There Is No Bailout Spoon: The Math Behind The €2 Trillion EFSF Reveals A "Pea Shooter" Not A "Bazooka"

Tyler Durden's picture

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TumblingDice's picture

Math always ultimately prevails upon psychology.

GeneMarchbanks's picture

Not always, as a day like today, demonstrates.

iDealMeat's picture

You both may be proven right before the close.


Irish66's picture

They (FRANCE AND GERMANY) agreed on 2 tr euro

The Limerick King's picture



A Eurozone crises averted?

New leverage will soon be inserted

So simple and sweet

Just wash, rinse, repeat

This Kleptocrat game is perverted!


Mactheknife's picture

France will QUICKLY lose their AAA rating...wait till you see what that brings.  LMAO

Mactheknife's picture

Amidst all the conniving to make the EFSF bazooka credible, the bond market has cast its vote already.

Sudden Debt's picture



ehe... I wouldn't put money on that. I did once and it made perfect sence and I lost my shirt.

the psychology of the state guarantees is keeping these curtains up. The math says there simply isn't enough money to back up all those guarantees.

and yet... the market is still way above the 2008 bottom... go figure...

logic and math won't cut it my friend.

Insanity and hangovers rule the markets and the world these last few decades.

DoChenRollingBearing's picture

Pea shooter be shootin' blanks!

I do not have a bazooka, but I do have a 9 mm and AK to keep me feeling safe...

Shootin' blanks bitchez!

dkd's picture

better to pea shoot than not shoot at all!


myne's picture

It looks like the Euro's only option is to gift each and every citizen and pension account of each and every nation a giant cash bonus.

It will: inflate away nearly all debts while retaining the relative value of each pension.

Yes, all prices will rise massively in a very short timeframe, but with the euro denominated debts gone, the system will effectively reset. With each nation essentially on the same footing - just with very little debt.

Bail out the people and the banks will be bailed out by default.

It's the monetarists version of a debt jubilee.


Ghordius's picture

The EuroZone wants to keep options open.

Is part of the village still intact? Is a part already burnt down?
Wait, don't send the Tsunami in yet...
Damage Control.

Little John's picture

No it doesn't. The human mind is greater than the sum of it's parts and does not lend itself to mathematical modeling - see Kurt Godel’s incompleteness theorems.  

Little John's picture


No it doesn't. The human mind is greater than the sum of it's parts and does not lend itself to mathematical modeling - see Kurt Godel’s incompleteness theorems.  


beartoe's picture


How many zeros?
Long scale is the English translation of the French term échelle longue. It refers to a system of large-number names in which every new term greater than millionis 1,000,000 times the previous term: billion means a million millions (1012), trillion means a million billions (1018), and so on.[1][2]
Short scale is the English translation of the French term échelle courte. It refers to a system of large-number names in which every new term greater than million is 1,000 times the previous term: billion means a thousand millions (109), trillion means a thousand billions (1012), and so on.[1][2]


TooBearish's picture

Awesome work ....or give me $2 and i will give u 1$ back.....

I think I need to buy a gun's picture

i'm so sick of all of this shit.....the garble on cnbc is at a peak....WTF is goig on just collapse this bitch or revalue gold or give me 1 dollar back for every 100 i have so I know where we are going this is getting old all this bullshit i'm trying to run a business here..........

Mugatu's picture

So if I owe someone $1000 dollars and I only have $200, I can guaranty the first $200 of loss and everyone is happy?  Can I do this with my mortgage?  Hey Obama, lets roll out this plan for all these people with negative equity and $500,000 in home equity loans!


schoolsout's picture

Incidentally, Paulson's bazooka was the same thing, too...

Lazane's picture

no amount of math is going to fix these financials 

redpill's picture

Will a pea shooter help us eat our peas?

EL INDIO's picture

Let me guess...It'll go in favor of the manipulators.

LawsofPhysics's picture

Ah yes, because capital controls always lead to a favorable outcome.

nobusiness's picture

The author misses one important point - NO ONE EVER DEFAULTS IN THIS BIZZARRO WORLD.

macholatte's picture


and there you have it.

Clearly, obviously and openly the governments around the world are busting their respective asses to maintain the status quo. Every day for months they throw shit at the wall in the hope that something, anything will stick. Some guy writes a report, proposes a plan, throw it at the wall. Did it stick? No? Go make up something else. In the mean time, manipulating the markets is what they must do in order to maintain control so that is what they do. Their goal is clearly to keep the Euro alive and kick the can so they can buy time. Problems surfacing in 2012 sounds good to them. Delay until 2013 is even better. Kick it out to 2015 is almost orgasmic. Facts don't matter. Perception is everything. 

MarkTwain00's picture

I think busting their asses is giving them too much credit....more like pick a ball from the bullshit lottery ball machine to feed to public

Hard work is not something these people understand 

Josh Randall's picture

A deal is worked out - the math behind the deal isn't important right now..

jdelano's picture

MMmmm....I smell more meat for the grinder.

AbelCatalyst's picture
German Exit Strategy... Here's a possible way for Germany to get out of this mess: Drop out of the Euro and go back to the Mark.  The Mark will appreciate significantly against the Euro, and becasue all of their debt is in Euros, this means they could easily pay back the debt using Marks.  It's like hyperinflating away debt, and having your neighbors suffer the consequences.  Of course, this would lead to war, but the Germans would be fine (until someone drops some bombs on major cities).   The Euro would spiral into the abyss and their main trading partners would not be able to buy anything from Germany, but with virtually no debt they would be just fine, thank you very much!  After all, it is better than working with 17 other countires to solve thier debt issues...   A few weeks ago a very credible source said that Germany was in the process of printing Marks...  hmmm, could this be the Black Swan that will take down the world economy...  Something is about to give in Europe and this very well could be the triggering event.  Thoughts?
Deadpool's picture

Euro was Germany's idea. they can't "drop out". It's their baby.

john39's picture

who says that Germany has to play fair...  they have been screwed in the past, so why not?

Instant Wealth's picture

Euro was France´s idea. It was the prize, Germany had to pay for reunification.

Quote Francois Mitterand. "Versailles without shooting *giggle*."

Steroid's picture

As I remember, the Euro was the price for German reunification. Any member could have used it to its advantage but only the best did though they become the host to the parasites.

Deadpool's picture

The earliest date was in Germany, where the mark officially ceased to be legal tender on 31 December 2001, though the exchange period lasted for two months more.

PY-129-20's picture

According to Austrian Economist Bagus, who is a university professor in Spain, the Euro was a French idea and the whole EU project turned into a socialist experiment, an empire.


In direct opposition to the classical liberal vision [of Adenauer(Germany), Schuman(France) and Alcide de Gasperi (Italy)] is the socialist or Empire vision of Europe, defended by politicians such as Jacques Delors or Francois Mitterand."

"It wants to see the European Union as an empire or a fortress: protectionist to the outside and interventionist on the inside."

"The socialist vision for Europe is the ideal of the political class, the bureaucrats, the interest groups, the privileged, and the subsidized sectors who want to create a powerful central state for their own enrichment Along the socialist path, the European central state would one day become so powerful that the sovereign states would become subservient to them. (We can already see first indicators of such subservience in the case of Greece. Greece behaves like a protectorate of Brussels, who tells its government how to handle its deficit.)"

"Before the introduction of the Euro, the Deutschmark was a standard that laid bare the monetary mismanagement of irresponsible governments. While the Bundesbank inflated the money supply, it produced new money at a slower rate than the high inflation of—especially southern European—countries, who used their central banks most generously to finance deficits"

"If the Euro means so many disadvantages for Germany, how is it possible that Germany agreed to its introduction? The fact is, the majority of the population wanted to keep the Deutschmark (some polls say up to seventy percent of Germans wanted to keep the Deutschmark). Why did politicians not listen to majority opinion? The most feasible explanation is that the German government sacrificed the Deutschmark in order to make way for reunification in. When the Wall came down, unification negotiations began 1990."

"Former translator for Mitterand, Brigitte Sauzay, writes in her memoirs that Mitterand would only agree to the German reunification “if the German chancellor sacrificed the Mark for the Euro.”

"Jacques Attali, adviser to Mitterand, made similar remarks in a TV interview in 1998"

"Another confirmation of these events is provided by Hubert Védrine, also a long time adviser to Mitterand, and later his minister for foreign affairs"
Read more about it: THE TRAGEDY OF THE EURO By Philipp Bagus; Ludwig von Mises Institute)

Deadpool's picture

Bagus is lame. I only listen to Krugman.

lookma's picture

Its hard to imagine a more utterly ignorant book about the Euro than the garbage Baggus published.

The most feasible explanation is that the German government sacrificed the Deutschmark in order to make way for reunification in.

Seriously, take the made up LvMI propoganda and go elswhere please.  LOL at LvMI, who much like the US lives by consuming the capital of its forbearers in lieu of any insightful production of ideas.  Mises would hate you poser conservatard.

JohnG's picture

Not only the world economy, but the entire WORLD.  WW3 quick.  NATO breaks up and it's every man for himself.  Bad option any way you look at it.  Looks like were all fucked.  On a long enough timeline......

Belarus's picture

You know, it's funny. Everyone, including guys like Gonzola Lira, assume that Germany is this huge creditor. But lest they forget, they are a debtor nation. They won' worry about their sovering holdings being paid back in depreciated EUR's agains the Mark. They'll at worst get partity between what they owe and what they recieve + gold holdings. 

Kyle Bass is right, ultimately, Germany leaves the EU. How does one short the EUR/USD?

Ghordius's picture

How many WW2 movies fuel this thought?

Snakeeyes's picture

BRUSSELS (Reuters) – Calls are growing for euro zone states to consider issuing bonds jointly underwritten by all 17 countries in the bloc — so-called euro zone bonds. European Commission President Jose Manuel Barroso promised on Wednesday to present options soon.

Some economic analysts, senior European Union officials, members of the European Parliament and financial market participants believe such a step could help resolve the region’s debt crisis, but little flesh has so far been put on the bones of the idea.

Talk about heaping European woes on the shoulders of Germany! Weaker and financially stressed governments want to pool with the strongest economy to free-ride off their superior credit rating. I will be surprised if Germany agrees.

And that is the problem with all the European solutions — there is too much free-riding off of Germany. Let’s see if the IMF (and the U.S.) step into the breech and guarantee European debt.

As Shakespeare wrote in Henry V, Act III, Scene I. The eve of another big battle against the French…

“Once more unto the breach, dear friends, once more;
Or close the wall up with our German dead.”

Deadpool's picture

Germany (aka Huns) have to agree. the Euro was their devil spawn brain child. It will happen with them kicking and screaming. Call it War Reparations 2.0.

PivotalTrades's picture

Now in for a penny in for a pound. If they are not ideologically against a bailout, they will be all in eventually.

Bob's picture



Thus far, with rough and all-unable pen,
Our bending author hath pursued the story,
In little room confining mighty men,
Mangling by starts the full course of their glory.
Small time, but in that small most greatly lived
This star of England: Fortune made his sword;
By which the world's best garden be achieved,
And of it left his son imperial lord.
Henry the Sixth, in infant bands crown'd King
Of France and England, did this king succeed;
Whose state so many had the managing,  
That they lost France and made his England bleed:
Which oft our stage hath shown; and, for their sake,
In your fair minds let this acceptance take.


catacl1sm's picture

You know what this means, don't you?



Ruffcut's picture

All the greens shoots, I see,  are always covered in feces.

kito's picture

shirley this plan will fix everything. after all, markets are up today, and we all know that the "free market" is the most effective gauge of the truth. right? right?