Gyroscopic Investing

[quote=http://www.forbes.com/sites/timworstall ... alled-for/]As I’ve been saying for some time now whether or not Greece stays in the euro is not something entirely under the control of the politicians sitting around the table and discussing the debt. If the Greek banks are drained of their deposits then it becomes the decision of the European Central Bank as to whether they will continue to prop up said banks. And that draining of those deposits is accelerating as the debt talks get nowhere. [/quote]

Read the article and the amount given for bank withdrawals over the last week or so is about 3 billion Euros. That comes out to about $300 for every Greek citizen. I don't know how to put that in context but I thought it was at least worth calculating. Let's see... it's equivalent to US citizens withdrawing 100 billion dollars which really does sound like a lot of money.

[quote=http://www.bbc.com/news/world-europe-33300543]
But as the deadline for Greece's €1.6bn payment to the IMF looms, and with Mr Tsipras calling for a referendum next week, lines have begun to form outside ATMs and bank branches in Athens.

One bank has imposed withdrawal limits of €3,000 per account, and some ATMs have handwritten "empty" signs on them - although I managed to withdraw cash at two separate locations.

Some customers were given a ticket number and told to come back in a few hours. One man told me he was 170th in line. "The game is over," said Peter, one of those queuing. "Greece is going into uncharted waters, and the banks will be closed on Monday, I suspect."

Anxiety is mounting in Athens. "Everybody's really scared," Elena, a woman in her 20s, tells me as she waits to withdraw cash. "We need to have enough money to last the week."[/quote]

Well, now with stock futures down and bonds up and gold up, will be interesting to see if again this is a blip that all the central banks can paper over or the start of something major, and with it, a likely change in sentiment from some folks on here toward gold!

Cortopassi wrote: Well, now with stock futures down and bonds up and gold up, will be interesting to see if again this is a blip that all the central banks can paper over or the start of something major, and with it, a likely change in sentiment from some folks on here toward gold!

It certainly has my attention. Asian stocks were down about 3% and The DAX is off about 3.5% so far. Gold is not responding much. Flight to safety with long bonds to the rescue? Is Reub sitting on a pile of cash and getting ready to buy stuff on sale?

Once again, gold fulfills its promise as a safe haven <sarcasm>  $1.70 up as we speak.  Woo Hoo!

Pretty sure (my conspiracy/manipulation hat on) that by the end of the day, stocks go green, bonds gets a little flatter and gold goes negative.

My hat is off to those in power who manage expectations. 

barrett wrote: It certainly has my attention. Asian stocks were down about 3% and The DAX is off about 3.5% so far. Gold is not responding much. Flight to safety with long bonds to the rescue? Is Reub sitting on a pile of cash and getting ready to buy stuff on sale?

I'm keeping an eye on the ever persistent and obnoxious Bitcoin movement.  So far the currency/digital commodity is up ~$7 today, though not many in Greece seem to be aware of Bitcoin.

https://bitcoinwisdom.com/markets/bitstamp/btcusd
http://www.theguardian.com/technology/2 ... eek-crisis

Cortopassi wrote: Once again, gold fulfills its promise as a safe haven <sarcasm>  $1.70 up as we speak.  Woo Hoo!

Pretty sure (my conspiracy/manipulation hat on) that by the end of the day, stocks go green, bonds gets a little flatter and gold goes negative.

My hat is off to those in power who manage expectations.

I think it mostly comes down to the fact that this Greece event doesn't effect us much at all. The flight to safety asset is treasuries when the US dollar is as strong as it's been lately.

That is where I guess it depends on who/what you read.  Many people seem to think Greece could be a Lehman type event because of all the unknown derivatives that are intertwined in all of this.  I don't pretend to understand!

My limited understanding of the Lehman bankruptcy is that while Lehman's business activities certainly helped fuel the financial crisis, Lehman was still a victim of the overall economic conditions at the time as opposed to having directly caused the conditions that led to the recession. Fannie, Freddie, WAMU, AIG...they were going down with or without Lehman.

Greece does have a bunch of debt outstanding throughout Europe but most of it is government debt. It certainly helps that you have the ECB in the middle of a $1 trillion QE program that extends all the way through Sept 2016. So they are ready to act to secure bond markets.

But who knows. I think the market still expect a deal. When Tsipras called for the referendum, I'm sure he expected additional help to at least keep Greek banks open this week. After a full week of bank closures and capital controls, something tells me even some of the hardliners will be clamoring for a deal come voting time.

Good post, iwealth.

People have been talking about Greece for years.  Big banks probably reduced their exposure to Greek bankruptcy, a long time ago.

Certainly that's what I understand.  All the bailout/loans mostly went to banks and not the people. 

Now you've got Spain looking at this, and Italy looking to do the same.  It may take time, but this may very well be looked back at the event that started the EU unraveling, which will be hard to contain.