Greece

[Malsua]

Local hunters preparing for the tax man?

[American Patriot]

Petele... they aren't getting ready for the "Tax Man", they are getting ready for Armageddon.

[vector7]

Has The Greek Bank Run Started?

Submitted by Tyler Durden on 05/15/2012 11:36 -0400

While the long-term decline in bank deposits over the past 3 years has been well documented both on Zero Hedge and elsewhere, it is the most recent, acute post-election phase that has not gotten much coverage.

Minutes ago Bloomberg sent out a notice that things in Greece may be on the verge of the final collapse. From Bloomberg: "Anxious Greeks have withdrawn as much as 700 million euros ($893 million) from the nation’s banks since the inconclusive May 6 election, President Karolos Papoulias told party leaders yesterday, according to a transcript of the meeting posted on the presidency’s website today.

Papoulias said he got the information from the head of the Bank of Greece, the central bank, George Provopoulos, according to the transcript." While this was likely a negotiation talking point to facilitate the formation of the government, the reality as we now know is that there has been NO government formed, which now means that the bank run will only get worse. Needless to say, a Greek banking system which is now virtually shut out of any extrenal funding except for the ELA, where it has a few billions euros in access left, will be unable to deal with hundreds of millions in deposit outflows.

This may be the beginning of the end for Greece, just as Buiter and later JPM warned over the weekend.

And courtesy of Russian_market, here is a picture of the first Greek ATM lines:

[Ryan Ruck]

As Bank Withdrawals Surge, Athens Relies More on ECB

May 15, 2012

Greek depositors withdrew €700 million ($898 million) from the country's banks on Monday, fueling fears of a bank run amid the growing political disarray.

With deposits falling, Greek banks become even more dependent on the European Central Bank to meet their funding needs, exposing the central bank to potentially huge losses if Greece leaves the euro area.

Greek President Karolos Papoulias told the country's political leaders that bank withdrawals plus buy orders received by Greek banks for German bunds totaled some €800 million on Monday, a transcript of his comments said. A central bank official confirmed the figures.

"The strength of banks is very weak right now," Mr. Papoulias said, citing a conversation he had with Greek central-bank Gov. George Provopoulos.

Monday's deposit withdrawal far outpaced Greek banks' steady decline in deposits since the start of the country's debt crisis in 2009, as depositors withdraw cash and transfer funds overseas. In the past two years, deposit outflows have generally averaged between €2 billion and €3 billion a month, though in January they topped €5 billion.

The latest data from the Greece's central bank show that total deposits held by domestic residents and companies stood at €165.36 billion in March.

With domestic funds drying up—and access to interbank lending markets shut down—Greek banks have become heavily dependent on the European Central Bank for funding needs. Greek banks borrowed €73 billion through the ECB's lending operations in January, say Bank of Greece figures, and an additional €54 billion via the ECB's emergency-lending facility, which allows Greece's central bank to lend money against a wider pool of collateral.

Risks associated with emergency lending remain with the Greek central bank and ultimately the Greek government and not the euro zone as a whole, as long as Greece is a member. Total borrowing from the ECB accounts for more than one-half of Greece's gross domestic product.

The ECB's emergency-lending facility isn't intended as a long-term fix. National central banks must get approval each month that they want to let their banks access the facility from the ECB's governing council, which can veto use of the program.

If Greece installs an antibailout government that reneges on its austerity promises, it would almost certainly be cut off from ECB funding. The ECB briefly rejected Greek bonds from its normal refinancing operations earlier this year after Athens was placed in default by major ratings agencies following its private-sector bond restructuring. Greek banks were still eligible for emergency funding.

Euro-zone officials have threatened to withhold rescue funds for Greece if it refuses to cut spending and make other reforms it promised as part of its latest bailout. The result would likely be another default on Greece's bonds, cutting it off from regular ECB funds.

With the ECB's emergency loans intended for solvent banks facing only temporary funding problems, access to even this window would most certainly be shut down as well.

Greece's situation illustrates how quickly circumstances can change for financial institutions that rely on customer confidence.

So far, at least, banks in other troubled euro zone countries aren't facing the same sort of acute liquidity problems that Greek institutions are suddenly suffering.

For example, in Portugal, which after Greece is considered among the candidates to one day leave the euro zone, banks actually have managed to increase their deposit bases. The governor of the Bank of Portugal recently said that household deposits rose by €11.6 billion last year and are still growing this year. Portugal's largest lender, Banco Espirito Santo, said Tuesday that its deposits at the end of March were up 17.7% from a year earlier.

Among Irish banks, flows of private sector deposits "have been broadly stable for some time now," although they remain in negative territory, the Central Bank of Ireland wrote in its quarterly report last month.

As long as the withdrawal of departures is a trickle, rather than a flood, banks generally can manage to replace the funding, even if they are locked out of the capital markets. Among their options, they can raise interest rates they offer on deposits or replace lost funds by borrowing from central banks.

In an extreme case, governments can impose capital controls to keep deposits from going abroad.

[Malsua]

So, an Italian line man is paying for a Greek to sit on the beach drinking Ouzo. Makes sense...if you're the Greek.

[American Patriot]

Trojan horses are still being used, so it seems....

[American Patriot]

Fox News Channel was JUST reporting on the Greeks rushing in to take out their money.

It's funny, how the news makes it here quicker than it does to National News Networks in the US now..... amazing.

[American Patriot]

Court official to be appointed Greek interim PM
By ELENA BECATOROS, Associated Press – 29 minutes ago
ATHENS, Greece (AP) — Greece appointed a senior judge Wednesday as prime minister of a caretaker government that will lead the country to repeat elections next month. The move comes as Greece lurches through a political crisis that has threatened its continued participation in the European Union's joint currency.
Council of State head Panagiotis Pikrammenos, 67, was to be sworn in Wednesday night, at the head of a government political leaders said would not be able to make any binding commitments until new balloting, which is expected June 17.
The protracted political uncertainty has worried Greece's international creditors as well as Greeks themselves, with the country's president warning wrangling political leaders that millions of euros had been withdrawn from bank deposits in the aftermath of the inconclusive May 6 election.
About €700 million ($898 million) in deposits have flown out of Greek banks, President Karolos Papoulias told party leaders Monday after being briefed by central bank governor George Provopoulos.
"The situation in the banks is very difficult," Papoulias said according to a transcript of the meeting's minutes released Tuesday night. "Mr. Provopoulos told me that of course there is no panic, but there is great fear which could turn into panic."
There were no queues at banks in Athens after the elections, but Greeks have been gradually withdrawing their savings over the past two years as the country's financial crisis deepened, either sending the money abroad or keeping it in their homes.
"I would expect the population to quietly be doing what it has been doing in the last days. In other words, some of the Greek citizens are afraid and are taking a portion of the money, but I'm not expecting a bank run," said Theodore Krintas, managing director of Attica Wealth Management.
The May 6 election saw a massive rise in popularity for parties that advocate pulling out of Greece's commitments to its international bailout deal, under which it agreed to strict austerity measures in return for billions of euros in rescue loans. The spending cuts and tax hikes have left the country mired in the fifth year of a deep recession and sent unemployment soaring to above 21 percent, and many argue the country cannot hope for recovery if they stick to the deal.
"I want to believe that next time the people will express their opposition to the bailout agreement even more adamantly so that a strong government will be formed without the current parties," civil servant Christina Papadopoulou said of the repeat ballot.
Negotiations to agree on a coalition government collapsed Tuesday, nine days after voters furious with the handling of the country's financial crisis deserted the two formerly dominant parties in favor of smaller anti-bailout groups. The election left no party with enough votes for a majority in parliament.
"In a democracy, new elections are the natural consequence of the impossibility to form a government following an election. It will now be for the Greek people to take a fully informed decision on the alternatives, having in mind that this will be indeed an historic election," said European Commission President Jose Manuel Barroso.
"We will of course respect the democratic decision of the Greek people," he added. "At the same time the Greek citizens should be aware that there are 16 other democracies in the euro area. The democratic decisions taken in the euro area must also be taken into account."
It is the bailout loans from other eurozone countries and the International Monetary Fund that have been keeping the country afloat, and losing them would lead to state coffers running out of money, including for pensions, healthcare and salaries. It is unclear how the mid-June election will affect the continued disbursement of the loan installments.
"It is our wish, and I think the wish of all Greece's European partners, that a Greek government which is capable of acting emerge as soon as possible from these elections," German Chancellor Angela Merkel's spokesman, Steffen Seibert, said in Berlin. "I am not going to say anything here now about the payment of tranches which are due at the end of June — that doesn't have to be decided on in mid-May."
The instability has led Greece's prospects of remaining in the euro top of the agenda.
"If the country's budgetary commitments are not honored, there needs to be appropriate revisions, which means either supplementary financing and additional time, or mechanisms for an exit, which in this case must be orderly," IMF head Christine Lagarde said in a Tuesday interview on France 24 television.
Greece leaving the euro "is something that would be extremely expensive and would pose great risks, but it is part of the options that we must technically consider."
Greece now faces of month of inertia, with a government hamstrung by party leaders' insistence that it can take no binding decisions.
"It will be a strictly caretaker government, which must not take any action at the EU or NATO that will be binding for the Greek people," Communist Party head Aleka Papariga said. "If there is an emergency or unforeseen event, that can be addressed by the consultation among the parties with the involvement of the president."
Alexis Tsipras, head of the Radical Left Coalition, or Syriza, which came a surprise second in the May 6 elections after campaigning on an anti-bailout platform, said he had requested "that the caretaker government should not implement measures that would involve further cuts in salaries, pensions and public spending, that would dismantle labor relations or allow privatizations. . I also asked for a freeze on every ongoing process regarding the sale of state property."
Tsipras is the frontrunner for the next election. Recent opinion polls have shown him as likely to come first, though with nowhere near enough votes to form a government on his own — meaning more coalition negotiations will be needed.
The two mainstream parties, conservative New Democracy and socialist PASOK, have warned that anti-bailout policies will lead Greece out of the euro.
"Two courses lie ahead of the Greek people: Either to change everything in Greece — with changes which can be carried out in a Europe that is also changing — or to experience the terror of an exit from the euro, the terror of isolation outside Europe and the collapse of all we have built so far," said New Democracy head Antonis Samaras.
A win by Tsipras would put him in a dominant position to make a coalition deal with other anti-bailout parties, even if he cannot form a government alone.
"This will make reaching an agreement between the next government and Greece's international creditors extremely difficult, raising the risk of a Greek exit from the euro and sovereign debt default," said Robert O'Daly, Senior Economist at the Economist Intelligence Unit. "The consequences of this would be dire for Greece and probably the rest of the euro area."
Geir Moulson in Berlin, Raf Casert in Brussels, Annita Mordechai, Derek Gatopoulos and Nicholas Paphitis contributed.

[Malsua]

The Greek is going to have a surprise.

Going to kick sand in his face?

[Malsua]

What does Phan Thi Kim Phuc have to do with anything?

Arbeit Macht Frei means Work makes you free. This is the only relevant part of the sign. Since you lazy Greeks don't want to work, you are not free. It's a simple concept really.

[American Patriot]

See, Peterle, you got it right...

They made everything with debt.
Now it is time to pay the debt.

The PROBLEM is those who made the problem aren't the ones to PAY.

And since they are pretty smart usually, they are already in some other country or on the Riviera, or in Argentina.

[Malsua]

See, Peterle, you got it right...



The PROBLEM is those who made the problem aren't the ones to PAY.

I spend other people's money pretty much every day. It's great

Unlike the government, everything I buy for my company, with my company's money, is so that the company can either fix an asset or use a new asset to make money easier or cheaper. I don't get to keep any of it.

The government has figured out a million ways to skim.

[American Patriot]

And thus you have the difference between private enterprise and government mismanagement.

lol

[Malsua]

This explains Greece. Think debt explosion.

-------
"Imagine a magic pipette. It is magic because every drop of water that comes out of it will double in size every minute. So the first minute there is one drop, the second minute there are two drops, the third minute four drops, the fourth minute eight drops and so on… This is an example of exponential growth. Now, imagine a normal sized football stadium. In this stadium you are sitting on the seat at the very top of the stadium, with the best overview of the whole stadium. To make things more interesting, imagine the stadium is completely water-tight and that you cannot move from your seat. The first drop from the magic pipette is dropped right in the middle of the field, at 12pm.

Here’s the question: Remembering that this drop grows exponentially by doubling in size every minute, how much time do you have to free yourself from the seat and leave the stadium before the water reaches your seat at the very top?

Think about it for a moment. Is it hours, days, weeks, months? The answer: You have exactly until 12:49pm. It takes this tiny magic drop less than 50 minutes to fill a whole football stadium with water. This is impressive! But it gets better: At what time do you think the football stadium is still 93% empty? Take a guess. The answer: At 12:45pm. So, you sit and watch the drop growing, and after 45 minutes all you see is the playing field covered with water. And then, within four more minutes, the water fills the whole stadium. This means that you think you are safe because it seems that you have plenty of time left, whereas due to the exponential growth you really have to take immediate action if you want to have any chance of getting out of this situation."

[American Patriot]

Ah... the old give me a penny and double it trick - Maxwell Smart, Agent 86.

[Malsua]

The point is that most people don't see the problem until it's too late.

[vector7]

Greece to Leave Euro Zone on June 18: Wealth Manager

Published: Monday, 28 May 2012 | 7:19 AM ET

By: Shai Ahmed
CNBC Associate Editor

Greece will leave the euro zone on June 18 if the populist government wins the country’s elections on the 17 as the rest of the euro zone rounds on "cheaters," Nick Dewhirst, director at wealth management firm Integral Asset Management, told CNBC.com Monday.

Bloomberg / Bloomberg via Getty Images

The Greek national flag is seen flying above the parliament building on Syntagma Square in Athens, Greece, on Thursday, Feb. 16, 2012.

“The euro zone is a club but you get cheaters who get away with it until everyone finds out and at that point you need to remove them otherwise everyone will cheat. It’s better for Greece to leave,” Dewhirst said.

He added that Greek society was built on cheating and scheming, saying “everyone does it” but that voters elsewhere in the euro zone were now calling Greece to account.

“The basic question is that a German has to increase working from 65 to 67 and that is to pay for Greeks retiring at 50. The 17th of June is the perfect opportunity to say either 'we’ll behave' or 'we’ll carry on cheating,'" he said.

Christine Lagarde, the head of the International Monetary Fund (IMF) sparked criticism in Greece after saying that Greeks needed to start paying their taxes, with Socialist leader Evangelos Venizelos accusing her of "insulting the Greek people." Greece was forced to call for a new round of elections, which will take place on June 17 after the country failed to pick a decisive winner in elections earlier this month.

Far left parties against the country’s bailout agreement received strong support from the electorate disheartened by harsh austerity measures in a country now in its fifth year of recession. However, polls at the weekend showed support for the pro euro bailout parties increasing enough to form a coalition.Dewhirst said that there had been a significant amount of "scaremongering" from the euro elite about the ramifications of a "Grexit" but that it would be feasible and even orderly.

“It’s a bit like Y2K, [also known as the Millennium bug, the much- hyped problems that would affect computers globally as the year changed to 2000] there would be a lot less to it then everyone thinks.


"The Greek banking system would close for a week and there’ll be a new currency. Not the drachma but ideally it would be two Geuros (the name given to a possible Greek parallel currency) to one euro so they devalue and fix to the euro,” Dewhirst said.

He added that this would transform Greece and the rest of the euro zone for the better.

“Greeks would no longer be able to afford German cars and Germans would be able to buy Greek villas and the young unemployed in Greece would have jobs as tourism booms. The best thing would be that they [Greeks] could blame the foreigners,” Dewhirst said.

He said suggestions of a bank run and contagion have been overplayed by some quarters.

“Yes, the banks would run dry but it can be done, there is a lot more money electronically than there is cash. In Argentina they closed everyone’s bank account and then they were reopened using Pesos.

The club would rally round the rest so the weaker members - Spain, Italy, Ireland and Portugal -would receive a massive support mechanism. The Germans would provide support to the rest of the euro but not to the Greeks,” he said.

Kit Juckes, global head of foreign exchange at Societe Generale, told CNBC’s “Worldwide Exchange” that the best outcome was “the status quo.” “A Greek economy in depression, austerity that guarantees they’ll stay in depression and living on life support from the rest of Europe is the best,” he said.

[Malsua]

The Euro is currently at 1.241 to the dollar. Two Weeks ago it was 1.30. One week ago it was 1.275.

Until a solid plan is made, it will continue to slide down. If Greece announces an exit from the Eurozone, the Euro will immediately climb. This would be a great money making opportunity if you had a ton of extra dough just sitting around.

[American Patriot]

Buy low, sell high.....

[American Patriot]

The Nation: Greece's Knife-Edge Election

by Maria Margaronis

Young supporters react as they attend a Syriza Party pre-election rally on June 14 in Athens, Greece. The Greek electorate are due to go to the polls on June 17 in a re-run of the general election after no combination of political parties were able to form a coalition government.

Read An Opinion On Why Greeks Want To Keep The Euro
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June 15, 2012

Maria Margaronis is a contributing editor for The Nation.

The sea at Katounia is a million shades of blue, ripples and shivers moving, changing all the time, pushed by the tides and currents of the Euboean Gulf. This place is a touchstone: rock and light and water, nothing that isn't true. But last week it felt as if the sea was full of knives.

The Greek crisis has been a bonanza for journalists like me. Besides the speculation about a Greek exit from the euro, containment and contagion, we've had endless stories about corrupt Greeks, lazy Greeks, suffering Greeks and hungry Greeks, heroically resisting Greeks, reckless and feckless Greeks. In these last days before the election that's supposed to determine the fate not only of Greece but of the whole Eurozone, the media feeding frenzy has reached piranha proportions.

For those who live here, though, the breakdown goes much deeper than the visible currents of economics and politics. What does a country mean for those who belong to it, beyond everyday life and home? Some alchemy, perhaps, of human connection and history; a language and a landscape; things that go without saying. The pain of what's been happening here touches on all of that. It's changed people's connection to the past as well as the present, their intimate relationships, their sense of who they are. It's taken apart the story they've believed about their lives for the last forty years. Rage and betrayal are mixed with a toxic sense of shame.

A woman I've known for two decades and always seen in motion sits slumped at the end of the day in front of the TV news. Two clone-like blonde presenters are discussing the latest "plan" to eject Greece from the Eurozone. How does she see the future? She waves her hand around the empty restaurant she runs with her family. "Nothing," she says. "Nothing." Her son has a young family and has to go running all over the place to look for a day's wage. "He's got a couple of goats back there, you should see how nice he's made it, so he can slaughter a kid now and then to fill the freezer with." She looks at me hopefully, as if I might know something: "Who do you think would be better, Tsipras [of the radical left party Syriza] or Samaras [from conservative New Democracy]?" I'm startled to hear her ask: this is a region where Syriza polled first in the May 6 election, where almost all the villages were on the left the civil war. I say, somewhat inanely, "I don't think any of them are telling the whole truth." Her eyes light up a little as she answers, slightly shyly, "I want Golden Dawn in Parliament to beat all of them up."

It's inconceivable that this woman would ever vote for Golden Dawn, the neo-Nazi party which won almost 7 percent of the vote in May and has since been flexing its muscles, stepping up its violent attacks on immigrants and leftists, unmolested by the police. A week before, the party leader's daughter had been arrested in Athens with a group beating up Pakistanis and let go without bail; the following day Golden Dawn's press spokesman, Ilias Kasidiaris, made the international media when he physically attacked two left-wing women MPs on live television. (He has since sued the TV station and the women for "unprovoked defamation.") The day after that an Israeli photojournalist was beaten up in Athens, almost certainly by Golden Dawn supporters, for taking pictures of men pursuing a group of migrants; the poor man wondered in an interview if telling them he was from Israel might have helped. And the day after that a friend phoned me to say that Golden Dawn were attacking the Panteion University where he teaches, smashing windows and fighting with students while the police again stood by.

And yet that line — "I want Golden Dawn in Parliament to beat all of them up" — has almost become a slogan, a fist against the system, heard not only from the right but sometimes even from people likely to vote Syriza. It's a symptom of humiliation, hopelessness and rage — and of the molecular meltdown of Greek politics. The old categories of left and right, which in Greece have long represented deep-rooted identities and painful family histories, are fraying at the edges. Many people won't decide till the last minute how they'll vote. A former Eurocommunist told me he might go for the hated New Democracy to keep Greece in the euro; a conservative taxi driver (until six months ago a civil engineer) says he'll vote Syriza because "that young man [Tsipras] is smart, and also clean."

The simple narrative imposed on this election by European politicians, bankers and journalists — that it's a referendum on whether Greece stays in the Eurozone — doesn't begin to map it. It's more like a wild bet, a frightened guess at which might be the less disastrous choice. As countless people have already said, the Greek people's faith in the old political class — which ground down the economy, called in the bailiffs of the EU and IMF, and then applied their measures in the most unjust and destructive way — has utterly collapsed. The political terrain is crazed with new divisions, some real, some mythical: private sector workers, who make up the vast majority of Greece's new unemployed, against the public sector, which has suffered deep cuts in pay; "reformers" against the rest (though pretty much everyone agrees reform is necessary); so-called "pro-Europeans" against what Samaras calls "the pro-drachma lobby" (though 80 percent of Greeks want to stay in the Eurozone and almost nobody is advocating a return to the drachma); "pro-memorandum" against "anti-memorandum" forces.

In fact, the real decision about whether Greece stays in the Eurozone rests not with the Greek electorate but with the EU, the Germans and the IMF: the only way an exit will take place is if they decide to push it by cutting off the next tranche of the bailout funds, forcing Greece to print its own money in order to pay the bills. (As ever, the messages leaking from Berlin and Brussels about whether or when this might happen are oracularly ambivalent.) In spite of the polarized atmosphere, both leading parties say they would "renegotiate" the bailout, though only Syriza has dared to play chicken with Angela Merkel by talking about rejecting it outright. And some of their proposals — such as extending unemployment benefits to two years and freezing wage reductions — are strikingly similar.

Of course there are deep differences, on traditional left/right issues: state versus private investment and economic control, taxation, redistribution, immigration policy. For all the talk of renewal and new beginnings, in many ways both parties are singing ancient songs. Samaras is shamelessly playing the right's old nationalist card, giving aid and comfort to the extremists in Golden Dawn; Tsipras draws on a rousing populist rhetoric familiar to the Greek left. And while Syriza presents itself as a new, squeaky clean force that will sweep away corruption and the old clientelist system, here, too, there is less of a break with the past than might at first appear: among the party's supporters are the old featherbedded Pasok trade union leaders and traditional clients from the public sector.

So the Greeks go to the polls in a strange hall of mirrors, papered with partial truths. This is hardly surprising: the meltdown here has been too fast for politics to keep up with, the tides of change too strong and unpredictable to contain. Besides, Greece's future depends in no small part on outside forces, which have their own agendas and conflicting interests. Whatever government emerges out of Sunday's vote, I suspect it won't last long. And when this latest lightning rod for despair and hope has failed, I am afraid of what might happen, of where the barely pent-up rage and violence might lead.