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The Cost Of The Combined Greek Bailout Just Rose To €320 Billion In Secured Debt, Or 136% Of Greek GDP

Tyler Durden's picture




 

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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Sat, 02/11/2012 - 13:28 | 2149311 Default to Reality
Default to Reality's picture

And it happens........The numbers get crunched the back door bazooka finally becomes nonsense and the first country defaults to reality.  Next the Euro dominos fall one by one and China get hammered.  The DTR buys a house in Canada 50% off!!!! Yay

Don't buy realestate bitches! Its going to get real cheap all over the world!

DtR

Sat, 02/11/2012 - 13:44 | 2149365 Dr. Kananga
Dr. Kananga's picture

Looking at high desert acreage, myself. The longer I wait, the cheaper it gets (down 40% in asking price this past month.)

Sooner or later, I'll have a strawbale casa, my own well, and a solar array that spins the meter backward all day. Mojitos and fajitas in the afternoon. Fandangoes with the coyotes at night. The US just needs to end the Cuban embargo and then I'll have my cigars too. Sweeeeet.

Sat, 02/11/2012 - 13:36 | 2149332 RexZeedog
RexZeedog's picture

What a bunch of wankers the Euro-weenies are. Not only are they trying to do the impossible, but they are totally screwing over anyone foolish enough to listen to them.  Let's see if they can understand this:

1. Debt is negative money.

2. Each unit of debt must eventually be cancelled by an equal size unit of postive money (capital).

3. If you have no capital and you have no cash flow, you can't pay off your debts.

4. New debt does not pay off old debt, it just shifts it from one ledger entry to another.

5. Until it is paid off or cancelled, all debt remains in force as a claim on capital and income.

What's so hard to understand about this?

 

 

Sat, 02/11/2012 - 13:54 | 2149386 tazmatic
tazmatic's picture

You are right, ya might want to add governmental debt passes to each succesive generation though. Something to ponder in the scheme of things.

Sat, 02/11/2012 - 13:36 | 2149333 bluebare
bluebare's picture

Greece Hires Temps To Ink False Promises

In one of the most elegant ponzi schemes of the post-Madoff era, Greece employed several new Cabinet ministers yesterday to sign a  bailout deal that their predecessors wouldn't.

Terms of the deal include binding successor Greek governments to compliance with the deal even if they disagree with it.  Consequences of failure to comply with this aspect of the deal remain unclear  and subject to further negotiation as the deadline for resolving such matters passed several days ago.

Citizens are rioting over the terms of the act.  Policemen are growing weary of fighting them.  Politicians are running away from the deal in droves.  Most economists agree that the Greece will be unable to uphold the terms of the agreement. 

An unnamed but high-ranking official close to the the negotiations is reported to have stated, "This is a bold and promising step forward for the You're A Peon Union."

Market futures responded favorably to the news.

Sat, 02/11/2012 - 13:40 | 2149347 carlnpa
carlnpa's picture

I think the most obvious and simplistic is that Germany needs Greece, the EU, and the Euro to keep the export price of its goods low.

The EU members subsidize the German strong economy at the expense of their own.

Sat, 02/11/2012 - 14:40 | 2149476 Chartist
Chartist's picture

Germany should leave the EU....Rich americans will still buy their favorite German car brands. 

Sat, 02/11/2012 - 16:07 | 2149621 slewie the pi-rat
slewie the pi-rat's picture

BINGO!!!

how fuking simple can it get, here, BiCheZ?

Sat, 02/11/2012 - 13:47 | 2149371 tazmatic
tazmatic's picture

Did they resurrect Buckminster Fuller for consultation on this plan?  There this saga includes more "fixes" than a geodesic dome has angles.

Sat, 02/11/2012 - 15:30 | 2149567 Use of Weapons
Use of Weapons's picture

I'm fairly sure you didn't get your own irony there:

 

http://bfi.easystorecreator.com/items/books-by-fuller/utopia-or-oblivion...

Sat, 02/11/2012 - 13:50 | 2149377 Martial
Martial's picture

Don't worry folks...China is coming any minute now! Yep any minute now...

...

...

...

...any minute now.

...

...

...well...umm...any minute now?

...

...

...nobody is coming

Sat, 02/11/2012 - 14:11 | 2149419 f16hoser
f16hoser's picture

At some point, the Greeks will stop taking it up the WAZOO. How is it, an unelected A-Hole takes over the Greek Government and then sell's 'em down the river? Sad really....

Sat, 02/11/2012 - 14:24 | 2149443 The Trade Group
The Trade Group's picture

Great work - this is exactly why I come to this site... 

Sat, 02/11/2012 - 14:37 | 2149467 Peter Pan
Peter Pan's picture

There is a paradox in all this. It is clear that the world is short of many zeroes in fixing the mess and yet in the end that is what we will arrive at....a big fat zero. Mark my words they will make Greece a protectorate of the United Nations which will then enable the extraction of the interest cost of all this aid in perpetuity.

Sat, 02/11/2012 - 14:38 | 2149470 Chartist
Chartist's picture

Aren't we looking at world-wide debt write-down?  And if so, shouldn't we do it now before China has a self sustaining economy?

Sat, 02/11/2012 - 16:12 | 2149625 slewie the pi-rat
slewie the pi-rat's picture

 

slewienomics indicate were are lQQking at:

  1. easily-verifiable gold & silver coinage, today
  2. ww.debt\\writewn.con,  "tomorrow"
Sat, 02/11/2012 - 14:38 | 2149472 flyonmywall
flyonmywall's picture

Just remember that no monetary system went through its death throes without the spillage of a LOT of blood.

You will see the burning of Europe within your lifetime.

 

Sat, 02/11/2012 - 14:46 | 2149492 Peter Pan
Peter Pan's picture

Something tells me that Mr Guttenburg will soon be making a claim for RSI.

Sat, 02/11/2012 - 14:55 | 2149513 tobinajwels
tobinajwels's picture

So could someone please tell ome what happens on March 20, 2012 regarding Greece? I feel as though I keep watching a bad horror movie that doesn't end?

Sat, 02/11/2012 - 17:02 | 2149697 Money 4 Nothing
Money 4 Nothing's picture

Well, from everything I just read, they will have a form of default.. no?

Sat, 02/11/2012 - 15:01 | 2149522 Curtis LeMay
Curtis LeMay's picture

It doesn't matter one jot...

Greece is to have elections in about 60 days or so, and guess what political partiies are way ahead in the polls? The hard left.

Come April, look for the term "null and void" to be applied to all past and current debts of the government of Greece - by the newly installed left dominated government of Greece...

 

Sat, 02/11/2012 - 15:11 | 2149540 jm
jm's picture

As well:  this isn't a bailout of Greece.  This is a political decision to recapitalize banks given that Greece is going to default in some way or shape. 

To repeat:  This is about shoring up bank balance sheets with Greek exposure.  By the time Greece defaults, it will be a low-impact event.

Sat, 02/11/2012 - 19:36 | 2149546 Curtis LeMay
Curtis LeMay's picture

It is indeed. 19 cents of every euro that Greece's current government wants to borrow in this second bailout would actually end up in Greek hands. 81 cents would go to servicing current and past debts to (overwhelmingly) euroland banks.

Still, one feels for the people. As usual, they are about to get royally fucked, and for an entire generation at that.

Greece should con euroland to deposit the loan in Greece and/or Greek banks, and then default. Otherwise, Greece will turn into another Albania... 

Sat, 02/11/2012 - 16:58 | 2149689 Olympia
Olympia's picture

Indeed. And this article explains in detail manu more things:

By knowing what happened in indebted Greece, where loan sharks created “bubbles” and the current inhuman debt, one can understand the inhuman plan in total ...understand where this plan started just to bring all states at the same end ...understand how this type of plans are established...

 

http://eamb-ydrohoos.blogspot.com/2012/01/global-debt-crisis.html

 

Sat, 02/11/2012 - 17:30 | 2149723 jm
jm's picture

Bull.  There was no grand plan, there never is.  Only a bunch of schleps that are now trying to fix the horrid mess on the fly.

Less conspiracy wank and more recognition and enforcement of individual responsibility is needed.

 

Sat, 02/11/2012 - 15:10 | 2149539 dearth vader
dearth vader's picture

Priceless, leaving me breathless

Sat, 02/11/2012 - 15:31 | 2149554 sasebo
sasebo's picture

And where did all this 'money" Greece "borrowed" come from? Is it some "money" somebody worked for & saved? Of course not. Some clerk at some "bank" sat down in front of a computer screen & "created' it. So what is the end game? Greece will give some "bank" some of its state owned companies & other assets in return for some "money" created by some clerk at some bank.

Insane? Psychotic? You got that right. 

Sat, 02/11/2012 - 15:26 | 2149555 cnx
cnx's picture

-Quote:  "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"

But according to the German press, this is far from being true: All major newspapers report that Merkel sees a Greek bailout as "Weg des geringeren Schadens", or the way of lesser damage. This shows that she has, however reluctantly, made up her mind to continue the bailout. The person who wants to pull the plug may be the finance minister Mr. Schaeuble, but he may not get his way if Merkel is determined to continue kicking the can further down the road.

Sat, 02/11/2012 - 15:27 | 2149559 El Gordo
El Gordo's picture

Greece has been bust now for quite some time. All that's being argued about at all is the bookkeeping.  The issue is how to reflect the losses on loans made to Greece, and any future loans made to Greece.  The loss occurred the day the money was loaned out, but the book keeping is still up in the air.  Bust is bust, no matter how you present it to interested parties.

Sat, 02/11/2012 - 15:34 | 2149573 q99x2
q99x2's picture

Time to purchase a fleet of drones for Greece. We have ours do you have yours?

Paid for by citizens of the NWO.

Sat, 02/11/2012 - 15:44 | 2149587 overmedicatedun...
overmedicatedundersexed's picture

greece will agree get money then not do anything. when , and if EU stops sending cash..greece defaults on all debt.

it is beautiful plan that everyone pretends the EU is in control, but banksta's the greeks own you. they know it, you know it. they are making jerks of merkilll and sorrokrazy..IMF and FED.. LOL  it really is beautiful a scam as any country ever ran. bravo.

Sat, 02/11/2012 - 16:26 | 2149644 Archon7
Archon7's picture

Greece has a gdp?  A GDP of what?  Entitlements?

Sat, 02/11/2012 - 16:28 | 2149646 Glasgow Gary
Glasgow Gary's picture

In other words, everyone who loaded up on Index Puts, and the latest Long VIX products into the end of last week will find them going poof! next week. Because, you see, it's all funny money and trying to short markets when QE is in play is a game for the smart fools. If you did not learn your lesson in 2009, you won't now. SP500 1370 is next. Is it real? No, of course not. SP500 at 1500 won't buy more wheat or copper, but it looks good in the newspaper. We're printing "numbers" for the public now. Don't short those numbers. They'll bit you.

GG

Sat, 02/11/2012 - 16:36 | 2149657 Olympia
Olympia's picture

Global Debt Crisis

The greatest private fraud of human history.
Who are the great fraudsters who are becoming the murderers of the human kind? How does the economy "illness" threaten Democracy and the freedom of people?

http://eamb-ydrohoos.blogspot.com/2012/01/global-debt-crisis.html
---------------------------------
By knowing what happened in indebted Greece, where loan sharks created “bubbles” and the current inhuman debt, one can understand the inhuman plan in total ...understand where this plan started just to bring all states at the same end ...understand how this type of plans are established...

Authored by PANAGIOTIS TRAIANOU

Sat, 02/11/2012 - 16:53 | 2149680 RoadKill
RoadKill's picture

More hateful tirades against the evil "banksters" from people with no understanding of banks or finance. If you are actually suggesting shooting or raping Goldmanites - then you are the one that belongs in jail.

Do you hicks even understand what debt is?

To understand economics you have to forget about money. The economy is people making and consuming things.

Debt comes from differentials between who consumes and who produces. It was intended only to finance short-term temporary deficits.

IE I need to overconsume today to build a factory so I can overproduce tomorrow. You need to overproduce today so that when you are old and sick you can underproduce what you will consume.

The build up of mountains of debt is a result of one group overconsuming with no intention of ever paying it back. Its the Grasshopper intentionally screwing over the ant and laughing at him.

This is not the fault of "banisters" it's the fault of welfare queens and government unions.

Now consider who the ants are. They are everyone in the middle class that saved 10% of their income every year and invested it for retirement. The millions of people that think they have a few hundred k or million $ stashed away. The grasshoppers are the burger flippers that lived a middle-class lifestyle off a credit card. The people squatting in their defaulted homes not paying the mortgage so they can buy an IPad 3.

Their are Millions of good, hardworking people that think they have enough money saved up for a nice retirement. They have done all the right things. They saved and invested. They didn't buy too much house for too much $. They over produced so others could overconsume. They are I'n for a rude awakening when they find out it's a Greek Communist they were funding. When PIMCO has to write off 50% of it's assets, alot of people will have big $0s I'n those retirement accounts.

Blame the Grasshoppers. Blame the socialist governments that intentionally helped them run up all this debt as the ultimate way of equalizing outcomes.

Someone name me a bankster. Who exactly do you want to rape or shoot? Sure the bankers failed in their duty to make sure they were lending the ants money to other honest ants. But the people you should be pissed at are the Grasshoppers. The ones that took the money to overconsume with no intention of ever overproducing. The ones I'n the streets of Greece relying on overly generous government pay and handouts to fund their 30 hour a week, retire at 45 lifestyles.

Looks like we are all going to have to work till 80. It's just tla fact of life. You can't freeload till you are 25 pursuing government funded liberal arts degrees, work 35 hours a week with 2 months of vacation AND retire at 50 while planning to live to 90.

Unfortunately the person that did just that (grass hopper) is the winner I'n all this.

The sucker is some one like me. I worked my way through university. Got my degree in just 3 years so I didn't have to borrow money and could start working. Did a 6 year stint as an evil "bankster" working 80 hours a week. Sure I made $100k my 1st year, but I drove an 8 year old Geo Metro and lived I'n the Ghetto so I could pay $500 a month I'n rent.

Saved up enough to pay for HBS with no loans. Even had a few hundred k left over. Had 3 roommates and ate pizza most days even then. Then 6 more years as an evil HF manager. Never bought a house, sold my car and walked to work everyday.

If it weren't for ZH I might have all that money I saved lent out to some Greek communist or US welfare queen just like the rest of the honest, hard working people that have tried to save and are now attacked for daring to be "successful".

Thankfully I'm not in that boat. I'm betting on the grasshoppers being lazy, dishonest bums and not paying back their loans. But the rest of the ants are screwed. They will find out they should have partied away their high school years, taken 6 years to get a liberal arts degree, taken the easiest job possible, bought too much house, lived off 12 credit cards etc...

Cause at the end of the day the Grasshoppers ain't paying and we will all have to work till we are 80.

Sat, 02/11/2012 - 16:56 | 2149682 Olympia
Olympia's picture

@RoadKill

feel free to read this very interesting article about the Debt and the Global Crisis: http://eamb-ydrohoos.blogspot.com/2012/01/global-debt-crisis.html

Sat, 02/11/2012 - 17:40 | 2149737 jm
jm's picture

All very true, but it won't have much currency when you are talking to a grasshopper.  They are the some of the schleps that refuse to admit how sorry their behavior has been.  it is easier for the weak to blame a banker for the loan they took out.

Sat, 02/11/2012 - 18:00 | 2149749 GeneMarchbanks
GeneMarchbanks's picture

Actually, little of that is true starting with Greek work weeks being one of the highest in the EU at 42/hrs per week but let's not let facts get in the way of our creditor self righteousness and vilification of debtors.

Dirty socialists, lazy Mediterranean people, welfare monkeys etc etc

Carry on with your sad, tragic nonsense.

Sat, 02/11/2012 - 18:04 | 2149757 jm
jm's picture

Look.  Here, there, and everywhere no bank makes customers take out loans.  Repeat this to yourself as many times as needed until it makes it through the dense bone matter.

No one likes bank bailouts.  But they are happnening and are going to continue to happen, guaranteed.

All this guy is saying is that it is time to accept the sad state of affairs, find the investable thesis, and move forward. 

 

Sun, 02/12/2012 - 08:35 | 2150565 GeneMarchbanks
GeneMarchbanks's picture

You're a fluffer for the banking cabal, that much is obvious. Being a banking apologist is bad enough, but not even knowing you are one, is indeed, just sad.

Sun, 02/12/2012 - 08:41 | 2150568 Ghordius
Ghordius's picture

Gene, you are confusing me, what part are you taking exactly? Or are you against banking-as-an-institution a priori?

Sun, 02/12/2012 - 08:48 | 2150572 GeneMarchbanks
Sat, 02/11/2012 - 18:18 | 2149766 SK8boarder
SK8boarder's picture

Roadkill, I have to agree with you that we live in an age of entitlement mentality.  However, it takes a lot of grasshoppers to make up for one Bear Stearns or even a lot more than that to make up for a Lehman Brothers.  Now the dumb grasshoppers didn't create this mess.  This was the direct result of the banks giving bad loans in a bank created bad situation that insured that the grasshoppers could never succeed in paying them back.

Grasshoppers did not sell mortgage backed securities rated AAA to about every state in the union when they knew before hand they were junk.    The reason why banks gave loans to every ant and grasshopper is because they knew they had a state backed pension funds on the back end buying up those bad loans.  Often times they would sell the same loan 2 to 10 times.   Meanwhile, all the states are trying to pay those pensions back with promised returns that are not materializing.  Now the states are getting close to bankruptcy, laying off their good ants and guess what, without a job that good ant can't pay back it's loan and thus we create a swarm of your "grasshoppers".

The next thing I'd like you to consider is - when was the last time you heard of a grasshopper being able to mark his assets to whatever he wanted to?  Like the banks can currently do with their assets.  These are just two small examples of how we're getting fleeced by the current banking cartel.

You and I are the exact opposite.  I dropped out of school in 10th grade, desiring to skateboard and surf, more than pursuing any mature activity.  Even at 51, I can still surf and skateboard at a very high level.  But rather than integrating into society I worked my way through small jobs, I hung out with the right people, went to the right places and lucked out.  I somehow managed to survive, and not only survive, I thrive.  I live in a beautiful place with good people and eat well every night; without the need for government assistance.  There are ways to live well without following the ant's path. 

The issue is fairness.  Any grasshopper could survive and thrive if they could play by the same rules that the banks play by.  

Sat, 02/11/2012 - 18:24 | 2149773 nicxios
nicxios's picture

You could have saved your time as well as mine by being more succinct. "I'm an idiot" would have sufficed.

Sat, 02/11/2012 - 20:36 | 2149931 dolph9
dolph9's picture

This ant has gold.

The banksters AND the grasshoppers can kiss my ass.

Sat, 02/11/2012 - 17:33 | 2149727 Fubared
Fubared's picture

So my head is the only one spinning in here? I can only hope that this Fucked Uped Beyond Any Recognition mess is managed by someone some where with enough brains so we do not get a military conflict in Europe again.  And for all the Armageddons in here, you think you can drink beer on the sidelines untouched if that happens..?

/R

Sat, 02/11/2012 - 20:31 | 2149928 loveyajimbo
loveyajimbo's picture

Hell there are only 11 million of the lazy turds in the whole country... at L320 billion... divided by 11 million... what, they going to retire at 35 now?!?!?  That's it!!  I am moving to Greece!!  Anyone got a deal on a gallon of KY jelly?

Sat, 02/11/2012 - 21:29 | 2149990 lolmao500
lolmao500's picture

Ask Obamabots, they always have the best deals.

Sun, 02/12/2012 - 03:21 | 2150423 Tom Green Swedish
Tom Green Swedish's picture

Insane isn't it. They are like little kids who don't get what they want. Germany should NOT give them a god damn dime. They will just continue their lazy ass behavior. And yes they will now be able to retire at 35 after working for one year because they are being granted their entire GDP in one year and nobody aged 18-34 has a job. They can just reinvest the money back into Germany and sit on their fucking beach all day while the Germans work their asses off.

 

Wouldn't it be nice to add 15 trillion in free money in the USA without any monetary depreciation? 

Sat, 02/11/2012 - 21:59 | 2150026 RoadKill
RoadKill's picture

There is no question that an any that got stepped on and a grasshopper look very similar in our screwed up world.

Probably >50% of the grasshoppers want to be ants but cant because:

1. Terrible parenting allowed them to party away highschool and spend 6 years in college chasing a worthless Lib arts degree.

2. No personal financial education in middle school / high school combined with CC companies pimping easy credit on campus and the NAR claiming housing is an "investment" not an expenditure.

3. Globalization and cheap China labor / environmental costs lead to increasing wealth disparities between manual labor and what I do.

Those are things we have to address too, and that won't be easy.

But those issues are with "private debt" not sovereign debt. Sovereign debt comes from governments pledging YOUR children into debt slavery so they can buy the votes of welfare queens, government unions and those few lucky retirees that got to pay into the system for only 20-30 years and will recieve 30 years of benefits on the rest of our backs - at least until the system bankrupts itself because people like those of us on ZH say F u, I'm not paying.

What needs to happen I'n Greece (and 50 other places) is a complete reset.

1. Default with recoveries that leave sovereign debt at or below 50% GDP AFTER the required bank recapitalizations and resulting GDP collapse.

2. Immediate balanced budget requirements that require that remaining 50% to be paid off in the next 10-30 years.

3. Making further government borrowings illegal except for emergency revolvers with a 3-5 year term and capped as % of GDP. Allowing governments to borrow is no different then slavery.

4. No bank bailouts, but massive recaps. Equity and debt get wiped out. New equity and debt is issued to the government and then sold to the mkt.

5. Pensions and retirement accounts are kept whole, up to a reasonable ammount. If you are 80 you'll keep getting $1,000 a month (after tax). If you are 65, you will have to work another 5-10 years. If you thought you gamed the system and had a gauranteed payout of $200k per year coming at 55 because you worked overtime the year before you retired - F U. You'll get made whole to maybe $2,000 a month if you retire at 75.

I HATE bailouts. But I hate even more listening to people that don't pay taxes winging about them. I pay 100s of times more in taxes then the average Joe. Well over $1mm in 2011. It's my money being used for the bailouts not OWSers. And I really hate all the conspiracy talks that assume these dumbass bankers are somehow smart enough to have created this elaborate conspiracy that only a handful of rednecks have been able to figure out.

I'll say it for the last time. I've heard this John Birtch crap for 20 years. If their was a conspiracy of "banisters" I would have joined. I'n reallity it's a bunch of idiots that don't have a clue how to think about and measure fat tail risk. That's why I left and am doing my own thing. I had millions of dollars tied up I'n the system at the hands of people I didn't trust after seeing the tech bubble and housing bubble. I was outperforming my own fund massively I'n my own PA even with massive trading restrictions. Since I left, I've never made so much $$.

I know what I'm recommending has NO chance of happening. I'm investing on what will happen, not what SHOULD happen. I WANT them to keep screwing things up so I can make some more worthless fiat (I hate gold). And I for one will not keep paying for welfare queens and unions forever. Just don't have enough to buy the yacht and live offshore using the four flags system.

BTW those of you that REALLY hate the system google 3, 4 or 5 flag theory and you'll find a way out. You just need a lot of money to do it right.

Sat, 02/11/2012 - 22:43 | 2150102 slewie the pi-rat
slewie the pi-rat's picture

ok, somebody else is a grasshopper or an ant or a bit of both or a little bit Country AND a little bit Rock&Roll

or something

uh-huh

but, since it is difficult to be "in charge" in this madness, it is better to be filthy rich and know a foolproof strategy to always be "safe" on base, too!

swell!

 

Sat, 02/11/2012 - 22:03 | 2150029 RoadKill
RoadKill's picture

Btw I know I can't spell on my IPhone and Auto-correct makes it worse not better. That is not a valid rebuttal of my points.

Sat, 02/11/2012 - 22:13 | 2150049 Hannibal
Hannibal's picture

“Civil disobedience is not our problem. Our problem is civil obedience. Our problem is that people all over the world have obeyed the dictates of the leaders of their government and have gone to war, millions killed because of this obedience. . . Our problem is that people are obedient all over the world in the face of poverty and starvation and stupidity, and war, and cruelty. Our problem is that people are obedient while the jails are full of petty thieves, and all the while the grand thieves are running the country. That’s our problem.” 

—Howard Zinn  

Sat, 02/11/2012 - 22:21 | 2150062 RoadKill
RoadKill's picture

Also - for the triple post - how is it there is no story up on Iran shutting off the Internet and promising a Nuclear announcement "soon"?

Glad I'm out of the country and my home is in Miami. Achmedwfjkll-phlem-adad isnt likely to be announcing an end to their peaceful experiments. I'm thinking something with a bang. They'd never hit Miami because they need it to get their drugs into the country an fund their operations. The best we can hope for is an underground "test" that causes an earthquake in Irans most Sunni / troublesome region.

Sun, 02/12/2012 - 03:14 | 2150415 Tom Green Swedish
Tom Green Swedish's picture

Germany has quite a problem on their hands don't they. Unification of Europe with 20 different cultures, most of which to the south think money is the only important thing and have nothing to contribute to the "Union" except for purchasing things from Germany with money they don't have.  What is Germany thinking? If I was a German resident I would be extremely pissed to have to pay for the Greeks and all the other trash of Europe just to work my ass off for nothing additional while those lazy shitheads sit on the beach all day and throw rocks and molotov cocktails at law enforcement because they think they are entitled to free money and infinite raises each year.

 

Germany should seriously consider dumping the Euro. The diversity of these cultures hasn't mixed for at least 5 centuries and its not going to work now no matter how much money they throw at them. It will just be a never ending money pit.  Instead they should let Greece (and probably the rest of that region) go to shit and purchase their entire country for a nice beach hangout spot.

Sun, 02/12/2012 - 03:14 | 2150416 Tom Green Swedish
Tom Green Swedish's picture

Germany has quite a problem on their hands don't they. Unification of Europe with 20 different cultures, most of which to the south think money is the only important thing and have nothing to contribute to the "Union" except for purchasing things from Germany with money they don't have.  What is Germany thinking? If I was a German resident I would be extremely pissed to have to pay for the Greeks and all the other trash of Europe just to work my ass off for nothing additional while those lazy shitheads sit on the beach all day and throw rocks and molotov cocktails at law enforcement because they think they are entitled to free money and infinite raises each year.

 

Germany should seriously consider dumping the Euro. The diversity of these cultures hasn't mixed for at least 5 centuries and its not going to work now no matter how much money they throw at them. It will just be a never ending money pit.  Instead they should let Greece (and probably the rest of that region) go to shit and purchase their entire country for a nice beach hangout spot.

Sun, 02/12/2012 - 03:33 | 2150434 Peter K
Peter K's picture

I don't think Greece is the real issue in this crisis. The real issue is the imbalances within the European payments system (Target2) created by the F'n PIIGS. The problem that a Greek default possess is that the European central banks (read Buba) would have to officially write off these losses (they sold off physical assets to fund these imbalances). And the Greek default would wipe out their balance sheet. This is where the real problems lie, and this is why the Germans are playing along to now. In my opinion, the Germans are trying to find an elegant mechanism by  which the Buba would not have to write down the Target2 losses.

 

 

Sun, 02/12/2012 - 03:40 | 2150441 Tom Green Swedish
Tom Green Swedish's picture

Let us realize how we came to this situation. Fiat Currency. Somewhat uncharted waters in human history with some few exceptions. We entered these uncharted waters in 1971 when The Nixon Shock of 1971 ended the direct convertibility of the United States dollar to gold. Since then all reserve currencies have been fiat currencies, including the dollar and the euro. 

 

One exception to non backed currency was in 11th century China. It failed.

 

However, in the later course of the dynasty, facing massive shortages of specie to fund their ruling in China, the Yuan Dynasty began printing paper money without restrictions on duration. This eventually caused hyperinflation. By 1455, in an effort to rein in economic expansion and end hyperinflation, the new Ming Dynasty ended the use of paper money.

 

Why  do you think China is buying up gold? Could it be they learned from their past mistakes?  The USA seems to not care about past mistakes apparently when they have made their shitty decisions for our future for the last 40 years. In retrospect 5.84 inflation is not very much and the Nixon decision should have been reversed directly after the Vietnam War ended. Unfortunately it wasn't.

 

And of course the beginning of the World Wars.

 

By World War I most nations had a legalized government monopoly on bank notes and the legal tender status thereof. In theory, governments still promised to redeem notes in specie on demand. However, the costs of the war and the massive expansion afterward made governments suspend redemption in specie. Since there was no direct penalty for doing so, governments were not immediately responsible for the economic consequences of printing more money, which led to hyperinflation – for example in Weimar Germany.

 

In monetary economics, fiat money is an intrinsically useless product, used as a means of payment.

 

Paul Krugman quote:

Furthermore, a system that leaves monetary managers free to do good also leaves them free to be irresponsible—and, in some countries, they have been quick to take the opportunity. 

Sun, 02/12/2012 - 04:01 | 2150453 Olympia
Olympia's picture

Loan sharks knew that if they took the dollars printing machines under their control they could suffocate the world ...they could initially suffocate USA and after taking the USA from the Americans, they could move and suffocate the whole world and take the countries from their people.

FED printed cheap money and loansharking multiplied this money in an unnatural way within the American economy boarders and they discarded them abroad so that they did not threaten USA. USA became the first state in the world with artificial “breathing”...

It cannot be possible but just in the USA for only the last year, more than one million houses were seized. It cannot be impossible but the New World has returned to tents and shelters ..has returned to the ages of Columbus. It cannot be possible that we allow to a few loan sharks looting the toils and the assets of people...

http://eamb-ydrohoos.blogspot.com/2012/01/global-debt-crisis.html

------------------------

Global Debt Crisis

Authored by PANAGIOTIS TRAIANOU

Sun, 02/12/2012 - 16:15 | 2151228 Gief Gold Plox
Gief Gold Plox's picture

"If your head is not spinning yet, you are not paying attention." The trick is to be on your fourth beer when starting this story. You can't tell if you're just stupid or illiterate first and stupid second.

On a more serious note, I've given this question some though: "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..." Hasn't in the course of staling the inevitable default some of the credit moved from PSI to institutions such as the IMF and the ECB who can't be defaulted on? Doesn't that mean that the time has been used to "steal" some of Greece?

 

Mon, 02/13/2012 - 01:39 | 2152671 q5251355
q5251355's picture

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