The Greek Tragedy -- May 17, 2015

Updates

June 5, 2015: So, the first payment was due, 300 million Euros today. So, the question is, did Greece make the payment. Nope, they negotiated to kick all of June's payments to the end of the month, June 30. 

May 25, 2015: the scorecard -- amount of money Greece needs to pay the IMF in June (it's questionable whether they have enough money to meet the first installment), in Euros, rounded:

• June 5: 300 million
• June 12: 300 million
• June 16: 550 million
• June 19: 300 million
• June 19: 100 million

I'm not sure why two separate payments to the same creditor (IMF) for the same date were posted. For me, the amounts don't matter; I don't know what "300 million euros means" to Greece. The dates are the important data points.

I assume we will see a story on June 6 that Greece is "technically" in default but "discussions continue. Negotiators see a way toward a solution." Most likely, the IMF will re-negotiate these payments, set a new date, and loan Greece the money they need to make the current payments.

Original Post

 
The "original" drop dead date was April 9, 2015.

Then it was April 24, 2015.

Then April 30, 2015. 

Then sometime in May.

Now, tonight, BloombergBusiness is reporting that the drop dead date now extends to June 30, 2015.

Banks have enough collateral to stretch that lifeline to about 95 billion euros under the terms currently allowed by the ECB, a person familiar with the matter said. With the central bank raising the ELA by about 2 billion euros every week, that could take banks to the end of June.

A crunch will come if the ECB increases the haircut on Greek collateral to levels not seen since last year. That could be prompted by anything from a complete breakdown in talks to a missed debt payment, the official said. A continuation of the current impasse could even be all that’s needed, the official said.

An increased haircut would reduce the ELA limit to about 88 billion euros, the person said. While that gives banks about four weeks before hitting the buffers, the leeway is so limited that Greece might need to impose capital controls, limiting transactions such as ATM withdrawals, to conserve the cushion.

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Not Exactly Headline News

In January, 2015, Saudi crude oil imports into the US hit the lowest rate since 1988 (Ronald Reagan was president). Most recent data can be found at EIA. Tonight Financial Times is reporting that Saudi Arabia is turning to China to make up for loss of imports into the US. This hardly seems like headline news.

Saudi Arabia’s oil exports to the US have fallen to the lowest level since the financial crisis, showing the impact of the shale boom and fast-growing imports from Canada.

The US has bought an average of less than 1m barrels a day of Saudi crude over the past year, weekly and monthly US government data show.

The only similar experience in recent memory was during the 1980s, when the kingdom slashed its own oil production in a failed attempt to prop up the price.

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Notes To the Granddaughters

Book review in this weekend's "Review" section of the Wall Street Journal, The Millionaire and the Bard, Andrea Mays, c. 2015, 350 pages. The millionaire, over three decades a Standard Oil executive, amassed fully a third of the 240 surviving First Folios.

About 750 copies of “Mr. William Shakespeare’s Comedies, Histories & Tragedies” were printed in 1623 in London, of which some 240 survive today. The book contained 36 plays.

200-plus years later: Enter Henry Clay Folger Jr., born in 1857 in Brooklyn, and related to Benjamin Franklin (and to the founder of the Folger Coffee Co.). Folger’s family was not wealthy, but he matriculated at Amherst and received a law degree from Columbia in 1881.

Folger would become an expert on the oil industry, to the great benefit of Standard Oil, where he worked most of his adult life. In 1923, he became the chairman of the board of Standard Oil of New York, a post he held until he retired in 1928. Folger had three passions: Shakespeare (especially First Folios), oil and golf.

Folger was not a robber baron. He was fair, honest, principled and modest, in business and in his private life. But when it came to Shakespeariana, he was relentless in pursuit and willing to spend whatever it took to get what he wanted.

Folger purchased his first First Folio in the 1890s. By the time he and Emily were finished, three decades later, they had acquired 82 First Folios—about one-third of those in existence—and 256,000 books, “60,000 manuscripts, 200 oil paintings, 50,000 watercolors, prints, and photographs; dozens of sculptures, half a million playbills; plus theater programs, musical instruments, costumes, and more.” His most expensive First Folio was bought in 1928 for $68,750. He didn’t always get everything he desired, but he came close (it took him four years to secure the Sibthorp First Folio).

Meanwhile, probably not coincidentally, The Dallas Morning News had a similar story, page 6E, highlighting how Dallas connects with this book. It turns out that the Dallas Public Library also has a copy of the First Folio. The Dallas Shakespeare Club bought a copy for $275,000 in 1984 to mark the group's 100th anniversary.

The folio went on display in Dallas the same week in 1986 that Ross Perot donated another folio to the University of Texas at Austin, which now owns three.