Bank Holidays, Bail-ins, & Full Capital Controls: Greece on the Precipice – AGXIIK

1498071I am of the opinion that some of the Greek banks will not open Monday and those that remain open will shut down with a day of opening or at least by June 30.  The ECB and IMF are looking at June 30 as the absolutely deadline for full on default, no concealing it any more.
The ELA must protect its position and will likely order a bank holiday and full on capital controls because the bank deposits are now less than what is owned. Collateral is going to be worth ZERO in short order as a Greek default shoots rates to 50-90% on 2 year bonds, just like the last time Greece took the haircut that avoided a full default 2 years ago.
This will precipitate a bail-in as the ELA, along with the troika, will demand full deposit theft to protect this 100 billion euro assets still within reach.  Bank holiday will give the troika and ELA provisions time to extract everything they can reach in these accounts.  If the Greek central bank does not nationalize the banks sometime between Sunday and Wednesday, the banks will fail and crash, throwing the entire system into chaos.


Eagle

Submitted by AGXIIK:

The latest intel on Greece this saturday indicates that  troubles loom large Sunday as ATMs are drained.

In April the Greek government borrowed/stole over 1 billion Euros over a 4 week period from greek social security pension plans to make the weekly IMF payments  Those funds were supposed to be paid back within 15 days but that never happened

The Greek gov. demanded any extra cash from municipal and public accounts to make early to mid May payments.  Those funds will never be returned.

The Greek gov used 700 million of a euro IMF segregated fund to make the June 1 payment.  That had to be returned to the IMF by June 19 but that did not happen

Greece defaulted on their second June payment, due June 7, owing around 400 billion Euros.  They have made no payments since then and will owe 1.5 billion Euros plus the 700 million euros on June 30

If a formal default notice is made by LeGard this will trigger a default on 130 billion in ESFS loans.   This means game over for the Eurozone. This may plan into Legard’s hand so she can jerk a knot the other PIGGY tails, blaming Greece for all the problems as the ECB floods Europe with a few trillion euros to fix the banks that would fail without it.

The ELA funding to the Greek banks has not been made for 2 weeks.  The last figures showed 120 billion in Greek bank deposits with the ELA obligations of 129 billion. This means these banks now owe more to the ELA than they have in their deposit base. I estimated that the 120 billion balance computed from early June is probably closer to 100-110 billion as the deposit draws have ranged from 400 to 1,000 million Euros each of the last 10 days.
That depletion makes the deposit base less that which is owed the ELA and that obligation is secured by Greek bonds that are essentially worthless but held on the books with a 50% haircut.

The Euro ministers are saying they will probably not put more funds into the ELA given the events unfolding at the bank ATMs this weekend.  The run on the banks began last friday with pensioneers withdrawing all their pension funds over the last two days. Lines are 10 deep at ATMs now with tourist boards warning the tourists to bring their own cash.

I am of the opinion that some of the Greek banks will not open Monday and those that remain open will shut down with a day of opening or at least by June 30.  The ECB and IMF are looking at June 30 as the absolutely deadline for full on default, no concealing it any more.
The ELA must protect its position and will likely order a bank holiday and full on capital controls because the bank deposits are now less than what is owned. Collateral is going to be worth zero in short order as Greek default shoots rates to 50-90% on 2 year bonds, just like the last time Greece took the haircut that avoided a full default 2 years ago.

This will precipitate a bail-in as the ELA, along with the troika, will demand full deposit theft to protect this 100 billion euro assets still within reach.  Bank holiday will give the troika and ELA provisions time to extract everything they can reach in these accounts.  If the Greek central bank does not nationalize the banks sometime between tomorrow, Sunday or by next Wednesday, the banks will fail and crash, throwing the entire system into chaos.

The Greek people voted 80% to stay in the Euro if things remain the same

55% to stay in with more austerity

These votes just took place but did not take into account the people’s vote if currency controls, bank holiday and bail-ins take place.  I’d prediction an 80% vote to leave the Euro union and total default if the 3 things noted above happen.

The fiery Greeks will also take to the streets, destroy property and make the politicians very lives untenable.
If you have concern over these events it might be wise to reduce bank account balances and stock some cash. 

The markets went down 20% the last time Greece went TU in 2011.  This time its our markets but the most important stock market,  China and its CHBOOM just dropped into bear territory, down 20% and they have $360 billion in margin debt that’s being called

When Greece fails, the Chinese stock market is going to crash limit down like an avalanche.
Our markets could go down 20% but China will be hammered beyond belief.

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