Greece-Endgame

Markets are set to open down on news that Greece and its creditors may be at an impasse.  You can read more about it over at Bloomberg at the link below.  A few thoughts.

1.  The Consigliere taught me to always follow the money.  Stripping away the niceties of the diplomatic negotiations gets you to this point.  Not only will Greece never have the money to pay back all of their debts, they have never had any intentions to do so.  The creditor institutions know this and so their choices are to simply let Greece default and possibly leave the Euro or find away to extend the maturities to a point that is basically a default in disguise.  Greece seems to not be willing to play along with that.  That is they don't even be willing to offer up any sort of serious reform of their economy that justifies their creditors to continue the extend and pretend game that's been played out for years.

2.  Who in their right mind still has money in Greek banks?

3.  I'm sick of the whole Greek mess.  The endgame here has been known and discussed from almost the time the Great Recession started.  It's hard for me to believe that the creditor institutions haven't prepared for this eventuality.  Plus, Greece's economy is a tiny percentage of Europe's GDP, something like 1.3% as of 2014.  It's hard for me to imagine that some sort of default or orderly exit from the Euro hasn't already been game planned.  Of course the other side of the coin is that nobody really will know what will happen to financial markets until it occurs/if it occurs.

4.  From the news today it sounds like the endgame here could happen this week, if not over the weekend.  Probability of something happening over the weekend would seem to be higher because the banks will be closed if capital controls need to be imposed.  Either somebody blinks soon or the endgame is most likely default and exit from the Euro.  I think that if this happens we'll have a couple of bad days overseas then people will wake up and see that the sun still rises in the east.  The world will not have ended and financial markets will go about their business.  The investment world will look for the next big, bad event to fixate on {likely rising interest rates} and things will go on as before......Or not!  Stay tuned!

Link:  Bloomberg:  EU Prepares for Worst as Greed Drives Finances to Brink.