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The Bad News Begins: Greek Q4 GDP Slide Revised Downward From -7.0% To -7.5%
Not even 6 hours after the PSI exchange offer details, and already the true Greek problem rears its head. Because it is not the crushing debt coupon that is the primary threat to Greece: cutting the cash coupon from infinity to 2.6% is welcome, but utterly meaningless if the debt load is still intolerable (as a reminder, just the Troika DIP is about 130% of Greek GDP, meaning all junior debt is worthless as confirmed by the trading price of the New Greek debt in the 15 cents on the euro region). No - the true threat to the Greek economy is that nobody wants to work anymore. Sure enough, the previously reported -7.0% contraction in Q4 GDP has just been revised to -7.5%. From Reuters: "Greece's gross domestic product (GDP) contracted by 7.5 percent year-on-year in the fourth quarter of 2011, the country's statistics office said on Friday based on seasonally unadjusted provisional estimates. The contraction, which followed a 5.0 percent GDP decline in the previous quarter, was deeper than a previous Feb. flash estimate of -7.0 percent." And one can be absolutely certain that this number will be revised far further lower when all is said and done. Also, with recently released Greek PSI data coming at an all time low, we wish Greece the best of luck in achieving that -1.0% GDP growth in 2013 as per the IMF's downside case. Finally, this explains why the NEW Greek debt is trading with an implied redefault probability of 98%.
Here is how Greek GDP looks by quarter in 2011:
Q1: -8.0%; Q2: -7.3%; Q3: -5.0%; and Q4: -7.5%
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Shocking
The expected reduction in government spending equivalent to 20% of GDP by 2013 under the TROIKA plan should really help improve the situation.
Economic implosion bitchez!!! There I said it.
Holy Crap!
..the yoghurt has hit the fan over there
#we wish Greece the best of luck in achieving that -1.0% GDP growth in 2013 as per the IMF's downside case
best joke of the year
alx
HAHAHAHAHAAAAA!!! Awesome!
Hey you never know - maybe they're reporting lower figures to leave some buffer for 2013.
This shouldn't be news.
Yea, but GDP is a backward looking figure. Need to look at the consumer confidence numbers :)
there's no accounting for Greeks leaving, Greeks shuttering business because they have no intention of being milked any longer by hardened socialist Govt scum, Greeks stashing their savings in foreign shores and Greeks just giving up
this is a Greek tragedy..birthplace of democratic Govt.. the right spot to learn a good lesson then
Excellent.
EU markets are looking kind of shaky at the moment. I hope it's a sign of impeding selloff.
I wonder how long it will take that scumbag Draghi to come up with a reason for delay or "fine tuning" of the newly announced exit plan. Or will the bureaucrats by that time find some other way to blatantly break laws and delay the inevitable by another quarter or two?
Phase 1: some decades of debt funded welfare for the rich and not so rich.
Phase 2: debt saturation, austerity, population on cold turkey, unknowingly screaming for a socialist totalitarian leader.
Phase 3: TPTB gladly deliver on this request.
KEYNES'S MISSION ACCOMPLISHED.
Seems someone is ignoring a cash only black market may be developing. Just because the government cannot measure something, does not mean it ceases to exist. If I was Greek, I would be playing for all the cash I could get.
accounts for some of it I'm sure. I imagine that if we don't fall into world war that within a few years most western economies will have large black market segments, people who have completely dropped out of the system and the politicians and talking heads will be blabbering on but nobody will be paying attention.
most continental european countries have never stopped having a black market - though there is a catch: black market partecipants are usually debt-free. I'm not goading, it's true.
If you have X in cash at home because half of your revenue is from let's say plumbing without receipt but you owe Y to the bank and you can't bring the cash to the bank things start to get ugly.
banks close their eyes on where you get your money from to pay them...
Usual case is this one - If you can not buy a house with your legal earnings you go to the bank take a loan buy the house and then repay the bank over several years with your illegal income.
not on the Continent - banks are, depending from the country, required to ask you where this cash is coming from and report suspicious activities (lots of money laundering laws). this creates a strong incentive to manage your finances in a radically different way, and being mostly debt-free, bank-free and credit-card free is usually the commonest.
Exactly...they have had that for years....but now it has doubled or tripled......they just found 12,000 people were getting paid that did not exist....
Where will be a year from now??? Greece will still be broke..much more strikes and destruction...the new bonds will be trash....there will be competiton from other countries defaults....maybe some truth will come out...doubt it...and teh USA will have 2.3 trillion more in debt....a bit more than forecast...lol
No one has yet to even venture into the subject of US Federal tax receipts missing expectations significantly.
"nobody wants to work anymore"
Was Atlas Shrugged ever translated into Greek ?
RECOVERY, BITCHEZ!!!!!!!!!!
Colective Action Clause will be triggered...Junker said
People won't work when you steal the fruits of their labors.
nobody wants to work anymore - why would i want to work to pay taxes to fat bankers i never borrowed money from?