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The Gloves Come Off: Moody's Warns Of Greek "Deposit Freeze" As Schauble "Won't Rule Out Default"
Ever since Syriza took over the Greek government and has refused, at least until now, to concede to every Troika demand of perpetuating a status quo which it was elected with a mandate to overturn, Europe has done everything in its power to make not only Syriza's life increasingly difficult and hostile, but has taken every opportunity to turn the Greek population against its rulers, in hopes that a more "moderate", technocrat government would replace the "radical leftists." So far it has failed, despite the best attempts by the ECB and the European Commission to sput a terminal bank run.
The problem for Greece is that the government has run out of cash. Long ago in fact, and as reported earlier, the country has just two weeks of cash left and the next IMF payment will certainly not be made unless the IMF first finds a way to inject some more money into Greece (so the IMF can essentially repay the IMF), which however won't happen without a deal first being implemented.
The other problem is that Greece has run out of time to get a deal in order, especially since with every incremental negotiation, the Syriza government repeats it has substantial "red lines" it won't cross, something the Troika takes as a direct ultimatum. And the ECB, the IMF and the European Commission are not good at handling ultimatums.
Which is perhaps why the push to force a terminal bank run in Greece took on an added urgency today when first Moody's and then Schauble, did everything in their power to strongarm Tsipras into agreeing with Troika demands, or else suffer the consequences of a Grexit: one which will have dire consequences for all of Europe, but which Europe is naively ignoring just because the recent launch of the ECB's QE is making the underlying tension in the economy and financial markets (which no longer exist courtesy of precisely this QE).
The gloves officially came off just before the market open today when Moody's released a report titled "Outlook for Greece’s banking system is negative" in which it did the unthinkable: it explicitly said that the worst case for Greece is now an all but certain outcome if the government doesn't concede to the Troika, or Institutions, or whatever they are called today.
To wit:
The outlook for the Greek banking system is negative, primarily reflecting the acute deterioration in Greek banks’ funding and liquidity, says Moody’s Investors Service in a new report published recently. These pressures are unlikely to ease over the next 12-18 months and there is a high likelihood of an imposition of capital controls and a deposit freeze.
Ordinarily, a statement like that by Moody's would be unthinkable, and would lead to an immedate, business-ending lawsuit by any other country, except for Greece which right now can't even afford the legal fees. And remember: the catalyst for everything getting better and Greece getting new cash is i) either a new government, ii) the current government conceding to Troika demands or iii) Grexit, and in neither case will Greece retaliate.
In other words, Moody's is great when it comes to picking on defenseless "credits." It would never say the same thing about any other country of course.
And then, perhaps just the confirm that both gloves are off, moments ago the WSJ reported that German FinMin, Wolfgang Schauble, said he couldn’t rule out a Greek default, a stance that will add pressure on Athens as negotiations over much-needed financing enter their final stretch.
Asked whether he would repeat an assurance he gave in late 2012 that Greece wouldn't default, Wolfgang Schäuble told The Wall Street Journal and French daily Les Echos that “I would have to think very hard before repeating this in the current situation.”
“The sovereign, democratic decision of the Greek people has left us in a very different situation,” he said, referring to the January election that delivered a radical-left government bent on reversing five years of creditor-mandated austerity and painful economic overhauls.
Yes, it's funny how "sovereign, democratic" decisions of any people leave a regime catering exclusively to supernational, technocratic banking oligarch elites leaves everyone in a very different situation.
What does all of this mean? Two things:
First, the Greece drama is almost over - indeed, having emptied its last remaining piggybank in the form of its IMF reserve capital, Greece now has no more funds and it can no longer raid its municipals and pensioners as they too are out of money. So one way or another, the endless Greek headlines will cease at midnight on June 4, when Greece either has a deal in hand with Europe or its fails to pay the IMF, which will being a 30 day grace period countdown, after which Greece will be officially in default, leading to a prompt expulsion from the Eurozone once the ECB yanks its ELA funds which now account for nearly two-thirds of all Greek deposits.
Second, both outcomes are now equally likely, which means volatility - currently dormant - will pick up in the next 2 weeks. It is unclear if said vol will be realized, but the front VIX contract, current at an artificially depressed level of just under 15, will likely be a good hedge if anyone is still long Greek bonds.
There is one outstanding question: perhaps after all this, the Greeks should just ask themselves if this is the kind of "European" partner they want to bind their fate to: a partner that will do everything in its power to subvert a democratically elected government, even if, or rather especially if, it means a wholesale "bail-in" for Greek depositors, who may lose as much as 70 cents on ever Euro: an outcome we predicted over two years ago when the Cyprus blueprint showed just how effectively it could be done.
And after Greece is done soul searching, the people of Spain, Italy, Portugal and Ireland should ask the same question, because if we have a Grexit in two weeks, then these PIIS countries are next.
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I think I will wait a little longer before I remove my money from the Greek banks....
lol
But don't hesitate too long, the Greeks already withdrew everything.
They need to rob Peter to pay Peter?
That Peter is some dumb dude.
Pietre
You don't pre-announce capital controls and a haircut.
They are trying to collapse the Greek banking system. Its the simplest explanation.
Outrageous ! Only bankers can f"ck up the banking system !
no mun, no fun.
desparate tymes require desparate measures.
sieze doz assets, bitchezz...
gov, thieves by their very existence...
Bank Bail-Ins, the new normal....
Just hope they didnt manage to defuse the CDS fireworks expected in a defaulting event. If the thing is to blow up, the sooner the better !
Throw those pathetic Greeks out of Europe already.
Au Contraire, Herr Schauble .. It's GREECE that isn't ruling out default on the Euro Bankers
Where can I get one of them Greek CDS things?
Is there an CDS ETF?
Pretty sure history says deposit "freezes" quickly result in bank "fires"...
I like to think of it as dangling my junk over a bear trap....
Ahhh, brinkmanship... it's all the rage these days.
People have "money" in the Greek banks with all this going on? Proof positive that most people are retards.
I'm just wondering how much it has occured to the rest of the EU, that this can and will happen to them too.....
Don't hold your breath. In my experience, people are more than willing to face up to reality after reality has hit them right between the eyes.
"Yes, okay, but this is Greece we're talking about. Such a thing couldn't possibly happen here."
If I had a euro for every time I heard someone say something along those lines... - You see, in France, Belgium or Holland, we have nothing to worry about, right?
As our 15 year old car is now slowly falling apart, I'll be using the last cash we have in our bank account to replace it with a decent second hand. This is the perfect time to trade our remaining fiat for something tangible and useful. One financial worry less.
Your local bank branch will not like that.
You know it's cold outside when you go outside and it's cold.
It always takes a Spainard to remind them http://gifrific.com/wp-content/uploads/2012/08/Are-You-Not-Entertained-Gladiator.gif
How much long can Spain play the game...http://www.tradingeconomics.com/spain/government-debt-to-gdp
But they actually pay interest (I think).
Gotta get that yield.
I know a lot of wealthy greeks and I can't name one with more money in the bank (in greece) than they are willing to lose.
My sister is far from a retard Doc.I still couldn't persuade her to get out of the Cypriot banks,
when anybody should have been able see the Kojak hair cut coming.
When *everybody* can see what's happening, we'll have ourselves a right nice revolution.
I pity people who are "genetic retards" (and got unlucky during conception).
I have NO pity or sympathy for people who are "Willfully Retarded". None! They deserve even less to be in the gene pool than genetic retards, because they are truly disgusting/revolting, rather than pitiable.
"FIRE!!!!!!!!!!!!!!!!!!"
I liked Moody's description though. Could be summed up on 1 word for those of us who are more prosaically challenged.
Fucked.
But come on, does anyone HAVE any money left in Greek banks?
pods
The slowest bank run in history started about 4 years ago in greece, though it has accelerated over the past 5 months.
My prediction: Moar' can kickin'. There's no reason the Euro's and Greek's can't milk this situation at least another 6 to 12 months. Either that or someone comes to their rescue at last minute with just enough cash to prop them up for a few more months.
Heck, they haven't even tapped the Pay Day Loan system yet.
"problem is that Greece has run out of time to get a deal in order, especially since with every incremental negotiation, the Syriza government repeats it has substantial "red lines" it won't cross"
PROBLEM?! Greece has been very clear that THEY'RE NOT PAYING SQUAT on those unsecured loans those idiots made them... there's nothing to negotiate, if you made a secured loan with Greece REPO THAT COLLATERAL NOW AND FLIP IT! otherwise, you get nothing because that's what they have been very clear that they have.
Someone tell me why the Greek government doesn't just start printing Euros. If North Korea can make a plausible copy of the US dollar, surely the Greeks can do the same.
They should start printing and tell the EU "We've kicked YOU out of our monetary system." Watch the feels fly. Unless the EU is willing to INVADE Greece, it will be the end of the Euro. Good riddance to a bad idea.
I suspect they've been doing so for a while. Their current relatively comfortable status would otherwise be unexplainable.
Actually they can, Printer identification codes: N Bank of Greece in Athens bill letter Y
source: https://en.wikipedia.org/wiki/Euro_banknotes
"Watch the feels fly" I admit I lolol'd
Blue Light Special Fuse Lighting Event
Default??? Soon??? Wow, haven't heard that before.
I think it is even funnier because the article states they are in default 30 days after June 4th. So basically they have almost two months to still do something to kick the can down the road.
'Sput'...it ought to be a word. One could claim it derived from old German.
Moodys is a criminal agent of the bankster world order.
Does the Anucal of Omaha still have control of Moody's?
Just additional pressure. The ratings agencies are political outfits, nothing more.
If you are a small business where do you keep your operating capital?
In a private safe might be a good choice these days. A hidden one.
so how much longer til moodys/s&p/fitch give us here in the U.S. our warning on deposit freezes due to our upside-down fiscal policies & unfunded liabilities? if they hold consistant to the mortgage crisis, im guessing about a month after i can't log into my bank account.
Never. They know they will be brought up on charges of treason.
Guys, they're not "Capital Controls" according to Syriza. They're "measures that restrict the “freedom” of capital flight".
Just imagine Oded Yinon/Cloward-Piven implemented world-wide.
That's the plan.
Comedy gold!!! LOL! What product of real value do the useless paper-pushers at Moody's provide again? How good were they at predicting the insolvent motherfuckers prior to 2008/2009 again?
Fuck em!!!
Remember when they gave Garden State Insurance a AAA rating and wrote glowing reviews even up to 1 month before they turned out the lights and boarded up?
Well on the EU side, you don't want the other financially strapped countries to think it is a cake walk not paying your debts.
Greece will change governments at the last minute then demand a "honeymoon" period to set things "right", where they won't do a fucking thing to fix their broken corrupt system.
Only sheep stand in lines.
Greece is just the leading edge of a big wave of change coming this year: http://redefininggod.com/2015/05/the-nwo-schedule-of-implementation-mod-1/
What stuns me is that anyone still has money in a Greek bank.
Tired of this Greek theater.
Same thing all the time. First crisis, then stick-save, then crisis again, then another stick-save.
No end to this play. I'd say give the pissed off Greek people all automatic weapons with RPGs and transportation to the Troika in Brussels, to go bankster hunting.
Reminds me of WWE wrestling.
I know,,, I know,,,, it's all real!!! (lol)
This is simply a live-test-study of the steps necessary to replicate what they've done to Cyprus and what they're currently doing to Greece, to be done everywhere else. Coming to your neighborhood soon.
Bored, they want to shout freedom aand independence yet cling to the Euro.. Either comply or be your own men.
which will be the first US state to drop the US Dollar and go Renminbi ?
Puh-lease! Ever since Tyler/ZH disclosed a few days ago that China is the true buyer behind the UST purchases by "Belgium", there can be NO MORE COVER for the fact that China (and its brand of Extreme Capitalism) is in fact part of the Globalist scheme/scam, and that it's all Kabuki Theater for the Unwashed Masses.
And by extension, due to China, Russia too has become a participant in this Theater -- albeit a much more reluctant actor.
I trust NOTHING that China does, since China does what it has done for >2000 years: Look at all Foreigners as Devils, and look after China's interests. All else is Chinese Stratagems and Tactics (Sun Tsu style). Just look at all the benefits that China has reaped from the US, EU, Russia and Saudis: Cheap and plentiful Commodities (foods, energy, gold) for its country and CB. Then add the unending Tech Transfer. Everything that has hurt these countries, has benefited China. Everything! So, folks, let's stop the BS and misdirections about China allegedly prepping for some "Gold Standard". That's just an Edward Bernays style PR campaign by China, plus Gold shills in the West, where the latter seek personal profits in the Gold trade.
I don't believe jack shit anymore, when it comes to large & powerful actors (national governments, multinationals, organized religion or international lobby groups). They're ALL self-serving liars and crooks -- and no better than a small-fry Elmer Gantry or snake-oil salesman. The "preponderance of evidence" dictates that the ONLY things left to trust are: 1. Laws of Nature (math, physics, chemistry, biology), and 2. Laws of Human Nature. All else is either BS or a Con-job.
For what it's worth Capt..... I completely concur.
Excellent Rant. I may have to consider my words more carefully in regard to China and Gold and new Currency.
"NO MORE COVER for the fact that China (and its brand of Extreme Capitalism) is in fact part of the Globalist scheme/scam,..."
I was just reading some on the Anglo-American Banking Cartel and how they formed the Federal Reserve. It seems to fit exactly with what you are saying. They Nepotistic Bankers formed the National Bank of N.A. in 1781 before the Constitution was Drafted. And they have been like flies on shit with Alexander Hamilton ever since. I didn't realize the "Federalist" were this Banking Cartel.
National Citizen League was formed by Bankers as a Political Action Committee in like 1911 to create propaganda in support of the New Federal Reserve System.
http://www.fas.harvard.edu/~histecon/crisis-next/1907/docs/Chen-Warburg_...
"Heading the League was Economics Professor J.Laurence Laughlin of the University of Chicago, a school heavily endowed by John D. Rockefeller."
- The bankers of 1911 planned all this out in Europe and in depth and cause a series of banking panics to convince the public of the need for reforms, Nelson Aldrich spent 2 years and visited Europe to study European Banks producing "38 volumes about them, these focused on Rothschild and Warburg Banks, Reichsbank.", Aldrich was related through Nepotism to these Bankers
Pretty obvious that China has been fooling everyone with their massive infrastructure building spree which allowed them to increase the size of their balance sheets including massive graft and corruption on the provincial and municipal level. Hot Asian Money (HAM) finding its way into European and North American real estate and in case of Canada, totally distorting the prices and creating artificial demand for luxury properties. They're in good company though because our crooks don't ask questions related to the origin of the money from their crooks. Money doesn't stink.
Elmer Gantry, OMG, I forgot all about ole Elmer banging Sister Sharon under the tent seats. I've got to include that along with my iconic Dr Strangelove and Soylent Green. What a movie.
I'm about to flip the toggle and also toss in Office Space, I can just see the Snowdyke protecting her red stapler in her mousey cubicle after she falls flat on her white pubics.
Greece should become a US dependency and receive billions of US dollars in return for voting in US Presidential Elections. With Ukraine and Greece the US will be on its way to total perdition without having to fight the Power of ISIS
I all works, the IMF just give Greece money and then they give it back to the IMF. Perfect PONZI .
"Greek deposits" - LOL!!!
Anyone with ANY menas has already moved thier dough somewhere else I bet, esp the uber wealthy who scrammed long ago to London, Netherlands, Switzerland, Merika, etc.
Kyle Bass, 2012, comments on restructuring debt:
https://youtu.be/JUc8-GUC1hY?t=18m39s
Kyle Bass, same presentation, on when we know something will happen (ref. the Tequila Crisis):
https://youtu.be/JUc8-GUC1hY?t=24m08s
and where did the funds Greece got come from? Let me guess... oh, central banks printing it up? Called counterfeiting if plebs do it.
SO WHO'S SCREWING WHO?
How do you turn $1MM Euros into $500k Euros?
Deposit it in a Greek Bank...
Good article, the Greek mass media owned by Oligarchs have also steped up the mud throwing against Syriza.
The public opinion war is badly mishandled by leftist govt but interestingly sheer panic with their dire situation has made Greeks stick to Syriza come what may, therefore all Mass Media scare and mud throwing attacks will most probably fail.
Stuborn Trembling Syriza is walking towards victory, it will be declared the victor of this showdown, Varroufakis game theory strategy will succeed to most peoples amazement, naturally it will be spun as kindness by EU and Germany ... wait and see.
There is an extremely remote alternative that Greece will default, this fact alone will cost most EU economies dearly in higher interest payments from then on, the possibily of a greek default is so remote as to make it not worth talking about.
The real cost to Germany of the Greek victory will be considerable down the road, war reparations, repayment war loan, odious debt cancellation and other goodies ready to be served to Germany by Syriza ... WHAT FUN !
When all is said and done, I want to know how somebody who is hot mopping roofs or raking asphalt in Greece feels about paying taxes to support a hairdresser who retired at age 50 because their profession involved hazardous chemicals.
Greeks are used to not paying taxes which end in oligarchs corrupt hands, not paying taxes to support early retirees is a walk in the park prometheus...
Moodys is just another Banker. It's their Job to get Red Faced, Stubborn, Positional, Outraged, Fed-Up, pissed off, and irrational.
- Fuck Moodys
- Fuck TBTF
- Fuck Schauble
- Fuck the FED
- Fuck the IMF & WB
I think I have Stockholm Syndrome. They had me at "Def...."
It's been 2x this year that I made the prediction of all hell breaking lose. Twice the fuckers somehow managed to scramble their pennies and make a payment. Using ELA for once and paying IMF from Greek deposits at IMF the second time.
Maybe 3rd time is really the charm and the wheels are finally allowed to come off.
The Greek banks are bracing for a run that is already underway... all part of the War on Cash that is happening there.
http://www.globaldeflationnews.com/more-proof-that-central-banks-have-de...
True story. I'll never forget making a port call on some Greek island (can't remember which one but not Souda Bay) in about 1993 in US Navy. Took a boat into the harbor through absolutely gorgeous turquoise blue waters and just wandered the town. The one thing that I recall was all the jewlrey shops (and there were a lot of them) that displayed what had to be at least .18k or probably .22k gold jewlrey (a lot of it and I was impressed even as a somewhat young guy). I was short on money at the time (wine, women and song of course) and didn't begin my stacking until a few years later but I always wanted to go back just because of the beauty of Greece as well to maybe pick up some of the gold that I missed at the time. I can't imagine that many of those stores are still displaying their wares like they were back then but I hope at least a few of the Greeks were smart enough to start stacking themselves as thing began to get worse over the last decade. Hopefully they were not as unfortunate as I was during the boating accident in which I was saved but all my precious sank to uncalculable depths.
On all the intelligent comments about what the anti democratic evil Eurozone is doing to Greece there is always one down vote. It has to be that dickhead wolferl who loves sucking Eurozone dick. Your pathetic you piece of German shit .
The Italians lent to Spain (bought their debt),the Spaniards lent to Greece (bought their debt,bonds).
This is about contagion and panic.Also,to hedge or insure oneself against sovereign default one would have to purchase CDS derivatives,which can only be bought thru J P Morgan.
This is about RISK .It is about people thinking they are hedged because they purchased a paper contract which is based upon a counter-party chain stretching out towards Pluto.The people (Mugs) that bought the CDS insurance contracts should look very carefully at who is on the ISDA board which alone determines whether an "Event" has occurred.When the Icelandic PRIVATE BANKS went insolvent,twice they had a referendum to place the debt on the people (taxpayers).The Icelandic people rejected it twice.
The bailout cash came from the German pension funds.Someone has to be the one to tell them its gone.....