Greenlight Capital CEO David EINHORN: “it’s time to short French government debt.”

Greenlight Capital CEO David Einhorn gave two ideas on Monday at the Robin Hood Investors Conference.

One was a long position — in the solar company SunEdison. And the other was a long/short — long Greek banks, short French government debt.

At about slide 38, Einhorn sorts out some of the mess that is Europe, focusing on Greece first. He argues that the worst is behind the country. The hardest decisions about austerity and the country is now “living within its means.” He recommends going long Greek banks — *Alpha and Piraeus.

France, on the other hand, is just starting to look ugly (that starts on slide 67). It’s overbudget, suffers from high unemployment, and needs reform. Once the bond market realizes all of that, Einhorn says, it’s time to short French government debt. SEE FULL PRESENTATION HERE

Greece has taken its bitter medicine, restructured its obligations and economy, and is recuperating after its near‐death experience. France appears too proud to reform.

-taken-its-bitter-medicine-restructured-its-obligations-and-economy-and-is-recuperating-after-its-neardeath-experience-france-appears-too-proud-to-reform
“France is a challenging place to do business. The labour laws are stifling, the 35-hour work week includes 5 weeks of vacation, and at over $12 an hour, the minimum wage is nearly the highest in the world. It is difficult and expensive to dismiss workers … French government spending is well over half of GDP. In 2012 France elected the Socialists led by Francois Hollande who then lowered the retirement age, raised the corporate and VAT taxes, and sought to raise the tax rate on salaries over 1 million to 75% … And while Greece’s economy continues to improve, France has lagged the global recovery and may be headed back into recession. The bond market hasn’t noticed, but the rating agencies downgraded French debt. Right now France is clashing with the European Commission, where its proposed 2015 budget exceeds the 3% limit, putting France in “serious noncompliance” with the new EU rules. France is potentially undermining EU authority, setting a dangerous precedent for other EU countries, and setting the stage for a possible Euro crisis”

ules-france-is-potentially-undermining-eu-authority-setting-a-dangerous-precedent-for-other-eu-countries-and-setting-the-stage-for-a-possible-euro-crisis

 

The debt service in France has remained stable. Ever lower interest rates have offset total debt ballooning from €1.2 trillion in 2006 to €2 trillion today. The bond market hasn’t noticed, but the rating agencies downgraded French debt.
Greece’s restructured debt has low interest rates and distant maturities. Almost half the debt pays no interest for a decade. Now, Greece has a lower interest burden than France.

d-debt-has-low-interest-rates-and-distant-maturitiesalmost-half-the-debt-pays-no-interest-for-a-decade-now-greece-has-a-lower-interest-burden-than-france

Yet, while France’s troubles are still ahead, 10‐year French Government bonds yield 1.3%, while Greek 10‐year paper yields 9%. If the market re‐prices the French sovereign risk just slightly, France’s debt service will quickly get out of hand. Given this dynamic, we think shorting French government debt is a good currency and tail risk hedge for owning Greek bank stocks.

ll-quickly-get-out-of-handgiven-this-dynamic-we-think-shorting-french-government-debt-is-a-good-currency-and-tail-risk-hedge-for-owning-greek-bank-stocks

SOURCE : BusinessInsider

 


 

Olivier Delamarche & Pierre Sabatier: Des pays comme la Grèce ne rembourseront pas

Olivier Delamarche & Pierre Sabatier: L’accord Iranien n’est que de la communication 1/2

Olivier Delamarche & Pierre Sabatier: Des pays comme la Grèce ne rembourseront pas 2/2

Meanwhile, in Europe…THEY ARE ALL IN BANKRUPCY !

[EDITOR’S NOTE: IMF has just given its forecasts for the year 2014. The economic situation of the Industrialized countries can be summed up in four words: They are in BANKRUPCY.

1- Japan : public debt of 242,3 % of GDP
2- Greece : public debt of 174 % of GDP
3- Italy : public debt of 133,1 % of GDP
4- Portugal : public debt of 125,3 % of GDP
5- Ireland : public debt of 121 % of GDP
6- United States : 107,3 % of GDP
7- Spain : 99,1 % of GDP
8- United Kingdom : 95,3 % of GDP
9- France : 94,8 % of GDP
IMF doesn’t mention Belgium. In March 2013, the public debt of Belgium was
of 104,5 % of GDP.
IMF Source:
http://www.imf.org/external/pubs/ft/fm/2013/02/pdf/fm1302.pdf]

By Sprout Money via Zerohedge

For years, since the onset of the euro crisis, we have heard that the crisis is over. Every year, politicians keep on telling us that the worst is over, but that next year will be so much better. Do you really think so? Here are some hard facts & figures instead of wishful thinking of lying politicians showing that the euro crisis is not over. On the contrary, things are getting worse.

Italy

La Dolce Vita, the good life, is no longer achievable for millions of Italians. Italy is the third largest Eurozone country and is in dire straits. Public debt has ballooned to well over 130 percent! Is this money ever going to be repaid? Who is going to do that? The country has one of the fastest aging populations in the world. Italian women, when having any children at all, prefer to have just one child. In order for a society to maintain a healthy demographic balance, they should have at least two. Nonetheless, unemployment, from a European perspective, is relatively low at 12 percent. But wait, youth unemployment is virtually at 40 percent. So there are no jobs in Italy, public debt is out of control and its aging population lays a heavy burden on both income taxes and Social Security payments.

Spain

Spain is one of the Eurozone’s largest countries. It is not in a recession, but in a downright depression. Do you need some figures? Unemployment stands at 26.3 percent?. That means more than one out of every four workers is idling and receiving benefits from government and waiting for better days. Even worse, youth unemployment is a staggering 57 percent. Indeed, more than one out of every two youngsters is out of work or is not expected to find one soon. Do you need more proof? Spanish government is spending billions on Social Security, money it simply does not have. Public debt has gone from a fairly modest 30 percent in 2007 to well over 90 percent this year and will soon move to 100 percent and beyond.

Portugal

Portugal is one of the smaller Eurozone countries in the Mediterranean Sea with an economy that is in shambles. The country had to be bailed out by the rest of the Eurozone to the tune of €78 billion. Public debt is around 128 percent, hardly lower than Italy’s. Unemployment hovers around 16.5 percent, which is unsustainable in the medium term. Youth unemployment stands at a depressing h 42 percent.

Although it seems that Portugal has lived up to its promises as part of the bail-out programme, the country will need a second bail-out coming 2014. Of course, it will be paid by other Eurozone members having a healthier economy.

20131017-212438.jpg

Europe in Shambles

Politicians babble about the worst of the crisis being behind us, or even ‘fixed.’ That is just cheap talk. The hard facts & figures prove them wrong. Europe is on the verge of a genuine collapse. On the one hand, this is because the Euro simply does not work, but makes things worse instead. On the other hand, Eurozone member states are simply unable to devaluate their currencies as they are part of the single currency bloc. As long as this flawed monetary currency, or rather political currency, is kept afloat, less well-off countries within the Eurozone will continue to suffer.

The ECB, the European equivalent of the Fed, will do ‘whatever it takes’ to keep the single currency alive. For now, markets have accepted this, but in the near term they will call their bluff. When, not if, that happens, the euro will be gone and with it billions worth of paper assets, wreaking havoc on an already damaged economy.

Does the graph below suggest the crisis has been solved?

20131017-212552.jpg
Courtesy: Zerohedge… of course

Europe has run OUT OF MONEY

The Eurozone has close to 20 million unemployed. These are millions of people requiring need food, housing and medical care. This is simply unaffordable in the medium term. Youth unemployment is a ticking time bomb. It will not take long before young people will take to the streets, demanding jobs and a comfortable future.

Has the crisis been solved? Will the Eurozone recover any time soon? We would not bet on it. Europe is an ageing, moribund continent and the sh*t will hit the fan sooner rather than later. Europe has simply run out of money due to its overgenerous entitlements. What will it take for people to start noticing?

Greece Slides Into The “Fourth World” – The Full Photo Album

With Greek government bonds at multi-year highs (up 300% in the last year), the Athens Stock Index still up 100% in the last year, and leaders all over the Euro-zone proclaiming the crisis is over (and that Greece has “made big strides”); we thought it perhaps useful to look at the reality behind the propagandized talk and manipulation. The sad truth is Greece is rapidly dissolving into a ‘fourth world’ nation with unemployment rates (broad and youth) at unprecedented levels, poverty widespread, and homelessness rife. Perhaps, as Germany today stated that there will be no more debt reduction for Greece, it is ‘math’ in the first image that the TROIKA and the Greek representatives should pay special attention to…

By Tyler Durden zerohedge.com via Reuters

20130607-085411.jpg
40-year-old Yiorgos, who became homeless in 2010 after his grocery shop went out of business, sleeps outdoors in central Athens February 3, 2013.

20130607-085434.jpg
42-year-old Alexandros, from Serres in northern Greece, sits in the abandoned car he lives in, at the port of Piareus near Athens April 10, 2013. Alexandros owned a plant shop in Athens until 2010, when it was forced to close, he became homeless soon after.

20130607-085450.jpg
Homeless people sleep outdoors in central Athens April 14, 2013.

20130607-085516.jpg
A homeless scrap collector sleeps outside in central Athens May 26, 2013.

20130607-085536.jpg
Stephanos became homeless in late 2012 when the clothes shop, where he had worked for over a decade, closed down and he had no income to pay for his flat. He now lives next to a church in central Athens and eats in soup kitchens. Stephanos smokes a cigarette as he sits on a rug in central Athens May 16, 2013.

20130607-085555.jpg
36-year-old unemployed clerk Michael sits in the sun near a bridge in central Athens May 24, 2013. Michael worked as a hotel clerk for over fifteen years but when the hotel closed he was unable to find work and in late 2011 became homeless, two months later he was diagnosed with lymph node and thyroid cancer. He now lives outside a church.

20130607-085618.jpg
51-year-old Romanian truck driver Adrian, who lost his job in 2010 when the lorry company he was working for closed down, sits with his head in his hands in central Athens January 18, 2013. Adrian survives by collecting scrap and lives in an abandoned warehouse in Athens central vegetable market.

20130607-085638.jpg
50-year-old Giorgos sits with his belongings under a bridge, where he lives with a group of other homeless people, in central Athens May 25, 2013. Giorgos was forced to close down the billiard hall he owned in 2006, and spent time in prison for not paying his social security debts.

Continue reading

EUSSR requires 6-day working week in Greece

20120906-085436.jpg

RT

A leaked email sent to the Greek Ministries of Finance and Labor from the Troika says Greek private sector workers should work six days a week and longer hours.

The letter, which was published on August 31, shows that the Troika expects the Labor Ministry to implement a number of other new measures. They include reducing the notice period before firing a worker, and cutting certain severance packages by 50 per cent by giving employers the right to reduce workers’ time in service. Restrictions on overtime are also expected to come into effect.

“It also wants a dismantling of the labor inspectorate which is the public service that is responsible for implementing labor law. So it’s not only about making the labor market more flexible,” Panagiotis Sotiris from the University of the Aegean told RT.

The email was sent ahead of meetings between Prime Minister Antonis Samaras and his coalition partners, the PASOK Socialists of Evangelos Venizelos and the Democratic Left of Fotis Kouvelis, according to the financial newspaper Imerisia.

20120906-085538.jpg

“I think we are going to see a total dismantling of labor law which would possibly even include a 7 day work week. It’s also interesting that they are trying to reduce the number of hours between shifts to only 11 hours. So their idea is that an employer can call up an employee at any time, giving the employee no stability of working hours,” Sotiris said.

Continue reading

The Banker’s New Greek Strategy: Starve them into Compliance

20120606-195447.jpg

By Soren Dreier, Zen-Haven

The news from Athens continues to bleak over the past few weeks. A 90 year old mother and her 60 year old son jumped to their deaths off on apartment building (See Ekarthimeini article here).

A 62 year old pensioner hung himself off of a tree on the outskirts of Nikaia (See Athens News article here). Migrants are being attacked and are desperate to leave the country. Pharmacists are now refusing the government benefits card and demanding cash only for life saving drugs because they fear not being paid in Euros by the Greek bureaucracy, as payments are already many months behind in reimbursements.

Sadly, soup lines are the longest since the end of World War II as the middle class has fallen into dire straits of poverty, forcing dumpster diving by parents and children around the nation.

Even with all of this hardship, the banksters of Brussels and Berlin have noted the anger and frustration of the Greek electorate and fear a victory by the anti-austerity forces but attempting to force the gyro (they’re out of turnips) to bleed is a field of expertise that the financial industry is unfortunately well known for.

The bankers have elected to engage in a new strategy and it will create a humanitarian crisis unseen on the Continent since the siege of Sarajevo and the misery of the Soviet occupation: Starve the Greeks into voting for compliance with austerity.

Continue reading

First New Concentration Camps in Europe Set to Sprout on Greek Soil

By Richard Cottrell, The Intel Hub

As if the current circumstances of austerity-riven Greece were not bad enough already, it seems that the country is set to have a dozen or so concentration camps dotted around the country.

In language that might have been lifted straight from the Nazi lexicon, these establishments will be known as ‘closed-hospitality’ centers.

The incarcerates will be undocumented – meaning unwanted – refugees flooding in from North Africa, particularly the once prosperous and richest country in the Maghreb belt, namely Libya.

Most of the Mediterranean countries are in the thick of the refugee tide, but Greece is so far the only country that plans to compulsorily pen them up.

The first ‘reception center’ is scheduled to open at a former army base near Athens in the next few weeks.

Why the sudden haste, you ask? The answer is simple. A general election is scheduled for May 6th.

All the parties straddling the spectrum from left to right are playing the immigrant card for all its worth, but none more so than the main establishment parties: Pasok (theoretically socialist) and New Democracy (nominally center-right).

Right now their electoral prospects look decidedly dim. New Democracy, led by Antonis Samaris, is barreling on about 22% in the opinion polls, Pasok rates scarcely better at 18 and a smidgeon percent.

The nightmare entertained by the EU-imposed Greek Quisling, Lukas Papademos, is that neither party will end up with sufficient seats to ensure a majority in the Vouli, the national parliament.

As the two principal challengers shed votes by the hour, Greek voters are turning to a plethora of fringe parties rooted in both the left and right.

They may squabble fiercely among themselves but they are united by one core belief: total opposition to the EU/IMF austerity package which has ripped the heart out of the Greek economy.

The indecent haste of the mainstream figurines wildly wind milling the immigrant camps to attract voters’ attentions speaks for itself.

But to catch the flavor, listen to the chillingly titled ‘Civil Protection Minister’ Michalis Chrisohoidis grand-standing for his party, which is Pasok.

“We have a commitment to start operating these closed-hospitality centers, and we will keep to that commitment. The first centre will operate before the general election in greater Athens, and it will act as a model to show Greek citizens that these facilities are safe for the public and will operate to high standards of health and hygiene,” he said.

Am I alone in detecting some singularly inappropriate language here? After all, was it not the Nazis who indulged in ‘health and hygiene’ as a constant reprise, particularly when it came to the ‘closed-hospitality’ camps established for the benefit (and ‘hygiene’) of European Jews? Can we ever forget the horrific deception of the gas chambers as fumigators?

At best, Greek politicians are indulging in cheap populist barrack-room politics.

But what is more disturbing is that the issue of the camps has — temporarily at least — deflected the attention of voters away from the rape and pillage of their own homeland by the globalist smash and grab gang.

Continue reading

Now even the eurozone admits it has condemned Greece to never-ending austerity

By Jeremy Warner The Telegraph

20120315-192939.jpg

There’s a general view out there that with private creditors having agreed their 50pc haircut, the “Greek problem” has been solved, at least for now. Unfortunately, it has not.

According to Reuters, an unpublished “Compliance Report” by EU executives has concluded that Greece will have to impose a further fiscal squeeze in 2013/14 amounting to some 5.5pc of GDP in order to meet the targets that underpin the second international bailout. The chances of Greece being able to do this are about zero, though that is my conclusion, not that of the report.

According to the report, the austerity measures already adopted by Athens should be enough to bring the primary deficit down to the agreed 1.5pc this year. However, “current projections reveal large fiscal gaps in 2013-14″. The projected shortfall is reckoned to be about 5.5pc of GDP. All this, of course, assumes that Greece achieves the output levels forecast by the Troika, the chances of which are again about zero. So infact, the required squeeze will be even larger, further undermining growth and digging an even deeper hole.
Unabashed, the report states that “substantial additional expenditure cuts will have to be announced and adopted by Greece in the coming months, in particular when Greece updates its medium-term budget in May 2012″.

Where is Greece expected to find these cuts? Further savings in welfare payments, pharmaceutical spending, defense and restructuring of central and local administration are said to be under discussion. Has anyone told the Greek electorate, which is due to go the polls next month, about this? Apparently not.
Menacingly, the report adds that continuation of international financial assistance can only be expected if policy implementation improves.

A second bailout from the eurozone and the International Monetary Fund worth €130bn was finally agreed on Monday, which in theory should keep Athens financed through to the end of 2014. However, the money is to he drip fed, with later tranches dependent on meeting the troika programme. Spain has had its deficit target for this year reduced, so the eurozone has shown itself to be flexible. But Spain isn’t in the programme. The treatment meted out to those in receipt of financial assistance may be somewhat harsher.
This is what Citigroup had to say about developments in a note published on Tuesday morning:

With the last night’s decision, the 2nd Greek bailout package is finally on its way. However, in order to get the full disbursement of this package Greece has to implement the requested austerity measures and structural reforms, which will be monitored on a quarterly basis by the Troika. Given Greece’s poor track record on implementing such measures and particularly in view of the uncertainty over whether a new Greek government (after the election, which probably will take place at the end of April/early May) will go ahead with these measures, it is very uncertain if Greece will meet the Troika requests and will get the full programme funding. Taking into account large extra liabilities in 2012, as recently reported by the IMF, and because our expectations for economic growth for Greece are much weaker than the Troika’s, the expected debt-to-GDP ratio of 117% for 2020 looks far too optimistic to us. As a consequence, we continue to expect further debt restructuring in Greece at a later stage and see the probability of Greece leaving the euro area at around 50%.

Actually, I’d put the chances at way above 50pc. The only question is when. Regrettably, it looks as if the whole miserable mess is going to keep us in column inches for quite a few more months yet.

Report: Insider Documents Detail a March 23 Greek Default Plan; Gov to Freeze Bank Accounts

…Eliminate Euro, Restrict Capital Flow

By Mac SLAVO at SHTFPlan.com via Infowars.com

That a default in Europe is coming has never been the question. For the astute observer the only thing at issue is how and when it will happen. While the mainstream financial media and government officials have tried to spin this story as one that involves only Greek debt, the fact of the matter is that this isn’t isolated to a single country. Italy, Portugal, Ireland and most other European countries are in exactly the same boat.

20120217-170948.jpg

Despite all of the propaganda and machinations from leading financial powers like the United States, Germany, and France, it’s should be clear that there is no viable solution to the debt debacle facing Europe. As such, we should understand that a situation similar to what led to the Great Depression of the 1930′s is now unfolding once again. The ability of entire nations to pay off their debt is now in question, and given the sheer size of the numbers we’re talking about, any reasonable person could agree that there is simply no plausible resolution that will make all parties whole again.

This has been playing out in Greece for nearly three years, and we may very well be just weeks away from the dreaded moment when it finally becomes official. An exclusive report detailing internal bank documents from two major Wall Street players says that we may have much less time than we think as insiders prepare for a financial doomsday next month:

Via The Slog:

A written document giving firm dates and detailed actions for a planned Greek default has been in the possession of two top Wall Street bank currency trading bosses since the second week in January. The Slog has separate but corroborative sources affirming the existence of the document, and a conviction among senior bank staff that – at least at the time – the plan represented “a timetable, not a contingency”.

The plan gives a firm date of March 23rd for default to be announced after the close of business.

Senior bankers on Wall Street have been given detailed documentation setting out a timetable to Greek default, including firm dates and technical ‘orders’ about last use of the euro as a currency there. The revelation arrived at Slogger’s Roost last Monday, since when I have been trying to obtain corroboration. This arrived in the early hours of today (Thursday). One of the banks is Barclays Capital (Barcap) run by controversial figure Bob Diamond. The other must remain anonymous for the time being, in order to protect sources.

The document asserts that Greece will officially be declared in default by all the ratings agencies after the close of business on Friday march 23rd. At the weekend all Greek bank accounts will be frozen, with emergency measures detailed to prevent the flight of capital. Included in the paperwork is a list of very limited exceptions to the ‘no withdrawals’ order. All major banks ‘are instructed not to deal with euro exchange as of open of business in Greece on Monday 25th march. All Greek markets will close for one day ‘at least’.

As yet, I have been unable to establish the source of the documents. But one of my informants admitted, “I have strongly suggested to Greek business friends and clients that they sell up fast, do a sale and leaseback on property, empty bank accounts, and change to a hard currency.”

Continue reading