While Greece may or may not have won its initial bluff with Europe, setting the stage for all future negotiations (which would also be a position of weakness for Merkel, which is why we doubt Europe will concede at this point), now that it has explicitly invoked the Russia and/or China card as sources of funding, the reality is that nothing has been resolved for Greece yet, which means that the old paradigm still stands: one of gauging whose leverage is bigger on a daily basis.
And, as explained previously, the simplest way of calculating leverage for the two counterparties is very simple - with the Eurozone, Germany and ECB all eager to squash all non-conciliatory rhetoric by Greece, what they are now doing is trying to put a liquidity squeeze on not only the Greek banking sector but its government. The thinking goes that if the people's money is cut off, they will force Tsipras and Varoufakis to soften their tone.
On the other hand, Greek leverage is measured by the level of the EURUSD and the Stoxx50/600 (and also the S&P 500). This explains why central bank intervention in markets in the past week has been truly staggering, starting with the SNB, through the ECB and the BOJ: it is inconceivable to admit to Greece that the contagion risks are not contained, and is why central banks will do everything in their power to offset market nervousness, no matter how hard-line the Greek position becomes. Ironically, it has gotten so bad even UBS admitted yesterday that "A Market Dislocation Is Necessary To Focus Minds."
All this was summarized very simply in the following tweet:
ECB leverage measured in Greek ATM lines; Greek leverage measured inversely in the level of the Stoxx 50— zerohedge (@zerohedge) February 5, 2015
And since central banks are there 24/7 and on site to intervene and "eliminate" Greek leverage at any flashing red headline, it is up to Greece to create a narrative that the European leverage in turn is also weaker, which means to project, whether based on truth or otherwise, that Greek bank deposit outflows are slowing.
That is precisely what Reuters reported moments ago when it reported, citing Greek bankers, that deposit outflows have slowed so far in February after a sharp increase estimated for a month earlier, but savers are still uneasy over the new leftist government's standoff with its official lenders.
More from the report, which is nothing but even more jawboning and political gamesmanship:
There has been some concern in financial markets and political circles that Greece's current standoff with its international lenders could worry depositors, causing them to make more withdrawals. But the senior banking sources said there was relative calm.
"We are seeing smaller outflows so far in February compared with January's 11 to 12 billion euros drop in deposit balances." said a senior Greek banker who declined to be named. "I estimate outflow at about 1 billion so far in February," he said, expecting household and business deposit balances to have fallen below 150 billion euros last month.
The Bank of Greece, the country's central bank, is expected to release official January deposit data on Feb. 26.
"Outflows have decelerated so far in February," the chief executive of one of Greece's top four commercial banks told Reuters. "There is adequate liquidity in the banking system."
"Since the election, we have seen outflows slow down," said another.
Which, of course, is i) precisely what Greece would say to offset European liquidity pressure leverage and ii) just the opposite of what one would expect.
This also means that one should take all Greek deposit numbers with a grain of salt, as the true state of the liabilities side of the Greek banks' balance sheet will not be known with any certainty until after the Greek negotiations with Europe are concluded, for better or worse.