Loans and Finance

Loans and Finance

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News and information about loans, money, debt, finance and business issues.

Wednesday, February 29, 2012

Happy LTRO Day II

Well my earlier bet on LTRO as being around Euro650BN was wide of the mark!

The ECB's 3 year LTRO has just been announced as being Euro529BN, given to the 800 banks which have come forward with their begging bowls.

Happy LTRO Day

At 10:20GMT today we will know how much money has been borrowed under the ECB's LTRO scheme, which is being used to sandbag banks in the likely event of a sovereign debt default.

The ECB claims that the money will be used to stimulate growth, the reality is that it will be placed by the banks at the ECB to be used when the forthcoming Greek default causes a run on the banks.

For what it is worth, I am taking a non financial punt on LTRO being around Euro650BN.

Tuesday, February 28, 2012

Barroso Speaks

Jose Barroso (President of The European Commission) has addressed the European Semester (no, I had never heard of it either), and stated:

"I insist we have to be clear about the goal, the goal is growth."

Would he care to explain to the people of Greece how their country will grow over the next few years, on the basis of the austerity programme that has been forced down their throats by the Troika? 

He went on to say:

"national budgetary decisions are the responsibility of national parliaments and will remain so.."

Not in Greece they're not!

"..growth-boosting reforms are still lagging behind. I mean this in areas such as tax reform, pension reform, labour market reform and opening up the services and retail sectors. 

Of course the picture is mixed across the Union, but these are the areas the Commission and Council will focus on in the Country-Specific Recommendations. 
 
I know these reforms can be difficult and sensitive."

Quite!

By the way, the title of his speech was "Unity in difference, strength in convergence"; clearly derived from Orwell's "1984" "Freedom is Slavery, War is Peace" etc!

Monday, February 27, 2012

The New Greek Treaty of Versailles

Gregor Gysi (parliamentary group leader of the Left Party) has just addressed the Bundestag, during the debate about the Greek bailout plan, and has compared the Greek bailout plan to the Treaty of Versailles:

"Bei der Krise in Europa greifen wir zu Versailles anstatt zu Marshall...."

"The crisis in Europe, we resort to Versailles instead of Marshall.."
 
Evidently he has been reading this site, as I said much the same thing two weeks ago:

"Let us be clear that the 50 page "agreement" (written in English) that the Greek political establishment has to agree, in order to receive Euro 130BN, will (if it is accepted) have the same consequences for Greece as the Treaty of Versailles did for the Weimer Republic"


Germany Trying To Sabotage Greek Bailout

I noted last week that "the IMF regards the EFSF as a busted flush, and has no intention of throwing any more money into the doomed project".

Unsurprisingly, the G20 have now stated categorically in their end of summit communique that no money will be forthcoming until the Eurozone puts more of its own money in, and that it is "essential" that the Eurozone boosts its own firewall first.

Meanwhile, as if deliberately trying to further humiliate and antagonise the Greeks, the German Finance Ministry has announced that more than 160 German tax collectors have volunteered for possible assignments in Greece.

Anyone would think that the Germans were deliberately trying to sabotage the bailout, and force the Greeks to walk away from it!

Given that German Finance Minister Wolfgang Schaeuble doesn't believe that the bailout will succeed, it is in Germany's interests that time and money are not wasted on it.

 

Sunday, February 26, 2012

Oil Shipment To Greece Stopped

"Greece relied on Iran for more than half of its oil imports during some months last year after traders and oil majors pulled the plug on supplies and banks refused to provide financing for fear that Athens
would default on its debt
."

Unfortunately, Iran has just stopped a shipment of oil to Greece:

"Oil tankers that had come to transfer 500,000 barrels of Iranian oil to a refinery in Greece had to go back empty-handed after Iran refused to give the shipment,"

However, Hellenic have denied the veracity of this story :

"That has nothing to do with us ... all supplies from Iran have been processed normally,"

Well, they would have to deny this wouldn't they?

They are currently negotiating for supplies of oil from elsewhere, any admission that their supplies have been cut will negatively impact those negotiations and cause panic buying in Greece.

Beware denials and irrational optimism from Greek oil companies!

Saturday, February 25, 2012

The Official Greek PSI Website

The first press release from the Hellenic Republic Ministry of Finance, as per the official and newly created PSI website:


HELLENIC REPUBLIC MINISTRY OF FINANCE
Press Release 
For Immediate Release 
24 February, 2012

Athens, Greece. The Ministerial Council of the Hellenic Republic today approved the terms of invitations to be made to private sector holders outside the United States of bonds issued or guaranteed by the Republic and selected to participate in the exchange offers and/or consent solicitations to be made by the Republic in furtherance of the 26 October 2011 Euro Summit Statement and the 21 February 2012 Eurogroup Statement, referred to as the Private Sector Involvement. The bonds invited to participate in PSI (listed by series in Annex I) have an aggregate outstanding face amount of approximately Euro 206 billion.

The exchange offers and/or consent solicitations will permit private sector holders to exchange bonds selected to participate in PSI for (i) new bonds to be issued by the Republic on the PSI settlement date having a face amount equal to 31.5% of the face amount of their exchanged bonds, (ii) European Financial Stability Facility notes with a maturity date of two years or less from the PSI settlement date and having a face amount equal to 15% of the face amount of their exchanged bonds, and (iii) detachable GDP-linked securities issued by the Republic having a notional amount equal to the face amount of each holder’s new bonds. On the PSI settlement date, the Republic will also deliver short-term EFSF notes in discharge of all unpaid interest accrued up to 24 February 2012 on exchanged bonds. The terms of the new bonds, GDP-linked securities and EFSF notes are summarized in Annex II.

The consent solicitation relating to Greek-law governed bonds issued by the Republic prior to 31 December, 2011 (having an aggregate outstanding amount of approximately Euro 177 billion) will seek the consent of the affected holders to the amendment of these bonds in reliance on Law 4050/2012 (the Greek Bondholder Act) enacted by the Greek Parliament on 23 February 2012. The proposed amendments provide for the redemption of the affected bonds in exchange for the PSI consideration described above. Under the collective action procedures

introduced by the Greek Bondholder Act, the proposed amendments will become binding on the holders of all the Republic’s Greek-law governed bonds issued prior to 31 December 2011 identified in the act of the Ministerial Council approving the PSI invitations, if at least two thirds by face amount of a quorum of these bonds, voting collectively without distinction by series, approve the proposed amendments. One half by face amount of all the Republic’s bonds subject to the collective action procedures will constitute a quorum for these purposes. The Republic will also separately solicit consents in favour of equivalent amendments from the holders of its foreign-law governed bonds and its foreign-law guaranteed bonds in accordance with the terms of those bonds.

To satisfy regulatory requirements applicable in a number of jurisdictions, the Republic will invite the holders of certain series of bonds to participate in the Republic’s exchange offer but not its consent solicitation, and holders of the Republic’s Swiss-law governed bonds may not exchange their bonds but will be solicited to consent to their amendment. Holders will receive substantially the same consideration irrespective of whether they participate in the exchange offer and/or a consent solicitation. The Republic also intends to invite holders in the United States of America to participate in a concurrent exchange offer and consent solicitation on substantially the same terms. The Republic will not, however, deliver any EFSF notes to holders in the United States of America, who will instead be paid the cash proceeds realized from the sale of the EFSF notes they would otherwise have received.

The full terms of each invitation will be made available in electronic form only through www.greekbonds.gr. In order to participate in an invitation, holders will need to comply with the procedures and offer and distribution restrictions described in the Republic’s related invitation memorandum available online at www.greekbonds.gr.

The invitations will be subject to certain conditions, including a financing condition and a minimum participation condition. Under the financing condition, the Republic will not proceed with any of the transactions contemplated in the invitations unless it meets all of the conditions under the financing agreements entered into with the EFSF for the Republic to be entitled to receive the EFSF notes, which include the approval by EWG, at its absolute discretion, of such disbursements. In addition, unless bonds representing at least 90% of the aggregate face amount of all bonds selected to participate in PSI are validly tendered for exchange, the Republic will not be required to settle any of the exchanges. However, if the Republic receives consents to the proposed amendments that would result in at least 90% of the aggregate face amount of all bonds selected to participate in PSI (including bonds tendered for exchange) being exchanged on the terms proposed by the Republic, the Republic intends, subject to all other conditions being satisfied and in consultation with its official sector creditors, to declare the proposed amendments effective and to complete the exchange of all bonds selected to participate in PSI that would be bound by the proposed amendments.

If at least 75% but less than 90% of the aggregate face amount of all bonds selected to participate in PSI are validly tendered for exchange, the Republic, in consultation with its official sector creditors, may proceed to exchange the tendered bonds without putting any of the proposed amendments into effect. However, if less than 75% of the aggregate face amount of the bonds selected to participate in PSI are validly tendered for exchange, and the Republic does not receive consents that would enable it to complete the proposed exchange with respect to bonds selected to participate in PSI representing at least 75% of the aggregate face amount of all bonds selected to participate in PSI, the Republic will not proceed with any of the transactions described above.

Deutsche Bank AG, London Branch, and HSBC Bank plc have been appointed to act as Closing Agents for the invitations made outside the United States. Bondholder Communications Group LLC and Hellenic Exchanges, S.A. have been appointed to act as the joint Information, Exchange and Tabulation Agent.

Friday, February 24, 2012

Greece Headed For Hard Landing

The "Bloodless" Greek Coup

has just tweeted the following:

"Source in EU Greece Task Force: growing concerns the 'prior actions' Athens has to enact to trigger bailout may be 'impossible' to meet."

Aside from the fact that people are now waking up to the fact that the austerity measures and financial targets being imposed on the Greek people are all but impossible to meet, it is also now dawning on people that, in all but name only, the Eurozone has enacted a (as yet bloodless) coup on the Greek people.

Greece has now been placed on "Special Measures" by the Eurozone and, for the next two years, irrespective of the wishes of the Greek people has now ceased to govern itself. Some Greek people now even have to pay for the privilege of working.

No one (aside from maybe those policy wonks who dwell in the bunkers of the Eurozone) seriously thinks that this stands a cat's chance in hell of working.

Why therefore go to all this trouble?

Simple, the decision has already been made to expel Greece from the Eurozone. However, those who have made the decision want Greece to pull the trigger!

Thursday, February 23, 2012

European Commission Forecast Worse Than Worthless

The European Commission, in its February 2012 forecast, has admitted that its November 2011 forecast for the Greek economy is in fact wrong.

"In 2011, economic activity was much weaker than anticipated in the autumn forecast."

Real output in Greece is expected to shrink by 4.3% compared with the November forecast of around 2.6%.

"Greece, Portugal and Spain account for 95% of the rise in unemployment in the EU since late 2010".

Unfortunately, the "success" of the Greek bailout "plan" rests on the reliability of the Commission's eight year forecast for Greece (which states that by 2014 Greece will return to growth). However, as the Commission has admitted, the forecast isn't worth the paper it is printed on.

"Greater spillovers from potential worsening conditions in Greece, due to the large exposure of the financial sector, are substantial."

Here is the Commission's February forecast, which will doubtless be out of date and worthless by mid year!

Wednesday, February 22, 2012

Greeks To Pay For Working

It seems that some hapless Greek citizens will now have to pay for the privilege of working (that makes the UK government's Workfare scheme look positively generous).

Source The Press Project:

"Salary cutbacks (called "unified payroll") for contract workers at the public sector set to be finalized today. Cuts to be valid retroactively since November 2011. 

Expected result: Up to 64.000 people will work without salary this month, or even be asked to return money. Amongst them 21.000 teachers, 13.000 municipal employees and 30.000 civil servants."

Boom! - Greek Bailout Consigned To The Flames

It seems that, in the interests of their Eurozone overlords, the Greek government is going to postpone the April elections.

Apparently implementing the austerity measures required by the Eurozone is taking up so much time, that the "annoying" and time consuming matter of "democracy" has to be placed on the backburner.

Let me be perfectly clear, irrespective of whether the austerity programme had a cat's chance in hell of succeeding (which it didn't), by stifling the democratic process the unelected technocrat Prime Minister has now guaranteed that the social unrest caused by this foolish decision will consign the bailout and Greece to the flames.

Greece Will Default

Fitch says that the Greek bond swap, if implemented, would constitute a rating default and result in downgrade to "restricted default".

For good measure they have just downgraded Greece from CCC to C.

Wheels Start To Come Off Greek Bailout

Unsurprisingly, less than 24 hours after the announcement that the bailout had been agreed and that the Greek crisis had been "solved", the wheels are now coming off the agreement.

There will be a G20 summit in Mexico on 25-26 February, where the EU will beg the IMF to increase its contributions to prop up its firewall.

Unfortunately, the IMF regards the EFSF as a busted flush, and has no intention of throwing any more money into the doomed project. In fact, according to the Telegraph, the IMF will threaten to pull the plug on its contribution to the Euro130BN bailout unless the Eurozone creates a Euro750BN fund.

The small problem with this idea is that Germany has no intention of creating such a fund, because it would increase Germany's exposure to default.

Olli Rehn, the EU's economic and monetary affairs commissioner, wants to merge the European Financial Stability Facility (EFSF) with a new European Stability Mechanism (ESM) which has yet to be created.

The fantasy value of this yet to be created ESM is Euro500BN.

However, as with the ludicrous "values" placed on the busted flush of the EFSF, it is safe to assume that the ESM will never reach that level.

As with all matters pertaining to the Eurozone firewall and the bailout, the "leaders" of the Eurozone are building castles in the air.

Tuesday, February 21, 2012

The Greek Bailout Explained



A rigorous and detailed explanation of the Greek bailout deal.

Greek Problem Sorted - LOL!

Some of the media are happily pumping the Eurozone line that the Greek problem is sorted, and that now the second bailout of Euro130BN has been agreed (after a marathon 13 hour session of finance ministers) we can all move on.

Not quite, aside from the fact that the Greek economy is sunk and that borrowing money to pay off debt will not resolve this problem; the private bondholders (sans ECB, which protected itself by sleight of hand last week) will have to take a NPV haircut of 74%.

Institute for International Finance (IIF) crisis resolution official Jean Lemierre was only told of the size of the haircut this morning.

The "party line" is that the creditors will voluntarily accept his haircut. The reality is that there will be a few who refuse to have their "assets" further written down, as such Greece will have to enforce the Collective Action Clauses (CAC) and force the recalcitrant bondholders to accept the 74% haircut (this of course is a default event).

Aside form that, all Greece has to do is to reduce its debt from 160%to 120.5% of GDP in 2020.

"Easy"!!!!

LOL!

This is not over, by any stretch of the imagination.

Here is the Sustainability Analysis by the Troika dated 15 February (as you can see, this will not work).

Greek Sustainability Proposal

Monday, February 20, 2012

"When It Becomes Serious, You have To Lie" - Jean-Claude Juncker

Greece Agrees To Escrow

The media report that Greece has agreed to an escrow account, whereby bailout funds will be deposited and distributed as and when Greece honours its part of the bailout deal; the escrow account formally subordinates national funding needs to those of creditors.

Government Waive VAT on Military Wives’ Charity Single

HMT have announced the following:

"The Chancellor of the Exchequer, George Osborne, has today announced that the Government will waive VAT on sales of the Military Wives choir’s Christmas single by making an exceptional one-off charitable donation to the Royal British Legion, and Soldiers, Sailors, Airmen and Families Association (SSAFA), the charities chosen to benefit from sales of the song.   The donation will be equivalent to the sum of the VAT receipts collected on sales. 

Recognising the service of the armed forces and the high levels of public support for the single, as well as the exceptional contribution both charities make through their work with members of the forces and their families, George Osborne and Defence Secretary Philip Hammond want to maximise the donation that the charity receives by adding the VAT equivalent. 

George Osborne said: 

“Our armed forces demonstrate incredible commitment to the nation and make sacrifices for all of us.  The Military Wives choir is doing a great job of raising money for this hugely worthy cause. We will donate the tax collected on the single so that as much as possible of the money spent by the public on this fantastic song goes to charities helping our armed forces and their families this Christmas.”
Philip Hammond said: 

“Christmas can be a particularly difficult time for our brave service personnel deployed on operations, but also for their families at home. I am delighted to be supporting the Military Wives choir in this initiative, who in turn are supporting our Armed Forces community.”

Notes for Editors


  • The fundraising song (Wherever You Are) is performed by the Military Wives choir.  All net record proceeds are going to the Royal British Legion and SSAFA.  For more information, visit http://www.whereveryouare.co.uk/.
  • The donation will be equivalent to the sum of the VAT receipts collected on sales before the 31 January 2012 and will be funded by HM Treasury.
  • Update - On 19 February 2012 the Government announced that the sales deadline of 31 January would be extended to 31 March 2012 in recognition of the fact that the single’s Brit award nomination is likely to result in additional sales.
  • D Day For Greece?

    Today, according to the media, is "D Day" (Decision Day) on the second Greek bailout.

    Most in the mainstream media, egged on by spin and hype from the usual suspects in the Eurozone, are predicting that the bailout will be agreed and that the Euro130BN will be handed over to Greece without further ado.

    However, scratch beneath the surface and the picture isn't quite so rosy.

    In the event that the deal is agreed today, acceptance by Greece of the terms of the deal will in effect mean that it has defaulted.

    For why?

    The ECB has done a better deal for itself than other bondholders, and those that hold out against this subordination will be forced to take a 70% haircut (the is a default event, by any definition of the word).

    Additionally, to add to Greece's woes, the Eurozone finance ministers (ever reluctant to trust Greece) are looking into setting up an escrow account which will be used to pay the bailout in tranches (if and when Greece honours its side of the deal).

    Finally, in a comment not yet picked up by some in the media, Finland has said the deal will not be approved until 12 March.

    Deal done?

    No!

    Friday, February 17, 2012

    Zen Like Calm

    A mood of "Zen like calm" appears to have settled upon the Greek bailout crisis. Ahead of Monday's Eurozone vote on the second bailout, the media reports that finance ministers apparently will approve the deal.

    This despite the fact that Greece's public debt will fall to 129% of GDP The target set by the Troika being 120%).

    As to whether this mood of calm continues to pervade during the weekend and on Monday; we shall see, this may just be the calm before the storm.

    Thursday, February 16, 2012

    Greece Bailout Decision Delayed - Again!

    Unsurprisingly, amid the increasingly tetchy "diplomatic" brickbats being lobbed between Greece and the Eurozone, yesterday's three-hour teleconference between Eurozone finance ministers did not resolve the issues regarding the second bailout.

    The decision on whether to grant a second bailout (pre or post election, or even at all) has been postponed to at least Monday next week, pending further clarification from Greece as to how they will implement the austerity package and the timetable for doing so.

    Don't hold your breath!

    Wednesday, February 15, 2012

    Playing Politics With People's Lives II



    Earlier today I wrote the following:

    "Samaras, continuing to play politics for the benefit of the domestic audience, will (if his spokesman is to be believed) sign and send the commitment within 24 hours.

    Playing politics may be all very well sometimes, unfortunately in this particular case he and others are playing politics with people's lives
    ."

    Unfortunately it is not just Greek politicians who play politics, but Greece's paymasters in the Eurozone.

    It appears, according to leaks emanating from the Eurozone bunker, that today's finance ministers' teleconference will discuss delaying the Greek bailout until after the results of the April election.

    Although a bridging loan will probably be provided, ministers intend to withhold the full bailout until Greece votes in favour of austerity.

    This of course is naked political blackmailing of a sovereign state by an unelected body, ie dictatorship by the back door.

    Iran Shuts Off Greece's Oil Supply

    As I warned in January, Iran has just shut off Greece's oil supply.


    Contingency Plans For Greek Exit From Eurozone

    Sir Mervyn King, Governor of the Bank of England, as just sated that there are contingency plans for a Greek exit from the Eurozone.



    'contingency plans' in place for says sir mervyn of BOE"

    Playing Politics With People's Lives


    Unsurprisingly Eurozone finance ministers have cancelled plans for a face-to-face meeting to discuss and approve Greece's bailout today, instead they will hold a conference call.

    The meeting has been cancelled because Greece has failed to say how it would fill the Euro325M black hole in its austerity programme, and because Antonis Samaras (a Greek conservative party leader) has still failed to sign the commitment to implement austerity measures after an election in April.

    Samaras, continuing to play politics for the benefit of the domestic audience, will (if his spokesman is to be believed) sign and send the commitment within 24 hours.

    Playing politics may be all very well sometimes, unfortunately in this particular case he and others are playing politics with people's lives.

    As German finance minister Wolfgang Schäuble noted today:

    "When you look at the internal political discussions in Greece and the opinion polls, then you have to ask who will really guarantee after the elections – and I find that very alarming – that Greece continues to stand by what we are now agreeing with Greece. 

    I am also not yet sure that all political parties in Greece are aware of their responsibility for the difficult situation their country is in."

    It is clear that Greece will default and exit the Euro, the only question is when.

    Tuesday, February 14, 2012

    The EU Begging Bowl Travels To China

    The EU, in the form of EU President Herman van Rompuy, has yet again taken its begging bowl to China in a desperate attempt to avoid having to use its own funds to resolve its own self inflicted mess.

    The Chinese, for their part, have been very polite and hospitable.

    China's Premier Wen Jiabao said that China was ready to increase its participation in efforts to resolve Europe's debt crisis, as per AFP:

    "China is ready to increase its participation in resolving the EU debt problems."

    However, despite van Rompuy believing that this may mean that China will provide funds this time (China sent the last EU begging delegation back empty handed in 2011), it is clear that the Chinese quite rightly believe that it is for Europe to sort its mess out. This week the Chinese foreign ministry said that the European crisis had reached a "critical juncture", the implication being that the EU needs to recognise this and address the issues itself.

    Greece Likely To Default

    Handelsblatt has quoted unnamed central bank (ECB or German central bank?) sources as saying that Greece will fail to achieve a voluntary haircut of its debt, thus leaving the only option as being a compulsory write down (ie default).

    The Greek Tragedy Laid Bare!

    As Greece struggles to find the extra Euro325M to fill the black hole in its austerity "plan", here comes a timely reminder of where they could have found the money from (based on a discussion that Nina Maria Potts had with a Greek protester):



    "Greece ridiculed for not finding 325 mill to cut-the price our gvt paid to Goldman Sachs to hide size of public debt.

    325 mill paid to Goldman Sachs to hide our public debt was signed by Papademos himself.Now my mother has to cut 15% of a 850 euro pension."

    I am sure that if Goldman Sachs were asked nicely, they would return the fee!

    Monday, February 13, 2012

    Athens Burns Whilst Berlin Fiddles

    Amid scenes of chaos, disorder, petrol bombs and destruction in the streets of Athens, the Greek parliament by a vote of 199-74 passed the austerity bill that, in theory, will give Greece access to the long awaited second bailout.

    However, the German finance minister Wolfgang Schaeuble added fuel to the flames by telling the Welt am Sonntag newspaper: 
     
    "The promises from Greece aren't enough for us any more.

    Greece needs to do its own homework to become competitive whether that happens in conjunction with a new rescue programme or by another route that we actually don't want to take."

    The German Economy Minister, Philipp Roesler, expressed a degree of scepticism about whether the vote was enough and said

    "It is good that the laws were passed and with a large majority but what counts now is the implementation of structural reforms.
     
    We have gone a step in the right direction, but we are still a long way from the goal.
     
    We have to see the troika report. They will assess whether the measures are sufficient to assure Greece's debt sustainability.
    We want to see what comes after the legislative process because the legislative process is one thing, implementation is another."


    Bailout or not, most now consider that it is only a matter of time before Greece exits the Eurozone; contingency plans for a return to the Drachma have already been made (its is indeed quite possible that the printing presses are already running).

    Saturday, February 11, 2012

    Greek Police Union Seeks Arrest Warrants for EU, ECB Officials

    Bloomberg reports the following:

    "The Greek police officers’ union called for arrest warrants to be issued for European Union, European Central Bank and International Monetary Fund officials negotiating austerity measures for a national debt bailout. 

    The Greek Federation of Police Officers said in a published letter it will ask for arrest warrants for former European Commission representative Servaas Deroose, the IMF’s Poul Thomsen and the ECB’s Klaus Masuch. Under Greek law, arrest warrants must be issued by an appellate court prosecutor, a police spokesman in Athens said today, speaking on condition of anonymity in line with official regulations. 

    “We warn you that we will demand, as legal representatives of the Greek police according to Greek law, that warrants for your arrest are immediately issued,” according to the letter published on the union’s website. 

    The police union accuses officials of the so-called troika -- which is negotiating austerity measures in Greece in exchange for a second bailout -- of extortion, promoting the elimination of Greece’s democracy and national sovereignty and insulting the country."

    Friday, February 10, 2012

    Eurozone Postpones Greek Bailout

    Eurozone finance ministers are more than a little sceptical about yesterday's announcement by Greece that they have accepted the Troika's deal. As such the Eurozone have refused to authorise the second tranche of the bailout, and have postponed their decision until next Wednesday.

    The Eurozone, in addition to wanting to see the Greek parliament vote in favour of the deal and enact supporting legislation, also wants to see the Euro325M hole (funding gap) in the "plan" closed before next Wednesday.

    In effect, and unsurprisingly, the Eurozone do not believe that the Greeks will live up to their promises.

    Greek finance minister, Evangelos Venizelos, was more than a little "peeved" at having to return home empty handed, and has allegedly stated that Greece now needed to decide whether or not to remain in the single currency.

    It seems as though the Eurozone wants Greece to leave of its own accord.

    Thursday, February 09, 2012

    Greek "Deal" Starts To Unravel

    My earlier cynicism of an hour ago about the alleged Greek "deal" seems to be well founded.

    Aside from the fact that holes are being picked in the announcement from Greece by all and sundry, and questions being raised by the IMF et al, news has just come in that Greek deputy labour minister Koutsoukos has just resigned over this.

    Additionally, German Finance Minister Schauble says that the Greek 'deal' does not yet meet EU expectations:

    "More work needed."

    Oh and let's not forget the 48 hour strike starting tomorrow.

    Greece Accepts The Treaty of Versailles

    In a volte farce (sic) Greece has now told the ECB that its political parties have now agreed the Troika's "Treaty of Versailles".

    However, the ECB is not saying whether it accepts the deal.

    Sorry for sounding a tad cynical over this, but this sudden change of heart does not ring true. There is also the annoying problem (which some in the mainstream media seem to have forgotten) that Papademos revised his budget targets, and only informed the Troika at 6am this morning, as such the Troika will have to rework their calculations to see if the bailout actually works.

    Here is the draft of the Troika's plan for Greece before they rework it.

    Oh and by the way, there is still the none too small matter of the Greek parliament having to endorse this.

    Here is the text of the official statement (short on details and rather woolly) from the Prime Minister's Office :

    The agreement with the troika has been completed

    February nine, 2012 | Categories: Articles and Statements , Prime Minister

    Prime Minister's Press Office
    Thursday, February 9, 2012
    The government's discussions with the troika were concluded successfully this morning on the issue which had remained open for further elaboration. The political leaders have agreed on the result of these discussions.
    Thus there is general agreement on the content of the new program, in view also of this evening's Eurogroup meeting. This program accompanies the new loan agreement to finance Greece with 130 billion euro.

    Juncker's Views on Democracy

    As the people of Greece prepare to go on 48 hour strike, and protest in the streets about the imposition of an EU protectorate, they may well care to reflect on the words of Jean-Claude Juncker (President of The Euro Group).

    In 2000 (some twelve years ago) he gave an interview to Der Spiegel

    Here is an extract of what he said:

    "We decide on something, then put in the room and wait a while to see what happens," the prime minister of tiny Luxembourg reveals the tricks to which he encouraged the leaders of the EU in European politics. 

    "If there is then no bluster and no uprisings, because most people do not know what has been decided, then we go on -. Step by step until it no return"

    Ever get the feeling you were conned?

    Greece Rejects Treaty of Versailles

    Unsurprisingly the much hyped, much delayed, meeting yesterday between Greek Prime Minister Papademos and leaders of those parties that are propping up his government failed to agree to the Troika's "Treaty of Versailles".

    One sticking point , apparently, was the demand for a reduction in pensions. Finance Minister Evangelos Venizelos heads for Brussels today empty handed.

    Another problem is that Papademos has revised his budget targets and only informed the Troika at 6am.

    Eurozone officials say that the deadline for Greece agreeing to the Troika's demands is 15 February (so that the necessary paperwork can be completed). Greece, on the other hand, claims that it has been given 15 days to sort this out.

    How "ironic", but not surprising, that the Eurozone and Greece cannot even agree on the new "deadline"!

    Well, irrespective of which "deadline" is the real "deadline", no one actually believes that either "deadline" will be met.

    Here is the draft of the Troika's plan for Greece.

    Wednesday, February 08, 2012

    Exclusive Photo of Papademos Meeting

    Papademos Meeting Has Begun

    I stand corrected, earlier today I wrote that the much postponed Papademos meeting would be again postponed from today.

    I was wrong, the meeting has in fact just begun!

    The questions is will the Greek political establishment sign up to the new Treaty of Versailles?

    Translating The New Treaty of Versailles

    As I noted earlier today, the new Treaty of Versailles (being imposed on Greece) is in English not Greek.

    At least one Greek politician has stood up and demanded that it be translated into Greek.

    Georgios Karatzaferis a member of the Hellenic Parliament, and president of the Popular Orthodox Rally, wont go to meeting until draft is translated into Greek.

    The New Treaty of Versailles

    Let us be clear that the 50 page "agreement" (written in English) that the Greek political establishment has to agree, in order to receive Euro 130BN, will (if it is accepted) have the same consequences for Greece as the Treaty of Versailles did for the Weimer Republic.

    The Fake Papademos Meeting - Greece To Exit Euro

    Yesterday, amid a welter of political theatrics and meeting postponements, I wrote the following:

    "Oh, if anyone actually cares anymore, the Papademos meeting (which of of course is pointless without a draft of the document to be "agreed") has been postponed again.

    Latest estimate for them meeting is 21:00 (19:00 GMT).


    As I said
    earlier this morning:
     
    "Stay tuned, I guarantee that there will be more theatrics and that his meeting will be postponed again.""

    Can you guess what happened yesterday children?

    Yes, that's right, the meeting was postponed to today.

    Can you guess what is happening now children?

    Yes, that's right, today's imaginary meeting has been put back from an imaginary start time to another imaginary start time.

    Oh, but today's theatrics don't quite end there.

    For your see children, today's meeting is in fact going to be postponed to tomorrow (where of course it will be postponed again).

    Now, many of you may be asking why does Papademos keep doing this?

    The answer is simple, he knows that it will be political suicide to impose the Troika's conditions on the Greek people; he is looking to exit the Euro (as I wrote yesterday). Until he finds a way of exiting the Euro, that saves his political hide, he must play for time and pretend that an agreement on the deal is close at hand.

    Tuesday, February 07, 2012

    The Moveable Feast That is The Papademos Meeting III

    Oh, if anyone actually cares anymore, the Papademos meeting (which of of course is pointless without a draft of the document to be "agreed") has been postponed again.

    Latest estimate for them meeting is 21:00 (19:00 GMT).

    As I said earlier this morning:

    "Stay tuned, I guarantee that there will be more theatrics and that his meeting will be postponed again."

    The Movable Feast That is The Papademos Meeting II

    Further to my article earlier today about the moveable feast, it seems that there has been another "postponement":
     
    "mega tv said that meeting will be today at 18:00, but the final document of the deal, will be given tomorrow to political leaders".

    Greece Looks To Exit Euro

    The Greek Prime Minister, Papademos  has asked the Greek Finance Ministry to examine the economic consequences of Greece leaving the Euro.

    Very wise, but very late in the day; given that Greece leaving the Euro is now dead cert.

    Turkey Cuts Off Greece's Gas - Greece Builds Fence

    Seemingly Turkey has just cut Greece's gas supply.

    This couldn't come at a worse time for Greece, given its financial/political woes, its general strike and the threat to its oil supply.

    Ironically Greece will soon begin building a six-mile-long fence topped with razor wire on its border with Turkey, to deter illegal immigrants.

    The question is, is this fence to keep people out or to keep people in?

    The Movable Feast That is The Papademos Meeting

    The much vaunted, much postponed, meeting between Greek Prime Minister Papademos and the leaders of his political "allies"/"supporters" wherein they will allegedly agree to the Troika's demands has become something of a movable feats.

    Originally scheduled to resume yesterday, it was postponed to this afternoon.

    An hour or so ago the major news networks were stating that the meeting wpould be around 1pm, that was then moved to 4pm.

    The latest "guestimate" is that the meeting (if it ever occurs) will be at 8pm.

    Incidentally, there are rumours that as today is a general strike in Greece, Papademos's driver hasn't shown up to work. As such lets us trust that the meeting is at his house, otherwise he may well be late!

    Stay tuned, I guarantee that there will be more theatrics and that his meeting will be postponed again.

    Monday, February 06, 2012

    The Greek Tragedy Continues II

    Earlier today I wrote:

    "A second round of talks is scheduled for today, as domestic unrest within Greece increases.

    Don't hold your breath in the expectation of a clear and decisive solution being found or agreed upon
    ."

    On Sunday I wrote:

    "As noted yesterday, and the day before yesterday, if it can go wrong it will go wrong!

    Rest assured, this meeting will continue to be postponed
    ."

    Well, as sure as eggs are eggs, Greek politicians have once again failed to step up to the plate. Today's meeting of Greek political leaders has been postponed to Tuesday (until it is announced tomorrow that it will be again postponed to Wednesday).

    No reason has been given for the postponement. However, it doesn't take much political savvy to see that Papademos has failed to secure support for the Troika's demands.

    Papademos will hold talks with the Troika later today, doubtless to try to buy more time and renegotiate the Troika's demands.

    With Greece, if it can go wrong it will go wrong!

    Understatement of The Year

    The EU sees a "backlog in implementation" of Greek austerity measures, and is "a bit worried" about tomorrow's strike in Greece.

    Quite!

    Juncker's Greek Ultimatum


    Euro Group President, Jean-Claude Juncker, is quoted in Der Spiegel:

    "If we were to conclude that everything is going wrong in Greece, then there won't be any new aid program, which would mean that Greece will have to declare bankruptcy in March."

    Those who know how Juncker thinks and operates, know that for him to talk about a Greek default means that it's already been decided as inevitable.

    The Greek Tragedy Continues

    Unsurprisingly yesterday's crucial meeting between Greek Prime Minister Lucas Papademos and the leaders of the three parties supporting his government failed to come to an agreement over the level of austerity required to be imposed in Greece, if it is to receive the second Euro130BN bailout.

    A second round of talks is scheduled for today, as domestic unrest within Greece increases.

    Don't hold your breath in the expectation of a clear and decisive solution being found or agreed upon.

    Sunday, February 05, 2012

    Papademos Meeting Postponed Again!



    The crucial meeting between Greek Prime Minister Lucas Papademos and the leaders of the three parties supporting his government which was to today, has again been postponed (from its scheduled start time) to later this afternoon.

    As noted yesterday, and the day before yesterday, if it can go wrong it will go wrong!

    Rest assured, this meeting will continue to be postponed.

    Saturday, February 04, 2012

    Papademos Meeting Postponed

    A crucial meeting between Greek Prime Minister Lucas Papademos and the leaders of the three parties supporting his government has been postponed until Sunday.

    As noted yesterday, if it can go wrong it will go wrong!

    Friday, February 03, 2012

    Papademos Threatens To Resign

    The Greek Prime Minister, Lucas Papademos, has threatened to resign if the leaders of the parties backing his interim government don’t agree to the new financing plan imposed by the Troika.

    This being Greece you can be sure that if something can go wrong, then it will go wrong!

    Oh, and by the way, the Greeks are denying that Papademos has threatened to resign.

    On Again Off Again - The Greek Farce Continues

    As another week of rumour and counter rumour about an "imminent" deal on the Greek haircut comes to a close, the usual rumourmongers from the EU and Greece are proactively spinning that the "deal" is almost done.

    However, a much rumoured meeting of EU finance ministers (in which the deal is to be discussed) appears to be in "on again/off again" mode.

    The EU recognises that the meeting (allegedly next Monday) cannot take place until the "deal" is signed off. Therefore, displaying a lack of confidence in the hype over an "imminent" signing, the EU has said it expects finance ministers to meet when there is clarity on the Greek PSI debt swap (it will not confirm a date for the meeting).

    This time next week we will still be awaiting the "imminent" signing of the "deal"!

    Thursday, February 02, 2012

    Schaeuble Says Nein!

    Wolfgang Schäuble, Germany's finance minister, has just said no to adding another Euro15BN to Greece's second bailout (the Troika have discovered a Euro15BN black hole) noting that Germany's part in the stabilisation of Greece is "sufficient".


    15BN Euro Black Hole Found in Greece

    The Troika has have discovered that Greece needs an extra Euro15BN on top of the Euro130BN second bailout that it has yet to receive.

    This black hole is hardly surprising, as I noted in October last year Greece is a busted flush!

    Change The Record Olli

    The EU's optimist in chief, the EU Monetary Affairs Commissioner Olli Rehn, has stated for the umpteenth time that "Greek debt-swap talks are very far along, talks should wrap up in “coming days”.

    He said this last week. 

    Change the record Olli, no one believes you anymore.

    Hire a new script writer to freshen up your tired old lies!

    China Tells Europe To Put Its House In Order

    Angela Merkel is visiting China (to ask for help in sorting out the European debt crisis). Her visit though has not produced the result that she was hoping for.

    Chinese Premier Wen Jinbao has told her:

    "Europe must rely on itself, reduce its debt load and introduce structural reforms".

    Back to drawing board for Europe then!

    Wednesday, February 01, 2012

    Greek Haircut 70%

    Andrew Neil has just Tweeted:

    Andrew Neil
    Greece supposedly one step away from a 70% haircut for private bondholders. Orig meant to be 50%. But will all bondholders agree?
     
    I noted in September last year that if a deal is ever done, the haircut would be 80%.

    Don't believe for one minute that a deal has been done, until a signed agreement has been published that stands up to rigorous scrutiny.

    Arise Mr Fred Goodwin

    Mr Fred Goodwin (ex CEO of RBS) has been stripped of his knighthood.

    He joins a distinguished hall of fame of those who have lost their "K", including:

    - Benito Mussolini
    - Robert Mugabe
    - Anthony Blunt
    - Nicolae Ceausescu

    The removal of the "K" of course does nothing to improve the fortunes of RBS.