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Thread: EU central bankers ponder Greece euro exit

  1. #41

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    Quote Originally Posted by GR_78 View Post
    European Central Bank cut Greek Banks off at the knees.

    Imagine what the runs on Greek banks are going to be like now.
    Oh, man. What a mess! For the financially-intelligent, please forgive me, but I am hopelessly stupid when it comes to economics. For those who understand issues like these, what will all this mean as far as the possibility of Greece leaving the EU is concerned? Will this turn of events accelerate that process in any way?
    "Can a mother forget the baby at her breast and have no compassion on the child she has borne? Though she may forget, I will not forget you!" -- Isaiah 49:15 (NIV)

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    What would be the significance of this?

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    It does look like we will be here to see a one world currency



    or maybe not

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    Some dramatic headliines in the news today.....


    Greek euro exit looms closer as banks crumble
    By Ambrose Evans-Pritchard, International business editor
    7:50PM BST 16 May 2012


    A tsunami of capital flight from Greece threatens to overwhelm the authorities, forcing the country out of the euro before fresh elections in June.

    Economists warned that the Greek financial system could crumble within weeks or days unless the European Central Bank steps up support.

    President Karolos Papoulias told party leaders that banks had lost €700m in withdrawals on Monday alone as citizens rush to pre-empt capital controls and a much-feared return to the Drachma.

    He cited central bank warnings that "great fear" might soon escalate to panic. The leaked details lend credence to claims that capital flight by both savers and firms have reached €4bn a week since the triumph of anti-bailout parties on May 6.

    Steen Jakobsen from Danske Bank said outflows are becoming unstoppable, not helped by open talk in EU circles of `technical’ plans for Greek withdrawal.

    "This has a self-fulfilling prophecy built into it and I don’t think we can get to June. The fuse is burning and the only two options now are a controlled explosion where Germany steps in to ensure an orderly exit, or an uncontrolled explosion," he said.

    http://www.telegraph.co.uk/finance/f...s-crumble.html


    IIF's Charles Dallara says Greek exit 'somewhere between catastrophic and armageddon'

    The damage to the rest of Europe from Greece leaving the euro would be "somewhere between catastrophic and Armageddon", the chief negotiator for the body representing private sector holders of Greek bonds said on Wednesday.

    Charles Dallara, who as head of the International Institute of Finance (IIF) spent months in Athens negotiating the largest ever sovereign debt restructuring, also said he had seen evidence that more people were moving their cash out of Greece.

    "There has been a pick up of deposit flight from Greece," Mr Dallara told reporters, but added he thought this could be stabilised "once you get a new government in place, if that government reaffirms its intention to remain in the euro zone".

    He was speaking on a visit to Ireland, which followed Greece into an international bailout in 2010 but has been far more successful in boosting exports to keep the economy afloat while slashing government spending.

    Policymakers have begun to speak openly of the risk that Greece, now in its fifth year of recession, might leave the euro. Mr Dallara said the costs of a Greek exit would be so severe that Europe has to find a palatable way of solving their woes.

    "I think that it (a Greek exit) is possible, but I wouldn't call it inevitable and I wouldn't even call it likely because the costs for Greece, for Europe and for the global economy are likely each in their own way to be immense," Mr Dallara said in a speech.

    "The pressures on Spain, Portugal, even Italy and conceivably Ireland could be immense and the need for Europe to step up with much greater support for the banking systems would be substantial."

    http://www.telegraph.co.uk/finance/f...rmageddon.html

    Britain must make ready for the storm as clueless Europe tears itself apart
    By Jeremy Warner, Associate editor
    8:57PM BST 16 May 2012

    Once every half century or so, Europe "tears itself apart" in an orgy of self-destructive national tribalism. It happens just like clockwork.
    It's ever harder to see any viable way out of this mess other than break-up. European solidarity has proved no more than a fair weather friend, with surplus nations retreating into the time honoured position of all aggrieved creditors. Like Shylock, they demand their pound of flesh, and in so doing they doom us all to penury.
    http://www.telegraph.co.uk/finance/c...elf-apart.html

    Euroland's €1 trillion question: after Greece goes, can Spain stay in?
    By Alistair Osborne, Business Editor
    7:35PM BST 16 May 2012

    Everyone knows Greece is leaving the euro, the real challenge is preventing the fall-out extending to Spain.
    Luckily SunGard APT doesn’t make films. Pretty much nothing happens in its version of that great euro drama Acropolis Now.

    The specialist in “multifactor risk models” popped up yesterday to tell us that a Greek exit from the euro would take 3pc off the UK stock market and see the oil price fall 5pc. The euro itself would strengthen 5pc against the dollar. And Greek equities would get away with a 20pc drop.

    On that basis, can someone kick Greece out right now? Really, if that’s all that’s going to happen, let’s get on with it.

    Annoyingly, SunGard appears to have overlooked quite a few factors, if not multi ones. Not least the fact that Greece is no longer the main event. Everyone knows it’s a matter of when, not if, ouzoland leaves the euro. Not least the Greeks themselves, who are pulling euros out of local banks at a right lick in preparation for the glorious return of a cheapo drachma.
    Madrid continues to look the biggest nasty for the eurozone. Ten-year bond yields spiked to 6.5pc yesterday, their highest level since the ECB put some financial morphine into the system late last year with the first of its cheap loans to banks. Totalling €1 trillion, it was dubbed a long-term refinancing operation but has proved anything but.
    Containing all these pent up risks – let alone bank runs elsewhere – would test anyone’s multi-factor risk-modelling. You hope SunGard APT is right. But some pundits reckon a Greek exit could cost as much as €1 trillion. For that, you’d expect much more drama, with costly special effects.
    http://www.telegraph.co.uk/finance/c...n-stay-in.html

    Spain could be locked out of the markets, says Mariano Rajoy
    By Louise Armitstead, and Fiona Govan
    7:37PM BST 16 May 2012


    Mariano Rajoy pleaded for an urgent “defence of the euro project” yesterday as Madrid was close to being locked out of international markets by “astronomical” borrowing costs.

    The prime minister of Spain called for European leaders to publicly back the so-called 'sinner states’ amid fears that contagion from Greece could trigger a highly-anticipated Spanish banking crisis and then a bail-out.

    Mr Rajoy told state television there was “a serious risk we will not be able to borrow - or borrow at astronomical prices” unless they succeeded in bringing down the debt levels and regaining market confidence. “All these measures are to get out of the hole we find ourselves in,” he said.

    He also fired a warning shot a Brussels after days of speculation about the break-up of the euro. “I would like a clear, strong message in defence of the euro project and an affirmation of the sustainability of the public debt of all the European countries that are subject to discussion at the moment,” he said.
    Good luck with that^.

    Even so, as Greece continued its slide towards political and financial chaos, traders became more alarmed over Spain. Mr Rajoy joined calls for Greece to be kept in the euro, to stop contagion spreading. ”I don’t want Greece to leave the euro,” he said. “I think that would be an enormous mistake, very bad news.”
    Italy was also swept back into the eye of the storm. Italian bond yields rose to 5.98pc - the highest since the end of January - as International Monetary Fund (IMF) warned Rome was also vulnerable. The fund said Rome was making progress with its austerity programme but warned that “renewed financial turmoil could push government bond yields higher, tighten bank credit and weaken activity.”

    Rome was urged to speed up its efforts to overhaul its economy. “Slow progress in implementing needed fiscal and structural reforms could undermine confidence and raise concerns about Italy’s fiscal consolidation,” the IMF said.
    Like Greek insitutions, Italian banks were also suffering from outflows. But Jose Manuel Barroso, president of the EC, said: “There is no way of changing the commitments taken by Greece and also by the other 16 euro area member states.”
    http://www.telegraph.co.uk/finance/f...ano-Rajoy.html


  5. #45
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    This all reminds me of the financial 'commitment' that people make when they move in together rather than making marriage vows and both partners really meaning them.

    If the 'union' is conditional before it united then bad things happen when it splits
    The heavens are telling of the glory of God; And their expanse is declaring the work of His hands.
    Day to day pours forth speech, And night to night reveals knowledge.
    (Psa 19:1b-2)

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    Quote Originally Posted by WarriorPrincess View Post
    Oh, man. What a mess! For the financially-intelligent, please forgive me, but I am hopelessly stupid when it comes to economics. For those who understand issues like these, what will all this mean as far as the possibility of Greece leaving the EU is concerned? Will this turn of events accelerate that process in any way?
    Yes it certainly can expedite the process of a Greek exit imo. A banking system without liquidity faces a credit crunch and where there are insufficient monetary flows, there is a collapse in economic activity. That’s the way I see it anyway. But I’ve also heard that the ECB may step up its support to Greek banks, but how far and wide they are prepared to support the failing Greek banking system is to be seen.

    Quote Originally Posted by Joseph The Carpenter View Post
    It does look like we will be here to see a one world currency



    or maybe not

    Lately I been thinking (and not suggesting any time frame here) it could be like we’re on a plane that is struggling and then loses control - it begins its plunge to the earth and you hear those final fatal words: ‘Brace! We’re gonna crash!’ But just before the crash, we are ejected from the plane (ie raptured from the world).

    The world then faces its financial and economic collapse, tragic prophetic wars, a surreal disappearance of millions of people from the planet, and a charismatic European leader emerge on the world political platform with grand promises of a brand new world in the making. And so begins the trib period.

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    Default What will the ECB do next

    I am still waiting for the ECB (European Central Bank) to print $$$ another trillion and then another 600 Billion in possible Derivative exposure.

    They will have to call it something like the EU Relief and restitution program.

    The problem is if Greece leaving the euro opens Pandora's box to the 4 quardrillion in derivatives world wide, they will have to come up with a new name like the world debt jubilee and restoration program.

    They will keep printing until all money is worthless and they can start over.

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    Quote Originally Posted by PaulG View Post
    The problem is if Greece leaving the euro opens Pandora's box to the 4 quardrillion in derivatives world wide, they will have to come up with a new name like the world debt jubilee and restoration program.
    Yes but I see that as being tantamount to collapse / reset. A world debt jubilee is something that could only occur following a major meltdown imo, with major disruption to give cause and justification for such action, not a program to relieve struggling debt holders. Any worldwide debt jubilee would also likely be implemented by the anti-christ.

  9. #49

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    The real questions are:
    1. How long before this leads to violence not only in Greece but throughout Europe?
    2. Funny that while this is happening the whole Debt Ceiling thing is being brought up again here in the USA.
    3. WHy is the US media ignoring this story when it has enormous ramifications for the whole world. Do they realize that the day Greece leaves the EU and unrest begins, our markets will plummet about 5-700 points?

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    Steve you could be right on that, makes sense.

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    The people of Greece will have the final say apparently, they have withdrawn upawards of a billion euros this week from their bank accounts, ye good olde fashioned bank run that sounds like to me.

    That kind of liquidity being removed so speedily allied to everything else that's going on with the austerity measures and the failed election, I am surprised they haven't done a complete meltdown this week.

    The domino is seriously wobbling and one more issue and its gonna topple, right into Spain, then Portugal then Ireland who are voting on their budget this week also....

    Stand by for blast off in Euro land in the next 2 months I would say.

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    Then another few trillion to Spain and Italy, Portugal as well.

    They will just keep printing, nothing else they can do.

    Then come the bank runs and spending of money as the people of europe begin to take their money out to spend before it becomes worthless, then hyper-inflation.

    Then a reset, as Steve said could be a nice layup for the AC to finish off and set up his program.

  13. #53

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    I repeat: what a mess! I'll just be sooooooo glad when the Tribulation's over and we're in the MK and all this sorrow and fear and anger in this evil old world is all behind us!!! Anyway, thanks for answering my questions, $teve. Forgive the change of subject, but I've been wanting to ask you for some time now (out of curiosity, that is). Why do you use the dollar sign for the "S" in your RR name here? (That is, if you don't mind my asking.)
    "Can a mother forget the baby at her breast and have no compassion on the child she has borne? Though she may forget, I will not forget you!" -- Isaiah 49:15 (NIV)

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    Quote Originally Posted by WarriorPrincess View Post
    I repeat: what a mess! I'll just be sooooooo glad when the Tribulation's over and we're in the MK and all this sorrow and fear and anger in this evil old world is all behind us!!! Anyway, thanks for answering my questions, $teve. Forgive the change of subject, but I've been wanting to ask you for some time now (out of curiosity, that is). Why do you use the dollar sign for the "S" in your RR name here? (That is, if you don't mind my asking.)
    The only reason I used the $ sign in my name is because Steve was already taken. My creative ability to think up board names is 0 so figured my given name with a $ is about as imaginative as I can get.

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    Quote Originally Posted by $teve View Post
    The only reason I used the $ sign in my name is because Steve was already taken. My creative ability to think up board names is 0 so figured my given name with a $ is about as imaginative as I can get.
    The $ has proven to be quite appropriate, since you often provide us with the latest economic stories!
    "Jesus said to them all: "If anyone would come after me, he must deny himself and take up his cross daily and follow me. For whoever wants to save his life will lose it, but whoever loses his life for me will save it."

    — Luke 9:23-24 (NIV)

  16. #56

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    Quote Originally Posted by $teve View Post
    The only reason I used the $ sign in my name is because Steve was already taken. My creative ability to think up board names is 0 so figured my given name with a $ is about as imaginative as I can get.
    Actually, I think that WAS pretty creative!
    "Can a mother forget the baby at her breast and have no compassion on the child she has borne? Though she may forget, I will not forget you!" -- Isaiah 49:15 (NIV)

  17. #57

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    Quote Originally Posted by God'sGraceInMe View Post
    The $ has proven to be quite appropriate, since you often provide us with the latest economic stories!
    And since he also provides economic dummies like me with explanations for what all's going on in more laymen's terms.
    "Can a mother forget the baby at her breast and have no compassion on the child she has borne? Though she may forget, I will not forget you!" -- Isaiah 49:15 (NIV)

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    I read laymen's as Lehmans!

    Wonder why!


    Zeti Says Greek Euro Exit Would Have ‘Unimaginable’ Consequences
    By Haslinda Amin and Elffie Chew
    May 17, 2012 10:57 AM GMT+1000
    Bloomberg


    Malaysia’s central bank Governor Zeti Akhtar Aziz warned that Greece exiting the euro would have “unimaginable” consequences for Europe and that she expects a solution will be reached to prevent a departure.

    “The consequences for that to happen I believe will be unimaginable for Europe, therefore a solution has to be found to address the situation,” Zeti, 64, said in an interview with Bloomberg Television in Istanbul yesterday. “I believe that such a solution can be found.”

    “The worst-case scenario is what we saw in Asia when one economy collapses, the market usually goes on to focus on the next one, and there will be contagion that will affect different countries probably that don’t deserve those kinds of consequences,” Zeti said. “This is what would be described as unimaginable.”
    The 'what we saw in Asia' is referring to the Asian currency crisis back in the late 90s.

    http://www.bloomberg.com/news/2012-0...sequences.html

    Video here: http://www.bloomberg.com/video/92829991/

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    Euro crisis ensnares Spain
    By Philip Aldrick, Economics Editor, Fiona Govan
    10:00PM BST 17 May 2012

    Spain moved back into the eye of the eurozone storm on Thursday, as the country’s borrowing costs rocketed to unsustainable levels and the country's banking sector was hit by mass downgrades.
    Earlier in the day, shares in Bankia, the country’s fourth biggest bank, plunged by as much as 29pc amid reports that depositors had pulled out €1bn in the past week.
    In Spain, Nicholas Spiro, managing director at Spiro Strategy, said the high cost of the Madrid bond auction was evidence that “'break-up contagion’ is seeping into Spanish yields”. “Make no mistake about it, these are painful auctions for the Treasury,” he added.

    In a desperate plea to Brussels, Spain’s economy secretary Fernando Jimenez Latorre said: “Spain is making every necessary adjustment to fiscal police, structural reforms and there should be some kind of reaction from the European Central Bank to support us.”
    The day had already begun badly with confirmation that Spain was back in recession, shrinking 0.3pc in the first three months of the year.

    As the crisis in the euro periphery spiralled out of control, divisions at its core deepened further. Pierre Moscovici, France’s newly-appointed finance minister, reiterated that the fiscal pact “will not be ratified as it stands” in the face of German Finance Minister Wolfgang Schaeuble’s call “to create a political union now”.

    David Cameron also demanded urgent action by Europe’s leaders for closer integration to spare the world economy from disaster
    ahead of crunch talks at the G8 meeting today in Camp David.

    With the odds on Greece leaving the euro shortening, economists warned a messy exit could cost the eurozone up to $1trillion (£630bn). Even the International Monetary Fund could be at risk of losing its bail-out contributions.

    Fabrice Montagne at Barclays Capital said: “Even though the IMF prides itself on never having made any losses on a programme, a Greek exit would certainly challenge this record.”
    http://www.telegraph.co.uk/finance/e...res-Spain.html

    It's the contagion that is the far bigger concern. Btw note the call for immediate political union^?

    And as the article above cites elsewhere, Moody's have downgraded a number of Spanish banks.

    Moody's downgrades Spanish banks

    Moody's has cut the ratings of 16 Spanish banks, and Santander UK.
    Moody's Investors Service has today downgraded by one to three notches the long-term debt and deposit ratings for 16 Spanish banks and Santander UK PLC, a UK-domiciled subsidiary of Banco Santander (Spain) SA. The rating downgrades primarily reflect the concurrent downgrades of most of these banks' standalone credit assessments, and in five cases also Moody's assessment that the Spanish government's ability to provide support to the banks has reduced.
    http://www.telegraph.co.uk/finance/f...t-in-full.html

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    EC and ECB working on emegency plans for Greek euro exit, says trade commissioner Karel De Gucht
    By Telegraph staff
    10:55AM BST 18 May 2012

    The European Commission and the European Central Bank are working on an emergency scenario in case Greece has to leave the eurozone, EU trade commissioner Karel De Gucht has said.

    It is the first time an EU official has confirmed the existence of contingencies being taken for a possible Greek exit from the currency bloc. Speculation has been rife about such plans, but their existence has not been confirmed before.

    "A year and a half ago there may have been the danger of a domino effect," Mr De Gucht said in an interview with the Belgium's Dutch-language newspaper De Standaard.

    "But today there are, both within the European Central Bank and the European Commission, services that are working on emergency scenarios in case Greece doesn't make it."

    Meanwhile, David Cameron has warned that the European debt crisis could "get a lot worse" unless decisive action is taken, and defended the Governement's austerity plans.

    The Prime Minister told ITV's Daybreak: “These are very difficult economic times and what’s happening in the eurozone is truly worrying. If things go badly wrong in the eurozone that affects us.”
    http://www.telegraph.co.uk/finance/f...-De-Gucht.html

    So 'a year and a half ago there may have been the danger of a domino effect' and today there are 'services that are working on emergency scenarios in case Greece doesn't make it.' Well that sounds like a concrete plan if I ever heard one /sarc. But the comments will probably be sufficient to boost the stock market casino.

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