Greece is FUBAR

[TakeAStepBack]

Has the Greek Bank Run Started?

Has The Greek Bank Run Started? | ZeroHedge

While the long-term decline in bank deposits over the past 3 years has been well documented both on Zero Hedge and elsewhere, it is the most recent, acute post-election phase that has not gotten much coverage. Minutes ago Bloomberg sent out a notice that things in Greece may be on the verge of the final collapse. From Bloomberg: "Anxious Greeks have withdrawn as much as 700 million euros ($893 million) from the nation’s banks since the inconclusive May 6 election, President Karolos Papoulias told party leaders yesterday, according to a transcript of the meeting posted on the presidency’s website today. Papoulias said he got the information from the head of the Bank of Greece, the central bank, George Provopoulos, according to the transcript." While this was likely a negotiation talking point to facilitate the formation of the government, the reality as we now know is that there has been NO government formed, which now means that the bank run will only get worse. Needless to say, a Greek banking system which is now virtually shut out of any extrenal funding except for the ELA, where it has a few billions euros in access left, will be unable to deal with hundreds of millions in deposit outflows.

This may be the beginning of the end for Greece, just as Buiter and later JPM warned over the weekend.

Why We Are Going To See Bank Runs Happening All Over Europe (NYSEARCA:XLF, NYSEARCA:FAS, NYSEARCA:FAZ, NYSEARCA:EWP, NYSEARCA:EWI, NYSEARCA:FXE, NYSEARCA:VGK, NYSEARCA:EWG) | ETF DAILY NEWS

Why We Are Going To See Bank Runs Happening All Over Europe (XLF, EWP, EWI, FXE, VGK, EWG, FAZ, FAS)

Michael Snyder: The bank runs that we are watching right now in Greece (NYSEARCA:GREK) are shocking, but they are only just the beginning. Since May 6th, nearly one billion dollars has been withdrawn from Greek banks. For a small nation like Greece, that is an absolutely catastrophic number. At this point, the entire Greek banking system is in danger of collapsing. If you had money in a Greek bank, why wouldn’t you pull it out? If Greece leaves the euro, all euros in Greek banks will likely be converted to drachmas, and the value of those drachmas will almost certainly decline dramatically. In fact, it has been estimated that Greek citizens could see the value of their bank accounts decline by up to 50 percent if Greece leaves the euro. So if you had money in a Greek bank, it would only make sense to withdraw it and move it to another country as quickly as possible. And as the eurozone begins to unravel, this is a scenario that we are going to see play out in country after country. As member nations leave the eurozone, you would be a fool to have your euros in Italian banks or Spanish banks when you could have them in German (NYSEARCA:EWG) banks instead. So the bank runs that are happening in Greece right now are only a preview of things to come. Before this crisis is over we are going to see bank runs happening all over Europe (NYSEARCA:VGK).

If Greece leaves the euro (NYSEARCA:FXE), the consequences are likely to be quite messy. Those that are promoting the idea that a “Grexit” can be done in an orderly fashion are not being particularly honest. The following is from a recent article in the Independent….

“Whoever tells you a Greek exit would be no big deal is an idiot, lying or disingenuous,” said Sony Kapoor of the European think-tank Re-Define. Economists fear that a disorderly exit would prompt a huge run by investors on Spanish and Italian debt, forcing those countries to seek support from an EU bailout fund, which, with a capacity of just €500bn, is widely regarded as too small to cope with those pressures.

A Greek exit from the euro would not only result in a run on Spanish and Italian bonds, but it would also likely result in a run on Spanish and Italian banks.

If Greece is allowed to leave the euro, that will be a signal that other countries will eventually be allowed to leave as well. Nobody in their right mind would want their euros stuck in Spanish or Italian banks if those countries end up converting back to national currencies.

Fear is a powerful motivator. If Greece converts their euros back to drachmas, that will be a clear signal that all euros are not created equally. The race to move money into German banks will accelerate dramatically.

And a Greek exit from the euro is looking more likely with each passing day. Even the IMF is now admitting that it is a very real possibility….

Christine Lagarde, head of the IMF, warned she was “technically prepared for anything” and said the utmost effort must be made to ensure any Greek exit was orderly. The effect was likely to be “quite messy” with risks to growth, trade and financial markets. “It is something that would be extremely expensive and would pose great risks but it is part of options that we must technically consider,” she said.

Meanwhile, banks in other troubled European nations are already on shaky ground. The Spanish banking system is an absolute disaster zone at this point and on Monday night Moody’s downgraded the credit ratings of 26 Italian banks.

The situation in Italy is especially worth keeping a close eye on. As Ambrose Evans-Pritchard recently noted, things are not looking good for Italy at all….

Italy’s former premier Romano Prodi said the EU risks instant contagion to Spain, Italy, and France if Greece leaves. “The whole house of cards will come down”, he said

Angelo Drusiani from Banca Albertini said the only way to avert catstrophe is to convert the European Central Bank into a lender of last resort. Otherwise Italy faces “massive devaluation, three to five years of hyperinflation, and unbearable unemployment.”

it was only a matter of time. But we knew this was coming. Fiat money never stands the test of time. Tic toc goes the clock.

 

[Katzndogz]

Part of the reason for the financial collapse in Greece is that as the nanny state grew, the business class was taxed at higher and higher rates. Some business left. Those that stayed made cheating on taxes and not paying any taxes an art form.

 

[TakeAStepBack]

That's part of it. They also have a huge socialist society with perks never paid for by govt. Which is how it always happens and the reason socialist programs don't work. Though, the root of it all is the fiat money. No country, no person, economy, can print their way to wealth. it's a mathematical and economic fact.

Fiat money always fails. This is the beginnning of the end of the Euro and could trigger a much more pervasive global capital market deterioration.

 

[TakeAStepBack]

On a more positive note, I read this morning that China took up buying our debt again like it's going out of style.

 

[waltky]

Granny says it was a bad idea from the start...

Eurozone set-up unsustainable, says Draghi
31 May 2012 : Mr Draghi said the ECB could not fill the vacuum caused by lack of action from governments

European Central Bank (ECB) president Mario Draghi says that eurozone leaders must decide what they want the bloc to look like in the future, because the current set-up is "unsustainable". He said that the ECB could not "fill the vacuum" left by governments on creating growth or structural reforms. EU economics commissioner Olli Rehn said more austerity was needed if the eurozone was to avoid disintegration.

New figures showed eurozone inflation slowed more than expected this month. Inflation in the 17 countries that use the euro eased to 2.4% in May from 2.6% in April. The figure is still above the ECB's target to keep inflation below 2%, but the lower-than-expected number could fuel calls for an interest rate cut next week.

Stability needed

Speaking to the European Parliament, Mr Draghi said: "Can the ECB fill the vacuum of lack of action by national governments on fiscal growth? The answer is no. Can the ECB fill the vacuum of the lack of action by national governments on the structural problem. The answer is no. "The next step... is to clarify what is the vision a certain number of years from now. The sooner this is specified, the better it is."

Mr Rehn talked down the idea of European states issuing joint bonds, saying that austerity and closer co-operation were needed. "We need a genuine stability culture and a much upgraded common capacity to contain common contagion," he told a conference. "This is the case, at least if we want to avoid a disintegration of the eurozone and instead make the euro succeed." Worries over the eurozone debt crisis - and in particular Spain's banking sector - have been hitting markets all week. However, the markets were enjoying a respite on Thursday. The euro - which had fallen to near two-year lows against the dollar at $1.2358 - recovered slightly to $1.2410.

More BBC News - Eurozone set-up unsustainable, says Draghi

 

[starcraftzzz]

Has the Greek Bank Run Started?

Has The Greek Bank Run Started? | ZeroHedge

While the long-term decline in bank deposits over the past 3 years has been well documented both on Zero Hedge and elsewhere, it is the most recent, acute post-election phase that has not gotten much coverage. Minutes ago Bloomberg sent out a notice that things in Greece may be on the verge of the final collapse. From Bloomberg: "Anxious Greeks have withdrawn as much as 700 million euros ($893 million) from the nation’s banks since the inconclusive May 6 election, President Karolos Papoulias told party leaders yesterday, according to a transcript of the meeting posted on the presidency’s website today. Papoulias said he got the information from the head of the Bank of Greece, the central bank, George Provopoulos, according to the transcript." While this was likely a negotiation talking point to facilitate the formation of the government, the reality as we now know is that there has been NO government formed, which now means that the bank run will only get worse. Needless to say, a Greek banking system which is now virtually shut out of any extrenal funding except for the ELA, where it has a few billions euros in access left, will be unable to deal with hundreds of millions in deposit outflows.

This may be the beginning of the end for Greece, just as Buiter and later JPM warned over the weekend.

Why We Are Going To See Bank Runs Happening All Over Europe (NYSEARCA:XLF, NYSEARCA:FAS, NYSEARCA:FAZ, NYSEARCA:EWP, NYSEARCA:EWI, NYSEARCA:FXE, NYSEARCA:VGK, NYSEARCA:EWG) | ETF DAILY NEWS

Why We Are Going To See Bank Runs Happening All Over Europe (XLF, EWP, EWI, FXE, VGK, EWG, FAZ, FAS)

Michael Snyder: The bank runs that we are watching right now in Greece (NYSEARCA:GREK) are shocking, but they are only just the beginning. Since May 6th, nearly one billion dollars has been withdrawn from Greek banks. For a small nation like Greece, that is an absolutely catastrophic number. At this point, the entire Greek banking system is in danger of collapsing. If you had money in a Greek bank, why wouldn’t you pull it out? If Greece leaves the euro, all euros in Greek banks will likely be converted to drachmas, and the value of those drachmas will almost certainly decline dramatically. In fact, it has been estimated that Greek citizens could see the value of their bank accounts decline by up to 50 percent if Greece leaves the euro. So if you had money in a Greek bank, it would only make sense to withdraw it and move it to another country as quickly as possible. And as the eurozone begins to unravel, this is a scenario that we are going to see play out in country after country. As member nations leave the eurozone, you would be a fool to have your euros in Italian banks or Spanish banks when you could have them in German (NYSEARCA:EWG) banks instead. So the bank runs that are happening in Greece right now are only a preview of things to come. Before this crisis is over we are going to see bank runs happening all over Europe (NYSEARCA:VGK).

If Greece leaves the euro (NYSEARCA:FXE), the consequences are likely to be quite messy. Those that are promoting the idea that a “Grexit” can be done in an orderly fashion are not being particularly honest. The following is from a recent article in the Independent….

“Whoever tells you a Greek exit would be no big deal is an idiot, lying or disingenuous,” said Sony Kapoor of the European think-tank Re-Define. Economists fear that a disorderly exit would prompt a huge run by investors on Spanish and Italian debt, forcing those countries to seek support from an EU bailout fund, which, with a capacity of just €500bn, is widely regarded as too small to cope with those pressures.

A Greek exit from the euro would not only result in a run on Spanish and Italian bonds, but it would also likely result in a run on Spanish and Italian banks.

If Greece is allowed to leave the euro, that will be a signal that other countries will eventually be allowed to leave as well. Nobody in their right mind would want their euros stuck in Spanish or Italian banks if those countries end up converting back to national currencies.

Fear is a powerful motivator. If Greece converts their euros back to drachmas, that will be a clear signal that all euros are not created equally. The race to move money into German banks will accelerate dramatically.

And a Greek exit from the euro is looking more likely with each passing day. Even the IMF is now admitting that it is a very real possibility….

Christine Lagarde, head of the IMF, warned she was “technically prepared for anything” and said the utmost effort must be made to ensure any Greek exit was orderly. The effect was likely to be “quite messy” with risks to growth, trade and financial markets. “It is something that would be extremely expensive and would pose great risks but it is part of options that we must technically consider,” she said.

Meanwhile, banks in other troubled European nations are already on shaky ground. The Spanish banking system is an absolute disaster zone at this point and on Monday night Moody’s downgraded the credit ratings of 26 Italian banks.

The situation in Italy is especially worth keeping a close eye on. As Ambrose Evans-Pritchard recently noted, things are not looking good for Italy at all….

Italy’s former premier Romano Prodi said the EU risks instant contagion to Spain, Italy, and France if Greece leaves. “The whole house of cards will come down”, he said

Angelo Drusiani from Banca Albertini said the only way to avert catstrophe is to convert the European Central Bank into a lender of last resort. Otherwise Italy faces “massive devaluation, three to five years of hyperinflation, and unbearable unemployment.”

it was only a matter of time. But we knew this was coming. Fiat money never stands the test of time. Tic toc goes the clock.

ROTFL the reason Greece is fucked is because it has something similar to a gold standard
but no one expects you do think or do anything intellgent

 

[starcraftzzz]

That's part of it. They also have a huge socialist society with perks never paid for by govt. Which is how it always happens and the reason socialist programs don't work. Though, the root of it all is the fiat money. No country, no person, economy, can print their way to wealth.

Except America GB Japan, Argentina, Belarus etc etc. I realize that all you can do is reguritate things you hear from Glenn Beck but reality is something difference

 

[starcraftzzz]

Part of the reason for the financial collapse in Greece is that as the nanny state grew, the business class was taxed at higher and higher rates. Some business left. Those that stayed made cheating on taxes and not paying any taxes an art form.

Well if you look at the data buinses taxes declined slightly in Greece.. but dont let reality get in the way of your stupiddiy

 

[Big Black Dog]

Greece is the word.....

 

[sparky]

Tsipras promised to boost the minimum wage, hike taxes on the rich and freeze a major privatization drive designed to raise $24.2 billion, a key condition of its bailout deal. He also pledged to "nationalize and socialize" Greek banks

Greek Leftists Lead Poll; Vow to Kill Bailout, Nationalize Banks | Common Dreams

well, this should prove an interesting turn of events to watch and learn from

~S~