Greece Looks Screwed; China Looks In Trouble Too

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From the Financial Times:

Hundreds of Chinese companies have halted trading in their shares as Beijing races to insulate the economy from the country’s steepest equity decline in over two decades. The list of suspended companies has reached 760 over the past week, representing more than a quarter of all companies listed on the Shanghai and Shenzhen exchanges, according to the Securities Times, a paper published by the Shenzhen Stock Exchange.

….Beijing has taken steps to keep stocks on China’s two main indices afloat, including direct purchases of large-cap companies, a halt to initial public offerings, and a cut to trading fees. But so far its efforts have failed to staunch concerns. “There is a panic but no matter how they [the authorities] jump in, this thing just doesn’t stop falling,” said Dong Tao, an economist at Credit Suisse.

So it looks like panicky moves from the authorities aren’t very effective at quelling panic in investors. I may have screwed up my Greece prediction, but at least I managed to get it right on this basic trait of human nature.

And speaking of Greece, what’s happening there? The Guardian reports:

The Greek government has been told by its eurozone partners not to expect debt relief any time soon, amid fading hopes of decisive action to stop the country tumbling out of the currency union.

….Greek banks are on the brink of running out of cash, but senior European figures are already dampening hopes of any breakthrough. “What we are going to do today is to talk to each other and restore order,” said the president of the European commission, Jean-Claude Juncker, adding that there would be no overnight solution.

In a coordinated press statement, the leaders of France and Germany called on Greece to come up with “serious and credible proposals” at Tuesday’s summit which are consistent with its wish to stay in the eurozone….“We are not in the business of renegotiating debt,” said Finland’s finance minister, Alexander Stubb. “That was already done in 2011 and 2012,” referring to re-structuring of Greek debts that imposed heavy losses on private creditors.

Basically, the rest of the eurozone is telling Greece to pound sand. No debt relief, no bank rescue, nothing. They will listen to a new Greek proposal, but that’s it. And apparently Greece doesn’t have one. Today’s meeting has been postponed to Wednesday to give the Greeks more time to throw something together.

And anyway, it looks like everyone is starting to give up on Greece. The FT suggests that EU lawyers are quietly looking for ways to allow Greece to exit the euro, an effort supported in private by nearly everyone. Publicly, however, no one wants to take the blame for precipitating Grexit. “Everybody knows what the others should do, and do not want to do what the others expect them to do,” said one senior eurozone official.

That could be the eurozone’s official motto for the next few weeks. Stay tuned.

SIX TRUTHS

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Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

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Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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