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Hours Ahead Of Monday's Euro FinMin Meeting There Is No Greek Deal; IIF "Remains Hopeful"
But wait, we thought Greece and the ECB had an upper hand? Wouldn't they exercise said upper hand by now, considering its now 9pm in Greece on a Sunday, the day before the critical European finmin meeting by which point the Greek deal was supposed to be in place?
From Reuters:
Greece's private creditors are working closely with Athens on a debt swap deal, their chief negotiator said on Sunday, adding that he was confident a deal could be reached.
"We are at a crossroads and I remain quite hopefull," International Institute of Finance chief Charles Dallara told Antenna TV on Sunday.
Greece and its private creditors are converging towards a deal but many details are still unresolved, sources close to the negotiations said during the weekend. Much of the attention will now turn to a meeting of euro zone finance ministers on Monday, and to how EU states and the IMF view the progress in the debt swap talks.
...
Much of the attention will now turn to a meeting of euro zone finance ministers on Monday, and to whether EU states and the IMF consider that the deal that is being put together by Athens and bankers does put Greece's debt back on a sustainable track. One key question will be whether the deal attracts a big enough participation rate.
"We are working together with the Greek government, European and global leaders and we can mobilise very very high participation," Dallara said.
And here is the FT:
Private owners of Greek debt have made their “maximum” offer for the losses they are willing to accept, the bondholders’ lead negotiator has said, implying that any further demands could kill off a “voluntary” deal and trigger a default.
Charles Dallara, managing director of the Institute of International Finance, said in an interview that he remained “hopeful and quite confident” the two sides could reach a deal that would prevent a full-scale Greek default when a €14.4bn bond comes due on March 20.
One banker said Friday’s demand by official creditors, led by the International Monetary Fund, for a further interest rate cut of 50 basis points on new long-term bonds to be swapped for existing Greek debt “may have put a voluntary deal out of reach”.
“I think its clear we are at the limits of a voluntary deal,” Mr Dallara said, recalling that eurozone heads of state had committed to keeping the restructuring voluntary at a high-stakes EU summit in October. “It is clear to me we are at a crossroads.”
As we noted last night, Hedge Funds are just hoping for litigation. Scratch that, praying.
Too bad hold out hedge funds with a blocking stake can't pay their LPs with hope. In the meantime, the EURUSD is not happy to start the Sunday session.
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They're playing beer pong in there?
Thong pong is more like it.
Just tell me how much Greek debt will be discharged.
Ok. If they default, all of it. If they hyperinflate, none of it.
If they go to war, they win.
They want the private holders of the debt to take at minimum 50 percent to 70 percent in the value of their bonds. I've said this before, why would any bond holder who has been paying insurance premiums on the bonds they hold not decide to hold out and say we will wait for the credit event and then get our 100 percent paid on the bond. They don't care if the insurance companies may or may not have the money, this is being done to force the govt. to backstop this regardless of their local politics. Unless they want an implosion of the bond market.
ECB needs a Greek hand job- http://www.youtube.com/watch?v=8g3tQaqizh0
Why not?
It's only 11:59:59
There's still time...
'sooner or later, all our games turn into Calvinball'
Useful idiots! Let's just trade, man! http://bit.ly/jmgPLz
Smoke and mirrors, hope and change, hookers and blow, shooting blanks --- call it what it is, it is bullshit to me. No deal, the official start of the EU sinking. The hedge funds will extort their money out the these pricks one way or another or by triggering CDS. Popcorn time!
Maybe they are busy setting up the deck chairs on the Costa Concordia....a fine luxury yacht !
Is the band warmed up, yet?
There a WSJ article that explains what's going on:
http://online.wsj.com/article/BT-CO-20120122-703236.html
I think the key sentence in the article is that Greece would not be allowed to default no matter what and if there is no agreement, the 14.5B Euro bonds will be redeemed at par.
If that’s true, why would anybody agree to a deal? They are better off delaying.
Any "solution" that does not involve a loss, is idiotic, mathematically impossible. Somebody has got to lose.
The German people and the Greek people will lose.
The trillion dollar question is who will take the loss?
The Greek people without a doubt. The only question is really: will they take the pain or retaliate and try to dish it out to where it came from.
If the Greek people could take the losses, we would not be having this dicussion. The problem is that the losses are beyond their capacity, so somebody other than the Greeks will need to take a loss.
Exactly. The Greek people are even abandoning children because they cannot feed them. These guys are tapped out. Greece needs to do an Iceland and see You in court bankers.
http://finance.ninemsn.com.au/newsbusiness/8401306/families-abandon-kids-in-greek-debt-crisis
Won't they just delay the meeting? Since the bond payment isn't due until march.
Lots of time to talk, fight, eat and drink, bunga bunga.
This restructuring/haircuts would require a massive amount of paperwork to finalize and it will require 6-7 weeks to complete. So time is of the essence, or Greece's bond payment of 14.5 billion Euros on March 20th will be for naught.
EXACTLY! Let's Bunga Bunga first....
I hope the Christ this damn thing blows up in their faces. I mean, REALLY, how many "meetings" and "fixes" can they do, that haven't worked, and they are still in a helluva pickle??? At what point do they pull calculators out and say "see this isn't gonna work, we can't get there from here." Stuff the rest of us have already figured out and accepted, and positioned for is beyond the "enlightened and intelligent economic elite".
I will pray that reality unfolds tonight and we get that "new start" and banks can take it up the ass for their stupidity!
They're holding it together with rubber bands and chewing gum.
Behind the scenes they know the inescapable truth, that this experiment will result in failure. It's not their job to tell the truth to us, it's their jobs to manage expectations, and to manage sentiment. They're not just gona' come out on the telley, throw their arms up, and say "sorry we're all fucked, this thing is over" They will lie, disseminate misinformation, and distract for as.long.as.possible, and to the end. It's just part of the job.
At the same time...someone should be investigating or checking their vacation schedules...maybe if no one is there when SHTF then it will be a "non event". Check the vacancies in those vacation hotels where those 'leaders' go when they want to get away from it all...
"holding it together with rubber bands and chewing gum"
- don't forget about that roll of duct tape they always keep behind their back.
Bilderberg hotel in NL is booked solid.
Time to OCCUPY ARNHEM.
MacGyver in Europe
Ponzi maintenance only requires looking ahead 24 hours.
I needs to gets me some of dem 1 year bonds with the 475% yield if this deal goes through. -:)
Except that Germany and the IMF are backing Greece in calling for the extra haircut.
The fact the IMF and ECB may be exempt from the haircut makes the debt reduction for Greece completely inadeqaute, another mere stop gap and bad precedent.
They are doing something very odd - on one hand they are demanding more concessions and on the other they are saying they will not allow a default. How do those coincide? How can you ask for concessions without a credible threat?
Negotiations are so exciting !! Also those 1/3 share blocking hedge funds will also need to be overcome...at some point in this fiasco.
I think we're giving far too much weight to the Hedge Funds. They can litigate it for 10 years for all the EU cares. Greece is not going back to the markets in this decade.
Germany won't let the ECB buy soveriegn bonds.
So where will they find lenders?
Same place that they got it from in the last year - EFSF, ESM, IMF.
BTW - LOL @ the ECB not buying sovereign bonds. Check their balance sheet $250B in bonds and growing (and I didn’t even mention the 400B LTRO).
You can breathe the desperation at the euro-meetings. As Chi-Pan has also refused to buy junk eurobonds, there is no one left to pick up those fraudulent promises to pay but for Mr. Ponzi himself. Thus the endless parade of "stability mechanisms" being drawn out from the sleeves of the euro-oligarchs.
The fact that the sheeple are completely and absolutely ignorant of what awaits them is working to the benefit of the rapist class.
History repeating itself.
Pretty much. There's nobody buying it other than Draghi and banks who are financed by Draghi. The ultimate Ponzi.
If Madoff was able to keep it up for 30 years, Draghi can survive just as long.
Worrying about stability when the rivets are popping loose on the wing root(s) -- go with throttle up!
It's like watching a gladitorial death match where the contestants are using rubber weapons...
Sounds like you're giving the EU too much weight if that's the case.
What?
Nice. Props to Chief Joseph. Another shocking example of the murder hungry US' corruption via military force. A truly horrible event.
Listen, assume people accept by phone everything. And then what? They've got to go to the company boards and sell the deal and if the boards accept it then they will get lawyers involved and sign papers.
Are we all stupid or what? Nothing will be tackled today or tomorrow. It's all smoke and mirrors.
Are we all stupid or what?
White house = Obummer
Iowa = Santorum
NH = Romney
SC = Newt
Any more questions?
C'mon hyperbole much? 0.005 lower.
So far...
This article at Big Picture infers that Greece is the problem and is just posturing to suck Germany and the IMF into more bailout funds. This seems to be the issue even more so than the hedge funds, who in truth are probably tag teaming with Greece for the same outcome. Coupon payments from Germany and the IMF now are huge pay offs.
http://www.ritholtz.com/blog/2012/01/oh-dear-greece-yet-again/?utm_source=dlvr.it&utm_medium=twitter
Greece is quite happy to commit to a 4.0% coupon on the new bonds to be issued as part consideration for the the cancellation of the existing debt – they know that they will never meet their obligations and are only interested in accessing additional bail out funds, and ECB funding as long as possible. In addition, they realise that a default makes their banks, pension funds etc, etc totally insolvent. They will agree to anything on the basis that it sucks in the EU/Euro Zone/IMF further and postpones their inevitable default.
The IMF and Germany are rightly concerned that the amount of the haircut currently proposed on private sector bondholders is insufficient to make Greece’s debt sustainable, a real problem for the IMF as it has to justify its continued participation in further bail out funds for Greece on the basis that the country’s debt will be sustainable – impossible given the current proposed “agreement”.
dood
Greece burns 400,000 barrels a day of Brent priced oil. If you annualize that, it is 5% of GDP drained out each year. There's no fix for this because They Have No Oil.
There is NO amount of debt that is sustainable. Their GDP doesn't have a praryer of funding any debt at all when it has a perpetual 5%GDP/yr drain of money out of the country.
The great Greek austerity and restructuring plan (final):
1. sell BMW's
2. saddle donkeys
Greece is a key transit country and struck a pipeline deal with Russia and Bulgaria which may (?) have been the catalyst behind the previous PM undoing. Oil is probably not the issue as per tolling. Greece caught between NATO and Bondsteel.
Maybe they could convert all their vehicles to run off ouzo and olive oil.
Maybe the ECB is waiting on the market to puke out all/most of the Greek bonds, buy them, average their cost down & reissue new debt? Create their own blocking stake. Is that possible? Why not at current prices? Could this have been going on all along?
yeah, if anyone buys. Plus what if the hedgies buy it up and blow raspberries at the ECB?
"Hey Rocky, watch me pull a rabbit out of my hat!"
"Bullwinkle, that trick never works!"
HAHAHAHA.
How do you say "Now here's something you'll really like." in Greek?
signa herea anda geta fuckeda
Ouzo
More like fractured fairy tails than R&B.
Math is very simple, unless you depend on the peasants who pay your way.
Saturday quiz – January 21, 2011 – answers and discussion Posted on Sunday, January 22, 2012 by billHere are the answers with discussion for yesterday’s quiz. The information provided should help you understand the reasoning behind the answers. If you haven’t already done the Quiz from yesterday then have a go at it before you read the answers. I hope this helps you develop an understanding of Modern Monetary Theory (MMT) and its application to macroeconomic thinking. Comments as usual welcome, especially if I have made an error.
Question 1:
The answer is True.
Fact – when a nation exports less than they import (including net income flows) we say they have an external deficit (current account deficit).
This is a question about the sectoral balances – the government budget balance, the external balance and the private domestic balance – that have to always add to zero because they are derived as an accounting identity from the national accounts. The balances reflect the underlying economic behaviour in each sector which is interdependent – given this is a macroeconomic system we are considering.
To refresh your memory the balances are derived as follows. The basic income-expenditure model in macroeconomics can be viewed in (at least) two ways: (a) from the perspective of the sources of spending; and (b) from the perspective of the uses of the income produced. Bringing these two perspectives (of the same thing) together generates the sectoral balances.
From the sources perspective we write:
GDP = C + I + G + (X – M)
which says that total national income (GDP) is the sum of total final consumption spending (C), total private investment (I), total government spending (G) and net exports (X – M).
From the uses perspective, national income (GDP) can be used for:
GDP = C + S + T
which says that GDP (income) ultimately comes back to households who consume (C), save (S) or pay taxes (T) with it once all the distributions are made.
Equating these two perspectives we get:
C + S + T = GDP = C + I + G + (X – M)
So after simplification (but obeying the equation) we get the sectoral balances view of the national accounts.
(I – S) + (G – T) + (X – M) = 0
That is the three balances have to sum to zero. The sectoral balances derived are:
These balances are usually expressed as a per cent of GDP but that doesn’t alter the accounting rules that they sum to zero, it just means the balance to GDP ratios sum to zero.
A simplification is to add (I – S) + (X – M) and call it the non-government sector. Then you get the basic result that the government balance equals exactly $-for-$ (absolutely or as a per cent of GDP) the non-government balance (the sum of the private domestic and external balances).
This is also a basic rule derived from the national accounts and has to apply at all times.
The following graph with accompanying data table lets you see the evolution of the balances expressed in terms of percent of GDP. I have held the external deficit constant at 2 per cent of GDP (which is artificial because as economic activity changes imports also rise and fall).
To aid interpretation remember that (I-S) > 0 means that the private domestic sector is spending more than they are earning; that (G-T) < 0 means that the government is running a surplus because T > G; and (X-M) < 0 means the external position is in deficit because imports are greater than exports.
http://bilbo.economicoutlook.net/blog/?p=17850
Never let the idiots on TV try to convince you how math really works
Interesting stuff, but what about the shadow economy ? Esp. countries with wellknown laissez faire fiscal discipline can't be measured by these formulas, when there is no data about the real input/output, right ? Quite a difficult job for the troika boys, I guess ..
Well done, Atomizer. Austerity is a political tool. It's not meant to "fix" the economy. It will deepen the rift betewwen haves and have nots
Now I need the ouzo.
They remain hopeful...but not changeful.
Greek default will be a non-event. Mark my words.
Sure it will. What does your crystal ball say about the death of the CDS market?
The sheeple will stick to their CDS's.
The grand finale will be the day they tell us a 99.99% haircut isn't a default.
Greek default will be a non-event
You couldn't be more wrong. This is a giant fork in the road. It signals the end of the blanket bailout era, Bernanke's put under the whole system is off the table.
So in a few weeks we're gonna have the Total Collapse so many doomprophets have predicted? And will Kyle 'epic crisis' Bass finally make it to billionaire?
I agree.
Oh, Greece will default. Carnage will ensue. Germany will be blamed. Problem, reaction, solution? Well, Euroland of course.
Obama: "I need another 1.2 trillion".
If you didn't know before, you do now.
They're lucky if they can figure out how to pay for the lunch, anything beyond that is wishful thinking...
The boys are starting to argue at the playground.
http://littleglassballs.com/
As for the printing press .. what good does it do if all the banks do is deposit it at the ECB? The Money is not making it into circulation and is deflationary. This is a hoarding of Cash, a large Bank Run.
Can you say vicious as in cycle? And can u say biflation? Because the answer will be to print and loosen monetary policy mroe
The Super Mario Duo should reflect on Captain Francesco Schettino and his $800 million disaster since it reinforces German attitudes towards sharp-suited Italians and responsibility., especially as some of the missing are German. Little things like this tend to reinforce the idea of a nation playing fast and loose and expecting others rto "do their duty". I should think as a founder member of the European Union, Italy has no credibility in Northern Europe....but Monti knows that.....he is really begging for help like Karzai in Afghanistan, before the tribes rise up and kill him as the agent of a foreign power
According to NPR today...The Germans wanted the Euro to control inflation inside Germany...They weren't worried about a strong Deutchmark or their export markets or anything...
And we all wonder why we can't talk to our neighbors about these issues...
Please keep your eyes at stage left, on Newt Gingrich and Joe Paterno's corpse.
That dip in the Euro must be the anticipation of that huge EURUSD short squeeze we've been hearing so much about.
More like a long squeeze is brewing, EUR/USD has a long way to go down before a short squeeze kicks in.
Don't worry, they'll ass fuck the shorts again.
How many times have they done this?
Look at Aussie$ and Basel 3 article in FT.....
Hopium bonds and shaved heads all around.
A Greek deal is likely to get done, which likely will produce a short term pop higher for the markets. However, we remain at a critical inflection point, but a bullish case can certainly be made as we are leaning more and more to as price action fails to break down. A new Market Report has been posted with a look at the SPX, TNX, HG, CL, AUDUSD, and AAPL. http://bit.ly/zrT8yb
It will only delay the inevitable. Economists from Kieler Institut für Weltwirtschaft calculated that a 80% haircut is the minimum required to have a chance ending the debt crisis - at least for Greece.
But a next Greece is on the way. Portugal looks not good and is even bigger than Greece.
http://www.spiegel.de/wirtschaft/soziales/0,1518,810645,00.html
If Portugal fails, Spain will fail.
in a negotiation one never ought to declare or reveal a hard deadline: it gives your counterparty the scope to leverage everything hes got straight into your nuts.
the IIF is politely telling Greece/EU/IMF that they "can mobilize very very high participation" is like saying " ... or very very high NON participation", its a stake raiser.
Could also be a signal to the market /dumb money/semi dumb money to buy while they short everyones pants off... could also be..... oh fuck it.
Eurofin to Venizelos: you got a deal?
Venizelos: No, you gonna gives us the money to make the march payment?
Eurofin to Venizelos: No:
Venizelos to Eurofin: Bye bye Europe, was nice while it lasted.
Eurofin to venizelos: oh wait... maybe we could put in a bridging loan..
Venizelos to Eurofin: you guys are geniuses!! and maybe we can get the money back once we roll the 14>5bn bonds, do something retroactive!!
Eurofin to Venlizeos: Sure with that out of the way there are many new possibilities to explore!!
Venizelos to Eurofin: Yeah whatever direction/options you want to explore them in, lets do that!!
Eurofin to Venizelos: Great idea! We'll start working on a working party to set up a working party to work on it..
Someone at the back *cough cough* "What are we going to say to the ECB, the markets, the press...????"
Eurofin and Venizelos together: " thats your job, draft something along the usual lines"
Eurofin to Venizelos, Venizelos to Eurofin walking out: "what a successful meeting! Great to see you , tell me.. how is your ... smile, smile " lots of flash phgotography.........
Exclusives in the media under captions of smiling Eurofin ministers "Eurofin and Greece make progress"
You scare me with your knowledge of the future.
Eurofin and Venizelos together: "That's your job, draft something along the usual lines."
IOW, "Round up the usual suspects!"
I can't figure whether this is more TV European daily soap opera, or old-style Saturday matinee 15 reel cliffhanger serial (only with 115 reels)...
EU gapped down nicely. Maybe some good short there only thing conerning is the record short interest and that the weekly chart flipped bullish with a big divergenz. So lets see how it plays out.
Trade what you see not what you think. Ps my first post looking forward to many more. good trading today