• Sprott Money
    05/05/2016 - 06:02
    Why is a Deutsche Bank mouthpiece suggesting “negative retail deposit rates or perhaps wealth taxes”? The answer is to (supposedly) stimulate our economies.

Eurogroup Scrambles With Greek "Solution" Late In The Day

Tyler Durden's picture


Following their brief interruption for calculations, the Eurogrouop is back hard at work and a few absolutely meaningless and ridiculous headlines are being spewed:


The market, for reasons we note below, completely ignored this idiocy as anything of relevance as they continue to try to find a way to enable the Greeks to appear to pay their next principal via pure accounting shenanigans as opposed to the transfer of any real money. We wait with baited breath for how they are going to wriggle out of this one and remind readers of the buyback 'boondoggle' Q&A from the weekend, as it is the write-down that is what the market is focused on.


First - the ECB has EUR10-15bn of non-PSI debt on its books (held at Par we would imagine) that was bought as part of the original SMP. Buying back this debt from the ECB (at the ECB's cost) would mean no nominal loss for the ECB (and no gain aside from the interest earned) and would reduce Greece's debt load marginally - very marginally.

Second - the acceptance of collateral is a joke! The ELA mechanism currently used to fuind Greek banks is simply a conduit to hide the ECB's direct acceptance of Greek bonds as collateral and does nothing to free up any capital or aid Greece in any way

Third - a bond rollover merely pushes the debt-load out further (obviously) and does nothing to improve debt sustainability

Fourth - using ECB profits for any of this is a non-starter as the amount is tiny in relation to the problem being faced.


And that is why EURUSD did not even uptick 10pips on the news!! The market remains 100% focused on the write-downs or haircuts as any real trigger here.

Your rating: None

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Mon, 11/26/2012 - 14:15 | 3011847 Conman
Conman's picture

Well seeing as the market priced in a full resolution to everything last week, no movement is actually good news on this non-resolution.

Mon, 11/26/2012 - 14:19 | 3011862 knukles
knukles's picture

Taking another look at portfolio profits on Greek bonds.

Holy shit....
Need a good 12 step program.

Mon, 11/26/2012 - 14:25 | 3011898 old naughty
old naughty's picture

They still think it can work?

But I thought Germany can/will NOT write the check.

Mon, 11/26/2012 - 14:48 | 3011977 SheepDog-One
SheepDog-One's picture

Right...but nothing wrong in just pretending 1 more day.

Mon, 11/26/2012 - 14:56 | 3012016 unrulian
unrulian's picture

All Math is Fuzzy when you're drunk as shit

Mon, 11/26/2012 - 14:17 | 3011858 TheFourthStooge-ing
TheFourthStooge-ing's picture

Another headline:


Mon, 11/26/2012 - 14:24 | 3011885 bdc63
bdc63's picture

well, its about time they catch up with the US Bureau of Labor Statistics ...

math is very overrated -- so last millenium ...


Mon, 11/26/2012 - 14:30 | 3011917 Overflow-admin
Overflow-admin's picture

So are physics!

Mon, 11/26/2012 - 14:33 | 3011937 Skateboarder
Skateboarder's picture

New Age Math - it flows from your ass instead of your noggin.

Just Look Around You!

Mon, 11/26/2012 - 14:28 | 3011916 Overflow-admin
Overflow-admin's picture


Mon, 11/26/2012 - 14:42 | 3011958 ebworthen
ebworthen's picture

I just knew there was a "solution" somewhere.

Mon, 11/26/2012 - 14:18 | 3011861 tooriskytoinvest
tooriskytoinvest's picture

We Are Witnessing The First Great Depression Of The 21th Century: 2013 Will Be A Year of Serious Global Crisis. Austerity, High Tax Rates, Near-Zero Growth Will Last At Least A Decade, Natural Resources Are Running Out At An Alarming Rate, And Many Won't Survive.


Mon, 11/26/2012 - 14:24 | 3011888 walküre
walküre's picture

Demand for commodities is in the crapper. Austerity, higher taxation and low-to-no growth will reduce demand even further. New investments into oil and gas exploration are on hold until demand improves again.

Mon, 11/26/2012 - 14:19 | 3011869 yogibear
yogibear's picture

Wow! What is the count for Greece being saved now?  It's a joke. 

The ECB should just give Greece and Spain the Euro Printing presses ao they can have fun. 


Mon, 11/26/2012 - 14:48 | 3011976 youngman
youngman's picture

Kind of funny but the ECB should have a rolling printing press...located in several trucks that they could move to a different country when needed...it could be in Greece now and they could print their own trillion or so...then they could move it to Spain...Italy...Portugal and so forth as the demand rises....pretty cool idea I know....its so simple these answers..why dont they invite me to the fun meetings

Mon, 11/26/2012 - 14:20 | 3011876 Dr. Engali
Dr. Engali's picture

What's their hurry? This ship has been sinking for four years now....another  day or ten isn't going to kill them.

Mon, 11/26/2012 - 14:28 | 3011903 scatterbrains
scatterbrains's picture

you might think using game theory that they will find a way to delay this so that we here in the USA can go over the fiscal cliff at the same time the Greeks pull out of the Euro.. after the market closes on a friday of course.

Mon, 11/26/2012 - 14:24 | 3011890 Ned Zeppelin
Ned Zeppelin's picture

I'm going with Door #3, i.e, the Debt Rollover.  Doesn't cost jack and it gets the can kickin' done.  You know this will end with this getting magically resolved, so the fun part is guessing how big of a whopper the EuroFibbers have to tell with a straight face to accomplish it.

Mon, 11/26/2012 - 14:26 | 3011901 vote_libertaria...
vote_libertarian_party's picture

I'm waiting for the next 'fix'....click your heels and wish a the badness.

Mon, 11/26/2012 - 14:26 | 3011902 Orly
Orly's picture

Not only are they kicking the can but they're kicking the can as a "do-over."

These boys and girls are real pros.


Mon, 11/26/2012 - 14:30 | 3011922 Orly
Orly's picture

And then there's this:


Apparently, the fat lady ain't sung yet.


Mon, 11/26/2012 - 14:31 | 3011905 CrashisOptimistic
CrashisOptimistic's picture

Always useful to step back and look at probabilities.

Probability the EU folks will walk to a microphone and say "we give up.  Nothing can be done.  We have contacted the Red Cross to be prepared to help Greece".   = 0

Probability the EU folks will walk to a microphone and say "we have a solution that will enable us to provide Greece with the next tranche and the solution involves lj;klj;aljsj;skdfsdlj and we expect to have details before the Dec 5 deadline for sending money to Greece"  = 85%

Probability the EU folks will walk out and present the details, say it's not perfect but it does justify the next tranche.  = 50%



Mon, 11/26/2012 - 14:27 | 3011908 bdc63
bdc63's picture

I cannot beleive that Germany hasn't figured out yet how to walk away from all of this and just put up a firewall around their banks -- 'cause you KNOW as soon as they figure it out, the fat lady launches into her final aria ...


Mon, 11/26/2012 - 14:32 | 3011928 CrashisOptimistic
CrashisOptimistic's picture

You can't insulate from global swaps.

Mon, 11/26/2012 - 14:49 | 3011981 Winston Churchill
Winston Churchill's picture

What do you De La Rue banknotes printers have  been working two shifts for

the last six months for ?

DM or Drachma ? Or both,maybe ?

It takes a little time to get prepared on a currency switch.

Mon, 11/26/2012 - 14:34 | 3011941 walküre
walküre's picture

What I find fascinating is how "cool" these heads still are that are prevailing all across Europe. They must have their faces in buckets of ice water to keep them so cool.

All these charades, the lies, the manipulation because at the end of the day NOBODY wants to fucking pay the bill. In the meantime the "happy, happy" propaganda creates the illusion that there will eventually be a solution to permanently defy gravity in Greece and elsewhere.

It ain't happening. There is a major SHITSTORM brewing in Germany. The problems are surfacing everywhere and one thing that is certain is that the descendents from tribe of Barbarians have a pretty impulsive and raging nature. Protests in Greece and Spain are for pussies. The real riots will happen in Berlin, Munich, Frankfurt, Cologne and Hamburg. Just wait. There are 80 million people confined and pretty well landlocked in a country half the size of California.

They will all wake up and collectively realize that everyone else has been pissing in their beers and excrementing in their gravies. The EU treaties and bureaucracies have long been a contentious issue. Germans generally have a problem with a foreign authority telling them how to live their lives.

Mon, 11/26/2012 - 14:39 | 3011954 gjp
gjp's picture

And the US equity party barely blinks.  Look at Amazon, up 10% over the last 6 trading days, well up from when it reported its most recent in a string of disappointing quarters (on both revenue and earnings, so let's not hear about investing for growth) and, unlike the cash spinning tech giant it is supposed to be, announces this morning they will be raising debt.  Incredible disconnect.

Mon, 11/26/2012 - 14:52 | 3011995 Winston Churchill
Winston Churchill's picture

Too many cries of 'wolf' .


Mon, 11/26/2012 - 14:39 | 3011956 WaEver
WaEver's picture

They could lend greece at negative rates for the next millenium! The debt will magically disappear....

Mon, 11/26/2012 - 14:50 | 3011986 SheepDog-One
SheepDog-One's picture

So basically- 'If we pretend we haz the money, then we haz it!' 

I think I just got a PHD in gobal economics.

Mon, 11/26/2012 - 14:52 | 3011994 payment expert
payment expert's picture

same ol' same ol' its been two years or is it three with the same mumbo jumbo.

Greece is not a sinking boat that can be fixed but rather a submarine in deep water with inmidiate fixes to be made.

The ECB should be focusing in making a better internal european economy.

Mon, 11/26/2012 - 15:14 | 3012060 Peter Pan
Peter Pan's picture

I woukd love to see how they will be carrying on when Spain starts making the same noises as Greece.

As soon as Germany's elections are over and Greece has been asset stripped, this farce will come to a head.

Mon, 11/26/2012 - 15:34 | 3012112 redd_green
redd_green's picture

"...as they continue to try to find a way to enable the Greeks to appear to pay their next principal via pure accounting shenanigans as opposed to the transfer of any real money...."


Tyler, Tyler, Tyler.    All fiat money IS accounting shenanigans.   The entire greek debt side show is accounting shenanigans aimed at getting Greeks, and the world, to belive that they should become slaves to these accounting shenanigans.  You, Tylers, of all peoples.

Mon, 11/26/2012 - 16:32 | 3012284 Joebloinvestor
Joebloinvestor's picture

Greek gold was already pledged for the last tranch.

I still want to know if it has been moved.

Greek property ownership and registration is a disaster so no tax money there.

What exactly does Greece want to offer as collateral besides some worthless paper or BS promises?


Do NOT follow this link or you will be banned from the site!