Apr 26

parthenon

Capital Controls Arrive: Greece Begins Confiscating Deposits Of “Small Debtors” (ZeroHedge, April 26, 2015):

Last week, the Greek government issued a decree which called for local governments to transfer excess cash to the central bank so that Athens would be able to pay pensions, salaries, and the IMF. The move is expected to raise as much as €2 billion to help keep the country afloat while the country’s “amateurish, time-wasting gambler” of a FinMin feebly attempts to find some kind of middle ground with his EU counterparts and as PM Tsipras pulls out all the stops including the old EU Summit sideline end-around with Merkel and the wild card energy gas pipeline advance from Gazprom (which may portend the dreaded “Russian pivot”).

If the “temporary” local government reserve sweep constitutes what we have branded “soft” capital controls, we now have the first evidence that the “hard” variety may have arrived because as Kathimerini reports, Greek debtors are having their deposits seized in lieu of payment. Continue reading »

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Apr 21

gold_bar2

– The Mystery Of China’s Gold Holdings Is Coming To An End (ZeroHedge, April 21, 2015):

Back in 2011, Zero Hedge first asked the key question that matters to the gold market: what are China’s true holdings of physical gold.

As is well known, the last time China did provide an update of its official gold inventory was in early 2009 when it disclosed to the IMF some 1,054.1 tons of gold held at the PBOC headquarters (or elsewhere).  The problem is that this number is now very outdated, and substantially undercuts China’s true gold holdings. Continue reading »

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Apr 20

As a side note:

If you take advice from Krugman, then you are either a bloody idiot, …

Paul-Krugman-Keynesians-Fail

… or an elite puppet (or both).


–  Did Greece Just Launch Capital Controls: “Mandatory Cash Transfer” Decreed Due To “Extremely Urgent Need” (ZeroHedge, April 20, 2015):

We warned last week that capital controls were inevitable and it apears the first steps have been taken (very quietly):

  • GREECE ISSUES DECREE: LOCAL GOVTS OBLIGED TO TRANSFER DEPOSIT RESERVES AT CENTRAL BANK

So, following the pension fund raid, the Greek government is now centralizing all Greek cash citing an extremely urgent and unforeseen need.”.

One wonders if this is per Krugman’s advice?

Tsipras-Krugman

As Bloomberg reports: Continue reading »

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Apr 16

If you said these are all things that current or former IMF heads are or have been accused of, you are 100% correct.


IMF

Spot The Common Theme: Prostitution Scandals, Kickbacks And Money Laundering (ZeroHedge, April 16, 2015):

First it was DSK with his ‘frequent’ sex-parties, rape charges, and pimpin’ hookers.

Ex-IMF chief Dominique Strauss-Kahn (DSK) – who denies charges of pimping – has told a court in northern France that prosecutors had greatly exaggerated the frequency of his “licentious evenings.” In fact, as The BBC reports, DSK explained (with a straight face) that he took part in only a few rare sex parties – “only 12 parties the last 3 years.”

As he took the stand on Tuesday, Mr Strauss-Kahn said: “I committed no crime, no offence.”

“The prosecution gives the impression of unbridled activity,” he told the court. But, he added: “There were only 12 parties in total – that is four per year over three years.”

Then came Christine Lagarde’s corruption and kickbacks scandal.

In 2008, Lagarde decided to allow an arbitration to end a dispute between Bernard Tapie, a businessman and supporter of then President Nicolas Sarkozy, and former state-owned bank Credit Lyonnais. Lagarde, who was put under investigation for “negligence” by the Cour de Justice de la Republique, denied any wrongdoing, saying it was the best option for the state. Continue reading »

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Apr 14

xi-jinping-vladimir-putin

Russia officially joins $50bn China-led infrastructure bank (RT, April 14, 2015):

On Tuesday Russia officially becomes a founder of the China-led Asian Infrastructure Investment Bank (AIIB). It means Russian companies can take part in infrastructure projects in the Asia-Pacific region, and could attract foreign investment into Russia.

Russia applied for membership as a founding member of the AIIB 2 weeks ago, along with another 52 countries. The founding members have the right to establish the rules guiding the bank’s activities. China reportedly had rejected requests from North Korea and Taiwan to join the AIIB. The final list of the bank’s founding members will be announced on April 15. Continue reading »

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Apr 14

Sure!


Greek Prime Minister Alexis Tsipras
Greek Prime Minister Alexis Tsipras

Greece isn’t preparing default – Tsipras dispels rumor (RT, April 14, 2015):

Greece isn’t planning a debt default, contrary to reports in the Financial Times, says Prime Minister Alexis Tsipras.

“Greece … is not preparing for any debt default and the same goes for its lenders. Negotiations are proceeding swiftly towards a mutually beneficial solution,” Prime Minister Tsipras’ office said in a statement, Reuters reported.

Greece is scheduled to make several payments to the IMF in the next few months. On May 1 €203 million is due, another €770 million on May 12, and about another €1.6 billion in June in Special Drawing Rights (SDRs), an artificial currency created by the IMF that the institution uses to give out extra funds. Continue reading »

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Apr 11

bis-bank-for-international-settlements-basel-switzerland

Meet The Secretive Group That Runs The World (ZeroHedge, April 11, 2015):

Over the centuries there have been many stories, some based on loose facts, others based on hearsay, conjecture, speculation and outright lies, about groups of people who “control the world.” Some of these are partially accurate, others are wildly hyperbolic, but when it comes to the historic record, nothing comes closer to the stereotypical, secretive group determining the fate of over 7 billion people, than the Bank of International Settlements, which hides in such plain sight, that few have ever paid much attention.

BIS committee

This is their story.

BIS table

First unofficial meeting of the BIS Board of Directors in Basel, April 1930

* * *

The following is an excerpt from TOWER OF BASEL: The Shadowy History of the Secret Bank that Runs the World by Adam LeBor.  Reprinted with permission from PublicAffairs.

The world’s most exclusive club has eighteen members. They gather every other month on a Sunday evening at 7 p.m. in conference room E in a circular tower block whose tinted windows overlook the central Basel railway station. Their discussion lasts for one hour, perhaps an hour and a half. Some of those present bring a colleague with them, but the aides rarely speak during this most confidential of conclaves. The meeting closes, the aides leave, and those remaining retire for dinner in the dining room on the eighteenth floor, rightly confident that the food and the wine will be superb. The meal, which continues until 11 p.m. or midnight, is where the real work is done. The protocol and hospitality, honed for more than eight decades, are faultless. Anything said at the dining table, it is understood, is not to be repeated elsewhere. Continue reading »

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Apr 09

IMF Payment Sends Greek Yields Lower; Athens Warns “Next Month Is A Different Matter” (ZeroHedge, April 9, 2015):

A central bank official, according to The FT, said that Greece has repaid the €450m it owed the International Monetary Fund today. Bond yields have fallen across the Greek curve with 10Y GGBs now at 11.1% (down 70bps from Tuesday’s highs). Greek stocks are not as impressed and are giving back their gains. Tsipras, on return from Moscow, explained Greece “was not a beggar…asking other countries to solve its problem,” but as a senior Greek official earlier this week said that while it would be able to make Thursday’s IMF repayment, it will still exhaust its cash reserves very soon and “next month is a different matter.” HSBC points out that the real crisis point looms on the 12th May and FinMin Varoufakis warns the “asymmetric union” that they “have learned nothing from economic history.”

Greece Wins More ECB Emergency Cash (Bloomberg, April 9, 2015):

Greece secured an increase in emergency funding available to its banks as Finance Minister Yanis Varoufakis said he’s confident of reaching an aid agreement with European partners this month.

The European Central Bank’s Governing Council raised the cap on Emergency Liquidity Assistance provided by the Bank of Greece by 1.2 billion euros ($1.3 billion) to 73.2 billion euros in a telephone conference on Thursday, said two people familiar with the discussion. That was more than the 700 million-euro increase granted last week. An ECB spokesman declined to comment. Continue reading »

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Apr 09

euro-coin

EUpocalypse Now?! Greece Demands WWII Reparations From Germany (The Corbett Report, April 7, 2015):

Regular readers of this column will remember when I “boldly” predicted that Syriza would change nothing regarding the Greek status quo and that those celebrating the party’s election win earlier this year were going to be as sorely disappointed as Obama’s “Hope & Change” cheerleaders. Actually, it wasn’t such a bold prediction for those who understand that the only meaningful changes that are ever going to happen are going to be structural changes implemented bottom-up in peer-to-peer decentralized economic systems that have nothing to do with regional currencies, central banks or deals with the IMF, but some people treated it as a bold prediction.

Sadly enough for the Greek people (with whom I truly do sympathize) that prediction was all too accurate. Since Syriza’s dramatic “no talks with the troika” rhetoric to their talks with the troika (oh, I’m sorry, the “Brussels Group“) to their inevitable complete cave-in (and re-cave-in) they have fallen all over themselves to make their payments to the banksters, complete all the bankster-assigned homework, and pledge their fealty to the banksters (in the only language the banksters understand, of course: fiat debt money and austerity conditions). And still, the banksters use every opportunity to remind Syriza and its supporters who’s really calling the shots in Athens (hint: it’s not Tsipras). Continue reading »

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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 03

Greece

Tsipras Heads To Moscow As IMF Withdraws Athens Staff; Greek Default Risk Hits Post-Crisis High (ZeroHedge, April 2, 2015):

Amid growing pressure from their ‘Troika colleagues’ with Eurogroup Chair Dijsselbloem noting there is “still a long way to go” on Greek proposals and The IMF withdrawing its staff in Athens; new prime minister Alexis Tsipras heads to Russia to meet with Putin early next week. As Kremlin spokesman, Dmitry Peskov noted – somewhat intriguingly – “Greece has not asked [Russia] for financial aid… yet,” as Tsipras is expected to seek agreement for a ‘road map’ of initiatives on the political and economic levels. Greek default risk has resurged in the last few days to its highest since the last ‘restructuring’…

Greek default risk hits post-crisis highs…

Greece-CDS-default-risk-on

With friends like this… Continue reading »

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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 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 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 12

THE IMF WAS HERE


‘New IMF loan to Ukraine will go down the drain’ (RT, March 11, 2015):

President Poroshenko’s government is far more corrupt and less efficient than the previous one, according to Martin Sieff, columnist for the Baltimore Post-Examiner. It’s like a black hole, the more money you pour in the less you will have, he added.

– IMF approves $17.5bn bailout package for Ukraine (RT, March 11, 2015):

The International Monetary Fund (IMF) board of directors signed off on Ukraine’s new $17.5 billion package of financial aid Wednesday, IMF chief Christine Lagarde has announced.

Lagarde however did not provide details on how large an initial payment will be made to Ukraine or on what timetable.

“This new four-year extended arrangement will support immediate economic stabilization in Ukraine,” she said.

The first immediate payment from the IMF will consist of $5 billion, Ukrainian Prime Minister Arseny Yatsenyuk announced at a cabinet meeting on Wednesday, RBC Ukraine reported. He also said the newly approved financial help would allow Ukraine to receive $7.5 billion in other loans. Continue reading »

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Mar 09

Eurogroup Humiliation Of Greece Complete: The Troika Is Coming Back To Athens (ZeroHedge, March 9, 2015):

Having been shamed what seems like numerous times now by the Eurogroup in recent weeks, Greece suffered its greatest humiliation today. First, the farcical renaming of ‘Troika‘ to ‘Institutions’ was summarily dismissed as “semantics,” as France played good cop (asking for the group not to call it Troika) while Germany’s bad-cop Schaeuble used the T-word four times in one interview. And second, Eurogroup chairman Dijsselbloem stated that “technical teams will begin considering Greek reform plans on Wednesday,” adding that some of the negotiations will have to take place “in situ in Athens.” So instead of discussing reforms with institutions in Brussels, the Varoufakis-defined “cabal of technocrats” Troika will be back on Greek soil to straighten out the nation. Continue reading »

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Mar 08

Greece “Risks Bankruptcy” As Europe Rejects Varoufakis Payment Plan; Another Referendum Fiasco Ensues (ZeroHedge, March 8, 2015):

There was one reaction by the Eurogroup following the (delayed) submission of the Greek 7-point reform proposal – which includes the brilliant idea to use foreign tourists as wired, part-time tax spies – in advance of the latest Monday finmin meeting: laughter.

Financial Times reports that the reaction from eurozone officials to the tourist plan was received with humor. They thought the proposal was hilarious and even laughed when they read it. “It’s quite hilarious, if it were not so tragic, that this is what a government in an industrialised country comes up with,” said one eurozone official involved in the talks.

There will be little laughter in cash-strapped Greece, however, if the Sunday Times is correct in its report that the “Eurogroup finance ministers are to reject radical reform proposals from Greece at a meeting in Brussels tomorrow.” Continue reading »

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Mar 08

H/t reader squodgy:

“It must be frightening having to continuously cough up endless sums to fund an economically, tactically & militarily bankrupt puppet Government who are up against a patriotic independence movement backed by a genius.”

See also:

Lord Rothschild Warns Investors: ‘Geopolitical Situation Most Dangerous Since WWII’


Rothschild Seeks to Advise Ukraine Bondholders in Debt Talks (Bloomberg, March 6, 2014):

Rothschild is seeking to advise Ukraine’s bondholders in restructuring talks with a government struggling to avert default after a year of fighting with rebels crippled its economy.

The company’s Paris-based sovereign advisory team has been in contact with creditors, Giovanni Salvetti, who handles central and eastern Europe and the Commonwealth of Independent States. Bondholders are bracing for harsh terms as the looming debt revamp drove the nation’s $2.6 billion of notes due in July 2017 below 50 cents to the dollar since mid-February. Continue reading »

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Mar 05

IMF Director Admits: Greek Bailout Was “To Save German & French Banks” (ZeroHedge, March 4, 2015):

For the first time in public, though practically the entire world assumed it, an official from The IMF has admitted that the various Greek bailouts were not for The Greeks at all… “They gave money to save German and French banks, not Greece,” Paolo Batista, one of the Executive Directors of International Monetary Fund told Greek private Alpha TV on Tuesday. As KeepTalkingGreece reports, Batista then went on to strongly criticized not only the euro zone and the European Central Bank but also the IMF and the Fund’s managing Director Christine Lagarde for defending Europe much too much

Oops! “The Greek issues were not the best handled by The IMF… They put too much of a bruden on Greece and not enough of a burden on Greece’s creditors

Batista then urged Greece to directly negotiate with the IMF and favored the restructuring of the Greek debt that is been hold by the European partners. Continue reading »

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Mar 02

As Greek Default Fears Return, Government Considers “Borrowing” Pensions To Repay IMF (ZeroHedge, March 2, 2015): 

Greek short-term default risk jumped over 300bps today putting the odds of a restructuring at 50-50 within the next year as the warnings we issued last week with regard Greece’s imminent default on its IMF loan loom. Seeking to reassure its lenders (and avoid yet more capital flight), Reuters reports the Greek government said it was “exploring solutions,” including delaying payments to suppliers or try to raise up to 3 billion euros by borrowing from state entities such as pension funds.    Continue reading »

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