World Economic Trend Analysis

Wednesday, 15 June 2011

Riots Images from Greece; Prime Minister to Reshuffle Greek Cabinet, Seek Vote of Confidence on New Government; Papandreou's Days Numbered

Amid violence and riots in Greece, it is increasingly clear Greek Prime Minister George Papandreou's days are numbered. Talk of containment is nonsensical.

Max Keiser is in Greece with excellent footage of Greek Rioting in Syntagma Square.

According to our hotel managers (all wearing gas masks) the government is jamming communications in the Square so we had to come to a friend�s apartment 10 minutes away to upload.

See link for more images.

Papandreou to Reshuffle the Deck

When all else fails, leaders inevitably propose reshuffling the deck. In this case it did not take long. After coalition talks with the opposition failed, Yahoo Finance reported Greek prime minister to reshuffle Cabinet

Greece's prime minister, struggling to ensure Parliamentary approval for a crucial austerity bill, said Wednesday he would reshuffle his Cabinet and seek a vote of confidence for his new government this week.

Papandreou's announcement came after hours of negotiations on a day when central Athens was rocked once more by anti-austerity riots and the debt-ridden country came under massive pressure from markets.

"Tomorrow I will form a new government and immediately afterwards I will ask for a vote of confidence from Parliament," the prime minister said, adding that "The country is facing critical times."

Wednesday's talks "reached the point that there should be a government of national unity and that Mr. Papandreou should not remain prime minister, because he symbolizes the failure of the last 18 months," senior conservative party official Panos Panagiotopoulos said on Mega TV.

Reshuffling Deck Cannot Possibly Help

I have seen the deck and reshuffling cannot possibly help.

26 cards say "Papandreou is Out". Another 26 cards say "Greece will Default". Two Jokers picture ECB president Jean-Claude Trichet as the court jester. The caption on those cards says "Stubborn Fool".

Irony of the Day

The irony of the day comes from ECB Vice President Vitor Constancio who said �Some sort of Vienna style initiative could be conceived. It�s not for us to provide solutions.�

Indeed, it is not for the ECB to provide solutions. Yet, that is exactly what the ECB tried to do when Trichet foolishly stuffed the ECB balance sheet with Greek and Irish debt.

Time's Up

The market has decided that time is up. The ECB's only choice in the matter now (assuming there is a choice at all), is whether a Greek default will be orderly or disorderly.

The longer Trichet plays the fool, the more disorderly the final result.

Greek Recap