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Art Cashin On The Way To The European Egress

Tyler Durden's picture




 

If there was one analogy we had not heard so far to the deplorable European situation, it was that to P.T. Barnum's infamous "Egress." Following this morning's Art Cashin note, that is no longer the case. Granted, since it references a museum exhibit, such as what the EUR, not to mention European socialism which recently ran out of other people's money, will soon be, it is about time...

From UBS Financial Products

This Way To The Egress - One of the more famous stories about the showman, P.T. Barnum, concerned a ploy he used at his American Museum.

The museum was hugely popular back in the 1800’s. The trouble was that it was so popular that visitors would revisit exhibits over and over again. Some would spend nearly the whole day there.

That frustrated Barnum on two levels. The dawdlers had paid only one fee so Barnum wasn’t making any more money, regardless of how long they stayed. Second, and more importantly, the dawdlers kept the museum so crowded, that new clients (and their new money) could not get in.

Barnum’s solution was to set up a series of signs reading “This way to the Egress”. Most clients were poor immigrants with limited vocabularies. Not knowing that egress was a fancy word for “exit”, they followed the trail thinking it was some exotic animal.

When they followed the signs and pushed through the door marked Egress, they found themselves outside and a locked “Egress” door behind them. If they wanted to see more, they would have to pay another fee and they had made from for new clients.

 Traders wondered if the Greek people were headed for the egress. Frustrated with austerity, they might find themselves suddenly locked out of the Euro and the Eurozone.

Their pain is palpable. Industrial production has fallen for 47 straight months. Unemployment is over 25% and near 50% among youth (some towns are said to have 80% unemployment).

The Greek mood seems a bit paradoxical. Nearly 80% of the people say they want to remain in the Euro, recalling various disasters under the drachma. In the recent election, however, 70% of the people voted for parties whose stated position was to reject the terms of the EU agreements. In short, they love and need the Euro but don’t want the imposed and painful austerity that may be the price to stay in.

Paradoxical attitudes pervade the Eurozone. Germans complain that the Greeks have already received more aid than they did under the Marshall Plan after World War II. But, even if Greece could exit the Euro quickly and clearly, the Germans and others would not want them out. Without Greece, the Euro might firm to a level that could cut the legs out from under German exports.

But, as noted earlier, Greece cannot exit cleanly. The contagion risk is evident. There are reports of plans to control currency flows. Banks would be closed for a week while drachmas are printed and distributed to replace current Euro deposits. There are discussions of how to deploy the police to protect the shuttered banks. ATMs would be restricted to allow de minimis daily distributions (20 Euros?) to meet daily needs. Transfers outside the border would be forbidden.

Like Barnum’s clients, the Greeks don’t want to leave the building, but an accidental slip on the wrong path could find them suddenly outside with the door locked behind them. Beware of the Egress.

 

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Tue, 05/15/2012 - 09:43 | 2426614 GetZeeGold
GetZeeGold's picture

 

 

It's not collapse....it's egress.

 

Tue, 05/15/2012 - 09:50 | 2426639 tocointhephrase
tocointhephrase's picture

Could I kindly ask all traders to short JPM.....PLEEEEEEEEEEASE?

Disclosure: I hold no positions other than the PHYZZ

Tue, 05/15/2012 - 10:37 | 2426922 BigJim
BigJim's picture

It's amazing... the writing's on the wall for Greece and the rest of the PIIGS - you'd think gold sales would be going through the roof.

Anyone holding euros in Greece at the announcement of the bank holiday is going to get raped.

How can people be so fucking complacent? Anyone who didn't start studying finance and monetary history at the start of this crisis deserves what they get.

Tue, 05/15/2012 - 10:46 | 2426958 tocointhephrase
tocointhephrase's picture

My Wife asked me last night what are they going to do, I said, if they had any brains they would have already done what we did (Buy Gold and Silver) if not, then more fool them!

Tue, 05/15/2012 - 12:19 | 2427558 flacorps
flacorps's picture

Greece and the rest of the PIIGS should coordinate their efforts to exit the Euro, form their own currency and fiscal union and work out their collective destinies as a bloc that the other countries will have to deal with.

Instead they allow the wealthier nations to go from one to the other with tongs and thumbscrews.

Tue, 05/15/2012 - 09:44 | 2426617 q99x2
q99x2's picture

I find Cashin interesting. And, that the best of CNBC do over time get the most coverage despite CNBC's apparent agenda.

Tue, 05/15/2012 - 09:53 | 2426676 stocktivity
stocktivity's picture

More of Cashin and Santelli and less of the cheerleaders would do wonders for CNBC.

Tue, 05/15/2012 - 09:46 | 2426631 ArkansasAngie
ArkansasAngie's picture

Getting out is the only way for the Greek people to not become serfs.  Bankruptcy laws arose becuase of this.  Neither a lender nor borrower be.

And certainly neither a Republican nor Democrat be.

Tue, 05/15/2012 - 09:59 | 2426672 CrashisOptimistic
CrashisOptimistic's picture

Yes, they did.

But there is no international bankruptcy court.  Greece refusing to pay the debt doesn't make it go away.  There is no court to expunge it.

Eventually they will be forced to pay a surcharge for their imported oil and that will service the debt.

Sovereign debt is forever.

Tue, 05/15/2012 - 12:16 | 2427526 flacorps
flacorps's picture

Greeks are inveterate and unabashed smugglers. How will the surcharge be collected from the fuel smugglers?

Tue, 05/15/2012 - 09:50 | 2426642 CrashisOptimistic
CrashisOptimistic's picture

Guys, you're out of control here.

For God's sake, think of all the bullshit the EU and IMF did last year.  There are huge quantities of money that Greece owes the EU, ECB and IMF.

As of right now there is essentially one guy, the head of Szyrios, standing in the way of staying the course and keeping the balls of perpetual debt rolling.  One guy.

Do you really think they will let one guy stop them?  Seriously?

Come on.  They framed DSK.  They gutted private bond holders.  They will get around this guy or they will kill him.

Tue, 05/15/2012 - 09:50 | 2426644 Cognitive Dissonance
Cognitive Dissonance's picture

I thought the Egress was a (water) bird. :>)

Egress

Tue, 05/15/2012 - 09:59 | 2426694 Biggvs
Biggvs's picture

So it's not a female eagle then?

Tue, 05/15/2012 - 10:04 | 2426728 onelight
onelight's picture

No egrets, I say..

Tue, 05/15/2012 - 10:13 | 2426770 Cognitive Dissonance
Cognitive Dissonance's picture

So you have a lisp too?

It makes for difficult conversations with strangers, that's for sure.

Tue, 05/15/2012 - 10:28 | 2426874 onelight
onelight's picture

not the lisping type, no -- sorry to disappoint -- just some occasional cognitive diissonance -- much like hemorroids I'm told that'll pass

Tue, 05/15/2012 - 10:52 | 2427003 ptoemmes
ptoemmes's picture

Food...

Tue, 05/15/2012 - 09:50 | 2426651 carbonmutant
carbonmutant's picture

The EU the Greeks want to stay in is not the one they have...

Tue, 05/15/2012 - 09:50 | 2426654 SheepDog-One
SheepDog-One's picture

So 'Globalization' is now scrapped, we're all 'de-coupled', and Europe will 'make an egress' to somewhere....oh it all sounds very logical to me. 

Tue, 05/15/2012 - 09:52 | 2426658 viator
viator's picture

The Roubini plan in 140 characters or less:

"Grezxit path: election, default, exit, capital controls, deposit freeze, drachmatization of euro claims, depreciation, return to growth/jobs"

https://twitter.com/#!/Nouriel/status/201653910828621824

Tue, 05/15/2012 - 09:55 | 2426673 Cognitive Dissonance
Tue, 05/15/2012 - 10:20 | 2426824 TTaco
TTaco's picture

Cognitive Dissonance should say: " Everything is fine and if it's not, then that's a good thing!"

Tue, 05/15/2012 - 10:06 | 2426729 CrashisOptimistic
CrashisOptimistic's picture

He's a fool.

There is entirely too much hand waving and "drachmaization of debt" talk around.

THAT DOESN'T WORK!

You declare debt is in drachmas?  The creditors say "nope", and then what.  The debt contract says Euros and the creditors will never agree to anything else.

So what happens to your "drachmaization"?  It becomes meaningless.

Tue, 05/15/2012 - 10:15 | 2426803 TTaco
TTaco's picture

It's Called Default meaning :
Fuck you I won't pay even if you force me because guess what... I can't pay what you gonna do now? Bomb me?

 - Yes, indeed!
8-O

Tue, 05/15/2012 - 09:53 | 2426667 youngman
youngman's picture

Transfers outside the border would be forbidden...............its already gone.....but this is an interesting statement....but the big question is who will put themselves in charge....I think the military will have a big roll....they have the guns

Tue, 05/15/2012 - 09:56 | 2426686 midgetrannyporn
midgetrannyporn's picture

This is crap. I quit halfway through it. Run for your lives Greece or you will always be slaves.

Tue, 05/15/2012 - 09:58 | 2426690 Dr. Engali
Dr. Engali's picture

 

"Nearly 80% of the people say they want to remain in the Euro, recalling various disasters under the drachma."

 

So 80% of the people are too stupid to realize that the Euro currency has been a disaster for them.

Tue, 05/15/2012 - 10:12 | 2426763 TTaco
TTaco's picture

The Message is simple, 80% of the people want to continue being subsidised by Germany although they don't want productivity to be imposed upon them. Go figure how it's going to end up. The EU is on Oily ground.

Tue, 05/15/2012 - 10:27 | 2426860 SheepDog-One
SheepDog-One's picture

Yes Dr Engali apparently people remember 'great troubles' with the Drachma and wring their hands over it, but are completely oblivious to the current disaster of the Euro today. 

Tue, 05/15/2012 - 09:57 | 2426691 buzzsaw99
buzzsaw99's picture

Cashin is a fossil. Go buy something ya relic.

Tue, 05/15/2012 - 10:00 | 2426699 Everybodys All ...
Everybodys All American's picture

Just think if the Greeks had come to this conclusion a few years ago alot of this pain would be unnecessary and they more than likely would be well on their way to a recovery. Instead the EU made the pain so much worse and the healing process so much longer. Really sad leadership in so many ways.

Tue, 05/15/2012 - 09:59 | 2426703 I am a Man I am...
I am a Man I am Forty's picture

let them go back to the drachma, they will either be responsible or their currency will collapse, like it should be, smart money is long gone

Tue, 05/15/2012 - 10:03 | 2426723 web bot
web bot's picture

I'm sensing the emergence of social collapse and unrest in Greece. A society can't have that amount of unemployment with a political and financial class that appear to be disconnected from the citizenry. This unfortunately is a precursor of what's to come for all of us.

Tue, 05/15/2012 - 10:05 | 2426724 scatterbrains
scatterbrains's picture

The stawk market yawns when viewed through VIXY...]

 

http://fiatflaws.blogspot.com/

 

 

 

 

Tue, 05/15/2012 - 10:07 | 2426737 Gavrikon
Gavrikon's picture

"Without Greece, the Euro might firm to a level that could cut the legs out from under German exports."

Sounds GREAT to me.  Just imagine how strong it would be without the rest of the PIIGS.  And France!

Tue, 05/15/2012 - 10:14 | 2426788 CrashisOptimistic
CrashisOptimistic's picture

That German GDP report was for Q1, and record setting global warmth for the winter includes Germany -- and of course their report is seasonally adjusted.

Tue, 05/15/2012 - 10:18 | 2426821 SheepDog-One
SheepDog-One's picture

'Record setting global warmth'...well how about the previous winter when record lows were set?

Tue, 05/15/2012 - 10:11 | 2426769 Pizza man
Pizza man's picture

like all of Europe and now America. The fools voted for promises of OPM. History is jammed with proof collectivism kills, but here we are again...They (and we) deserve everything they get.

When will we ever learn...for longer than a generation or two???

No one is getting screwed. We have screwed ourselves.

Tue, 05/15/2012 - 10:31 | 2426887 Doubleguns
Doubleguns's picture

Its the fools that always vote for "R" or "D" because its what they think will fix the problem that have screwed us. Both partys are spending us twords a Greek event. Both partys point fingers at each other and blame each other.

 

The foolish believe them.

 

We need an "egress" from the partys. GOOOH.com

Tue, 05/15/2012 - 11:50 | 2427303 De minimus
De minimus's picture

If you are lied into screwing yourself because your information is controlled by people who want certain results, is it really your fault?

You have to remember that the media have a very definite agenda and almost nothing makes it past them. Unfortunately, most of people, get their information from these sources. They never even have a chance to choose between the red and blue capsules, they are force fed the blue one.

Their process and sought outcome is decidedly Soviet in nature.

Tue, 05/15/2012 - 18:21 | 2429244 Doubleguns
Doubleguns's picture

How many times do they have to believe the lies till it becomes thier fault. 

I would say 2. Fool me once....well you understand. This has been going on for decades.

Tue, 05/15/2012 - 10:31 | 2426896 prains
prains's picture

Pizza ism kills too just ask 250 million Americans

Tue, 05/15/2012 - 11:14 | 2427092 Nachdenken
Nachdenken's picture

Did you follow the Egress sign on gold ?

Tue, 05/15/2012 - 11:57 | 2427364 Hedgetard55
Hedgetard55's picture

Now that Bernanke has severed the pricing transmission mechanism with ZIRP fossils like Cashill cannot deal. They are geared for the older Ponzi market, not the newer, more improved version.Their experience means nothing now. Many big names will be revealed to be wearing no clothes when it all comes crashing down. ZIRP is the equivalent of losing the feeling in your hand, you can put it in a flame or a wood chipper and never realize it. Then the feeling comes back, and ouch!

Wed, 05/16/2012 - 03:04 | 2430577 cnhedge
cnhedge's picture

Greece: when the lights go out
http://www.cnhedge.com/thread-4650-1-1.html

Wed, 07/11/2012 - 02:24 | 2605079 Belinda
Belinda's picture

There should be a graceful  exit. But this is impossible with the current setting. It is predicted that if Greece exits, it will have a domino effect. Spain might be next. And we also have Italy or Portugal. The strongest in this organization is Germany but an organization is only as strong as its weakest link.

 

Best regards,

Belinda | <a href="http://www.nextpay.com/credit_card_processing.php

">Nextpay.Com /a>

Wed, 07/11/2012 - 02:24 | 2605081 Belinda
Belinda's picture

There should be a graceful  exit. But this is impossible with the current setting. It is predicted that if Greece exits, it will have a domino effect. Spain might be next. And we also have Italy or Portugal. The strongest in this organization is Germany but an organization is only as strong as its weakest link.

 

Best regards,

Belinda | www.Nextpay.com

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