As all of China watches in horror at the country’s stock market plunges day after day there’s only one idea keeping people invested.
They believe the government will ultimately rescue the market when the time comes.
“China has been through the planned economy model for decades. This is especially ingrained in the generation of my parents, who make up the bulk of individual investors,” South China Morning Post managing editor George Chen wrote this week.
“Just as everything once belonged to the government, many of these people believe the stock market should also belong to the government. So it’s the job of the government – in other words, the Communist Party – to rescue the market.”
With just hours to go before Greece officially forfeits on its debt payment interest of 1.5 billion Euro ($2 billion), it may be of interest to explore how all of this came to be. We have seen the European Central Bank using emergency bank funding instruments and even imposed Capital Controls ‘in extremis’ in the past with both Ireland and especially during the banking crisis in Cyprus. What is happening in Greece goes way beyond those examples of ECB ‘strongarming’ EU member nation states into doing its bidding.
Both Cyprus and Ireland folded in the face of ECB and IMF pressure. Greece has not. At midnight on 1st. July Greece will be in default on its debts and that reality is now a foregone conclusion. The sideshow of a referendum next weekend is just political theatre. It comes down to a yes-no vote that will determine whether Greece stays in Europe.The 3 billion Euros ‘Emergency fund’ will remain firmly in the ECB pocket as it plays hard ball with the Greeks.
A YES vote will mean that Austerity and a ‘sea change’ in Greek social funding will be attempted once more, abet with much stricter guidelines and program targets. A NO vote will mean that Greece and European Community will part company and the Greek Drachma will be reintroduced.
How this will happen nobody knows as there are no rules written that allows for a member state to exit the Euro. Be advised however that NO will be the answer from the Greek people.
As Greek financial resources are emptied both sides in the Greek financial standoff remain far apart on a strategy to resolve Greece’s fiscal woes. There have been only a minimal flow of resources into the country in the shape of the European Central Bank’s emergency liquidity assistance, which Greece’s tottering banks rely on for survival. The Greek Civil Service risks running out of money to pay State Employees as the June deadline for the latest Greek debt repayments approaches.
China is holding a naval exercise in the Mediterranean for the first time. The operation is being held in conjunction with Russia and is appropriately named Joint Sea 2015.
Although the exercise is framed as a way for China and Russia to increase bilateral military cooperation — the two countries had previously conducted a naval exercise in the Pacific together in 2012 — China’s presence in the Mediterranean could mark the beginning of more assertive Chinese policy outside of Asia.
Question: Is there a linkage between the US Navy , Saudi / Egyptian blockade on the Yemen coast and the Irian Revolutionary Guards initiated seizure of US owned freighter in the Straits of Harmuz at the entrance to the Persian Gulf ?
- Given the fast failing talks between the West/ Russia and Iran over the Iranian bid to acquire nuclear weapons, currently held up to ridicule by the US Congress,
- the tactical failures of Iranian backed Hezbollah troops in Syria,
- the tied down and neutralised Iranian Revolutionary Guards support networks in Yemen,
- the Iranian naval squadron ‘seen off’ in the Straits of Bab el Mandeb in the Southern Red Sea by the Egyptian navy,
- and the blockading of the large Iranian freighter convoy attempting to supply its al-Houthi / Salah surrogate forces in Yemen, by Saudi and US naval forces
The Iranian Revolutionary Guards may have felt that it was their turn to have a victory, even if it of the ‘Pyrrhic type’. Is this behind the seizure of the US owned freighter MV Maersk Tigris by Iranian forces in the Straits of Hormuz?