The IMF is delighted to announce that it just approved a €3.2 billion disbursement of cash for Greece, its fifth, as part of the €12 billion in money that Greece needs in order to continue operating in the months f July and August. And just for what purpose will this money be used, one may ask? Well, as explained a few weeks ago, in Greek Math: €12 Billion In, €18.2 Billion Out the entire amount will be promptly recycled by global financial institutions in the form of debt maturities and interest payments, which amount to €18.2 billion in the months of July and August. Simply said ECB, EU and IMF money in, money owed to bankers out. The kicker: 17.09% of the money coming from the IMF, comes from, that's right dear US taxpayer, you (and since 21% of the quota contributions allocated to the IMF are deemed "non-usable", the actual number funded by the US is likely much higher). But this plot has a bonus kicker: as we reported on Wednesday, the actual Greek debt is no longer owed by European banks to the extent it had been previously expected: a development that threatens to scuttle the entire second Greek bailout plan as currently proposed. So as the banks have been selling Greek debt, who has been buying? Mostly hedge funds, such as everyone's favorite John Paulson. So to recap: US taxpayers have just paid out about $780 million of the $4.6 billion in order to fund interest owed to... hedge funds.

The WSJ provides a pretty chart explaining who is responsible for what:

And more:

Counting all IMF funding sources, the 15 euro-zone nations would be responsible for a substantially larger stake in the institution's Greek bailout than the U.S. European contributions to the IMF loan, of course, will in turn be dwarfed by euro-zone countries' far larger exposure through the European bailout.



To make its loan, the IMF will borrow from the U.S. Federal Reserve and the other central banks it taps and pay them interest of about 0.25% on the money; the IMF will then charge Greece about 3% on the loan.



Will the money be wasted? That depends on whether the Greek electorate swallows the cuts in salary and pensions required by the IMF and the country's European partners and whether a new economic strategy boosts Greece's competitive position.



The IMF is always at the top of any list to be repaid because its blessing is crucial for any country to be able to borrow internationally. If there were to be any losses on Greek loans, IMF policy is to absorb them rather than passing them on to members.

So that's the truth. And here is the party line, from Reuters:

In announcing the payment, part of a 110 billion euro IMF-European Union bailout package crafted for Greece last year, IMF Managing Director Christine Lagarde pointed to progress being made by debt-laden Greece, though noting that more work remains.



"The program is delivering important results: the fiscal deficit is being reduced, the economy is rebalancing, and competitiveness is gradually improving," Lagarde said in a statement.



"However, with many important structural reforms still to be implemented, significant policy challenges remain. A durable fiscal adjustment is needed, lest the deficit get entrenched at an unsustainably high level, and productivity-enhancing reforms should be accelerated, lest growth fail to recover," she said.



The IMF has warned that the crisis in Greece could reach countries like the United States through money market funds, especially if the contagion spreads to European banks heavily exposed to Greek debt.



The global lender scheduled its meeting to consider the fifth loan disbursement for Greece after euro zone leaders agreed on Saturday to release their portion of the 12 billion euros due to be paid to Athens from the initial bailout.



Lagarde said Greek authorities had made progress in the fiscal area by identifying measures required to reduce the general government deficit to less than 3 percent of gross domestic product by 2014.



She also lauded the government's privatization strategy and noted that while the plan to sell 50 billion euros of state assets by 2015 is "very ambitious, the establishment of an independent privatization agency should help realize transparent and timely implementation."



Still, more work needs to be done, Lagarde said.



"To strengthen Greece's competitiveness, structural reform implementation needs to be accelerated. This will help achieve synergies, such as between privatization and reducing administrative barriers to investment. The reform agenda should be expanded to address Greece's high labor tax wedge and inefficient judicial system," Lagarde added.

Incidentally, while not a minute was spared to sequester and prosecute DSK, today, for the second time, the French Republican Court of "Justice" decided to once again delay its probe into her alleged money laundering affair with Bernard Tapie.

Hedge funds around the world salute the decision, which will simply allow more taxpayer money to be reallocated into their various Cayman Island petty cash accounts.