JUL 6 SIT EC y POL
ZERO HEDGE
The
First Post-Referendum Head Rolls: "Toxic" "Martyr" Yanis
Varoufakis Resigns. S- by Tyler
Durden on 07/06/15.
[ Toxic to troika bankers… and martyr for Greek people. Yanis –un hombre de firmes convicciones- fue mas que
un Ministro de Economia.. fue un lider internacional de la lucha contra el
capital buitre no solo en Grecia, lo fue a nivel de toda Europa y a nivel
mundial. Salud Yanis, los latinos te admiramos! ]
The Greek referendum landslide "No" vote came and
went and just hours after its passage claimed its first head, which was - perhaps
somewhat surprisingly - that of the Greek finance minister himself, Yanis
Varoufakis, who many say orchestrated the referendum seen as a loud endorsement
of the government's actions. As of this morning he is no more. Here is why in his own
words.
The referendum of 5th July will
stay in history as a unique moment when a small European nation rose up against
debt-bondage.
Like all struggles for democratic
rights, so too this historic rejection of the Eurogroup’s 25th June ultimatum
comes with a large price tag attached. It is, therefore, essential that the great capital bestowed
upon our government by the splendid NO vote be invested immediately into a YES
to a proper resolution – to an agreement that involves debt restructuring, less
austerity, redistribution in favour of the needy, and real reforms.
Soon after the announcement of the referendum results, I was made aware of a certain preference by some Eurogroup
participants, and assorted ‘partners’, for my…
‘absence’ from its meetings; an idea that the Prime Minister judged to
be potentially helpful to him in reaching an agreement.
For this reason I am leaving the Ministry of Finance today.
I consider it my duty to help Alexis Tsipras
exploit, as he sees fit, the capital that the
Greek people granted us through yesterday’s referendum.
AND I SHALL WEAR THE CREDITORS’
LOATHING WITH PRIDE.
We of the Left know how to act
collectively with no care for the privileges of office. I shall support fully Prime Minister Tsipras,
the new Minister of Finance, and our government.
The superhuman effort to honor the brave people of Greece, and the
famous OXI (NO) that they granted to democrats the world over, is just beginning.
Varoufakis' resignation which came early in the morning
Greek time, may be seen by many as the crowning cap of his path to political
martyrdom, but more importantly is seen by others as a catalyst to what may be
a long overdue deal. As Standard Bank's
Demetrios Efstathious says in an email to Bloomberg, "without Varoufakis,
who’d become toxic and had to
go, negotiations will prove somewhat easier" adding that "the slim hope of a last minute deal
is indeed alive. "Varoufakis’s replacement increases chance of sensible
negotiation, and positive outcome. If Tsakalotos or Dragasakis were to replace
him would be positive news. Tsakalotos has been a key part of the negotiating
team and is one of the most sensible/moderate figures in Syriza."
That view was dashed by German SPD lawmaker Carsten
Schneider who said on German ZDF public television that the resignation won’t make
talks between Greece and its creditors any easier. Varoufakis is
"building his own legend" adding
that Varoufakis’s promises aren’t backed up by any money.
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It
Begins: ECB Hikes Greek ELA Haircuts; Full "Depositor Bail-In"
Sensitivity Analysis. Submitted
by Tyler Durden
on 07/06/2015
The ECB just announced "the Governing Council
decided today to adjust the haircuts on collateral accepted by the Bank of
Greece for ELA."
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THERE
IS ONLY ONE WAY OUT FOR GREECE. by Martin Armstrong via
ArmstrongEconomics.com Submitted by Tyler
Durden on 07/06/2015
Germany moved opposite of the USA toward extreme
austerity and conservative economics because of its experience with
hyperinflation. The USA moved
toward stimulation because of the austerity policies that created the Great
Depression, which led to a shortage of money, and many cities had to issue
their own currency just to function. The federal government thought, like
Brussels today, that they had to up the confidence in the bond market and that
called for raising taxes and cutting spending at the expense of the people. The
same thinking process has played out numerous times throughout history. Our problem is that no one ever asks : Hey, did someone try this
before? Did it work? This is why history repeats – we
do ZERO research when it comes to economics. It is all hype and
self-interest.
GREECE SHOULD IMMEDIATELY BEGIN
TO PRINT DRACHMA. By no
means has the introduction of a new currency been a walk in the park. There is
always a learning curve, as in the case of East Germany’s adoption of the
Deutsche mark, the Czech-Slovak divorce of 1993, and the creation of the euro
itself . However, the bulk of transactions today are electronic, meaning we are
dealing with an accounting issue more than anything. The euro existed
electronically BEFORE it became printed money; Greece should do the
same right now.
Brussels already cut off the
banks in Greece. All accounts in Greece should be electronically switched to
drachmas. Begin to issue printed drachma for small change. The umbilical cord
to Brussels must be cut immediately for Greece to stand on its own.
You cannot negotiate with people who will not change their view of the world,
for their own self-interest will cloud their perspective.
All EXTERNAL debt
should be suspended. Any future
resolution of debt should be reduced by 50% to account for the overvaluation of
prior debt, thanks to the euro, and any interest previously paid should be
deducted from the total loan.
All income tax should be
abolished and the only taxation should be indirect. A close
examination of the cost of government should be carried out and as many aspects
of government as possible should be privatized and put out for bid. For
example, motor vehicle and police agencies can privatize, eliminating pensions
paid by the government. The size of government must be addressed, or Greece
will risk civil war between government workers and private citizens.
Eliminating the income tax is
critical and desperately needed for job creation. Small business
must be profitable to begin to creating jobs and those who had to leave, whom
are the nations’ brightest, will return. Bring your best talent home and build
an economy.
Eliminating the debt is critical.
Some 20 nations forgave all debt for Germany after World War II. The
London Agreement on German External Debts, also known as the London Debt
Agreement, was a debt relief treaty between the Federal Republic of Germany and
its creditor nations that concluded August 8, 1953.
Therefore, what enabled Germany to rise from the ashes
is a successful model. Greece too must be debt free. End federal borrowing, suspend
all debt, and do not accept any more bailouts from Brussels.
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Health insurance companies around the country are seeking
rate increases of 20 percent to 40 percent or more, saying their new
customers under the Affordable Care Act turned out to be sicker than expected.
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Why
Greece Matters A Lot: The Case Of Europe's Falling Dominoes. S- by Tyler
Durden on 07/06/2015
Barclays’ analysis showed the absolute national euro
exposure to Greece broken down by bailout program and also as a % of respective
host nation's GDP. What it found is the following:
Below are some of the scenarios
where the contagion will be worse than any algo, not to mention central banker,
expects:
-The backstops are not entirely infallible ….
- Greek exit and an official sector default would be new
precedents ….
- Greek default would have a non-negligible effect on EA
balance sheets …
- ... while a default opens up a host of political risks
that remain unanswered .
According to Jens Boysen-Hogrefe, economist with Kiel-based
institute Ifo, the hit “would hardly be noticeable for Germans." He may be
right, but where he is wrong is looking at Greece as an isolated case: since
Europe is, or rather was, a union, one has to evaluate the combined impact
of a third of a trillion in impaired assets across the Eurozone. For the vast majority of European nations,
the effect of a "write-off" of 3-4% of GDP would be sufficient to
launch a depression, which would then promptly drag Germany lower as well,
adverse impact (and thus quite welcome to Germany) on the EUR notwithstanding.
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Bob
Janjuah Asks "Is A Flash Crash Imminent?". Submitted by Tyler
Durden on 07/06/2015
"My concern is not just that markets are mis-pricing
Greece contagion, mis-pricing deflation, mis-pricing street liquidity and
mis-pricing the (now negative) trend in corporate (US) revenues and earnings
(Q2 earnings season is upon us and may well show year-over-year earnings down
5%/5%+). My concerns are also that markets are way too optimistic about global
growth (especially the US), about China, about the ability of policymakers to
do anything new and/or effective to alter things meaningfully to the
upside,"
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Meet
New Greek Finance Minister Euclid Tsakalotos. Submitted by Tyler
Durden on 07/06/2015
Now that Yanis Varoufakis has metamorphosed from economist
academic to controversial finance minister to political martyr, the eyes of the
financial universe will turn nervously to newly-appointed Euclid Tsakalotos,
who has led Greece’s negotiations with creditors since Varoufakis was sidelined
after making a scene at an April Eurogroup meeting in Riga.
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ECB
To Keep Greece On Hold Until Wednesday When Balyasny Sees Rioting Begin.
Submitted by Tyler Durden on 07/06/2015
According to Colin Lancaster, senior managing director with
Balyasny "we now have another 48 hours of calm before things really start
happening", and the punchline: "situation could then break down as
banks stay closed, ATMs will run out of cash Tuesday or Wednesday, uncertainty
grows and rioting possible."
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Greece
Set To Restart Negotiations, IMF "Ready To Assist" Greece, Lagarde
Says. Submitted by Tyler Durden on 07/06/2015
LEADERS OF GREEK RULING AND OPPOSITION PARTIES ISSUE JOINT
STATEMENT BACKING EFFORTS TO REACH DEAL WITH CREDITORS
"The IMF has taken note of yesterday's referendum
held in Greece. We are monitoring the situation closely and stand ready to
assist Greece if requested to do so."
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Piketty:
"Germany Has Never Repaid Its Debts; It Has No Standing To Lecture Other
Nations". Submitted by Tyler
Durden on 07/06/2015
"When I hear the Germans say that they maintain a very
moral stance about debt and strongly believe that debts must be repaid, then I
think: what a huge joke! Germany is the country that has never repaid its
debts. It has no standing to lecture other nations. ... Germany is really
the single best example of a country that, throughout its history, has never
repaid its external debt. Neither after the First nor the Second World War. However,
it has frequently made other nations pay up... "
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With
Yanis Gone, Now Troika Heads Must Roll. Submitted by Tyler
Durden on 07/06/2015
It’s time for the Troika to seek out some real men too. It
cannot be that the winner leaves and all the losers get to stay. The attempts
to suppress the IMF debt sustainability analysis were a shameful attempt to
mislead the people of Greece, and of Europe as a whole. And don’t forget the
US: Lagarde operates out of Washington. It cannot be that after this mockery of
democracy, these same people can just remain where they are.
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Submitted by Tyler
Durden on 07/06/2015 - 07:40
- Greece Bailout Referendum: They Voted ‘No’. Now What? (BBG)
- Varoufakis Quits as Greece Enters New Showdown With Europe (BBG)
- Merkel to Meet Hollande as Greece Told to Make Next Move (BBG)
- German line hardens after Greek referendum 'No' (Reuters)
- BOJ keeps rosy view of regional Japan, watching markets after Greek upset (Reuters)
- Oil falls on Greece vote, China stock market turmoil (Reuters)
- China Urges U.S.-Iran Compromise 36 Hours to Nuclear Deadline (BBG)
- U.S. and Iran: the unbearable awkwardness of defending your enemy (Reuters)
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Tumbling
Futures Rebound After Varoufakis Resignation; Most China Stocks Drop Despite
Massive Intervention. Submitted by Tyler
Durden on 07/06/2015
More than even the unfolding "chaos theory"
pandemonium in Greece, market watchers were even more focused on whether or not
China and the PBOC will succeed in rescuing its market from what is now a crash
that threatens social stability in the world's most populous nation.
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The
Biggest Issue Now Is "The Math" .Submitted by Tyler
Durden on 07/06/2015
Once the reality of debt write-offs and who lent how much
and what that means at home, the real fireworks could start. Can Italy, Spain
or Austria afford to write-off 1/3 or 1/2 or more of what they lent to Greece?
How about the EFSF or ECB? How will depositors feel if they get a quick 30% off
the top? That is the biggest issue. The math as they say. And it is what we
should be watching for.
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GLOBAL RESEARCH
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RT, SPUTNIK &
LATEST SHOWS
Euclid Tsakalotos has been appointed as the new Greek
finance minister following the resignation of Yanis Varoufakis on Monday.
Tsakalotos was previously the deputy foreign minister responsible for
international economic relations.
The Greek people "wanted to
trust a government that will offer a sustainable solution. We wouldn’t have
reached this point without Yanis Varoufakis. I cannot imagine that any other minister
of finance would have achieved for the entire Europe to be talking about a
sustainable solution, for the entire planet to be discussing that something is
going on in this country," Tsakalotos told reporters, as cited by
Ruptly.
It’s not the first time Tsakalotos has taken over from
Varoufakis. He was appointed to negotiate with creditors at the end of April
when the Syriza government replaced Varoufakis. On the sidelines of the talks
the former finance minister was often referred to as ‘impossible’ do deal with.
Tsakalotos has been a member of Syriza for almost a decade. .
His appointment is hardly out of the blue. When resigning on Monday, Varoufakis
said he hoped Tsakalatos would take over.
"I am leaving and I will
see you tomorrow with Mr. Tsakalotos," Varoufakis said on leaving the
finance ministry on Monday. When asked whether Tsakalotos would be the new
finance minister, Varoufakis said: "I hope so."
On Tuesday eurozone members will make another attempt to
find a solution to the deadlock at an emergency summit where they’ll discuss
the Greek referendum result. The EU President Donald Tusk and president of the
European Commission Jean-Claude Juncker are expected to talk at a European
Parliament session in Strasbourg on July 7 at 13:00 GMT.
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NEWS IN SPANISH
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Atenas ejerce su soberanía frente a la
austeridad que impone la troika. Alberto Pradilla
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PRESS TV
‘EU
trying to loot Greek economy’. Tue
Jul 7, 2015 An analyst says the European Union is trying to loot the Greek
economy by forcing Greece to implement austerity measures.
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Iran,
IAEA firm on 'technical interaction' .Tue Jul 7, 2015 Iran and the IAEA
discuss ways to improve technical interaction in line with the Islamic
Republic’s red lines.
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ISIL
fight ‘not simply a military’ one. Mon Jul 6, 2015 US President Barack
Obama says the fight against the ISIL terrorists in Syria and Iraq is “not
simply a military effort.
[ISIL leader in the shadow speaking on “long-term campaign”...
but he is going out and the dollar is
going to collapse in the short term .. ]
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Rouhani
to attend BRICS, SCO summits Mon Jul 6, 2015 Iran’s President Rouhani
will attend BRICS and SCO summits in the Russian city of Ufa.
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