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Greece: T-Minus 30 Days To Funding D-Day (Give Or Take)
In this interview with the BBC's Andrew Marr, Greek Prime Minister George Papandreou makes it clear that Greece has enough cash to get it through another 30 days (and likely less), or to last it thought "Mid-March." While this statement was likely supposed to remove pressure from expectations that Greece will auction off another €5 billion this week, which as we disclosed previously will most likely not happen, this revelation will likely not achieve the required goal. It has been well known for a long-time that Greek bond maturities culminate with €16.7 billion over April and May. Specifically, there is €8.22 billion maturing on April 20. The fact that there is a lag time of at least a month between when Greece should be rolling maturities and actually in need of funding, will likely be taken as a sign of additional weakness, as spending apparently has not moderated by one bit. This means that Greece will now have to raise double the amount as it approaches the funding deadline when taking into account the natural deficit generated between mid-March and April 20. How happy the EU, and Germany in particular, will be with this disclosure will be seen in tomorrow's Greek CDS market.
Furthermore, Papandreou's attempt to marginalize the importance of the auction which now it appears will not take place is refuted by Greek website bankingnews.gr, which (Google translated) notes the following:
It is obvious that this auction is perhaps the
most crucial in the history of borrowing as the country takes place
amid wild speculative gambling in bonds and amid dire situation for the
economy.
Taking a lesson straight out of the Obama administration, Papandreou placed the blame for the Greek catastrophe squarely where it belongs: it is all the prior administration's fault, thank you...oh yes, and tax-evading tax"payers."
"We had a mismanagement of the economy from the previous economy. And we have to admit that. And the mismamangement had to do with a lot of corruption, cronyism, clientilism, and the way money was used. Taxpayers just began to say "why should I pay my taxes" and we had an increase in tax evasion, which of course then hit our budget and deficit. When we were elected a few months ago, we found out that the deficit was actually double the figures that the previous government had announced officially, and that of course further created problems with credibility."
Adding to the head-scrathing is George's validation for the "support" of his far-overdue austerity measures.
"Even though there are austerity measures and
they do hurt, we have the support right now for the austerity measures
which is around 50 to 60 percent of the population, and the government
also has that support."
Unfortunately, the problem is that the other 40 to 50 percent are currently on strike.
And, just in case you missed it the first one trillion times, Greece does not want financial support... Just political. Presumably political support will be enough to collapse GGB yields from the current 6.8% ballpark to something on par with Bunds, once Greece regains market "credibility." It is a good thing that Papandreou's government has been on the stage for just a few months, as otherwise one would be tempted to question his understanding of basic finance.
"We need the help so that we can borrow at the
same rate as other countries, not at high rates which undermine our
ability to make the changes we need to make."
His response to the question of whether Greece will issue bonds next week is the abovementioned avoidance in which he notes that Greece has money until mid-March. This is quite bad, because it means that not only will Greece need to issue at least the €8.22 billion due on April 20, but whatever cash burn the government will see from mid-March to late April, likely a total of at least €10 billion, if not materially more. If Greece is unable to raise €5 billion next week, just how capable will it be to access capital markets in one month, for double the amount, and when bond vigilantes know they will be able to extract whatever interest expense they desire as the country will have no option but to pay whatever is demanded of it?
The kicker comes from Marr's question: "If the speculating against Greece goes on, and if you are unable to raise money in the bond markets in the usual way, I can't see what alternatives you've got to going back and asking for straightforward bail out help from the rest of the EU, beyond possibly suspending Greece from the euro itself." And when pressed on why a Greek suspension is not in the cards, which as Marr points out would deal with the situation "more quickly than anything else" Papandreou notes it would be the start of the the break up of the eurozone.
In the meantime, please visit Santorini for your summer vacation. The Greeks need your money. Overall, Papandreou really wishes this bad nightmare would just end already.
All this and more after the jump.
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ftd says that an aid package is ready
http://translate.google.de/translate?js=y&prev=_t&hl=de&ie=UTF-8&layout=1&eotf=1&u=http://www.ftd.de/politik/international/:gefahr-der-staatspleite-griechenland-hilfe-kann-fuer-deutschland-teuer-werden/50078051.html&sl=de&tl=en
there are only two possibilities
- ftd and spiegel have the same wrong source
- the german government lies
I take number 2.
Imho, this is a giant game of chicken. The question becomes who blinks first?
One speculates that absent some sort of EU (read German) guarantee, the proposed bond issue failed to attract so much as a single soft circle (at anything south of 20%).
Extend and pretend with a t-30 day time limit. Perhaps we are about to run out of hopium?
Harrisburg defaults on March 1. They win!
I dated a greek girl once, she was a real whore...with a big nose.
If you haven't noticed yet, that was your mom
Sunday night: Sydney up 1.5%. Nikkei up 2.5%. Doesn't seem to be a lot worrying around the globe.
Hey, the Greek Prime Minister is a better speaker than our current and former Presidents.
Allow me to paraphrase: It isn't fair (that those productive and frugal Germans should be able to borrow at a lower rate than us Greeks)! It isn't our fault (that we Greeks borrowed more money than we can afford).
"It isn't fair." "It isn't our fault," said the American sub-prime mortgage borrower.
"It isn't fair." "It isn't our fault," said the Irish real estate agent.
"It isn't fair." "It isn't our fault," said the Spanish construction worker.
"It isn't fair." "It isn't our fault," said the English banker.
"It isn't fair." "It isn't our fault," said the Germans with the machine guns.
+10
They should be absolutely fucking ecstatic there's anyone in the world who would lend them money for 10 years at 6.8%.
What is this constant bullshit about speculators driving Greek bonds wider ?
It is investors who own them who are selling them
Why the fuck is that so difficult for these people to understand ?
I (strongly) doubt the german or the french taxpayer really cares about the Greek bailout since there is now a mentality worldwide (yes, the US included) that others will pay. Who are exactly the "others" doesnt matter !
In Germany, there is a much more important debate right now about raising the HartzIV amount (social money), because slowly the idiots who are still working realize they are far better off stop working and take the money from the state.
Some Context
The spread between Greek 10-year bonds and benchmark bunds widened 22 basis points last week to 318 basis points. The gap widened to 396 basis points last month, the most since the year before the euro’s debut in 1999. It was 8 basis points five years ago.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aV6TggelbXe4&pos=4
Some Context
The spread between Greek 10-year bonds and benchmark bunds widened 22 basis points last week to 318 basis points. The gap widened to 396 basis points last month, the most since the year before the euro’s debut in 1999. It was 8 basis points five years ago.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aV6TggelbXe4&pos=4
Gold up in Asia.
aus_printer -
i think you are mistaken. holders may be selling, but they are not the only ones who are trading in Greek sovereign & bank debt & also the associated CDS markets.
Nikkei up 2.75% out of blocks...Hong Kong to follow...US futures show typical Monday ramp-in-waiting.
Absolutely everything everywhere that is bad is already factored into the market; it's only biscuits and gravy from here on out!
great analysis
The water boiled and you broke the spaghetti in half and put it in the water and went back to watching the big game on tv.
Two hours later you're standing in the street in your underwear trying to figure out how you forgot about the spaghetti and burned the entire building down.
Wonder what's going on in California.
Here in California we're watching the big game on TV....hey. Where's that smoke coming from?
Never break the spaghetti in half.
Press it slowly into the bottom of the pot and it will bend
and fit the pot in about two minutes or less.
Ok ok we get it. March 16th, Iceland defaults, Greece defaults european bank crashes, libor goes to 0.0 percent, Citi won't let anyone withdraw over 10 bucks a day without a long waiting period. Oh throw in a 3 dollar service charge everytime you take out 10 bucks.
Where can one trade Greek bonds(wanted to short it back in Nov,but couldn't find a futures for it)?. I understand it is a thinley traded market,so is that a specialty for big hedge funds only?
Those are nice cabinets behind them in the video.
I wonder what they will retail for next weekend.
Thanatos
Euro Worst to Come as Greece Hammerlocks ECB on Interest Rates 22 February 2010 (Bloomberg) http://www.bloomberg.com/apps/news?pid=20601087&sid=acOoDNFwLiAs
Greece Said to Have Arranged Swap Contracts With About 15 Banks 22 February 2010 (Bloomberg) http://www.bloomberg.com/apps/news?pid=20601068&sid=aV6TggelbXe4Looks like the "Greek Strike" virus has spread to the French oil refineries. This is the kind of thing that will encourage bailouts.
http://online.wsj.com/article/BT-CO-20100219-711139.html?mod=rss_Commodi...
Not really, I think; strikes in France are not new news.
Greek language its quite old, and has a word to address these cases.
Its the word "malakas".
Now its quite clear to the world what malakas is all about.
This guy inherited greece as a kind of real estate from his father (and his grand father).
If he gets a word, speads are jumping.
Very energetic and president of Socialist International.
One of the reasons I dont feel threatend on Bilderberg scenarios.
This guy is a member! (un-f**cking believeble).
Iceland defaults on March 6. Defaults usually comes in group, according to Rogoff "This time is different".
Iceland defaults on March 6. Defaults usually comes in group, according to Rogoff "This time is different".
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