Greece crisis: markets begin to tumble as investors flee
Source: The Guardian
Share prices began to plummet across Asia on Monday as hopes dwindled for a resolution to the Greek debt crisis.
Japan’s Nikkei stock average briefly fell by more than 500 points in early trading, while the euro dropped more than 3% to 133.80 yen, its lowest level for five weeks. The common currency fell as much as 1.9% to $1.0955, its lowest level in almost a month.
The Nikkei fell 2.1%, while MSCI’s broader index of Asia-Pacific shares outside Japan dropped 0.8%. US stock futures dived 1.8%, hitting a three-month low, while US Treasuries futures price gained almost two points.
More than $35bn was wiped off the Australian stock market in the first hour of trading on Monday as investors brace for an increasingly likely Greek exit from the eurozone.
Read more: http://www.theguardian.com/world/2015/jun/29/greece-crisis-markets-begin-to-tumble-as-investors-flee
= new reply since forum marked as read
Highlight:
NoneDon't highlight anything
5 newestHighlight 5 most recent replies
Jack Rabbit
(45,984 posts)Eat your shit, banksters.
Igel
(35,300 posts)The top 0.1%?
Nope. We always hear about private wealth and private income.
Some of the largest investors are things like the California public employees' pension fund. They don't put money in a mattress. They invest it. They suffered huge losses in 2008 and 2009. That stock and bond mess ate up a lot of Detroit's pension fund--it was underfunded before that, but after it lost value it was massively underfunded.
You want bankers to eat shit? Then you want the public employee pension funds--and private employee pension funds, and privately held retirement accounts--to eat shit.
Jack Rabbit
(45,984 posts)I want them to pay the investors who lost money. The Greek people should not pay for the crimes of Wall Street criminals with austerity imposed by the very criminals who cheated them and the investors.
Please click here.
snappyturtle
(14,656 posts)Kelvin Mace
(17,469 posts)who thought investing in Greece was a good idea.
It's not like people didn't know allowing Greece into the EU was a bad idea.
geek tragedy
(68,868 posts)geek tragedy
(68,868 posts)I would be shocked if any pension funds charter for investments allowed them to buy junk like Greek sovereign debt.
killbotfactory
(13,566 posts)They've been acting so rude to their superiors in the Troika. It's unacceptable.
JDPriestly
(57,936 posts)History shows that our economies are, even without disastrous trade agreements like the TPP, intertwined and interdependent.
The fall of Greek banks if allowed to occur will set off a chain reaction very possibly.
Remember this (many of the facts are very different from the situation in Greece, but this story is an eerie reminder that when it comes to our banking system). Our stock market crashed in 1929. Several years later here is what happened to spread our crisis to much of the world. (Bloomberg, 2011.)
In May 1931, a Viennese bank named Credit-Anstalt failed. Founded by the famous Rothschild banking family in 1855, Credit-Anstalt was one of the most important financial institutions of the Austro-Hungarian Empire, and its failure came as a shock because it was considered impregnable. The bank not only made loans; it acquired ownership stakes in all kinds of companies throughout the sprawling empire, from sugar producers to the new automobile makers. Its headquarters city, Vienna, was a place of wealth and splendor, famous for its opera, balls, chocolate, psychoanalysis, and the extravagant architecture of the Ringstrasse. The fall of Credit-Anstalt—and the dominoes it helped topple across Continental Europe and the confidence it shredded as far away as the U.S.—wasn't just the failure of a bank: It was a failure of civilization.
Once again, Europe's banking system, and by extension its social fabric, is threatened by bad loans. What had been slow-moving fiscal disasters in Greece, Ireland, and Portugal have gathered speed in recent weeks despite rescue packages designed to calm markets and prevent spreading the contagion to Spain, Belgium, and beyond. Portugal's 10-year borrowing costs hit a record 9.3 percent on Apr. 20, up from 7.4 percent just a month before, even as authorities met in Lisbon on an €80 billion ($116 billion) financing package. The higher that creditors drive up interest rates, the more unaffordable the debt becomes—creating the conditions for the very failure they fear. "All of the rescue packages don't really ensure that we can escape this adverse feedback loop that these countries are being trapped in," Christoph Rieger, head of fixed-income strategy at Frankfurt-based Commerzbank (CRZBY), told Bloomberg Television on Apr. 19.
. . . .
The tipping point came early in 1931 when a bank director named Zoltan Hajdu refused to sign off on Credit-Anstalt's books without a comprehensive reevaluation of the bank's assets. The bank revealed losses that it kept revising upward as the weeks passed. Depositors withdrew funds. The Austrian government stepped in to guarantee all the bank's deposits and other liabilities—but that only brought the government's own creditworthiness into question. "In today's language," says Schubert, "Credit-Anstalt was too big to fail, but too big to save."
. . . .
Thus the failure of Credit-Anstalt accelerated the financial panic that turned a recession into a global depression. Economic distress in Austria contributed to the outbreak of violent conflict between socialists and fascists in 1934. Jews became scapegoats. In 1938, Nazi Germany occupied Austria, and Adolf Hitler was received by adoring crowds in Vienna. Albeit indirectly, the failure of Credit-Anstalt helped clear the path for some of the darkest events of the 20th century.
(More -- fascinating story memorialized in the novel, The Lost City by John Gunther)
http://www.bloomberg.com/bw/magazine/content/11_18/b4226012481756.htm
geek tragedy
(68,868 posts)GliderGuider
(21,088 posts)Beggars the imagination, that does. 
geek tragedy
(68,868 posts)That is Tsipras's job.
Their insistence on austerity has been wrongheaded.
But, at the end of the day there is only one party-Tsipras--that has any obligations to the people of Greece.
And he failed, spectacularly.
GliderGuider
(21,088 posts)
On edit: does the phrase "a vampire squid jamming its blood funnel into anything that smells like money" ring a bell?
That vampire squid now has three heads, and Greece smelled like easy blood...
geek tragedy
(68,868 posts)with the word 'victory.'
Vampire squid metaphor has nothing to do with what's going on in Greece. No one held a gun to their head and told them to borrow and spend beyond their means while not taxing
their own rich people.
Tsipras could have claimed victory by improving terms early.
Greece was never going to escape austerity.
Forced austerity (I.e. Physically running out of money) is the alternative to negotiated austerity.
GliderGuider
(21,088 posts)They were transfixed by geopolitical dreams of a 21st century 4th Reich, with European (aka German) hegemony across the continent. Greece's euro-entry shenanigans were mirrored in the the other weak-sister entries - Portugal, Italy Spain, Ireland - with each entry of a failing nation giving yet another precedent to admit those who came after. The financiers didn't care that these countries were busted from the start - they realized that there would plenty of residual money to be drained out as they shriveled and collapsed - and they could always blame the victim.
And here we are, blaming Greece. Next they'll set their sights on Portugal, then Spain, Ireland and finally Italy. You know it's coming.
geek tragedy
(68,868 posts)GliderGuider
(21,088 posts)We must always be polite when faced with unpalatable truths! Diplomats never call a spade a shovel, after all.
GliderGuider
(21,088 posts)the Greek government thinks it should hold a referendum, it should hold a referendum. Maybe it would even be the right measure to let the Greek people decide whether they’re ready to accept what needs to be done.” Fine words from Germany’s finance minister, Wolfgang Schäuble, on May 11. Yet on June 26, when prime minister Alexis Tsipras duly announced a referendum on whether the Greek government should accept its creditors’ highly unsatisfactory final offer, Schäuble and other eurozone finance ministers reacted very differently. They cut off negotiations with Athens, sabotaged the referendum, and set Greece on a course for capital controls, default, and potentially even euro exit. Democracy? What’s that?
The creditors have tried to blame Tsipras for the breakdown in negotiations. But it was their stubborn refusal to offer an insolvent Greece the debt relief that its depressed economy desperately needs to recover which backed Tsipras into a corner. In exchange for a short-lived infusion of cash, they were insisting on years of grinding austerity dressed up as “reforms”, as I explained previously. With rapacious creditors intent on pillaging the impoverished Greek economy, Tsipras could scarcely agree to their terms. So he gave Greeks themselves a say, while rightly urging them to vote No.
Ironically, the exaggerated fear of Grexit and the emotional association, even after five years of debt bondage, between euro membership and being part of modern Europe might well have led Greeks to vote Yes to the creditors’ iniquitous terms. But eurozone authorities are so terrified of voters that they have sought to deny Greeks a say. They rejected the Greek government’s request to extend the current EU loan program for a month beyond its expiry on June 30. So, if and when Greeks vote on July 5, the program will have expired, and with it the creditors’ offer on which they will be casting their ballots. It would be funny if it weren’t so sad.
I tend to side with the underdog, not with German financiers.
KingCharlemagne
(7,908 posts)six weeks back in 1941; I hope the Greek masses demolish German capitalism this time around.
GliderGuider
(21,088 posts)A few years ago, when Greece was still at the start of its slide into an economic depression, the Nobel prize-winning economist Joseph Stiglitz remembers discussing the crisis with Greek officials. What they wanted was a stimulus package to boost growth and create jobs, and Stiglitz, who had just produced an influential report for the United Nations on how to deal with the global financial crisis, agreed that this would be the best way forward. Instead, Greece’s foreign creditors imposed a strict program of austerity. The Greek economy has shrunk by about 25% since 2010. The cost-cutting was an enormous mistake, Stiglitz says, and it’s time for the creditors to admit it.
“They have criminal responsibility,” he says of the so-called troika of financial institutions that bailed out the Greek economy in 2010, namely the International Monetary Fund, the European Commission and the European Central Bank. “It’s a kind of criminal responsibility for causing a major recession,” Stiglitz tells TIME in a phone interview.
Along with a growing number of the world’s most influential economists, Stiglitz has begun to urge the troika to forgive Greece’s debt – estimated to be worth close to $300 billion in bailouts – and to offer the stimulus money that two successive Greek governments have been requesting.
Failure to do so, Stiglitz argues, would not only worsen the recession in Greece – already deeper and more prolonged than the Great Depression in the U.S. – it would also wreck the credibility of Europe’s common currency, the euro, and put the global economy at risk of contagion.
geek tragedy
(68,868 posts)raise your own retirement age to 71 so you can donate another $300 Billion to them so they can lower their retirement age."
The creditors were indeed too focused on austerity, but the Greeks got themselves into this mess, and Germans weren't going to lend money to them so they could retire a decade earlier than German workers can.
Do you think the US should present Greece with an aid package?
GliderGuider
(21,088 posts)Like all those poor schnooks who took out liars' loans during the housing bubble. First you victimize them, then you blame them.
geek tragedy
(68,868 posts)The entire universe conspired against Greece?
It didn't overspend, and overborrow, while undertaxing its own rich people?
It's quite simple: don't blame people for the conditions under which they are willing to lend you money that you don't appear keen on repaying.
GliderGuider
(21,088 posts)People bear some degree of responsibility for their actions, but we need to keep in mind that the playing field of power is always tilted by the weight of the money. I.e. those with the power and money have more responsibility.
It's like the situation where a 14 year old gets into a sexual relationship with a teacher. Do we blame the child for not just saying no? It ain't that simple, is it?
In this case, Greek citizens are the 14-year-olds, and Jean-Claude Juncker is the lascivious vice-principal. The ranks of the Greek government that previously approved the loans and didn't fix their taxation system was heavily salted with Juncker think-alikes.
But it always feels good to have a scape-goat.
geek tragedy
(68,868 posts)which is one nation state with local authorities.
The Greeks are not children. They are a sovereign nation. They wear their adult clothes while going into work on a daily basis.
It is good to have a scapegoat. Which is why the Greeks are blaming outsiders for their own self-inflicted wounds.
Greece should leave the EU. The EU was never a set up where the rich nations bail out and subsidize the poor nations.
And Greece needs that, or it needs to be cut loose so it can devalue its own currency and chart its own course.
Sometimes divorce is the only answer to a failed marriage.
GliderGuider
(21,088 posts)Too bad the fallout is going to be so severe - and not just for the Greeks.
geek tragedy
(68,868 posts)Italy, Spain, Portugal are nowhere near as badly off as Greece, and would have a lot more to lose and a lot less to gain from a departure.
And, part of the ECB/EU mentality on this is to not reward Greece's threats of leaving. People in Madrid or Lisbon watching what's going to happen in Greece are not going to be saying "sign me up for a double dose of that."
pampango
(24,692 posts)in the Greek crisis.
Terrible stock markets - like in 1929 - can eventually affect all of us but, in the short run and in most bad stock markets, the pain is felt largely by the 1%. Not that any of them will starve but let the greedy bastards feel a little of the 'fear' side of the "fear/greed' psychology that infects the stock market.
The rest of Europe seemed to know that a Greek default and exit from the euro was not going to be painless for them either but this should serve as a reminder of how tightly they are tied together. Perhaps the pain for the 1% from the stock market falls will put some more pressure on European creditors. "Don't save Greece for the sake of Greeks. Save it for our sake!"
Bosonic
(3,746 posts)The European Commission chief, Jean-Claude Juncker, has said he feels "betrayed" by the "egotism" showed by Greece in the failed debt talks.
He told a news conference that Greek proposals were "delayed" or "deliberately altered" and the Greek people "should be told the truth", but the door was still open to talks.
Talks broke down on Friday sparking a weekend of dramatic developments.
Greece called a surprise referendum and Greek banks are closed for a week.
http://www.bbc.co.uk/news/world-europe-33311240
Bosonic
(3,746 posts)ATHENS — For investors around the world looking at Greece, there was but one question Sunday: What is going to happen when the markets open?
On Sunday night, the prime minister, Alexis Tsipras, said in a televised address that Greece’s banks and stock market would be closed on Monday, as Athens tries to avert a financial collapse.
But the question of what happens when the markets do open is particularly acute for the hedge fund investors — including luminaries like David Einhorn and John Paulson — who have collectively poured more than 10 billion euros, or $11 billion, into Greek government bonds, bank stocks and a slew of other investments.
Through the weekend, Nicholas L. Papapolitis, a corporate lawyer here, was working round the clock comforting and cajoling his frantic hedge fund clients. “People are freaking out,” said Mr. Papapolitis, 32, his eyes red and his voice hoarse. “They have made some really big bets on Greece.
http://www.nytimes.com/2015/06/29/business/dealbook/panic-among-hedge-fund-investors-in-greece.html
OilemFirchen
(7,143 posts)without a... uhm... hedge?
Someone's inept or blowing smoke.
FLPanhandle
(7,107 posts)I guess it'll be cheaper for me and all Americans now.
The Greek government totally screwed up their already bad economy.
geek tragedy
(68,868 posts)countries should be cheaper given that the Euro will be weakened.
I'd avoid Greece, of course. Who knows if airports will be running in a few months?
candelista
(1,986 posts)I'm sure that all of Greece will thank you for your dollars. 
Bosonic
(3,746 posts)German Chancellor Angela Merkel played down prospects of a breakthrough with Greece in the coming days, but said she stood ready to restart talks with the government in Athens after a planned referendum on Sunday.
Speaking on Monday after a meeting of German party and parliamentary leaders in the Chancellery, Merkel also criticised the government of Prime Minister Alexis Tsipras for failing to compromise with its euro zone partners after receiving what she called a "generous" offer.
Economy Minister and Vice Chancellor Sigmar Gabriel, standing alongside Merkel, said if Greeks voted against the bailout offer on Sunday, it would be a clear vote against staying in the euro.
http://www.reuters.com/article/2015/06/29/eurozone-greece-germany-merkel-idUSB4N0VQ01920150629
