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Greece Said To Tap Social Security Capital To Fund T-Bill Rollover
As reported over the past two days, in order to fund the payment on various imminent debt maturities to the IMF, the cash-strapped Greek government has been forced to consider, among other things, raiding Greek pension to procure the required funds. We noted yesterday, citing Reuters, that Greece will use short-term repo transactions to transfer the cash, but one government official said they could not be used to repay the IMF.
Greece is tapping into the cash reserves of pension funds and public sector entities through repo transactions as it scrambles to cover its funding needs this month, debt officials told Reuters on Tuesday.... At least part of the state's cash needs for the month will be met by repo transactions in which pension funds and other state entities sitting on cash lend the money to the country's debt agency through a short-term repurchase agreement for up to 15 days, debt agency officials told Reuters
"Repo" because the implication is that this funding need is temporary. Of course, should it provde to be anything but, the local population will promptly exhibit very angry tendencies once it is revealed that the "radical left" government plundered Greek pensions to pay the IMF which could then immediately turn around and use the fund to pay the Kiev government, which in turn could pay Putin to keep the gas running. Where Greece will find an additional source of funds to replace this Pension "repo" was not quite clear as of this writing.
Which brings us to the Greek T-Bill rollover auction this morning: an auction which as DB's Jim Reid summarized is one of the two main events of the day, as follows:
As mentioned the Greek T-Bill auction will be worth keeping an eye on today. The nation has a €1.4bn maturity due on Friday along with a €300m repayment due to the IMF. DB’s George Saravelos noted that the portion of the bill held by foreigners (c. €800m) may be unwilling to roll over and so potentially raise the risk that the auction does not generate the necessary amount to cover Friday’s maturity. This, combined with reluctance by the ECB to raise the cap on T-Bill issuance, will likely place the government under considerable near term pressure. It’s likely that we hear the first request from the Greek government to the ECB to increase the T-Bill issuance cap at the Eurogroup meeting next Monday. However it remains to been seen whether or not the ECB is willing to comply and instead we heard earlier suggestions from the EC’s Dijsselbloem that Europe may be willing to allow for an early disbursement of the final tranche should conditions be agreed upon.
Well, the rollover auction came, and it was successful, even if it means the yield on the paper rose from 2.75% previously to 2.97% - the highest yield in 11 months, since the 3.01% in April of 2014. Kathimerini had the full breakdown:
Greece sold 1.138 billion euros ($1.27 billion) of six-month Treasury bills on Wednesday, covering the amount it wanted to refinance a maturing issue, in a sale that tested the country's ability to raise funds amid a cash crunch. But for Athens the funds came at a higher cost. The T-bills were priced to yield 2.97 percent, up 22 basis points from 2.75 percent in a previous sale in February, the country's debt agency PDMA said.
The sale's bid-cover ratio was 1.30, unchanged from the previous sale in February and showing no deterioration in demand despite tight liquidity conditions
The amount raised included 262.5 million euros in non-competitive bids. The settlement date for Wednesday's auction will be March 6.
Issuing T-bills is the only source of commercial borrowing for the leftist government of Prime Minister Alexis Tsipras but the country's EU/IMF creditors have set a 15 billion euro cap on such issues, which has already been hit.
The problem is when looking at where the funds came from: as Bloomberg reported, also citing Kathimerini, today it was the turn of Greek Social Security funds to prop up the auction, with part of the reserves of other public entities held at Bank of Greece also used to cover the Treasury-bill auction.
Bloomberg adds that the "investment of common capital reserves was necessary as no foreign investors participated in auction, Greek banks couldn’t buy additional securities as they weren’t allowed to increase their exposure to Greek Treasury bills." The biggest problem is that, as DB framed above, about €750m of the T-bills maturing Friday were held by foreign investors who didn’t participate in today’s auction.
In other words, first the Greek government is contemplating using pensions to pay the IMF, and today had no choice but to use social security funds to rollover its debt maturities - a process which didn't even raise any incremental money but merely kept total Greek leverage flat, in the process raiding some more of Greek entitlement funds.
How much longer, one wonders, can this continue without the population starting to ask very pointed questions? And perhaps ironically, preempting just these questions,moments ago Greece’s biggest pension fund IKA said, via Bloomberg, that "repurchase agreements is a practice which has been in place for the past four years in order to tackle real or potential cash flow problems, secure timely payment of pensions."
Press reports that use of fund’s reserves for internal borrowing is extraordinary event “do not contribute positively in this crucial period for the economy, exacerbate climate of insecurity and uncertainty among Greek pensioners."
So with that, we hope that the climate of "insecurity and uncertainty" among Greek pensioners has been restored.
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Time to apply for another credit card to rollover the last credit card balance.
Oh....wait....
the U.S. does the same on a daily basis...... $3+ trillion in US debt purchases by SSC so far and counting, not to mention the embezzelment of Federal Pension funds during "government shutdowns"
Words:
Tap
Borrow
Bond Buying
Quantitative Easing
How long before the banksters have it all?
It's a sad commentary when not even a Communist can stand up and tell the Capitalist Bankers to go fuck themselves.
Next up, a Hitler style fascist; maybe that's what it will take to get the job done.
Greece should confiscate all Foreign/Western owned assets in Greece and hand them over to the Bankers as repayment; that would be fun to watch.
I like your shirt
It's OK, cuz we owe it to ourselves...
"That's as good as cash. That's an IOU."
The Greek Social Security fund belongs to the poor and middle class of Greece. That is used to pay off the rich bankers. The huge estates and mansions of the rich in Greece, the one that never get taxed, are beyond reach. Sucks.
Every Greek should end up poor with the exception of Syriza bosses and Greeks abroad.
When they have it all they dictate tax and fiscal policy? This has already been seen in the EU.
Police state is the only way they can hope to control it.
...then Panos Kammenos, Greek Defense Minister and the other half of the impotent Syriza/Independent marriage, might be your man: http://redefininggod.com/2015/02/globalist-agenda-watch-2015-update-19a-...
Greek Nationalist Independents, Golden Dawn, pissed off pensioners... could get interesting.
Regardless, someone's gonna have to bail out the debt-ridden Greeks. If only there were a meeting of some whole "new development bank" of sorts meeting in June of this year to discuss their first round of loan packages...
Why not tap our reserve? Oops, never was one. Tapped ten too many times.
Robbing Peter to temporarily pacify Paul....good plan
Robbing retirees to temporarily pacify banksters. There, fixed it for ya.
Isn't this more like robbing Peter to pay Peter back his incremental interest due.?.?
A special message to Alexis Tsipras
since social security capital is gathered by the force of the law (you cant opt out from it), then this capital belongs to the state, so why surprise?
World's slowest train wreck.
More time to plan and enjoy life. No rush. When she falls off the rails it will be gamoe over for many.
Tsparis probably hasn't transfered enough "funds" to Russia so that he can live comfortably in exile...I'm sure once he's "moved" a billion or two to Russia, he'll "step down".
Is it safe to say " This ain't Sparta"?
Sparta? Let me see... Sparta's constitution mandated that every boy at the age of seven had to join the military until the age of... thirty
further, every year Sparta declared a special ritual war on the peoples in it's imperial possessions, just to drive in who was in command and enjoy a bit of pillage
as such, the Spartiates of old can only be described as a military-aristocratic caste. I don't know if you'd really like Sparta
let's start with the little thing that they did not allow neither free trade nor free enterprise nor even honest money. their iron coins were the equivalent of the first fiat money for most of their rule (the story behind the iron coins is a bit more complicated then that)
Ghordius appreciate the history lesson but it was sarcasm.
On a side note Sparta sounds a lot like a current superpower.
sarcasm noted/appreciated. a current superpower where the elites are at the front, in war? and there is a law forbidding them to ever retreat?
LOL. I might actually have a little respect for them if they did that...
once again, pay no attention to Syriza's words - instead take note of their actions - which, keeping score, are:
1. maintain status-quo bailout program
2. rape its citizens - steal their pension funds, hand over to the elites
3. rape its citizens yet again since the first rape wasn't hard enough - steal their social security funds
4. rape #3 coming soon....
Thought these people were brought in to alleviate the issue.
New boss, same as the old boss.
They need to exit the Euro.
So much for tough talk.
... because devaluing the currency in the pockets of the people is way more... elegant? Champagne Socialism's kind of elegance?
Realsocialism like we knew it under Ceausescu...
Realsocialism like we knew it under Ceausescu...
"the "radical left" government plundered Greek pensions to pay the IMF..."
nah, I prefer a different spin, today. let's say...
"the radical socialist government briefly borrowed from Greek pension funds to pay back US Tax Payers"
much better
after all, they do call themselves radical socialists, they are of course painting it as a provisional measure (and only time can tell if it's so) and ZH's Tyler is himself often rewriting the IMF as the US Taxpayer, when it's the IMF paying out instead of getting money back
I'll spot you a five for a twenty. Eurotrash Grifters.
They are really going to do some sick prison s**t to Tsipras and Vanoufakis before this is over.
What a joke.
So, when do we get offered the 30% yield bonds?
Turning Japanese ..I really think so....
The Vapors - Turning Japanese
Can't beleive Putin just does not give these guys $10B............ in exchange for them vetoing all EU sanctions against Russia.
that's the way to solve all political issues. bribe away! /S I'm sure you do realize that this way of thinking... is self-defeating, in the long run
The Russians might do something like for a a Greek Naval port on the Aegean.
#Tylers
could you plese provide the Bloomberg link, my google search of your quote is not productive
I don't see total Greek Debt anywhere. I mean you have national debt from Federal Government, you have total Debt as reported by Government Agencies, and then you have the Financial Position of the Country or Entity.
CIA Factbook Greece:
Debt - external:
$568.7 billion (30 September 2013 est.)
country comparison to the world: 25
$577.2 billion (2012)
CIA Factbook EU:
Debt - external:
$15.95 trillion (31 December 2012 est.)
country comparison to the world: 1
$14.78 trillion (31 December 2011)
CIA Factbook USA:
Debt - external:
$15.68 trillion (31 December 2012 est.)
country comparison to the world: 2
$15.51 trillion (31 December 2011)
But FRED Charts show USA at $58 Trillion Total Debt, and $17.8 Trillion Federal Debt.
http://research.stlouisfed.org/fred2/series/TCMDO
http://research.stlouisfed.org/fred2/series/GFDEBTN
Wikipedia shows Financial Position of the USA:
As of the first quarter of 2010, domestic financial
assets totaled $131 trillion and domestic financial liabilities $106 trillion.[6]
And a bit of a break down we would expect in Europe:
https://en.wikipedia.org/wiki/Financial_position_of_the_United_States
- Household Debt $12.9 trillion by Q2 2012
- US financial sector debt $15.6 trillion in 2009 (Mostly GSEs and Bonds)
- State and Local Governments $2.4 trillion in 2009
- nonfinancial businesses $10.9 trillion in 2009
- Federal Government $7.8 trillion in 2009 (Debt held by the public)
So if ZH & Bloomberg say they are looking at $400 Billion Euros in Greece Debt... well WTF does that Means??
How much Debt does Greece really have?
Then we want to see what Liability Greece has for Pensions, Social Security, and Medicare type Funds or Social Programs.
Of Course I may just need to search ZH Posts & Articles to see the Answer, but I hate articles that try to fool me. FOOL ME AGAIN.
If Greece were thinking of taking a big step soon, something like this might be buying time. If they WERE considering a return to the Drachma, couldn't they just 'use up' their Euros beforehand?
I mean, what would those Euro accounts be worth should they do that? I can't imagine they'd be worth much then, or that those accounts would be accessible to the Greeks anyway...
I don't know...what would a Euro based retirement account be worth if your country defaulted and changed currencies? Meanwhile, you need X amount of Euros NOW...
How can you restore security and certainty to those folks anyway, with or without those Euros? It sounds to me like they're fucked no matter WHAT Syriza does.
Better to be fucked and free than die slowly strangling at the end of a leash.
Holy Shit a Beta Test by Communists to cut Social Programs. These guys are CIA Assets. I am totally blown away.
Speechless.
Ah, well. It could be an Intelligence Operation to help them sell bonds...
So, the Greeks actually have a social security lockbox...that looks now to be opened?
Apparently it is his plan to heat things up a bit
Eventually, everyone receives what he deserves.
"I have some good news Spiros. Remember that nice pension I promised you when you bought your Govt. job from me? We invested it all in high yield bonds. "
"The bad news is that they were Greek bonds."
Great plan.
Old people dont need money anyway.
Why wouldn't they? Same as the US 'social security trust fund'. Except right now there would actually be buyers for these 'non-publicly held' treasuries.