FT Report That Greek Bailout Package On The Verge Of Collapse After Surge In Greek Funding Needs Sends Stocks, Euro Plunging From Highs

Tyler Durden's picture

Wondering what just caused the market to slump? Take a wild guess. That's right - Greece. Minutes after Greece passed a vote in which it promised to promise to promise to consider collecting 1998-1999 taxes (even as all of its tax collectors are about to go on permanent strike), the FT was breaking news that while the Troika was "bailing out" Greece in the past years, the country was spending itself into an  even greater oblivion. As a result, the terms of the July 21 Second Greek Bailout will most certainly need to be renegotiated, with banks having to take even greater write downs on the bond exchange, and with far more capital having to be injected into the country. The result is the France and the ECB are panicking because as we all know, any additional write downs will expose just how undercapitalized French banks already are (no need to even mention the world's most toxic hedge fund: Trichet et Cie). Should this story pick up traction, look for Europe to open limit down again tomorrow.

From the FT:

A split has opened in the eurozone over the terms of Greece’s second €109bn bail-out with as many as seven of the bloc’s 17 members arguing for private creditors to swallow a bigger writedown on their Greek bond holdings, according to senior European officials.


The divisions have emerged amid mounting concerns that Athens’ funding needs are much bigger than estimated just two months ago. They threaten to unpick a painfully negotiated deal reached with private sector bond holders in July.


While hardliners in Germany and the Netherlands are leading the calls for more losses to be imposed on the private sector, France and the European Central Bank are fiercely resisting any such move. They fear re-opening the bond deal could spark renewed selling of shares in European banks, which have significant holdings of Greek and other peripheral eurozone debt.


Because of the recent economic downturn and Greece’s slow implementation of austerity measures, officials estimate Athens’ funding needs over the next three years have grown beyond the €172bn forecast this summer. The scale of the shortfall will be determined by international lenders over the next few weeks.

So let's get this straight: the funding hole was €109 billion two months ago, and it is €172 billion, an incremental diferential of €63 billion in two months, or €360 billion annualized.

...Pardon us, while we...


We apologize but...


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FunkyMonkeyBoy's picture

Go long rumor-mill.

waylon153's picture

Dammit!  This rumor mill monkey hammering is hurting my head....

Popo's picture

Any second we'll hear the "Tanks in the streets",  financial-blitzkrieg argument.

"You must give up your national sovereignty RIGHT NOW because this is an EMERGENCY!!! THERE IS NO TIME TO DEBATE THIS!"

Let's hope cooler heads prevail -- Let the banker scum immolate themselves.   This is not an emergency for everyone.   Life will go on.




TruthInSunshine's picture

Watch the markets close unchanged or modestly up, with 5 minutes to go, from +3% earlier, all on the basis that the facts are JUST beginning to trump the propaganda.

Just wait until that process of factual realization accelerates, and the propaganda is discounted as soon as it's shat out.

dwdollar's picture

I thought after the Greek 1 Year went over 100% we'd finally get some truth from the more sensible governments in the EU.  Wow, was I wrong!  They are intent and quite capable of keeping this circus going for longer than anyone suspects.  As we tumble down the rabbit hole, the weird will become normal, and the really weird will become just weird.  On and on...  These are the times which future generations look back upon and ask how the fuck people could have been so stupid.

iDealMeat's picture

I'm no fan of the hitler era. However, I can certainly understand how the German folks elected him to power, sans internet.



Bicycle Repairman's picture

Just so we all understand, the Greeks aren't paying.  Make up any programs, rumors, whatever.  The Greeks aren't paying

franzpick's picture

And here's a report from a greek local on how greeks are not paying, put here by me because the fed, geithner, and the eu crowd deserve imho a good pasting:

On the ground report from Greece by Manos
September 11, 2011

Today, after two years of screwing and pressing us, most households and businesses have stopped paying. Stopped paying taxes, utility bills, toll fees, or anything else related to the government.

Two hours ago, this same government announced a new property tax (added to the 2 previous ones). This one will be calculated on every and each household, business, cottage, or even a barn for animals. It will be 4 euros per square meter calculated immediately, to be paid by this December the latest.

Which property tax will also not ever be paid: bailing out unpayable debt with more debt, while tax revenues collapse, is an impending disaster hiding in plain sight, and I will not run out of popcorn waiting for the currency danse macabre and the credit, trade and commerce collapse to become unsuppressable headline news.


Bring the Gold's picture

So I should go pro? Apologies to Hunter S.

Skid Marks's picture

.....and nobody is even slightly embarrassed by all the lying. Wouldn't it be refreshing if a reporter, or newspaper editor or any media persona was tarred and feathered and hauled off on a rail for telling lies.  Oh well. Back to the Disney channel.

NotApplicable's picture

There are no such things as lies in a political world, as it implies something was said. Instead, if you look closely, you'll notice nothing but meaningless phrases which are used to make implications, which are then used within the mind of the listener to create the idea that the speaker actually said something.

But they didn't. It was all imagined.

StychoKiller's picture

Well, that's a relief!  I thought I was losing my marbles -- turns out it was just typical Political doublespeak! :>D

Bring the Gold's picture

Great post NotApplicable.



Kitler's picture

Yes the ECB will no doubt demand control over the bailed out ban... err.. countries fiscal and social policies. It is essential that the neccessary cuts and privatizations should only be made by those who can best determine value.

Perhaps it is time the Euro experiment should be ended. Kill the Euro and merge it with the US dollar.

Call it the Enduro?


knukles's picture

Denominations like the old pound, shilling and pence;

24 Lieses make one Falsetto,
12 Falsettos manke 1 Enduro.
1 Enduro plus one Falsetto is a Ainnal
100 Ainnals is a DSBR (Dis Shit Be Real)
1,000,000 DSBR's has initially been set equal to 1 gram of gold With The Promise to retain full convertibility without predetermined value at any point of time in the future as of yet to be recognized by the to be established (subsequent to formal approval by each and every EU and ECB member as well as Ms. Thaznotreel O'Fuckme of Cheapside, Cornwall) Euro Replacement Ainnal Temporary Blue Ribbon Study and Unlimited Debate Extended Dreary Meeting and Conference Group.

Miles Kendig's picture


Post of the day

 Everything Is Broken (R. L. Burnside) http://www.youtube.com/watch?v=jhKqqYuV9MU&feature=share

beaker's picture

I have crisis fatigue....

Debugas's picture

go to Greece and cool your feet ;)

DoChenRollingBearing's picture

This has been a very long running horror movie.  I am stuffed full of popcorn...  But, I will throw on another batch and watch the markets.  It has been a long strange trip waiting for the crack-up.  

But it is coming.  Got gold?

SheepDog-One's picture

I'm watching all of season 1 of The Walking Dead right now, good reality show.

junkyardjack's picture

You should read the comic book, it prepares you for what will come very well.  Pillaging, killing, hiding in jails to keep out "the others".  I'd also recommend World War Z or Zombie Survival Guide, it'll tip you to the places you need to find when the world governments collapse

SheepDog-One's picture

Ive read both of them as well.

Frog-And-Toad's picture

Haha I just did the same with my roommate this weekend... 

It got us talking about the coming systematic collapse that's coming (he's a Therapist and has no idea just how bad it really is), and I think he's starting to realize that a Walking Dead type scenario could actually happen (minus the zombies of course).  But think about the episdoe with the Latin gang taking care of the elders.  

For those not prepared, life will be a constant battle.  I'll take bullion and guns right now, thank you very much

knukles's picture

"he's a Therapist and has no idea just how bad it really is"

Coulda been "he's a Keynesian has no idea how bad it really is", either.

TruthInSunshine's picture

This is the biggest charade of an equity Ponzi rally that I've ever witnessed (in such short an interval). EFSF is DOA. It's not going to happen.

If anyone thinks that the majority or even a plurality of Germans will cast votes to change the German Constitution, to support the PIIGS+France+UK bailout, which is legally what will be absolutely required for the EFSF, or any terrible derivative thereof, to be enacted, please go on record now.

Short the ever living shit out of this PIIG(S+France+UK) of a market rally.

The world is high and dry, and banks are busted, and the long knives are about to pulled out over in Europe.

After the crash, the financial 'experts' and talking heads on bubble-vision will all be proclaiming that "no one could have seen this coming," although it's literally handwriting on the wall.

As a final note, I love hearing how publicly traded corporations are sitting on 2 trillion USD in cash, as they also are sitting on 12 trillion USD in debt, presently.

hambone's picture

But ETF sir,

if the EFSF x infinity won't work, then think man, think...they'll come up with another whopper to be followed by more ludicrous whopper...and Liesman will be there to "break" them all. 

Credibility is in the saying, so they'll say anything as long as anyone will listen.

SheepDog-One's picture

The carrot on the end of this stick is looking pretty mushy and rotten.

SokPOTUS's picture

...and having a shriveled carrot is no fun...

jdelano's picture

My sentiments exactly.  Got greedy and was waiting for a last ramp up into the close to stack my puts so my entry price was with the market at +200 instead of +300, but if we go up tomorrow I will double double down.  No stress about it anymore.  The game has gotten downright silly, more predictable than a Tyler Perry flick.   

tekhneek's picture

On those 300-400+ up days just load up on TZA, SKF and FAZ and wait...


PD Quig's picture

I'm short as shit and long the USD (for a trade), but this idiocy is crazy-making. There is no technical, there is no fundamental, there is only Steve Liesman and assorted other shills to leak sewerage into the collective economic consciousness. There are many people spread out across the western world who are actively trying to screw the common man.

Would it be harsh to say that the damage they have caused deserves capital(ist) punishment?

Bring the Gold's picture

Anyone else think reality is giving us a hint when the biggest rumormonger shill is named LIESman? I mean come on, that's too good for fiction!

Vincent Vega's picture

Truth, I posted on another ZH story a little while ago that I believe the Germans will cave and vote for the plan. (i got a few junks too). I don't like it, I don't agree with it, I hope it doesn't pass, and I think it is a stupid idea; but I think they will eek out a yes vote. This is the ultimate can kick. The system is toast. This will be the final hail Mary before Europe goes down. (imho) Either way I think the vote will be close.

jdelano's picture

Question--assuming they do launch this plan, which seems to be more of a cyanide pill than a solution, where will the leverage come from?  (Rhetorical, leading)  Who is going to vountarily grab hold of the hot potato?  That's right.  Nobody.  The "plan" is complete horseshit.   

Vincent Vega's picture

I agree with you...the plan is for shit. Since when has a bad plan EVER stopped TPTB from going ahead with it. I'll let you answer your own question by asking a question: who is "the lender" of last resort? The best thing that could possibly happen to Germany is for the entire plan to fall apart so that there is no need for a vote.

Bring the Gold's picture

Dispense with the idea that the current system being saved is the TPTB end goal and much becomes clear. They want a new, more evil, less opaque and far more centralized system to rise like a phoenix from the ashes of the current one. Still blows my mind that folks don't see this as the final goal.

Cathartes Aura's picture

+++ Bring the Gold.

I was resisting posting just this until I'd read down the thread, and I'm surprised more don't point out the fact - end game is to cause the SHOCK to the system(s), in as many ways as possible, until the "voters" BEG to be saved from the resulting chaos by a GLOBAL governing FORCE. . .

everything will lead to THIS, and indeed, appears to be crumbling along quite nicely so far. . . one can "hope" voting in certain favourite leaders can "save" the system, or making scads of monies to "escape" it, or whatever the strategy is - but never doubt their stated goals.

Bring the Gold's picture

Its far too scary for the average middle or lower tier rich person to imagine the level of betrayal that is taking place. I tend to see the following thinking played out again and again on ZH:

"But...but...but I've benefitted so much from the system and surely those that run the system always meant for me to benefit not to accrete personal power for themselves with my good fortune merely being a side effect! I especially reject any thesis that might include the thought that I am irrelevant to the elite's plans and in fact now obsolete in my place holder societal stabilizer role."

Buck Johnson's picture

Bingo, they thought that they where on the elite or TPTB team.  They thought that as long a they said the right things and looked the part, they would be okay, wrong.  The elite looked at these useful idiots as just that useful idiots. If you can't have enough common sense to look after yourself in their mind, then you aren't a apex predator like the elite.  Greece is needing another 63 billion euros to a totall of 172 billion euros in only 2 months.  Now here's something that isn't being said, if they are burning through money as fast as they are, this bailout will only last (if agreed too) until possibly Feburary of next year.  I don't even believe the 172 billion euros, it might be even more right now.  Greece is a money pit that can't pay back any of the debt that they have.  They are essentially at half a trillion euros in debt if this 172 billion goes through.  And how is a country with a population of 11 million and change going to be able to have a tax base big enough to pay these debts.  LA has a Metro population of 15 million and change and it would be like they oweing half a trillion dollars by themselves.

This is a suicide pact, but this time the suicide won't be averted it will happen.

Bring the Gold's picture

Yep, very well said. Greece is just the tip of the iceberg too. The US, UK, Japan and PIS countries make Greece look like a pimple on the global debt problem's ass. 

Btw, "apex predator" the perfect term I plan on stealing that Buck. Just very well said all the way through sad I can only give you +1.

Vincent Vega's picture

Bring the Gold, I never said they were trying to save the system. I agree completely that they are trying to get us to the system you describe. So which is better for the oligarchy achieving that objective: 1) keep Greece a debt slave. 2) Have Greece default and wipe the slate clean.

There is more money and control in option #1. If I were the oligarchy I would want everyone to be a debt slave.

StychoKiller's picture

Even if the German public does indeed vote against such lunacy, WHO is counting the votes??

scatterbrains's picture

grain mills bitches...  some of yuz will be stealing out of feed bins before it's all said and done

Muddy1's picture

Greece isn't the only Euro country, oh hell, it isn't the only country in the world with "funding needs are much bigger than estimated just two months ago".  We have our own dirty little secret with trillions in "off the books" funding needs.  Nearly every country is lying in order to coverup just how bad things are in order to keep money coming in.  And the Bitch bankers... they're doing the same.  Let the house of cards fall.

Id fight Gandhi's picture

They really need a rumor ETF, leveraged too.

knukles's picture

Complete with a 2X, 3X, 5X, inverse 3X and inverse 5X, futuers and option all the preceeding not to mention futures on the options, all to be traded on the CRIMEX along with  Vix, double Vix, inverse double VIX, options and futures and futures on options and options on the futures on the options of anyfuckingthing that Goldman's little heart desires.

NotApplicable's picture

Only in comparison to silver.