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German Fin Min Schaeuble Refutes Himself Again, Sees EU Greek Aid Decision In Two Weeks, "Surprised" By Rescue Request
The record volatility in the market on no liquidity, and the resulting 20 pts moves in the S&P every day must be getting to the heads of German ministers. The same guy whose comments killed the USD, spiked the EUR and thrust gold, the German Finance Minister is now saying that he expects a decision by the European Council on the Greek request for aid only “in the week after next week.” Obviously, this is a little different from what he was quoted saying earlier that Greek aid would be forthcoming instantaneously. And the kicker: "It will take some time before Greece will have met the preconditions for the aid, namely a credible consolidation plan also for the years 2011 and 2012. It is not to be expected that a decision will be taken in the next days" as well as the discovery that in a "telephone call with the Greek Finance Minister he had tried to convince him to still wait a couple of days," will likely soon result in years of psycho-therapy and nail gnawing for G-Pap and his henchmen. The headline risk (and we are getting conflicting headlines now literally every 10 minutes) is just ridiculous. As always, those trading this insanity are brave (and increasingly poorer) men and women. Have fun.
From Market News:
The minister said the German government had been surprised by today's decision to activate the aid mechanism. In a telephone call with the Greek Finance Minister he had tried to convince him to still wait a couple of days, Schaeuble explained.
The minister announced that he will meet with the leaders of the German parliamentary groups on Monday morning. Schaeuble repeated that German loans to Greece will come from the state-owned KfW bank. The loans will be then guaranteed by the German government.
Schaeuble said he aimed to seek approval for the guarantees in parliament and hoped to convince the opposition that it will agree to a fast-track law procedure.
Earlier on Friday, Germany's main opposition party, the center-left SPD, said it was willing to support the government in an eventual financial aid for Greece if it informs parliament quickly and gives it enough time to deliberate.
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On. Off. On...offOn. The German Finance Ministry is the Ministry of Silly Walks.
Perhaps someone hooked the Bailout Decide-O-Matic to a Clapper by mistake
These people are starting to sound like the Keystone Kops.
Shirley Tegodd, they're not that dumb.
The market responses positively to ANY news so if they keep this charade going everyday....there are catalysts to pump the algos
Exactly. It is NEWS that is bullish.As long as they are not rendered mute by abject fear of the abyss, it is bullish.
I can picture the Paps and Germans on poker night - trying to think up new comments to have for the next week to play with trader's minds. Laughing the whole time...
"The same guy whose comments killed the USD, spiked the EUR and thrust gold, the German Finance Minister is now saying that he expects a decision by the European Council on the Greek request for aid only “in the week after next week.”
Must be taking lessons from this guy.
http://en.wikipedia.org/wiki/Janus
This is actually a very clever strategy. If they can keep a cloud of uncertainty over the structural integrity of the Eurozone - it will keep a lid on the Euro. The ECB has a hard-money philosophy - so the politicians are fighting back by acting as foolish and irresponsible as possible to get a sustained weak Euro -. Just a cockeyed theory!!
It is clever, and they are following the new, foolproof playbook perfectly. The old story: market moves on fear and greed. But keep repeating and revisiting and extending the same bad news over and over, and everyone gets used to it. Hence, no more fear, even when the endgame finally comes. CNBC can report then that don't worry, it is all priced in the market, even though the market is already higher than when the whole situation began. Same will happen with Portugal, Spain, California, or an asteroid about to hit the earth. There is only greed now, and the market will only move higher. You gotta tip your hats to Bernanke, Geithner, et. al. They figured it out last year, and the rest of the world now follows the playbook.
Yo TD, just a head up: GM repayed TARP loans with....TARP loans in escrow - per Neil Barofsky.
http://www.cnsnews.com/news/article/64629
WSJ ran a small piece as well.
The Europeans, led by the Germans, have totally screwed up handling the Greek crisis. The ECB should have told the politicians to stay the fuck out, and they should have handled the situation by backstopping Greek bonds. This would have put an end to speculative feeding frenzy from the bond vigilantes. Instead, the politicians had to get involved and muddle everything up. Europe has exposed its biggest weakness and has shown itself to be totally inept at handling a financial crisis. The bond vigilantes are having a field day, laughing all the way to the bank.
Why should the ECB backstop the bonds? What's the point of that really, to kick the can and introduce even more moral hazard into the system. The right call would have been to hold a hard stance and let the chips fall where they may. Let Greece default or negotiate with it's creditors to force them to take a haircut to get their debt level down. Having the ECB backstop only tells Spain/Portugal/Italy that they have nothing to fear because the ECB will step up to the moral hazard plate for them.
They have handled the situation dreadfully, agree with you on that. But I must disagree with your solution.
Exactly, these people want to abolish the risk from any investment by offloading it to the populations of well run (sort of) countries. Same with the IMF global tax on financial transactions.
They need a good spanking to stop being such cry babies.
What, like US politicians stay out of the affairs of the Fed? The ECB does not have a mandate to backstop Greek bonds, and if the backstop is triggered, who actually pays?
You know, there are two ways of dealing with a solvency crisis, one is restructuring or default, the other is throwing more debt at the problem and try to pretend there is no problem. The Greek financial crisis is not a sudden trauma event, but rather the culmination of years of excess, mismanagement and fraud and there is no change that a few bridge loans are going to prevent rather than merely delay the hard reality.
Leo,
while I could hardly get more annoyed with the current German leaders the position they are taking could make sense, at least from a pessimistic view.
Say that they started to count all debt held by German banks that will become worthless during the next financial crisis.
From Memory:
~ 500 billion Euro US junk (from 2008)
~ 300 billion Euro to Southern Europe
~ 500 billion Euro to Britain
Add in Eastern Europe, export guarantees, business debt, export financing and various items.
At one point in time the only way to clean up the mess is to devalue the currency.
Take a Greek default to have someone to blame, leave the unpopular Euro, devalue savings and move on.
The back and forth moves by politicians are only to deflect blame and to choose the best timing.
The above is only my wild guess but that could explain the action.
Wouldn't that be flouting the no-bailout clause, and possibly other parts of the ECB's mandate as well? I think the ECB is sailing close enough to the wind with its backdoor PIIGS bailout, especially after the recent policy change specifically to benefit Greece. Of course no-one's going to raise too much of a stink about it, at least until Greece defaults heavily enough and a hole suddenly appears in the ECB's balance sheet. And in any case, ECB sovereign rescues would loose rampaging moral hazard unless the ECB also had both the authority and the will to demand an austerity package in exchange for any bailout.
Because, you know, this is much too important for actual elected representatives for the plebes deciding how tax dollars are spent. That would be like, oh, a Republic or something.
They might stop to think... 'Why should German taxpayers work until age 65 so that Greek tax avoiders can retire at 50?" And then some banks might actually have to suffer, like, consequences for their investment decisions.
The best backstop for the Greek bonds would have been the Greeks themselves, telling the truth. How do you backstop smoke?
Considering the speed at which Eurocrats move, it might take the next 100 years to reach a decision on whether to take a decision on Greece's bailout.
They're still considering the shape of the table.
Everyone who's remotely surprised by the EU's inability to organise a timely bailout, or who considers it evidence of a cunning plan, obviously doesn't remember the last Balkan war.
This is better than any reality TV show!
I think the players think they are in a reality TV show. Where are the grown-ups anymore? This is Lord of the Flies writ large.
Here is our oligarch's simple two step recipe for continuing "extend and pretend" for next 1000 years:
1. When markets go down, say Greece is being bailed out.
2. When markets get a bit too frothy for their own good, say Greece is not being bailed out.
Here is the secret algo behind our (so called) "markets" today - you know the one which Goldman is so desperate to hide:
uptick = greece is being bailed out
downtick = greece is not being bailed out.
UNCH = greece needs no bailout.
All of this for Greece?
What's going to happen when the PIIS countries' debt starts getting pummeled by the evil CDS speculators?
not to mention the PUKeS
The volatility is a necessary smoke screen so that the plebs in the US and EU don't notice their currency being devalued.
... that and also ... the move to bailout greece is extremly unpopular here in germany so they do the usual "rumzicken" (there´s no nice english word for that but it means that they are playing hard to get?). They cannot give the greek the bailout just like that after all it was Schäubles party that until recently claimed that there will be no german taxmoney wasted in a greek bailout. There´s an important regional election in like two weeks, of course they try to avoid the topic until after these elections they´d loose all their political credibility. (as far as it concerns me they never had any) Angie wants to do what she always does, sit and wait, and Schäuble wants to get rid of the topic, get done with it as fast as possible and move on ... wich also explains the different headlines.
Some people here said this move is clever because "keeping repeating and revisiting and extending the same bad news over and over, and everyone gets used to it." ... well sure it might be clever, yes but honestly i do not think the CDU guys are clever enough to do that on purpose, maybe it was one of the Chancellorwhisperers Josef or Otmar who told them to do so ;)
LMFAO... SNAFU FTMFW!!!
Translation please? I got lost after snafu. Forgive me but I don't text (and proud of it) so I'm at a disadvantage.
GIYF! (Mine too in this case.)
An elaboration of FTW! i.e. For The Mother Fucking Win!!! I'm not an avid texter either. My cell phone is a 5 year old Motorola SLVR. It just seems natural to throw an MF into any of the hip acronyms :)
Der Spiegel reports on its website.. http://www.spiegel.de/politik/deutschland/0,1518,690778,00.html
Der Notruf aus Athen setzt die schwarz-gelbe Koalition unter Druck: Die Kanzlerin wollte das unpopuläre Thema Griechenland-Hilfe im NRW-Wahlkampf kleinhalten - nun versucht sie, auf Zeit zu spielen.
Google translation returns:
The emergency call from Athens uses the black-yellow coalition under pressure: the Chancellor wanted kleinhalten the unpopular topic of Greece help in the NRW-election campaign - now she is trying to play for time.
Ultimately this is what is comes to in Germany. The Nord-Rhein-Westfalen (NRW) election coming up early May.
The EU promised swift action if a bailout was needed. Two weeks is an eternity. This bailout timeline is political. If they bail them out it will only come after elections.