[Sixstrings]

Headlines on drudgereport:

GREEK CRISIS IGNITES AS BANKS SHUT FOR NEXT 6 DAYS...
As referendum looms, many in country hoard groceries, gas...
ATM withdrawals limited to 60 euros a day...
WEEKEND THAT SHOOK EURO...
BRINK OF MELTDOWN...
Patience, Composure...
World 'defenseless' against next financial crisis...

I'm not up on all the details with this, anyone know? I had a hunch that the federal reserve / US gov would get involved, ultimately, rather than let it crash. But looks like maybe not.

Anybody know? Could this cause a global financial meltdown or some such?

[Peak_Yeast]

Im a in doubt about this - since I can see it go both ways.

The creditors has had a long time to prepare for the bankruptcy - so I suppose those that could has protected themselves as good as they can...

And ECB has still extended loangiving to banks to keep them afloat.

Also the EU must have prepared, too...

The greek economy is exporting Feta-cheese and Olive-oil - besides that they earn their income on tourism. So its not likely that anyone besides the creditors will lose something important.

[ohanian]

Will Greece default?


er? Is the pope Catholic?

[Cog]

A few down days on the stock market. Greece is not leaving the EU or the Euro. No default. 300 billion in Euro debt isn't really all that much. The bankers will make sure that fantasies of a world wide financial meltdown remain just that, a fantasy.

I figure to by some more stock in the next few days to take advantage of those who are going to panic.

[Paulo1]

The debt myth/trap cannot continue much longer. All a crash will need is a loss of faith, (and how anyone can still have faith in the 'system' is beyond me). Fucking banksters and IMF. They work just like the Mafia taking over a business. Squeeze and suck...then have a fire and milk the insurance companies....whoops, Hedge Funds. Eventually, somebody has to pay up and it is usually the little guy. 80% of the so called bailout funds have already gone back to the German and French banks. Bastards.

[GHung]

The World Is Defenceless Against The Next Financial Crisis, Warns BIS (Telegraph)

The world will be unable to fight the next global financial crash as central banks have used up their ammunition trying to tackle the last crises, the Bank of International Settlements has warned. The so-called central bank of central banks launched a scatching critique of global monetary policy in its annual report. The BIS claimed that central banks have backed themselves into a corner after repeatedly cutting interest rates to shore up their economies. These low interest rates have in turn fuelled economic booms, encouraging excessive risk taking. Booms have then turned to busts, which policymakers have responded to with even lower rates.

Claudio Borio, head of the organisation’s monetary and economic department, said: “Persistent exceptionally low rates reflect the central banks’ and market participants’ response to the unusually weak post-crisis recovery as they fumble in the dark in search of new certainties.” “Rather than just reflecting the current weakness, they may in part have contributed to it by fuelling costly financial booms and busts and delaying adjustment. The result is too much debt, too little growth and too low interest rates. “In short, low rates beget lower rates.” The BIS warned that interest rates have now been so low for so long that central banks are unequipped to fight the next crises. “In some jurisdictions, monetary policy is already testing its outer limits, to the point of stretching the boundaries of the unthinkable,” the BIS said.....

more: http://www.telegraph.co.uk/finance/econ ... s-BIS.html

... and no one dares to ask how many cross bets (CDS, derivatives, etc) are tied to this mess.

[SeaGypsy]

Well it looks like being the most interesting week in economics for a very long time. The potential for a serious crisis in confidence is of course more of a threat than if Greece fell into the Med. The fact most of the world is at near zero interest rates begs the question 'how much loss of confidence can the market take?' For this reason I suspect those guessing at 3rd party intervention at the midnight hour is more likely than the experiment the Grexit will entail. Popcorn time anyhow!

Sent from my HUAWEI Y320-U151 using Tapatalk

[GHung]

Meanwhile, back at the ranch, the US has its own little Greece:

Governor: Puerto Rico near 'death spiral':

Puerto Rico can no longer make payments on its $73 billion in debt, according to Governor Alejandro Garcia Padilla, who warns the island is perilously close to entering a "death spiral"....

http://money.cnn.com/2015/06/29/news/ec ... oplead-dom

...and PR's woes are, in part, energy related:

One flashpoint is a $400 million debt payment that government-run electricity provider, PREPA, must make on July 1. It's a debt that PREPA almost certainly can't pay in total -- Moody's has rated the electricity company's bonds in the lowest possible category.

PREPA itself has about $9 billion in total debt -- by comparison, when Detroit went into bankruptcy, it shed $7 billion.

....and more tax-payers have been abandoning ship since the 2008 crisis:

Things have gotten so bad that Puerto Ricans of all social classes have left in search of jobs elsewhere.

Between 1980 and 2000, the average annual migration of Puerto Ricans to the mainland United States was 12,000 people. From 2010 to 2013 -- when the economy started tanking -- that figure jumped to 48,000 people per year.

Every time someone leaves Puerto Rico, it only exacerbates the situation. It shrinks the island's tax base, which the government needs to pay for itself and its debts. In recent years, the government just issued even more debt to pay off its current debt.

[Sixstrings]

It's official, Greece will default tomorrow:

Greece Will Default To IMF Tomorrow, Government Official Says
http://www.zerohedge.com/news/2015-06-29/greece-will-default-imf-tomorrow-government-official-says

[Outcast_Searcher]

It's official, Greece will default tomorrow:

Greece Will Default To IMF Tomorrow, Government Official Says
http://www.zerohedge.com/news/2015-06-29/greece-will-default-imf-tomorrow-government-official-says

Good old zerohedge. The bastion of the lack of credibility. Funny how I can't find verification of this "news" on Google. (the article cites a "flash" on the Wall Street Journal -- funny how that doesn't show up in web searches about greek default).

Greece will be in arrears if it doesn't pay on time. When the IMF declares them to be in actual default will be up to the IMF. This has been discussed repeatedly in Bloomberg articles in recent weeks.

If the referendum fails and Greece makes no payments, say, through July, then it certainly could credibly be called default.

[Plantagenet]

Its entirely up to the Greek people to decide if they want to default.

The terms of a continued IMF and EU bailout will be voted on by the Greeks. If they want to default they'll vote "NO". If they want to continue in the Euro and accept more austerity in order to pay back their huge debt, then they'll vote "YES" to accept another loan and their acceptance of the EU bailout conditions.

My guess is the Greeks will vote "YES".

[Outcast_Searcher]

Well, if the capital controls are any indication, it's not like there won't be any cash flow in Greece in the short term. And if electronic transactions aren't restricted (including credit cards), then for the law abiding, taxpaying part of the economy not trying to hide things, it's not even an inconvenience.

With all the complaints about "hardship" in the media now, I'd hate to see the time when a Grexit causes hyperinflation of the new Drachma, and/or a true implosion in the Greek economy.

http://www.bloomberg.com/news/articles/ ... t-ibh78tb7

Greek Capital Controls

Banks closed up to and including July 6

Wages and pensions will be paid

Daily ATM withdrawal limit of 60 euros ($67; £42)

No restriction on foreign tourists using ATMs

Electronic transactions unaffected: Greek debit/credit cards can be used

History shows capital controls usually don't work

But government insists deposits are safe

OTOH for the "safety" of the deposits...If you want to hang onto those new Drachmas as bastions of a viable long term currency, yeah. (You'll get "X" somethings, which might buy VERY little within a few months.)

[Fishman]

Enjoying the popcorn as we watch the Thacher's quote play out, 'The problem with socialism is that you eventually run out of other people's money.' Looks like France is in dire straits also

[americandream]

Bearing in mind that the social basis of the EU is largely symbolic, Greeces fate is of no global economic relevance other than to those on the margins.

Is there therefore a need to rescue Greece. The answer is no. If Greece is rescued it will be to placate the minds of the marginal to avoid a run on their accounts and of course any upsetting of the systems momentum. To that extent, I suspect that Greece will be bailed out in one form or another.

[americandream]

Enjoying the popcorn as we watch the Thacher's quote play out, 'The problem with socialism is that you eventually run out of other people's money.' Looks like France is in dire straits also

The problem with this logic is that it fails to recognise that these problems have at their root the forwardisation of labour surplus for credit based consumerism. Socialised spending if any, merely served as the foundation on which all of this activity could occur.

Thatcher was renowned for catchy but airheaded phrases. She however played a pivotal role in causing the wolds current debt ridden state with her policies which put capitalism on debt steroids....along with that actor fellow, Reagan....in pursuit of yuppiedom, many simply overspent and continue to overspend.

[Plantagenet]

Thatcher .... Reagan....blah blah blah

Thatcher and Reagan have been out of office for over 30 years.

They aren't to blame for the current problems in Greece.

Cheers!

[Sixstrings]

More drudgereport doom headlines:

GREECE SET TO SUE OVER THREAT OF EURO EXIT...
'Soon even most basic goods won't be available'...
Threat to drug supplies...
SHOCK...
Fear of social unrest...
Future hangs on 72 words...
Europe's dream dying...
Failed euro would define Angela Merkel legacy...
Lagarde on the hook...
DOW plunges 350...
BEAR MARKET GRIPS CHINESE STOCKS AS PANIC GROWS...

So what does this mean, Greece's solution is to "sue the EU?"

Greece threatens top court action to block Grexit

Greece has threatened to seek a court injunction against the EU institutions, both to block the country's expulsion from the euro and to halt asphyxiation of the banking system.

“The Greek government will make use of all our legal rights,” said the finance minister, Yanis Varoufakis.

“We are taking advice and will certainly consider an injunction at the European Court of Justice. The EU treaties make no provision for euro exit and we refuse to accept it. Our membership is not negotiable,“ he told the Telegraph.
http://www.telegraph.co.uk/finance/economics/11707092/Greece-threatens-top-court-action-to-block-Grexit.html

Odd, a lawsuit isn't going to put cash in the atms, or bread in the grocery stores. I guess they want to default, but keep the euro?

I was watching CNN reporting on this, they said China alone "creates a new Greece every six weeks," in terms of GDP.

Capital controls in Greece are limiting people to 60 euros per day. Which isn't a lot, considering people need to pay all their bills with that and feed themselves.

Elderly pesnioners are having to go from ATM to ATM to try to find one that works, and has money in it.

Wall street crashing.. Asian markets crashing.. doesn't look good.

[Plantagenet]

I guess they want to default, but keep the euro?

The Greeks lied about their finances when they joined the EU. Then the Greeks lied when they took hundreds of billions of Euros and promised to meet certain conditions and eventually repay the bailouts from the IMF and the EU.

Now they want the EU to forget about their lies, and forget about the reforms that were promised, and most definitely forget all about the 300 billion the EU and IMF loaned to Greece.

There's an old saying----"beware of Greeks bearing gifts". The new version is "Beware of loaning money to Greeks"