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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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.

Hugh G Rection's picture

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

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.

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?

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....

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?

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!

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?

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.


Stoploss's picture

Quad witch today.

Cognitive Dissonance's picture

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

Ray1968's picture

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

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."

Bay of Pigs's picture

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


Cognitive Dissonance's picture

They're all afraid of a RIMM job.

scratch_and_sniff's picture

Ask no questions, hear no lies.

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. 

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.

hugovanderbubble's picture

Im shorting this equity market till 1.100

Tactically till 1.220

snowball777's picture

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

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?

Sambo's picture

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

and the winner is ...nobody!

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.

Double down's picture

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

plocequ1's picture

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

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!

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?

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.

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.

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.

SDRII's picture

Rumor china to widen out band against the dollar this weekend

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.

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. 

Cdad's picture

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

Cognitive Dissonance's picture

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


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.

America- Some Assembly Required's picture

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

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?

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?

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? 

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. 

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".


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.

hugovanderbubble's picture

Tyler JPM has a big trouble with CDS

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.

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. 

tallen's picture

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