Greece Debt Crisis - Après Oxi

BoJack Horseman

NorthStars wrote: »

Greece will get their debt writedown.
Kenny will be shown for what he is.
A serf.

Stellar counterpoint.

Thought this forum was meant to be a cut above pointless sloganeering.

Jonblack

NorthStars wrote: »

The IMF seem to be prepared to assist Greece.

http://www.irishtimes.com/news/world/europe/greek-crisis-imf-says-it-is-ready-to-lend-to-greece-if-asked-1.2275100

America starting to pull strings. IMF, , America and U.K say that Greece will never be able to repay debt without some writedown, Berlin says "no". The in fighting has started , time to make sure you are on the right side of the line when America pulls the trigger.

johnnyskeleton

NorthStars wrote: »

Greece will get their debt writedown.
Kenny will be shown for what he is.
A serf.

MOD: Please read the charter before posting again, specifically in relation to the quality of posting required. Calling the Taoiseach a serf is hardly advancing the debate on the issue of what happens now in Greece.

BoJack Horseman wrote: »

Stellar counterpoint.

Thought this forum was meant to be a cut above pointless sloganeering.

MOD: Please use the report post function rather than commenting on it on thread

NorthStars

So, it'll be interesting to see how this pans out for Greece.
The IMF, only last week, were claiming that the Greek debt was unsustainable and a writedown of €50 billion or so was required with better terms for the remainder.
If this happens, it will show how weak Ireland is/was at the negotiating table.
Being proud of not asking for a writedown on the debts foisted on our country is not a good idea.

Inquitus

The ECB has raised the haircut on the collateral assets the Greek banks have posted for the ELA. I believe this means they are all now officially bankrupt / insolvent....

https://www.ecb.europa.eu/press/pr/date/2015/html/pr150706.en.html

Next step would be a Cypriot style bail in of the banks resulting in a loss of deposits. If this is true then its game over for Greece unless a deal is signed imminently.

Stheno

Inquitus wrote: »

The ECB has raised the haircut on the collateral assets the Greek banks have posted for the ELA. I believe this means they are all now officially bankrupt / insolvent....

https://www.ecb.europa.eu/press/pr/date/2015/html/pr150706.en.html

What exactly does this mean? There's a twitter graph showing that the rise in the haircut will affect 27% of all deposits in Greece.

Does that mean that everyone who has money on deposit in Greek banks have just lost a quarter of that money if the ELA were to be repaid tomorrow?

Quin_Dub

NorthStars wrote: »

So, it'll be interesting to see how this pans out for Greece.
The IMF, only last week, were claiming that the Greek debt was unsustainable and a writedown of €50 billion or so was required with better terms for the remainder.

Interesting that that piece of information from the IMF is never shown with the rest of the commentary..

Namely that they needed a write-down and an extra €50Bn because of the damage to the economy that Syriza have done in the last 6 months..

The very same report says that the plan was working right up to the point that Syriza took office..

Yet somehow Syriza are trying to spin this as justification for their actions....

NorthStars wrote: »

If this happens, it will show how weak Ireland is/was at the negotiating table.
Being proud of not asking for a writedown on the debts foisted on our country is not a good idea.

As I said in another thread , being envious of any deal that Greece get now is like envying the homeless guy for being able to get free food from the soup kitchen when you can't...


Greece is MUCH worse of as a result of Syriza , not better...

Quin_Dub

Stheno wrote: »

What exactly does this mean? There's a twitter graph showing that the rise in the haircut will affect 27% of all deposits in Greece.

Does that mean that everyone who has money on deposit in Greek banks have just lost a quarter of that money if the ELA were to be repaid tomorrow?

Can anyone in the know explain what this means in reality today/tomorrow..

Does that mean that if I had €100 on deposit in a Greek bank today that my balance is now €73 or whatever

Or does it just mean that if/when the banks go bang , the ECB has first dibs on the wreakage to the tune of 75% of remaining deposits?

Quin_Dub

Quin_Dub wrote: »

Can anyone in the know explain what this means in reality today/tomorrow..

Does that mean that if I had €100 on deposit in a Greek bank today that my balance is now €73 or whatever

Or does it just mean that if/when the banks go bang , the ECB has first dibs on the wreakage to the tune of 75% of remaining deposits?

it wouldn't be that stark to begin with, and there'd probably be a floor.

So out of every euro over €xk in your account, you lose Yc out of it.

Depending on the capitalisation requirements of the banks, X could be small (I've seen €8k mentioned) and Y looks like this

Quin_Dub

Deleted User wrote: »

it wouldn't be that stark to begin with, and there'd probably be a floor.

So out of every euro over €xk in your account, you lose Yc out of it.

Depending on the capitalisation requirements of the banks, X could be small (I've seen €8k mentioned) and Y looks like this

But this happens only if the marker gets called in - This isn't happening right now , correct?

Quin_Dub

Quin_Dub wrote: »

But this happens only if the marker gets called in - This isn't happening right now , correct?

http://www.zerohedge.com/news/2015-07-04/will-greek-depositors-under-%E2%82%AC100000-be-spared-case-bail

We don't know what the haircut % is yet.

As soon as it gets to the % that impacts deposits, they must be used as collateral.

NorthStars

Quin_Dub wrote: »

Interesting that that piece of information from the IMF is never shown with the rest of the commentary..

Namely that they needed a write-down and an extra €50Bn because of the damage to the economy that Syriza have done in the last 6 months..

The very same report says that the plan was working right up to the point that Syriza took office..

Yet somehow Syriza are trying to spin this as justification for their actions....





As I said in another thread , being envious of any deal that Greece get now is like envying the homeless guy for being able to get free food from the soup kitchen when you can't...


Greece is MUCH worse of as a result of Syriza , not better...

Lets wait and see, shall we?
A debt writedown is a debt writedown.
BTW, it wasn't Syriza who got Greece into trouble.

Phoebas

NorthStars wrote: »

Lets wait and see, shall we?
A debt writedown is a debt writedown.
BTW, it wasn't Syriza who got Greece into trouble.

They played their part.

Namely that they needed a write-down and an extra €50Bn because of the damage to the economy that Syriza have done in the last 6 months..

MadYaker

NorthStars wrote: »

So, it'll be interesting to see how this pans out for Greece.
The IMF, only last week, were claiming that the Greek debt was unsustainable and a writedown of €50 billion or so was required with better terms for the remainder.
If this happens, it will show how weak Ireland is/was at the negotiating table.
Being proud of not asking for a writedown on the debts foisted on our country is not a good idea.

Seriously if you're only looking to use the Greek crisis as a stick to beat the irish government (and it hasn't even gotten that far yet!) there's no point posting in this thread.

NorthStars

MadYaker wrote: »

Seriously if you're only looking to use the Greek crisis as a stick to beat the irish government (and it hasn't even gotten that far yet!) there's no point posting in this thread.

The thread is about the Greek debt crisis.
Last week the Irish government was putting the boot in to Greece, and continue to do so for political reasons.
It's very relevant to the thread.
You can report my post if you think it's not.

Inquitus

Inquitus wrote: »

The ECB has raised the haircut on the collateral assets the Greek banks have posted for the ELA. I believe this means they are all now officially bankrupt / insolvent....

https://www.ecb.europa.eu/press/pr/date/2015/html/pr150706.en.html

Next step would be a Cypriot style bail in of the banks resulting in a loss of deposits. If this is true then its game over for Greece unless a deal is signed imminently.

That's not what it means.

The ECB's use of the term haircut sounds more dramatic than it is. It refers to a higher discount rate on the assets it accepts from the Greek banking system as collateral for ELA. The value of this collateral has now fallen, and the ECB is naturally taking account of that.

A discount rate is just a financial term for interest rate. Central banks don't charge interest on these securities for practical reasons (expensive and cumbersome), so they just dock a value from the maturity value which diminishes as the security approaches maturity. The 'docked' value has now been increased, which the ECB is calling a haircut.

The two broad questions now will be

1. Whether this affects the Greek banks' abilities to honour customer deoposits? If so, which banks? Can the stronger banks provide interbank loans to the others?
2. How can the new banks be recapitalised, in order to preserve access to liquidity?

You really need a crystal ball to answer these questions. The bottom line is that it's bad news for Greece, but not fatal.

BoJack Horseman

What can the Greek government do (if anything) to improve that situation.

Ie: what does thecECB look for when assessing haircut criteria.

Is it the usual macroeconomic stuff?

@A

@A Tyrant ... - What other assets do the Greek banks have other than deposits?

Inquitus

A Tyrant Named Miltiades! wrote: »

That's not what it means.

The ECB's use of the term haircut sounds more dramatic than it is. It refers to a new discount rate on the assets it accepts from the Greek banking system as collateral for ELA. The value of this collateral has now fallen, and the ECB is naturally taking account of that.

The two broad questions now will be

1. Whether this affects the Greek banks' abilities to honour customer deoposits? If so, which banks? Can the stronger banks provide interbank loans to the others?
2. How can the new banks be recapitalised, in order to preserve access to liquidity?

You really need a crystal ball to answer these questions. The bottom line is that it's bad news for Greece, but not fatal.

The banks have now been reduced to the point where they have no more collateral to provide, the ELA was frozen at 89bn and now cannot be increased due to the "haircut", the next step is the ELA is pulled or further haircuts are introduced requiring a bail in. 2 members of the ECB voted against the proposal as it didn't go far enough, the ECB will review the situation again on Weds, time is almost up, unless a deal is agreed imminently its all over for Greece.

Deleted User

Deleted User wrote: »

@A Tyrant ... - What other assets do the Greek banks have other than deposits?

Loanbooks, Greek government bonds, T-Bills, pillar 2 bonds. They're all ELA-eligible with various discounts applied.

BoJack Horseman wrote: »

What can the Greek government do (if anything) to improve that situation.

Presumably agree to a bailout programme, since it's the lack of a programme that has led to this revision.

The ECB regularly revises its rates of discount for ELA collateral.

As Inquitus says, it's particularly serious for Greece though, because they cannot afford much higher discount rates if any, I presume.

Greek banks aren't officially insolvent but they're one step closer.

KingBrian2

NorthStars wrote: »

The thread is about the Greek debt crisis.
Last week the Irish government was putting the boot in to Greece, and continue to do so for political reasons.
It's very relevant to the thread.
You can report my post if you think it's not.

The Irish gvt has always been supporting Greece. We all want them to stay in the € with sustainable debts.

Crosswind

Quin_Dub wrote: »

Interesting that that piece of information from the IMF is never shown with the rest of the commentary..

Namely that they needed a write-down and an extra €50Bn because of the damage to the economy that Syriza have done in the last 6 months..

The very same report says that the plan was working right up to the point that Syriza took office..

Yet somehow Syriza are trying to spin this as justification for their actions....

What Syriza did so far was:
1) Re-hire the former national television employees as it was a decision from the supreme court
2) Pass a same-sex cohabitation law
3) Give electricity to several thousands of families that were beyond poor
4) Pass legislation for immigrants born in Greece to get citizenship

I fail to see how the above damaged the economy for 50bn. Also failing to see, in reality (not in paper), how the economy was doing well until Syriza came.

Greece is MUCH worse of as a result of Syriza , not better...

Quite the opposite in my humble opinion.

Inquitus

Crosswind wrote: »

Quite the opposite in my humble opinion.

Clearly not borne out by what is happening, Grexit on the cards, no chance of better terms from the EU, economy being devastated each day capital controls are in force, chance of bail in and loss of deposits, if not for Syriza this would not have happened.

A Tyrant Named Miltiades!

A Tyrant Named Miltiades! wrote: »

Loanbooks, Greek government bonds, T-Bills, pillar 2 bonds. They're all ELA-eligible with various discounts applied.

Could you think of any reason at all that these aren't already being used as collateral?

KingBrian2

Crosswind wrote: »

What Syriza did so far was:
1) Re-hire the former national television employees as it was a decision from the supreme court
2) Pass a same-sex cohabitation law
3) Give electricity to several thousands of families that were beyond poor
4) Pass legislation for immigrants born in Greece to get citizenship

I fail to see how the above damaged the economy for 50bn. Also failing to see, in reality (not in paper), how the economy was doing well until Syriza came.





Quite the opposite in my humble opinion.

Greek politics is still dysfunctional. He went against rival political parties in the parliament sensing he could not rely on them to back him up. Paralysis in the banking sector is forcing Greek politicians to make unusual alliances. The Far left and right wing supported the no to austerity from Europe. The average Greek citizen is still worse off. Decisions have been delayed until an agreement is reached with the Eurogroup.

Phoebas

Deleted User wrote: »

Could you think of any reason at all that these aren't already being used as collateral?

My reading is that they are, but the value that the ECB put on them has been adjusted.

QuinDixie

K-9 wrote: »

I can't imagine multinationals and financial services being too happy either as us being in the Euro market is a big draw for them.

As for Greece, the meeting of the finance ministers tomorrow will set the tone. It's all guess work really until then.

large multinationals and financial services stay in Ireland has very little to do with us being in the EURO.
With them its the tax system and nothing else matters.

Quin_Dub

Crosswind wrote: »

What Syriza did so far was:
1) Re-hire the former national television employees as it was a decision from the supreme court
2) Pass a same-sex cohabitation law
3) Give electricity to several thousands of families that were beyond poor
4) Pass legislation for immigrants born in Greece to get citizenship

I fail to see how the above damaged the economy for 50bn. Also failing to see, in reality (not in paper), how the economy was doing well until Syriza came.

So in other words , they did nothing to help the economy - Not a single piece of legislation to make it easier to do business in Greece , nothing to root out Tax evasion/avoidance.

At the same time they were also busy destroying international confidence in the Greek economy through posturing and threats..

Allusions to Fascism , Calling your creditors Terrorists etc. etc. etc.

Those are the thing Syriza did to ruin the economy...

The Greek people played their part too by paying even less taxes in the last 6 months as they held back on taxes waiting to see if Syriza might cancel them...

Crosswind wrote: »

Quite the opposite in my humble opinion.

Do you truly believe that Greece is in a better position to work its way back to a functioning economy today then it was last December??

Set aside feelings of Nationalism, Patriotism etc....Do you believe that Greece is now a better place today than it was 6 months ago??

frankbrett

Crosswind wrote: »

What Syriza did so far was:
1) Re-hire the former national television employees as it was a decision from the supreme court
2) Pass a same-sex cohabitation law
3) Give electricity to several thousands of families that were beyond poor
4) Pass legislation for immigrants born in Greece to get citizenship

I fail to see how the above damaged the economy for 50bn. Also failing to see, in reality (not in paper), how the economy was doing well until Syriza came.





Quite the opposite in my humble opinion.

The cost of brinkmanship (before capital controls and closing the stock market)

http://www.bloomberg.com/news/articles/2015-06-12/greece-counts-cost-of-one-man-s-gamble

Icepick

Dutch prime minister Mark Rutte has warned Greece it must decide whether it wants to remain in the eurozone, and accept the ‘deep reforms’ needed.

He told MPs tonight that Athens must deliver acceptable proposals to its creditors.
If things stay the way they are, then we’re at an impasse. There is no other choice, they must be ready to accept deep reforms.

so much for a deal in 24-48 hours