Greek Bank Stocks Crashing 20% Today

Any thought of pragmatism from the newly elected Greek government is quickly being thrown out the window. But, when you elect Marxists, this I guess is what you get. Greek capital markets are under major stress again today as they are losing faith that the negotiated process from here on with debts and budgets will go smoothly. The Athens stock market is down by another 8% and lower by 14% in just 3 days. Greek banks are down by 17-20% today alone. The 3 yr note yield is higher by 295 bps to 16.98% vs 10.1% as of Friday’s close. Greek 5 yr CDS is wider by 40 bps and has risen by 400 bps over the past three days.

Alexis Tsipras held his first cabinet meeting today and pledged four priorities: 1)a return to dignity for the Greek people, 2)help the economy, 3)renegotiate Greek debt, 4)Get rid of corruption in government. He also wants to bring back a higher minimum wage just when the Greek economy needs to get more competitive. He wants to hire more government workers just as they have too many and he wants to freeze plans for privatizations just as the private sector is most needed. With respect to what everyone is most focused on, debt renegotiations, Tsipras today said “we do not want an extreme catastrophic clash…we do not want to go to mutually assured destruction but we won’t continue being subservient.”