“You, irresponsible, you.”
Well, that’s exactly how Schauble defined Syriza’s government this morning to a German radio station.
The new Eurogroup meeting is on in Brussels. It does not look good. On Wednesday there’s another cliffhanger, an ECB meeting in Frankfurt. They will decide whether they prescribe Orwellian ELA – emergency liquidity – to Greek banks.
This will only happen if Athens continues with the dreaded bailout racket. That is, the Greeks fold.
If the ECB says “Nein” to ELA, they will be, for all practical purposes, forcing a Grexit. Next step would be capital controls – and back to the drachma.
“Nein” to ELA requires a two-thirds majority from the ECB governing council. Significantly, Peter Praet, the ECB’s chief economist, is saying ELA stays.
Meanwhile, Morgan Stanley is busy hedging on Grexit. They are spinning it at 23%; well, last week it was between 30% and 40%. This may be an indication the ECB does NOT want Grexit after all.
For all of you out there, Morgan Stanley suggests: sell euros and buy stocks. Soon we’ll have 1 euro = 1 US dollar. Sell your euros and buy Chinese stocks in Hong Kong. You won't regret it.
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