Deep in the Greek hall of mirrors

We are past the point of farce on Greece, but the story line just keeps getting weirder.

Stocks rose midday as Greece has thrown a last minute request to negotiate a new bailout, or at least an extension of the current terms, and then dropped back when it appeared there was no deal.

But there will be another meeting on Wednesday!

Creditors—who have said they will not change the terms of the prior offer—are forced to take this seriously because they are afraid of a NO vote on Sunday's referendum. They are afraid Tsipras will use the NO to reopen negotiations, which they have said they will not do.

But the creditors also do not want to be blamed for pushing Greece toward an exit by refusing to negotiate.

So the speculation is the creditors WILL negotiate, and are poised to offer new, more liberal, terms.

The hope is that these concessions will enable Tsipras to switch sides and support a YES vote on the referendum, or, even better, cancel the referendum altogether.

Why would Tsipras switch sides? Because Tsipras knows the creditors despise him. He knows that continuing to campaign for a NO vote is what some (not all) of the creditors want, because that is how they will get him out of office, assuming the vote is YES.

So the entire game hinges on whether Tsipras believes the vote will be YES or NO. If he believes it will be a YES even if he is a NO, and that will cost him his job, then he needs to switch.

But he needs a pretense. The concessions...if there is some meat on the bones...may be the pretense.

Bottom line? Tsipras is very much in charge of the pace of this game. We are very, very deep into the infinite Hall of Mirrors that is Game Theory.

  • Bob Pisani

    A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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