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Greek Stocks, Bank Bonds Battered As Deal Hope Fades
Headline hockey remains all that matters if one is "trading" European stocks, bonds, or FX. Today, so far, no deal... and so Athens Stock Exchange and Greek bank bonds are plunging (for now)...
Greek Bank Bonds are probably the most sensitive financial instrument to the endgame in Greece...
But even the broad stock market has reached hyper-sensitivity...
And moments ago Reuters just added fuel to the fire with the following:
- SENIOR EURO ZONE OFFICIALS DISCUSSED "PLAN B" FOR GREECE FOR THE FIRST TIME, WHAT WOULD HAPPEN IF GREECE DEFAULTED - OFFICIALS
- SOME EURO ZONE COUNTRIES REGARD A GREEK DEFAULT SCENARIO AS A LIKELY SCENARIO -OFFICIALS
The full Reuters story:
Senior EU officials have formally discussed for the first time a possible Greek debt default as negotiations between Athens and its creditors have stalled ahead of an end-month repayment deadline, several officials told Reuters.
The government representatives, preparing next week's Eurogroup meeting of euro zone finance ministers, concluded at talks in Bratislava late on Thursday that there were three possible scenarios for what would happen with Greece at the end of June. The least likely, they think, is a successful cash-for-reform deal next week in time to meet end-June legal deadlines.
The second possibility was a further extension of the current bailout programme, which expires this month at the same time as Greece must repay 1.6 billion euros to the IMF. The the third -- discussed formally for the first time at such a senior level in the EU -- was to accept Greece could default.
The meeting reached no decision or concrete conclusion.
Most officials argued that it was unlikely that creditors would strike a deal on reforms with Athens in time to disburse the 7.2 billion euros that remain available to Greece under a rescue programme extended in February for four months.
"It would require progress in a matter of days that has not been possible in weeks. The reaction of the ECB, the IMF and several member states was extremely sceptical," one official familiar with the discussions said on Friday.
The Greek representative at the meeting said Athens would do everything to reach a deal in time, other officials said. That would in effect mean an agreement in time to be endorsed by the Eurogroup when it meets in Luxembourg late on June 18.
Officials said, however, that even then, disbursement of loans to Athens by June 30 would be very difficult because of the time needed to finish all the legal procedures necessary.
Therefore, their second scenario was that the current bailout would be extended to keep the 7.2 billion euros, and 10.9 billion euros set aside for Greek bank recapitalisation, available for Athens once a reform deal is reached later.
The money will otherwise disappear and a new bailout agreement would be needed to secure further financing.
Various extension deadlines were discussed, varying from a few weeks to the end of the year or even to the end of March 2016, to align the euro zone's programme with the end of the IMF bailout package for Greece.
Such an extension would entail imposing further conditions on Greece and could involve the disbursement of funds in tranches as those conditions were met.
Representatives of some euro zone countries, however, believe that governemnts should prepare for a third scenario -- that of a Greek default.
"For the first time there was a discussion of a 'Plan B' for Greece," a second official said. Two other officials confirmed that such a debate took place.
So far euro zone officials have refrained from discussing such a possibility, even in closed-door meetings such as the one on Thursday, even though some governments, including Germany, have been preparing for it on their own.
The discussion was very theoretical because the scenario of a euro zone country defaulting within the currency union would be without precedent. The meeting came to no conclusion on it.
But officials said such a scenario would almost certainly involve Greece imposing capital controls to prevent an outflow of euros from the country and could also entail the issuance of IOUs by Athens as an alternative means of payment.
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Somebody is making money off that volatility.
Other than that, this entire Greek saga is a big fat nothingburger.
It really does seem like --->
Greece: The Achilles’ Heal That Will Bring Down The European Union
Oh yes, Oh no, Oh yes, Oh no, Oh yes, Oh no
Reminds me of an old tune..
https://www.youtube.com/watch?v=ydjccYpPVgI
No thanks. I refuse to read an article with a major misspelling in the title.
as the dolphins said when leaving planet earth ahead of it being blown up to make way for an intergalactic highway...
"so long, and thanks for all the fish"
Time for a new market meme....tired of Greece already.
Best short since the US housing bubble in 2007/8.
There has never been a "Greek deal."
The President put the knife in it at the shortest G-7 meeting in history just this past weekend.
As usual "we read the news purely out of boredom" as well.
Most pathetic media in history...the irony being Greece's media just got turned back.on for the first time in two years.
"Western Civilization"...what a joke.
Well, at least the US speculators know what to do with this information...dump paper gold!
I can't wait for the day when former, now destitute, hedgies are too ashamed to admit that they ever sold naked paper gold. I will find them, I will taunt them.
Please, please make it happen. You all keep promising me $700 gold and I'm chomping at the bit to buy large quantities at that price. Can't someone ring up Goldman and convince them to get me my price?
The Europeans are stupid to be making so much noise about the Greek issue...
"Greece has merely exposed the fatal flaw of the modern economy, it’s Achilles Heel (to stay with the Greek motif), which is that, by definition, a system suffering from Too Much Debt cannot pay it back. The only meaningful question to address at this stage is: Who is going to eat the losses?
The banks would like that to be the citizens of Greece, and the citizens would prefer it to be the other way around. This is the drama that is now playing out.
But should this Greek drama concern the rest of us?
Absolutely.
The sovereign insolvency at the heart of the Greece crisis is not unique nor isolated. Most other countries around the globe share the same terminal condition of having Too Much Debt. Greece, a small player, is simply succumbing earlier than they are.
And as Greece proves you can’t get blood from a stone, other countries will similarly demonstrate their debts cannot be repaid in full, either. And losses will eventually — inevitably — have to be taken. And when that happens, watch out."
Good one Truthseeker except that the losses have already been spread all over Europe... All Europeans are going to eat the losses
The Odyssey continues, we've been watching this for what, 4 years.
What kind of market rockets up 260 points on rumors, the rumor is denied and the area remains locked in the same position afterwards for the remainder of the session.
Confusion say when a cow stop give milk time for new cow
Matthieu Pigasse, head of investment bank Lazard in Paris which is advising the Greek government on its debt restructuring, said on Tuesday the troika imposing austerity on Greece was totally mistaken and had driven the country's economy into a wall.
"I think that the policies conducted by the troika (International Monetary Fund, European Central Bank and European Commission) are mistaken and have driven Greece into a wall and may yet drive Europe into a wall," Pigasse told France Inter radio. "Yes I think the troika had it all wrong."
Pigasse also repeated that a restructuring of Greek debt was inevitable and that the country's total debt load should be reduced by some 100 billion euros ($113.28 billion) to allow it to return to an "acceptable" debt to GDP ratio.
http://mobile.reuters.com/article/idUSKBN0LE0IM20150210?irpc=932
We shall desist, whatever the consequences, from deals that are wrong for Greece and wrong for Europe. The “extend and pretend” game that began after Greece’s public debt became unserviceable in 2010 will end. No more loans — not until we have a credible plan for growing the economy in order to repay those loans, help the middle class get back on its feet and address the hideous humanitarian crisis. No more “reform” programs that target poor pensioners and family-owned pharmacies while leaving large-scale corruption untouched.
http://www.nytimes.com/2015/02/17/opinion/yanis-varoufakis-no-time-for-g...