On Thursday there was some talk of an IMF-led rescue for Greece before the end of the month.
Scratch that.
On Friday, UBS economists led by Stephane Deo think we might get an IMF intervention as soon as this weekend:
We have always been cautious on the ability of Greece to meet its financing needs during Q2 without any external assistance. In our view, the recent market action means that an external intervention may be unavoidable and could happen very soon as the situation is untenable. We think an intervention over the week end is a distinct possibility.
Might as well, really. The IMF is already in Athens on a technical visit.
Reading the UBS note gives one a distinct sense of urgency, however.
According to the analysts Greece could run out of cash within the next two weeks, based on its bond schedule, as viewable here:
In terms of timing, we estimate that Q1 has been probably “overfunded” by about 9Bn which includes the 5Bn bond issuance during the last week of March. With these numbers in mind, and assuming that a large part of the T-Bill could be rolled, we would believe that Greece could be able to fund itself until the end of April. However, when the May-2010 bond matures on May-19th, the arithmetic will be difficult to square for Greece. If we now assume that the TBills cannot be rolled, an increasingly distinct possibility given market situation, the deadline comes much closer, probably with the redemption of the Apr-2010 bond on Apr-20th. This seems to suggest that Greece could run out of cash in two weeks. Note that there is no significant payment after Q2. So the stress peak is really the next two months.
If that seems extreme, just remember that other analysts are prepping their clients to prepare for a Greek bond default. UBS doesn’t think that’s a very big possibility in the short-term but it’s one Hellenic-helluva-gamble, given Greece is still publicly saying it doesn’t need a bail out at all.
Bond traders — place yer bets.
Related links:
So where does Greece go from here? - FT Alphaville
The Greek tragedy, recapped – FT Alphaville
The kindness of (bond market) strangers – FT Alphaville