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What's Next For Greece, The Euro, And Markets?
First, a quick recap of what happened yestrday, courtesy of the WSJ:
#1: Germany Got What it Wanted, for Now
Germany spent the last few weeks insisting that it wouldn't scrap the bailout program and still lend money to Greece. The new left-wing government of Alexis Tsipras insisted that it wouldn't extend the program and instead sought some "bridge" financing from the eurozone. In the end, Greece asked to extend the program and pledged to follow its rules. The extension lasts until the end of June, just weeks before Greece must make several large debt repayments.
#2: Greece Got the Prospect of Some Leniency
First, the eurozone appeared to offer some leeway on Greece hitting its budget target for 2015. Given the sharp deterioration in the Greek economy and government tax receipts, that seemed inevitable. The eurozone statement also doesn't repeat the budget targets for future years of the existing program, which call for the government to run a surplus, excluding interest payments, of 4.5% of gross domestic product. Relaxing that requirement had been one of Mr. Tsipras's main goals.
#3: The Deal May Not Hold
By the end of business Monday, Greece must submit a list of legal overhauls that it wants to adopt, based on the current program. Mr. Tsipras has said he wants to replace many of the mandated changes. But a number of the ones he dislikes most--such as cuts in pensions--are also the ones considered most vital by the eurozone and the IMF. If the eurozone doesn't like his proposal, ministers will meet again to discuss their next move.
#4: Greek Politicians May Reject Deal
The deal appears to go against some of Mr. Tsipras's campaign pledges. Greece will still be subject to oversight by the European Commission, the IMF and the European Central Bank, whom he had vowed to kick out. Rejecting such conditions would have left Greece without access to funds and at risk of its banks being cut off from the ECB. That could have forced Greece from the eurozone, something the Greek public still opposes. But Mr. Tsipras's Syriza party and his coalition partner may not be happy.
#5: Greece Will Need More Money
Running lower budget surpluses this year, and possibly for years in the future, means Greece will need more funds. Eurozone officials have said they may lower interest rates on loans given to Greece, but it is unlikely to be enough. There is only around EUR15 billion ($17 billion) left in Greece's bailout, around EUR10 billion of which is in a fund for Greek banks. As it stands now, the deal says those funds should be reserved for the banks and not for financing the Greek government.
* * *
And next, courtesy of Peter Tchir Of Brean Capital, is one outlook on What's Next For Greece, The Euro, And Markets?
I’m sure that at this stage everyone is sick and tired of hearing about, reading about, or even thinking about Greece and GrExits, but it is impossible not to spend a couple of minutes looking at Friday’s “deal” and figuring out what that will mean for the future.
Garanimal 30%: These “mix-and-match separates makes clothes easy to pair and fun to wear” is my new term for the optimistic outcome. Greece starts aggressively collecting taxes, makes progress on other “hot button” issues for the rest of Europe and gets a package designed for long term sustainability. I think we see European equities rally. European bank stocks rally. Credit spreads narrow considerably, and very quickly, a new deal is cut for Portugal. That is followed by renewed efforts to kick-start the economies of Spain and Italy. This would all be very good, and is possible, but already seems like the market is putting a higher probability on this occurring than I am. Greek bonds should do extremely well in this case. For the Euro, I think I can create believable scenarios that have a short covering spike higher on the back of this sort of watershed event, but I can also think of plausible reasons why it would resume its QE inspired downtrend.
GrExit 40%: I put the likelihood of a Greek exit at 40%, making it my most likely scenario. The 4 months is merely an attempt by both sides to revamp their plans for an exit. On the bright side, that considerably increases the likelihood of an orderly exit. They have to renegotiate the terms of all their existing loans from Euros into Drachmas (they should probably do the same with the bonds, but the loans are their big issue). That way the rest of Europe can still say they are getting paid in full – just in Drachma at likely an overly generous conversion rate, rather than in Euros. Greece CANNOT start a new currency and keep all of its outstanding debt in Euros. It would also give the ECB (probably with strong encouragement from the Fed) the time to create a realistic way to make the transition palatable for the banks – the Greeks will need solvent banks in the new world order. I believe that an orderly exit is fine, and I think with 4 months to do it, they are 75% likely to find a solution that works for everyone. Given all the parties at the table, the precarious status of some of those parties (political or financially) there is a risk that the GrExit is messy, which I put at 25%. While the markets should largely be able to ignore a well negotiated reasonable exit strategy, it will encourage parts of Spain, Italy, Portugal, and possibly even Finland to discuss exiting the single currency (they will want to maintain as many benefits of being in the EU as possible, without the currency or some of the more onerous regulations). Under the good exit scenario, risk assets in Europe struggle to continue their strong performance (the CAC, DAX, MIB, and IBEX are all up 10% to 15% this year). The new “better” Euro appreciates as investors start to bet that other weak members, requiring the most ECB support, also look to leave, making the Euro look more and more like the Deutschemark and crushing the large short base. The “messy” Grexit scenario hurts all risk assets as questions arise about who will pay what debt and when. Even with QE, I would expect selling of periphery debt and I think the Euro would drop precipitously as investors fled Euro denominated assets in droves. So maybe this is actually two scenarios – the Good Exit and the Bad Exit.
Kick the Can 25%: The Germans, who apparently have a word for everything, also have a work for Kicking the Can – its “EU Summit”. There is no group that is better than kicking the can the EU, and betting on any summit resulting in a statement that sounds great, that is really more just can kicking is usually the odds on favorite. I put that at a reduced probability this time around, as it might be causing more instability at home for many politicians, rather than less. Having said that, the prospect of potentially working through July and, horror of horrors, August, could be daunting enough that another 4 month kick could be given – especially if Greece makes some progress, just not enough. Remember, the EU “bailout” largely goes to cover paying back previous EU, ECB, and IMF loans. Some is new debt to fund the country, but that is the smaller amount. This is more of the same. If this scenario looks likely, expect more small moves in all asset classes – the moves will be relatively small and particularly vicious – and feel random after the fact – just like the past 3 weeks. It would warrant fading any strong view either way without sufficient evidence.
GerExit 5%: While this seems like such a low possibility, it does seem that Germany is becoming more and more isolated from the rest of Europe (with the possible exception of Finland which seems even more separated, both physically and fiscally). Is there a point where Germany just decides that “I’m going to take my ball and go home!” Does it get too tiring being the “only adult in the room” or at least believing that you are the only adult in the room? Does Germany believe that its system is superior enough to withstand the immediate pain from moving to a much stronger currency? Would they be more comfortable dealing with the issues of having a the Bundesbank run a new Deutschemark instead of feeling that they have to constantly act as the police of the European banking system? At some point, does the feeling that they are the only owns really sticking to the original plan become so frustrating that they decide it isn’t worth it? Would a German exit from the Euro be welcomed by others? In theory, a Euro without Germany and maybe some other strong members, would sell off dramatically. It should help the rest of the countries become more competitive, and if they still allow visa free travel, it won’t hurt the tourist trade as relatively rich Germans still come to the Mediterranean to spend their shiny new Deutschemarks. This seems like a very low probability event as Germany has been a key architect of the Eurozone and done so much to keep it together, but, it does in many ways seems to solve the issues faster and more conclusively than any solution focused on Greece.
What This Means For Trading
I think Friday’s outcome and the potential future outcomes boil down to a few simple things to consider
- Friday’s bounce was rather weak. The S&P and NASDAQ both only managed to climb by 0.6%. Since Europe had already closed down for the weekend, almost all the short covering related to announcements would have to have been done in the U.S. market – making the pop even less compelling. A classic example of “buy the rumor, sell the news”? Treasuries still wound up the day only unchanged as well.
- Unless someone senior from Greece says they are defaulting, or someone senior from Germany says they are kicking Greece out, any headlines from Europe should be ignored. Over time which of the scenarios seems most likely should play out, but until then, this is mostly noise.
- I will be looking to see how Spain reacts – will Rajoy’s opposition view Greece’s extension as a victory for Greece and put renewed pressure on Rajoy? Will the Greek people feel like their leaders sold out too quickly and try to put an actual radical party in charge? It seems that a few days of EU Summits can take the radical out of a party.
- We can now focus on the domestic situation. On earnings and growth and what it means to have a Fed far more interested in “normalizing” policy than intervening at every market blip?
Be Careful What You Wish For
Yes, we are all sick and tired of the incessant Greek headlines, but I am not so sure we will like what we see when we resume focus on our own economy
I have to admit that the chart is far less compelling on a longer term time horizon, but I wanted to end this note with a good segue into the new “meme” that I expect to dominate the news waves over the coming weeks – what is going on with the U.S. economy and is it really as good as the last NFP report suggested?
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"Grexit" makes a great headline to push newspapers and up the click count but the truth is it isn't going to happen under Syriza. The Greeks don't want to leave and never gave them the mandate to do so.
Janet Yellen has to testify in front of Congress this Tuesday and Wednesday. Let's see how many lies she tells and how many softball questions she gets asked..
I'm hoping for hardball questions. Don't think much of the jelly-spine republicans, but at least with the "Audit the Fed" bill in the works, somebody will surely be grilling her -- NOT for the benefit of the people, but for their own political aspirations. I don't care what the reasons are, I just want to see SOMEONE make her squirm.
Next up, the Cyxit:
First Greece, next up Cyprus as Opposition Parties want to Renegotiate EU BailoutSerious can kicking at this point...
I think the Greeks are playing a more sophisticated game.
First, Greece cannot lose the EURO without the New Drachma is printed and THAT takes a lot of time.
Second, they cannot use their own mint, currently printing the 10’s, and keep it a secret from the world – they have to outsource it to another country which can keep it under wraps, most likely Russia.
Third, the reason they were originally insisting on the SIX MONTHS extension is because this is how much time they needed for the newly printed Drachmas to be delivered. Now, they have to beg the Drachma-printer to complete the order within the 4 months.
Meanwhile, they can attend all the meetings, pretend to roll back some or all campaign promises - all of that doesn’t matter. As soon as they have their Drachmas, they will pull a Nuland, i.e., “Fuck the EU”. I think? ;-)
Looney
at this point it is click revenue...
google should enter the fray.
apple could buy greece!?
payoff debt, setup shop and kick back while slaves in china get'r done.
at this point it is lol...
Greek politicians took all the money, why don't THEY pay it back to GERMANY? The Greek people never received any benefits, but they were heavily taxed for the money that the politicians fled with.
Garanimal.
Deuxit! (pronounced d-o-i-xit)
Best solution for everybody.
And in order to keep the new mark from appreciating too much Deutschland could just payoff its external debt by printing new marks.
"Greek politicians took all the money, why don't THEY pay it back to GERMANY?"
thats a general statement widely used ,,, the money (97% according to Disslebloom) goes back to Brussels.
even in general for other situation and countries despite this widely distributed view by MSM, about the local politicians dont be so sure they are just given the money and they just pocket it ... would you do it, if you were the lender .... probably not, why do you assume others are stupid to do it? or just because you hear it all the time by the Brian Williams of the world?
I WISH YOU WERE RIGHT.
But history has proved that the Greek politicians are the biggest bastards there are, for the Greek Population, they betrayed them time and again.
I don't care what the reasons are, I just want to see SOMEONE make her squirt.
FIFY
It's a phony tent show to provide the illusion that the FED is a government agency for the sheep!!! It never ends the escorted lies and deception..
Europe is run by fools...
Greece requested money untill the summer to begin with and after that they would stop the austerity and downpayments.
It’s winter now and not the right time to shut down theninfrastructure.
And whatever the deal is, the greek economy is done with, there’s simply no more income to tax.
Almost all the people still employed are government workers and that’s not productive in any way.
Greece got what it wanted for and europe lost another bundle of money that will never return.
it’s going to be a hot summer...
"income tax"
95% of the tax owed is by only 11% of the People.
Pretty much sums up the whole "deal". As they say, "he who laughs last..." ;)
'And don't forget "Grrrreeeaat" has a chance too' - Tony the Tiger
Grexit?!
Greece must leave the EUR quagmire if it has any self respect, instead of being governed by the troika.
Respect...now thats funny!
May seem funny...but there was no rule at inception that any sovereign nation state would be over rulled or ruled by another political and economic heavyweight. EUR was supposed to be a monetary union of equal nation states and it has turned out to be anything but.
A union is only tested in a crisis and EUR monetary union is failing in that regard. The strong must support and help the weaker and not bully them.
This crisis, like most, was designed and devised to enable even greater powers for the central governments. This was documented in recordings of those who created the EU. Any fool could look at this setup and see failure written all over it. So why else do it other than to create financial mayhem that generates the fear and desperation needed for society to voluntarily surrender their freedoms....to preserve them. Exactly what we are witnessing. the EU is demanding more power to "fix" things. As you point out, this monetary union DID NOT provide the authority we now see them tossing about.
EUR has been a failed monetary EXPERIMENT from day one. The sooner the 'central Governments' realise this, the better it will be for the masses.
In the end, the masses always pay for the experiments made by the rich and the powerful.
I agree that EUR has been doomed to fail, as you also point out, since inception. When this will happen is anyone's guess, but the sooner EUR is done away with, the better it will be for mankind living in Eurozone.
Designed by Wall Street, not Washington.
That says to me "designed to make Wall Street money"...and indeed, the market surges higher on "the news."
A virus? Some "malware"? Even the backdrop (" War in the East!") seems, well...if not planned then somehow "devised."
The returns just don't seem real to me.
Not that this is suppose to be a fair fight of course.
These are entire countries however.
Warren Buffet did call them "financial weapons of mass destruction."
Obviously this has lead to "real war" as the backdrop was "9-11."
Hmmmm.
911....
Where have I heard those numbers before...
Usury...
But it was "deliberately" doomed, for a purpose, which is being realized NOW. The EU is the power and the bankers are their armies. We will watch while each EU member surrenders more and more power to the central government an the banks will be the ones with financial weapons of threat in their hands.
"A union is only tested in a crisis and EUR monetary union is failing in that regard. The strong must support and help the weaker and not bully them."
LOL. When the weak refuse to change in ways to help themselves and the rest of the union, how long should the strong continue to carry them? Would you do all the work in a partnership and allow your partner to drain productivity from your house into theirs, indefinitely?
Yes.
How long will Washington carry California, Illinois, Michigan? This about power, not money, not paying your bills or living within your means. The EU is trying to develop the kind of centralized power that Washington enjoys. As the sole source of funding means they call the shots. the more broke their states are, the more power they possess.
Would you buy greek bonds? I wouldnt, either. Thats why they'll stay in and do what they are told...along with some whining.
Just get the hell out of the EU and earn a living. The Greek people will then have to throw out their Socialist Dear Leaders if they want to survive.
Why is all this happening? oh...got it. And the resolve? oh, got it. There in lies the answers
Crack kills
I had such high hopes for the new Greek leaders. But alas, they reverted to what all politicians do, take the option of least resisance and pain. Kneel before the EU bankers. castrated.....
Germany is isolated? You´re in delusion really badly. This was a everybody in the Eurozone against Greece, nothing else. Most of the Southern European countries wanted even more punishment for Greece, Germany actually saved those pathetic Greeks.
Germany has to pay for everybody to stay in. That's the future... unless the Germans decide to insulate themselves from the euro black hole. Your move, tough guy !
Germans do not pay more than anyone else in the Eurozone. But they take the most advantage out of it. Think about that.
This is the reason for Schäuble to flinch always at the end. A weak EURO is excellent news for German exporters. Grexit would lead to a stronger Euro after a first shock obviously.
That's history. It was a nice one while it lasted. However, from now on Germany will have to pay everybody else to stay in. It's the way of the future for EU. The most fun you'll have it's when France will come around asking for "economic compensantions" (aka money)...
The "union" is the only thing those actually making the decisions care about. It will be preserved at all costs. Greece has no way to repay and the EU has no way to force them to pay, so the only solution is no solution....extend and pretend. These little crisis's will come and go, much to do about nothing...except keeping the illusions alive. The Greeks will reject austerity and the EU will reject default, so, they must agree to some nebulous payment scheme that sounds real yet has no definite timelines or specifics that can be verified. This goose, like all of our gooses, was cooked years ago. This about those in power, staying in power.
Whatever lie it takes.
MacGruber has a solution to the Troika/Greece problem
Winston Churchill once told the British people "I have nothing to offer you but blood, toil, tears and sweat". Tsipras needs to tell the Greek people the same thing - because that is what they are in for sooner or later.
They voted him in precisely because they dont want to give 'toil, blood, tears and sweat', they want to continue living on somebody elses money and they dont want to make any effort to pay it back.
Maybe no blood...because they are bleeding now in their hospitals without the means to cure certain sick people.
Quick, distract the sheep with a picture of Nancy Pilosi having a side boob nipple slip while lap dancing for congressman Barney Frank. Greek problem fixed.
Grexit will save Greece and Europe from the neoliberal jail
In case that SYRIZA has a secret agenda, and be pressed by the lenders beyond red lines, it could nationalize the central bank and return to the national currency, blowing up eurozone. This could bring a disaster to the plutocrats' plans, as may trigger the domino of other Leftist European parties to follow SYRIZA's example and drive Europe towards the direction of the real democracy and unification under different terms for the benefit of the majority.
The countries that joined the Eurozone in 1999 understood the deutschmark to be backbone of the euro. Thanks to Germany, they got a stable currency and low interest rates on their borrowings. By borrowing more than it could afford to repay and misreporting its budget deficits, Greece abused its membership privileges. This is where trust between Greece and its fellow Eurozone members broke down. It appears that Germany and the other members of the Eurozone want Greece to stay, but at the same time Greece will be required to accept some fiscal discipline and responsibility if it wants to retain the euro.
The January elections demonstrated that a large section of the Greek population is dissatisfied with their present economic plight and want change. The Greek govt strongly believes that it has a mandate for change and if it doesn’t get what it wants or finds that the EU is unwilling to compromise then it may look elsewhere for alternative ways of achieving its economic objectives.
Heavy handedness and rigidity on the part of the USSR towards Yugoslavia following WW2, led to its expulsion from the Cominform in 1948. This caused Tito to re-evaluate his country’s relationship with the domineering USSR, ultimately deciding to build a closer relationship with the west. Britain and the US rolled out the red carpet for Tito and supported Yugoslavia because they understood its geostrategic importance. The threat of Soviet military bases in the Adriatic was neutralised thus giving Italy breathing space.
In order to resolve this bitter dispute it’s likely that the EU will try to find a way to accommodate the new Greek govt. Regional stability and security considerations will likely have equal weighting to those economic.
1. The banksters, as always, got what they wanted.
2. The Greeks got exactly shit.
3. Yanis will give the banksters what they want or be replaced by someone who will.
4. Syriza will bend over or be put against the nearest wall.
5. Secret police forces across Europe will need more money for false-flags against patriotic and anti-austerity movements. They'll get all they ask for.
Actually, Wall St got it wanted, a headline to ramp the markets higher.
How many Greek government employees have lost their jobs or benefits?
Its only the Greek people who are being ass raped and while the bankers are enabling it, it is the Greek government who is willing to throw its people to the wolves in order to preserve their paychecks. When we see the Greek GOVERNMENT actually practice austerity, then and only then will Greece have a chance. If they don't, it doesn't matter who bails who or what, their economy, is toast.
Nothing has changed for the citizens of Greece. They are still eating the same shit sandwich.
The fact of the matter is they are in debt up to their eyeballs and there is no way they can pay it back. Well, there is a way however to suggest such a thing would truely get you hung from a lamp post. So the solution is...There is no solution. We live in a world were few want to face reality. So just kick the can and let the next guy worry about it.
All this does is take a bad situation and make it worse. Apparently that is what people want the world over.
Here in the USSA we have our head buried so deep in the sand we can see China!
Remember this about a shit sandwich:
"The more bread you have, the less shit you have to eat"
Greeks, like Americans have way too much debt, but the problem is government that buries its citizens in endless debt of such immense scale it can NEVER be paid back. American is capable, because of our position in the world, to suspend the illusion of paying this debt back much longer than a small socialist country like Greece. The day we openly admit we too are socialist is when it stops as EVERYONE knows that socialist countries NEVER pay their debts, they only create them. Its an ideological thing, where people who always perceive that those with real assets should always pickup the tab on everyone else's expenditures. And this is why we see so much denial to the fact that for all practical purposes we are socialized as there is no "free enterprise" left. To declare America socialist is to officially admit we will never pay our debts.
OH C'MON!
Greece will be a perpetual basket case.
Monday being a holiday, they will wait till tuesday to announce there is no fucking deal and the wash rinse repeat cycle will commence.
Here's to the Greeks pushing for GD to replace the currently elected dumbshits.
Watch tax collection change when a GD tax collector shows up at their door with a truncheon.
Be careful what you wish for.
I have an apparently stupid question for which I cannot find a simple answer. That is, "Why does a Greek default equate to a Greek exit of the euro?"
If I default on a loan, I don't exit the dollar. If the city or county or state I live in was to default on its bonds they would not exit the dollar. Can't Greece simply default and stay in the euro?
Sorry for the stupid question. Anybody with a good explanation please reply.
Thanks!
After default where do they get money?. Print your own would be there only way, so Drachme it is.
Would you accept Greece currency, much less buy any of the bonds?
The only reason they have been able to run up the debt they have is because they are in the EU, with all of its implied credibility.
Greece is fucked but they will not leave the EU and the EU will not ask them to leave. Most of the member countries lied to qualify to join the EU in the first place and it was with a wink and a nod....the EU knew exactly what they were getting. So if they have to bash Greece about the ears publicly to show the proper disdain for member deadbeats, then they will and Greece will allow it. Its part of the deal. Everyone knows people like this and they will take all types of abuse in order to continue receiving the benefits, all while complaining loudly of the abuse. Greece wants what they have always gotten and the EU wants to retain the union and build ever greater power, something financial crisis's tend to augment. Greece is a small price to retain the union. All they have to do is minimize the contagion and they may well do it. At this point, who would want to be Greek? They are officially labeled as deadbeats. I don't think France or Spain or Italy would live with that label.
Bingo. Tigg gave the answer, with the small point that they need to devalue somewhere, and they can't devalue the Euro externally, so that leaves the only option a grinding internal devaluation of living standards if they don't get their own currency.
Gasp, what if... just an idea here.
What if...Greeks stop paying taxes, the government disolves into anarchy, and ... Greeks keep using the Euro . . . and... dont pay any taxes to anyone.?
What would happen if people just .. ."used" money instead of trying to "afford" a government they dont need or want.!
Tig is correct, Greece are big spenders with a budget deficit. They pay for their spending with more borrowing. If they are part of the EU, but the ECB and IMF will not lend them any more money, they go bust. They'll have to exit and start printing and borrowing from other sources. The problem is that after being thrown out of the EU for welshing on their debts, who would loan them anything? Thats why they are desperate to stay in and, in the end, can do nothing but whine.
The Euro policy is made for Germany and not for the Greek. With monetary independence they would at least be masters of their own destiny. A Greek default without exit of the EURO would be a half measure. In 5 years they would have the same problems again.
Thanks for the good answers. However, I'm still hungry.
Each euro country can issue its own debt. As far as I know such debt can be denominated in euros or drachmas or dog biscuits. Greece is a poor credit risk any way you slice it. Greece doesn't seem substantially lower credit risk just because it hasn't defaulted (yet).
Is there some part of the euro agreement that stipulates automatic expulsion of a country that defaults?
Peter Tchir says Friday's bounce was weak? Really. A 250 hyper swing in the Dow is weak. He's a moron for saying that.
When the Greek news is good, CNBC runs to tell everyone it affects the market in a positive way. When the news starts to sound fishy, they say "the market isn't really affected by Greece"
BS detector on high alert! Which is it CNBC?
As for the Dow, the most central bank manipulated index in the last 3 weeks I've seen in 20 years. The Dow closed 312 points above it's 20EMA. That's insanity and based on intervention not earnings.
And the poor Dow can't handle a 1/4 pt rate hike?
Like it will implode Harry Dent style?
The Fed is festering meat puppet, that should have raised rates years ago, but is beholdant to one entity... Wall St, not the American people.
If you are interested in drones check out this site http://pickyourdrone.com/
There are other possibilities.
--full fiscal and political union
-- complete dissolution of the Eurozone
Unless Greece is invaded this is a game of chicken. Greece is going to stay with the EURO until the flow of funds gets cut. Does the troika have the convictions to cut the flow? Doubt it. Until then Greece can say one thing and do another.
Again, this is not a state of affairs, not a contract freezing history in place. It is a process, and we are at moment in a "struggle between the future and the past." This article, like so many, in failing to look at the latest deal and the motives and likely actions of the actors in the larger context of the ongoing struggles within Grece, within Europe and with the US and the Empire, fails to penetrate very deeply behind the curtain.
A great drama is being acted out now, one whose outcome will be seen in hindsight to have been inevitable - but which we are struggling now to just dimly perceive. A bettor might find these odds more helpful than a pinwheel or deck of cards, but you don't need to turn to ZH for that kind of help.
https://www.youtube.com/watch?v=mQX9qvsk838
https://www.youtube.com/watch?v=mQX9qvsk838ithy ...
Greece is the WORD....
feed it right
https://www.youtube.com/watch?v=TpNKtz0wCZs
Off topic, but I thought this might be worth bringing the board's attention to:
Editor's note: We're seeing numerous unconfirmed reports that Turkey may be moving military vehicles into Syria in an apparent attempt to guard the Tomb of Suleyman Shah, a sovereign Turkish exclave located in the Syrian state of Aleppo. - JimmyCan't wait to hear our bro's on Bloomberg TV talking about Garanimal.
When it all seems like the market, be it stock or housing market keeps going up. Sure as it did last time.
Get out of both before its to late.
Best advice is to stay poor or stack like a madman. Pick your poison. I choose stacking. With lots of guns and ammo. Oh yeah, TP! Can't foget that. LOL!
Greece needs Joh Corozine as a finance minister. I think he is available.
Tsipras and YV could have kick-started a true revolution. Alas, it was not to be.
NO Greek exit, more Greek austerity, Germany wins.
No conflict in Ukraine, Germany wins.
Just remember Germany always wins.
SPX up 20% this year to 2600, 1% win.
Syriza is backed by Soros.
Link please?
The elephant in the room is GREEKS AREN'T PAYING THEIR TAXES. The government has little revenue from it's tax base.
Nor are US companies outsourcing labor.
http://action.sumofus.org/a/google-taxes/
Google shifts almost €10bn in royalties through the Netherlands
http://www.dutchnews.nl/news/archives/2015/01/google-shifts-almost-e10bn-in-royalties-through-the-netherlands/
The Supreme Court Still Thinks Corporations Are People. Look at the Affordable Care Act. Imagine if we start shifting money into other banking accounts around the world to avoid taxes. If it's good enough for corporations to become people, we can do the same.. Just takes a PO box, fake corp business and Bank account.
Lets face it, why would I buy taxes if most of it is to buy a fat Banker. Is it my fault that the Banks lost all their Money and my taxes have to bail them out?
What's next?? Seriously? Next Monday, Yanis Varoufakis is going to show the world how to suck the Troika's dicks.
The plan to loan the junkie more money for smack is a good one. I can't see any way that could fail.
ECB on their back for 4 months stimulating of autofellatio and dick sliding metrosexual pole riding too round up new Greece debt expansion.
Just like a credit card, if you cannot pay $50/month minimum payment. We will have to increase your credit line with 4% mandatory per month spending w/o reward perks. We’ll restructure this payment for a 10 year period, balance will be rearranged at time of SIV maturity or if Yellen raises interest rates prior to contract obligations..
Some thoughts:
1. Syriza does not have any mandate to leave the EU or to exit the Euro. Their mandate from the Greek voters is to renegotiate the austerity conditions imposed by the Troika. Looking beyond the hoopla about Grexit and default, Syriza may just have got the wiggle room it wants to loosen up austerity. The issue has been narrowed down to how much Greece gets to loosen the handcuffs. Syriza has pledged to continue to follow the bailout rules otherwise - key for the Troika.
2. The EU is in recession, facing depression, and Darghi of the ECB has finally been allowed his cherished wish of QE. QE will allow the ECB to buy sovereign bonds and corporate bonds in whatever amount the ECB wishes from each Euro country. This effectively gives each Euro country a Euro printing press to the limit allowed by the ECB.
3. The European Financial Stability Facility agreement of 2010 is meant to provide emergency financial stability for the Euro zone. Under the EFSF, each Euro country guarantees the debts of all other Euro countries. An early analysis of the EFSF revealed its flaw - if one defaults and drops out of the guarantee pool, the next weaker members are likely to default, and so on, leading to a cascade of defaults that run up the chain, leaving only the most financially sound members holding the debts of all. Thus, EFSF is as much a trap as a security blanket for the stronger Euro members.
4. Germany, as the pre-eminent exporter of manufactures and high tech in the Euro zone, running large trade and financial surpluses, would see the value of its currency automatically rise as a result, if it were not in a currency union with the importers in Europe. Likewise, the importing countries cannot compensate for their trade and financial deficits by devaluing their currencies or altering interest rates or trade conditions. The Importers in the Euro zone are in a trap and Germany quietly lives large. At the same time, Germany's trade and financial surpluses with the rest of the World are masked by the overall trade surplus of the Euro zone, and the Euro does not rise as much as a purely German currency would from Germany's trade and financial surpluses.
Germany desperately wants to maintain the Euro system.
5. Putting all the PIIGS into the Euro removed currency risk for lenders - the debtors could not alter the value of their currency to inflate debts away. The German, French and Italian banks went on a lending spree to the PIIGS and the Troika had to bail out those banks in 2010 because the worthless Sovereign bonds from the PIIGS that these banks held threatened to bankrupt those banks. So the Troika bailout was to save those banks, not the Greeks. The Greeks got a drip feed of cash to keep their economic corpse on life support and were put under enforced austerity rules to force the government to prioritize debt repayment.
6. Greece is in depression. Even without depression, the chances of Greece ever being able to repay the 340 Billion or so Euros it owes are about as good as my chances of winning the lottery - about nil. That means the Greek bonds and Greek bank IOUs held by the Troika are worthless, but they are carried on the Troika's books at face value. As long as Greece does not overtly default, the Troika does not have to mark these "assets" down to real value (zero). Carrying these "assets" at face value, instead of market value, keeps the ILLUSION alive that all is well in the Euro Financial House of Cards. That also safeguards a huge pile of derivatives from default, apparently.
7. The Troika fear contagion among the PIIGS if Greece gets too much easing of austerity rules.
8. The politicians of the non-PIIGS Euro nation, sensitive to voter sentiment and seeing the risk that the EFSF presents if Greece defaults (the risk being that each of the remaining Euro nations would have to contribute to pay off the amount on which Greece defaulted), see it as ABSOLUTELY IMPERATIVE that no appearance of Greek default or of any significant easing of the Greek bailout terms and austerity be seen.
9. The approach of the Troika to the PIIGS problems has been, and remains, EXTEND AND PRETEND, under which the PIIGS debts are continually rolled over to new maturity dates, drips of money are fed to the PIIGS, and their debts increase, as long as the PIIGS go along with austerity and pretend that their debts will eventually be paid. Varoufakis and Tsipras threatened this pretence by outright stating that Greece is bankrupt and can never pay off its debts. Extend and Pretend makes no financial sense, but is essential to maintaining the illusion that the Euro is sound and that the Troika has CONTAINED the 2009-2010 financial meltdown.
TWO MAIN IDEAS COME OUT OF ALL THIS.
(A) Germany, the Troika, and non-PIIGS politicians see it as absolutely imperative to maintain the status quo, with Greece pledged to follow the bailout rules as they are or as they may be modified with Troika approval.
(B) Extend and Pretend makes no financial sense, throwing good money after bad to bankrupt states, but are seen as essential to maintain confidence in the Euro and in the EU financial system. The illusion of CONTAINMENT of the financial meltdown is key.
Enter Super Mario Draghi and his QE (DQE).
Under DQE, each Euro nation can cover its budget deficits and any liabilities it may face under the EFSF by issuing bonds to the ECB (so long as the ECB will buy. Greece is currently locked out, but might negotiate an entry). By issuing bonds at ZIRP or even NIRP, with maturation dates at near infinity away, the Euro nations can raise whatever Euros they need and stave off the possibility of calamity from any defaults by rogue PIIGS.
CONCLUSIONS:
1. Greece is too broke to leave the Euro and Syriza has no mandate to do so, or to take Greece out of the EU. That said, if Greece could join the BRICS and get sugar-daddy funding, they might pull it off, but that seems unlikely for now.
2. The Troika must maintain the Extend and Pretend game to keep the Euro in good standing, and is willing to provide more funding to the PIIGS governments to keep them on life support, even though the Troika knows that the debts will never be repaid. Extend and Pretend protects EU financial institutions from having to mark the "assets" they hold to market values and the crises of insolvency that would follow.
3. Draghi's new DQE positions the EU nicely to continue Extend and Pretend, and to withstand any cascade of defaults and accumulating debts under the EFSF.
4. All is well as long as Greece and the PIIGS do not declare default.
5. Greece may be allowed some slight easing of the austerity rules, but not enough that the other PIIGS will be encouraged to kick up a storm and further threaten the Euro Financial House of Cards.
Excellent summary, as usual.
Thanks.
TThe problem for Syriza is that they have no mandate to leave the Euro. The Greek people want debt relief and an end to austerity, but they don't want to pay for that by leaving the Euro. What they don't understand is that you can not have it both ways. If you stay in the Euro, you must play by Eurozone rules - no option. Germany knows that, and now Syriza knows that. Syriza can yell all they want about the unfairness of the Troika and neverending indebtedness to the banks (and rightly so!), but in the end they must back down in humiliation.
what is next is very simple...Your world will change.give it 4 months or give it 4 years...the place where democracy was born is the place where it will rightfully die...it's only natural isn't it?
We never intended to give birth in such anomaly as what you call "democracy"...we gave birth to a system that includes election next to ostracism...where is the ostracism in today's democracies?
we will show it to you by been the first to be ostracized and you will then see the light of true freedom...but it will hurt all of us for a while.
how improbable is a scenario in which Greek government members get killed in a false flag event
(it is blamed on some fanatic or nationalists who kill the gov cos of bowing to EU).
if banks are talking about 300B Euro kind of money, or - general EU stability, then I am pretty sure such a game would be worth a candle.
Unless of course - we re having all these events staged now anyway...
It would be so nice to knwo the truth.
what's next for Greece??? How about fucking starvation???