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How The Report That Europe Is Formally Discussing A Greek Default Shook Markets
With Greek PM Alexis Tsipras seemingly determined to take negotiations over pension reform and VAT hikes down to the “Zambian” bundle wire on June 30, and with the IMF having shrugged its shoulders, sighed, and traveled back to Washington, EU officials are now formally discussing what formerly was not to be mentioned in polite circles: a Greek ‘Plan B’.
Reuters has the 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...
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..." one official familiar with the discussions said on Friday.
Officials said 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...
Representatives of some euro zone countries, however, believe that governments 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.
In other words, EU officials have now stopped pretending that no one has mentioned a Greek default thus far. Of course that contention was absurd on its face considering Greece in fact defaulted on May 12 when it was forced to pay the IMF out of its SDR reserves (which now stand at just €30 million) and then effectively defaulted again last Friday when Athens asked to bundle its June payments so as to buy more time for Tsipras to convince the IMF to pay itself (again) by disbursing its portion (around 50%) of the €7.2 billion remaining in Greece's current (and apparently last) bailout program.
But to the market (and certainly to the algos) whether or not this most recent headline actually means anything is ... well, meaningless, which is why when the "Plan B" 'news' hit the wires, this happened:
These are your markets on Greek cooking.
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German FinMin Wolfgang Schaeuble sums up our take on the above...
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June 4, 2015 - "There is no Plan B for Greece," European Commissioner for Economic Affairs Pierre Moscovici said on Wednesday.
http://en.enikos.gr/economy/29980,There-is-no-Plan-B-for-Greece-Moscovic...
June 12, 2015 - "For the first time there was a discussion of a 'Plan B' for Greece," a second (EU) official said. Two other officials confirmed that such a debate took place.
Throw those pathetic Greek dead beats out of Europe already.
Sei nett Wolferl. Ihre deutschen Überlegenheit zeigt.
Is it possible the Greek Central Bank bought 200 billion in CDS coverage from Deutche bank??
GREXIT Can Only Be Postposed, Not PreventedSo Super Mario Draghi was lying when he said their is no plan "B". Hmmm, the markets took off like a rocket on that news so now i guess it will sell off hard...maybe even .5%
Pathetic is not a bad characterization but not for all Greeks... the word pathetic characterizes better the public administration
by the same token someone could say
throw those scumbag Germans out the euro
but that would be unjust for the majority
https://en.wikipedia.org/wiki/Obsessive%E2%80%93compulsive_disorder
the Greek political system in its urgency to protect the privileges of the public administration is killing the country
Pull the plug
And take the blue pill
They will vomit and struggle with the food look for a while.
But all will be ok in the .........................end
Tsipras did sit down with the Venezuelan President for a "one on one"
That should have raised a few red flags...
I am personally very shocked.
A Random Walk Down Wallstreet. Efficiency in markets.
Five years later and we are still talking about Greece. Had they defaulted when they should have this whole mess could have been put behind them. One thing I know for sure, even if they do default...... it won't be a default.
They already defaulted and it wasn't a default apparently.
I disagree.
You see...Greece actually owes that debt to other Central Banks.
Those players will not be too happy if they cannot collect the Credit Default INSURANCE and they will feel as if they've been ripped off...which they have.
The Faith, Trust and Confidence will erode quicker than yu can imagine as there is NO HONOR amongst THEIVES.
Can yu spell Credit Freeze II. It is easy.
G...R...E...E...C..E
D...E...F...A...U...L...T
The fucking game is over. Thank God Almighty the entire fraudulent corrupted system will crash down upon the top of their heads,
Then we all starve for a little while.
But we can rebuild from the embers and ashes.
Once there is an actual default and the insurers have make good on their empty promises it's game over, which is why a default won't be a default.
In a fair world, everyone would be looking to Goldman The Book Cooker Sachs for restitution. Instead they are just allow to make even moar money off of the mess they caused.
Why doesn't the IMF take a page out of O's student loan playbook? Release Greece from their debt obligations and hang the whole amount on the back of the US taxpayer. Heck, we're already shouldering the load for irresponsible students, irresponsible homeowners and irresponsible car buyers. Let us US taxpayers make Greece's bankers whole too!
Don't forget that we USSA taxpayers contribute 20% of Israel's GDP, most of ISIL / Al-CIA-Duh's funding along with corporate welfare worldwide.
How long before this all goes down the drain?
Well Greece has been on the verge of default for five years, so who the fuck knows?
I discussed the Greek default last night over a couple of cocktails...so there
I suspect that this drama is a good metaphor for the broader economy, by which I mean that most people talk about the "next" crisis, when in fact the crisis has been ongoing (and worsening), and what they are really referring to is an obvious acceleration of the process.
The derivative bomb fuse has likely already been lit, and there are many accelerants that could prove the catalyst for the real fireworks. Greece, which has, for all practical purposes, already defaulted, is of course among them.
I bet my friend $1,000 last night after the 24 hour notice was given that Greece will end up making a deal this weekend.
Money in the bank (for me)
If my chart reading skills are accurate, I'd say it's business as usual.
According to the Economist's world debt clock public debt as of 2007 was roughly 27 trillion today its 57 trillion, and we're still talking about Greece. Let's talk about Japan, the US and the UK. Let's talk about Spain, Italy and Germany.
Only two ways out, debt jubilee or the owners of the banks will eventually own everything that they don't already own. The tsunami is coming, serfs up!!
The Greek pancake joint over by my house is the only place I can still get "freedom fries".
All fiat is fraud.
To defeat the Greeks, all Xerxes had to do was loan them money and wait; Easy Peezee and world history would have changed in an instant.
www.ttraderzoo.mobi
Burn baby burn Disco Inferno!!!
At least Schlubbie accepts the programming and has hmself picced wearing a regulation dark pinstripe. With a bit of luck the NSA will long ago have hacked his wheelchair and have a nice liftshaft door lined up for him.
Actually, I like Schlubbie! At least he's hard line enough to look semi-credible. Can't say that about 'bought-and-paid' McCain.
Goot lukk.
The truth is usually opposite of what is being said... being there is a policy against telling the truth by these scumbags
My God, it's full of stars...
If all else fails, they can just pay half of the poor people to kill the other half.