Home » Posts tagged 'greece' (Page 32)
Tag Archives: greece
Europe, US Risk Off After Greece Rejects European Ultimatum, Ukraine Peace Talks Falter
Europe, US Risk Off After Greece Rejects European Ultimatum, Ukraine Peace Talks Falter
In the absence of any notable developments overnight, the market remains focused on the rapidly moving situation in Greece, which as detailed over the weekend, responded to Europe’s Friday ultimatum very vocally and belligerently, crushing any speculation that Syriza would back down or compromise, and with just days left until the emergency Eurogroup meeting in three days, whispers that a Grexit is imminent grow louder. The only outstanding item is what happens to the EUR and to risk assets: do they rise when the Eurozone kicks out its weakest member, or will they tumble as UBS suggested this morning when it said that “the escalation of tensions between the Greek government and its creditors is so far being shrugged off by investors, an attitude which is overly simplistic and ignores the risk of market dislocations” while Morgan Stanley adds that a Grexit would likely lead to the EURUSD sliding near its all time lows of about 0.90.
That, the ongoing Ukraine “peace talks” which are rapidly going nowhere and in fact have already managed to splinter Europe and the US (as well as sow internal European discord) and the collapse of Chinese imports, and weaker than expected exports, reported over the weekend leading to a record high trade surplus, is what is on traders’ minds this morning.
As a result European equities (Eurostoxx50 -1.21%) trade in the negative territory across the board with concerns and uncertainty surrounding Greece weighing on sentiment after Greek PM Tsipras rejected terms on the bailout extension. This also supported a bid in core fixed income as Bunds trade with gains of over 50 ticks breaking above Friday’s high, with the prospect of lower bond issuance this week also supporting upside. The GR/GE 10Y spread is wider by around 68bps and ASE down over 5% indicating the dampened optimism in Greece after being downgraded at S&P to B- from B whilst Moody’s put the country’s Caa1 rating on review for downgrade on Friday. Weakness in equities was further exacerbated after reports that Hannover, Hamburg & Stuttgart airports face delays due to strikes sent DAX heavyweight Deutsche Lufthansa (-2.4%) lower and caused selling in the DAX (-1.52%) after a technical break below 10,700. Furthermore, the DAX was further compounded by JPMorgan downgrading the index.
…click on the above link to read the rest of the article…
Crunch Time as Greece’s Terrible Deadlines Loom
Crunch Time as Greece’s Terrible Deadlines Loom
Since the election of Syriza, the pressure on Greece has been cranked up to almost unbearable levels. The first shot across the bow came from the European Central Bank’s Master of Ceremonies, Mario Draghi, who warned that if Greece didn’t start behaving itself (i.e. stop all this silly talk about representing voters and restructuring or auditing the country’s wholly unpayable debt), the ECB would, as of February 11th, sever a large chunk of the country’s monetary supply lines.
Should Draghi follow through on his threat, Greek banks will, as of next Wednesday, have to get their daily dose of liquidity from the Bank of Greece instead of the ECB – and of course at much higher interest rates! Draghi’s threat is a stark reminder of just how dependent Greece now is on the whimsy of a wholly undemocratic, unaccountable, non-independent, Goldman Sachs-infiltrated banking institution – an institution that, thanks to the banking union hurriedly and stealthily rushed through last year, is now the sole supervisory force of over 80% of Europe’s banking industry.
If Draghi’s MAD threat is not enough to force the Greek government back into strict compliance of the Troika’s law, the Eurogroup Chairman Jeroen Dijsselbloem came up with his own 10-day ultimatum: if Greece did not apply for a bailout extension by February 16th, it would be cut off from access to Euro Zone funding. The ever-dependable US rating agencies Standard & Poor’s and Moody’s then chipped in with even more negative than usual outlooks for the Greek economy.
…click on the above link to read the rest of the article…
UK Begins Preparations For Grexit
UK Begins Preparations For Grexit
As recently as two years ago, even the merest hint that any entity was preparing for what then was unthinkable, namely the Greek exit from the Eurozone, was enough to get one burned at the stake. After all, recall what happened when none other than the head of the ECB lied on the record to Zero Hedge, saying there is no Plan B for an ex-Greece Eurozone (even if he was technically right: Europe defined it as “Plan Z”).
Now, supposedly just because the ECB started monetizing about 100% of German gross Bund issuance two weeks ago (and monetizing debt all across the Eurozone for as long as said Eurozone exists: at this rate it may not be too long) “things are different“, and no longer is it taboo to either incite bank runs in Greece (in fact it is encouraged as both the ECB, Germany and S&P have tried to do in the past week), but outright discussions about preparation for a Grexit are a daily occurrence.
The U.K. government is stepping up contingency planning to prepare for a possible Greek exit from the eurozone and the market instability such a move would create, U.K. Treasury chief George Osborne said on Sunday.A spokeswoman for the Treasury declined comment on the details of the contingency planning.
…click on the above link to read the rest of the article…
War and Default in Europe Pose Merkel’s Biggest Challenge
War and Default in Europe Pose Merkel’s Biggest Challenge
(Bloomberg) — After almost a decade as German chancellor, Angela Merkel faces a moment of truth as a resurgent Russia and fed-up Greeks challenge her blueprint for Europe’s future.
As bloodshed in eastern Ukraine escalates and the new Greek government rejects austerity championed by Merkel, her deliberate leadership style may be reaching the limit of its effectiveness.
With Europe’s post-Cold War order and its unifying currency at stake, the weight of global and domestic expectations is pushing Merkel out of her comfort zone and into two direct confrontations. Both adversaries and allies have repeatedly underestimated Merkel’s determination as she rose from obscurity in an East German lab to become the world’s most powerful woman.
“It underscores how much Germany is really the pivotal power in Europe and Angela Merkel is the pivotal leader,” Daniel Hamilton, head of the Center for Transatlantic Relations at the Paul H. Nitze School of Advanced International Studies in Washington, said in an interview. “Much of it has to do with Germany’s success, but much of it also has to do with default by other powers. It’s not like she or Germany aspires to this role.”
Merkel’s status as Europe’s go-to leader will be on display when President Barack Obama hosts her at the White House on Monday. In the run-up, she’s resisting pressure by U.S. politicians to send arms to Ukraine’s government.
The biggest risk for Merkel is if either crisis spiraled out of control. At that point, she would have failed to address “German concern about stability,” Hamilton said.
…click on the above link to read the rest of the article…
Greece: Greenspan predicts exit from euro inevitable
Greece: Greenspan predicts exit from euro inevitable
The former head of the US central bank, Alan Greenspan, has predicted that Greece will have to leave the eurozone.
He told the BBC he could not see who would be willing to put up more loans to bolster Greece’s struggling economy.
Greece wants to re-negotiate its bailout, but Mr Greenspan said “I don’t think it will be resolved without Greece leaving the eurozone”.
Earlier, UK Chancellor George Osborne said a Greek exit would cause “deep ructions” for Britain.
Mr Greenspan, chairman of the Federal Reserve from 1987 to 2006, said: “I believe [Greece] will eventually leave. I don’t think it helps them or the rest of the eurozone – it is just a matter of time before everyone recognises that parting is the best strategy.
“The problem is that there there is no way that I can conceive of the euro of continuing, unless and until all of the members of eurozone become politically integrated – actually even just fiscally integrated won’t do it.”
Following the election in Greece of the anti-austerity Syriza party, Greek ministers have been touring European capitals trying to drum up support for a re-negotiation of its bailout terms.
However, there appears little willingness in Berlin, or at the European Central Bank, to alter the terms of its €240bn (£182bn) bailout.
Historically speaking, Germany a bigger deadbeat than Greece
Germany’s debt defaults after the two world wars dwarfs anything Greece has done, economists say
That warning from German Chancellor Angela Merkel and others is overwhelmingly backed by a German public outraged by the contrast between Greece’s spendthrift ways, with its penchant for treating tax bills as junk mail, and their own obsession with a tight hold on the purse strings, both personal and as a country.
What the Germans are conveniently ignoring is their own record as one of history’s biggest deadbeats.
In the 1920s, according to a prominent German economic historian, Germany was “like Greece on steroids.” Albrecht Ritschl, a professor at the London School of economics and an adviser to the German ministry of economics, says that Germany’s current prosperity was built on borrowed — mostly American — money, much of it written off.
It all started in 1918 when Germany lost the First World War. In the peace settlement that followed, the victors exacted payment of 269 billion marks or 96,000 tonnes of gold.
…click on the above link to read the rest of the article…
Greece Gambles On “Catastrophic Armageddon” For Europe, Warns It “Only Has Weeks Of Cash Left”
Greece Gambles On “Catastrophic Armageddon” For Europe, Warns It “Only Has Weeks Of Cash Left”
One of the bigger problems facing the new, upstart Greek government, which has set before itself the lofty goal of overturning 6 years of oppressive European policies and countless generations of Greek cronyism, corruption and tax-evasion is not so much the concern about deposit outflows and bank runs – even though it most certainly will be in the next few days unless the Tsipras government finds some resolution to the dramatic standoff with Merkel and the ECB – but something far more trivial: running out of money.
Recall that two weeks into the Greek elections, Greece was rocked by a dire, if entirely underappreciated development, when its already “tax-paying challenged” population decided to completely hold off paying any taxes in advance hopes that the Tsipras government will “overturn” austerity. We wrote:
… while there will be no official confirmation whether Greece did or did not have a bank run for months, unless of course some bank keels over and dies in the interim, one thing is certain: with an increasing probability they may not have a “continuity-promoting” government in less than two weeks, Greeks tax remittances to the government, which were almost non-existent to begin with, have ground to a halt!According to a second Kathimerini report, budget revenues have slumped over the last few days as a result of the upcoming elections and taxpayers’ uncertainty about the future: “Most taxpayers have chosen to delay their payments, given that the positions of the two main parties leading the election polls are diametrically opposite: Poll leader SYRIZA promises to cancel the ENFIA and even write off bad loans, while ruling New Democracy acknowledges the difficulties but is avoiding raising issues that would generate problems and fiscal consequences.
The dwindling state revenues will not only hamper the next government’s fiscal moves, but, given that the fiscal gap will expand, also negotiations with the country’s creditors.
The tax collection mechanism appears to be largely out of action while expired debts are swelling due to taxpayers’ wait-and-see tactics and the reduction in inspections.
So for battered, depressed Europe “austerity” really meant “taxation” – it is no surprise then why so many in peripheral Europe, who for the past 7 years have not seen any benefits from Germany’s delay in reintroducing the Deutsche Mark (and keeping its export industry humming, and Deutsche Bank solvent, courtesy of the much lower Euro), hate “austerity” so much: after all there really should be no “austerity” without representation and most European voices hardly matter in a monetary “Union” where only bankers and unelected eurocrats are heard.
…click on the above link to read the rest of the article…
Global Conflict Intensity Spikes To 7-Year High
Global Conflict Intensity Spikes To 7-Year High
If it’s not one geopolitical concern these days it’s invariably another. If today’s story isn’t weak-handed Greece escalating the rhetoric in its hopeless game of chicken with eurozone creditors, it’s ISIS ratcheting up the shock factor in a campaign to scare U.S. coalition partners away from an increasingly ineffectual bombing campaign in Syria and Iraq. If it’s not an escalation of tensions between Russia and Ukraine, it’s logrollingbetween the U.S. and Saudi Arabia with the fate of the Assad regime, Gazprom, and the Russian economy at stake. As we’ve seen over the past several months (e.g. crude in a veritable tailspin) and over the past several days (e.g. hourly news out of Greece raining on the BLS’s non-farm revision parade), markets are becoming increasingly tethered to the vagaries of geopolitics — and don’t expect that trend to abate any time soon.
Fortunately, BBVA is on the case, noting that “geopolitical analysis is becoming a key element on the agenda for 2015.” Indeed. That’s why the bank has just launched their first ever “BBVA Research conflict & social unrest monthly update.”
From BBVA, on conflict:
During January, the presence of ISIS in the Middle East continued to be a threat while the Russian-Ukrainian crisis escalated, increasing geopolitical worries in the region. In contrast, territorial disputes and geopolitical tensions eased in South-Eastern Asia. Social unrest related to demands for democracy (North Africa), together with terrorism and economic demands (Europe), have also increased……key hot spots continued to be the Russia-Ukraine and ISIS conflict. The Russian-Ukraine crisis escalated again in January (see our previous hot topic) after a relatively calmer period during October-November. This triggered a new meeting in the EU level to discuss new sanctions. The situation in neighbouring countries (Armenia, Belarus, Georgia…) also remained tense. In the Middle East, the International coalition forces regained some ground in Northern Syria (Kobane) and were able to stop the advance of ISIS in Iraq. However, it will take more time to secure peace in the region. Tensions also increased in Western Europe after the attacks in Paris and in Belgium.
And on protests:
…click on the above link to read the rest of the article…
‘The Communist Manifesto’ (2015 edition)
‘The Communist Manifesto’ (2015 edition)
In the Communist Manifesto, Karl Marx wrote that “a specter is haunting Europe — the specter of communism.”
That image has been much adapted. The specters that have been held to haunt the Europe of today include Americanization, privatization, the far right, and the breakup of the euro, among others. Mark Carney, the governor of the Bank of England, said recently that today’s haunting specter is “economic stagnation,” daring to invoke Marx from the heart of the City of London.
But now, the original specter in 1848, wandering unheeded for many decades, is back, hovering again over the old continent. Communism is again haunting Europe.
Syriza, which won the Greek parliamentary elections last month and is the dominant party in the country’s coalition government, is a layered confection of mainly hard-left parties, survivors of — and combatants in — the splits, wars and betrayals of a Greek left whose members had been, over the years since the war, outlawed, imprisoned, tortured and, in the last three decades, marginalized.
The new prime minister, Alexis Tsipras, was a leader of the youth wing of one of the communist parties. Its finance minister, Yanis Varoufakis, says he is a libertarian Marxist. The party has promised to raise wages, rehire sacked public-sector workers and nationalize sectors of the economy. In an interview with Britain’s Channel Four news, Varoufakis said that his government would confront the “oligarchic system” in Greece — the mix of political leaders, wealthy business people and their media — and “destroy” it.
…click on the above link to read the rest of the article…
Defiance and Charm: A Measured First Week for New Greek Leader
Defiance and Charm: A Measured First Week for New Greek Leader
Minister of Administrative Reform Georgios Katrougalos sits cheerfully in his new office and rejoices about his little revolution. He has just announced that soon the first 3,500 public-sector employees can return to work, including the famous cleaning ladies who led the protest against job cuts. With their rubber-glove-clad clenched fists, they embodied a feeling shared by many Greeks — that they had been mistreated by Europe. Now the cleaning ladies were becoming the symbol of the new beginning.
According to the administrative reform minister, these aren’t new hires — they are the reversal of unfair layoffs. “The cleaning ladies were the weakest, and the troika needed numbers.” He claims this is primarily a redress for the absurdity of the austerity measures. After they were let go, the financial authority’s 595 cleaning ladies — who had to be fired in September 2013 in order to fulfill the requirements of the savings plan — continued to receive 75 percent of their earnings. Their work was then done by private cleaning companies — in the end, the whole thing was more expensive than it had been before. It was these kinds of decisions by the previous government that had made the Greeks furious — and led them to vote for Syriza.
The administrative reform minister is a counterpoint to Athens’ new culture of laxity, characterized by Alexis Tsipras and Finance Minister Giannis Varoufakis, who like to appear tie-less in public. Katrougalos wears a suit and a tie. He has given up his role in the European Parliament and joined the government in order to reform the administration — a thankless task. He is a gambler, he says with a laugh. He loves calculated risk. All of his friends had advised him against it. “But I want to help shape the new beginning,” he says, “and only a left-wing party can tackle this kind of reform.”
…click on the above link to read the rest of the article…
Why the Beautiful New Greek Government Is Screwed
Why the Beautiful New Greek Government Is Screwed
Greek Prime Minister Alexis Tsipras and Finance Minister Yanis Varoufakis, often in a good-cop-bad-cop manner, have been cruising through the media, lobbing a mix of admirable rhetoric, verbal hand grenades, and down-to-earth explanations. And they have become white-hot media darlings.
So Varoufakis was in Germany to meet with his counterpart, Wolfgang Schäuble, and they didn’t “even agree to disagree,” he said. He urged Germany to help end the “gross indignity” of the Greek debt crisis. The Troika’s austerity program had wasted “too much time, hopes, lives,” he said.
But it’s all about other people’s money.
They’d come to power with a pledge to wipe out half of Greece’s insurmountable pile of debt. Debt restructuring, debt exchange, more haircuts for bondholders, exit from the Eurozone… these are the kind of terms that Syriza party officials have bandied about before and after the election victory.
To show that this isn’t just talk, that the Greeks mean business, the government hired Lazard’s government advisory arm, headed by Matthieu Pigasse, master of sovereign-debt restructurings. And they made sure the media picked it up.
Syriza is also running a highly effective charm offensive. Not just words and smiles – but actions, or at least symbolic actions. It wants to show that it’s different from the prior succession of corrupt, self-serving governments.
…click on the above link to read the rest of the article…
Debt In The Time Of Wall Street
Debt In The Time Of Wall Street
With all the media focus aimed at Greece, we might be inclined to overlook – deliberately or not – that it is merely one case study, and a very small one at that, of what ails the entire world. The whole globe, and just about all of its 200+ nations, is drowning in debt, and more so every as single day passes. Not only is this process not being halted, it gets progressively, if not exponentially, worse. There are differences between countries in depth, in percentages and other details, but at this point these seem to serve mostly to draw attention away from the ghastly reality. ‘Look at so and so, he’s doing even worse than we are!’
Still, though there are plenty accounting tricks available, you’d be hard put to find even one single nation of any importance that could conceivably ever pay back the debt it’s drowning in. That’s why we’re seeing the global currency war slash race to the bottom of interest rates.
Greece is a prominent example, though, simply because it’s been set up as a test case for how far the world’s leading politicians, central bankers, bankers as well as the wizards behind the various curtains are prepared to go. And that does not bode well for you either, wherever you live. Greece is a test case: ho far can we go?
And I’ve made the comparison before, this is what Naomi Klein describes happened in South America, as perpetrated by the Chicago School and the CIA, in her bestseller Shock Doctrine. We’re watching the experiment, we know the history, and we still sit our asses down on our couches? Doesn’t that simply mean that we get what we deserve?
…click on the above link to read the rest of the article…
China’s Monumental Debt Trap—-Why It Will Rock The Global Economy
China’s Monumental Debt Trap—-Why It Will Rock The Global Economy
Bloomberg News finally did something useful this morning by publishing some startling graphs from McKinsey’s latest update on the worldwide debt tsunami. If you don’t mind a tad of rounding, the planetary debt total now stands at $200 trillion compared to world GDP of just $70 trillion.
The implied 2.9X global leverage ratio is daunting in itself. But now would be an excellent time to recall the lessons of Greece because the true implications are far more ominous.
Today’s raging crisis in Greece was hidden from view for many years in the run-up to its first EU bailout in 2010 because the denominator of its reported leverage ratio—national income or GDP—–was artificially inflated by the debt fueled boom underway in its economy.
…click on the above link to read the rest of the article…
Shunned Greece Agrees To Boost Economic Cooperation With Russia
Shunned Greece Agrees To Boost Economic Cooperation With Russia
It’s been an odd few days for Greece’s new PM Alexis Tsipras. From being lambasted by Jeroen Dijsselbloem, shunned by Angela Merkel’s henchmen, holding hands with Jean-Claude Juncker, and losing a key funding channel from Mario Draghi; Tsipras’ anti-austerity platform has been ‘supported’ by Barack Obama and he has been invited for a visit to Russia by Vladimir Putin, and reminded that Russia is willing (and able) to provide financial aid if asked by finance minister Anton Siluanov. So headlines this evening from ekathimerini should not be entirely surprising that Putin and Tsipras have agreed to boost cooperation in the economy and energy, tourism, culture and transport sectors; and discussed the possible creation of a pipeline to carry natural gas from Russia to Europe via Turkey and Greece.
Prime Minister Alexis Tsipras and Russian President Vladimir Putin on Thursday agreed to boost bilateral ties in a telephone conversation during which the latter invited the new Greek premier to an event in Moscow in May to mark the victory over Nazism.The two men agreed to boost cooperation in the economy and energy, tourism, culture and transport sectors. They also agreed on the need to “secure peace and stability in Ukraine,” according to a statement from Tsipras’s office. Putin expressed satisfaction at Greece’s stance at a recent summit in Brussels where Greek Foreign Minister Nikos Kotzias conveyed concerns over the prospect of additional sanctions against Russia over Ukraine.
…click on the above link to read the rest of the article…
Greece: Are You Finally Ready to Do the Right Thing and Leave the Euro?
Greece: Are You Finally Ready to Do the Right Thing and Leave the Euro?
The era of living off borrowed money is over in Greece, and the Greek people now have a choice.
Almost four years ago I wrote Greece, Please Do The Right Thing: Default Now(June 1, 2011). Default remains the only real way forward for Greece and Europe.Consider the destructive “gains” reaped by four years of lies, predation, debt-serfdom and austerity in service to kleptocrats: tremendous suffering by many Greek citizens, all for nothing but propping up the evil of debt-serfdom to the Greek kleptocracy and the financial royalty of Europe.
The truth is Greece squandered four years propping up a patently false illusion that using the euro as a currency was worth everything, when it was always worth nothing. As I have described at length for four long years, the euro created a brief (and highly profitable to the kleptocrats and banks) fantasy that marginal borrowers would magically be transformed into solid credit risks simply because they were now borrowing euros instead of drachmas.
It doesn’t matter what is being borrowed–euros, drachmas, quatloos or beads–marginal borrowers are still high credit risks. The entire subprime mortgage fiasco was based on a similar financial fraud: that the housing bubble would enable homeowners with insufficient cash, income and creditworthiness to service gargantuan mortgages–mortgages that were issued with the intent of defrauding buyers of mortgage-backed securities.
Greece is simply an example of the same fraud played out on a larger stage.
…click on the above link to read the rest of the article…
