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Here Come Today's Rumors

Tyler Durden's picture


What would a day be without recycling of tired and expired rumors out of Europe. Sure enough:

  • EFSF is to prepare a credit line for Spain in the case of need - Dow Jones
  • EFSF provisional credit line for Spain is one option according to a German newspaper

Ah, the good old EFSF, which was last summer's magical bailout mechanism which with 3-4 turns of leverage, would bring the total to €1 trillion... until the realization that there is nothing to lever, as nobody (except for Japan occasionally) wanted to put any money in it. Oh well: the rumor is good to get stocks into the green for at least a few minutes.

But at least we now know that Spain will be paying to bail out itself. Just wait until it is Italy's turn next.

Source: EFSF

Finally, here, ONCE AGAIN FOR THE CHEAP EUROCRAT SEATS, is the real math:

So €200 billion in EFSF funding capacity, and...

If a Spanish EU/IMF bailout package covered the government’s gross funding needs through the end of 2014, and included €75bn for bank recapitalisation, then it would amount to around €350bn.

At least according to JP Morgan. Last we checked €350 > €200


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Tue, 06/05/2012 - 12:38 | 2496260 THX 1178
THX 1178's picture

We must be getting close...

Tue, 06/05/2012 - 12:40 | 2496266 Lost Wages
Lost Wages's picture

...but close to what?

Tue, 06/05/2012 - 12:46 | 2496284 THX 1178
THX 1178's picture

The big event. The big day. The reset.

Tue, 06/05/2012 - 12:50 | 2496296 malikai
malikai's picture

Watching the eurusd cross right now. That rumor seems to be miserably failing to perform.

Tue, 06/05/2012 - 12:59 | 2496318 Ahmeexnal
Ahmeexnal's picture

This looks like a repeat of the days when germany "bailed out" spain and placed puppet Dei Gratia generalissimo Francesco Franco as ruler of the iberic peninsula.
Look forward to germany arming both sides of the upcoming spanish civil war.
Sheeple are sheeple.

Tue, 06/05/2012 - 12:46 | 2496285 AccreditedEYE
AccreditedEYE's picture

Sadly, the market used to be a great forecasting mechanism of future events. Now, it has the intelligence of an ADD teenager hoped up on speed. What a complete joke.

Tue, 06/05/2012 - 13:19 | 2496382 brooklynlou
brooklynlou's picture

This is not a predictive market, only a reactive market.

If you want predictions, just check out the share prices of Greek and Spanis banks. If the Germans come to the rescue* those things will start rising up in the advance of any news as those in the know start accumulating.

* Have the Germans, ever, like in their entire history, come to the altruistic rescue of another people, like ever? Just once?

Tue, 06/05/2012 - 12:48 | 2496290 kaa1016
kaa1016's picture

We are closer to an '87 type crash than most people care to accept.

Tue, 06/05/2012 - 12:57 | 2496316 malikai
malikai's picture

Except, this time it can happen in a few minutes/seconds.

Tue, 06/05/2012 - 13:06 | 2496348 kaa1016
kaa1016's picture

Very true.

Tue, 06/05/2012 - 13:19 | 2496383 chet
chet's picture

Seems like there is much less potential to string along the Spain crisis with a rolling bunch of half-assed "solutions" like they did with Greece. It should become apparent pretty darn quick that Spain is too big to bail out.

But what do I know? This crisis has already been stretched to four years.

Tue, 06/05/2012 - 12:39 | 2496262 BandGap
BandGap's picture

The mainstream headlines (Yahoo!) say that Spain is being shut out of funding. A country living way beyond it's means because it borrowed money is being shut out. Crazy world we live in.

Tue, 06/05/2012 - 12:44 | 2496274 junkyardjack
junkyardjack's picture

The problem isn't that they lived way beyond their means, the problem is that they aren't continuing to live beyond their means.  Their spending problem can only be solved with spending.  Every economist worth his grit knows these simple truths....

Tue, 06/05/2012 - 12:53 | 2496263 williambanzai7
williambanzai7's picture


Tue, 06/05/2012 - 12:40 | 2496265 cat2
cat2's picture

Make it stop

Tue, 06/05/2012 - 12:48 | 2496291 Urban Redneck
Urban Redneck's picture

Hide out in a banana republic for a few months, the same bs will still be recycled daily upon your return.

Tue, 06/05/2012 - 12:52 | 2496304 knukles
knukles's picture

Stop what?
Ain't doin' nothin' but mankin' a whole buncha noise.

Tue, 06/05/2012 - 12:54 | 2496311 BandGap
BandGap's picture

It ain't over till we say it's over.


Tue, 06/05/2012 - 12:43 | 2496272 crawl
crawl's picture

Rumors. Gather round the fire, hold hands, and sing that silly song. Resting on hope and creative math that fails under any examination.

Tue, 06/05/2012 - 12:45 | 2496280 junkyardjack
junkyardjack's picture

The G7 meeting was something like this...

Tue, 06/05/2012 - 12:51 | 2496300 BandGap
BandGap's picture

Don't ever do that agian, do you hear me?

Tue, 06/05/2012 - 12:54 | 2496310 knukles
knukles's picture

Dude, that is just way too fucked up.

Tue, 06/05/2012 - 13:01 | 2496334 EverythingEviL
EverythingEviL's picture

Oh my god, that one is classic! Lol Ive had that as one of my YouTube favorites for years. Thanks for bringing it back!

Tue, 06/05/2012 - 13:27 | 2496411 salvadordaly
salvadordaly's picture

Oh too sweet, sick, but sweeeeeeeet!

Tue, 06/05/2012 - 15:04 | 2496930 malikai
malikai's picture <- That's me watching this crap.

Tue, 06/05/2012 - 12:44 | 2496278 LongSoupLine
LongSoupLine's picture




counter-rumor to hit in 3...2...1...

Tue, 06/05/2012 - 12:45 | 2496281 monopoly
monopoly's picture

These rumors are late today. I really expected them by Noon East Coast time. Wish they would keep to the daily schedule.

Tue, 06/05/2012 - 13:22 | 2496389 brooklynlou
brooklynlou's picture

Dude, its a nice day. Wine and cheese. The rumor-mongers stayed a little late out for lunch. Cut the rumor-mongers some slack. They're peoples too.

Tue, 06/05/2012 - 12:46 | 2496283 death_to_fed_tyranny
death_to_fed_tyranny's picture

Rumors ad nauseam. The world economies are failing. PERIOD!

Wed, 06/06/2012 - 10:08 | 2499096 PrinceDraxx
PrinceDraxx's picture

The world economies would do just fine if the world governments would quit fucking with the system start using real money again instead of toilet paper with IOU's written on it.

Tue, 06/05/2012 - 12:47 | 2496287 kaa1016
kaa1016's picture

LOL. People keep falling for this shit, like a bunch of retards...

Tue, 06/05/2012 - 12:47 | 2496288 max2205
max2205's picture

anything to set up a bottom

Tue, 06/05/2012 - 12:50 | 2496295 skepticCarl
skepticCarl's picture

The Spanish Banks will get bailed out.  Economics is a man made system, and men can change the rules at will.

Tue, 06/05/2012 - 12:53 | 2496307 insanelysane
insanelysane's picture

Just 0 out the debt instead of loaning more fiat.

Tue, 06/05/2012 - 12:56 | 2496314 knukles
knukles's picture

What's the difference?

Tue, 06/05/2012 - 12:53 | 2496305 Shizzmoney
Shizzmoney's picture

Call the rumor manatees!

- China will bail out Europe

- Fed Reserve will bail out Europe

- US Govt will bailout Europe

- Wall St will bailout Europe

- Greece will accept German austerity

- Germany will bail out the Euro Zone

- UK will bailout the Euro Zone

- The Market, Europe, and the US are a bunch of fucking idiots

Tue, 06/05/2012 - 13:25 | 2496397 brooklynlou
brooklynlou's picture

Greece has been willing to accept German austerity for a while now. Its just that the Germans demand that the Greeks put a little red ball in their mouths. The Greeks are willing to try anything once, but they feel that the German request is way too kinky ...

Tue, 06/05/2012 - 12:53 | 2496308 Village Smithy
Village Smithy's picture

I noticed that in the "...won't close the funding gap" chart the unicorn tears and rainbows from yesterday's version are missing. Are we getting renegs to pledges already?

Tue, 06/05/2012 - 12:58 | 2496320 1eyedman
1eyedman's picture

yes, new promises of using ineffective tools to save spain, an economy and debt load multiple times larger than greece....they will propose, promise and fund...look for the funding to somehow be ineffective once all the cajas line up and then its back to germany...sorry did we say 20billion?  we meant 200billion, for spain...we're still adding it all up for italy....just send it to the payroll clerks in brussels

Tue, 06/05/2012 - 12:59 | 2496324 theTribster
theTribster's picture

Love it. You go Europe, the EFSF has to be the one of the funniest financial structures I've ever seen especially considering the circumstances. Its like having 17 credit cards all at their limit except 1, fortunately the one left has access to cheap, cheap money. I know, the rest of northern Europe can help too but let's face it, Germany is the big dog. If France has to commit more money they will get hammered by the ratings agencies, as will Germany but to a lesser extent. France will be nationalizing their banks before this is all said and done - just after Italy.

I think each country should just have its own printing press to print a local currency that can be used for local trade, the Euro's used for inter-country trade. This would allow countries some ability to control things - albeit limited. The Greeks should have the Drachma and the Euro, they would be in much better shape than they are now or will be if they stay in the EU, watch the Irish economy and see the impact of theat decision.

All we can do is watch and see what solutions ultimately get put in place, I'm sure they are going to tighten integration as Merkel suggested - more Euro not less. This will give them the confidence to sort out Eurobonds, further debt restructuring, etc. Until they have committments on that level of integration Germany is unlikely to move. Now is the time for Germany to get what it wants so it should. What happens to France in all of this? I think the French realize their position immediately behind the Italians in terms of a meltdown...

Keep plenty of popcorn on hand in the next few weeks, months...

Tue, 06/05/2012 - 13:12 | 2496366 williambanzai7
williambanzai7's picture


Tue, 06/05/2012 - 14:29 | 2496732 malikai
malikai's picture

I wonder if we'll be able to tour the shot tower some day and see the glassified bondholders.

Tue, 06/05/2012 - 12:59 | 2496325 Joebloinvestor
Joebloinvestor's picture

Jean-Claude Juncker ruined the ending for this fiasco, when he admitted they LIE.

Who would believe anything these fucks say?

Looks like they make announcements just to make it through the next 24 hours..........

Tue, 06/05/2012 - 13:00 | 2496329 jmcadg
jmcadg's picture

32% coming form Spain and Italy combined ... to bail out ummm Spain and Italy.


Tue, 06/05/2012 - 13:01 | 2496333 SoNH80
SoNH80's picture

Blech.  A German pensioner carefully trims turnip greens to save E 0.12 for dinner, and then a Spanish gigolo hoovers that right up his nose.  Yow!  Better head into the Mogambo Bunker of Entropic Doom (MBED)!!

Tue, 06/05/2012 - 13:02 | 2496336 insanelysane
insanelysane's picture

When I was a young man programming $1/2 million dollar computerized machine tools to make products, I got an order to make a part that was a little too big to fit on the machine tool.  So after analyzing the machine, the part could be made if we removed the factory installed limit switch and hard switch.  We removed the switches and then by matter of conditioning, I gave the machine a command to move back until it hits the limit switch.  The machine moved back until it went off track and crashed.  Lesson learned by me; once you remove the limit switches there is no way to automatically stop the crash.

Moral hazard and bankruptcy, the limit switches of the financial system, have been removed and there is no stopping a crash.


Tue, 06/05/2012 - 13:02 | 2496338 Dad Was Right
Dad Was Right's picture

Wait a sec. Let me get this straight. The EFSF doesn't really have the money, mostly just guarantees from participating nations, right? And the EFSF was downgraded by S&P from AAA to AA+ in January based on eurowide downgrade of european banks, which has made it less attractive to investors, right?  And now the 4th largest participant in providing the EFSF guarantees is now poised to tap the fund to which is is guaranteeing 92 billion Euro? And the market and the EUR/USD actually ticked up on this news? It truly is a world gone mad.

Tue, 06/05/2012 - 13:04 | 2496341 tahoebumsmith
tahoebumsmith's picture

Back when the financial system was functional, credit lines were given to those who had the means to pay them back. With Spain's unemployment on the rise and their GDP in full free fall, they might just as well burn the money on the City Hall steps in Madrid. This will buy us what? Another MONTH? Just keep kicking the can and printing more money so the globe doesn't find out how big the ponzi really is. The domino is still going to drop no matter how much money you prop it up with, and when it does fall this will only add more dominos to the stack..

Tue, 06/05/2012 - 13:06 | 2496346 theTribster
theTribster's picture

Extending the TBTF paradigm to include Europe is logical step, certainly is for Europeans but I think also for the US, China, Japan, etc. We'll all kick in a little sumtin sumtin to make it work, we love you Europe! I'd be willing to redirect my Thingamajig check from Obummer right to the European Central Bank and get me some of that there EuroBondage stuff everyone's talkin 'bout.

Tue, 06/05/2012 - 13:08 | 2496349 Stoploss
Stoploss's picture

I want to know about italy's 2T, when do they get the 2T?

What, Spain cuts in line??

PIIGS - Portugal, then the I's!! Spain is the last in line!!

This is why everything is all fucked up!!!

The bailout order is wrong, you got GIPSI  You got FUCKIN GIPSI!!! NOT PIIGS!!

Do the europeans have to pay for their education??

Bail out Portugal first, then Ireland, then Italy, then Greece, and Spain last.


Now. who do i see to get paid?

Tue, 06/05/2012 - 13:08 | 2496350 chinaguy
chinaguy's picture

EFSF is to prepare a credit line for Spain "in the case of need" - LOL

Tue, 06/05/2012 - 13:10 | 2496356 Seize Mars
Seize Mars's picture

Yeah but look what current events have confirmed: there doesn't really need to be any actual collateral behind the creation of new money, or the shoring up of old money or other collateral (which in turn gets repoed, or whatever). In other words, this system of fiat is ACTUALLY fake, insane, bat-shit-crazy monopoly money or grocery coupons with a picture on it.



Tue, 06/05/2012 - 14:28 | 2496729 Cupid Stunt
Cupid Stunt's picture

Recycling of tired and expired rumors.


Tue, 06/05/2012 - 15:41 | 2497095 valley chick
valley chick's picture

"Market" still floating at 3:40 on these rumors?
