Mish's Global Economic Trend Analysis |
- Sudden Stop Thesis: What Are the Odds of Grexit Within Three Weeks?
- Bank Holiday: Greek Banks and Stock Market Shut Until July 7; Capital Controls Imposed
- ECB Cries Uncle, Halts ELA Amid Run on Greek Banks; Capital Controls and Bank Holiday Next?
Sudden Stop Thesis: What Are the Odds of Grexit Within Three Weeks? Posted: 28 Jun 2015 10:22 PM PDT Four years ago I thought odds of an eventual Grexit were nearly certain. Some people still don't believe so, while others are just beginning to understand the obvious. Former Pimco Co-CEO El-Erian Sees 85% Grexit Odds With 'Massive' Contraction Coming. Greece is heading for a "massive economic contraction" and is likely to be forced out of the euro zone, according to Mohamed El-Erian, the former chief executive at Pacific Investment Management Co.Sudden Stop Thesis While I still think it likely Greece will exit the eurozone, I will take the "over" line on a "few weeks". It is amazing how long these things drag out. There are at least two wildcards in play that could prolong things. At the top of the list is Russia. Second in line is the US. Why? Because the US does not want Greece to form serious ties with Russia. Also, Merkel does not want Grexit on her watch. Russia the Key Meanwhile, and as I have been saying for months, Russia is the Key. Will Russia come to aid Greece with enough money and oil to enable Greece to hang on longer than a few weeks? I suspect the answer is yes. If so, the price may be sanctions. EU rules require unanimous agreement on sanctions. I expect Greece to play that card very well. Greece can and likely will torpedo EU sanctions on Russia by the end of the year. Unless there is an immediate collapse in Greece starting now, look for Russia to keep Greece afloat until sanctions are lifted. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
Bank Holiday: Greek Banks and Stock Market Shut Until July 7; Capital Controls Imposed Posted: 28 Jun 2015 09:26 PM PDT After the ECB shut off ELA, prime minister Alexis Tsipras imposed capital controls while blaming the ECB just as I predicted. Of course, that was an easy prediction. Yet, even at the last moment, many did not believe it would come to this. Let's tune into the Guardian Live Blog for some details. Bank Holiday
Capital Controls
Bank Queues
Vacation In honor of the bank and stock market vacation, I offer this musical tribute. Link if video does not play: Connie Francis Vacation. How Can People Be So Stupid? What are bank queues forming now that it's too late? The only answer I can come up with is those who waited are stupid beyond belief. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
ECB Cries Uncle, Halts ELA Amid Run on Greek Banks; Capital Controls and Bank Holiday Next? Posted: 28 Jun 2015 07:31 AM PDT I have been wondering when the ECB would finally pull the plug and put a stop to the ELA. Today, amid an accelerating run on Greek banks, the ECB capped the ELA. The Guardian has a Live-Update on the crisis. Here is the key point "No more extra emergency funding to Greece's banks, despite steady outflow of deposits since crisis escalated." Capital Controls, Bank Holiday Coming Economics professor Karl Whelan says Capital Controls Coming Professor Karl Whelan of University College Dublin just launched a blogpost which explains why he thinks some Greek banks won't open tomorrow.Greece now gets to blame the ECB for bank failures. This move likely seals the deal on the July 5 referendum (See Tsipras Calls July 5 Referendum on Creditors' Demands; Merkel Says No Alternative to Creditor's "Generous" Offer). Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
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