Oct 06

IMF Cuts Global Growth For The Fourth Time In 12 Months… But That’s Not The Biggest Problem

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Sep 04


The IMF Just Confirmed The Nightmare Scenario For Central Banks Is Now In Play (ZeroHedge, Sep 4, 2015):

The most important piece of news announced today was also, as usually happens, the most underreported: it had nothing to do with US jobs, with the Fed’s hiking intentions, with China, or even the ongoing “1998-style” carnage in emerging markets. Instead, it was the admission by ECB governing council member Ewald Nowotny that what we said about the ECB hitting a supply brick wall, was right. Specifically, earlier today Bloomberg quoted the Austrian central banker that the ECB asset-backed securities purchasing program “hasn’t been as successful as we’d hoped.

Why? “It’s simply because they are running out. There are simply too few of these structured products out there.” Continue reading »

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Aug 28

Russian president Vladimir Putin

Putin To Get $3 Billion From US Taxpayers After Ukraine Bond Debacle (ZeroHedge, Aug 28, 2015):

On Thursday, Ukraine struck a restructuring agreement on some $18 billion in Eurobonds with a group of creditors headed by Franklin Templeton. The deal calls for a 20% writedown and a reprofiling that includes a maturity extension of four years and an across-the-board 7.75% coupon. All told, Kiev should save around, let’s just call it $4 billion once everything is said and done (there are some miscellaneous loans and bonds that still have to be worked out).

That’s the good news.

The bad news is that Ukraine also owes $3 billion to Vladimir Putin.

Now obviously, owing Vladimir Putin $3 billion is not a situation one ever wants to find themselves in, but this particular case is exacerbated by the fact that Putin did not loan the money to Ukraine as we know it now, he loaned the money to a Ukraine that was governed by Russian-backed Viktor Yanukovych. Of course Yanukovych was run out of the country last year following a wave of John McCain-attended protests. Continue reading »

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Aug 23

currency wars

– China chooses her weapons (Gold Money Aug 20, 2015):

China’s recent mini-devaluations had less to do with her mounting economic challenges, and more to do with a statement from the IMF on 4 August, that it was proposing to defer the decision to include the yuan in the SDR until next October

The IMF’s excuse was to avoid changes at the calendar year-end and to allow users of the SDR time to “adjust to a potential changed basket composition”. It was a poor explanation that was hardly credible, given that SDR users have already had five years to prepare; but the decision confirming the delay was finally released by the IMF in a statement on Wednesday 19th. Continue reading »

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Aug 19

No SDR For You: IMF Tells China To Wait At Least One Year Until Reserve Basket Inclusion (ZeroHedge, Aug 19, 2015):

If there was any confusion as to whether the recently devalued Chinese yuan would be landing in the IMF SDR basket on January 1, the Fund just cleared it up.

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Aug 14

H/t reader squodgy:

US Military Uses IMF and World Bank to Launder 85% of Its Black Budget (Anti Media, Aug 13, 2015):

Though transparency was a cause he championed when campaigning for the presidency, President Obama has largely avoided making certain defense costs known to the public. However, when it comes to military appropriations for government spy agencies, we know from Freedom of Information Act requests that the so-called “black budget” is an increasingly massive expenditure subsidized by American taxpayers. The CIA and and NSA alone garnered $52.6 billion in funding in 2013 while the Department of Defense black ops budget for secret military projects exceeds this number. It is estimated to be $58.7 billion for the fiscal year 2015.

What is the black budget? Officially, it is the military’s appropriations for “spy satellites, stealth bombers, next-missile-spotting radars, next-gen drones, and ultra-powerful eavesdropping gear.Continue reading »

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Jul 27


– Goodbye Troika: Germany Rides Into Its Greek Colony On The “Quadriga” (ZeroHedge, July 27, 2015):

With creditors’ motorcades having officially returned to the streets of Athens in the wake of Greek lawmakers’ approval of the second set of bailout prior actions last Wednesday, tensions are understandably high.

After all, these are the same “institutions” which Yanis Varoufakis famously booted from Greece after Syriza swept to power in January, and they’ve come to represent the oppression of the Greek people and are now a symbol of the country’s debt servitude.

Although an absurd attempt was made to rebrand the dreaded “troika” earlier this year, the new and rather amorphous moniker – “the institutions” – never really stuck and perhaps because everyone involved felt the need to put a new name to the group that Greeks regard as the scourge of the Aegean in order to make negotiators feel safer on their trips to Athens, creditors have now added the ESM to their collective and rebranded themselves “The Quadriga.” 

Apparently (and unfortunately), this is not a joke. Here’s MNI: Continue reading »

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Jul 26

–  Greek Capital Controls To Remain For Months As Germany Pushes For Bail-In Of Large Greek Depositors (ZeroHedge, July 26, 2015):

Two weeks ago we explained why Greek banks, which Greece no longer has any direct control over having handed over the keys to their operations to the ECB as part of Bailout #3’s terms, are a “strong sell” at any price: due to the collapse of the local economy as a result of the velocity of money plunging to zero thanks to capital controls which just had their 1 month anniversary, bank Non-Performing Loans, already at €100 billion (out of a total of €210 billion in loans), are rising at a pace as high as €1 billion per day (this was confirmed when the IMF boosted Greece’s liquidity needs by €25 billion in just two weeks), are rising at a pace unseen at any time in modern history. Continue reading »

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Jul 18

draghi prayer

Was Greece Set Up To Fail? (The Automatic Earth, July 18, 2015):

An entire economy is being deliberately suffocated, and all in all it’s just total madness. Quiet madness, though (update: and then the riots broke out..).

Two things I’ve been repeatedly asked to convey to you are that: Continue reading »

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Jul 17


More smoke and mirrors …

Ex-IMF Chief: Germany Should Leave The Euro, Not Greece (ZeroHedge, July 17, 2015)

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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

“Several days ago when we first calculated that the new Greek debt/GDP post bailout #3 will promptly hit 200%, something the IMF agreed with earlier today. But it won’t stop here, and as the  following analysis from Michael Lebowitz at 720 Global shows, just based on the country’s negative growth rate and positive interest rate, Greek debt/GDP will keep rising indefinitely and will likely hit 336% in about one decade, at which point Greece will, for all intents and purposes, cease to exist.”

Greek Debt/GDP: 336% By 2025 (ZeroHedge, July 14, 2015):

Back in 2012, when the IMF forecast that by 2022 Greek debt would become sustainable (under 120%) we laughed, and laughed, then laughed some more (see: The Farcical Tragicomedy Of The “Sustainable” Greek Debt/GDP “Denominator from November, 2012)

Three years later the IMF itself not only admitted its original Greek debt “sustainability” predictions were total garbage (hence our quarterly humor series presenting the latest and greatest IMF projections about world growth), of which the most humorous was its forecast of Greek 2016 GDP growth as the highest in the entire Eurozone…

IMF Greece growth

… but the IMF itself, under pressure from Washington, has become the biggest advocate of debt forgiveness, just not its own debt: that of the ECB will do nicely. Continue reading »

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Jul 14


“The dramatic deterioration in debt sustainability points to the need for debt relief on a scale that would need to go well beyond what has been under consideration to date – and what has been proposed by the ESM. European countries would have to give Greece a 30-year grace period on servicing all its European debt, including new loans, and a very dramatic maturity extension, or else make explicit annual fiscal transfers to the Greek budget or accept ‘deep upfront haircuts’.”

Or, more simply: “Mark it zero.”

IMF Declares War On Germany: In “Secret” Report Lagarde Says Greece Will Need Massive Debt Relief (ZeroHedge, July 14, 2015):

Update: Europe now looks to be in damage control mode. Here’s Reuters:


A divide between the IMF and Europe (read: Germany), regarding writedowns on Greece’s debt to the EU has been brewing for quite some time and recently returned to the international spotlight when, a few months back, the Fund indicated debt relief was a precondition for its participation in any further aid for Athens. Continue reading »

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Jul 14

Complete Humiliation: Greek Parliament Pressed To “Approve” German “Coup” (ZeroHedge, July 14, 2015):

Months ago we said the following about the future of Greek politics:

It is becoming increasingly clear that the Syriza show will ultimately have to be canceled in Greece (or at least recast) if the country intends to find a long-term solution that allows for stable relations with European creditors although it may be time for Greeks to ask themselves if binding their fate to Europe is in their best interests given that some EU officials seem to be perfectly fine with inflicting untold economic pain upon everyday Greeks if it means usurping the ‘radical leftists.’

At the risk of overstating the case, that assessment has now proven to be almost entirely accurate.  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 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 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

Ahead Of Dark ATMs, Import Shortages, Tsipras Goes Back To Brussels Begging For Bailout (ZeroHedge, July 7, 2015):

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.

EU finance ministers will convene in Brussels first, followed by a meeting of European leaders which is scheduled to begin at 6 pm local time. According to Sueddeutsche Zeitung, the Greek delegation will table a proposal that looks quite a bit like what voters explicitly rejected on Sunday. Here’s more (Google translated): 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 06


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.



Greece Set To Restart Negotiations, IMF “Ready To Assist” Greece, Lagarde Says (ZeroHedge, July 6, 2015):

Just hours after receiving a clear mandate from the Greek people to stand firm in the face of calls for more austerity, the Greek government, squeezed by an acute liquidity shortage in the collapsing banking sector, is set to head back to the negotiating table seeking to “restore liquidity” and find a “sustainable” solution to the country’s debt problem. From Bloomberg:


Speaking of finding a “sustainable” solution (i.e. one that includes writedowns), the IMF, whose well-timed report on the necessity of Greek debt haircuts might well have played a vital role in cementing a victory for the “no” vote on Sunday, is now “ready to help” the Greeks. Here’s Christine Lagarde: 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:


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


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!


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 03

… at this very moment, politicians from Spain’s Podemos to Italy Five Star movement are drafting memos demanding that the IMF evaluate their own debt sustainability. Or rather unsustainability.

Did The IMF Just Open Pandora’s Box? (ZeroHedge, July 3, 2015):

By now it should be clear to all that the only reason why Germany has been so steadfast in its negotiating stance with Greece is because it knows very well that if it concedes to a public debt reduction (as opposed to haircut on debt held mostly by private entities such as hedge funds which already happened in 2012), then the rest of the PIIGS will come pouring in: first Italy, then Spain, then Portugal, then Ireland. Continue reading »

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Jul 03

The Troika Turns Europe Into A Warzone (The Automatic Earth, July 3, 2015):

So now they do it. Now the IMF comes out with a report that says Greece needs hefty debt restructuring.

Mind you, their numbers are still way off the mark, in the end it’s going to be easily double what they claim. Not even a Yanis Varoufakis haircut will do the trick.

But at least they now have preliminary numbers out. The reason why they have is inevitably linked to the press leak I wrote about earlier this week in Troika Documents Say Greece Needs Huge Debt Relief. If that hadn’t come out, I’m betting they would still not have said a thing.

It’s even been clear for many years to the IMF that debt restructuring for Greece is badly needed, but Lagarde and her troops have come to the Athens talks with an agenda, and stonewalled their own researchers. 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’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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