Jul 15

“What Europe Wants” – to use global issues as excuses to extend its power:

  • environmental issues: increase control over member countries; advance idea of global governance
  • terrorism: use excuse for greater control over police and judicial issues; increase extent of surveillance
  • global financial crisis: kill two birds (free market; Anglo-Saxon economies) with one stone (Europe-wide regulator; attempts at global financial governance)
  • EMU: create a crisis to force introduction of “European economic government”

The Shocking 2008 AIG Report On “Empire Europe” And The Death Of Greece (ZeroHedge, July 15, 2015)

Yesterday, Nomura’s Richard Koo presented one of the better assessments of the situation in Greece, when he said that the “IMF is slowly beginning to understand the Greek economy“, which explains its strategic U-turn, one which now demands far greater debt cuts than what Europe, and Germany in particular, is willing to concede. Continue reading »

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Jul 14

Greek bailout deal highlights monumental scale of Syriza’s betrayal (WSWS, July 14, 2015):

Prime Minister Alexis Tsipras has signed up to an agreement that transforms Greece into a de facto colony of the European Union and places the country under the dictates of Germany.

What remains of the Greek economy, above all its most valuable assets, is to be pillaged so that Athens can continue to pay back loans from the EU, the European Central Bank and the International Monetary Fund.

Greece is to be placed under the direct control of EU officials. The function of Greece’s parliament will be to rubber-stamp the transfer of real authority to Brussels and Berlin. It has until Wednesday to pass a series of laws implementing the demands of German imperialism and the EU. Continue reading »

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Jul 12

Greece May Sue Goldman Over Bank’s Role In Greek Collapse (ZeroHedge, July 12, 2015):

It’s Goldman Sachs’ world, we just happen to live in it.

That rather unfortunate, yet exceedingly accurate, characterization of the global financial and geopolitical landscape seemingly becomes more true with the passage of time and perhaps nowhere is it more evident than Europe, where the common currency experiment (which never had any hope of working without some semblance of a fiscal union) is on the brink of collapse.

Goldman Sachs European Domination

As we noted in “The Biggest Winner From The Greek Tragedy,” the losers from the disintegration of the EMU are ordinary, common, taxpaying Europeans who enjoyed a few brief years of artificial prosperity, which in retrospect was entirely due to debt, masked well by the “currency swaps” and other financial engineering concocted by banks such as Goldman Sachs, in clear violation of the Maastricht treaty which is now a long-forgotten memory of the founding ideals behind the Eurozone. Continue reading »

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Jul 11

Troika Says Greek Proposal Not Enough To Meet Targets, Serves As “Basis For Negotiations” (ZeroHedge, July 11, 2015):

Tsipras betrayed the public trust last night when we rammed through a draft proposal for a Third Greek bailout, one which would push total Greek Debt/GDP over 200%, which the Greek population overwhelming rejected in a democratic vote last weekend. And now, it is up to Europe to decide if it will trust the Greek government, which clearly has no problem lying to anyone, to implement reforms which Greece has been unable to effect for over 5 years.

 

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Jul 10

draghi

Greek Financial Advisor Suing “Politically Motivated” ECB For Crushing Greek Banks (ZeroHedge, July 10, 2015):

The European Central Bank’s decision to reject the Bank of Greece’s request for increases in Emergency Liquidity Assistance (ELA) has, in a nutshell, crushed Greek banks for what appears to be purely political, nogitating-based motives. Greek financial advisor Alcimos (infamous for their heretical comments on the referendum) commenced proceedings before the General Court of the Court of Justice of the European Union, requesting the annulment of the ECB decisions.

The global and European economies are increasingly dominated by bureaucrats taking arbitrary decisions on capital allocation, with little regard for rules or process. The decisions of the ECB to reject the applications of the Bank of Greece for additional funding under ELA could have only been politically motivated, and therefore in clear violation of the ECB’s independence as enshrined in Article 123 TFEU. It is time for EU bureaucrats to stop acting as autocrats. Continue reading »

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Jul 07

Draghi Satan

Peak Central Banker Hypocrisy: ECB Warns On ELA “Moral Hazard” (ZeroHedge, July 7, 2015):

On Monday, the ECB ratcheted up the pressure on the Greek banking sector.

The bank holiday is now in its second week and Greeks have been living with capital controls for nine days. The unequivocal results of Sunday’s referendum suggest that the ‘inconvenience’ of the daily limit on ATM withdrawals and the supplier credit crunch that threatens to empty the shelves at Greek stores hasn’t yet been sufficient to force the country into submission. Continue reading »

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Jul 07

ECB Board Member Says Introduction Of Another Greek Currency “Most Realistic Scenario” (ZeroHedge, July 7, 2015):

ECB Governing Council member and Latvian central bank chief Ilmars Rimsevics — who earlier leaked that the ECB’s new haircut on ELA for Greece will mean the ailing banking sector must now post “a third” more collateral — says the most “realistic scenario” is now for Greece to introduce “another currency.”

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

Rimsevics

Rimsevics also says Sunday’s referendum outcome means Greeks have effectively “voted themselves out of the eurozone.” Here’s more, via Bloomberg: Continue reading »

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Jul 06

ELA Haircut vs Deposit Haircut

It Begins: ECB Hikes Greek ELA Haircuts; Full “Depositor Bail-In” Sensitivity Analysis (ZeroHedge, July 6, 2015):

Earlier today we reported that as Bloomberg correctly leaked, the ECB would keep its ELA frozen for Greek banks at its ?89 billion ceiling level last increased two weeks ago. However we did not know what the ECB would do with Greek ELA haircuts, assuming that the ECB would not dare risk contagion and the collapse of the Greek banking system by triggering a waterfall solvency rush in Greek banks if and when it boosts ELA haircuts. Turns out we were wrong, and as the ECB just announced “the Governing Council decided today to adjust the haircuts on collateral accepted by the Bank of Greece for ELA.”

Full Press Release: Continue reading »

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Jul 06

Greece Financial Crisis Riotsgreece-athens

ECB To Keep Greece On Hold Until Wednesday When Balyasny Sees Rioting Begin (ZeroHedge, July 6, 2015):

As we have repeated since January, and certainly on numerous occasions over the weekend, at this point the only variable is what the ECB will do: will it give insolvent Greek banks more aid, or will it increase its ELA collateral haircut (or even withdraw it altogether), the ramifications of which action would have a dire impact on contagion within the rest of the periphery but most certainly on both the Greek financial system as well as Greek society which is now facing an indefinitely period of capital controls.

A quick reminder: this is how we laid out the dynamic between Greece and the ECB in on January 31, which 6 months later, has played out precisely as forecast: Continue reading »

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Jul 05

ECB currency printing

IOUs It Is: Why Greece May Have A Problem Printing “Rogue” Euro Banknotes (ZeroHedge, July 5, 2015):

 

Previously we reported that in a heretofore unknown exchange, Varoufakis told Telegraph’s Evans-Pritchard that “if necessary we will issue parallel liquidity and California-style IOU’s, in an electronic form. We should have done it a week ago.” Shortly thereafter, SocGen released a note in which it confirmed largely what the Greek finmin may have said, namely that “Greece is likely to issue a form of parallel currency.”

Continue reading »

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Jul 05

euro crisis can kicking failed

Eurogroup In Shock: Finance Ministers “Would Not Know What To Discuss” After Greferendum Stunner (ZeroHedge, July 5, 2015):

Just out from Reuters:

  • FINANCE MINISTERS “WOULD NOT KNOW WHAT TO DISCUSS” AFTER EMERGING GREEK ‘NO’ VOTE-EURO ZONE OFFICIAL

More: Continue reading »

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Jul 05

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Jul 04

Greek dominos

The Greek Bluff In All Its Glory: Presenting The Grexit “Falling Dominoes” (ZeroHedge, July 4, 2015):

Earlier today, Yanis Varoufakis reiterated his core thesis driving the entire Greek approach from day 1 of its negotiations with the Eurogroup: “Europe [stands] to lose as much as Athens if the country is forced from the euro after a referendum on Sunday on bailout terms.”

This is merely a recap of what we said 4 years ago when in July of 2011 we explained “How Euro Bailout #2 Could Cost Up To 56% Of German GDP“, recall: Continue reading »

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Jul 04

Flashback:

Max Keiser on Greece: ‘The IMF is a Financial Mafia’ (April 28, 2010):

The only solution for Greece is to arrest the Goldman Sachs bankers immediately and all those involved in the fabrication of Greek economic data in 2000, when you became a member of the eurozone. The next step is to nationalize all banks like Sweden did in 1993. The International Monetary Fund is that last thing you need. You will lose your sovereignty. It exercises terrorism. You will be raped in such a way, that it will be the worst pain you have ever felt.


Varoufakis accuses Greece’s creditors of ‘terrorism’ ahead of crucial referendum (RT, July 4, 2015):

Greek Finance Minister Yanis Varoufakis has described the actions of Athens’ creditors as “terrorism,” but said agreement with them was inevitable in an interview published hours before a landmark referendum to accept or reject the bailout terms.

“What they are doing with Greece has a name: terrorism,” Varoufakis told Spain’s El Mundo daily. Why have they forced us to close the banks? To make people frightened. And when it comes to spreading terror, this phenomenon is called terrorism.”
Continue reading »

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Jul 04

Could deposits below €100k be protected as it happened in Cyprus? The answer depends on the total amount of deposits above €100k. If there are enough of these large deposits above €100k, then most likely any required deposit haircut will be inflicted on these depositors only. There are no recent data on how big this universe of large deposits is. The most recent data from the European Commission suggest that at the end of 2012, covered (i.e. those below €100k) represented 75% of eligible Greek deposits. We suspect this number is now significantly higher leaving little room for depositors with less than €100k to be spared.

You’ve been warned, Greece!

Flashback:

Here is what happened to Mexico:

Hedge Fund Manager Kyle Bass Explains The New World Order (Panel Presentation):

On Greece:

For those who think a 50% write-down on debt will fix Greece, you have lost your mind. It is only a full wipe-out of the non-TROIKA-owned debt that is the only mathematical way for Greece to have any chance.

Don’t believe these governments when they tell you everything is going to fine. The day before Mexico devalued by 60% they denied that they would ever devalue. They can and will never tell you the truth. Find your own numbers.

Here is what happened to Belarus:

Belarus Devalues Its Currency By 56% Overnight, Against Every Currency Out There:

Luckily for those who held their “money” in the form of gold and silver, they just got an instantaneous 56% value preservation and a relative boost in their purchasing power with just one central bank announcement.


Will Greek Depositors Under €100,000 Be Spared In Case Of A “Bail-In”  (ZeroHedge, July 4, 2015):

One week ago, we first explained that as the Cyprus bail-in “blueprint” scenario unfolds, the one final, and most important, remaining variable in the ongoing Greek drama, soon to devolve to tragedy, is how big the ECB’s ELA haircuts would be in the case of a No vote, which would be the first catalyst of a depositor haircut.

ELA Haircut vs Deposit Haircut

Then, overnight, in a report since denied by both the Greek finance ministry and by the European Banking Authority Plan, the pro-Europe FT did yet another hit piece on Greece desperate to push those Greek voters on the fence ahead of tomorrow’s referendum to vote “Yes” (just think of the lost advertising revenue if say Deutsche Bank were to go under). Continue reading »

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Jul 02

Euro-QE

Goldman “Conspiracy Theory” Validated As ECB Expands QE Program (ZeroHedge, July 2, 2015):

The ECB has expanded the list of SSA securities eligible for purchase under PSPP. The updated list includes:  Continue reading »

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Jul 01

Equities Soar As Tsipras Said Ready To Accept Most Of Expired Bailout Offer, European Response Muted (ZeroHedge, July 1, 2015):

It’s deja vu all over again.

Just hours after Greece became the first developed country to default to the IMF, as a result being expelled from its existing bailout program, a little before 5am CET news hit that Greek PM Tsipras was willing to concede to virtually all creditor demands, with a few exceptions. As the FT first reported, “Greek prime minister Alexis Tsipras will accept most of the bailout creditors’ conditions offered last weekend, but is still insisting on a handful of changes that could thwart a deal according to a letter he sent late on Tuesday night.” Continue reading »

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Jul 01

For Greeks The Nightmare Is Just Beginning: Here Come The Depositor Haircuts (ZeroHedge, June 30, 2015):

With capital controls already imposed on Greece, some have wondered if this is as bad as it gets. Unfortunately, as the Cyprus “template” has already shown us, for Greece the nightmare on Eurozone street is just beginning.

As a reminder, over the past few months there have been recurring rumors that as part of its strong-arming tactics the ECB may eventually move to raise the haircuts the Bank of Greece is required to apply to assets pledged by Greek banks as collateral for ELA. The idea is to ensure the haircuts are representative of both the deteriorating condition of Greece’s banking sector and the decreased likelihood that Athens will reach a deal with its creditors.

Flashback to April when, on the heels of a decree by the Greek government that mandated the sweep of “excess” cash balances from local governments to the Bank of Greece’s coffers, Bloomberg reported that the ECB was considering three options for haircuts on ELA collateral posted by Greek banks. “Haircuts could be returned to the level of late last year, before the ECB eased its Greek collateral requirements; set at 75 percent; or set at 90 percent,” Bloomberg wrote, adding that “the latter two options could be applied if Greece is in an ‘orderly default’ under a formal ECB program or a ‘disorderly default.’”  Continue reading »

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Jul 01

europe-the-final-countdown


Europe’s Controlled Demolition (Tha Automatic Earth, June 30, 2015):

I have plenty to say on the topic of this essay. But the most important thing I think is that I know the EU is blowing up itself by trying to exert far too much influence on the very member nations that made its existence possible. Brussels is a blind city. To see it blowing itself to smithereens makes me very happy.

The flipside is that it will take a lot of pain, and probably even the very wars the EU was originally founded to prevent, to figuratively burn it to the ground. But that, if you’ll allow me, is for another day: Continue reading »

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Jun 30

draghis-bazooka

ECB Says “Grexit Can No Longer Be Excluded”, Hints At More QE (ZeroHedge, June 29, 2015):

It seems Goldman Sachs’ conspiracy theory was right all along…

ECB’S COEURE SAYS ECB IS EVEN READY TO USE NEW INSTRUMENTS, WITHIN ITS MANDATE
GREECE COULD EXIT EURO, COEURE SAYS IN LES ECHOS INTERVIEW

This is exactly what The ECB wanted all along (and their leaders overlords)all they needed was an ‘excuse’. Or, in the parlance of Rahm Emanuel’s times, “Let no Greek default crisis go to QE waste.”

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Jun 28

ECB problem chart

–  The ECB Suddenly Has A Huge Headache On Its Hands (ZeroHedge, June 28, 2015):

Last week we reported that as a result of the relentless surge in the Greek deposit flight, which may finally end tonight if, as now appears almost certain, the Greek government imposes capital controls, the ECB’s claims on the Greek banking system have now surpassed the total amount of Greek deposits… Continue reading »

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Jun 28

A little under 24 hours before Europe opens for trading, and just under 12 hours before the open of equity futures, and things are not looking good.


Draghi Freezes Greek ELA, Varoufakis Tells BBC “Looking At Imposing Capital Controls, Closing Banks” (ZeroHedge, June 28, 2015)

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Jun 25

Bundesbank Slams ECB’s “Bridge Financing” To Greece (ZeroHedge, June 24, 2015):

The Bundesbank’s Jens Weidmann unleashed a litany of cticisim on the Eurosystem (read the ECB) when he said that Greek banks should not continue to buy the short-term debt of their government, which is then repoed back to the ECB in exchange for precious cash. “The Eurosystem must not provide bridge financing to Greece even in anticipation of later disbursements,” said Weidmann, who also sits on the European Central Bank’s Governing Council, which approves such funding to Greece. “When banks without access to the markets buy debt of a sovereign which is likewise locked out of the market, taking recourse to ELA raises serious monetary financing concerns,” he said in a speech to be delivered at a conference in Frankfurt.

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Jun 22

Mario-Draghi-laughingdraghi prayer

Goldman’s “Conspiracy Theory” Stunner: A Greek Default Is Precisely What The ECB Wants (ZeroHedge, June 22, 2015):

“… the immediate aftermath of such a non-payment will be to push bond yields up across the periphery. This rise in the fiscal risk premium (Exhibit 3) will of course be limited, because the ECB will likely accelerate QE, including via the Bundesbank. That will push rate differentials, especially longer-dated ones, against EUR/$. We estimate that the initial fiscal risk premium effect could be three big figures, while the subsequent QE effect could be worth around seven big figures”

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Jun 21

Merkel Tsipras

Greece Told To Have A Deal Ready Before Monday Meeting; Tsipras Submits Revised Plan With No Pension Cuts (ZeroHedge, June 21, 2015):

Update: the farce must go on because according to Bloomberg the “final final” Greek proposal never made it, and was, ahem, lost in tranmission: EU HAS RECEIVED NO NEW PROPOSAL FROM GREECE YET: EU DIPLOMAT – BLOOMBERG

* * *

With just under 24 hours until Monday’s final summit after which even JPMorgan now agrees the ECB will be forced to use a nuclear option and limit or cut Greek ELA thus imposing capital controls as a “negotiating tactic”, earlier today both France and Germany told Greece it must have a reform deal agreement with the Troika finalized and delivered before a crucial leaders’ summit between Athens and its creditors on Monday; in other words before trading opens on Monday. Continue reading »

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Jun 21

H/t reader M.G.:

“Unless all three creditors agree that Greece can borrow more money to make a payment………nothing will work? Reading this article tells me the entire plan is insane…………..


Greece

Greece and eurozone leaders in last-ditch scramble to reach deal (Guardian, June 21, 2015):

Greek prime minister, Alexis Tsipras, is thought to have offered concessions on VAT and pensions in return for some form of eventual debt relief

The Greek prime minister, Alexis Tsipras, and European leaders were attempting to stitch together a last-minute Greek bailout deal on Sunday following a frantic round of phone calls to discuss an outline agreement.

The high-level diplomacy comes as eurozone finance ministers and their government leaders prepare for a key summit in Brussels on Monday that could determine whether or not Greece remains a member of the group. Continue reading »

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Jun 20

EurosPrint

Meanwhile, Greece Is Quietly Printing Billions Of Euros (ZeroHedge, June 20, 2015):

Earlier today we showed why Greece is now literally living on borrowed time. The combined €2.9 billion in ELA cap increases ‘generously’ bestowed upon the flailing Greek banking sector by the ECB last week looks to have been barely enough to keep things from “ending very differently” (to quote Kathimerini) at the ATMs on Friday.

But perhaps more importantly from a big picture perspective, Greece may have already breached the upper limit of its borrowing base. JPM calculates Greek banks’ eligible collateral at €121 billion (€38 billion in EFSF bonds €8 billion in government securities, and €75 billion in “credit claims”). With Friday’s ELA increase, the country’s total borrowings (that’s OMO plus ELA) amount to some €125 bilion. Why would the ECB allow this? Because it knows the breach will be promptly limited or reversed on Monday, or there will be a deal.

So, it is literally “deal or no deal” time, because if JPM is correct and eligible collateral was either exhausted two weeks ago or, in the best case scenario, is right at the limit, capital controls will need to be put in place as early as Tuesday at which point the ATMs will officially stop dispensing freshly-minted euros which, incidentally, brings up an important point. As Barclays notes, during the same period over which Greek banks lost nearly €30 billion in deposits, banknotes in circulation jumped by some €13 billion. In short, because Greeks are increasingly prone to stuffing their euros in mattresses, a large proportion of the deposit flight has come in the form of hard currency withdrawals, meaning the Bank of Greece is forced to (literally) print billions in physical banknotes: Continue reading »

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Jun 20

“The Collateral Has Run Out” – JPM Warns ECB Will Use Greek “Nuclear Option” If No Monday Deal (ZeroHedge, June 20, 2015)

“If no agreement is reached on Monday, then the ECB will have little reason to show further flexibility and it will likely freeze its ELA limit on Greek banks. As a result capital controls will become almost inevitable after Monday.”

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Jun 19

ECB Gives Greek Banks Barely Enough Cash To Cover One Day’s Bank Run  (ZeroHedge, June 19, 2015):

Yesterday evening, after what had been a dramatic surge in the Greek bank run which has resulted in over €3 billion in cash withdrawn through Thursday night, the Greek central bank requested an emergency cash dispensation from the ECB under the country’s Emergency Liquidity Assistance program, just one day after the ECB granted the latest €1.1 billion expansion in the ELA. Rarlier today, in an unscheduled session, the ECB did as requested, however it granted Greece far less than the amount it sought, and according to MarketNews reports, the ECB gave Greece just €1.8 billion in addition funds.

This means that Greek deposits have declined by over €5 billion in the past 7 days alone, as indicated by the surge in the ELA from €80.7 billion on June 10 to €85.9 billion currently.

Worse, as Reuters reported moments ago, on Friday alone there was another €1.2 billion in deposit outflows which means that the entire ELA increase has already been used up, and Greece is again facing the abyss. Continue reading »

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Jun 17

Greek Debt Committee Just Declared All Debt To The Troika “Illegal, Illegitimate, And Odious” (ZeroHedge, June 17, 2015):

It was in April when we got a stark reminder of a post we first penned in April of 2011, describing Odious Debt, and why we thought sooner or later this legal term would become applicable for Greece, because two months ago Greek Zoi Konstantopoulou, speaker of the Greek parliament and a SYRIZA member, said she had established a new “Truth Committee on Public Debt” whose purposes was to “investigate how much of the debt is “illegal” with a view to writing it off.”

Moments ago, this committee released its preliminary findings, and here is the conclusion from the full report presented below:

All the evidence we present in this report shows that Greece not only does not have the ability to pay this debt, but also should not pay this debt first and foremost because the debt emerging from the Troika’s arrangements is a direct infringement on the fundamental human rights of the residents of Greece. Hence, we came to the conclusion that Greece should not pay this debt because it is illegal, illegitimate, and odious. Continue reading »

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