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Greek Stocks Crash, Bonds Plummet, Banks Have Worst Day Ever
In the two days after Syriza's dramatic victory in the local Greek election, global investors assumed this loud cry against European policies would mean... more of the same, and as a result not much changed in the risk assessment of Greek assets. Then, overnight, following the previous report that not only does Syriza mean business but it is actively pivoting away from Europe (and toward Russia?), and everyone started paying attention, with a waterfall of selling engulfing not only the Greek stock market but also its bonds, which are crashing in the process sending the 3 Year yield to 16.4%, the highest since the restructuring, and the 10 Year either below or above 10%, depending on which data source is used (Bloomberg has them slightly below, others reporting 10-year bond yields up 50 basis points at 10.30%).
For those who missed our take from last night on Greece, it can be found here, while Reuters' update this morning notes the following:
Prime Minister Alexis Tsipras promised "radical" change on Wednesday as his new government swiftly moved to roll back key parts of Greece's international bailout, prompting a third day of losses on financial markets.
A swift series of announcements signaled the newly installed government would not back down from its anti-austerity pledges, setting it on course for a clash with European partners, led by Germany, which has said it will not renegotiate the aid package needed to help Greece pay its debts.
Even before the first meeting of the new cabinet, ministers had hit the airwaves to reassure voters they would honor campaign pledges to roll back the tough economic policies imposed under Greece's 240-billion-euro bailout program.
The planned sale of a 30 percent stake in Public Power Corporation of Greece (PPC), the country's biggest utility, was halted while ministers pledged to raise pensions for those on low incomes and reinstate some fired public sector workers.
"We are coming in to radically change the way that policies and administration are conducted in this country," Tsipras told ministers at their first cabinet meeting.
Needless to say "radically changing" is the last thing all those US hedge funds, may they rest in piece, who bet all-in on the Grecovery in 2013 and 2014 is what they wanted to hear and the resultant decimation of Greek risk is as follows:
- Greek banks continue rout as 3-yr bond yield rises to 16.5%, highest since restructuring.
- 10-yr spread vs bunds widens to more than 1,000 bps
- FTSE/Athex banks index down 19%, taking decline since election to as much as 39%
- Piraeus Bank falls as much as 23.2%; volume-at-time is 286% of 30 day average
- Eurobank Ergasias falls as much as 22%; volume-at-time is 284%
- National Bank of Greece falls as much as 20.5%; volume-at-time is 394%
- Alpha Bank falls as much as 19.5%; volume-at-time is 324%
- Those four banks account for 0.54 points of Stoxx 600 decline; index down 0.6 points, or 0.2%, to 368.11
This is what the first three days of post-election Greece look like for local stocks: the biggest weekly (so far) drop ever.
Update: Greek bank stocks not liking Syriza's victory, -38.5% this week, on track for biggest weekly fall ever: pic.twitter.com/fsectnGMMt
— Jamie McGeever (@ReutersJamie) January 28, 2015
Worse, Greek bank stocks right now are having their worst day ever.
Last one on Greek bank stocks for now - they're having their worst day ever: pic.twitter.com/5PKMRiwRSq
— Jamie McGeever (@ReutersJamie) January 28, 2015
It's amazing what happens when a country finally has a politician who truly puts the interest of the people ahead of those of the bankers or shareholders.
And of course, nobody ever said going cold turkey on years of European bailouts (bailouts which are used by Greece to mostly continue paying its obligations to the Troika) is going to be easy. If indeed Greece is intent on proceeding with the Icelandic route, we congratulate them... and wish them luck because the next 6-12 months are going to be painful. The good news: it's all uphill from there.
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Molon labe bitchez.
Mr Panos is now selling shart proof underwear to the ECB, he is one enterprising Malaka!
::IN MR. PANOS VOICE::
Who holds enormous amounts of Greek debt?
THE GREEK BANKS DO!
Somebody get cnbc on the line, this is going to be tough to cover up.
Yes, we have our real estate experts here today on CNBC today.
Mr. Schnitzelface, what do you think about the selloff in Greek stocks today?
--Yes Michelle, I think its generally bearish for the economy in General. Greece is a small country and completely contained. There are no run-on effects, and it would be a great time to invest in the S&P. I think we could easily see 3000 by July.
I bet the ECB QE is quietly terminated soon cause of Greece defaulting.
To keep the EUR from falling through the floor?
Liquidity will be disappearing as various entities are having to write off hundreds of billions Draghi will add a 1 before the 60 to keep the thing from imploding. You want to talk about "deflation" -- remove over 400 billion in "assets" from the bank's balance sheet in less than 30 seconds. That'll show you deflation.
I think the ECB via the national central banks will buy all those Italian 8% bonds that are now at 1%, the banks will book a huge profit and that is the offset for them.
How I see this playing is Greece leaves the Euro, but the IMF (US Taxpayer) backs a new Drachma to keep them from turning to the axis of evil....
So the Greeks pay back the Germans with American tax-payer subsidized Drachmas back by the full faith and credit of the USD.
Excellent for the Germans.
Excellent for the Greeks.
Shit for us Americans.
Lets hope Mr. Panos does not outsmart himself and fall into the socialist trap. He is a Genious you know..
Banks Have Worst Day Ever
Who could have seen it coming really?
How dare they oppose our imperial policy towards Russia!
It's time for nationalization.
Yeah, well...I'm thinking military dictatorship now.
There isn't going to be a "Greece" by Friday.
How many Greek people signed the contract to underwrite this 'debt'?
..........Oh yes, nearly forgot.... did the unborne manage to sign it?
Default is the fastest way for Greeks to get out of their situation. Go Icelandic... Tell them to piss off and throw the banksters in jail.
"Tell them to piss off and throw the banksters in jail.".... Finally a good definition for a 'bail-in'. We could even allow the occasional 'bail-out' to the yard if they work hard enough to earn the required printed prison tokens.
Default works only for non-lazy nations. As evidenced by the multitude of defaults in Greece's past. What makes you think this default would be different for Greeks? Also why does everyone invoke Iceland here? Hard working, northern Europe heritage country compared to lazy, "manana" type southern Europe heritage country? The fair comparison here is Argentina.
Interesting point.
Can you please explain why the Hard working, northern Europe merged economically with lazy, "manana" type southern Europe?
What was the positive target of that move? Wasn't the end predetermined inevitably?
"Banksters throughout Greece were freed from their prison cells today after the sudden coup detat by the Greek Armed Forces."
Call China Greece .
Politicians who do what they say they are going to do? Whatever next??
If the banks close their doors, every depositors money goes with it.
Nationionalize the fucks. Hell, they are admitted socialists anyway.
Greek crash - so what
Europe is still stable
no reaction there
As i said before- who cares about greek banks and bonds(aside the greek pop and Cyprus)
when it doesnt influence any western asset?
So wjy post these panic news??wtf
" Europe is Stable "
Tell that to Germany .
are you living in the same planet?
Dax is up from 3000 to 10700 in 6 years
and Even Greek election hasnt influenced it- will it in the future?probably - but this site has been negative in the last 3 years and as i said- if Tayler had to run a gedge fun he would have lost 90 %
of money-
SO TIMING IS EVERYTHING
Dax is up from 3000 to 10700 in 6 years
Drugs are good for you......and so is QE.
Six years......sounds about right.
O.K., 3000+- was due to some crisis-effects...
But this 10850 is due to it's debt! Look how debt did since 2008 and you know a little more within these mysterious markets.
And don't mention Italy.
Or Spain !
Germany may be the first to leave and join the BRIICS
Take a look at Germany's aging population or look at thier population demographics in general. Its not pretty. They haven't been reproducing and it has already started to bite them in the a$$.
There is this thing called a much bigger picture...just sit back and watch, it's starting to move a little faster now.
Except, of course, that pretty financially unstable countries within the EU are on the hook: Italy alone has put 48 billion euros in Greek bonds and would have to immediately find (thro taxes on its already hyper-taxed citizens) 25 of them to recapitalize its hare of the ECB and the various EU funds that were used.
As an Italin taxpayer, I kind of care (altho at the same time I'm kinda rooting for tsipras to break the game, as it has became unplayable for everybody but Germany by now)
debt is a piece of paper. to which two parties agree. it is worthless if one party breaks agreement, when both do it's war. legal,economic, propaganda or armed conflict wars.
EU to greece, look we printed some euros for you - with them we bought you - we own you because of the printed out of thin air euros.
greek government..well no you don't keep your created bankster paper. and get out.
A 'contract' between countries (fictions) is not a contract.
A 'handshake' between countries (fictions) is not a handshake, too.
Come on Spain. Italy. Ireland. Portugal.
Death to the moneychangers indeed.
Europe is about as stable as a drunk on one leg. It is a warped, unworkable pipe dream that was conceived badly, was a breech birth and will end up like an abortion if they keep persisting with their stupid policies.
I just hope that neither the government nor the people of Greece will lose their nerve in the process of overturning some of the sacred cows that have been worshipped by their politicians until now.
Hear hear.
DavidC
Here Here
bunnyswan
Over here you will find a person who agrees, Sir
http://www.dailywritingtips.com/hear-hear/
Bankster life insurance premium increases exponentially.
That recent QE is starting to make more sense now.
Long Greek donkey carts....still :)
Let it all burn baby ! I love the smell of defaulted bonds in the morning !
Smells like dogshit !
"It's amazing what happens when a country finally has a politician who truly puts the interest of the people ahead of those of the bankers or shareholders."
100% spot on Tyler(s), spot on.
DavidC
"It's amazing what happens when a country finally has a politician who truly puts the interest of the people ahead of those of the bankers or shareholders." to quote from the article.
So, how do you know that this guy puts the interest of the people ahead of (...)? Isnt it a ridiculous statememt? Just wait a bit, this guy has to first kiss putin's hand and wait for the intructions.
anyways, greece better does what the grandmaster putin suggested: turn the back to europe, join eurasia and they will buy their olives and cheese:) Thats a future.
Someone put it rightly: greece is a liability not an asset.
2015 politics:)))
mandea
"this guy has to first kiss putin's hand and wait for the instructions".
Beats the hell out of kissing the ass of Brussels and being forced to do everything and anything they tell you to do. Look how far that policy has gotten them.
are u sure? greece was never a developed country, they simply could not learn how to pay/collect taxes. They are in this situation only because of them, anyways they were paid 240B(!!!) and now they cant return this money and? cry loud, we die for our honour:) and dignity:)))- But when you sit like a begger and wait for UE to save your ass, what then? no honour? no dignity?
And please stop talking about evil banks.
Well, for europe is actually good: russia should assume UE role and you will see:))))
It appears that BRICS will get a new one. That's ok, who cares?
As we speak shadowy figures are busy leaking falsified documents to incriminate Syriza's leadership with involvment and conspiring with IS and must therefore be immediately jailed and the party disbanded for the good of Greece.
Well worked in Egypt....
This was going to happen anyway. What cannot be repaid will not be repaid. The $240 bn in freshly printed loans up to now were to bail out the banks holding Greek govt. bonds, with a nice slice being allocated to grease the politicians. Maybe the Rooskies have assumed the latter role now. Kudos for forcing the tempo.
Putin's drawing up plans for his dacha on the greek coast as we speak. Greece is out and will be much better for it in the long run. The predjudice against the west for all the damage done, well that could take a while. Payback is a bitch.
Russia: umm.
In theory, Russia has 400 billions of reserves and an immense amount of oil it doesn't really know what to do with right now. Assuming they'd promise Greece their yearly oil imports for free, that would mean 8 billion euros of help for minimum cost. Reopening Russia for greek food exports, making it the only EU partner, would mean another 5 to 10 billions for Greece between direct Greek production (which would mean money going directly to part of Tsipras' political base:impoverished farmers) and considering that the rest of Eu wuld re-route thro Greece (allowing it to reap some form of transit fee... probably in the form of import-export price spread) and an inflation damper for Russia (and bonus points for Vladimir on the internal front as saviour of the Orthodox borthers).
Appealing.
Besides: how much would be worth for Russia (or China) a vote within the EU Council? or an effective veto power within it on matters that require an unanimous vote?
of course, if anything like this would seem, not even likely, but just possible to happen, Tsipras would probably end up having a strange plane accident on a Russian airport's tarmac, or something.
See, that is Europe. "We are a union!" (if it's in the Interest of Germany and French) but sometimes there's Greece (and most likely some others) disagreeing.
'QE to boost Inflation and growth' - but not for Greece, well, maybe starting in July if they stick to the torture-policies...
The new Greek government has also come out fighting over the Ukraine.
Greece remembers only too well the mass murder of fascists and nazis.
The government is rejecting the EUSSRs latest blame of the Russians being responsible for the attack on Mariupol.
As are some other EU states.
http://rt.com/news/226947-greece-russia-statement-ukraine/
Well, he isn't too bright, is he? Rehiring workers that the state can't afford.... increasing pensions. Hahaha. I literally could not care if Greece fell into the ocean.