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Greece Bailed Out To Get In Even More Debt

Tyler Durden's picture





 

Does anyone have a problem with the attached chart?

Ignore for a second the sheer lunacy of anyone who thinks that the Greek government can grow GDP and decline the budget deficit in a straight line now that the country will see crippling strikes and rolling riots (not to mention blackouts) on a daily basis. But do note the black line, which shows the projected Debt/GDP ratio for the country as part of the bailout package. In essence Greece will go from having "only" a 133% Debt/GDP ratio to an insane 149% in 2013 before presumably dropping to 144% lower in 2014, still a good 11% higher than currently. Greece just got bailed out so it can get into even more debt! What psychopath of the Keynesian school thinks that this unbelievable trajectory is anything but a complete and utter waste of money? German, and US taxpayers, are merely giving Greece money so it can increase it debtor status with French and a few other European banks. To say that this is a viable solution is something that only those who bow at the altar of Alan Greenspan can do.

 


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Sun, 05/02/2010 - 18:14 | Link to Comment JJP
JJP's picture

its the new norm

Sun, 05/02/2010 - 18:44 | Link to Comment SignsAndWonders
SignsAndWonders's picture

The goal ain't to save Greece.  It's just meant to buy time for Germany to figure out how to dismantle the EU.

Sun, 05/02/2010 - 20:30 | Link to Comment Thomas
Thomas's picture

I think that Ras is essentially correct (although I do not accept his presumption of success): they are diddling around looking for the politically most expedient way to print money and give it to the organize crime syndicate using the international banks as a front. I miss the days when the banking-crime syndicates like BCCI were actually viewed as corrupt.

Mon, 05/03/2010 - 01:50 | Link to Comment ConfederateH
ConfederateH's picture

And to plan an orderly default on the Greek debt and switch to the drachma.

Mon, 05/03/2010 - 09:16 | Link to Comment desgust
desgust's picture

+1

Sun, 05/02/2010 - 18:15 | Link to Comment Rick64
Rick64's picture

Even more ridiculous is the idea that their projections are accurate.

Sun, 05/02/2010 - 18:15 | Link to Comment JJP
JJP's picture

lol

Sun, 05/02/2010 - 18:24 | Link to Comment snowball777
snowball777's picture

They just got confused by the inverted chart. Here are the real numbers:

2011: -7.6, 145.1

2012: -8.7, 153

2013: -10.8, 163.8

2014: -12.9, 176.7 (I think I'm turning Japanese)

 

Sun, 05/02/2010 - 18:48 | Link to Comment Nihilarian
Nihilarian's picture

Those projections are accurate. They were generated by Joe Biden (http://voices.washingtonpost.com/44/2010/04/biden-predicts-economy-will-...).

Sun, 05/02/2010 - 18:19 | Link to Comment RobotTrader
RobotTrader's picture

Tick-tock, tick-tock. That's the sound of...
Rasputin


- Sun, May 2, 2010 - 07:52 AM

...the clock ticking down on the IMF/ECB bailout of Greece (and soon to
be Spain, Portugal, Ireland, Italy, and the rest of the Western world).

How many scleros/SDRs/fiatscos/whatevers will be flung at the "Greece
fire" to try to smother it before it spreads?

Of course, Asian stock/bond/currency markets open in a matter of
hours--and Europe shortly thereafter--so Dominatrix Strauss-Genghis-Kahn
had better twist Angela Jerkle's arm a little tighter and get her to
commit to scrooming the German taxpayer, or it could get ugly very
quickly in the casinos.

In any event, I still don't understand all the wrangling and hubub
over this seemingly minor matter of a hundred billion fiatscos. Sheesh,
the world's governments and central banks flung TENS OF TRILLIONS of
digits at the "Great Disintegration" a year and one-half ago.

...the world "blinked" and Greece WILL be getting its "Infinite Loan"
bailout, WILL be staying in yhe EU, and U.S. taxpaying suckers WILL be
paying the pensions of Greek bus drivers.

Here's the N.Y. Times skinny on the deal:

http://www.nytimes.com/2010/05/03/business/global/03drachma.html

(Ras Conclusion) Please reference my post yesterday, found here:

http://www.wallstreetbear.com/board/view.php?topic=68973&post=235197

...regarding the Greece bailout totally corroborating my Infinite
Theory for what's on deck in virtually every single country.

(Ras Note): For an even broader and deeper dissertation on the
depths of depravity to which TPTP will resort to keep the Ponzi Pyramid
propped, please refer to my "Rasipedia" post yesterday, found here:

http://www.wallstreetbear.com/board/view.php?topic=68975&post=235203

Then, after wading through that massive missive, never again should
you have any doubt that these goons will stop at NOTHING to prevent an
economic collapse.

Once again, Infinite Fiat theory steps being
played out in exact order specified.

So why all the hand-wringing, wailing and gnashing of teeth now?

Infinite Fiat: Learn it. Live it. Love it.

Sun, 05/02/2010 - 18:20 | Link to Comment lizzy36
lizzy36's picture

So Greece goes off the market for 3 years and when it comes back it's debt/GDP in excess of 140%.  Yeah that's fucking genius. 

Basically restructuring is all but assured, the only question is timing. 

Sun, 05/02/2010 - 19:17 | Link to Comment Quantum Noise
Quantum Noise's picture

The market is overrated... unicorns are now the real deal. Oh yeah... and PIIGS flying.

Sun, 05/02/2010 - 19:56 | Link to Comment SWRichmond
SWRichmond's picture

My god, it's sheer genius!  More debt = less debt!!!

Why didn't I think of that?????  Now I can see that I am way too stupid to be in charge!!!  The guys that are running the place are AWESOME!!!

Sun, 05/02/2010 - 20:04 | Link to Comment Hansel
Hansel's picture

If masters of the universe don't feel better tonight, then the bailout will have accomplished nothing.  For everyone else, tomorrow will be same shit, different day, i.e. fucked.

Sun, 05/02/2010 - 20:46 | Link to Comment baserunr
baserunr's picture

I'm surprised that you didn't learn this in college, from Professor Bernanke.  It's officially known as the "Panhellenic Paradox", where the further in debt you go, the less that you owe overall.  It's a key principle of Central Banking.  It's the only way to save... never mind.

Mon, 05/03/2010 - 12:00 | Link to Comment sheeple
sheeple's picture

100%+ debt-to-(mickey mouse)GDP is the new normal

Sun, 05/02/2010 - 18:30 | Link to Comment Racer
Racer's picture

This is like a trader who keeps doubling up as he keeps a losing trade going, but is different, the governments are doing it now... so they can't lose cost they change the rules in their favour so there is no worries this time. Will it work long term?  Didn't work for all the other traders who did this.......... but at least they lost before they wrecked the  companies they traded for instead of the world

Sun, 05/02/2010 - 18:30 | Link to Comment kohoutek
kohoutek's picture

Keynesian-Martingale Ponzi Finance - the current economic paradigm

Sun, 05/02/2010 - 18:29 | Link to Comment sangell
sangell's picture

So Greece will owe more ( as will its fellow Piigs) in 2013/14 and interest rates for sovereign debt will be lower than this IMF loan and the EU's concessionary rate?

Sun, 05/02/2010 - 18:31 | Link to Comment AccreditedEYE
AccreditedEYE's picture

so Dominatrix Strauss-Genghis-Kahn

How many times do we have to say it? Strauss Kahn is man baby! 

Sun, 05/02/2010 - 18:34 | Link to Comment RobotTrader
RobotTrader's picture

Virtually every "Convulsion/Spasm/Debt Default" by a foreign country has been a buying opportunity in stocks.

Remember:

- Thailand in 1997

- Russia in 1998

- Argentina in 2001

The "Infinite Hose of Liquidity" is always turned on full blast...

Any questions???

Sun, 05/02/2010 - 18:50 | Link to Comment Paul E. Math
Paul E. Math's picture

I would distinguish your other examples as 'one-off's. 

I might agree with you if Greece were the only country in trouble.

But Spain?  Plus Portugal?  Plus Ireland?  Plus Italy?

The Titanic would have limped into port safely if only 1 hull compartment had been breached.  It sank because the ice-berg sliced holes in several compartments, more than the ship could bear.

I'm not so confident in your investment thesis here.

Sun, 05/02/2010 - 20:10 | Link to Comment SWRichmond
SWRichmond's picture

Show us a chart for Japan/Nikkei.

Sun, 05/02/2010 - 18:35 | Link to Comment BernankeFed
BernankeFed's picture

Maybe Greece is just the "AIG" that is being used as a conduit to keep afloat EU banks, for now.

Sun, 05/02/2010 - 18:38 | Link to Comment HarryWanger
HarryWanger's picture

Now with Greece officially bailed out until the inevitable implosion in three years, GS has managed to pretty much stay off the radar this weekend as well. Looks like the markets may be back to a cheerful disposition on Monday (futures green as I type).

The oil spreading through the gulf is probably a much, much bigger issue than anyone is willing to admit. Most people are still talking about an amateur "bomb" set to go off with a child's alarm clock rather than a truly unprecedented situation in the gulf.

So life goes on for most and we'll probably see some good "headline" economic data this week. As the macro issues that matter get shoved back to the second page, expect more juice in the US markets this week.

Sun, 05/02/2010 - 19:04 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Harry Warbanger, hint, you are wearing emerald tinted glasses.

Sun, 05/02/2010 - 20:16 | Link to Comment lizzy36
lizzy36's picture

Wanger, even you seem a little (pun intended) flaccid this evening.

Euro trading negative again (1.3285), got you down?

Sun, 05/02/2010 - 20:28 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

I get a kick how Harvey Wallbanger said late last week that Greece doesn't matter. Now he says that since Greece is bailed out, all is well. The contradictions are stunning. Of course Harvey will deny saying this.

http://en.wikipedia.org/wiki/Harvey_Wallbanger

Mon, 05/03/2010 - 00:03 | Link to Comment Miles Kendig
Miles Kendig's picture

Time does demonstrate and those for whom time poses difficulties will always retort; "Why live in the past?  There is money to be made today and you're behind the times dude".

Classic

Mon, 05/03/2010 - 02:14 | Link to Comment Temporalist
Temporalist's picture

And people who don't look behind themselves are always the ones getting bit in the ass.

Mon, 05/03/2010 - 12:36 | Link to Comment Miles Kendig
Miles Kendig's picture

And we have the action of Ben & Co. who drive by looking at the rear view mirror.

Sun, 05/02/2010 - 20:56 | Link to Comment Rider
Rider's picture

What are we buying Harry? I am all in APPL as you said last week...

America is N.1

F%$# the rest of the world!!

The oil issue is nothing.

Tiny Greece...  who TF cares?

This is just about America, are you a patriot or not?!

BUY!!!

 

Sun, 05/02/2010 - 22:36 | Link to Comment Cursive
Cursive's picture

Wanger, you dumb f**k.  The futes are basically flat tonight.  One would think a true Greek bailout would have goosed them good.  But then, maybe we can agree that news doesn't move markets....

Sun, 05/02/2010 - 18:40 | Link to Comment JJP
Sun, 05/02/2010 - 18:41 | Link to Comment Paul E. Math
Paul E. Math's picture

More debt would only make sense if this were a mere liquidity crisis.

Of course, we know Greece is insolvent and this bailout will only work until the money is spent and it's time to start paying off the principal.

Sun, 05/02/2010 - 18:48 | Link to Comment Popo
Popo's picture

Yes, but we can take Greece's new debt and securitize it.  Then in the magic of bundling, slicing and insuring against default -- we can create a triple A security and sell it all before the summer season in the Hamptons comes around.  Why is everyone so negative?  < / sarcasm >

 

 

 

 

 

Sun, 05/02/2010 - 18:53 | Link to Comment RobotTrader
RobotTrader's picture

Exactly.

Wall St. never changes.

They will be "slicing and dicing" foreign junk bonds before long.

Of course, this time there will be 4 pages of "risk factors" in bold print for full disclosure.

It won't matter.

People "hungry for yield" will buy them anyway, since this crisis has already passed...

LOL.....

Sun, 05/02/2010 - 19:19 | Link to Comment Quantum Noise
Quantum Noise's picture

government backed securities... also to be known as government BS?

Sun, 05/02/2010 - 18:48 | Link to Comment Hondo
Hondo's picture

It won't work....just kicks the can down the road in a game of musical chairs. I would remind robot trader that Greece and Europe is not Asia ...they don't have the demographics to bail the out nor do they have the income generation to service their debt.

Sun, 05/02/2010 - 18:54 | Link to Comment long_and_short
long_and_short's picture

from "The International" with Clive Owen

[In explaining the "true" nature of banking in the world] The IBBC is a bank. Their objective isn't to control the conflict, it's to control the debt that the conflict produces. You see, the real value of a conflict, the true value, is in the debt that it creates. You control the debt, you control everything. You find this upsetting, yes? But this is the very essence of the banking industry, to make us all, whether we be nations or individuals, slaves to debt.

enough said .. carrry on

Sun, 05/02/2010 - 18:54 | Link to Comment Rick64
Rick64's picture

I need to buy a country. What a perfect scam.

Sun, 05/02/2010 - 22:49 | Link to Comment Rusty_Shackleford
Rusty_Shackleford's picture

Bingo.

 

The State - The Ultimate Scam

Sun, 05/02/2010 - 19:00 | Link to Comment doggings
doggings's picture

"tick tock tick tock.."

"do you hear that? .. that is the sound of inevitability.."

Sun, 05/02/2010 - 22:25 | Link to Comment Mitchman
Mitchman's picture

The sound does not appear to be disturbing the sleep of the Egregious Ben Bernanke.

Sun, 05/02/2010 - 19:02 | Link to Comment Comrade de Chaos
Comrade de Chaos's picture

the graph is a little bit misleading. The black line, the way it is projected makes the visualization of the total debt better than it is because it's out of proportion. It has ether be projected on the top starting with 133% to 145% or in the reverse on the bottom. 

And yeah, whoever believes that more DEBT is the answer to pay off the old debt is a LUNATIC out of touch with the REALITY.

Sun, 05/02/2010 - 19:31 | Link to Comment MacedonianGlory
MacedonianGlory's picture

Greek PM things so. He is presented as a savior here. He gave a "breath" of freedom, propaganda says, as he saved Greece from bankruptcy. The time he leaves power Greece will be reborned.

That is the Greek political culture. Lies and nothing but lies from an ansestor of liars.

Sun, 05/02/2010 - 21:53 | Link to Comment Mitchman
Mitchman's picture

You mean like our Fed Chairman?

Sun, 05/02/2010 - 22:13 | Link to Comment MacedonianGlory
MacedonianGlory's picture

Probably. But GPap cries and does not sleep at night for he is working to save Greece (Gvnt propaganda)

Sun, 05/02/2010 - 22:24 | Link to Comment Mitchman
Mitchman's picture

G=Pap is obviously just the guy left to turn the lights out.  He was given a wonderful opportunity to catch a falling knife and even if he was and is part of the problem, he had LOTS of help.  

Wonder who it will be when the wheel turns here to the US?

Sun, 05/02/2010 - 23:44 | Link to Comment TBT or not TBT
TBT or not TBT's picture

"GPap cries and does not sleep at night for he is working to save Greece"

He's doing the gods' work!

Sun, 05/02/2010 - 19:30 | Link to Comment Double down
Double down's picture

It looks a wee bit optimistic.

Sun, 05/02/2010 - 19:41 | Link to Comment doggis
doggis's picture

when i get too fat, and can no longer fit into my pants - I GO ON A DIET! hello GREECE...you can no longer fit into your debt pants, and rather than diet you are shopping for a pair of super stretchy pregnancy pants. you will give birth to a debt baby named DEFAULT!!

Sun, 05/02/2010 - 19:45 | Link to Comment ZackAttack
ZackAttack's picture

It's ridiculous to call it a "Greek bailout" when it's actually a bailout of useless French and German banksters.

I suppose this must be the official fantasy.

Mon, 05/03/2010 - 07:47 | Link to Comment bb5
bb5's picture

Zack----You have hit the nail on the head. This will also bail out US banksters who also have exposure to this junk.

Sun, 05/02/2010 - 19:47 | Link to Comment dumpster
dumpster's picture

the old  scam  . bridges for sale

the new scam   countrys for sale

the next scam .  rocket ride to the moon .  lots going fast

Sun, 05/02/2010 - 21:42 | Link to Comment dumpster
dumpster's picture

why the fuss over greece.. nice diversion .. look for 33 states in the USA to be saved , California, new york ,

the austeritymeasures in the states will be to take via direct payroll deduction, the money , send back enough to pay the taxes ,, .. with food stamps , free housing , and assorted gizmo's of slight of hand,   

we all will be equal.   in the sight of the overseers of humanity , 

a quite logjams of feeding , at the trough of the brave new world . ... master bates calling the shots from his perch atop the tower of babble. 

 

 

Mon, 05/03/2010 - 02:09 | Link to Comment dumpster
dumpster's picture

in perspective

Here’s some food for thought. Puerto Rico’s GDP is about $76 billion, about 21% of the size of Greece’s ($356 billion). What is more relevant to the concerns of U.S. citizens, the fact that Greece is experiencing budget problems, or that FDIC-insured banks controlling one-fifth of the value of the assets on Puerto Rico failed in one week?

What possible explanation could there be for the fact that the Greek “crisis” has been dominating headlines in the U.S. press for months, while matters such as these horrendous bank failures and the impending failures of the majority of U.S. States barely get a mention?

Can you say, Manipulation of Perspective Economics?

sinclair mine set

Sun, 05/02/2010 - 21:18 | Link to Comment Caviar Emptor
Caviar Emptor's picture

Actually Greece can still cheat the hangman. Under current rules the Greek government can legally monetize it's debt (as endorsed by Uncle Ben when asked how to cure Japan's massive debt in 2003). Greek banks buy the debt which can then be repoed to the ECB at current low rates. This provides an out from needing to issue at higher yield in the open markets. But it provides an incentive for the weak economies to seek liquidity with the backing of the stronger economies. Hence the friction. The EU will have to hash this out but it won't be pretty.

Not that we in the US aren't practicing the same little game. The Fed holds trillions in treasuries repoed by banks. We just don't care if it's Florida or Michigan draining liquidity compared with other states.

Sun, 05/02/2010 - 21:42 | Link to Comment Implicit simplicit
Implicit simplicit's picture

Would the ECB agree to do that considering the debt has been basically degraded to sub-junk?

The bond vigilantes haven't got to the US debt YET.

Sun, 05/02/2010 - 22:18 | Link to Comment Caviar Emptor
Caviar Emptor's picture

They have, and yes they do. That's the out. Of course they've been doing this quietly. Part of the flap was over the fact that Goldman helped the government obtain AAA under false pretenses and hence the ECB was left holding the bag on junk. Don't expect that uncomfortable dance to end soon.

Sun, 05/02/2010 - 22:26 | Link to Comment Mitchman
Mitchman's picture

All in all, it couldn't happen to a nicer bunch of guys.

Sun, 05/02/2010 - 23:10 | Link to Comment RottingDollar
RottingDollar's picture

So what is the cure to all this debt the world is swimming in?    I hear all the complaints, but how do we stop the world's dependency on debt crack?

Mon, 05/03/2010 - 01:35 | Link to Comment ambrosiac
ambrosiac's picture

 

You mean, crack whores giving blowjobs for a dollar to feed their habit?

 

You run out of crack

or you run out of dollars.   (Oh wait--- )

Mon, 05/03/2010 - 03:08 | Link to Comment AnAnonymous
AnAnonymous's picture

The disease is to seek a cure for debt.

Debt is a powerful enabler of consumption. Greek is another perfect example.
What they are going to get through debt is as much others wont get.

So far, people throw in that debt is bad. Against an increasing pile of evidences.

Sun, 05/02/2010 - 23:28 | Link to Comment glenlloyd
glenlloyd's picture

the cure to all this debt we're swimming in is....wait for it...more debt (according to those in charge)

Someone needs to put a stop to it....really.

Sun, 05/02/2010 - 23:39 | Link to Comment jkruffin
jkruffin's picture

Now, with Greece getting bailed out, and who understands why and how at this point, what would you do if your were one of the other PIIGS in trouble and in danger of default?  

 

I would default on purpose now, and make them bail me out.  I would cry to the world everyday my country would default soon.   Now these morons in charge, have set a precedence where they have to bailout every country no matter what.  Bunch of idiots we have in charge running the largest ponzi ever known to man.

Sun, 05/02/2010 - 23:57 | Link to Comment trav7777
trav7777's picture

More debt is ALWAYS the answer.

Just grow your way out of it.

See how debt is a growth mandate?

The world isn't going to cooperate in the aggregate this time around, sadly.  Gonna be some frown faces from the debt merchants when they wake up to a world where their product is unsaleable.

Mon, 05/03/2010 - 02:11 | Link to Comment ConfederateH
ConfederateH's picture

"More debt is ALWAYS the answer." 

Reminds me of the old adage, if the only tool you have is a hammer, then every problem looks like a nail...

Mon, 05/03/2010 - 00:12 | Link to Comment Defiant1968
Defiant1968's picture

How to get out of debt - Jubilee - this did not sneak up on God - We need to have a debt jubliee and start over again - we have failed to live by the standards of the Bible and we are being made slaves to debt - I don't know how this would work in a modern society but I know it needs to be done NOW

Mon, 05/03/2010 - 00:21 | Link to Comment virgilcaine
virgilcaine's picture

This will accelerate the Greek bond selloff, more supply is on the way.

Mon, 05/03/2010 - 00:30 | Link to Comment Caviar Emptor
Caviar Emptor's picture

For now the world sovereign debt problem is a numbers game. It's a crisis on paper that has economists and politicians gnashing their teeth. But it can easily cross the line and morph into a political crisis.

The early signs: sovereign debt is moving to the front burner in the upcoming UK and US elections. Gradually the debates are getting louder, but they're still debates. 

But existing debates can escalate if the economics deteriorate. We could get escalation to a globally coordinated sovereign debt crisis once it becomes clear that the prevailing economic policies have created definite winners and losers. You can't have a large pool of disenfranchised, angry people in any one country let alone 50. 

The radical politics of the 1930s were proposed as "solutions" to dire economic conditions. There's the risk.

Mon, 05/03/2010 - 03:14 | Link to Comment AnAnonymous
AnAnonymous's picture

Where have you been living for the 300 hundred last years?

Economic policies creating definite winners and losers are possible through segregation.

Get the winners to live on a distinct territory and the losers on another distinct territory.

And the situation(in terms of available solutions) is very different from the 1930s.

 

Mon, 05/03/2010 - 08:15 | Link to Comment bb5
bb5's picture

You are indeed correct Caviar----this is a major problem coming down the pike. Crime is already increasing in my area (FL) even though Uncle Ben has the stimulus juice at full throttle. When the juice dries up---I don't think the have nots will lay down in the street and die. The real ugliness lies ahead unless Timmay, Helicopter Ben, and Big Larry have some magic in their economic doctor bag.

Mon, 05/03/2010 - 00:32 | Link to Comment Privatus
Privatus's picture

Lies.

Mon, 05/03/2010 - 01:12 | Link to Comment mudduck
mudduck's picture

I think the Greek government (as well as many other govs) thinks of this bailout money or bond issuance money as income not debt.

 

Mon, 05/03/2010 - 01:21 | Link to Comment goober
goober's picture

It is the same thing we have done here in the US. Simply digging a bigger hole. Must be the same guys n charge? Get a rope!~

Mon, 05/03/2010 - 01:26 | Link to Comment Eddyspain
Eddyspain's picture

 

Re that MERVAL chart: those parabollic rises are in a devalued currency (in this case, 3,5 x) so they are not really so great.

 

The Greek bailout is rally a French/German Bank Bailout. At the end of the 3-year perior much of their greek debt will be transfered to the Eu/Fmi. 

Mon, 05/03/2010 - 01:31 | Link to Comment goober
goober's picture

makes sense

Mon, 05/03/2010 - 02:10 | Link to Comment goober
goober's picture

The ECB/EU has now assured further contagion. Amazing! They just relaxed the rules regarding Greek bonds and collateral measures regarding debt. What idiots, they have assured their demise. 

Mon, 05/03/2010 - 02:29 | Link to Comment primefool
primefool's picture

ECB drops credit ratings requnts for collateral!! Now they have finally decided to drink the Koolaid and they are drinking by the bucket! Any dreams of running a chaste "hard money" policy are finished. Expect Euro to drop.

Mon, 05/03/2010 - 02:33 | Link to Comment primefool
primefool's picture

So Tricky Trickster is gonna get shit faced and do the lambada - an ugly sight indeed.

Mon, 05/03/2010 - 02:37 | Link to Comment tom a taxpayer
tom a taxpayer's picture

ECB suspends rating threshold for Greek debt

By Polya Lesova

FRANKFURT (MarketWatch) -- The European Central Bank on Monday said it would suspend the application of the minimum credit rating threshold in the collateral eligibility requirements for credit operations in the case of debt instruments issued or guaranteed by the Greek government. This suspension will stay in place "until further notice." 

http://www.marketwatch.com/story/ecb-suspends-rating-threshold-for-greek...

Mon, 05/03/2010 - 03:49 | Link to Comment A Man without Q...
A Man without Qualities's picture

This is merely confirmation of what the Greeks understood from the start.  Governments are not willing to recognize the losses on the bad debts in the system, owing to the defaltionary impact this will create.  Deflation kills those who have the most leverage and debt, and this is the governments and the banks.  The consequence of this will be a massive spike in prices (but then that is what happens when you devalue all currencies).  Once this plan is understood, those who can will take on even more leverage, which is what the banks are going via equities and fixed income via cheap money from the central banks) to stay ahead of the curve.  

As an individual, the only sensible strategy is to do what the banks will do, but just watch out for the "corrections" that the banks use to shake out the weak hands.

Obviously, this may fail in a hyper inflationary collapse and you might find your massive gains won't even pay for a loaf of bread, which is why you take as much money as you can, go and buy some gold and silver and bury it somewhere safe.

Anyway, that's what I have done.

Mon, 05/03/2010 - 08:19 | Link to Comment docj
docj's picture

The problem with trying to drink yourself sober is that you eventually pass-out and (hopefully) wake-up with a really awful hangover, generally much worse than what you'd be suffering from if you had cut yourself off at only a mild state of knee-walking inebriation.

Sounds like the Greeks are about to experience the financial equivalent of that.

And I hear hangovers caused by Ouzo can be a real bitch.

Mon, 05/03/2010 - 15:55 | Link to Comment Grand Supercycle
Grand Supercycle's picture

DOW/SP500 intra day chart gives bullish signal.
Interesting ...

MARKET UPDATES:
http://www.zerohedge.com/forum/latest-market-outlook-0

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sun1's picture

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sun's picture

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