I find it absolutely stunning whenever a government official tells the unvarnished blunt truth. Do you loan someone more money when they don’t have the means to repay what they have borrowed already? The evilness of central bankers is revealed in this short exchange. It’s time to end Wimpy economics.
Greece’s New FinMin Explains “This Is What Happens When You Humiliate A Nation & Give It No Hope”
Submitted by Tyler Durden on 01/27/2015 13:19 -0500
“This is not blackmail,” explains new Greek Finance Minister Yanis Varoufakis, “we simply want to end this seemingly never-ending Greek Crisis.” In what must be worryingly calm and simple to comprehend words for Brussels, Varoufakis tells CNBC’s Michelle Caruso-Cabrera, “this is what happens when you humiliate a nation and don’t give it any hope.” Carefully noting that membership in the Euro is not imperative, Varoufakis concludes “bankruptcy cannot be dealt with by borrowing more,” asking rhetorically, “how can I look the German and Finnish taxpayer in the eye and tell them you know I can’t really pay you the money I have already borrowed from you…” but lend me more so I can pay back the ECB?
As Varoufakis explains, he believes Europe is willing to negotiate haircuts – anything else appears a waste of time.
(our apologies for the audio quality)
Greece Begins The Great Pivot Toward Russia
Submitted by Tyler Durden on 01/27/2015 21:50 -0500
Ten days ago, before the smashing success of Greece’s anti-austerity party, Syriza, we noted that Russia gave Greece a modest proposal: turn your back on Europe, whom you despise so much anyway, and we will assist your farmers by lifting the food import ban.
And, sure enough, Greece’s new premier Tsipras did hint with his initial actions that Greece may indeed pivot quite aggressively away from Europe and toward Russia in general and the Eurasian Economic Union in particular (as a tangent recall “Russia’s “Startling” Proposal To Europe: Dump The US, Join The Eurasian Economic Union”). Some previously noted examples of this dramatic shift in perspective:
Today we got further evidence that Tsipras will substantially realign his country’s national interest away from the west and toward… the east.
First, as Reuters reported, today the new premier halted the “blue light special” liquidation of Greece to those highest bidders who have the closest access to various printing presses and stopped the privatization of Greece’s biggest port on Tuesday, “signaling he aims to stick to election pledges despite warning shots from the euro zone and financial markets.”
One of the first decisions announced by the new government was stopping the planned sale of a 67 percent stake in the Piraeus Port Authority, agreed under its international bailout deal for which China’s Cosco Group and four other suitors had been shortlisted.
“The Cosco deal will be reviewed to the benefit of the Greek people,” Thodoris Dritsas, the deputy minister in charge of the shipping portfolio, told Reuters.
Europe, for one, will be most displeased that Greece has decided to put its people first in the chain of priority over offshore bidders of Greek assets. Most displeased, especially since the liquidation sale of Greece is part of the Greek bailout agreement: an agreement which as the Troika has repeatedly stated, is not up for renegotiation.
Syriza had announced before the election it would halt the sale of state assets, a plank of the 240 billion-euro bailout agreement. Stakes in the port of Thessaloniki, the country’s second biggest, along with railway operator Trainose and rolling stock operator ROSCO are also slated to be sold.
And it wasn’t just this open act of defiance that marked the new government’s anti-European agenda:
In a separate step, the deputy minister in charge of administrative reform, George Katrougkalos said the government would reverse some layoffs of public sector workers, rolling back another key bailout measure. “It will be one of the first pieces of legislation that I will bring in as a minister,” he told Mega TV.
The Germans were not happy: A German central banker warned of dire problems should the new government call the country’s aid program into question, jeopardizing funding for the banks. “That would have fatal consequences for Greece’s financial system. Greek banks would then lose their access to central bank money,” Bundesbank board member Joachim Nagel told Handelsblatt newspaper.
Well, maybe…. Unless of course Greece finds a new, alternative source of funding, one that has nothing to do with the establishmentarian IMF, whose “bailouts” are merely a smokescreen to implement pro-western policies and to allow the rapid liquidation of any “bailed out” society.
An alternative such as the BRIC Bank for example. Recall that the “BRICS Announce $100 Billion Reserve To Bypass Fed, Developed World Central Banks.”
And yes, the BRIC are going through their own share of pain right now as a result of plunging crude prices, but remember: crude is only low as long as the US shale sector is still vibrant. Once this marginal producer of crude with a $80 cost-breakeven is out of the picture, watch as Saudi Arabia tightens the spigots and Crude surges to $100, $150 or more. The question is whether Saudi FX reserves can outlast the Fed’s ZIRP, which is the only reason – think idiots junk bond investors desperate for any ounce of yield – why the bulk of unprofitable and cash flow-bleeding US shale can still operate.
Which naturally means that now Russia (and China) are set to become critical allies for Greece, which would immediately explain the logical pivot toward Moscow.
But wait, there’s more.
As Bloomberg reported, “Foreign Minister Nikos Kotzias is due in Brussels on Thursday to discuss possible additional sanctions on Russia over the conflict in Ukraine. Before the cabinet even meets for the first time tomorrow, the Greek government said that it disagreed with an EU statement in which President Donald Tusk raised the prospect of “further restrictive measures” on Russia.”
The punchline:
In recent months, Kotzias wrote on Twitter that sanctions against Russia weren’t in Greece’s interests. He said in a blog that a new foreign policy for Greece should be focused on stopping the ongoing transformation of the EU “into an idiosyncratic empire, under the rule of Germany.”
And when it comes to the natural adversary of any German imperial ambitions in recent history, Europe has been able to produce only one answer…
Maybe we’re really all saying the same thing.”Fuck the Banksters”-(as Friday would say) Isn’t that about it, Maam?
BUCHEAD’s comment “This guy may be fish food soon.As John Perkins said in Confessions Of An Economic Hitman….now they’ll send in the jackals. ” dovetails nicely with Admins comment.
But the world grows tired of the IMF jackals, and Greece, Portugal, Italy, France, and Ireland are not Ecuador or Panama. All eyes are on Southern Europe, IMF, BIS(and henchmen) tracks are everywhere, the theft and looting clear.
2015 is going to be epic.
I missed a great discussion here. Great subject. I see myself as a conservative, yet i want to see syriza succeed, socialist or not. And i hope their courage spreads across europe. The problems we have nowadays have been solved in the past by world wars. Let’s hope it doesn’t come to that. Who would be free/must themselves strike the blow
They should repudiate their debt completely.What’s Germany et al going to do – confiscate the country? They wouldn’t have the stomach to try that again. Sure ,Greece could be forced off of the Euro and their economy could tank. So what? They’d have greater control of their own destiny if they had their own currency. The whole Euro concept was/is a bunch of bullshit born of the idea that they could create a United States of Europe. The project was based on an inferiority complex – especially among the French, who fancy themselves some sort of superpower. Ceding national soverignty to Brussels wasn’t a mark of a confident country, it was the mark of a country (and countries) completely lacking in self-esteem. Switzerland didn’t fall for it, leaving them the ability to manipulate their currency (for good or ill). Once Greece adopts the drachma again, it’ll be up to them to try to live within their means, hack back the social safety net, entitlements and the size and scope of government. They won’t do it. They’re Greece. They’ll still have the olives, the sunshine, the beaches and even good skiing.
Note to self: Countries to never lend to: Greece, Mexico, Argentina, Jamaica….and most of the rest, especially those with palm trees.
Greek Stocks Crash, Bonds Plummet, Banks Have Worst Day Ever
Submitted by Tyler Durden on 01/28/2015 06:53 -0500
In the two day after Syriza’s dramatic victory in the local Greek election, global investors assumed this loud cry against European policies would mean… more of the same, and as a result not much changed in the risk assessment of Greek assets. Then, overnight, following the previous report that not only does Syriza mean business but it is actively pivoting away from Europe and toward Russia, and everyone started paying attention, with a waterfall of selling engulfing not only the Greek stock market but also its bonds, which are crashing sending the 3 Year yield to 16.4%, the highest since the restructuring, and the 10 Year either below or above 10%, depending on which data source is used (Bloomberg has them slightly below, others reporting 10-year bond yields up 50 basis points at 10.30%).
For those who missed our take from last night on Greece, it can be found here, while Reuters’ update this morning notes the following:
Prime Minister Alexis Tsipras promised “radical” change on Wednesday as his new government swiftly moved to roll back key parts of Greece’s international bailout, prompting a third day of losses on financial markets.
A swift series of announcements signaled the newly installed government would not back down from its anti-austerity pledges, setting it on course for a clash with European partners, led by Germany, which has said it will not renegotiate the aid package needed to help Greece pay its debts.
Even before the first meeting of the new cabinet, ministers had hit the airwaves to reassure voters they would honor campaign pledges to roll back the tough economic policies imposed under Greece’s 240-billion-euro bailout program.
The planned sale of a 30 percent stake in Public Power Corporation of Greece (PPC), the country’s biggest utility, was halted while ministers pledged to raise pensions for those on low incomes and reinstate some fired public sector workers.
“We are coming in to radically change the way that policies and administration are conducted in this country,” Tsipras told ministers at their first cabinet meeting.
Needless to say “radically changing” is the last thing all those US hedge funds, may they rest in piece, who bet all-in on the Grecovery in 2013 and 2014 is what they wanted to hear and the resultant decimation of Greek risk is as follows:
Greek banks continue rout as 3-yr bond yield rises to 16.5%, highest since restructuring.
10-yr spread vs bunds widens to more than 1,000 bps
FTSE/Athex banks index down 19%, taking decline since election to as much as 39%
Piraeus Bank falls as much as 23.2%; volume-at-time is 286% of 30 day average
Eurobank Ergasias falls as much as 22%; volume-at-time is 284%
National Bank of Greece falls as much as 20.5%; volume-at-time is 394%
Alpha Bank falls as much as 19.5%; volume-at-time is 324%
Those four banks account for 0.54 points of Stoxx 600 decline; index down 0.6 points, or 0.2%, to 368.11
This is what the first three days of post-election Greece look like for local stocks: the biggest weekly (so far) drop ever.
Worse, Greek bank stocks right now are having their worst day ever.
It’s amazing what happens when a country finally has a politician who truly puts the interest of the people ahead of those of the bankers or shareholders.
And of course, nobody ever said going cold turkey on years of European bailouts (bailouts which are used by Greece to mostly continue paying its obligations to the Troika) is going to be easy. If indeed Greece is intent on proceeding with the Icelandic route, we congratulate them… and wish them luck because the next 6-12 months are going to be painful. The good news: it’s all uphill from there.
And so it begins…
Actually I think Llpoh, Stucky, Admin, most here are on the same page: Everyone should be responsible for their own shit. That means Greece, that means the banksters, that means us (both us and the U.S.).
– Greece was not responsible: Default, go off the euro, suffer the consequences.
– The bankers were not responsible: Should have (almost had to) know that the Greek books were B.S.
– The U.S. is not responsible, not Japan, the E.U. ad nasuem with all the money creation out of thin air.
– We are not responsible being people alive on this Earth that are trying to act personally responsible but letting our govt’s get away with this shit (yeah, I know a whole other debate about prudence and what actions we should personally take).
Llpoh, I applaud you for taking steps to remove yourself in the next (however long) from the increasingly untenable situation you have many times described. I wish you the best and hope your plans to move and be done with it come through and that your new situation puts you in a more sustainable place long term. My wife and I have done the same. We will see how much our actions matter (meaning in repositioning) as time goes on. Obviously I think they will matter.
Thanks, Didius. Pretty soon I am planning on being a non-involved spectator as the shit hits the fan.
Re this issue, I suspect you are right – the differences between our various positions are actually very slight. We are pretty much just arguing over who is most responsible. There is plenty of blame to go around.
I think Iska’s comment re “Note to self: Countries to never lend to: Greece, Mexico, Argentina, Jamaica” is quite accurate. Those fucks cannot organize a bake sale much less run a country.
My plan is to let Llpoh do all the work, and then beg him to let me in.
Admin – that will work. Just remember to bring the Scotch. No Irish whisky.
Llpoh
I hate whiskey.
I do like rum.
I’ll bring the scotch for you.
As for admin, Llpoh (I already invited Stucky on another thread), if you get a hankering to see New Zealand, you are welcome to stay with us while in the Wellington area. Fair warning: There is a high probability you will really really like it!
Just bring some good booze per llpoh’s suggestion. My wife is partially to really nice Tequila. I just recently discovered Laphroaig and really like it (http://www.laphroaig.com/) among other vices. If either if you like good red wine, the Australian Shiraz we have been able to easily get over here is mind blowing if you like full bodied rich smoky wines, never saw it in the U.S. but we have also expanded our palate quite a bit since being here.
One down side at some point (may have even been on TBP where I saw it), recently read about all the ultra rich and their get away spots with New Zealand being one of their favorites in that regard. Well, if a bunch of them end up here when TSHTF, I don’t think regular Kiwis are too apt to take their shit, this is a refreshingly non-PC, speak your mind, hunting, not much tolerance for B.S. culture here (although I do see numerous signs of corruption by the same forces as in the U.S., just seems to be not near as far advanced. My favorite example for being behind the times in a good way (other than hunting being really big over here) is they still have shooting clubs in high school over here and everyone is cool with it and little kids still go to school unattended by parents the way they did in the U.S. when we were little, they are allowed to play unsupervised and are polite!.
Above invite means both admin and llpoh.
Admin, which rums are you partial to? Just now getting into different rums.
Didius
I’m not an expert. I generally buy moderately priced bottles of Curzon.
I’m becoming a fan of Tequila too.
Didius – many thanks! NZ is on my bucket list for sure. Transited through a couple times but never had time to explore.
Re Scotch, Laphroaig is very nice. My favorites are Lagavulin (for a peaty Scotch in the Laphroaig vein), and for less full bodied sipping Highland Park.
You will not be disappointed in either of those.
Australian shirazes are generally too fruit bomb for me. I prefer Cabernet and nice southern European reds myself – nice chianti, brunellos, tempranillos, etc.
Re rum, when I lived in the hell hole Puerto Rico, the only thing that made it livable was very nice $2/bottle rum. Don Q was the general drink of choice.
I do not know much about good rum. I have had some mata rata, tho – rat killer rum. That is pure rotgut to match any cheap bourbon out there.
I have taken to creating my own gin – take a cheap bottle of vodka (filtering it through charcoal filter a few times turns it into very good vodka) and then steep some botanicals in a couple of cups of it (juniper, coriander, cubeb, ginger, lemon peel, cassis, cinnamon, etc. to your preference.). Then I simply use the steeped “gin” to flavor G+Ts (say half an ounce of steeped to say an ounce of filtered vodka), etc. You can make the flavor as strong or mild as you want. I find it better than store bought gin as you can adjust to personal tastes, and a lot cheaper than the expensive gins. One of those hobbies of mine I mentioned.
Hi Llpoh,
We definitely try the Lagavulin and Highland Park, I really like the peaty taste. I know what you mean and that is what I thought before I tried some of our favorites, they are as complex, full of tannins, smoky, dark chocolate, etc. as my favborite cabs, tempranillos/riojas, and chianti. Ones to try include Mojo, Metala, Chocolate Box (also produce a mean cab), Penfolds Bin 28, Yalumba “The Cigar”. I suspect you will like any of those.
Would appreciate a few chianti and brunellos recommendations, I have not tasted enough of those to figure out which ones fit the robust deep flavors I like (when I did it was in a rare restaurant and I blew it by not remembering).
Llpoh, sounds like a good way to make “gin” (or better, infused vodka).
I am about to take the plunge and make my first batch of beer. The craft beer scene is big here. I am going to concentrate on perfecting a very very rare bread: A highly spicey, dry fairly high alcohol (for beer, maybe 7 or 8 %) ginger beer. Only one I have found over here slightly approaches that profile, the others are more typical alcoholic ginger sodas.
BIG Tequilla fan here. The best I can afford is $50 Petron. Very good.
But, YOU can afford this $500 bottle of Petron
[img[/img]
Top 10 Tequilas
http://www.gayot.com/spirits/top10tequilas/tres-quatro-cinco-anejo.html
Admin, my wife likes (and I do too) this tequila:
1800 Reserva Reposado 100% blue agave, aged in American and French oak barrels for six months[3]
or
1800 Reserva Añejo 100% blue agave, aged in French Oak barrels for three years[3]
That Petron is good (talking about the cheaper stuff). I think I wold not be too happy to buy that expensive bottle, rather pout that much into 10 bottles of the cheaper or mix and match with some of the other beverages discussed so far! 🙂
Here is an apparently excellent Australian rum in the 125th anniversary edition (originally cost only $1200 a bottle!!) Would love to have that..
http://www.bundabergrumshowcase.com.au/125.html
[img[/img]
Admin – Coruba seems to be the favorite rum over here (I think it is similar to Cruzan that you mentioned), we have a couple bottle, one of the dark one with black strap molasses over tones and one of the more golden colored ones. Both good!
http://www.coruba.co.nz/History/The-History.aspx