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A Quick Take On The European "Marshall Plan"

Tyler Durden's picture




 

From Peter Tchir of TF Market Advisors

So far all the news out of Europe is based on changes to EFSF.  Greece will be able to borrow for 15 years at 3.5%.  French bonds with a 15 year maturity trade at 3.8%.  So the EFSF will have to pay more on its debt than it receives?  Interesting. Have the rating agencies signed up to rate the new EFSF as AAA?  From deals I've worked on, things that always hurt ratings were i) extending maturity, ii) including banks in addition to sovereigns, iii) allowing trading, iv) vague rules as opposed to written rules.  The headlines all indicate the new EFSF has all of these components.  I am sure the agencies have been involved in these discussions, but I remain dubious how happy the market will be to finance the EFSF at rates that are remotely in line with the rates the EFSF plans to provide financing at.   Lots more details likely to come out during the day, but watch for the details.  The headlines sound great, but can they be executed.  I also noticed somewhere that new lending would be collateralized.  If that is true, has anyone asked the borrowers if that makes sense for them?

 

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Thu, 07/21/2011 - 09:05 | 1476656 dcb
dcb's picture

the german taxpayers eat it again. wonder what this will do for merkel, does she go down in flames now.

Thu, 07/21/2011 - 09:08 | 1476672 66Sexy
66Sexy's picture

what if china overcommits to the euro, then the eurozone dissolves?

Thu, 07/21/2011 - 09:25 | 1476738 TheTmfreak
TheTmfreak's picture

Who says they haven't already overcommitted? (I guess one needs to describe what that means).

I try to argue this to people all the time. So long as China is dependent upon the US dollar and the Euro, they will be dependent upon the financial state of both entities, and will pay the price. The Euro is collapsing and the Dollar has nowhere to go, but to be inflated. Furthermore who says that anybody is going to buy their shit anymore if/when the mass globalization ends?

Thu, 07/21/2011 - 09:36 | 1476780 kridkrid
kridkrid's picture

yup... they have the same collapse ahead for them... unfortunately for them (and everyone else), they have about 1/5 the world's population living in about 1/4 of the land mass of China.  That is, at the same time, a lot of mouths to feed and a lot of soldiers to send off to battle.  Throw in the sex starved single teen to 20-something based on parents gaming the one child policy and you've got yourself a fairly disposable army to throw at something.  They'll be like storm troopers.

Thu, 07/21/2011 - 09:10 | 1476678 PY-129-20
PY-129-20's picture

No, my "friend". This will lead to open Rebellion sooner or later.

Thu, 07/21/2011 - 09:17 | 1476709 Bang Dae Ho
Bang Dae Ho's picture

German style rebellion:

- spitting chewing gum on public spaces

- saying ugly words while watching TV evening news

- breaking speed limits not just 10km/h but staggering 15 km/h

- throwing the wrong type of garbage in public garbage separation containers

Thu, 07/21/2011 - 09:21 | 1476721 Cult_of_Reason
Cult_of_Reason's picture

Scheiße

Thu, 07/21/2011 - 09:25 | 1476742 Bang Dae Ho
Bang Dae Ho's picture

Ja, 'scheiße' ist eine sehr gute Zusammenfassung.

Thu, 07/21/2011 - 09:25 | 1476743 TheTmfreak
TheTmfreak's picture

Add owning a baseball bat.

Thu, 07/21/2011 - 09:42 | 1476807 Bang Dae Ho
Bang Dae Ho's picture

there is a famous Lenin quotation: 'if there is a revolutionary train station raid, Germans would buy a station ticket'.

Thu, 07/21/2011 - 09:49 | 1476819 magpie
magpie's picture

It would have been a nice touch to classify the loan as WW2 reparations, with a nice Thank You-note from G-Pap. Though as we all know, the Greeks tend to make the "gift."

But maybe the next bailout round...

Thu, 07/21/2011 - 09:11 | 1476683 Azannoth
Azannoth's picture

Dude there is absolutely no alternative in Germany, Merkl is a 'conservative' the opposition are the Greens and Socialists both advocating debt forgiveness to Greece, we'll see more of Merkl for years to come

Thu, 07/21/2011 - 09:30 | 1476758 PY-129-20
PY-129-20's picture

Tell me about them. What a bunch of traitors. You serve them? Well make sure you bend all over again...

Steinmeier? Gabriel? Nahles? Merkel? Trittin? Steinbrück? Traitors. That's what they are.

No, nobody will save what's left of our constitution. Our nation today ceased to exist. Just let them declare the United States of Europe. I say bring it.

Why do I pay taxes? For what? To pay off my lords in Brussels, my bank lords, that corrupt class in Greece that ruined this country so royally...

Ya think that will save us? Do you? Oh, yes, sunflowers will grow in Antarctica, unicorns will appear, hell freezes... What stops them to make the same fucking mistakes over and over again?

Why do we allow this to happen? They just reward misallocation...

Are they above the law? Are they more worth than you and me? I thought Europe passed that age.

Yeah, laugh at me if you want. They are breaking with the young generation and fuck their own kids and grandkids a tergo. What a generation of assholes and pussies. May the thundergod (or anyone/anything) in charge punish all of them... I curse all of them, bastards.Goddamit send that angry German kid into the ECB headquarter.

And now I cool down. Sorry for the rant. It's what is left of my liberties in the EUDSSR

Thu, 07/21/2011 - 09:34 | 1476773 Azannoth
Azannoth's picture

There is 1 simple solution emigrate, that's what I am planning

Thu, 07/21/2011 - 09:31 | 1476763 SoNH80
SoNH80's picture

Ja, better the Frau they know than the Rot they don't..... the SPD makes the Democrats look like pikers in the socialism department....

Thu, 07/21/2011 - 09:17 | 1476704 Cult_of_Reason
Cult_of_Reason's picture

An average German taxpayer is as ignorant as one in the US; hence, the banksters are having a field day milking the taxpayers.

Thu, 07/21/2011 - 09:23 | 1476728 Sophist Economicus
Sophist Economicus's picture

Yup!   the "cashindectomy" of the people goes global

Thu, 07/21/2011 - 09:19 | 1476715 Azannoth
Azannoth's picture

You know what caused massive protests in Germany recently ?

A tear down / rebuild of an old train station!!!!

The Germans(in general) don't give a shit about how much of their money goes where, they'll end up broke and homeless 1 day but till than it's Party On!

Thu, 07/21/2011 - 09:57 | 1476871 Bang Dae Ho
Bang Dae Ho's picture

You know what caused massive protests in Germany recently ? A tear down / rebuild of an old train station!!!!

BTW, this tear down / rebuild just passed..... drumroll.....drumroll.... its STRESSTEST!

http://www.spiegel.de/politik/deutschland/0,1518,775736,00.html

Thu, 07/21/2011 - 10:35 | 1477041 IQ 145
IQ 145's picture

 Greece will be able to steal other peoples money for fifteen years---there; fixed that.

Thu, 07/21/2011 - 09:09 | 1476658 Re-Discovery
Re-Discovery's picture

Did Greece ever repay what they got from the first Marshall Plan?  Good luck with this one.

The headline risk in this 'market' is believing them.

Thu, 07/21/2011 - 09:22 | 1476727 trav7777
trav7777's picture

no shit...greece is the equivalent of all the CRA bullshit money our banks were forced to "lend"

Thu, 07/21/2011 - 10:30 | 1477024 Are you kidding
Are you kidding's picture

Fucking darkies...it's always the fucking darkies ruining everything.

Thu, 07/21/2011 - 09:06 | 1476660 freethinker4now
freethinker4now's picture

No news is good news 

Thu, 07/21/2011 - 09:07 | 1476666 ZippyBananaPants
ZippyBananaPants's picture

We had a kid in 2nd grade named Marshall

Thu, 07/21/2011 - 09:12 | 1476687 Quintus
Quintus's picture

Was he widely known for the excellence of his planning?

Thu, 07/21/2011 - 09:08 | 1476669 Version 7
Version 7's picture

If this movie goes on, expect european voters to massively turn right the next round of elections.

Thu, 07/21/2011 - 09:14 | 1476692 Azannoth
Azannoth's picture

In most European 'democracies' extreme right/nationalist parties are banned good luck with that vote

Thu, 07/21/2011 - 09:09 | 1476670 Cognitive Dissonance
Cognitive Dissonance's picture

 Lots more details likely to come out during the day, but watch for the details.

Details? DEATAILS?

I don't need no stinking details. MY ass is saved for a few more news cycles. That's all I care about at this point.

Details! Too funny. Who cares about details when you have headline reading algos?

Keep up people.

/sarc

Thu, 07/21/2011 - 09:23 | 1476729 wisefool
wisefool's picture

here are some Marshall plan #1 details for you CD.

On August 5, 1971, Congress released a report recommending devaluation of the dollar, in an effort to protect the dollar against foreign price-gougers.

 

How We Got Here: The '70s. New York, New York: Basic Books. pp. 295–298. ISBN 0-465-04195-7.

Thu, 07/21/2011 - 09:28 | 1476754 kridkrid
kridkrid's picture

Here it is in Nixon's words (well... his voice anyways) 10 days later: http://www.youtube.com/watch?v=iRzr1QU6K1o

 

Thu, 07/21/2011 - 09:36 | 1476781 Cognitive Dissonance
Cognitive Dissonance's picture

Even back then they were blaming the evil speculators. The oldest tricks are usually the best tricks.

Thu, 07/21/2011 - 09:49 | 1476832 kridkrid
kridkrid's picture

Remarkable to watch.  Have you read the book Psychopath Test yet?  You'll enjoy it.  I'm fairly certain that Nixon would have set the bar.  Part of my continual awakening has been the realization that some relatively large percentage of elected officials are psychopaths.  Things that I would have once found difficult to believe becomes not only plausible, but totally predictable.  And, of course, most of our heads of industry, heads of banking, etc. etc.... the world is basically run by psychopaths.

 

Thu, 07/21/2011 - 09:53 | 1476849 SoNH80
SoNH80's picture

Johnson and Nixon, signed and countersigned the bill that's coming due.  Vietnam, "Great Society", cultural rot, destruction of Bretton Woods, cooking the economic numbers, secret wars, a certain 1967 incident in international waters, EPA/unaccountable mega-state, Kissinger, Bundy/McNamara, cutting a deal with the ChiComs, etc. etc. etc. etc.

Thu, 07/21/2011 - 09:59 | 1476883 Cognitive Dissonance
Cognitive Dissonance's picture

Looks like a fun read. Just purchased. I needed something to read in bed that will keep me awake.

Thu, 07/21/2011 - 10:15 | 1476949 kridkrid
kridkrid's picture

One word of caution... he is somewhat frustratingly averseto "conspiracy theory".  I would think that the realization that a relatively large percentage of our "elite" are not bound by any moral code that you or I would recognize would lend plausibility to ideas that may otherwise seem implausible.  This is different, of course, than "believing in" everything that surfaces... but if one adheres to the philosophy that the ends justify the means, and you are able to act without remorse, anything is possible.

Thu, 07/21/2011 - 11:28 | 1477247 Cognitive Dissonance
Cognitive Dissonance's picture

One word of caution... he is somewhat frustratingly averse to "conspiracy theory".

That's probably the only way the MSM publisher would accept the book. That's OK, I can read between the lines.

Thu, 07/21/2011 - 09:49 | 1476834 wisefool
wisefool's picture

Well there are some speculators that are evil. The first Marshall Plan bankrolled Europe with US resources. The Euroes also double tapped the old US of A by getting her to clean up the mess they left in their colonies.

And when the time was right, the Euros cashed in (speculated) all of these gifts to triple up by taking the gold of their benefactor (the USA).

Not all speculators are evil. Just the ones who speculate with ill gotten gains. We now return our news coverage to the heartbreaking stories of humanitarian tragedies in MENA, where American soldiers are fighting for "Democracy"

Thu, 07/21/2011 - 10:43 | 1477076 IQ 145
IQ 145's picture

 Yes, I lived through that as an adult. It was hilarious. Nixon used to rant and rave about the speculators damaging the dollar all the time. They had big gold auctions out of Fort Knox designed to punish, "speculators"; the plan was drown gold demand in supply. They were utterly defeated and cancelled that plan. It was too funny. My favorite quote from Nixon, "I am not a crook"; but of course, he was! Then don't forget, President Ford came out with a WIN button to wear on your shirt collar, Whip Inflation Now; this supposed to help by some sort of magic thought transference process. as my friend Dave Barry says; " I am not making this up!".

Thu, 07/21/2011 - 10:44 | 1477080 IQ 145
IQ 145's picture

 Yes, I lived through that as an adult. It was hilarious. Nixon used to rant and rave about the speculators damaging the dollar all the time. They had big gold auctions out of Fort Knox designed to punish, "speculators"; the plan was drown gold demand in supply. They were utterly defeated and cancelled that plan. It was too funny. My favorite quote from Nixon, "I am not a crook"; but of course, he was! Then don't forget, President Ford came out with a WIN button to wear on your shirt collar, Whip Inflation Now; this supposed to help by some sort of magic thought transference process. as my friend Dave Barry says; " I am not making this up!".

Thu, 07/21/2011 - 10:46 | 1477086 IQ 145
IQ 145's picture

 Yes, I lived through that as an adult. It was hilarious. Nixon used to rant and rave about the speculators damaging the dollar all the time. They had big gold auctions out of Fort Knox designed to punish, "speculators"; the plan was drown gold demand in supply. They were utterly defeated and cancelled that plan. It was too funny. My favorite quote from Nixon, "I am not a crook"; but of course, he was! Then don't forget, President Ford came out with a WIN button to wear on your shirt collar, Whip Inflation Now; this supposed to help by some sort of magic thought transference process. as my friend Dave Barry says; " I am not making this up!".

Thu, 07/21/2011 - 09:43 | 1476815 wisefool
wisefool's picture

History sure does have a way of repeating itself, doesn't it?

Thu, 07/21/2011 - 09:09 | 1476674 papaswamp
papaswamp's picture

Extreme high risk and low return? Who will be on the hook for that? Don't worry it's 15 yrs down the road. What no 100 yr bonds?

Thu, 07/21/2011 - 09:09 | 1476675 gwar5
gwar5's picture

15 years at 3.5%?  I want some of dat.

To good to be true? Probably is. For sure, Paul Volcker didn't put this together.

Don't low rates mean high quality collateral?  So, what's up with dat?

Thu, 07/21/2011 - 09:15 | 1476695 gwar5
gwar5's picture

"Marshmellow Plan" ?

Thu, 07/21/2011 - 09:15 | 1476700 gwar5
gwar5's picture

"Marshmellow Plan" ?

Thu, 07/21/2011 - 09:11 | 1476681 yabs
yabs's picture

how casn long can they keep this no haircuts charade going?

Its torture

Thu, 07/21/2011 - 09:12 | 1476689 Long-John-Silver
Long-John-Silver's picture

The Marshall plan for Europe was preceded by a World War.

I'm all for a new Marshall plan as long as we (USA) get to go in and rape and pillage them for 4 years before it's implemented.

(Dibs on the BMW motorcycle factory Bitchez!)

Thu, 07/21/2011 - 09:13 | 1476690 Johnny Lawrence
Johnny Lawrence's picture

So basically the plan for Greece is to build a bunch of shit?

Thu, 07/21/2011 - 09:16 | 1476703 Azannoth
Azannoth's picture

The Greeks have been 'stealing' as much money from the EU as they could from the day they joined, so what's their 'punishment' Give Them More! Till they burst

Thu, 07/21/2011 - 09:17 | 1476705 alien-IQ
alien-IQ's picture

It actually sounds like they are taking an American consumer approach and applying it to an entire nation. Therefore, I believe, the proper way to phrase it would be : Building a bunch of shit they don't need with money they ain't got.

Thu, 07/21/2011 - 09:14 | 1476693 Havana White
Havana White's picture

Heads up, Spain!  Getcha some of that action times 20!  What?  Greece only?  Foul!

Thu, 07/21/2011 - 09:14 | 1476694 wisefool
wisefool's picture

Oh, it can and will be executed. Never underestimate the Europeans ability to maintain their lifestyle by any means necessary. The last time they screwed over their American benefactors.

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

... But history shows the Germans generally don't react that way (passively) when they realize they are the mark (pun intended)

 

Thu, 07/21/2011 - 09:15 | 1476697 LeBalance
LeBalance's picture

"...but I remain dubious how happy the market will be to finance the EFSF at rates..."

Who here thinks "the market" is financing ANY of this?

Bueller?  Bueller?  Bueller?

Thought Not!

Please, this is a game of "invent a new trash can," no new production, no new reserves, no foundation, ....

This sounds like a struck broken church bell: "DUNG!"

Thu, 07/21/2011 - 09:17 | 1476706 jkruffin
jkruffin's picture

The ponzi scheme to cover up the ponzi scheme to cover up the ponzi scheme.  WOW!!!!  The only way this ends is for everyone to quit playing the retard's games.  Otherwise, they will create anything imaginable to find a new set of suckers to unload their crap onto.

Thu, 07/21/2011 - 09:17 | 1476708 papaswamp
papaswamp's picture

Gold and silver don't seem to believe in the plan....yet anyway.

Thu, 07/21/2011 - 09:21 | 1476722 tallen
tallen's picture

My bullshit sense is tingling.

Thu, 07/21/2011 - 09:25 | 1476739 ivana
ivana's picture

Important step forward for NWO.

Banksters taking over EU and spreading their fingers in core EU citizen pockets

Thu, 07/21/2011 - 09:26 | 1476746 BlackholeDivestment
BlackholeDivestment's picture

...the Marshal plan they say? Naw,The Ponys plan is what they are riding on. Must be, cuz I can hear the horse hooves to their suicide song. http://www.youtube.com/watch?v=YXjmcnczYL0&feature=related

''more on it's debts than it receives'' ...sounds trendy, this whole Portugese hole thing, so Social Security to me. lol 

Every time Tiny Turbo Tim tip toes with his two lame lips and mentions ''the economy as a whole'' it gives me a chuckle because of the ''hole'' thing.

Thu, 07/21/2011 - 09:27 | 1476751 milanitaly
milanitaly's picture

Looking at the Italian market today seems that we will get the Marshall plan not that we will have to pay it.

Thu, 07/21/2011 - 09:35 | 1476774 Doode
Doode's picture

Borrowing money/getting into cheap debt is a basic human entitlement (like healthcare) - more free debt to all!!!!!

-Socialist greek salad tossing liberal

Thu, 07/21/2011 - 09:35 | 1476776 Clowns on Acid
Clowns on Acid's picture

On the streets of NYC its called the 3 card monte.

Thu, 07/21/2011 - 12:04 | 1477366 Sudden Debt
Sudden Debt's picture

The reason why rates go up is because a country has to much debt.

Simple right?

The rates go up because nobody believes that a country can pay back all that debt, even interst.

Simple right?

So by lowering interest rates from somebody who has to much debt may not be bad for greece but the rest of Europe will bite the bullet.

In case of Greece, we're only talking about 2% of the European economy. It's not a biggy. BUT the private banks will pass the bill to the rest of their clients and other suckers will now also give it a shot.

If the room is on fire and you have 1 bucket of water and have to figure out how to put the fire out with only that bucket of water, you don't all throw it into the corner of the room where the trashcan with paper is burning.

You use the bucket to make a way to the door or window so you can get out. You can't stop the fire once it's raging.

 

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