REVEALED: How the Troika bailout is ACCELERATING Greek insolvency.

Hellenic bailout, Troika method. (Reconstruction)

Why Athens is robbing Greek institutional bank accounts

Slog’s Brussels source confirms Mish’s GET site analysis

“I was wondering when someone would spot this,” said The Slog’s Brussels Mole this morning, “but yes, there’s no getting away from it….just by getting the bailout on these [Brussels Accord] terms, Greece is going backwards”. Thus did this EU official confirm the incredible analysis published by professional business site Mish’s Global Economic Trends this morning: although Greece needed the capital (aka ECB non-cash wobblymoney) forthcoming from the Troika to avoid outright messy default, the terms of the 159-page report guarantee that the situation in Athens will deteriorate more quickly.

My Brussels Mole would not, I know, mind me telling you he works there in a relatively junior EU capacity. But one Fifth Columnist in the Kingdom of the Dined is still a Prince if he can confirm damning analyses.

“I’m sure a lot of investors are fully aware of the hari-kiri clauses in the SEAPG [see below]” he told me, “but the media have been slow on the uptake. Or maybe they just see the Greek tragedy as worn to a shred, it’s possible. Either way, the analysis is spot on…whether it was designed to do what it’s doing, well…I can only guess.”

Can’t we all? Was this Christine and Wolfgang’s revenge for not pulling off the Greek amputation last month? Who knows? What’s clear however is that Greece isn’t just treading water now….it’s descending some slimey steps to the sea bed with every step it takes.

After The Slog used Athenian sources to establish embezzlement of public institutional funds by the Papademos Government last week (a story as yet untouched by MSM hacks) Mish publisher Mike Shedlock picked up the story…following which MGET reader Brett bit the bullet and read all 159 pages of Greece’s bailout agreement, the snappily titled Second Economic Adjustment Programme for Greece. What a hero – and what gems he found.

This is what the analysis shows beyond any doubt.

Accepting that Greece is of course technically and entirely insolvent, Brett confirms that it raided University accounts held at the Bank of Greece to complete the bailout-related bond swap last month. And he adds, “We know the bond swap offer (450 million Euro) for issue XS0147393861 was rejected and is payable on May 15 (6 Weeks to go). Somehow it [Greece] has to pay this before the next [bailout] tranche.”

Crucially, he adds:

‘Of the 7.4 billion it received in the first tranche a Greek government official stated that “Greece would use this money to pay 4.66 billion euros to the European Central Bank and other eurozone national central banks for the capital amount of a three-year bond that expired yesterday”…..This leaves 2.74 billion over 3 months to survive with. Even if you believe the 1% deficit for 2012 forecast (complete nonsense on page 99) Greece is in arrears 1.25 billion per month. This consumes entirely the remaining distributed money from the EU & IMF. Plus there is 5.2 billion Euros of Treasury bills due in April and May.‘

Mike Shedlock asks rhetorically at the end of the piece, ‘..somehow Greece needs to come up with money for April 20 and May 12 redemptions…Is there another rabbit in the hat? I really do not know, but I do know that hats cannot hold an infinite supply of rabbits’.

Talking to Slog contacts in Athens over the last three weeks, the main struggle from here on will be finding a hat to steal. To complete the English Law swap, the Papademos to Venezelos Conglomerate of Bollocks hoovered up 70% of the entire further education budget last month in one midnight raid. As Mich observes, not one investor has bought a Greek 1-year bond since the March bailout.

Given that I still think there is a treble issue here – immediate, cynically hidden obligations, medium term derivative obligations, and the terms of the Troika bailout – my take on this is that either the Athens Government rapes every budget it can find in the Bank of Greece (busy itself printing unauthorised euros already) or it defaults probably on April 20th – and definitely on May 12th. But I’m all predictioned out when it comes to Greek default, because Greek default entered Room 101 via the Ministry of Truth last month: and in Room 101, a default is not a default, subordination never happened, the Bundesbank never banned ClubMed bonds as collateral, and Mario Draghi is a Pope who sh*ts invisible money in the woods.

Raping or printing, lying or denying, these elites are utterly untrustworthy. What I suspect they may not realise is that professional investors know this now: as a result of playing according to Goldman Sachs Rules, the EU has doomed the eurobond market. It may very well have doomed the entire EU as well

The Slog