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Summarizing The Open Questions Surrounding The Second Greek Bailout

Tyler Durden's picture


Think this time around finally the Greek deal is done? Think again. OpenEurope lists the "many" questions still surrounding the second Greek bailout that remain unanswered. We would add that this is hardly an exhaustive list, and believe the key question, to put it simply, is a CAC is a MAC? Because if the answer is yes, the deal is off.

From OpenEurope

Many questions around the second Greek bailout remain unanswered


Unfortunately, it is once again hopelessly optimistic and contains numerous gaps and unanswered questions which could still bring down the whole deal. This is nowhere outlined better than the damning leaked debt sustainability analysis (see here for full doc).



















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Tue, 02/21/2012 - 09:02 | 2180415 Seasmoke
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Greece shouldnt be allowed to use that name any longer

Tue, 02/21/2012 - 09:11 | 2180433 ZippyBananaPants
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Tue, 02/21/2012 - 09:11 | 2180434 falak pema
falak pema's picture

Fleece land? Grease land...

Tue, 02/21/2012 - 09:22 | 2180457 clones2
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MSM already having to change their headlines this morning... from "Stock Markets up on Greece bailout"... already to "Stocks Weigh Greece News".... as the NAZ went red and the S&P is flat. Hahahahahahaha.

Going to be hilarious if the markets open slightly red...


Tue, 02/21/2012 - 09:25 | 2180462 trebuchet
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slightly red? Eurofinancials slipping, that extra haircut doesnt bode well. 

we are in such a mess, the only trade worth doing was the hopium trade, made tyou feel good that just maybethings get fixed. 


Now we got the reality of how fixed they really are   ....... NOT


So we gotto wait for more Good rumour, buy the rumour sell the news

Tue, 02/21/2012 - 09:30 | 2180469 falak pema
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oh when the saints go marching in to Athens burning..they well sing...what are these ashes worth?

Ashes to ashes...and fiat to fiat. Will WS burn after Athens and Lisbon and Madrid and Rome?

Tue, 02/21/2012 - 09:21 | 2180455 trebuchet
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Schauble commenting that he will make sure Greece implements........  hahhahaHaHA hA HAHAHAHAHAHA!!!!   


Tue, 02/21/2012 - 09:04 | 2180420 LongSoupLine
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Former banking executives, (now non-elected EU "leaders"), making decisions...


any questions?

Tue, 02/21/2012 - 09:04 | 2180422 MsCreant
MsCreant's picture

They are putting the "Stab" in Price Staabeeelaateee.

Tue, 02/21/2012 - 09:05 | 2180424 mc_LDN
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Its all Greek to me.

Tue, 02/21/2012 - 09:12 | 2180436 WonderDawg
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So, the agreement isn't an actual "agreement" yet. Big surprise. With so many open questions, this is a solution, how again? It just gets more absurd every day.

Tue, 02/21/2012 - 09:13 | 2180439 Hugo Chavez
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Greek banks and pension funds are not taking write offs are they? I thought they? I thought they got preferential treatment too.

Tue, 02/21/2012 - 09:15 | 2180441 chubbar
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Anyone taking odds on that little detail of passing legislation to cut minimum wage and opening up jobs to greater competition (think union busting) by next week?

Tue, 02/21/2012 - 09:16 | 2180445 FubarNation
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Out of the whole piece the thing that struck me the most was that Greece won't be able to issue new debt in 2014/2015.


I would think that is a big fucking problem.

Tue, 02/21/2012 - 09:17 | 2180446 Capitalist10
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If Greece is "saved", why is the Greek 1 year yield at a record 682% today?

Tue, 02/21/2012 - 09:28 | 2180466 machineh
machineh's picture

Probably, because it's going to be exchanged for package of bonds that take years to pay out. 

Not only is it getting haircut, but the principal payback recedes into the distant, dangerous future.


Tue, 02/21/2012 - 09:52 | 2180535 Capitalist10
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I think the supposed "fair value" of the 70% writedown/swap that is currently on the table results in a yield of around 500% for the existing 1 year bonds.

682% indicates that the markets expect a further kneecapping or an outright default, notwithstanding all the happy talk out of Brussels.

Tue, 02/21/2012 - 09:44 | 2180499 tabasco71
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to be honest, at that rate, I fancy a punt

Tue, 02/21/2012 - 09:18 | 2180447 williamsosa
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do you still think that is not clear where the money will come from ¨It’s not clear where this money will come from or when it will be raised. The bond restructuring will be like dancing through a minefield for Greek banks., 

the money will come from the ECB. where else.!!! that is the only source of money as of now. 


Tue, 02/21/2012 - 09:18 | 2180448 tabasco71
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Deal gets committed, world moves on. Able Greeks start to emigrate. Country gradually regresses into a semi-closed, dictatorial state.

Tue, 02/21/2012 - 10:13 | 2180631 trebuchet
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Albanians already leaving Greece in droves, as many youngster as poss looking to get out

Tue, 02/21/2012 - 11:28 | 2180869 Manthong
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“huge adjustments to labour markets and protected professions” .. “will not be painless and could result in further riots

                       -a bit of an understatement?

Allow me to rephrase..

"massive unemployment and dislocations across all segments of the population will be agonizing and result in chaos."

Tue, 02/21/2012 - 09:20 | 2180449 Jacks Cold Sweat
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Greeks would be better off by defaulting and leaving the Euro. It would become a tourist mecca and investors from all over the world would flood their markets seeking attractive investments. This is just to save the banksters at a terrible cost to the average citizen. But ,oh snap, the whole world would be f**ked up.

Tue, 02/21/2012 - 09:19 | 2180451 blindman
blindman's picture
Melanieeee - What Have They Done To My Song, Ma (Live)

Tue, 02/21/2012 - 09:19 | 2180453 Catullus
Catullus's picture

Profit on the greek bonds?  There will be no market to mark them off so I guess they mean interest... so they're going to "re-invest" the interest to purchase more Greek debt (like Operation Twist).  That debt machine keeps on rolling.

Tue, 02/21/2012 - 10:25 | 2180660 MsCreant
MsCreant's picture

Steam rolling that is.

Tue, 02/21/2012 - 09:21 | 2180456 Vincent Vega
Vincent Vega's picture

After reading all the latest "news" surrounding the Greek bailout; the term "smoke and mirrors" comes to mind.

Tue, 02/21/2012 - 09:24 | 2180459 mayhem_korner
mayhem_korner's picture



The Greek bailout deal is about as "done" as Dodd-Frank in 2010.

Tue, 02/21/2012 - 09:24 | 2180460 Element
Element's picture

"... debt sustainability ..."  ... bitchez

Tue, 02/21/2012 - 09:25 | 2180461 mayhem_korner
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Latin translation:  servitudis perpetuous

Tue, 02/21/2012 - 09:29 | 2180465 Element
Element's picture

how do you say, "...with a bonus free mud-hut!"

Tue, 02/21/2012 - 09:27 | 2180464 blindman
blindman's picture

here from fox news ! ?
Greece, Riots and Revolution to spread all over Europe ?
"Greece is at a standstill once again, with people venting their anger at more cuts, which the EU is demanding in return for vital funds. Greece appears to be just another failed state that fell for the lending schemes of the banksters. Best not to borrow another dime, declare independence from? the EU, bankruptcy to eliminate all current debt and start over.The EU crisis is all a buying opportunity created for the international bankers . A lot of great European companies are now even more under valued than they were back in 2008 and the bankers are ready to buy Europe's assets for pennies to the dollar .The Police and Politician cannot possibly understand the anger of a "no future" generation, or the anger of those who have played the game by the rules and ended up with nothing.!! And it will get worse. Banks are not lending and reactivating the economy. Meanwhile, the 1% is in the process of violently assaulting the historical rights of working and middle classes - even? at the risk of losing what's left of their political and social legitimacy (they don't care anyway)" site comment

Tue, 02/21/2012 - 09:30 | 2180468 flyme
flyme's picture

Greyland, since all the young people will leave.

Tue, 02/21/2012 - 09:31 | 2180470 machineh
machineh's picture


THIS I have to see! An auction for the ages! 

Hope it's broadcast live like the Super Bowl, so we can throw an 'EFSF auction' party.

(I'm backing the bond vigilantes in the betting pool.)

Tue, 02/21/2012 - 09:34 | 2180471 BlackVoid
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I think people who think that a disorderly default will be allowed are mistaken.

THERE IS NO LIMIT TO KICKING THE CAN, if "kicking the can" can be done by printing money, cheating, disregarding the law. Whatever. If it can be papered over, it will be papered over.

There will be no banking collapse (or any other collapse for that matter) before either of the following happens:

- there is a serious, real, physical oil shortage
- there is a massive public confidence loss resulting in bank runs and/or runaway inflation

Forget it. They will PRINT AND LIE, there is no limit to printing or lying and nothing will happen while the majority belive the lies. If if it is for a few days / lie. There is always a new lie.

Counting the losses even if it is primary school math is totally useless. IT WILL BE PAPERED OVER. I REPEAT: ANY LOSSES OF ANY TOO BIG TO FAIL INSTITUTION WILL BE PAPERED OVER.

Tue, 02/21/2012 - 09:37 | 2180484 Element
Element's picture

especially if Mr Rothschild were to chip-in ... oops ... sorry, ... I meant to say the FED ... doh!

Tue, 02/21/2012 - 10:28 | 2180670 MsCreant
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So now what?

Tue, 02/21/2012 - 10:33 | 2180696 machineh
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'RISK ON' !!!111!

Tue, 02/21/2012 - 09:32 | 2180472 Catullus
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Wait until people figure out that the notionals on Interest Rate Swaps are significantly larger than the Credit Default Swaps.  That $700 trillion time bomb isn't triggered on default.  It's triggered on rising interest rates in general.

Tue, 02/21/2012 - 09:33 | 2180473 djsmps
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I don't understand anything about finance I guess. I thought the goal was to make money. From CNBC:

The agreement by private sector holders of Greek government debt to take losses of 53.5 percent as part of the 130 billion euros ($172 billion) second bailout will actually see real losses of more than 70 percent, Charles Dallara, managing director of the Institute of International Finance told CNBC. “When investors get over the net present value loss, just north of 70 percent, this will be quite attractive. I am quite confident that most investors will find this deal an attractive one and of a high level of participation."

Tue, 02/21/2012 - 09:33 | 2180474 AU5K
AU5K's picture

another question is where is the greek economic growth, key to returning to 120% by 2020, supposed to come from?


Are more islands going to suddenly appear in the sea, for tourists to visit???


The debt to gdp curve will never bend back as the hope case requires.

Tue, 02/21/2012 - 09:38 | 2180481 BlackVoid
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Speculating about stuff like this is totally useless. THEY CAN RAISE FUNDS BY TYPING ZEROES!!! It can be done in 10 seconds. Is that quick enough? No approval is needed, because if they cannot do it in the open, they will do it behind the curtains.

Tue, 02/21/2012 - 10:31 | 2180691 MsCreant
MsCreant's picture

Relax Neo. It's always shocking when you first disengage from the matrix, all those needles and tubing hanging from you. We'll get you some gruel and clean you up. It will all be okay.

Tue, 02/21/2012 - 09:37 | 2180483 cnhedge
Tue, 02/21/2012 - 09:40 | 2180489 chindit13
chindit13's picture

Assuming all parties are browbeaten into agreeing with the crumbs negotiated, we will be back to needing Greek growth to make it all work.  Absent some dramatic and innovative changes to Greek society, however, growth over the near term is unlikely.  I’m no Goldman Sachs, so the only things I can think of to help the Greeks make money are what follows:

1) NPV the future stream of residual earnings on the Kojak Collection, starring Telly Savalas, and sell them as CDOs

2) Sell rights to the five Olympic rings to corporate sponsors

3)  Install luxury boxes around Syntagma Square so that foreign tourists can view the riots in comfortable surroundings while noshing on dolmadakias and tzatziki

4)  Trademark the term “Greek Style” and charge a user fee for anyone journeying up that particular path

5)  Dig up the corpse of Aristotle Onassis and have it marry Kim Kardashian on pay-per-view;  she’ll do it for the attention, and he won’t mind…she’d even consumate the marriage if it could get on network prime time

6)  Borrow from Greek-American Nicolas Cage, who is at least as solvent as most of the big Eurobanks

7)  Cut the -opodopolous off everyone’s family name and sell the carbon credits resulting from the use of much smaller business cards

8)  Offer to fight the Persians again on behalf of Israel and the US Neocons

9)  Get hired as a financial consultant to the governments of Portugal, Spain and Italy, sharing your new-found wisdom

10)  Threaten default again and sell CDSs on yourself

Tue, 02/21/2012 - 10:34 | 2180699 MsCreant
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Nice list. See you at Syntagma Square...

Tue, 02/21/2012 - 09:50 | 2180524 Forgiven
Forgiven's picture

>70% loss option is 'attractive?'  What are they smoking?  Bondholders have zero to gain from this deal.  Many are probably better off letting this default and CDS' trigger.

Tue, 02/21/2012 - 09:51 | 2180530 Element
Element's picture



I hope you realise there are now people teleconferencing furiously to discuss such a debt-sustainability option.

Tue, 02/21/2012 - 10:19 | 2180648 toothpicker
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Tue, 02/21/2012 - 10:34 | 2180701 yogibear
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And more Greek bailouts to come. 

Tue, 02/21/2012 - 10:37 | 2180708 MsCreant
MsCreant's picture

The bucket's leaking...

Tue, 02/21/2012 - 10:39 | 2180713 Optimusprime
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Don't miss Dave Henderson's brilliant take on the deal:

Tue, 02/21/2012 - 11:22 | 2180841 Libertarian777
Libertarian777's picture

Greece is the word is the word is the word

Wed, 02/22/2012 - 03:42 | 2183796 sikefeier0728
