“The chart below needs no commentary, neither does what it represents. In May Greek unemployment, pre revision, was 23.1%. It was subsequently revised higher to 23.5%, but this is merely to make the jump to the June number more palatable. What was June? 24.4%. In other words, no matter how one looks at it, the unemployment rate rose by 1% in one month.”
Via Zero Hedge
“When the economy of a nation collapses, almost everything changes. Unfortunately, most people have never been through anything like that, so it can be difficult to know how to prepare. For those that are busy preparing for the coming global financial collapse, there is a lot to be learned from the economic depression that is happening right now in Greece. Essentially, what Greece is experiencing is a low level economic collapse. Unemployment is absolutely rampant and poverty is rapidly spreading, but the good news for Greece is that the global financial system is still operating somewhat normally and they are getting some financial assistance from the outside. Things in Greece could be a whole lot worse, and they will probably get a whole lot worse before it is all said and done. But already things have gotten bad enough in Greece that it gives us an idea of what a full-blown economic collapse in the 21st century may look like. There are reports of food and medicine shortages in Greece, crime and suicides are on the rise and people have been rapidly pulling their money out of the banks. Hopefully this article will give you some ideas that you can use as you prepare for the economic chaos that will soon be unfolding all over the globe.”
Via Alt Market
“Would you pool your debt with a bunch of debt addicts that have no intention of reducing their wild spending habits? Of course you wouldn’t. But that is exactly what Germany is being asked to do. Increasingly, “eurobonds” are being touted as the best long-term solution to the financial crisis in Europe. These eurobonds would represent jointly issued debt by all 17 members of the eurozone. This debt would also be guaranteed by all 17 members of the eurozone. This would allow all countries in the eurozone to enjoy the same credit rating that Germany does, and borrowing costs for nations such as Greece, Portugal, Italy and Spain would plummet. But borrowing costs for Germany would rise substantially. In fact, it is being estimated that Germany could be facing an extra 50 billion euros a year in interest expenses. So over ten years that would come to about 500 billion euros. Needless to say, Germany is not thrilled about this idea. But new French President Francois Hollande is pushing eurobonds very hard, and he has the support of the OECD, the IMF and many top Italian politicians. In the end, this could be the key to the future of the eurozone. If the Germans give in and decide that they are willing to deeply subsidize their profligate neighbors indefinitely, then the euro could potentially be saved. If not, then this issue could end up shattering Europe.”
“Now you’re screwed Christine Lagarde, Merkel and the various ECB wonks. They figured it out over in Greece.
You have crap cards and Tsipras has a Royal Straight Flush.
Now he may be lying, but if he’s not he knows that he can pay the workers and retirees — if he walks on the debt payments.
This means he holds the trump hand. He can operate internally and tell you all to stuff it. And assuming he’s telling the truth and really has run the numbers, the ECB, Merkel and the rest of the Eurozone is stuffed on trying to force anything down Greece’s throat.
He also wants to nationalize the banking system. Now, if he goes further and forces a “One Dollar of Capital” standard for all banks inside Greece, then the game-playing stops but so does the systemic risk — inside Greece.
Now what’s left for the rest of Europe? They’ve got a problem — a big problem. By nationalizing the banking system he flushes the private parties that would otherwise play “hand grenade” with the economy and government.”
Via Market Ticker
“Money is being pulled out of Greek banks at an alarming rate, and if something dramatic is not done quickly Greek banks are going to start dropping like flies. As I detailed yesterday, people do not want to be stuck with euros in Greek banks when Greece leaves the euro and converts back to the drachma. The fear is that all existing euros in Greek banks would be converted over to drachmas which would then rapidly lose value after the transition. So right now euros are being pulled out of Greek banks at a staggering pace. According to MSNBC, Greeks withdrew $894 million from Greek banks on Monday alone and a similar amount was withdrawn on Tuesday. But this is just an acceleration of a trend that has been going on for a couple of years. It has been reported that approximately a third of all Greek bank deposits were withdrawn between January 2010 and March 2012. So where has all of the cash for these withdrawals been coming from? Well, the European Central Bank has been providing liquidity for Greek banks, but now it has been reported that the ECB is going to stop providing liquidity to some Greek banks. It was not announced which Greek banks are being cut off. For now, the Greek Central Bank will continue to provide euros to those banks, but the Greek Central Bank will not be able to funnel euros into insolvent banks indefinitely.”
“Sometime in the next few weeks we’re going to find out if Greece can afford to stay in the euro. We’re also going to find out if Spain and Italy can afford to leave the euro. Access to credit markets is the key issue. The stigma of default will lock a country out of capital markets. If you don’t have a plan to replace your currency and then devalue it, you’re doomed.
But first, the crisis in Greece didn’t come to a head over night but it can’t be far away. Rival political parties have been unable to form a government. New elections are scheduled for the second week in June. The financial has definitely become political. The people have run out of patience with unsound money and the world built on it.
All that said, the Greeks managed to make a €430 million payment to hold-out creditors last night. Nearly 97% of Greek creditors agreed to the restructuring of the country’s debt in March. That wiped off over €100 billion in Greek debt and resulted in 70% losses for some of the bondholders who accepted the deal. Not all of them did.”
“What was considered unthinkable a few months ago has now become probable. All over the globe there are headlines proclaiming that a Greek exit from the euro is now a real possibility. In fact, some of those headlines make it sound like it is practically inevitable. For example, Der Spiegel ran a front page story the other day with the following startling headline: “Acropolis, Adieu! Why Greece must leave the euro”. Many are saying that the euro will be stronger without Greece. They are saying things such as “a chain is only as strong as its weakest link” and they are claiming that financial markets are now far more prepared for a “Grexit” than they would have been two years ago. But the truth is that it really is naive to think that a Greek exit from the euro can be “managed” and that business will go on as usual afterwards. If Greece leaves the euro it will set a very dangerous precedent. The moment Greece exits the euro, investors all over the globe will be asking the following question: “Who is next?” Portugal, Italy and Spain would all see bond yields soar and they would all likely experience runs on their banks. It would only be a matter of time before more eurozone members would leave. In the end, the whole monetary union experiment would crumble.”
No Deal: Greek Moderate Left Party says “No Government Possible”; Chart Explains Why Deal Is Now Impossible
“Those conditions leave the Unity coalition two vote short of a majority. Unless a couple of elected representatives switch parties, a new vote will take place. It is highly likely Syriza will get enough votes from the left to form a government.”
“Now that the Greek exit is back to being topic #1 of discussion, just as it was back in the fall of 2011, and the media has been flooded by groundless speculation posited by journalists who have never used excel in their lives and are merely paid mouthpieces of bigger bank interests (long live access journalism and the book sales it facilitates), it is time to rewind to a step by step analysis of precisely what will happen in the moment before Greece announces the EMU exit, how the transition from pre to post occurs, and the aftermath of what said transition would entail, courtesy of one of the smarter minds out there, Citi’s Willem Buiter, who pontificated precisely on this topic last year, and whose thoughts he has graciously provided for all to read on his own website. Of course, take all of this with a huge grain of salt – these are observations by the chief economist of a bank which will likely be swept aside the second the EMU starts to post-Greece rumble.”
Via Zero Hedge
“Back on May 5th, before the shocking outcome of the Greek elections was known, and before anyone had even heard of the May 15th €430 million bond maturity, we explicitly warned that in the case of continued lack of government in the country (predicting the inability to form a gogvernment) that, “it is unlikely that Greece can persist under anarchy, especially with another critical event coming due: a €430 million payment on an international law bond that matures on May 15, and whose owners have held out from the PSI process (remember that? apparently not all has been swept under the rug). In fact we now know that the Norwegian sovereign wealth fund could very well be the entity that will demand payment and when it doesn’t get it will promptly proceed to sue Greece.” Indeed, as explained, the bond is held by non-PSI holders, and it has international-law covenants, in other words by parties non compliant to the PSI agreement and whose claims must be satisfied unless total chaos were to break out in the sovereign arena! Which means that for all the rhetoric about the successful Greek PSI with acceptance rates of nearly 97%, it is one tiny issue that can derail the whole process and send Greece into an out of control default. “
Via Zero Hedge