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Monday Will Not Be The End Of The World, Sorry

Tyler Durden's picture




 

Via Mark Grant, author of Out of the Box,

It was January 13, 2010 when I first wrote in my commentary that I thought Greece would go belly up. It was in May 2010 when they first needed to be bailed out. This small country with a giant debt of $1.3 trillion has engaged the markets ever since. Sunday the country votes and whoever wins I expect no massive explosion in the short term. The new Greek government will try to renegotiate the terms and conditions of their bailouts and we shall see just how far anyone is willing to go. It will be a game of chicken with Germany in the end and a solution perhaps will be found but no good one as Greece could not pay back their current debts if Hercules arrived to help; much less any new debts which will be required to keep the country afloat. Any “Big Bang,” if it comes, will not come on Monday morning as that will just be the beginning of the process to scream and shout and dance around like some Opa bar with Ireland, Portugal and Spain demanding equal terms and, oh yes, Spain will be in the hand-out line soon enough along with their banks.
 
Perhaps that all of this has gone on for so long or perhaps because we keep hearing the cries of “Wolf” each week for the last several years that the markets are impervious to any new cries for help. An odd kind of complacency seems to have set in where nothing matters too much and everything will just be fine. Yesterday’s equity market rally based upon the central banks providing liquidity is just what any serious observer would expect and yet the stock markets rallied as if this was something out of the ordinary which clearly demonstrates either the market’s lack of understanding of real world events or it represents the hype of some hedge fund that was tossed around in the media like it was a new product at Apple. In any event, don’t wake up on Monday morning and think that Greece will have left the Eurozone and returned to the Drachma. That is not how things will play out.
 
At some point, in the next few weeks, it will come down to a calculation of just how much money the EU is willing to spend to support Greece and not cause a default and if Greece is to leave the Euro I think it is much more likely that they will be forced out rather than leave on their own decision. In the meantime the situation in Spain will worsen as the needs of their banks and of their Regional debts throw the country past the borderline of self-help. Aid will be called for in increments and it will probably total $350-400 billion by the time the final tally is made. Europe cannot afford this and I would not be surprised to see one of the funding countries saying that is it for them which will throw Europe into a tailspin. Effectively there are bank runs underway in both Greece and Spain currently and while no central bank will talk about it and no politician mentions it there is every indication that this is what is taking place each and every day now. It would not surprise me to see the imposition of capital controls and then a new round of havoc will ensue.
 
In the final analysis it probably all comes down to what price the Germans are willing to pay for dominating Europe. I suspect that when the Germans find themselves with a lower standard of living for paying off everyone else’s debt that the mood in Berlin will become much more somber as the cost of “living the dream” becomes so burdensome that tempers begin to flare. The French and the troubled nations are all calling for a single standard of living really and I just cannot imagine that Germany is ready to undertake that cost without serious consternation. Due to the recession and to the European methodology of counting debt to GDP ratios and to their allowance of “funny accounting” at their banks the downgrades continue, such is in the Netherlands today, and you can see the financial deterioration that is taking place all across Europe. The European Union is sinking under its own weight and it is not only questionable if the Germans and their partners want to pay but if they have the capacity to pay without all of Europe becoming a BBB+ credit if, to quote Chancellor Merkel, “more Europe” actually takes place.
 
“Enter Stranger, but take heed
 
Of what awaits the sin of greed
 
For those who take but do not earn,
 
Must pay dearly in their turn.
 
                                          -The Front Doors of Gringott’s Bank

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Fri, 06/15/2012 - 09:22 | 2528943 LULZBank
LULZBank's picture

Where is Cosimo De Medici?

Fri, 06/15/2012 - 09:25 | 2528956 achmachat
achmachat's picture

could you ever forgive your parents for naming you Cosimo?

Fri, 06/15/2012 - 09:31 | 2528978 somecallmetimmah
somecallmetimmah's picture

If they put you in charge of the world, would you care?

Fri, 06/15/2012 - 09:38 | 2528996 MillionDollarBonus_
MillionDollarBonus_'s picture

Reasons why Greece CANNOT be allowed to leave the Euro:

1. This would cause a loss of confidence sovereign credit throughout the EU, which will seriously damage the balance sheets of some of the world’s largest Systemically Important Financial Institutions (SIFIs)

2. If Greece is allowed to leave the Euro, it will set a precedent for insolent populism which will lead to ignorant EU voters demanding "referendums" on issues they simply do not understand

3. According to President Sarkozy (former President of France), a Euro breakup is highly likely to cause war between the currently unified member states

President Van Rompuy has his hands full this weekend, but I trust that he will succeed in building a foundation for a stronger more unified Europe, REGARDLESS of the outcome of the Greek 'elections'.

Fri, 06/15/2012 - 09:39 | 2529005 RiverRoad
RiverRoad's picture

And where are they getting the money to hold all these elections?

Fri, 06/15/2012 - 09:50 | 2529018 malikai
malikai's picture
Dear Valued Client, This coming Sunday, June 17, 2012, will be the Greek legislative elections. This is important regarding the future of Greece as part of the Eurozone. While FXDD does not give specific trading advice, we believe these elections may result in periods of extreme volatility. We urge you to take every step possible to protect yourself from potential price spikes or market gaps, including but not limited to:
  • Adding funds to your account to avoid liquidation.
  • Curtailing unnecessary exposure, by closing some or all existing positions prior to the market close at 4 pm EST on Friday June 15th.
  • Placing stop orders. Please be aware that stop orders may slip if the market gaps or if there is extreme volatility.
The events unfolding in the Eurozone in the following weeks will be pivotal for the future of the common currency and the nations involved. Stay current with news announcements so you are aware of potentially volatile market conditions. lol
Fri, 06/15/2012 - 09:50 | 2529047 somecallmetimmah
somecallmetimmah's picture

Pffft!

Now where's that crack pipe at?

Fri, 06/15/2012 - 10:15 | 2529166 OttoMBMP
OttoMBMP's picture

"... what price the Germans are willing to pay for dominating Europe."

Mark, you are pathetic and tiresome.

Go back into your anglo-saxon hate box and close it, you son of ex wordl-dominating carpet bombers.

Fri, 06/15/2012 - 10:18 | 2529188 nope-1004
nope-1004's picture

MDB, forgot the "C" in SIFI.

Should read SCI-FI, Systemically Corrupt International Financial Institutions.

 

Fri, 06/15/2012 - 11:26 | 2529427 dracos_ghost
dracos_ghost's picture

Or SIFI Less

Fri, 06/15/2012 - 10:31 | 2529232 mtomato2
mtomato2's picture

Wow.  Sensitive, much?

What he said belied nothing of which you accuse.

Big down arrow for not knowing how to play Fight Club.

Fri, 06/15/2012 - 10:45 | 2529278 OttoMBMP
OttoMBMP's picture

Yes. Sensitive. And yes, much.

"The Germans" have been been paying for others for decades now.  Hundreds of billions. We didn't  want the "Euro". "The Germans" didn't want this bailout game either.

So, we are not only paying the bills, driving our ex nation into ruins. No, we get accused for this mess. The German elite hates the German people, history and culture. So they want to dominate Europe? They want to set up the NWO and they are as German as Rockefeller or Kissinger.

Scroll down to rwe2late's comment (2529084). You might understand than.

Fri, 06/15/2012 - 10:50 | 2529299 dizzyfingers
dizzyfingers's picture

OttoMBMP: So STOP already!!! Save yourselves. It's ridiculous to participate.

Fri, 06/15/2012 - 11:12 | 2529376 OttoMBMP
OttoMBMP's picture

How exactly?

Fri, 06/15/2012 - 14:08 | 2530040 mick_richfield
mick_richfield's picture

excellent and non-trivial question.

if you live in a society controlled by beasts ( they call themselves the elite ) with no real democracy ( all the candidates belong to the beasts ) what can you do?

especially, what can you if you have not figured this out until you already have a job, a family, and children?

what you can do is prepare for when beastworld falls apart, which it is very busy doing. 

and teach your children that no human can have power over another human, and that fake money is the root of all power.

 

Fri, 06/15/2012 - 10:55 | 2529308 mtomato2
mtomato2's picture

Fair enough, but I don't infer that Mark is automatically pooling the German people with the German elite.  I think that, when speaking of a "European take over," he is referring to the German elite.  That's my take, and it's clear that you have a passion for the discernment that I don't know or clearly understand.  But I don't think Mark is your enemy here.

Fri, 06/15/2012 - 11:44 | 2529394 OttoMBMP
OttoMBMP's picture

When I see "Mark Grant", I can be sure there is some bold text about German plans for domination.

Barroso is Portuguese, van Rompuy is Belgian, Lagarde is French, Draghi is Italian.

So why always "the Germans"? No, my friend. This is no innocent accident.

Fri, 06/15/2012 - 13:21 | 2529837 JOYFUL
JOYFUL's picture

Dear Otto, please understand that yur traction here will be extremely limited until yu come out with the truth that lurks behind yur thesis...

how could one reasonably expect the Germans to 'dominate Europe' when they can't even dominate Germany? 

Germany, in it's various forms since the beginnings of the C20th, has been an outlier component of the Kosher Klepocratic Konspiracy - which arranges the deaths of real Torah Jews and then pins the blame on gullible gentiles - and spans both sides of the Atlantic in it's function as a hegemonic korporo-khazarian-kartel that prohibits publication of its many krimes against human kind by means of it's vice grip control over all forms of kommunications media.

I know that it's a kriminal offence now in Allemanistan to repeat such verboten verities, but I guarantee yu'll feel better if yu just say it anywho.

Fri, 06/15/2012 - 10:58 | 2529325 constantine
constantine's picture

I don't see how anybody could logically come to the conclusion that the end result of everything going on in Europe is German domination.  Their balance sheet is not that much better than everybody else's and if you don't want to listen to me, simply pay attention to Kyle Bass who is everybody's hero here, right?  Germany has a lot of their own problems.  They're not apparent yet because, like the USA, they are perceived as a safe haven.  The key word is perception.  The math does not support the conclusion at all and the math will win.

Fri, 06/15/2012 - 11:22 | 2529413 OttoMBMP
OttoMBMP's picture

Yep. Germany will go down with the rest.

And it would be nice if Germany could at least share the responsibility with the rest (for once).

Fri, 06/15/2012 - 11:18 | 2529397 boogiedown
boogiedown's picture

yes einstein, go ADD funds to your account

Fri, 06/15/2012 - 11:52 | 2529520 malikai
malikai's picture

Margin call, suckaz!

Fri, 06/15/2012 - 10:54 | 2529307 dizzyfingers
dizzyfingers's picture

"And where are they getting the money to hold all these elections?"

"World" bank pulling of cartel strings?

Fri, 06/15/2012 - 13:34 | 2529897 boogerbently
boogerbently's picture

If the market hasn't "baked in" this Greek farce by now, they shouldn't be in the kitchen.

Greece's TOTAL debt is $360 Billion.

We threw MORE than 1000 X that much at bailout/QE/Twist, so far.

The ONLY thing I can't figure out is WHY they are trying SOOOO hard to make this seem like such an earth shattering event.

Sun, 06/17/2012 - 01:45 | 2533250 i-dog
i-dog's picture

 

"WHY they are trying SOOOO hard to make this seem like such an earth shattering event."

Ever watched a sheep dog viciously biting the heels of a single fluffy sheep attempting to stray outside the flock?

Fri, 06/15/2012 - 09:45 | 2529030 Bazinga
Bazinga's picture

Methinks each of those instances have already happened.

Fri, 06/15/2012 - 09:46 | 2529034 somecallmetimmah
somecallmetimmah's picture

Ha!  Ha!

 

Ha?

Fri, 06/15/2012 - 10:02 | 2529107 Everybodys All ...
Everybodys All American's picture

The biggest fear the ECB/EU has is if Greece successfully leaves the EU. I imagine a Greece with a robust recovery would be the EU's worst nightmare. That would then mean all of these policiticians would have to move on from this mess admitting failure and they would have to find some other government entity to bleed dry.

Fri, 06/15/2012 - 10:22 | 2529203 Azannoth
Azannoth's picture

At this point it's definitely all in, even if Greece got out, certainly not on it's own but maybe by accident, they would do everything to bury it economically, they could not afford an embarrassment like that to see any1 succeed outside of their control, lest people might get funny ideas of independence and national pride

Fri, 06/15/2012 - 10:06 | 2529126 William113
William113's picture

Go back to bed MDB its to early for you.

Fri, 06/15/2012 - 10:14 | 2529175 Dr. Richard Head
Dr. Richard Head's picture

I wish Tyler would bring bacck the captcha.  Perhaps then, MDB wouldn't be able to figure out how to enter a four character answer in a three character space. 

Fri, 06/15/2012 - 10:23 | 2529209 Azannoth
Azannoth's picture

.. quantum mechanics based captcha ?!

Fri, 06/15/2012 - 10:32 | 2529240 mtomato2
mtomato2's picture

Reason-based captcha...

Fri, 06/15/2012 - 10:35 | 2529251 AllWorkedUp
AllWorkedUp's picture

Not sure it's complacency as much as gov't algos completely controlling every market move. Don't know how else to explain every down move recovering all losses by the next day.

Fri, 06/15/2012 - 10:10 | 2529142 Gavrikon
Gavrikon's picture

Funny stuff MDB.  Your comic stylings made my afternoon!

Fri, 06/15/2012 - 10:38 | 2529213 fleur de lis
fleur de lis's picture

The Euro was hatched by the same vermin who scam and control every other monetary system on Earth. Everything they touch rots. Including the Euro. It was never intended to streamline currencies, but to make it easier for parasites to collect.

Would you advise anyone to buy or keep rotting food? Then why are you trying to salvage a rotting currency that only feeds monetary maggots? It's the same cabal feeding off all the rot all the time, why do you want to keep feeding them? 

Parasites feed off healthy tissue and the maggots take over after the healthy tissue can no longer function. Parasites by nature cannot survive without leeching off something else, which often dies. We are looking at just that on a massive scale. The big mistake was letting parasites control commerce and growth. They simply can't. They only want to confiscate money through control. That is, to leech off everyone else's work and money.

The drachma worked just fine for 3,000 years, and the sooner the Greeks stop taking orders from parasites the better for them. I still can't believe they are so stupid as to think someone else will provide for them. For this they fought the Turks for independence? What independence? They were better off under the Ottomans.  Now they have turned into welfare queens.

If they need a handbook for financial independence they can call up somebody in Iceland. If they choose to listen to parasitic lies they can expect more of the same. As can we all.

Fri, 06/15/2012 - 11:12 | 2529375 tiger
tiger's picture

Thanks fleur de Lys. It is good to read some sense after a very poor article. Marc should have kept it in his Box

Fri, 06/15/2012 - 13:00 | 2529744 TaxSlave
TaxSlave's picture

And right when a pundit says nothing is going to happen because it didn't when he last predicted it would, then it the shit can hit the fan, and in retrospect everyone can agree that they knew it was going to happen right when it did.

This whole thing is like seeing someone who drank too much as he begins to percolate.

You don't want him to vomit.  He doesn't want to vomit.  Everyone hopes he won't vomit.  But he is going to vomit.  Best policy is to stay well out of range.  And nobody much cares what he had for lunch, so long as they don't have to look at it.  Or smell it.

Fri, 06/15/2012 - 10:28 | 2529219 Divided States ...
Divided States of America's picture

Honestly, I could care less if armageddon happens on monday.

Would you rather live a mediocre life of working 10 hours a day, paying taxes and funding a select few to a lap of luxury?

Or do you rather live a life in poverty where the you are tilling the farmland with the likes of Warren Buffett, Larry Fink and Mark Zuckerberg?

I would definitely choose the latter.

Fri, 06/15/2012 - 10:28 | 2529224 mtomato2
mtomato2's picture

Your argument reads something like:

"That volcano CAN'T be allowed to blow, because then:"

1.) Houses and people would burn

2.) Smoke and soot would fill the skies

3.) Airplaines wouldn't be able to fly

 

The results of an event don't determine the chances of that event occurring.

 

But, then, you probably know this.

Fri, 06/15/2012 - 11:20 | 2529407 Popo
Popo's picture

"The results of an event don't determine the chances of that event occurring."

Unless you're talking about 21st century economics.

Fri, 06/15/2012 - 09:44 | 2528998 hedgeless_horseman
hedgeless_horseman's picture

 

 

I don't know about those dego wops, but the frog banks in socialist-surrender land are pricing-in a New Printopia.

Socialist politicians just love having (other people's) money gush out of their asses.

Fri, 06/15/2012 - 09:44 | 2529027 malikai
malikai's picture

You seem to work the french markets a lot. You have a special interest in France?

Fri, 06/15/2012 - 09:56 | 2529060 hedgeless_horseman
hedgeless_horseman's picture

 

 

Oui, c'est vrai. 

It just seems to me to be a little easier to predict what is going to happen there, tactically, considering the players and the numbers.  Also, a slightly cleaner market, compared to the USA.

Non?

Fri, 06/15/2012 - 10:00 | 2529095 malikai
malikai's picture

Oui, since you were posting that stuff about your cac shorts a while back, I decided to sick the dogs on cac. I've found some interesting stuff. It does look more 'real' than anything in the states.

Surprising, actually.

Fri, 06/15/2012 - 11:50 | 2529511 malikai
malikai's picture

At least 4 people on ZH are from France and disagree with us.

Fri, 06/15/2012 - 09:33 | 2528987 LULZBank
LULZBank's picture

Delores means "period pains" in Spanish, from what I was told.

Fri, 06/15/2012 - 09:38 | 2529002 mayhem_korner
mayhem_korner's picture

 

 

there's a Seinfeld reference in there somewheres...

OT, nice to see the "glass is always full" Snorgtees ad again

Fri, 06/15/2012 - 09:40 | 2529012 t_kAyk
t_kAyk's picture

End of the world or not, those Snorg girls always bring a smile to my face ; )

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