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Perhaps what's really roiling markets today are weekend elections in France and Greece. Greece...

Perhaps what's really roiling markets today are weekend elections in France and Greece. Greece looks particularly ugly, with true economic collapse in Athens potentially paving the way for the neo-Nazi Golden Dawn party to take 5-6% of the vote (2009 election: 0.23%). The communists are polling at about the same. "Be very worried," says Credit Suisse.
Comments (13)
  • Stone Fox Capital
    , contributor
    Comments (6061) | Send Message
     
    Greece doesn't matter anymore!
    4 May 2012, 11:06 AM Reply Like
  • SanDiegoNonSurfer
    , contributor
    Comments (2670) | Send Message
     
    Stone Fox, you might be surprised. Just wait until the gov't that's elected in Greece is too dysfunctional to find the additional cuts by June for the next tranch of bailout funds and Greece is again facing default. If that happens (which looks rather likely at this point), let's check back with you and see if you still think "Greece doesn't matter".
    4 May 2012, 01:14 PM Reply Like
  • Tack
    , contributor
    Comments (13204) | Send Message
     
    Nothing like a little market pullback to inspire new hysteria over nothing.
    4 May 2012, 11:08 AM Reply Like
  • catamount
    , contributor
    Comments (374) | Send Message
     
    Maybe it's just a typical Friday? I haven't done a proper statistical analysis, but my intuition, just following the daily market moves, is that Friday is a down market ~85% of the time.
    4 May 2012, 11:15 AM Reply Like
  • SA Editor Stephen Alpher
    , contributor
    Comments (543) | Send Message
     
    85%? Not a chance.
    4 May 2012, 11:16 AM Reply Like
  • youngman442002
    , contributor
    Comments (5131) | Send Message
     
    It just shows what a joke the last two saves were...they are toast..they were toast..and all that money the ECB and the IMF gave them is lost....wasted....nice business decisions
    4 May 2012, 01:21 PM Reply Like
  • SanDiegoNonSurfer
    , contributor
    Comments (2670) | Send Message
     
    youngman, the bailout money was never intended to benefit Greece or the people of Greece. It's for the benefit of the banks. Ask yourself why a condition of getting the bailout funds was that Greece use some of it to buy more German submarines.
    4 May 2012, 02:34 PM Reply Like
  • Tack
    , contributor
    Comments (13204) | Send Message
     
    SDS:

     

    But, that's why, in reference to your coment to Stone Fox above, it makes no difference what Greece does, now. LTRO was to buttress the banks, not rescue Greece, which can only be rescued through its own actions, if any.
    4 May 2012, 02:36 PM Reply Like
  • SanDiegoNonSurfer
    , contributor
    Comments (2670) | Send Message
     
    Tack, I'm not talking about LTRO in the comment to Stone Fox. I'm referring to the IMF/ECB bailout funds that are needed for Greece to meet its bond obligations. The next tranch of the bailout is in June but it's conditional on the Greek gov't finding additional budget cuts. What are the chances that a hodgepodge group of neo-Nazi's and communists are going to agree on (or even want to discuss) additional budget cuts to satisfy their foreign masters?

     

    And btw, Greece's Nazi wing isn't connected to Germany's. They believe the True Aryan Race is the Greeks. If you've ever been to Greece it's a complete melting pot of all racial types -- except maybe Chinese. These people are certifiably nuts.
    4 May 2012, 02:58 PM Reply Like
  • Tack
    , contributor
    Comments (13204) | Send Message
     
    SDNS:

     

    It matters not what the source of Greece's funds are or whether they receive them, except to the Greeks. The banks have been backstopped.

     

    And, it really matters not much, except as a curiosity, what sort of goofballs Greeks may decide to enfranchise within their own country. Many European countries have fringe parties that always get press, but rarely amount to any threat to world peace.

     

    Generally speaking, I find it somewhat humorous that any volatile day always brings forth the plethora of theories and scare pieces to explain the occasional big-mover day. Heck, a few months back, we moved 1-2% nearly every day; now, it's an earth-shaking event.
    4 May 2012, 03:08 PM Reply Like
  • SanDiegoNonSurfer
    , contributor
    Comments (2670) | Send Message
     
    That's not correct, Tack. Greece still has to make payments on new bonds to avoid default. To do that, they need bailout money. To get the bailout money they need to make cuts by the June deadline. Here's Reuters talking about this on 4/23, well before the current market dip:

     

    "The 'troika' of IMF, EU and ECB lenders have said the election is a big risk to the fiscal steps and reforms Greece needs to deliver to get cash and turn its ailing economy around, including 11 billion euros worth of new measures in June."
    Source: http://reut.rs/KkFlxR
    4 May 2012, 07:33 PM Reply Like
  • Tack
    , contributor
    Comments (13204) | Send Message
     
    SDNS:

     

    You still haven't recognized that the risk has been transferred from the banks to the ECB. If Greece defaults, it's the ECB, which accepted Greek bonds as collateral, that will be on the hook. If that occurs, the ECB will just manufacture more euros, just as the fed has created dollars here. It's changed the entire dynamic and eliminated the risk of cascading bank failures.

     

    Sure, any Greek default will occasion the usual handwringing and temporary market weakness, but as a critical lynchpin to Europe's future, it's already been eliminated.
    4 May 2012, 07:38 PM Reply Like
  • SanDiegoNonSurfer
    , contributor
    Comments (2670) | Send Message
     
    Since the Reuter's article doesn't make clear the link between the June bailout money and Greek bond payments, here's more background:

     

    "ZARROLI: Iscaro points that the bailout requires Greece to meet certain budget-cutting targets. And it's already been tough to sell them to the Greek people. If political support for the bailout erodes any further, the government will have trouble meeting those targets and the whole bailout plan could unravel.

     

    "ISCARO: ... We may have avoided hard default now [Feb 2012], but we may actually encounter Greece in the same situations in a couple of months' time.

     

    :ZARROLI: In fact, Greece has more bond payments coming due in June. And European leaders could once again be back at the negotiating table this spring...."

     

    Source:
    http://n.pr/IRDHHl
    4 May 2012, 07:41 PM Reply Like
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