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The True Cost Of The Greek Bailout Emerges

Tyler Durden's picture


Two months ago many scoffed at us when we calculated that based on preliminary information, "The Cost Of The Combined Greek Bailout Just Rose To €320 Billion In Secured Debt, Or 136% Of Greek GDP." We clarified as follows: "Some of our German readers may be laboring under the impression that following the €110 billion first Greek bailout agreed upon and executed in May 2010, the second Greek bailout would cost a "mere" €130 billion. Alas we have news for you - as of this morning, the formal cost of rescuing Greece for the adjusted adjusted adjusted second time has just risen to €145 billion, €175 billion, a whopping €210 billion, bringing the total explicit cost of all Greek bailout funds to date (and many more in store) to €320 billion. Which incidentally is a little more than Greek GDP (which however is declining rapidly) at 310 billion, only in dollars. So as of today, merely the ratio of the Greek DIP loan (Debtor In Possession, because Greece is after all broke) has reached a whopping ratio of 136% Debt to GDP. This excludes any standing debt which is for all intents and purposes worthless. This is secured debt, which means that if every dollar in assets generating one dollar in GDP were to be liquidated and Greece sold off entirely in part or whole to Goldman Sachs et al, there would still be a 36% shortfall to the Troika, EFSF, ECB and whoever else funds the DIP loan (i.e., European and US taxpayers)! Another way of putting this disturbing fact is that global bankers now have a priming lien on 136% of Greek GDP - the entire country and then some now officially belongs to the world banking syndicate." Well, as it turns out, we were optimistic (which incidentally is always the case when we try to account for government stupidity and lies). To wit:


This is SECURED debt, or debt which foreigners have funded with a lien on all Greek assets. Including gold! Translated, the Greek Debtor in Possession loan has a 177% Loan to Value.

Recall that according to the IMF Greek Debt/GDP will somehow be 120% in 2020. This means that 57% of the incremental debt will somehow have to be paid down. Or, as is 100% more likely, liquidated, with even more super-senior DIP debt. In other words, the Troika itself admitted that the Troika itself will be haircut before all is said and done.

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Wed, 04/18/2012 - 09:23 | 2354486 vmromk
vmromk's picture

I shit on Bernanke's head and hope the overflow lands straight into his mouth.

FUCK YOU Bernanke, you motherless piece of shit.

Wed, 04/18/2012 - 09:26 | 2354499 sunnydays
sunnydays's picture

At what point will they just let Greece go or the other countries (Germany) refuses to give any more to them?  When will the people stand up like the Iceland people have?  We have heard about Greece for how long now?  The kick the can down the road has got to stop at some point.

Wed, 04/18/2012 - 09:29 | 2354508 Careless Whisper
Careless Whisper's picture

The Careless Whisper Morning News Update & Threadjacking

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Wed, 04/18/2012 - 12:03 | 2355070 Montecarlo
Montecarlo's picture

That picture with Obummer says it all.

Wed, 04/18/2012 - 09:59 | 2354630 Stuck on Zero
Stuck on Zero's picture

The Greek people may become motivated when they box up the Parthenon and ship it to China.

Wed, 04/18/2012 - 11:59 | 2355059 SilverRhino
SilverRhino's picture

At what point will they just let Greece go or the other countries (Germany) refuses to give any more to them?

When the other countries attempt to collect the gold and Greece tells them to go fuck themselves (as they should) ... then the currency stops flowing and the tanks will start moving.

Wed, 04/18/2012 - 09:24 | 2354489 achmachat
achmachat's picture

if you were to see this in a movie, you'd immediately walk out, saying that it's stupidly unrealistic.

Wed, 04/18/2012 - 09:35 | 2354533 t_kAyk
t_kAyk's picture

Sad thing is, this is only the preview.  The big show has yet to commence. 

Wed, 04/18/2012 - 09:55 | 2354612 francis_sawyer
francis_sawyer's picture

Hey ~ at least we all know where the bankers are going to run off to when the system collapses...

Here's hoping that the day after it happens, Santorini erupts...

Wed, 04/18/2012 - 11:21 | 2354903 MeetTozter
MeetTozter's picture

Learned during the Cheney/Halliburton reign to play the "What is the most stupid and evil thing that could happen?" game.  Could we be getting ready to roll out the formal merger of the USD and the Euro?


There would be a weekly "lott-a-reeeee" where the matching fiat serial number would win really big fiat.  You can't win if you don't play!

Wed, 04/18/2012 - 09:32 | 2354492 Ratscam
Ratscam's picture

nice and slow robbery of the people financed assets, done in the open public, done by the banks! Wake up Malakas and fight like Iceland!

Wed, 04/18/2012 - 09:30 | 2354521 disabledvet
disabledvet's picture

Wake up to what? This is debt that has to repaid. In DOLLARS no less. You can't roll this over. How you can right it off is a mystery to me as well. Anywho "all eyes on DC and the IMF" this week. Europe is broke!

Wed, 04/18/2012 - 09:42 | 2354565 Ratscam
Ratscam's picture

in history many countries have not repaid their sovereign debt, hence the higher risk premiums in bonds. The change has to come from within, from the people standing up saying: i am mad as hell and I'm not going to take it anymore.

Wed, 04/18/2012 - 09:26 | 2354500 Hansel
Hansel's picture

Those loans aren't secured.  There's no way the IMF of ECB will ever collect.

Wed, 04/18/2012 - 09:49 | 2354554 SMG
SMG's picture

I think the plan goes something like:

Make things so bad, the Oligarchs can come to the rescue and say "You can't feed your kids, now give us your land, resources, and freedom and then we'll help you"

That is how they will collect.

Wed, 04/18/2012 - 09:27 | 2354503 Aunty Christ
Aunty Christ's picture

177%? keep going...that'll be just the down payment when it's all said and done

Wed, 04/18/2012 - 09:30 | 2354509 Eireann go Brach
Eireann go Brach's picture

Joe Biden just advised Barroso to call Jon Corzine, because he is the smartest guy in the room!

Wed, 04/18/2012 - 09:28 | 2354512 lizzy36
lizzy36's picture

I think with a mere 19 cents of every dollar going to the actual Greece citizens, i think it is time to re-brand this bailout as something other than a bailout of Greece.

Bailout of EU banks, bailout of ECB bond buying, bailout of IMF lending......NOT a bailout of Greece.

A Greek bailout would have been one where they restructed Greek debt in May 2010, and then "bailed in" the greek people.

Wed, 04/18/2012 - 09:31 | 2354516 Dr. Engali
Dr. Engali's picture

I don't know why anything surprises me anymore, yet it still does. But the biggest surprise is how people just shrug their shoulders and move on.

Wed, 04/18/2012 - 09:31 | 2354520 junkyardjack
junkyardjack's picture

One day they'll look back be like, remember when it was only 177% of GDP

Wed, 04/18/2012 - 09:32 | 2354527 GreekGod
GreekGod's picture

Where is all these money going, the Greek people never saw any of it.

Wed, 04/18/2012 - 09:59 | 2354639 Vince Clortho
Vince Clortho's picture

Back to the Banks.

Wed, 04/18/2012 - 09:35 | 2354528 NEOSERF
NEOSERF's picture

So simple math for Portugal, Ireland and Spain (not to mention Cyprus, Lithuania, Latvia and Hungary) that 177% x 1.3T euro combined GDP = 2.3T euro in "firepower" needed over the next two years to keep this game going and that doesn't include any Italy and Greece future needs...the funny thing is that some of the current firepower is being guaranteed by those that will need it....just amazing..

Wed, 04/18/2012 - 09:35 | 2354530 Trader47
Trader47's picture
So everything is hunky- dory  
Wed, 04/18/2012 - 09:35 | 2354535 jus_lite_reading
jus_lite_reading's picture


Hey, I've got some magic Greek beans to sell you and they will grow a giant beanstalk in 100 years... so if you don't see any results soon just wait a little longer!! No refunds before 100 years

Wed, 04/18/2012 - 09:39 | 2354545 youngman
youngman's picture

And gold and silver are down today.....WTF....so Greek paper is better than gold.....I truly have gone crazy if this is right...the new norm...WTF

Wed, 04/18/2012 - 09:39 | 2354548 Vincent Vega
Vincent Vega's picture

We're going to need a bigger boat.  ~Chief Martin Brody

Wed, 04/18/2012 - 09:38 | 2354550 PaperBear
PaperBear's picture

Since when is sovereign debt a secured form of debt ?

Did the word sovereign change it's meaning when I wasn't looking ?

Wed, 04/18/2012 - 09:53 | 2354586 PaperBear
PaperBear's picture

And the 60% debt-to-GDP ratio requirement for entry in the euro currency is now a distant memory.

Wed, 04/18/2012 - 11:06 | 2354858 earnulf
earnulf's picture

There was actually a requirement (laughter) and they actually wrote it down? (more laughter) and they really believed it? (ROFLMAO)

Wed, 04/18/2012 - 09:39 | 2354551 LongSoupLine
LongSoupLine's picture



Cue film of Nigel Farage with flaming chainsaws.

Wed, 04/18/2012 - 09:49 | 2354594 PaperBear
PaperBear's picture

Cue film of Nigel Farage to call for the impeachment of the entire European Commission and European Council or whatever the hell they call themselves. Oh wait, can they be impeached ?

Wed, 04/18/2012 - 09:54 | 2354616 LongSoupLine
LongSoupLine's picture

I believe impeachment requires you be in an "elected" position.

Wed, 04/18/2012 - 09:43 | 2354567 MFL8240
MFL8240's picture

Need to change te title of this article to : THE TRUE COST OF BAILING OUT US AND GERMAN BANKS.

Wed, 04/18/2012 - 10:14 | 2354684 blu
blu's picture

Fact. Greece was and remains a conduit, a la AIG--> GS during Lehman.

Wed, 04/18/2012 - 14:59 | 2355656 sessinpo
sessinpo's picture

MFL8240         2354567

Need to change te title of this article to : THE TRUE COST OF BAILING OUT US AND GERMAN BANKS.



That wouldn't be accurate either. They'll need more than that because many banks in the PIIGS own Greek debt, most notably Spain.


Quite frankly, the amount of debt is in the trillions, just being rotated around. Where the hot potatoe lands is the game.




Wed, 04/18/2012 - 09:47 | 2354580 bnbdnb
bnbdnb's picture

Check out the straight out manipulation of the EURUSD.

Wed, 04/18/2012 - 09:56 | 2354615 pleseus
pleseus's picture

At what point will they say uncle?

Wed, 04/18/2012 - 09:57 | 2354621 They_Live
They_Live's picture

Reasons to be cheerful.

Surely if the 100+ tonnes of Greek gold was fairly valued at approx. 50x it's current book value then the debt/asset ratio is a lot better.

And that's not even counting all the Greek gold that should be returned by the Germans currently being looked after by whoever took it from Fort Knox at some unkown point in the recent past.

Wed, 04/18/2012 - 09:55 | 2354623 strangeglove
strangeglove's picture

And its gone!

Wed, 04/18/2012 - 09:58 | 2354634 Freewheelin Franklin
Freewheelin Franklin's picture

Greece has a probem? No. You gave Greece money. You have a problem.


- Mr Panos

Wed, 04/18/2012 - 10:03 | 2354651 DutchDude
DutchDude's picture

Man this ship is sinking...

If Spain, Italy and Portugal need 177%, they'll need almost in bailout... <gulp>

Wed, 04/18/2012 - 10:13 | 2354679 blu
blu's picture

Where's riot dog?

Wed, 04/18/2012 - 10:17 | 2354691 nah
nah's picture

its not a precise science



Wed, 04/18/2012 - 10:34 | 2354733 Bartanist
Bartanist's picture

Banks create money out of thin air. They can destroy debt just as easily with no one knowing or caring as long as it does not affect them.

It sure looks as if money/debt have the following primary purposes:

- To control the actions of people through the decision of what gets funded and what does not get funded (those on the inside and those that serve their interests get FREE MONEY ... others do not)

- To levy a tax on all assets that is greater than the value of the assets themselves so that over time the central banking government owns all assets

- To afford the bankers, who are at least apparently human-like, a greater standard of living than those they fund, tax and steal from.

In exchange for the above privileges, the banks provide a service that allows people to trade amongst themselves without the use of barter.

It is getting more and more apparent that the service is not worth the cost and that the world could put bankers to better use, picking crops or digging ditches.

Wed, 04/18/2012 - 10:41 | 2354750 Reptil
Reptil's picture

Nigel Farange in the European Parliament: https://www.youtube.com/watch?v=llDYLb7HoIk

Wed, 04/18/2012 - 11:12 | 2354876 writingsonthewall
writingsonthewall's picture

A broken clock is still right twice a day.


Farage and his UKIP loonies are merely jumping on a convenient bandwagon which was pasing his 'small insignificant island stuck on the edge of the Atlantic ocean'

Wed, 04/18/2012 - 11:01 | 2354835 Sandmann
Sandmann's picture

They are funny these men like Barroso with no understanding of what they are doing. Just puffed up little lawyers who think because you can state a fact you have control of it.

Wed, 04/18/2012 - 11:06 | 2354855 chinaboy
chinaboy's picture

Then this is not the final tally. Germans and northern Euros, don't go away.

Wed, 04/18/2012 - 11:09 | 2354865 earnulf
earnulf's picture

Hey Greece is just the preview, the main attraction is still to come (or as you older folks will remember, Greece was the cartoon before the main movie)

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