Greece Bank Run Shows No Sign Of Stopping: Deposit Outflows Continue In November

Tyler Durden's picture

The year is not over yet, and already Greece's banks have lost €36.7 billion of their deposit base in 2011, and a whopping €64.6 billion since the beginning of 2010, which is down from €233 billion to €173 billion in under two years. In October another €3.5 billion was withdrawn from Greek banks and likely either redeposited somewhere deep in the heart of Switzerland, or converted to various inert metals and buried somewhere in the back yard. The good news: the outflow is just over half of October's record €6.8 billion. The bad news: at this rate of outflows, Greek banks will have zero deposits in around 4 years. Which at the end of the day is all the matters, because while the Troica can keep funding capital shortfalls indefinitely, all faith in the country's banks has now been lost and Greece is officially a zombie economy. The fact that the country's deficit as a % of GDP is about to be re-revised even higher is no longer even meaningful: the Greek economy and its banking sectors are now officially dead. We merely feel bad for anyone who still has cash in banks as, just like gold in 1930s America, any residual cash may soon be "sequestered" for national security purposes. After all there are bankers who need record bonuses, and Military sales from Europe and the US that have to proceed using what will likely soon be "commingled" deposit cash.

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Pladizow's picture

The surprise is that there is still a bank left to run from!

DoChenRollingBearing's picture

Typically through history we see that it takes a long time for a country to come apart when it gradually deteriorates through government mismanagement, loss of moral values, etc.

This can go on a for a long time yet (kicking the can).  Or something could blow up, and the game ends quickly.  This is now Black Swan Country, where one of those could land on us, and then it's lights out.

Bank runs will come here too.  And I always liked the analogy that the first rats off the ship usually get it right.

Pladizow's picture

You are on the internet - where is "here"?

Cognitive Dissonance's picture

"This can go on a for a long time yet (kicking the can)."

I agree DoChen. We ain't seen nuttin yet. Our 'problem' is that we have a sense of outrage. So we see the manipulation and can kicking for what it really is. Sadly, for the great unwashed masses as well as those who directly benefit from the Ponzi, much of what is to come will be welcomed, even cheered on, as necessary, needed and desperately wanted. Thus there will be popular support for a great deal more can kicking.

We have (many) miles to go before the deep sleep.

LawsofPhysics's picture

I disagre CD.  From my perspective, the supply chains of essential materials is pretty damn fragile right now.  I agree in so much as we see a slow deterioration in the standard of living for a while until a major supply line is interupted (most likely in the energy sector, but could be as crazy as fresh water).  Then the world simply goes to war over the remaining resources.

Cognitive Dissonance's picture

I have someone in my ear on a daily basis who constantly reminds me of the eventuality of supply line disruption. I have no doubt it will happen. I also have no doubt it will be spun by the 'leadership' as all the more reason to do this or that even more. The urge to kick the can will become irresistible to both the can kickers and the general population.

Certainly more and more average Joe's are becoming angry and/or concerned. But when their little corner of the world starts to deteriorate they will demand someone do something about it to stop their pain. Thus they will kick the can some more.

The real questions are this. When will can kicking no longer "work" to stave off a (massive) collapse and what exactly is meant by a "(massive) collapse"? I contend that the sheer number of (half) asleep people in America and the rest of the developed world, when rudely awakened, will not let go of their cheap gas and supermarket food very easily. This all but assures us that we will go to war in a big way if for no other reason than to distract the population from what's really going on.

This is an old game that has been played for thousands of years. Yes, it will collapse. But not as soon as we expect it to happen. Momentum is a very difficult force to overcome.

Mr Lennon Hendrix's picture

I think the oilgarchs are watching closely and that they will bleed the Fiat Ponzi until the disruption, then only to go to war so to have an exuse for the disruption.

The turning point could be as simple as debt outweighing gdp.  It could be a sharp decease in oil supply.  It could be a leverage up situation of collective balance sheets due to the debt, spurring gold to new (real) highs.  This would incight panic, and the panic will usher in chaos.  The chaos will bring destabolization and it could be a very small event that gets the ball rolling.

MachoMan's picture

Yes, but what happens when everyone knows the plan ahead of time?  When instantaneous communication renders the knowledge gap much more narrow?  How do you go through with a secret plan when those secrets are much more difficult to keep?

The sad part is that exposure has an increasingly less chance of being materially punished...  (thus the exposure of plans/secrets has an increasingly smaller effect).

Overflow-admin's picture

10 years and counting of slow-motion collapse in Argentina. 100% agree.

StychoKiller's picture

When a moving object hits an immovable wall, all that kinetic energy gets converted to heat and light, you know:  an explosion!

E = 1/2mv2

DoChenRollingBearing's picture

@ Laws

So far in MY business the supply lines are running just fine.  Even Japanese bearing productiosn was only a little affected by the earthquake.

GeneMarchbanks's picture

'Our 'problem' is that we have a sense of outrage.'

Not really sure what you mean but I get the feeling that the 'sense of outrage' is something people tell themselves out of sheer vanity. MsCreant's piece about MF Global reminded me of how that is always the first reaction among the 'great unwashed' as if those of us who simply say: 'Yeah, that's about right' are living in some dark underworld of cynicism.

midtowng's picture

At what point does the flight of deposits turn insolvent banks into bankrupt ones?

jez's picture

". . . down from €233 billion to €173 billion in under two years. In October another €3.5 billion was withdrawn from Greek banks . . ."


The surprise to me is that these outflows have been so sluggish. Tyler is telling us that total deposits are down 26 per cent in 23 months, and that November's withdrawals were about two per cent of the October 31 balance.


So, compared to January 2010, three-quarters of the money hasn't moved. I couldn't say whether the Greek people lack imagination, or whether they fear burglary more than they fear their banks closing, or what the reason might be. Seems odd to me.

Watson's picture

I agree.

I would have expected large balances to have been wired long ago to a location outside Greek jurisdiction, and J6P's small balances to have been converted to EUR (or CHF) notes, and buried.

A four year wipeout period is not a 'run', more a gentle stroll.

Why is the decline so slow?


ucsbcanuck's picture

Does anyone have equivalent stats for Argentina? 

Phil's picture

What is the other $173 billion thinking?

GeneMarchbanks's picture

Saganaki is a better place for their Euros than Piraeus.

I'm looking forward to my summer vacation to a bankless state...


Don Birnam's picture

What the Hellene authorities ough do is forge a strong Greco-Roman "lend-lease" partnership -- say, for instance, the Italian Financial Police ( "Guardia di Finanza" ) can lend ( not lease -- the Greeks have nothing with which to pay ) a kennel of their currency-sniffing dogs to the Greek Ministry of Finance. Posting several "Eurohunds" at strategic border crossings will go far in fostering a more ordered civic comity: bank runs are a symbol of the freedom of capital movement -- in this case, flight -- and are in poor taste, you know. The State simply cannot allow it to continue.

Manthong's picture

I have had the pleasure of many a nice seafood meal for less than a few hundred drachma ($ 10.00 or less) at the time.

Way before the Euro and when the dollar was still strong and just beginning its long, sad Nixonian voyage away from any semblance of soundness.    

vegas's picture

Another shocker headline. Who could have guessed this? Maybe this is what Taleb meant by a "black swan" event?


ZippyBananaPants's picture

Happy 3rd Birthday ZH!!

Let's all send them some love in the form of cash contributions!

I did, they are the best place for news, and that I am grateful for!!


BLOTTO's picture

THE EU is not meant to fail - the weaker member countries will get tossed out and replaced with stronger ones (if their is such thing)

It took them awhile to build this baby up - they are not going to let it go down. Having the EU fail is going against the grain of the agenda they want to achieve - a One World Government.

I think we will have a 10 member nation at the end of it all.

The New Holy Roman Empire...

Nothing NEw Under the Sun. History is just repeating itself...


ekm's picture

Based on my recommendations, two of my buddies in Greece moved their money out.

Greek default by March simultaneous with an Iran attack.

RobotTrader's picture

Transports are rocking.  UNP and KSU making new 3-year highs today.

What happened to the "Recession"?

I thought we were supposed to have bank runs and gas lines by now?


SheepDog-One's picture

Gold rocking hard today!

Nice job on finding yourself 2 brand new rear-view stocks to glom onto.

HarryM's picture

Gold rocking hard because Gold has been moving the same direction as the market.

So might as well go long on equities .

mayhem_korner's picture

Gold rocking hard because Gold has been moving the same direction as the market.

So might as well go long on equities .


No thanks, Mr. Squid.  Priced in gold, the market is going down and has been for years.  It's funny how often in those "equities surging" days (as CNBC gushes) that gold is going up more.  Like today.

It's also funny (not ha-ha funny in this case) how often the gold market is manipulated down just as folks are beginnning to notice that it is going up more than equities.  Hmmm...

agent default's picture

While I agree that much of the latest action across the markets is liquidity driven, I think that when people realize the true mess we are in, they will flee the stock markets and pile on to gold and silver, as a means of storing wealth.

mayhem_korner's picture



Agreed, but lots have fled the equity markets already - thus the ultra-low and declining volumes.  I think it gets really interesting when people realise what's going on and flee the US Treasury market.  All bets are off then...

Jay Gould Esq.'s picture

<< Gold rocking hard today! >>

Ag following suit, as of this writing. Even Cu is up nearly 3%. Stuff found in the ground is the trade du jour, for January 10. 

Now, come January 11 ? Who the Devil knows. Too long-term.

Overflow-admin's picture

In Switzerland, they discontinued the last in-train ticket buying possibility that existed in intercity trains last december. Surprisingly, they managed to earn around CHF 500'000 in around 2 weeks just in fines.

Actually fines cost more than almost any single ticket (even first class) you can buy to travel in Switzerland. Less than 10 years ago the fine was half, and you could buy your ticket in almost ANY train (even in little regional lines). You can check that fact: geneva airport to saint-gall in 1st class costs just CHF100 = today's fine.

How do you spell growth, RT?

SheepDog-One's picture

Meanwhile the totaly overt and desperate act of pumping equity markets thru futures manipulation continues in your face.

snowbaall's picture

If I lived in Greece, I'd want my money, too.

Nevertheless, Greek female ass smells like roses.

Screw the banks.

It's time for the Drachma.

Mr Lennon Hendrix's picture

The Algo Machines from Hell are going haywire lately.  LULU?  NFLX?  WTF?

Silver Bug's picture

Greece HAS to go back to the Drachma this year. They will be forced to, by the market!


Pandora Style Beads

toros's picture

looks like $/Yen intervention coming soon

roy10's picture

If only they were smart enough to let Greece restructure in 2010, everybody would have been much better off now. This unexplainable fear of a default is causing nothing but suffering for everybody involved.

yogibear's picture

The Euro is dead meat. The sweet-talking Frenchman, Sarkozy, is dictating the gameplan for Merkel.

roy10's picture

The biggest fallacy of this crisis is the one saying that the Euro needs to break up if a country (or countries) default? Why exactly should that happen? Should California succeed if it defaults? This argument makes no sense. Greece, Italy, Ireland, Portugal and Spain should all restructure their debts and move on. It will only make the euro stronger.

supafuckinmingster's picture

"Greece, Italy, Ireland, Portugal and Spain should all restructure their debts and move on. It will only make the euro stronger."


By that you mean the above countries should decide to pay less to banks, thereby affecting the profits/survivability of banks, and at the same time saving their taxpayers billions? Sorry friend, that's not how the game plays, as the banks control the governments, and the governments are the ones that at least appear to make decisions on restructuring/default. Won't happen.

Jay Gould Esq.'s picture

Sweet-talking Frenchman ? 

I thought Sarkozy was Hungarian -- simply with an accent like Maurice Chevalier ?

Dr. Engali's picture

My question is what are the owners of the other 173bil waiting for?

RobotTrader's picture

KRE straight up off the lows, $19 to $26 in 3 months.


Where's the "banking crisis" everyone has been harping on???

HarryM's picture

Did you think Obama was going to "Roll Over"?


kito's picture

hey robo, great hindsight call again on KRE. btw, those two consumer charts we peeked at the other day, you know, the one that shows consumers depleting their savings for the holiday season, and the other chart, that shows consumers spending on credit at double the pace of their savings wind down----not looking too good for the strength of the consumer, eh???

HarryM's picture

DAX + 2.50%   DOW + 102


pupton's picture

Hey TD/ZHers, did anybody see this article slamming ZH???  Calling TD out for an article on PSLV being described as physical vs. the paper it really is.  I kind of agree with them.  WTF is the reason for the 30% premium on PSLV???  It isn't anything more than paper.