Apr 03

GREXIT

- Greece Said To Prepare “Grexit”, Drachma, Bank Nationalization Plans (ZeroHedge, April 2, 2015):

On Thursday morning, we took an in-depth look at what the progression of events is likely to be in the event a cash-strapped, negotiation-weary Greece finally, for lack of will or for lack of options, fails to scrape together enough cash to pay its creditors. As BofAML notes, a missed IMF payment and/or failure to make interest payments to either the ECB or private creditors over the coming weeks would likely lead to default within 30 days, at which point “mark-to-fantasy” becomes mark-to-market and then “mark-to-default” in very short order.

Although Greek officials came out midday with a “categorical” denial of reports that the country was set to run completely out of cash in just 7 days, it now appears Athens may be prepared to chance a missed IMF payment and all that comes with it if it means saving face and preserving Syriza’s campaign promises to the beleaguered Greek populace.  Continue reading »

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Apr 02

Greece

- Greece Faces D-Day On April 9, Will Default Within 30 Days Of Missed Payment, BofAML Says (ZeroHedge, April 2, 2015):

Greece officially runs out of cash on April 9 according to Reuters, citing Eurozone officials, and with interest payments due on the 17th and the 20th, and with €2.4 billion in t-bills coming due in two weeks, BofAML outlines the end game. 

And speaking of April 9, that is the day that the country has told Eurozone officials it will officially run out of cash according to Reuters. 

Coincidentally, it’s also the day Tsipras will be in Moscow to discuss “international developments” with President Putin.

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Apr 01

- Greece Hints At Default, Russian Pivot:”Will Not Respect IMF Deadline” – What Happens Next (ZeroHedge, April 1, 2015):

Update: GREECE GOVT DENIES PLAN TO DELAY APRIL 9 IMF PAYMENT: REUTERS

For now the algos can’t decide if Greece is joking about making the payment or joking about not making the payment.

* * *

IMF-Greece

The hints are growing louder that the Troika-Greece standoff will not end well for either side. Spiegel is reporting that Greek Interior Minister Nikos Voutzis has stated:

“If no money is flowing to 9 April, we will first determine the salaries, pensions pay here in Greece and then ask our partners abroad to achieve consensus and understanding that we will pay 450 million euros to the IMF not on time,”

In other words… Continue reading »

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Mar 31

H/t reader M.G.:

“Another article on Greece from Bloomberg…..does not address many of the points the NY times did……..but at least they are mentioning it…”

- Greece’s Debt Crisis Explained (Bloomberg, March 25, 2015):

Time is running out for Greece. By early April, the Greek government will have a bond payment come due, and there will be no way for the government to make the payment unless it gets a fresh tranche of cash from its creditors, who are in large part euro zone governments.


H/t reader M.G.:

“Here is a story that ought to be worrying every state of the EU and the US economy……..Greece.

Greek officials are meeting with Russian and Chinese leaders…..Greek leaders already assuring China they have a place in the largest Greek shipping port. Russia and China are financial and political allies, and together, they could easily step in and help Greece if they leave the Euro…..
If Greece leaves the Euro, it will start a financial unraveling that will spread throughout the Euro Zone and the US……”

Greece-Athens

- Greece Looks to Russia as Deal With Europe Stumbles (New York Times, March 30, 2015):

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Mar 27

- Japanese Government Bonds Are Crashing – Biggest Surge in Yields In 2 Years (ZeroHedge, March 26, 2015):

Whether due to contagion from the surge in US Treasury yields or a double whammy of weak household spending and Retail Trade data indicating that Abenomics is an utter failure is unclear, but yields across the entire JGB complex are spiking by the most in over 2 years. 10Y yields are up almost 9bps (not much you say) except that is from 32bps to 41bps!! 2Y and 5Y JGB yields have roundtripped from last week’s Fed-driven plunge. Is the BoJ/GPIF losing control of the largest and now most illiquid bond market in the world?

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Mar 26

Putin chess

- Putin Is Becoming A “Vulture” Bond Investor (ZeroHedge, March 26, 2015):

With Washington throwing its full faith and credit behind a new Ukrainian bond issue, it appears it’s time for Moscow to play spoiler to current debt restructuring talks between Kiev and its creditors. Russia is the country’s second-largest creditor after buying $3 billion in bonds back in the days of Viktor Yanukovych (who was once the victim of an attempted assassination by egg and who famously fled the country amid widespread protests last year) and now the Kremlin wants its money and isn’t likely to be amenable to any haircuts imposed on private creditors. Continue reading »

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Mar 23

FYI.


grexit-3

- Why Greece is the lynchpin that could unleash economic collapse, domestic martial law and global war (Natural News, March 23, 2015):

I wish I could download to your brain everything you need to know about the European Crisis unfolding right now. The possibility of the breakup of the European Union could be the spark that sets off the global debt implosion that leads to violent conflict across the globe.

The actions of Greece, it turns out, could set off a chain reaction that leads directly to a Wall Street panic and the “bail-in” seizure of your savings accounts at your favorite hometown bank. It could also radically destabilize Eastern Europe, heightening the risk for conflict between Russia and Western European nations (including NATO members like the United States).
Continue reading »

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Mar 23

Collapse

- Drowning In Liquidity But None In The Bond Market: The Spark Of The Next Financial Crisis? (ZeroHedge, March 22, 2015):

Of all the themes we’ve been pounding the table on of late, the idea that a lack of liquidity in certain markets will eventually lead to an “accident” or “adverse event” (to use the Center for Financial Stability’s words) is perhaps the most pressing because with the Mario Draghis and Haruhiko Kurodas of the world intent on monetizing every bit of government paper they can get their hands on, “outlier” events such as the Treasury flash crash that occurred last October are likely to become far less outlier-ish as central banks discover that depriving the market of anything that even approximates high quality collateral can have a rather nasty destabilizing effect in a pinch. Two weeks back, we summarized the situation as follows:  Continue reading »

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Mar 21

poroshenko_obama

- US Taxpayers To Fund Ukraine Bailout With Bond Guarantee (ZeroHedge, March 20, 2015):

Last week we reported that as part of the latest “check kiting” bailout scheme, Greek pensioners (and now utility companies) are being raided by the Greek government so that it can repay its debts to the IMF, which in turn would go ahead and fund a part of the recently approved $17.5 billion bailout of Ukraine, which then would have the money to pay its debts to Russia… and the IMF. And, as we also noted, “The only question is how long will it take the current puppet government to syphon off enough funds into various illegal ventures and offshore accounts before the IMF has to step back in a la Greece with bailout #2.”

Turns out the answer is about a week, because as Reuters reported earlier today, CCC-rated Ukraine is preparing to issue more debt, debt with a Aa+/AAA rating because it will come with the explicit guarantee of the United States of America. Continue reading »

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Mar 21

10-Charts-Economic-Crisis

- 10 Charts Which Show We Are Much Worse Off Than Just Before The Last Economic Crisis (Economic Collapse, March 18, 2015):

If you believe that ignorance is bliss, you might not want to read this article.  I am going to dispel the notion that there has been any sort of “economic recovery”, and I am going to show that we are much worse off than we were just prior to the last economic crisis.  If you go back to 2007, people were feeling really good about things.  Houses were being flipped like crazy, the stock market was booming and unemployment was relatively low.  But then the financial crisis of 2008 struck, and for a while it felt like the world was coming to an end.  Of course it didn’t come to an end – it was just the first wave of our problems.  The waves that come next are going to be the ones that really wipe us out.  Unfortunately, because we have experienced a few years of relative stability, many Americans have become convinced that Barack Obama, Janet Yellen and the rest of the folks in Washington D.C. have fixed whatever problems caused the last crisis.  Even though all of the numbers are screaming otherwise, there are millions upon millions of people out there that truly believe that everything is going to be okay somehow.  We never seem to learn from the past, and when this next economic downturn strikes it is going to do an astonishing amount of damage because we are already in a significantly weakened state from the last one.

For each of the charts that I am about to share with you, I want you to focus on the last shaded gray bar on each chart which represents the last recession.  As you will see, our economic problems are significantly worse than they were just before the financial crisis of 2008.  That means that we are far less equipped to handle a major economic crisis than we were the last time. Continue reading »

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Mar 21

ouroboros tomb

- One Last Look At The Real Economy Before It Implodes – Part 3 (Alt-Market, March 18, 2015):

In the previous installments of this series, we discussed the hidden and often unspoken crisis brewing within the employment market, as well as in personal debt. The primary consequence being a collapse in overall consumer demand, something which we are at this very moment witnessing in the macro-picture of the fiscal situation around the world. Lack of real production and lack of sustainable employment options result in a lack of savings, an over-dependency on debt and welfare, the destruction of grass-roots entrepreneurship, a conflated and disingenuous representation of gross domestic product, and ultimately an economic system devoid of structural integrity — a hollow shell of a system, vulnerable to even the slightest shocks. Continue reading »

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Mar 20

the-unraveling

- The Unraveling Is Gathering Speed (OfTwoMinds, March 18, 2015):

Debt saturation and debt fatigue = diminishing returns on central bank tricks.

Does anyone else have the feeling that things are not just unraveling, but that the unraveling is gathering speed?
Though quantifying this perception is more interpretative than statistical, I think we can look at the ongoing debt crisis in Greece as an example of this acceleration of events. Continue reading »

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Mar 18

Grexit-2

- Greece Faces Cash Crunch This Friday Without “Plan A Or Plan B”: What Happens Next (ZeroHedge, March 17, 2015):

Greece will need to find €2 billion by Friday in order to repay creditors as Schaeuble, others see no way out. With no contingency plan, Athens’ day of reckoning may be at hand. Morgan Stanley is out today with a note diagramming what happens next.

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Mar 17

- Germany Has Had It With Greece: Schauble Says “Doesn’t Know What To Do With Greece Now” (ZeroHedge, March 16, 2015):

In his fiercest rhetoric yet, Germany’s angry Finance Minister Wolfgang Schaeuble unloaded at a CDU event today:

  • SCHAEUBLE SAYS DOESN’T KNOW WHAT TO DO WITH GREECE NOW
  • SCHAEUBLE SAYS NEW GREEK GOVERNMENT HAS DESTROYED ALL THE TRUST THAT HAD BEEN REBUILT

He went on to explain that “no one I talk to sees how Greek approach can work,” which perhaps explains why Greek 3Y bond yields spiked back above 20% for the first time since the election today.

Some additional headlines: Continue reading »

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Mar 17

Italy

- Italian Bad Debt Hits Record $197 Billion As Bank Lending Contracts For Unprecedented 33 Consecutive Months (ZeroHedge, March 16, 2015):

Repeat after us: the biggest threat facing Europe’s banking system is not a Grexit, is not the Austrian “bad bank” black swan (although it is pretty bad), it is the trillions in non-performing loans on the balance sheets of European banks, which Europe has no idea how to and which continue to multiply in the process threatening to impair depositors with bail-ins (see Cyprus). It is also why, after years of debate, the ECB finally agreed to flood European banks with what it hopes will be over €1 trillion in excess reserves a la the US (of course, if Zero Hedge, and now JPM, is correct, the ECB will break the bond market long before it achieves its goal) in order to mitigate the relentless cash demands of a constantly rising NPLs.

And unfortunately for the third largest issuer of sovereign bonds in the world, Italy – the country all eyes will focus on once Greece and/or Spain exit the Eurozone – when it comes to NPLs things are going from bad to worse because as Reuters reported earlier, citing ABI, gross bad loans at Italian lenders continued to rise, totaling 185.5 billion euros ($196.5 billion) in January from 183.7 billion euros a month earlier.

As the chart below shows, Italy now has over 10% of its  GDP in the form of bad debt.

italy-bad-debt-gdp Continue reading »

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Mar 17

Irish Finance Minister Dumps Stocks - Buys Gold

- Irish Finance Minister Dumps Stocks – Buys Gold (ZeroHedge, March 16, 2015):

- Ireland’s Minister of Finance shifted personal wealth out of stocks and into gold
– Minister invested in SPDR Gold Shares ETF, Portuguese government bonds and other ETFs
– Maintained holdings in bank and agricultural commodities ETFs
– Gold ETF not a safe haven asset – much unappreciated counterparty risk

The Minister for Finance in Ireland, Michael Noonan, sold his shares in funds that track European and US stocks and diversified his portfolio including allocating some of his personal wealth into a gold exchange traded fund (ETF) in 2014. Continue reading »

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Mar 15

varoufakis finger
If the German media needed a photo-op which to put on their front pages and rile up public opinion against Greece even more, they just got it.

- Varoufakis’ “Strategy”: “No Grexit, But Default Inside The Euro, And Stick The Middle Finger To Germany” (ZeroHedge, March 15, 2015):

In a recently uncovered speech by the Yanis Varoufakis that took place in May of 2013, and which was either ingenious or naive beyond comprehension – we can’t decide – or is simply the contradictory stream of consciousness of a financial expert who has become the epitome of saying one thing now, and its diametrical opposite 5 minutes later, the Greek finance minister explains why he was for a Greek default but against returning to the Drachma. Continue reading »

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Mar 14

From the article:

“That the manner in which we live today is about to drastically change, and that this coming change is being hidden from us deliberately by those who wish to use a tactic of financial shock and awe to their ultimate advantage.”

Related info:

- One Last Look At The Real Economy Before It Implodes – Part 1


debt slave1

- One Last Look At The Real Economy Before It Implodes – Part 2 (ALT-MARKET, March 11, 2015):

Consumer spending in the U.S. accounts for approximately 70 percent of gross domestic product, though it is important to note that the manner in which “official” GDP is calculated is highly inaccurate. For example, all government money used within the Medicare coverage system to pay for “consumer health demands,” as well as the now flailing Obamacare socialized welfare program, are counted toward GDP, despite the fact that such capital is created from thin air by the Federal Reserve and also generates debt for the average taxpayer. Government debt creation does not beget successful domestic production. If that was a reality, then all socialist and communist countries (same thing) would be wildly enriched today. This is simply not the case.

That said, the swift decline in manufacturing jobs in the U.S. over the past two decades, including a considerable 33 percent overall decline in manufacturing jobs from 2001 to 2010, leaves only the consumer and service sectors as the primary areas of employment and “production.” The service sector provides about three out of every four jobs available in America, according to the Bureau of Labor Statistics. Continue reading »

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Mar 14

“Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren,” Obama said in a 2006 floor speech that preceded a Senate vote to extend the debt limit. “America has a debt problem and a failure of leadership.”
– Barack Obama

debt-obama


Sinking-dollar-debt

- Debt Ceiling Drama Is Back: Two Days Until US Borrowing Capacity Is Exhausted (ZeroHedge, March 13, 2015):

And so, a little over a year after the last debt ceiling melodrama, in which the US kicked the can on its maximum borrowing capacity to this Sunday, March 15, in the meantime raking up total US public debt to $18.149 trillion the soap opera with the self-imposed borrowing ceiling on America’s “credit card” is back, and the US is once again faced with sad reality of its debt ceiling (now at well over 100% of America’s upward revised GDP of $17.7 trillion). The reason: two days from today Congress’s temporary suspension of the debt ceiling, which was approved in February 2014, ends. Continue reading »

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Mar 13

Related info:

screwed

- Greece Passes Law To Plunder Pension Funds


- Germans Furious After Varoufakis/Tsipras Admit “Greece Will Never Repay Its Debts” (ZeroHedge, March 12, 2015):

The Greco-Germanic war of words continues… Having pissed off The Greeks with his “Troika” remarks, Germany’s Schaeuble went on today to more ad hominum attacks by reportedly calling the Greek FinMin “foolishly naive.” The Greek ambassador has ‘officially’ complained to “friend and ally” Germany about the personal insult. But The Greeks had the last laugh, as first Varoufakis and then Tsipras explained respectively that “Greece would never pay back its debts,” and “Greece cannot pretend its debt burden is sustainable.” The German response, via tabloid Bild, “there must be an end to this madness. Europe must not be made to look stupid.” Continue reading »

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