"Recapitalization Time" The Latest Conflicting Data On Greece
This latest on Greece, this time from Dow Jones. Why is Obama speaking about windmills as the future of global moral hazard, Larry Summers edition, is being decided in Berlin?
Germany and other EU member states are weighing measures to help Greece climb out of its financial emergency and plan to discuss the matter this week at the European Commission, Germany's finance ministry said Tuesday.
Finance Ministry spokesman Michael Offer said EU members wanted "to develop further recapitalization measures that calm the markets."
A government source said Tuesday that parliamentarians from the Christian Democratic Union and Christian Social Union, part of Chancellor Angela Merkel's center-right government, will meet Wednesday to discuss possible aid for Greece.
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on Tue, 02/09/2010 - 14:00
#223673
"There are no facts, only interpretations."
-Nietzsche
on Tue, 02/09/2010 - 14:02
#223677
No one is happier than Germany with a nice big decline in the value of the Euro. The past week has done wonders for the export business in the D-mark domain. They may dance around the edges of helping but they're loving this too much and they don't want the Euro to move back up.
This of course doesn't help with the plan on this side (or every side) of the ocean since every country currently plans to export their way back to prosperity.
on Tue, 02/09/2010 - 14:21
#223717
+1. Nothing like a hyper-export dependent global economy to fuel a systemic correction.
on Tue, 02/09/2010 - 15:28
#223890
Bing-gie-o. Deutschland is the biggest winner with the weak Euro. They're the X-port driven economy and the problem with the good old D-mark was that it was always an expensive currency.
Sooooooo, wanting to keep the Euro intact, depreciated by the PIIGS or whatevers, got to keep Greece as a basket case on life support. Means emptying bed pans periodically, but a mere minor inconvenience.
No tin foil hat from Germany's perspective. Clear as a fine pilsner.
on Tue, 02/09/2010 - 16:08
#223989
Greece should weaken the Euro enough to milk out easy trading games, but then the USA will simply announce the state's woes to rebalance the teeter-totter. Currencies and sovereign debt markets can withstand much mischief that the equities and muni/corp bonds have rejected.
The Feds can't wait to break a CANINE on the Greek/EU.
http://www.cnbc.com/id/15840232?video=1408551704&play=1
on Tue, 02/09/2010 - 14:02
#223680
One thing is clear. Someone made alot of money going both ways today on these "rumors". Meanwhile S&P downgrade of BAC & C are disregarded. They both were on their way to breaking KEY support levels. Something is afoot
on Tue, 02/09/2010 - 14:08
#223695
As I said in one of the previuos rumor pieces:
"I wonder who got paid how much to say what at the strategic moment so who could buy/sell what at what price to make a killing?"
http://www.zerohedge.com/article/here-comes-selling-germany-claims-greek-bailout-rumors-are-unfounded-confusion-reigns#comment-223576
on Tue, 02/09/2010 - 14:02
#223681
just another shell game, moving the risk around once again.
on Tue, 02/09/2010 - 14:07
#223693
glenlloyd,
You're comment is elegant in its simplicity and profound in its lucidity.
on Tue, 02/09/2010 - 16:31
#224041
why thank you.
I have to wonder whether the rumors spread about Germany et al stepping up to bailout Greece were nothing more than fabrications concocted purely for the sake of staving off the pending market corrections for another day (or two). Afterall, there certainly was a lot of contradictory information flowing about...more than usual IMO.
on Tue, 02/09/2010 - 14:04
#223685
Race to the bottom
on Tue, 02/09/2010 - 14:09
#223696
Good luck on the "further recapitalization measures".
The discussion now being the amount of the print run. Fingers are poised above the keyboards, awaiting the go-ahead to start the presses. At least this will keep the Euro valuations from rising.
on Tue, 02/09/2010 - 14:12
#223700
The French are keeping oh-so quiet in all this.
I wonder why, and how long their financial data has been massaged to slip under the debt limits.
Perhaps to the PIIGS should be added France & UK, but that would spell something nawrrty.
on Tue, 02/09/2010 - 14:41
#223756
With all this talk about PIIGS I'm surprised we aren't yet talking about the CAGRUFS here at home.
California
Arizona
Georgia
Rhode Island
Utah
Florida
South Carolina
"I am an oil man"
on Tue, 02/09/2010 - 16:51
#224083
You mean
Alaska, Alabama, Arkansas, Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Iowa, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Wisconsin, West Virginia, Wyoming, and of course D.C. and perhaps our territories.
We're all screwed
on Tue, 02/09/2010 - 14:12
#223701
Recapitalization: Issuing yet more debt to payoff the debt and interest from the last time.
on Tue, 02/09/2010 - 15:24
#223886
Exactly how it works. And somehow the market thinks this is a great idea.
Heres the real question though. What about Spain, Portugal, Italy, France and the rest who are in the same position as Greece. Who bails them out?
on Tue, 02/09/2010 - 16:24
#224026
In a fractional reserve fiat currency monetary system, more debt is always the answer. The taxed populations always pay. And, the controllers of all this chaos truly do... play with themselves.
on Tue, 02/09/2010 - 14:12
#223703
They must be all out of Big Fat Greek Maxi-Pads.
on Tue, 02/09/2010 - 14:12
#223704
CDS on German bunds is bound to soar over the intermediate term. To an extent, Bunds will be synonymous with Club Med debt. The Reichsbank did an excellent job of protecting their export industry by snuffing the EUR rally.
on Tue, 02/09/2010 - 14:17
#223710
Race to the bottom
on Tue, 02/09/2010 - 14:20
#223713
My Pet...Windmill?
on Tue, 02/09/2010 - 14:21
#223715
he's not talking about windmills. he is starting a new mission targetting teenage obesity. meanwhile fatcat bankers romping away with gay abandon.
on Tue, 02/09/2010 - 15:07
#223823
"Gay abandon"? So that's why Barney Frank loves those Wall Street guys so much
on Tue, 02/09/2010 - 14:29
#223724
Hidden Treasure!
How might a deal like this work? Let’s say that Greece issues a bond for $10 billion, which it would then normally swap into euros at the prevailing interest rate, getting $10 billion worth of euros up front. In this case, it seems, the swap was tweaked so that Greece got $11 billion worth of euros up front — and, of course, has to pay just as many euros back when the bond matures. Essentially, it has borrowed $11 billion rather than $10 billion. But for the purposes of Greece’s official debt statistics, it has borrowed only $10 billion: the extra $1 billion is hidden in the swap.
This wouldn’t be the first time that Goldman came up with a clever capital-markets deal to help a European country get around the Maastricht rules: as far back as 2004, Goldman put together something called Aries Vermoegensverwaltungs for Germany, in which Germany essentially borrowed money at much higher than market rates just so that the borrowing wouldn’t show up in the official statistics. And according to Balzli, Italy has been doing something almost identical to the Greek swap operation, using a different, unnamed, bank.
http://blogs.reuters.com/felix-salmon/2010/02/09/how-greece-hid-its-borr...
on Tue, 02/09/2010 - 14:30
#223726
Why does everything about today's price action just feel so phony? Giant futures gap up in the morning. Giant burst of SPY/futures volume to push the market off of it's lows... and now the mystery bid to try and keep the market from drifting back down.
My theory is the government crooks behind this bizarre market action know everyone is watching this SPY channel and they're going to waste millions of our tax dollars to try and push us out of it. Just like they did back in July to void the head and shoulders pattern.
on Tue, 02/09/2010 - 16:50
#224084
Today felt very manipulated. That is the only way I could describe it. I watch the market every day, every tick, and today felt like Sept 2008.
Remember remember what came in October/November.
on Tue, 02/09/2010 - 14:32
#223731
The Greece story was fun while it lasted. It really revved up the ZH base. But the resolution will be just what the market wants: Just sweep it under the rug, extend and pretend, just like here. And guess what? It worked here and will work there. No problems: Let's just move on to Spain and Portugal. Or we can get back to Armageddan predictions and bashing GS. Did you see Taibbi's new GS story? He has proof they were short the Colts. The referee looked a lot like a GS prop-desk trader who was "on vacation" last week. Damn squid.
on Tue, 02/09/2010 - 14:45
#223767
That makes for a huge lump under the rug. When is debt not real?
on Tue, 02/09/2010 - 15:14
#223854
Thanks for the lecture Professor, now get back to diddling your students.
on Tue, 02/09/2010 - 15:57
#223953
So clever! No wonder you're Anonymous!
on Tue, 02/09/2010 - 15:03
#223799
Finance Ministry spokesman Michael Offer said EU members wanted "to develop further recapitalization measures that calm the markets."
recapitalization measures? or,
recapitulation measures? or,
recrapitalization measures?
on Tue, 02/09/2010 - 15:08
#223825
Brace yourselves mortals! God's work is about to get DONE!
on Tue, 02/09/2010 - 15:12
#223843
Ultimately, the problem is that there are not enough deep pockets to bail out all the banks, companies, cities, states, countries.... that need to be bailed out. Once these moronic markets realize this cold hard truth, game over.
on Tue, 02/09/2010 - 15:22
#223883
I wonder who got the phone calls before the Almunia rumor was released?
on Tue, 02/09/2010 - 15:28
#223899
IS THE RISK TRADE BACK ON?
http://pragcap.com/is-the-risk-trade-back-on
on Tue, 02/09/2010 - 16:05
#223982
Wow, between this and the Paulson/GrandPa Buff show...
ARE PEOPLE IN THE WORLD THIS STUPID?
Seems to me that many markets/countries all around the world are frucked and now they have stopped even trying, so how about Ftv plays reruns of Captn Kangaroo and Mr. Rogers?
Here is an idea, since obviously Ftv has run out of quality commentary... Perhaps CNBC needs to break out Tinky Winky instead of those trust fund absolute idiots who have no clue about the REAL markets. You know, the 'less bad' and 'signs of stabilization' guys. CNBC went downhill long ago and now Bloom is sinking fast.
Thank goodness for ZH!!!! :)
on Tue, 02/09/2010 - 16:35
#224056
in a word....yes, yes they are
on Tue, 02/09/2010 - 16:20
#224019
The great worldwide debt unwinding continues. The unelected bureaucrats of the EU cannot stop the great debt deleveraging in the EU or the world.
There are only ultimately two scenarios, the EU (Germany) bails out Greece then they are asked to next to bailout Spain, Portugal, Ireland, Italy etc. This scenario would certainly end with Greece. The EU then tries to force Draconian economic budgets on the governments of Spain, Portugal, and Ireland etc. The populace of these nations revolt and say no and the governments of these countries then exit the EU and the EU unravels.
Or scenario two, which seems which has a 50/50 probability, Greece announces they are leaving the EU and defaults on their bonds and at some point in time the bond holders resolve to take a 90% haircut. Other countries like Spain, Portugal and Italy then follow suit and the EU again unravels.
The toothless EU politicians will announce economic tricks to extend the EU debt unravel but at best the charades last a few months. The worldwide debt crisis can’t be stopped with more gimmicks, the massive world debt will ultimately be resolved and it will be ugly and painful for much of humanity.
on Tue, 02/09/2010 - 20:10
#224309
Agree, either way the EU, and the Euro, are done.
on Tue, 02/09/2010 - 17:23
#224127
Greek Bailout? Maybe. European QE? I doubt it. I'm thinking “bridge loan” stuff. Germany plays banker, and banks a banker's margin. Good, sound business. What better loan than to a *client* state with taxation powers? When I say client state that’s what I mean – something like “we own you”. With that kind of “guarantee”, Greece is triple A. The “bet” then becomes a bet not against Greece, but rather a bet against the EU. Do you think the EU is in danger of ruin? Me either. Do you think the EU needs QE? Me either. There’s no real estate bubble, well almost (there’s only Spain with a “sub-prime” mess – that would be similar to the U.S. with *only* California as a problem – and the UK doesn’t count because it’s not in the monetary union). The underlying fundamentals of the European economy are much better than North America’s; in fact, the real big problems in Europe stem in large measure from U.S. derivatives …