Socio-Economics History Blog

Socio-Economics & History Commentary

And So It Begins – Greek Banks Get Shut Down For A Week And A ‘Grexit’ Is Now Probable

Photograph: Petros Giannakouris/AP

Photograph: Petros Giannakouris/AP

  • And So It Begins – Greek Banks Get Shut Down For A Week And A ‘Grexit’ Is Now Probable
    by Michael Snyder, http://theeconomiccollapseblog.com/
    Is this the beginning of the end for the eurozone?  For years, European officials have been trying to “fix Greece”, but nothing has worked.  Now a worst case scenario is rapidly unfolding, and a “Grexit” has become more likely than not.  On Sunday, the European Central Bank announced that it was not going to provide any more emergency support for Greek banks.  But that was the only thing keeping them alive.  In order to prevent total chaos, Greek banks have been shut down for at least a week.  ATMs are still open, but it is being reported that daily withdrawals will be limited to 60 euros.  Of course nobody knows for sure if or when the banks will reopen after this “bank holiday” is over, so needless to say average Greek citizens are pretty freaked out right about now.  In addition, the stock market in Greece is not going to open on Monday either.  This is what a national financial meltdown looks like, and the nightmare that has been unleashed in Greece will soon start spreading to much of the rest of Europe.

    This reminds me so much of what happened in Cyprus.  Up until the very last minute, politicians were promising everyone that their money was perfectly safe, and then the hammer was brought down.

    The exact same pattern is playing out in Greece.  For example, just check out what one very prominent Greek politician said on television on Saturday… 

    “Citizens should not be scared, there is no blackmail,” Panos Kammenos, head of the government’s coalition ally, told local television. “The banks won’t shut, the ATMs will (have cash). All this is exaggeration,” he said.

    One day later, the banks did get shut down and ATMs all over the country started running out of cash.  The following comes from CNBC… 

    read more.
http://www.theguardian.com/commentisfree/2015/jun/25/greece-blackmailed-eurozone-troika-syriza-common-currency

Click on image for article.

euro_logo_dynamite

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June 30, 2015 Posted by | Economics, GeoPolitics, Social Trends | , , , , , , , , , | Leave a comment

Collapsing CDS Market Will Lead To Global Bond Market Margin Call

Global financial storm approaching!

Global financial storm approaching!

  • Collapsing CDS Market Will Lead To Global Bond Market Margin Call
    by Daniel Drew, http://www.dark-bid.com/home.html  
    As Zero Hedge previously noted, liquidity is there when you don’t need it, and it promptly disappears once it is in demand. Consider it “cocktease capitalism.” If liquidity lasts longer than 4 hours, call the CFTC because you may be experiencing a spoof. Right now, the ultimate spoof is setting up as the credit default swap market collapses, and a global bond market margin call is just around the corner.

    The most serious risk at the moment is the lack of bond market liquidity. This problem was created by the Federal Reserve. By flooding the market with liquidity, the Federal Reserve paradoxically destroyed the liquidity it sought to create. Initially, the Federal Reserve’s actions helped stem the panic selling when it stepped in as the buyer of last resort. However, the Fed is quickly becoming the buyer of first resort. The CME even has a Central Bank Incentive Program to encourage foreign central banks to buy S&P 500 futures. It’s not a stretch of the imagination to presume the Federal Reserve is buying S&P 500 futures alongside the foreign banks.

    As the Fed’s balance sheet expanded ever larger, they transformed from being a mere market participant to becoming the market itself. The Federal Reserve, along with the rest of the world’s central banks, are essentially engaging in a multi-year effort to corner the global bond market. As we have seen in every case, no one has ever successfully cornered a market indefinitely. From the Hunt Brothers in the 1980 silver market to the Saudi royal family in the modern fractured oil market to the Duke brothers in the frozen concentrated orange juice market, it simply has not worked. Running a monopoly is an uphill battle that eventually results in a spectacular blowup. Why would the central banks be any different?

    As Zero Hedge pointed out recently, the run on the central banks has already begun. For the first time ever, QE failed. The first casualty was the Riksbank in Sweden.

    read more.

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June 30, 2015 Posted by | Economics, GeoPolitics | , , , , , , , , , , , , | Leave a comment

Grexit?, BIS Warning, Chinese Market Crash & Systemic Risk Shake the Global Economy

The BIS warned that the low rate environment could result in a backlash from ordinary people whose savings were being eroded away Photo: AFP

Photo: AFP

  • Grexit?, BIS Warning, Chinese Market Crash & Systemic Risk Shake the Global Economy
    by Mark O’Byrne, http://www.goldcore.com/us/  
    – Persistent low rates leave central banks with no ammunition to fight next crisis
    – BIS says short-sighted central banks and governments contributed to current weaknesses
    – Lack of policy options have forced some central banks to stretch “boundaries of the unthinkable”
    – Bust in developed economies the main risk facing global economy
    – Greece prepares to default
    – China markets routed overnight
    – Gold will be last man standing when currencies collapse

    Greece embarked on capital controls as talks over the weekend between Tsipras’ leftist government and foreign lenders fell apart.

    All banks and the Greek stock exchange are closed today. Greek citizens cued in long lines at ATMs or cash machines over the weekend and a run on the banks left most ATMs empty. There is a €60 limit on withdrawals from cash machines under strict capital controls. The ATMs will reopen tomorrow. Citizens are also lining up for petrol and food.

    Central banks have run out of options to deal with the next global financial crisis the Bank of International Settlements (BIS) has warned in its annual report. Failure to make difficult policy decisions and raise rates throughout the “recovery” have left central banks with no stimulus options with which to juice the economy when the next downturn arrives.

    The BIS, which is central bank of the central banks based in Basel, Switzerland, points to the short-sighted policies of governments and national central banks over the past few years who preferred to try keep their economies afloat using excessive debt rather than take unpopular steps to reform their economies.

    read more.

Eurozone_on_fire

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June 30, 2015 Posted by | Economics, GeoPolitics, Social Trends | , , , , , , , , , , , , , , , | Leave a comment

The Troika Intends to Suffocate Greece. Threaten an “Uncontrollable Crisis”…

Greece message to Troika: IMF, EU and ECB!

Greece message to Troika: IMF, EU and ECB!

  • The Troika Intends to Suffocate Greece. Threaten an “Uncontrollable Crisis”…
    by Ariel Noyola Rodríguez, http://www.globalresearch.ca/  
    The Central Bank of Greece surprised everyone with the publication of their monetary politics for 2014-2015. Besides revealing the consequences of the economic suffocation imposed by Brussels, it concluded that in case of not getting to a prompt deal with its European partners, a crisis of great proportions will be detonated.

    “A crisis with a manageable debt as we are currently facing with the help of our partners will transform into an uncontrollable crisis, with great risk for the banking system and for the financial stability”
    , it quoted[1]. It was the first time this institution seriously contemplated Greece’s separation from the Eurozone.


    The mainstream media immediately began to stress that the majority of Greek’s population is against abandoning the Monetary Union. Approximately a 70% according to a recent poll published by the GOP. For keeping the “common currency” the norms in the Maastricht Treaty have to be complied, therefore the Western media concludes that Greek citizens are willing to accept the Troika’s conditions: Austerity is the price for membership in the Eurozone.

    However, the media omit mentioning is that the same majority was opposed to measures that the Troika (formed by the International Monetary Fund, the European Central Bank and the European Commission) intends to impose. That same majority is currently convinced that the original 245 billion euros rescue program has only brought economic affliction. The increase of inequality and poverty, lock of housing, mental illness and suicides, are evidence of the “humanitarian crisis” Greeks are daily suffering[2].

    A change regarding to economic matters in urgent. In that sense, the Greek government has insisted in solving the more immediate needs (taxes on investment, creation of employment, a better distribution of income, etc.) and less in questioning terms of the debt. Despite this, Brussels has blocked any agreement that would help Greece’s recovery; debt repayments are maximum priority[3].

    Alexis Tsipras, prime minister, is practically “hands tied”, he can’t implement an alternative economic policy, this situation is contrary to his intentions, therefore it slowly diminishes the trust citizens have put into Syriza, his political party.

    Disqualifications between the Greek government and the Troika were quite prompt on dates near the meeting with the Eurogroup. Tsipras addressed that the International Monetary Fund (IMF) had “criminal responsibility” for the crisis. He also repeated that his government wouldn’t falter before the pressure imposed by the Troika. The objective of this proposal is to “humiliate Greece” and there he committed to reject the adjustment plans at every moment[4].

    read more.
http://www.attac.org/en/Stories/greek-bail-out-77-went-financial-sector

Click on image for article.

https://www.opendemocracy.net/can-europe-make-it/thomas-fazi/troika-saved-banks-and-creditors-%E2%80%93-not-greece

There is no bailout of Greece. It is a LIE by the MSM. It is a bailout of TBTF European and American banks by the troika!

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June 30, 2015 Posted by | Economics | , , , , , , , , , , , | Leave a comment

The World is Defenceless Against the Next Financial Crisis, Warns BIS

http://www.telegraph.co.uk/finance/economics/11704051/The-world-is-defenseless-against-the-next-financial-crisis-warns-BIS.html

Once again the serpents who are behind the crisis are speaking like the good guys warning the sheeple about the coming crisis they engineered. Click on image for article.

Carroll_Quigley_Tragedy_n_Hope2

http://www.globalresearch.ca/the-financial-new-world-order-towards-a-global-currency-and-world-government

Click on image for article.

http://www.newdawnmagazine.com/Article/A_Global_Central_Bank_Global_Currency_World_Government.html

Click on image for article.

https://socioecohistory.wordpress.com/2013/04/18/the-tower-of-basel-secretive-plans-for-the-issuing-of-a-global-currency-2/

Click on image for article.

WallStreet_Follow_the_Money_Illuminati_Pyramid_organizations

June 30, 2015 Posted by | Economics, GeoPolitics | , , , , , , , , , , , , , , | Leave a comment

Jim Rogers: ‘Greece Will Collapse This Week and People Will Be Terrified’

  • Published on Jun 29, 2015
    Hundreds gathered in Paris to show their solidarity with Greece, supporting Athens’ resilience in fighting the harsh bailout conditions now being demanded. The protesters were mainly from France’s left-wing parties. The prime minister is calling for Greece to be respected, to make sure it stays in the eurozone. For more RT is joined by Jim Rogers, Financial commentator and co-founder of the Quantum Fund.

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June 29, 2015 Posted by | Economics | , , , , , , , | Leave a comment

“Risk of Collapse” and “Panic” in the Air, China Cuts Rates

Global financial tsunami fast approaching!

Global financial tsunami fast approaching!

  • “Risk of Collapse” and “Panic” in the Air, China Cuts Rates
    by , http://wolfstreet.com/  
    It didn’t take long: the frazzled People’s Bank of China tries to put a stop to the worst 2-week crash since 1996. The whole world piled into what had been the hottest stock market in the universe. Chinese stocks had been endlessly hyped in the US and elsewhere. For the smart money, it was a game of chicken; ride it up and get out just before the crash.

    Chinese stock markets had more than doubled in 12 months, propelled also by margin debt, cheap credit all around, and the irresistible desire to get rich quick. Everyone in China, from street vendors to housewives, suddenly opened margin accounts in Hong Kong and mainland China, and borrowed money to buy stocks. Outstanding margin debt ballooned to $348 billion, even while insiders were reportedly dumping stocks. A well-oiled wealth-transfer machine.

    It was one heck of a party. By early June, it had created $6.5 trillion in “value” over a period of 12 months; 63% of China’s 2014 GDP! The Chinese government continued to aid and abet that wealth transfer by touting stocks. Even in March, as stocks had already reached dizzying heights, a spokesman for the China Securities Regulatory Commission said that the soaring valuation for Shanghai-listed shares had its own “inevitability and rationality,” such as China’s “improving economic conditions.”

    Then someone accidentally turned off the juice. Over the last ten trading days, the Shanghai Composite Index has plunged 19%, including 7.4% on Friday – the steepest two-week plunge since December 1996. The Shenzhen Composite has given up 20%, and the startup-focused ChiNext Index has plummeted 27% over the last three weeks, including 8.9% on Friday. According to Bloomberg, by Thursday, margin debt has dropped four days in a row. Markets were running out of propellant.

    And on Saturday, the People’s Bank of China tried to put a stop to it. It cut its benchmark interest rates by 25 basis points, to 4.85% for the one-year lending rate and to 2% for the one-year bank deposit rate. The fourth cut since November. The last cut on May 10 had stemmed a much smaller rout and had re-ignited the propellants to drive stocks to greater highs. But the descent since has been brutal.

    read more.

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June 29, 2015 Posted by | Economics | , , , , , , , , , | Leave a comment

“Uncontained” – Greek Stocks Crash 17% As European Banks Plunge Most In 3 Years

European_Bank_Stocks_Crash-20150629

  • “Uncontained” – Greek Stocks Crash 17% As European Banks Plunge Most In 3 Years
    by Tyler Durden, http://www.zerohedge.com
    Despite the Greek stock market being closed there is an option for hedging the exposure that all the smart money has been building to Greece in the past few days – GREK – the US-trade Greek ETF. In the pre-open, GREK is trading down 17% but the problems lie ahead as more and more realize how illiquid it is and redemptions are forced to be made from ‘cash’ – since there is no way to offload the underlying Greek stocks, unless OTC trades can be arranged with other entities – which could thus expose the entire false-liquidity-facade of the ETF industry.
    ….
    While the best efforts of the SNB are underway to protect the markets from unease, European banks are suffering the exact ‘contagion’ that we were told numerous times would be contained. And European Banks are getting crushed : (top of post)

    read more.

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June 29, 2015 Posted by | Economics | , , , , , , , | Leave a comment

Central Banks Scramble To Stabilize Crashing Markets: China Fails, Switzerland Succeeds (For Now)

Shit_Storm

  • Central Banks Scramble To Stabilize Crashing Markets: China Fails, Switzerland Succeeds (For Now)
    by Tyler Durden, http://www.zerohedge.com  
    Following a week in which the Chinese stock bubble popped and a weekend in which the Eurozone bubble followed, it was all up to central banks to stabilize the devstation that would follow should the Plunge Protection Team, now global, not show up.

    And while US equities futures were looking grim overnight, China at least started off on the right foot, rising a little over 2% in early trading following China’s scramble to stabilize markets as it knows the alternative could very well be (deadly) civil unrest.  And then something unexpected happened: the market did not follow the Chinese central bank script. In fact, as noted earlier, stocks plunged tumbling as much as limit down for CSI-300 futs, and the SHCOMP crashing the most since 1996.

    read more.

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June 29, 2015 Posted by | Economics | , , , , , , , , , , | Leave a comment

Greek PM Announces Closure of Banks, Impose Capital Controls

  • Published on Jun 28, 2015
    The Greek prime minister says his country’s banks and the Athens stock market will be closed on Monday. Alexis Tsipras blamed the Eurogroup for rejecting his government’s request for extending the current bailout program. Greece wants the bailout program to be extended for a few days until the July 5 referendum on the international creditors’ proposals in return for bailout funds. Tsipras announced the referendum on Friday after an emergency meeting of his cabinet. The referendum has increased Greece’s chances of exiting the eurozone.

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June 29, 2015 Posted by | Economics | , , , , , | Leave a comment

All Indicators Point To An Event Occurring In The Next 100 Days

  • Published on Jun 26, 2015
    Still no deal with Greece as deposits hit an 11 year low. Consumer confidence surges as food and gas prices rise and people cannot find full time jobs. All indicators, geo-political and economic are pointing to an event with in the next 100 days. Germany may lose 9 billion dollars because of the sanctions with Russia. When the supreme court is blackmailed with NSA spying they will change the law. US color revolution continues in Armenia. Ukraine has increase the number of troops to 60,000 soldiers. US invasion of Syria could start at any moment. Terror attacks in Tunisia, France and Kuwait push the agenda of the Authorization of War. US authorities warning of an event on July 4.

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June 29, 2015 Posted by | Economics, Social Trends, GeoPolitics | , , , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

Greece is Being Blackmailed. Exiting the Eurozone is Its Way Out

http://www.theguardian.com/commentisfree/2015/jun/25/greece-blackmailed-eurozone-troika-syriza-common-currency

Click on image for article.

http://www.forbes.com/sites/afontevecchia/2012/02/21/greek-bailout-deal-a-farce-to-benefit-banks-at-the-expense-of-greece/

Click on image for article.

http://www.workers.org/articles/2015/02/03/banks-bailed-out-themselves/

Click on image for article.

http://www.attac.org/en/Stories/greek-bail-out-77-went-financial-sector

Click on image for article.

June 29, 2015 Posted by | Economics, GeoPolitics | , , , , , , , , , , , | Leave a comment

Greece Will Survive But Will the Euro or the EU?

Santorini will still be standing, but will the European Union?

Santorini will still be standing, but will the European Union?

  • Opinion: Greece will survive, but will the euro or the EU?
    by DARRELL DELAMAIDE, http://www.marketwatch.com/
    Brussels may win the battle, but lose the war

    WASHINGTON (MarketWatch) — Whatever happens with the bailout talks, the one certain thing is that Greece will survive, in or outside the eurozone.

    One of the most beautiful countries in the world in an incredibly strategic location, it will remain a world-class tourist destination and a sought-after ally.

    In the past century alone, the country has survived Nazi occupation, civil war, military dictatorship, and decades of a political class riven with corruption.

    It will survive European Union’s austerity policies, or Grexit, or default. So don’t cry for Greece — the country has been there for millennia and it’s not going anywhere. What is far less certain is whether the euro EURUSD, +0.0000% and the EU will survive.

    This artificial construct foisted on a European public by a political elite far less idealistic than it pretended is wearing out its welcome. With its bloated and corrupt bureaucracy in Brussels, the craven submission of its political leaders to a dominant reunified Germany, its increasingly obvious disrespect for democratic principles, the EU has strayed far from the founders’ concept of a free-trade zone designed to contain a defeated Germany.

    It is not just about Greece — or Portugal, which MarketWatch columnist Matthew Lynn identified as the next country to fall, or Spain, or Italy — but about the whole concept of political and economic integration across the entire continent, the so-called “European project.”

    It is difficult to see how Britain can retreat from Prime Minister David Cameron’s rejection of the “ever closer union” enshrined in the EU treaties as he seeks to renegotiate the terms of his country’s membership.

    And without this goal — or without Britain — how can the EU hope for anything but sliding back into a loose trade confederation?

    read more.

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June 29, 2015 Posted by | Economics, GeoPolitics | , , , , , , , , , | Leave a comment

If Greece Defaults, Imagine Argentina But Much Worse

The BIS warned that the low rate environment could result in a backlash from ordinary people whose savings were being eroded away Photo: AFP

Photo: AFP

  • If Greece Defaults, Imagine Argentina But Much Worse
    by There may be a one-word explanation for why Greece will ultimately capitulate to European demands for more austerity:

    Argentina.

    Greece is hardly the first nation to face the prospect of defaulting on its sovereign debt obligations. Argentina has defaulted on its external debt no fewer than seven times since gaining independence in 1816, most recently last year. But it’s Argentina’s 2001 default on nearly $100 billion in sovereign debt, the largest at the time, that poses a cautionary example for Greece.

    Should Greece default, “Argentina is an apt analogy,” said Arturo C. Porzecanski, a specialist in international finance at American University and author of numerous papers on Argentina’s default. But for Greece, “It would likely be worse. Argentina was comparatively lucky.”

    Daniel Gros, director of the Center for European Policy Studies in Brussels and the author of “A Tale of Two Defaults,” a paper comparing Greece and Argentina, agreed. “Default would be much worse for Greece than it was for Argentina,” he said.

    Like Greece today, Argentina had endured several years of hardship and austerity by 2001. It borrowed heavily from the International Monetary Fund, the World Bank and the United States, all of which demanded unpopular spending cuts. The I.M.F. withheld payments when Argentina (like Greece) failed to meet its deficit targets. A bank run led the government to freeze deposits, which set off riots and street demonstrations. There were deadly confrontations between police and demonstrators in the heart of Buenos Aires, and the president at the time, Fernando de la Rúa, fled by helicopter in December. In the last week of 2001, Argentina defaulted on $93 billion in sovereign debt and subsequently sharply devalued the peso, which had been pegged to the dollar.

    In addition to social unrest and a wave of political instability (at one point, the country had three presidents in four days), Argentina’s economy plunged into depression. Tens of thousands of the unemployed scavenged the streets collecting cardboard, an enduring image that gave rise to the term “cartoneros.” Dollar-denominated deposits were converted to pesos, wiping out over half their purchasing power.

    read more.

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June 29, 2015 Posted by | Economics, GeoPolitics, Social Trends | , , , , , , , , , , | Leave a comment

The Market Detonation You’re Ignoring: “The Chinese Market Is In An All-On Crash”

WW3 is near?

  • The Market Detonation You’re Ignoring: “The Chinese Market Is In An All-On Crash”
    by Mac Slavo, June 27th, 2015, SHTFplan.com  
    With the eyes of the world on Greece and a possible collapse of the of the Eurozone as a likely end result, many are ignoring a potentially much more massive elephant in the room. It’s been the hottest market in the world, so flush with cash that they have actually built entire ghost-cities lacking populations and mega shopping centers without tenants – a clear sign of bubble waiting to be pricked. But the inevitable seems to now be taking hold as once unstoppable Chinese stock markets are now reversing the unprecedented gains seen over the last several years.

    Forget Greece. We’ve seen that story before. This could be the first domino:

    The Chinese market is in an all-on crash. Last night the Shanghai index was down 8%, and while there have been some wild recovery rallies during the last couple of weeks as well the cumulative loss is close to 20% at this point, the formal “declaration” of a bear market.

    That market had been in a parabolic blow-off since roughly December, a classic (to a chartist) three-stage parabolic move with two retracements.  The most-recent move down, however, threatens to violate the uptrend support originated back in November and has already erased the gains since May.

    Yes, a 2-month round-trip of about 20%.
    “Liquidity” is usually given as the reason for the “reasonableness” of stock valuations these days.  I have only one question: What happens when said “liquidity” is really nothing more than a loan (which it always is) and the borrowed funds are lost instead or producing “gains”?
    – Source: Karl Denninger / The Market Ticker

    What happens is exactly what’s happening in Greece and China, and what will undoubtedly soon come to pass in the United States.

    read more.

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June 29, 2015 Posted by | Economics | , , , , , , , , | Leave a comment

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