Stocks Plunge As IMF Tells Greece To Plug Holes Or It Pulls The Plug

Tyler Durden's picture

As we warned earlier in the week, Greece is notably missing its Troika goals and the issue just became a lot more critical. As The FT reports, the IMF is preparing to suspend aid payments to Greece over what it claims is a EUR 3-4 billion shortfall that has opened up. Between healthcare budget shortfalls, central banks refusing to roll-over Greek bonds, and amid signs that even the scaled-back privatization plans that Athens had agreed to being behind schedule, the IMF - following its own admissions of mistakes in the Greek bailout, has warned EU officials the shortfall will require it to stop aid payments by the end of July. The equity market is already reacting (as is EURJPY - EUR weakness against the big carry pair) to this re-awakening of EU event risk (and the awkward timing with Merkel's election so close) - with the Fed's comfort blanket somewhat removed.



Via The FT,

The International Monetary Fund is preparing to suspend aid payments to Greece by the end of next month unless eurozone leaders plug a €3bn-€4bn shortfall that has opened up in Greece’s €172bn rescue programme, according to officials involved in management of the bailout.


The gap emerged after eurozone central banks refused to roll over Greek bonds they hold, and comes amid signs that even the scaled-back privatisation plan Athens agreed to last year is falling behind schedule.




The shortfall will force eurozone finance ministers to discuss “alternate sources” of funding




But the timing is particularly awkward as Germany is holding parliamentary elections on September 22. In the run-up to polling day Chancellor Angela Merkel will be loath to submit any further aid request to the Bundestag where it would likely be highly controversial.




the IMF has warned EU officials the gap will require it to stop aid payments at the end of July, said a person involved in the discussions.


Under its rules, governments must have at least 12 months of financing in place to receive IMF disbursements under a bailout programme. This latest shortfall of €3bn-€4bn means that Greece’s financing needs are only covered up to the end of July 2014.

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Midasking's picture

tapering is not happening or the entire world will be a smoking hole in the ground. QE will be expanded you can count on that.

Freedom In Your Lifetime's picture

We need a whole new economic system, until something that isn't centrally planned is accepted by the majority of the world things will not get better and we very well may become that giant smoking hole in the ground you mention. Economies and currencies need to become more localized rather than more centralized.

SpiceMustFlow's picture

Greece adopted the "Detroit Economic Model"

true brain's picture

yes, 1600 on S&P is breached. Can't wait till 3:30 ramp.


These fools at the Fed world wide need to get real about real wealth vs paper fantasy. ONly real wealth creation can lower unemployment, provide growth. Real wealth is very hard to get, depends on energy, innovation, etc.  Get real Fed fools.

LetThemEatRand's picture

I wonder if the guys who push the buy button at 3:30 with our future tax dollars play rock, paper scissors to decide which of them gets to pick the exact closing price each day.  

BLOTTO's picture

Needing a new financial system is still only part (b)...


Part (a) is needed first...which is...good people to create that system.


Or it will be just the same, fuckin, horseshit all over again...


Nothing New Under the Sun,

History is Repeating itself.


ya digg?

Herd Redirection Committee's picture

I think if we are able to decentralize, then the need for superhumans decreases.

Its just the current system, with so much power in so few hands, that cannot possibly be reformed.  Its like sending a virgin to reform the whorehouse.  Whats the most likely outcome?

12ToothAssassin's picture

Would really be some great icing if margin calls started a last half hour cascade

Herd Redirection Committee's picture

BTW, just to clarify, when I say the current system "cannot possibly be reformed", I just mean that it needs (substantial/complete) overhaul, not 'good people' in the place of the current banksters.

Kirk2NCC1701's picture

PMs are getting hammered beyond belief. Have to admit that outside the Fed/JPM/GS triangle, no one - not even ZH - saw this coming last Fall.

Q:  PM bro, how low will it go?

A:  I'm going out to BTFD.  Later I'm going boating.

RockyRacoon's picture

Just picked up an ounce today on this pull-back.  Now I need to go out and fix that hole in the boat... or not.

Prison Justice's picture

A whole 6 point drop?  Excuse me while I take a trip to Schnoozeville.

Cult_of_Reason's picture

Just yesterday Cramer said that Europe was fixed and turning around.

Well, Bear Sterns was fine too.

SmallerGovNow2's picture

Cramer said, that explains it....

RockyRacoon's picture

I wish I had 0.0000000000001 % of the money he has lost for his viewers.  I'd take that fee to have told them all to change the channel... Honey Doo Doo is better than Cramer.

bank guy in Brussels's picture

Pull it

Pull it, IMF

Pull it like Larry Silverstein and Building 7

Pull it

RockyRacoon's picture

Nah, they ain't gonna pull anything.

"...governments must have at least 12 months of financing in place to receive IMF disbursements under a bailout programme."

This will be reduced to 6 months, then 3 months, then 3 days, then 15 minutes.

Crash Overide's picture

Gold, Silver, barter, practical skills, common sense... I want that to be the new system.

Freedom In Your Lifetime's picture

I am right there with you CO. More localized, less cetral planning. Less aggression and coercions, more voluntary interaction.

howenlink's picture

If it walks like a smoking hole, and smells like a smoking hole, and sucks like a smoking hole...

ParkAveFlasher's picture

...don't step in it?

By "alternative means of payment", do they mean "internal organs"? 

BlueStreet's picture

Pull the fucking plug already, the patient died long ago.  

williambanzai7's picture

If this were August, we would be saying wait till September hits. But this is June!!!




Buck Johnson's picture

Oh I know, I think they won't stop.  But the problem is that it will make it impossible for them to hide inflation/hyperinflation in the near future.

thismarketisrigged's picture

i am so happy the s&p finally broke away from the 1600 level. lots of red below, and i love watching my screens go all red.


also noticing lots of mini flash crashes on my screen.


i hope gold and silver bounce back

El Viejo's picture

Soylent Red is Retirees!!!

Tsunami Wave's picture

I think the precious metals are being FORCED to go lower. Even in the midst of all asset-classes crashing, they're trying to make gold look like the worst thing to own by far. All the articles in seeing on every site says 'all stocks/commodities/blah blah down with Gold leading the way'. Maybe they can pull off everything stabilizing while gold/silver/platinum hopefully staying down. Either way, those hopeless morons are still fucked, and I will keep buying that shit dips or not.

JJ McApe's picture

don't worry greece is ready to implode. after the vultures sold the whole country out and people are doing drugs on the streets its time to finish them off...


falak pema's picture


insanelysane's picture

We're off the lows so that means there is a rush to buy the dip!  </sarc>

astoriajoe's picture

Wait a second. I was told this was all taken care of.

Bay of Pigs's picture

Greece? LOL...thats pretty funny after all these years of QE can kicking.

Wile-E-Coyote's picture

Greece is like a dose of the clap that Penicillin doesn't quite clear up. You think you are over it and then your dick starts dripping again.

Conax's picture

When he finally caught the Roadrunner, Wile E. got more than he bargained for.

trebuchet's picture

China banking crisis, Brazil burning, Fred tapering, IMF pulling plug  on Greece and therefore Euro, Abe resolve weakening.........


Black Friday, anyone?

Ness.'s picture

Black Friday - Steely Dan

When Black Friday comes
I'll stand down by the door
And catch the grey men (banksters) when they
Dive from the fourteenth floor
When Black Friday comes
I'll collect everything I'm owed
And before my friends find out
I'll be on the road

Yen Cross's picture

    As the European bond market blows out. Pay special attention to GGBs.


European bonds

  • Italy 4.54% +28 bp
  • Spain 4.86% +33 bp
  • France 2.26% +15 bp
  • Portugal 6.41% +34 bp
  • Greece 10.67% +50 bp
  • Germany 1.66% +10 bp      
kchrisc's picture

German rates went up by 6.41% while Greece went up by "only" 4.92%. Hmmmm!