Greek Stocks Enter Bear Market As Privatization Program Crashes But Does Not Burn

Tyler Durden's picture

"It all began with Greece," and as Mark Grant notes today, "somebody, somewhere is going to take a hit." It appears the 'news' is piling up thick and fast in the 'islands' nation. As Reuters reports, Greece did not receive any binding bids for natural gas producer DEPA. This was part of the asset-sale program demanded by the TROIKA, with Hellenic Petroleum's sale later in the year now potentially on hold. The sad truth is that the country cannot pay their bills, cannot pay their pension obligations, cannot fund social services and is just about out of money to even run their government. The reality is; they are bankrupt again and there is no way out without some form of debt forgiveness and more money. Debt forgiveness, alone, will not cut the mustard now by itself and some kind of end game may well be near. That is increasingly reflected in 2012's no-brainer trade as GGBs are now back below 60 and down over 10% from their highs and the Athens Stock Index just entered bear market territory, down 20% from its highs.
Greece may reconsider when it sells its biggest oil refiner Hellenic Petroleum, Deputy Energy Minister Asimakis Papageorgiou said on Monday after Athens failed to receive any binding bids for natural gas company DEPA.
Athens had planned to privatise Hellenic Petroleum in the last quarter of 2013 as part of an asset sale programme demanded by its European Union and International Monetary Fund lenders.
It seems the market is getting nervous...
and one only has to glance at the reality in Greece to know that this chart is remarkable by any measure of hope. As Southwest's Mark J. Grant explains below, "Somebody somewhere is going to take a hit. Somebody somewhere is going to have to supply more capital in this race to the finish"
It all began with Greece.
From the first moment up until today the Greek bailout has been a disaster. Draghi made his “Save the World” speech. The Greek equity markets have rallied mightily. The Greek economy has sunk into the Mediterranean Sea and the people of Greece have suffered the slings and arrows of a barbaric plan that even the IMF has admitted is a failure.
The financial projections of the ECB, the EU and the IFM have had all of the accuracy of a sixth grade elementary class making projections in Hoboken. No disrespect to New Jersey. It is unclear to me if these three agencies were living in a world of opiated fantasy or if eternal hope was the driving force or if the motivation was an intentional scheme to mislead everyone. I would like to err on the side of unintentional to be kind but these people cannot have been that uninformed or that misguided in their calculations.
I first entered the fray on January 13, 2010 stating that the country would go bankrupt. The yield on their ten year Treasury was 4.38% on that day and while the yield has seen over 30% since then it has never seen 4.38% again even after the Draghi gambit.
I have further predicted that Greece will stand, suffer and take it until the money is shut off. We may be getting close to that point now and what has always been an interesting Greek tragedy may now be entering the final acts.
The IMF, according to Der Spiegel, has now indicated that they will not lend Greece anymore money until the shortfall of $6.07 billion is made up. This is a problematic position for Europe. The ECB has already said that they will not be taking any losses in their portfolio so that leaves the various stabilization funds to take the hit or the various nations of Europe to do the debt forgiveness dance or to put up more actual cash themselves. Germany, who has elections shortly, has already said that they would not be participating in either a new money giveaway or a debt forgiveness scheme and so everyone is in a gridlock with no new money for Greece to be forthcoming unless it is broken.
In the meantime the financial condition of Greece just keeps getting worse. Every new report gives us numbers that are worse than not only the absurd projections but worse than anyone has imagined or feared. The worst case scenario has not even been close to the actual case scenario as the pension fund obligations of the country now stand at almost 19% of their current GDP. 
The sad truth is that the country cannot pay their bills, cannot pay their pension obligations, cannot fund social services and is just about out of money to even run their government. The reality is; they are bankrupt again and there is no way out without some form of debt forgiveness and more money. Debt forgiveness, alone, will not cut the mustard now by itself and some kind of end game may well be near. 
If Greece does blow up the losses will be staggering which is why that Europe has kept them alive. If the IMF holds to their word and refuses additional aid then Europe is finally going to have to confront the issue instead of engaging in their usual can kicking. The cheese is beginning to bind. 
Somebody somewhere is going to take a hit. Somebody somewhere is going to have to supply more capital in this race to the finish at Marathon. Jason and the Argonauts are about to re-enter the Straits of Messina and the sea monsters, Scylla and Charybdis, are going to have to be dealt with and someone must decide which catastrophe to face once again. If the decision is made not to make the crossing then Mutiny may well be on the horizon!
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Mon, 06/10/2013 - 11:39 | 3642275 williambanzai7
williambanzai7's picture

The crisis is fucking over again!!!

Mon, 06/10/2013 - 11:46 | 3642295 Temporalist
Temporalist's picture

The Never Ending Recovery

Mon, 06/10/2013 - 11:54 | 3642330 Skateboarder
Skateboarder's picture

At all time highs, mind you.

To QEternity and beyond!

Mon, 06/10/2013 - 12:02 | 3642361 Skin666
Skin666's picture


Mon, 06/10/2013 - 11:52 | 3642319 BandGap
BandGap's picture

Death by a thousand cuts

Mon, 06/10/2013 - 12:23 | 3642455 Nussi34
Nussi34's picture

Long Greek failure!

Tue, 06/11/2013 - 02:11 | 3645077 Haus-Targaryen
Haus-Targaryen's picture

I don't know why people are scratching their head wondering where the money is going to come from to keep Greece afloat. It's gonna come from the Greeks - Cyprus style.

The Greeks have proven time and time again they are nothing but a toothless lion. Until the opposition gets a Tywin Lassister type figure -- it will be the Reynes who rule.

I expect to see that figure come from Golden Dawn - and their popularity skyrocket as things get worse.

But as long as the lion has no teeth - the crown and his Grace - Draghi have nothing to worry about.

Mon, 06/10/2013 - 11:40 | 3642280 Nothing To See Here
Nothing To See Here's picture

This is just a temporary glitch for Greece, no more than an isolated case. It's gonna be fixed shortly. Now back to regular soaps and sports news.

Mon, 06/10/2013 - 12:04 | 3642368 Doubleguns
Doubleguns's picture
Privatization Program Crashes But Does Not Burn.


Does not burn.....yet.

Mon, 06/10/2013 - 11:44 | 3642289 Kaiser Sousa
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"What you need to understand here in Japan is that the crisis in Europe is over,"

Francois Holland, June 9, 2013


fucking Greeks...all they had to do was tell the bankers to fuck off and remove or murder their banker owned politicians...instead they bitched out and accepted serfdom...

fuck'em...resist or be slaves........

Mon, 06/10/2013 - 12:36 | 3642496 walküre
walküre's picture

Don't blame the Greek people or any people for that matter if they don't rise up. Consider it a case study.

Just what does it take for a people to take matters back into their own hand, round up the oppressors and reclaim what is rightfully theirs?

I tell you what it takes. Funding. I've concluded that revolutions or violent revolutionary acts only happen when another group is funding the "rise" and stands to benefit in the process. Who that group exactly is should be anyone's guess.

The fact that the Greek or Italian people only made a bit of noise but didn't get their act together to abandon the EU, the Euro and kicked out the IMF just confirms what I'm saying. When revolutions happened in the past they were orchestrated and well funded from outside groups.

Where do we go from here? We could make a deal with the devil and propose our "business plan". It has got to make sense for some elite group to see real change in Europe and America and squash the (financial) oligarchy currently running the world affairs.

So much is wrong, has been wrong for decades. Its too much to list. Before departing from this world, I'd like to see the foundation for change so my offspring can build upon that foundation as opposed to serving the elites and maintaining their parasitic status quo.

Mon, 06/10/2013 - 18:16 | 3643869 MisterMousePotato
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Profound. Almost sublime.

Mon, 06/10/2013 - 11:44 | 3642290 Temporalist
Temporalist's picture

And in related news, Swiss unemployment highest since 2010, Italian manufacturing dropping, France laying off 700 from Michelin.


ZHers must know that this is obviously a case of lack of liquidity and must be solved by printing, sorry the strikethrough isn't working, I mean providing stimulus.  It's for the childrens.

Mon, 06/10/2013 - 12:08 | 3642374 Dr. Venkman
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RE: France laying off 700 from Michelin

Any comment from Montebourg regarding France's large and profitable tire maker?

Mon, 06/10/2013 - 14:01 | 3642860 Non Passaran
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LOL I was about to leave the very same comment.

Mon, 06/10/2013 - 12:15 | 3642300 Yen Cross
Yen Cross's picture

     The 10yr GGB looks like it could easily slide another 10% before it hits any substantial support on the chart.

     The MSM derps are doing a good job of sweeping this under the rug.

       Spain 10-Year   [ 4.595]    4.564    4.598    4.510    0.032    0.68%    15:31:17
     Italy 10-Year   [ 4.300]    4.193    4.303    4.171    0.107    2.55%    15:29:17

Mon, 06/10/2013 - 11:47 | 3642301 Mototard at Large
Mototard at Large's picture

It appears the 'news' is piling up thick and fast in the island nation.

Greece is an island?

When did that happen?


Mon, 06/10/2013 - 11:56 | 3642337 Aurora Ex Machina
Aurora Ex Machina's picture

Tyler's obviously thinking of the parts everyone else is eyeing.

Mon, 06/10/2013 - 12:13 | 3642404 Hulk
Hulk's picture

Its an island with respect to the fact that its sinking. Lets hope all the greeks don't all go to one side and tip it over !!!

Mon, 06/10/2013 - 14:01 | 3642858 Non Passaran
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It's a nation that has islands

Mon, 06/10/2013 - 11:47 | 3642304 Groundhog Day
Groundhog Day's picture

They'll come up with a new phrase, 3 or 4 letter program which will lift the markets once more.  In a world of computer programs anything is possible

Mon, 06/10/2013 - 11:58 | 3642345 earnulf
earnulf's picture

I think I would prefer that they at least be honest and make the next program XXX.    At least that way we can see what little skin there is in the game and who has it.

Mon, 06/10/2013 - 11:49 | 3642307 q99x2
q99x2's picture

Rob those spineless wannabe Nazi's blind.

Mon, 06/10/2013 - 11:53 | 3642314 orangegeek
orangegeek's picture

Let's do some celebration with a nice souvlaki.


Nice stocks chart - from 500 to 1150 in about a year.


All that fucking economic growth in Greece - and it paid off - market more than doubled.



Mon, 06/10/2013 - 11:53 | 3642322 Inthemix96
Inthemix96's picture

Not to worry, our top boss politician 'Call Me Dave', has assured us plebs over here that GCHQ has acted 'Within The Law', while spying like fuck out of us peons.

Isnt it nice these psycophants couldnt give a fuck about clearly criminal actions?

You know when you get that strong urge, to pull this fucking manchilds head off and shit down his neck?

I think I've developed that urge.  Fuckers

Mon, 06/10/2013 - 11:59 | 3642348 Skateboarder
Skateboarder's picture

When the food riots come, someone will do that for you. Meanwhile, sip on some nice ale while they're still available handily.

Mon, 06/10/2013 - 12:02 | 3642357 Inthemix96
Inthemix96's picture

Will do Skateboarder,

As it happens, the suns popped out, its about 20C, and I'm enjoying a nice cold pint of Stella Artois, (its 5pm here).

Life aint that bad mate.

Mon, 06/10/2013 - 14:12 | 3642905 Andy Lewis
Andy Lewis's picture

I'm all set - I've got a big cardboard box full of Hormel Compleats.

Mon, 06/10/2013 - 12:05 | 3642370 tarsubil
tarsubil's picture

I bid a dollar!

Mon, 06/10/2013 - 12:18 | 3642427 americanspirit
americanspirit's picture

Why would anyone buy a gas company or any utility in Greece knowing that the customer base is wiped out and that bills will simply never be paid?

Mon, 06/10/2013 - 12:24 | 3642461 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

They need a shortage of toilet paper to levitate the market....

Mon, 06/10/2013 - 12:30 | 3642484 mydogisprettier...
mydogisprettierthanyou's picture

Greece, then Spain, then Japan. Then more of Europe, far east except china. Then ww3.


bring it

Mon, 06/10/2013 - 12:45 | 3642529 Rodders75
Rodders75's picture

That clown Hollande says the European crisis is over. Poor bastard. Anyway France is next. 

Mon, 06/10/2013 - 13:02 | 3642602 SmallerGovNow2
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That ass_clown Hollande says the European crisis is over. Poor bastard. Anyway France is next.



Mon, 06/10/2013 - 16:57 | 3643612 The Contrarian ...
The Contrarian Investor's picture

Is he the same Hollande who said he would reverse the rising jobless trend by year-end?

Mon, 06/10/2013 - 17:06 | 3643624 falak pema
falak pema's picture

An interesting oversight of the IMF involvement in this Greek debacle and in the Euro crisis in general is given here, as posted by ZH :

It just shows what a shambles and a political hoypolloy this Euro crisis handling has been. To summarise, as looked at thru the involvement of THREE key french bureaucrats in this deal, very interesting convoluted facet of this post mortem :

1° At initial stage Trichet as head of ECB did not want the IMF involved, and recommended that EU governments handle this on their own, as buying the Greek or Irish bonds was outside his direct mandate at ECB, and the banking crisis made direct purchaisng of bad sovereign bonds by "hocked" banks increase the systemic risk already prevalent in EU. Trichet wanted the governments to set up a safety net with direct funding by government bodies of rich countries to succor poor PIIG ones. This got shot down and he lost his job and IMF was called in fast, with the new ECB changing strategy under Draghi and LTRO.

2° At the same time DSK, as outside observer in IMF, said straight off when he was sollicited that Greek debt needed a HUGE write off much bigger than EU would accept as it bled their CORE Banks. Lagarde, then french finance minister opposed this reccomendation, as did Timmy, proxy spokesman for Ireland as head contributor to IMF funds, as it would have meant serious hemorrhage of national banks. But DSK was right all the time, if that debt write off had occured fast, with ECB monetary support as put in place ONE YEAR later by Draghi; when the Greek debt had doubled due to political shenanigans, ditherings cum huge HF speculation that bled the sovereigns further. Dissensions between EU/ECB (Trichet) and outsider IMF, now insider, (DSK) made Greece, Portugal and Ireland miss the boat. All due to EUro political shenanigans and market speculative vigilante pressure. Mad as bad 'cos the Euro ship was part of WS ship; this was more short term than a 2 min in- out gang bang rape.

3° WHen Draghi started pumping money into fast decaying PIIGS system and ECB went all in, the IMF approach created dissension as DSK still felt the banks should pay more in haircuts and EU politicians like Lagarde/Merkel/Rehn said Nein, again and again.

4° IN end 2011/2012, two years down the road, DSK having fallen and lo and behold Lagarde stepped in and started singing as IMF head the very opposite song she sang as french Fin Min! And things went from bad to worse in terms of debt restructuring of Greece.

4° Now in 2013, Lagarde of IMF tells the EU, aka old Lagarde of Fin Min days, "you phukked it up for us of IMF!"

How two faced and head up your ass can you get!! ?


more on this :

Mon, 06/10/2013 - 18:02 | 3643794 Youri Carma
Youri Carma's picture

Greece is bankrupt again!!!

It seems that all began with Greece, all will end with Greece.

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