Rumors that a deal will be reached "soon" have gone on for weeks. Indeed announcements of an expected agreement today have already hit new snags.
For the sake of argument, let's assume a deal does go through and crunch the latest numbers to see what the situation looks like from the point of view of Greece before and after the deal.
Please consider Greece Needs EU145 Billion in Second Aid Package
The US bug, whereby the worse the economy, the higher the stock market and bond prices must have shifted to Greece, because while the Greek stock market was the best performing "asset" class in October, and Greek bond yields are plunging just because the greater fool stock posse has now moved to the insolvent nation if only for a few months, the economic reality just gets worse by the minute. Case in point - Greek corporations, or what's left of them, and what Greece needs more than anything - taxes.
While the latest European FinMin summit desperately tried to put on a united facade when responding to the latest and greatest Greek proposal, which incidentally is so weak that the IMF will throw up all over it as shown below, the reality behind the scenes was anything but. In fact, Greece was this close to having capital controls forced on it earlier today, and would have, if the demand of not just its old BFF Germany's finmin Schauble, but Ireland's Noonan, had materialized.
On Monday afternoon, news broke that the IMF looked to be splintering from the rest of the Troika over just what conditions must be met in order for Greece to receive a €7.2 billion tranche of aid the country desperately needs to pay salaries, pensions and, ironically, the IMF.
The curious story of the day is back-to-back reports, minutes apart, by the same news agency, saying different things. I commented on that just a bit ago in Greece Says Creditor Agreement Deal Close, Senior Eurozone Official Says "I Wish it Were True".There is no proof Greece is the one lying, but Greece certainly benefits more from such a lie, two different ways.
Well that didn't last long. It seems - just as earlier in the week - the ability for either side in this Euro-system death match game of chicken to find any common ground to even start negotiations remains lost: GREEK GOVT OFFICIAL SAYS THAT "IN THESE CIRCUMSTANCES, THERE CANNOT BE A DEAL TODAY" EUROGROUP DISCUSSED "UNREASONABLE", "UNACCEPTABLE" DRAFT TEXT INSISTING ON EXTENDING BAILOUT EURUSD is tumbling and S&P Futures are falling fast.
ATHENS: Greeks voted overwhelmingly on Sunday to reject terms of a bailout, risking financial ruin in a show of defiance that could splinter Europe. With nearly half of the votes counted, official figures showed 61 percent of Greeks rejecting the bailout offer. An official interior ministry projection confirmed the figure as close to the expected final tally. The astonishingly strong victory by the 'No' camp overturned opinion polls that had predicted an outcome too close to call.
In attempt to bridge the gap between a proposal submitted by Greek PM Alexis Tsipras last Monday and a draft agreement devised by creditors the following day, Athens has reportedly submitted a new three-page plan focused on fiscal sustainability. A second document was also submitted in which Greece has apparently proposed borrowing from the ESM to cover its obligations to the ECB in July and August. Those payments amount to around €7 billion.
Via email I received an interesting set of facts from Barclays regarding banking exposures to Greece.
Greece: Euro area official sector exposures in excess of EUR290bn
Euro area official sector exposure