Athens proposes third program as second lapses
As Greece’s second bailout program came to an abrupt end on Tuesday night, the Greek government made a new last-ditch proposal to its lenders amid disputes within the cabinet about what route the coalition should follow.
Eurozone finance ministers are to convene by teleconference Wednesday morning after an emergency session on Tuesday to discuss a last-minute request by the Greek government for an extension to the country’s second bailout and a new aid package. The finance ministers rejected the request for the extension almost immediately, as the second bailout had been due to expire in just a few hours. But they are to hold talks again on Tuesday on Greece’s request for a two-year program with the European Stability Mechanism which foresees some 30 billion euros in funding. Greek Finance Minister Yanis Varoufakis promised to submit to his eurozone peers a document setting out specific economic measures that will be based on the proposals submitted by creditors.
John J. Xenakis
Greece Joins Zimbabwe and Cuba in Missing IMF Payment
At midnight on Tuesday, June 30, Greece became the first "developed" nation to miss a payment to the International Monetary Fund (IMF), joining the ranks of "undeveloped" nations, including Zimbabwe and Cuba, that have also missed IMF payments.
Greece is now "in arrears" in payments to the IMF, but is not "in default." The three major credit-rating companies have said failure to pay the IMF doesn't constitute a default because that term is reserved for private-sector creditors. Greece has requested an extension for payment to the IMF, but it's thought to be unlikely that the IMF will grant the request.
Earlier in the day, a panicky prime minister Alexis Tsipras made a desperate last gasp proposal to the Eurogroup to request a new 2-year bailout program. The Eurogroup rejected it immediately.
It now appears that there will be several days of arguing and posturing on the part of both the Greek government and the European leaders. Right now, it seems the most significant next event will be the referendum on Sunday.
Since the referendum refers to a bailout plan that no longer exists, no one knows what YES means or what NO means. So it's now being widely assumed that YES will mean that Greece will remain in the eurozone, and NO means that Greece should leave the eurozone. As I wrote yesterday, my personal opinion, not a Generational Dynamics prediction, is that one way or another Greece will remain in the eurozone, even if the referendum vote is NO.DYI Comments: Fireworks on Wall Street with a big down day and then followed by only a mild recovery the following day. Is this the pin that will pop this bubble? Only hindsight will tell us unfortunately. The best thing to do is staying very defensive as stocks and bonds in the years ahead will deliver sub par returns (below inflation) at best and worst negative returns. Prices are so bid up it is mathematically baked into the cake for sub par/negative returns.
The Future of the Stock Market
The above link is from Money Chimp.com their calculator (very easy to use) is outstanding for estimating future long term returns. According to Professor Hussman this calculation has an average 92% correlation to the actual returns. Estimating the Long-Term Return on Stocks Professor Hussman's explanation a great read for the long term value player.
No comments:
Post a Comment