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And The Proverbial Moral Hazard Foot-Shooting Ensues: With Ink Not Dry On First Bail Out, Greece Already Demands Another €50 Billion
Here is what happens when you green light Moral Hazard - in less than two hours after the videoconference in which the EMU announced €30 billion in aid for Greece, a Greek senior official has already come up and said that they were only kidding about needing just €40 or so billion (with the IMF's 10). The full amount will actually be double that, or €80 billion, for the three year period. Look for Portugal, Spain, Ireland, Bulgaria, Hungary, Latvia, and Lithuania to come knocking in the next 45 minutes.
From Reuters:
It would be logical that the EU/IMF aid for Greece amounts to some 80 billion euros ($107 billion) over the next three years if the mechanism is triggered, a senior finance ministry official said on Sunday.
The senior offical said aid this year would amount to at least 30 billion euros from the euro zone and at least 10 billion from the IMF.
"40 billions for 2010 is part of a bigger amount for the three-year period. A logical amount for the three-year period would be double than 40 billion," the official told reporters.
The official added: "We will monitor the markets in the coming days and, depending on how the spreads move, we will decide whether to request the aid mechanism."
He reiterated that Greece still aimed at being able to raise money from markets.
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Hmmm...and this is the smallest of the PIIGS and already, get ready to pony up 80B euro (which really means 1.5x that given Greek proligacy). Precedent is set and now (next 3-6months) is when things will get interesting for the rest of the little piggys. How many more euro's will be needed??? 300, 400, 500, 1T euro's? Pucker up Germany, it's your chance to save the big spenders.
california is a true pig .. wait for this piggy to go to market ..
...wait for this piggy to go to market...
Hilarious!
mark to market the pork!
these just might be larger margin calls than pork bellies lol...
would not that be "schweine"
I would have thought you would have said, Bend over Germany, and let the ass raping of the taxpayers by the big spenders begin.
I would think if the Germans were being "bent over" that Greece would actually help the situation.
JTS
Maybe the Greek MinFin has some debts to their cocaine dealer they haven't told us about yet?
Here is "Infinite Fiat" in action at its finest, folks.
Rasputin
- Sun, Apr 11, 2010 - 07:53 AM
So, if one reads the doom-and-gloom deflationist Websites and blogs (and
even some mainstream media outlets as well), one is led to believe that
there has been some sort of major economic/financial/credit collapse.
However, the "facts on the ground" reveal a quite different
reality.
For, despite all the hysterical shreiking from the perma-gloomers,
BOTH total U.S. credit AND international reserve assets have INCREASED
throughout this entire so-called "Great Recession".
Hey, don't take my word for it. Please allow dapper Doug Noland to
slap you with the ugly truth. From his latest "Credit Bubble Bulletin"
comes the only two statistics you need to know:
1. "Fed Credit was up $220bn, or 10.6%, from a year ago.
Elsewhere, Fed Foreign Holdings of Treasury, Agency Debt this past week
(ended 4/7) increased $4.8bn to a record $3.025 TN. "Custody holdings"
have increased $69.2bn y-t-d, with a one-year rise of $403bn, or 15.4%."
...and:
2. "International reserve assets (excluding gold) as tallied by
Bloomberg's Alex Tanzi were up $1.162 TN y-o-y, or 17.4%, to a record
$7.855 TN."
(Ras Conclusion): Infinite Fiat, indeed. I hope at this point every
single stock bear, deflationist, U.S. fiatsco-hater, Treasury shorter
and all the other malcontended miscreants get the message being pounded
into their thick skulls by TPTB:
There has not been, nor will there be any collapse in credit,
derivatives, or fiat allowed.
Period.
Ignore this information at your own peril.
And please, please spare an aging and exhausted Rasputin the "But
any minute now, I swear...!" talk. I have been reading, listening to,
(and even screeching it myself), dire warnings for THIRTY FULL YEARS
NOW, beginning at about tnis time in 1980 when total U.S. sovereign debt
was a mere one trillion fiatscos, total debt five-trillion, and the
securitization and derivatives markets barely existed.
Now, Uncle Gorilla is at over twelve-trillion fiatscos of debt,
total U.S. debt is over fifty-trillion, and securitization and
derivatives are measured in the HUNDREDS OF TRILLIONS!
Yet, the U.S. fiatsco remains strong, interest rates are at
near-record lows and--as pointed out above in this now-too-lengthy
missive, system credit CONTINUES TO GROW.
So, thank you for your restraint in not screaming scroomage.
Because we all now it's a futile endeavor.
riiiiiiight
That's about my response to this character, who I remember used to dominate the Prudent Bear Chat board with the same rant throughout 2007 and 2008. While I can agree with the wry criticisms he occasionally levels at the PTB, particularly the Fed, I will never accept his surrender to the inevitability of infinite fiat screed. It did not work for the Roman Empire, the France of John Law or any number of other manipulating, coin cutting, paper printing regimes and it won't work this time around either.
If everyone always believed in the mysterious and inviolable powers of the high priests (of religion or finance), we would not have survived this long as a species.
Hetty,
Please define what the goals of the "Actor" were in each case you cited and how each of these goals were not met by their program of infinite fiat / capital theft.
I would put it to you that you do not know the goals, therefore you don't know if their program "worked."
...and yet the one credit number that matters is consumer credit , which after growing exponentially for 50 years is now shrinking.
The ponzi is built off THE CONSUMER.
The leverage employed by the "system" - Fed , fractional reserve banking - implodes in on itself without the sheep spending. The only reason that massive credit derivative market hasnt gone supernova yet is because Bernankes orders are to buy time , to slow the train wreck.
Theres no putting the genie back in the bottle. Push on a string all you like , the securitization and credit market output peaked in 2007 and is now in a process of shrinking into oblivion regardless how big the Feds balance sheet gets or what shell game tactics they employ with foreign CBs.
= Stagflation.
Rising commodity asset prices, falling consumer demand (ie: credit). It's the giant margin squeeze. The sovereign default dominoes guarantee the money printing that will trigger inflation though.
you are a fiesty little thing (based on pic). Unfortunately, you have look at ALLLLLLL credit not just the ones you like. Why is the fed/and assets rising? daaaaa. because everything else including consumer credit, velocity, etc are declining. What value is the fed holding its assets under? WE will never know. its a secret. They are probably worth 10% of the reported value (ie lehman's crap and everyone else's crap). I do agree with you that fiat money will not be allowed to fail. That would destroy the only thing that keeps this ponzi going; Confidence. Right now, the Euro will be the target of bond vigiliantes. The U.S. has a perfect time to load up as much debt as they can (probably the fed buys it all anyway). With the fed structure its like a black hole. If there is a problem, send the black hole over to suck it up into a secret world where nobody can go. That is very very very beautiful thing for a reserve currency.
Robot,
definitely possible things play out as you have seen over the past 30yrs but that's sorta of my whole premise that the past 30yrs have been an aberration and that reality (reversion to norm) will show it's head.
I can see your premise that fiat's can be printed forever and I agree they will be but to make it all hang together commodities (copper, timber, food, especially oil) will have to stay low in a time of heavy underemployment and big deficits (ie, OPEC will need to go against their short term profit for long term business w/out end) or else stagflation will destroy the "recovery". Not saying it can't happen but oil producers have never been a real homogeneous group.
What say you?
Robo yea and your full of it. You dont always get what you want, and the more you want it the harder it is to get. No matter what the gorilla wants, it will rain when it wants to. We can over mentalize, simple facts remain.
We are overunemployed. No product=no economy =currensea flow interruptus. Are we running on empty yet? Credit= gone with the wind
If i am mistaken say so.
You leave him alone! He posts great pics.
Go on Robo, reply..., please
That must be Brian Westbury's screen name...was wondering what he was up to since his we are not going into any type of recession call.
The problem is Ras has been crying wolf for thirty years and now that the wolf is at the door,no one will listen, including himself. We are deflationary and consumer credit is collapsing. Wait till the oil shortages start. China's YOY gasoline consumption for Jan was up a whopping 27% and with the collpase of Mexican and Venezuelan oil supplies, oil shortages are right behing the wolf...
Yep, everything will muddle along - until it doesn't.
I'm starting to believe this is what it looks like when (western) society collapses, as it has several times before in our history, always with, uh, messy consequences.
(Fed) Credit, smedit! Where's the CASH?
Just show me the MONEY!
Isn't this what everyone says just before they suffer the indignation that comes from a massive tax revolt?
What is owed, what will be repaid, and the purchasing power of the Fiat are all separate things.
Sheeesh. Grubbing fiat money bankster lovers...
Classic.
Is this not proof that they ARE doomed, and that time IS short?
DETROIT, Dec. 19 (UPI) -- Emergency, short-term federal financing will help General Motors Corp. finish its restructuring plan for long-term viability, the U.S. automaker said Friday.
President George Bush said he was authorizing about $13.4 billion in short-term financing for GM and Chrysler LLC so they can reorganize their operations to be more viable and competitive in the future. The plan also would make available another $4 billion in February if needed. If they cannot show improvements in a three-month window, the companies must repay the loans and possibly seek Chapter 11 bankruptcy protection.
Bush's action "helps to preserve many jobs, and supports the continued operation of GM and the many suppliers, dealers and small businesses across the country that depend on us," the company said in a statement posted on its Web site.
The loan would permit the company to complete its restructuring plan "for long-term, sustainable success," the statement said.
"We know we have much work in front of us to accomplish our plan," the statement said. "It is our intention to continue to be transparent as we execute our plan, and we will provide regular updates on our progress. We again thank the administration for this important support of our industry at this challenging time, and we look forward to proving what American ingenuity can achieve."
Anyone who had taken Accounting 101 and took 30 seconds to pull up GMs balance sheet when this deal was announced would have noticed that they had about 20 billion more in current liabilities than current assets, and so bankruptcy was assured. I was shocked at this lack of diligence, as I am continually amazed at what good financial reporting we get here in the USA. Just because they missed that GM thing doesn't mean they aren't on the ball now. I'm going all in on risky equities first thing tomorrow.
basically if you are a politician or a bnker you get all the money you need. If you are just a mere worker who cannot pay his debts you have all your assets taken off you.
Justice should be labelled Justus
rules only apply to us mere workers/slaves
We have to understand that other countries in Euro zone won't escape similar to Greek problems ( US, UK, Canada and so on will be in the same situation, earlier or later) and logic dictates that if you see imminent colapse you'll be better off to be one of the first. Will to patch up something which is not patchable will be so strong that they will agree for anything. That's western economy thinkers mantra "just delay inevitable and it suddenly turns into prosperity". So to me Greeks doing right thing, get as much as possible before other beggars show up on the scene. And I bet you in few years they will be first to emerge from that shit we created! Sorry not "we" they!
Behold the age of infinite moral hazard!
Beware of Greeks bearing Thank You Notes
And POOF. The EU sign away any chance the Euro had of surviving.
Once any euro shorts are covered , fade it in a big way. The single currency will not make it to 2015.
A view from Europe: Financing needs for Greece have been estimated
to be between 50 billions euros ( the amount the
Bundesbank experts were working on before the
European 'support agreements' started in February) and 150 billion
euros by Simon Johnson. The annoucement
was made Sunday afternoon for "the markets",
and is very unlikely to be finalized, as full details
are supposed to be disclosed next Friday during
the next European summit in Madrid, go figure
Well lets see, Greece has as near as I can discover a shade over 5.1 million members in its workforce.
So the nice thing is the way to rescue a country that owes about 75,000 euros per worker in public debt is to add another 10,000 euros per worker in public debt.
And now the circle is complete....
I expect this Euro 80B to last Greece until 06/31/2010 upon which time they will pull an Oliver Twist.
"Please, sir, can I have some more."
And that is being optimistic.
In the meantime, the gaggle with lineth up at the trough.
(((( PIIGS / Eastern Europe / US [CAPANJ(etc)] / UK ))))
I think everyone at ZH clearly sees this sequential "loan" (bailout)[theft] as a done deal.
The bankstas will take everything you value. Everything you put your energy into creating. Because its their ride and you are a tourist. Get over it or get your own ride.
Why so serious!
zee Germans are going to be pissed. Watch Merkel's party get tossed like a salad.
Hope so. But then I would love to see anyone stand up against being openly robbed. No doubt if they do they will be vilified.
The Germans are experts at being villified. To them it is a way of life. I fear for Poland.
No one likes us. We don't care!
So 80 billion Euros will be created out of thin air, mostly funded by euro states, and this is "good" for the strength of the euro as indicated by the MSM?
I would suggest that it will only lead to a more spectacular euro collapse, especially after bigger EU members request aid.
Sell your Bunds now, Mr. Gross
Turns out Greece was TBTF?
P.S. Gold Bitches!
Knock Knock!
Who's there?
The whole fucking Europe!
debtors win - creditors lose...I just can't figure who is who
Actually you have that reversed. Creditors are being made whole with the bailout, not the debtor, regardless if they are being "bailed out" do you really think its about them having their debt liquidated as much as it is about their creditor getting their money?
Besides even that they were loaned the money to pay off their debt. So its not like the debt was even liquidated.
Corrupted officials are hungry in Greece. Bail them out more! They want more!
The party in Greece has just began.
You can throw a MUCH nicer party for E80 billion than for a punty 40 billion. Ouzo for all!
Sure! Like this one.
http://en.wikipedia.org/wiki/Dance_of_Zalongo
"it would be logical"
actually, it would be logical only for someone who already has a plan for a default. Turn on the vacuum & clean 'em out big, - the "only way" your name will be inprinted in a "history" book.
Next Winter:
knock, knock.
Who is there?
I am your (post-bailout) default.
Why are you so blue?
Cold & tired of waiting.
Homework: Since there seem to be few adults left in charge of the purse strings, predict the outcome with the children's verse of your choice:
ex:
This little PIIGy went to market
This PIIGy's bonds wouldn't float...
I'm waiting for the "squeal like a PIIG" remake. Greek deliverance indeed.
Wow Free Money.
Some bond purchases may be required.
MORON!!
It's 30 BILLION NOW, and 70 BILLION AS A BACKUP FOR THE NEXT 3 YEARS.
I hate it when people like you change the news to write a funny article build on thin air.
Care to link a souce? The sources I have found say nothing about 70 billion as back up over the next three years.
Their still on bended knee with bag in hand,Really doesn't matter how much it's the principal it sets.
Intraday chart of Athens Exchange says Goldman Sachs found out via its global government moles around 3 PM Athens time. A market that was going sideways and doing nothing rallied 3%+ in an hour. Boo yah free markets.
http://www.fundmymutualfund.com/2010/04/greece-offered-61-billion-in-sta...
Seems alot of people here didn't take to heart the lessons learned (rightly or wronly) from the Lehman debacle: "no more Lehmans." There is no point fighting the powers that run the printing presses. After all, we're all trying to make some money, right? What happens down the road is a different story. Meanwhile, I can tell you Greek assets will rally impressively starting tomorrow as they play catch-up to the RoW. So will gold.
I think the lesson I've learned isn't 'no more' but rather 'not enough Lehmans'
Hey Tyler
Here's one for you
US military warns oil output may dip causing massive shortages by 2015http://www.guardian.co.uk/business/2010/apr/11/peak-oil-production-supply?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+creditwritedownsnews+%28Credit+Writedowns%27+News+Feed%29
I thought every other nation on earth hates the US Military? Why would they trust them now? Carbon credits? AWG dead?
Time to throw out peak oil again. I just read that 1 billion barrels of recoverable oil has been found on what was thought to be nearly empty working fields in Kalifornia.
http://www.youtube.com/watch?v=4bHZRSlhJxY
This video exposes the eco-socialist Gaia conspiracy to rob hard working Americans of God-given V-8 power and tax them into the poorhouse. Combined with the Global Warming hoax, this will bring our ravenous economy to a halt by 2020.
Don't believe the Marxist geologists with their sky-is-falling doomsayerism. T. Boone Pickens got lucky with some price pickings, nothing more. Lindsey Williams learned the real truth in Alaska. Technology has actually made oil easier to find every year and high prices are not due to extraction costs. They are the result of Green Hollywood propaganda attached to hidden tax code amendments after the recent Democratic takeover...
How many *months* will a billion barrels last?
With China & India coming on line for oil demand, things will be getting very interesting soon.
$5 gas in 3 years? If we're lucky!!
Hey, sorry to inform you Gloomy but Tyler does not give a flying fuck because we have technology!!! If there was a problem we would see it clearly on our bloomberg terminals... Also, todays monetary economics has made physics and energy economics obsolete, we write the rules now, the military should stick to what it does best, spreading democracy... Oil hahaha, don't worry about falling net energy return rates on production of 70 million year old cooked phytoplankton reserves... Yeesh, we are not cavemen Gloomy, get with the times dude... ;-)
http://www.youtube.com/watch?v=dmrohzSZNoo&feature=related
Next little piggie slithering to the Big Teet ?
Portugal.
This is ridiculous do they not know that Portugal,Spain,Italy, Ireland,and eastern Europe will want some sort of bailout! So they will print more euros to prevent default but creating stagflation. They are really dumb, the situation is Europe is a foreshadow of the debates we will have in two to three years when our own states have a Greek moment. Now the lines for 1-888-EMU-CASH,1-888-ECB-CASH will be off the hook with the rest of Europe. Over here California's governator will call 1-888-FED-CASH very soon and Weimar Ben will pick up and many states will follow suit. Its going to be a hot summer in the EU. This is going to be an interesting decade.
Regardless of how one puts it, socialism is built on promises it cannot deliver. Consequently, EU unity is on a very slippery slope to its own eventual disintegration. EU leaders are no dummies. They are just too desperate to see the reality because their ideology overwhelmed their intellectual process.
If shitty Greece needs euro100B, just imagine for zillions euros will Spain, Italy, England, etc., need to "stabilize" them in the next 3 years?
Can we bail them out and get it over with? After that, We must work on California. Lets see, Im figuring after the Health care kicks in along with all the bailouts, An extra $50.00 - 100.00 will be deducted from my paycheck in taxes. Just get it overwith so i have some idea how much they will be fucking with my paycheck so i can figure out my finances..
Back in 1976 with George McGovern running, during the campaign, one democrat asked about taxing too much and the answer was it our money and be thankful we let you keep anything. That is still the democrat's mantra.
Now more so than ever.
I can't wait for the market to open. How do you trade this"old" news?
I could argue that:
The Euro will strengthen
Greek/bund spreads will narrow. Greek CDS will narrow.
German Bunds will fall. Yields will rise.
The Yen will get stronger against the Euro, ergo, the dollar.
The US will lose the "save haven" benefit, the curve will steepen.
Global stocks will rally.
Gold might be the winner. I think gold has a bid of late because people are getting afraid of all money. We could see a break on gold to 1190.
I am bored....
Everyone should take possession of physical gold, ASAP.
There was a post several days indicating a possible sign of the end game, with the signal being the dollar going down significantly and US long rates going up. Throw in gold going up and there you have it.
It seems that the market wants to skip directly to this, ie dollar failure and US bond market implosion.
Things could unfold rather quickly from here.
Spot gold is already testing 1170. The NY COMEX mobsters will shank it down as usual on the open, but it looks like nothing but up from here.
And that sort of worries me.
Sorry for the dumb question, but does the Greek/bund spread narrow to the point that it becomes cheaper to buy Greek bonds than comparable Spanish or Portuguese or Italian bonds? After all, those countries don't have the same semi-guarantees that Greece does, so why would I not dumb those bonds and buy greek ones instead?
I'm not a trader or a market pro, so the question may be obvious to others. It isn't obvious to me, though.
Currency is not money, Its a medium of exchange, This debt debacle is accounts at the end of the day, Most western debts cant be paid off, They wont be so a market to whatever on sovereign debts haircuts will take place, A global announcement all cash deposits are reduced by 50% and all bonds the same, Debt down by 50% globally job done, China wont be happy but the system keeps working, A bankrupt west = bankrupt China, This may sound silly now but it may not when the sh1t hits the fan, I am not forecasting such a thing but holding cash has risks other than inflation.
This debt debacle must blow up soon,
Putting aside the efforts of Wall Street banks (and the U.S.propaganda-machine) to destroy entire ECONOMIES, for PROFIT; the greatest REAL risk of default today lies in the U.S.
As soon as the Federal Reserve's sham of secretly buying-up $100's of billions (trillions?) of grossly over-valued bonds is exposed, the U.S. bond market will collapse - since the U.S. government simply cannot produce NEARLY enough revenues to SERVICE U.S. debt at REALISTIC interest rates.
with over $60 TRILLION in total public/private debt (and not including the $70 TRILLION in "unfunded liabilities") every 1% increase in interest rates drains $600 BILLION per year in ADDITIONAL interest payments - equal to a 5% plunge in GDP.
I had not seen the effect of interest rates on GDP quantified that included total public and private debt. With our GDP growing at 2% per year (if we're really lucky), it wouldn't take long at all to paralyze the country with a 2% - 3% rise. If we had a 10%+ rise like the 70's, that would be equal to 50% of our GDP. Game over.
Prechter makes some compelling arguments that the Fed does not dictate interest rates. He says that the markets do and the Fed only reacts to them. I think in this case that the Fed's backdoor monetization scheme cannot continue forever without something happening.
Are we in the calm before the storm right now?
It is like watching the Simpsons, but not so real as that. I see the hand go out, and the character not so dutifully ask for money from the fair citizens of Springfield to cover gambling debts and the late nights out at Moe's, etc., they give him the money, then he immediately asks for more, as Homer in the back of the crowd exclaims: Doh! at each request. Then someone else announces that Ireland needs some: Doh, Doh, Doh ... Then Spain: Doh! ... and at each turn a pronouncement is made that from that day forward all will be well and it is really truely the end of asking for any more money from the good citizens of Springfield. You get the idea.
What makes it seem to be less than real, or at least subpar acting, to me is that I expect (much like Homer) that all the actors by now should know their parts, and taxpayers should know their parts, banks, Germany, etc., yet we/they will keep running this act over and over until it just doesn't work anymore. At least wouldn't it make sense to spice it up and at least throw a random bone in there just to liven things up? For example, I would suggest a moral hazard lottery. In the currency union they should randomly select countries to bail out each period by roultette wheel or better yet like an inverted The Lottery. One country would be picked to be "saved" by pilling on more debt to the debt wall it just hit (so, e.g., next year, quarter, month, whatever they could have a lottery for Ireland, Italy, Spain, etc.). Of course, unlike The Lottery, it would never be final but would always be announced as such. We could do it here for the states and pretend that it's only a state problem, not a federal issue.
At this point, not knowing exactly where things will end is to be expected (e.g., inflation in goods vs. debt deflation, etc.), but knowing they will end badly is almost assured. I just wish that if our overlords have decided on this specific course (i.e., keep doing this until it absolutely no longer works on any level), they would at least be slightly clever and more creative or entertaining with the charade. I demand a lottery where I could vicariously watch who gets voted off the island.
If it takes Portugal, Spain, Ireland, Bulgaria, Hungary, Latvia, and Lithuania 45 minutes to come knocking on the free money door then either they've been asleep for the last couple of months, or the suffer from attention deficit disorder.
Like a group of welfare queens standing in line at the Food Stamp store the only waiting they've been doing is for the manager to unlock the front door. Greece was just lucky to have been first in line.
I suspect they've all been camping out at the head of the line for weeks like a bunch of nerds waiting for tickets to a Star Trek convention.
How do they turn down the next beggar.Bailout one, turn your back on the next I don't see that happening.
In Europe, the beggars are also the bailouters.
Imagine if California, New York, Michigan and Texas voted on whether or not to bail out California.
And just look at those thin out of hours futures soar!
As usual
Put some lipstick on that pig and rally on.
Dot com was a mere training run by comparison to this lip painting
Mania is now back in full swing thanks to the biggest bubble blowers that are the FED...
They never did learn, and now they are going to destroy the world because of the destructive path they are taking. Anarchy will result after the next big bubble pop, which will happen despite their idiotic efforts.
Many civilisations thought they could control events, but they didn't and they failed. It goes back thousands of years where each think they are better and it is 'different this time'
but it never is, those in power never learn, politicians never learn, those in who try to change never learn enough to change it,.
I'm thinking Germany-or at least exporting Germany is quite happy about this--
70-75% of their exports circulate through eastern Europe-so they do have a reason to have a so called "solvent" buyer-even if its at the expese of the German people--
I really don't see how this will strengthen the EUR--
They're devaluing-by printing--how does that strengthen a currency?
Germany also needs a weak EUR-since shes export heavy and China et al are sucking away its foreign market and Germany has no choice but to devalue-in fact--none of us have a choice--
I doubt the EUR crashes-because we'll all print at basically the same speed--
Competitive devaluation--to the bottom--Gold will win--
Yes, Why would the true high rollers ever let this game end when all they have to do is print. No chance.But they have definitely given the green light that there is such thing as TBTF.
JCT is my favorite bankster. No accountability, no control. Easy job.
What do you think are his hobbies?
Don't answer that.
So a group of "wisemen" sat around for the last month and a half trying to figure out what to do, and after all the hair pulling and hand wringing.....CAME UP WITH THE EXACT SAME SOLUTION THEY USE FOR EVERY OTHER PROBLEM. More debt, free money and no accountability.
Markets, breathless with anticipation, can now act all surprised and collectively say, "Wow, what a great idea!"
So we can expect a 10% Greek rally, 2-3% rally across the ever generous Eurozone, a percent or two in the now "solid" and increasingly un-rare Euro, a huge bank and retail rally in the US, punching both Dow 11K and S&P1200, 120 points on the Nikkei, 350 on the Hang Seng, and $25 on gold.
There's a reason Mondays are on Monday.
What is this IMF bailout crap. If Greece wants credit, let them go to the public markets.
The only possible reason for extending Greece credit is to keep credit held by the banks from needing to be marked to market in case of a Greek default.
It is time for the IMF to be shut down and the private credit markets be allowed to function.
It is time for the IMF to be shut down and the private credit markets be allowed to function.
I think that at the rate they're going, the IMF will be broke and not be able to function pretty soon in any case...
So are they printing the euros for this or is someone actually using earned money?
On inflation deflation: money multiplier is now negative, the big gov ship aint sailing.
(its all semantics anyway, its going to be a hyperinflationary deflationary depression regardless).
I like the comment on endless printing leading to the collapse of confidence.
This is the beginning of something that could be the "dark ages" for Europe (not that the US is far behind). The Germans, hard workers, disciplined and industrious have always looked at Southern Europeans as lazy, welfare basket cases. Let's hope the German's don't get fed up with being burdened by everyone elses irresponsibility and start goose steeping through Europe again!
Rather than goose stepping through Europe, Germany is being viewed as the golden goose. The rest of Europe needs to step back or they will kill the egg laying goose.
As A Man without Q... said: Edward Hugh is one of the best writers on this topic around at the moment, this is his take.
http://fistfulofeuros.net/afem/demographics/angela-calling/
I liked Hugh’s final statement: What the countries in the South of Europe need to give the Germans right now are not arguments about how they would be foolish for them to leave (the Eurozone), but arguments about what they themselves are prepared to do to make it more attractive for them to stay. The German giving machine is all done, and the Germans themselves are now more than tired of being continually told they need to pay, pay and pay again for events that now took place over half a century ago. Calling, Berlin, calling Berlin, hello, hello, is anybody there?
It’s also noteworthy that the article quotes from “former IMF chief economist” Ken Rogoff regarding the tipping point of Greece’s debt.
I'm aware that Rogoff is currently the Thomas D. Cabot Professor of Public Policy and Professor of Economics at Harvard University. But I did not know that he had served as an Economic Counsellor and Director, Research Department of the IMF and also at the Board of Governors of the Federal Reserve System.
It’s getting more than frustrating to continually hear from the same voices, the Rogoffs, Reichs, Roubinis, Summers, Romers, Sunsteins, Liebmans, Bernsteins, et cetera, who weave back and forth between government and cabinet posts and ivy league universities as an ongoing part of the establishment, sometimes critical but always within acceptable parameters so they can continue to be called on by the media for opinions that will never damage the ruling oligarchy.
It’s a game of musical chairs without taking a chair away—called the Establishment. It’s for people who dance to the music of the ruling elites, the oligarchs, always providing media comment that follows the Pravda line.
Interesting, too, how many, including Rogoff, are members of the Keynesians founded by John Maynard Keynes:
Hugh’s latest take can be found at:
http://seekingalpha.com/author/edward-hugh/articles
JR:
Right you are. It amazes me that he writes this book with Reinhart, where in my mind it largely documents how bad Keyesian economics is (or at least this notion that adding to the debt pile is not without real economic consequences), yet he cannot bring himself to apply the factual wisdom gained. Clearly, the positions and being stroked by those in power is more important than actually laying out the truth behind the policies and probable consequences thereof.
I must say that Bulgaria has no issues with its public debt. In fact the country has one of the smallest budget deficits and government debt in the EU. Not to mention we do not share the euro currency (although BGN is pegged to it).
Germany never had a housing bubble-in fact house prices have been falling since 1995--
What's up with that-in a country that was a super producer all through that time?
The German people acted responsibly--their banks loaded up on toxin and lost--
They would have been better to piss it away having fun-like we did--cuz-they're getting the same ass bite as-we are-no matter what--
http://www.facebook.com/photo.php?pid=3263696&op=1&view=all&subj=1840139...
We are now in the post fiat-money world... it's surreal.
You don't even bother to auction any bond, not even announce it. Somebody else says you'll have money, no source no timeline, and then all is well.
Does this mean that the Greeks can resume insulting the Germans?
I think you should read the Soc Gen Report - Government Hedonism and the Next Policy Mistake (Hat Tip MLM in the comments over at Calculated Risk - Europe Offers Greece...)
http://www.sgresearch.com/PUBLICATION/en/19C05683D1CC9042C12576C7003152D...
Germany has it's hands full. The report paints a different picture on the German surpluses.
I think it is reasonable to expect that Greece is hiding a great deal. That is the main reason for their reluctance to pull the trigger on the EU backstop. I suspect once they call for help, the EU and the IMF can go in and find ample evidence that the Greeks were dealing from the bottom of the deck. They can then re-work the deal to their benefit. We likely will not see the evidence unless the Greeks are so dumb as to fight the change to the new direction.
Only a nut would buy Greek debt for 5% without a Government backstop. Once the next bond sale rolls around, expect the Greeks to be forced to call for help. I do not expect much of an invisible hand helping the bond sale as the EU has already ponied up for the backstop. Why should they hold more Greek debt?
Now there could be a backroom deal where somebody supports the bond sale in return for a writedown on their share of the backstop. You never know.
I think you are correct. There is only a slim chance that Greece has completely come clean about their decades of financial gimmickry. I wouldn't be surprised if they have a bunch of "off budget" liabilities laying around... and who really knows what the true state of their actual tax collection is.
I'm curious... how does one get access to Societe Generale documents like this one? Is it a paid subscription site?
This indicator says we are very close to a top. http://bit.ly/b6OmLE
+1
The bear market rally wants to continue for a bit longer ...
DOW/SP500 daily bull signals from Friday 9 April continue.
http://www.zerohedge.com/forum/latest-market-outlook-0
The Greeks have many decades of learning how to game the system.
Denninger has it right (although he is criticized here quite a bit, I think he gets it right more often than not.)
http://www.market-ticker.org/
This announcement is a last-ditch attempt to buoy confidence, the starting (and ending) point for every fiat/ponzi. This is not a sealed deal, and the specter of the balance of the PIIGS turning from the fields and moving slowly towards the ECB/IMF trough is a real problem. This is not over, or "solved," by any means.
The captain would like to remind you that your seat belt light is still on. Inflection point dead ahead and we expect turbulence.