Chart Of The Day: The Greek Bailouts In Context... Or To Debt Reduction Via Debt Increase

Tyler Durden's picture

The simple Bloomberg chart below summarizes the running insanity that is the ongoing Greek bailout. To date, the existing bailouts - already completely wasted - amount to well over 100% of Greek GDP.

Keep in mind this is a simplistic, superficial read of the components involved in the three Greek bailouts to date. We show this to present the context for the Fourth Grek bailout which was a failure last night as virtually everyone knows that Greece, in its current iteration, is finished, and that with each passing day the economy collapses ever tighter into a singularity of its own, as nobody works, everyone is on strike, no taxes are collected, yet more government spending is curtailed, and the circle keeps on turning.

All of this is also quite well known to our regular readers. From April:

Two months ago many scoffed at us when we calculated that based on preliminary information, "The Cost Of The Combined Greek Bailout Just Rose To €320 Billion In Secured Debt, Or 136% Of Greek GDP." We clarified as follows: "Some of our German readers may be laboring under the impression that following the €110 billion first Greek bailout agreed upon and executed in May 2010, the second Greek bailout would cost a "mere" €130 billion. Alas we have news for you - as of this morning, the formal cost of rescuing Greece for the adjusted adjusted adjusted second time has just risen to €145 billion, €175 billion, a whopping €210 billion, bringing the total explicit cost of all Greek bailout funds to date (and many more in store) to €320 billion. Which incidentally is a little more than Greek GDP (which however is declining rapidly) at 310 billion, only in dollars. So as of today, merely the ratio of the Greek DIP loan (Debtor In Possession, because Greece is after all broke) has reached a whopping ratio of 136% Debt to GDP. This excludes any standing debt which is for all intents and purposes worthless. This is secured debt, which means that if every dollar in assets generating one dollar in GDP were to be liquidated and Greece sold off entirely in part or whole to Goldman Sachs et al, there would still be a 36% shortfall to the Troika, EFSF, ECB and whoever else funds the DIP loan (i.e., European and US taxpayers)! Another way of putting this disturbing fact is that global bankers now have a priming lien on 136% of Greek GDP - the entire country and then some now officially belongs to the world banking syndicate." Well, as it turns out, we were optimistic (which incidentally is always the case when we try to account for government stupidity and lies). To wit:


This is SECURED debt, or debt which foreigners have funded with a lien on all Greek assets. Including gold! Translated, the Greek Debtor in Possession loan has a 177% Loan to Value.


Recall that according to the IMF Greek Debt/GDP will somehow be 120% in 2020. This means that 57% of the incremental debt will somehow have to be paid down. Or, as is 100% more likely, liquidated, with even more super-senior DIP debt. In other words, the Troika itself admitted that the Troika itself will be haircut before all is said and done.

And yet another aspect of the ongoing Greek insanity. As per Bloomberg:

European governments tore open the hole last week, by giving Greece two extra years to cut its budget deficit. The required extra financing provoked a clash with the IMF, since it would add to Greece’s debt load instead of reducing it.

Or, as we predicted the day the first Greek bailout was announced in May 2010, "Greece Bailed Out To Get In Even More Debt."

The absolute idiocy continues.

In summary: to debt reduction, via debt increase comrades! Forward!

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GetZeeGold's picture



So it's time for your allowance again? How time flies.


You do realize when you turn 18 we expect you to get your own place.

TWSceptic's picture

The parents will be dead before that happens.

GetZeeGold's picture



Welcome to the world's your bill.


Don't be pissed at me....I didn't get a damn dime of that money.

AldousHuxley's picture

they just need to come up with a car that runs on olive oil.


mccoyspace's picture

OK, you can stay until you are 21, but then that is really it. We're starting to get disappointed in you.

Bag Of Meat's picture

What is this BS article again? It's like they test us to see if we just swallow whatever crap they post.
Let's begin with: "each passing day the economy collapses ever tighter into a singularity of its own, as nobody works, everyone is on strike, no taxes are collected, yet more government spending is curtailed, and the circle keeps on turning."
Oh that is the reason! The filthy non working,EU-money robbing greeks did it again! Thank god we have all those Elites and their Media to save us from them and their stereotypes! .......

 Second turd: "Another way of putting this disturbing fact is that global bankers now have a priming lien on 136% of Greek GDP - the entire country and then some now officially belongs to the world banking syndicate."

Well this is new! we learn all kinds of new stuff here in zerohedge. Today we learned that GDP is actually the worth estimate of A WHOLE COUNTRY. Right? Forget the broken window paradigm. Forget the fact that GDP IS ANNUAL. This doesnt mean that the debt is 1,36 years of greek economy work! No! It means they gotta sell off the whole Greek territory and some rights on the potential finding of the lost atlantis for the bankers to be happy!
Congratz for another great piece of ............. 

LongSoupLine's picture

Covering a lie to ensure the wealth of a few is expensive business.

overmedicatedundersexed's picture

the banks own the greek debt, does anyone see a solution here?

buzzsaw99's picture

Just give the money directly to the banks like they do in the usa? [/sarc.]

GetZeeGold's picture



No way in hell those guys get down on their knees to Nancy Pelosi.....they have their standards.

disabledvet's picture

"reductio ad absurdium." spot on...but it was never a Greek bailout to begin with, yes, yes? "The goal has always been and still is to bailout out the German creditors." So the question we must ask (since we need to peer beyond the rhetoric so that we maintain OUR integrity!) is "how is the German bank bailout going?" Seems to me with the annihilation of the euro, the forced migrations of millions on the Continent, the still outrageously high prices for fuel over there, etc...etc..."not very well." Keep it Simple Stupid...we know the simple truth of the matter over there...let us move beyond that now and ask "how's it going?" Perhaps we can learn something to apply to our ability to move the US economy forward in a healthy way over here in the USA as a consequence. At the very least it should give us a heads up on potential "price spikes" since indeed "this response to the USA's debt crisis is not different from any other in the past" is it not?

goldnguns's picture

We should just make Greece the 51st state.  Heck, half of Greece has relatives in the US anyhow.  Then we taxpayers can absorb that piddling ass debt load (what?  300 billion?  we blow that in 2-3 months), Greece can thumb their nose at the IMF, we get a big discount on ouzo, they all get Obamaphones, and life is again good.

Kobe Beef's picture

I'm surprised Obama hasn't thought of this yet. They'd vote democrat & we'd have another few million socialists on the welfare rolls.

evolutionx's picture


Euro Collapse Explained in 3 Minutes

Reflections on Europes financial woes. Special subject: the economies of the European Community. Which debt is owed by whom? Who will pay the bill?

LongSoupLine's picture

annnnd it's gone...


ES just went green boys.  Welcome to the new normal of corrupt algo fullretard.

Sudden Debt's picture



Look at Belgium! (dutch article) 

Dexia ready to fall!!


GDP Belgium => 315 BILLION




overmedicatedundersexed's picture

look up the banks the FED bailed out in 08/09..dexia was a favorite pet..same now.

BurningFuld's picture

Why is everyone picking on Dexia? Or I guess more to the point, why is everyone picking on Belgium, surely this can be swept under a rug somewhere or the data fudged a little better. Freekin' amateurs.

Sudden Debt's picture

I don't understand either...

we supplied the entire Israeli army with new weapons from FN....

and this is the thanks we get... go fish...


timbo_em's picture

If someone attached some mean teeth to that darker blue area of that left circle, it would look funnier and it would illustrate the malaise in a very obvious manner.

Shizzmoney's picture

Hey look, it's Pac Man!

Broccoli's picture

Modern political and economic thinking: The problem of malinvestment can be fixed with more malinvestment.

Do they still teach "the first loss is your best loss" anywhere?

GMadScientist's picture

I'm afraid that was repealed in favor of corporate socialism.


mccoyspace's picture

You could say that it was good money after bad, but it hasn't been good money for a while now.

NEOSERF's picture

And given that Spain's economy is as bad and 5x the size, I can't wait to see how the Euro group absorbs $1.5T in aid especially with France unable to help.  Gives new meaning to slow motion train wreck as we all simply wait for the Lehman moment where the Fed and UK has to step in to stop the complete collapse of Europe...again

BullionTweet's picture

Front row seats as Greece sinks into the Black Hole of oblivion and drags everyone else in with it. We're all being draged in but at different placements on the drain vortex. No way out for those poor bastards. The reaper commeth soon.

Anyone want to buy a Greek Island cheap? Learn German.

OneTinSoldier66's picture

Long Financial Engineering Degrees.

WaEver's picture

Madoff would be proud looking at the prerformance of his pupils

GMadScientist's picture

Especially after they put it in.


jmcadg's picture

So that's about €2900 for every man, woman and child in Greece.

Let's see now, we have people dumpster diving and we have Venizelos looking a svelt as ever.

Just remind us where the money is going?

Kobe Beef's picture

The International Banking Cartel. In a few fell swoops they managed to steal more than 100% of Greek GDP. Now that's some serious racketeering.

shovelhead's picture

Goats over there...Olives over here.

And... the women who don't need a shave,  thru that door.

"Jah...jah. Gut ze debt is secured... Dumkopfs."

Vegetius's picture

Dexia the bank that keeps on giving!



dicktator's picture

Quick Nov. summary:

Obama: Four more years
Greece: Two more years
Adoboli: Seven more years