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“No Deal”: Tsipras Says Creditors Did Not Accept Greek Proposal
“No Deal”: Tsipras Says Creditors Did Not Accept Greek Proposal
Who could have possibly foreseen that the IMF would throw up all over the Greek “proposal”… aside from this post here “Why The IMF Will Reject The Latest Greek Proposal In Just Two Numbers” yesterday afternoon of course. In any event, moments ago Bloomberg reported that just as we wrote here yesterday afternoon, there is no deal and that Greek PM Alexis Tsipras told his associates that creditors not accepting equivalent fiscal measures has never happened before, according to a Greek govt official, who asked not to be named in line with policy.
Creditors “not accepting parametric measures has never happened before. Neither in Ireland, nor in Portugal, nor anywhere. This strange stance can hide two scenarios; they either don’t want an agreement or serve specific interests in Greece,” the official cited Tsipras as saying.”
As a reminder, Tsipras is meeting Wednesday with European Central Bank President Mario Draghi, International Monetary Fund Managing Director Christine Lagarde and European Commission President Jean-Claude Juncker in an effort to reach a deal before Greece’s bailout expires and about 1.5 billion euros ($1.7 billion) in payments come due to the IMF on June 30.
Here is the man himself tweeting as much and confirming that the blame game continues:
The repeated rejection of equivalent measures by certain institutions never occurred before-neither in Ireland nor Portugal. #Greece (1/2)
…click on the above link to read the rest of the article…
When Bonds Go Kaboom!
When Bonds Go Kaboom!
We’re not the only ones giving Neanderthal advice about holding on to physical cash. British newspaper the Telegraph reports:
The manager of one of Britain’s biggest bond funds has urged investors to keep cash under the mattress. Ian Spreadbury, who invests more than £4bn of investors’ money across a handful of bond funds for Fidelity, is concerned that a “systemic event” could rock markets, possibly similar in magnitude to the financial crisis of 2008…
The best strategy to deal with this, he said, was for investors to spread their money widely into different assets, including gold and silver, as well as cash in savings accounts. But he went further, suggesting it was wise to hold some “physical cash,” an unusual suggestion from a mainstream fund manager.
The Fuse Is Lit
The markets seem to be in wait-and-see mode. Yesterday, we were waiting to see what happens in Greece. Today, we wait to see what happens in the bond markets. We watch them like we watch a stick of dynamite. For a long time, it might sit there… silent… still…
Then all of a sudden – kaboom!
At the end of January, it looked as though bond yields had finally found their bottom. With $5 trillion of sovereign debt trading at negative yields, bond prices began to fall. And yields, which move in the opposite direction to prices, started to rise.
Not for the first time did we think: The fuse is lit!
We were 33 years old when this bond market made its last turn. The yield on the 10-year Treasury bond hit a high of almost 15% in 1982. Yields have been trending downward ever since. If we had only imagined what would happen next!
…click on the above link to read the rest of the article…
The Only Good Deal For Greece Is NO Deal
The Only Good Deal For Greece Is NO Deal
The only thing that would really go towards beginning to solve the problems with Greece is for Athens to NOT sign a deal. The short version of why that is so: it would leave the EU intact for longer. And the ECB.
Neither have any viable future, but as they go down, they can cause a lot of damage and pain. It’s mitigating that pain which should now be our priority no. 1, the pain that will result from the demise of Europe’s institutions. But we see precisely zero acknowledgment of this. Anywhere.
All that attention for whatever comes out of yesterday’s, and today’s, and tomorrow’s Troika vs Athens talks is very cute and nice and all, and putting on a ‘phantom summit’ is hilarious, but in reality it’s all based on a far too myopic picture.
Maybe that’s what you get when you’re only looking at life as exclusively consisting of things that can be either bought or sold, which seems to be the way the entire world press interprets the negotiations, the only way they have of interpreting anything. But this is not about money.
There’s more to life than money. That is to say, there’s a lot more going on than those talks and the deal-or-no-deal results that may or may not emanate from them. To wit: If the past 5 months or so have made anything clear, it’s that the eurozone has no future at all, and the EU as a whole has very little.
There is no trust left between Brussels and Greece, and therefore at the same time also not between Brussels and Rome, or Madrid. Italy and Spain could be the next to receive a five-month treatment like the one Greece has had, and the people there sense it. Even if their present governments do not.
…click on the above link to read the rest of the article…
Does The IMF Actually Want To Cause A Greek Debt Default?
Does The IMF Actually Want To Cause A Greek Debt Default?
When it comes to geopolitics, there are often wheels working within wheels that are working within wheels. Once in a while we get a peek behind the scenes, but for the most part the machinations of the global elite remain shrouded in mystery most of the time. And sometimes the global elite appear to be doing things that, on the surface, do not seem to make much sense at all. What is going on in Europe is a perfect example of this. If everyone was negotiating honestly, I believe that a Greek debt deal would have been reached by now. As this endless crisis has stretched on month after month, it has become increasingly apparent that more is going on here than meets the eye. In particular, the IMF has been standing in the way of a deal time after time. So what do IMF officials want? Are they looking for the “unconditional surrender” of this new Greek government in order to send a message to other governments that would potentially defy them? Or could it be possible that the IMF actually wants a Greek debt default for some other insidious reason?
When the latest Greek proposal was embraced with enthusiasm by EU officials, many hoped that this meant that the crisis would soon be resolved. But it turns out that there is still one very important player that is not happy, and that is the IMF. The following comes from the Wall Street Journal…
But the IMF is still unhappy with key aspects of Greece’s new economic proposals and German officials were irritated by the speed with which the commission welcomed them, warning that much work needs to be done.
Greece’s plan calls for reducing the deficits in its pension system and government budget by relying heavily on raising taxes and social-security contributions, whereas the IMF wanted bigger spending cuts.
The Washington-based IMF has said Greece’s economy is already too heavily taxed and that too many additional tax increases would hurt economic growth, making it harder to pay down Greece’s debt.
“It is still short of everything that should be expected,” IMF Managing Director Christine Lagarde said Monday, suggesting Greece will have to modify its proposals significantly to win the IMF’s backing.
…click on the above link to read the rest of the article…
Alexis Tsipras—-Angel Of Mercy Or “Trusty” Of The Keynesian Central Bankers’ Debt Prison?
Alexis Tsipras—-Angel Of Mercy Or “Trusty” Of The Keynesian Central Bankers’ Debt Prison?
Greece, Europe and the world are being crucified on a cross of Keynesian central banking. The latter’s two-decade long deluge of money printing and ZIRP has generated a fantastic worldwide financial bubble, and one which has accrued to just a tiny slice of mankind. That much is blindingly evident, but there’s more and it’s worse.
The present replay of high noon on Greece’s impossible mountain of debt clarifies an even greater evil. Namely, that the central bank printing presses have also utterly destroyed the fundamental requisite of fiscal democracy.
To wit, in the modern world of massive, interventionist welfare states, fiscal governance desperately needs an honest bond market. The latter is the only mechanism capable of taming the modern state’s primal urge to entitle, transfer, indulge, placate, subsidize and spend without the parallel pain of a commensurate burden of taxation.
Soaring bond yields and the fear of losing debt market access, therefore, are the one force that can cause the politicians, thieves and charlatans who man the machinery of democracy to sober-up and acknowledge the facts; and then to weigh the difficult options and tradeoffs, congeal a consensus and close the deal.
This proposition is based on experience, not theory——even though the logic of bond market discipline is unassailable. Approximately 33-years ago, in fact, I was part of a small group of White House staff who talked Ronald Reagan into the impossible. That is, into signing not only a giant tax increase bill at the dark bottom of the 1982 recession, but to actually embrace several more such measures over the course of the subsequent three years. When the dust settled, these so-called “tax grabs” took back fully 40% of his cherished and sweeping 1981 tax reduction.
…click on the above link to read the rest of the article…
Geopolitics Will Trump Economics in Greece
Geopolitics Will Trump Economics in Greece
Based on the continued failure of the negotiating parties to make any substantive progress in the talks over Greek debt payments, the financial world is tied up in knots over a possible Greek exit from the European Union. The uncertainty has manifested in both high and low finance, with a sharp sell-off in bonds, particularly EU and Greek government debt, and heightened retail withdrawals from Greek banks as depositors become wary of capital controls that would be imposed in the case of an exit. All concerned parties should likely breathe easier. Despite Greece’s almost complete lack of financial integrity, neither NATO nor the EU can afford the political cost of a Greek exit from the EU.
Collapse, Part 1: Greece
Collapse, Part 1: Greece
When systems are broke and broken, collapse is the only way forward.
The theme this week is collapse. It’s a big, complex topic because there are as many types of collapse as there are systems. Some systems appear stable on the surface but collapse suddenly; others visibly decay for decades before finally slipping beneath the waves of history, and some go through stages of collapse.
The taxonomy of collapse is broad, and each unsustainable system (i.e. a system that will fail despite claims to the contrary) has its unique characteristics.
Which brings us to Greece.
I have written extensively about Greece and the doomed financial arrangement known as the euro for many years–for example: Greece, Please Do The Right Thing: Default Now (June 1, 2011).
When Debt is More Important Than People, The System Is Evil (February 18, 2012)
Greece at the Crossroads: the Oligarchs Blew It (January 27, 2015)
Greece and the Endgame of the Neocolonial Model of Exploitation(February 19, 2015)
When Europe Gets Greece’s Jingle Mail: Dealing with Default (May 15, 2015)
With the bankruptcy of Greece now undeniable, we’ve finally reached the endgame of the Neocolonial-Financialization Model. There are no more markets in Greece to exploit with financialization, and the fact that the mountains of debt are unpayable can no longer be masked.
Europe’s financial Aristocracy has an unsolvable dilemma: writing off defaulted debt also writes off assets and income streams, for every debt is somebody else’s asset and income stream. When all those phantom assets are recognized as worthless, collateral vanishes and the system implodes.
The peripheral nations of the EU are effectively neocolonial debtors of the core, and the taxpayers of the core nations are now feudal serfs whose labor is devoted to making good on any loans to the periphery that go bad. (see chart of Greece’s debtors below)
…click on the above link to read the rest of the article…
Presenting The New Plan For A Eurozone Superstate—–Curly, Larry And Moe
That will likely take time: The plan released on Sunday envisions its more-ambitious measures, such as a shared budget for the eurozone, possibly taking 10 years to come into effect, reflecting the political obstacles that now stand in the way of drawing the its 19 disparate nations more closely together.
Despite those hurdles, senior European officials who have pushed for the plan say fundamental changes to the eurozone are needed to prevent a repeat of the bloc’s debt crisis, which was caused in large part by wages and prices in the south rising much faster than they did in the north.
The eurozone has proved unable to reverse the loss of competitiveness in the south, leaving those countries grappling with unemployment rates exceeding 20% in some cases and little prospect of a significant recovery soon.
Greece, in particular, remains engulfed in crisis, and is running out of time to reach a deal that would avert its exit from the eurozone.
…click on the above link to read the rest of the article…
Jim Rogers: Turmoil Is Coming
Jim Rogers: Turmoil Is Coming
Two years since his last interview with us, investor Jim Rogers returns and notes that the risks he warned of last time have only gotten worse. In this week’s podcast, Jim shares his rational for predicting:
- increased wealth confiscation by the central planners
- a pending major financial market collapse
- gold’s return as the preferred safe haven investment
- more oil price weakness, followed by a trend reversal
- Russia’s rebound
- a China bubble reckoning
- agriculture’s long-term value
I suspect in the next year or two we will see some kind of major, major problems in the world financial markets.
I would suspect when we have this correction, it’s going to cause central banks to panic. There’s going to come a time when there is not much the central banks can do when they have lost all credibility. When governments have lost all credibility. They will print and spend and borrow, but there comes a time when people are just going to say We don’t want to play this game anymore. And at that point, the world has serious, serious problems because there’s nothing to rescue us.
I suspect the next economic/financial collapse will be the one they can’t deal with. But, if somehow they are miracle workers, be very, very careful. I would be worried about 2022 – 2023 then. The game will definitely be up if it’s not up this time around.
…click on the above link to read the rest of the article…
The Euro Was Doomed From The Start—–And Still Is
The Euro Was Doomed From The Start—–And Still Is
Next week will be a momentous one for Europe, with a string of crucial meetings including the summit at which the PM will table his renegotiation demands. We may be focused on our renegotiation but it is Greece which will dominate. For some time it has looked as though the Greek drama must reach its final denouement. But the Greeks have become highly skilled at managing to push back deadlines ever further into the future. Whether Greece leaves the euro or stays in, a decision surely cannot be delayed much longer. So what will this mean for the EU?
The creation of the euro has been an error of historic dimensions and done great harm to the EU, which in its first 40 years had brought economic prosperity to the citizens of the Continent. Then the less well-off countries benefited from the lowering of tariffs and the increase in internal trade. After the creation of the euro, however, economic growth slowed markedly. Poorer countries fared worse than the more prosperous countries, like Germany, which benefited from the new, weaker currency.
The Greek crisis epitomises the complete mess that Europe has made of the single currency. Greece should never have been admitted in the first place, though it was not the only country – Belgium and Italy were two others – that didn’t meet the strict criteria for membership. From the beginning, the rules put in place for the euro, relating to bail-outs, monetary financing and deficit levels, have been ignored. Europe claims to be a rule-based organisation. But however else the eurozone is run, it is not run strictly according to its own rules.
…click on the above link to read the rest of the article…
“The Collateral Has Run Out” – JPM Warns ECB Will Use Greek “Nuclear Option” If No Monday Deal
“The Collateral Has Run Out” – JPM Warns ECB Will Use Greek “Nuclear Option” If No Monday Deal
(via Corriere)
Although estimates vary, Kathimerini, citing Greek banking officials, puts Friday’s deposit outflow at €1.7 billion. If true, that would mark a serious step up from the estimated €1.2 billion that left the banking system on Thursday and serves to underscore just how critical the ECB’s emergency decision to lift the ELA cap by €1.8 billion truly was. “Banks expressed relief following Frankfurt’s reaction, acknowledging that Friday could have ended very differently without a new cash injection,” the Greek daily said, adding that the ECB’s expectation of “a positive outcome in Monday’s meeting”, suggests ELA could be frozen if the stalemate remains after leaders convene the ad hoc summit. Bloomberg has more on the summit:
Dorothea Lambros stood outside an HSBC branch in central Athens on Friday afternoon, an envelope stuffed with cash in one hand and a 38,000 euro ($43,000) cashier’s check in the other.
She was a few minutes too late to make her deposit at the London-based bank. She was too scared to take her life-savings back to her Greek bank. She worried it wouldn’t survive the weekend.
“I don’t know what happens on Monday,” said Lambros, a 58-year-old government employee.
Nobody does. Every shifting deadline, every last-gasp effort has built up to this: a nation that went to sleep on Friday not knowing what Monday will bring. A deal, or more brinkmanship. Shuttered banks and empty cash machines, or a few more days of euros in their pockets and drachmas in their past – – and maybe their future.
For Greeks, the fear is that Monday will be deja vu, a return to a past not that distant. Before the euro replaced the drachma in 2002, the Greeks were already a European bête noire, their currency mostly trapped inside their nation, where cash was king and checks a novelty.
…click on the above link to read the rest of the article…
Gold, the War on Cash and Greece – a Podcast with Claudio Grass
Gold, the War on Cash and Greece – a Podcast with Claudio Grass
Claudio Shares his Ideas
We were quite busy lately and are therefore actually a bit late in posting this podcast, in which our good friend Claudio Grass of Global Gold is interviewed by The Daily Coin on the recent hot topics of Greece, the declaration of war against cash and how gold fits into all of this.
Claudio Grass, CEO of Global Gold
Anyway, it is always refreshing to hear Claudio’s viewpoints, and although there is currently always the potential of events overtaking one’s guesses/predictions in connection with Greece, Claudio does offer an interesting perspective here. One of the problems Greece has (which at the same time, is the only trump card of the creditors, since they can switch off ELA anytime) is deposit flight. People are taking their money out of Greek banks in droves, inter alia hoarding cash. As Claudio avers, similar to Cyprus, Greece could end up becoming a test bed for unsavory policies in the attempt to bring it to heel.
The people interviewing Claudio are trying to direct the conversation toward a discussion of alleged gold price manipulation at the beginning, but Claudio politely sidesteps the issue. We’re just mentioning this because we want you to know that in spite of the impression one might get at the beginning, this topic isn’t what the podcast is about.
As far as we are concerned, we do have some sympathy regarding the idea that governments and central bankers don’t really want to see the gold price going bananas, given that it would deliver an unwanted verdict on their fiat money Ponzi. That seems obvious enough. However, if, as some observers allege, a conspiracy to suppress the gold price on an ongoing basis over the past several years, even decades, exists, the endeavor has to be called one of the biggest successes in history in terms of enforcing omerta on its members, and in light of the gold price trend between 2000 and 2011, also one of the biggest failures in the entire history of market manipulations.
…click on the above link to read the rest of the article…
“Bank Holiday” Preparations Begin In Greece, Lines Form At Athens ATMs
“Bank Holiday” Preparations Begin In Greece, Lines Form At Athens ATMs
The writing has been on the wall for quite sometime.
Deposit flight from Greece’s ailing banking sector has been running north of €500 million per day this week as the threat of capital controls casts a pall over the Greek government’s efforts to reassure the public and head off a terminal bank run.
Sparking a panic has been the most powerful tool at the troika’s disposal to bring PM Alexis Tsipras to the negotiating table and force Syriza to either concede to pension cuts and a VAT hike or risk social and political upheaval in the face of dark ATMs and public protests – we said this first in February and finally even the Greek government realized just what game Europe is playing.
Until now, Greeks had taken the barrage of headlines in stride with a stoic fortitude that would impress Marcus Aurelius but now, it appears as though the ‘institutions’ might have finally broken their spirits.
Earlier today, the ECB agreed to lift the ELA cap by just €1.8 billion, far less than Greek banking officials had requested and probably just barely enough to cover Friday’s withdrawals. And so, as Europe’s “Lehman Weekend” may finally be kicking off, the ATM lines are officially forming as Greeks prepare to be ‘Cyprus’d’ and as the country stares into “template” oblivion.
…click on the above link to read the rest of the article…
