ESM - A Primer - Not So Big, And Not So "Paid-In"

Tyler Durden's picture

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Tsar Pointless's picture


Whether it works or not, or is fully implemented, or is even possible to implement, is not pertinent. The point is, something was done.


JPM Hater001's picture

Ok, so I have secured a loan on a house.  Well, actually I have 8% of a loan secured.  Well, actually I have the money from another loan being used currently to fund my debt which is in complete shambles and ready to explode but this new theoretical credit line will do the trick. </sarc>

CClarity's picture

Of this amount, €80 billion will be in the form of paid-in capital provided by the euro-area Member States”  (€700 billion of subscribed capital becomes €80 billion of paid in capital?)

“of which €40 billion bill be available from July 2013 with the remaining share being phased in over the three following years”  So at launch it would have €40 billion of paid in capital and then would add €13.3 billion per annum for 3 years?  Where is Jon Stewart when you need him.  He would do a much better job of making you laugh while he incredulously walks through how 700 becomes 40.

Not a fix.  Not even much help.  Sovereign debt extinguish not even a plan yet.  I think you can count on destruction through default and repudiation ahead.

Scalaris's picture

"..(some of the AAA guarantees would be used up by their portion of the paid-in capital).."

What if the only AAA guarantor left by then is Germany?

lizzy36's picture

What if?

Count on it. And then think of what happens when Germany has to bail out its banks and pick up the Guarantees of other downgraded countries.

firstdivision's picture

WTI waaaaay down.  Once we hit mid-80's, I suspect BB will announce a QE'ish type program. 

mountgirnar's picture

Impressive post ... more impressive this am, however was when I checked my BofA account.  Suddenly,  I had a $3 k overdraft on the account. 

At that all my money was also missing from my account when I logged into my account electronically.   Glad I had a stiff expresso for breakdast

Phoned my local freindly banker at BofA. 

 --   Bof A account officer in the local bank was missing in action.  CHRIST!

Phoned the "help" line given on my debit card and on my electronic checking account.

 The BofA help line people likewise were missing

The office there is open 7 am to 11pm.   Got a recording that they were not open.



Hmmmm.   So now my entire account and the money therin is "missing". 


I NOW feel EXACTLY like Gerald Celente.    Mabye Seth Kalrman's derivative punt killed the bank.





kiwione's picture

Can anyone point me to a chart showing the interconnections between all the funds/orgs/entities?  There was one for the EFSF that was helpful.  But I suspect that would be one element of a very large chart of spaghetti ...

The 100 Trillion Dollar Man's picture

If the ESM buys the EFSF debt and the EFSF buys the ESM debt...

Peter K's picture

" I am not sure that countries will ratify a proposal that really makes them commit capital."

Yes, this is the money line. It is about this all along. The whole point of the excersize is to see what combination of words will get the stupid speculators to give up and go home.

Peter K's picture

Good case in point. Monti just came out and said that work on Eurobonds is proceeding forward,  and the EUR/USD jumped 10 pips.

mountgirnar's picture



Sorry mixed up my accounts... mea culpa. 

BofA help line still out. 





bank guy in Brussels's picture

Tip: You can edit your post so long as no one has replied to it yet.

Ham of Love's picture

Why are we even debating this? I thought 2.3 trillion was the magic number? 470m or 500m is an irrelevance. I'm eerily aghast at how positive the markets are receiving this 'agreement'. As an aside, most decisions I've ever made at 4am in a nightclub involve someone getting screwed, but very often myself.

homer8043's picture

So, what they did today rolls over Spain and Italy's debt in February??? I really don't think so. They still need another dramatic move.

We haven't begun talking about March, April, etc. They don't have a prayer other than a direct Fed bailout which I hope someone in Congress can shutdown.

Canucklehead's picture

It seems quite clear that the ECB is the "Bad Bank" that will accept all the bad european debt.  The tipping point is when the ECB is found to exceed it's mandate by the soon to be elected political leaders who will be forced to make the flight/f(l)ight decision on whether the EU goes forward from this crisis. They will rollback many of the perceptions used to buy time for the european states to get themselves out of trouble.  Unfortunately, many states will keep grabbing while the grabbing is good.

As things presently stand, the proper German/American geopolitical decision is to give the minimal amount of rope needed for those wishing to hang themselves.  In turn it is desired they do so with the least disruption to global affairs.

The IMF is the "real" bank that will receive the haircut sovereign debt when the ECB goes belly up.  From the IMF position, there will be political decisions made on the viability of european states who are in a position to default on ECB/IMF debt.  Germany will retreat to a high chair at the IMF while the ECB/EU mess sorts itself out and a multi-track currency replaces the euro.

Those european states that thought they were players will find their banking systems merged with the new world order.  Social values will definitely change.

It is interesting to note that the euro is tracking nicely with a synthetic German Mark.  There will be minimal disruption to the German economy should the decision be made to dump the euro.

bank guy in Brussels's picture

Peter Tchir, you are simply The Man, on the ever-changing EU Plan.

They need to invite you over to Brussels to look over their rubbish before they put it out for viewing.