On The Eve Of The Greek Bailout, Clusterfuck Reigns, Threatening Tentative Market Stabilization With Collapse

Tyler Durden's picture

The only thing in this world worse than Hank Paulson showing up in Congress with his initial 3-page TARP proposal giving him unlimited control over the US printing press? 12 non-Hank Paulsons, all of whom speak different languages, all of whom are hell bent on bailing everyone and everything out (just not on their political or physical dime...or 10 eurocents as the case may be), and all of whom have no idea how to bail out others' (and soon their own) economy... oh, and none of whom have access to Hank's reserve currency printer. In short, more than 24 hours after announcing a "bailout" of Greece, nobody in Europe has any idea what they need to do to actually "bail" Greece out. On the verge of tomorrow's summit during which it is widely expected that EU's new president
Herman Van Rompuy will announce just what the details of [asset guarantee|debt purchase|IMF (aka US Taxpayer) to the rescue] plan will be, the utter cluelessness and confusion is unprecedented.

One modest proposal: send Larry Summers and have him exacerbate, er, fix, the European mess, by showing those pesky Burssels bureaucrats how we fix stuff over at Harvard, er D.C. In exchange, a grateful Europe can keep him. In perpetuity. With negative interest. He could even moonlight as the Oxford University hedge fund manager. After all nothing beats Two Stay Puft Marshmellow Men for the price of one.

From TimesOnline

Finance ministers from the main economies in the single currency area, led by
Germany and France, worked through the night to let the EU’s new President,
Herman Van Rompuy, save his first one-day summit from disaster by announcing
a guarantee that Greece would not be allowed to fail.

There were sharp disagreements yesterday over how to restore market confidence
in Greece, with the Netherlands continuing to argue for the Washington-based
International Monetary Fund (IMF) to be called in despite strong opposition
from Angela Merkel, the German Chancellor.

Germany will be expected to put up most of the money and after years of
misleading Greek statistics, fiddles and broken promises of reform, the
rescue plan is likely to infuriate conscientious German taxpayers.
Nevertheless, it is increasingly seen as the least worst option. One
possible outcome of the crisis would be the break-up of the euro.

The rescue is also seen as more attractive than getting a German state-owned
bank to buy Greek debt, as that would only increase Berlin’s exposure to the
risk of a crash in Athens.

One longer-term plan under discussion is the creation of a “European monetary
fund” to avoid the humiliation of having to call in the IMF to save the
euro. France and Germany in particular have invested a great deal of
prestige in the euro.

And of course:

There is still a question mark over how markets will react even if the EU can
agree on a bailout, because it may not satisfy demands for systemic change.

The clusterfuck reaches epic proportions as the European leaders realize that someone has to pay for their stupidity. That someone is gradually emerging to be, gasp, Uncle Sam (congrats America, you will soon LBO Greece).

Ruling out a role for the IMF, José Zapatero, the Prime Minister of Spain,
said last night: “We have to support Greece, that’s clear, and it’s Europe
and the Eurogroup which will do it.”

France, like Germany, is eager to avoid calling in the IMF. “We are not going
to have Washington coming in to tackle our problems,” a French official
said.

However, officials at the French Finance Ministry were reported by Le Monde
yesterday to be favouring an IMF role in the bailout in order to take the
weight off EU taxpayers.

In France, the crisis is being depicted by the Government and media as the
product of immoral speculation by “Anglo-Saxon” banks and hedge funds. Mr
Sarkozy, the first EU leader to sound the alarm over Greek finances, has
seized on Athens’s predicament for his crusade to impose new regulation on
the markets and the world economy.

Meanwhile across the English Channel, Gordon Brown is panicking, as he realizes that the €20 billion (and far more likely €60 billion) that will be needed to bail out Greece will have to come largely from his pocket. Yet if it does, he can just as easily resign tomorrow as he will likely be promptly crucified by Her Majesty's subjects.

Last night European officials were involved in furious efforts to try and
complete a €20 billion rescue package, designed to halt the looming crisis
in Greece before it spreads to other countries.
France and Germany were at
the forefront of the eurozone negotiations.

However, Mr Brown - when challenged in the Commons over Britain’s position -
was unable to rule out Britain's involvement in a a Greek rescue package.

But the issue of other countries needing urgent help, as well as Greece, is
also pressing. The economies of both Spain and Portugal are in serious
trouble and their deficits spiral.

It means a total rescue package for the so-called PIGS – Portugal, Ireland,
Greece and Spain – could be as high as €60 billion.

Britain contributes 20 per cent of the EU budget and any EU-wide bail out of
either Greece - or the other threatened economicies - could, as a result,
fall heavily on British shoulders.

At least Brown realizes that his political career is almost over.

Gisela Stuart, a former Labour Europe Minister, asked Mr Brown: "Could
you confirm that any negotiations involving a bail-out for the Greek economy
will be completely confined to eurozone countries and will have no impact on
the UK?"

Mr Brown said support was available at an "international level"
under the G20 agreement and added: “If the euro area wishes to move ahead
with a proposal, that is for the euro area," he added.

Amusingly, after all the recent chauvinist posturing it seems that even the UK is once again looking at Ben to bail Europe out.

Mr Brown yesterday pointed to new G20 commitments to the
International Monetary Fund which will enable it to intervene. An
intervention by the IMF would be considered almost a last-gasp solution as
some senior Brussels officials fear it is an instrument of American foreign
policy.

Surely that is the best outcome: US citizens have proven completely oblivious to being robbed blind in broad daylight. After $23 trillion has already been pledged to pay for a few more Goldman Sachs G-V's what's another $80 billion in future increased taxes and US debt expressed in silly notation, between friends? At least the Europeans are willing to quickly go to the bathroom when the bill comes. America, on the other hand, is always eager to pay with the Taxpayer Platinum card. And tip handsomely. Especially if it means the dollar goes to zero and buys even more G-Vs for Goldman.

And just because you asked, we'll end this post not with pictures of striking grandmothers in Greece, but with another money shot of the marshmallow scourge from D.E. Shaw-cum-Harvard.

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deadhead's picture

irrespective of whatever is developed for Greece, Portugal/Spain/Ireland/Italy/black swan will get hammered by the market shortly.  the contagion will spread, no doubt about it.

at least dubai is completely fixed and because nothing has been mediaized about eastern europe, they must be doing okay, right?

 

ShankyS's picture

LOL, nice DH. The STD that is an actual FTD (Financial) contageon will spread like wildfire as bodily fluids are exchanged among the partners of the EU. To bad TD did not put up a pic of Trojan Man. They could use the protection. Apparently they will be using the K-Y Intense to add to the pleasure. Sadly what's another 200bn to bail outall the PIIGS. You know we'll do it. Hopefully spme of they K-Y will be left over for some of us taxpayers over here who will be footing the ultimate bill.

girl money's picture

Greetings, fellow pleasure seekers!

http://www.youtube.com/watch?v=qegm5Z5rmVw

The first one that "feels like nothing's there."

PERFECT!

Cognitive Dissonance's picture

This one is better. It shows the real intentions of the (almost) cheating husband nearly "exposed" shall we say. Reminds me of politicians.

http://www.youtube.com/watch?v=QyekMx50PvU&NR=1

DoChenRollingBearing's picture

As the unforgettable, but no longer heard from, Mogambo Guru used to say:  "We're freakin' doomed!"

Contagious?  check

Lots & lots of bailouts?  check

Pretend & extend?  check

Black Swan(s)?  check

...

 

Anonymous's picture

The Mogambo Guru is back. I saw a new post from him today at dailyreckoning.com.

Anonymous's picture

Right and the USA - primarily your banks, have nothing to do with hiding the issues in Greece to begin with, loading up the debt, pumping up the cost of insuring it - or anything like that at all hey?

Make up your mind - on the one hand you spend ages saying GS is behind this mess and on the other, you're making out like the USA is the saviour here. The world is just one big credit card shuffle - the dealer is the USA.

Get used to paying for this stuff, if you want that shuffle to continue. Simple.

Tyler Durden's picture

Reread the article. This time focus on the pictures.

Scooby Dooby Doo's picture

i don't get it. the michelin man's dad? what does he have to do with all the grease stuff?

Clampit's picture

Exactly, well said Tyler. If Liz Warren doesn't run in '12, you have my write in.

BTW, Scoobs, making sense of all this is a fools errand.

 

 

Scooby Dooby Doo's picture

I'm thinking a 90% flat income tax for 3 years should balance things out fairly. Sarah will fix things, huh?

Anonymous's picture

(not counting the current academic in office)The last time we elected an academic, he created the Federal Reserve. I plan on only voting for military leaders from now on.

Petraeus '12

jmc8888's picture

Gerneral Betray-us who is doing the Queen's bidding, no thanks.  You know he wants the people he's been railing against and fighting to be in power now right? The taliban.  After all the queen needs her opium wars.

The dealer isn't America, it's Britain's system.  America is just the biggest cog in the BRITISH imperialist system.  The EU? Well that was the Queen again, and you tend to forget she left you at the alter by not joining in your mess.  (was that accident, NO!)

The last intellectual who was voted in......what a sophistric answer.  I'm sure you be pleased with your new 'president' filter.  Be prepared to constantly clean up the crud. 

FDR was a smart man, and he wasn't a Keynes.  He HATED keynes for gloming on to what he did, and trying to put a theory together around that (which of course he added lots of bunk stuff to).  But most don't realize that.  Well realize it.  FDR was anti-keynes.

It's what LaRouche has been talking about for years, that Euro cannot govern itself, because they gave it all away to someone else who doesn't have authority to do crap.  Thus, in the article it mentions how they don't know how to do it.  Because, it was made so they COULDN'T.  What you didn't know the Euro system was a scam from the start? Whoops.  Guess you euros forgot your history, and that everything had changed.  It didn't. Sorry, we're all victims here, but we can become the policeman too.

Anonymous's picture

I am going to keep voting for Ron Paul until one of us dies.

MrPalladium's picture

Who ya gonna call???  - The ghost busters!!

BTW, what happened to the mandatory picture of Sigourney Weaver in her prime. :(

Eternal Student's picture

And I have to say, that picture is absolutely superb for this article!

I guess some youngsters haven't seen the original Ghostbusters movie. Do so. It's well worth the time.

i.knoknot's picture

"stay puft" is from the first ghostbusters. to my thinking, should've gotten a "best supporting" oscar.

Clampit's picture

It's god damn brilliant; the fiat currency mascot. It's nice to come here and be humbled...

starfish's picture

Don't cross the streams. Proton packs? or was it photon packs... i like the metaphor of a 'demon from another world' that we have engage in battle. so...what is our metaphorical proton pack...truth of course...what else? stop feedig the beast? galt's gulch? eh braddah, doze guyz no grow nothin but jus keep eatin my food...gettin old already...saavy

Anonymous's picture

Don't cross the streams. Proton packs? or was it photon packs... i like the metaphor of a 'demon from another world' that we have engage in battle. so...what is our metaphorical proton pack...truth of course...what else? stop feedig the beast? galt's gulch? eh braddah, doze guyz no grow nothi but jus keep eatin my food...gettin old already...saavy?

ghostfaceinvestah's picture

Shorting the Euro has got to be the biggest no-brainer trade in the world.  This is just like  Britain trying to keep the pound in the ERM, they are going to waste incredible resources just to keep up the Euro charade.

scaleindependent's picture

For everyone: If the bailout of the EURO passes, how far up will it bounce ? i.e., what is a good entry point on shorting the Euro after a bounce/

ratava's picture

the QE rally 50% retrace at 1.3788 was my entry point

Anonymous's picture

So elequantly written. Unfortunately, Harvard MBAs forgot to write like that,long time ago....

plocequ1's picture

The world is a big printing press. Money is nothing anymore. I hope to be dead before the US hasto pay the bill. I have noticed a $2.00 increase in my Federal tax. I dont care anymore. Let the fuckers print all they want. Japan is still around....They must of done something right. Maybe one  day the world will not use money anymore..I love you Ben, Keep up the good work...

Anonymous's picture

What you are describing is called 'capitulation'....... but yes, for what it's worth - I feel the same.

ratava's picture

japan squeezed a ton of cash out of domestic consumers to pay for the massive debt, sif that can happen in US with the jobless overleveraged losers everywhere

Stevm30's picture

Stay Puft Marshmellow men - beautiful wordsmithing!

Anonymous's picture

LEGENDARY! SO FREAKING FUNNY! Larry Summers should have learned at Wharton. Ah, only for the proud and the few.

ghostfaceinvestah's picture

Good thing Obama got his IMF funding provision through, and with a signing statement removed any restrictions on that funding.

http://uk.reuters.com/article/idUKTRE56K6N920090721?sp=true

Anonymous's picture

Those signing statements are going to be ruled unconstitutional very quickly. They're being issued like candy, and are obviously circumventing Congress.

Clinteastwood's picture

Whatcha gonna do????????

Call Ghostbusters!!!! (IMF)

They'll zap old Zuleee!!!!!

(well, that's what I heard)

Crab Cake's picture

Dr. Peter Venkman: This city is headed for a disaster of biblical proportions.
Mayor: What do you mean, "biblical"?
Dr Ray Stantz: What he means is Old Testament, Mr. Mayor, real wrath of God type stuff.
Dr. Peter Venkman: Exactly.
Dr Ray Stantz: Fire and brimstone coming down from the skies! Rivers and seas boiling!
Dr. Egon Spengler: Forty years of darkness! Earthquakes, volcanoes...
Winston Zeddemore: The dead rising from the grave!
Dr. Peter Venkman: Human sacrifice, dogs and cats living together... mass hysteria!

Anonymous's picture

Brilliant, I loved that movie brings back the good old bad days. If
I recall we managed to get through them too. Then we had real
Nukes pointed at us, how did we manage. No matter what remember
one thing the sun will come up tomorrow even if it's covered by
clouds. I'm starting to think Leos on to something. I'm long Solar
just for different reasons.

covered's picture

[Dana is possessed]
Dr. Peter Venkman: I make it a rule never to get involved with possessed people.
[Dana starts passionately making out with him]
Dr. Peter Venkman: Actually, it's more of a guideline than a rule...

Probably a good idea to make it rules rather than guidelines next time. I know there'll be a next time, I am curious what it will look like though

 

ghostfaceinvestah's picture

Maybe the IMF can sell more of their gold to help out Greece.

I am sure India and China would be happy to take it off their hands.

Joe Sixpack's picture

With the $1070-$42 per ozt. profit, it will help!

Going Down's picture

 

"12 non-Hank Paulsons, all of whom speak different languages...."

 

Well, there's "sheisse" and "merde" to start with. Oh...and of course "skata!"

 

 

Hansel's picture

What's a "Cluterfuck"?

Cistercian's picture

 Epic ZH Tyler.

 Fantastic.

lsbumblebee's picture

This ties in with my Pillsbury Doughboy thesis. If we can just keep the markets soft and fluffy then nobody has to worry about a thing forever!

i.knoknot's picture

the "stay puft" dude actaully meets a nasty demise...

the reference works rather well, methinks.

Anonymous's picture

If I recall correctly, the exit from this madness (or Exodus) requires hasty packing & preparation. Unleaven bread and bitter herbs to mimic the travail in a wilderness of want.

The antithesis of Stay-Puft Man.

Take the liquidation and dissolution of the rotten entities and LIVE; or continue sacrificing the futures of the young to a consuming sea of red ink. No chariot can outrace it, no stay-puft pride can resist it.

Fare thee well, yeasty dough-boy world economies. Die another day?

Anonymous's picture

This prose was so eloquent, it brought tears to my eyes...

BobPaulson's picture

Good. Hurry it up already. I want to see some serious players hit the mat here. I'm sick of the parade of clowns saying nothing is wrong. Anybody remember "this is contained to subprime mortgages only". Keep stripping away the veils, I can take it.

Anonymous's picture

Not me, I can't take it any more. They said it was "good to be king" 'caus you get your very own printing press and all that neat stuff, but now I can't handle the truth, 'caus my fiatskos won't buy me any more paper and ink!