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Latest PSI Terms Leaked; Imply Greek Redefault Within 2 Years

Tyler Durden's picture


The first details of the Greek bond deal are leaking out via Reuters, and we now learn the reason for the Greek bond sell off in recent days:

  • PRIVATE SECTOR WILL ALSO GET A GDP-LINKED ADDITIONAL PAYMENT, CAPPED AT 1 PCT OF THE OUTSTANDING AMOUNT OF NEW BONDS [If it appears that nobody gives a rat's ass about this bullet point, it's because it's true]

Which in turn explains the sell off in pre-petition Greek junior triple subordinated bonds (i.e., those held by private unconnected investors, which are subordinated to the Troika's bailout loans, to the ECB's SMP purchases, to the Public Sector bonds and to UK-law bonds in that order). With the EFSF Bill "sweetener" amounting to about 15 cents (and likely less), the fact that bondholders will receive a 3% cash coupon, a cash on cash return based on Greek bonds of 2015 trading at just 20.7 cents on the euro, indicates that investors are expecting to collect 1 cash coupon payment, and at absolute best 2, before redefault, as buying a 2015 bond now at 20.7 of par, yields a full cash return of 21 (15+3+3), thus the third coupon payment is assured not to come. And since there is a substantial upside risk premium kicker to bond buyers, in reality the investing market is saying that Greece will last at best about a year following the debt exchange (if it ever even happens) before the country redefaults.

Oh, and by the way, the fact that creditors just got even more bent over, just assures that Greece can kiss the 75% threshold for PSI acceptance goodbye. Hello CACs, and CDS trigger.

Some more just out of Reuters:

Greece will need additional relief if it is to cut its debts to 120 percent of GDP by 2020 and if it doesn't follow through on structural reforms and other measures, its debt could hit 160 percent by 2020, a debt sustainability report by the IMF, European Central Bank and European Commission shows.


The baseline scenario is that Greece will cut its debt to 129 percent of GDP in 2020 from 160 percent now, well above the targeted 120 percent, the confidential, 9-page analysis prepared for euro zone finance ministers showed.

"The results point to a need for additional debt relief from the official or private sectors to bring the debt trajectory down," said the report, dated Feb. 15 and obtained by Reuters.

The report forms the basis of discussions of euro zone ministers on the conditions under which Greece is to get further financial help from the euro zone and the IMF.

"There is a fundamental tension between the program objectives of reducing debt and improving competitiveness, in that the internal devaluation needed to restore Greece competitiveness will inevitably lead to a higher debt to GDP ratio in the near term," the report said.

"In this context, a scenario of particular concern involves internal devaluation through deeper recession (due to continued delays with structural reforms and with fiscal policy and privatisation implementation)," it said.

"This would result in a much higher debt trajectory, leaving debt as high as 160 percent of GDP in 2020. Given the risks, the Greek program may thus remain accident-prone, with questions about sustainability hanging over it," it said.

It appears nothing has been resolved. YET AGAIN


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Mon, 02/20/2012 - 16:35 | 2178397 markmotive
markmotive's picture

"Redefault" in 2 years? Greece is already finished. Just ask the man in the street.


Greek poverty is skyrocketing (i.e. why Athens burns):

Mon, 02/20/2012 - 16:36 | 2178399 MillionDollarBonus_
MillionDollarBonus_'s picture

Greece must not fall into the trap of cutting spending. This is proven to be a failed policy, as it undermines economic growth. The key is for Greece to spend even more on fiscal stimulus programs, to get the Greek people spending again. You see, money is like the life blood of the economy – it has to keep flowing or the economy dies. 

Mon, 02/20/2012 - 16:40 | 2178414 Dr Paul Krugman
Dr Paul Krugman's picture

Agreed.  These terms are great for Europe and Greece:  Greece gets the liquidity it needs to spark its work force and Europe, who is as reliant on Greece as visa versa, will now have Greece creating growth opportunities!

Mon, 02/20/2012 - 16:46 | 2178428 resurger
resurger's picture

Hey Crookman,

fuck how you are? Can you explain how strong is the Greek financial foundation? a small straw wont break the camels back you know .


Mon, 02/20/2012 - 17:00 | 2178448 Dr Paul Krugman
Dr Paul Krugman's picture

It's bad.  Europe -and Greece - are in a bad situation.  As they sink into the abyss should we not look to history to guide us?  Bernanke, whom I admire, is using his tools to perfection, and look at the growth in the U.S. economy!  Europe has sunk into depression.  They should take a note; use your tools!

Austerity is not constructive and we need to redevelope the economy.The ECB, and rightly so, has made a decision to create liquidity, as oppossed to letting the system freeze up.

OK, I unsderstand the fright:  spending now to create growth doesn't sound sexy.  But we have no choice.  It has worked before, thus why it will work again.  Greece needs to rebuild itself, and how could they do it in an austere period?  They couldn't.  They need help gaining traction.  Europe is willing to help, as they should be, considering they have skin in the game.

Mon, 02/20/2012 - 17:03 | 2178478 HoofHearted
HoofHearted's picture

If you're really considering buying Greek bonds, just write them the check and stick it in the hat that gets passed around. And never again think about that money you just pissed away.

Mon, 02/20/2012 - 17:07 | 2178492 Dr Paul Krugman
Dr Paul Krugman's picture

It's about investing in the future.  If there was no tomorrow for Greek debt, if the market crashed, then where would Europe be?  It is in Europe's best interest to listen to the technocrats and invest in their future.  It's cost benefit analysis.  And it is also opportunity cost.  It is in their benefit to invest now, for the sake of the future European Union.

Mon, 02/20/2012 - 18:20 | 2178786 TruthInSunshine
TruthInSunshine's picture

Put me down for $25 worth of those 2021 and forward 3.75%.

I am putting the $25 an escrow account bearing interest at the overnight Fed funds rate.

Mon, 02/20/2012 - 17:06 | 2178484 nope-1004
nope-1004's picture

Then put your money where your mouth is and send some funds to the Greek populace.  I, for one, will not.  I refuse to subsidize a bloated social structure full of lazy-ass teet suckling cling ons.  We don't need more spending, we need less dependance on the state and less intervention from the state.  The failed belief by the economic community is that the gov't "creates" jobs and manages the economy.

The economy starts at the household and works up, not the reverse.  If mom and dad are sucking off of a social structure that is broke, while juniors are living in the basement "looking for work", death of the system is a foregone conclusion.



Mon, 02/20/2012 - 17:13 | 2178522 Dr Paul Krugman
Dr Paul Krugman's picture

I do put my money where my mouth is.  I pay my taxes and will continue, hoping that everyone begins to undtand, like I do, that we are building a bridge to the future.  We may need less dependence on the state in time, but that will be reserved for when we come out of this hole.  Right now, more important than anything, is that we get out of the depression.  The science of economics can make that happen by spending now, and paying it off later.

We should provide junior with a job now so that he can help mom and pop back on their feet, then the same will be for his life when he retires.  Economies are cyclical in nature, like life.

Mon, 02/20/2012 - 18:12 | 2178763 LawsofPhysics
LawsofPhysics's picture

"Economies are cyclical in nature, like life"

LOL, only when companies are allowed to fail moron and the people associated with those bad ideas and bad management are kicked to the curb.  Like "life" the good ideas, good innovation, and good managment will "live" on.

What graduate program are you part of? LOL!  What no classes to teach today?

Mon, 02/20/2012 - 17:38 | 2178634 FreeNewEnergy
FreeNewEnergy's picture

less dependance on the state and less intervention from the state

Ding, ding, ding. We have a winner.

Mon, 02/20/2012 - 17:06 | 2178485 Bunga Bunga
Bunga Bunga's picture

Growth escape doesn't work in a resource constrained world anymore. The only way that Greece gets out of this mess is by exporting its debt to others like Germany, but this requires inversion of the trade balance on both sides. Germany would suffer. Bottom line: there is no free lunch. Except: Aliens will import Greek (PIIGS, US, ...) debt. I think you already got the point.

Mon, 02/20/2012 - 17:14 | 2178536 Dr Paul Krugman
Dr Paul Krugman's picture

Technology will solve that, so we must invest in technology.  It is when investment stagnates that growth does too.  Thus why we must invest in our future.

Mon, 02/20/2012 - 17:51 | 2178676 LawsofPhysics
LawsofPhysics's picture

"Technology will solve that, so we must invest in technology.  It is when investment stagnates that growth does too"

So long as the capital 1) has purchasing power (yes engineers and scientists can not inovate if the capital you lend them won't buy shit) and 2) the capital is available and not mal-invested in a paper ponzi between central bankers, political puppets and corrupt corporations.  Moreover, it is the return on capital and ENERGY that will determine whether or not growth can proceed.  No return, no growth.

Moreover, there is a very real cost for creating capital without adding any real value fucknut.  You of all people should know that. How about we prosecute the fucking fraud.  If we don't put the moral hazard back in the bottle it won't matter anyway.  Know the real value of your labor?  If things keep going the way they are I guess we will find out precisely what the value of everyone's labor is.  Fuck the paper-pushers, especially academic ones.

Mon, 02/20/2012 - 17:57 | 2178705 Dr Paul Krugman
Dr Paul Krugman's picture

There is a return once the economy begins growing.  Companies hire, and there is growth!  And value is added with every new job.

Mon, 02/20/2012 - 18:09 | 2178745 LawsofPhysics
LawsofPhysics's picture

Bullshit.  Not if the energy is unavailable or the energetic cost to recover and deliver the energy is more than the amount of energy released for any given source.

Sorry, the laws of physics and thermodynamics win.  Unless like every academic fucknut you are suggesting a sudden drop in the human population (making more energy available in the short term).  Inthat case, you might get your wish, and then the infinite growth in a system with finite resources scam can go on a bit longer.  You also ignore living standards and the consumption/pollution/entropy required to simply bring technology to the market   Again, troll harder.

Every new job so far has paid less in terms of real purchasing power for over 30 years.  That is you "winning".  again, troll harder, I have waste enough time.


Again, you also ignore the issue of fraud.  Fine with me, let the system collapse, I know the value of my labor.  Academics will be the first to go.

Mon, 02/20/2012 - 23:08 | 2179636 trav7777
trav7777's picture

uh...the guy is not actually Paul Krugman

Mon, 02/20/2012 - 18:11 | 2178758 Bunga Bunga
Bunga Bunga's picture

It doesn't explain how you get the resources required for growth.

Mon, 02/20/2012 - 18:13 | 2178767 LawsofPhysics
LawsofPhysics's picture

They simply "print" them.

Mon, 02/20/2012 - 18:26 | 2178818 Bunga Bunga
Bunga Bunga's picture

I still do not believe that the mother of the universe is the Keynesian printer. Probably I need more brain wash.

Mon, 02/20/2012 - 18:30 | 2178836 Kayman
Kayman's picture

Sheer idiocy !  It depends entirely on what that dollar is spent on.  During the Great Depression men were mainly put to work building assets that had future payoffs. 

Now, we just piss it into the wind.  Give your head a shake; your position is entirely academic.

Mon, 02/20/2012 - 18:03 | 2178725 Seer
Seer's picture

Here's the simple equation on how things work

Output = input of physical resource + energy to transform them + (given/driven by) technology (method)

Failure to properly account for physical (raw natural) resources is a glaring gape of a hole...

One can try and insert "capital" wherever one would like, but it's really only an abstract, an adjective.

Mon, 02/20/2012 - 18:07 | 2178746 LawsofPhysics
LawsofPhysics's picture

precisely, the only "accounting" that matters is in terms of BTUs or calories etc.

Mon, 02/20/2012 - 17:54 | 2178692 Bunga Bunga
Bunga Bunga's picture

That's a lie as it has been a lie of growth policy economics all the time. Of course, you can kick the can down the road maybe for another decade by building cars using less gas, but you will end up with more people beeing able to afford a car, more miles or both, thus more steel, highays, oil a.s.o. consumed. More efficiency just allows the Ponzi scheme going for longer, but it is still a Ponzi scheme eating the resources of the planet.

Mon, 02/20/2012 - 17:11 | 2178508 nasdaq99
nasdaq99's picture

Dr Krookman, 

THey are at the Keynesian Endpoint otherwise they wouldn't be giving haircuts.  Broken "Rule of Law" haircuts i might add, given the unequal treatment of bondholders.  It's sickening.  Socialists like Europe and you always default on their debts.  Sometimes it just takes longer to run out of other peoples money.  Some day the socialists in DC will too.


And it won't work this time because the money is already spent.  Politicians DO NOT have the moral integrity to be trusted with Keynesian economics.  Hell, they've been stimulating the economy for 50 years and just when you need it the most, your flat assed broke.


Mon, 02/20/2012 - 17:18 | 2178546 Dr Paul Krugman
Dr Paul Krugman's picture

There will be demand for the bonds and price will find equalibrium.  Same as always.  And the US is not broke, or else we wouldn't have made it out of the recession with a flourishing stock market.

Mon, 02/20/2012 - 17:47 | 2178666 nasdaq99
nasdaq99's picture

Flourishing stock market?  Somebody help me out.  In terms of gold, how much is the S&P500 down since 07???????????

Keynesian Economics is grand theft and anybody practicing it should be tried for treason against the monetary system of the USA.

Read the Coinage Act of 1792.  Here's the penalty for DEBASEMENT OF THE CURRENCY:


 Penalty on de- Section 19. And be it further enacted, That

basing the coins. if any of the gold or silver coins which shall be struck or coined at the said mint shall be debased or made worse as to the proportion of the fine gold or fine silver therein contained, or shall be of less weight or value than the same out to be pursuant to the directions of this act, through the default or with the connivance of any of the officers or persons who shall be employed at the said mint, for the purpose of profit or gain, or otherwise with a fraudulent intent, and if any of the said officers or persons shall embezzle any of the metals which shall at any time be committed to their charge for the purpose of being coined, or any of the coins which shall be struck or coined at the said mint, every such officer or person who shall commit any or either of the said offenses, shall be deemed guilty of felony, and shall suffer death.




They got it!  You people should suffer the same fate because it is THEFT.

Mon, 02/20/2012 - 18:08 | 2178750 DosZap
DosZap's picture


Kind of superceded it.................and several others changed it along the way before it really got debauched.

But Congress was granted the authority to set the values.

Mon, 02/20/2012 - 17:53 | 2178689 LawsofPhysics
LawsofPhysics's picture

LOL!  take away the Fed and show me the demand.  I dare you.

Mon, 02/20/2012 - 17:58 | 2178710 Dr Paul Krugman
Dr Paul Krugman's picture

Demand is not yet sustainable.  Once UE falls lower, then it will be.  But it is falling.

Mon, 02/20/2012 - 18:17 | 2178782 DosZap
DosZap's picture


 But it is falling.

According to WHO's Stats?. NONE you can take from the BLS, or the CPI, all lies.................or intentional deception.

Give us all the real numbers.

Count the OLD ones who had jobs, but stopped looking, and count the NEW ones that drop off the roles, and gave up also.(they are not counted either)

Just like Fuel and Groceries, never figured in the CPI #'s.......................

Mon, 02/20/2012 - 18:20 | 2178788 LawsofPhysics
LawsofPhysics's picture

LOL!!!!  So we can look forward to 40+ years of of "not yet sustainable" then.  LOL.  You graduate students, clearly need more to do.  Want to bring back demand? here is a suggestion prosecute the fucking fraud at all levels.  Put that in your dissertation fucknut. 

Mon, 02/20/2012 - 17:13 | 2178518 WonderDawg
WonderDawg's picture

Growth in the US economy? That is some funny shit. You oughta take your act on the road.

Come from miles around to hear the funny man tell his jokes.

Mon, 02/20/2012 - 17:16 | 2178540 Dr Paul Krugman
Dr Paul Krugman's picture

UE is down.  Stocks are up.  Is it perfect?  No, it will take time.  And that is why we should keep rates low for the foreseeable future.

Mon, 02/20/2012 - 17:26 | 2178574 WonderDawg
WonderDawg's picture

UE is down? Really? Care to explain how that works with the labor participation rate also crashing? It wouldn't have anything to do with manipulation of data by the BLS, would it? Reality sucks when it kicks you in the face.

Mon, 02/20/2012 - 17:29 | 2178589 Dr Paul Krugman
Dr Paul Krugman's picture

Right the BLS manipulates data.  OK, so how could thousands of people that crunch the numbers manipulate the data?  That is crazy!

Mon, 02/20/2012 - 17:33 | 2178610 WonderDawg
WonderDawg's picture

It's not the thousands crunching the numbers, it's the guys who decide how to present the numbers. But, disregarding that, how would YOU explain UE going down, while at the same time, the labor participation rate also going down. If the numbers were true, they would be inversely correlated. So, DOCTOR, your explanation?

Mon, 02/20/2012 - 17:38 | 2178633 Dr Paul Krugman
Dr Paul Krugman's picture

Baby Boomers are retiring in droves.  10,000 per day.  And yes, UE is still higher than what we want, but it has improved, and is still improving, thanks to economic and fiscal policy.

Mon, 02/20/2012 - 17:42 | 2178650 WonderDawg
WonderDawg's picture

Arguing with a sociopathic liar is pointless, so I'll just say, bullshit.

Mon, 02/20/2012 - 18:10 | 2178755 Seer
Seer's picture

You're chasing your own tail.  This is satire!  Really, think that Krugman would turn 190 because of anything any of us here would say?

Sigh, but I really don't need to read what this person writes because it's already written (and spoken) everywhere as it is...  the dominant culture has a death wish.

Mon, 02/20/2012 - 20:47 | 2179274 satan2liberals
satan2liberals's picture

"Baby Boomers are retiring in droves.  10,000 per day. "


Yeah , because they lost their jobs.

Mon, 02/20/2012 - 17:54 | 2178694 LawsofPhysics
LawsofPhysics's picture

There is a very real cost for creating capital without adding any real value, if we are in a recovery, then rates should be going up.  Troll harder.

Mon, 02/20/2012 - 18:02 | 2178722 nasdaq99
nasdaq99's picture

Keynesian Economics got us here and instead of fixing what is wrong--the FED, they grab more power to fix the mess they made.  Here's Mish's Fed Uncertainty Principle, Corollary Number two:

Uncertainty Principle Corollary Number Two: The government/quasi-government body most responsible for creating this mess (the Fed), will attempt a big power grab, purportedly to fix whatever problems it creates. The bigger the mess it creates, the more power it will attempt to grab. Over time this leads to dangerously concentrated power into the hands of those who have already proven they do not know what they are doing.


This now applies to the EU and every other Central Bank controlled economy.

You make a huge mess then print more, demand more power and proceed to make a bad problem worse.  Greece could be RECOVERING JUST LIKE ICELAND RIGHT NOW had they done the right thing two years ago.

Mon, 02/20/2012 - 17:18 | 2178538 resurger
resurger's picture

How exactly did the growth happen sir? Let me walk you through the crises since 2008-2012:



Angelo Mozilo giving sub-crime mortgage to unqualified Citizens

2- The Zionist Banks package the mortgages into CDO's

3- The Bubble pops, Lehman goes bankrupt and Dick Fuld is a collateral damage.

4- The housing market is fucked

5- The FED announces SCAP (Supervisory Capital Assessment Program)

6- The TBTF get's shit loads of fiat ponzi free money and the interest rates goes to zero due to ZIRP

7- The FED announces Qeasy 1 and then Qeasy 2

8- The FED forces the TBTF "if TBTF hurts you try this (systemically important financial institutions) to buy their bond's through ESF on the downgrade and the Indian CEO is gone.

9- Q with a little Twist

8- The FED promises to keep interest rates near zero till 2014

"spending now to create growth doesn't sound sexy.  But we have no choice"

There are no more tools , just admit that the Economy is fucked, the only way you could have solved the problem is by letting the people get near Zero loans which you did not give!

i dont even want to waste my time on you! You can't even answer are you smarter than a fifth grader first question

you are joke on ZH!


Mon, 02/20/2012 - 17:19 | 2178552 Dr Paul Krugman
Dr Paul Krugman's picture

It has worked.  What is your point?

Mon, 02/20/2012 - 17:22 | 2178563 resurger
resurger's picture

of course it did work, the 0.0000000000000000000000000000000000000000001% got richer.


Mon, 02/20/2012 - 17:24 | 2178568 Dr Paul Krugman
Dr Paul Krugman's picture

And UE has gone down.  And growth has increased.  Is the economy back on its feet?  Not yet.  Which is why the policy must continue.

Mon, 02/20/2012 - 17:28 | 2178582 resurger
resurger's picture

The Economy back on it feet? Please EXPLAIN, are you telling me that the USD is stronger because people has found a safe Haven in the USD like China and Russia

What about Gold and Silver, do you believe in Gold and Silver? Becuase if you do i will go sell them tomorrow

Mon, 02/20/2012 - 17:39 | 2178626 Dr Paul Krugman
Dr Paul Krugman's picture

Do I believe that gold and silver make for valuable investments?  Well, they are used in technological devices, but why not buy apple if you want technology?  Or a HC stock.  Then you get opportunity for growth AND yield.  Gold is too speculative an investment.  Besides, it is at a high, why would I buy a top?

The dollar has become stronger, and although that isn't helping our exports, it isn't a bad thing short term.  Over the long run we should create growth by increasing exports.  In due time, we will.

Mon, 02/20/2012 - 17:42 | 2178648 resurger
resurger's picture

you are a rikers graduate, no doubt.

Lets end the troll here, what a waste of time.

hope you fuck Ben nicely, because am sure he admires you too.

Mon, 02/20/2012 - 17:57 | 2178704 LawsofPhysics
LawsofPhysics's picture

"Over the long run we should create growth by increasing exports."

LOL, selling to whom?  Moreover, this is precisely what every country on the entire planet is trying to accomplish.  So if the earth is going to increase exports, who is buying? Mars?

Thanks for the humor, who do you write for, John Stewart?  I get it now.  I have wasted enough time.

Mon, 02/20/2012 - 19:00 | 2178940 nasdaq99
nasdaq99's picture

HAHAHAHA!  Dr Krookman is CALLING A TOP IN GOLD!!!!!!!!!!!!!!!

Let's remember this post for posterity!   

Mon, 02/20/2012 - 20:52 | 2179284 satan2liberals
satan2liberals's picture

Ah, yes the ol "the patient is still alive better bleed him some more" philosophy of  superstitious medicine.

Mon, 02/20/2012 - 17:33 | 2178609 saints51
saints51's picture

I stopped reading when  you stated, "Bernanke, whom I admire."

Oh my...

Mon, 02/20/2012 - 16:58 | 2178467 Dasa Slooofoot
Dasa Slooofoot's picture

I agree with Mr. Krugman.  A billion Chinese will develop a taste for feta and Ouzo, pulling the Greeks out of their depression death spiral!!

Mon, 02/20/2012 - 16:43 | 2178421 infiniti
infiniti's picture

"not fall into the trap of cutting spending"


Huh? They were spending other people's money to start with, now they are just sinking back to an unlevered standard of living.

Mon, 02/20/2012 - 16:47 | 2178429 MillionDollarBonus_
MillionDollarBonus_'s picture

now they are just sinking back to an unlevered standard of living.

Precisely. And this is an unnecessary tragedy. During times of great economic upheaval, we need to support the economy with generous monetary and fiscal stimulus programs. The vast majority of top politicians, government workers, college professors and industry leaders agree with me on this point.


Mon, 02/20/2012 - 16:51 | 2178435 CrashisOptimistic
CrashisOptimistic's picture


Their monetary and fiscal stimulus will not bring food to grocery store shelves when oil depletion denies trucks a fillup to do precisely that.

Oil is the one thing that can't be printed and the party is over.  There is nothing that can be done about this.

Mon, 02/20/2012 - 17:04 | 2178477 Ignatius J Reilly
Ignatius J Reilly's picture

The vast majority of top politicians, government workers, college professors and industry leaders agree with me on this point.


Dude, seriously.  That is some funny S$%& right there.   I nearly hurt myself laughing.

Mon, 02/20/2012 - 17:09 | 2178499 nope-1004
nope-1004's picture

Would be interesting to chart just how much each of those groups (politicians, gov't workers, profs, and industry leaders) contribute to a countries' GDP?

Hint:  Don't bother trying.  It's below housewife.


Mon, 02/20/2012 - 17:13 | 2178524 Ignatius J Reilly
Ignatius J Reilly's picture

Sorry, you need to edit that.  Housewives are HUGELY more important than that list.


May I suggest family pet..... nope.  Still more important....


Family pet, gold fish or below..... still not right.


....geeeze.....I'm stuck..

Mon, 02/20/2012 - 17:58 | 2178706 nope-1004
nope-1004's picture

I did say they are "below housewife".  So what exactly needs to be edited?


Mon, 02/20/2012 - 18:01 | 2178721 Ignatius J Reilly
Ignatius J Reilly's picture

It implies that they are close in the pecking order.  Insulting to Housewives.  But point taken.  -1 to me.

Mon, 02/20/2012 - 17:05 | 2178483 HoofHearted
HoofHearted's picture

Count this one college prof as being against all the fucktards who would agree with your sentence. All the other Austrians out here would tend to agree with me. Fear the boom and bust cycle!

Mon, 02/20/2012 - 17:14 | 2178528 youngman
youngman's picture

Hunger is a great motivator.....let em go hungry...then they will work first for food...then clothing..then for housing...and the market begins anew..but at a much lower base this bloated salaries or pensions...just market will take time to rebuild the wealth that was pissed away be it...they deserve it...they need to live it..its so sad when yuppies go bad...

Mon, 02/20/2012 - 17:10 | 2178504 Yen Cross
Yen Cross's picture

Are you for FUCKING real? Take your polit-bureau and shove it up your ass! We at Z/H live in the Real World you idiot!

 Just what, justifies more spending? Olive plantations and night clubs. Greece has no GDP to spend on, other than your corrupt ILK!

Mon, 02/20/2012 - 17:32 | 2178600 Hulk
Hulk's picture

I wonder if you can catch fish with sarcasm ???

Mon, 02/20/2012 - 17:36 | 2178627 Saro
Saro's picture

A++.  I can't decide whether the obvious parody is the best part of MDB, or the idiots who don't understand that it's an obvious parody and rage out over him.

Mon, 02/20/2012 - 18:13 | 2178769 Seer
Seer's picture

"During times of great economic upheaval, we need to support the economy with generous monetary and fiscal stimulus programs."

Wouldn't it just be quicker if everyone could just print up their very own $$s on their inkjet?  Seems like That would reduce the overhead AND accomplish the very same thing.

Mon, 02/20/2012 - 18:25 | 2178814 DosZap
DosZap's picture


Precisely. And this is an unnecessary tragedy. During times of great economic upheaval, we need to support the economy with generous monetary and fiscal stimulus programs. The vast majority of top politicians, government workers, college professors and industry leaders agree with me on this point.

And just how has that been working for the USA?.

It has helped NOTHING but the Bankstas,and Wall Street,and contiues to increase the Natl debt.

Whatever your smoking, pass it long.

You are a Troll DELUXE.

Mon, 02/20/2012 - 18:10 | 2178679 DosZap
DosZap's picture


Libtards are all alike, keep spending that which you do not have, you have been forced to take a 50% cut in pay, have no jobs, but keep spending.Sheeeeeeesh.

When will you get it, if you do not HAVE it you cannot spend it.(if your not the government)

We get the last part............yes we agree, but if your dead dik broke,you have nothing to spend.


  • Greece Warns It Will Soon Be In "Condition Of Absolute Poverty"
  • Mon, 02/20/2012 - 17:34 | 2178618 resurger
    resurger's picture

    I just got the Answer from Paul:

    The Greeks are not spending to spur their Economy, they deserve it.

    "Wish you had a printing press" Dr. Paul Krugman

    Mon, 02/20/2012 - 21:20 | 2179338 Buck Johnson
    Buck Johnson's picture

    It sure is, it's just a matter of time before they just can't do what the Troika wants.  I don't even think it will be 2 years, it will happen real soon.

    Thu, 02/23/2012 - 18:47 | 2190966 Reggie Middleton
    Mon, 02/20/2012 - 16:30 | 2178383 TonyCoitus
    TonyCoitus's picture

    Finally this mess is behind us.  Equities to the moon Alice!



    Mon, 02/20/2012 - 16:33 | 2178386 French Frog
    French Frog's picture

    "so in reality the investing market is saying that Greece will last at best about a year following the debt exchange (if it ever even happens) before the country redefaults"

    My feeling is that this same 'investing market' will disregard this and carry on pushing higher, because despite the fact that markets are supposed to be forward looking, 1 year is a long time away so here's another golden opportunity to screw any remaining shorts and force them to cover yet again.

    Sad but quite likely

    Mon, 02/20/2012 - 16:33 | 2178388 Eisenhorn
    Eisenhorn's picture

    Just when you thought the can was finally too heavy to kick....

    Mon, 02/20/2012 - 17:02 | 2178473 slewie the pi-rat
    slewie the pi-rat's picture

    best comment in 2 months, e_horn!

    +1 for bein a stand-up guy

    we've all had to do it, so welcome aboard, shithead!

    Mon, 02/20/2012 - 17:26 | 2178575 Eisenhorn
    Eisenhorn's picture

    I hate you with the burning passion of a thousand suns....

    That said.....Thanks Slewie! Appreciated.

    Mon, 02/20/2012 - 17:50 | 2178672 Quaderratic Probing
    Quaderratic Probing's picture

    Heavy can is no problem we just print enough money to hire 2 billion Chinese to carry it down the road so far we will never see it again.

    Mon, 02/20/2012 - 16:33 | 2178391 PontifexMaximus
    PontifexMaximus's picture

    Auf gehts buam! Oggi alle stelle domani alle......

    Mon, 02/20/2012 - 16:35 | 2178395 Cojones
    Cojones's picture

    Greece: Like lending a drug addict ten dollars out of your kids savings account, so he can buy better drugs before he steals your car stereo.


    Mon, 02/20/2012 - 17:18 | 2178547 Seer
    Seer's picture

    This ISN'T about bailing out Greece,  it's about bailing out the banksters!  Fucking Greece (and all other "borrowers") was no more than a prop to achieve this.

    It's simple math, we all get it, we know where it all ends up.  Pretending that TPTB don't get it is pretty lame, it lets them off the hook (and that's exactly what's happening, for it it not They who are being asked to correct things).

    Mon, 02/20/2012 - 16:35 | 2178396 infiniti
    infiniti's picture

    EUR/USD doesn't seem to be moving on the news

    Mon, 02/20/2012 - 17:49 | 2178671 Martin W
    Martin W's picture

    Because here in Europe everybody went to bad apart from some stupid Eurofuckers in Brussel.

    Mon, 02/20/2012 - 17:10 | 2178403 Manthong
    Manthong's picture

    So we can just take that boilerplate and apply it to Portugal and Spain, right?

    And  shouldn't basic fraud and theft be a little faster and a little less complicated?

    Mon, 02/20/2012 - 16:38 | 2178406 Irish66
    Irish66's picture

    Any one have any extra red piils....this is sooooooo ridiculous

    Mon, 02/20/2012 - 17:06 | 2178482 slewie the pi-rat
    slewie the pi-rat's picture

    how abt some green veggies smell like yer dog's worst day, ever?

    slewie's 'wearing' the green!

    won't cure anything, but sure takes the edge off workin here!   L0L!!!

    Mon, 02/20/2012 - 16:51 | 2178411 LookingWithAmazement
    LookingWithAmazement's picture

    A complete non-event, this "default". If Total Collapse would result, nobody would agree. Greece and the banksters will be saved by taxpayers' money and for years we will hear nothing about it anymore. Boring world we live in.

    Mon, 02/20/2012 - 16:40 | 2178413 Id fight Gandhi
    Id fight Gandhi's picture

    What's the official unemployment rate there now? 21%?

    No way no day they'll get shit done. Its pure delusion that Greece is self contained from spreading. They keep saying no matter what, it won't effect the rest of Europe, but guess what? It will. They need this can kicked.

    Mon, 02/20/2012 - 16:40 | 2178416 Dr. Engali
    Dr. Engali's picture

    Just roll in the panzers and get it over with for cripes sakes !

    Mon, 02/20/2012 - 16:41 | 2178417 Robslob
    Robslob's picture



    Nobody cares about anything until "they" can get Obammy re-elected then and only then can things go to hell while they strip whatever remaining freedoms we have left to the bone!

    Mon, 02/20/2012 - 16:41 | 2178418 YesWeKahn
    YesWeKahn's picture

    Even at 99% of haircut, CDS won't be triggered.

    Mon, 02/20/2012 - 16:45 | 2178425 LongSoupLine
    LongSoupLine's picture can we finally get back to Italy, no Portugal...well, Spain accually...wait, no, uhmm....

    Mon, 02/20/2012 - 16:46 | 2178427 CrashisOptimistic
    CrashisOptimistic's picture


    Do you REALIZE what threats must be hanging over the heads of the bankers to even consider such bullshit?

    I don't mean monetary loss.  I mean jail sentences.  I mean planting porn on their computers to be discovered and their lives destroyed.

    The one thing that gets in the way is the American hedgies, who probably play hardball too and moved ownership of the bonds to trusts and other entities immune to threats.  A bullet in their brain would not stop the power of their holdings.

    THAT is the overall point here.  Imagine what threats exist to force these kind of losses.  Why on Earth they have been willing to negotiate in secret is hard to understand.  Record the threats and expose them.

    Mon, 02/20/2012 - 18:19 | 2178789 Seer
    Seer's picture

    Who can pay off the armies, that's who is in charge...

    Mon, 02/20/2012 - 16:47 | 2178430 q99x2
    q99x2's picture

    I betcha the law firms that dream this stuff up are billing by the hour.

    Mon, 02/20/2012 - 16:47 | 2178431 Dr Paul Krugman
    Dr Paul Krugman's picture

    A multiplier must be used to also understand how liquifying the banking sector will promote them to make loans and how this will increase production and thus growth.  The bond yield from the coupon may not seem attractive, but we are dealing with spurring whole sectors of Greece here.  This is a big deal!

    Mon, 02/20/2012 - 16:54 | 2178449 agent default
    agent default's picture

    How will  they make loans when everybody around them is either already in  deep debt, or just plainly insolvent with no chance of ever repaying even a fraction of their existing debt.  It is this type of crackpot economic theories that have brought us at this situation, and now you just want us to repeat more of the same hopping for a different result.

    Mon, 02/20/2012 - 16:58 | 2178466 Dr Paul Krugman
    Dr Paul Krugman's picture

    It has worked time and time again.  Lest you forget the Great Depression, when FDR created many programs which made jobs.  Then WWII came and went, and, viola!  Demand was up!  This is where we find ourselves now, in a period where we need to grow our way out of the darkness of depression.

    Mon, 02/20/2012 - 17:16 | 2178517 Bunga Bunga
    Bunga Bunga's picture

    And Earth providing all those resources for the biggest Ponzi scheme in the history of mankind grows too?

    Mon, 02/20/2012 - 17:20 | 2178556 Dr Paul Krugman
    Dr Paul Krugman's picture

    Technology is another key to growth, and yes, technological advances do happen.

    Mon, 02/20/2012 - 17:41 | 2178647 Bunga Bunga
    Bunga Bunga's picture

    When did technology made us use less resources? In fact technology/efficiency has been always the enabler for more resource consumption, not less. There is at least evidence over the last 200 years. Jevons' paradox, rebound effect, you should be familiar with.

    Mon, 02/20/2012 - 18:31 | 2178843 Seer
    Seer's picture

    "When did technology made us use less resources?"

    Better question: When did technology CREATE resources?

    Answer: never.  Technology concerns PROCESSES.

    Mon, 02/20/2012 - 17:30 | 2178593 nasdaq99
    nasdaq99's picture

    What you fail to grasp is that we are in the midst of deflation and that deflation is GOOD.  It is good for rational people who save and prepare for the future.  It is BAD for bankers and governments who spend and inflate their way out of debts.  You should have to trade places with the millions of old, retired good citizens who are now recieving .005% on their CD's so your Bernanke can bail out the fucking banks and governments  that overleveraged and overspent.  Your solution is MORALLY REPREHENSIBLE.  It is also criminal what you've done to the western world.  Republicans too.  RON PAUL!  AUDIT THE FED AND SHUT IT DOWN.  BRING CRIMINAL INDICTMENTS.


    Why are we in a massive deflation?  Because we import $1/hour labor from China, et al every single day, 24/7 at every port in teh USSA.  You can't stop that and your mess will crumble becasue of it. 

    Mon, 02/20/2012 - 18:36 | 2178856 Seer
    Seer's picture

    We're in massive deflationary grips because we've overshot our growth, our ability to sustain a level of living.

    Before you rejoice too much be sure you're aware of what this Greatest Depression will really mean- contemplate "economies of scale in reverse."

    Mon, 02/20/2012 - 17:58 | 2178709 Quaderratic Probing
    Quaderratic Probing's picture

    Lets not forget overextending credit caused all crashes/depressions in the first place.

    Mon, 02/20/2012 - 20:06 | 2179168 agent default
    agent default's picture

    Yeah, you know what FDR did in order to fund those programs?  Hint: Hide your gold.

    Mon, 02/20/2012 - 19:50 | 2179117 LongSoupLine
    LongSoupLine's picture

    Holly shit you proof read your horseshit before pressing "enter"?

    Mon, 02/20/2012 - 16:51 | 2178438 pods
    pods's picture

    Of course this will have to be re-revised every quarter as they slowly sink into forced austerity abyss.

    Why do I see Jeff Spicoli in these meetings?

    "Relax, all right? My old man is a television repairman, he's got this ultimate set of tools. I can fix it."


    Mon, 02/20/2012 - 16:52 | 2178441 Dick Darlington
    Dick Darlington's picture

    Wow, a nine-pager! With "projections" up to 2020! In december 2011 these same experts made "projections" on Greece's January 2012 budjet and missed abt 20%-points on revenue side. They shud really call good ol' Hanky-Panky and ask how to reduce 9 pages into 3 and increase the number of bailout money (they don't have) by at least multiple of 5. Dear lord, just default already and call it the day...

    Mon, 02/20/2012 - 17:29 | 2178588 youngman
    youngman's picture

    The more pages the less culpability

    Mon, 02/20/2012 - 16:52 | 2178442 PicassoInActions
    PicassoInActions's picture

    and the euro... is going up till it will come down


    Mon, 02/20/2012 - 16:52 | 2178443 froghat
    froghat's picture

    Kicking the can means one more year of huge stock market gains! Ignore Zerohedge and buy stocks with both hands!


    Mon, 02/20/2012 - 16:54 | 2178447 froghat
    froghat's picture

    Kicking the can means one more year of huge stock market gains! Ignore Zerohedge and buy stocks with both hands!


    Mon, 02/20/2012 - 16:54 | 2178451 Misean
    Misean's picture

    It's a 55 yard field goal attempt with 1 second to go, 4 points needed and a can that is overly heavy and out of balance.

    It could work....

    Mon, 02/20/2012 - 18:37 | 2178863 Seer
    Seer's picture

    And Lucy's holding the can...

    Mon, 02/20/2012 - 16:55 | 2178452 froghat
    froghat's picture

    Kicking the can means one more year of huge stock market gains! Ignore Zerohedge and buy stocks with both hands!


    Mon, 02/20/2012 - 16:55 | 2178453 froghat
    froghat's picture

    Kicking the can means one more year of huge stock market gains! Ignore Zerohedge and buy stocks with both hands!


    Mon, 02/20/2012 - 17:19 | 2178550 Tyler Durden
    Tyler Durden's picture

    When you talk about the previous year of "huge stock market gains" are you referring to 2011 which was down, and in which 80% of hedge funds had a negative return (and -11% average), following a start to the year that was precisely what has happened so far in 2012?

    Mon, 02/20/2012 - 18:39 | 2178870 Seer
    Seer's picture

    Yes, but the arc of the slinky looks so promising!

    Mon, 02/20/2012 - 16:55 | 2178455 max2205
    max2205's picture

    So it's fixed and done. Well that's was 16 months of panic for nothing. Can we buy now that we are near all fucking time highs.

    Trade and ignore the headlines is what I say

    Mon, 02/20/2012 - 16:56 | 2178458 slewie the pi-rat
    slewie the pi-rat's picture

    jeeeez, tyler!  If it appears that nobody gives a rat's ass about this bullet point, it's because it's true

    you know what my mom sez about that kinda talk!

    Mon, 02/20/2012 - 16:57 | 2178459 surf0766
    surf0766's picture

    I heard some ***hole on tv earlier today stating it was all contained to Greece. The firewall has been setup.

    The propaganda continues.

    Mon, 02/20/2012 - 17:14 | 2178533 pods
    pods's picture

    This problem has been hogtied behind a ringfenced firewall!

    Of course, they have said that for a couple of years.


    Mon, 02/20/2012 - 16:57 | 2178460 Tic tock
    Tic tock's picture

    ..liquidity is not going to spark it's workforce. the assumption that main street needs low interest rates is a few days too late. A low i% will hold together rosy expectatations about the future, applied to the man on the street, it is a perception of future risk - that is done away with - what sector would you invest in, in greece, knowing that taxes will be going up, The workforce needs out-and-out rescuing if you want any positive expectations about the future - that's a Marshall Plan - in Euros the price of that is too high, in Drachmas', it isn't. ...but until there is secure availability of food, shelter and gas, at affordable prices - Greece is a high-risk environment - that is not typically Europe, certainly not the same as Germany.

    Mon, 02/20/2012 - 16:57 | 2178461 ebworthen
    ebworthen's picture

    3.75% in 2021?

    That reminds me of my promised "annuity" via Social Security that I have been paying into for over 30 years and whose goal posts keep getting moved back and the field size changed from 100 to 150 yards.

    "I'll gladly pay you Tuesday".

    Sure you will Kleptoligarchy, sure you will.

    I'm also certain you'll want more blood and sweat for promissory notes too, eh?

    Mon, 02/20/2012 - 17:42 | 2178653 Hulk
    Hulk's picture

    The field will increase to 300 yards about the age where your knees and hips  give out...

    Mon, 02/20/2012 - 17:07 | 2178465 surf0766
    surf0766's picture

    Meanwhile Greece slips into depression.


    Greek hope rally 401 queued up !

    Mon, 02/20/2012 - 16:59 | 2178468 monopoly
    monopoly's picture

    What planet is MillionDollarBonus from? Or better yet, what universe. And who is this Krugman troll. How can the Greek economy possibly grow when you are cutting the heart out of its economy. This will not and cannot work. It is simple math. Although I admit politicians and the Fed have trouble with simple math.


    Mon, 02/20/2012 - 17:32 | 2178605 youngman
    youngman's picture

    They have NO ECONOMY...60% of the people work for the government.....all make work productivity...

    Mon, 02/20/2012 - 17:02 | 2178474 Hugo Chavez
    Hugo Chavez's picture


    The market is fed a lot of lies and lurches back and forth but it ultimately tells the truth better than politicians.

    Mon, 02/20/2012 - 17:03 | 2178476 Kaiser Sousa
    Kaiser Sousa's picture

    Hey greek citizens.....have mother fuckers heard if Iceland???????
    Grow some fuckin balls and oust ur banker owned politicians, and set things fuckin right.....WHat the fuck!!!!!!!!!

    Mon, 02/20/2012 - 17:37 | 2178631 resurger
    resurger's picture

    You are promoring Terror so you deserve a Plus One.


    Mon, 02/20/2012 - 17:30 | 2178481 Shibumi2
    Shibumi2's picture

    no disrespect intended towards anyone with DOCTOR in their name...deserved or otherwise.

    I may be way off base here, but isn't the general idea here that when an entity becomes, can no longer service the debt and has no realistic prospects to do so going forward, that said entity declares BANKRUPTCY or DEFAULT or whatever. Said entity then liquidates whatever assets remain and apportion the remaining assets per the formula agreed when the debt was issued...said formula being the basis of pricing the original debt.

    Assuming that the participants entered into the arrangement freely, what is the problem?

    All of the conversation is nothing more than obfuscation designed to cheat, and then justify, the taking from one group to another.

    I know it is hard to comprehend the loss of the rule of law in this country and the world, but here we are. It is appalling that those supposed learned members of this forum attempt to justify outright thievery by painting a rosy picture which has ZERO chance of happening.





    Mon, 02/20/2012 - 17:13 | 2178529 icm63
    icm63's picture

    Dr Paul Krugman  says the USA has growth, use Ben tools. Yeah Right. Growth really, GDP ia an inventory build up, employment is fudged, inflation is fudged, price of risk is fudged (bond market), actuall the whole USA is a fudge market.  Please read a lttle of Steve Keen (Aussie Economist) apply his tools and then normal folk will have real growth rather than the very very wealthy.

    Mon, 02/20/2012 - 17:13 | 2178530 Piranhanoia
    Piranhanoia's picture

    the fine print;

    (details not confirmed, no government has agreed, no amount has been set, no date has been set, no party outside the banks will see the original draft through to the final documents.  This includes any and all court orders, legal actions, international law, European Union law. No government officials will be allowed to speak of, write of, or imply that they are aware of what the governing body is doing at any time.  No action or discussion thereof will be taken until delivery of all riot related equipment has been distributed to the bank security personnel and puppet government agencies. No money will change hands during the deliberation period, No member of pariliament in any EU nation is allowed to think, say or do anything to allude to or create inuendo about any non elected director.  Loyalty oaths will be demanded with severe punitive action being mandatory against the party and their family, including wealth confiscation and banishment.  These agreements will be changed as necessary without notice to any party.)

    Mon, 02/20/2012 - 17:14 | 2178535 Cloud9.5
    Cloud9.5's picture

    Peace in our times.

    Mon, 02/20/2012 - 17:30 | 2178591 AC_Doctor
    AC_Doctor's picture

    Krugman and MillionDufusBoner posting the same spend, spend, spend slobber posts right after each other, what are the odds this is the same paid banking shill.

    Mon, 02/20/2012 - 17:35 | 2178621 youngman
    youngman's picture

    The only ones I hear cheering are the Caterers....its meetings to the moon for them.....

    Mon, 02/20/2012 - 17:45 | 2178662 pmm009
    pmm009's picture

    My kingdom for a blocking stake!  Does anyone have a clue who actually has one?  What is the status of Vega-Madrid.

    Mon, 02/20/2012 - 17:52 | 2178681 Schmuck Raker
    Schmuck Raker's picture

    For a second there I thought I was experiencing the DTs, then realized it was just MDB and Dr Paul Krugman's comments causing the effect(unreality, confusion, room spinning, nausea, prickly heat around the scrotum, and loud zinging noises); whoever the fuck Dr Paul Krugman is. Did he date Oprah?

    Mon, 02/20/2012 - 18:18 | 2178785 chump666
    chump666's picture

    Stupid ECB is distorting prices.  Private holdings will vote no, ZH is right, CDS blowout coming.  Yes cue the ECB with it's butt-boy the FED and we will have the printing rev up for the overkill.

    Utterly pathetic.  Our markets are run by academic madmen.  Nice, hey Germany remember Weimar?  You'll get 90 on the EUR for oil, that and your main player China is crunching (refer to their markets after the RRR cut...they sank).

    Doomsday trade on, chaos erupts.  Gotta love it.

    Mon, 02/20/2012 - 19:12 | 2178980 thewhigs
    thewhigs's picture

    Maybe Dr. Krugman can learn a thing or two as to how Iceland dealt with their debt situation.



    I also like the fact they are going after the criminal gangsters, er, I mean "banksters".


    "Iceland’s special prosecutor has said it may indict as many as 90 people, while more than 200, including the former chief executives at the three biggest banks, face criminal charges."



    Mon, 02/20/2012 - 21:32 | 2179369 Tom Green Swedish
    Tom Green Swedish's picture

    Great. We can relive this crap over and over again.

    Mon, 02/20/2012 - 21:45 | 2179415 Vince Clortho
    Vince Clortho's picture

    After reading some of the gems in this thread, it has become clear to me that everyone should have there own printing press.

    That will solve the spending and liquidity issues in a heartbeat and usher in a new golden age for mankind.

    Mon, 02/20/2012 - 22:55 | 2179599 Eally Ucked
    Eally Ucked's picture

    Who the fuck even answer to DBD or Wanger, that sarcasm is manufactrured, and stupid. Let them find new names they just deflect discussion. They disrupt any exchange of ideas, probably that's their goal.

    Do NOT follow this link or you will be banned from the site!