Mish's Global Economic Trend Analysis

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Mr. "Lie When It's Serious" Juncker, Lectures Greece On the Truth; Coordinated Meddling Posted: 29 Jun 2015 07:28 PM PDT Irony of the Day In a bitter 40 minute lecture, European Commission president, Jean-Claude Juncker, lectures Greece on the "truth". Other than being a pompous buffoon, Jean-Claude Juncker is most famous for his statement "When it becomes serious, you have to lie". I believe it's safe to say that things are serious. Coordinated Meddling Please consider Eurozone Leaders Take Coordinated Gamble with Response to Athens By publicly insisting that Greece's referendum on Sunday is a choice about the country's future in the eurozone, Europe's leaders are taking a high-risk political gamble that their intervention will win over Greek voters rather than alienate them. The strategy was carefully chosen. According to two eurozone officials, the EU's three most high-profile leaders — Angela Merkel, the German chancellor; François Hollande, the French president; and Jean-Claude Juncker, the European Commission president — co-ordinated how they would respond to the Greek government's call for a No vote during a series of phone calls at the weekend. Greek voters have come to resent the EU's interference in their domestic politics. Eurozone leaders were complicit in the ousting of George Papandreou as prime minister in 2011 and they actively campaigned against the far-left Syriza party in parliamentary elections back in 2012. But eurozone leaders believed they could not let the Greek government's campaign for a No go unanswered, officials said. "What do the Greek people know about all this? The reason why I am addressing . . . the Greek people is they have to know the truth," Mr Juncker said in an occasionally bitter 40-minute address. "I think that the Greek government knows all these elements and it would be advisable to tell the truth to the Greek people instead of simplifying its own message to a 'No'." It is a strategy that could still go awry. Mr Juncker's bill of particulars included some evasions. His argument that creditors were not proposing pension cuts, for instance, is true only according to the narrowest possible definition of a pension cut. Greek officials also argue his claim there was never an "ultimatum" is a rewriting of recent history. Several eurozone officials at the time described the offer made to Athens on Thursday in such terms. Believable Juncker The only significant statement Juncker ever made that I accept as factual is his own admission that he is a liar. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Triumph of Democracy; Reader Reflections on Greece; Absurd Reactions Posted: 29 Jun 2015 07:51 AM PDT Reader Reflections on Greece Reader "AC" pinged me this AM with her accurate assessment of events in Greece. "AC" writes ... I find strange that no Euro leaders realized that even if Tsipras accepted the deal, his parliament would with almost certainty have rejected it. European political leaders have lost the sense of democracy and of the power of Parliaments. We may agree or not with Tsipras ideas and economic or social program, but one thing I think we can all agree on is that he has already made history. Tsipras restored democracy with his decision to leave such a crucial decision to his people by referendum, showing everybody that in democracy, people must decide their own fate. Triumph of Democracy Reader "AC" is surely correct. I have mentioned on many occasions that the policies of Tsipras are terrible. I cannot support them even as I support his decision to tell the Troika to go to hell. Many will blame Tsipras. In actuality, it was Troika policies that all but assured the rise of the so-called "radical left" Syriza party. Recall that Greece technocrat Prime Minister Lucas Papademos was handpicked by the Troika to replace George Papandreou simply because the latter proposed a voter referendum on the Greek bailouts. Instead of imposed technocrats bowing down to kiss the ECB's ass, or early elections that the Troika hoped to see, Tsipras was willing to let the people decide. One may or may not like the result, but this was a triumph of democracy over technocrats and nannycrat puppets. Absurd Reactions I was up early this AM and watched the futures. At one point the S&P was down over 40 points. Markets were (and still are) down everywhere, across the board, although the S&P has taken back about half the overnight low. How could anyone have expected anything but what happened? Even those who failed to see this coming in advance should have realized late last week, this was finally inevitable. The market is acting as if this was a big surprise. There is certainly no surprise in this corner. The big shock will come when Spain marches down the same path. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

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