Creditors

In the end, finance—at any level—has to be about rules and numbers, or it becomes about nonsense. Break enough of your own rules, and your money turns to garbage, because in a world where money is debt and debt is garbage, money is garbage. But there is a proven method for solving this problem and moving on: it's called national bankruptcy. Greece is bankrupt; if its resolution brings on the bankruptcy of Spain, Italy and others, and if that in turn bankrupts the entire Eurozone, then that's exactly what must happen. But something else might happen instead.

“Wake up, people of the world and investors! Greece will come to your neighbourhood very soon, maybe not this year but next year or whenever…because the world is over-indebted and defaults will follow or they’ll have to create very high inflation rates”.

"We Greeks have voted 'No' to slavery -- but 'Yes' to our chains... What's simply whack-o is that, while voting "No" to austerity, many Greeks wish to remain shackled to the euro, the very cause of our miseries."

For every loser there is a winner, and in the case of Greece and its tragedy, just as millions are about to lose everything, a few not only made billions but quietly, under the guise of "sovereign bailouts" transferred their entire risk onto the taxpaying public.

At this point it is unclear who wants Grexit more: the ECB or Greece.

ECB’S RIMSEVICS SAYS INTRODUCTION OF ANOTHER CURRENCY IN GREECE IS MOST REALISTIC SCENARIO, MAY BE ONE LESS EURO ZONE MEMBER IN FUTURE

On the heels of Sunday’s referendum wherein Greeks essentially gave the greenlight for an unceremonious EMU exit should Europe decide to spurn the IMF and stick to a “no debt relief” policy for Athens, PM Alexis Tsipras and his newly-appointed finance minister Euclid Tsakalotos are making a final push to break the stalemate with creditors before the ATMs go dark and a supplier credit crunch creates widespread shortages of imported goods.

• Greece faces last chance to stay in euro as cash runs out (Reuters)
• Tsipras Begins Brussels Campaign to Keep Greece Inside the Euro (BBG)
• Greek Crisis Shows How Germany’s Power Polarizes Europe (WSJ)
• Eurogroup Head Dijsselbloem Calls for ‘Credible’ Greece Package (BBG)
• Europe Not Playing ‘Domino Theory’ Leaves Markets Calm on Greece (BBG)
• China stocks fall again despite support measures (Reuters)
• Chinese Trading Suspensions Freeze $1.4 Trillion of Shares Amid Rout (BBG)
• Crude Creeps Higher After Downturn (WSJ)

When it comes to Greece, and Europe in general, "hope" continues to remain the driving strategy. As Bloomberg's Richard Breslow summarizes this morning, "if you were looking for a word to describe the general feeling of equity markets today, you might well pick hopeful. U.S. equity futures opened higher and have been up all day. European bourses opened cautiously     higher as they await word, any word, from the European finance ministers or more importantly, Chancellor Merkel. Equity markets will continue to be very reactive to European headlines, but so far, no news has been taken as a reason for hope." Which incidentally, has been the general investment case for the past 6 years: "hope" that central banks know what they are doing.

Now that Yanis Varoufakis has metamorphosed from economist academic to controversial finance minister to political martyr, the eyes of the financial universe will turn nervously to newly-appointed Euclid Tsakalotos, who has led Greece’s negotiations with creditors since Varoufakis was sidelined after making a scene at an April Eurogroup meeting in Riga.

According to Colin Lancaster, senior managing director with Balyasny "we now have another 48 hours of calm before things really start happening", and the punchline: "situation could then break down as banks stay closed, ATMs will run out of cash Tuesday or Wednesday, uncertainty grows and rioting possible."

LEADERS OF GREEK RULING AND OPPOSITION PARTIES ISSUE JOINT STATEMENT BACKING EFFORTS TO REACH DEAL WITH CREDITORS

"The IMF has taken note of yesterday's referendum held in Greece. We are monitoring the situation closely and stand ready to assist Greece if requested to do so."

On the heels of Sunday's landmark referendum in Greece, all eyes are now on global financial markets and how the European Central Bank intends to prevent contagion in the event Greece exits the currency bloc. 

Like a game of chess Tsipras may have just sacrificed a knight in order to achieve a greater strategic aim – the marketing of a compromise deal to highly sceptical northern European countries. Were Greece to be expelled, and our television screens filled with Greek humanitarian causes, the likelihood of any euro nation passing additional powers to an increasingly European feckless elite has become essentially zero.

"After the Greeks voted against accepting the latest demands from its creditors, Merkel is facing her worst nightmare: a possible Greek exit from the euro, a possible exit from the EU completely and loss of confidence in the currency itself.  Half of her was Merkel — the pragmatic economist, the other was Merkel — the great European. She has now discovered, in her vacillation, she has not shown the leadership expected of the most powerful woman in the European Union."