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Greece must secure a funding backstop for its banking system before it becomes too late

Every day in which Athens does not have a funding backstop, be it the ECB or the BRIC bank, is a day which brings the Greek banking system to the edge of total collapse.

Alex Christoforou

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Post originally appeared on Zerohedge.

While the Greek government believes it may have won the battle, if not the war with Europe, the reality is that every additional day in which Athens does not have a funding backstop, be it the ECB (or the BRIC bank), is a day which brings the local banking system to total collapse.

As a reminder, Greek banks already depends on the ECB for some €80.7 billion in Emergency Liquidity Assistance which was about 60% of total deposits in the Greek financial system as of April 30. In other words, they are woefully insolvent and only the day to day generosity of the ECB prevents a roughly 40% forced “bail in” deposit haircut a la Cyprus.

ELA greece june 5_0

The problem is that a Greek deposit number as of a month and a half ago is hopefully inaccurate. It is also the biggest problem for Greece, which has been desperate to prevent an all out panic among those who still have money in the banking system.

Things got dangerously close to the edge last Friday (as noted before) when things for Greece suddenly looked very bleak ahead of this week’s IMF payment and politicians were forced to turn on the Hope Theory to the max, promising a deal with Europe had never been closer.

It wasn’t, and instead Greece admitted its sovereign coffers are totally empty this week when it “bundled” its modest €345 million payment to the IMF along with others, for a lump €1.5 billion payment, which may well never happen.

And the bigger problem for Greece is that after testing yesterday the faith and resolve of its depositors (not to mention the Troika, aka the Creditors) and found lacking, said depositors no longer believe in the full faith (ignore credit) of the Greek banking system.It may have been the Greek government’s final test.

Because accoring to banking sources cited by Intelligent News, things today went from bad to horrible for Greek banks, when Greeks “responded with massive outflows to the Greece’s government decision to bundle the four tranches to IMF into one by the end of the June.”

According to banking sources, the net outflows sharply increased on Friday and the available liquidity of the domestic banking system reduced at very low and dangerous levels.

The same sources estimate the outflows on Friday around 700 million Euros from 272 million Euros on Thursday. The available emergency liquidity assistance (ELA) for the Greek banks is estimated around 800 million Euros. In addition, the outstanding amount of the total deposits of the private sector (households and corporations) has declined under 130 billion Euros or lower than the levels at early 2004.

The total net outflows in the last 7 business days are estimated 3.4 billion Euros threatening the stability of the Greek banks.

This means 2.5% of all Greek deposits were pulled in just the past 5 days! Indicatively, this is the same as if US depositors had yanked $280 billion from US banks (where total deposits amount to about $10.7 trillion)

As further reported, the Bank of Greece is set to examine on Monday if Greece will urgently ask additional ELA. However, since one of the main conditions by the ECB to keep providing ELA to Greece is for its banks to be “solvent” (a condition which is only possible thanks to the ECB), one wonders at what point the Troika, whose clear intention it has been from day one to cause the Greek bank run in the process leading to the fall of the Tsipras government, will say “no more.”

For those interested, according to IN, the deposit (out)flows in the last 7 business days are as follows:

greek deposit flows_0

Finally, for those who missed it, here is the first hand account of the Greek bank run from precisely a week ago as retold by ZH contributor Tom Winnifrith:

Witnessing the great bank run first hand as I deposit money in Greece

Jim Mellon says that the Greeks should build a statue in my honour as on Friday I opened a bank account in Greece and made a deposit. Okay it was only 10 Euro, I need to put in another 3,990 Euro to get my residency papers so I can buy a car, a bike and a gun, but it was a start. But the scenes at the National Bank in Kalamata were of chaos, you could smell the panic and they were being replicated at banks across Greece.

For tomorrow is a Bank Holiday here and if you are going to default on your debts/ switch from Euros to New Drachmas a bank holiday weekend is the best time to do it. And with debt repayments that cannot be met due on June 5 (next Friday) Greece is clearly in the merde. If it defaults all its banks go bust.

But I had to open an account and make a deposit. Outside the bank in the main street of Kalamata there are two ATMs. The lines at both were ten deep when I arrived and when I left an hour later. Inside I was directed to the two desks marked “Deposit”. You go there to put in money, to open an account or if you are so senile that you cannot do basic admin of your account without assistance. As such it was me depositing cash and four octogenerians who had not got a clue about anything. Actually I lie. These folks may have been gaga but they were not so gaga that they were actually going to deposit cash, I was the sole depositer.

Friday was also the day when pensions are paid into bank accounts. On the Wednesday and Thursday it was reported that Greeks withdrew 800 million Euro from checking accounts. Friday’s number will dwarf that. Whe you go to a Greek bank you pull off a ticket and wait for your number to be called. The hall in my bank contains about 60 seats all of which were filled. There were folks standing behind the seats and in fact throughout the hall, all wanting to get their cash out before the bank closed at 2 PM.

At the side of the room, shielded by a glass screen sat a man behind a big desk. He tapped away at his screen and made phone calls. Ocassionally folks wandered over, shook papers in his face and harangued him having got no joy elsewhere. So I guess he was the bank manager. I rather expected him to end one phone call and stand up to say “That was Athens – all the money has gone, its game over folks.” But he didn’t. He may well do so at some stage soon.

Eventually I got the the front of my five person queue of the senile and opened my account. Passport, tax number, phone number all in order. I handed over a 10 Euro note and the polite – if somewhat stressed – young man gave me about ten pieces of paper to sign and stamped my passbook. I have done my bit for Greece and have given it 10 Euro which I will lose one way or another in due course. So Jim – time to lobby for that statue.

The Government did not put up a default notice on Friday as I half expected. The can kicking goes on. The ATMs will be emptied this weekend and on Tuesday and in the run up to a potential default day next Friday the banks will be packed again with folks taking out whatever money they can.

It is not just the bank coffers that are being emptied. To get to The Greek Hovel where I sit now from my local village of Kambos is a two mile drive. On my side of the valley there is some concrete track but it is mainly a mud road. On the other side of the valley there is a deserted monastery so to honour the Church – even if there are no actual monks there – a concrete road was built in the good times. By last summer it was more pothole than road.

By law, since I have water and electricity, I can demand that the road be mended and so last summer I went to the Kambos town hall (4 full time staff serving a population of 536) and did just that. They said “the steam roller is broken and we have no money but will try to do it in the Autumn.” They did not.

But last week a gang of men appeared and the road is now pothole free, indeed in some places we have a whole new concrete surface. And as I head towards Kalamta there are extensive road mending programmes. At Kitries, the village has found money to renovate its beach front. It is a hive of activity across the Mani.

Quite simply each little municipality is spending every cent it has as fast as it can. The Greek State asked all the town halls to hand over spare cash a few weeks ago to help with the debt repayment. The town halls know that next time it will not be a request but an order. But by then all the money they had hoarded will have been spent. That is Greekeconomics for you.

Everyone knows that something has to give and that it will probanly happen this summer. The signs are everywhere

References:

http://www.zerohedge.com/news/2015-06-05/greek-banks-verge-total-collapse-bank-run-surges-massively-depositors-yank-%E2%82%AC700-mill

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Defeat in Bavaria delivers knockout punch to Merkel’s tenure as Chancellor (Video)

The Duran – News in Review – Episode 136.

Alex Christoforou

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The stunning CSU defeat in Bavaria means that the coalition partner in Angela Merkel’s government has lost an absolute majority in their worst election results in Bavaria since 1950.

In a preview analysis before the election, Deutsche Welle noted that a CSU collapse could lead to Seehofer’s resignation from Merkel’s government, and conceivably Söder’s exit from the Bavarian state premiership, which would remove two of the chancellor’s most outspoken critics from power, and give her room to govern in the calmer, crisis-free manner she is accustomed to.

On the other hand, a heavy loss and big resignations in the CSU might well push a desperate party in a more volatile, abrasive direction at the national level. That would further antagonize the SPD, the center-left junior partners in Merkel’s coalition, themselves desperate for a new direction and already impatient with Seehofer’s destabilizing antics, and precipitate a break-up of the age-old CDU/CSU alliance, and therefore a break-up of Merkel’s grand coalition. In short: Anything could happen after Sunday, up to and including Merkel’s fall.

The Financial Times reports that the campaign was dominated by the divisive issue of immigration, in a sign of how the shockwaves from Merkel’s disastrous decision to let in more than a million refugees in 2015-16 are continuing to reverberate through German politics and to reshape the party landscape.

The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris discuss the stunning Bavarian election defeat of the CSU party, and the message voters sent to Angela Merkel, the last of the Obama ‘rat pack’ neo-liberal, globalist leaders whose tenure as German Chancellor appears to be coming to an end.

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Follow The Duran Audio Podcast on Soundcloud.

Via Zerohedge

Voters in Germany’s economically dominant southern state of Bavaria delivered a stunning rebuke to the ruling Christian Social Union, in an election that delivered another crushing blow for the parties in Angela Merkel’s grand coalition in Berlin.

With all eyes on Sunday’s Bavaria election, moments ago the first exit polls showed a historic collapse for the ruling CSU party, which has ruled Bavaria continuously since 1957, and which saw its share of the vote collapse from 47.7% in the 2013 election to just 35.5%, losing its absolute majority and suffering its worst result since 1950, as voters defected in their droves to the Greens and the far-right Alternative for Germany.

German newspaper Welt called the election “the most painful election defeat of the past 50 years for the CSU”. As predicted in the polls, the CSU experienced a “historic debacle” in the Bavarian state elections, according to Welt. The CSU was followed by the Greens which soared in the election, more than doubling to 18.5% from 8.6% in 2013, the Free Voters also rose to 11% from 9.0%, in 2013.

Meanwhile, the nationalist AfD are expecting to enter Bavaria’s parliament for the first time ever with 11% of the vote, and as such are setting up for their post-election party. Party leader Alice Weidel already is having the first beer in the small community of Mamming in Lower Bavaria.

Establishment party, left-of-center SPD also saw its support collapse from 20.6% in 2013 to just 10% today.

The full initial results from an ARD exit poll are as follows (via Zerohedge):

  • CSU: 35.5 %
  • Grüne: 18.5 %
  • FW: 11.5 %
  • AfD: 11.0 %
  • SPD: 10.0 %
  • FDP: 5.0 %
  • Linke: 3.5 %
  • Sonstige: 5.0 %

The breakdown by gender did not show any marked variations when it comes to CSU support, although more women voted for the Greens, while far more men supported the AfD:

There was a greater variation by educational level, with highly educated voters tending more towards the green GRÜNE (G/EFA) and liberal FDP (ALDE) then the average, while low/middle educated voters tended more towards CSU (EPP) and AfD (EFDD).

This was the worst result for the CSU since 1950.

Zerohedge further reports that alarmed by the rise of the anti-immigration, populist AfD, the CSU tried to outflank them by talking tough on immigration and picking fights with Ms Merkel over asylum policy.

But the strategy appeared to have backfired spectacularly by alienating tens of thousands of moderate CSU voters and driving them into the arms of the Greens.

Meanwhile, as support the CSU and SPD collapsed, the result confirmed the Greens’ status as the rising force in German politics. Running on a platform of open borders, liberal social values and the fight against climate change the party saw its support surge to 18.5%, from 8.4% in 2013. Meanwhile the AfD won 11%, and for the first time entered the Bavarian regional assembly.

“This is an earthquake for Bavaria,” said Jürgen Falter, a political scientist at the University of Mainz.

The CSU had governed the state with an absolute majority for most of the last 60 years. “It was Bavaria and Bavaria was the CSU. That is now no longer the case.”

The latest collapse of Germany’s establishment parties highlights the shaky ground the grand coalition in Berlin is now resting on as all three parties in the alliance, Merkel’s Christian Democratic Union, the CSU and the SPD, are haemorrhaging support. Some are now questioning whether the coalition, already frayed by personal rivalries and near constant bickering over policy, can survive a full term in office.

“This outcome throws ever more doubt on the future of the grand coalition,” said Heinrich Oberreuter, head of the Passau Journalism Institute and an expert on the CSU. “Based on current polls, if an election were held now, the CDU, CSU and SPD would not even command a majority in the Bundestag.”

The CSU will now be be forced to form a coalition government — a humiliating outcome for a party that has run Bavaria single-handedly for 49 of the last 54 years. Its preference is probably for a three-party coalition with the Free Voters, a small party that is mainly focused on local politics. It could also team up with the Greens, though it would be highly reluctant to do so: the two parties are deeply divided over immigration, transport and environmental policy.

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Elizabeth Warren’s DNA ploy backfires big time (Video)

The Duran Quick Take: Episode 1.

Alex Christoforou

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RT CrossTalk host Peter Lavelle and The Duran’s Alex Christoforou take a quick look at Senator Elizabeth Warren’s ‘genius’ idea to accept POTUS Trump’s ‘Native American DNA’ challenge. Let’s just say that Warren will never recover from this self-inflicted wound.

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The Cherokee Nation issued a statement crushing Elizabeth Warren for her “continued claims of tribal heritage.”

“A DNA test is useless to determine tribal citizenship. Current DNA tests do not even distinguish whether a person’s ancestors were indigenous to North or South America. Sovereign tribal nations set their own legal requirements for citizenship, and while DNA tests can be used to determine lineage, such as paternity to an individual, it is not evidence for tribal affiliation. Using a DNA test to lay claim to any connection to the Cherokee Nation or any tribal nation, even vaguely, is inappropriate and wrong. It makes a mockery out of DNA tests and its legitimate uses while also dishonoring legitimate tribal governments and their citizens, who ancestors are well documented and whose heritage is prove. Senator Warren is undermining tribal interests with her continued claims of tribal heritage.

– Cherokee Nation Secretary of State Chuck Hoskin, Jr

Zerohedge reports that Elizabeth Warren just owned herself after releasing a DNA test confirming that she’s as little as 1/1024th Native American – about half the percentage of the average white person.

What’s more, the DNA expert she used, Stanford University professor Carlos Bustamente, “used samples from Mexico, Peru, and Colombia to stand in for Native American” as opposed to, say, DNA from a Cherokee Indian which Warren has claimed to be throughout her career.

Adding to the absurdity are two major corrections by the Boston Globe (which has become the media mouthpiece of Warren’s 2020 damage control efforts of late), letting readers know that “Due to a math error, a story about Elizabeth Warren misstated the ancestry percentage of a potential 10th generation relative. It should be 1/1,024,” and later updating it to “between 1/64th and 1/1,024th Native American.”

Adding to the absurdity are two major corrections by the Boston Globe (which has become the media mouthpiece of Warren’s 2020 damage control efforts of late), letting readers know that “Due to a math error, a story about Elizabeth Warren misstated the ancestry percentage of a potential 10th generation relative. It should be 1/1,024,” and later updating it to “between 1/64th and 1/1,024th Native American.”

Elizabeth Warren’s got trolled by Trump in the most epic fashion, pushing the Senator to make a blunder that will follow her for the rest of her career.

The Daily Caller’s Benny Johnson exposed Elizabeth Warren’s history of lies in 10 simple tweets…

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Hillary Clinton: Democrats have been TOO CIVIL with GOP (VIDEO)

Civil war becomes more likely as Clinton calls for greater civil unrest after weeks of absolutely insane behavior from leftist activists.

Seraphim Hanisch

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Former presidential candidate Hillary Rodham Clinton just called for an end to civil behavior towards Republicans and conservatives. In an interview with Christiane Amanpour of CNN expanded on in a piece by USA Today, the failed candidate had this to say:

“You cannot be civil with a political party that wants to destroy what you stand for, what you care about… That’s why I believe, if we are fortunate enough to win back the House and / or the Senate, that’s when civility can start again.”

Clinton said that Senate Republicans under Majority Leader Mitch McConnell, R-Ky., “demeaned the confirmation process” and “insulted and attacked” Christine Blasey Ford – who testified before the Senate Judiciary Committee about a sexual assault she alleges Kavanaugh committed in 1982 – along with other “women who were speaking out.”

It should be pointed out here that Clinton told a lie. The Senate Republicans did everything possible to hear out Dr Ford’s testimony, and no one has gone on record with any sort of insults or demeaning comments about her. Every Republican Senator who stated anything agreed that something happened to her, but they also agreed that there was no corroboration showing that Judge Kavanaugh was actually involved in any misdoings. USA Today’s piece continues:

Clinton compared the handling of Kavanaugh’s confirmation to “Republican operatives shutting down the voting in 2000,” the “swift-boating of John Kerry,” attacks on former Arizona Sen. John McCain in the 2000 Republican primary and “what they did to me for 25 years.

“When you’re dealing with an ideological party that is driven by the lust for power, that is funded by corporate interests who want a government that does its bidding, you can be civil but you can’t overcome what they intend to do unless you win elections,” she told Amanpour.

Clinton compared Kavanaugh’s swearing-in ceremony at the White House on Monday to a “political rally” that “further undermined the image and integrity of the court.”

She told Amanpour the effect on the court “troubles” and “saddens” her “because our judicial system has been viewed as one of the main pillars of our constitutional government.”

“But the President’s been true to form,” Clinton added. “He has insulted, attacked, demeaned women throughout the campaign – really for many years leading up to the campaign. And he’s continued to do that inside the White House.”

Here, Clinton told at least two more incendiary whoppers.

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First, no one has been specifically after her, and second, President Donald Trump’s record with women including in the White House has been nothing short of stellar and gentlemanly. Nikki Haley, who supported Marco Rubio in the 2016 campaign and has at times been openly critical of Donald Trump, yesterday announced her full support of his 2020 campaign and her intent to campaign with and for him.

By all accounts, Mrs. Haley is a woman.

The first American Civil War had economic policy and states’ rights as its central focus. Slavery was a part of that issue, though slavery was practiced in the North as well in the South before this war began.

Now a new civil war is coming, but perhaps it should be called the American Social War. It is not about any real policy matter at all. It is hysteria, but it appears to be hysteria with a purpose.

The first American Social War has two apparent sides and allying forces and groups:

The Left:

  • pro-gay marriage
  • pro-death (in other words, pro-abortion)
  • anti-Christian, especially Christianity that says these first two issues are wrong
  • anti-GOP / Republican / Conservative
  • “victim class” – feminists, some millenials
  • supporters of legalized use of mind-altering / mood-altering drugs
  • appears to support overreaching socialist style government, featuring “fair” wages, such as a $15.oo minimum wage
  • anti-traditionalist
  • Mainstream media is strongly allied here
  • George Soros is a supporter
  • social media outlets, like Facebook and Twitter are supporters through “scrubbing” of media content
  • anti-white, anti-male, and if you are white, male and Christian, look out. You are Enemy Number One
  • supports and executes violence against all these people they are against, including family members.
  • very zealous, and very monolithic in terms of alignment and energy

The Right:

  • Conservatives
  • people who generally want the government to leave them alone
  • generally favors life, considering abortion tragic and to be avoided, though some consider that it should be made illegal
  • marriage has always been between one man and one woman and it should not be redefined to fit the whims of a few
  • God is sovereign (though many conservatives would never make this connection)
  • No real animus against the left, but at the same time, fed up with being hectored by the left all the time, as we saw in Senator Lindsey Graham’s explosive confrontation against Senate Democrats
  • Generally Republican by party affiliation, though many libertarian and conservatives are also present as well as a number of conservative democrats.
  • seeks to avoid violence. While there do exist a very few neo-Nazi types, their numbers are infinitesimal, and their behavior is rejected by the Right
  •  generally against drug use, though many have unfortunately moderated on the matter of actual illegality

The main characteristic of this approaching war, as stated before, is little more than some sort of outrage over identity politics and perceived victimization. This is something both new and old, as there is always a party in any war that claims that they are fighting because they are in fact the aggrieved party, under the other side’s aggression and suppression.

That factor exists with this war too. However, the reality of that aggression or suppression is that it does not exist, and this makes it very difficult for the “perceived aggressors” to ramp up the zeal needed to carry out the fight.

This factor is often very maddening for conservative people. As a whole they do not wish to fight. They wish to be left alone. The left on the other hand insists that everything must be fought for because the right has somehow managed to take it away from them, or is keeping it away from them.

This is purely fiction but it is almost impossible to convince a leftist that this is so. Tucker Carlson expands on this matter in this report. He makes reference at 6:37 about how Hillary Rodham Clinton is now openly calling for civility to the GOP to end (as if it hasn’t already!), but the entirety of this report begs to be seen to give perspective to the look and feel of this crisis:

This is unfamiliar territory in many ways, and it is unclear how far this will go. But one this is clear: it is testing all available limits, and it may come to real fighting, and real killing, for no reason better than perceived victimization.

It should be understood that the advocates for violence are all people that reject God and traditional values openly. There is certainly a connection.

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