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Greek Deficit Miss To Be Re-Re-Revised Again, 1 Year Greek Bond Hits Record 159%

Tyler Durden's picture




 

A week ago our post announcing that the Greek deficit target was going to be revised higher once again, from 7.6% to 8.5%, started with the following sentence: "As the Greek parliament meets to finalize huge public sector job cuts, Reuters is reporting that Greece will miss the deficit targets set in its EU/IMF bailout this year and next... We would say "again" but at this point "as usual" makes far more sense." Guess what: it is time to "as usual" re-re-revise it once again.

While one short week ago the projected debt as a % of GDP was hiked from 7.6% to 8.5%, Kathimerini now reports that the final number may actually be just a little bit higher once again. From Bloomberg: "Greece’s 2011 budget deficit may be 9.1 percent of gross domestic product, according to a European Union, European Central Bank and International Monetary Fund mission, Kathimerini said. The so-called troika, which completed its fifth review of the country’s economy, found Greece will miss the original target of 7.5 percent of GDP as well as a revised target of 8.5 percent for this year in the 2012 budget draft, the Athens-based daily reported, without citing anyone. Greece has enough cash reserves to last to the end of the year and possibly the start of next year, in part due to revenue from extraordinary levies, the newspaper said." Why is the timing of this conspicuous? Because the EU announced it expects a statement by the Troika this afternoon which is a virtual thumbs up/down on Greece. We wonder just how, in its praise of Greek "reforms", the Troika is prepared for the realization that it was just fooled once again. Unless, of course, this is all part of the masterplan to have enough of a validation to finally cut Greece loose by not disbursing the €8 billion in cash needed, without which Greece is kaput. The only question is whether or not German and France believe they have enough "firewalls" in place to prevent a Greek contagion. While this speculation is fast and furious, the fact that 1 Year Greek bonds hit just under 160% in yield earlier, is an indication we may be on to something.

Lastly, the fact that the country could barely auction off 6 month bonds hardly inspires confidence: from Reuters "Tuesday's
1.3 billion euro issue, which included 300 million euros in
non-competitive bids, was priced to yield 4.86 percent, up six basis
points from last month and above the roughly 4.2 percent Greece pays on
its EU/IMF bailout loans. Tuesday's auction attracted lower demand and
the bid-cover ratio dropped to 2.73 from 3.02 at the Sept. 6 sale. "

 

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Tue, 10/11/2011 - 07:11 | 1760383 GeneMarchbanks
GeneMarchbanks's picture

Opa!

Tue, 10/11/2011 - 07:13 | 1760385 westboundnup
westboundnup's picture

The ice get thinner, but the skater's confidence grows by 100+ point daily.

Tue, 10/11/2011 - 07:13 | 1760387 knight99
knight99's picture

Anyone buying those bonds will get what they deserve

 

 

Tue, 10/11/2011 - 07:24 | 1760406 PaperWillBurn
PaperWillBurn's picture

a G5 and lots and lots of money

Tue, 10/11/2011 - 07:34 | 1760433 Minoan
Minoan's picture

Government obliges some businessmen to accept 1 year bonds.For example,if a state hospital owes to a pharmaceutical company 100M,it pays a part in cash and the rest in bonds.

Tue, 10/11/2011 - 07:15 | 1760390 ItFarmer
ItFarmer's picture

don't worry, machines are in full control, waiting that eurex exchange resume trading

http://www.youtube.com/watch?v=QBPK4FP3G8U

Tue, 10/11/2011 - 07:16 | 1760392 defencev
defencev's picture

It appears that political carrier of Shmulek in Slovakia is over, the new facility will be approved   , as I predicted.

http://www.bloomberg.com/news/2011-10-10/slovak-ruling-party-said-to-tie...

 

Tue, 10/11/2011 - 07:22 | 1760400 GeneMarchbanks
GeneMarchbanks's picture

But what does this have to do with Greece?

Tue, 10/11/2011 - 07:35 | 1760413 Ghordius
Ghordius's picture

Coming from you I expect it's sarcasm, still, I'll swallow the bait. ;-)

The Euro-Mini-Bazooka the Slowaks are going to vote on is needed for the recapitalization of all EuroZone Banks that so foolishly hold Greek Bonds.

Tue, 10/11/2011 - 07:16 | 1760393 Ghordius
Ghordius's picture

Nought from the Greeks towards me hath sped well.
So now I find that ancient proverb true,
Foes' gifts are no gifts: profit bring they none.

Tue, 10/11/2011 - 07:17 | 1760395 bartek
bartek's picture

Why such a huge difference between 6m and 1 yr?  4.86% vs 159 %

Tue, 10/11/2011 - 07:23 | 1760401 Ghordius
Ghordius's picture

I understand it's called a "steep curve" - Chairman Bernanke is busy flattening it for the UST.

From this difference you can imply the market's expectation in when Greece is going to default. Ready for it?

Tue, 10/11/2011 - 07:26 | 1760410 Mike2756
Mike2756's picture

If we get one more lift towards 145, i'm going short, lol.

Tue, 10/11/2011 - 09:35 | 1760685 tarsubil
tarsubil's picture

So if Greece defaults in 7 months, which has the higher yield? The one year or 6 month bond?

Tue, 10/11/2011 - 07:25 | 1760408 broke433
broke433's picture

Think Germany and France knew Greece will miss their target and is currently trying to buy more time but it seems like they really don't have any control over this. They can't even keep the inspectors quiet until end of October. This is bad because the finance minister from Greece said they are getting a better deal after the inspection and will implement new plans by end of the month.

USA treasuries Bitchez

Tue, 10/11/2011 - 07:32 | 1760427 Ghordius
Ghordius's picture

Germany & France know that Greece is not going to change any substance - the charade must go on until all idiot-banks are prepared for the default.

By the way, US smart money is already leaving some of the UST for stocks.

Tue, 10/11/2011 - 07:26 | 1760411 bartek
bartek's picture

To me it doesn't make sense. It would imply that there is  0% chance of default within 6 months and 100% chance of default after 6 months.

Tue, 10/11/2011 - 07:34 | 1760432 Ghordius
Ghordius's picture

in the article above it's explained quite clearly: "...Greece has enough cash reserves to last to the end of the year and possibly the start of next year, in part due..."

Tue, 10/11/2011 - 07:33 | 1760429 Ray745
Ray745's picture

T-Bills are treated differently under default, so I believe there is barely any risk there at all, if a default occurs the T-Bills will be paid back in full.

Tue, 10/11/2011 - 07:33 | 1760431 juggalo1
juggalo1's picture

I don't understand how we are still muddling through on Greece.  All this austerity, and all the economic restructuring are not moving the country in the right direction.  Do the lenders seriously think that one more round of tax hikes and public sector layoffs will have the economy spurt in the right direction?  You can only push things so far.  At some point the debt has to be restructured.  Everyone acknowledges the lenders are not going to get paid, and yet no one talks about how to reduce the debt to a level the country can endure.

Tue, 10/11/2011 - 07:42 | 1760446 EL INDIO
EL INDIO's picture

They are trying to gain as much time as possible to prepare themselves to what is going to happen and everyone should do the same.

Get ready, those who are not prepared will suffer greatly.

50% Gold, 50% Cash (USD) and you will sleep well knowing all outcomes will be good for you.

Tue, 10/11/2011 - 07:55 | 1760476 Esso
Esso's picture

But, but, but RoboTarder sez I'm supposed to put all my money into flash-in-the-pan stocks like LULU and I'll be a zillionaire! Plus I won't have to worry about where to store all that metal and cash.

Real value is frightening & icky. I'm stickin' with The Tarder!

Tue, 10/11/2011 - 09:06 | 1760613 jez
jez's picture

Pooh, who needs stocks? I'm getting 159% in safe-as-houses Gubbermint bonds!

Tue, 10/11/2011 - 07:38 | 1760439 Dick Darlington
Dick Darlington's picture

Troika's "strict conditionality" will once again be pissed on by the Greeks. They will get their 8 billion. Venizelos aka Jabba the Hut is laughing out loud to the eurofanatic fools who keep pouring hundreads of billions to the black hole. Banks once again will smirk behind the curtain coz the tax payers will make their mistakes whole. This undemocratic political dream these eurofanatics are trying to preserve deserves to collapse sooner than later.

Tue, 10/11/2011 - 07:40 | 1760443 Ykroxor
Ykroxor's picture

but then why are 26w greek bills yielding 4.86% ?? :-/

Tue, 10/11/2011 - 07:51 | 1760462 Ray745
Ray745's picture

T-bills are treated differently under default, the capital in those is senior

Tue, 10/11/2011 - 07:41 | 1760445 slackrabbit
slackrabbit's picture

Is that 159% or 951%? 

It all gets so confusing.....;-)

Tue, 10/11/2011 - 08:15 | 1760502 holdbuysell
holdbuysell's picture

From the above Bloomberg article:

"Greece has enough cash reserves to last to the end of the year and possibly the start of next year, in part due to revenue from extraordinary levies, the newspaper said."

But...but...but, on October 4, Bloomberg wrote this:

"Greece Has Cash to Meet Needs Until Mid-November, Finance Minister Says"

http://www.bloomberg.com/news/2011-10-04/greece-has-cash-to-cover-needs-until-mid-november-finance-minister-says.html

So which is it? Is it because of the special levy's? I'm skeptical.

Tue, 10/11/2011 - 08:23 | 1760524 Taterboy
Taterboy's picture

I'm going to give those 1 year bonds as Christmas gifts. People will really be impressed with that 159% return!

Tue, 10/11/2011 - 08:54 | 1760590 Ykroxor
Ykroxor's picture

are you sure about the seniority of bills over bonds?

also, this difference  is far too big  to only reflect the spread between two tranches in the liability structure....

as most people say those days..."there has to be a reason"...

I mean I have the choice today between paying 4.86% in primary for greek bills and buying a

GGB 5 ¼ 05/18/12 for 50% of par...

Really struggling to get that spread

Tue, 10/11/2011 - 09:29 | 1760670 rambler6421
rambler6421's picture

Wait.......even if Europe recapitalizes their banks.......won't the deriatives market burst when Greek defaults?  We don't know who has what.......

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