Good day,
Lacoon was killed by the gods because he tried to warn the Trojans against bringing in the Trojan horse. Is the Greek referendum a Trojan horse? Is the austerity plan the Trojan horse? That stakes are high on the European contintent as the brinkmanship between Greece and its creditors continue. Here are the top reads in finance for Sunday:
Hellenic panic; Greek banks will not open Monday. Officials in Athens are trying to avert a run on the banks – spurred in part by a decision to hold a referundum on July 5 on the terms of a deal with creditors. Hedgies are apparently panicking. But the debt of other debt-laden countries haven’t been pulled into the maelstrom. At least not yet. New York Times (paywall) Wall Street Journal (paywall)
The European Central Bank says it will maintain its credit lifeline to Greece — but it won’t provide additional needed funds either. No penalty for the surprise maneuver by the Greek Prime Minister, who requested and got a referendum on the proposed creditor deal. But no extra cash, either. Read the ECB press release here.
Don’t fear a Grexit, welcome it. Mark Dow writes: “The heartless truth is Greece adds very little to the EZ and has subtracted a lot. It was a noble experiment, but it failed. Now we can and should own up to that.” Read “Greece: It’s Time (Three Reasons to be Cheerful, Part 3).
Wait. Europe will never allow a Greek default. “(T)hat’s a big gamble for the EU, for the ECB, the IMF and everybody else including China and the US. Why? Because all of them have carefully orchestrated a construct that they do no want to see disturbed. It’s not an accident that we have seen 46+ rate cuts this year.” Read the assessment of Northman Trader here. A bonus quote from this terrific post:
Greece’s referendum move risks putting a debt deal up for a vote to citizens. When has that ever happened? Have Americans every voted on their government’s debt spree? Have citizens ever had a say on their central bank’s policies and balance sheet expansions? The answer is no. This so ever important element of our global economic system is completely removed from voters.
And not everything in the papers this weekend is about Greece. Barron’s takes on tech company in a cover story:
Silicon Valley is cooking the books and no one cares. “The earnings of a host of tech companies, including Amazon.com, Salesforce.com, Twitter, and LinkedIn (LNKD), melt away when stock compensation is appropriately reflected in earnings.” Read the cover story in Barron’s here.
Photo by Dimitri B. via Flickr