2015 - Greece drops Euro?

[verdo]

Re: 2015 - Greece drops Euro?

What I'm really curious about is if this means N. Korea will open up some form of public internet access. I don't think a country like that can truly enter the modern world without some semblance of public internet access (even if it has restrictions) that is not reserved for only the elites. Apparently, there are upwards of 2 million mobile phones , along with an internalized 3G network service called Koryolink already in play within the country. So there are a good few number of people who already have the tools and the know-how. Now the DPRK just needs to push the go button.

[Adeptus]

Re: 2015 - Greece drops Euro?

(ignore, double post)

[Adeptus]

Re: 2015 - Greece drops Euro?

Looks like ECB called Syriza's bluff (??). Count down to Greek bank runs as Greek bank bond collapse? Good times in markets tomorrow for sure.

Source:http://www.ft.com/intl/cms/s/0/3dec1...#axzz3QoTO7hE8
Select Quotes

The ECB said it would ban the use of Greece’s debt as collateral for its liquidity operations, lifting a waiver that had been set to expire at the end of February if the Syriza-led government carried out its threat to leave its EU bailout programme.

The central bank explained its decision by saying that it was impossible to assume a successful conclusion of the current Greek programme.


The announcement came after the Greek markets closed. The Athens General equity index edged up a further 0.9 per cent following the previous day’s 11.3 per cent jump. Greece’s 10-year government bond yield briefly moved back above 10 per cent with the uncertainty surrounding the outlook for the country was further underscored by weak demand at an auction of Treasury bills.

On a related note, Greece may run out of cash by late Feb as Gov refuses more loans.
Source: http://www.bloomberg.com/news/articl...thout-ecb-help

Select quotes...

(Bloomberg) -- As Greece’s creditors line up to oppose the country’s demand for a debt restructuring, Prime Minister Alexis Tsipras’s refusal to accept more bailout loans may result in a cash crunch as early as next month

Unless the 15 billion-euro ($17 billion) limit on short-term borrowing set by Greece’s troika of official creditors is raised, the government may run out of cash on Feb. 25, said one of the people, who asked not to be named because the figures are confidential. Three weeks ago, international officials reckoned Greece could hang on until mid-year.

With Greeks yanking their cash from banks and withholding tax payments, Tsipras would only be able to survive for a few more weeks by tapping social-security funds and withholding payments to vendors, the person said. By the end of March he may face existential choices: accepting a lifeline with conditions he has consistently rejected or abandoning the euro.

Chancellor Angela Merkel expects the Greeks to meet their existing commitments to the rest of the euro area and she’s prepared to wait until May for Tsipras to fold, a person familiar with her thinking said Tuesday.

Varoufakis also met with ECB officials in Frankfurt on Wednesday. ECB President Mario Draghi told the Greek finance chief he needs to talk to the troika, which oversees Greek compliance with the bailout’s terms, and made no offer about raising the central bank’s own limits on collateral, according to a person briefed on the meeting.


Greek banks have maxed out the 3.5 billion-euro limit on the total amount of treasury bills the ECB will accept as collateral from them. The ECB supervisory chief, Daniele Nouy, has written to bank executives advising them not to invest their liquidity in assets that the central bank won’t accept.
The squeeze is getting worse because the change of government and a looming standoff with the troika persuaded many to hold off paying their taxes, according to a troika official. In part that’s because of Tsipras’s policy proposals. During the campaign, he pledged to replace property levies with a wealth tax and to raise the income-tax threshold. So some, reckoning their tax bills might be cut, opted to avoid paying altogether.
Tax revenue fell short of government forecasts by 1.3 billion euros in December, according to finance ministry data.


Cash Hopes

The government’s coffers are set for a 641-million-euro boost this quarter from a Bank of Greece dividend and cash-back from its investment in Greek bonds. The government can also tap at least 625 million euros in its bank recapitalization fund, the person said.
But this still won’t be enough to meet end-March obligations if the stock of treasury bills doesn’t increase, he said. Without help from the ECB, the government will be 4 billion euros short, the person said.
To stay liquid, Greece needs the troika to lift its 15 billion-euro cap on the amount of short-term debt it can issue, and it needs the ECB to lift the 3.5 billion-euro limit on the volume of bills it will accept from Greece as collateral.
The funding limits give “the power to the ECB to turn off liquidity and effectively impose Grexit,” Nicholas Economides, professor of economics at Stern School of Business in New York said in an e-mail, referring to a Greek exit from the euro. “Greece is in very deep waters.”
Euro region finance ministers are due to meet Feb. 16 in Brussels when Greece’s plight is likely to dominate discussions.

[Woodsman]

Re: 2015 - Greece drops Euro?

Looks like ECB called Syriza's bluff (??).

Assuming grexit is the end game, how many moves and counters before they get to the finish line?

[EJ]

Re: 2015 - Greece drops Euro?

What I'm really curious about is if this means N. Korea will open up some form of public internet access. I don't think a country like that can truly enter the modern world without some semblance of public internet access (even if it has restrictions) that is not reserved for only the elites. Apparently, there are upwards of 2 million mobile phones , along with an internalized 3G network service called Koryolink already in play within the country. So there are a good few number of people who already have the tools and the know-how. Now the DPRK just needs to push the go button.

I was referring to the North Korean Special Economic Zone. I recall being in Hong Kong in the 1980s and viewing the Chinese SEZ from a hillside the Hong Kong side and wondering what was to become of this. Two years to meaningful reforms may be optimistic but ten is a near certainty.

[verdo]

Re: 2015 - Greece drops Euro?

I was referring to the North Korean Special Economic Zone. I recall being in Hong Kong in the 1980s and viewing the Chinese SEZ from a hillside the Hong Kong side and wondering what was to become of this. Two years to meaningful reforms may be optimistic but ten is a near certainty.

ahh gotcha. Well i guess i was too optimistic, but I'm aware of what they've been doing in this economic zone they've set up. I'd love to see them abandoned these old dated communist ideals for the sake of the North Korean countryside which is in dire straights. If i could though, I'd be buying up North Korean gold as jim rogers has been doing, but mainly because I think North Korea is going to make headlines in the years to come when it starts to open up its economy more to foreign investment

[vt]

Re: 2015 - Greece drops Euro?

http://www.telegraph.co.uk/finance/e...th-Greece.html

[jpatter666]

Re: 2015 - Greece drops Euro?

Here's another interesting one.

http://www.project-syndicate.org/com...letsky-2015-02

[touchring]

Re: 2015 - Greece drops Euro?

Here's another interesting one.

http://www.project-syndicate.org/com...letsky-2015-02

Really? My gut feel is that Yanis Varoufakis is trying to fool the Germans into believing he will concede, but actually he has already decided not to concede right from the start.

[jpatter666]

Re: 2015 - Greece drops Euro?

Really? My gut feel is that Yanis Varoufakis is trying to fool the Germans into believing he will concede, but actually he has already decided not to concede right from the start.

I agree he will not concede, but he is betting the Germans will.

I personally believe the Germans have already decided to cut Greece loose and their strategy is more to put the majority of the blame on Greece for the upcoming implosion.

[touchring]

Re: 2015 - Greece drops Euro?

I agree he will not concede, but he is betting the Germans will.

I personally believe the Germans have already decided to cut Greece loose and their strategy is more to put the majority of the blame on Greece for the upcoming implosion.

I'm doubtful that he really believes that the Germans will concede. A smart man like him is always prepared for the worst case scenario.

However, he can't show that he doesn't believe a deal can't be done because everyone will blame him for it.

[gnk]

Re: 2015 - Greece drops Euro?

I'm doubtful that he really believes that the Germans will concede. A smart man like him is always prepared for the worst case scenario.

However, he can't show that he doesn't believe a deal can't be done because everyone will blame him for it.

Varoufakis doesn't have the power you think he does. Alexis Tsipras, the Prime Minister, calls the shots. Nonetheless, Varoufakis is the intellectual heavyweight of the two - Tsipras, on the other hand, is just a good speaker and politician who unfortunately has not had the international experience Varoufakis has and as a result, doesn't communicate well with non-Greek EU representatives.

It also seems to me that the two may not always be on the same page, so to speak. This occurred last week:

On Thursday morning, rumours about what happened in that "missing hour" were swirling after the text of a purported agreement was leaked to the Financial Times. It reportedly shows an agreement between the European finance ministers and the Greek finance minister, which was then vetoed by the Greek prime minister minutes after the bargain was struck.

Article Here

Negotiations are touch and go, and the current loan request for an extension submitted this morning by Greece seems to be a non-starter. Greece wants the money with no strings. That's not happening. But it is interesting that they submitted the request so quickly after yesterday's meeting, maybe to buy time for further haggling before the drop dead date?

What I haven't seen in the international press is the potential for a national referendum some are discussing in Greece right now. They are merely mumblings right now, but I think that should Tsipras hit a wall at the eleventh hour, he or the oppposition may throw the entire "stay with the memorandum or leave the EU" issue to the electorate, which politically, would somewhat absolve the politicians of the subsequent disaster should the populace vote thumbs down.

If Greece is about to hit the iceberg, so to speak, I expect Varoufakis to jump ship. Tsipras, I fear, is in over his head. The politicians that were in charge during the prior bailouts, one can argue were kleptocrats. However, they understood how the system worked and knew where the boundaries lie.

It's anyone's guess where this goes. I still believe an agreement of sorts will ultimately prevail. When politicians say they are not bluffing... usually they are bluffing. What makes me uncomfortable is Tsipras' inexperience and youth.

[jpatter666]

Re: 2015 - Greece drops Euro?

Varoufakis doesn't have the power you think he does. Alexis Tsipras, the Prime Minister, calls the shots. Nonetheless, Varoufakis is the intellectual heavyweight of the two - Tsipras, on the other hand, is just a good speaker and politician who unfortunately has not had the international experience Varoufakis has and as a result, doesn't communicate well with non-Greek EU representatives.

It also seems to me that the two may not always be on the same page, so to speak. This occurred last week:



Negotiations are touch and go, and the current loan request for an extension submitted this morning by Greece seems to be a non-starter. Greece wants the money with no strings. That's not happening. But it is interesting that they submitted the request so quickly after yesterday's meeting, maybe to buy time for further haggling before the drop dead date?

What I haven't seen in the international press is the potential for a national referendum some are discussing in Greece right now. They are merely mumblings right now, but I think that should Tsipras hit a wall at the eleventh hour, he or the oppposition may throw the entire "stay with the memorandum or leave the EU" issue to the electorate, which politically, would somewhat absolve the politicians of the subsequent disaster should the populace vote thumbs down.

If Greece is about to hit the iceberg, so to speak, I expect Varoufakis to jump ship. Tsipras, I fear, is in over his head. The politicians that were in charge during the prior bailouts, one can argue were kleptocrats. However, they understood how the system worked and knew where the boundaries lie.

It's anyone's guess where this goes. I still believe an agreement of sorts will ultimately prevail. When politicians say they are not bluffing... usually they are bluffing. What makes me uncomfortable is Tsipras' inexperience and youth.

I think part of the problem is that Greece is still thinking the old rules apply not realizing there is a new game. Even two years ago Greece could have made these types of demands (and did in various forms) and gotten away with it. But the past few years have been spent financially and psychologically preparing for Grexit. Germany is IMO not kidding -- to them the benefits of kicking Greece out now outweigh keeping them in. Greece's occasional Nazi comments help harden the German populace against Greece.

Greece has become that relative who is always hounding you for money but despite numerous attempts to bail them out and get them on their feet they refuse to change and keep blaming you for not helping out enough (we've been here).

At some point, you wake up and sadder but wiser cut them loose.

[touchring]

Re: 2015 - Greece drops Euro?

At some point, you wake up and sadder but wiser cut them loose.

The question is, can the Greek people survive another 5 more years of austerity?

It's like a youth, out of varsity with a Masters degree and works in a cafe serving dishes, or is jobless at home working odd jobs, for the last 4-5 years. Can this person still function after another 5 more years?

[jpatter666]

Re: 2015 - Greece drops Euro?

The question is, can the Greek people survive another 5 more years of austerity?

It's like a youth, out of varsity with a Masters degree and works in a cafe serving dishes, or is jobless at home working odd jobs, for the last 4-5 years. Can this person still function after another 5 more years?

That's an excellent question. At this stage I'm not sure there are good options for Greece -- simply lesser bad ones.