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DAX Surges After Germany Unexpectedly Opens Door For Greek Debt Negotiations
It appears Germany is indeed very concerned about a Greek bank run and its concomitant contagion possibilities across the European Union's banking system...
*GERMANY OPEN TO GREEK DEBT TALKS AFTER ELECTION, LAWMAKERS SAY
Although careful to point out that they are "not open to debt write-offs," German lawmakers (who preferred to remain anonymous) suggested "possible easing of repayment terms."
As Bloomberg reports,
Germany is leaving the door open to discussing debt relief with Greece’s next government, lawmakers in Chancellor Angela Merkel’s coalition said, signaling a more flexible stance than her administration has taken publicly.
While writing off Greek debt isn’t on the table, talks on easing the repayment terms on aid that Greece received from European governments are possible after the country’s parliamentary elections on Jan. 25, the lawmakers from Germany’s two biggest governing parties said. The condition is that Greece sticks to its austerity commitments, they said.
The potential opening reflects scenarios under discussion in Merkel’s coalition for how to respond if Greek voters oust Prime Minister Antonis Samaras, a Merkel ally who has enforced German-led demands for austerity, and elect anti-austerity leader Alexis Tsipras’s Syriza party.
“There should be talks with any government that emerges from the election,” Ingrid Arndt-Brauer, a Social Democrat who chairs the lower house’s finance committee, said in an interview. “You can talk about extending maturities and easing the interest rate on loans with a left-wing government, too.”
A senior lawmaker from Merkel’s Christian Democratic Union said Germany will talk with any elected Greek government, including about an easing of aid conditions, as long as Greece doesn’t renege on its austerity commitments. The lawmaker asked not to be named because coalition discussions are private.
Germany's DAX Futures are surging (as are US Stocks)
Of course, this is rational - as we noted earlier - it's cheaper for Germany this way... in quantifying the problems, KeepTalkingGreece reports Germany's FAZ notes German economists estimate that...
A debt write off will cost Germany 40 billion, but a Grexit will cost 76 billion euros.
...
Economist Jens Boysen-Hogrefe is member of the Kiel Institute for the World Economy (IfW), an economics research center and think tank located in Northern Germany.
By a Greek haircut the German state budget would suffer greatly. Financial expert, Jens Boysen-Hogrefe estimates the potential losses for Germany, one of the main creditors of Athens, will be up to 40 billion euros, should Athens insists on a haircut, that would sink its debt ratio from current 175% to 90%.
“If Greece does not serves its debt anymore, the cost would be even higher, notes the FAZ, adding that another Institute for Economic Research, the Ifo Institute calculates the cost of a Grexit as much higher.
The Ifo Institute has added further costs that would be incurred if Greece not only goes for a haircut, but it exists the euro (“Grexit”).
“If Greece becomes insolvent and leaves the euro, the Federal Republic would expect a loss of up to 76 billion euros,” said economics professor Timo Wollmershäuser from the Ifo Institute for Economic Research.
* * *
So to summarize: Germany just won Syriza's elections for them, muted fears of a Greek bank run in the next 2 weeks, and gave German banks higher asset values into which they can sell greek exposure until January 25
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how is that bullish?
So does that mean Greece is fixed, unfixed, or unfixed and ringfenced?
I know it is bullish, just wondering what flavor of bullish it is today.
pods
Not open to write-offs but will write-off Greek debt.
Must create Euro zone uber alles.
How are they going to cover the losses when ECB has no means to buy Eurobonds?
Italy and Spain are next.
Very simple:
What can't be repaid won't be repaid.
All the rest is re-arranging deckchairs on the Titanic...
Trying not to panic anyone with the knowledge the boat is sinking, cause, well, you know, folks might actually demand something be done about it. This way it all goes so much smoother!!
I came upon two men breaking into a truck one day. One guy walked away from the truck while the other kept on working and looked me in the eye and started to tell me everything was okay. Like he has the power to hypnotize me or something. He told me to just go back into my home.
Fuck him, I called the cops.
This has that flavor, the criminals are at work, and other criminals are trying to tell you to go back to sleep.
"GDP is growing."
"Unemployment is back down to pre-recession levels."
"Stocks are up, so the economy is doing well."
"Gasoline prices are down, saving the consumer money."
"We are winning the war against terrorism."
"We have always been at war with Eastasia..."
It's a small club; and you're not a member:
http://en.wikipedia.org/wiki/Nineteen_Eighty-Four#mediaviewer/File:1984_Social_Classes_alt.svg
"Go back to sleep, Proles; nothing to see here..."
And you taught them a good lesson, MsCreant. Like a real teacher. Kids need to learn. That's very important. More important than it ever was. Now that you have a taste for it - why don't you catch the big fish?
"I came upon two men breaking into a truck one day. One guy walked away from the truck while the other kept on working and looked me in the eye and started to tell me everything was okay. Like he has the power to hypnotize me or something. He told me to just go back into my home. "
It would have been a funnier story if the truck had been YOURS.
Should have went back in your home, grabbed a shotgun, and fired a warning shot of buckshot into the guy's ass.
Not legal and my life was not threatened. I did not carry back in the day but I have a permit now...
My friend had left her wallet in her car and it had just been taken. I was wandering around to see if I saw anyone. Then I found those clowns, breaking into yet another car. It was not my neighborhood, but hers. She was freaking out that I should not even be out there, I was incensed at her passivity (in retrospect she was probably right, but you could not tell me shit back then). I didn't give a fuck if they are men or not, they can't just do whatever they please to whoever they please.
I am actually glad I was not armed. Because they did not threaten me, I had no business using violence on them.
When I was young I always had a loaded gun nearby, living in a middle class neighborhood. I sat myself down and had a chat with myself about what I was willing to actually shoot someone over. For me, it isn't a tank of gas or a set of tires. If a victim can get away with it, it is quite humorous as to what effect a warning shot has.
A few random shots in the night I found, kept a lot more fuel in my fuel tank and the local pilfering dropped way down. I have also been burglarized. It is hard to convey the feeling of being violated.
Most of us should be willing but not anxious to use brute force.
Somehow I get the feeling that it will be repackaged and sliced and diced and used as leverage for something new and the derivative balloon inflates more.
What a shit show.
Meanwhile the banks in Germany are loaning out 100% LTV on RE and even up to 120% because there's so much fucking money in the system and the rates are not yet negative enough to make a difference.
Oh.... I thought Herr Dr Whazzizname said the other day that it was time for the Gercxsitorcism and that Germany was all isolated and De-linked from any outside problems and that everything was really hunkie-dorie and that Angie and Vlad had had a slippery sitcky love coupling in the old used historic Calvin Coolidge sweat lodge Opajamas had removed from the third sub level of the Situation Room to make way for the new basketball court and ESPN broadcast training facility.
So, I'm a bit off, again?
Indeed.
In fact, Germany's economy is so strong, they've beaten Japan to negative rates on their 5-year government bonds:
http://globaleconomicanalysis.blogspot.com/2015/01/germany-wins-race-to-negative-yields-on.html
The bribes are being negotiated....
If you mean fixed like "My cat is fixed" then you got it. No balls anywhere.
First, Greece, then German Taxpayer bailouts of Italy, Spain, Portugal...then France.
...Dummkopf Germans passive in face of seditionist Merkel & "their" entire spate of "elected" politicians who are literally sacrificing them on the altar of the inevitably failed EU (union & euro currency).
Such a tragic waste. All for the glory of the banksters (i.e. criminals who truly qualify as terrorists & a scourge & parasitic pox on the sanctity of decent, hard-working people).
Just like the US, no one actually pays real tax increases (other than inflation) to enable banks to be refilled. The Fed and the ECB just create the money out of thin air. The rich will keep taking from everyone else until we don't let them any more. They make the rules and they make the money.
It's like resetting a credit card to zero. How fucking long will that last?
Slow bleed instead of clean break.
"I know it is bullish, just wondering what flavor of bullish it is today. "
BullSHITish flavor: same as yesterday.
"how is that bullish?"
It just IS! SO SHUT UP AND BTFD!!!!
Tom Lee said it was bullish
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20,000 Ebola cases later…
Shirley, Rand will be cutting off aid to Isreal as well, correct? You know, since he is a conservative and stuff..?
the "markets" are just computerized policy-voting machines
Rigged ones and I will buy it. It goes in reverse too, the policy voting machines make an impression on the public, thus manipulating a belief outcome.
Good observation.
No one is going to hold anyone to any standard. Nothing is going to tighten up straighten up, the bad debts will not clear, this shit is so tired.
the bailouts will continue until morale improves
Standards take work to maintain, free for alls not so much. Its the difference between immoral and amoral.....
Guess ALL shorts just got anihilated!
1. Jawbone and threaten to tighten up and hold folks accountable.
2. Wait for shorts to pile on board.
3. Place bets against shorts.
4. Pull rug out from under shorts.
5. Profit.
6. Rinse & Repeat.
And the longs will get whipsawed when the next EU idiot comes out and says "just kidding, hahaha."
pods
It's about a 1% move. That's "surging"?
*GERMANY OPEN TO BLACKMAIL AFTER ELECTION, LAWMAKERS SAY
I read it as Greece opening it's back door in order to get money. No shock there.
the bailouts will continue until morale improves
Isn't it the Greeks who normally open their back door to the Germans and anybody else willing to enter?
why did the little greek boy leave home ?
Easing my payment terms, MEANS, writing-off most of what I owe; at least it does, I'm thinking, in Greek. In not so sure what it means in German.
Interest only negative interest rate ReFi here we come!
I surprised the can even rolls anymore... It's been kicked so many times that it's got to be damn near flat.
All we are is cans in the wind.
Greater fools are born every minute.
FUCK GERMANY THE PUSSY PROXY OF THE VICHY DC
It's worse than that.
Looking for cheese:
https://www.youtube.com/watch?v=Q9cD3tyfKsI
"Germany just won Syriza's elections for them, muted fears of a Greek bank run in the next 2 weeks, and gave German banks higher asset values into which they can sell greek exposure until January 25"
Genius! lol - what a great summary ZH :)
Lol, now that is a fast reaction on Germany's part to the Paris killings.
Mutti is seeing the danger of Eurozone falling apart at the core under the twin threats of populist knee jerks -- ready to use the Islamist menace in France as in Germany-- AND the disgruntled PIIGS wanting to either opt out or get a huge hair cut.
Politics is about Power and Money.
And politicians act very fast when their base is menaced.
Ukraine is not core Europe...that is the message to the world.
PS : The new ZH post on Le Pen's statements speaks volumes on the coming rising tide of populism.
>>>
Mutti is seeing...cut.
<<<
I entirely agree.
However:
>>>
Politics is about Power and Money.
<<<
In Mutti's case the situation is more complex.
She is certainly interested in power, almost certainly _not_ particularly interested in money
(makes my teeth grate to suggest this about any politician, but I honestly believe it to be true).
Her top priority, however, is neither: it is keeping the United States of Europe dream alive.
And that means that if push comes to shove, German taxpayers will _give_ (not lend) further
money if that keeps Greek debt being paid.
But the first stage is to offer zero interest/zero coupon loans out to 100-200 years...
Watson
Yes fp
The Kabuki Karaoke Theatre is getting to me ; i almost wish they pressed the button and started this whole human race fiasco again in 100,000 years.
Don't look now but the krauts just blinked. Greece will get more money and concessions. They should go hard core and tell Germany "fuck you, we're out" then follow through. It would be in their best interest, tons of soviets would love to vacation there if the deal with Vlad was done right.
how much does it cost to buy 200 Greek MPs?
Papandreou cost half a billion euros if that's any guideline.
Why is the 'market' ever only allowed to go down ~1% in a day but allowed to climb 2-5% a day?
Excuse me Frau Merkel......Ireland, Spain, Italy and Portugal are on line 2.
Exactly right...translation on these comments is:
1. We can't afford you to renounce anything
2. We will offer you a shit extension on the time to repay us
3. Continue on with your Depression and don't bother again us until our own elections are over
On other sites Obama is trying overtures to Putin - seems like the major players need the US to back off with France leading and then Germany - atlantic alliance under severe pressure - NATO splinters and EU splinters at the same time -
I hope both Putin and Syriza dont back off - if the debt is written off then Greece splits EU with new currency and starts over as export center - if USA out of Ukraine then Ukraine splits up north / south / east and west - as well and exports both to EU and Russia
maybe then we all move forward for the rest of EU - they may be using Greece as a test for massive debt write down
I have a crude metaphor for all this.
We all know the boiling frog metaphor. I would like to suggest the exponentially increasing dildo theory.
Quantitative easing involves liquidity injections, but that is not all. When something is too tight, you have to lubricate it, and ease into it, this is a given. Too fast and the receiver notices because it hurts. So you inject a little liquidity, then a dildo goes in and announces it is all okay. Then you fuck them a little. Then they say it hurts too much. So you inject some more liquidity. Then a bigger dildo goes in and says everything will be okay. The country believes it, lets it happen a little more, then notices they are being fucked again because it hurts. Inject, send in a bigger dildo, fuck harder till they notice, repeat process.
After a while you are wildly fucking them and they just don't care anymore because they know the next injection will be coming soon. Before long the last injection is too much, and it is no longer capeable of giving the relief it once provided short term.
(This message has been inspired by Greek stereotyping, many actual Greeks have been hurt in the production of this message).
I like your metaphor. But all that talk made me somehow thirsty.
You see! In the scheme of things, You only need to give a banker the slightest of pushes and they fold real quick! If only more people knew this!
The Greeks will opt out of the EU, that's pretty much a given. The question is whether or not they will take Italy, Spain and Portugal with them.
http://www.globaldeflationnews.com/grexit-looms-possible-as-snap-electio...
and by "door" for Greece they mean "back door", yes?
So you reduce all thier loans to zero.....what do they do next week..they have no economy....they are still losing money...who is going to buy their bonds then.....
It's not the cost of a re-negotiation, or write-off that is of major importance - it's the precedent it sets with the rest of the slacker EU member states.
... and a European QE would cost them 500 billion.
Merkel is willing to tear off the German people's heads and shit down their throats for an extra 2 weeks of looting
no german working citizens were available for comment.
Greece: Leave the EU and DEFAULT on 100% of debt.
They are fiat, fake, fraud, fiction, fantasy... valueless.
Or print up your own equivalently valueless pieces of paper, and pay back everything. Once that's over adopt a 100% physical gold standard, and your economy will rebound and prosper.
Either way, fiat is fake. Don't be a putz.
Tsipras just won the election.
Cool down. Everything is under control.
Greece is going to declare its insolvency after the election, no matter which side is winning the election.
Then the haircut comes. Loosers are the investors holding unsecured Greek debt, But the ECB and conservative pension funds within Euroland are not the loosers. Its the investment banks and hedge funds. Banks which have financed the spending binge of Greece after the Euro was introduced, hoiping that Germany is going to pay the bills one day. These original lenders do still sit on their bad loans and they are going to take the hit. Thats all.
And this is the new thing. No QE from the ECB to bail out the banks which do still hold unsecured Greece debt. But dont worry, this is all planned. The ECB has in the meanwhile an overview how the situation of the system relevant banks within the Eurozone really is. No bank within the Eurozone is going bankrupt because of Greece, at least not a big one. Over the last years the ECB has bought already from system relevant banks their loans concerning Greece and has received at the same time additional guarantees from Greece that the ECB is not taking losses or only small losses.
So its the foreign banks and investors outside Euroland that are taking the blow. And its their governments which have to take care of. No problem for UK and the US, they have the privilege that they can print as much as they want and this is what they are most probably doing then. Unlike the ECB which has to take care that the Euro stays stable and that debt is not monetized.