Loans and Finance

EU To Impose Dictatorship On Greece

2012-01-28T12:16:00.000Z

Bloomberg reports that European policy makers are discussing plans to directly intervene in Greek budget decisions as the country struggles to cut its deficit.

Under the proposals, European institutions would have powers to implement austerity measures agreed under the terms of Greece’s bailout agreements.

This will not go down well with the Greek people.

In fact the Greek government have told the German government to fuck off wrt this proposal. This rejection means that Greece will not get its second bailout and will default.

Greece Will Default - Merkel Sees The Light

2012-01-28T11:42:00.001Z

Angela Merkel has finally realised what the rest of the world (excluding Rehn) has known all along:

@afneil Andrew Neil

Foreign Office sources say Merkel now thinks Greece will default.

ECB Stands Back From Debt Talks

2012-01-27T11:59:00.001Z

European Central Bank Executive Board member Jose Manuel Gonzalez-Paramo has said that the ECB is not involved in the Greek debt talks.

This is hardly good news, if Paramo is speaking the truth, for those who are hyping the rumour that a deal is close at hand.

The End of The Euro

2012-01-27T11:34:00.001Z

@faisalislam Faisal Islam

I hear one European bank has already started to account for euros by nation, ie German euros, Greek euros, with internal exchange rates.

The Troika's Wishlist

2012-01-27T09:55:00.001Z

Reuters reports that the EU, IMF and ECB (aka troika) have drawn up a report which includes a list of measures they want to see enacted by Athens, before the Euro130BN bailout fund is released (always assuming of course the bondholders agree to their haircut).

This is all very nice.

However, given that the bondholders have yet to agree terms of their haircut and the Greeks are in denial about the wishlist actually being binding or relevant (government spokesman Pantelis Kapsis said the government would try to negotiate some of the points), the chances of Greece avoiding a disorderly default are the same as that of a cat in hell.

Iran To Stop European Oil Shipments

2012-01-27T09:41:00.002Z

The FARS news agency reports that the Iranian parliament will debate an emergency bill this Sun that would halt oil exports to Europe from next week.

That will hit the EU's plans for a gradual imposition of sanctions.

Greece To Lose Oil Supply II

2012-01-26T12:20:00.000Z

A few days ago I asked where, with the implementation of EU sanctions on Iranian oil imports, will Greece, which currently imports 30% of its domestic oil from Iran on favourable terms, source its oil from?

I noted earlier this month that oil would likely rise to $150 a barrel, a price that would cripple the already enfeebled Greek economy.

Now it seems that IMF have woken up to this issue, and have warned that sanctions will cause a "large effect on prices".

The Telegraph quotes the IMF:

"A halt of Iran's exports to OECD economies without offset from other sources would likely trigger an initial oil price increase of around 20pc-30pc."

Brent crude is currently trading at over $110 per barrel, a rise of 30% gives a price of $143.

Greece Won't Play Major Role?

2012-01-26T12:00:00.000Z

Reuters reports that Germany does not expect the troika of foreign lenders, that is currently in Athens, to deliver a report on Greece's progress before a summit of European Union leaders next Monday.

The German source that Reuters quoted then added that this meant that Greece would not play a major role at the EU leaders summit.

Who is he trying to kid?

Meanwhile, the Greek press is reporting that private lenders have accepted a lower interest rate in debt deal. Athens News Agency also says that PM Papademos and the IIF's Dallara are to meet at 8pm to resume debt swap talks.

My advice is, don't believe this rumour (especially given its source) because the ECB is not going to accept a loss.

Madness

2012-01-26T10:53:00.000Z

David Cameron has told the Davos summit that to be even considering a Tobin tax is "madness".

Quite right!

Rats Leaving The Sinking Ship

2012-01-25T12:39:00.001Z

Unsurprisingly, given the failure to reach a deal on the Greek haircut, and the abrogation by the Greek government of responsibility for talking with bondholders (the Greeks have passed the buck to the Troika), hedge funds are now scrambling of offload Greek debt.

The New York Times reports:

"Hedge funds that in the past month or so have purchased an estimated 4 billion euros, or $5.2 billion, of beaten down Greek bonds that mature on March 20 are now trying to unload their positions, according to brokers and traders.

That is because it is becoming clear to one and all that Greece — under pressure from its financial backers — is preparing to impose a broad-based haircut that would hit all investors with a loss of 50 percent or more, whether they agree to the deal or not."

Meanwhile, private boindholders are meeting in Paris to determine their next course of action.

The ship is sinking fast, and not all the rats will escape in time!

George Soros Speaks

2012-01-25T12:26:00.001Z

George Soros is making an opening speech at the Davos summit.

Faisal Islam quotes him:

"outlook is truly dismal. EU.. is undemocratic to the point where the electorate is disaffected and ungovernable."

That dear readers is why, in a nutshell, the Euro will fail!

Hedge Funds Have The Edge

2012-01-24T16:05:00.001Z

Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co (Pimco), has tweeted that hedge funds appear to be controlling the fate of Greece and beyond.

Quote:

"PIMCO PIMCO

Gross: Hedge funds appear to control the fate of #Greece – by extension Euroland – by extension…??"

Greece To Be In "Selective Default"

2012-01-24T15:26:00.000Z

Reuters reports that Standard & Poor's will likely downgrade Greece's ratings to "selective default" when (substitute "if" for "when") Greece concludes its debt restructuring.

Advice To Greek Politicians - Read The Small Print!

2012-01-24T12:07:00.001Z

ekathimerini.com reports that a Greek cabinet minister didn't read the loan agreement with the EU in 2010.

"Development Minister Michalis Chrysochoidis, who has declared he intends to challenge for the PASOK leadership, said on Tuesday that when he was part of the Cabinet in 2010 he did not read the terms of Greece's loan agreement with the European Union and the International Monetary Fund."

Does it really matter if you don't read these agreements?

Well, the bondholders seem to think so.

Reuters reports:

"Hedge funds are combing through the small print of Greece's planned rescue deal with private creditors, readying a wave of potential litigation to squeeze a better payout from the country."

Well then, you sow what you reap!

The Greek Clusterfuck Negotiations

2012-01-24T10:26:00.001Z

Despite the hype form some sections of the ill informed media and from the EU, that the Greek deal on haircuts was almost in the bag, reality has hit the fan.

Eurozone finance ministers have rejected the current offer from bondholders, and have "demanded" that negotiations between the Greek government and Institute of International Finance (IIF) reach agreement on a lower average coupon.

Lovely!

The EU seems to be under the impression that it has some control over this and that, like Canute, it can somehow control elemental forces (in this particular case, the markets and economic reality).

The EU ministers want a lower rate than the 4% currently being demanded by the bondholders.

Ain't going to happen without enforcement (ie a default).

Negotiations are turning into a clusterfuck!

There will be no deal.

Moody's States The Bleedin' Obvious

2012-01-23T14:43:00.002Z

Moody's claims that a disorderly default would increase likelihood of Greece exiting Euro area.

No kidding???!!

Shortlisted For Accountancy Personality of The Year

2012-01-23T14:35:00.001Z

My thanks to PQ Magazine for placing me on the shortlist for their 2012 awards, in the category of “Accountancy Personality of Year“.

Greece To Lose Its Oil Supply

2012-01-23T11:26:00.001Z

The EU has agreed to an immediate ban on all new contracts to import, purchase or transport Iranian crude oil and petroleum products.

EU countries with existing contracts for Iranian oil and petroleum products will have until July 1, 2012 to complete those contracts.

OK then, here's a small question for the EU.

Where will Greece, which currently imports 30% of its domestic oil from Iran on favourable terms, source its oil from?

Greek Haircut Talks Suspended

2012-01-22T12:00:00.000Z

The Telegraph reports that that talks over a debt deal between lenders and the Greek government were suspended over the weekend, as the representative of bondholders flew out of Athens empty handed.

A spokesman for the IIF said that Mr Dallara had travelled to Paris for a long-standing social arrangement and his departure was "in no way a reflection on the talks".

LOL:))

No one seriously believes that spin, surely?

Greek Haircut Talks Continue

2012-01-21T10:53:00.001Z

Unsurprisingly no deal has been reached yet between Greek bondholders and the Greek government, over the haircut that will have to be applied if Greece is to avoid default.

Talks will continue this weekend and into next week.

It seems that yesterday's hype by some sections of the media that a deal had been reached was, unsurprisingly, nothing more than hype.

Don't believe any reports about a deal being reached, until the details of the deal are presented in document that has been signed by the relevant parties.

Greek Haircut 70%

2012-01-20T16:12:00.004Z

Holders of Greek bonds will have to take a 70% haircut, IF a deal is reached.

The crucial word is "IF".

Greece To Agree Deal With Bondholders?

2012-01-20T11:58:00.000Z

Reuters reports that Greece and its private bondholders are inching closer towards a much vaunted debt swap deal.

Let us see if they can pull their nuts from the fire at the eleventh hour.

Going Going Gong - Fred Goodwin To Lose K?

2012-01-20T11:06:00.000Z

"Sir" Fred the Shred Goodwin, disgraced ex CEO of RBS, may be stripped of his knighthood.

The Forfeiture Committee is looking into whether they can strip him of it, even though he has not been charged or convicted of a criminal offence.

All well and good.

However, the real question that should be asked is why the hell was he knighted in the first place?

Same Old Lies - Greece Is Busted Flush

2012-01-19T12:59:00.002Z

In October 2011 the "leaders" of the Eurozone assured the world that the Greek debt crisis was resolved, and that Greek bondholders had accepted a 50% haircut.

As I noted then:

".. there are some "issues" that may well unravel this sooner than the "leaders" of the Eurozone would like".

What a difference a few months make!

Moving forward to the present day, we see Greek finance minister Evangelos Venizelos has been addressing parliament. Greece failed to reach an agreement with its international creditors on Wednesday.

He is still prattling on about doing a deal with bondholders (the deal that the world was told was finalised last year) and has reiterated that he wants any debt swap with private sector bondholders to be voluntary.

Nonsense:

"The "haircut" is, despite the spin (seemingly, according to the Euro spin machine the "haircut" is voluntary, therefore it is not a default!), a default.

Does this matter?

Yes, it does matter.

By defining it as not a default, the Eurozone has null and voided sovereign hedging via CDS (this has not gone down well with those who hedged against default)."

No one believes the Eurozone "leaders", most especially the Greek "leadership", anymore.

There will be no deal, and Greece will default.

As I noted in October last year, Greece is a busted flush.

PERIOD!

The Greek Tragedy Continues

2012-01-18T11:34:00.000Z

The ongoing negotiations between bondholders and the Greek government are continuing.

The media is spinning the lie that there is hope for a deal.

"Deal" or no "deal", the reality is that Greece will default.

The IMF knows this, because it it seeking to increase its funding by $600BN to $1 trillion.

End of story!