Oops: ECB Says Greek PSI Participation May Fall Short, As Troika Expects Third Greek Bailout

Tyler Durden's picture

Following up on Peter's summary of the if-then conditional analyses to be conducted concurrently by various classes of Greek bondholders ahead of Thursday's PSI deadline (even as Bingham is rapidly organizing a Greek ad hoc 'holdout' committee to stop the PSI), here is some news that may obviate pretty much everything, and goes back to our warning from January, namely that despite all the sturm und drang, media fanfare, and threats from former Goldman-cum-JPM bankers, the hedge funds will 'just say no' and courtesy of basis packages (yes, the fact that Greek CDS soared to a record 76 pts upfront on Friday indicates more buyers than sellers) hold out for par recoveries in court: they would be idiots (or have a gun at their head) not to do so. To wit from Bloomberg: "Greece may fail to garner enough investors to participate in a voluntary writedown of its debt, Der Spiegel magazine reported, citing unnamed officials at the European Central Bank. A second Greek bailout is partly tied to investors’ agreeing to the writedown by a March 8 deadline." Remember that Germany has made it very, very, very explicit that if the PSI fails, the bailout is off... just as they have planned from the get go.

We will post the Spiegel article asap. And while we wait, here is something else very special from Spiegel:

Troika expects third rescue package for Greece


The billions from the second bailout did not even have arrived in Greece, since international inspectors already have a third payment required. According to SPIEGEL information is the so-called Troika believes that another 50 billion euros would be needed


The financial controllers of the EU Commission, European Central Bank and the International Monetary Fund hold a third rescue package for Greece to be necessary. They quantify the extent to SPIEGEL information on up to 50 billion €.


It is not guaranteed that the country as planned as early as 2015 could again get their own loans, it said in a recent draft of the Troika report on the situation in Greece. Therefore, the country from 2015 to 2020 may be an "external financing needs of up to 50 billion euros." This analysis unpleasant apparently liked some politicians do not: The passage was deleted also under pressure from the German government.


Officially immediate concern is that Greece receives the second aid package of € partners and the International Monetary Fund, more than 130 billion euros. The Assembly has already approved the rescue package. Before the money is paid, must agree to the government in Athens, but first with the private creditors on the debt waiver. For this purpose they should exchange their Greek government bonds with new debt securities. The average debt is considered one of the most important points in the rescue plan for Greece.

More here

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rehypothecator's picture

The restructuring will not be televised.  

Sudden Debt's picture

YES!! Straight to the cinema's! IMAX 3D!!!!
You'll be able to feel the heat from the exploding molotov's!

knukles's picture

"Citing sources at the ECB" who likewise decided not to partipate, instead stepping the fuck in front of everybody else in the priority of payments.

BW's picture

They will keep on paying minimum payments.  Their will never be a deal, just lots of money printing.

Popo's picture

PREDICTION:   After the third bailout they'll stop numbering them and just institute a policy of "they get money as needed".



Mr Lennon Hendrix's picture

Or they never number the third one, like they did with QE.

Zero Govt's picture

numbering your failures gets a bit masochistic after 2 or 3 in even less years

knukles's picture

Yeah, sorta like allowance with my kids. We no longer keep track of which week it is (except for knowing it's been many) for the only point of discussion having become the amount.

Sorta like being up to your ass in alligators, forgetting that you'd come to drain the swamp.

oogs66's picture

Or go with roman numerals - it worked great for the NFL

smlbizman's picture

is it not obvious yet , these guys are burrying these guys with useless stuff so they can get the gold...and it doesnt matter how much you print as long as you get the gold.....whoever has the gold makes the rules....if you calculate how much they are willing to settle for to get the gold, it sure is alot more than 1800. ...all the rest is smoke and mirrors. just the path they are taking to get the gold.....at fuckin least we gave the indians some fucking beads...at least they were worth something.....

Dead Canary's picture

"After the third bailout they'll stop numbering them and just institute a policy of "they get money as needed".

That's the whole point of "Euro bonds" that the EU has been pushing. It would allow an invisible way of taking money from north Europe countries and quietly fund south Europe countries. No more inconvenient transparency.

boogerbently's picture

"We couldn't pay you back last time........so, who wants to buy some more??"

"Hey, what's that on your shirt?"...flink his nose.

"Hey, what's that on your shirt?"...flink his nose.

"Hey, what's that on your shirt?"...flink his nose.

"Hey, what's that on your shirt?"...flink his nose.

Conrad Murray's picture

This gives me an idea for an augmented reality/game app. It would be similar to Angry Birds; we'll call it Angry People.

You walk around wherever you want, perhaps by a Central Bank, and hold up the camera/tablet to get the building in view. Then, instead of launching birds, you launch Molotovs! Get a quality, realistic physics engine in the mix and see just how many bottles one would have to launch to burn the place to the ground.

Bonus points for hitting the parasites fleeing the flaming mess.

May 1, 2012 - http://pastebin.com/iTx8RA2P

AbelCatalyst's picture

The endgame for Germany is to go back to the Mark, which will destroy the Euro, which will basically wipe away their debt (which is in the Euro). By pushing Greece out the Euro will go into a tailspin. Germany will simply say, "There is nothing we can do, we all need to go back to our own currencies." Game over for all but Germany!

If Germany tries to go back to the Mark now, they will be the scapegoat, but if they can get everyone to do it they end up with the strongest currency paying of debt denominated in Euros. Just watch actions, not words, and you can see this unfolding right before your eyes.

Remember that at the end of the day each country will act in its own best interest. They will talk about working together, but actions will speak louder than words. Germany is being patient, as it should, but there is no question they are drawing subtle lines in the sand. At some point Germany will return to the Mark because that is what is best for Germany, just like being in the Euro up to this point was best for Germany (exporting their way to wealth creation). The only way they can cash in their chips and harvest the fruits of their hard work and sacrifice is to return to the Mark.

Dismal Scientist's picture

At which point the German export machine would be crushed, and Merkel would have no chance for reelection in 18 months time. Its not as simple as this.

AbelCatalyst's picture

The export machine is already crushed because the countries they export to are broke. The next 10 years will be about survival, not growth. Say hello to the the upcoming deflationary winter! And, ah, yes, acting in ones own best interest is that simple - look back through history...

Dismal Scientist's picture

Ah, a deflationist. Of course, never let practical realities get in the way of a good dogmatic ideology.

'The export machine is already crushed because the countries they export to are broke'

This is simply rubbish. German exporters are performing very well, as long as the Euro stays weak, and will continue to do so as long as thats the case. Am pretty sure that the Germans will care more about losing their jobs if the Euro strengthens than anything else, hence my statement re timeline up to elections in September 2013.

You sir, have no clue what happens in the next 10 years, and nor does anyone else. You might be right, but considering that the world's elite are lined up against you, I severely doubt it. Biflationary outcome remains the most likely. Look it up if you need to...

AbelCatalyst's picture

I don't think it is all that difficult to see the writing on the wall. What we don't know is timing - it could take years to unfold. Central banks will try to inflate, inflation will rise, and eventually the debt will need to be dealt with, which means the defationary winter will take hold. There is far too much debt that will never be paid back - money printing will ultimately get swamped by the forces of debt reduction, which is the definition of a deflationary winter season.

This ain't rocket science, even for a Dismal Scientist! (sorry, I couldn't resist!!)

Dismal Scientist's picture

Deflation can only occur if its allowed to, ie: if the inflationary policies being pursued fail. We can debate that until the end of time, and neither of us knows the answer. My original point stands re your statement that Germany wants the Mark back. I choose to disagree, the politicians cannot allow it for a while. Debt will be written off as necessary and taxes will rise, as always the public will take the pain. Its either that, or banking system nationalisation/collapse across the Eurozone.

Whichever way you look at it, prices of things you need will inflate, while prices of things you own financed by debt will deflate. This is biflation. As a Dismal Scientist, economics is my focus. Not the same thing as a rocket scientist. Keep trying ;-)

Withdrawn Sanction's picture

Deflation can only occur if its allowed to, ie: if the inflationary policies being pursued fail.

What charmingly naive faith in the power of central bankers, and circular logic to boot.  A two-fer

_ConanTheLibertarian_'s picture

The truth is usually in the middle. You'll probably both be right. First a deflational collapse, and then hyperinflation. Listen to Kyle Bass about this scenario for example.

Rynak's picture

Prices != Economic health.

Just by pushing nominal numbers up via price inflation, it doesn't mean that real economic velocity... let alone population lifestandard or purchasing power... goes up.... typically, more like the OPPOSITE.

Every time another fucking idiot, cannot distinguish nominal price development from real wealth and real velocity, i want to punch the fucking idiot in the face.

To put it really simple: in the current economic and finacial system, there never is generic inflation, nor generic deflation... there only is stagflation..... simple reason: any strong increase in nominal prices is usually the reaction to economic and financial depression, wealth transfer to the ponzi (OUT of the economy!), or both.

And as for that "german export" bullshit..... ask any generic german what he/she things about that, but be prepared to be punched in your face once again.

Eclipse89's picture


Germany won't sell one VW anywhere with a new Deutsche Mark; they need the Euro more than anyone else in this europonzi club.

Rynak's picture

Those "they" you're talking about, aren't even german.

TheGardener's picture

If Merkel gives Germans the Mark back, they will make
her queen for life.

oogs66's picture

They will use strong mark to import natural resources. For a country with no natural resources, how important is a weak currency?

zilverreiger's picture

Germany loses 500B they have in the ECB system the minute the euro is stopped for whatever reason.

AbelCatalyst's picture

At the end of the day everyone loses. Going to the Mark will allow Germany to lose the least compared to all others. Moving into the deflationary winter season means it's all about survival, not growth - its an entirely different model.

Jake88's picture

Chump change.  Ctrl P. Caching.

The Reich's picture

It's actually 800B as Weidemann said the other Day.

Rynak's picture

"Germany" has 500B in the ECB system? Or do you mean german BANKS? Like, i.e. that totally insolvent Deutsche Bank, that will never ever be solvent anyways?

Germany is not a bunch of banks. Germany isn't a bunch of multinational megacorps that aren't even based in germany. Go. Fuck. Yourself. Globalist asshole. Get the fuck out of this country (or ANY country, for that matter), you parasites.

A healthy economy and finacial system isn't built on a reliance on exports, imports, or TBTF banks.... it is built on a healthy domestic market and solvent national banks.

DosZap's picture


I agree, and I am all for it.............Slap the NWO bitch right in the mouth.

Bring back Nationalism.

When we were still separate nation states, when Japan, Germany, etc,etc, got into an economic recession, the rest of the world did not get pneumonia.

Now when ONE is screwed up, ALL are screwed up.Used to be if America got a cold the rest of the world got pneumonia, but AT LEAST One or Two could not bring the entire world to its knees.

disabledvet's picture

That would guarantee failure then! I recommend they announce the results in this format:

DosZap's picture


WONDERFUL......I think we can get you syndicated!!!

Silver Bug's picture

OH COURSE there will be many many more bailouts. This is QE to infinity. There is nothing they can do to resolve the problem. JUST default Greece. Save yourselves! 



prains's picture

cue the drums of war / dead celebrity diversion

Sudden Debt's picture

They might get a second chance to get the bailout....

If they can jump from Athens to Berlin in one go they get the money....
I bet Hercules could do it...l

GeneMarchbanks's picture

Goldman-cum-JPM bankers


DosZap's picture

GREECE will DEFAULT......................period.

Sudden Debt's picture

I remember I went with my wife to that movie Titanic back in the days....
After 2 minutes I said: I bet that boat is goiing to sink!

Somehow people thought that was a spoiler... History aside....

So what I mean is:


resurger's picture