Greek Fire, Part 9

With reports that a Greek bailout by the IMF/EU is imminent and the bid on Greek bond debt at, well, Greek tragedy levels, it looks like this little play is coming to a close.

“The recent market action means that an external intervention may be unavoidable and could happen very soon as the situation is untenable,” UBS economists including Stephane Deo wrote in a note to investors late yesterday. “We think an intervention over the weekend is a distinct possibility.”

The premium investors demand to buy Greek 10-year bonds instead of German bunds jumped to 442 basis points yesterday, the highest since the introduction of the euro. Greece will need to seek emergency funding to make bond payments and cover debt refinancing of more than 20 billion euros ($27 billion) in the next two months, the UBS report said.

Greek Finance Minister George Papaconstantinou said today he’s still not planning to seek emergency financing from European Union allies. The spread on Greek 10-year debt narrowed to 409 basis points. 

409 basis points, which is basically the international equivalent of having a credit score of "Have you talked to Louie the Mouse lately?  I hear he can help people in...your...situation."   Greece isn't going to be able to sell enough bonds to buy a case of ouzo, much less save their economy.  That mystical, unquenchable weapon of antiquity has resurfaced as the burning of the country's economy to the ground, with a deal as early as this weekend in the works.

Tyler Durden's right, this game is over.  Greece is done.  It's just a matter of what the details will be in order to facilitate the bailout.  We'll be learning that soon.  Possibly as early as this weekend.

Stay tuned.