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Greece to leave Euro... Eventually

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... Greek Deputy Foreign Minister Marilisa Xenogiannakopoulou,...

Longest and most difficult to pronounce surname I have ever seen (hyphens and nobility excluded). Give me a Papa!

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It's very simple: anyone who backs the Troika has reached the end of his/her political career in Greece by default. They will be lucky if they don't get death threats. That's why the rats are leaving the sinking ship.

 

It's just like in Germany in 1917/18.

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“What has particularly bothered me is the humiliation of the country,” George Karatzaferis, whose Laos party has 16 members in the 300-seat parliament, said in televised comments. “Clearly Greece can’t and shouldn’t do without the European Union but it could do without the German boot.”

...

You have to understand the context:

 

Karatzaferis spoke hours after German Finance Minister Wolfgang Schaeuble told lawmakers in Berlin that Greece was missing deficit goals and had to do more to meet its bailout commitments.

Schaeuble was "Mr. 3%" in Germany over decade ago: only countries with a deficit of 3% or less would be allowed to join the Euro, so Germans could sleep sound at night with no worries about losing the Deutschmark. I remember the "3% are 3%"-phrase. No 0.1 of a percent more should be allowed.

 

Well, either Schaeuble closed both eyes, or Greece fudged him up the behind with the help of Goldman Sucks. Say latter was the case - they cheated their way in (the Germans could sense it, BTW; and not only Greece, of course) - well, then do you understand the "boot" now? :) And, BTW, he is paralyzed after an assassination many years ago, so he'd rather give them the fist.

 

Schaeuble is trying to do something for his own politcal legacy. He fudged up royally when letting in Greece over a decade ago. Now he has to make up for it. Payback time.

 

He'd really make up for his mistake if he pushed them out asap.

 

auf-sparkurs-finanzminister-wolfgang-schaeuble-.jpg

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Greek finance minister Venizelos talking to German finance minister Schaeuble.

 

Well, I can tell you, and you see it here: Schaeuble just can't take it anymore.

 

2,w=457.bild.jpg

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“What has particularly bothered me is the humiliation of the country,” George Karatzaferis, whose Laos party has 16 members in the 300-seat parliament, said in televised comments. “Clearly Greece can’t and shouldn’t do without the European Union but it could do without the German boot.”

I read he literally said today that Merkel couldn't do anything anyway because a Greek default would drag the whole of Europe into the abyss. Do, that's why his ministers can step back, because they think German money will rain onto them anyway. Well, we'll see. The thing is, German politicians have careers to take care of too, and their careers are over if they hand out free money to Greece while their people are facing a harsher and harsher economic reality. Merkel and Mr. 3% know this.

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Here's a neat little piece of half-hearted scaremongering by Jim Sinclair

 

He's says that ISDA's impedning decision (on declaring a default or not by ISDA) threatens to bankrupt 5 big banks, who he says "hold 97% of the liabilities" behind the outstanding CDS's backing Greek debt.

 

http://www.jsmineset.com/2012/01/30/the-impending-undeclared-default-of-5-major-us-banks/

 

Here are the stakes, which he never explains clearly:

 

Some portion (?) of the Greek debt of EUR xx Billion is backed by Credit Default Swaps (CDS) issued by big Global banks. ISDA was to make a decision about whether or not the proposed 70% haircut being forced on the private creditors was an event-of-default-which-triggers-payment on the outstanding CDS obligations relating to Greek debt.

 

Since ISDA* makes the decision, they are likely to make one that least harms its members (the big banks).

 

What will their decision be?

ISDA has already said that a voluntary reorg is not an event of default.

(see: http://video.cnbc.com/gallery/?video=3000053670 )

The upshot would be banks and hedge funds holding CDS on Greek debt, would get no payout on those CDS, because default has not been declared.

 

But that may not be the end of it. I expect that some hedge funds holding CDS insurance will take this potentially biased decision to court eventually.

=== === ====

 

*Why might I understand this better than JS:

First of all, as often happens: he is tongue-tied (intentionally or unintentionallly) in discussing some complex financial structures.

 

Secondly, Years ago when I worked at Chase, my boss was R-- S--, and his non Chase job was Chairman of ISDA, so I have some insight into how ISDA operates, from having seen his decision-making up close. (There's a book out there someplace about derivatives, for which he was Editor, and I contributed a chapter.)

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Greek finance minister Venizelos talking to German finance minister Schaeuble.

 

Well, I can tell you, and you see it here: Schaeuble just can't take it anymore.

 

2,w=457.bild.jpg

He's even in a wheelchair.

The problems must lay very heavily on his shoulders

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Here's a neat little piece of half-hearted scaremongering by Jim Sinclair

 

He's says that ISDA's impending decision (on declaring a default or not by ISDA) threatens to bankrupt 5 big banks, who he says "hold 97% of the liabilities" behind the outstanding CDS's backing Greek debt.

 

http://www.jsmineset.com/2012/01/30/the-impending-undeclared-default-of-5-major-us-banks/

In contrast to JS's clumsy scaremongering, here's the actual size of the potential problem for the banks:

 

No more Greek CDS

 

Dealers do not expect the Greek CDS trigger to cause heavy losses for banks. For one, the net notional of US$3.2bn is small compared with the €350bn of Greek debt outstanding, and the issue has been flagged well enough in advance for participants to be prepared.

 

“I don’t think we’ll have a new [Greek CDS] market. Who’s going to sell it? All we’re doing now is trading legacy risk from the heyday of the credit bubble”

 

There is no consensus, however on how long it will take the Greek CDS market to re-emerge after a CDS trigger. Two major dealers expected to be quoting Greek CDS again within a matter of weeks citing likely client demand for the product. In contrast, a trader looking after distressed sovereigns for a major firm said he would be happy to see the back of Greek CDS.

 

“I don’t think we’ll have a new [Greek CDS] market. Who’s going to sell it? All we’re doing now is trading legacy risk from the heyday of the credit bubble,” he said.

 

/source: http://www.ifre.com/hopes-for-greek-trigger-to-validate-cds/20047837.article

 

$3.2 billion is not a big deal.

Even JS could cover a decent part of that from his likely profits from trading gold.

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Papademos Gets Cabinet Approval for 2nd Bailout

http://www.bloomberg.com/news/2012-02-10/papademos-wins-cabinet-approval-for-budget-steps-to-secure-second-bailout.html

 

It's all good now! Crisis is over. Let's get back to where we were when all this started to blow up. What was it? Oh, yes, Italy. How is Italy doing?

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Papademos Gets Cabinet Approval for 2nd Bailout

http://www.bloomberg.com/news/2012-02-10/papademos-wins-cabinet-approval-for-budget-steps-to-secure-second-bailout.html

 

It's all good now! Crisis is over. Let's get back to where we were when all this started to blow up. What was it? Oh, yes, Italy. How is Italy doing?

Greek Prime Minister Lucas Papademos obtained approval from his Cabinet for deeper budget cuts needed to secure a second package of international aid, clearing the latest hurdle in his race to prevent financial collapse.

Cabinet approved the 287-page document unanimously, said a government official, who declined to be named. The approval means the 300-seat Parliament will vote, probably tomorrow, on budget measures amounting to 7 percent of gross domestic product over the next three years and a debt swap to slice 100 billion euros off more than 200 billion euros of privately-held debt.

“The social cost this program implies will be limited compared to the economic and social catastrophe that would follow if we don’t adopt it,” Papademos told his ministers earlier

 

Right.

Less than if they don't adopt it - he knows that it will never be fully implemented,

but Greece will get the cash from Europe anyway.

 

Let the "fun on the streets" begin.

Will we see a full-scale riot early next week?

 

Scuffles in Athens

Police in Athens scuffled with protesters as unions started a 48-hour strike against the austerity measures demanded by the so-called troika of international creditors who monitor progress made by Greece.

. . .

The strike called by the private-sector GSEE union shut down schools, government services, and some public transit for the second time this week.

“They want to privatize the entire country,” Ploumitsa Triantafillopoulou, 42, who works for an organization that promotes day-care facilities for children, said yesterday in an interview. “All of us here we will lose our jobs. They don’t care for us. They don’t care for the people of Greece

 

Do they really expect haircut-taking foreign investors to "care" about more than getting their moeny back? Surely, charity begins at home, and the workers should care about whether or not those who are paying their salaries can actually afford it.

 

Greece is headed back to a poorer status, as it will soon have less access to generous European handouts.

 

Let the riots begin. They will justify the default. And that in turn will get Europe to turn its back on Greece for years to come.

 

Tough luck, Spiros. The days of French wine, and Italian roses are soon to end.

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I read he literally said today that Merkel couldn't do anything anyway because a Greek default would drag the whole of Europe into the abyss. Do, that's why his ministers can step back, because they think German money will rain onto them anyway. Well, we'll see. The thing is, German politicians have careers to take care of too, and their careers are over if they hand out free money to Greece while their people are facing a harsher and harsher economic reality. Merkel and Mr. 3% know this.

 

 

I can not see the German people letting there leaders just send truck loads of there money to Grease and not getting anything in return. And i don nmot blame them i would hate to see the UK do the same. It very well maybe better to let grease default and then let the ECB print to re-cap any EU banks to stop them from going under.

 

I dont know, this whole thing is a right mess. Who knows what is best to do anymore.

 

We really could do with a world wide Re-set, Start everything again from 0,

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Papademos Gets Cabinet Approval for 2nd Bailout

http://www.bloomberg.com/news/2012-02-10/papademos-wins-cabinet-approval-for-budget-steps-to-secure-second-bailout.html

 

It's all good now! Crisis is over. Let's get back to where we were when all this started to blow up. What was it? Oh, yes, Italy. How is Italy doing?

 

 

 

I belive that Portugal are going to be the next country to amke the headlines, Bailout needed the people on the streets. Just re read every story on grease and replace the world grease with the word Portugal.

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Tough luck, Spiros. The days of French wine, and Italian roses are soon to end.

 

The days of French wine and Italian roses never arrived for most of the population.

 

Halight, the country is spelled Greece not Grease.

 

A final point. If Greece, benefited from low interest rates, its debt (after the hair cut) could become sustainable. Eurobonds could have been used.

I note that the US pays 0.25% although its debt issue will soon turn out to be a much bigger problem than Greece's debt, because low interest rates are NOT accompanied by austerity as in Greece. High interest rates, imply that inevitably one, by one, all countries in the Eurozone will default in their debt. The days of French wine and Italian roses will then end for everyone.

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The days of French wine and Italian roses never arrived for most of the population.

 

Halight, the country is spelled Greece not Grease.

 

A final point. If Greece, benefited from low interest rates, its debt (after the hair cut) could become sustainable. Eurobonds could have been used.

I note that the US pays 0.25% although its debt issue will soon turn out to be a much bigger problem than Greece's debt, because low interest rates are NOT accompanied by austerity as in Greece. High interest rates, imply that inevitably one, by one, all countries in the Eurozone will default in their debt. The days of French wine and Italian roses will then end for everyone.

 

When you say all countrys in the euro zone default, are you talking about the pigs, or ALL, inc Germany,

Iv never given much thourt to a germany defult.

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Europe is now deliberately trying to push Greece out

 

There is only one way of interpreting the set of fresh demands tabled by eurozone finance ministers last night in return for agreeing a new €130bn bailout for Greece – that they are now quite deliberately trying to push Greece out of the euro. All pretence at European solidarity has been abandoned, to be replaced by the vengeance of Shylock.

 

Mind you, it's easy enough to see why their patience has been broken. The Greeks keep promising, but have consistently failed to deliver. Today, their promises are more worthless than ever, as popular support for the political parties which are signing up to them has collapsed.

 

The way things are going, they'll all be out at the next election, to be replaced by a ragbag of populist politicians unbound by whatever the present lot have signed up to. Even if eurozone finance ministers manage to get their new conditions agreed, there is not a chance of them being adhered to.

 

What is more, to push Greece out is of course the right approach for all. There is now no chance whatsoever of Greece making it in the eurozone. Economically and politically, the country is in meltdown.

 

Nobody in their right mind would invest in Greece right now, knowing that at any moment Greece might leave the euro and that overnight, they will therefore lose half to two thirds of their money.

 

Richer Greeks have adopted the same view. They are all getting their money out as fast as they can, as those of us who have been gazumped in the London property market by Greeks bearing piles of wonga know only too well.

 

It's a disgrace what's going on, little short of the rape of Greece by its own countrymen, but it is an entirely rational and logical response to the grossly overvalued currency they find themselves with.

 

Greece has very little option now but to impose capital controls and leave the euro. The longer it leaves things, the more desperate will its plight become.

 

 

Link http://blogs.telegraph.co.uk/finance/jeremywarner/100014766/europe-is-now-deliberately-trying-to-push-greece-out/

 

 

I can really see some truth in this. They should never have been able to join in the forst place.

How about givving them a suit case full of cash and gettingf shot of them once and for all ??

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Europe is now deliberately trying to push Greece out

 

There is only one way of interpreting the set of fresh demands tabled by eurozone finance ministers last night in return for agreeing a new €130bn bailout for Greece – that they are now quite deliberately trying to push Greece out of the euro. All pretence at European solidarity has been abandoned, to be replaced by the vengeance of Shylock.

 

Mind you, it's easy enough to see why their patience has been broken. The Greeks keep promising, but have consistently failed to deliver... not a chance of them being adhered to.

 

What is more, to push Greece out is of course the right approach for all. There is now no chance whatsoever of Greece making it in the eurozone. Economically and politically, the country is in meltdown.

 

Nobody in their right mind would invest in Greece right now...

. . .

Greece has very little option now but to impose capital controls and leave the euro. The longer it leaves things, the more desperate will its plight become.

====

Link http://blogs.telegraph.co.uk/finance/jeremywarner/100014766/europe-is-now-deliberately-trying-to-push-greece-out/

 

I can really see some truth in this. They should never have been able to join in the forst place.

How about givving them a suit case full of cash and gettingf shot of them once and for all ??

The likely has become the inevitable.

And now people are pressing for Reality to be recognised, rather than more "kicking the can."

 

Pity the poor Greek bondholder, who stands to take a 70% haircut, followed by a switch into Drachma, which will then get inflated away towards zero. What's the smart play? Forcing a default now, collecting on the CDS insurance (which might be 70% of face, paid in EUROS!?), and then taking one's chances on the 30% value left in the rump - I suppose.

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The days of French wine and Italian roses never arrived for most of the population.

I suppose you are right

 

It was Slappers, not Wine Sipping - even in the Good Ole Days

(the Greeks and their girls were boozing-and-cruising-on beers with few roses)

 

 

Even the "good old days" of summer 2008, provided nothing but: local beer, ouzo, and boozy English girls for the majority. In the future, they might have to beg or perform to get the beer and ouzo. I suppose slappers will become even more common in Greece after the New Drachma is introduced, and loses value - to boost tourism.

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The Pressure is on - and a Yes vote isn't likely to end it

 

http://www.youtube.com/watch?v=VynEFXRJ_Mo

 

article-2099842-11AB3C1F000005DC-732_468x286.jpg

Protest: If the Greek parliament approves the new austerity measures, the minimum wage will be cut by a further 20 per cent to £504 a month

 

...demanding an extra £273million in cuts on top of the £2.7billion austerity package already on offer.

Jean-Claude Juncker, Luxembourg’s prime minister and chairman of the Euro Group, which exercises political control over the euro, said Greece must agree to all of the cuts by Wednesday at the latest and all major political parties must commit to the austerity programme. He said that if these conditions are not met, the new funds, to be supplied by the European Union and the International Monetary Fund, would not be released.

 

More...

Desperate Greece bows to austerity demands in bid to stave off bankruptcy

The new austerity package was causing ructions in Greece even before the Euro Group demanded more cuts. At stake were 15,000 public sector jobs, a shake-up in restrictive labour laws and a 20 per cent cut in the minimum wage to £504 a month.

 

Industrial action has been disrupting rail and bus services. Doctors, bank clerks and teachers have all been out on strike. The turmoil was reflected in rising yields for Greek debt.

 

Greece : 10 year Bond ... update

xx

 

Read more: http://www.thisismoney.co.uk/money/news/article-2099842/Embattled-Greece-knife-edge-vote-austerity-measures.html#ixzz1m7PhTVMD

 

What will it take to turn a "haircut" into a Jubilee ?

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MORE CALLS - Get Greece Out !

 

Michael Lewis : Greece already defaulted (back in Oct. that was clear)

http://www.youtube.com/watch?v=EmvatXp_Fe8

 

"A disfunctional and bloated state"

"National railway generates Eur.100mn in revenues, and pays Eur.400mn in salaries."

"Government workers retire at 50, and the government is an instrument of corruption."

"The Greek banks will go bust... because they own Greek bonds."

"The culture is: Go to the government to steal, and don't pay your taxes."

"No guilt in Greece, just anger that they are being asked to change."

"And Greece has a 'special greivance' towards Greece."

"I think the debts need to be wiped out."

"Once the debts are wiped out... You are a good risk once again."

"But if the banks go down, other countries will have problems."

 

(1) CNN: Shrink the Euro to Save it

This has to raise a basic question: Would not the European core countries be better served by proactively taking action now to form a smaller and more enduring currency union than the present eurozone? And would such action not be preferable to continuing with the pretense that the euro can be preserved in its present form, which runs the real risk of a disorderly and costly unraveling of the common currency?

Sadly, the IMF and EU's heroic, if quixotic, efforts to keep Greece afloat with a second 130 billion-euro bailout package that has now finally been agreed upon, are all too suggestive that European policymakers remain in denial that Greece will soon be forced to exit the euro.

/see: http://edition.cnn.com/2012/02/10/opinion/lachman-euro/index.html

 

(2) Economist: Get the Hellas out !

For Greece, on the other hand, departure is unlikely to work out well. A devaluation would make Greek exports more competitive, but in the short term the chaos of a departure would likely reduce or eliminate entirely the benefit of a cheaper currency to Greece's top export industry—tourism. The new Greek currency would likely overshoot on the way down, and given the country's fiscal difficulties rapid inflation, and perhaps hyperinflation, would loom as a threat. In all likelihood, Greek money and labour would flee the country in droves, potentially forcing the country to adopt tight capital and border controls. The country might well wind up a failed state, a political and economic wreck.

 

Perhaps euro-zone leaders are counting on this shifting leverage—a much worse outcome to exit for Greece than for the single currency—to help them drive a hard bargain. It is no sure thing, however. There is a serious risk that officials are overstating the extent of Greek containment; in the days before Lehman's bankruptcy, according to reporting at the time, the heads of Goldman Sachs and JP Morgan were said to believe that having seen the bank's troubles coming from so far away, Wall Street should be well prepared to handle the death of the firm. One question looms particularly large: would a Greek exit convince markets that Greece is a special case or would it raise the perceived odds of exit of all other euro-zone members?

/see: http://www.economist.com/blogs/freeexchange/2012/02/euro-crisis-2

 

JUST WAIT.

Once Greece is forced out, the official line will be: "It's contained !" (to Greece)

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Facing Reality - some weren't ready

 

 

Rubin: "They'd better have strong firewalls, or this thing will ripple."

 

 

Malkiel: "Restructuring is inevitable... We will have a bigger blow-up."

"We don't have labor mobility in Europe." (Greeks cannot get jobs in Germany.)

"The UK is very lucky that they did not join the Euro."

Conclusion: (The Euro) "in its present form is not sustainable."

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"Once a Rich man gets poor, it isn't easy to get rich again."

 

 

Greece: a "fancy pants" no more

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Felix Zulauf on the European Debt Crisis−No Painless Way Out

Money Printing Going Global

 

NEWSHOUR, GUEST EXPERT

MP3: http://www.netcastdaily.com/broadcast/fsn2012-0210-1.mp3

 

Jim welcomes back Felix Zulauf, Founder and President at Zulauf Asset Management AG for another wide-ranging discussion. In the first of a two-part interview, Felix discusses the European debt crisis and believes the bailouts will be bigger than anticipated. He also sees money printing going global as central banks expand their balance sheets to equal or surpass the GDP of their respective countries.

 

(CLICK HERE FOR TRANSCRIPT)

 

/see: http://www.financialsense.com/financial-sense-newshour/guest-expert/2012/02/10/felix-zulauf/the-european-debt-crisis-no-painless-way-out

 

"Greece cannot deliver."

"If they exit, every Greek entity with debts to the outside world, will go bust."

"But Greece tourism will boom if they exit... and (Greece) may return to the capital markets in 4 years."

"That would be the right way to go."

"Staying in, will bring pain to everyone."

 

"Portugal's bond yields are in 'default territory.' Spain is next. Italy 'has choices.'"

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Felix Zulauf on the European Debt Crisis−No Painless Way Out

Money Printing Going Global

 

NEWSHOUR, GUEST EXPERT

MP3: http://www.netcastdaily.com/broadcast/fsn2012-0210-1.mp3

 

Jim welcomes back Felix Zulauf, Founder and President at Zulauf Asset Management AG for another wide-ranging discussion. In the first of a two-part interview, Felix discusses the European debt crisis and believes the bailouts will be bigger than anticipated. He also sees money printing going global as central banks expand their balance sheets to equal or surpass the GDP of their respective countries.

 

(CLICK HERE FOR TRANSCRIPT)

 

/see: http://www.financialsense.com/financial-sense-newshour/guest-expert/2012/02/10/felix-zulauf/the-european-debt-crisis-no-painless-way-out

 

"Greece cannot deliver."

"If they exit, every Greek entity with debts to the outside world, will go bust."

"But Greece tourism will boom if they exit... and (Greece) may return to the capital markets in 4 years."

"That would be the right way to go."

"Staying in, will bring pain to everyone."

 

"Portugal's bond yields are in 'default territory.' Spain is next. Italy 'has choices.'"

It was one of the best interviews I've heard on FS for a long time AND Felix Zulauf will be back on Monday in Pt2 to talk all about GOLD on Financial Sense. Well worth a listen to see what he has to say, IMHO.

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