Mish's Global Economic Trend Analysis |
- Pact With the Devil? Syriza Projection 150 Seats; Coalition Deal Already; "Indisputable Mandate to Leave Austerity"
- Ireland Proposes Debt Restructuring Conference for Spain, Greece, Ireland; A Turnip is a Turnip
- Syriza Trounces New Democracy; Greeks Stop Paying Taxes; Run on Greek Banks Escalates; Get Out!
| Posted: 25 Jan 2015 10:46 PM PST One Short of Outright Majority With vote counting nearly over, it appears Syriza captured exactly half of the 300 member Greek parliament. That is just one vote short of the majority it needs. However, Syriza has already secured an alliance with Independent Greeks, a right-wing party that shares little common ground with Syriza except for its rejection of austerity measures. The coalition would have at least 162 seats, and that's an allegedly comfortable governing majority. I do not rule out other alliances. But holding them all may prove difficult. Certainly this was not the alliance most expected. Can Syriza govern with the Independent Greeks on some issues and another party on others? Or will this all blow up soon? If the latter, before or after Grexit? For now, it's party time for Syriza, albeit one vote short of an even bigger party. Of course, there is always the chance of a party shift. It only takes one shift. New Clash for Europe With that backdrop, please consider Greek Vote Sets Up New Europe Clash. With nearly all votes counted, opposition party Syriza was on track to win about half the seats in Parliament. In the wee hours of the morning, it clinched a coalition deal with a small right-wing party also opposed to Europe's economic policy to give the two a clear majority.Pact With the Devil? The Wall Street Journal called the coalition of 162 seats a "comfortable majority". I called it an "allegedly comfortable majority". Time will tell which version is correct. But other alliances are possible as well. It's interesting this coalition is the one that emerged rather than a coalition with one of the other leftist or centrist parties. Perhaps there is more in common on the issues that is apparent at first glance. Then again, perhaps so many are so fed up with austerity they would sign a pact with the devil to get rid of it. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot |
| Ireland Proposes Debt Restructuring Conference for Spain, Greece, Ireland; A Turnip is a Turnip Posted: 25 Jan 2015 07:00 PM PST Contagion? Well don't worry about that! German Chancellor Angela Merkel assures us that will not happen. However, a difference of opinion is forming in Greece, Spain, and Ireland. Via translation from El Confidencial, SYRIZA Extends the Debate, "Ireland Stands Out: Seeks Conference to Restructure Debt, Including Spain." The Greek elections this Sunday still shaking European foreign ministries. ...Why Ireland Should Support Greek Plan The above article was based on an Irish Times column Why Ireland Should Support Greek Plan to Write Down Eurozone Public Debt. Contrary to many reports, Syriza is not threatening a unilateral default but wants Greece's debt burden to be considered within a broader restructuring of sovereign debt in the euro zone. Its leader, Alexis Tsipras, has called for a "European Debt Conference", based on the 1953 London Conference that wrote off half of post-war Germany's debt and extended the repayment period for the rest over a number of decades. As Hans-Werner Sinn, one of Germany's leading economists and president of the Ifo Institute for Economic Research, acknowledged recently, the 1953 conference was, along with the Marshall Plan, a key factor in enabling Germany's post-war economic miracle.Simple Math I saw Lagarde's nonsensical "A Debt is a Debt" speech in numerous places last week. I nearly responded "A turnip is a turnip and gold is gold, but neither turnips nor gold can default." And that is the essence of the debate isn't it? Whether Germany agrees to restructuring or not, what cannot be paid back, won't. Germany either agrees to debt restructuring or Greece will default. Either way, Germany will pay a price. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot. |
| Syriza Trounces New Democracy; Greeks Stop Paying Taxes; Run on Greek Banks Escalates; Get Out! Posted: 25 Jan 2015 11:57 AM PST As late as yesterday I read numerous mainstream media reports that Syriza would win by three to five percent and would need to form an unstable coalition to rule. In contrast, here was my January 19 prediction (and rationale): Expect a Blowout Win by Syriza in Greece. Syriza Trounces New Democracy The final votes are not counted, but exit polls show a blowout, with incumbent party New Democracy going down in flames. The Wall Street Journal reports Greece's Radical Leftist Syriza Party Poised to Win Election, Exit Polls Say. Syriza appeared set to win between 35.5% and 39.5% of the vote, trouncing the incumbent New Democracy party, which managed to secure just 23% to 27% of the vote, according to the exit polls whose results were issued immediately after voting booths closed. Greece Exit Polls  Note the double-digit (or near double-digit) trouncing of New Democracy leader and current prime minister Antonis Samaras. Here's an interesting quote from the Journal. "Europe is self-destructing," said Polyxeni Konstantinou, a 56-year-old public-sector worker voting in central Athens. "I voted for Syriza because I hope that it will help change the tragic circumstances that now govern Europe. Will Syriza be able to achieve everything it says? Probably not. But whatever it does achieve, then that will be good for Europe." Greeks Stop Paying Taxes Late last week the Financial Times reported Greeks Stop Paying Taxes in Expectation of Syriza Poll Victory. A reluctance to pay taxes was much criticised by Greece's creditors as one reason why the country needed a big international bailout. Now many Greeks are again avoiding the taxman as they bet the radical left Syriza party will quickly loosen fiscal policy if it comes to power in Sunday's general election.As late as last Friday polls expected New Democracy would lose but not get trounced. Voting by Feet (Bank Accounts) ZeroHedge reports Greek Deposit Outflows Soar In Run-Up To Syriza Victory. The monthly Bank of Greece balance sheet data for the month of December revealed a significant increase in Greek bank ECB borrowing which rose by €11bn in December to €57bn (including €1bn of Emergency Liquidity Assistance). This is more than the €3bn deposit outflow reported for December. It is thus likely that Greek banks had to borrow even more in December to offset not only their lost deposits but likely reduced access to private repo markets, as it happened before during Greek crisis.The above paragraphs not by ZeroHedge but rather from JPMorgan (no link given). Run on Greek Banks Will Escalate I repeat my January 9 warning: Another Run on Greek Banks Begins; Get Out While You Still Can; Buy Gold. Get Out! There is no reason to hold money in Greek banks, and every reason not to (even if there is talk of ECB guarantees). At this point, the "Juncker Rule" applies (they will lie when it's serious). It's serious. Get out! Get Out Where? By get out, I do not mean to another European bank. If I were a Greek citizen, I would personally worry that any euro-denominated bank (not just Greek banks) would confiscate my money. For short-term needs, consider US dollars or euros, in hand, not in Greek bank safe deposit boxes. For mid- to long-term needs, US treasuries (or US treasury ETFs), German bonds (or German bond funds), and gold look attractive, especially gold. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
| You are subscribed to email updates from Mish's Global Economic Trend Analysis To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google Inc., 1600 Amphitheatre Parkway, Mountain View, CA 94043, United States | |
Postări
Niciun comentariu:
Trimiteți un comentariu