2 Trillion (2,000,000,000,000) bailout fund and 50% Greek Haircut - will it work?

Mrs_Bones

Heyman wrote: »

Will we in the UK be presented with a bill for any of this? Can't see anything in the article about it. Obviously we'll be affected no matter what tho....

In theory no, we are not in the Euro, but we have all ready made a precedent on chipping in to bailing out Ireland and while the government has stated we will not help out any other countries with bailouts, it does depend a bit who's doing the asking for extra money. If it's the IMF that comes asking for more money then we are obligated to them and it could cost us dear.

Either way, with our two largest export area's being Europe and the USA then we will feel the fall out of what happens there, if they slow down or things get worse.

michaels

No prizes for guessing which way that trader has bet and is thus trying to move the market....

wymondham wrote: »

Thats quite a revelation! I'm thinking why are people wasting so much money to repair something that can't be fixed??

IronWolf

nearlynew wrote: »

What a market trader thinks about the greek bailout ...

http://www.youtube.com/watch?v=aC19fEqR5bA&feature=player_embedded#!

I didnt expect much from a "trader" but he exceeded my expectations, was a bit of a tool tbh. Dont agree with him at all that the "stock markets are toast", we've heard it all before. While chumps rush to US bonds for their 0.5% yields, the smart money moves to equities for those high yields.

Thrugelmir

IronWolf wrote: »

the smart money moves to equities for those high yields.

Smart money is moving East......

Rinoa

http://www.eubusiness.com/news-eu/finance-economy.cgn

Germany KOs bid to raise euro rescue guarantees

26 September 2011, 22:18 CET
— filed under: eurozone, Finance, Greece, debt, public, economy
(BRUSSELS) - Germany shot down Monday moves to boost European debt rescue funding, bursting renewed optimism on markets amid global pressure for the eurozone to stave off recession.
As Greece languished without a date for the return of auditors blocking loans it needs to avoid default, European Union economic affairs commissioner Olli Rehn said the 440-billion-euro ($590 billion) European Financial Stability Facility should be given "greater strength."
Rehn's spokesman Amadeu Altafaj added that discussions among eurozone partners involved an "increase of the means at the EFSF's disposal," but German Finance Minister Wolfgang Schaeuble said there was no plan to boost the fund's actual size.
"We are giving it the tools so it can work if necessary," Schaeuble said. "Then we will use it effectively -- but we do not have the intention of boosting its volume," he underlined.
The blunt reaction of the eurozone's de facto paymaster -- and which would be called on to stump up much of any increased funding -- comes ahead of a parliamentary vote on Thursday on changes to the fund's operating scope agreed in July.
But it still dents momentum built up during intense debt diplomacy in Washington over the weekend.
There, the International Monetary Fund, the United States and other G20 economies pushed Europe to ring-fence bigger risks such as Italy -- and prevent the world slipping into a fresh downturn.
Indeed, European markets had risen during the day on the signs of a step-change in approach -- including bank share prices in anticipation the plan would include a hefty re-capitalisation component, notably in France.
Schaeuble's comments came after the European markets closed.
"We are thinking about the possibility of giving the EFSF greater leverage, to give it greater strength," Rehn had said in a German newspaper interview, in a marked change of pace.
Ten days ago in Poland, US Treasury Secretary Tim Geithner had urged eurozone finance ministers to ramp up their bailout fund, created after last year's 110-billion-euro Greek rescue.
Geithner was given short shrift by Schaeuble on that occasion.
Just eight of the 17 eurozone states have so far ratified the new powers decided at a July summit.
The existing fund has already been tapped by Ireland and Portugal, and is now needed by Greece for a second bailout for another 159 billion euros also agreed in principle at that summit.
Investors, meanwhile, really want to be convinced that Italy will not need help too.
In essence, Schaeuble's Germany opposes any increase in the size of the national government "guarantees" that give the EFSF its borrowing clout on commercial money markets.
However, Berlin could yet support fancy footwork enabling the fund to raise more "capital" to be directed at weak eurozone states in the interests of eurozone and wider financial stability.
Press reports and rumours given credence by analysts suggest the fund's reach, even on the same guarantees, could stretch ultimately as high as two-to-three trillion euros, depending on international involvement and especially the extent of European Central Bank backing.
While the European Commission refused to enter into a numbers game on the speculation, Austrian finance minister Maria Fekter said taxpayers would have to be spared further investment.
Analysts were already cautious before Schaeuble's intervention, RBC FX Strategy stressing: "It would be premature to think the solution is ready."
Slovak hardliners in the coalition government are also threatening new obstacles, demanding that countries deposit assets such as "state-held shares" as collateral.
The absence of a date when EU and IMF auditors will return to Athens, to recommend whether to release eight billion euros in blocked loans, means the issue may go to EU leaders at their next summit, on October 17 and 18.
The Greek authorities have yet to convince creditors that they can fix a "budgetary hole" in their public finances for 2011-12, or successfully implement a vast privatisation scheme demanded by bailout partners.
Greece's government has warned it will begin running short of cash in mid-October

Germans don't want to play this game.

michaels

Now to me this reads as the Germans are onside - for domestic consumption the 440 bln EFSF is it - but once signed off of course it will turn out to equal 2-3 trillion of ECB funding with the EFSF holding the 'equity' tranche - of course any losses beyond 20% and they are through the equity tranche and in to the ECB core capital, and (whisper it), German taxpayers again.

Rinoa wrote: »

http://www.eubusiness.com/news-eu/finance-economy.cgn




Germans don't want to play this game.

Sapphire

All this procrastination seems to me like prolonging the agony. Greece must be allowed to fall, then get it itself out of the rut it has created for itself, though this will be tough for the people of that country. If it is bailed out, then other countries can easily emulate its example knowing they will be bailed out by others. It's similar to banks and individuals who have over-borrowed – if they know they will be bailed out by taxpayers, what's to prevent them from engaging in stupid behaviour again in the future? It should not be down to other countries to ruin their own economies to try and bail out a country that's had it economically.

Utterly stupid, stupid thing to have done to join up the currencies of countries with hugely varying economies into one.

wymondham

All this reminds me of a posh family, where the parents pick up the pieces of their offsprings continual mess up, thus ensuring nobody learns from the mistakes/problems!

The_White_Horse

i blame the public sector.

Going4TheDream

Argentina went bankrupt and survived, why cant the Greeks?