A quick recap of the key implications of Friday’s Greek “deal”, and what it means for the future of the Eurozone, the common currency and capital markets.
"Are the playing cat and mouse?" Or, "Is this some form of brilliant display of game theory that we mere mortals can’t understand?" If it is borne out to be true that what is being reported throughout many media channels is the fact that Greece has indeed nearly forfeited all its positions in-turn for some changes in language as to appear they have indeed stood up to their nemesis “and won” will not only be disappointing, in our opinion it will embolden central bankers and Keynesian devotees everywhere to view the monetary world with even more self-aggrandized thoughts and actions.
An Egyptian student living in Milan, who walked around the city for five hours dressed as an imam, has released a video showing how he was insulted along the way. Dressed in an imam’s robe and carrying a copy of the Koran, Hamdy Mahisen made the video below, published by La Repubblica, as part of a social experiment to see how tolerant people in Milan are of Muslims. Along the way, he attracted odd stares and insults such as "Taliban shit!". One onlooker said, "Shit, have you seen the Isis?" while another remarked, "Imagine if he has a gun under his tunic".
Outlook for the US dollar and other markets in the week ahead.
Germany Gives Greece Just Enough Rope: Varoufakis Says If Troika Rejects Reforms "The Deal Is Dead And Buried"Submitted by Tyler Durden on 02/20/2015 23:28 -0500
Here is what Schauble meant when he said that the "Greeks Certainly Will Have A Difficult Time To Explain The Deal To Their Voters": under the conditionality of the Troika's approval, the Tsipras government now has to walk back essentially all the promises it made to the Greek people - promises which by some accounts amount to over €20 billion in additional spending - or the Troika, pardon Institutions, will yank the entire deal and the Grexit can then commence. And that's the bottom line. It's also the reason Schauble was gloating: because he gave the Greek government just enough rope with which to hang itself.
Just weeks before Mario Draghi's "whatever it takes" trillion-euro Q€ bond-buying-fest is set to come true, The ECB faces a problem they likely never expected - unwilling sellers. On the heels of our analysis showing central banks will monetize over 100% of government bond issuance this year, Reuters reports that mere weeks before the ECB begins their program, banks, pension funds and insurers across the continent are hoarding them for regulatory or accounting reasons. "We prefer to hold on to them," said Antoine Lissowski, deputy CEO at French insurer CNP Assurances. "The ECB's policy ... is reaching its limits now."
Right now there is a world war taking place right in front of us but all we see on cable news are the nightly military skirmishes on the periphery of the conflict. The real war is economic, financial and currency related and the empire is already over-extended in debt, military operations and financial manipulation. Surely the near-term dollar strength is evidence that while defeat is not imminent and that all markets can be manipulated for a season, ultimately real global market forces will prevail. Just remember that all empires eventually become over-extended financially, economically or militarily and the consequences of retribution and blowback are real and deadly to innocent populations.
The signals are clear: the world has already entered a downturn in economic activity. Therefore we can expect accelerated money-printing and the imposition of more negative interest rates in a forlorn attempt to avert economic reality.
Having, as we previously explained, been given 'just enough rope' by the Germans, we thought it worth looking at just what Greece capitulated on (or perhaps a shorter version - what they did not capitulate on) and how Tsipras and Varoufakis will sell this to their fellow politicians... and most of all people.
Shots Fired: Schauble Says "Greeks Certainly Will Have A Difficult Time To Explain The Deal To Their Voters"Submitted by Tyler Durden on 02/20/2015 15:53 -0500
Did anyone honestly not think the German finance minister would not have the final word?
GERMAN FINMIN SCHAEUBLE SAYS AS LONG AS THE PROGRAMME FOR GREECE ISN'T SUCCESSFULLY CONCLUDED THERE WILL BE NO PAYOUT
GERMAN FINMIN SCHAEUBLE SAYS 'THE GREEKS CERTAINLY WILL HAVE A DIFFICULT TIME TO EXPLAIN THE DEAL TO THEIR VOTERS'
Greek Finance Minister Yanis Varoufakis is holding a press conference to explain the decisions that led up to what by appearance seems to be a Greek fold...
VAROUFAKIS SAYS GREECE STOOD TALL DURING EUROGROUP TALKS
Just out from the Eurogroup, the final statement. Bottom line: Greece caves on pretty much everything, however it has two semantics successes: the dreaded "Troika" words has been replaced with "institutions" and "Current programme" has been changed to "Current arrangement" - surely nobody will notice. Sarcasm aside, Greece has just kicked the can for four months. Why four months? Because that's just ahead of the big Greek debt maturity.
Past: Scarily Prescient Analysis of @Grexit meets Present: Analysis of the Goldman Hedge meets Future: Goldman DisintermediationSubmitted by Reggie Middleton on 02/20/2015 15:12 -0500
A literal Tour de Force, likely the most indepth, practical analysis of the Grexit situation as you will ever read. This is why I like blogging... You can never find stuff like this in the mainstream media.
Update: EUROGROUP SPOKESPERSON SAYS AGREEMENT REACHED ON GREECE
While the Eurogroup will supposedly present a Greek deal in a few minutes some of the key terms remains undisclosed, and somewhat unexpectedly Reuters reports that Greece will have until Monday, which is a national holiday, to list the planned measures it intends to take. It is surprising that Germany has agreed to an open-framework of this nature, which also means that once the final momerandum is available, everyone will dissect the language to find out just who folded. So while we wait, the Eurogroup's press is said to begin momentarily. Watch it live below.