The Cost Of The Combined Greek Bailout Just Rose To €320 Billion In Secured Debt, Or 136% Of Greek GDP
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. Consider that when evaluating Greek promises of reducing total debt to GDP to 120% in 2020, as it would mean wiping all existing "pre-petition debt" and paying off some of the DIP. Also keep in mind that Greece has roughly €240 billion in existing pre-petition debt, of which much will remain untouched as it is not held in Private hands (this is the debt which will see a major "haircut" - or not: all depends on the holdout lawsuits, the local vs non-local bonds and various other nuances discussed here). If you said this is beyond idiotic, you are right. It is not the impairment on the Greek "pre-petition' debt that the market should be worried about - that clearly is 100% wiped out. It is how much the Troika DIP will have to charge off when the Greek 363 asset sale finally comes. This is also what Angela Merkel will say tomorrow when Greece shows up on its doorstep with the latest "revised" agreement from its parliament to take Europe's money ahead of the March 20 D-Day. Because finally, after months (and to think we did the math for Die Frau back in July) Germany has done the math, and has reached the conclusion that letting Greece go is now the cheaper option.
So how do we get to the €210 billion number? Well, there is the €130 billion already "agreed" upon.
- Then there is the additional €15 billion which Spiegel broke 2 weeks ago... New net second bailout : €145 billion, and €255 billion total.
- Then there is the fact that the ECB's bond swap into the EFSF for the 15 cent sweetener in "cash" equivalents to creditors has to be funded. As Credit Suisse's William Porter explains: "The ECB's reported bond swap has to be funded." Bingo. The WSJ further adds today, that according to a new 19-page bill, "An additional €30 billion will be provided in the form of bonds issued by the EFSF and will be offered to private creditors as a "sweetener."" Ah, so another €30 billion cost in the hole. Which incidentally begs the question- if the ECB is Europe's bad bank (courtesy of the potential $7.1 trillion collateral expansion discussed here, just what the hell does that make the EFSF which is now the ECB's bad bank)... So new net second bailout: €175 billion, and €285 billion total.
And finally, and going back to the WSJ's article, it appears that in addition to the €30 billion in Ponzi accounting which will have to be funded from the EFSF so the ECB does not "profit" on its Greek bond holdings (can someone please look at this chart and explain to us how the ECB can profit on this security).
Greece will borrow up to €35 billion from Europe's temporary bailout fund to finance an ambitious debt-buyback plan from the European Central Bank, according to official documents released by the government Saturday.
The 19-page bill sets out how the restructuring will be implemented and includes a plan through which Greece will buy back those bonds now held as collateral in the national central banks of euro-zone countries.
The plan is part of a raft of new measures Greece must take to secure a €130 billion bailout from its European partners and the International Monetary Fund, along with a €100 billion debt write-down the country is negotiating with its private-sector creditors
The measures, which will be voted on in parliament Sunday, include sweeping reforms such as €1.1 billion worth of cuts in pharmaceutical costs, abolishing restrictive rules on tourist guides and opening up Greece's energy market to foreign investment.
Who funds this latest and greatest addition to the monetary black hole that is Greece? Take a wild guess...
According to the bill, the European Financial Stability Facility, the euro zone's transitional rescue fund, will lend Greece the money to carry out the buyback. The ECB will act as an intermediary in this transaction, buying the bonds on Greece's behalf.
In other words, joint and several EFSF member countries such as Italy and Spain, oh and Greece of course, will be funding even more money to bail out Greece, only they won't be doing it, the ECB will... If your head is not spinning yet, you are not paying attention.
One person, whose head is most certainly not spinning and whose mind is long made up, is Angela Merkel. Who will promptly put an end to this lunacy as soon as the ball (bail?) is back in her court officially, some time on Sunday. And all that is of course assuming that there are Greek member of parliament who have not resigned by the time tomorrow when Greece is now fully expected to pass this latest bill.
Finally ask yourselves this: what would have happened if Greece had been allowed to default in May 2010 and all debts wiped out, and instead of feeding its creditors, the funding sources had provided the country with €320 billion in new debt (as they are anyway, only it is to make its creditors whole). It would mean that, assuming a dollar for dollar equivalency between GDP and debt, Greece would have grown by about 36% more in the past two years compared to where it is now, even with the occasional German submarine purchase. Something tells us the Greek people should have the right to know this.
Finally, a chart of what is coming to a Keynesian banana republic near you, or what it means when you can no longer mask insolvency in nominal terms.
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Tyler would be great if you could cover the links below. Somethings up in Canada.
Read http://www.fin.gc.ca/n12/12-014-eng.asp related to http://www.bankofcanada.ca/about/backgrounders/intervention-foreign-exch...
It would really suck to be a German taxpayer ... and be forced to support this basket-case economy.
Indeed! Because to support our own addiction... errr, lie... I mean endless debt, makes so much more sense! But then again, we are supporting their idiocy, via Helicopter Ben! We're on the winning track!
No medicine for you:
"The measures, which will be voted on in parliament Sunday, include sweeping reforms such as €1.1 billion worth of cuts in pharmaceutical costs, abolishing restrictive rules on tourist guides and opening up Greece's energy market to foreign investment."
Germany should bailout Greece in Weimar Marks.
How is this unusual?
Papademos is an EU puppet and he will force the vote through his coalition. It's why he was hired. Further, the EU will refuse to allow him to step down for new elections until the people are fired and the pensions removed. The EU won't risk a new government undoing the legislation.
We have to be ever vigilant and remember the Prime Directive of the New Normal. Governments will do anything to keep the wheels turning. Simply that. ANYTHING.
It is very clear that they are terrified of default. If nothing was passed and no consensus existed, then when the March date came along the ECB would write a check to make the debt payment. Greece, under no circcumstances, is going to be allowed to default. The EU is terrified of it.
Nothing will change without bullets flying and entering skulls.
+1 No contracts, no CDS, no derivatives = No rule of law = do anything. Hunger and then bullets and then skulls a popping. Unfortunately, only this equation changes anything..
Its like a good English breakfast plate, the chickens are present, but the PIGS are committed.
The decision to let Greece default was made years ago when Greece was allowed to lie its way into the Euro.
Why would you want to let Greece default and end all the confusion?
And GS showed them how. Through the magic of swaps, massive debt disappeared from the Greek balance sheet just long enough for Greece to pass the EU entrance exam. The debt reappeared, and grew exponentially, once they were in.
Oh, and Goldman made a boatload of money doing this.
Calling Kyle Bass...oh wait, he already explained to everyone months ago that a formal 100% default on Greek debt would not solve the problem. I forgot he has already moved on to shorting Japan.
http://www.zerohedge.com/news/kyle-bass-dont-sell-your-gold
TD,
You know this and most bearish bloggers know this, but the language and the body language of everybody involved in this say otherwise. Frau Merkel does not want Greece to default and you seem to be saying that since the math is so compellingly evident that default is the only rational course then that is the course she will take. But you, we have been saying this for 2 years now. And Greece can't seem to grow a pair and walk away to do the right thing for their own people.
Seems to me that this will go on until they suck the IMF dry and get what they can out of China, then in defalut call in the Fed for what money they can get out of the US in default before anybody walks away from Greece. I think her math is better than we give her credit for.
Merkel is socialist through and through. Look at her Wiki page.
Maybe Greece understands its' proximity to Russia and China....
Thanks to the mnimonio, Greece is not allowed to seek help from anybody else.
Greece officially has a pimp; the EU.
That's why I hope these crises- there will be more- destroys the union, not just the currency.
Pencil-neck soldiers from Brussels doing the bidding of Timmie.
Cyprus went to the Russkies and got a loan.
Body language is important... when speaking to peasants who know nothing. Everybody up top knows about the importance of body language. Nowadays with poker, politics, business, etc (don't forget what actors do in entertainment) there are courses and training for knowing what message you are projecting with your body language and how to project a different message.
Hell, even I keep thinking about my own body language when I go to pick up chicks (unsuccessfully).
Stand up right, head straight = confidence
Hands in pockets = defensive, self conscious
Feet spread slightly and standing upright = strength and confidence.
Look at watch often = defensive, self conscious.
etc etc
Really, all you gotta do is fake it. Especially when you know you will have pictures taken of you, you modify your behaviour to project what you want others to think. Say CHEEESEEE!
Translation: When the bonds come due, the dollar will be worth a handful of dirt, so our debt will be CHEAP! to finance :0D
Ecoman11, I think the answer to your question is that it is in Canada's interest to structure the deal that way.
If you believe what you have read here, there will be a managed descent in the value of the USD relative to the CDN. As the US prints money, generally the monies tied up in bonds will look to move to new financial instruments that should hold value.... likely commodities or equities, or government bonds of economies that will prosper. The CDN increases on both accounts.
Borrow in today's currency and pay back in tomorrow's currency.
Another side point is the Canadian social/cultural/economic connections are shifting more north/south rather than staying east/west. It is amazing how many families have family members working in the States or now have property in the States; be it vacation property, USD denominated financial instruments, equities, etc.
This is nonsense, run that chart again showing WHERE the Greek Bailout money will go. The Tricycle is screwing themselves.
Actually with 81% of it going back to banks, it is going precisely where it is intended to go.
Excellent! I mean they are screwing themselves by STALLING, the sooner they get on with this is the sooner they can go for another bailout to themselves (that is if Greece is still in the EU).
"Chancellor Miracle lines up center. Team Bankster's defence has been playing Team Sovereign tough all day. They've already knocked Guard Greece out of the game with a season ending knee injury. Looks like they're set up for a running play with Prez Sarkozy anchoring the "I" formation. Look likes she's calling an audible! ("300 billion! 300 billion!") Receiver Portugal is in coming in motion! "Hut! Hut! HIKE!" Miracle is dropping back...SHE'S GOT SARKOZY ON A SCREEN PLAY.....but wait!...it'a Bankster blitz and Linebacker Dimon is ROARING up the middle! WHAT A HIT! 15 YARD LOSS AND THE MEDICS ARE OUT...AGAIN! Miracle's down! Miracle's down!"
"Man, that's gotta hurt, John." Here's the replay:
http://www.youtube.com/watch?feature=player_detailpage&v=tJ8OYNNvf6k
"man, those Banksters are MEAN i tell ya! EMM-EEE-AYY-ENNN MEAN!"
TD - w/ all due respect it was Banks money to start with ... so, it is only logical to go back to them ... well, agreed multiplied a little bit - after all they are in business of making money...
Multiplied a little bit? The returns they are getting, especially considering woldwide ZIRP, come from taking massive downside risk. And the belief that they can push the downside onto the taxpayers. So heads they win and tails we lose.
agreed - but they (the banks) owned it; it is their system, they can milk it anyway they want...correct?
>> it was Banks money to start with ... so, it is only logical to go back to them
Listen spud. It's not going BACK to them. YOU and I are making them whole.
Let that sink in before you reply.
i do not mind that, do you? before you reply, think where would you and me be if banks were not bailed out ....
we all went into a spending bindge and we all got to bend together and pay the price ... just take the pill, it will be easier ...
In a paid off home purchased at a reasonable price?
Watch that use of the word 'we', dipshit.
Must be French....
Nothing French about being completely debt-free.
Not you, Anius must be French, tossing around the "we" all the time.
That may be their 'business', but they apparently SUCK AT IT.
Unless by 'making' you actually mean 'fabricating'.
well said scientist !
if thats how they teach bankers to apologize - they SUCK AT IT.
Rgds - Erin Bronkovich
So then TD, why do you say this:
"One person, whose head is most certainly not spinning and whose mind is long made up, is Angela Merkel. Who will promptly put an end to this lunacy as soon as the ball (bail?) is back in her court officially, some time on Sunday. And all that is of course assuming that there are Greek member of parliament who have not resigned by the time tomorrow when Greece is now fully expected to pass this latest bill."
Nobody disputes that default is the correct course but everybody in Europe has cognitive dissonance so they keep this thing going because the otherwise they have to confront the unconfrontable-that the house of cards gets blown over. But is this the absolute endpoint? I just don't think so.
angela has been walking a fine line [energy is nearly exhausted?],... a parallel line, so to say, regarding greek wants' - the greek's too, have been 'talking-and-a-walking' an [in]finite parallel line [not enough kinetic energy?], under the variable radar-rated retention of time,... a directional curve in this financial universe we call reality - but, in close proximity to angie baby's defined parallel line - sadly, as the laws of [theoretical physics?] money regarding relativity are concerned - fiduciary responsibility would posit the unequivocal finality that human nature is undoubtedly bounded by the laws of a 'darwinian, financial universe', where parallel lines, do, and must, come to a point, and an abrupt ending
just plain old reality at its present best?
jmo
This is why governments shouldn't do business with banks, especially if they're engaged in a fractional reserve system. Seriously, does anyone here believe that the average government bureaucrat is a match for the average bankster? Despite what else you may think of them, banksters are highly-skilled, highly competent, and ruthless businessmen. The average government bureaucrat is barely half as competent as their "private industry" counterparts, as if their "counterparts" in industry would even be able to hold a job in the first place. Banksters are the top predators in the shark tank, and governments are just another tasty morsel that can't get out of the tank. This is one of the many reasons why some kind of "gold standard" is necessary, because governments have neither the discipline nor the competence to swim with the sharks.
Out of the 130 billions (+30 billions to be found)
88,5 billion will go back to banks as interest payments due and rolling of bonds expiring
30 goes to PSI participants (banks & private bond holders)
39 has been promised to Greek banksters for recapitalization
nothing goes to the real economy........
L0L!!~ TheTricycle
"they're" not stalling; greece is! lQQky why in these #s!
well at least:
germany is so fuked, angela is off babbling about trying to get The City into this!
like, theyre gonna let her know what the deal is before it's over?
if germany doesn't like what the banksters want, they can leave the EU, right? but, if they somehow participated in this "magic show" by kiting checks into electronic floatPonzi, and "finding" stuff, just in case that shit has any basis whatsoever in truth, there is that french existential no exit thingy, gain. oops! other than that, i'm sure they're free to leave and may be planning on doing so. with the blunderBank, how could there be a problem?
what the hell does greece give a fuk for at this point?
they are gonna agree to something "tomorrow", but only if they feel like at and it keeps them bankrolled
the farce that roared
heilcopterz a go-go,000,000,000e/fringe, BiCheZ!
Timmie's behind it all, and London.
It's surprising how the Germans haven't said that Douchebank owes
them two, so she has to go talk bailouts.
Seems though that by squeezing Greece, she's convincing her
people that a bailout is needed, meanwhile, her people
love to watch Greeks suffer. They get their payoff.
Schadenfreude, and expensive, too.
Germany has done the math and concluded correctly that it's cheaper to let Greece go, where does that leave France?
In the ditch?
"Drinking some wine, eating cheese, catching some rays, ya know."
Oddball
Kelly's Heroes
http://www.youtube.com/watch?v=O03pTxIxq1E
They shouda made a movie about how oddball spent his share of the loot.
Early Woodstock - with Wavy Gravy and the Hog Farm, yo.
the 'city of lights' has the illuminati to overshadow any darkness there may be
jmo
Chapter 11, Zorba. Confirmation of plan rejected: insufficient votes and lack of feasibility. Country converted to Chapter 7 Liquidation. Auction under the big tent.
Well that's gonna be hilarious when the world is forced to bailout the US... Combined bailout of America, 2016 : 20+ trillion!
The Martians will bail out the US and Europe. I little birdy told me they want to set up bases here and will fund our interest payments in exchange for those bases
Martian: "Bleep blip bloop blop dink doink dong."
Translation: "All your base are belong to us."
http://www.youtube.com/watch?v=qItugh-fFgg
Does Greece use a Bad Credit Card ? .. certainly looks that way.
I guess of that 320 Bio. , at least 200 Bio. is PURE INTEREST ... for the Bankstas.
... just the usual to "bail out" Bankstas I suppose.
@Tyler ... LOL , just saw your post .. 100% correct !
these bankers should rot in Hell........
What about instead of waiting and hoping they go to hell, we round them up right now and create for them a nice earthly hell? We put them naked in a big cell with dozens of rapists... for hours at a time, every day, for years. They deserve at least that much.
unfortunately even wretched, dirty, hairy, toothless, rapists wouldn't lower themselves..for that matter neither would rabid dogs, piranhas, starved rats, shit hawks, sharks with lazer beams....i'd lock them up with nancy pelosi and sarah palin....fuck that would be hell
Indeed. Or even worse, lock them up with the worst Jesus freaks there are. Or Hipsters. Those people are annoying as hell.
-Europonzi
Aw man, you were on a roll until you lumped Palin in with Pelosi.
I'll take a good looking, ditzy conservative any day.
Death and refuge in hell would be welcome escape from being locked in a cage with Pelosi and Janet Napolitano, though.
You can't have sex with her. She'll just talk to you about how bright she is...
Yeah right. Palin is a freak.
Yeah right, someone has been drinking big glasses of msm drool / koolaid.. I gotta get me some Navy corpsemen to administer ipecac..
All the puppets are sexual devients. Bush, his father, Barrack, Palin, it doesn't matter which face it is, they all are.
leave them alone long enough, they'll be raping each other.
-The Great Europonzi
They will rot in hell, but in the meantime, many of us will lose all they have. Heaven can wait, but I can't.
Beans, bullets and bullion. Before banks be bare. Bitchez!
-The Great Leader of 21st Century Europe, Europonzi
This is total nightmare, they have to default, there is no other way. and this will be really tough burden on their population but at least it will last just few years (maybe 3 or 5). I know from my personal experience that they will withstand that sharp downturn for 2 or 3 years but after that they will grow at the pace nobody would believe. Getting into a deal which guarantees them to go to 120% debt to GDP by 2020 is insane, that means next 20 years or so to get to 100%.
I have to wonder if ANYONE in Greece has ever even HEARD of ICELAND? Note: Caps indicate screams.
Iceland exists in some other alternate universe beyond the debt horizon...Iceland fell into the black-debt-hole a few years back and no one has heard from them since.
You mean the "Country no one can speak of" is like the "Candidate no one can speak of?"
Iceland is BACK BABY!!!!!!!!!
My head is spinning 'cause it's all "Greek" to me.
I'm still buying gold, silver, food, and ammo because the riots are coming here...it's just a matter of when.
Sounds like Terrorist activity...
They have already planned for that.
A few well-placed nukes by a friendly Eastern Mediterranean country, followed by a flying sqeal flu, then rounding up anyone who doesn't want to be "protected from the terrrrrists?"
Is this really a bailout of Greece or the German and European banks? I suggest that its a bailout of the banks who are holding the Greek government and bank paper. These bailout funds will come from the European banks one way or the other and go back to these same banks in an effort to licj the can down the road as and is being done in the US. Everyone in the US seems to think that US Companies are "doing better than expected," but what heppens if you didnt have or continue to have this $1.5 Trillion faux US Givernment addition to demand in the US?
too many IFs bro ... the reality is US is moving strong!
if you disagree, deal at your own risk - an axiom proven true to live by: never bet against USA!
What do you predict the stock market may fall on an actual Greek default?
It will be bullish, no falling indexes to be seen here.
Bullish, markets will shrug it off.
The answer lies on the cover of this morning's issue of Barron's: Dow at 15,000 in the next two years. Buy on the dips and hold. What could possibly go wrong?
Gold:Silver:Dow at 1:1:1?
Would that be wrong?
Drudge linking to a Brooking's Kagan describing the need for American power projection. This passage almost too ironic for words...
"Another problem is that China's form of capitalism is heavily dominated by the state, with the ultimate goal of preserving the rule of the Communist Party. Unlike the eras of British and American pre-eminence, when the leading economic powers were dominated largely by private individuals or companies, China's system is more like the mercantilist arrangements of previous centuries. The government amasses wealth in order to secure its continued rule and to pay for armies and navies to compete with other great powers."
"But international order is not an evolution; it is an imposition. It is the domination of one vision over others—in America's case, the domination of free-market and democratic principles, together with an international system that supports them. The present order will last only as long as those who favor it and benefit from it retain the will and capacity to defend it."
http://online.wsj.com/article/SB1000142405297020364600457721326285666944...
Let the fortune 500 pay the pentagon budget.......for they are the only ones who benefit from it..........
[...] in America's case, the domination of free-market and democratic principles, together with an international system that supports them. The present order will last only as long as those who favor it and benefit from it retain the will and capacity to defend it.
Blah blah. For 30-odd years conservative sheeple Americans thought they could run a country on literally no taxes. "Free-market"? More like screw over everyone but the rich and the Pentagon, print worthless green rectangles to cover over "deficits don't matter", and pretend that the USA still has something that resembles industry. Where'd all that "money in your pocket" go? Cheep Chinese crap.
Beijing must laugh when Glenn Beck has yet another temper tantrum.
Really, no taxes.. Because for the last 30 years no taxes have been collected at least not enough for your unicorn breeding fantasies.. That is such a concentrated grouping of stupid it is hard to retort.. How about we slow or yes even stop spending WAYY beyond our means?
The Lib/Soc trolls msut have gotten marching orders this week.. George is that you?
Old NeoCons never die. They just keep shitting all over everybody else.
[It isn't poetry, just true.]
old leftists never die, they just put on their fascist hats and run for office.
Merkel doesn;t have the courage or the will to let greece go. The Merry - go - round will continue. On Sunday the Troika will have some other nonsense meeting. the Charade will go on to the Nth hour on March 20 when somehow the first 14 billion tranche will mysteriously show up to make the bankers quarterly numbers look good. Frustrating just doesn't describe the system we are in. If even 10% of the ppl knew what was really going on around the world and in the US with the crooked Central banks their would be blood on the streets. They are winning this boxing match and going for the one two punch.
To put it more explicitly, she doesn't have the balls. No wonder, even male leaders nowadays have shown complete lack of testosterone.
They do rot in hell. Their lives are worthless and meaningless.
That is not it at all.... Merkel is an EAST GERMAN socialist and tool of the banksters. She wants wants the bail out. She is central to the fiscal union movement that more tightly couples the EMU and eventually governments. She does not give a hoot about the damage to the German economy.
Sooner or later, it will be up to the people to break the statist/bankster rollover-to infinity death grip..
Greece, Portugal,, Italy.. HERE.