was an 'excuse'. Or, in the parlance of Rahm Emanuel's times, "Let no Greek default crisis go to QE waste."

At the open, Europe looked in the abyss, and with no help coming from China, it did not like what it saw: And then the answer came from the Swiss National Bank, which stepped in to prevent the collapse just as Europe was opening. Because seemingly out of nowhere, a tremendous bid came in to life the EURCHF, buying Euros (against the CHF and the USD) and selling Europe's last left safety currency. We now know that it was the SNB, the same central bank which is the proud owner of well over $1 billion in Apple stock.

It appears Greece matters after all - US futures are tumbling, Japanese stocks are tanking (as JPY is bid on mass carry unwinds), Chinese stocks are limit down and collapsing.. and now European equity futures are open and in free-fall. Bunds are well bid, down 20bps to 72bps. Peripheral bonds are being dumped (contagiously).

*EURO STOXX 50 FUTURES FALL 7% AT MARKET OPEN
*ITALIAN BONDS DECLINE WITH 10-YEAR YIELD RISING 57 BPS TO 2.72%