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Here Is How The 50% Greek Haircut Is Actually Just 28%

Tyler Durden's picture


Just the math, something Europe is unable to do:

  • Greece has €350 billion in total debt including about €70 billion in Troika "post-petition" loans; these are untouched.
  • Of the €280 billion, roughly €75 billion is held by the ECB: this, like the Troika loans, will be untouched.
  • This leaves just ~€200 billion in actual debt to undergo a haircut.
  • Apply a 50% haircut to this debt (ignoring the fact that of this about €35 billion is held by Greek pension funds, and once the realization that Greek pensions have been cut in half dawns upon the population, the result will be the biggest riots ever seen in Athens yet).
  • Total debt to be cut: just about €100 billion.
  • Hence, of the total €350 billion, just €100 billion is eliminated, most of it used to backstop and service Greek pension and retirement obligations
  • €250, or the residual, of €350, the original, means 72%, or a 28% haircut.
  • Greek GDP was €230 billion on December 31, 2010 and declining fast.
  • And that is how a 50% haircut is "cut" almost in half


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Wed, 10/26/2011 - 22:51 | 1815634 oogs66
oogs66's picture

and that is assuming it is a real 50% haircut and not some bastardized NPV calculation

Mon, 01/30/2012 - 08:11 | 2108998 taxi952
taxi952's picture

A little windy isn`t it . Hahaha. I would like to see the proof

bloons tower defense 4

Wed, 10/26/2011 - 22:54 | 1815646 reflex_121
reflex_121's picture

Shout out to Zero for being the pinnacle of financial news. You all are exhaustive and righteous.

Wed, 10/26/2011 - 23:14 | 1815745 undercover brother
undercover brother's picture

exhaustive and riteous no doubt, but with way too much bearish tint. Meanwhile, back in reality and despite the zero hedge negative drone, the S&P has rallied almost 200 handles in 15 days. Party On!

Wed, 10/26/2011 - 23:49 | 1815893 Banksters
Banksters's picture

Go back to sucking your boyfriends cock.

Thu, 10/27/2011 - 03:59 | 1816292 e_goldstein
e_goldstein's picture

I was going to say BTFD; but, yeah.


Fri, 11/11/2011 - 00:20 | 1868927 haibop
haibop's picture

This is no funny - think about on a memory foam mattress

Thu, 10/27/2011 - 00:02 | 1815937 Mark123
Mark123's picture

Yes siree....there are not enough booster financial news outlets.  C'mon Zero Hedge - quit it with the accurate anlaysis...maybe some stories about lottery winners, unicorns, and magic fairies would be good.

People like you always refer to the last rally.  How about the return over the last 10 years?

Wed, 10/26/2011 - 22:55 | 1815649 knukles
knukles's picture

Some pigs are more equal than others.


Wed, 10/26/2011 - 23:00 | 1815682 caerus
caerus's picture

neither cast
ye your pearls before swine, lest they trample them
under their feet, and turn again and rend you...bitchez

Wed, 10/26/2011 - 23:31 | 1815818 knukles
knukles's picture

Amen, my brother...

Uncle Knukie's thought for the eve...

The bulls.  Problem solved, risk back on, All's Ho-Kay.  Same game we's been playin' now for weeks.  But finally, resolution is here! Hooray!
Stocks rally
PM's get shat upon.
Regular stock portfolio manager perspective of the world. (About as far as his dick and a duh.  And yes, you fuckers know who you are.)

The realists. (credit, commodity, 4X and bond daddies)  Nothing's changed. The solution is all form over substance.  The haircut for some but none for the Official EU Organizations is a purely political sleight of hand, solving shit. 
Political Kabuki Theater.
The Law of Unintended Consequences Bites Hard, Eventually....
The prior bull case might take hold first.
Watch the fixed income markets! 
Interest rates rise on higher risk credit paper (spreads widen). 
This is the EU's GM moment.  Good fucking luck.
Credibility of Euro is shite along with EU due process.
Makes the first 2 fiat reserve currencies officially useless. 
Hello China!
Hello Gold!
Note gold right now.  About unchanged, but silver palladium and platinum rallying.  Oh Fed/Treasury with JPM/HSBC on their behalf.  Manipulate (sorry, intervene) away.  Gotta keep making like it's all orderly, don't we.  No need to cry havoc and loose the dogs of hard money.

Longer term....
What with abrogations of contract law becoming a normal everyday occurrence, whatta wanna own longer term?
Gold and etc......

Scuttle the fiats!  Free men and strong women first.  The band will remain playing for the rest of the decline in the Idiot Lounge. 
There will be a behavioral contest held after the Velocity of Money rebounds and Inflation takes hold, after the depression, continued.
Whilst partying, please be careful of official slippery bullshit manipulated data.

This, my kind gentle fellows is the end as we know it... end of "normal". 
It's Official, Declared by Dr, Knukles Hisveryself.
There will be no more talk of "are we there yet" or "when the shit hits the fan."
We're there, it's splattering. 

Buckle in.  Its' gonna be one motherfucking rough ride.
Keep your cool and remain clear.

There will be many mirrors. Nothing is as it seems.

Careful, Alice.  That Rabbit Hole is Mighty Deep©


Wed, 10/26/2011 - 23:45 | 1815879 James-Morrison
James-Morrison's picture

Have you seen the bigger piggies 
In their starched white shirts 
You will find the bigger piggies 
Stirring up the dirt 
Always have clean shirts to play around in. 

In their styes with all their backing 
They don't care what goes on around 
In their eyes there's something lacking 
What they need's a damn good whacking. 

--The Beatles 

Thu, 10/27/2011 - 03:04 | 1816239 Peter K
Peter K's picture

Lyrics by John "the Reagan Republican" Lennon. I like the way that sounds:)

Mon, 11/14/2011 - 21:03 | 1877714 haibop
haibop's picture

pretty cool isn't it?

Wed, 10/26/2011 - 23:54 | 1815912 James-Morrison
James-Morrison's picture

Big man, pig man, ha ha charade you are.
--Pink Floyd

Sat, 11/26/2011 - 11:46 | 1915097 haibop
haibop's picture

agree... walk in cooler

Tue, 05/01/2012 - 20:58 | 2389820 haibop
Sat, 05/05/2012 - 12:49 | 2399431 haibop
haibop's picture

more ... want you

Wed, 10/26/2011 - 22:55 | 1815652 maxw3st
maxw3st's picture

And as usual the banks make out like bandits, literally, and the people who worked a lifetime for retirement pensions get screwed.

Wed, 10/26/2011 - 22:55 | 1815653 Darth Sidious
Darth Sidious's picture

hooray, so the banks have to write down $75b less than expected.  buying opportunity

Wed, 10/26/2011 - 22:59 | 1815676 Unprepared
Unprepared's picture

Please post your proof

we are in a math class

Wed, 10/26/2011 - 22:55 | 1815654 Alexmai
Alexmai's picture

UBS says the 50% writedown of Greek paper is really just 22% after factoring in that only privately held bonds will be subject to the haircut (leaving the ECB, EU, and IMF holdings whole), and also that Greece will then need to recapitalize its banks. In other words, 50% is not nearly enough. “To achieve an actual 50% reduction … Greece would need to implement a 100% haircut.”

Wed, 10/26/2011 - 22:56 | 1815656 Caviar Emptor
Caviar Emptor's picture

The plan: shout "haircuts!" then bail the Euro banks through the back door quietly. ECB will have those Greek bonds on its balance sheet by close of business. 

Wed, 10/26/2011 - 22:56 | 1815659 Unprepared
Unprepared's picture

Brilliant ... a haircut of a haircut

Sat, 11/19/2011 - 14:37 | 1894315 haibop
haibop's picture

no much you can do, isn't it? walk in freezer

Wed, 10/26/2011 - 22:56 | 1815663 winter is coming
winter is coming's picture

fuck it, im buying calls on s and ptomorrow

Wed, 10/26/2011 - 22:57 | 1815667 tkinfo
tkinfo's picture

Funny thing how the ECB doesn't apply the 50% haircut to their loans. You can gore someone else's ox, just not mine...

Wed, 10/26/2011 - 23:22 | 1815783 ziggy59
ziggy59's picture

Uh, goring didn't come to mind..

Wed, 10/26/2011 - 22:57 | 1815668 chump666
chump666's picture

I see. 

Await credit markets EZ open in 3 hrs.  To see whats up

Tue, 03/13/2012 - 22:38 | 2252821 haibop
haibop's picture

it's interesting to know... incline treadmill

Wed, 10/26/2011 - 22:57 | 1815671 JSchroe
JSchroe's picture

Equity futures soaring ever higher on this game-changing news! May be a good opportunity to buy some china fraudcaps

Wed, 10/26/2011 - 23:01 | 1815693 jcaz
jcaz's picture

"soaring"? Dude, settle down, they're up about 1%, wont' last till morning, once people figure out the details.....

Wed, 10/26/2011 - 22:58 | 1815672 zorba THE GREEK
zorba THE GREEK's picture

Greek haircuts? I just wish Greek women would shave off hair on their legs.

All kidding aside

Wed, 10/26/2011 - 23:03 | 1815696 knukles
knukles's picture

And their upper lips.
Is very disconcerting kissing something with a mustache and feeling down there again just to make sure.
Note to self.... easy on the Ouzo.

Thu, 10/27/2011 - 00:05 | 1815946 Mark123
Mark123's picture

Still safer than Thailand though!

Thu, 10/27/2011 - 00:10 | 1815954 pods
pods's picture

I have heard that Greeks don't mind Thailand at all.


Wed, 10/26/2011 - 23:41 | 1815865 Freebird
Freebird's picture

Greek bondholders to go bald.

Wed, 10/26/2011 - 22:59 | 1815679 jcaz
jcaz's picture

Wow- good work, Tyler- will take the market a week to do that math.....

Sat, 12/24/2011 - 03:27 | 2008935 haibop
haibop's picture

impressive! mini fridge

Wed, 10/26/2011 - 22:59 | 1815680 Comay Mierda
Comay Mierda's picture

so.... is this bullish?

Wed, 10/26/2011 - 23:03 | 1815700 Mactheknife
Mactheknife's picture

Well yeah...for at least the next couple of hours.

Wed, 10/26/2011 - 23:06 | 1815714 eigenvalue
eigenvalue's picture

Zerohedge has almost become a contrarain indicator. Everytime Zerohedge spreads some bearish analysis, markets will soar.

Wed, 10/26/2011 - 23:10 | 1815727 Cursive
Cursive's picture


Buy all you want, bitch. The sky's the limit! We don't need no maths!

Wed, 10/26/2011 - 23:15 | 1815748 tekhneek
tekhneek's picture

Let the underwater burn!

Wed, 10/26/2011 - 23:27 | 1815806 lizzy36
lizzy36's picture

Spreads some bearish analysis? Or merely does the math? I know math confuses most Yanks.

Remember how awesome October 2007 was? Remember how math didn't matter then either?

Perception is reality until reality kills perception.

But enjoying the soaring market. Get super super long, and preferable short some gold. After all you have your perfect contrarian indicator:the man who can do math.

Thu, 10/27/2011 - 03:15 | 1816249 malikai
malikai's picture

Hmm. Confusing HFT headline action for a 'contrarian indicator'. Yea, this cat will last long. Heh.

Thu, 02/23/2012 - 02:14 | 2188004 haibop
haibop's picture

interesting silver

Thu, 10/27/2011 - 12:25 | 1817579 Cat On A Ledge
Cat On A Ledge's picture

Hey hey maybe ZH touched some nerves with the scoop on PrimeX, and we're seeing 'Operation Discredit' in progress.

It's a conspiracy!

Wed, 10/26/2011 - 23:00 | 1815686 streethedge
streethedge's picture

Let the riots start again!

Wed, 10/26/2011 - 23:01 | 1815690 nyse
nyse's picture

When did the concept of "retirement" come about? This is a realtively new construct, I believe (i.e., not sure if the pilgrims or the injuns counted on "reitement years").


Perhaps retirement in the conventional sense is unsustainable, even unrealistic, on a longer timeline, as it is turning out to be a ponzi as well (like every fucking thing).


To be sure, the prospect of a "traditional retirement" for somone who is, say, <10 yrs out of school is not the "sure thing" it once was.

Wed, 10/26/2011 - 23:17 | 1815756 tekhneek
tekhneek's picture

Retirement is a very real concept and it's easier to achieve when you spend less than you make and save in terms of purchasing power and future consumption instead of paper.

Wed, 10/26/2011 - 23:04 | 1815702 arkel
arkel's picture

So let's see, after all this drama Greece's debt to GDP is still over 100%? When is the next bailout?

Wed, 10/26/2011 - 23:18 | 1815758 tekhneek
tekhneek's picture

Let's see how this one pans out first.

Wed, 10/26/2011 - 23:04 | 1815704 virgilcaine
virgilcaine's picture

The Greek riot Granny is not going to like it.

Wed, 10/26/2011 - 23:36 | 1815838 knukles
knukles's picture

Bring on Sausage the Riot Dog!

Wed, 10/26/2011 - 23:05 | 1815709 PAPA ROACH
PAPA ROACH's picture

Time to bust out the gas masks and motorcycle helmets!!

Wed, 10/26/2011 - 23:10 | 1815730 MoonshineDelight
MoonshineDelight's picture

Dow 14000 indeed!  Equity bears are going to be hanging from lamp posts by lunch tomorrow.  Bulls on parade.

Wed, 10/26/2011 - 23:13 | 1815739 Darth Sidious
Darth Sidious's picture

i'll take that bet

Wed, 10/26/2011 - 23:12 | 1815734 TradingJoe
TradingJoe's picture

Still going to be/go short(er) tomorrow! Good night y'all!!

Wed, 10/26/2011 - 23:13 | 1815736 Eireann go Brach
Eireann go Brach's picture

Calculates like Obamanomics to me!

Thu, 10/27/2011 - 00:09 | 1815953 Mark123
Mark123's picture

I think the ECB claimed this will create 10 million jobs.

Thu, 10/27/2011 - 03:00 | 1816233 Peter K
Peter K's picture

"Creates or Saves". Can't forget the saves;)

Wed, 10/26/2011 - 23:13 | 1815740 Caviar Emptor
Caviar Emptor's picture

Money becomes increasingly meaningless and valueless the more they try to save the system without a reset. Buying power will continue to get decimated on all fronts. 

Wed, 10/26/2011 - 23:14 | 1815744 virgilcaine
virgilcaine's picture

 That is some impressive Mathematics in RT . Tyler's calculus vs EU BS.

Wed, 10/26/2011 - 23:14 | 1815746 Cursive
Cursive's picture

Who knew this was the road to riches! Fuck cramer. Fuck Rich Dad. Fuck carlton Sheets. Go Greek defualt!

Wed, 10/26/2011 - 23:37 | 1815849 knukles
knukles's picture

I was just thinking of going Greek, myself. 
Where's Sausage the Riot Dog?

Wed, 10/26/2011 - 23:17 | 1815752 jonjon831983
jonjon831983's picture

Phew, thought there was bad news.

Are we dead yet? :(

Wed, 10/26/2011 - 23:23 | 1815785 Lady Heather...UNCLE
Lady Heather...UNCLE's picture

But wont Greek pension funds already have marked their holdings to market (at more than 50% discount to face value )???

Wed, 10/26/2011 - 23:26 | 1815798 Tic tock
Tic tock's picture

28% isn't so bad

Wed, 10/26/2011 - 23:36 | 1815841 ziggy59
ziggy59's picture

The bond market association is at same address..

Wed, 10/26/2011 - 23:55 | 1815919 Bansters-in-my-...
Bansters-in-my- feces's picture

Bankers don't take haircuts,they give them.

Wed, 10/26/2011 - 23:56 | 1815923 Mark123
Mark123's picture

I can't fathom why Greece would want to remain in the Euro...all this does is get them to the absolute maximum amount of debt a society can bear.  It is surreal.


I guess they are afraid that their military funding would disappear and the Turks would take all their islands.

Thu, 10/27/2011 - 00:04 | 1815942 Banksters
Banksters's picture

The 50% haircut will be a voluntary agreement with private creditors. An involuntary writedown could have potentially constituted a “credit event” that would have required the payout on billions of euros in credit default swaps, instruments used to insure debt against non-payment.



Thu, 10/27/2011 - 00:11 | 1815961 Mark123
Mark123's picture

I was very relieved to see that no bankers will go to jail as part of this deal.

Thu, 10/27/2011 - 08:12 | 1816595 Peter Pan
Peter Pan's picture

Bankers should not be in jail. They should be free to walk the streets where some decent person can have the opportunity of punching their lights out.

Thu, 10/27/2011 - 00:17 | 1815974 Banksters
Banksters's picture

The 50% haircut will be a voluntary agreement with private creditors. An involuntary writedown could have potentially constituted a “credit event” that would have required the payout on billions of euros in credit default swaps, instruments used to insure debt against non-payment.




Thu, 10/27/2011 - 00:58 | 1816072 t0mmyBerg
t0mmyBerg's picture

all i can say is are you fucking kidding me.  and i rarely swear in public.

Thu, 10/27/2011 - 01:47 | 1816145 Jeffrey Lebowski
Jeffrey Lebowski's picture

What is reality? What is perception?

When the same entity that controls the politicians and MSM also controls the printing presses, you have a machine that is capable of transcending time and space to create its OWN reality.... and if not, it is truly capable of creating a "perception" of that reality that will be as believable as the truth

Thu, 10/27/2011 - 02:56 | 1816229 Peter K
Peter K's picture

Supposedly there's talk of a 30bEuro "sweetner" for those who either volunteer, or just for the Greek Bank's who volunteer. That would take the writedown to (350/70=) 21%.

Now, where have I heard this figure before?

Thu, 10/27/2011 - 08:09 | 1816587 Peter Pan
Peter Pan's picture

Alice In Wonderland move over!!

Europe has done a Houdini which will no doubt keep the crowd enthralled for some time but not for good.

I spoke to a friend in Greece who tells me that her teaching wages have gone down from 1300 euro a month last year to 730 euro per month at the moment.

With incomes being decimated how on earth do they expect economic activity to generate sales tax and income tax revenues?

Watch what happens as home loans and commercial property loans go sour as real estate values start to reflect incomes, turnover and the present glut of vacancies.

The same colleague told me of respectable people being seen going through rubbish bags whilst telling passers by that they are lookig for scraps to feed their pets. Yeah sure !!

Greek TV has already reported instances of children fainting at school as a result of not having eaten.

When that pig of a Greek Finance Minister loses half a metre off his girth, I will then be convinced that austerity has hit its true mark.

Sarkozy will lose the next election and Merkel will bow out to spend time with Jenny Craig. The light at the end of the tunnel will turn out to be a debt laden carriage travelling at the speed of light.

Sun, 02/26/2012 - 00:01 | 2196959 haibop
haibop's picture

unfortunately this happens. Hopefully the situation will improve soon. reverse phone detective

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