IT'S STILL GOOD! IT'S STILL GOOD! IT'S JUST A LITTLE DOWNGRADE!

• It's just a little dirty.
• It's still good, it's still good!


• It's just a little slimy.
• It's still good, it's still good!


• It's just a little airborne
• It's still good, it's still good!

Homer Simpson

Hi,

My fans have been asking me, "Manny, what's this PIGS they always talking about in the news?"

Well readers, PIGS is what we call an acronym. Each letter in the word represents a different European country

• Portugual
• Italy
• Greece
• Spain.

Nowadays, they add Ireland (FOR PIIGS); and sometimes Great Britain (FOR PIIGGS).

I think this acronym was started around 1997 (long, long before I was born) by British bankers (and I think it was Goldman Sachs, my world domination heroes). It was suppose to refer to countries whose debt was 100% of GDP (Gross Domestic Product) or going to be.
(Click the graph to see how bad it really is.)

Now, I wrote about Greece before (see here, here, and here). By the way, I translated the first post for you, since I wrote it before I learned English.

Last week, many bad things happened for Spain (the S in PIGS). This company named Fitch lowered their rating of Spain from AAA to AA+. This is not a big deal, but still means there is very, very small chance Spain will default on their payments. It's not good.

Spain is a bigger problem than Greece, just because Spain is a bigger country than Greece. Too big to fail, but also to big to bail out. The Spanish government tried to pass austerity measures to cut spending by EUR15.0M (USD$18.0M) and it barely passed. The vote was 169-168-13. This is also not good.

To make things worse, it looks like the Spanish public doesn't want their government to cut spending. If they had an election right now, the opposition party would win most of the votes. I think that the Spanish Prime Minister has to call an election soon, since the vote was so close. It's too bad he doesn't have a smoking hot wife. to help him get votes. Instead, his daughters are kind of scary.

More on Italy next.

Thanks,
Manny

O HAI,

MAI FANZ HAZ BEEN ASKING ME, "MANNIE WHUTZ THIS PIGS THEY ALWAYZ TALKING ABOUT IN TEH NEWZ?"

WELL REEDERZ, PIGS IZ WHUT WE CALL AN ACRONYM. EACH LETTER IN TEH WURD REPRESENTZ A DIFFERENT YOURUPEEAN COUNTREE

• PORTUGAL
• ITALY
• GREECE
• SPAIN.

NAOADAZE, THEY ADDZ IRELAND (FOR PIIGS); AND SUMTIMEZ GREAT BRITAIN (FOR PIIGGS).

I THINKZ THIS ACRONYM WUZ STARTED AROUND 1997 (LONG, LONG BEFOAR I WUZ BORN) BY BRITISH BANKERZ (AND I THINKZ IT WUZ GOLDMAN SACKZ, MAI WURLD DOMINATION HEROZ). IT WUZ SUPPOZ TO REFER TO COUNTREEZ WHOZ DEBT WUZ 100% OV GDP (GROSS DOMESTIC PRODUCT) OR GOANING TO BE.
(CLICKZ TEH GRAPH TO SEE HOW BADZ IT REELY IZ)

NAO, I ROTEZ ABOUT GREECE BEFOAR (SEE HERE, HERE, AND HERE). BAI TEH WAI, I TRANZLATED TEH FIRST POST FOAR YOU, SINCE I ROTE BEFOAR I LERNT ENGLISH.

LAST WEEK, MANY BAD THINGZ HAPPENZ FOAR SPAIN (TEH S IN PIGS). THIS COMPANEE NAYMED FITCH LOWERD THIER RATING OV SPAIN FRUM AAA to AA+. THIS IZ NOT HOOJ DEAL, BUT STILL MEANZ THERE IZ VERY, VERY SMALL CHANCE SPAIN WILL DEFAULT ON THIER PAYMENTZ. IZ NOT GUD.

SPAIN IZ BIGGER PROBLEM THAN GREECE, JUST BECAUZ SPAIN IZ BIGGER COUNTREE THAN GREECE. IZ TOO HOOJ TO FAIL, BUT IZ ALSO TOO HOOJ TO BAIL OUT. TEH SPANISH GUBBERMENT TRIEZ TO PASS AUSTERITY MEASURZ TO CUT SPENDING BAI EUR15.0M (USD$18.0M) AND IT BARELY PASSED. THE VOTE WUZ 169-168-13. THIS IZ ALSO NOT GUD.

TO MAKEZ THINGZ WURZ, IT LOOKZ LIEK TEH SPANISH PUBLIC DUZNT WANT THIER GUBBERMENT TO CUT SPENDING. IF THEY HAZ TEH ELECSHUN RITE NAO, TEH OPPOSISHUN PARTEE WUD WIN MOST OV TEH VOTEZ. I THINKZ THAT TEH SPANISH PRIME MINISTER HAZ TO CALL ELECSHUN SOON SINCE TEH VOTE WUZ SO CLOSE. IZ TOO BAD THAT HE DUZNT HAZ SMOKING HOT WIFE TO HELP HIM GETZ VOTEZ. INSTEAD, HIZ DAUGHTERZ IZ KIND OV SCAREE.

MOAR ON ITALY NEXT.

K THX BAI,
MANNIE

GREEK PONZI SKEEM PART 2

O HAI,

SEE, I WUZ RITE ABOUT TEH GREEK PONZI SKEEM.
DEY SOLD THEIR DEBT AT HIGHER YIELD DEN USUAL.

I GOTZ IT FRUM HERE: http://bit.ly/bbNfJ4

GREECE WUN BREATHIN SPACE ON TUESDAI WIF AN OVERSUBSCRIBD ISSUE OV SHORT-TURM GUBMENT BONDZ BUT IT STILL FACEZ TOUGH TASK 2 REASURE MARKETS IT CAN TURN ROUND TEH ECONOMY, TEH FT REPORTS. EXCEPSHUNALLY HIGH INTEREST RATEZ PAID ON NEW ISSUEZ OV 6-MONTH AN WAN-YER DEBT – AT 4.85 PER SENT 4 DA WAN-YER NOWT COMPARD WIF 2.2 PER SENT IN JANUARY DIS YER – HIGHLIGHT TEH CREDIBILITY GAP FACD BY TEH SOCIALIST GUBMENT.

4.85 PER SENT VERSUS 2.2 PER SENT!
IF I HADZ MUNNY AN THUMBZ, I'D BUY LOTZ OV GREEK DEBT.
I WUD HELP MAI PLANZ 4 WURLD DOMINASHUN.

K THX BAI,
MANNIE

GREEK PONZEE SKEME

Hi,

I was listening to the radio and they tried to explain what is happening in Greece.
I'm confused, but will try to explain what they said.

Greece spent more money then they had.
This is called Deficit Spending.
But the Maastricht Treaty says that the European Union (EU) countries has a 3% deficit ceiling.
Large investment banks helped Greece hide this deficit via Currency Swaps and Forward Rate Agreements.
Greece has a deficit of 13% in 2009.
Now everyone is pretending nothing is wrong.

To pay of the current debt, Greece will issue more debt (Bonds) at high interest rate (Yield).
Greek banks will buy these bonds using their capital reserves; buying with money that the Greek government already has.
Then Greek banks will sell the bonds to the European Central Bank (ECB) via Repurchase Agreements (Repos).
Then the Greek banks will use the money to buy more Greek bonds.
That sounds like a Ponzi Scheme.

Now, the ECB will sell Greek bonds to Germany via Repo/
And use that money to buy more Greek bonds,
or the bonds of Portugual, Spain or Italy.
Germany will issue its own bonds at a low yield and pocket the difference between their bond yield and Greek Bond Yield.

Seems like everyone makes money, and no one loses money.
But where does the money come from?
Can someone please explain?

I think this could help may plans for world domination, once I get thumbs.

Thanks,
Manny

O HAI

I WUZ LISTENIN 2 TEH RAYDEEOH AN THEY TRID 2 ESPLANE WUT IZ HAPPENIN IN GREECE.
IZ CONFUSD, BUT WILL TRY 2 EXPLAIN WUT DEY SED.

GREECE SPENZ MOAR MUNNY DEN DEY HAZ.
DIS AR TEH CALLD DEFICIT SPENDIN.
BUT TEH MAASTRICHT TREATY SEZ DAT EUROPEAN UNION (EU) COUNTRIEZ HAS 3% DEFICIT CEILIN.
HOOJ INVESTMENT BANKZ HELPD GREECE HIDE DIS VIA CURRENCY SWAPS AN FWD RATE AGREEMENTS.
GREECE HAZ DEFICIT OV 13% IN 2009.
NAO EVRYONE IZ PRETENDIN NOTHIN IZ WRONG.

2 PAI OFF CURRENT DEBT, GREECE WILL ISSUE MOAR DEBT (BONDZ) AT HIGH INTEREST RATE (YIELD).
GREEK BANKZ WILL BUY THEES BONDZ USIN THEIR CAPITAL RESERVEZ,
BUYIN WIF MONEY DAT GREEK GUBMENT ALREADY HAS.
DEN GREEK BANKZ WILL SELL BONDZ 2 EUROPEAN SENTRAL BANK (ECB) VIA REPURCHASE AGREEMENT (REPO),
DEN USE TEH MONEY 2 BUY MOAR GREEK BONDZ.
DAT SOUNDZ LIEK PONZI SKEME.

NAO, ECB WILL SELL GREEK BONDZ 2 GERMANY VIA REPO.
AN USE DAT MONEY 2 BUY MOAR GREEK BONDZ.
OR BONDZ OV PORTUGAL, SPAIN OR ITALY.
GERMANY WILL ISSUE OWN BONDZ AT LOW YIELD AN POCKET DIFFERENCE TWEEN THEIR BOND YIELD AN GREEK BOND YIELD.

SEEMS LIEK EVRYONE MAKEZ MONEY, AN NO WAN LOOSEZ MONEY.
BUT WER DOEZ TEH MONEY COME FRUM?
CAN SOMEONE PLZ EXPLAIN?

I FINKZ DIS CUD HALP MAI PLANZ 4 WURLD DOMINASHUN, ONCE I GIT THUMBZ.

K THX BAI,
MANNIE