This method will yield the same error of margin than "official" figures which can now double overnight. It was the Wall Street Journal that scooped the shocker of the day:
Greece may require financial assistance of as much as €80 billion ($107.92 billion) to escape its debt crisis and avoid default, Bundesbank President Axel Weber told a group of German lawmakers Monday, according to a person familiar with the matter.
The estimate, considerably more than the €45 billion that European countries and the International Monetary Fund are currently prepared to extend Greece this year if it needs a bailout, suggests that a rescue of the country may come in several stages and reach beyond 2010.
Mr. Weber, a member of the European Central Bank's governing council and a leading candidate to succeed Jean-Claude Trichet as ECB president next year, told the legislators that Greece's situation was worsening and that "the numbers are changing all the time," according to the person. A Bundesbank spokesman declined to comment.If you now think this will cover Greece's stabilization, haha, you are dead wrong. Give the random number generator another spin and you will arrive at the exact figure this blogger has stated last summer and that is now also used by the German Bundesbank.
According to a Reuters report,
German newspaper Bild said Weber warned that the total amount of aid Greece requires may not be known until later, drawing a parallel with the case of nationalised German property lender Hypo Real Estate in 2008.I would not carve Weber's figure of €80 billion in stone,
remembering another Reuters story from last Friday, citing internal ECB documents:
The situation for Greek banks remains difficult and could deteriorate further, according to a European Central Bank document seen by Reuters.
The Greek banking system is availing itself of the liquidity provided by the ECB and national central banks while the recent changes to rules on accepting assets as security in exchange for loans removed the risk banks would no longer be able to use government bonds as collateral, says the document, taken by ECB President Jean-Claude Trichet into a meeting of euro zone finance ministers on Friday in Madrid.
The ECB will keep accepting BBB-rated debt next year in a boon for Greece, and will exempt government bonds from new risk penalties on lower-rated assets.
"Still the liquidity situation of Greek banks remains difficult and could deteriorate," the document says.
The document also says market worries remain after an aid package announced last week to help Greece."
Despite the commitments expressed in the statements by the euro area heads of state and governments on 25 March and Eurogroup on 11 April and the determination signalled by the Greek government to implement the announced adjustment measures for 2010, financial market tensions are persisting."
In the case of Ireland first reports of a €18 billion hole were overtaken by € 32 billion and ended at €43 billion of new capital needed by banks as of Wednesday morning.
I am holding on to my opinion that Eurozone members will out-compete each other on yields later this year as not a single structural issue has yet been tackled in the Eurozone.
- Hedge fund oversight: result zero
- Cross-border banking oversight: result zero
- Derivatives oversight: result zero
- Sovereign deficits: rising and no end in sight.