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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oogs66's picture

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

taxi952's picture

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

bloons tower defense 4

reflex_121's picture

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

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!

Banksters's picture

Go back to sucking your boyfriends cock.

e_goldstein's picture

I was going to say BTFD; but, yeah.


haibop's picture

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

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?

knukles's picture

Some pigs are more equal than others.


caerus's picture

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

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©


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 

Peter K's picture

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

James-Morrison's picture

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

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.

Darth Sidious's picture

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

Unprepared's picture

Please post your proof

we are in a math class

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.”

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. 

Unprepared's picture

Brilliant ... a haircut of a haircut

winter is coming's picture

fuck it, im buying calls on s and ptomorrow

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...

ziggy59's picture

Uh, goring didn't come to mind..

chump666's picture

I see. 

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

JSchroe's picture

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

jcaz's picture

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

zorba THE GREEK's picture

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

All kidding aside

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.

Mark123's picture

Still safer than Thailand though!

pods's picture

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


Freebird's picture

Greek bondholders to go bald.

jcaz's picture

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

Comay Mierda's picture

so.... is this bullish?

Mactheknife's picture

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

eigenvalue's picture

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

Cursive's picture


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

tekhneek's picture

Let the underwater burn!

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.

malikai's picture

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

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!

streethedge's picture

Let the riots start again!

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.