^^^ True... but its also fantastic oppourtunity for innovators and clever folk. This calamity SHOULD cleanse the country of the incompetence and cronyism that has brought it to this juncture. Without the money to import foriegn goods & services, Smart, industrious Greeks will have the chance to start home grown alternatives. Like you said, they've already had their referendum... it was the election they were voted in on.
So anyone want to take a guess how the markets will react tomorrow at the opening of the European session?
Yeah but regardless other markets in the region will be open, so will fx, bonds, PM markets etc - normally one would think the euro would slide against the other major currencies in such a circumstance, but in this crazy illiquid and irrational trading world it may rise as if a burden has been lifted from the Eurozone.
Photographs of people lining up at ATMs and (soon) rioting in front of closed banks make for attention-grabbing headlines, but the impact would pale in comparison to the potential downside for counterparties to the Greek default. To bring back one of the buzzwords of the 2007-2010 era, "financial contagion". We're going to find out if the CDS (credit default swap) sellers/underwriters are over-exposed just like AIG back in 2009. Regardless of whether a Greek default leads to Grexit, the Euro will languish in the short-term especially against the USD and CHF. The pressure will mount on any peripheral Europe nation with large sovereign debts to service. To resurrect another unwelcome term, the PIIGS. In no particular order, Italy, Spain, Portugal. A Greek sovereign default would probably slow down Euro-denominated monetary velocity all across Europe. European equities cooling, businesses reducing inventory, putting off expansion, cutting down on headcounts. The big 'unless' is the ECB is willing to pursue full-bore Quantitative Easing, which is far from being out of the question as long. Greece as an economy is a minnow compared to the major players in Europe...but so was Thailand back in 1997 right before the Asian Financial Crisis. Thats the insidious latent power of the contagion phenomenon. As for gold & silver, who the heck even knows anymore? I don't claim to be any of expert on the Greek sovereign debt or Eurozone Monetary Policy. This just my 0.02.
If Greece were kicked out of the Euro, one of the first things the ECB would do is crank up QE to prevent a credit crunch throughout the Eurozone. I'll be watching Euribor, bonds and the Euro very carefully throughout the next week.
Yeah Bill Murray was great in his prime [youtube]http://www.youtube.com/watch?v=gOwhG_y0HQg[/youtube]
The European Central Bank is expected to end emergency lending to Greece's banks on Sunday, the BBC understands. The country's banks depend on the ECB's Emergency Liquidity Assistance (ELA). Its governing council is meeting later. Greece will probably have to "announce a bank holiday on Monday, pending the introduction of capital controls", a source told the BBC's Robert Peston. The bailout for heavily indebted Greece expires on Tuesday and talks have broken down. Greek banks would find themselves in serious straits as soon as Monday if the ECB went ahead and cut the lifeline, the BBC economics editor says. Capital controls are restrictions on how much customers can withdraw from banks. Until now, the Greek government has signalled that it does not want to impose such controls. In recent weeks, Greeks have withdrawn billions of euros from banks, and long queues formed at cashpoints on Saturday, amid fears that banks would not open on Monday. The ECB has been sending emergency funds on a daily basis to the Greek central bank, which then allocates it to the high-street banks. Grexit risk looms Austria's Finance Minister Hans Joerg Sche Bbc news
If I recall correctly, didn't Russia lend a few billion to Cyprus on reasonably good terms. May sound a bit dramatic but there is a precedent. If Greece looses all emergency funding she is in some serious trouble and quickly. As much as I believe Greece will be better off in the long term without taking on more debt from the ECB, the rate of social collapse and hardship would be enormous. They must have another source of funding up their sleeve to play such a dangerouse game of cat and mouse with the money they desperately need. Remember it's not the money they don't want - it's the terms....Enter Russia and her cashed up friends to the east.
Sunday trading has already seen German index drop close to 4%, I'm sure the rest will follow (if not, drop more) tomorrow
The crazy thing is that the ECB owes Greece 1.9B but won't use that for debt payments and won't release it to pay the 1.6B owed without a deal...that seems like a pretty reasonable request by the Greeks, they aren't even asking to hold the money so there's no risk of them keeping it, they just want to use the money they are entitled to for the next debt payment.
ok so there is a difference between ending it, maintaining it at its current levels and raising it. the ECB has said it will maintain it at its current levels http://www.ecb.europa.eu/press/pr/date/2015/html/pr150628.en.html If there has been a draw down in funds over the weekend question is if the top up on friday was enough to cover this weekend
O.k I apoligise its not 'fantastic' news.......But this outcome could have been resolved months ago. Its taken '5 whole months' to come to the same conslusion that they new was going to happen. And that is a Greek exit from the Euro? They new they could'nt afford all the bailots in the first place???
The ECB could still be pulling the rug under the greeks if the bank of greece has requested more money and they have rejected the raising it instead leaving it at its current level.
