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The Collapsing Greek Income Statement, Or Why Greece Is Doomed
With everyone focused exclusively on the Greek balance sheet, where apparently the market has now realized that you don't cure unmanageable debt with yet more debt (something the Troica will figure out just as soon as the eurozone breaks apart), a far more important statement is the country's P&L, or income statement. After all, if a country can not grow into its balance sheet with excess cash at the end of the day, all bailouts are completely irrelevant. Alas, as this historical and projected income from Egan-Jones shows, there is simply no hope for Greece as a "going concern", and if anything should the ECB and IMF continue pursuing bailout after bailout, the end result will be Greek bonds that will be a bigger paradox than Schrodinger's Cat: not bankrupt, yet trading at a price that when lim'ed to ∞ approaches zero. Sadly, there just is no way out, even if China pulls a White Knight for the 3rd time and triple down on good money after bad and worse.
Below is the one chart that everyone wishes to avoid, yet which is the biggest elephant in the room:
And Egan-Jones', a rating agency that has proven infinitely better at predicting the future than Moody's or S&P, summary of what to expect:
End of the line - although Greece is likely to receive additional funds, those funds might be senior to existing debt and both creditors and Greece's patience is waning. The rise in interest rates is likely to place an unbearable burden on the issuer and the austerity measures will further pressure GDP. The Hellenic Statistical Authority cited an accelerated contraction in domestic demand and a fall in consumer expenditures with the decline.
We expect that Greece will be forced to restructure its debt within the next 2 to 18 months; it cannot sustain significant additional budget cuts, the tepid economy, restricted capital raising, and 20+% interest rates. Greece's stated debt is EUR329B, GDP is EUR230B, and the federal budget deficit is EUR3.8B before interest expense and EUR16.4B after interest expense. The country has failed to meet its initial deficit target of 8.1% of GDP for 2010 as agreed to under the joint IMF-EU bailout terms in May 2010. Meanwhile, Greek debt (currently the highest in the EU at 127%) is projected to reach 160% of GDP in 2011. Austria withheld funds due to Greece after claiming the country has failed to meet its spoken commitments for the EU bailout package.
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Greece will default or restructure with bondholder haircuts within 2 months.
She will eventually, but unless there is a surprise government collapse (which would cause an immediate 2008 redux), they can kick the can 6 or 7 months more.
I think the IMF/EU/ECB will give enough slack so they have 2 months to sort out a more orderly restructuring. Germany is done bailing them out. They would rather save their own banks directly. They are already working on a comprehensive plan with Ireland to announce when they do Greece - that is why Noonan speaking more now. ECB is going to crucify Trichet and that is why Draghi is now doing their speaking, and is actually far less adamant about no restructuring in his comments. Germans have even planted the seed that their banks are in okay shape if there is a credit event. They will buy a few months to make it more orderly, but whatever is said, the deal is signed. G-Pap is willing to share power because his GS senses are tingling and he doesn't want to be labelled as the man who broke Europe. He wants others to be with him when it goes down.
All these things point in same direction, late summer actual default/restructuring with haircuts.
A Greek collapse will almost certainly drag down Austrian banks. Austrian banks will cause the bank systems of other medium sized European countries to fail. They will then start collapsing ever bigger systems.
The British banking system could withstand an Irish collapse. But the Danish, Dutch, and Belgian can't. And the British can't withstand a simultaneous Irish, Danish, Dutch, and Belgian collapse.
Dominoes, bitchez.
Austria = drop in the ocean.
But right on dominoe effect - will get nasty over in EU.
Credit Anstalt redux?
lets make it even more basic
1> greece iied about its finances before entering the eu
2> greece lied every year about its finances while in the eu
3> greece has burnt the eu & others financially
4> no more financing for greece
5> foreclose on greece
I read that Greece has been in default approximately 50% of the time, yes one year out of every two! so, it's just a matter of time until they do it again.
The more interesting question is how are they going to live within their means after they have defaulted or would anyone be stupid enough to lend them more money?
Since WW2, that's correct. Greece suffered hyperinflation through 1941-1946, only periodically stabilized (usually through a combination of press releases, monetary policy, and outright selling of gold sovereigns in support of the Drachma).
how devious and clever those greeks must be to fool the bankers so easily. /sarc off.
Eskalation
OT-Weiner is stepping down. P is crashing. Markets will be solidly green by 2pm.
They are already green.
Greeks jumped the shark 3 millenia ago. They heard the siren song of socialism/communism/liberalism and decided to take the wax out of their ears, unlike Odysseus' crew. Now they are on the rocks with so many others, and more coming to join them.
http://www.pbs.org/wgbh/pages/frontline/warning/view/
The Warning.
watch as our heros do what they do.
also
weiner is stepping down. this is what happenes ladies and gentlemen when you piss in the wrong cornflakes, you are gone......he fucked with monsanto. they have major stroke. he became expendible.
I don't want one of my representatives posting boner picks on the internet.
technically speaking, he was being a idiot on facebook. a lot of people get silly on facebook. was it a sin. yes. was it a terminal offense as far as being a representative? not sure. but the thing that is interesting is how these things are started and how these things are manipulated and used. one can postulate that he was very pro israel etc. maybe he thought he was bulletproof. but when you mess with a bought off supreme court judge who has possible litigation in the pipe concerning his owners, this activity, (no matter who you are) will piss the status quo off........and so it did.
divorce lawyers love facebook
That's the thing.
Explain to me again why Eliot Spitzer had to resign for committing an offence which Luisiania Republican David Vitter was guilty of as well?
If there are ties to Wall St, they'll go. Otherwise it's seemingly not a problem whatsoever.
spitzer got punked when he messed with the squid. he was getting to close to costing someone some major bucks, so the story about him messing around with call girls came out.
How the hell did Monsanto get him to post picture of his cock on the internet?
GM corn.
Nacho?
monsanto owns clarence thomas. he is their boy on the supreme court. for some reason, weiner had a hard on for him about something and was pestering him about his tax returns and something about cheating on his taxes. the mossad owns facebook. this is one of their information gathering services. now did weiner do anything that was actionable as far as being removed from the us house? not sure on that one. i mean there are some that have done much worse and are still around. barney frank comes to mind. but whenever something like this happens, about some politician, a lot of times it is happening on purpose and if you noticed the news goon squad would not let up. they were given the green light to go after him. now weiner is jewish and i am sure he is pro israel so he does have some bona fides. but when he went after thomas about this tax issue, he was messing with something i guess he didn't understand. i am not sure , but perhaps monsanto , may have some pending litigation concerning their gm seeds etc, in the pipeline both here and abroad. they made thomas. they own thomas. they have a lot of money invested in this man. along comes this minor cog in the machinery and starts jacking with this expensive black man that they created. they got pissed. the next thing you saw was a story about how weiner is messing around on facebook. so , you can see how these things start and information is used against you, when it serves a higher purpose. i knew from the start that weiner was getting hung out to dry for some reason. i didn't know until yesterday, when someone started talking about it on the radio, about why this was happening. i knew weiner had pissed in someone's cornflakes. this is how politics works. if you noticed, the pressure remained in place. he tried to shake it off with the rehab thing, but it didn't work. the president even said, he thought he should go. so the fix was in. and nothing but his resignation would work. the same thing happened to spitzer. he is jewish yet he pissed in the wrong cornflakes with some of the boys on wallstreet. so they got him gone as well. same game , different name. monsanto did not get weiner to do anything on facebook, but they sure used the information, when the time came to use it. moral to the story. stay the hell away from facebook.
Weiner posted his weiner on Twitter, not Facebook. But nonetheless, I stay away from them both. I don't know anything about Twitter, but I'm guessing the rumors about links between FB and the CIA aren't unfounded. Plus, with a FB rep attending this year's Bilberberg, I'd say that's enough of a reason to stay away.
Weiner posted his weiner on Twitter, not Facebook. But nonetheless, I stay away from them both. I don't know anything about Twitter, but I'm guessing the rumors about links between FB and the CIA aren't unfounded. Plus, with a FB rep attending this year's Bilberberg, I'd say that's enough of a reason to stay away.
Weiner posted his weiner on Twitter, not Facebook. But nonetheless, I stay away from them both. I don't know anything about Twitter, but I'm guessing the rumors about links between FB and the CIA aren't unfounded. Plus, with a FB rep attending this year's Bilberberg, I'd say that's enough of a reason to stay away.
Weiner posted his weiner on Twitter, not Facebook. But nonetheless, I stay away from them both. I don't know anything about Twitter, but I'm guessing the rumors about links between FB and the CIA aren't unfounded. Plus, with a FB rep attending this year's Bilberberg, I'd say that's enough of a reason to stay away.
Hey Drifter, could you expound on the Weiner/Monsantos theme, I could not find any info, I do remember hearing something about it from Amy Goodman on Democracy Now.
Thanks in advance,
Dapper.
well try googling weiner clarence thomas virginia (his wife) taxes
etc...
i think i posted a link about this yesterday. i will look for it again.
Need moar prosperity injections.
So either the Germans allow their banks to collapse (no bailout), or Greece drip bleeds them dry.
Is there a particular reason why taxes - which so far have been paid on a more of a voluntary basis - can't be increased? Since expenditure > receipts, the situation is unsustainable even before considering interest.
Actually the Germans seem to be happy to let Greece go now. Comments from several senior sources today about putting off any Greek bailout until September (knowing that Greece will have run out of money long before that) confirm this.
I guess that's what Ben's $600B QE2 money was for. Now that the Germans have padded their banks sufficiently, it looks like Game On for a Greek default.
By "the Germans" you mean the German bankers right?
I do. Apologies for the lack of precision. I suspect, however, that the polls indicating that a majority of the German populace would also be fine with letting Greece go its own way are not wrong.
You meant accuracy and not precision.
An argument could be made that this is a matter of precision, in that I did not make clear the precise sub-set of the German population to which I was referring (Bankers vs the population as a whole).
GLOBAL WARMING AND PILLS ARE THE ANSWER!!
1. Put in a new Carbon Dioxide tax in place to control the energy markets, and nationalise whatever is needed (can generate up to 25% extra tax income)
2. Tighten the grip on the SS plans to control the pharmacy markets, and nationalise whatever is needed (can generate another 10% extra tax incom)/
No need to worry, BBG CONsumer comfort in few minutes. It'll kiss the booboo away and send Russell 2000 to the moon.
Can a country ever go Bankrupt ???
I thought No - for a long time.
Now I'm sure its the right thing to do because that is just plain unmanagable (unless they can double the tax take)
Ever heard of the saying:
"In the land of the blind, the one eyed man is king"
or
"In the land of fools, the joker rules the land"
Everybody's in the same mess.
Have you ever seen 2 bums fight or discuss over who is most broke?
The only discussion they have is who controls the trashcan territories and the streetcorners.
Serious question: how does depreciation work on a country income statement?
its transitory and due to the bad weather or the speculators..thats why EU is falling apart...why are these lying POS still given talk time and space?
CNBS on Greece today:
"everyone knows you can't throw debt at debt"
Jump over the pond to Obamaland:
"we need more QE, more stimulus, more money..." WTF?
Greek income? From what, everyone knows Greeks barely pay taxes anyway.
Oxymoron perhaps...
GE doesn't pay taxes either and yet they seem idolized
Yes. But can you blame a corporation for taking advantage of tax lawyers who know what theyre doing? For that matter, can you blame GOOG for setting up shop in Ireland - nay, basically being POACHED by the Irish to come settle into their country for a favorable tax exemption law valid for a decade?
I saw that too...no income, excise, sales, or VAT taxes. Only "Social Contributions" and "Grants" whatever the hell that is. (Grants seem to be some sort of cash flow device because it washes out on the expense side.) Also, I thought they received bail out money just after the May flash crash last year. Where does that money post? Even if it's just passed through to the banksters, it should show up.
And negative revenues make a $30B (neg-to-pos) swing....in one year? Yeah, right. Even if this is from asset sales, no way it happens that fast.
This is the income statement of a sovereign...of the cradle of western civilization? This regime (and those who bet on her) are toast.
Could we see the equivalent spreadsheet for the U.S., please?
Thanks.
Who's focusing on the greek balance sheet? I'm looking at the great better than expected employment numbers and buying stocks as fast as I can. GMAFB.
"...the market has now realized that you don't cure unmanageable debt with yet more debt..."
ROTFLMAO!!
Masters of the universe my fats ass!
Maybe if the people running the fucking economy would just try to live on $50,000 a year BEFORE taxes, they'd be much better prepared to run an economy.
Wow, this is how a failed nation looks like. They´d be running 7% budget deficit even with zero interest payments. (year 2013, GDP: 230 bln EUR, deficit: 17 bn EUR)
The obvious answer is that Greece doesn't tax their billionaires and trillionaire enough;) BTW Socialism es muerte;)
you only get to power if you aredamaged goods ..so they can quickly get rid of you if you mis-step..so simple a tactic so implicit in those who are allowed to run for office to keep the elite sociopaths at the top.
Watch the Ireland ball, too. Ireland now pays interest on it's debt of 30 billion euros against tax revenues of 34 billion. A debt trap is defined as interest against revenue of 40%. Ireland is acabou by any definition.
Ireland ups the haircut ante on the senior bank bondholders.
Of course, the irish debt will have to be restructured too, no question about it, but Ireland at least has a productive economy. Ireland exports more(on per capita basis) than Germany(!). Greece, on the other hand, is pure Ponzi, no production, no economy, nothing just fraud.
http://en.wikipedia.org/wiki/List_of_countries_by_exports_per_capita
"The Collapsing Greek Income Statement, Or Why Greece Is Doomed"Open up the Fed discount window is a simple solution!
Maybe the Fed can open one up in ATM's too so that every man-on-the-street bankrupt in the world can take a dip of accomodative policy?
Easy Money, the World Fixed
Russia defaulted starting the whole LTCM deal.
Now Greece (and everyone else) is looking for a way out. Sure Russia has oil, but that just means Greek bond holders take a discount.
You, me and everyone else actually take a loss when business goes bad. These bankers double down and expect the whole world to bail them out.
Some banks need to fail.
Its time for the banks to take a loss and sure maybe that means no more cheap money for Greece and maybe hard times for others. Tough love has to start somewhere.
Where's the line item for "IMF Bluff Called"? They're not letting this PIIG go down. They want austerity, but they're not going to get it. The IMF will eventually bail them out to save the system. This is what the IMF was designed to do. If they don't bailout Greece then they have no credibility.
The funny thing is that Greece has already collapsed-- the policymakers are buying time so that they can protect their own, but because of modern day central banking and the need to serve their banking masters-- contagion has already spread and there's no way to stem it unless you have a pre-emptive restructure which is basically ensuring you're not the last one left holding the hot potato. There is just too much debt globally for the world economy to work out of and it's like one big Greece. The financial institutions are insolvent, and the bailouts/stimulus have done nothing but give the bankers golden parachutes before this plane comes crashing down.
The time to bring to these officials to justice is now, the time to break these financial institutions is now, the time to end the IMF/Worldbank/central banks is now, and the time to make these bankers pay for their crimes against humanity is now.
@@@hey tyler
, you goona be called terorist soon , you know why ?
heres why.. too much information and analysis
Greece is in default, RIGHT ..
lets divide shortfall of revenues by revenues
v.v. roughly
2008
40/95 == %40+
2009
58/87 = %60+
2010
16/90 = %20+
2011
22/86 = %25+
so lets compare w/ USA...
basically last 3 years revenues were around 2-2.2 trln$
, but outlays were 3.5-8 trln$
so ratio
shortfall revenues / revnues equals 1.5/2 == 75%
SO FOR FUCKING LAST 3 YEARS USA FED GOV BOROWED RELATIVE TO REVENUES MORE DEBT THAN GREECE IN EVEN WORSE 2009 YY.. dont forget there's also state/local debt..in USA most states have shortfall in tune of 20% of revenues at least..
SO WHO IS in fucking PERMANENT DEFAULT...
ALX
Let's see now......
Vancouver doesn't appear to be in dire straits but decides to burn their own city over a HOCKEY GAME!?!?!?
Someone tell the banksters to find out which soccer team will play Athens next and pay them handsomely to throw the game....or Athens will undoubtedly be a smoking hole in the ground.
Take their pensions, cut their wages, steal their country and they gather to pussy around in the square...but mess with a city's sports team and you're courting true disaster.....apparently.
Is Vancouver's water fluoridated? Can we get them to up the dose? Maybe add a little lithium, too.
A hockey game? Jesus Christ on a pony!....a HOCKEY GAME?!
No worries, Mon...the ECB will issue bonds which it will buy (or EU Pension Funds) and then use that case to Bail out Greek (aka German and French) bankers.
It will be massive EU Monetization Bernanke style.
PS: Watch gold priced in Euros soar...just as Gold prices in Yen has soared due to the JCB printing recently.
Memo to Tyler: Can we see who will profit the most from CDS on Greek debt (or as they as on Wall Street, "who will we need to bailout now that Greece will default ?").
As for Weiner, look for MSM to promote a pilot series called "Weiner with A Spitzer," a new food show for addicts.
Since the bankers keep talking about trying to avoid a credit event, it's clear that the banks have been net sellers of CDS. Who would the buyers be? I'm sure it's the usual suspects (Goldman, etc.)
If the ECB & IMF want to extend the inevitable as long as possible they really should call Hernando de Soto.
May seem like a stupid question, but - can anyone enlighten me as to how Greek businesses are surviving?
I mean - if they want to borrow money - they will surely be paying a premium to the Greek yield curve. (over 19% on a 10yr loan)
Does anyone know how easily they can finance themselves outside of the Greece? Can they get better terms?
(btw - i'm talking more in terms of SME's and taking bank loans; not tapping the bond market)
Why would they a premium to the Greek government? If their books are filled with the same sort of liabilities and no income to cover them, then they would pay a premium, otherwise, the loan is done at a discount.