Germany Humiliates Itself By Conceding To A Second Greek Bailout, EUR Predictably Jumps Briefly

Tyler Durden's picture

Like clockwork, hours before the US market reopens, we get another Greece bailout. Since last week's Chinese white knight "rescue" of Portugal helped the EUR for about 18 hours, it is now time to get the biggest guns possible out: the WSJ reports that Germany, contrary to populist demand which has indicated that another German bailout of Greece would mean the end of Angela Merkel, has decided to allow Greek bailout round two to proceed. Per the WSJ: "Germany is considering dropping its push for an early rescheduling of
Greek bonds in order to facilitate a new package of aid loans for
Greece, according to people familiar with the matter.Berlin's concession that it must lend Greece more money, even without burden-sharing by bondholders in the short term, would help Europe overcome its impasse over Greece's funding needs before the indebted country runs out of cash in mid-July." The end result: the EURUSD surged by 70 pips from the closing print of 1.4270 to a high of 1.4350, although the half life of even that innuendo appears to have peaked and the pair is now on the way down, as it does absolutely nothing, except to destroy any credibility Merkel may have had, to resolve the impasse which is that, well, Greece is bankrupt.

Below is a snapshot of the halflife of the latest intervention, which appears to be 45 minutes:

The WSJ explains why Germany has thrown in the towel and has done a complete 180, to the terminal detriment of Ms. Merkel's political career:

Some officials in Berlin hope that a short-term fix can be found that would allow a full deal including a bond rescheduling later this year.

LOL. No really, LOL.

Euro-zone officials have acknowledged for weeks that Greece will face a shortfall in financing of around €30 billion ($43 billion) a year in 2012 and 2013—even after a €110 billion bailout agreed last year. But agreement on how those gaps should be filled is proving difficult, thanks to growing political opposition in northern Europe to bailouts of profligate countries such as Greece.

Germany has for weeks argued that private investors in Greek bonds should, in some way, bear part of the burden of any new bailout package for Athens. But the European Central Bank staunchly opposes any form of debt restructuring. Meanwhile the International Monetary Fund is demanding clarity on Greece's 2012 funding before it releases money that Greece needs to get through this summer.

A senior German official said on Monday that the deal being discussed in Vienna might not include any investor participation—even though that could spark a backlash from German lawmakers.

"We will try to resolve the Greek problem between now and the end of June," Luxembourg's Prime Minister Jean-Claude Juncker said on Monday. European finance ministers are expected to discuss Greece at a June 20 meeting, ahead of a summit of European leaders on June 24.


And good luck: the Greeks are so delighted with being bailed out, pardon, with bailing out Germany's banks, that they have been celebrating this fact for 6 nights straight in front of the parliament in Athens. Surely this latest batch of good news, will only send the popular jubilation to previously unseen highs.

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Rider's picture


The real cowboys are FX tradies. Mix 100X leverage and a greek bailout and you get "some" margin calls.

This is the wild wild west son.

Roy Bush's picture

It's not the Wild's bizarro world!  Print money and your currency gets stronger...seal your own doom and get richer.  

tellsometruth's picture

I had the same thought...depends where you are in the supply of new fiat well for a while...


IdioTsincracY's picture

I don't get it!

Every day ZH talks about the hold that the Oligarchy has on the current political and economic entities ...

just to marvel, every single time, at the ploys theOligarchy concots to perpetuate the current system ....

the more 'successful' a Country is, the more reasons it has to keep the system going!!

Wakey wakey!!

Muir's picture

Friend, are you of the body?



IdioTsincracY's picture

Speaking of body ...

nice one! .... or two...

:-)'s picture

No Red Hour for me, thanks. I'm driving.

Landrew's picture

Funny, friends have always called me that.

French Frog's picture

in an ironic way, the more bearish articles/remarks appear in ZH, the higher it goes...

Michael's picture

Listen magott frog, shut the fuck up and stick to the program. No need to point out the obvious. Just keep taunting them.

It is my intention for the controllers egos to show us who is in charge and keep doing exactly what I have been working so hard programming them to do.

They've poo pooed every warning us bloggers have presented to the world and acted according to my will, massaging their own egos because they think they are right, and keep blowing the bubbles bigger and bigger for a buildup to the greatest economic fireworks finale I have been dreaming of my entire life.

The dot-com bust was great, the housing bubble bust was greater, but the complete and total economic collapse of the entire fucking world will be the greatest economic fireworks bust display I've ever been entertained by.

Please don't ruin my fun. I need maximum entertainment value from what the oligarchs are doing and besides, they will ultimately get the blame for the whole fucking economic fiasco.

Carry on.

French Frog's picture

"No need to point out the obvious" ..... do you sometimes re-read what you actually type lol?

If you remove "and acted according to my will", your 3rd & 4th paragraphs DO state the obvious to anyone who has been reading ZH for long enough.

Nice make up though

downwiththebanks's picture

Amen:  nobody gets more pissed on these pages than the levered up Forex parasites.

I wonder why!

Muir's picture

For one who must surely stroke his "precious" every night, you seem pretty judgemental about the parasites.

downwiththebanks's picture

I don't fetishize money, no matter the form.

And I CERTAINLY don't fetishize levered-up greed.

Slow-choke-off's picture

Sorry to interupt, but Germany is buying Greece. That's all folks, nothing more. Nice warm place in a cold cruel world.


ElvisDog's picture

Bingo. The most predictable and obvious outcome is what happened. No haircuts, no cutoff of aid, just extend and pretend like so many times before. So much for Russia, China, and Germany going to war over Greece or any of those other silly alarmist scenarios.

HamyWanger's picture

Denninger, Prechter and Gerald Celente probably had a cardiac arrest out of anger, frustration and stupefaction, by now. 

We are entering the 4th successful year of "extend and pretend", with incredibly low long rates, stocks at the levels of December 2006, and nearly zero inflation. 

The PigMen have once again achieved the "impossible"


chump666's picture

They caused oil to go bid.  Great job! So you get extended middle east problems and long behold... major riots throughout Europe coming to a screen near you.

Lets see what the crystal balls says...ah, yeah France, germany riot central, strikes...ect etc.  Major sell coming.  You want be in on that when everything goes short, till the QE3 kicks in and China sends a warship around the pacific or something.


ml8ml8's picture

China might need its warship (or three) when it comes time to foreclose on Greece and Portugal. 

Seriously, I can only imagine the entirely unrelated political favors that China will seek when it comes time to extend/foregive/reprofile the debt of these countries.

Chris Jusset's picture

Extend & pretend, baby ... Whatever it takes to keep the Titanic afloat ...

takeaction's picture

"EURUSD surged by 70 pips from the closing print of 1.3270 to a high of 1.3350"

Just a typo...right?

Made this today...This is your team...including Tyler!

ParaZite's picture

I wonder how quickly all the nations will drown in debt when everyone ties themselves to the anchor cast off a sinking ship. 

buzzsaw99's picture

Greece is bankrupt...


pap smear bitchez!

Id fight Gandhi's picture

Kick that can Germany. dorfmatratze comes to mind.

Gotta keep the markets up... For a day.

HamyWanger's picture

Hehe. What did I say? 

Like clockwork, indeed. Why please goldbugs and doomers with a restructuring when the "extend and pretend" policy works so well?


Bay of Pigs's picture

Nope. That is incorrect.

Gold sees past all this garbage, which is why it is near all time highs right now.

Silver is set for its 2nd best monthly close ever tomorrow.

Nice try Hamy.

Muir's picture

Well all fucking kiddin aside, this really is bullish for gold.


Bay of Pigs's picture

And what's you view on silver? Ha ha...

Yen Cross's picture

 I was wondering when the crew would catch those spreads. Then you caught the fixing? SWAPS!

Gordon Freeman's picture

This is pathetic!  Germany has no real resolve--they are merely playing the Bad Cop role in this charade.  Saying Merkel is finished is ridiculous, as it's clear that TPTB like her just where she is.

They can keep this game going for years.  Anybody trading a plan that requires a quick collapse is going to get shit-canned, again and again.  These fuckers have zero interest in s greek/irish/etc. collapse, of any kind, and will pull rabbit after rabbit out of the hat, for ever and ever, amen.

I wish the world was more just, and that those fuckers would get what they deserve--but it just isn't going to happen.

Trade accordingly.

Yen Cross's picture

  Well spoken! Australia is running a close 2nd!

downwiththebanks's picture

Another Banker-Gangster pissed ONLY BECAUSE he's shorting the Euro.

"You suck, Germany, for not letting us Banker-Gangster parasites take down the Euro today."

Yen Cross's picture

 A lot of traders have been (FLAT) euro for some time.  Best Wishes.  P.S. you can call it square, if it's hedged. EURO.

margaris's picture

In todays crazy world HEDGING is the way to go.

I hedge everything: investments, money, clients, love...

Be ready for everything! :-)

Ned Zeppelin's picture

I wish the world was more just, and that those fuckers would get what they deserve--but it just isn't going to happen.

Trade accordingly.

Tis the problem - how dp you trade on this basis? 

ElvisDog's picture

This isn't trading advice, but what I would do (and am doing) is to use this time to prepare. Pay off all your debt. Own your house free and clear. Make sure that all major repairs to your house have been done. Put away enough in cash to pay for your kids' college education. Things like that.

Boop's picture

So business as usual, then?  :-)

Die Weiße Rose's picture

hey Gordon, where does all that anger come from ?

I don't really understand what you mean by :

"I wish the world was more just, and that those fuckers would get what they deserve--but it just isn't going to happen".

If the world was more just, then what would happen to the FED and the US Debt situation ?

The Chinese would sell and relegate the USD to junk-status ?

Why should Germany not do exactly the same thing as the FED ? After all,where's the difference anyway ? Germany's resolve must be to keep the Euro together,no matter what and to think otherwise is just wishful thinking for trading on the wrong side of reality.

As it stands, Europe is a welcome distraction to keep traders eyes from the real big Elephant in the trading room: US ballooning Debt and deficits and the inflating Interest on 14.3 trillion USD national Debt. If the world was more just, perhaps the Chickens would come home to roost on top of that big white Elephant.

So Gordon, remember to be careful what you wish for, and don't trade the Euro if it makes you that angry ;)

Yen Cross's picture

The government of the United States is scared. Nothing will block the masses.

Orly's picture

They can't keep it up forever.

Spalding_Smailes's picture

Yes they can. 


When did Lehman go under ... ?

HamyWanger's picture

Indeed. Most people on this site believe that Lehman had to fall.

But it was only an authorized and controlled collapse, just like Bear Stearns. 

And I don't think another "doomer event" will be authorized until a long, long time away. 

Corn1945's picture

Riiiiight. They've got it all under control. That's why Greek interest rates are at 25%. That's why every Western Government is printing money to desperately keep the game going. That's why gold is at $1500 an ounce. That's why the US is dead flat broke according to anyone that can do third grade addition and subtraction.

Don't worry. Nothing will "authorized" to fail because that would be a "doomer event." You're a huckster and a clown.



Al Gorerhythm's picture

Hamy's one of those guys who strap on their ice skates in June. Always late to the party.