ESM Termsheet - Page 1, footnote 2....

Tyler Durden's picture

From Peter Tchir of TF Market Advisors

ESM Termsheet - Page 1, footnote 2....

Talk about launching ESM early and in conjunction with EFSF has helped the market rally. 

On Page 1, the ESM will have an effective lending capacity of 500 billion (footnote 2)  During the transition from EFSF to ESM, the combined lending capacity will not exceed this amount.

Somone better ask Finland and Slovakia whether they are prepared to fund both?

Are stocks as strong as they are because Algo's are good are reading headlines, but suck at finding termsheets and reading them?


Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Ahmeexnal's picture

Just let us short eurocrapian markets!

jarboejl's picture

Markets have stalled out.  Algos must be staring at that footnote awfully hard.

buzzsaw99's picture

how much of this money will go to the squid i wonder?

gatorengineer's picture

Squid wants Greek credit event, so all of those delicous CDS's go off............  It will be a string of squidlicious CDS events going off months after Greece fails.....

As sick of a thought as it is, not a bad time to buy some squid.....


slewie the pi-rat's picture

the quid to the squid?  110%

heluva job, brownie!

pendragon's picture

this is beyond a joke. 160+ s&p handles and 8 big figures in eurusd on a double count

slewie the pi-rat's picture

count dracula:  coffee is perky, today!

count de monte cristo:  indeed!  say, could i bother you for the grey poupon?  it is just wonderful on this swiss cheeZe!

It is a bargin my friend's picture

Someone better ask Finland and Slovakia?

According to this if they signed on the dotted line there is no need to ask..its due

Manthong's picture

"During the transition from EFSF to ESM, the combined lending capacity will not exceed this amount."

.. unless they need more.

buzzsaw99's picture

and what is the cut for the tattaglia family?

machineh's picture

'The consolidated EFSF and ESM lending shall not exceed 500 billion euros.'

'Non euro area Member States can particpate on an ad hoc basis alongside the ESM in financial assistance operations for eura area Member States.'

Oh yeah, I'll bet they're lining up in the corridor to get on this deal!

espirit's picture

Hint, hint.  Sort of gives a clue how much QE the Bernank plans on at the Nov. 3 meeting doesn't it?

The Amerikan taxpayer funds these follies under a MBS sham, although they just don't realize whose MBS they're buying.  Sad...

jarboejl's picture

A video for anyone who believes that this bailout of Europe will actually work.

Oh yeah, I'm bringing it back!

machineh's picture

'The ESM will have a total subscribed capital of € 700 billion. Of this amount, € 80 billion will be in the form of paid-in capital provided by the euro-area Members states, of which € 40 billion will be available from July 2013 with the remaining share being phased in over the following three years.'

Hey, did anybody notice that this is just VAPORWARE? 

Almost two years from now they're going to have € 40 billion of paid-in capital?

This is no bazooka ... it's a broken BB gun with bubble gum plugging the barrel. LOL!

Dick Darlington's picture

And the funniest thing is that NONE of the euroutopia members have that money. NONE. They NEED TO BORROW the money in order to pay their shares of the capital. Oh, ponzi scheme's a bitch...

FinHits's picture

Finland has agreed to pony up all of her share (€1.4 billion) immediately in one go rather than in five installments, and can easily do it as well. This was the quid-pro-quo for getting partial collateral on the (forthcoming) Greek Bailout II. But for sure it will piss Finland off, if EFSF somehow now gets collapsed into ESM and the amounts will get double-counted.

Dick Darlington's picture

Sure, Finland can easily do it but the point is that even Finland doesn't actually have the money. They will need to borrow it just like everyone else.

A Man without Qualities's picture

One suspects that various other member nations guessed the intentions of the FPIGS so put measures in place to prevent backdoor attempts to leverage up the risk sharing... 

Now what Monsieur Sarkozy?

gatorengineer's picture

Ok, so its white out and printers ink that are needed.....

AldoHux_IV's picture

It's basically another synthetic cdo or consider this the backup to the backup with no real plausible nor credible funding measures for this or the EFSF. It's just going to be a tranche of 'crap' (to steal a phrase from GS) and when that fills up, the next tranche aka EFSF will be there to help until they create an EBSF (Euo BS fund) to aborsb any other necessary funding gaps sovereigns may be facing at a later point in time.

1. This is a pathetic attempt to maintain credit rating strength by 'shifting the risk' somewhere else.  Guess they figured that the credit agencies were too moronic to rate the cdo's of past appropriately to sniff out this total blunder called the ESM/EFSF.

2. You can only balance transfer to another credit card at a lower rate until: a. you run out of money because you're insolvent b. rates creep higher on the next credit card because the teaser rate is subjected to prevailing market conditions i.e. funding pressures due to the continuation of the same old bullshit.

3. This is hilariously pathetic and falls short of any real solution-- yeah it's going to take many strokes to fix this problem, but in this case it's the kind that happens to your brain because markets have to lose their thinking capacity in order to think this'll work.

Dick Darlington's picture

I would add to your point #1 the fact that euroutopia members decided to "shift the risk" somewhere else because under the Lisbon Treaty there's this tiny, little, small inconvenient "thing" called NO BAIL OUT -CLAUSE (Article 125). The eurofanatics created the cdo monster to go around that. Of course they are still breaking the treaty and this is only technical issue, smoke and mirrors to justify their actions. I'm amazed that so little attention has been given to this.

Finance Addict's picture

How exposed are the U.S. banks to the eurozone crisis?

Fips_OnTheSpot's picture

Too bad, them Tylers never hopped on the actual ESM contract I've submitted:

run this thru google-translator for your fav'd language:!.html

If you think Hitler was bad, this will frighten you to death.