Back To The Drawing Board: S&P Says Greek Rollover Debt Plan "Would Likely Amount To A Default Under Our Citeria"

Tyler Durden's picture

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hugovanderbubble's picture

if no default why keep paying and wasting  money into CDS market....CDS market may close.

Cos NEVER would happen a Credit Event with such crap of Financial lawmakers.


Just remember the 2 entities which controls the CDS market and ICE ( JPMorgan and Goldman Sachs)


-If CDS market goes NULL Trading income for Jpmorgan and GS will hurt.


This is the biggest legal Scam ever done.


Any Greek Debt = DEFAULT 100% other things are lies and more lies.


Next Ireland, Portuguese, Spanish ,Belgian and Italian Bonds.


China u will eat Eurojunk in SAFE  and C&C Sovereign Wealth Funds ....

Short Hong Kong

Popo's picture

So let me get this straight:  These rating agencies are perfectly willing to overlook massive changes in accounting laws which render utterly insolvent companies, magically "solvent".    But they're putting their foot down **now**?

Someone has obviously forgotten to include a provision under which the ratings agencies make a boatload of under-the-table money on this deal.



hugovanderbubble's picture




Soft Reprofiling = Haircut yes or yes, its the new euphemism to lie European and WorldWide European Debtholder.

Greeks will never pay, Greece needs to devaluate and get back to Drachmas the same has done by Iceland, its hard but its the best thing to preserve the real economy in Greekland, other thing is just, wasting (or gaining some  months/time) for banksters, meanwhile they place into the market more Collateralized Products to swap this junk structures into Chinese Portfolios. China is becoming Financially Stupid more and more trusting  in Eurozone, but its normal they need Europe to expand its philosophy of " no life just work without unions, just work, no life, in general terms to continue developing a world with no intangible values.


LETS get back to protectionism¡ China has crushed the entire world (Illegal Competence)


Thats why the European Union wants to create its own Rating avoid " Financial Terrorism by Fitch, moodys and Standard&Pums¡"




Bob's picture

That's the elephant in the room, alright.  WTF happened to mark to market?!

Urban Redneck's picture

The ratings agencies are trying to make sure their TBTF banking customers remain whole on existing investments in Greece.  Since at the end of the day it is the FED and Treasury that will monetize the Eurozone bailouts- to avoid directly bailing US TBTFs again.  They will at some point probably lean on S&P and tell them to tow the company line, the ECB will change a comma or two in the MLEC2, and present a "new" plan, and everyone will be silent.  The industry knows at some point it is going to have to take a haircut on some debt, but that won't stop them from delaying and minimizing the exposure and loss as long and as much as possible.  So until the FED and Treasury tell the bankers to shut up and take what's offered- we have kabuki theater, and hopefully a flight to the USD and bonds (from the Treasury's perspective), allowing them to postpone QE^next. 

Cursive's picture


Excellent comments from everybody and you succinctly captured the rank hyprocrisy of the ratings ladies. I wish I knew their angle.

Bob's picture

Problems, problems.  When are the banksters gonna figure out a way for the rating agencies to get paid on this deal?

Rynak's picture

If they haven't by now, then there is probably no easy way. Either this statement by S&P is just bargaining/theater, or they simply won't bent over unless it someway is compliant with their criteria.

oogs66's picture

So they would rate it D for about 2 days?  It would have no impact on the banks if they do this.  As I've said all along! 

nmewn's picture


There's nothing wrong with that credit card! it through again and get the manager over here!

The nerve.

New_Meat's picture

Lad--I'm off to burn some beef and the correct white meat.  I hope that this Independence Day has some rather more recent meanings in addition to the usual family and reverent festivities.  New translation of the Federalist Papers is promising (I'm shosh' through).

Wishing you and yours the best.

- Ned

bigwavedave's picture

Tyler: You are starting to sound more and more like Reggie..... Back off the me me me meme

Rynak's picture

I think you are mistaking S&P with (the) tyler(s).

bigwavedave's picture

"Last Wednesday we cited from a Reuters report"

Rynak's picture

Oh noes, ONE selfreference in the entire article!

Do you have any idea how many selfreferences (the) tyler(s) make in some other articles? You pick an article with minimal "me me me", to complain about "me me me"?

Not disagreeing with your overall point, but the timing couldn't be worse.

bigwavedave's picture

Yeah well I dont even read reggie anymore because of it. Even though he has good analysis I just cant get through the 'reggie told you so....' crap. Its just too tiring. And he has never ever heard of jpg compression. Prick.

Popo's picture

Is your avatar having a seizure?

bigwavedave's picture

I am just tired of the same 'Like we said.... when... here...." crap. It isnt effective or professional. I guess i would be forgivable for sites and commentators that have no audience. But for ZH this needs dropping. 

Bob's picture

As you point out, it can be overdone.  WRT Tyler, however, I don't agree that he has crossed that line or, for that matter, even come close to it.

Fazzie's picture

   Nobody likes the "I told you so" guy, but ZH has the right to crow when they really did tell you so. Theyve been right about a lot of things lately except when they go into "Tom Clancey" mode and think Iran or something is about to be invaded.


decon's picture

I agree, very un-Fight Club like.

Tyler Durden's picture

Um... it is there to provide a hyperlink jump point. Feel free to read encyclopedia brittanica if it is more attuned with your stylistic and narrative needs.

Cursive's picture


It is good to know the history and context of a post. Don't change a thing.

ArkansasAngie's picture

Moral Hazard applies to systems, too.



Zer0head's picture

'Moral Hazard" is so 2008

Ghordius's picture

Louis Gargour, chief investment officer at LNG Capital gives some comments on this on Bloomberg

He reminds us at the end about how this things are done: "...the example here is Latin America in the eighties.

There was a Baker plan, (kick the can down the road, lend money, austerity
then came the Bradley Plan (with the "Bradley Bonds") writing debt down, extending maturities, etc. so that they can service the debt.

It seems that this French idea is not (yet) that welcome at the moment.

Tense INDIAN's picture

Fuck the GREEKS this for a change ::::


i wonder how will the GERMANS react to find that they had BEEN DECIEVED....BIG TIME

spanish inquisition's picture

So I will extrapolate and propose that the Obama birth certificate issue has been to prevent his "actual" father from being traced back to the Rothchilds. He is actually a controlled illuminati rube through his time in the CIA, now doing the bidding of his masters by furthering wars and bailing out their interests....

I was going to be sarcastic. but after typing it out, it doesn't seem that far off.

MadeOfQuarks's picture

I don't get S&P have started actually rating risk now? Why? What's their angle?

hugovanderbubble's picture

All Rating Agencies has started to analyze the Rollover Bond Scheme for Greek , which implies a massive hidden losses for German and French Banks (Yes or YES)

They have been lending to Greece with higher risks, now they have to pay their lack of risk controlling. Not me , not you. Im sorry for French banks specially, but this is not a zero sum game.

Greek will  never payback its debt, so everything is such a ECB final fantasy to avoid the Euro Collapse.


Again and again matchball in process.


But the most funny thing are US Munibonds which are currently in worst situation that most of the European Debt tranches.



Bob's picture

Perhaps the angle here is for the suddenly "renegade" American rating agencies to demonstrate some apparent credibility in the case of Greece so that later, when the states start blowing up, they will appear consistent when they insist on no haircuts for those bondholders and open the door for their toadies in government to roll out the greatest asset privatization program in the history of humankind as the "only solution." 

steve.stuart's picture

using the same criteria what would they rate USA?

Rynak's picture

Devaluation isn't considered reducing..... value.....

hugovanderbubble's picture

USA indeed is not the big problem


Are the Munibonds sir.


Next Crisis is not in the Eurozone, is in Municipal and SubGovernment US debt.


Debt Ceiling is not an issue, Is something necessary to avoid the infinite keynesian model of printing debt without deleveraging. Monetary offer will be reduced 30-50% next 10 years.

Cameli's picture

I wonder what their "criteria" for sub-prime were then? From not being able to rate a mortgage to being qualified to pronounce on soveign debt? Give me a break. These people don't have "criteria" only big mouths. Meredith Whitney would be a perfect fit there.

rufusbird's picture

going after people who are not paying them anything yet...

johngaltfla's picture

Shorting the Euro looks like the play of the day now. Then again it has hit a major resistance area and is due to collapse as it should. The funny thing is S&P is more proactive on Greece than they ever were on CFC, WM, or IMB.

sbenard's picture

What a suprise! NOT!

The only real surprise is that they haven't called the U.S. as a technical default yet. It's coming!

MadeOfQuarks's picture

Yep, but after the fact, naturally, so as not to cause a panic.

Freebird's picture

That NOT thing - is that like 1930s Vaudeville or something?

ForWhomTheTollBuilds's picture

Am I the only one imagining a future where the US government announces that they are still capable of paying their debts but choose not to and so, are not "in default"?

CrashisOptimistic's picture


You all know better than this.  After two years of careful analysis and extrapolation, you KNOW perfectly well they can legislate definitions and manufacture a change of whatever rules to get the result they want.  This is not science.  This is not mathematics.  This is all arbritrary. 

They will redefine things in very detailed form to create a facade of logic, but they are going to get the result desired and the mechanism . . . we will try hard to understand the mechanism and see how it all "makes sense" . . . the mechanism truly doesn't matter.  It's all contrived AND DOES NOT HAVE TO BE CORRECT.

There is only one thing that they can't wave a hand and make different than it was before.  Understand this at the core of your intellect.  The one thing is geology and oil.  The SPR release was their attempt to pretend, and it's failing.  They cannot manufacture physics, and that, and only that, will be the end.

Law97's picture

US stock futures aren't giving back one point of the 640 point runup last week.  Let's see, +640 points because Greece avoids default, -0 when two days later they default. Not literally, of course, but you would expect just a bit of the shine to come off last week's Greece-based spectacu-rally.

Actually, the one thing most bullish anaylysts are forgetting is that the softness in stocks over May and June was due mostly to deteriorating US economic conditions, NOT Greece.  They think now that Greece is fixed, we can make new highs. 

Remember the 1.8% GDP number, horrible jobs #, the housing double dip?  None of that has gone away.  So even if Greece is off the table for the time being, that does nothing to address the main reason for US stock market softness: the deteriorating US economic picture, the latest slightly better than expected PMI/ISM numbers notwithstanding.

Libertarian777's picture

Actually makes one wonder why we even pay fund managers any money. Particularly bond managers. Is their sole criteria the portfolio mandate? So if it says only invest in AAA screw the actual analysis and just invest.

I would have hoped that any bond manager, except maybe a distressed fund, would have exited PIIGS bonds last year.

It's funny how they'll keep playing the game to extract those last few cents out the bond (and get the big bonus) while the risk profile grows exponentially, until the 'credit event' occurs.

Libertarian777's picture

Actually makes one wonder why we even pay fund managers any money. Particularly bond managers. Is their sole criteria the portfolio mandate? So if it says only invest in AAA screw the actual analysis and just invest.

I would have hoped that any bond manager, except maybe a distressed fund, would have exited PIIGS bonds last year.

It's funny how they'll keep playing the game to extract those last few cents out the bond (and get the big bonus) while the risk profile grows exponentially, until the 'credit event' occurs.