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Greece On Verge Of Activating Rescue Package
Follow the motions: with Greece imploding once again, and bonds back to 7%+. let's try everything all over again and hope it works this time: IMF is *yawn* sending another team to Greece, Dominque Strauss-Kahn reports, even as Greek PM G-Pap has sent a letter to top officials in Europe and the IMF, requesting talks to discuss the details of a contingency financial support plan for his country. Um, we did that charade last weekend: it worked for 24 hours, just long enough for you to issue $2.1 billion in Bills, which auction by the way bankingnews.gr recently reported was a scam, with half the bids being fake! Well, congrats, but it ain't gonna work any more, as the market has called your half-pregnancy bluff. But that does not stop Greece, and its ex-Goldmanite head of public debt management, from demonstrating just how clueless it is when accessing the capital markets. At least Greece is acknowledging that at this point formal aid request is merely a matter of a few days. We are now convinced that Greece is in fact doing all it can to be allowed to default, yet Germany and Europe are forcing a two tier sovereign debt capital structure, with new guaranteed money becoming the Secured tranche in the Greek balance sheet. Of course this means that any demand for the "Unsecured" portion will disappear as soon as the bailout mechanism is finally activated.
According to Market News:
"Greece’s Finance Minister George Papaconstantinou sent a letter Thursday to top officials in Europe and the International Monetary Fund, requesting talks to discuss the details of a contingency financial support plan for his country. Though the letter makes clear that Greece is not yet asking for the help to be activated, the request for a meeting nonetheless suggests that, with Greek bond spreads once again widening and prospects for a U.S. dollar bond of up to $10 billion quickly evaporating, the formal request may not be long in coming.”
Eurozone finance ministers on Sunday announced that they stood ready to provide loans to Greece of up to E30 billion in the first year of a 3-year plan, with more funding negotiable in subsequent years. As part of the plan, the IMF would contribute between E10 and E15 billion of its own money, sources said. But details of exactly how the EMU and IMF portions of the plan would mesh together have been vague to non-existent.
A senior Greek Finance Ministry official told Market News that With the call for a meeting today, Greece is seeking to iron out “immediately” exactly what the details of the joint EMU-IMF plan will be, and what fiscal, macroeconomic and other conditions will be imposed on Greece in exchange for the aid.
It seems likely that Greece is feeling pushed to the wall, as the yields on its sovereign debt remain stubbornly high despite last Sunday’s aid agreement. Another factor may be the diminishing prospects for funding its needs in financial markets even at elevated interest rates.
The Wall Street Journal reported earlier today that Greece was being forced to slash its expectations for a U.S. dollar bond, which the Greek government had hoped would raise $5 billion to $10 billion. Now, the Greeks are looking at a figure in the range of $1 billion to $4 billion, and could end up scrapping the bond sale altogether, the newspaper said.
It cited a Greek official, who acknowledged that there appears to be very little appetite for Greek paper among U.S. investors.
However you slice and dice it, this is all very euro negative, and once the shorts clear out, we expect that the Euro will continue its one way path lower. Which of course means scrambling for the Fed which is starting to officialy lag in the debasement rally. We expect California and other bankrupt states to take a much more prominent media appearance in the next month, as the US reminds the world just how bankrupt it itself is.
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http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100004933/greece-dred-scott-and-the-american-civil-war/
Which works better and has a longer effect, Viagra or a Greece rescue package?
Really, who cares, as the answer is simply to buy, buy, buy...
S&P green again. That little dip this morning was just a bad dream. Had to shake it off before heading north.
The reality has been, bad news out of Greece has resulted in maybe 300 red Dow points, while bailout news has been responsible for about 1000 green.
If Greece has an apparent solvency lasting more than four hours, call an IMF or EU Official immediately, as permanent damage to your portfolio could result.
Isn't this last weeks story? Did TD inadvertantly repost?
This was so, so dealt with; there was a big huddle. Afterwards the politicos said all was cool. What more do you want?
The biggest problem, as I see it, is that each EU member state has to approve the bailout. If true, that's not going to work. TD has reported this in earlier story about the Greek non-bailout bailout, but it is missing here.
Yawn. Seen this movie before. Boring. Zzzzzzzzzzzzzzzzzzz...
Sir, activating the rescue package...prepare for liftoff...3...2...1
http://www.youtube.com/watch?v=5w_DqhpMuFY&feature=related
It has been obvious for ages that at least Germany would not approve a bail out as Merkels coalition partners categorically stated they would vote no. And without Germany there is no EU bail out.
That leaves the IMF. Greece holds some cards if everyone else is desperate for her to not default. She can demand less harsh condition in an all or nothing gamble.
I think Greek will default, eventually, after this is played out a little longer, some more money wasted...
I think Greece will first get any money it can that is guaranteed/backed by someone else (American Tax Payer), and then it will default.
"immediately" exactly!!
like....HOW MUCH AND HOW SOON?
Straight from DJ.
04/15 10:26AM =DJ 2nd UPDATE: Greece Seeks Aid Talks As U.S. Bond Hopes Fade
ATHENS (Dow Jones)--Greece Thursday took another step towards the first
sovereign bailout in the history of the euro zone, amid growing doubts that
the country can continue raising money on the financial markets.
In a letter to European and International Monetary Fund officials, Finance
Minister George Papaconstantinou asked that formal "discussions" on the aid
package begin, in the event Greece would need to avail itself of that aid.
"Greek authorities are requesting discussions with the European Commission,
the European Central Bank and the IMF on a multi-year program of economic
policies... that could be supported with financial assistance from the
euro-area member states and the IMF, if the Greek authorities were to decide
to request such assistance," the letter said.
Seeing the letter as the first step towards a formal request for help, Greek
financial markets staged a relief rally late Thursday with the Athens Stock
Exchange up 2% at 2,027.54 points.
At the same time, the interest rate spread on Greek government bonds over
their benchmark German counterpart--a measure of credit risk--narrowed to
around 398 basis points, down from about 410 basis points earlier in the day.
Following on the request, the IMF announced that it would be sending a
delegation to Athens to discuss financing arrangements.
The letter comes as the Greek government cuts its expectations on the amount
it hopes to raise from a global dollar bond at the end of this month, which it
may even drop altogether if interest from U.S. investors keeps waning, two
government officials said.
One of the officials said Athens now hopes to raise "between $1 billion and
$4 billion," compared with $5 billion-$10 billion previously.
"Fact is there is no strong interest in the U.S. for Greek debt," a second
official said, adding Athens could cancel the issuance if "the minimum
necessary amount can't be collected."
Greece has been pinning its hopes on the U.S.-dollar bond deal to gather
much of the funding it needs to cover some EUR8.8 billion in bond redemptions
that fall due in May, including an EUR8.5 billion, 10-year bond that is due
May 19. Athens has said that it has enough cash on hand to meet its needs
until the beginning of May.
If the deal fails it could send a negative signal to the markets and further
increase Greece's already high cost of borrowing. In turn, this may force it
to resort to a European Union-IMF bailout package which the country has asked
for, but wants to avoid because of the political backlash at home.
Last Sunday, finance ministers from the 16 countries that use the euro
agreed on a joint rescue plan for Greece that would include as much as EUR30
billion from other euro-zone members in the first year, and a mooted EUR15
billion from the IMF. However, some details of the plan--including how long it
would take to activate the loan--still remain unclear and have since stoked
renewed investor jitters in the market.
Even so, a government official said that Greece would still proceed with a
previously announced "non-deal" roadshow next week to meet with U.S. investors
and gauge their interest in Greek debt.
But U.S. investors appear skeptical that Greece will live up to its promises
of fiscal restraint, even with the EU-IMF package ready, if the country can't
get the financing it needs from capital markets.
"I don't see that there is real demand for a Greek dollar-denominated bond
at the moment," said Mark Grant, managing director at Southwest Securities.
Italy, Spain and Portugal should start some really enormous, costly public works projects. A space elevator would be nice.
Can we! please, please!!!!
3month yld up 580.9bps to 7.204
Value: 7.20 !
Change: 5.809 !
% Change 416.320 % !
>3month yld up 580.9bps to 7.204
"I don't see that there is real demand for a Greek dollar-denominated bond
at the moment," said Mark Grant, managing director at Southwest Securities"
:-(
Why not just declare bankrupt now - the economy is too small to handle the debt they have and by borrowing more from the Euro states means the Euro will take more and more pain. Bankrupt now and focus to save the bigger economies in Europe (Italy, Spain and the UK) as they will be next without a doubt!! The Euro and Europe will benefit massively from this in the longer run.
In short --
They can't be allowed to fail, because the capitulation of a first-world country under a modern, fiat currency, would be waving a white flag. All around the world, fiat currency countries would be TOAST.
"All around the world, fiat currency countries would be TOAST."
And what other kind are there that would not "be TOAST"?
If anyone was paying attention most of these currencies would be toasted on both sides already. But they are not because quicksand-based fiats are universal now, and surviving on blind faith. White flags, red flags, meteors exploding over Iowa - nobody wants to see any signs so they won't.
Ah well, at least the ECB is still doing what it can to help out in its quiet way, free of legal process and mass-media attention. And to think some people say there's no EU bailout for Greece, or that the PIIGS have no access to a printer! But it could later turn out to be pretty awkward if the discount the ECB is now demanding on Greek goverment bonds fails to cover the haircut from a future Greek restructuring, yes?
Duhh...
The guy owning the printing press (ECB) volunteers to take the eventual "haircut".
And it took them "how long?" to come up with this idea?
EURO PIT:
http://williambanzai7.blogspot.com/2010/04/euro-pit.html
Greek Prime Minister George Papandreou said his country's debt crisis "has created psychological terrorism in our economy and among Greek citizens"
This is the statement of a clown.
I know a lot of folks talk of the imminent "death" of the dollar longer term, and the replacement of the dollar with a new global currency.
This is kind of a contrarian thought, but, if the US bails out the world, could it perhaps be setting the table for the dollar being installed by the powers that be as the new world currency?