Reuters

While by now virtually everyone around the world is intimately familiar with the nuances of Greek electoral law, knows the names of Greek politicians better than of those at home, and is all too aware of the broader media propaganda that unless Greece does as the banks demand the world as we know it will end, one aspect of the Greek collapse into hell has gotten lost: the complete failure of the Greek healthcare system. As the following Reuters report shows, regardless of the outcome on Sunday, it just may be too late to preserve the future of Greek sickcare, and with that, of the entire population: "The country's state hospitals are cutting off vital drugs, limiting non-urgent operations and rationing even basic medical materials for exhausted doctors as a combination of economic crisis and political stalemate strangle health funding. "It's a matter of life and death for us," said Persefoni Mitta, head of the cancer patients' association, recounting the dozens of calls she gets a day from patients needing pricey, hard-to-find cancer drugs. "Why are they depriving us of life?"" They are depriving of you of life, Persefoni, because in old times, when a given country was enslaved, there was a specific aggressor that the people could revolt against. Now, when the slave-master is debt, and thus one's own desire to live beyond their means, it is far more difficult to look in the mirror and to revolt against what one sees. Which is why, one day at a time, the Greek civilization will continue to suffer the terminal consequences of infinite debt serfdom, until finally, after two thousand years, it no longer exists.

• Greece is Relevant: Central Banks Warn Greek-Led Euro Stress Threatens World (Bloomberg)
• Greece is very Relevant: World Economies Prepare for Panic After Greek Polls (Reuters)
• ECB's Draghi flags euro risks, spurs rate cut talk (Reuters)
• And as usual, beggars can be choosers... Hollande Urges Common Euro Debt, Greater ECB Role (Reuters)
• Wait and flee - Electoral uncertainty sends the economy into suspended animation (Economist)
• The EU Smiled While Spain’s Banks Cooked the Books (Bloomberg)
• Osborne’s £100bn Plan for UK Economy (FT)
• Two Cheers for Britain’s Bank Reform Plans: Martin Wolf (FT)
• BOJ Holds Policy Ahead of Greek Vote with Eye on Global Markets (Bloomberg)
• China Hits Back at U.S. Criticisms at WTO (Reuters)

Tony Robbins warned about the risk of dollar devaluation and spoke about the opportunities in gold

"The most important election this weekend may have nothing to do with the Eurozone - at least directly. The election in Egypt may change the face of the Middle East. The implications to Israel, Iran and Saudi Arabia are enormous. Will the most populous Arab nation become a theocracy? This will be some weekend."

All you need to know.

There was a time in 2011 when every European auction, particularly those in Spain and Italy, was followed with great interest due to a morbid fascination that it may well be their last. In 2012 this time has come much faster than last year. Earlier Italy sold a total of €4.5 billion in 3, 7and 8 year bonds which was at the top end of the range of expected issuance. The problem was in the unsustainable yields this debt sold for:

• €3 billion in 2015 bonds, B/C 1.59 vs 1.52 in May 14, yield soared to 5.30% vs 3.91% a month ago
• €627 million in 2019 bonds, B/C dropped from 2.27 on April 27 to 1.99; yield soared from 5.21% to 6.10%
• €873 million in 2020 bonds, B/C dropped from 2.08% on May 14 to 1.66%, yield soared from 5.33% to 6.13%

Yesterday, we did an update of the Greek bank jog, when noting that between €100-€500 million per day was being withdrawn from Greek banks based on Kathimerini reports. 24 hours later the jog has become a trot with the most recent estimate from Reuters now estimated at nearly double: "Combined daily deposit outflows from the major Greek banks have reached 500-800 million euros over the past few days, with the pace picking up as the election draws closer and rising noticeably on Tuesday, two bankers said." This is roughly $1 billion a day in the upper case, and a number that is approaching 0.5% of the entire documented €170 billion (now likely much less) deposit base.

Gold rose $11.40 or 0.71% yesterday in New York and closed at $1,611.60/oz.  Gold started out trading sideways in Asia and then edged up in early European trading.  

• How original: Syria prints new money as deficit grows (Reuters)- America is not Syria
• Former SNB head Hildebrand to become BlackRock vice chairman (FT)
• Osborne says Greece may have to quit euro (Reuters)
• Osborne Risks the Wrath of Merkel (FT)
• China second-quarter GDP growth may dip below 7 percent - government adviser (Reuters)
• Italian Borrowing Costs Surge at Auction of 1-Year Bills (Bloomberg)
• Greeks withdraw cash ahead of cliffhanger vote (Reuters)
• Merkel’s Choice Pits European Fate Against German Voter Interest (Bloomberg)
• Italy Tax Increases Backfire as Monti Tightens Belts (Bloomberg)
• Dimon says JPMorgan failed to rein in traders (Reuters)

All you can read.

Yesterday, Reuters royally spooked the market when it announced that Europe is in all seriousness considering full blown capital controls, including border halts and ATM closures. Subsequently, various European talking heads aggressively tried to talk down this latest development. However, overnight Saxo Bank appears to have focused on the former and not the latter, and sent out an email with the following key text: "Due to the current market environment in Europe, Saxo Bank is adjusting the margin requirement for Swiss Franc (CHF)." Specifically, the margin is going from 1% to 2% on June 14, to 4% on June 21. How soon until margins become so high that they effectively act as an FX trading prohibition- i.e., an implicit "capital control", and how long until all other exchanges get the memo next?

Turkey remained the world's number one minter of gold coins in 2011. There is an increasing tendency for gold bars to be retail investors' vehicle of choice – although gold coins still retain a majority market share. Turkish people can pay in gold in certain foreign exchange houses and most jewellers will accept gold as payment. Turkish banks are is now offering digital gold saving accounts. Turkey expanded its gold reserves by 29.7 metric tons in April. Turkey’s bullion reserves climbed to 239.3 tons last month meaning that Turkey increased their gold reserves by 14% in April. The central bank on March 27 doubled the share of lira reserves banks can hold in gold to 20%, saying it would provide 6.1 billion liras ($3.3 billion) of extra liquidity. "This addition," the WGC says, "was the result of a policy change under which the central bank will now accept gold in reserve requirements from commercial banks to help the banks utilize their gold in managing their liquidity." Some analysts have suggested that the increase in Turkish gold reserves, as reported by the IMF, may actually be a form of “double accounting”. Whereby the gold held in Turkish banks client’s gold account is transferred from the local bank as a reserve to the central bank, from where it then figures as gold reserves.

All you need to know.

• J.P. Morgan Knew of Risks: Warning Flags Raised Two Years Ago About CIO (WSJ)
• Cyprus Poised to Seek Bailout within Days (FT)
• U.S. Exempts India, South Korea From Iran Oil Sanctions (Bloomberg) - so those countries who need Iran crude?
• Barroso Pushes EU Banking Union (FT)
• Hollande Set for Poll Victory (FT)
• Fed Says U.S. Wealth Fell 38.8% in 2007-2010 on Housing (Bloomberg)
• Fed Officials Amplify Concerns over Europe (Reuters)
• Fed's Lockhart Says Lower Yields Bolster Case for No New Action (Bloomberg)

And just as ISDA was starting to become somewhat credible again, we get this from Bloomberg:

• Spanish CDS Trigger Unlikely on Subordination, Says ISDA *Dow Jones

So..... Subordination? Thank you ISDA for confirming that the true reason of today's sell off has now been enacted.