FWIW - tweet updates from Bloomie Reporter who seems to have started to tempest in a teapot ( to quote Jamie Dimon - recently on his big whale's trades - before they blew up )

Tweets

and....

http://www.zerohedge.com/news/europe-blinks-troika-willing-change-terms-greek-bailout-deal

Europe Blinks: Troika Willing To Change Terms Of Greek Bailout Deal

Submitted by Tyler Durden on 05/12/2012 12:46 -0400

Budget Deficit

China

Creditors

European Central Bank

International Monetary Fund

Newspaper

And so it all begins anew:

From Bloomberg: IMF, EU, ECB Open to Changes in Greek Aid Deal, Real News Says

The so-called troika of the European Union, the International Monetary Fund and the European Central Bank is willing to make six important changes to Greece’s financial aid agreement if a pro-European government is formed in the country, Real News said.

The Troika is willing to extend by one year to end 2015 the time for Greece to cut its budget deficit as well as to proceed with a restructuring of loans, the Athens-based newspaper reported in its Sunday edition preleased today, citing “well informed” sources at the European Commission.

The Troika is also willing to maintain the force of collective labor agreements, to alleviate the level of pension cuts or restore certain pensions to previous levels and to keep wage levels in the private sector and reduce the average tax burden on employees, the newspaper said.

If confirmed, and with Germany having stated repeatedly this will not happen,there is a very high possibility this is just another press-based red herring(remember all those FT headlines of an imminent Chinese bailout of Europe?)seeking to exacerbate the political power grab in Europe, where Germany is now surrounded on all sides, this will mean that the outcome of the Greek elections is no longer relevant, as Syriza will propose an adjustment to the bailout plan, Europe will promptly agree since a pro-bailout "coalition government" of ND, Pasok and Syriza will have be formed, and all shall be well, at least until the next Greek bailout in a few months. Then the country will need yet another priming DIP from Europe, and the fiasco begins anew, only this time with even less money left in Greece to be pillaged and plundered by the country's creditors. That, and of course, German capital being pledged in the form of more "contingent liabilities" which are anything but.

But for now, between a Greek "solution", and China easing again, it appears that all has been saved. If only for a few more days, which as the central planning regime is coming to an end, appears the best the planners can obtain.

At the end of the day, it is once again Mr. Panos who explained it all perfectly, and showed just who has all the leverage in Europe.

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http://www.zerohedge.com/news/germany-begins-quantifying-cost-greek-exit-and-discovers-contingent-liabilities-are-all-too-rea

Germany Begins Quantifying The Cost Of A Greek Exit (And Discovers Contingent Liabilities Are All Too Real)

Submitted by Tyler Durden on 05/12/2012 12:28 -0400

Contagion Effect

European Central Bank

Gross Domestic Product

International Monetary Fund

Reality

First came the rhetorical jawboning, where following announcements by Fitch, European politicians, and finally Germany's finance minister, the scene was set to prepare the general public that despite protests to the contrary, a Greek exit from the euro would not really be quite the apocalypse imagined. Now comes the actual quantification part, whereby in addition to adding numbers and determining what the further sunk costs to a Greek bailout will be (hint: much, much greater than anyone can conceive), Germany has finally understood what we have been warning for over a year: that contingent liabilities become very real liabilities when a threshold event forces the transition from "off balance sheet" to on, and the piper has to be paid. According to an analysis released hours ago inWirtschafts Woche, Germany "would only absorb losses of 76.6 billion euros in Germany. This amount results from bilateral aid loans, the liability of Germany's share in credit rescue fund EFSF, Germany's share of losses of the European Central Bank (ECB) and the German share of liability to the credit support of the International Monetary Fund (IMF)."

The quantification continues (google translated):

15.1 billion euros from Germany alone would have been awarded the bilateral loan write off, which was adopted in May 2010 part of the first rescue package are. 20 billion euros stuck to Germany as a liability amount from the second bailout by the IMF and EFSF. Would be added to the percentage loss of 12.1 billion euros of Greek government bonds, Federal Bank, which bought the ECB and these would have to write off a national bankruptcy in Greece. On further € 28.1 billion would amount to the federal share of the losses in the so-called target of the ECB claims against Greece.

A far bigger issue, however, is that once Greece bails, the contagion effect would begin: first by Fitch downgrading all European countries as it warned yesterday, then more and more countries becoming ineligible for EFSF/ESM participation, as we warned last July when we predicted this entire chain of events in "The Fatal Flaw In Europe's Second "Bazooka" Bailout: 82 Million Soon To Be Very Angry Germans, Or How Euro Bailout #2 Could Cost Up To 56% Of German GDP" when we explained how in a daisy chain collapse of European countries which could only be sustained, paradoxically, by an exponential expansion in the EFSF, could result in Germany easily footing 32% of its GDP (and in reality up to 56%) in "contingent liabilities":

And the biggest concern, one which WiWo only briefly touches upon, is that once the EMU exits begin, and the Eurosystem collapses, all those receivables due to the Bundesbank become null and void, or at best payable in drachma, peseta, escudo, and lira. In other words: completely worthless. As a reminder, at last check the total amount of TARGET2 obligations had soared to a record 25% of German GDP.

So while we appreciate Germany's first attempt at quantifying the cost of the Greek exit, the truth is that the number proposed is woefully inadequate. And the roughly 50% of German GDP already "sunk" will only get bigger and bigger, until finally there is no choice for Germany but to pull the plug.

What, however is most important, is that after months and years of even denying this potential outcome as a possibility, Germany too has finally discovered that when it comes to numbers, no amount of rhetoric can change the final outcome.

That the quantification of costs has finally started is critical. And yes, we are confident that the true final number, one that Zero Hedge predicted with precision last July, will soon be derived even by the most hardened pro-Euro German press.

Catharsis Ours

Saturday, May 12, 2012

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Europe Blinks: Troika Willing To Change Terms Of Greek Bailout Deal

Germany Begins Quantifying The Cost Of A Greek Exit (And Discovers Contingent Liabilities Are All Too Real)

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