Did The Bank Of England Just Admit Financial Markets Aren’t "Real"?

On a day that has seen global financial markets take a roller coaster ride, which is not the fault of greedy bankers but is the latest move in the currency war being fought between the USA led developed world and the eastern bloc and emerging powers led by Russia and China, we spotted a story that reveals the truth about ‘markets which is that they are all rigged and the eastern bloc are better tat playiong the system than the west..

The Bank of England has announced an “Open Forum” to be held on November 11, with the title: Building Real Markets for the Good of the People. No, I’m not making this up. Here’s a screenshot from the BOE website:

This might be good news for people with pensions and savings, but don’t depend on it – the corruption in the financial system is very deep. At best we can hope to see curbs on the algorithm driven high frequency trading that has served investment bankers and financial traders so well and the public so poorly.

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I Love A Good Greek Drama

First of all sad but not unexpected news this week that blog.co.uk is to close. We will be able to export our blogs to wordpress apparently but whether all the links well transfer and the SEO fuel be passed on we cannot yet know.

Meanwhile, life and the greek economic crisis go on. In what might be an attempt to turn a crisis into a Greek drama, one of the country’s oldest surviving newspapers I Kathimerini has predicted the latest developments will drive the country to civil war.

It has been a painful six months six painful for Greece, with round after round of bitter argument between Greek politicians (Yannis varoufakis notably) and its creditors producing all sorts of speculation about what a “Grexit” would actually entail but no workable solution.

With no historical precendent, planning a member state’s exit from the currency bloc has proved a virtually impossible task, but the collective efforts of the marketsd, mainstream media, political opportunists, and fuckwit economists has managed to produce a veritable dogs dinner of diagrams, decision trees, flowcharts, schematics, statistics, spells and charms in a futile attempt to map the complex interplay of politics, economics, and financial considerations that would follow if Athens decided to finally break off its ill-fated relationship with Brussels.

And it wasn’t just people with an interest drawing up Grexit plans. The game was joined by David Cameron, Francois Hollande, Piers Morgan, John Bishop, Beppe Grillo, King salaman, old Barack Obama and all and all, old Uncle Tom Cobleigh and all.

EU officials denied the existence of a “Plan B” right up until German FinMin Wolfgang Schaeuble’s “swift time-out” alternative was “leaked” last weekend, no one outside of polite eurocrat circles pretends that a Greek exit wasn’t contemplated all along. Yanis Varoufakis insists that Athens was threatened with capital controls as early as February if it did not acquiesce to creditor demands.

Now in the most shocking revelation yet about what EU officials really thought may happen in the event Greece crashed out of the EMU and unceremoniously reintroduced the drachma, highly repected newspaper Kathimerini has published a description of what the leader writer calls the “Grexit Black Book,” which purportedly contained the suggestion that civil war would breakout in Greece in the event the country was forced out of the currency bloc.

Here’s more (via Google translate)You’ll see what I mean about Greek drama:

” On the 13th floor of the building Verlaymont in Brussels, a few meters from the office of the European Commission President, Jean-Claude Juncker, stored in a special security room and in a safe Greece’s exit plan from the Eurozone. There, in a multi-page volume, written in less than a month from 15-member team of the European Commission, answered questions on how to tackle such an outflow, including, as shocking as it may sound, even the possibility of the country out of the Treaty Schengen, and not only being driven outside the euro, but also outside the EU

According to European official, in that the European Commission Summit already had a bound volume, a multi-page document, which described the Greek prime minister, before the start of the session, by the same Mr. Juncker with all the details of a Grexit , giving him to understand the legal and political context of such a decision. In multipage document in accordance with European official who has the ability to know its contents, there are detailed answers to 200 questions that would arise in case Grexit.

These questions, as he explains official, are interrelated, as an exit from the euro would create a cascade of events, which would evolve in a relatively short time. From the drachmopoiisi economy to foreign exchange controls that would take place at the country’s borders and which will ultimately lead at the exit of Greece from the Schengen Treaty.

The authors of the draft, according to European official, conducted under conditions of absolute secrecy. A special group of 15 people of the European Commission, by direct contact with Greece started to prepare, and was also in direct contact with a number of senior officials and DGs in the European Commission who had expertise in specific areas. The writing of the project started when the expiry date of the program (end of June) was approaching, so it is the Commission prepared for every eventuality, and by the time the referendum was announced, Friday, June 26, the relevant procedures were accelerated. The weekend of the work referendum intensified, so now two days later, Tuesday of that Synod, the project has been finalized.

According to well-informed source, involved in creating the plan worked “suffer the pain” as typically describe the “K” and “overwhelmed” because they could not believe that things had reached this point, and most of them had direct involvement with the Greek rescue programs. The European Commission also was hoped that even until the last minute solution would be found as members of this group knew better than anyone the consequences exit of Greece from the Eurozone and understand the cost of such a decision. One of those involved with direct knowledge of Greek reality in the critical phase of the training, he said the rest of the group that “if implemented this plan, the streets of Athens will sound tracks of tanks.”

It’s not entirely clear what is meant by “will sound the tracks of tanks,” but perhaps google translate which is good but far from perfect, has obfuscated the sense of what the Greek text was saying. We must assume the suggestion is not that the EU and its constituent member states would somehow seek to orchestrate a military takeover of the Greek state in the event Athens makes the ‘wrong’ decision about EMU membership (although with help from the USA, that’s exactly what they did in Ukraine).

A more resonable interpretation based on the information presented by Kathimerini seems to be that Brussels was of the opinion that the referendum results together with the divergent rhetoric emanating from Greek politicians on the far-right and far-left betrayed the degree to which the Greek people were divided on the issue of austerity. Although Tsipras’ concessions will have far-reaching consequences for national politics and Greek society, it looks as though Brussels feared that the economic malaise that would have resulted from a Greek departure from the single currency and return to the drachma might have triggered a level of civil unrest that would ultimately have to be brought under control by the Greek army. We can only wait and see.

Greece: A New Versailles

In spite of rejoicing over the story (which is looking more credible as time passes) that leftie loony Comrade Jeremy Corbyn is set to win the race to lead the Labour Party and will certainly take the party so far to the left they will end up on the right of Pol Pot, we are still cheering another left winger, former Greek finance minister Yannis Varoufakis.

In his latest swing of the big dead fish with which he keeps slapping the EU leadership, V-fak has accused Brussels and the Troika of imposing “A new Versailles” on Greece, a reference to the humiliating and punitive treaty France (though opposed by Britain and the USA insisted on imposing on Germany after World War 1 and which is generall accepted as having led to the rise of Naziism and the outbreak of World War 2.

Here’s a little from V-fak’s latest outburst, with the qualifier that while we do not support a lot of his left socialist economic thinking, he has the big one absolutely right, globalism and the expansionist policies of the EU are corporatism, the sibling of fascism, and have nothing to do with democracy, free speech and the underlying principles of democratic societies. Over to V-fak.

In the next hours and days, I shall be sitting in Parliament to assess the legislation that is part of the recent Euro Summit agreement on Greece. I am also looking forward to hearing in person from my comrades, Alexis Tsipras and Euclid Tsakalotos, who have been through so much over the past few days. Till then, I shall reserve judgment regarding the legislation before us. Meanwhile, here are some first, impressionistic thoughts stirred up by the Euro Summit’s Statement.

A New Versailles Treaty is haunting Europe – I used that expression back in the Spring of 2010 to describe the first Greek ‘bailout’ that was being prepared at that time. If that allegory was pertinent then it is, sadly, all too germane now.

Never before has the European Union made a decision that undermines so fundamentally the project of European Integration. Europe’s leaders, in treating Alexis Tsipras and our government the way they did, dealt a decisive blow against the European project.

The project of European integration has, indeed, been fatally wounded over the past few days. And as Paul Krugman rightly says, whatever you think of Syriza, or Greece, it wasn’t the Greeks or Syriza who killed off the dream of a democratic, united Europe.

Back in 1971 Nick Kaldor, the noted Cambridge economist, had warned that forging monetary union before a political union was possible would lead not only to a failed monetary union but also to the deconstruction of the European political project. Later on, in 1999, German-British sociologist Ralf Dahrendorf also warned that economic and monetary union would split rather than unite Europe. All these years I hoped that they were wrong. Now, the powers that be in Brussels, in Berlin and in Frankfurt have conspired to prove them right.

The Euro Summit statement of yesterday morning reads like a document committing to paper Greece’s Terms of Surrender. It is meant as a statement confirming that Greece acquiesces to becoming a vassal of the Eurogroup.

The Euro Summit statement of yesterday morning has nothing to do with economics, nor with any concern for the type of reform agenda capable of lifting Greece out of its mire. It is purely and simply a manifestation of the politics of humiliation in action. Even if one loathes our government one must see that the Eurogroup’s list of demands represents a major departure from decency and reason.

The Euro Summit statement of yesterday morning signalled a complete annulment of national sovereignty, without putting in its place a supra-national, pan-European, sovereign body politic. Europeans, even those who give not a damn for Greece, ought to beware.

Much energy is expended by the media on whether the Terms of Surrender will pass through Greek Parliament, and in particular on whether MPs like myself will toe the line and vote in favour of the relevant legislation. I do not think this is the most interesting of questions. The crucial question is: Does the Greek economy stand any chance of recovery under these terms?

The Greek Fiasco Trundles On

Has a deal been reached to solve Greece’s debt problem? No.

Has a deal been cobbled together to impose more hardship on the Greek people because the arrogant EU pen pushers and backroom deal makers are unable to admit failure and thus will do anything that will allow them to kick the can down the road a little further before the inevitable default and Greece is forced out of the Euro? Yes, well sort of.

Will the Greek parliament approve the deal? Unlikely.

If the Greek parliament does approve the deal will there be a return to civil unrest in Greek cities? Very likely.

Will the government of Greece fall? It’s a question of when rather than if.

Will the other EU nations approve the deal? The Finns have promised to veto it and Germany’s parliament, The Reichstag is deeply divided on the issue. About half of EU member states have strong misgivings, based on fears that sooner or later Germany will do the same to them.

So what should all this tell us in Britain? That we should ignore the blandishments of those neo-Nazi lefties who would sell out our national sovereignty and be happy to see our great nation absorbed into a Euronazi bureaucratic dictatorship (called The German Empire) because by now anybody with eyes to see and ears to hear should be aware that the EU is an undemocratic attempt by a cabal of unelected bureaucrats to destroy national independence and create a supranational tyranny.

Cameron’s Tories and the Labour leadership contenders with the exception of Liz Kendall, the only one talking any sense and so, predictably, the one trailing in fourth position behind the two spouters of anodyne platitudes and the left wing idiot) are making populist noises about reclaiming sovereignty from Brussels.

The Greek debacle should demonstrate to even the most brain dead political apparatchik there is no way to negotiate with the bureaucratic fascists, it’s like punching a sponge. The only way to escape is to walk away and face the consequences, which is what Britain should do now. Every day’s delay will only make our eventual exit harder.

Let’s put the optimistic drivel of mainstream media into perspective by looking at what is really happening in Greece as this will be the pattern for other nations that do not quit the EU.

Greece’s governmental debt to private investors (bondholders) as of, first, December 2009; and, then, five years later, December 2014, fell by over 80%. In almost all countries, private investors either eliminated or steeply reduced their holdings of Greek government bonds during that 5-year period.

(Overall, it was reduced by 83%; but, in countries such as France, Portugal, Ireland, Austria, and Belgium, it was reduced closer to 100% — all of it.)

In other words: by December 2009, word was out amongst the financial aristocracy that only suckers would want to buy their Greek debt holdings from them. So where do you find enough clueless saps to pay premium prices for worthless shite? There just aren’t that many idiots in the world so the bankers and investors deployed the fail – safe system set up in past centuries that permits or rather compels governments to buy the wealthy elite’s bad bets at face value despite its worthlessness in real terms; for governments to become the suckers with pockets full of taxpayers money when private individuals back off.

Not all Greek debt was sold directly to governments; much of it went instead indirectly, to agencies (bond dealers and brokers) that the industry elite set up as basically transfer-agencies for passing junk from the private sector to governments; in other words, as middlemen, to transfer unpayable debt-obligations to various governments’ taxpayers.

So who actually bought Greek debt you might well ask. Who were these governments and middlemen-agencies? According to Bloomberg, as of January 2015, they were: 62% Euro-member governments (including the European Financial Stability Facility); 10% International Monetary Fund (IMF), and 8% European Central Bank; then, 17% still remained with private investors; and 3% was owned by “other.”

What got bailed-out was private investors, not ‘the Greek people’ or ‘The Greek nation’ as mainstream media have constantly tried to suggest.

A reasonable assumption (and one often used by media commentators) is that a large part of the Greek debt to the Germans was the result of Greek consumption of German goods and services bought with the German provided credit. In that case, the Germans have lost the Greek goods and services that could have potentially been bought with the money that is owed to them.” But this is entirely false: that “consumption” was by the aristocracy, not by the public, anywhere or at any time.

After all, as we have showed, it’s the elite and their agencies that get bailed-out, not the public, not now, not ever. (The same thing is happening now in Ukraine.)

In other words this whole Greek crisis has been about transferring debt from bankers, investors, hedge funds and financial institutions to taxpayers. Because in spite of what the pseudo-anarchists of the occupy movement may tell you, the bankers and their buddies are not stupid and they have leaned that if bureaucracies such as the E U and the United Nations are put between the democratic process and the global financial system so that voters cannot call ‘ enough’, the flow of cash from us poor taxpayers into the pockets of the super rich is endless and unstoppable.

IsThe IMF Profoundly In Love With Pandora

Germany so far held its negotiating position with Greece because the German government knows that if it agrees to a sovereign debt cancellation (rather than a ‘haircut’ on privately held debt held which would affect mostly banks, financial institutions and hedge funds as happened in 2012), then more of the PIIGS nations (Portugal Italy, Ireland, Greece, Spain,) will demand the same.

It is the IMF that has finally opened Pandora’s box and let all the troubles previously contained within the European Union’s secretive governance mechanisms escape into the public domain.

While the Greek crisis has been containable, the problem posed by the other PIIGS is on a different scale, it took the EU 5 years to transfer around €200 billion in Greek debt exposure to the public balance sheet but in the end it looks as if Greece’s debt problem has overwhelmed both the EU’s ability to kick the can down the road and the faith of German taxpayers in “ever closer union” has been exhausted.

Should the first victim of the common currency pass through the exit door as early as next week however, nobody in Europe believes that the same exercise can be repeated with Italy, or Spain, or even Portugal. Their economies are too big (and their at-risk loans run to €hundreds of billions). Today, we saw the first public evidence of the schism within the IMF/ECB/EU Commission Troika, when the IMF in a press release explicitly stated that Greece is no longer viable unless there is both additional funding provided to the country, which can only happen if there is another massive debt haircut. Here’s the tasty bit:

” Even with concessional financing through 2018, debt would remain very high for decades and highly vulnerable to shocks. Assuming official (concessional) financing through end–2018, the debt-to-GDP ratio is projected at about 150 percent in 2020, and close to 140 percent in 2022 (see Figure 4ii). Using the thresholds agreed in November 2012, a haircut that yields a reduction in debt of over 30 percent of GDP would be required to meet the November 2012 debt targets. With debt remaining very high, any further deterioration in growth rates or in the medium term primary surplus relative to the revised baseline scenario discussed here would result in significant increases in debt and gross financing needs (see robustness tests in the next section below). This points to the high vulnerability of the debt dynamics.” [ … ] “”these new financing needs render the debt dynamics unsustainable.” (Read what the IMF said in full:)

That is precisely what Tsipras and Varoufakis have been claiming since day one. Unsurprisingly Greek government officials promptly said that the IMF report is in line with the Greek government’s views on debt. What makes the IMF report even more odd is its timing; three days before the Sunday referendum, Tsipras now has prima facie evidence to present to Greek voters as he tells them “see, we were right all along.”

Looking forward to the next Eurozone crisis, what the IMF’s “debt sustainability analysis” has just done is open the door for every single other comparably insolvent peripheral European nation (and it goes way beyond the PIIGS) to knock on the IMF’s door and say: “Mme Lagarde, if Greece is unsustainable, then why aren’t we?”

Greece’s route out of Europe

Financial web sites are reporting that the Greek government have caved in to EU bullying and accepted all the austerity demands in return for a few more months of economic chaos before the stricken country is finally forced out of the EU. These reports are not true.

Earlier this morning as Alexis Tipras was again urging voters to reject more austerity in the referendum to be held this coming weekend, finance minister Varoufakis said he would cut off his right arm before accepting a “Yes” vote. Doesn’t sound much like a cave in to us.

As we have reported several times recently, while the Syriza bosses have been playing mind games with the Eurorats of Brussels they have also been spending a lot of time cosying up to Moscow. And nothing would suit the Russians better than to prise Greece out of the EU.

There is a very simple way for Greece and Russia to win here and tell Washington along with Brussels to go to hell. First Greece quits the Euro and starts issuing Drachmas. Then Russia announces that it will peg the Drachma to the Rouble and make them convertable. Greece agrees to credit any fees from the south stream pipeline targeted to terminate in Greece back to any Rouble debt they incur.

Its a safe bet that the other PIIGS countries, Portugal, Ireland, Italy and Spain countries would follow suit and both NATO and the EU will start to unwind.

Europe would be pushed into the Russian orbit and without the political cover of NATO the wars the USA is running in the middle east would have to end immediately. Check and mate for the fools in Washington who thought they could control the world. Greece and eventually Britain and Europe can at last be completely free of the Washington warmonger’s malign influence for good.

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Grexit: What’s really going on

Although mainstream news sources are reporting only positive stuff about the latest chapter in the saga of the Eurozone collapse, if you read Boggart Blog you will have learned yesterday that the latest ‘austerity’ proposals offered by the Greek government are about as substantial as a set of hen’s teeth or a bucket of rocking horse shit.

Today the media spin is even worse, we are on the verge of a ground breaking deal that will keep Greece in the Euro and hold the EU together all the TV channels and newspapers tell us. In reality, having failed to offer any realistic proposals, Alexis Tsiparis now has as many problems at home in Greece as he has in Brussels.

Late on Monday evening European news channels were leading on a “Greece Capitulates: Tsipras Will Accept Bailout Extension,” headline, offering the narrative that Greece’s non-cuts would enable a new bailout to go ahead. Not only was this not true, while the French, fearing that they are next maybe, are keen to grab anything Germany’s ruling coalition parties are in open revolt against Hausfrau Merkel’s efforts to dum another pile of Greek debt on the shoulders of German taxpayers.

On top of that Alexis Tsipras now faces a political battle at home in the wake of his move to make a deal with creditors that includes higher taxes and restrictions on early retirements.

The agreement, which accepts the necessity of extending the country’s second bailout in order to bridge the gap between payments due to creditors over the coming weeks and final discussions around a third program, has not been received well by Syriza party members.

In fact no agreement will satisfy the more radical wing of the party, many of whom believe the best option for Greece is to default and return to the drachma — these lawmakers contend redenomination would not be as economically catastrophic as the EU would have them believe. If Tsipras cannot rally enough support for the new proposal, we could be looking at a new Greek government as well as a new currency before long.

Here’s Reuter’s report on the Greek Political situation