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Schauble Says Europe Can Handle Greek Exit As EFSF, Fitch Warn Of "Catastrophe", Mass Downgrades

Tyler Durden's picture





 

Oh yeah..... Greece.

As already pointed out, first we had Fitch and then various European ladies and gentlemen, all lining up one after another, to talk down the event that as recently as 4 months ago would presage the apocalypse of Europe: i.e., Grexit, or the country's exit from the Eurozone. And now that a second Greek elections is inevitable (as we expected a week ago), and with Syriza likely to surpass 30% of the vote alone in the next two weeks, all hope appears to be lost for preserving Greece in the EMU. Europe's reaction? Why talk it down of course.

From Bloomberg:

German Finance Minister Wolfgang Schaeuble suggested the euro area could handle Greece dropping out, raising pressure on Greek political leaders struggling to form a government amid a rise in anti-bailout sentiment.

 

“We have learned a lot in the last two years and built in protective mechanisms,” Schaeuble told the Rheinische Post newspaper in an interview published today, when asked whether the euro area is girded for a Greek exit. His comments were confirmed by the Finance Ministry in Berlin.

 

The risks of contagion for other countries of the euro zone have been reduced and the euro zone as a whole has become more resistant,” Schaeuble said. “The notion that we wouldn’t be able to react in a short time to something unforeseen is wrong.”

 

“The future of Greece in the euro zone now lies in Greece’s hands,” German Foreign Minister Guido Westerwelle said in a speech in the lower house of parliament in Berlin today. “Solidarity is not a one-way street” and aid to Greece can only be disbursed if Greece sticks to its part of the deal.

 

“We have to tell our Greek friends and partners honestly, fairly and openly that there is no way other than the one we jointly agreed,” Schaeuble said. Other European governments and private investors have gone “extraordinarily far” in making concessions, so Greece “has to understand that must fulfill its commitments in return.”

But, but...

A Greek exit from the euro zone would be catastrophic not just for Greece, the head of the euro zone's temporary rescue fund said on Monday, a day after pro-bailout ruling parties lost their majority in parliament in Athens.

 

If Greece exited the euro zone that would "of course have a huge impact not just for other program countries, not just for the banks, but also for Greece itself," Regling said, adding Greece's public creditors would also suffer. "It would be a catastrophe for Greece."

 

Regling also said it was completely out of the question that the European Stability Mechanism (ESM) would directly recapitalize banks, a proposal by some policymakers to help Spanish banks.

We are confused: Greek exit - good or bad? Or should we just wait for the post-fact CNBC spin. In the meantime, just out from Fitch, the stakes get raised:

Fitch Likely to Put Member States on Rwn If Greece Leaves Emu

 

The inconclusive outcome of Greece's May 6 parliamentary elections and the subsequent failure to form a coalition government make fresh elections in June probable. The election or formation of a Greek government unwilling or unable to abide by the terms of the current EU-IMF programme would increase the risk of Greece leaving the eurozone. If they are required, the re-run elections will therefore be a critical event for both Greece and for the eurozone.

 

The implications for the eurozone of a Greek exit are highly uncertain and would depend on how it happens and the European policy response.

 

In the event of Greece leaving EMU, either as a result of the current political crisis or at a later date as the economy fails to stabilise, Fitch would likely place the sovereign ratings of all the remaining euro area member states on Rating Watch Negative (RWN) as it re-assessed the systemic and country-specific implications of a Greek exit.

 

This would be in line with the approach set out in Fitch's report, 'The Future of the Eurozone: Alternative Scenarios". In the report, published 3 May, we said that if Greece left the eurozone, the ratings of those sovereigns currently on Negative Outlook - Cyprus, France, Ireland, Italy, Portugal, Spain, Slovenia and Belgium - would be at most immediate risk of a downgrade. The probability and magnitude of this would largely depend on the European policy response and its success in limiting contagion, as well as outlining a credible vision of a reformed EMU. Nonetheless, the sovereign ratings of all eurozone member states would potentially be at risk.

 

A Greek exit would break a fundamental tenet underpinning the euro - that membership of EMU is irrevocable. In a benign scenario, the spill-over and contagion to the rest of the eurozone could be less profound than feared and possibly provide the catalyst for greater fiscal and political integration that would strengthen the viability of Economic and Monetary Union.

 

The May 6 vote in Greece saw a rise in support for explicitly anti-austerity (although not necessarily anti-euro membership) parties, such as the left-wing Syriza, which rejects the terms of Greece's EU-IMF programme. This came at the expense of the incumbent Pasok-New Democracy coalition, which fell two seats short of a parliamentary majority.

 

The outcome of re-run general election is unpredictable as the choice facing the Greek electorate is between parties that would implement highly unpopular fiscal austerity and structural reforms, and those political forces that reject the EU-IMF programme and would put at risk Greece's membership of the eurozone. The May 6 poll and probable need for a second election have underlined the growing political risks to the successful implementation of the EU-IMF programme and financial support for Greece.

 

In the near-term, new elections in June would make it doubtful that Greece could comply with the EU-IMF's end-June deadline to propose further medium-term austerity measures worth 5.5% of GDP, although we would expect Greece to be granted an extension to that deadline. However, we think any attempt by Greece to significantly renegotiate its agreed consolidation and reform programme (to which both Pasok and New Democracy are committed) would be unacceptable to the Troika of the ECB, Eurogroup and IMF, who appear unwilling to countenance a significant easing of the programme or any increase in funding.

 

Greece's Long-Term foreign currency and local currency Issuer Default Ratings were moved to 'B-'/Stable from 'RD' on 13 March 2012 following the completion of the distressed debt exchange that facilitated the provision of the country's new EU-IMF programme.

 


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Fri, 05/11/2012 - 09:40 | Link to Comment chunga
chunga's picture

I'd fight Cramer

Fri, 05/11/2012 - 09:48 | Link to Comment Village Smithy
Village Smithy's picture

Boo Yaa to that!

Fri, 05/11/2012 - 09:52 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Europe is fine!

Fri, 05/11/2012 - 09:58 | Link to Comment SilverTree
SilverTree's picture

"Fine" is a relative term.

Fri, 05/11/2012 - 10:45 | Link to Comment Leraconteur
Leraconteur's picture

Ground to a fine powder.

Fri, 05/11/2012 - 11:16 | Link to Comment Possible Impact
Possible Impact's picture

Ground so fine the Angst is measured in Angstroms!

 

Fri, 05/11/2012 - 11:28 | Link to Comment lineskis
lineskis's picture

Funny to see how the impossible a few short months ago is now possible, how what was supposed to be the end of the world is now OK and contained... yet again...

Fri, 05/11/2012 - 13:25 | Link to Comment markmotive
markmotive's picture

Where did Fitch say "catastrophe"? I can't seem to find it.

Fri, 05/11/2012 - 10:13 | Link to Comment walküre
walküre's picture

If Greek exits the Euro, they will compete with Italy and Spain. Soft Drachmas vs. hard Euros.

Greece will be fine. Italy and Spain won't like it and start considering their own exit strategies.

Once Greece goes, more will follow and the Eurozone and quite possibly the EU is finished. It would put alot of EU bureaucrats on the street and Brussels and Strasbourg would become ghost towns.

Perfect. I'd move to Europe when that happens.

Fri, 05/11/2012 - 09:57 | Link to Comment RyanW525
RyanW525's picture

Doesn't Europe belong to his charitable trust??

Fri, 05/11/2012 - 11:20 | Link to Comment Harvey Lee Oswald
Harvey Lee Oswald's picture

No sense in trying to preserve your honor in this situation.

Just shoot the bastard; we all know bankers don't play fair.

Fri, 05/11/2012 - 09:45 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Downgrade every financial firm on the entire fucking planet, who is your "cleanest dirty shirt?" - Oh yeah, bitchez.

< sarc on > Boy, Buffet's comment to "avoid cash" really makes sense now. < sarc off >

Fri, 05/11/2012 - 09:54 | Link to Comment SilverTree
SilverTree's picture

"A Basket of downgrades"

Fri, 05/11/2012 - 10:06 | Link to Comment CPL
CPL's picture

I went to my mother's house with a basket of:

 

A)  Cookies

B)  Bread

C)  Eggs

D)  Downgrades

 

 

 

Fri, 05/11/2012 - 10:14 | Link to Comment Apeman
Apeman's picture

mmmmmmmm... downgrapes

Fri, 05/11/2012 - 10:22 | Link to Comment jez
jez's picture

You put all those eggs in one basket? You're not that Bruno Iksil guy, are you?

Fri, 05/11/2012 - 10:14 | Link to Comment tekhneek
tekhneek's picture

"Hi I'm Warren Buffet and I just shit my diaper."

Fri, 05/11/2012 - 09:42 | Link to Comment RyanW525
RyanW525's picture

Hahaha....Europe is waving its hands in the air, shouting  "guys over here...remember me!?"

Fri, 05/11/2012 - 09:48 | Link to Comment Aductor
Aductor's picture

Well, it isn't working. Traders in the United States of Hopium BTFD as usual.

Fri, 05/11/2012 - 10:06 | Link to Comment HarryM
HarryM's picture

No surprise - I said last night that there will be a full scale coordinated effort today to calm the market- if they didn't - there would have been a +200 meltdown.

The money JPM lost is a pimple compared what is being spent to contain this shitstorm.

Fri, 05/11/2012 - 12:27 | Link to Comment mick_richfield
mick_richfield's picture

They're not waving, they're drowning.

Fri, 05/11/2012 - 09:42 | Link to Comment Caviar Emptor
Caviar Emptor's picture

I am warning of a giddy period of drunken denial followed by a nuclear winter

Fri, 05/11/2012 - 09:42 | Link to Comment the not so migh...
the not so mighty maximiza's picture

Once Greece leaves others will follow.

Fri, 05/11/2012 - 09:45 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

"leaves" means defaults, right?

Fri, 05/11/2012 - 09:48 | Link to Comment the not so migh...
the not so mighty maximiza's picture

Yeap.

Fri, 05/11/2012 - 10:06 | Link to Comment Watson
Watson's picture

But not all.

For example, Germany has put the pieces in place to abandon the EUR and go back to the DEM, but I'm sure they will pay their EUR debt.

Shame so few others will...

Fri, 05/11/2012 - 10:18 | Link to Comment walküre
walküre's picture

I pray they will all agree mutually NOT to pay any EUR debts. The aftermath will be desastrous enough. Unfortunately, the Germans might just take all the debt on them and we would see a repeat of Versailles, Weimar etc.

Fri, 05/11/2012 - 11:21 | Link to Comment ghenny
ghenny's picture

Just think of it as their last installment payment for WW II

 

Fri, 05/11/2012 - 13:39 | Link to Comment Mountainview
Mountainview's picture

No--it means Drachma for EURO...nice !!!!

Fri, 05/11/2012 - 11:16 | Link to Comment odatruf
odatruf's picture

So here's my question: I have a small amount of money in a Greek bank (like 10,000 USD or 7,700 Euros).  Not a huge amount and it's only there to cover expenses for a small piece of island propery. Most of the time, there isn't a draw on it so I could manage not having it in country.

I've been thinking about moving it out of Greece and into, say Italy, or somewhere else.  It's lost value relative to the dollar, but not a huge amount and I put it in the account long enough ago that it doesn't really matter, but I have been so nickled and dimed by local and national government over this property that if I could gain some of that back, I'd like to - or at the very least not face more account erosion if the banks locked for a few days if they left the Euro and then end up with a bucket of worthless drachmas or whatever their new money would be called if I could just as easily move it and then move it back later at a great new exchange rate. 

Would you all:

  1. move the money to another Euro country now
  2. move it to another Euro country now
  3. do either at a later point
  4. leave it where it is assuming that however it ends up, the in country value will stay roughly the same
  5. return it back to the US

All else being equal, I'd assume leave it all as it is.  But if action might save/make more than 1,000 USD I'd overcome that preference.

Thanks in advance for any guidance.

Fri, 05/11/2012 - 11:39 | Link to Comment falak pema
falak pema's picture

buy yourself a good feast and invite all those poor greeks; you'll be a God to them, even if your pocket's empty and your problem solved. Remember Zorba!

Fri, 05/11/2012 - 11:53 | Link to Comment GeneMarchbanks
GeneMarchbanks's picture

I second that motion. Do as falak says, or CHF it.

Fri, 05/11/2012 - 12:50 | Link to Comment odatruf
odatruf's picture

I had to look that up.  I though about Swiss Francs.  Does anyone know if I'd have to go do that in person?

Not that I hate the idea of going to Greece sometime soon and in fact, that's one motivating factor in all of this.  If I do it and I save myself a thousand or two, in effect the trip costs me nothing.

 

Fri, 05/11/2012 - 13:04 | Link to Comment chubbar
Fri, 05/11/2012 - 13:16 | Link to Comment odatruf
odatruf's picture

Converting that cash into gold or silver isn't a good option.  I need to keep it pretty liquid so that if I need to put some bucks into the property, I can. And if the account is moved out of country, I need to be able to do that electronically from the US. 

Plus, I have a small bit of metals here in the US.  Again, not a lot, but some anyway.

Fri, 05/11/2012 - 14:56 | Link to Comment Mountainview
Mountainview's picture

Better take banknotes (but not those with a Y before the serial number... those are Greek and will be converted in new Drachmas) and put them under your matress! Wait a few week or month!

Fri, 05/11/2012 - 12:32 | Link to Comment mick_richfield
mick_richfield's picture

Buy silver with it, and store it with someone you trust in-country.

Fri, 05/11/2012 - 09:42 | Link to Comment agent default
agent default's picture

And why won't the rest of the PIIGS follow down that path in six months time?  The EU is toast, plain and simple.

Fri, 05/11/2012 - 10:37 | Link to Comment DeadFred
DeadFred's picture

They've done a good job of desuading the other piigs. If you knew that exiting would lead you through the rubble of Athens (circa late 2012) you would want to stay in the union. Expect them to do whatever they can to minimize the distress to the rest of the EU but maximize the carnage to Greece pour l'encouragement des autres

Fri, 05/11/2012 - 09:43 | Link to Comment youngman
youngman's picture

Kind of an unreal day....oh yeah....Greece..JPM...Spain...Econ reports..and its early...

Fri, 05/11/2012 - 09:51 | Link to Comment j.tennquist
j.tennquist's picture

Indeed, the more real things get, the more unreal they seem.

Fri, 05/11/2012 - 09:57 | Link to Comment t_kAyk
t_kAyk's picture

The more things change, the more they stay the same. 

 

bitcheZ...

Fri, 05/11/2012 - 09:50 | Link to Comment a growing concern
a growing concern's picture

Makes you wonder what turd they've got queued up for 4:01 PM.

Fri, 05/11/2012 - 09:42 | Link to Comment mayhem_korner
mayhem_korner's picture

We are confused: Greek exit - good or bad?

 

It's like the Vegas line on a football game - it depends on how much money has been bet on each side.

Fri, 05/11/2012 - 09:43 | Link to Comment Caviar Emptor
Caviar Emptor's picture


Merkel meets with European Investment Bank head

 

  • Discussed methods for boosting European growth

Vee haf vays of boosting zee growth…

Fri, 05/11/2012 - 10:00 | Link to Comment LongBalls
LongBalls's picture

Germany will accept inflation soon.

Fri, 05/11/2012 - 10:06 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

 

 

Discussed methods for boosting European growth...

...nominally. 

It would be ironisch if the meeting was held in Heidelberg.

Fri, 05/11/2012 - 10:18 | Link to Comment walküre
walküre's picture

She's meeting with them to engage in the preliminary but not so tentative discussions on HAIR CUTS.

Fri, 05/11/2012 - 11:37 | Link to Comment falak pema
falak pema's picture

long preliminaries could have unexpected effects for the frau on austerity diet.

Fri, 05/11/2012 - 09:43 | Link to Comment kridkrid
kridkrid's picture

Would you like to play a game?

Fri, 05/11/2012 - 09:58 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

 

 

Schauble Says Europe Can Handle Greek Exit

Default?  If Greece leaves the Euro to return to its own currency I am sure they will do the right thing and pay back all their pre-existing Euro debt.  They borrowed the money, so they will surely pay it back.  No?

If they didn't, why, other Euro nations might see default as a good option, and decide to default, too. I am sure they, also, will do the right thing and pay back all their pre-existing Euro debt.

If they didn't, why, other nations outside Europe might see default as a good option, and decide to default, too. I am sure they, also, will do the right thing and pay back all their pre-existing Euro debt.

Greece Europe The World will be fine as long as every nation in debt will just do the right thing and pay back all their pre-existing Euro debt.

Fri, 05/11/2012 - 09:44 | Link to Comment Zola
Zola's picture

In the meantime, the oligarchs have been bailed out for the last two years. Best thanks from their yacht sipping a cocktail. 

Fri, 05/11/2012 - 09:44 | Link to Comment The Third Man
The Third Man's picture

 “We have learned a lot in the last two years and built in protective mechanisms,” Schaeuble told the Rheinische Post newspaper in an intervie.

I think that's called 'whistling past the graveyard'.

Fri, 05/11/2012 - 09:56 | Link to Comment Chaffinch
Chaffinch's picture

+ 1 Third Man - I was struck by that comment too. Made me think of the Siegfried Line - I think it will be easy enough for the markets to sneak around the back...

; )

Fri, 05/11/2012 - 10:06 | Link to Comment Sudden Debt
Sudden Debt's picture

I had to take a crap after reading that one...

Fri, 05/11/2012 - 10:22 | Link to Comment walküre
walküre's picture

What Schäuble means is that for the past two years, they have been preparing for the day when (not if) Greece exists. Clear as mud that this was all planned.

But Schäuble & Co. needed the two years to payoff the banks via the ECB and get the Greek puppet government to sign off on the deal. Remember the pressure right before the election to get these vehicles passed through legislation in Berlin and in Athens. They all knew full well that there wouldn't be a chance in hell to get this signed under a new government.

People and their votes be damned.

Fri, 05/11/2012 - 16:44 | Link to Comment malek
malek's picture

It sounded more like a concession they were "learning by doing" instead of getting the recommended theoretical education first.

Fri, 05/11/2012 - 09:47 | Link to Comment postafoa02
postafoa02's picture

Lalalaa.. Dummdidumm

This is fun to watch from the asylum

Because i got here by saying this will happen

Nemesis Nomos / After a friend of Another

Fri, 05/11/2012 - 09:44 | Link to Comment Dr. No
Dr. No's picture

its a bluff.  It is being engineered.  Greece was allowed to enter so as to expand markets.  EU chewed them up, and is getting ready to spit them out.  The Austerity demands have been placed on them knowing the voters will revolt.  The new greek government will then initiate an exit and exclaim it is their soverign right, all the while this is what the EU was praying for.  Soverign debt will be down graded (as planned) and the EU will monetize.  next.

Fri, 05/11/2012 - 09:59 | Link to Comment ThirdWorldDude
ThirdWorldDude's picture

Spain?

Fri, 05/11/2012 - 09:47 | Link to Comment Quintus
Quintus's picture

I suspect that a second Greek election would play out very much like what happened when Ireland gave the 'Wrong' answer in the Lisbon Treaty referendum and was made to vote again.

Europe will apply a full court press of fire and brimstone sermons about how the Greek people will be reduced to eating their own children if they vote the wrong way.  They will effectively make the election a 'Euro in or out' decision, and throw in some meaningless concessions to the Austerity treaty to make it look like they are listening.

Meanwhile the Greeks may feel that they made their point by upsetting the status quo in first election, and with their pride somewhat salved, they will vote for the pro-bailout parties.

I seriously doubt that they will go through with it and actually vote for an anti-bailout majority second time around.

Fri, 05/11/2012 - 09:45 | Link to Comment He_Who Carried ...
He_Who Carried The Sun's picture

Of course.

Greek isn't much of a problem, financially spoken, the Greeks are and the media.

Spain, Belgium, Italy and France are the ones that decide over the future of the monetary union, not tiny Greece.

Contagion risks regarding Greece are also exaggerated, but if Spain goes down, it will take Italy with it and then the UK as well as the UK is its most exposed creditor.

Fri, 05/11/2012 - 09:55 | Link to Comment GMadScientist
GMadScientist's picture

a) Sovereigns are on the hook when the Greeks take a powder (because banks won't be)...think that'll affect the continued roll of the Bail-o-rama?

b) WHEN Spain goes down.

EU -> Kaputnik.

Fri, 05/11/2012 - 11:59 | Link to Comment CuttingEdge
CuttingEdge's picture

German and French banks are far more exposed to Spain and Italy than the UK. Why do you think their governments have been kicking this can down the road and avoiding reality? Its only to avoid their own banks getting butt-fucked. Then there's the Bundesbank's Target2 imbalance.

Fri, 05/11/2012 - 09:48 | Link to Comment youngman
youngman's picture

Did anyone know that the London metals exchange is for sale.....?????  very strange

Fri, 05/11/2012 - 09:53 | Link to Comment Dr. No
Dr. No's picture

Everything is for sale dude.

Fri, 05/11/2012 - 10:06 | Link to Comment Sudden Debt
Sudden Debt's picture

2 billion ounces of silver and it's yours to keep!

Fri, 05/11/2012 - 10:24 | Link to Comment DosZap
DosZap's picture

2 billion ounces of silver and it's yours to keep!

 

Yeah, small problem...............its JUST PAPER.

Fri, 05/11/2012 - 10:00 | Link to Comment Sudden Debt
Sudden Debt's picture

got a link?

I'm lazy today and don't feel like googling it :)

Fri, 05/11/2012 - 10:11 | Link to Comment DosZap
DosZap's picture

Did anyone know that the London metals exchange is for sale.....?????  very strange

Yep, dey BROKE................................gots no metals.

Fri, 05/11/2012 - 10:19 | Link to Comment youngman
youngman's picture

That is what I was thinking.....they can see that Asia will take all their business...and people are asking for their metals and taking them home.....and they are probably short quite a bit.....lol.....look at the bidders.....the usual crooks or competitors....CME...Shanghi..

Fri, 05/11/2012 - 09:49 | Link to Comment jekyll island
jekyll island's picture

Blah, blah, blah, blah....Greece.  Can we we get over this?  They're done, toast.  Can we talk about something else?  Maybe the ESM won't directly capitalize the banks, but it would probalby be OK with TPTB if they channeled the money through Goldman Sachs and they sent it to the banks, minus their fees.  Got to give the Rothschilds and Rockefellers their cut before hitting the reset button.  

Fri, 05/11/2012 - 09:48 | Link to Comment LongSoupLine
LongSoupLine's picture

All this on a Friday. With that, we'll see either a massive PPT stick save or a fear sell-off 'cause no one wants to hold over the weekend.

I'm in the later of the two camp.

Fri, 05/11/2012 - 09:54 | Link to Comment Whoa Dammit
Whoa Dammit's picture

JPM has another conference call scheduled for today at 5:00 PM EDT. Seems like another good reason not to hold over the weekend.

Fri, 05/11/2012 - 09:50 | Link to Comment rebelscum1967
rebelscum1967's picture

I'm going to strangle Crammer

Fri, 05/11/2012 - 09:55 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

 

 

Please, video.  Please.

Fri, 05/11/2012 - 09:49 | Link to Comment GMadScientist
GMadScientist's picture

How many rings does this @#$% circus have?!

Fri, 05/11/2012 - 09:53 | Link to Comment kridkrid
kridkrid's picture

3....<crunch>

Fri, 05/11/2012 - 09:56 | Link to Comment LULZBank
LULZBank's picture

“We have learned a lot in the last two years and built in protective mechanisms,”

... like bought CDS from JollyPants Moron as a hedge?

Or ... asked Gonadman Sucks to do a report on implications of a GreeK exit from EURO, just like they did for inclusion of Greece?

There is no way the "protective mechanism" or any EU mechanism can go wrong ... again.

P.S. Sorry Blankfeind, but eveytime I see your picture, it reminds  me of single testicle.

Fri, 05/11/2012 - 09:51 | Link to Comment distopiandreamboy
distopiandreamboy's picture

Monthly OPEX next week...BTFD?

Fri, 05/11/2012 - 09:55 | Link to Comment ThirdWorldDude
ThirdWorldDude's picture

Now where the heck is that report from Moody's when you need it? It would be a great ending to a good week and a reason more to open that freezing 'Beefeater'...

Fri, 05/11/2012 - 09:56 | Link to Comment ebworthen
ebworthen's picture

Dr. Strangelove?  Paging Dr. Strangelove?

Greece will exit the Euro; after they get all the cash they can from the ECB.

Fri, 05/11/2012 - 09:59 | Link to Comment michigan independant
michigan independant's picture

Treaty of Economic Verdun again soon.

Fri, 05/11/2012 - 10:00 | Link to Comment CuriousPasserby
CuriousPasserby's picture

This all sounds like the description of how Europe was holding meeting after meeting, trying to figure out how to get Germany to pay impossible amounts of war reparations in 1920, in the book, When Money Dies. And we all know how that ended! Get physical, bitchez!

Fri, 05/11/2012 - 10:14 | Link to Comment kridkrid
kridkrid's picture

so much of the book echoes what we are witnessing today.

Fri, 05/11/2012 - 10:44 | Link to Comment ebworthen
ebworthen's picture

"That it's all just a bit of history repeating..."

http://www.youtube.com/watch?v=wBaBee6xDi8

Fri, 05/11/2012 - 10:03 | Link to Comment BandGap
BandGap's picture

There have to be bank runs if anyone has anything left in the tank.  That's what I'd do. Who knows what the Drachma will be worth in a few months. It's not like Greece can fall back on any sort of industrial base.

To coordinate and keep everyone in line has to be impossible. Just watch for those tip-toeing for the door. Once they are spotted it will be every man for himself.

And now, back to Spain!

Fri, 05/11/2012 - 10:34 | Link to Comment Mitzibitzi
Mitzibitzi's picture

"It's not like Greece can fall back on any sort of industrial base."

They can't now, thanks to the Central planners in Brussels (and probably Germany and France).

In the 80s and 90s, Greece actually ran a small budget surplus most years and had a thriving and slowly expanding industrial sector. Joined the Euro, pocketed the 'free' cash and were promptly told by the EU to stop exporting a whole range of products to other EU countries. Factories closed pretty much daily after that, until only the handful they have now remained. Wonder if it was planned that way?

Fri, 05/11/2012 - 10:04 | Link to Comment Sudden Debt
Sudden Debt's picture

YEP! THE MAGINOT LINE JUST GOT A FRESH PAINT JOB AND ALL THE SCEPTIC TANKS WHERE EMPTIED!

BRING IT ON!

 

Fri, 05/11/2012 - 10:03 | Link to Comment Mongo
Mongo's picture

"Protecting mechanims" ... yeah for sure...

 

How do you say moron in German?

Fri, 05/11/2012 - 10:15 | Link to Comment Apeman
Apeman's picture

I believe the correct term is Schaeuble

Fri, 05/11/2012 - 10:18 | Link to Comment CuriousPasserby
CuriousPasserby's picture

Dumkopf?

Fri, 05/11/2012 - 10:05 | Link to Comment firstdivision
firstdivision's picture

Don't be afraid Greece. There is one word that you should keep in mind when you're busy giving all your assets to various banks, Iceland. Try to follow in their footsteps, and the EZ will be begging for you to rejoin.

Fri, 05/11/2012 - 10:12 | Link to Comment ThirdWorldDude
ThirdWorldDude's picture

Just yesterday I was explaining the same to a Greek "Golden Dawn" supporter - the sooner Greece exits the Eurozone, the sooner & better will their recovery follow... That is, if the Club doesn't immanentize the eschaton in the meanwhile.

Fri, 05/11/2012 - 10:07 | Link to Comment Vince Clortho
Vince Clortho's picture

"the euro area could handle Greece dropping out,"

until  Spain defaults and the rioters hit the streets in Madrid, Paris, Berlin, and in front of Herr Schauble's house.

Other than that, things are on the upswing.

Fri, 05/11/2012 - 10:16 | Link to Comment DavidC
DavidC's picture

Couldn't the exclusion of Greece and, say, Spain, paradoxically strengthen the Euro, weakening the Dollar relatively speaking, causing the stock markets to go UP?

DavidC

Fri, 05/11/2012 - 10:17 | Link to Comment orangegeek
orangegeek's picture

Actually Greece is bailing our Europe.  Souvlaki anyone?

Fri, 05/11/2012 - 11:34 | Link to Comment falak pema
falak pema's picture

Greece is the alleged sovereign felon but in reality the trigger that could implode the whole private banking scam, the heart of the matter on both sides of the pond. Sovereign bonds are just the tip of the hidden banking debt iceberg. 

Fri, 05/11/2012 - 10:40 | Link to Comment CryingBear
CryingBear's picture

HE IS LYING.

Fri, 05/11/2012 - 10:50 | Link to Comment TJ00
TJ00's picture

Remember there are inter-european central bank transfers, so if Greece leaves the Euro all the Euros the Greek central bank owes other countries central banks disappear in a puff of smoke, How leveraged is the Bundesbank again?

Fri, 05/11/2012 - 11:03 | Link to Comment falak pema
falak pema's picture

Herr Schauble is playing at Herr Schulz in "To be or not to be"... but the ending will be less hilarious, even if it risks being just as classic in terms of historical logic : as you sow so you shall reap.

Fri, 05/11/2012 - 11:57 | Link to Comment Treason Season
Treason Season's picture

Sgt. Schaubel, " I zee nuhting!"

Fri, 05/11/2012 - 16:21 | Link to Comment NaiLib
NaiLib's picture

The Euoro still only have one single chance to survive: If Germany leaves it.

Fri, 05/11/2012 - 16:22 | Link to Comment NaiLib
NaiLib's picture

The Euoro still only have one single chance to survive: If Germany leaves it.

Sun, 05/13/2012 - 23:16 | Link to Comment qiongqiong
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