Tyler Durden's picture

Past Midnight Headlines From Greece Send zEURq.PK Tumbling

Nothing really new per se, just G-Pap reiterating, now that his meeting is finally over at about 2 am local, that the referendum will proceed as noted earlier, probably some time in January, and Europe will like it or leave it.


What? Or Else? And how does this mesh with the following headline from Bloomberg:

  • Netherlands Will Try to Get Greek Referendum Canceled, PM Says

At what point do the crazy pills run out already?

Tyler Durden's picture

Independent Strategy On "Greece The Ungovernable" - "Go short the euro and PIIGS debt — and hold on to your seats!"

The decision by Greek PM Papandreou to call for a referendum on the latest Greek bailout deal shows that Greece is becoming ungovernable. The PASOK leader made this decision because riots in the streets, increasing refusal by civil servants to implement the austerity measures and the likely loss of his majority in parliament made the survival of the government unlikely within weeks or months. So Papandreou has gone for broke. He hopes that by winning a vote on the bailout plan he can shut up the opposition both in parliament and on the streets. But this high-risk strategy threatens to bring the whole house of Euro cards down.

Tyler Durden's picture

Greece Sends Global Markets Into Tailspin Again: European CDS Spreads Demand Another Bailout

The futures are tumbling with U.S. futures falling in sympathy with plunge in European stocks; Italy’s FTSEMIB index down 5.3%, DAX down 4.4%, CAC down 4.3%, Spain’s Ibex down 4.1%, FTSE down 2.9%. But here is the true reason why Europe already needs another bailout, or the promises thereof, courtesy of those so vile CDS which no matter how hard it tries, Europe just can't kill:

  • Italy CDS Rise 45.5 bps to 491; update +53 495/505
  • France CDSs rise 14 bps to 190; update + 17 191/196
  • Spain CDSs rise 33.5 bps to 374.5; update + 41 375/385
  • Portugal CDSs rise 57 bps to 1,028; update + 71 1015/1055

The reason? Why Greece of course: the same referendum decision that it took the market yesterday 45 minutes to process before the sell off began.

Tyler Durden's picture

Euro Bailout Cracks Emerge; Greece "Just Says No"

When reporting on the announcement of the math-free deus ex machina bail out that was announced last night, which nobody still has any grasp over, but it had a "trillion" in there somewhere so that alone sent the market scurrying, we suggested that it would take about 24-48 hours for reality to start settling in.  It may have been considerably less. As the Telegraph reports, "A trillion euro bail-out to save the EU’s single currency is in danger of unraveling after Germany’s central bank warned that the rescue measure was too dependent on the high-risk deals that caused the economic crisis." So what did the Bundesbank do to send tremors that threaten to fracture the brittle nanometer ice-plated facade under which the most tempestuous riptide in European history is contained? Well, first it appears to have used a calculator, something nobody else in the European Council seems to be capable of. Second, it realized that heaping leverage upon leverage to fix a problem, something even a five year old (non-Ivy league trained) would tell you is lunacy, may not be the best approach to fix the problems at hand. "The concerns were led by Germany’s powerful central bank, which expressed fears that a plan to leverage a €440 billion eurozone rescue fund to amass a “fire power” of €1 trillion, or £880 billion, resembled the risky finance methods that triggered the crisis in 2008. Jens Weidmann, the president of the Bundesbank and a member of the European Central Bank, sounded the alarm over the plan to “leverage” the fund by a factor of four to five times without putting any new money into the pot. He warned that the scheme could be hit by market turbulence with taxpayers left holding the bill for risky investments in Italian and Spanish bonds." Does that mean that the "ironclad firewall" is neither "ironclad" nor walls off any fire? Especially since neither the object (Germany) of the bailout nor the subject (Greece) appear to have any desire to go along with the deus ex?

Tyler Durden's picture

As Greece Launches Latest 2 Day General Strike, Unions Warn Of Austerity "Death Spiral" - A Primer On Greek Politics

A few days ago we pointed out that Greece has now effectively shut down following a relentless barrage of strikes and occupations which not only have halted the economy, but now prevent the economy from even collecting tax revenues (one wonders if the country has finally borrowed the ink it needs to print tax forms, from Ben Bernanke). It appears the irony of the vicious loop whereby more austerity means more strikes, means less tax revenues, means bigger budget deficits, means more austerity, means even more strikes, has not been lost on the population, and now, according to Reuters, local unions warn that the country "risks sliding into a "death spiral" if the government continues to slash salaries and lay off workers instead of cracking down on tax evasion and raising money from the rich, the head of the biggest public sector union said Tuesday. "This will exacerbate recession, unemployment and state revenues will continue to fall, creating a death spiral. It must not continue," Tsikrikas told Reuters in an interview and urged lawmakers to reject the package when it is voted in parliament Wednesday and Thursday." He is right, and unfortunately for him, as the attached Nomura primer on near-term Greek politics indicates, both parties have no upside in severing monetary ties with Europe and realize all too well that unlike what G-Pap is saying, specifically that the country is being held hostage by strikes and protests, it is Greek strikes and protests that are holding Europe and its taxpayers hostage. However, since productive Europeans have no problem with that, it will continue indefinitely, even as the Greek economy grinds to a halt and nobody does or produces anything, and the entire country becomes a permanent ward of the European state, receiving its bi-monthly IMF bail out funding which in turn is flipped right back and used to pay off European bank interests. Rinse. Repeat.

Phoenix Capital Research's picture

Forget Greece, EUROPE is Finished

Greece is not the issue here. The issue is that Europe as a whole is broke, facing massive unfunded liabilities, and running out of viable creditors to band-aid its banking crisis. We are literally talking about a banking system collapse over there.


testosteronepit's picture

Greece's Extortion Game

"Tax fraud is a national plague," said Greece's finance minister after he found that Greeks owed $50 billion in back taxes. But it's complicated....

Tyler Durden's picture

Put A Fork In It: Greece Effectively Shuts Down As Finance Ministry To Begin 9 Day Strike

Remember the country that started it all yet was "so small nobody should worry about it." Well, it turns out its size was juuuuust right, and while the Eurozone is now fighting contagion fires everywhere up to and including the heart of the core (thank you most-bailed-out-by-the-Fed-bank Dexia), Greece still has yet to see any benefits whatsoever from all the so called bailouts, including the 5 previous tranches from the US taxpayer funded IMF. Well, it appears Greece has effectively shut down, after the country's Finance Ministry - the nerve center coordinating not only the country's economy but its continued bailout requests, has announced the start of a 9 day strike beginning October 17. May as well call it indefinite, and may as well put a fork in it.

Tyler Durden's picture

Troika Releases Statement On Greece: Commentary Attached

Summarizing the Troika'a statement, with some gratuitous commentary

  • Sixth tranche depends on Eurogroup, IMF approval: the use of Greece as a passthru vehicle for Eurobank funding will continue until morale and bank CDS improve
  • Troika says Greek recession to be deeper than anticipated, 2011 fiscal target no longer within reach: the 50% negative revision in deficit to GDP in the past month has been duly noted
  • Recovery only expected from 2013 onward: when it will be Bundesrepublik Griechenland
  • Privatization revenue below expectations: must sell more islands to the Chinese, more gold to Qatar
  • Additional Greek measures likely needed; essential more emphasis placed on structural reform - back in the day "freefall bankruptcy preparation" was not called "structural reform"
  • Greece needs additional measures for 2012, 2014 - must be certain future penetration can proceed absent lubrication
  • Greece overall made important progress - riotcam viewership is now PeyPerView and is used to pay for G-Pap's 3rd winter vacation
Tyler Durden's picture

Guest Post: How To Explain Greece To A Complete Idiot / Politician

Dexia passed summer bank stress tests with flying colors. A couple of months later it’s going bust. How can markets function without confidence in balance sheet accuracy? Or whether a government will even be around tomorrow? This is kind of a problem when sovereign debt is the cornerstone of the financial system… And yet, stock markets worldwide surged today on the news of a European ‘pledge’ to help banks. Do yourself a favor and stop watching their lips move. These ‘plans’ are nothing more than lies and misdirection. Just like our friend George, a Greek default has to happen.  Politicians can pretend whatever they want, but in the real world where we live, financial deadbeats have no other options.

testosteronepit's picture

Greece 'Finds' Treasure, Stays Solvent For Another Month

Financial shenanigans by the Greek government don't surprise anyone anymore ... until there's something that surprises everyone.

Tyler Durden's picture

Things About To Turn Violent Again - Greece May Mobilize Police Against Striking Students And Teachers

Even as the three bureaucratic stooges from the Eurogroup mumbled something or another about kicking the Greek can down the road in the just concluded press conference indicating that Finland will indeed get the Greek collateral its desires, only it will be in the form of worthless Greek bonds that can not be touched for 15 or so years, we have a feeling that Greek society may soon take matters into its own hands, and with quite a terminal outcome at that. According to Kathimerini, the Deputy Education Minister Evi Christofilopoulou (henceforth known simply as Lud-E-Chris) has "suggested" that the police be mobilized to break up "hundreds of sit-ins at schools on Monday a few hours after hundreds of pupils protesting cutbacks clashed with riot officers in central Athens." And if people think that our own version of occupational protests is troubling, just wait until a country's protesting student body comprehends that its country has just sicced the police force against it.

Tyler Durden's picture

Greece To Miss Budget Deficit Targets, As Usual, While Qatar Prepares A Bailout Pennies-For-Gold Swap

As the Greek parliament meets to finalize huge public sector job cuts, Reuters is reporting that Greece will miss the deficit targets set in its EU/IMF bailout this year and next... We would say "again" but at this point "as usual" makes far more sense, Why this should come as a surprise to anyone is beyond us but the next steps by the Troika (as again and again targets are not met and yet still bank-extending-and-pretending-funding is provided) will be fascinating as they switch from carrot to stick and back to carrot perhaps. Assuming, of course, the "wildcat strikes" at any and all government institutions by government workers about to be sacked, allow Troika member access at some point in the near to long-term future. Although using numbers conceived on napkins as a replacement will be nothing new to either Greece, Eurostat or the Troika. Add to this the comment from the Deputy Leader of the CSU (one of Merkel's tri-party coalition) that Greece would find it easier to recover outside the currency bloc and rhetoric remains high, as do expectations for an inverse surge in the EURUSD at open in a few hours. The biggest winner: Qatar which just snuck in some recycled petrodollars into Greece, which will last the kleptocorrupt government about 1 week, in exchange for Greek gold.

Tyler Durden's picture

100% Debt Discharge Decision In Greece Sets Troubling Precedent For Local Banks

A very disturbing precedent, for the already frayed domestic financial system, was set in Greece over the past few days, where as the linked story from explains, an unemplyed Greek woman who owed a little over 26,000 euros to two banks, Eurobank and National, received a full debt discharge on her outstanding loans. As the blog logical concludes, this decision will probably be adhered to in thousands of similar cases. Furthermore, it should be noted the woman had a perfect payment record for 18 years, and only fell behind when she lost her job. Imagine the sheer panic that would ensue if a comparable legal decision vis-a-vis ordinary consumer debt were to occur in the US - that would be a supreme court resolution for the ages. In the meantime in Greece, a one-two punch arrives: deposits being drained and moved overseas, and bad loans being outright erased from the balance sheet by court order. At least both sides of the balance sheet are declining so there will be no way for banks to fudge their capitalization and make it seem that loan writedowns are actually a beneficial thing for book equity.

testosteronepit's picture

Reform Rebellion In Greece

As demands to bail out Greece wash over Europe, Greek society digs in its heels, and Greek ministries just pulled the rug out from under their prime minister.

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