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When Fearmongering Goes Bad: Greece Scrambles To Prevent Deposit Run Goldman Warned About In Its "Worst Case"
Earlier today we got a classic, if rare, example of what happens when bankers bluff with a 2-7 off suit... and the people call it.
Recall that just over two weeks ago, none other than Greek currency swap expert Goldman (alongside Jean-Claude Juncker who quite explicitly warned Greeks not "to vote wrong") came out with a fire and brimstone worst-case scenario for Greece, which was nothing but an attempt at fearmongering designed to scare Greek MPs into doing Samaras' bidding, in which it said not electing the designated presidential candidate may lead to a worst-case scenario which involves a "Cyprus-style prolonged bank holiday."
For those who have forgotten, these were the salient points from Goldman:
In the event that the parliament fails to elect a president, general elections would be held and market uncertainty/pressures would extend. At this stage it is important to understand that market pressures are not linked to the democratic process of elections nor to a potential government change, whatever the ensuing government formation may be. They are linked to the risk of policy discontinuity and a severe clash between Greece and international lenders. More specifically, we think the room for Greece to meaningfully backtrack from the reforms that have already been implemented is very limited. Any such attempt would lead to an interruption of official financing to Greece.
Examining the downside scenario.
To be sure, even in the event of a government change, there is room for a cooperative solution between Greece and Europe. Greece has made significant reform progress between 2012 and the gap between what has already been implemented and what remains to be done is not insurmountable.
Also, the incentives for a clash are not there. For instance any Greek government would likely want to capitalize on the momentum that the economy is building on the activity front, rather than trigger a disruptive capital flight that would lead Greece to a double–dip recession. In addition, given that more than 80% of Greek debt is held by the official sector and given that any OSI would be feasible only as part of an agreement with the Euro-area, there is an incentive for a Greek government to pursue cooperative solutions.
However, the history of the Euro-area crisis has shown that the probability of an “accident” can never be dismissed, when it comes to intra-EMU politics. And it is important for markets to be able to understand and quantify the aspects of a potential downside scenario, where official financing to Greece is interrupted.
The Biggest Risk is an Interruption of the Funding of Greek Banks by The ECB.
Pressing as the government refinancing schedule may look on the surface, it is unlikely to become a real issue as long as the ECB stands behind the Greek banking system. In fact, refinancing became a lot more pressing between 2011 and 2012. But financing needs were met despite the impasse in negotiations between Greece and international lenders – partly via the issuance of T-bills repoable at the ECB by Greek banks. Such methods can always be revisited at times of extreme need.
But herein lies the main risk for Greece. The economy needs the only lender of last resort to the banking system to maintain ample provision of liquidity. And this is not just because banks may require resources to help reduce future refinancing risks for the sovereign. But also because banks are already reliant on government issued or government guaranteed securities to maintain the current levels of liquidity constant.
And this risk can become more pressing from a timing perspective. At the heat of the Greek crisis, there was evident deposit and broader capital flight, which Greek banks helped accommodate with ECB’s help via the ELA facility. In the event of a severe Greek government clash with international lenders, interruption of liquidity provision to Greek banks by the ECB could potentially even lead to a Cyprus-style prolonged “bank holiday”. And market fears for potential Euro-exit risks could rise at that point.
Stripping all the political correctness, what Goldman said is that unless Greece quickly folds back in line and does as unelected Brussels eurocrats demand, there may well be a Cyprus-style bank closure coupled with preemptied bank runs.
Oops. Because if that was the doubled-down bluff, then Greece just called it, and the "downside scenario" is now in play.
Which means Greece now has to scramble to avoid precisely what Goldman warned would happen if the Greeks dared to put their (meagre) savings at risk. And, case in point, here is the Greek finance minister rushing to squash the next steps, which - as Goldman so conveniently explained - involve potential bank runs, a potential bank holiday, and potential Cyprusing of the financial system, only this time it is not Russian oligarchs who are most exposed - they have learned their lessons by now - by ordinary Greeks.
Here is Newsbomb.gr with what is sure to be an amusing backtracking on all the fearmongering that had been unleashed previously.
The government has guaranteed that bank accounts are safe and legislated deposit safeguards in the event of a shakeup ahead of Monday's parliamentary election for Greek president, Finance Minister Gikas Hardouvelis said in an interview on Sunday's Vima.
Hardouvelis was speaking ahead of the third and last attempt by this Parliament to elect a Greek president that will held on Monday, December 29. Failure to elect one
"We are preparing to withstand any rolling and pitching. We have already passed laws safeguarding bank deposits, and are in constant touch with our EU fellow-members, while the whole government will be on alert and vigilant," Hardouvelis said.
Hardouvelis said that Greece must continue "to the next stage, which will be based on our growth plan, under our own initiative, without coercion by the troika of Greece's lenders."
Speaking of "bank deposits, which are safe," he said his ministry had "taken care this past week and legislated the option of the Hellenic Financial Stability Fund's to lend money to the Hellenic Deposit and Investment Guarantee Fund if it needs greater reserves than those available to support depositors."
Asked whether he thought that a new government might be elected with a stance hostile to the memorandum, the finance minister replied, "The key to avoid tossing and turning and our economy's future in 2015 and later is held by the European Central Bank... This key can easily and abruptly be used to block funding to banks and therefore strangle the Greek economy in no time at all."
Actually no.
The ECB's hands are tied right now, because the last thing Mario Draghi can do is proceed with open monetization of peripheral bonds (which would have to be purchased in any ECB public QE alongside all other Eurozone bonds) at a time when Greece can pull the rug from under the ECB's already massive holdings of Greek public debt, and enforce a haircut which would impair the ECB's balance sheet, in the process costing Mario Draghi his job and a handing the victory to the "sound money" Bundesbank on a silver platter.
Worse, should Greece decide to default it would means those several hundred billion Greek bonds currently held in official accounts would go from par to worthless overnight, leading to massive unaccounted for impairments on Europe's pristine balance sheets, which also confirms that Greece once again has all the negotiating leverage.
So with the ECB out of the picture, and with the ball in Greece's court, it actually makes the situation that much more unstable, and indeed could be just the precursor to the "Cyprus-style bank holiday" that Goldman warned about.
How credible will this warning be in practical terms over the next month as Greece prepares for a historic election? Keep an eye on those lines in front of ATMs, because unlike Cyprus, at least the Greeks still have access to Euros. The question is will they pull out enough Euros before their only currency option in front of the ATM is New Drachmas?
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heres how u stop Goldmans fear mongering...
march over to their building...
drag some employees and execs out...
then stomp them the fuck out in front of the cameras...
problem solved.
...The NWO currency will be the Canadian Loonie.
No pun intended.
The Loonie will be backed by Wheat, Alberta Tar Sands, Gold, Silver and the RCMP's Dudley Do-right, because "they always get their man."
The Canadians gave up their guns their toast....
"Next man moves, and the nigger gets it!"
We Reject Keynesianapoulos...
We GoldmanSacked A Few Folks...
Greece is not Cyprus?
..or what.
"But financing needs were met despite the impasse in negotiations between Greece and international lenders – partly via the issuance of T-bills repoable at the ECB by Greek banks. Such methods can always be revisited at times of extreme need."
Someone explain this to me please?
It's just a way for them to move collateral around. All these are is issues of debt that are supposedly worth X amount of euros. They are held as good collateral based on the mistaken belief that they will actually be repaid someday. It's a way for the ECB and Greek banks to maintain the illusion of solvency. It's just a thin veneer of debt
We owed some folks.
Emphasis on "owed".
The last piece of furniture in Greek homes will be the mattress.
Nope, not Cyprus. The Greeks are very stubborn and trying to threaten them will make it worse and they have a history of doing what they damn well want.
Yep. Threatening them probably won't go well. It's won't go well for the Greeks either, since the banks will get their retribution against the Greek people, one way or another, but since it is inevitable, they might as well get it over with. What this boils down to is that other EU member countries will pay up at the behest of their own countries banks and the ECB, since if Greece defaults those banks will lose billions when their Greek bonds become worthless. And the Eurocrats and the rest of the EU member nations will choose the banks over their people. It will look like a bailout of the overspending Greek govt and their entitled people, and that is part of it. However, it is also, and more importantly, bailing out all other banks who hold Greek bonds on their books, since they would become worthless absent another bailout.
The EU screwed up. First order of business should have been to fluoridate the water so the Greeks would be more cooperative, like Merkans.
What?? It doesn't matter that I can't get my Tavor to accept my 100 rd drum-mag....NFA will see AR15's non-restricted soon enough. Then maybe I'll be taking it to the range in my $500.00 Norinco AR; maybe I'll bring along my 1911 and one of my $400.00 m-305's, or $200.00 SKS's....
NFA, Bitchez!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
No Dragon HAwk, we Canadians are fine. Amerians have lots of guns...they're toast
no Gary, Canadians are docile...big difference
You dumbass Yanks always get that wrong. We all have guns, we just don't shoot each other.
The loonie is just part of the dollar. CSEC and CSIS are NSA/CIA branch offices. Nuff said. As domestic unrest in the US spreads Canada cannot escape it due to 9000 km of shared border.
you'd be surprised how passive canadians are & how much they trust the gov. no looting during a flood event that covered downtown areas...in fact the gov looted guns from evacuated homes yet there was still order & still people trust the gov despite this
oh...and usd/cad proves you otherwise.....glad i sold all my cad for usd each time it crossed the 50sma..
"Canadians" might be passive and law-abiding but your millions of recently-introduced cultural enrichers from Africa and Pakistan are unlikely to be so accommodating.
true - the ones i've met are ruthless. but that's why europe had "relocations" after wwii to solve these kinds of problems.
Over 20% of Canadians are foreign born 1st generation immigrants. They are FAR from passive and don't trust ANY governments (Canadian one included...)
Don't joke about my POS country. We're toast.
wish i could up arrow and down arrow comments at the same time cuz i don't know which country you're talking about
;)
Yeah. I can see the Greeks now moving their money to the safety of the Ruble.
More boomerangs for Europe.
Sure! we`re gonna need a nuclear arsenal, our gold reserves back,and some legal national control over our own natural resources! its good not to be the enemy!
Bond contagion pressures mount. 30 yr Treasury yields up 2 BP, while 10 yrs bonds fall. Syriza promises skittles for everyone, and no doubt they will be swept into power, proving democracy is not a good form of government for lemmings.
With low oil prices putting pressure on the HY sector, and the Fed toying with rate hikes, do we expect Greek bonds to skyrocket in isolation? Everone thinks, "Who cares? Isn't Greece in Level 4 isolation, and attended by Dr. Goldman?"
"Dr. Goldman, Dr. Goldman. You are needed in Emergency Proctology immediately."
"Here, nurse. Hold my pants. I've got work to do!"
Would this really work? My guess is that they would sick their private armies on you pretty quick and sick their personal media companies on you too. They end up murdering your family while making them seem like martyred saints to the public.
Better to just get rid of all debt and take delivery on gold and silver (final elimination of last debt when holding dollars). Honestly, the movement against the great vampire squid will have to be something like the Fremen on Arrakis. Slowly but surely.
Fremen = ISIS = CIA
The Spice must flow.
Fremen weren't a suicide death cult like Islam. That's where your analogy breaks down.
But, the Spice must indeed flow.
Nice to know someone read the novels. However Islam is no suicide death cult. They're extremists.
You would think that the ECB would have learned by now not to play poker with Greeks,
especially if you are playing with their deck.
the Squid is as usual full of lies. subtle lies. take this part:
"The Biggest Risk is an Interruption of the Funding of Greek Banks by The ECB. Pressing as the government refinancing schedule may look on the surface, it is unlikely to become a real issue as long as the ECB stands behind the Greek banking system. In fact, refinancing became a lot more pressing between 2011 and 2012. But financing needs were met despite the impasse in negotiations between Greece and international lenders – partly via the issuance of T-bills repoable at the ECB by Greek banks. Such methods can always be revisited at times of extreme need."
that's a wonderful conflation of the financing/refinancing needs of the Greek sovereign and the liquidity that the ECB provides to the Greek national banking system
trust a damn Squid Banker to take such terms and twist them like a bretzel in a sentence full of doom for those it wants to go down
Thanks for putting words on that. I saw it and thought, "But they are bankrupt and propped up anyway, what is special about now except for playing the blackmail game?"
Nothing new here, they are just threatening to turn off the music for musical chairs if they don't get their way. Time to claim as many chairs as you can before others start trying to sit down. Past time. I got mine as best as I can.
the strangest thing about this business is that the Squid sounds... butthurt. and I really don't think it really cares about the long-term game, only about doing some short-term games with the CDSs on Greek debt, which are it's best handle on the Greek banks that issued them. meanwhile I'm told Europe seems to be bombarded with old news about the IMF and Greece, repackaged as new
The current so-called rescue policies are exclusively focused on short-term interests, primarily those of the banks.
Hey Half-man ot but care to comment on Malmos police station being bombed and layed seige too... Thats all a lie too right...
Each one of their warnings is a billboard advertisement of the perils of central banking. Unfortunately, the sheeple are too stupid to see it.
The central banks are private entities for privately created money. This privately created money has usury and rents imbedded in it, in order to profit at the expense of everybody else.
Note words like SWAPS and EXCHANGES are a method of rent taking. Swapping two unlike items is usually at the root of private banker magic.
Draghi is also a Goldman - so their method is to insert their puppets. The real power is the system design, and said system design is money that is not sovereign.
The Federal Reserve note is a debt instrument from a private central bank, sanctioned by government - and I would say coerced into this sanction if one does a fair reading of history.
The idea is to have the entire world hypothecated and subjected to debt instruments. These instruments recall their credit and direct humanity.
There are two types of currency in circulation. US Notes, and Federal Reserve Notes.
Lawful Money = United States Notes; Not “Federal Reserve Notes”
Title 12 USC §411 :
http://www.law.cornell.edu/uscode/uscode12/usc_sec_12_00000411—-000-.html
Read:
“Federal reserve notes, to be issued at the discretion of the Board of Governors of the Federal Reserve System for the purpose of making advances to Federal reserve banks through the Federal reserve agents as hereinafter set forth and for no other purpose, are authorized. The said notes shall be obligations of the United States and shall be receivable by all national and member banks and Federal reserve banks and for all taxes, customs, and other public dues. They shall be redeemed in lawful money on demand at the Treasury Department of the United States, in the city of Washington, District of Columbia, or at any Federal Reserve bank. “
This proves that “Lawful Money” and “Legal Tender” are not the same.
Read the whole article here:
http://stormthunder.com/federal-reserve-act/
Ok. Cornell link: "Lost and Found
Looks like something has moved -- sorry! Use the search form below to continue searching, access the advanced search, or contact us directly."
Kaiser Sousa:
"march over to their building...
drag some employees and execs out...
then stomp them the fuck out in front of the cameras...
problem solved."
+++++++++++
Extreme nonsense as suggestion to combat investor fear. Those UP votes demonstrate how many other morons read ZH articles.
Killing some bankers does nothing to increase confidence in government ability to guarantee bank deposits.
Goldman did not vote for the policies that, over the last 30 years, have indebted the population and the country.
Tsipras and Syriza party promise to restore the policies that created the present debt crisis, and expect to get the ECB bailout funds while giving current bond holders another haircut. Is there any problem with that logic?
fuck you you kike hasbara troll, you and your tribe will rot in hell for the misfortune you have brought upon the earth.
thoroughly excellent suggestion
Wait, what? Greece still has a government? I thought they sold it on Ebay?
I bid $1 but someone sniped me.
It's okay, you can pretend to have it, that's what they are doing.
Yes, I see what you mean. Probably like I also pretend to own my 401(k) and IRA.
Golden Dawn (neo-nazis) is polling TWICE as high as PASOK (socialists). Current score is 6.5% GD vs 3.3% PASOK. That's all you need to know about present day Greece... and EU !
Fear is their most powerful technique for getting their way.
Matrial Law in America:
https://www.youtube.com/watch?v=0L-KGUjU-iU
Apparently, the Greek leaders are not subject to fear tactics as their counterparts in the US.
A dissertation topic I started and never completed was based on fear being a primary motivator of human behavior. Quite possibly the primary motivator.
Were you afraid to finish it?
Hunger trumps fear, 10 times out of 10. The bankster-coopted NWOers pretend not to understand this, but it does provide a hard limit on their control. You can offer people a mountain of paper fiat and put a regiment of SWAT-troopers in front of the food, but if they are hungry enough, they'll kill all the SWAT-troopers and suffer lots of casualties in order to eat.
What about the fear of going hungry.
Fear of death, the primary human (living being of any kind really) motivator. Their are exceptions, but as a rule, that which drives us is survival (fear of death).
Touche. Decided to stop with the mental masturbation and go out and start a tech company. I was always intrigued with futuristic technology. Did fairly well with it. The model I was using was written by the guy who was my mentor. A genius of a fellow.
Now I am back into the mental masturbation stuff, but with a hell of a lot more insight.
Greek Politician Says Bankers Paid Him Millions To Vote For PresidentRead More: http://www.trueactivist.com/greek-politician-says-bankers-paid-him-millions-to-vote-for-president/
1776 - Thoughts on Government, John Adams
"Fear is the foundation of most government."
Economoists work on the bases of fear and greed.
Just devalue the euro.
"That'll be 25 dollars.
Per olive...
"The question is will they pull out enough Euros before their only currency option in front of the ATM is New Drachmas?"
(Cough Bitcoin Cough...)
They should leave the EU and back the Drachma with silver and gold.
At this point, anyone who decides that banks and stawk portfolios are fine and dandy for "savings" they deserve to lose it all. They aren't paying attention and are lulled to complacency with bread and circus media/political bullshit. I will not have pity on their souls.
in the US banks guarantee up to 250.000, it is much different, and the stock market remains very strong. ignore the fear, there is nothing to fear
you mean back the current Greek sovereign debt with silver and gold? I'm sure Greece's creditors would applaud. particularly Germany
or did I mistake you, or did you leave some steps out of the process?
the current debt is just numbers ... it was only 2.8 billion few years ago, before Goldman and Soros got into all this
And how much silver and gold does Greece ACTUALLY have? Probably about as much as we have in FT. Knox.
The last I heard all of Greece's gold was in Bonn/Frankfurt. Oooops I meant the US! Sorry revise that, China. In other words its gone.
Crikey, that's a great plan. Only problem is that they don't have any PMs.
They have Gold mines in the North that the Oligarchs stole them for themselves.
Bitcoin user not affected, I would want to add Gold and Silver user too (unless they want to flee the country).
The New-Drachma will be crushed by market speculation: the Ruble collapse will be nothing against the New-Drachma collapse.
Prepare to see EURGRD on your charts.
Also North Korea remains unaffected.
Dwarfs don't have as far to fall as giants. Funny.
greece IS going to default. when it does, the EU is going to make an exampel out of greece for everyone.
the leaders of syriza will be shot dead by 'the far right' or someone.....else who is a lie. and it will be in the middle of a speech about leaving the EURO and re-Drachmaing the money supply.
and you will know that greece will be the EU equivalent of Ukraine . it will be made an example of for the rest of Europe. and eventually even the greek's will learn that they better do as they are told or it will be much much worse for them.
If brusels cannot make a very public and punitive example of greece, than the EU will fall apart over 20 years just as surely as the iron curtain fell apart after the loss of hungary. . what is empire if not the centralize power to keep everything 'TOGETHER'. ????
read about the hungarian failed revolution in 56' --totally crushed by the soviets.
when poland and hungary 'rebelled' against a faltering soviet union in 1989---it presaged the fall of the soviet empire entirely 3 years later. things build for years, pressure can be released relatively quickly.
WE ARE STILL IN THE PRESSURE ACCUMULATION PHASE AND WILL LIKELY BE SO FOR ANOTHER NUMBER OF YEARS.
With 30% unemployment and almost 50% poverty, the situation is more similar to Eastern Europe in 89' than to Hungary in 56'
The EU does follow the Rhodesian form of collectivism, which prefers a softer approach to corralling the sheople. But it will resort to violence (Leninist collectivism's default method) if all else fails.
Either globalist ideology that's already in place (Rhodesian in the west, Leninist is the East) means enslavement to the masses.
The only question is which form (or hybrid) will 'win'. As the face to the sheople. Either way, the bankers stay in control behind the scenes fronted by governments and corporations in lockstep partnership.
can you define what you mean by "Rhodesian"? If you mean Cecil Rhodes... nothing soft about that corralling. If you mean the country... they fought hard against collectivism but were overwhelmed by US/UK/USSR finance and armaments.
more about Rhodes and follow ups:
http://www.carrollquigley.net/pdf/The_Anglo-American_Establishment.pdf
I can agree with the very last sentence, but the rest...
let's start with the usual little fact: Greeks don't want to get rid of the EUR. Even Syriza noticed
further, how can you even think about comparing Greece to Ukraine while implying that the EU has something to do with it?
what were the Imperial Envoy's (called Vicky Nuland) words? In regard to what the EU wanted about Ukraine? Yes, "Fuck the EU". Does that sound like "let's do the EU's will in Ukraine"? Since when is Hunter Biden's father an eurocrat?
stop this projection thing and look at the facts, will you?
+1
it's amusing the things people will say to justify their investment interests...
you think so? teslaberry strikes me as quite genuine. he would not be the only one that conflates the US with the EU, particularly here on ZH. see it this way: "why should europeans not want to emulate the US in every detail?". the answer to this question can be very, very different, depending from who answers
and you have to admit that Brussels caters to prejudice, as well as Draghi caters to Wall Street's feeling that the sky ought to be the ceiling and that the EUR is in a worse position then the USD, by far
btw, notice Tyler's "pristine european banks balance sheets" without italics and without any other sign of sarcasm
revolving doors ... think global, get f'd local
See Cuba Jan 1, 1959. Happy New Year!
Implying that you look only at facts? The only thing that is certain is that the Greeks want the Euro but none of the hardship, responsibility and work that comes with it. This may sound basic and elementary but it is consistently overlooked while being the single most important fact. They themselves know that they are not to be trusted. The others (with their high ideals and endless analysis) found this out very slowly and painfully.
Greece is like the loser brother that sits on the couch all day and tries to be nice to exact a constant stream of sympathy and charity. The unsuspecting participants do not realize that misery wants company and eventually get sucked into the black hole. When things go bad, as they always do, the excuses and blame games start.
The destruction started in the early 80s and was masterfully executed by A. Papandreou whom all Greeks had elevated to the status of a God as 50-60% was on the take (.gov jobs, higher pensions) He also attacked the language, education, family values, the currency (through his loose policies) and the results were/are devastating. He also promoted a false, quasi pro Soviet direction to appease all the "lefties" and strengthen his stranglehold on the country.
Anyone with half a brain knew a bailout would be needed back in the mid to late 90s. The Euro and cheap borrowing only made an already horrible situation worse. This is not so much about money. Money is the effect. The underlying cause is their psyche and thought process.
Greece..Japan..USA..Canada.....blah blah different stages of the same game. Notice the same friendly banks are everywhere and the same decay of soveignty is progressing. Notice similar lefties in each nation (like happenstance twins), note each nation is obssessed with bail-outs, bail-ins..."same same but different"; lets blame locally but operate this ponzi psycho scheme globally without actually telling the average person on the street in any nation what it actually means in reality -suck 'em up with fake data and info then kick them for listening.
Of more than 20+ nations I have visited in recent years - none receive honest information of consequences just BS beyond the average persons comprehension. Because 'they' know if you tell and mother or father what will actually happen - they'll take a look at their sleeping kids one evening, and think twice.
I understand and don't disagree. In the case of Greece, it is a tad different in the sense that the addict is demanding more drugs and doesn't want to pay. It is at a point beyond the understanding of most and this is what I'm trying to convey. It is well beyond a sense of entitlement that some, in other countries, may try to equate it with and this runs far too deeply in a very high percentage of the population. It is unhealthy and there was no way it could be corrected in 6 years.
In the US and other countries people have been complaining and warning about the deficits and heavy debt load for years. Many want .gov off their back so as to reduce the role of .gov but are willing to face the consequences. They are not. They want more free stuff and will do nothing for it......well, except protest.
I don't know how much 'hardship, responsibility, and work' other Europeans undergo to keep their currency. It's only money.
And yet the banks kept lending and now refuse to suffer losses of their bad judgment. And yet the EU admitted them to the euro and now pleads ignorance.
I disagree with your comment because you are assuming that the average person knew what their government was up to (with fake statistics about the deficit and phoney numbers to get in to the euro) whereas the people who should have known, like the banks, didn't.
I am puzzled as to why the Greeks are clinging to their euro. It is against their best interests, in my opinion. I think that the mainstream media is to blame because they try to scare people about what will come when they no longer have the euro.That, and the fact that the population is older and quite a few might be senile.
"And yet the banks kept lending and now refuse to suffer losses of their bad judgment. And yet the EU admitted them to the euro and now pleads ignorance.
I disagree with your comment because you are assuming that the average person knew what their government was up to (with fake statistics about the deficit and phoney numbers to get in to the euro) whereas the people who should have known, like the banks, didn't. "
I have to agree. How many Greeks under the age of 25 have known anything but unemployment and scarcity?
Let the people who made disasterous loans go bankrupt and let the people that borrowed and cannot pay go bankrupt.
STOP trying to foist the odious debts onto innocent people.
Greeks don't want to get out of the euro now. Now 1/3 of the people in Greece do not use the internet and the mainstream media is owned by oligarchs who tell the people that leaving the euro will result in hell on earth. When Syriza gets in power, I predict attitudes will change, even though Syriza is pro-European, the Europe of leftists' dreams, that is, and not the current reality.
I don't see how what the EU wants is different from what the US wants. There may be squabbles at times but the EU leaders are good puppets for Washington.
EU falling apart in 20 years is very optimistic, given the situation in Club Med.
Oh, and the USSA prodding of Russia with ever increasing pressure?
More like 20 weeks (or less) after the SHTF on that front. Sometime next year or 2016, maybe? Unless the cunts in DC are dealt with beforehand the war they are blatantly playing for (with Europe as a battleground, as usual) is becoming inevitable.
Greece is since 7 years bankrupt, technically sure. The politicians coloured it pink and yelow and gave it a sunshine glory, but the country is bankrupt.
The same for Ukraine. What does it mean, that the rating agencies, intertwisted with the banks, give to Ua rating BBB-. it is a clear default, as they do not have resources to refinance. The same is Greece.
Good luck making an example of Greece. Since the former South Stream has been redirected to Turkey the only way that Europe can tap into Turkey is through Greece. I expect that Russia isn't going to ship much gas through Ukraine because the crooked greedy oligarchs will steal most of it and demand Europe pay through the nose for what Ukraine lets them have. There can be no doubt that Ukraine will collapse Europe, perhaps even this year, and with it the EU.
Pull all your money out of banks and buy stawks! Good news, bad news, it appreciates either way underlying fundamentals be damned.
Made a run for my money and the money gone....
Da do run run run da do run run!
If I were in Greece the last thing I would do is take my fucking money out of one of the Banks and buy Gold with it.
Last thing I tell ya...last thing.
Somebody told me I had Euros still
We doo da run run, we doo da run
But when I went to the bank
They had an empty till
We doo da run run, we doo da run
Yeah, I had Euros still
But just not a-vail-a-bill
And when I walked on home,
They took my house and they threw me out.
We doo da run run, we doo da run
Get to work Mr. Bullard!
I am sure Nobody over there is scrounging around to buy any of that Useless Gold colored stuff...
/s
like russians few weeks ago?
/no sarc
This is like 2 guys having a fight and they have each other by the balls and are wondering what happens next.
Where can one rent this movie? Asking for a friend of course.
-J. Gundlauch
Coming to a theater near you.
War Theater.
Deregulation Plans, Transportation, Energy, Communication, Finance, Free Trade, Campaign Finance
1964 - Gulf of Tonkin, Congress gives up War Powers, Legislative Powers, and Budget Powers
1978 - Bankruptcy Reform Act of 1978,
1980 - Depository Institutions (J. Carter, followed by S&L Crisis, 5000 convictions, RTC)
1981 - Executive Order 12287, (R. Reagan, removed price controls on Petrol)
1984 - Caribbean Basin Initiative (Free Imports to USA)
1992 - Energy Policy Act (H.W. Bush)
1994 - NAFTA, Deregulation of Trade, 3 Nations (W. Clinton)
1995 - Community Reinvestment Act, the Clinton Admin urged flexibility,
1995 - HUD advocated greater involvement of state and local organizations
1996 - Energy (W. Clinton, followed by ENRON Scandal)
1996 - Telecommunications Act (W. Clinton, cross ownership)
1996 - Start of a Period of Accounting Fraud in USA which continues today
1997 - M2 Money Velocity Top
1998 - Clinton's Kosovo War
1998 - Brooksly Born Rejected on her concerns on OTC Derivatives
1998 - Derivatives expanded and were not regulated
1998 - Citicorp & Travelers Insurance Merger
1999 - Gramm–Leach–Bliley Act (Phil Gramm, W. Clinton, followed by 2008 Financial Crisis)
1999 - bombing campaign in Kosovo (W. Clinton, over 60 days)
2000 - Commodity Futures Modernization Act of 2000 (P. Gramm, W. Clinton, derivatives)
2002 - McCain–Feingold Act (G.W. Bush, Campaign Finance, soft money unlimited)
2005 - Energy Policy Act (G.W. Bush, subsidies, excluded clean air Water acts)
2005 - Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA).
2005 - CAFTA-DR Ratified, 2006 El Salvador, Honduras, Nicaragua, Guatemala
2009 - 2014 Continuing Resolutions in which Congress gives up Budget Powers
2010 - Citizens United v. Federal Election Commission (money is free speech for corps)
2011 - US combat in Libya (B Obama, over 60 days)
- (Laissez-faire economic policies)
Uh, that's when the government gets to laissez-faire, and the rest of us don't get laissezed alone?
Let me be clear. Goldman's "worst case" should be the public execution of their entire leadship.
I don't think people really understand things like "worst case" anymore.
Reaching for the empty toilet paper roll?
I like the new moniker--the "preemptied" bank.
Some bankers in the EU are going to lose some money with the default..but I bet they dont..they will find a way of selling that junk to the ECB first...where they can just print over the mistake...
and of course this all should cause the Dow and S&P to rally while Silver and Gold do the following on the open in London and NY....
http://www.kitco.com/charts/livesilver.html
http://www.kitco.com/charts/livegold.html
yeah, baby...
Bullish: Teargas and batons.
Governments telling the sheople their money is protected. LOL.
To paraphrase Kyle Bass: governments won't tell you the truth; they can't tell you the truth. They are there to promote comfidence.
The Greeks I know, who live in Greece, have long been in the habit of taking all their money out of the bank on Friday and putting it back on Monday. They've all made arrangements to be as independent of the system as possible. It goes with the territory I guess, they've always assumed governments and bankers are untrustworthy, so they're largely immune to their bullshit, much more than here.
Yes, and back in 2011 they were buying AK47s etc by the truckload on the black market...
Yeah, and then they go vote for politicians.
Because the politicians promise them free stuff.......for which somebody else somehow will pick up the tab.
Time to step up to the plate Putin.
Are you for real? Do you want to save Russia from Western Imperialism?
Greece is your first big chance in 2015 to strike a blow against the Fiat Empire of EU/USA.
South Stream has been rerouted to the Turkey-Greece border - extend it into Greece at a discounted rate for your Orthodox Greek brothers.
But.
Payments for this cheap gas can only be made in New Drachma, Roubles, Yuan or Gold - not the fiat follies of Euros or US Dollars.
Do these and watch the European banking system implode.
I posted the exact same ideas several days ago on ZH. You must have a great mind to think so alike.
I like where this is going...Bond holders becoming empty bag holders....Watch where you put your money, A-Holes....
Eagles. Welcome to the Hotel Europa. You can check-out anytime but you can never leave.
Not much different here.
"The Biggest Risk is an Interruption of the Funding of Greek Banks by The ECB. "
I think this insinuation alone guranteed there would be elections. What more could the Greeks want than to interrupt what the EU banks are doing?
it's Greek banks. which actually still are... EU banks. and eurozone banks. just in case you did not notice
Sorry, I tend to look at the reality of situations. Greece is long due an exit from the monetary union that they, and numerous other EU states, should never have attempted to join.
Just a matter of time now, but for the moment, your observation is still valid.
why? Greece is on the way of balancing it's budget. it already has a primary surplus. all you need to stay in the EUR club is balanced budgets. not yet reality, but on it's way
of course if Greeks don't want to have a state that spends only what it gathers... but knowing a bit Greeks that's actually one of the reasons why they wanted to join those two clubs
LOL. maybe you should hit pause, just for a second, to consider. maybe, just maybe, their books are as real as they were when greece joined the euro?
well, that's why the Troika is monitoring them, isn't it? reality and accounting are not in good terms, lately, anywhere
maybe even some goldman sachs advisers are part of the troika's task force currently scrutinizing greek books. experts as they are, especially on greek matters.
Goldman Sachs delivered Greece to the Troika. If it had not been for them hiding the true conditions of the country's finances Greece would not have been admitted. Goldman Sachs has also hidden things for Italian banks so their regulators would not actually see what is going on. Why is Goldman hiding things- for a nice fee of course. In what universe should this be allowed? Greece should leave the Eurozone. That abomination was created for one purpose only- concentrate power. Decentralize and keep power hunger psychopaths separated. Draw a million lines over the world- power needs to be difused.
you do know who the Troika is, do you? meanwhile, I'd prefer to have the Squid leaving the EU, or at least the eurozone. that is an abomination, in my eyes, that they are still here
All these "unions" that took place under false pretenses should be dissolved. GS should all be in prison. Houses sold under false pretenses with their mortgages bundled and sold into the market place as a financial product, all those contracts up and down the line should be nulled and voided as should the CDSs sold on them...
I could get exhausted if I really continued this game.
Everything is based on fraud. Even things that are clean are embedded in a fraudulent financescape. We are all tainted by them.
They are indeed an abomination.
some of those unions were not taken under false pretenses. at least, not in every country. I am against this "it's all the same" that so easily throws the baby with the bath water
I'll make an example: I was an early supporter of the EUR project because I was sure we'd have eventually a big currency war, courtesy of the Almighty Dollar. I was proven right, so far
I know I am being stubborn and state that up front as I formulate my answer in defense of the idea I am NOT throwing out the baby with the bath water on this, that all these deals are corrupt and so are all of us.
First: Who, among the Euro nations, is not so far in debt that they actually have a hope of repaying what they have "borrowed?"
Second: If you cannot name one, then by definition the whole enterprise is bankrupt (like the US btw). If you cannot even state that the majority of them are solvent individually or collectively, the EU, by definition, is bankrupt.
GS helped to cook the books for a couple countries, but currently those countries are not the only problem.
The way I see it, the flow of money stays up until it becomes defined as unworkable. Then it will come down on all our heads. That will only occur when supply chains fail. Until then, all the books have been cooked in a way that the majority is either ignorant or willing to go along with it because the minute we do not go along with it, by definition, the collapse is officially on. Right now faith (or denial) is all that is holding the system up. It is working for enough folks and enriching a very tiny minority, so the show will go on until it can't. But the EU, the individual nations, the US, and more, are all bankrupt and the idea that anyone is loaning anyone anything in an honest manner, expecting to get paid back, is a sad lie.
The world economy is a false pretense.
I think my view is dynamic and global and yours is static and situational. I don't think you are wrong, I think you are focused on some snapshots. Inside the crooked context, some of those who joined the EU, were in a relative way, legit. Inside a crooked context, with two crooked fiat currencies, the Dollar and the Euro, the Euro may well be a wise move for Europe to defend itself against dollar hegemony/collapse/dependence.
There is no way to fix the economy and punish all the wrong doers. The second we did that for real, the whole thing does unwind. Lying is keeping it alive.
Hope that made sense. I think we are two blind people holding different parts of an elephant, debating what it is.
MsCreant, I think two blind people holding different parts of the elephant and debating it is one of the best descriptions of the human condition
regarding your excellent points, I read them late and think I have to come back to you, piecemeal. always a pleasure to read from you, btw
MsCreant, perhaps your first point deserves an immediate answer, even though it might get lost, in this nearly dead thread:
there is no need to pay back all gov debt. in fact, if you were running a country without any sovereign debt the way "the game" is played now, you'd have difficulties to have a proper basis for your banking system and your pension system
the question is not "debt or no debt". it's how much, and chiefly how much of your budget it needs to be serviced
the "healthy" numbers for that are somewhere around 40%-60% of GDP and as much less then 25% of the budget as possible
currently, if the eurozone was one country, it would be around 90% of GDP and around 12% of the combined budgets
"unsustainable" begins when debt service exceeds 25% of the budget. but again, sovereign debt as such is useful, when not driven to excesses
Calm down, Ghordius. Man, this thread ain't dead, not even nearly. I am always with you, watching what you people have to write. May you excuse that I am often too tired to comment myself, because I am working like mad, and I mean exhausting work. But wherever you go here on ZH, there always roars a bearwagon not far behind.
Hey Ghordius,
normally the process of lending and borrowing fullfills the role of transfering excess savings to people who have a shortage of capital to invest. In the world we live in now money has become virtual and rather disconnected from real assets or labour, and more connected to political cunning and financial knowledge. What is the real usefulness of sovereign debt in some cases, other than setting up a system where a hidden hand collects a stealth tax on nations as a whole. One of the problems is, for instance in Belgium, that nobody knows (alledgedly) who owns all the debt. The system is not transparant ( by purposeful design I guess ). It is crystal clear to me that there is a financial elite that wants countries to be indebted, so that they can collect interests and exert control over states ( bonds, binding states ). A general statement that sovereign debt as such is useful will not do. Useful to whom ? And under what circumstances ? That can not only be expressed in debt to GDP or other ratio 's.
Hey, piratepiet
as I was mentioning, the usefulness of big piles of debt is in pensions, first (and banking system's "anchor" second)
I'll make an example: the Monte dei Paschi di Siena. the origin of that oldest bank in europe is in the fact that wealthy people of that time found buying debt useful for the "pension" of their daughters
there is a demand for big piles of somehow trustworthy debt delivering every year a small revenue, with some hope to get the principal back. and the history of those Renaissaince "mountains of debt" shows that this demand precedes the state's involvement in them
note, that's human action. without the involvement of investment as such. later the state just took over for the "guarantee" part, and the modern state uses it's debt to give a basis for it's national banking system and it's pension system(s)
to put it differently, if Martians would land and buy up all sovereign debt to then cancel it... this demand would have to find a new source
organically, it's a bit like the body putting up fat, which is not muscle (i.e. "invested for useful work") or bones and blood vessels (i.e. infrastructure)
sovereign debt fulfils this role of storage
a bit of fat is useful. Belgium's 130% of GDP, though, is not the cute little belly of the Manneken Pis. it's more what used to be called... bloated, and now obese
shedding fat, on the other side, is not that easy. it involves lots of willpower, the scarcest resource of the planet
thank you for your answer.
Though interesting, I do not really regard it as a rebuttal of my argument.
In the case of Belgium, as in the case of Italy, I guess investors know the economy is a bit bigger than what is reflected in official GDP numbers, and therefore tolerate a higher debt to ( official ) GDP ratio. Or could it be Belgium needs more financial pressure applied on, in order to keep the lid on ? Just speculating, Ghordius.
piratepiet, it is not a rebuttal of your argument. your argument is based on how things ought to be, while I try to stick to historic reality of what people do, and then rationalize why the do it
take Belgium and Italy. the "investors" are mainly pension funds and banks, private persons directly buying sovereign bonds come second
the very moment Belgium and Italy have only pensioners... they would be broke anyway
I'll try to explain in a different way: what is healthy leverage at a personal or household level? depends on how much of the income can be set apart for debt service. as for corporations
in theory, a corporation could have debt... forever. as long as the cow gives enough milk (and calves it's replacement), it does not matter that part of that cow is unpaid
debt is not bad per se. excess of debt is. nobody is asking Belgium and Italy to pay back the principal. meanwhile, thanks to ZIRP and NIRP, there is a big problem about finding new sources of "rentier income", because there is a huge demand for as-risk-free-as-possible steady income
and this demand is not created by financiers, is created by... grandmothers, if you want. financial sharks just want to milk the system for their gains
but again, absent the state... the demand is still there. in fact, this new serfdom of the student debtors in the US looks like this demand found some new sources, while the financial sharks smile for providing it to them
I am only beginning to understand some of the basics of finance and economics, so I have to be humble, but it is important to talk about how things ought to be. To attain the possible, you have to attempt the impossible ? Historic reality is too imperfect to stick too. You are skillfully avoiding thorny issues and presenting it all as rather innocuous. Demand created by...grandmothers..lol Ghordius.
I remember reading in an old book that UST yield was considered the risk free rate. Now I see that even Spain and Italy's yields are lower. Is that not a clear sign US hegemony is over ?
And, probably rather unrelated, what would be a relevant question about Chinese public diplomacy in the context of Sino-European relations ? Which question would you like to see answered ? ( forgive me for asking you this, it is actually a question I have to find an answer to myself, obviously, but I thought maybe I can pick Ghordius' brain ).
if it sounds innocuos, well, it's not the way it was meant to be. that stuff is explosive. but again, a very small petard is fit for the hands of a child, while a stick of dynamite... isn't
don't underestimate the demands from grandmothers, or females in general. ever. without those demands, we'd be probably still at a hunter/gatherer stage of civilization. possibly even patriarchalism was a response to too much of those female-oriented urban & debt demands in ancient Mesopotamia, with dissatisfied urban populations opting for becoming pastoralists, instead. David Graeber makes a good theory out of that in his excellent book "5'000 years of debt"
"risk-free" is an invention of debt peddlers. and a way to overvalue USTs. note the collateral that Greek banks use for their dealings with the ECB. plenty of USTs among them
I'd be very careful with those signs of hegemony state. do you calculate from the perspective a USD or from an EUR portfolio? note that the USD is damn "hard", from the perspective of all those who are outside those two currency zones. further, note how much effort the ECB puts in talking down the EURUSD
damn difficult question about Sino-European relations. Russia comes to mind, and of course Iran and Saudi Arabia. but Uncle Sam is in the middle of all this, with exception of trade regulations for direct import/export
"do you calculate from the perspective a USD or from an EUR portfolio?"
I would not call what I have a "portfolio", it is too little.
My angle here at ZH is not really personal financial, but much broader.
My question was about Chinese public diplomacy, in other words the efforts by the Chinese government to inform and influence the European public. But thanks for having a go at it anyway !
yes, but the aggregated personal perpectives add up. Wealthy South Americans, for example, often bank in Florida, in USD. from their perspective, it's "hard" and safe
OK Ghordius, I am just an amateur in all of this. Maybe I see too often what I want to see. Obviously USA is still relatively hard and safe, but we are talking about a trend here. I have my eye on very few numbers, but the spread between the Bund and UST is one of them, and it suggesting something to me. Or are these merely different inflation expectations that are baked in ? Or maybe more is happening, like the Chinese and others selling US debt and buying European debt ? I do not know. Hand me the dynamite, Ghordius !:-)
piratepiet, remember that it's all something that started 1971. it is a trend, but with a slow buildup. now we are in a full blown currency war
dynamite? the USD has a 5% chance of entering a hyperinflationary phase in 2015, imho. like Russian Roulette with one bullet and twenty chambers
meaning that in 95% of the cases in 2016 we'll be still living in a world where the Mighty Dollar rules supreme
remember all the ZH articles about all those stock exchanges going up, up, up while the FED was printing? now the FED isn't, and lots of those dollars are coming back home. one of the biggest flows back was after the earning/dividend season in europe
as long as the FED refrains from printing further, we'll see an incipient dollar dearth, first in the world, then domestic. it's deflation that triggers the demand for inflation
"The world economy is a false pretense." absolutely
yet consider this: there is a real economy around. and it clothes, feeds, shelters and entertains... billions
what are broken are the valuation methods of this economy, particularly on the financial side. on the other hand, the whole real economy is... priceless and precious beyond valuation
remember that prices are the imaginary concept. because prices are done at the margin. of the flow. stocks... are just stocks. a mathematical sum of the parts... were math deceives us
example: lots of people would sell their little finger to destruction, given enough money. but the price for their little finger can't be used to extrapolate/evaluate the price they would ask for the whole body to be destroyed... because that would be a completely different preposition, and so transaction
as such, humanity is blessed with unmesurable riches. proper accounting of those riches... is illusionary. some of the madness we are seeing is steeped in those giant markets that try to account for the whole globe's flows and stocks, and fail, miserably
Yes, the questions you bring up reach very deep and the answers would be voluminous and complex: What is value? What is of value?
I can't tell you either, but what I can say is that an attempt to answer these questions can be very beneficial for the individual development of a person.
the biggest insight there is that value is personal, while price is transactional and at the margin. this is the insight of the so called Marginal Revolution of economics
which focused of course on prices, leaving the more philosophical question about value on the side, except for the introduction, like: "how much do you value one glass of water when dying of thirst in the desert?"
Goldman Sachs of shit ain't no ones friend,buddy,pal, nor do they have anyones best interest in mind but their own. If they're making the deal or like the deal, "Be afraid,be very Afraid"
Government interference never works, not even in Europe as Greece exemplifies...
http://www.globaldeflationnews.com/jaguar-inflation-a-laymans-explanatio...