On the heels of the news out of Europe that the EU and Greece had reached a deal, today a legend in the business warned King World News that the so-called Greek deal has absolutely no substance to it and the crisis could turn into a catastrophic “financial Ebola.”
Eric King: “After the news of this so-called deal with Greece was announced, I thought of one guy on the planet I could call to find out what this really means and that’s you, Art. You’ve been doing this for over half a century, you are a legend in the business and honestly, I don’t know who else I would call to get some clarity on this unless I went straight to the Greek Prime Minister himself. What is your take on this announcement?”
Art Cashin: “It looks to me like all they (Greece) have bought here is time. The Greeks asked for six months and they (the EU) gave them four months. They (the EU) told Greece that if they lived up to certain conditions, the payments that were already due would be made.
So as Gertrude Stein once said about some place, ‘There is no there there.’ Well, there is no there there with this package either. It is a simple attempt to delay and buy more time for further discussions to see if they can reach a compromise.”
Crises And A Run On The Banks
Eric King: “You have warned for some time now that Europe just keeps kicking the can down the road and as I listen to your take on this Greek situation, what you really just said to me is: ‘Eric, they just kicked the can down the road.’”
Cashin: “That’s absolutely correct. I think it came (this so-called deal) because they realized that money was beginning to hemorrhage out of the Greek banks, and the way all these things come to crises, one of the invariable signs, is a run on a bank. We saw it in Cyprus. We saw it the last time around in Greece. And if that had started, they knew things would have gotten out of control. So they compromised and bought a little more time. There is absolutely no substance to this deal (that was just announced).”
Don't Leave The Theater Yet – This Play Is Not Over
Eric King: “Art, this Greek crisis looks like a train wreck because Greece can’t pay back its massive debts. Everybody knows that, so how does this end?”
Cashin: “What they will do is continue to negotiate. The difficulty is if the newly elected government begins to lose the support of the Greek people. They will then become more hardened in terms of what they demand in their bargaining and this will make a compromise less and less likely. So don’t leave the theater because this play is not over.”
Contagion And Catastrophic Financial Ebola
Eric King: “Will this end in disaster?”
Cashin: “It always can. This can turn into a financial Ebola. We learned from Lehman and other things that people don’t fully understand the fact that we live in a world of geopolitics and linking from continent to continent — contagion can break out anywhere and you never know how far it goes.”
***ALSO JUST RELEASED: Europe Moving Away From U.S. After Ukraine Fiasco CLICK HERE.
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