Thursday, June 18, 2015

Can Greece Bring Down The Global Financial System?

Yes. But then again, so could a 7-11 bankruptcy. But only because we too are Greece, and way too fucking arrogant to realize it. It's all part of the Idiocracy's "Inevitable unforeseeable" dilemma. 

Greece's problem is that they have an unsustainable lifestyle and borrowed too much money. Sounds vaguely familiar. However, they can't print money to finance their deficits so they had to implement austerity programs which decimated what was left of their middle class. Now they have no economy. Meanwhile, in the rest of the fat and happy "civilized" world, we are busily monetizing our debts while excoriating the profligate Greeks. The global economic "recovery" is a debt-sponsored total fucking fabrication - growing at the slowest pace in a decade despite global interest rates at 500 year lows. The stock market is an unregulated casino funded by record margin debt, and long term bonds are already selling off world-wide, while Etraders are adding more Netflix.

To put things into perspective, the global bond sell-off since March which is substantially attributed to concerns over Greece, has already cost $625 billion which is 2x the size of the 5 year Greek bailout. 

So yes, a Greek bank run, which is underway currently, can bring down the global Ponzi scheme. If only because the Too Big To Bail banks are overexposed to all manner of Nobel Prize Winning financial WMDs reminiscent of 1998 LTCM, as chronicled in the spell-binding: "When Genius Failed (To Exist- and hasn't been located in the meantime"). The story of Nobel Prize winning PhD dumbfucks leveraged 1000x to buy "riskless" assets that turned out to be the exact opposite. Somehow the Thai Bhat collapse echoed globally culminating in Russian sovereign default. But don't worry, Greenspan bailed everyone out, so that problem's fixed...

The Committee to make subprime and 2008 inevitable:

We've identified the problem. It's Time Magazine:

For four years straight - since the debt downgrade in 2011, there has been no risk-off capital call. Per Minsky, it's not when they ask for their interest back that it's a problem it's when they come asking for the principal that the entire fucking charade comes to its inevitable and of course "unforeseeable" ending.