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Greece Feigned Deal Progress, Launched Rumors To Avert Bank Run
By now, investors are mostly desensitized to conflicting reports out of Athens and Brussels regarding “progress” on Greece’s negotiations with creditors. Indeed it’s quite rare that a day goes by without an “unnamed” Greek official reporting that a deal is “close” only to have someone on the other side of the negotiating table dispel any notion that discussions are headed in the right direction.
That said, Wednesday’s version of this merry-go-round seemed even more absurd than usual with Greece indicating that a deal between Syriza and the troika was imminent. In fact, PM Alexis Tsipras posted the following message to his official website:
As you are aware, the government operates collectively. Over time, we have established a collaborative decision-making process. Obviously, though, the ultimate responsibility lies with the Prime Minister and the Cabinet. I’d like to state that we have taken many steps and we are now in the final stretch, we are close to an agreement. This agreement will be positive for the Greek economy, this agreement will redistribute the [financial] burdens and I believe that, very soon, we will be in a position to present more information.
Additionally, I would like to add one thing: it is obvious that during this final stretch, composure and determination are required. We are not alone, we are dealing with three separate institutions, which often hold conflicting views and mainly, we are dealing with our partners -many different countries- among which there exist different approaches, but also within those countries there are differing political interests. As such, during this time there may be pressure, and there may be those that seek to create a false sense of danger.
I want to reassure the Greek people that we are negotiating to obtain secure and stable conditions, in advance, for the Greek economy. Today and tomorrow, salaries and pensions will be paid as they have been all this time; for the past four months now, some have been constantly claiming, in an attempt to spread alarmist and false news, that the Greek economy is on the verge of collapse.
I am optimistic that we will soon have positive results. We all, however, need to turn a deaf ear to those spreading doom, the alarmists. There is absolutely no danger to salaries and pensions or to the banks and people’s savings. And I believe that very soon we will be able to look ahead with greater optimism. However, we need composure and determination in this final stretch.
So, unpacking that, Greece is “in the final stretch”, is “close to a deal”, public sector employees will be “paid as they have been all this time”, and despite commentary from “alarmists” determined to “spread doom”, there’s “absolutely no danger to the banks and people’s savings.”
Here is what Germany had to say about the idea that an agreement is imminent:
- LITTLE PROGRESS SEEN IN GREECE TALKS, GERMAN GOVT OFFICIAL SAYS
- GERMAN GOVT SURPRISED BY GREEK REPORTS OF PROGRESS: OFFICIAL
As for banks and depositors, Kathimerini reported that according to some sources, as much as €300 million in deposits disappeared from Greek banks on Tuesday alone after FinMin Yanis Varoufakis indicated the government may consider a special levy on ATM withdrawals in an effort to encourage the use of credit cards over cash. Meanwhile, the ECB declined to raise the ELA ceiling for the Greek banking sector citing a “stable” situation.
What all of the above seems to suggest is that Greek officials are now desperately attempting to convince the public that the country, its banks, and its citizens are not hurdling towards the economic abyss with no agreement in sight when in fact, the situation is deteriorating rapidly on the way to an ugly climax on June 5.
That suspicion was confirmed today. As Kathimerini reports, PM Tsipras was advised by his aides to essentially lie in order to halt a terminal bank run. Here’s more:
Prime Minister Alexis Tsipras said Wednesday that a deal with creditors was “close” and government officials said an agreement was being drafted but representatives of the country’s creditors made it quite clear that they do not share such optimism.
In comments after a meeting at the Finance Ministry, Tsipras said a deal with creditors was “close” and that “very soon we will be able to present more details.” He stressed the need for “calm and determination,” noting that Greece would come under additional pressure in the final stretch of negotiations. He also referred to “conflicting views between institutions” and to “countries with different approaches.” Tsipras added that there is “absolutely no risk to salaries and pensions, nor to bank deposits.”
According to sources, Tsipras was advised to make the statement by aides fearing that jitters were creeping back into the markets and could prompt a new wave of deposit outflows. Tsipras chose to make the statement flanked by Finance Minister Yanis Varoufakis to underline the government’s backing for the latter, who has come under fire over his confusing statements about the content of a potential deal.
Earlier in the day, the European Central Bank decided not to raise the ceiling on emergency liquidity to Greece. A Greek government official commented that the Bank of Greece had not requested an increase to emergency liquidity as the current ceiling of 80.2 billion euros is regarded as adequate “following a stabilization of deposit outflows.”
Meanwhile, Greece is busy refuting creditors' refutations by swearing it really believes its own rhetoric...
"This optimism is not just words, it is based on the experience of the previous weeks and the progress achieved."
...and The Eurogroup is sticking to its script as well...
"We’re not there yet. There are open issues which need to be resolved."
We imagine these "open issues" are related to Syriza's attempt to uphold its campaign promises in the face of an unyielding attempt by creditors to dictate political outcomes using financial leverage and for better or worse, it's likely the "institutions" will succeed.
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Stand up, wipe the snot off your face, and walk like an Icelander.
Beautifully put.
DavidC
OMG. Even the 'good' guys lie?
Say it ain't so Joe, say it ain't so.
Everybody lies, mostly to ourselves.
I lie even when I tell the truth.
Don't forget that German schadenfreude....
"I lie even when I tell the truth."
That is why your rates are negative....
Just stop it.
It really is that simple.
https://www.youtube.com/watch?v=8XrpCdHm-Qg
"We're not there yet. There are still issues that need to be resolved."
That doesn't sound exactly like "no" to me. I smell a surprise, last-minute, market-levitating, epic can-kicking deal in the offing.
I like to think of it as a 'reaffirmation of my world view'.
The word lying just seems so ...deceptive when all you want is to preserve harmony.
Why should a noble motive be made to sound like low behavior?
Wait. What ?!?
A government lies to its citizens - ?
Those personal emails deleted from clintonemail.com - very likely contained details between HItlary and Bill on deals he was making.
NoVa
"When it becomes serious, you have to lie."--Claude Juncker
yes, "good guys" lie. if it's necessary. that is what Juncker once said, and his core constituency nodded, and elected him
are Luxembourgers a kind of strange people? not here on the european continent, actually
it's part of... culture. emphasis of culture
the question is: is it right to say the truth if this leads to bad things?
this leads to the example of the goon asking you if you are hiding "undesirable people" in your attic that "ought to be taken care of"
another, more worldwide dominant culture says that the truth is always the better solution, and "Honest Abe" is it's patron
cultural preferences are this way. it's often a question of emphasis, not values
ghordius, where we differ, you assume the lie is for the benefit of all, I assume the lie is for the benefit of the jon corzines of the world..context.
do we differ? in the case of Juncker and his constituency, I'd say they decided he was stating that he was willing to lie, or even did lie... for their sake
jon corzine? is that a famous case of an American politician, political fund raiser and banker that admitted anything?
you are putting Corzine next to an european that has said something that counters everything Americans are used to hear from a politician... at home
imho it just shows how strongly culture influences politics, among other things. like US prosecutors preferring FIFA as target to... Corzine or megabanks
pity the elite like juncker and corzine..they bear the white mans burden..we all should be thankful for lies and corruption, can I have Moar sir?
overmed... how much do you know about Juncker?
I'm asking this because you seem to be quite convinced that you have Corzine, ergo we have... Juncker
And that both are in any way... comparable
You know how much Corzine collected for various political campaigns, his and other candidates?
You know how much Juncker's campaign to get elected as EU Commission Prez costed?
Does the cost include the tab for Juncker's drinks, or more precisely bottles?
my goodness, no. that would definitely blow his campaign money kitty. Juncker needs a bottle of wine for breakfast just to return to sober
Luxemburg Premier Buttel has come out as a bum bandit. Nothing else is politically relevant.
http://www.aljazeera.com/news/2015/05/luxembourg-pm-eu-leader-wed-gay-lo...
is "bum bandit" an endearing term or are you protesting against his "homosexual marriage"? honestly, never heard that term
Just a colloquialism. Check out the urban dictionary
http://www.urbandictionary.com/define.php?term=bum+bandit
The German equivalent, I believe, is a good deal more graphic.
Rump Ranger, Hershey Highwayman, Fudgepacker, Brown Starfish Hunter, Sphincter Sinker, Rectal Raider, Tailgunner, Poop-shooter...
I left out the vulgar versions because you Euro-types have delicate sensibilities
if I had "delicate sensibilities" I would not be in the comment crowd of ZH
hey, it's your - generally speaking - "West and East Coast Champagne-Socialist crowd" that has introduced "Political Correctness" as weapon in a "Culture War", aided by some Britons and some Scandinavians
the most annoying part of being a Continental in this blog is all those assumptions based on myths that seem very useful in propaganda
we, for example, have very often governments led by conservatives. but our conservatives, for some reasons, aren't evah recognized as such... outside
what have, for example, Putin, Berlusconi, Sarkozy, Merkel, Juncker and Rajoy... in common? besides a terrible "press"... in the English-speaking media landscape?
They could have used the term Ass Master but the google search results would have come up with something completely different than european politics.
Progressive culture worships liars. Non-honorable men and women that blatantly lie are progressive heroes. Corzine. Obama. Hillary. McConnel, Bohner. All Euro politicians.
The ten commandments of godless state worshipers:
Lie
Lie
Lie
Lie
Lie
Lie
Lie
Lie
Steal
Murder
But this is elementary. So knowing progressives are just base criminals should they just be jailed? Hmmmmm, no, I think better to send them all to Europe.
Grimaldus
I heard recently that the Iceland story had some cracks now. Should check in.
But here, Greece...probably the most televised global tragi-comedy, being played out at the birthing grounds of the modern tragedy (of the commons and commoners at that) and Comedy, they gave the world demoncrazy and COngress (Parliament, the CONGRESS, congress is etymologically SEX....so yes, the US Congress, India's CONGRESS party, just fucking with us, literally)...
The irony is heavy and the consequences real.
Heck of a time...
Piece y'all...
https://aadivaahan.wordpress.com/2011/10/23/peace-in-pieces/
Iceland always kept its own currency. That is the decisive difference to Greece.
or repo Crete, get it over with. No one understands the "absolutely ruthless act vs. a whole, frivolous reign of terror"...i.e. Don Vito Corleone
The difference being Don Corleone only asks politely once.
Berlin and Brussels aren't interest in repos (or anything else that preserves equity and future cash flows), the want the balance sheet stripped and liquidated.
Meanwhile the algos only read "GREEK" and "PROGRESS" in the headlines so they BTFATH
"What all of the above seems to suggest is that Greek officials are now desperately attempting to convince the public that the country, its banks, and its citizens are not hurdling towards the economic abyss with no agreement in sight"
I think you mean "hurtling". Though perhaps the slip was intentional, making reference to the popular Olympic sport as a hattip to the Greek situation.
What's this? A downvote?
Who could hate Olympic sports?
Dear Greeks: kill your politicians, all of them. Default and start over. Stop being such fucking bellends.
So true. People forget they have self determination when they become dependent.
Being a pacifist, I would put this as "I wish they were all dead". And if some of them died a horrid death, in fact, I think it would benefit the public in the long run by increasing the integrity of future contestants. I'm not going to become a killer or any killer's patron
Leeches leave and/or die when there's no more blood left on the host. Good thing is, these leeches are not sucking actual blood, and we will still be alive when their food is over, hopefully to restart our lives.
Is this even news?
Cheapo balless Greeks.
Would appear Iraq isn't the only one with a "lack of will."
I just don't see it.
With a sanctions regime now on Russia and Turkey's economy getting hammered I really don't see anything but the failure of Europe's currency let alone trade Union going forward.
So a blatant lie added how much in global stock market cap?
When it is this easy to manipulate the markets, it proves the entire purpose of the market has been obliterated.
The markets only exist to generate wealth through lies, propaganda, and theft. That isn't exactly what we have been told they are for.
It almost seems like a coincidence that gambling has always attracted the criminal class of people.
The ones running the tables.
It's the rubes that make it work.
"This is another fine mess you got us into Ollie."
Ollie is now Hitlary with a Sh*t Eating Grin
Ok ok Ill be the bad guy here...
FUCK GREECE! I'm tired of hearing about it, its a fucking farce, and they're broke! dead broke in fact!...go away!
Transparency is the enemy of delusion. How can we all survive with OUR delusions intact if we fail to embrace everyone else's?
@ Bill of Rights
That means all debted nations should "go away"
Their all..................."dead broke"
Nothing personal
How many times has this "good news" been priced in to the market?
This will cost ~320 bn euro. If you're ok with that, Greece will promptly disappear from your news.
look somebody got to pay..or else Jon corzine and buddies go hungry. so many banks went under making poor loans in days gone by..seems the banksters fixed that.now whole countries go bk to protect bankster profit statements..the ultimate joke it seems ..finance was crime all along, who knew?
not long ago, a German newspaper ("Die Zeit", here link to article of March 2015, in German) was quoting Yanis Varoufakis and his tax scheme
in short, the Greek FinMin was offering all... let's say "slow taxpayers" an easy, no-fines, up-to-100-installments payment mode
he was calculating with 3.7 million individuals (note: total Greek pop is around 10 million) and 447'000 companies that have not yet paid "their due"
total unpaid taxes: € 76 billion. that's some 46% of Greek GDP. so the FinMin calculation was that roughly 8.9 billion per month should make his ministry "flush" while he plays heady "Game Theory" approaches with the creditors of his country
for me, the most interesting part is that the Greek Tsipras Cabinet is playing poker with it's cards very, very close to it's chest. the biggest item of irritation for the collegues of Yanis Varoufakis, the "Eurogroup", i.e. the finance ministers of the other countries (aka "EuroCrats", and many of them representing the main creditors) is that...
... they are not allowed to see any Greek FinMin accounts. Ergo, they get asked, as Schaeuble often is, if Varoufakis can "pull it off" and they have to... shrug
As far as I remember, this was also tried with the IMF. and the official reply from NY's HQ was that they have to, it's part of the IMF charter, i.e. it's a "rule of the club"
I guess Varoufakis checked and find out how often he really has to report to the IMF (possibly even if he really, really has to be... truthful. or precise. or whatever)
anyway... this "game" resembles both poker and chess. as far as I can see, it all depends on the willingness of the Greek... taxpayer
we'll see what happens, I wish good luck to Greece (and it's partners)
Man. Your figures are so off it's not even funny. 76 bn of which less than 10% was assumed collectable, the rest is debt from decades past and accrued interest and penalties, you'll never get to it and no one thought they could get to it, be it troika or Varoufakis.
Expectations from this instalment scheme were outlined in a leaked document to the FT a while ago (the first one that contained detailed reform proposals from the Greek side) and they amounted to less than 700 mln for 2015. That mark has been by far surpassed by the way, mostly because it was an actually good law, one that helped citizens/companies pay off debts and still survive/operate.
ZH: if you review the timing of Greece's payment obligations, it becomes much more manageable after the summer crunch. Without question, the TBTJ control fraud operators and their CB reports are trying to maximize leverage and engineer duress. You're helping them with this framing. Be part of the solution. Make the real dynamics clear. And if it seems the Troika doesn't want a deal, remember they effectively secured the 2nd program against Greece's gold. The nearly infinite abuse of control of the effective money supply (that which has been created from nothing by the privately controlled fractional reserve banking system) must stop. And all of us who are effectively robbed by their control fraud must stand together to end it, not engage in schadenfreude...
great comment. the fundametal issue is always the privately controlled fractional reserve banking system. this point must be repeated ad naseum unti lthe sheeple finally grasp the true underlying cause of a huge amount of our problems. we are effectively debt slaves in a system where culture, politics, media, almost every facet of our lives becomes controlled and manipulated because the power of the printing press lies in a very small group of private hands.
re "privately controlled fractional reserve banking system"
does it mean that you would find a state banking system a better or even solid solution?
that is something upon which i have spent a good deal of time reflecting recently. i would say since i woke up in 2010 and immediately devoured all the austrian economics books i could manage, until recently when i stumbled upon ellen brown's web of debt, i was a firm believer in the gold standard. after reading web of debt i have begun to increasingly consider the possibility that a pure gold standard, even though it would eliminate fractional reserve banking, would still probably allow private banks to corner the gold market and manipulate credit and money supply accordingly.
to answer your question i think a state banking system, where banking was nationalized and the printing press was used to finance public projects with debt free money, would without question be a better alternative to the clusterfuck we currently enjoy. whether that or a PM backed system, or even simply allowing the markets to dictate what constitutes money, as long as the supply is not in the hands of small private cabal who can counterfeit infinite amounts at the push of a button.
that is something upon which i have spent a good deal of time reflecting recently. i would say since i woke up in 2010 and immediately devoured all the austrian economics books i could manage, until recently when i stumbled upon ellen brown's web of debt, i was a firm believer in the gold standard. after reading web of debt i have begun to increasingly consider the possibility that a pure gold standard, even though it would eliminate fractional reserve banking, would still probably allow private banks to corner the gold market and manipulate credit and money supply accordingly.
to answer your question i think a state banking system, where banking was nationalized and the printing press was used to finance public projects with debt free money, would without question be a better alternative to the clusterfuck we currently enjoy. whether that or a PM backed system, or even simply allowing the markets to dictate what constitutes money, as long as the supply is not in the hands of small private cabal who can counterfeit infinite amounts at the push of a button.
State banking issuing interest free money backed by commodities and full reserve 'credit' with easily verifiable accounting.
Yes, credit would be expensive. It's a feature, not a bug. Companies couldn't afford to operate giving multi-million bonuses out like candy and savers would get a market return on their money based on actual risk.
Your dog would no longer be eligible for an FHA loan.
The last person that tried to have debt-free money in a developed country ended up with a bullet on his head in a Berlin bunker in 1945. The bankers will not let you go easily.
Why can't Janet Yellen and Ben Bernake help out the Greeks and show them how to be fiscally responsible. Yellen and Bernanke have done a great job getting the US firing on all eight cylinders. Just imagine what their sage financial advice would do for Greece!
Bailouts are bullshit! So what, the can gets kicked for the next funding cycle until a new bailout is called for again. Then what? Hope for magic growth when austerity is shoved down the throats of Greeks by outsiders for over 7 years now?
Time for Greece to invoke the legal concept of ODIOUS DEBT and repudiate the damn thing already, start a clean slate. This is all bullshit, creditors being allowed to ruin entire nations because some assholes in Brussels didn't think things through properly when devising the one-way cult.
What a system we have, one day if we make it till then, we will look back to this period as the age of financial tyranny.
Is there a single ZeroHedge reader who would still have money in a Greek bank at this point? Even if they were offering, say, a 20% interest rate? I don't get it. Why would even the dumbest Greek on Crete still have money in a Greek bank?
one other question: why would anyone have money in a Greek bank at this stage? Default is right at the door, Cyprus is the template for everyone to see. So why the fuck would you even consider putting your cash in peril like that?
Unless of course, you are a fucking idiot. In which case, I wish you good luck.
I'm convinced these pussies Greece voted in , will never stand up and walk away.
The "institutions" consider Greece "uninvestible" short of direct rule from Brussels---or rather Berlin---imposed by NATO forces, and the liquidation of any and all political forces opposed to the expropriation and expulsion of the Greek people from their homeland and the transformation of their country into a holiday camp for rich thieves from London to Riyadh.
Negotiating in good faith wouldn't do Greeks any good now. Their death warrant was signed a long time ago. The only question is when Berlin will pull the trigger and which Greek oligarch will be appointed by Berlin to serve as nigger-king over the remains of the Hellenic Republic.
That's the only thing Greece can export - rumors.
I bet the Greek Politicians have figured out they can make money manipulating the markets with their statements....and Greece needs money....so they play with the markets....
Man, this is the longest process I have ever seen. It's like trying to light a wet camp fire... you know it's eventually going to burn, but it just keeps smoking! Burn Baby Burn!
Uncle Beauford would tell em " Ain't no reason to stay in the shitter if the paper is gone. Pinch it off, buckle up and walk like a man."
But a bank Run.. would mean there was Money in there to Take out.. I call Bull Shit...
Regardless of what happens on June 5th, reality will not be tolerated. If they do default, it will be ruled a non-default. I bet they'll even come up with an obscure meaningless name. Functional Restructured Non-Default Delinquency. (FRNDD)
Could someone please do a interview with someone who has money in a Greek bank? I would just like someone to ask them, what the fuck are they thinking?
I'm astounded that there is so much cash still sitting in back accounts. Surely with near zero interest rates, the risk of keeping money in the bank and losing it all far outweigh the paltry returns? Yes. for practical reasons some money needs to remain in bank accounts and there is is risk of burglary, but Greece (as the Greeks themselves have stated) is bankrupt, so a tax/haircut on deposits is almost guaranteed.
Hardly confined to Greece,
Easy enough to get personal funds out of the banking system, with a plan and
perseverance,but for the life of me,I can see no way to get my biz cash out of the banks, and
remain in business.
Any ideas are welcome ????
The Greek government is trying hard to keep the bank run under control but it's just not going to be possible...
http://www.globaldeflationnews.com/more-proof-that-central-banks-have-de...
What a farce.
You kind of hope the Greeks string up these two clowns.
The problem for USA and EU is that the small country Greece has a government with more intelligence and balls than all of them put together.
All the bitching, bullshitting propaganda and laughable blackmail is seen for what it is, empty threats that only persuade the totaly ignorant and those 'master races' with issues who hate Greece.... and all small countries.
Actually Greece is in a very strong position to demand total write off of the debt, the fact that they dont do so straight out, prooves their pro EU mature stance.
It is disingenious to believe that only Greece will lose if there is no agreement, the EU is an integrated interdepent block with a common currency, any change to its structure will impact the whole block, from Britain and Holland to France, Spain, Italy and portugal most EU countries are very heavily in debt, shaking the boat will cost them extremely dearly.
Greece's pain will make all of them scream a lot louder.
U.S. finance minister Jacob Lew gave the game away when he warned of an accidental Grexit, Germans will push hard against a clearly well informed superior enemy , guess accidents could happen , Germany's loss at told will be deep, and its government the first to feel it.
Yolo