As IMF Default Looms & Tax Revenues Plunge, Greek Stocks & Bonds Tumble
Submitted by Tyler Durden on 02/27/2015 11:55 -0500
As the rest of the world appears happy to assume everything is fixed in Europe (and if it’s not, Draghi will buy it back to being awesome), Greece is looking unwell once again. Initial exuberance has faded dramatically in the last 3 days as IMF default warnings and a 22.5% plunge in tax revenues has sparked concerns about Greece’s sustainability once again. Default (or restructuring) risk is soaring, Greek bond yields are surging, stocks sliding, and Greek banks (bonds and stocks) are getting hammered. As The Guardian’s Helena Smith notes, “the country is in a strategic vacuum,” and next week’s T-Bill auction could be a major catalyst.
Greek Stocks and Bonds Ugly…
Greek Banks even worse…
As The Guardian’s Helena Smith reports,
Angst over the pending funding gap is VERY real. Government figures show that tax revenues have dropped precipitously (22.5%) as a result of the political turmoil gripping the country. Greeks have simply stopped paying. The country’s former deputy premier Evangelos Venizelos has just made a statement saying rather than conducting real negotiations, the new leftist-led government is waging a “war of impressions,”
The country is in a strategic vacuum. Just one month after the election everything is in the air. Revenues, cash requirements, fiscal targets. How will the fiscal gap that exists be plugged? Where are we going regarding the debt? Sadly our array of negotiating mistakes has taken us way off from the point we were when the parliament was dissolved,” he said referring to the day snap polls were called in December.
Everything is being enthusiastically projected as a triumph, but as soon as you scratch the surface, you see that there is no plan, or result, or security or prospect. The country has to find its goals.
Next week will be interesting given the weakness into the weekend, as The Guardian notes,
In a closely watched auction, Greece plans to sell €875m of six-month treasury bills next Wednesday to refinance a maturing issue. Greek banks use T-bills as collateral to borrow from the ECB’s emergency liquidity line and then invest the money in more T-bills. This helps the government, which is frozen out of the bond markets, to cover its short-term needs.
Foreign investors have shied away from T-bill sales in recent months. They are the only source of commercial borrowing for Tsipras’ government.
* * *
Greek CDS still indicate a 75% probability of restructuring (assuming ‘norm’ recovery rates).
TC
February 27, 2015 12:35 pm
What a complete fuck job. Just goes to show that the globalist bankers are in control everywhere. Oh, you *think* you’re electing a new government which is going to change things… HA, HA. Keep dreaming, serfs!
Thinker
February 27, 2015 12:52 pm
Meanwhile, in our own version of Greece, a little closer to home…
In a blow to Mayor Rahm Emanuel, one of the major bond-rating services today downgraded Chicago’s credit to just two levels above junk, saying the city has not been able to adequately control the soaring cost of worker pensions.
In a statement, Moody’s Investors Service moved city debt to Baa2 from Baa1, and kept the city on a negative outlook. The latter means that there is a likelihood, though not a certainty, that its credit will be further downgraded in coming months.
In response, Emanuel’s office today noted that two other ratings services, Fitch and S&P, have affirmed the city’s credit rating, and characterized the Moody’s view as an outlier “out of step with the other rating agencies, (and) ignoring the progress that has been achieved.”
Reads like a Shakepearean tragedy, doesn’t it?
BUCKHED
February 27, 2015 12:57 pm
Moody’s better watch it ……Comrade Rahm will have them jailed. Just look at what happened when S&P lowered the rating on the Good Ol’ USA.
Mark
February 27, 2015 1:28 pm
And agreement that taxes money out of the Greek economy to pay bond holders can’t be conducive to economic growth.
The people have a moral obligation to violent redress.
As IMF Default Looms & Tax Revenues Plunge, Greek Stocks & Bonds Tumble
Submitted by Tyler Durden on 02/27/2015 11:55 -0500
As the rest of the world appears happy to assume everything is fixed in Europe (and if it’s not, Draghi will buy it back to being awesome), Greece is looking unwell once again. Initial exuberance has faded dramatically in the last 3 days as IMF default warnings and a 22.5% plunge in tax revenues has sparked concerns about Greece’s sustainability once again. Default (or restructuring) risk is soaring, Greek bond yields are surging, stocks sliding, and Greek banks (bonds and stocks) are getting hammered. As The Guardian’s Helena Smith notes, “the country is in a strategic vacuum,” and next week’s T-Bill auction could be a major catalyst.
Greek Stocks and Bonds Ugly…
Greek Banks even worse…
As The Guardian’s Helena Smith reports,
Angst over the pending funding gap is VERY real. Government figures show that tax revenues have dropped precipitously (22.5%) as a result of the political turmoil gripping the country. Greeks have simply stopped paying. The country’s former deputy premier Evangelos Venizelos has just made a statement saying rather than conducting real negotiations, the new leftist-led government is waging a “war of impressions,”
The country is in a strategic vacuum. Just one month after the election everything is in the air. Revenues, cash requirements, fiscal targets. How will the fiscal gap that exists be plugged? Where are we going regarding the debt? Sadly our array of negotiating mistakes has taken us way off from the point we were when the parliament was dissolved,” he said referring to the day snap polls were called in December.
Everything is being enthusiastically projected as a triumph, but as soon as you scratch the surface, you see that there is no plan, or result, or security or prospect. The country has to find its goals.
Next week will be interesting given the weakness into the weekend, as The Guardian notes,
In a closely watched auction, Greece plans to sell €875m of six-month treasury bills next Wednesday to refinance a maturing issue. Greek banks use T-bills as collateral to borrow from the ECB’s emergency liquidity line and then invest the money in more T-bills. This helps the government, which is frozen out of the bond markets, to cover its short-term needs.
Foreign investors have shied away from T-bill sales in recent months. They are the only source of commercial borrowing for Tsipras’ government.
* * *
Greek CDS still indicate a 75% probability of restructuring (assuming ‘norm’ recovery rates).
What a complete fuck job. Just goes to show that the globalist bankers are in control everywhere. Oh, you *think* you’re electing a new government which is going to change things… HA, HA. Keep dreaming, serfs!
Meanwhile, in our own version of Greece, a little closer to home…
Chicago’s debt is now two notches above junk: Moody’s
http://www.chicagobusiness.com/article/20150227/BLOGS02/150229839/chicagos-debt-is-now-two-notches-above-junk-moodys
In a blow to Mayor Rahm Emanuel, one of the major bond-rating services today downgraded Chicago’s credit to just two levels above junk, saying the city has not been able to adequately control the soaring cost of worker pensions.
In a statement, Moody’s Investors Service moved city debt to Baa2 from Baa1, and kept the city on a negative outlook. The latter means that there is a likelihood, though not a certainty, that its credit will be further downgraded in coming months.
In response, Emanuel’s office today noted that two other ratings services, Fitch and S&P, have affirmed the city’s credit rating, and characterized the Moody’s view as an outlier “out of step with the other rating agencies, (and) ignoring the progress that has been achieved.”
Reads like a Shakepearean tragedy, doesn’t it?
Moody’s better watch it ……Comrade Rahm will have them jailed. Just look at what happened when S&P lowered the rating on the Good Ol’ USA.
And agreement that taxes money out of the Greek economy to pay bond holders can’t be conducive to economic growth.
The people have a moral obligation to violent redress.