Begone, Rebels

As we noted last week, a surprisingly large number of Syriza MPs voted against the bailout package, thereby defying their own government. The rebel faction was led by Marxist hardliner and energy minister Panagiotis Lafazanis, who has always been on record for being in favor of a “Grexit”.

After the vote, Lafazanis told journalists that he “was against the plan”, but “supported the government”. This didn’t save him however – Tsirpas reshuffled his cabinet, removing Lafazanis and two deputy ministers, replacing them with more loyal allies.

 

1000Grexit supporter Panagiotis Lafazanis got “exited” himself.

Photo credit: Thanassis Stavrakis / AP

 

As Reuters reports:

 

“Greek Prime Minister Alexis Tsipras sacked left-wing Energy Minister Panagiotis Lafazanis and two deputy ministers on Friday as he reshuffled his cabinet following a party revolt against a tough new bailout deal adopted this week.

The 40 year-old prime minister moved to clear out the rebels after 39 Syriza hardline lawmakers refused to back the government over the measures, which were demanded by European partners as a pre-condition for beginning talks over a new bailout.

The main economic ministries remain unchanged, with Euclid Tsakalotos remaining in place at the finance ministry and George Stathakis staying at the economy ministry.

But Labor Minister Panos Skourletis, one of Tsipras’ closest allies, will replace Lafazanis in the key energy portfolio, where he will be responsible for sensitive privatization dossiers. Administrative Reforms Minister George Katrougalos will take over at the labor ministry.

The reshuffle had been expected ever since the party rebellion left Tsipras dependent on the votes of pro-European opposition parties to pass the bailout deal but it is not likely to change the uncertain overall outlook for the government.

Alongside Lafazanis, leader of Syriza’s Left Platform, a faction that was bitterly opposed to the bailout, Deputy Labor Minister Dimtris Stratoulis and Deputy Defense Minister Costas Isychos also lost their jobs.

Stratoulis was replaced by Pavlos Chaikalis, a former comic actor from Syriza’s right-wing coalition partners, the Independent Greeks, in a slightly reworked portfolio.

Former Deputy Finance Minister Nadia Valavani, another bailout opponent who resigned earlier this week before the vote, was replaced by Tryfon Alexiadis, a leading member of Greece’s tax experts’ union.

Christoforos Vernardakis, an academic, will become deputy defense minister, while Syriza lawmaker Olga Gerovasili was named government spokeswoman.

 

Given that 39 of Syriza’s 149 MPs voted against the deal, early elections are widely held to be likely. After all, it must be expected that the rebel faction will continue to defy Tsipras, who seems intent on implementing the deal. This should in principle be no problem, as he can probably continue to rely on opposition support.

 

500px-Anticommunist_Logo.svgIt could also be that the rebellion simmers down again. After all, MP is a fairly cushy job in economically challenged Greece. Once people get a taste of political power and the perks that usually come with it, they often become conveniently forgetful about their principles.

 

However, we do at the moment believe that an early election – probably after all the most urgent reforms have been set into motion – is the most likely outcome. This will be quite interesting, as support for Syriza has actually soared in spite of the government deciding to ignore the referendum outcome. Whether that support will persist at recent levels is however an open question. Moreover, it cannot be ruled out that Syriza will actually split in two, with the hard left faction led by Lafazanis forming its own party.

 

Greece’s new ministers are sworn in

 

The Greek Stock Market Recovers – Sort Of

The stock market in Athens seems to like the fact that Grexit was avoided for the time being, but its celebration is so far oddly subdued. We believe the main reason for this is the growing danger of a “bail-in” of shareholders and creditors of Greek banks, which are widely no longer considered solvent after the events of recent months.

Views on this particular topic are actually divided, but at least one of the larger banks is reportedly in serious trouble. In any case, non-performing loans in the Greek banking system have recently streaked to a new record high, in parallel with the run on deposits. So the banks are certainly not healthy, in spite of having been recapitalized at great cost late last year and remaining in the ECB’s good graces for now.

 

ATGThe Athens General Index bounces back – but the bounce seems a bit subdued so far, although it was actually a large move in percentage terms, via BigCharts, click to enlarge.

 

This makes a bit more tricky to play Greece via ETFs or similar index-tracker vehicles, all of which are certain to contain bank stocks as well. To be safe, one should probably wait for the upcoming verdict on the banking system situation, which is bound to become known soon.

 

Conclusion

We seem to have come full circle. Readers may recall that we once speculated that the differences between the euro-group and the Syriza government may just be an example of Kabuki theater (see “Greece and the EU – Nothing but Political Theater?”. We later dismissed the idea again, as it appeared that the two sides were serious in their intransigence. Now we’re not so sure anymore.

One thing has become clear though: Tsipras did not secretly sympathize with the Marxist wing after all. For some time we were unsure where he actually stood on the leftist spectrum (which is a broad one in Syriza’s case), as he never really declared himself in this respect, at least not to our knowledge. Now it seems likely that he is closer to the center than the far left. Whether he and Syriza will survive the new course politically remains to be seen, but for the moment the party still enjoys a surprising amount of electoral support, if recent polls can be believed.

 

 

 

Emigrate While You Can... Learn More

 


 

 
 

Dear Readers!

You may have noticed that our so-called “semiannual” funding drive, which started sometime in the summer if memory serves, has seamlessly segued into the winter. In fact, the year is almost over! We assure you this is not merely evidence of our chutzpa; rather, it is indicative of the fact that ad income still needs to be supplemented in order to support upkeep of the site. Naturally, the traditional benefits that can be spontaneously triggered by donations to this site remain operative regardless of the season - ranging from a boost to general well-being/happiness (inter alia featuring improved sleep & appetite), children including you in their songs, up to the likely allotment of privileges in the afterlife, etc., etc., but the Christmas season is probably an especially propitious time to cross our palms with silver. A special thank you to all readers who have already chipped in, your generosity is greatly appreciated. Regardless of that, we are honored by everybody's readership and hope we have managed to add a little value to your life.

   

Bitcoin address: 12vB2LeWQNjWh59tyfWw23ySqJ9kTfJifA

   
 

Your comment:

You must be logged in to post a comment.

Most read in the last 20 days:

  • The Gold Debate – Where Do Things Stand in the Gold Market?
      A Recurring Pattern When the gold price recently spiked up to approach the resistance area even Aunt Hilda, Freddy the town drunk, and his blind dog know about by now, a recurring pattern played out. The move toward resistance fanned excitement among gold bugs (which was conspicuously lacking previously). This proved immediately self-defeating - prices pulled back right away, as they have done almost every time when the slightest bit of enthusiasm emerged in the sector in recent...
  • Monetary U-Turn: When Will the Fed Start Easing Again? Incrementum Advisory Board Meeting Q1 2019
      Special Guest Trey Reik and Board Member Jim Rickards Discuss Fed Policy On occasion of its Q1 meeting in late January, the Incrementum Advisory Board was joined by special guest Trey Reik, the lead portfolio manager of the Sprott Institutional Gold & Precious Metal Strategy at Sprott USA since 2015 [ed note: as always, a PDF of the complete transcript can be downloaded further below].   Trey Reik of Sprott USA.   Also at the meeting, Jim Rickards, who is inter...
  • Watch Europe - Free Pass for the Elliott Wave European Financial Forecast
      Europe at an Important Juncture European economic fundamentals have deteriorated rather noticeably over the past year - essentially ever since the German DAX Index topped out in January 2018. Now, European stock markets have reached an important juncture from a technical perspective. Consider the charts of the Euro-Stoxx 50 Index and the DAX shown below:   The Euro-Stoxx 50 Index already peaked in early November 2017, the DAX followed suit in January 2018 – such divergent peaks...
  • Why Warren Buffett Should Buy Gold
      Riding the Tailwinds of Fiat Money Inflation to Fame and Fortune Warren Buffett bought his first shares of stock when he was 11 years old.  He saved up $114.75 and “went all in,” purchasing three shares of Cities Service preferred stock.  The day was March 11, 1942 – nearly 77 years ago.  Buffett recently reminisced about this purchase in his annual letter to shareholders:   “I had become a capitalist, and it felt good.”   The Oracle of Omaha – he was...
  • Fake Money’s Face Value Deceit
      Not the Brightest Tool in the Shed Shane Anthony Mele stumbled off the straight and narrow path many years ago.  One bad decision here.  Another there.  And he was neck deep in the smelly stuff. These missteps compounded over the years and also magnified his natural shortcomings.  Namely, that he’s a thief and – to be polite – a moron.   Over-educated he ain't: Shane Anthony Mele, whose expressive mug was captured by a Florida police photographer first in...
  • Rise of the Zombies - Precious Metals Supply and Demand
      Rise of the Zombies - Precious Metals Supply and Demand Last week, the prices of gold and silver fell $35 and ¢70, respectively. But what does that mean (other than woe unto anyone who owned silver futures with leverage)? The S&P 500 index and the euro was up a bit, though the yuan was flat and copper was down. Most notably, the spread between Treasury and junk yields fell. If the central banks can lower the risk of default premium, they can make everything unicorns and...
  • Bitcoin Bottom Building
      Defending 3,800 and a Swing Trade Play For one week, bulls have been defending the 3,800 USD value area with success. But on March 4th they had to give way to the constant pressure. Prices fell quickly to the 3,700 USD level. These extended times of range bound trading are typical for Bitcoin Bottom Building in sideways ranges. This 60 minute chart of Bitcoin shows (represented by the yellow candlestick wicks) how the bulls defended 3,800 USD :   BTCUSDT 60 minute chart...
  • The Magic Doesn't Always Work - Precious Metals Supply and Demand
      The Week Ends with a Surprise The weekly closing prices of the precious metals were up +$5 and +¢11. But this does not tell the full story of the trading action. Prices were dropping until Friday. More precisely, Friday 8am in New York, or 1pm in London.   Gold and silver - back in demand on Friday... [PT]   At that moment, a light cabal conspiring to jack the price struck traders began buying. The end result was the prices, especially of silver, rose on the day...
  • Intraweek Profit Opportunities
      In 6 of 10 Countries a Single Day Outperforms the Entire Week! In the Seasonal Insights issue of 13 February 2019 I presented a study illustrating the power of intraweek effects. The article was entitled “S&P 500 Index: A Single Day Beats the Entire Week!” The result of the study: if one had been invested exclusively during a single day of the week since 2000  – namely on Tuesday – one would have outperformed a buy and hold strategy, beating the broad market. Moreover,...

Support Acting Man

Item Guides

Austrian Theory and Investment

j9TJzzN

The Review Insider

Archive

Dog Blow

350x200

THE GOLD CARTEL: Government Intervention on Gold, the Mega Bubble in Paper and What This Means for Your Future

Realtime Charts

 

Gold in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Gold in EUR:

[Most Recent Quotes from www.kitco.com]

 


 

Silver in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Platinum in USD:

[Most Recent Quotes from www.kitco.com]

 


 

USD - Index:

[Most Recent USD from www.kitco.com]

 

Mish Talk

 
Buy Silver Now!
 
Buy Gold Now!