Greek finance minister Yanis Varoufakis resigns despite referendum no vote

The controversial minister says he is standing down after pressure from Greece’s ‘assorted partners’

The Greek finance minister Yanis Varoufakis has quit, despite the country’s decisive rejection of the eurozone’s terms for the country remaining in the single currency.

Varoufakis, who infuriated eurozone leaders and recently compared Greece’s creditors to terrorists, said the Greek prime minister, Alexis Tsipras, thought it would be better if he stood down, after pressure from European leaders.

Related: Greek referendum: finance minister Yanis Varoufakis resigns – live

Related: Greek referendum result: what happens next?

Continue reading…

Silver Market Change Report 5 July, 2015

The prices of the metals drooped further this shortened week (Friday was a holiday in the US, as the Fourth of July, Independence Day, occurred on Saturday). The S&P 500 index also fell this week, as did crude oil.

Markets all over the world are beginning to feel shocks from Greece. As we write this, on Sunday evening Arizona time, the Greeks voted “No” to the terms of the bailouts offered them. The simple fact is that Greece cannot pay. What they cannot pay, they will not. What they don’t pay, has to be written off by whomever holds it as an asset. Some of these write-offs will obligate European governments to pay in more euros to recapitalize the now-insolvent entities. For example, countries like Spain that need bailouts themselves will have to contribute to the European Central Bank.

A Greek default is not about the size of its GDP, but about the size of the holes blown out of various balance sheets, where Greek debts used to be marked as their assets. We don’t know precisely how much the Greek government, Greek central bank, Greek commercial banks, and other Greek debtors owe. According to Demonocracy, the total is €360 billion (and they have a very cool infographic to illustrate it). We suspect that, at the end of the day, the number turns out to be greater than that.

The Greek default is a forcible contraction of credit (Keith’s definition of deflation), and bound to be negative for the prices of ordinary assets. That said, something extraordinary has occurred in the silver market this week.

Read on, for the only accurate picture of the supply and demand conditions in the gold and silver markets, based on the basis and cobasis.

First, here is the graph of the metals’ prices.

Greek crisis: European leaders scramble for response to referendum no vote

Merkel and Hollande will meet for crisis talks and the ECB faces a crucial decison over whether to its funding freeze after Greece rejected austerity by 61% to 39%

European leaders were scrambling for a response on Monday after a resounding no from Greek voters in a momentous referendum on austerity which could send the country crashing out of the eurozone.

With Europe’s financial markets set to follow Asia’s overnight lead by going sharply into the red, German chancellor Angela Merkel was to meet with French leader Francois Hollande in Paris after Greece overwhelmingly rejected international creditors’ tough bailout terms.

Related: Greek referendum: Asian markets fall sharply after Greece no vote – live

Related: Greek referendum result: what happens next?

Continue reading…

Backing down on Greece’s debt is the safest, most rational option | John Quiggin

If Greece leaves the EU, the European project is over. If it leaves the euro and recovers, austerity is done for. The best option is a backdown on Greek debt

Lots of people have raised the suggestion of applying game theory to the the Greek debt crisis. I haven’t attempted this, reflecting my general scepticism about game theory in the absence of a well-defined strategy space.

But now the Greek government and public have made what is, in effect, a final move.

Related: Greek referendum: we are back to wild markets of the 2008 banking crisis

Continue reading…

Greek crisis: financial markets buffeted after no vote

Many stock markets in Asia fall sharply – but losses are limited as investors wait to see how European leaders will react to the referendum vote

Share prices were sent tumbling across the Asia-Pacific on Monday after Greece’s resounding no vote in the weekend’s bailout referendum raised fears it could be forced to exit the eurozone.

While significant losses had not descended into regional turmoil as Asian markets prepared to close, analysts warned of more trouble ahead depending on the outcome of crisis meetings of European leaders later today and on Tuesday.

Related: Greek referendum: finance minister Yanis Varoufakis resigns – live

Related: Greek referendum: we are back to wild markets of the 2008 banking crisis

Continue reading…

Greferendum Caption Contest: Two For The Price Of One

We were conflicted about today’s choice of a caption contest to summarize what was the most surreal day in modern European history: a day in which one nation voluntarily made the choice to take steps toward a severance of its ties with some 18 other nations through what was recently seen as an “irreversible” currency.

So here are the two choices for today’s caption contest: we leave it up to readers to decide which is more appropriate.