Thursday, November 3, 2011

Poker With Pappy

Ya can't "double or nothing" with no money, Georgios!
Twenty-four hours later and Prime Minister George Papandreou of Greece is starting to look like a very shrewd - albeit high stakes - politicopoker player.  After a) driving the EU to the brink so that they (almost) came up with a (sort of) credible rescue (as yet unfunded) plan, and then b) surprising everyone - including his EU benefactors and his own finance minister - by announcing that a referendum would be held to see if the Greek-on-the-street would "accept" the terms of the now famous 3am EU plan, he was unceremoniously subpoenaed to a pre-G-20 meeting yesterday where he received a tongue-lashing from that old tag-team of Merkel and Sarkozy.  Unrepentant, Pappy didn't back down on his referendum plan, except to move it up to December 4th (ostensibly as a condescension to Merkozy, but also because he knows he'll be out of bailout bucks by then).  Et voila!  By snubbing the EU northern know-it-alls twice in one week, he is now a hero instead of a bum to the beleaguered Greek public, including importantly a few opposition members in parliament, and will probably win a make-or-break non-confidence vote on Friday as a result, thus retaining power.  As for that referendum?  A 3/5ths majority of parliament is required to hold it, and I don't think G-Pap will get it.  In fact, I think he secretly knows it is out of reach.  Thus, with no referendum (through no fault of his own, you understand), Greece will end up having to accept the EU bailout money and terms (decades of severe austerity) but the PM gets to stay PM and comes out smelling like an Athenian rose (or shot of Ouzo) to his people.  All of which incidentally fits nicely into the EU schedule - not only because Greece will be out of euros about then, but because, according to The Economist: "Europe's bailout capacities may fall apart in a matter of weeks".  And if Pappy loses?  Watch out below.  Never have the stakes been higher for all of us.

The Good News:  VIX rules, er, VXX rules!