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Greek Math: €12 Billion In, €18.2 Billion Out... And That's IF The Impossible Happens

Tyler Durden's picture


Here is a simple summary of the Greek bailout math explained with just 2 numbers. First, the country has to do the impossible. As Citi's Jurgen Michels summarizes: "Once the whole new cabinet is announced, parliamentary discussions ahead of the vote of confidence will probably  start on Sunday, with the vote actually taking place next week on Tuesday evening. Even if the new government manages to pass the vote of confidence, it will still have to submit to Parliament the new austerity package for approval, probably sometime later next week or the week thereafter. This will be key for the smooth disbursement of the next tranche of EU/IMF loans, of €12bn." In other words, the Greek government has to pass 2 near-Sysiphean tasks before it can even hope to sniff the IMF's €12 billion in rescue funding. That's number 1. Number 2 comes from the chart below, which shows the debt and interest payments through August. This number is €18.2 billion. This number does not include the billions in deficit spending that will also have to be funded somehow over and above debt paydown. Ergo, the math for a viable Greece is as follows: €12BN > €18.2BN  + X. Simply said, unless somehow Greece discovers how to tax its citizens and actually record net revenue in July, the best the ECB can hope for before it has to mark its tens of billions in Greek bonds to about 45 cents on the dollar, is one month. So will someone please explain to us why again the EUR is up today? Actually the only possible reason is that Europe is now pricing in the fact that China will be the de facto owner of at least 2 European countries by this time next year, however not in an Asset Purchase Transaction but Stock, whereby China also acquires the liabilities. Which in turn may explain why Russia's just announced minutes ago that China may turn into "zone of risk" for the global economy.


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Fri, 06/17/2011 - 10:54 | 1377538 CPL
CPL's picture



it's pointless to even attempt to figure out the market rationale nowadays.  In a bizarro superman universe it could mean anything.

Fri, 06/17/2011 - 11:01 | 1377568 Hugh G Rection
Hugh G Rection's picture

Carve it Up, The Creature From Jekyl Island is Hungry!

Fri, 06/17/2011 - 11:00 | 1377574 Goatboy
Goatboy's picture

Before, we just knew less. Now we know more (or think we do).

Bizzare is monkey society market's middle name and always was.

Fri, 06/17/2011 - 11:15 | 1377626 GoldSilverDoc
GoldSilverDoc's picture

Maybe somebody could tell me why China would WANT to own Greece and Portugal?  Wouldn't that be like owning a bunch of REO that hasn't been marked to market?

Fri, 06/17/2011 - 11:24 | 1377645 jerry_theking_lawler
jerry_theking_lawler's picture

there is no more "mark-to-market" is now "mark-to-fantasy"....that is the reason this whole ponzi is still going....

Fri, 06/17/2011 - 13:07 | 1377651 GoinFawr
GoinFawr's picture

"Maybe somebody could tell me why China would WANT to own Greece and Portugal?"

They're running into a dearth of Falun Gong 'suppliers' for their human organ export business, and Europeans will provide better matches for the rapidly expanding Rotschild market?

Hunh. Gives new meaning to 'extracting a pound of flesh' from your debtors, no?

Mon, 06/20/2011 - 15:23 | 1385898 Onohymagin
Onohymagin's picture

Lovely bit of lateral thinking.

Tue, 06/21/2011 - 12:47 | 1389330 GoinFawr
GoinFawr's picture


Fri, 06/17/2011 - 11:53 | 1377745 Dreadker
Dreadker's picture

Greece is a nice place to station lots of chinese fighter jets and bombers... and portugal can be used to regulate sea trade routes to and from the Meditteranean... Global oil wars bitchez!

Fri, 06/17/2011 - 12:21 | 1377834 ambrosiac
ambrosiac's picture


China's Cosco, running one of the piers at the Port of Piraeus, has imposed a no-breaks

policy, including a no-urination one.  No trips to the little boys' room.


Piss before the opening bell or forever hold your bladder.  A sign o' things to come?

Fri, 06/17/2011 - 12:09 | 1377791 Founders Keeper
Founders Keeper's picture

[Maybe somebody could tell me why China would WANT to own Greece and Portugal?]---GoldSilverDoc

Hi Doc.

IMO, China is not ready for the European dominoes to start falling. China still has too many USDs yet to spend on shoring up foreign resources and securing food supplies.

China, like everyone else, is pushing against the inevitable. Buying more time to prepare for the economic catastrophe.


Fri, 06/17/2011 - 10:51 | 1377544 Stoploss
Stoploss's picture

Quad witch today.

Fri, 06/17/2011 - 11:03 | 1377573 Cognitive Dissonance
Cognitive Dissonance's picture

Very volatile. I can't wait until 2-3 PM for the afternoon fireworks display.

Fri, 06/17/2011 - 11:11 | 1377618 Ray1968
Ray1968's picture

Nasdaq is leading the way down right now. DJIA to follow.

Fri, 06/17/2011 - 11:32 | 1377677 Cdad
Cdad's picture

That is because the mother of all liquidity driven bubbles is about to pop...and everyone knows it [except the folks at Citi, I guess].  I am talking about the life sustaining price action on Netflix, of course.

Surely, if Netflix can no longer maintain positive traction, doom is at hand.

Attention Netflix "Investors"!  Please report to your "smoothing mechanism."

Fri, 06/17/2011 - 11:55 | 1377757 Bay of Pigs
Bay of Pigs's picture

Where are the "value" investors snapping up the bargain priced RIMM at?


Fri, 06/17/2011 - 12:03 | 1377769 Cognitive Dissonance
Cognitive Dissonance's picture

They're all afraid of a RIMM job.

Fri, 06/17/2011 - 10:53 | 1377550 scratch_and_sniff
scratch_and_sniff's picture

Ask no questions, hear no lies.

Fri, 06/17/2011 - 10:54 | 1377554 LRC Fan
LRC Fan's picture

They are unable to kick the can, now it is taking more and more force to move the can down the road.  Bulldozers and cranes come to mind.  Pretty soon the can is going to fall through the road and cause a huge fucking pothole.  They will try to fill it with paper money and open the road back up. 

Fri, 06/17/2011 - 10:58 | 1377555 slow_roast
slow_roast's picture

Who's more confident here, bulls or bears?  Really?

Is there really any hope of this situation looking any better on Monday?  By then we might have riots in France and Germany protesting Greek protests.

Fri, 06/17/2011 - 10:58 | 1377557 hugovanderbubble
hugovanderbubble's picture

Im shorting this equity market till 1.100

Tactically till 1.220

Sat, 06/18/2011 - 11:28 | 1380132 snowball777
snowball777's picture

Good bounce target, but your final cover may leave much on the table.

Fri, 06/17/2011 - 10:56 | 1377560 Dick Darlington
Dick Darlington's picture

This will make Greece GDP and tax revenue soaring

In the meantime, let's read EU headlines how we are one big happy family and as confident abt anything as ever. Can we sing Kumbaya too?

Fri, 06/17/2011 - 10:56 | 1377561 Sambo
Sambo's picture

China owning two countries...? Sounds like a game of Monopoly....

and the winner is ...nobody!

Fri, 06/17/2011 - 11:26 | 1377638 TheTmfreak
TheTmfreak's picture

Except they'll own Baltic and mediterranean avenue. Whoopdy fucking doo.  (Funny how ironically that turns out to be what they would be owning...)

Even if you put a hotel on Greece its not like it'll be a worthwhile purchase.

Edit: Even the monopoly board game understands the value of the property... Unimproved... about 2 bucks, with full improvements about 250 bucks.

Fri, 06/17/2011 - 11:32 | 1377685 Double down
Double down's picture

Let them own all they want, just do not let them have the "collateral". 

Fri, 06/17/2011 - 10:58 | 1377563 plocequ1
plocequ1's picture

Im confused. Ill go back to the Rimmberrrrrrrrr post. Its much easier to understand

Fri, 06/17/2011 - 10:56 | 1377564 rubearish10
rubearish10's picture

The EUR is up today because all these shenanigans are at the expense of the reserve currency. More USD's will be printed to allow for more EUR's to be disbursed to buy more Greek Isle Bikini's!

Fri, 06/17/2011 - 11:02 | 1377569 Cognitive Dissonance
Cognitive Dissonance's picture

Actually the only possible reason is that Europe is now pricing in the fact that China will be the de facto owner of at least 2 European countries by this time next year,....

Is it creditors choice or does China simply get stuck with whatever defaults? Can Chine trade one Greece and one Spain for 1/2 of Germany? Or does cash also need to change hands? Or better yet......Gold?

Fri, 06/17/2011 - 12:30 | 1377860 hamurobby
hamurobby's picture

Im surprised that Germany would let this happen, me thinks they will buy Spain and Greece for .50 on the Euro. Have not wars started over less?

Oh, and Rimm job, good one CD.

Fri, 06/17/2011 - 11:03 | 1377571 lizzy36
lizzy36's picture


Market up on either DIP financing to be provided by China (look forward to the Nasdq listed RTO of Greece in 2014)


Market up because the ECB will prevail (just long enough for Trichet to retire with his legacy intact, although see Greenspan for viability of duration trade in ones legacy), by adding even more debt on to the Greek balance sheet, providing for an even more catastrophic default going forward.

Fri, 06/17/2011 - 11:01 | 1377580 Cognitive Dissonance
Cognitive Dissonance's picture

I select number 2 under the premise that "Not on my watch" is the policy of all politicians the world over.

Fri, 06/17/2011 - 11:51 | 1377740 SDRII
SDRII's picture

Rumor china to widen out band against the dollar this weekend

Fri, 06/17/2011 - 11:00 | 1377575 Cdad
Cdad's picture

So will someone please explain to us why again the EUR is up today?

 I thought this was because China [the single worst allocators of capital on the globe, bar none] was buying Euros yesterday [and by algo too]?  In which case, and perhaps with about one more penny in the crocodile algo advance of that clearly FUBAR currency, I think it is time to sell it.

And since this entire US equity session is looking like every session in the last six weeks, with the ETF/underlying stock arb trade running wild, it seems pretty clear to me that a reversal is highly likely today, in equities and in currencies.

My math would also indicate that today's Greek cure [firmly established as something in the past tense this morning on the BlowHorn] is nothing more than a story started so as to convert dumbass upside calls into liquidity destined for downside put on Monday morning.  But I freely admit that I might be missing something here...and the disturbing feeling in my posterior just now may well be, in fact, a unicorn horn.

Fri, 06/17/2011 - 11:08 | 1377588 Cognitive Dissonance
Cognitive Dissonance's picture

....that today's Greek cure......

I took The Cure once. But it still itched for several weeks afterward.

I suspect the world will be itching for decades from this fiat transmitted disease. 

Fri, 06/17/2011 - 11:16 | 1377629 Cdad
Cdad's picture

My guess is...come Monday, noonish est, the itch will resume.

Fri, 06/17/2011 - 11:28 | 1377674 Cognitive Dissonance
Cognitive Dissonance's picture

I highly recommend liberal application of this. In physical form of course.


Sat, 06/18/2011 - 11:31 | 1380135 snowball777
snowball777's picture

That'll be $3079.80 + tax.

Fri, 06/17/2011 - 11:03 | 1377590 SheepDog-One
SheepDog-One's picture

Its all so broken I cant even look at it anymore...just like how 4 years ago I had to stop watching all the media because the assault to the senses was too much, now following this daily sausage making spectacle the only ingredient of which is bullshit and they tell us its the finest grade-A choice cuts is too insulting to me.

Its all just crap, frankly I think they planned the grand world melt down, but now have cold feet to go over the edge.

Fri, 06/17/2011 - 12:25 | 1377856 America- Some A...
America- Some Assembly Required's picture

Biding their time to suck the rest of the marrow out before the world gets the BONE

Fri, 06/17/2011 - 11:00 | 1377576 SheepDog-One
SheepDog-One's picture

Gee I wonder how the already rioting Greeks will view the new and worse austerity measures for 'the plan' to be accepted?

Fri, 06/17/2011 - 11:06 | 1377584 Cdad
Cdad's picture breaking the front window of the new shiny Abercrombie and Fitch store front, and then curiously standing in line with their credit card to buy $30 t-shirts?

Fri, 06/17/2011 - 11:06 | 1377586 LRC Fan
LRC Fan's picture

Yeah what the fuck is the "plan" they keep mentioning on Bloomberg and CNBC?  Printing/stealing more money and throwing it to Greece?  So they can do the same thing in the fall? 

Fri, 06/17/2011 - 11:04 | 1377579 LRC Fan
LRC Fan's picture

This situation reminds me of a compulsive gambler.  He needs more and more money over time, and constantly is broke and losing money.  The market going up is similar to the credit rating of the person providing the money to go up.  Even though it is nothing more than throwing good money after bad, with the prospect of more money being lost later on. 

Fri, 06/17/2011 - 11:01 | 1377581 wally_12
wally_12's picture

This is Kabuki Theatre.

The FED will never let a domino fall that is part of the Ponzi.

Merkel has been told to fall in line with FED support.

A few more days of theatre and ECB will announce another "Solution".


Fri, 06/17/2011 - 11:03 | 1377591 markytom
markytom's picture

I thought the IMF, in an act of complete desperation, was going to approve the next distribution basically without any conditions:

Rehn strongly implied that the International Monetary Fund, which must also sign off on the loan payment, would agree even if euro-zone governments haven't put a multi-year financing plan in place for the country.

Fri, 06/17/2011 - 11:08 | 1377593 hugovanderbubble
hugovanderbubble's picture

Tyler JPM has a big trouble with CDS

Fri, 06/17/2011 - 11:04 | 1377595 Version 7
Version 7's picture

A chart that paints a 1000 words. Greece is bust, period.

It would be nice if we could have analogous charts for all five little PIIGS.

As a percentage of 2010 GDP.

Fri, 06/17/2011 - 11:08 | 1377596 LRC Fan
LRC Fan's picture

CNBC should run a poll:

Which is more vital to the economic recovery?

Raising the US debt ceiling


Bailing out Greece

Liesman's head would explode. 

Fri, 06/17/2011 - 11:11 | 1377607 tallen
tallen's picture

I think Rick Santelli is about to start fighting Steve Liesman.

Fri, 06/17/2011 - 11:12 | 1377622 Cognitive Dissonance
Cognitive Dissonance's picture

$100 on Rick in a first round knockout.

Fri, 06/17/2011 - 12:02 | 1377775 Ahwooga
Ahwooga's picture

I dunno, Liesman has that thick ugly head with the underbite to match, he looks like a bulldog waiting for you to give him a biscuit. As dumb as he is, I reckon itd take more than one round.

Fri, 06/17/2011 - 12:38 | 1377908 Cognitive Dissonance
Cognitive Dissonance's picture

You might be correct.

The most dangerous opponent is the one who doesn't recognize he is essentially dead with no discernible brain function and should fall down now.

Fri, 06/17/2011 - 11:25 | 1377649 cowdiddly
cowdiddly's picture

 I pay $200 just to get to watch Rick stomp his ass to a bloody pulp.

Fri, 06/17/2011 - 11:29 | 1377656 qussl3
qussl3's picture

Nah, he was ready to punch out hobbs tho.


Fri, 06/17/2011 - 11:13 | 1377610 The Butchers Dog
The Butchers Dog's picture

IMF/Goldman converting Dollars to Euros...

G-Pap:  "Put it on my Uncle's tab,... his name is Sam."


Fri, 06/17/2011 - 11:21 | 1377634 LawsofPhysics
LawsofPhysics's picture

"China may turn into "zone of risk" for the global  economy"

Well maybe, but only after they bail out everyone else (including the U.S.).

What are the chances of that happening?  My bet is on WWIII happening first.

Fri, 06/17/2011 - 11:29 | 1377659 alien-IQ
alien-IQ's picture

the notion that China can bail everybody out will go down in history as one of the most laughable economic myths of the 21st century.

Fri, 06/17/2011 - 11:19 | 1377640 old naughty
old naughty's picture

"...Russia's just announced minutes ago that China may turn into "zone of risk" for the global economy..."

And so they shied from signing the 1 tril gas deal with China?  Hmmmmm.

Fri, 06/17/2011 - 12:35 | 1377890 hamurobby
hamurobby's picture

But but I thought they agreed to quit using usd to trade with each other, that might create a sucking sound over there..

Fri, 06/17/2011 - 11:20 | 1377647 Bansters-in-my-...
Bansters-in-my- feces's picture

FUCK the Banksters......

Let them eat SHIT......

And Ps....Why are all these leaders(so called)


Am I missing something,or am I as dumb as I think I am...???

Fri, 06/17/2011 - 11:23 | 1377652 alien-IQ
alien-IQ's picture

and yet somehow the markets belief in the viability of this mathematical voodoo is providing the USD with a major Rikers Island shower style ass pounding...for now at least.

Fri, 06/17/2011 - 11:37 | 1377676 swissinv
swissinv's picture

IMO the EUR is should go up when the bottemless pit is getting restructured.

However, this does not explain the jump in NBG - not surprised to see a new concocted patchwork again.

Fri, 06/17/2011 - 11:29 | 1377679 vegas
vegas's picture

trader math says it is Friday, and if you are short from this week's fall off the cliff, then it is time to cover for the weekend. Add in weekend event risk, and it comes as no surprise we get a Euro rally from some level.


Fri, 06/17/2011 - 11:38 | 1377711 Foul Ole Ron
Foul Ole Ron's picture

Exactly. Throw in a bit of risk-on rally in EZ and US equities and you've got your Euro rally. Plenty of time for shorting the hell out of the Euro next week once nothing is sorted in Greece yet again.

Fri, 06/17/2011 - 12:28 | 1377849 wally_12
wally_12's picture

Germany does not like beign pushed around by a bunch of dumb asses.

What will be very interesting is the alliances and changes that are going to occur because the US is telling Germany what is "necessary".

I have been to NATO meetings and can assure you that it's members consider it a very important political entity.

Do you remember Germany's reation to Libya invasion? I think OB was told to go fly a kite.

Wait for the rest of the story. Greece will be bailed out. The EURO will soar on Monday, but Geopolitics are changing!


Sat, 06/18/2011 - 11:33 | 1380136 snowball777
snowball777's picture

Chinese buying spree...transitory as a BoJ intervention.

Fri, 06/17/2011 - 11:34 | 1377693 Double down
Double down's picture

Is risk on not really a risk off trade?

Fri, 06/17/2011 - 11:37 | 1377707 AldoHux_IV
AldoHux_IV's picture

I get the sense that IMF/ECB/FED/EU/US are all trying to coerce the emerging markets (aka more solvent nations thought how much that will be remains to be seen) into keeping the inslvent system afloat. Hope they have enough sense to avoid the mess, but knowing the idiocy that follows greed I'm guessing there will be plenty o' collateral damage-- damage nobody could've seen (right).

Fri, 06/17/2011 - 11:42 | 1377718 monopoly
monopoly's picture

Just need patience all. Playing out to script. Just taking a while. Greece is gone, lets concentrate on Ireland, Portugal next.

Sat, 06/18/2011 - 11:35 | 1380139 snowball777
snowball777's picture

Image of anxious man holding several grenades and several different pins. Pucker Factor 5!

Fri, 06/17/2011 - 11:43 | 1377724 Frank N. Beans
Frank N. Beans's picture

let Progressive Insurance bail out greece; they seem to have plenty of money to throw around in adverts (including on THIS site).

Fri, 06/17/2011 - 11:49 | 1377730 web bot
web bot's picture

So which supposed leader would like to step up to the plate and make some decisions?

Many who want power choke when the cards are down and we're seeing lots of choking right now...

Fri, 06/17/2011 - 12:20 | 1377830 Caught Stealing
Caught Stealing's picture

SeriIs there anybody who has a positive light on this? I guess that's a rhetorical question, sas it appears this group is in 100% agreement that this is a patch to buy time for the peoteam that is steering this Titanic...and the iceburg is looming.

Fri, 06/17/2011 - 12:48 | 1377928 DoctorMad
DoctorMad's picture


The EUR is up today because it is a stronger currency without Greece and the other losers. Once Europe faces reality and starts accepting the defaults it will become a much stronger fiat...and the markets will turn their attention toward the dollar and the yen forcing our governments to go austere or turn on the presses into hyperdrive.

Greece leaving the EUR and the other weak nations is ultimately net Euro positive.

Fri, 06/17/2011 - 12:57 | 1377979 Cdad
Cdad's picture

The EUR is up today because it is a stronger currency without Greece and the other losers.

It's possible to make this case, but I suspect it would only become realized from much, much lower levels.  You see, there first comes the running of the lemmings as a result of Greece defaulting.  After that, sure, constant jibber jabber from criminal syndicate Wall Street banks about how great the Euro is...thus explaining to the world the counter trend rally.  

And after that, Ireland, the lemmings, the jibber jabber.  Then Portugal, etc, etc.

Fri, 06/17/2011 - 13:41 | 1378116 skistroni
skistroni's picture

We got 12bn reserves, short term auctions 3bn, VAT income from tourism, tax revenue, etc. I am not saying we will make it in the end, but you might have to wait another 5-6 months for our default. Don't rush it yet.

Fri, 06/17/2011 - 13:54 | 1378155 godzila
godzila's picture

Well I guess they can resort to US inspired tactics and finance directly from the pension funds...

Fri, 06/17/2011 - 18:12 | 1378909 Buck Johnson
Buck Johnson's picture

All they are doing is delaying the inevitable.  They are doing everything to not have a default situation, but it won't happen.  Also I still don't believe that they will pass the severe austerity at all, it's impossible.

Fri, 06/17/2011 - 23:57 | 1379570 Acton27
Acton27's picture

The chart would be more credible if "principal" were spelled correctly. 

Sat, 06/18/2011 - 02:44 | 1379758 libelmage
libelmage's picture

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Sun, 06/19/2011 - 05:32 | 1382094 Chestire
Chestire's picture

Principal, not principle

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