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 Post subject: Re: Greece Financial Bailout
PostPosted: Thu Apr 08, 2010 6:49 pm 
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dkfan9 wrote:
according to some headline i read on nyt, someone's not willing to let greece default

Emelio Estevez?

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 Post subject: Re: Greece Financial Bailout
PostPosted: Thu Apr 08, 2010 6:50 pm 
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thodoks wrote:
dkfan9 wrote:
according to some headline i read on nyt, someone's not willing to let greece default

Emelio Estevez?


I was going to say Olivia Newton John


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 Post subject: Re: Greece Financial Bailout
PostPosted: Thu Apr 08, 2010 6:52 pm 
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Doug RR wrote:
thodoks wrote:
dkfan9 wrote:
according to some headline i read on nyt, someone's not willing to let greece default

Emelio Estevez?


I was going to say Olivia Newton John

It looks to me like you did say Olivia Newton John.

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 Post subject: Re: Greece Financial Bailout
PostPosted: Thu Apr 08, 2010 8:33 pm 
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I will not let Greece default. The world needs gyros.

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 Post subject: Re: Greece Financial Bailout
PostPosted: Thu Apr 08, 2010 8:37 pm 
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bart d. wrote:
I will not let Greece default. The world needs gyros.


Maria D's for the win...amirite?


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 Post subject: Re: Greece Financial Bailout
PostPosted: Thu Apr 08, 2010 8:37 pm 
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Doug RR wrote:
bart d. wrote:
I will not let Greece default. The world needs gyros.


Maria D's for the win...amirite?

Good lord yes.

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 Post subject: Re: Greece Financial Bailout
PostPosted: Thu Apr 08, 2010 8:38 pm 
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bart d. wrote:
Doug RR wrote:
bart d. wrote:
I will not let Greece default. The world needs gyros.


Maria D's for the win...amirite?

Good lord yes.

8)


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 Post subject: Re: Greece Financial Bailout
PostPosted: Fri Apr 09, 2010 12:28 am 
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bart d. wrote:
I will not let Greece default. The world needs gyros.

Gyros are about as Greek as pizza is Italian.

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 Post subject: Re: Greece Financial Bailout
PostPosted: Fri Apr 09, 2010 12:32 am 
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$úñ_DëV|L wrote:
bart d. wrote:
I will not let Greece default. The world needs gyros.

Gyros are about as Greek as pizza is Italian.

Pizza is Italian, so :?:

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 Post subject: Re: Greece Financial Bailout
PostPosted: Fri Apr 09, 2010 1:12 am 
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bart d. wrote:
$úñ_DëV|L wrote:
bart d. wrote:
I will not let Greece default. The world needs gyros.

Gyros are about as Greek as pizza is Italian.

Pizza is Italian, so :?:

What most people think of pizza as being is not really Italian, and what most people think of gyros as being is not really Greek. Sure, there are Italian and Greek "versions," but they're actually pretty recent, too.

Actually, according to Wikipedia, gyros actually originated in Turkey, and were introduced to Greece in the 1950s or 1970s.

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 Post subject: Re: Greece Financial Bailout
PostPosted: Fri Apr 09, 2010 2:30 am 
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$úñ_DëV|L wrote:
bart d. wrote:
$úñ_DëV|L wrote:
bart d. wrote:
I will not let Greece default. The world needs gyros.

Gyros are about as Greek as pizza is Italian.

Pizza is Italian, so :?:

What most people think of pizza as being is not really Italian, and what most people think of gyros as being is not really Greek. Sure, there are Italian and Greek "versions," but they're actually pretty recent, too.

Actually, according to Wikipedia, gyros actually originated in Turkey, and were introduced to Greece in the 1950s or 1970s.


Was that what all the fighting was about? Getting Greece to adopt gyros?


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 Post subject: Re: Greece Financial Bailout
PostPosted: Fri Apr 09, 2010 1:51 pm 
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Holy shit.

http://www.zerohedge.com/article/greek- ... th-bid-213

Quote:
Greek Curve Goes Apeshit: Bloomberg Reports 3 Month Bid At 21.3%
Submitted by Tyler Durden on 04/09/2010 07:47 -0500

If this information is correct, it is all over. Bloomberg calculates the yield on the Greek 3 Month as determined by the bid, or where investors are willing to buy it, based on BVAL sources at 21.3%. In all honesty the bid/offer market in the 3 Month are all over the place....The HDAT bid implies a yield of 14.049%, which is still game over for Greece.

Image

...

Why is all of this relevant? Because as Market News confirms as we initially noted, Greece plans to sell €600 million in 6 Month and €600 million in 12 Month Bills on April 13. Sorry, if the 3M is anywhere close to 14% bid (let alone 21%), this is not happening.

Denninger notes:

Karl Denninger wrote:
PS: Greece's deficit spending as a percentage of GDP (~12.5% this year) looks a lot like ours, which is right around 11% at present. Is anyone in Washington DC paying attention to what's happening over there?

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 Post subject: Re: Greece Financial Bailout
PostPosted: Fri Apr 09, 2010 3:38 pm 
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Greek Rescue Could Happen over the Weekend: UBS

http://www.cnbc.com/id/36314618

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 Post subject: Re: Greece Financial Bailout
PostPosted: Fri Apr 09, 2010 3:43 pm 
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rafa_garcia18 wrote:
Greek Rescue Could Happen over the Weekend: UBS

http://www.cnbc.com/id/36314618

Bah. An IMF bailout requires 100% EU approval. No way Germany agrees. Something like 75% of Germans oppose bailing Greece out, and with German elections scheduled for May 9th, no way Merkel agrees to this. Political suicide.

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 Post subject: Re: Greece Financial Bailout
PostPosted: Fri Apr 09, 2010 4:03 pm 
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you think the shit will hit the fan then? like next week? ratings downgrades, fire selling, widening yields, no cash for greek banks...

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 Post subject: Re: Greece Financial Bailout
PostPosted: Fri Apr 09, 2010 6:37 pm 
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rafa_garcia18 wrote:
you think the shit will hit the fan then? like next week? ratings downgrades, fire selling, widening yields, no cash for greek banks...

Dunno. It very well could. And the longer the wait, the higher the interest rate promises to spike. Something has to be done before the April 13 auction.

Oh, and what if Greece does get bailed out? Surely the creditor will demand of Greece some degree of fiscal rectitude. But this will cause revenues to plunge (and, likely, expenses to spike). If they get a loan that approaches what the market is currently demanding, and then impose fiscal austerity, how in the world will they ever make the payments?

A bailout only kicks the can. There is no option other than default/devaluation.

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 Post subject: Re: Greece Financial Bailout
PostPosted: Fri Apr 09, 2010 6:46 pm 
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if they decided to kick greece out of the euro zone, issue new currency and devalue, what of all the euro-denominated debt? is that why default is implicit/inevitable?

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 Post subject: Re: Greece Financial Bailout
PostPosted: Fri Apr 09, 2010 6:52 pm 
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rafa_garcia18 wrote:
if they decided to kick greece out of the euro zone, issue new currency and devalue, what of all the euro-denominated debt? is that why default is implicit/inevitable?

Welp, it forces those Euro-denominated creditors who lent to Greece to eat it. Plain and simple. I don't know which EU members are exposed to Greek debt, or to what extent that exposure may be, but I'm sure it isn't insignificant.

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 Post subject: Re: Greece Financial Bailout
PostPosted: Sat Apr 10, 2010 1:14 am 
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rafa_garcia18 wrote:
you think the shit will hit the fan then? like next week? ratings downgrades, fire selling, widening yields, no cash for greek banks...

Well, the ratings downgraded have already begun, even if they're only down to BBB-.

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 Post subject: Re: Greece Financial Bailout
PostPosted: Mon Apr 12, 2010 5:31 pm 
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http://www.economist.com/business-finan ... tures_box2

Europe's Greek rescue plan

The skies brighten over Greece
The EU-led aid package is huge—but more will be needed
Apr 11th 2010 | BRUSSELS | From The Economist online


AFTER two months of bluff and bluster, the European Union finally unveiled the details of a financial rescue mechanism for Greece on April 11th. The package was unveiled in an unusual Sunday press conference in Brussels, following a round of telephone conference calls among the governments of the 16 countries that use the single currency. It would offer Greece up to €30 billion ($40 billion) in bilateral loans in the first year, with more available in 2011 and 2012. Interest rates would be set at around 5% for three-year loans, at least to start with. That is a rate about midway between the punitive rates that markets have been demanding from Greece in recent days, and the interest rates being paid by the next weakest members of the euro-zone club, such as Portugal.

The interest rate reflects the need to offer Greece a breathing space from the markets, while mollifying German-led calls to avoid any hint of a “subsidy” for an errant and profligate member of the euro club. When and if (though it is surely a case of when) Greece seeks to activate the mechanism, the loans from the other 15 euro-zone members would be topped up by substantial funds, perhaps amounting to €15 billion, from the International Monetary Fund. The IMF would set its own interest rates and conditions for its loans, the first of which could be available within hours of a Greek request.

Jean-Claude Juncker, the prime minister of Luxembourg, who also chairs the Eurogroup of euro-zone finance ministers, insisted that the mechanism, if activated, would leave intact the “no bail-out” clause in the EU’s treaties, on the grounds that “the loans are repayable and contain no element of subsidy.”

As the largest EU economy, Germany will contribute more than any other country towards a Greek rescue (though German banks also hold large amounts of Greek government debt, and thus would suffer greatly in the event of a default). In these recessionary times, German public opinion is strongly opposed to anything amounting to a handout for Greece, and Angela Merkel, the German chancellor, has duly taken a tough line in advance of important regional elections her coalition must fight on May 9th.

Backed by Austria and the Netherlands, Mrs Merkel repeatedly demanded that Greece be made to pay market rates for any rescue loans (even though such a rescue would only logically be necessary once market rates reached levels Greece could not afford). The German government has also said that the country’s federal constitution outlaws any help that might undermine the strict rules created to ensure the stability of the single currency.

The Brussels announcement amounted to the third and most detailed attempt by EU bosses to sell a tricky message to financial markets and voters alike: that Greece would not be allowed to fall victim to a sovereign credit crunch, but that the euro zone stands by its founding principle that profligate members cannot be bailed out.

EU leaders first pledged in February they would not allow any member of the euro zone to fall victim to a sovereign credit crunch, but failed to explain how they would carry out this promise—as if hoping that their resolve alone would frighten the markets into submission. In March, tense negotiations led by the two largest euro members, France and Germany, generated a second pledge with more details—such as a substantial lending role for the IMF—while still maintaining the polite fiction that a rescue mechanism might never be needed.

As so often before, the Greek finance minister, George Papaconstantinou, told reporters that Greece had not sought help, and hoped to continue borrowing on financial markets. However, his boss George Papandreou, the prime minister, displayed striking candour, telling the Sunday edition of To Vima, a newspaper: “The question remains whether this mechanism will convince markets just like a gun on the table. If it does not convince them, it is a mechanism that it is there to be used.”

Whether it does convince the markets may soon be clear: On April 13th Greece was due to try to auction a fresh slice of short-term debt. The government needs to borrow about €11 billion by the end of May to roll over maturing debt and service interest charges. All in all, the country may need to borrow more than €50 billion in 2010 (estimates vary).


In recent days market anxiety had pushed Greece’s long-term bond yields to their highest levels since the country joined the single currency nearly a decade ago, partly thanks to uncertainty over the EU’s readiness to provide aid. Amid press reports of wealthy clients withdrawing deposits from local banks and sharp falls on the Greek stockmarket, Fitch, a credit-rating agency, downgraded the country’s debt by two notches to BBB-, the lowest investment grade, just above “junk” status. In its announcement on April 9th, Fitch cast doubt on the Greek government’s vow to cut its public deficit by a third—the equivalent of 4% of GDP—this year, in light of the country’s deepening recession and the rising costs of servicing a €300 billion mountain of public debt.

In theory, the rescue mechanism is equipped with a double lock: once Greece has decided it has reached the end of the road with normal market borrowing, officials from the European Central Bank and European Commission must agree that Greece is out of options. In practice, once Greece signals it has lost the confidence of the markets, things will move fast.

Representatives from the commission, the ECB and the Greek government will meet IMF officials on April 12th to discuss the conditions that would be imposed on Greece and the exact size of the IMF contribution. The combined EU-IMF package is a substantial one but few imagine that it will be a one-off: on Sunday Reuters news agency quoted a Greek official as saying the country is likely to need a total €80 billion of loans over three years. If so it will be the largest multilateral rescue of a debt-ridden country yet seen.

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