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Greeks Take It To The Mattresses As Graccident Looms

Tyler Durden's picture




 

Last week, we reported that the Greek banking sector lost some €400 million in deposits in a single day as Greek citizens debate a future which may include the suspension of salaries, pension fund plundering, and capital controls. Meanwhile, rumors swirled that Athens may fail to make €2 billion in debt payments on Friday to lenders which included the IMF, the ECB, and a certain blood sucking mollusk. As it turns out, Athens found enough money to make the payments thus avoiding a weekend “Grexiddent.”

On Monday, Alexis Tsipras will meet with Angela Merkel in Berlin where we assume no one will be causing any “kerfuffles” by sticking anyone else the middle finger. Meanwhile, the Greek populace is left to wonder if the government which just two months ago was billed as the savior that would finally throw off the chains of austerity bondage will be able to come up with a better plan than recruiting tourists as honorary tax collectors and pitch it in a humble enough way to convince European creditors to finally throw Athens a bone in the form of disbursing the next tranche of aid. We expect there will be more drama to come next week and as a primer on just how fearful Greek citizens truly are, we present to you the following from JP Morgan which nicely summarizes the evolution of distress in the Greek banking sector since December.

From JP Morgan on deposit flight...

The quantity of banknotes placed into circulation by the Bank of Greece has increased further by €2.7bn in February following a €4.9bn increase in January and €2.2bn in December, i.e. €10bn went under the mattress between December and February (Figure 4). This also means that of the €27bn of cash that went under the “mattress” between the end of 2009 and mid 2012, only €5bn has effectively re-entered the Greek banking system.

 

What portion of deposit outflows went under the mattress? €4bn of deposits left the Greek banking system in December, €12bn in January and likely €6bn in February (based on the purchases of offshore money market funds which we use as proxy for deposit outflows). That is between December and February €22bn of deposits likely left the Greek banking system and of this €10bn or 45% went under the mattress. 

...and on the increasingly punitive cost of staying afloat...

Bank of Greece data also revealed how much more onerous central borrowing is becoming for Greek banks. For example in December Greek banks posted €10bn of extra collateral for borrowing an additional €11bn from the central bank, in January they posted €38bn of extra collateral for borrowing an additional €30bn and in February they posted €47bn of extra collateral for borrowing an additional €17bn. As of the end of February Greek banks had €104bn of central bank borrowing with collateral of €180bn, i.e. the average haircut was 42%. 

....and on what happens next… 

What will happen if Greek banks reach the maximum borrowing estimated above? The ECB has the flexibility to adjust haircuts to allow Greek banks to borrow more from the Bank of Greece for a given amount of collateral. So there is some flexibility in order to avoid triggering capital controls but what is clear is that the Greek banking system cannot withstand another big wave of deposit outflows. 

*  *  *

Stay tuned. 

 

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Sat, 03/21/2015 - 12:52 | 5913048 kaiserhoff
kaiserhoff's picture

This is how the Ponzi ends.

When there is nothing left to steal.

Sat, 03/21/2015 - 13:03 | 5913061 Cognitive Dissonance
Cognitive Dissonance's picture

We are still in the 'Rob Peter to pay Paul' stage. Still several miles to go in the final fall to Earth.

<While it may be 'just' a cute saying I always remind myself it ain't the fall that kills you, but the sudden stop.>

Sat, 03/21/2015 - 13:31 | 5913105 Latina Lover
Latina Lover's picture

If I were Greek, why would I keep my remaining meagre funds in banks when I know that the EU bankster controlled government will steal them, be it via taxation, bail in's or false accusations of criminal activity?  

You would have to be a brainwashed fool to believe anything that comes out of the mouths of EUcrats.

Sat, 03/21/2015 - 13:33 | 5913109 kliguy38
kliguy38's picture

"We are prepared to do whatever it takes"......unless its more than we're prepared to do then we'll just take

Sat, 03/21/2015 - 13:35 | 5913114 Latina Lover
Latina Lover's picture

What is not reported by the MSM pressitutes are that the Greeks are refusing to pay taxes, and are openly defying their bankster masters.  This is the real story behind the bank runs.

Sat, 03/21/2015 - 13:50 | 5913136 zhandax
zhandax's picture

LL, I would be surprised if the Greek banks are holding much more than transactional balances at this point.  The press would have a field day if the city of Kalamata moved their checking account to a bank in Switzerland.

Sat, 03/21/2015 - 14:01 | 5913162 TruthInSunshine
TruthInSunshine's picture

With respect, everyone should be wondering about Portugal, Spain & Italy at this point (France is deteriorating rapidly, also - if Italy, Spain or France leave, the EU will already have begun the process of either a) unwinding itself, or b) modifying its charter in a radical way).

By the time Grexit de jure or de facto is a fait accompli, the "viability" and the "credit worthiness" of those nations will then be openly discussed in the FMSM.

Sat, 03/21/2015 - 12:59 | 5913062 Stuck on Zero
Stuck on Zero's picture

All this proves is that Greeks prefer paper to electronic digits. 

Sat, 03/21/2015 - 14:18 | 5913214 TheFourthStooge-ing
TheFourthStooge-ing's picture

They saw what happened in Cyprus.

Sat, 03/21/2015 - 21:36 | 5914451 tarabel
tarabel's picture

 

 

Everyone saw what happened in Greece. The question is not what they saw but what they have done about it since then.

 

There are a lot of people who believe that they can catch the last train out of town but, until then, the money's too good to pass up.

I have my own name for them: future pedestrians.

Sat, 03/21/2015 - 21:53 | 5914490 NEKO
NEKO's picture

Cyprus 2 - coming to a cinema near you - SOON!

Sat, 03/21/2015 - 12:53 | 5913054 Wolferl
Wolferl's picture

Throw the Greeks under the bus already. They are asking for it.

Sat, 03/21/2015 - 13:15 | 5913082 Luckhasit
Luckhasit's picture

Greece isn't leaving until some positions are unwinded.  No way France and Germany will be left as the bag man.  If they are, expect to see some tanks.

Sat, 03/21/2015 - 13:18 | 5913085 Its_the_economy...
Its_the_economy_stupid's picture

a year early is better than a minute late

Sat, 03/21/2015 - 13:18 | 5913086 Stormtrooper
Stormtrooper's picture

Is gun ownership legal in Greece?  Do they have a history of using them during times of "distress"?

Sat, 03/21/2015 - 14:12 | 5913200 Sudden Debt
Sudden Debt's picture

It isn’t difficult to buy a gun on the black market in Greece.

you can’t find the toyguns like the ar15 but they do sell a lot of kalashnikovs and rpg’s and they’re not expensive at all.

But greeks in general aren’t a violent people and just like the people of cyprus they’ll take what’s comming their way. They where defeated already in 2010 and moral never recovered.

 

Sat, 03/21/2015 - 13:36 | 5913111 Captain Willard
Captain Willard's picture

The Yin of deposit flight, a symptom of state collapse, corresponds with the Yang of the euro project itself.

In this respect, the Greeks are ahead of the rest of Europe. Greeks may care deeply about being Greek, but do they care about the entity known as Greece? The Euro project is all about making the nation-state irrelevant.

Now the Brussels Elite have to deal with the natural consequences of their project. Ironically, the success of the Euro project depends upon people retaining enough national identity to maintain local order while surrendering enough of their sovereignty to keep Eurocrats and Bankers happy.

This is a very difficult equilibrium to maintain. Euros can be spent everywhere. As we head toward zero interest rates, or even negative interest rates, why would the average Portuguese, or Italian or Spaniard keep any money in any local bank? Worse yet, why should they care about the success of their nation-states when the real fiscal power is in Brussels?

 

 

Sat, 03/21/2015 - 13:37 | 5913117 adonisdemilo
adonisdemilo's picture

Goodbye EU, it was very unpleasant knowing you, not much different from when the SS were here.

Sat, 03/21/2015 - 14:17 | 5913212 Sudden Debt
Sudden Debt's picture

Very unpleasant? Did you ever visit Greece pre 2000?

They rebuild the entire country from rubble and they got greedy and corrupt.

Almost nobody pays their taxes so how can a society survive with constant money infuses?

Greece has no industry. They’ll be thrown to the stoneage if they exit and Europe will lose it’s first line of defence against the middle east.

Everybody loses.

Sat, 03/21/2015 - 16:02 | 5913527 TeaClipper
TeaClipper's picture

They got very fat feeding of the Euro hog, which is why despite everything Greek people are still desparate to stay in the Eurozone and the EU

Sat, 03/21/2015 - 13:44 | 5913129 Lmo Mutton
Lmo Mutton's picture

Rebellion bitchez.  Made in Greece.  Served with a side and dressing of your choice.

Sat, 03/21/2015 - 15:26 | 5913387 hooligan2009
hooligan2009's picture

there is no greek banking system, only a facade of book entries maintained by the ECB that is hoping that nobody sees greek national debt monetization for what it really is (a fiction of accounting valuations that bear no relation to economic value or the servicability of debt); when Greece officially ceases to have a banking system, other countries headed by France will be exposed in the same way.

Europe needs to split into north and south. the north can only (barely) afford to pay for its own extravagant social welfare programs let alone the ludicrous equivalents in the south (and France).

Sat, 03/21/2015 - 15:28 | 5913389 hooligan2009
hooligan2009's picture

woops ..d/p (or was that security agency monitoring and release ;) )

Sat, 03/21/2015 - 15:44 | 5913459 Jano
Jano's picture

The colonels will come forward.

We have seen it in Greece already.

Will be nice for "democratic" EU.

Sat, 03/21/2015 - 15:55 | 5913492 Dead Canary
Dead Canary's picture

"the Greek banking system cannot withstand another big wave of deposit outflows."

You mean there's still some money left in the banks?

Also, don't they have lakes to keep their money in?

Sun, 03/22/2015 - 02:47 | 5914843 Spiro The Greek
Spiro The Greek's picture

hahahaha...smart bird. What money they talking about? Read my post above.

Sat, 03/21/2015 - 21:50 | 5914487 Paracelsus
Paracelsus's picture

 Old Nigel Farage was spot on about the open borders stuff.Get into Europe and no more passport waving at the border entry posts.

Ask Italy about all the boat people headed towards Pantellaria Island.The Italians have  absorbed all they can take. The Arab Spring has produced a huge exodus of economic migrants.France,Germany,Belgium? Anyone want more Muslims? Didn't think so.

Send them all to Gaza? Got about a million per square mile already.

With the expansion of NATO (and Brussels bureaucrats) they wanted the borders extended out towards Poland and Greece,but they didn't want to provide any resources to police these borders.What with UN occupied Afghanistan back producing 4000 tons of opium per year,this will make all the European cities look like Detroit.   

Sun, 03/22/2015 - 02:43 | 5914840 Spiro The Greek
Spiro The Greek's picture

Oh yes ..The bank threat...old one of your kind and of the JP Morgans and the likes.

Greek people are not fearful, we are FOOKED as we have lost everything years ago.

Ask your selves this...if Greeks are broke, jobless etc who's money we talking about here been taken out of the banking system?

There is law in Greece and has been for 5 years now, that if you owe money to the state they seize your bank account...we moved our money out of the banking system some 5 years ago.

What money are they talking about?

lol...we do not fear the "banks will collapse" crap....we are in our overwhelming presentage supporting SYRIZA even if the do the wrong thing. At least they have not done the wrong thing ever before as they never govern before.

Watch us from your comfortable armchair while you do nothing to change this world...we will do it for you..AGAIN...this time while we lie on our matresses.>

Sun, 03/22/2015 - 09:07 | 5915082 Playtime's Over
Playtime&#039;s Over's picture

Or lie on a stretcher..............

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