UPDATE (Feb 21, 2015): A lot of pundits with poor-analysis-egg-on-their-face are now predicting that the deal struck yesterday to bail out Greece will fall apart. Well ya, I guess eventually Greece will blow up but it will blow up with the entire EU. Does this statement from Greek Tsipras sound make it sound like the deal will blow up?
Greek Prime Minister Alexis Tsipras declared victory on Saturday after agreeing a last-minute conditional financial rescue deal with Europe, despite making big concessions to avert financial collapse within days (LINK)
The real beneficiaries of this deal are the people running the big banks – U.S. and European – because a Grexit would have blown up them up and the upper management of these banks could no longer milk QE by paying themselves huge salaries/bonuses. Hey Germany: You just made sure that the CEO’s of Goldman, JP Morgan, Deutsche Bank, Citibank, Morgan Stanley, et al will get to reward themselves handsomely with YOUR tax money. Now ya know how we feel…
Three weeks ago I wrote that the ECB and the Greeks would reach a “kick the can down the road” agreement – that everything in between would be staged grandstanding for the benefit of Germany’s restless anti-euro population (you know, the ones that want to hold the Bundesbank accountable for the gold that the Bundesbank
has claims to have). Well, guess what? They kicked the can down the road: Bloomberg, Zerohedge.
It was simple to figure this: follow the money. The real money wasn’t in the exposure to the Greek sovereign debt that everyone was blathering about. The real money is in the OTC derivatives connected to the Greek sovereign debt, the former to which big Too Big To Fail Banks have a huge exposure. I can guarantee you that the U.S. Treasury and the Fed had played a huge role in engineering this latest maneuver to put off the day of reckoning.
“You can ignore reality, but you can’t ignore the consequences of ignoring reality.” Ayn Rand