Thread: Greek Bank Run Update: Up To $1 Billion A Day Now

Greek Bank Run Update: Up To $1 Billion A Day Now



Submitted by Tyler Durden on 06/13/2012 15:00 -0400

Yesterday, we did an update of the Greek bank jog, when noting that between €100-€500 million per day was being withdrawn from Greek banks based on Kathimerini reports. 24 hours later the jog has become a trot with the most recent estimate from Reuters now estimated at nearly double: "Combined daily deposit outflows from the major Greek banks have reached 500-800 million euros over the past few days, with the pace picking up as the election draws closer and rising noticeably on Tuesday, two bankers said." This is roughly $1 billion a day in the upper case, and a number that is approaching 0.5% of the entire documented €170 billion (now likely much less) deposit base.

Deposit outflows at smaller and medium sized banks were running at 10-30 million euros.

"This includes cash withdrawals, wire transfers and investments into money market funds, German Bunds, U.S. Treasuries and EIB bonds," said one banker, who spoke on condition of anonymity.

Fears that Greece may have to quit the single currency and return to a weak drachma have fuelled a steady stream of withdrawals by companies and businesses alarmed at the prospect of seeing the value of their deposits cut sharply.


The result of the election, called after a previous vote in May failed to produce a government, remains too close to call, with the conservative New Democracy party running neck and neck with radical leftist SYRIZA.

Both groups say they want Greece to remain in the single currency but SYRIZA has pledged to scrap a 130 billion euro bailout agreement signed in March which has imposed some of the toughest austerity measures seen in Europe in decades.

At the daily rate of doubling the "estimate" by Friday the trot will be an all out sprting and Greece will be experiencing a $4 billion in outflows. We wonder which banks will have any cash left at that point.
How much of this is fact, and how much pre-election rumormongering to scare people from voting against Syriza remains to be seen. Due to the polling moratorium it is impossible to get any grasp of which is the most popular party in Greece currently, even if the polls that had been released had the accuracy of an Excel random number generator.

Greek Bank Run Update: Up To $1 Billion A Day Now | ZeroHedge

With Greece Back Down To Just €2 Billion In Cash, Zeit Suggests A Third Greek Bailout May Be Coming

Europe Bailout #5 Is In The Books



Submitted by Tyler Durden on 06/13/2012 10:34 -0400

After Greece, Ireland, Portugal, and Spain, we just got domino #5. They are falling real fast now:

• CYPRUS LIKELY TO HAVE TO SUPPORT ONE OF ITS BANKS, SHIARLY SAYS
• CYPRUS GOVERNMENT IN CLOSE CONTACT WITH EU ON BANKS: SHIARLY
• CYPRUS'S BANKING SYSTEM AT CRITICAL TURN, SHIARLY SAYS
• CYPRUS PREFERS PRIVATE SOLUTION TO EU BAILOUT FOR BANKS:SHIARLY

And now just the fulcrum domino is left. The boot-shaped one.


Cyprus bond yields are now back at record highs...




Europe Bailout #5 Is In The Books | ZeroHedge

The EU’s Real Agenda: “Lie Until You Are About to Die”


Submitted by Phoenix Capital Research on 06/13/2012 14:20 -0400

The following is an excerpt from my most recent issue of Private Wealth Advisory, my newsletter for private clients.

The big news that the markets are attempting to digest this week is the €100 billion Spanish bailout. This action and the upcoming Fed FOMC meeting on June 19-20 will dictate the market’s action over the next two weeks and possibly for the remainder of the year.

The first of these topics, the Spanish bailout, is an extremely complicated affair. The key takeaway issues that need to be considered are:

1. How the bailout was performed: who was involved and who wasn’t.
2. The details of the bailout structure itself.
3. The financial implications of the bailout.
4. The political implications of the bailout.

Let’s dive in.

Spain has been denying the need for a bailout for months now. Indeed, a mere two weeks ago, Prime Minister Mariano Rajoy stated that Spain would not need outside assistance. In fact, when France’s President Francois Hollande implied that Spanish banks might need outside funds at an EU summit last month, Rajoy retorted, "Hollande does not know the state of Spanish banks,"

What’s peculiar about this statement was that it was made when the Bankia nationalization was already underway. Indeed, two days after Rajoy’s comment, Bankia asked Spain for €19 billion in bail out funds.

So we now know that’s Spain’s political leaders will lie right up until the point of systemic collapse. We also know that both Spanish banks and politicians are highly incentivized to not quantify the true extent of the risks inherent in the Spanish banking system (remember, Bankia was discussing paying its dividend in April… just one month before it requested a bailout and revised its 2011 €309 million profit to a €3 billion loss).
Thus, I would change the common phrase applied to the EU’s political/ financial policies from “extend and pretend” to “lie until you are about to die.”

This notion is illustrated by the fact that on May 28^th, a mere week before Spain requested a bailout, Prime Minister Rajoy continued to maintain that Spain would not need a outside funding, stating, "there will be no rescue of the Spanish banking sector."

At this point, Bankia had already requested its bailout and Spanish banks’ shares were in a free-fall. Moreover, Spain itself was just days away from requesting outside aid from the EU.

The timeline says it all:

• May 9^th: Bankia requests €4.5 billion loan, Spanish Government states that the bank is “solvent.”
• May 21^st: Spain meets Bankia’s request for loan and takes a 45% stake in the bank thereby instigating a partial nationalization.
• May 23^rd: Bankia’s bailout needs grows to €11 billion/ Rajoy retorts to France’s Hollande, "Hollande does not know the state of Spanish banks."
• May 24^th: Bankia’s bailout needs grow to €15 billion
• May 25^th: Bankia’s bailout needs are now €19 billion (2011 profits revised to €4 billion loss)… the Spanish Bailout Fund has just €5 billion in cash.
• May 28^th: Rajoy comments, "there will be no rescue of the Spanish banking sector."
• Weekend of June 8-10^th: Rajoy texts to his finance minister: “Aguanta, we are the fourth European power. Spain is not Uganda… If they want to force the rescue of Spain, they need to start getting ready €500 billion and another €750 billion for Italy, which will have to be rescued afterwards.”/ Spain informally asks for €100 billion bailout/ EU Finance Ministers OK the bailout.
• Sunday June 10^th: Rajoy states that the bailout is a “victory” before commenting, "This year is going to be a bad one: Growth is going to be negative by 1.7 percent, and also unemployment is going to increase."

Thus, in just one month’s time, Spain implements the largest bank nationalization in its history and requests €100 billion from the EU to recapitalize its banks. And yet, throughout this time, Spanish politicians maintain that Spain’s banking system is “solvent” or in great shape… right up until they get the €100 billion at which point the truth comes out: “This year is going to be a bad one.”

As I said before, “Lie until you are about to die.”

With that in mind, I fully believe the EU is on the verge of a systemic collapse. How can a €100 billion bailout for (from a currently non-existent entity, the ESM, no less) save Spain when even its Prime Minister admits the real needs could be in the ballpark of €500 BILLION.

Ignore this week’s move, this is just the usual options expiration nonsense. The Spanish bailout (assuming it even occurs) has done nothing to address the underlying problems in the EU banking system (hence why Spain’s CDS and 10 year bond yields continue to explode higher).

On that note, if you’re not preparing for the collapse of the EU’s banking system, you need to do so now. I recently published a report showing investors how to prepare for this. It’s called How to Play the Collapse of the European Banking System and it explains exactly how the coming Crisis will unfold as well as which investment (both direct and backdoor) you can make to profit from it.

This report is 100% FREE. You can pick up a copy today at: http://www.gainspainscapital.com

Good Investing!

Graham Summers

PS. We also feature numerous other reports ALL devoted to helping you protect yourself, your portfolio, and your loved ones from the Second Round of the Great Crisis. Whether it’s a US Debt Default, runaway inflation, or even food shortages and bank holidays, our reports cover how to get through these situations safely and profitably.

And ALL of this is available for FREE under the OUR FREE REPORTS tab at: http://www.gainspainscapital.com

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