Greece to Seize Local Government Cash; Two Year Bond Yield Tops 28% - InvestingChannel

Greece to Seize Local Government Cash; Two Year Bond Yield Tops 28%


Greece to Seize Local Government Cash

Robbing Peter to pay Paul took another leap forward in Greece today as Tsipras to Seize Public-Sector Funds to Keep Greece Afloat.

Running out of options to keep his country afloat, Greek Prime Minister Alexis Tsipras ordered local governments to move their funds to the central bank.

Central government entities are obliged to deposit their cash reserves and transfer their term deposit funds to their accounts at the Bank of Greece,” according to the decree issued Monday on a government website. The “regulation is submitted due to extremely urgent and unforeseen needs.

Credit-default swaps suggested about an 81 percent chance of Greece being unable to repay its debt in five years, compared with about 67 percent at the start of March, according to CMA data.

The move is a sign of the “dire liquidity situation for the Greek financial system as the government pools all liquidity available,” said Gianluca Ziglio, executive director of fixed-income research at Sunrise Brokers LLP in London. The “next step may be forcing all public-sector entities, including public-sector companies to do the same,” he said.

Greek officials, including Deputy Prime Minister Yannis Dragasakis, remained defiant over the weekend, saying the government won’t betray its electoral promises and worsen the pain that came from previous austerity measures.

Unforeseen?

Somehow Tsipras labeled this event as “unforeseen” even though it was blatantly obvious the moment the Troika refused to relax terms on Greece back in January.

Stealing money from cities like Athens to pay state workers will ensure city workers don’t get paid. Precisely what good will that do but prolong the shell game?

Two Year Bond Yield Tops 28%

The bond market is getting increasingly jittery over the current state of affairs as yield on two-year Greek bonds is now over 28%.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot 

Related posts

Carl Icahn Increases His Stake In Take-Two Interactive To 10.68%

ValueWalk

iPad Mini Display Outperformed By Kindle Fire HD & Nexus 7

ValueWalk

Foxconn Might Open Manufacturing Plants In The U.S. [REPORT]

ValueWalk

Peter Cundill Protégé Tim McElvaine on Investing in Japan [VIDEO]

ValueWalk

Set Bing Home Page Image As Lock Screen In Windows 8

ValueWalk

Morning Market News: JCP, APO, MCHP, ZIP, ENR, LGF, EA, ATVI, COV, LNT

ValueWalk