Lack Of Cash Flows Ends Greek Export "Miracle"

While cash flows may be an anachronism in a time when the return of the dot com bubble means only future corporate prospects of growth matter, and the lower the actual profits or earnings the greater the upside stock potential due to ridiculous future PE multiples (flashing back to the year 2000), for some the lifeblood of success is still dependent on cash flow. Or the lack thereof. Such as Greece, where a brief episode known as the “Grecovery” driven by a recent export surge was put on indefinite hiatus where as Kathimerini says “exports run out of steam due to cash flow problems.” It explains: “The rise of Greek exports sadly proved short-lived, as the momentum observed in the last couple of years has all but vanished. Exporters estimate that 2013 will end with a rise of 3 to 4 percent. But that figure includes fuel products, and when they are taken out of the equation it turns into an annual drop of 2 to 3 percent.”

The loss of momentum is due to the cash flow problems Greek enterprises are facing, which are preventing them from reaching out to new customers. External factors also play a role: According to World Trade Organization estimates, the growth rate of global commerce will drop to 2.5 percent this year from an original forecast for 3.3 percent.


Even if we had large orders we would not have been able to fulfill them,” an exporter says. Acquiring raw materials from abroad remains difficult while the high energy costs are a major obstacle. The latest data from the monthly PMI index issued by Markit show that the inflow of new orders from abroad declined in November for a third consecutive month.

It’s always something. And better to have bled cash and exported than never to have exported at all, or whatever the saying is in a day when liquidity injections and made up trade data between China and Hong Kong mask the global trade flow contraction shown best by the following IMF chart “forecasting” future trade growth. Or the lack thereof.


via Zero Hedge Tyler Durden

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