Newedge Leaves Greek Stock Market, Will Only Execute Sell Orders

Tyler Durden's picture

Either the game of chicken in Europe has just hit and surpassed ludicrous speed, or French banks SocGen and Credit Agricole, both of which have some of the worst CT1/TA ratios in the known universe, and which are the JV participants of Newedge, have decided to formally pull the plug on Greece. As the FT reported moments ago, Newedge "has told clients that it will process only sell orders, and stop extending margin loans for existing positions in Greek securities, according to a memo obtained by the Financial Times."

A list of securities subject to the new restrictions include foreign-listed shares and American depositary receipts for Greek companies including Alpha Bank, Coca-Cola Hellenic Bottling and Paragon Shipping, a New York-listed shipowner that is headquartered in Greece.

 

“It is part of our ordinary risk practices to minimise our potential exposures proactively when we are concerned about potential issues,” the broker said.

 

Newedge – a joint venture of French banks Société Générale and Crédit Agricole – has Europe’s seventh largest hedge fund prime brokerage business, with more than $31bn in client assets, according to industry publication EuroHedge.

 

Its move is the latest evidence that the financial sector is preparing for a eurozone break-up, even as European officials debate the terms of the Greek bailout. A person familiar with the matter said Newedge wanted to avoid unpredictable risks in the event that Athens returned to the drachma as the national currency.

Add this to news over the weekend that Euler Hermes is "reviewing Greek export coverage." To wit - "In light of the recent developments, Euler Hermes will most probably have to switch to a more prudent approach, also in the interest of its customers,” spokeswoman Bettina Sattler said in an e-mailed response to questions. “The outcome of the new elections in June remains highly uncertain. Consequently, the situation is further deteriorating. The risk of Greece exiting the Eurozone has been revived." Translation: Greek foreign trade is about to be halted dead in its tracks.

And now, as per the Newedge hint, we have a concerted effort to crash the stock market too.

In other words, in addition to a bank run (because as has been widely reported already, Greek banks have seen billions in cash withdrawn in the past 3 weeks), in addition to trade paralysis, we are about to see a full blown stock market collapse of what little is left in the Athens Stock Exchange as everyone rushes to sell any securities at firesale prices. Sadly, this is nothing but the final punishment for a Greek population which held its first quasi-referendum on being a Eurobanker tolling operation (where European "bailout" funds go simply to fund European bank capital shortfalls, and the ECB of course) and said no.

Simply said - what we are witnessing is the concerted effort of Greece's former "allies" do everything in their power to destroy the small nation just so it has a taste of what would happen if it indeed follows the democratic process. And those organizations, such as the IMF, whose job it is to mitigate such a process, are doing the opposite, and merely pouring fuel on the fire, as LaGarde's interview in the Guardian indicated.

Basically, the entire developed world has now gone all in that Greece can be scared out of doing what its population has indicated ever since the first parliamentary election, has every intention of doing.

The only question is whether, as we asked even before the election, the "Greek population has already lost everything and is now free to do anything." Because if it has, and following 2 years of wealth transfer from the Greeks to the banks the answer is almost certainly a resounding yes, the outcome for all those attempting to herd the Greeks, will be far more disastrous than any of their fearmongering attempts of a Greek social collapse ever could be.

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Timmay's picture

And so it ...... extends.

Gidas19's picture

reverse IPO you can only sell

Marginal Call's picture

Greece just got facebooked. 

knukles's picture

Just when you think it's safe to rehypothicate all your Greek securities. 

The Monkey's picture

Everybody is twisting the Greeks' arms. I hope Greece tells the rest of Europe to go fuck themselves. Lenders are responsible for this mess. When I buy a bonds, I'm always duly aware the risk lies on my own shoulders.

sitenine's picture

The black swan of diminishing collateral continues to spread its wings over a very large fan known as the world's financial system - it wont be long before it takes a very large dump on said fan.  We're going to need a LOT of paper to clean this mess up!  And then there's that problem of desposing of all that shit covered paper.  Are central banks still buying shit covered paper?

Its_the_economy_stupid's picture

The news is so depressing on this site that I usually need a drink just to get through the synopsis, let alone opening the articles, but ocassionally I get to laugh really hard!

Thank you sitenine for a needed guffaw.

Harlequin001's picture

Who the fuck takes out a margin loan to buy Greek stocks?

I mean, come on, some people are just asking for it...

RoadKill's picture

Wont happen. Greeks are so afraid of bank runs and a return to the Drachma every poll now shows ND at #1 with enough margin to form a coalition government.

Heaping the pressure on here could lead to a blowup even if the Greeks BEG for austerity. I think the point is more to dissuade Portugal Spain and Italy from even thinking of Fing with the Troika.

This is going to go on longer then you think. US will kick then can on austerity, probably take till 2015 to blow up....

The Monkey's picture

If the US follows the path of Japan, then, we'll be at 240% debt-to-gdp some years out, while we endure this slow water torture decline. That's pretty much what I expect. Rapid liquidation isn't an option at these debt levels. Should prove to be one of the most difficult investment environments in history.

CompassionateFascist's picture

We have got to start thinking outside the "economic" box. The IranWar will kill the dollar. And that war is no more than 90 days away. Invest in lead.

DeadFred's picture

All-in in poker is exciting but someone always loses big

unununium's picture

Actually, everyone except for the winner loses everything...

Bill D. Cat's picture

Memo to Greece : 

 

See Iceland .

ToNYC's picture

Iceland didn't have a shared currency like the Euro; they'll pay in the hell of their own free democratic choosing. They can pay each other with back rubs and olive oil. No tears from Turkey.

Bill D. Cat's picture

Iceland fucked off the right parties , at the right time , good on them . There's a lesson in what they did , I think .

SunBlaster's picture

GREXIT<-------..............this way!

nudlee's picture

eat a gyros today to save greece's tomorrow!

ThisIsBob's picture

I'll gladly pay you Tuesday for a gyro today.

Mark123's picture

So they will not extend margin loans to clients with Greek investments....soooo, does this mean that clients with margin loans HAVE to sell their positions on Monday, or is this a future thing?

 

Sounds rather ominous.

 

 

Elwood P Suggins's picture

Everybody picking on poor little Greece - a deadbit trash pit.  They deserve every bit of it.  Wasn't it touching when one of the Greek politicians who has stolen millions over the years said Greece had been insulted by the IMF cunt saying they didn't pay their taxes?  If they get this pissed about the truth wonder what would have happened if she told a lie?

wretch's picture

Try not to lay it on so thick next time.  You're smelling up the place.

Elwood P Suggins's picture

I thought my post was quite sympathetic - to the people who've been screwed - the creditors.  When you borrow money you have an absolute obligation to pat it back.  If not you're a deadbeat.

john39's picture

depends on what you mean by "you borrow money".   if politicians borrowed it, they can pay it back.  send them in chains to the EU so the satanic bankers can sacrafice them to banker gods.  leave the people alone.

Umh's picture

TBTF should include ignorant voters. Sooner or later things have to be paid for.

mjk0259's picture

But when? 30 years ago I was hearing that the US budget deficits would lean to ruin. Today US borrows at less than inflation in amounts that would have been unimaginable  30 years ago.

jeff montanye's picture

makes me wonder if the thirty year treasury bond is a good deal at 2.85%.  the lowest yield/highest price was like 2.5% december 2008.  and it's not like there won't be any more real soon.

RoadKill's picture

Didnt you get the note ZH is no longer a bastion of free market capitalism and investors. Its all hippy OWSers, PM bugs/doomsdayers, conspiratorialists and other parasites looking to redistribute your ill gotten gains. Whats that Star Wars quote about the worst den of villany and larceny... Its here.

Im actually afraid to post here because the SS might think Im part of some conspiracy to mail bomb letters to the "evil banksterz"

hyperbole2000's picture

Through the valley of darkness we march and the gates of hell we charge for we our the meanest son of a bitches in the valley.

bshirley1968's picture

What about when you are forced to borrow money?  Don't think that is possible?  Wake up, sheeple-boy.  Everyone is a slave.  Money IS debt.  And you are one of the dumbed down idiots that keep the banksters in business.

The Monkey's picture

The lenders were reckless, period. Optimism, ironically, cut us off at the knees.

Ghordius's picture

... even going after shipping companies that have global operations and no "Drachma event" exposure.

Hmmm... Markets are... Are... What was the word?

kanenas's picture

The left wing said that they will Tax the Greeks with off shore companies/operations (like ship owners).

Good luck with that.

Most of them have moved to the City since 1981 (year that Pasok came to office with exactly the same rhetoric). 

knukles's picture

Moved to the City?!?!
What would be a motivation to do that?

tom a taxpayer's picture

Markets are…

facing headwinds?

experiencing a bit of rough weather?

forming a bottom…a rather large bottom?

starting to unravel?

entering the House of Pain?

like Thelma and Louise, heading for a clifff?

turned off the freeway and into Panic City? 

 

Black Forest's picture

Hmmm... Markets are... Are... What was the word?

Transitory.

Umh's picture

FWIW most Greek shipping companies are very opaque to investors.

mjk0259's picture

I think they are very clear. The owner rips off everyone else and pays no tax. The latter legally in Greece.

hyperbole2000's picture

Nearing but not crossing the event horizon.

The Fonz...before shark jump's picture

I just vaporized some bud

Feeling pretty calm about the Greece and the euro debacle at the moment

Conman's picture

I think Spain is in a pretty precarious situation. They couldn't even capitalize bankia, instead turning to issuing bonds to use as collateral ! What is going on over there? This is the big news story.

delacroix's picture

what about the 3 bigger spanish banks?

ljag's picture

We should pay close attention to what the people of Greece do..........after all, our turn is just around the corner.