Greece, Austerity, Depression, Grexit or Fresh Start? (video)

Japonica Partners Founder and CEO Paul Kazarian discusses his company being one of the largest private bond holders in Greece and his thoughts on the latest proposal by the country to its creditors. He speaks with Jonathan Ferro on Bloomberg Television’s “On The Move.” Published on Jul 10, 2015

Counter from Paul Krugman:

Austerity and the Greek Depression - The New York Times: "... So now what? A few months ago I thought that stabilizing Greece at a small primary surplus might work, in the sense that it would allow a return to growth even if it didn’t do anything to make up lost ground. But the creditors are still demanding a rising primary surplus over time, and balking at top line debt relief that might at least offer a clear marker of progress. If those are the requirements for Greece to stay in the eurozone, Grexit is inevitable."


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Greece, United, Finally Says "NO" to EU Austerity "Insanity"

Screenshot of  Greek Ministry of Interior website NO: 61.31% ; YES: 38.69%

It wasn't even close!

Blasts from the past (2012): 

• Views under the Palm | Greece: a return to the drachma? (February 20, 2012)
• Views under the Palm | The Greek Sustainability Report and Reaction & Analysis (February 25, 2012)

Time for the EU Creditors of Greece to take a haircut! Tomorrow will be interesting! Follow Live Twitter feed below:

#Greece Tweets

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IPOs Halted on China's Stock Markets, Too Little, Too Late?

On Saturday evening, China’s two stock exchanges — in Shanghai and in the far southern city, Shenzhen — issued notices suspending initial public offerings until further notice even for companies that already had provisional approval to list their shares. (source infra)

As Chinese stocks soared in the 12 months until their peak on June 12, the small- and medium-size companies with weak financial fundamentals fared the best. Many of them quadrupled, or rose even more, in value, while the overall index doubled because large-cap stocks lagged far behind. The small-cap and medium-cap stocks overwhelmingly tended to draw middle-class and working-class investors who were buying whatever stocks were rising fastest. The Shanghai market rose 149 percent in the year until June 12. By comparison, a stock price index of 100 large mainland Chinese companies that are traded in Hong Kong — and many of them in Shanghai, too — rose 24 percent over the same period. (source infra)

China's government-controlled Securities Association of China said that 21 big brokerage firms had agreed to set up a fund worth at least 120 billion renminbi, or $19.4 billion, to buy shares in the largest, most stable companies, and to stop selling shares from their own portfolios. But some experts said the moves might not be enough to stop the hemorrhaging of money from the stock market, particularly given that $105 billion in shares changed hands in Shanghai on Friday.--China Moves to Stabilize Stock Markets; Initial Offerings Halted - The New York Times

The world is addicted to fiscal stimulus and central bankers' fiat money, and as a result has too much debt--The Smartest Man is Wild about Innovation: "The whole world is suffering from too much debt. As a result, growth almost everywhere is going to be slow. I know you believe the problem is insufficient demand, but the major industrialized countries already have considerable debt and do not want to add any more to it to stimulate the consumer."

Financial Crisis Events to watch this week: 

• Greece UPDATE: Greeks Vote "No" more here
• China
• Puerto Rico
• Chicago and Illinois -  Lawmakers 'no closer' to deal hours away from state budget, CPS deadlines - Chicago Tribune

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Why the Champagne Keeps Flowing in Mykonos, Greece (video)

Why the Champagne Keeps Flowing in Mykonos, Greece - Mega yachts, champagne showers and fresh lobster. It's just another day on Mykonos, the Greek party island unscathed by the country's economic crisis. (source: Bloomberg video)


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George Soros: Greece Is Going Down the Drain (video)

George Soros: Greece Is Going Down the Drain -

In an exclusive interview, Hedge Fund Billionaire George Soros discusses Greece's bailout agreement and the U.K. elections with Bloomberg's Francine Lacqua on "Countdown," March 24th.


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Bill Gross Is Very Bullish on Treasuries (video)

Bill Gross Is Very Bullish on Treasuries -
April 3 -- Janus Capital Group Portfolio Manager Bill Gross talks about his treasury holdings, his stance on the German Bund and his thoughts on Greece. He speaks on Bloomberg's "Surveillance."


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Greece's Debt Problem Explained in Five Charts (video)

Greece's Debt Problem Explained in Five Charts -

Greek leaders met with European officials to come up with a plan to get Greece's economy back on track. The country may run out of money as soon as early April if no agreement is reached. Bloomberg's Joe Weisnethal looked at five charts that explain Greece's ongoing financial problems. (Charts by: Maxime Sbaihi, video by: Kelly Buzby, David Yim)


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Nouriel Roubini Does Not See Greece Leaving the Euro (video)

Nouriel Roubini Does Not See Greece Leaving the Euro -

In an exclusive interview, Roubini Global Economics Co-Founder Nouriel Roubini discusses what a Greek exit from the euro would look like. He speaks to Bloomberg's Jonathan Ferro from the Ambrosetti Spring Workshop in Cernobbio, Italy.

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Why Austerity Will Not Save Greece (video)

Austerity programs demanded by Greece's debtors are pinching the country's economy. And history shows that very few countries have been able to meet the surpluses the Troika is asking for from Greece. Blooomberg's Brendan Greeleyexplains how to measure austerity and how it is unlikely to help Greece get out of debt. (Feb 19, 2015)

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Brexit Unlikely If EU Terms Renegotiated says Boris Johnson (video)

`Brexit' Unlikely If EU Terms Renegotiated: Boris Johnson -

London Mayor Boris Johnson talks about the Greece's future and the outlook for the U.K.'s membership in the European Union. Johnson, speaking with Betty Liu on Bloomberg Television's "In the Loop," also discusses concerns over citizens who join Islamic State. (Feb. 11)

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Greece vs Europe, Who Will Blink First? (video)

Greece vs. Europe: Who Will Blink First? -

Yannis Manuelides, a partner at Allen & Overy, discusses Germany and Greece drawing battle lines ahead of an emergency meeting of official creditors. He speaks with Bloomberg's Trish Regan on "Street Smart" February 10th.

Greece Faces Snap Election as President Pick Fails (video)

Greece Faces Snap Election as President Pick Fails: Video - Bloomberg:
(Allow video to load after clicking play or go to link above)

Greece faces snap elections next month after Prime Minister Antonis Samaras failed in his third attempt to persuade parliament to back his candidate for head of state. Bloomberg’s Elliott Gotkine and Joe Weisenthal report on “In The Loop.” (Source: Bloomberg 12/29)

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Don't tell Ireland and Greece, but Iceland is doing much better

Guess Who’s Emerging From the Crisis? (And don't tell Greece and Ireland who suffer from Eurozone imposed "austerity")--

FT Alphaville » A glimpse of an economy post this crisis: "Iceland, of course. Kitchen-sinked and cleaned-up, the Icelandic central bank has just decided to push up rates by 25 basis points to combat signs of inflation amidst “robust” domestic demand."

The poor  periphery of the Eurozone--a/k/a PIIGS (Portugal, Ireland, Italy, Spain)--they've swallowed the propaganda (necessary to save French and German banks) that there is no other way out but to stay with the euro and suffer. On the other hand, Iceland is really on the upward trajectory.

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Europeans Dig Themselves Deeper

The Greeks vote today, and yet nobody in Europe wants to face the truth and do the right thing:

Hussman Funds - Weekly Market Comment: The Heart of the Matter - June 11, 2012: " . . . what is really happening is that a continent that is already excessively in debt is promising funds so that Spain can increase its government debt, and then needlessly protect the bondholders of Spanish banks, who should be subject to orderly restructuring instead. . . . The only way Spain could make a more explicit gift to bank bondholders would be to include wrapping paper and a bow. If it seems as if the global economy has learned nothing, it is because evidently the global economy has learned nothing. The right thing to do, again, is to take receivership of insolvent banks and wipe out the stock and subordinated debt, using the borrowed funds to protect depositors in the event that the losses run deep enough to eat through the intervening layers of liabilities (which is doubtful) . . . "

At some point, something's got to give--until then, caveat emptor.

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Greece: “The situation is getting out of hand”

More on Greece today--“The situation is getting out of hand”--people aren't paying their taxes, utility bills, etc:

Greece warned of public finances collapse - FT.com: " . . . Mounting anxiety that Greece is headed for further political instability and a possible exit from the euro has prompted many Greeks to postpone making tax payments, and has also accelerated outflows of deposits from local banks. Athens bankers estimate that more than €3bn of cash withdrawn since the May 6 election has been stashed in safe-deposit boxes and under mattresses in case the country is forced to readopt the drachma. . . . “The state will face considerable difficulty covering its expenses in June”. . . The EU has held back €1bn from its latest tranche of bailout money pending formation of a stable government in Athens. . . . The struggling state electricity utility PPC has received a €250m special payment from the budget to help cover a widening deficit. The utility has been hit by a sharp rise in non-payments of household electricity bills after the finance ministry imposed an extra “solidarity tax” last year that was added to the bills. “The situation is getting out of hand,” said a private sector economist. “If a government is formed after the June election, it’s going to find that the fiscal programme agreed in March has already been derailed.” (emphasis added)

The Greek election is June 17--but at this point does it really matter who is elected?

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An Exit Strategy for Greece et al

Everyone in the Eurozone is wringing their hands about Greece and its possible exit from the euro (Eurozone). Here's an exit plan to which one could say, "the devil is in the details," but this looks like an "elegant" strategy--

Mosler/Pilkington: A Credible Eurozone Exit Plan – Smart Taxes Network: "So, we contend that the periphery governments should have a credible exit strategy on hand and it is to this that we now turn. Such a strategy would not be very hard to implement and would consist of two key principles: 1. Upon announcing that the country is leaving the Eurozone, the government of that country would announce that it would be making payments – to government employees etc. – exclusively in the new currency. Thus the government would stop using the euro as a means of payment. 2. The government would also announce that it would only accept payments of tax in this new currency. This would ensure that the currency was valuable and, at least for a while, in very short supply. And that is pretty much it. The government spends to provision itself and thereby injects the new currency into the economy while their new taxation policy ensures that it is sought after by economic agents and, thus, valuable. Government spending is thus the spigot through which the government injects the new currency into the economy and taxation is the drain that ensures citizens seek out the new currency."

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Greece and the Eurozone: Voting with your Money

June 17th is the date for new Greek elections but it looks like the Greek people are already voting (with their money):

Greek politics: Slouching towards the drachma | The Economist: "Today, cash was being taken away from the banks in orderly fashion. There were no queues outside branches in central Athens or its suburbs. Customers ordered cash by telephone and picked it up 24 hours later. Some went straight into safety-deposit boxes at the same bank; some was stashed beneath mattresses in case Greece has to re-adopt the drachma. "People are taking preventive measures," says one veteran banker. "If you own a pile of euros, you’ll feel rich in a drachma environment." Despite their enthusiasm for holding on to the euro, Greeks are fed up with the austerity that German politicians say is the price of continued membership. . ."

Paul Krugman: Jogging for the Exit "What’s happening now is a “bank jog” — Greeks are pulling euro deposits out of banks fairly rapidly, but not quite fast enough to be called a bank run. But where are the euros coming from? Basically, banks are borrowing them from the Greek central bank, which in turn must borrow them from the European Central Bank. The question then becomes how far the ECB is willing to go here; is it willing, in effect, to lend enough money to buy up the entire balance sheet of the Greek banking sector, given the likelihood that this sector will be left insolvent by Greek default? Yet if the ECB says no more, Greek banks stop operating — and it’s hard to see how they can be restored to operation except by ditching the euro and using something else. And if that happens, surely depositors in other European countries will start their own bank jogs …"

Question: If you owned a pile of euros, wouldn't you be better off converting them to pound sterling or U.S. dollars?

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The Greek Drachma Cometh--are the Fed and U.S. Treasury ready?

The Greeks (and who can blame them?) have had enough already with Eurozone "austerity" which, afterall, was a cruel "hoax" (zero chance of success) the Eurozone imposed on Greece in order to "save" French and German banks, and now the endgame is playing out--

Brace, brace. Dark times ahead as Greece heads for the exit - Telegraph: " . . . If Greece redominates all its debts in cut price drachmas, the ECB and its backers – in particular the German Bundesbank – will take a terrible hit, but it won't be terminal. The Bundesbank would most likely simply write off its Target 2 lending to Greece, which would certainly be a major curiosity given its abhorrence of debt monetisation but wouldn't of itself destroy either the Bundesbank or the euro. The threat comes instead from market contagion to other eurozone countries worst hit by the debt crisis. To Germany, Greece has always been a special case, a nation which cheated its way into the euro, whose citizens are lazy and won't pay their taxes, and is in any case basically ungovernable. There is a very different attitude to Spain and Italy. Germany's determination to make the rest of the eurozone work should not be underestimated. . . ."

As the Telegraph points out, once Greece leaves the euro, the Germans will begin to realize the euro could all come down (as a flawed currency, it probably will inevitably) and focus diligently on (and be preoccupied with) Spain and Italy--but what about Greece? Greece may be small but its membership in NATO and its strategic location make it too important to be left adrift--Bernanke and Geithner better be ready to step into the breach and extend Greece a "helping hand."

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Reality Check: Eurocrisis Is Far From Over

Don't listen to the pundits and salesmen, the eurocrisis is far from over--here is Germany's Der Spiegel's take just last week:

Not Out of The Woods Yet: Despite Progress, Euro Crisis Is Far From Over - SPIEGEL ONLINE - News - International: " . . . So has Greece been rescued and financial markets been tamed? Is the euro crisis a thing of the past? Unfortunately not. With their successes in the last few days, euro-zone politicians have done little more than bought themselves time. They must use this window to brace themselves for the next wave of the euro crisis which is about to crash down on Europe. It's already clear that the Greek economy can't survive with a government debt to GDP ratio that will -- at best -- still be at 117 percent in 2020, especially given the record pace at which the country's GDP is contracting. There is still no coherent strategy for making Greece competitive again inside the euro zone, or for raising the capital for the huge investments needed -- let alone for the wholesale revamp of the country's entire public administration. And so Greece is likely to report the next set of disappointing budget figures in a few months, and the wrangling over a new debt cut and a new rescue package will start shortly afterwards. Maybe the next wave of the crisis will hit us even sooner: Greece is scheduled to hold an election on April 22 which is expected to produce a left-wing majority deeply opposed to the strict austerity program imposed by Brussels. . . .  Portugal, Spain and Italy, the three other problem countries in the south of the euro zone, must perform the magic trick of stimulating growth while reducing their budget deficits. That can only succeed with a lot of pragmatism -- austerity without growth is as pointless as growth without austerity. . . ."

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Eurozone: Running Out of Options

As a follow-up to my post-- In Greece Nothing Succeeds Like Failure: "OK, Greece had an "orderly default." Problem solved? Hardly" -- Paul Krugman in Sunday's New York Times paints the picture just as clear:

What Greece Means - NYTimes.com: " . . . You may ask what alternative countries like Greece and Ireland had, and the answer is that they had and have no good alternatives short of leaving the euro, an extreme step that, realistically, their leaders cannot take until all other options have failed — a state of affairs that, if you ask me, Greece is rapidly approaching. . . . " (emphasis added)

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