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Preston Clive in Preston Clive - THE IRRITATED AMERICAN, Wielding The Digital Hatchet,

. . . and the Greece-y, Slippery Slope Keeps Tripping

Graph of January Greek Deposits, brick and mortar style. (IMAGE: newsfeed.time.com)

Good lord, man. Talk about difficult times. The Bank of Greece has just released (NYSE: NBG) its much-anticipated January deposit data, and the numbers are pretty brain-bending. I mean like completely and totally, head-numbingly awful. 

The bank withstood a record €12.2 Billion outflow of nervous depositors seeking havens elsewhere. This is pretty much the biggest capital outflow the country has endured ever, regardless of period or specific crisis under discussion. The sum total of all Greek deposits from both the corporate and private sector has plunged like a bird picked off in mid-flight, down to €148 Bil, which is down a staggering 7.7% over the previous month, and a full 10% since November. 

Thus, as a result, the cash holdings in sum are at their lowest number since the year 2005 .  .  .  the lowest in just nigh on ten years. What is most frightening to economists is the not-reflected-here obvious fact that the outflow has continued apace into February, with expectation/estimates running in the ballpark of approximately €10 Billion more. Sheesh.

There are those who will argue that capital controls are badly needed and long overdue (as I reported this week there are many angry souls like Stathis Kouvelakis in Syriza who insist they should have been put into place when the run began); this may be true, but at this point in time .  .  .  today 2/26/2015 and forward, the situation is so cyclically self-reinforcing that hanging on to remnant deposits through draconian enforcement is no remedy to the much larger disaster.

While this dismal news is being reported by the national bank, a fever is overtaking the German press and it has taken over social media like a gas-doused kitchen fire. The leading German newspaper, Bild, ran a headline today--as the bill to approve the latest Greek bailout request floats through German Bundestag--which proclaims (translation) "NEIN: NO MORE BILLIONS FOR GREEDY GREEKS!" with a suggestion to those who agree with the sentiment to post selfies of themselves holding up the NEIN headline.

The idea has caught on like wildfire with Germans who have begun posting images of themselves wryly posing with annoyed looks on their faces. Some examples:

Wouldn't it be rich for all the humiliation that the Syriza newbie cabinet just went through via the eating of a massive crow sandwich in Brussels where all of their party platform bullet points got trashed by their Eurozone creditors, if they wound up getting rejected by the German government and not getting bailout funding anyhow? 

Preston Clive

2/26/2015***