Sunday, June 28, 2015

Hey, gold went up tonight. Wonder why?

Hey. I wonder why gold just popped $10.

The Guardian - Greece crisis deepens as banks close for a week. Tsipras is going to hold a referendum where the Greeks get to vote on whether they want to be humiliated by Europe.

In the meantime, the rest of the world gets to watch whether Europe's "firewalls" are strong enough to hold back the collapse, and Greece doesn't actually have to leave the EZ. Like I said already, my interest is in Europe's nonexistent political firewall... let's see what happens there.

I think it all ends miserably, because:
The Greek government decided on Sunday night it had no option but to close the nation’s banks the following day after the European Central Bank (ECB) raised the stakes by freezing the liquidity lifeline that has kept them afloat during a six-month run on deposits.
That's not exactly a sign of a willingness to pursue constructive solutions.
The European commission said on Sunday for the first time in the crisis that it wanted to offer Greece debt relief, Tsipras’s central demand during the five months of stalemated talks. Reports from Berlin said that Angela Merkel and Fran├žois Hollande shared that view.
So... you are just playing a game of chicken, then? So, why did you waste everyone's time by picking a fight with a government whose finance minister wrote three different textbooks on game theory?

See, people: this is why you don't fight economists with failed physics post-docs and tax lawyers. Don't bring a fucking butterknife to a gunfight, Germany.

BBC - Greek debt crisis comes to a head. Quote:
As for the impact on the rest of the eurozone, corporate treasurers and wealthy individuals will wake up on Monday wondering if their money is safe in the banks of other weaker eurozone economies.
Cough cough contagion cough cough....
German Chancellor Angela Merkel and US President Barack Obama spoke about the crisis by phone, agreeing that it was "critically important" to help Greece remain in the eurozone, the White House said.
Hey Angela, if you feel this so strongly, you might want to talk to the ECB about that whole "freezing the liquidity lifeline" thing.

NYT Upshot - the next few days have the potential to transform Europe. Yeah, I doubt that. Oh, and quote:
Capital controls that limit people’s ability to withdraw and move money out of the country are, it is safe to say, not a sign of a healthy currency union. It would be hard to call the dollar the national currency of the United States if laws prevented me from taking Maryland dollars and depositing them in a Virginia bank.
Yeah well, the Euro is a failed currency union to begin with, because it doesn't have fiscal union or even a simple fiscal transfer. Good luck keeping the rest of the EZ together, guys!
But saying that this won’t be a Lehman Brothers-style economic catastrophe isn’t the same as saying it would be a good thing. In geopolitical terms it would push Greece closer to a hostile Russia. It would set a precedent that the European currency, and the European Union more broadly, is more fragile than its leaders would like the world to think.
That an American columnist clued into that last sentence there, oh so late in the game, means we should have a fun couple weeks on the markets.

Darn, I sure hope there's nobody short gold on margin out there....

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