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Greek Banks On Verge Of Total Collapse: Bank Run Surges "Massively" As Depositors Yank €700 Million Today Alone
While the Greek government believes it may have won the battle, if not the war with Europe, the reality is that every additional day in which Athens does not have a funding backstop, be it the ECB (or the BRIC bank), is a day which brings the local banking system to total collapse.
As a reminder, Greek banks already depends on the ECB for some €80.7 billion in Emergency Liquidity Assistance which was about 60% of total deposits in the Greek financial system as of April 30. In other words, they are woefully insolvent and only the day to day generosity of the ECB prevents a roughly 40% forced "bail in" deposit haircut a la Cyprus.
The problem is that a Greek deposit number as of a month and a half ago is hopefully inaccurate. It is also the biggest problem for Greece, which has been desperate to prevent an all out panic among those who still have money in the banking system.
Things got dangerously close to the edge last Friday (as noted before) when things for Greece suddenly looked very bleak ahead of this week's IMF payment and politicians were forced to turn on the Hope Theory to the max, promising a deal with Europe had never been closer.
It wasn't, and instead Greece admitted its sovereign coffers are totally empty this week when it "bundled" its modest €345 million payment to the IMF along with others, for a lump €1.5 billion payment, which may well never happen.
And the bigger problem for Greece is that after testing yesterday the faith and resolve of its depositors (not to mention the Troika, aka the Creditors) and found lacking, said depositors no longer believe in the full faith (ignore credit) of the Greek banking system.It may have been the Greek government's final test.
Because accoring to banking sources cited by Intelligent News, things today went from bad to horrible for Greek banks, when Greeks "responded with massive outflows to the Greece's government decision to bundle the four tranches to IMF into one by the end of the June."
According to banking sources, the net outflows sharply increased on Friday and the available liquidity of the domestic banking system reduced at very low and dangerous levels.
The same sources estimate the outflows on Friday around 700 million Euros from 272 million Euros on Thursday. The available emergency liquidity assistance (ELA) for the Greek banks is estimated around 800 million Euros. In addition, the outstanding amount of the total deposits of the private sector (households and corporations) has declined under 130 billion Euros or lower than the levels at early 2004.
The total net outflows in the last 7 business days are estimated 3.4 billion Euros threatening the stability of the Greek banks.
This means 2.5% of all Greek deposits were pulled in just the past 5 days! Indicatively, this is the same as if US depositors had yanked $280 billion from US banks (where total deposits amount to about $10.7 trillion)
As further reported, the Bank of Greece is set to examine on Monday if Greece will urgently ask additional ELA. However, since one of the main conditions by the ECB to keep providing ELA to Greece is for its banks to be "solvent" (a condition which is only possible thanks to the ECB), one wonders at what point the Troika, whose clear intention it has been from day one to cause the Greek bank run in the process leading to the fall of the Tsipras government, will say "no more."
For those interested, according to IN, the deposit (out)flows in the last 7 business days are as follows:
Finally, for those who missed it, here is the first hand account of the Greek bank run from precisely a week ago as retold by ZH contributor Tom Winnifrith:
Witnessing the great bank run first hand as I deposit money in Greece
Jim Mellon says that the Greeks should build a statue in my honour as on Friday I opened a bank account in Greece and made a deposit. Okay it was only 10 Euro, I need to put in another 3,990 Euro to get my residency papers so I can buy a car, a bike and a gun, but it was a start. But the scenes at the National Bank in Kalamata were of chaos, you could smell the panic and they were being replicated at banks across Greece.
For tomorrow is a Bank Holiday here and if you are going to default on your debts/ switch from Euros to New Drachmas a bank holiday weekend is the best time to do it. And with debt repayments that cannot be met due on June 5 (next Friday) Greece is clearly in the merde. If it defaults all its banks go bust.
But I had to open an account and make a deposit. Outside the bank in the main street of Kalamata there are two ATMs. The lines at both were ten deep when I arrived and when I left an hour later. Inside I was directed to the two desks marked "Deposit". You go there to put in money, to open an account or if you are so senile that you cannot do basic admin of your account without assistance. As such it was me depositing cash and four octogenerians who had not got a clue about anything. Actually I lie. These folks may have been gaga but they were not so gaga that they were actually going to deposit cash, I was the sole depositer.
Friday was also the day when pensions are paid into bank accounts. On the Wednesday and Thursday it was reported that Greeks withdrew 800 million Euro from checking accounts. Friday's number will dwarf that. Whe you go to a Greek bank you pull off a ticket and wait for your number to be called. The hall in my bank contains about 60 seats all of which were filled. There were folks standing behind the seats and in fact throughout the hall, all wanting to get their cash out before the bank closed at 2 PM.
At the side of the room, shielded by a glass screen sat a man behind a big desk. He tapped away at his screen and made phone calls. Ocassionally folks wandered over, shook papers in his face and harangued him having got no joy elsewhere. So I guess he was the bank manager. I rather expected him to end one phone call and stand up to say "That was Athens - all the money has gone, its game over folks." But he didn't. He may well do so at some stage soon.
Eventually I got the the front of my five person queue of the senile and opened my account. Passport, tax number, phone number all in order. I handed over a 10 Euro note and the polite - if somewhat stressed - young man gave me about ten pieces of paper to sign and stamped my passbook. I have done my bit for Greece and have given it 10 Euro which I will lose one way or another in due course. So Jim - time to lobby for that statue.
The Government did not put up a default notice on Friday as I half expected. The can kicking goes on. The ATMs will be emptied this weekend and on Tuesday and in the run up to a potential default day next Friday the banks will be packed again with folks taking out whatever money they can.
It is not just the bank coffers that are being emptied. To get to The Greek Hovel where I sit now from my local village of Kambos is a two mile drive. On my side of the valley there is some concrete track but it is mainly a mud road. On the other side of the valley there is a deserted monastery so to honour the Church - even if there are no actual monks there - a concrete road was built in the good times. By last summer it was more pothole than road.
By law, since I have water and electricity, I can demand that the road be mended and so last summer I went to the Kambos town hall (4 full time staff serving a population of 536) and did just that. They said "the steam roller is broken and we have no money but will try to do it in the Autumn." They did not.
But last week a gang of men appeared and the road is now pothole free, indeed in some places we have a whole new concrete surface. And as I head towards Kalamta there are extensive road mending programmes. At Kitries, the village has found money to renovate its beach front. It is a hive of activity across the Mani.
Quite simply each little municipality is spending every cent it has as fast as it can. The Greek State asked all the town halls to hand over spare cash a few weeks ago to help with the debt repayment. The town halls know that next time it will not be a request but an order. But by then all the money they had hoarded will have been spent. That is Greekeconomics for you.
Everyone knows that something has to give and that it will probanly happen this summer. The signs are everywhere
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Calm down, they just wanna scare mom & pop investors a little bit and then there will be a "surprise" Greece rescue and everything will be so great and CNBS and all the other retail investor propagangsters will spin it 24/7 to make mom & pop buy stocks. They will rinse & repeat it several times so the smart money can unload their overpriced stock every time.
Fool me once, shame on you. Fool me many many times, damn on me.
Oh, shit is getting real !
An Argentinian crisis just right in Europe !
If I where a Greek I will go phyzz and crypto (if available) a long time ago.
I think Greece has been limping along for a while now on a barter economy, not necessarily a bad thing and maybe way better than the costs of keeping a throughly corrupt official financial system going. Coming to the US soon - actually, it may be already here in some areas.
What I find amazing about the IMF is that they'd demand money back when a bank run is going on. It means they're trying to push the situation over the edge.
THE IMF EXISTS ONLY TO PREVENT BANK RUNS. There's no other reason for its existence. They don't loan money for international development. They're not sitting on gold reserves. They're just a slush fund for bank runs. In return for a bailout of the banks, you're supposed to let them run your country.
This is what the Bretton Woods system was. And this is what the IMF does.
No, the IMF exists as a tool for the Empire to use to break any nation who opposes the Empire.
Not according to Morgan Stanley's Paul Kazarian, who estimates Greek debt closer to $30 bln than $300 bln, depending on accounting methods...
http://www.nytimes.com/2015/02/21/business/dealbook/greek-debt-is-vastly...
If it were so simple, this would have resolved itself 3 years ago....
Depending on what you call resolved. In the end, we are hearing for over 2 years that Greece is now really at a point of default; question is why default hasn't happened. Perhaps because there are other motives than debt repayments to keep Greeks afraid and fuel public opinion against a 'Grexit'? A 'Grexit' may even prove beneficial to Greece, just like Iceland's decision to let all their failing banks default which brought new prosperity to that country. If this would be the case in Greece, Italy and Spain will follow suit and eurozone will be back to pre-'00's, when European economies were actually doing much better than they are doing right now (remember the booming 90's).
"...depending on accounting methods..."
I have repeatedly told my lenders that same thing to no avail. According to what they tell me, the "mark to fantasy" only applies to them.
Correct. And who's got the blame for this? Always the Greeks? The Greeks are bad and everybody else is an angel. Well.......A new SOMO report in the Netherlands reveals that while Greece endures harsh austerity measures imposed by the European Commission, European Central Bank and the IMF and supported by the Netherlands, Greece's economic recovery is being undermined by large-scale tax avoidance enabled by the Netherlands. The report, "Fool's Gold", reveals that tax avoidance by the Canadian mining company Eldorado Gold, which uses mailbox companies in the Netherlands, has led to tax losses of at least €1.7 million for Greece in the past two years. If this had taken place in your own country would you still blame the Greeks for not paying their taxes? You see, .... there are two sides in every coin..... More details on the SOMO website, or you can just search "Fool's Gold" :)
I saw a story, can't find it now, where they had made overtures to the Russian Government.
Could be a big-game changer!
They'll use these bank runs to further their cashless society agenda.
No cash,,, no bank runs. sweet...
18 Trillion and counting and we jest the Greeks about being bankrupt.
A new SOMO report in the Netherlands reveals that while Greece endures harsh austerity measures imposed by the European Commission, European Central Bank and the IMF and supported by the Netherlands, Greece's economic recovery is being undermined by large-scale tax avoidance enabled by the Netherlands. The report, "Fool's Gold", reveals that tax avoidance by the Canadian mining company Eldorado Gold, which uses mailbox companies in the Netherlands, has led to tax losses of at least €1.7 million for Greece in the past two years. If this had taken place in your own country would you still blame the Greeks for not paying their taxes? You see, .... there are two sides in every coin..... More details on the SOMO website, or you can just search "Fool's Gold" :)
Where the hell did they get all that money? And why are they leaving it in the bank? What are they crazy?
I don't always monkey-hammer PMs, but when I do I wait until Greece is about to default, take down the Euro, break apart the EU and collapse the global derivatives market!
Greece collapsing? Do you really have such hopes? Do you think we Greeks are stupid? Who told you so? You guess so, I think. Well what if I tell you that Greece will make the EU to spit blood, if does not pay Greece the money from massive tax evasion committed by its multinationals. WE WILL NOT STOP UNTIL THE WHOLE WORLD LEARNS WHO THEY REALLY ARE ! You got it? Well, take this for now: A new SOMO report in the Netherlands reveals that while Greece endures harsh austerity measures imposed by the European Commission, European Central Bank and the IMF and supported by the Netherlands, Greece's economic recovery is being undermined by large-scale tax avoidance enabled by the Netherlands. The report, "Fool's Gold", reveals that tax avoidance by the Canadian mining company Eldorado Gold, which uses mailbox companies in the Netherlands, has led to tax losses of at least €1.7 million for Greece in the past two years. If this had taken place in your own country would you still blame the Greeks for not paying their taxes? You see, .... there are two sides in every coin..... Jeroen Dijsselbloem a crook? Never! Varoufakis is a crook.....because he doesn't wear a tie !!! LOL. - More details on the SOMO website, or you can just search "Fool's Gold" :)
According to the Guardian, based on a report by Barclays, most of Greece's debt is held by Eurobank EFG, led by Greece's billionaire Spiro Latsis and familiy. You are being screwed by your own people (or benefiting if you work at EFG).
http://www.theguardian.com/commentisfree/2011/jul/11/banking-bond-holder...
We have always been screwed by our own people. The oligarchy problem in Greece has quite a long history. The people who own the banks are the ones that also own huge companies and the media and they have been spewing propaganda for at least the last 30 years. These are also the people that benefited the most from the Euro funds (apart from the Greek state). Oh, and those people have tax exemption. But I guess it's the little people that didn't pay taxes that is the problem here...
SYRIZA holds firm in polls, eight in 10 still want euro
http://ekathimerini.com/4dcgi/_w_articles_wsite1_1_06/06/2015_550765
An opinion poll published over the weekend showed SYRIZA holding a strong lead of 23.6 percent over New Democracy, while eight in 10 Greeks said they wanted to remain in the eurozone.
According to the poll by Metron Analysis, if elections were held now, 45 percent of Greeks would vote for SYRIZA and 21.4 percent for ND. Such a result would allow SYRIZA, which co-governs with the right-wing Independent Greeks, to rule autonomously. Potami garnered 6.1 percent, followed by Golden Dawn on 4.4 percent, the Communist Party with 4.3 percent, ANEL with 3.2 percent and PASOK falling below the 3 percent threshold to enter Parliament with 2.9 percent. The survey found that 79 percent of Greeks want to stay in the eurozone.
Nearly half (47 percent) said Greece should accept a proposal by creditors to secure loans, with 35 percent saying it should rebuff the plan. A total of 59 percent said they were satisfied with the government’s style of negotiation.
Tyler if you want us to believe you at least make sure there are no typos in your reports...ELA 80B no 80M, got it?
Greece is already backrupt. The question is when will it happen in real time?
1 day, 1 month, 1 year, 10 years...how long?