All Hail the Greek Exit
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Washington, D.C. “Storm damage. Between 1913 and 1918.” Somewhere under all this rubble, I suspect, is a narrative waiting to be unearthed by a Shorpy
[See the full post at: All Hail the Greek Exit]The sea was angry that day, my friends–like an old man trying to return soup at a deli.
Setting aside the question of Greece exiting the euro, I’m curious what people’s view here is about likely outcomes of the greek election. If it turns out in line with recent polling, it would seem neither a pro-memorandum nor an anti-memorandum coalition will be possible. And then what, another election? Maybe PASOK taking a U-turn and joining SYRIZA?
Hello Ash, here is what happens accourding to Financial Times (h/t ZeroHedge):
https://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2012/05-2/FT%20breakdown.jpg
YesMaybe post=3104 wrote: The sea was angry that day, my friends–like an old man trying to return soup at a deli.
The great beast appeared before me… I tell you he was ten stories high if he was a foot! He let out a great bellow, I said “easy, big fella!” 😆
Setting aside the question of Greece exiting the euro, I’m curious what people’s view here is about likely outcomes of the greek election. If it turns out in line with recent polling, it would seem neither a pro-memorandum nor an anti-memorandum coalition will be possible. And then what, another election? Maybe PASOK taking a U-turn and joining SYRIZA?
I’m pretty confident that they won’t make it to a THIRD election. If no pro-euro coalition is formed, that’s basically the same as forming an anti-euro coalition. They need Greece to reaffirm its “commitment” to the bailout/austerity ponzi, and soon.
(according to me, anti-memorandum is anti-euro, regardless of what the politicians say)
First, I think a lot of people are trying to figure out how to manage a Greek exit. Greece can possibly manage their exit in a way that minimizes the ramifications for them to some extent, but there are a lot of problems they can’t address.
The big one is that Greece leaving the Eurozone, particularly if they show within a year or two, that they can begin to recover, will put tremendous pressure on other nations to follow suit.
I actually agree that in the abstract, a Greek default would be a good thing for them, just as bankruptcy can be a good thing for those who are too deep in debt. The problem though is that this is would send deep shockwaves through the rest of Europe and this has tremendous implications for Greece as well as everyone else.
Also the BBC piece is interesting because if you read it slowly and carefully, it is a *lot* more doom and gloom than I think even the author was aware. She basically paints a picture of international currency and debt markets already essentially near collapse and a world of financial institutions bordering on insolvency.
Alexander Ac post=3105 wrote: Hello Ash, here is what happens accourding to Financial Times (h/t ZeroHedge):
https://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2012/05-2/FT%20breakdown.jpg
Saw that and liked it. Doesn’t try to quantify anything based on isolated history, like Pettifor, and doesn’t resort to meaningless phrases such as “crisis management”, like the Bundesbank.
Of course, the “Exit euro” and “EURO BREAK UP” bubbles are colored in a shade of gray that seems to represent a great void for humanity. Not such horrendous outcomes, IMO.
Well! well! well!
Everyone is starting to see the light.
… mutually assured destruction…
The Greeks have a bigger gun that the EU
All of those professional financial advisors did was to line their own pockets.
Wake up!
https://www.zerohedge.com/news/german-press-greek-exit-done-deal
German Press: “The Greek Exit Is A Done Deal”
The EU has finally realized that the Greeks have not met any agreements and will not continue not to meet them.
Most debts are now in the public sector – ie the ECB and the IMF. In the case of a state bankruptcy of Greece on the Target 2 system, the German Bundesbank would be taken immediately. Altogether, it is so appreciated, are the Greeks with 200 billion euros at the ECB and the IMF in debt.Subtitled: Greece, the Gift that Keeps on Giving for the Doomer
Grexit: RE Prays to the Porcelain God
Warning for the easily offended: Included in the post are some graphic pics I won’t repost here on TAE to offend the faint of heart.
Excerpt
RE wrote: …For their part, the Krauts blame the whole mess on the Greeks as Profligate Spenders who did not live within their means, but the fact is the Krauts ENABLED the Greeks to do this for their own self-aggrandizement. At ANY time in the last 40 years the Kraut Banksters could have looked at the Greek Balance Sheet and said “Hey, they can’t AFFORD this Loan”, but they never did that. If they did, then they would have lost the Konsumer Base of Greeks buying BMWs…
RE
ash – “The possibility of a Greek exit is weighing heavily on the markets as I write this today, as well as for the past few weeks, but have we really seen the full extent of panic that can result when it actually happens?”
First, as best I can tell, the Greeks really don’t want to exit the EU. The Greeks I know all say this, and Greek opinion polls seem to back this up. Perhaps the previous years under the mis-managed Drachma have convinced them their savings are better protected by Germans than by their own corrupt leadership.
Whether they will be allowed to stay in after defaulting on the ECB-owned debt – well that’s another matter entirely. But they don’t seem to WANT to leave.
As for news weighing on the market, I’d agree since May 1 the market (equity, forex, PM) has not been so happy about the situation. Everything was thrown under the bus and US dollar and US long bonds were bought.
But for the past week, it would seem that things have backed off a bit. 10 year rates are off their highs in Italy and Spain, SPX is rallying, PM may have found an interim bottom – and this support is all in the face of some pretty unpleasant headlines coming out of Spain, and a disappointing non-solution coming from the recent EU meeting.
So I guess my point is, when the market rallies on bad news (something seen sometimes at market turning points) I wouldn’t agree that seems like news weighing heavily on the markets.
But I will agree – the full impact of a default is most likely not “priced in.” That can has been kicked so often, traders are most likely expecting it to happen yet again.
Funny thing is, it might actually happen yet again.
What about the possibility of a slow exit? The Greeks can reintroduce the Drachma and allow it to float against the Euro. If Greece requires its citizens to pay their taxes in Drachma, the Drachma will have some value. Greece can pay its State workers in Drachma and guarantee only its external debts in Drachma. Eventually, they exit completely, but they don’t have to do that immediately unless the ECB pulls the plug.
According to the treaties, there is no way for a country to exit the eurozone. It can only leave the EU as a whole.
Even if a way is created, then Greece has a WMD to put in negotiations. Leaving the EU as a whole.
The implications under a geopolitical scope would be huge for Europe. There would be no border continuity to SouthEast Mediterranean and the new discovered Gas Fields which are vital for Europes energy independence. Who always have the Russians, that would give a lot for the passage to the Med too.
I would be very interested in your views on GrExit under the geopolitical scope.
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