The Greek game of Chicken

[Scout26]

Looks like the Greeks have voted "OXI" on the proposed bailout by the ECB.  And according to sources they have only 2-3 days of money left.

So they're at the point of does the ECB (and the EU or at least Germany) bail them out anyway, without any concessions or plans to "fix" their economy and budget

OR

Do we get the Greexit, where the Greeks leave the Euro Union and go back to the drachma.   In which case, Greece becomes a shoppers and tourist paradise because of the rapidly deflated (and deflating) currency.   (Anyone want to by the Parthenon for pennies on the dollar or drachma?)


It will be interesting to see who blinks first.   Because if the EU does, then Greece will never get it's fiscal house in order.  If Greece does, then the .gov falls, and the country will descend into anarchy for a while with whoknowswhat emerging from the other side.  IIRC, the Greek Fascist/Nationalist/Nazi's) are in a coalition with the Socialists, so there's always that, however the heart of Europe is long slog and many warlike cultures away from Greece.   However, they hate the Turks and could cause a metric buttload of trouble in the Med (Hello 6th Fleet !!!)

Anywho, the next two days will be fun to watch.  While the EU could weather the storm of a Greexit without much of a hiccup, for now.  Spain, Portugal, Italy, and Ireland are rumoured to be the next dominoes to fall in this on-going saga. 

So strap in and hunker down the next 48 hours are going to be very interesting.  Especially if you are invested in any of the markets.  Might be a good time to move to a cash position, and buy stuff that tumbles in the next few days or so.

 

[dogmush]

You gotta think that if the EU blinks, and gives in there will be a race in all the countries near the edge to spend as many Euros as possible.  No one wants to be the last one standing in musical socialism.

[vaskidmark]

Did anybody seriously expect the Greek people to give up the free cheese?

Does anybody seriously expect any other country's citizens to be so altruistic as to take a bite of a [expletive]it sandwich now in the hopes of avoiding being force-fed [expletive]it porridge later?

The referendum was merely a way of the politicians to avoid having to shoulder the responsibility.

And yes, a vacation to Greece ought to be in order - about 3 months from now when it is more clear that crime and mob violence are not the order of the day.

stay safe.

[roo_ster]

I had a disturbing visual when first I read the thread title:
http://tinyurl.com/greekstylechicken
(use of a naughty word at the link, but no visuals)

In retrospect, the visual was apt, since the Greeks will keep it up.

============

Expect to see the German/euro investment firms bailed out.  Since that is what the Greek bails outs were all about: keeping the big banks from taking a bath.  IOW, letting them keep the profits made from risky loans in good times and socializing/nationalizing the losses when the Greeks do not repay.  In that sense, I have no sympathy for the Euroweenies.  Let them eat grape leaves.

I do hope that this brings the Euro & EU down.

[French G.]

Hopefully there are clear minds at the ECB and Euro Commission. Greece has to fail. No talks, no emergency cash. It's done.  If it's not done then all of Europe is. All the rest of the marginal countries are not only going to spend euros like it's 1999, but their idiot left wings are going to dig in ever harder. No deals, no austerity, give us everything like you did for Greece. Gets dumb enough and a shooting war is not impossible.

[Ben]

Well, that's it then. The vote just came back overwhelmingly "no".

Interestingly several prominent liberal-leaning US economists were urging this because, "The EU will bail you out. If you vote "yes" you'll be throwing away free money." Jackasses.

I'm getting the proceeds from my condo sale on Tuesday. I think I'm going to park it for now and see how all this plays out. Or else buy a bungalow on a Caribbean island, toss my phone and computer, and let everything pass me by. :)

[roo_ster]

Hopefully there are clear minds at the ECB and Euro Commission. Greece has to fail. No talks, no emergency cash. It's done.  If it's not done then all of Europe is. All the rest of the marginal countries are not only going to spend euros like it's 1999, but their idiot left wings are going to dig in ever harder. No deals, no austerity, give us everything like you did for Greece. Gets dumb enough and a shooting war is not impossible.

It aint about greece.  The priorities of the euroweenies are
1. Preservation of the eu.
2. Preservation of the large institutional investors who have principal at risk.
3. Everyone else can feast on shinola.

I think the question they are asking themselves is "is it more dangerous for the eu to carry--continually bail out--greece and the other piigs or is it less dangerous to cut greece off?"

They would prefer that greek depositors eat bags of dicks to the tune of 30pct of their deposits but that was voted down.

I doubt that the money lenders will be left out in the cold.  Harshest case scenario for greece
1. Greece is cut off and loan principal considered unrecoverable from greece.
2. Large investors made whole by screwing the depositors in the rest of the eu.

All in all it could not have happened to a better lot of turd burglars.

[MillCreek]

^^^I agree, and it will be interesting to see who is determined to be 'too big to fail'.  I am thinking that the EU banks are not going to be standing on the street corners of Brussels asking for spare change.

[French G.]

Of course it is not about Greece. Despite what Tsiparas says about strengthening their negotiating position I figure all other parties need to talk about Greece like they aren't in the room, even if they are. The choice to be made is does the unity of the euro fail this week, or does the whole EU collapse within the decade.

[SADShooter]

I'm also wondering what this may mean in terms of the regional strategic picture. With Vlad the Invader lurking, instability in the Middle East and North Africa, and the U.S. in a non-interventionist mode, will any in Europe decide they can't afford to keep skating on the tiny percentages of GDP they've been spending on defense? And if any nations do begin ramping up militarily, would that strengthen NATO or fragment it?

[vaskidmark]

Supposedly oil futures took a big hit when the vote results were announced.  Which I'm sure explains why the price at the pump jumped 12 cents from when I went out this morning until 45 minutes later when I came back.

But I'm feeling all smug and such - I filled up on the way out. 

stay safe.

[Hutch]

Well, that's it then. The vote just came back overwhelmingly "no".
<snip>
I'm getting the proceeds from my condo sale on Tuesday. I think I'm going to park it for now and see how all this plays out. Or else buy a bungalow on a Caribbean island, toss my phone and computer, and let everything pass me by. :)

Ben, reflect on the notion of a bail-in, as well as capital controls.  I'm going to pay off the mortgage with a very generous inheritance, rather than have it available for SJW's to covet.  I just hope the recent SCOTUS  ruling allowing .gov "protection" of employer-sponsored savings plans doesn't get the camel's nose into the tent of 401k management.  As God is my witness, I will drain my 401k and figuratively "bury it in a jar in the backyard" if that looks imminent.

[Scout26]

Looks like the Germans are going to tell them "Nein".  And cut off anymore funding.  Simply because if they give in Greece will never fix their budget, taxation and economic issues.  Greece never should have been allowed in the Eurozone in the first place.  Also, if Italy, Spain Portugal, et al, see Greece being defiant, and still getting money, then it will be a race to see who spends more and faster.   Net result European economic implosion.  And if that doesn't get the Drang Nach Osten going again, nothing will.

Cutting Greece loose will make the aforementioned countries get their shiesse together if they want to stay.  Greece was only 2% of the EU. Which would be like us losing Louisiana.   Might be a little hard for the EU, but it's going to suck donkey dicks to be Greek.  If it does dissolve into civil war, I won't be surprised.  

What was is it Bismarck said? Something about nothing in the Balkans being worth the life of one Pomeranian Grenader...

[Angel Eyes]

What was is it Bismarck said? Something about nothing in the Balkans being worth the life of one Pomeranian Grenader...

They can get those little dogs to carry grenades?  Impressive.

[Hutch]

It is a pickle.  Piss away more money on the Greeks so that it doesn't start a cascade of ordure, thereby tacitly encouraging the other southern tier countries to follow the example of Greece, or force them into default and out of the EU, which might start some other derivative-based, sovereign debt food fight.  What a terribly interesting time to be alive.

[French G.]

I reluctantly think that I would have favored the not going to happen option of 30% of Greek deposits being nationalized, seized or what have you. I know it sounds a lot like the wet dream here of 401Ks being seized and is pretty much grounds for a civil war, but in fairness the debt was used to pay for what the people voted for. Certainly less wrong than what is being asked by Greece now, for lenders to give up 30% of what they are owed.

[Scout26]

While we will find out soon enough.  (Sunday)

http://news.yahoo.com/germany-france-press-greece-fast-credible-proposals-020951804--business.html#

Greece being kicked out of the Eurozone will actually strengthen the Euro via-a-vs most other currencies.  With the boat anchor of Greece freed from the EU,  the remainder of the deadbeat Eurozone nations will see that they have to get their financial/fiscal houses in order, or go through the economic meltdown that will be Greece. 

Those smarmy people dancing in the streets after the "OXI" vote are about to learn what "Nein" means when the Germans say it good, loud, and hard.

Even in France, the euro zone country most sympathetic to Athens, an opinion poll published on Tuesday showed one in two people want Greece to leave the euro zone.   

The Greeks are phucked, but they don't get it. 

[De Selby]

I reluctantly think that I would have favored the not going to happen option of 30% of Greek deposits being nationalized, seized or what have you. I know it sounds a lot like the wet dream here of 401Ks being seized and is pretty much grounds for a civil war, but in fairness the debt was used to pay for what the people voted for. Certainly less wrong than what is being asked by Greece now, for lenders to give up 30% of what they are owed.

Wait, how was the debt used to pay "for what the Greek people voted for"?

[De Selby]

While we will find out soon enough.  (Sunday)

http://news.yahoo.com/germany-france-press-greece-fast-credible-proposals-020951804--business.html#

Greece being kicked out of the Eurozone will actually strengthen the Euro via-a-vs most other currencies.  With the boat anchor of Greece freed from the EU,  the remainder of the deadbeat Eurozone nations will see that they have to get their financial/fiscal houses in order, or go through the economic meltdown that will be Greece. 

Those smarmy people dancing in the streets after the "OXI" vote are about to learn what "Nein" means when the Germans say it good, loud, and hard.

The Greeks are phucked, but they don't get it. 

The Germany economy benefitted greatly from exactly the opposite of the policy being applied to Greece.  Why would the Greeks be dumb enough to ignore that?

[French G.]

Wait, how was the debt used to pay "for what the Greek people voted for"?

Umm, the FSA voted for more, more, more for how long?

[Ron]

Stop looking for good guys, there are no good guys.

[Fitz]

You gotta think that if the EU blinks, and gives in there will be a race in all the countries near the edge to spend as many Euros as possible.  No one wants to be the last one standing in musical socialism.

I laughed WAY harder at this than i should have, and will be stealing it. LOL

[HankB]

A LOT of Greek depositors took their money out of banks in the past few months - at one point the government planned to give a 30% "haircut" to deposits in excess of 100,000 Euros, but . . . there are hardly any accounts left with that much. Now the talk is of a "haircut" on deposits in excess of 8000 Euro.

That will cause massive rioting . . . and if not, I predict the Greek government will try to put the squeeze on the folks who took their money out; it wouldn't surprise me if they "ordered" them to bring it back so they could seize it, much like the Mugabe government in Zimbabwe "ordered" farmers who'd moved their farm equipment out of the country just before their farms were seized to bring it back since it " . . . belonged to the people of Zimbabwe."

I expect the Greeks will comply just like the Rhodesian farmers did.

[dogmush]

I don't blame them.

If the government wanted to take 30% of y cash, I'd think of shooting someone too.

Of course, I didn't vote for a bunch of socialist crap.*


* I bet there's a bunch of Greeks that didn't vote for this stuff as well.........sucks to be them.

[Scout26]

The Germany economy benefitted greatly from exactly the opposite of the policy being applied to Greece.  Why would the Greeks be dumb enough to ignore that?

Well, in the first place the Greeks haven't kicked the *expletive deleted*it out of the French three times in less then 70 years.

In the second place, the Greeks aren't shouldering and accepting the debts of former rogue  governments with only half a country left.

And in the third place, they aren't willing to buckle down and restore fiscal order, like the Germans did.  They not only want to spend as they have in the past, they want to spend MORE then they have in the past.  

http://www.bloombergview.com/articles/2015-01-27/germany-deserved-debt-relief-greece-doesn-t-i5fdca2y

To sum up from the above article:

Parallels between today's Greece and 1953 Germany are demagoguery, pure and simple.