The Biggest Greek CDS Speculator Has Been Uncovered - Culprit Is... Greek State-Controlled Hellenic Post Bank!

Tyler Durden's picture

We have officially moved from a Greek tragedy to a Greek surreal comedy. After nearly a month-long scapegoating campaign in which Greek PM G-Pap said he would spit in the faces and skullf#@* all those who dared to buy Greek CDS (because as we have all been lied to by everyone who doesn't know the first thing about CDS, it is CDS buying not bond selling that drives spreads), with the stupidity reaching as far and wide as the Spanish and German secret services, which said they would spy on CDS traders in London and New York, Greek daily Kathimerini has just uncovered that the biggest speculator, holding 15%, or $1.2 billion of the total $8 billion in Greek notional CDS, has been a firm that operates about 2 blocks away from the parliament building in Athens - the state-owned Hellenic Post Bank (TT)! Luckily poetic justice is about to be served, as every single media outlet tomorrow will apply the same circus monkey treatment to G-Pap and his clownshoes henchmen, not to mention the chorus of obese idiots over at the European Commission who fell for the ruse (speaking of EU idiots, has anyone heard of Jenny Craig relapse patient Joaquin Almunia in the past 2 months, with his "Greece will never demand a bailout" arrogance). While there had been speculation that Greek banks were selling Greek CDS to hedge funds, it had never crossed anyone's mind that a Greek bank could be betting on the collapse of its own sovereign host (especially one which does not own Bernanke's printing press), and that in such size! Frankly this beats even our very own AIG fiasco by orders of magnitude in stupidity.

What an unbelievable joke the intersection of global capital markets and politics has become.

Kathimerini reports that Post Bank bought $1.2 billion of Greek CDS at 135 bps in August 2009 and sold them at 235 bps in December at 235 bps, making a profit of €35 million. 

More from Kathimerini:

State-controlled Hellenic Post Bank (TT) spent nearly 1 billion euros last year to secure its positions against the possible bankruptcy of the Greek government, according to documents seen by Kathimerini.

In August, the bank bought credit default swaps (CDS) – a form of insurance on financial instruments – worth 950 million euros when the spread on the Greek five-year bond over the German Bund was at 135 basis points.

CDS products allow investors to purchase protection against the default of debt issued by governments, hedging existing positions.

TT’s management, which changed after the Socialists took power in October, sold the CDS when the spread was at 235 basis points in December, earning a profit of some 35 million euros, the documents show.

Hopefully this will finally and forever force G-Pap to shut up in discussing not just the "speculative mania" whose only purpose is the destruction of Greece, but every other thing he does not understand, unless of course, he is referring to banks based in his very own country hell bent on suiciding the country...then again that would leave him with exactly zero things to discuss.

h/t Nick

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jwo1908's picture

This proves the age-old adage:  Truth is stranger than fiction.  That pithy phrase and one other comes to mind:  circle jerk.  OMFG you can't make this stuff up.18

Tethys's picture

I was going to go with a more recent adage: comedy is tragedy plus time - C. Burnett


asteroids's picture

The Greek language has a slang term for this kind of behaviour. It's is "Malakia"

jibran's picture

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jibran's picture

Love is knowing that the person you want to spend your life with will give you the last of anything that they have. Love is just being able to smile at the thought Working Capital

AR15AU's picture

You don't think the Federal Reserve is buying CDS on Treasury default....?  Why not, they play the S&P 500 ;)

Grayson should ask Ben in their next fireside chat...

perchprism's picture


Yeah, that's the trillion dollar question.  It's what I immediately suspected, too.



WaterWings's picture


There is no way in hell I would have been the first to post the idea. It's pretty much "status quo" thought around here anyway - call it a Hellenic "pre-shock" to the shitstorm of all time. Eastern thought wins over West in the end? Is Jesus (deus ex machina) about to show up, or has the western world fatally enslaved itself for the next few centuries?

Problem Is's picture

"Is Jesus (deus ex machina) about to show up..."


The Rapture Plot Thickens...

Hey, Pat Robertson or Palin McMILF can put up the anointed one in quasi luxury... Oh wait, Jesus was a Jewish Rabbi...

Maybe he should make reservations at the Blue Moon or the Avenue Plaza just to be on the safe side... Those fundi's don't exactly read that book they are always thumping around...

MsCreant's picture


The prose is gettin' kinda edgy. I like it and all, but the style change is noticeable. This is your blog. Fuck these bastards. Hard. With a baseball bat and no astroglide. I'll keep reading, that's for sure.

Thanks for all you do.

SilverIsKing's picture

Would that be wood or aluminum?

MsCreant's picture

If you're gonna phuck someone (trying to clean up my act here) I think it would be best to sprout some wood. But if you're like, acting as caddy, what do you suggest on this hole?

SilverIsKing's picture

Definitely a big wood with an extra long shaft.  I don't golf but getting it in the hole won't be a problem.

Hephasteus's picture

If you use aluminum and rip the colon wall and get enough aluminum in the blood stream they'll get ahlzeimers and then forget. So then you get stuck in a sysiphus loop having to redo it over and over. LOL

aus_punter's picture

why don't you and your friends find a private chat room to remind each other how amusing you are .... for a lot of other people on here (who may be interested in the subject) it's actually pretty boring

rubsgen12's picture

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delacroix's picture

Ms you're kind of edgy too, I like it.

M.B. Drapier's picture

it had never crossed anyone's mind that a Greek bank could be betting on the collapse of its own sovereign host

*khoff* *khoff*

What they *should* have done is followed the GS model and bought all their own CDS. Hey, maybe they did! It's like one of those ancient Greek comedies: you know the one, Aristophanes' /The Producers/.

I will admit that I may have thought I was joking.

Dirtt's picture

It's because you put it in the context of a joke.  Humor is what is keeping us alive.

I walked right by a confirmation of a theory I held for about a couple years. The empirical data was munching on lunch literally on picnic benches. Yet it took 48 hours for the data to purge the revelation from my subconscious.

Keep the jokes coming.

merehuman's picture

i so wish the greeks would come , and teach that circular firing squad thingi to the fed. AH gee, maybe they did!

three chord sloth's picture


G-Pap press conference tomorrow: "Uhhh... ummm... hey look! Over there! A squirrel!" *runs away*

jwo1908's picture

Well the Greek population should be "happy."  At least they know that their own bankers know that the fiscal situation is untenable, and it has to make money somehow. That said, they probably bought cds at the wides.  If they restructure, do they pay the counterparties the full mtm like AIG did?  Oh the can of worms is yummy indeed. 


BlackBeard's picture

HA HA! this just made my evening.  That was funnier than 30 Rock.

This old pirate knew it was the longs that were holding that stuff.  Now...if they ban CDS trading..enjoy the no bid action!

Mr Lennon Hendrix's picture

Someone grab the scooby snacks!

Dirtt's picture

Edgy?  “Ambition must be made to counteract ambition. The interest of the man must be connected with the constitutional rights of the place.” Madison.

Just ambition.  It's merely a reflection of what is about to erupt in the USA. Those who are calling for cooler heads to prevail have the unfortunate position of being vested interests. There is one very fatal flaw to the progressive move towards enslaving the USA.  Said slaves are packing heat. And a lot of it.

So better to fight this fight with the sharp tongue of the mighty pen than the dry powder of Middle America. Once the USA gets whiff of that powder every and all bets are off.  And the perps better get their familes out sooner rather than later.

B9K9's picture

You don't think this eventuality hasn't been hedged? If events have played out so far pretty much according to script, then why would the opera just suddenly end in the middle of Act I? Wouldn't the power elite lose money covering their long positions in societal collapse if they failed to transpire, er, pay off?

No, threats of looming social chaos and perhaps civil war are merely events waiting to be queued up in order to launch Act II. Get out your guns and fire up the revolution; if these events didn't occur, I would imagine there might be some pretty disappointed actors. After all, why launch a global coup if there isn't any reward?

As for Act III, guess what it entails? Hint: all remaining assets captured & profits siphoned while the remaining culled slave population placidly begs for its survival.

Grappa's picture

...then we have closed the cycle of nations and have devolved back to bondage from which the cycle will start again.

"The history of nations shows that the cycle of the body politic slowly but surely undergoes change . . .

It progresses –
From bondage to spiritual faith
From spiritual faith to courage
From courage to freedom
From freedom to abundance
From abundance to selfishness
From selfishness to complacency
From complacency to apathy
From apathy to fear
From fear to dependency
From dependency to bondage"

This can also be described as a cycle of freedom:

"The Cycle of Freedom

      From freedom to abundance;
      From abundance to selfishness;
      From selfishness to complacency;
      From complacency to apathy;
      From apathy to fear;
      From fear to dependency;
      From dependency to bondage;
      From bondage to spiritual faith;
      From spiritual faith to courage;
      From courage to freedom."
  • People progress:

I think there are better sources for this,


nope-1004's picture

I thought it was only US banks that had a greed problem?  Hmmm....  seems to be universal.


As for Geithner, well he needs to go to prison.

Leo Kolivakis's picture


I wouldn't be so quick to read too much into this. No offense to you, and the experts here, but I know for a fact that some of the world's brightest derivatives traders work at NBG Securities. These guys aren't half as dumb as you all think and I doubt they were the ones selling Greek CDS to hedge funds. More grilled squid please!

swamp's picture

Bright they may be but arrogance is blinding.

Nihilarian's picture


I'm curious, how else would you read into this? Do tell.

Belrev's picture

The financial markets have now been oficially mumified.

The populace is presented a semblance of real market, except it is holow inside and does not react to any of the news that should normally move it.

Health care bill passage - no reaction.

This CDS scandal - no reaction.


Is it because the only players left are the arms of the Central Banks that just toss the securities between each other for the sole purpose of publishing desired quotes as this is much cheaper than have to do another multi-trillion bailout?

swamp's picture

Monday they pumped the DOW 15 points just before closing bell to get it over 1725 a technical area of importance (so I'm told I don't trade the DOW).

"They" levitated the DOW again Tuesday, in support of the hell control bill, when really the market should have tanked hard. By levitating the market Monday and Tuesday, in the appearance of mild action, they made the hell control bill appear to be insignificant. They are magicians and the world of flat superficial appearance is everything.

You no doubt remember how "they" tanked the DOW to 6,000 when Paulson was pleading for TARP. 


RobotTrader's picture

Betting on the collapse of their own central bank?

Heh, that is almost as stupid as the ongoing, "market meltdown" cheerleading by the so-called gold bugs like Bill Murphy at GATA.

Seems like by now, he would have figured out that by cheering and trumpeting a "systemic collapse" is the same as cheering for his own demise, as gold and gold stocks go down 300% faster than the S & P 500 when a "convulsion" hits...

One day these guys will learn, that the only way gold reaches "Armstrong's, Alf's, E.T.'s, and Buzz Lightyear's" targets will be when Bernanke gooses the money supply to get the Dow pushed up past 20,000+.

These guys should be rooting for more money, more printing, and higher stock prices.


Frank Owen's picture

Would love front row seats for when you and GG eventually go at it.

AR15AU's picture

You seem confused...  A market meltdown is good in the sense that it stops our politicians from robbing the taxpayer of the future via the bond market.  It literally puts the pain on the current generation (who deserve it) and spares the future generation (who had no part in this mess).  

Also, your analysis on gold vs the S&P 500 makes no sense.  I mean, just throw up a basic 10 year chart gold vs the S&P 500.  S&P shares also carry significant counterparty risk (ever hear of Enron?) whereas bars of gold are not encumbered that way.

Frank Owen's picture

I've been in PMs for years but I think Robo's comment has some weight and would love a debate about whether a market crash (which should be on every ZHer's mind) in our current fuckedupenomics situation will cause gold to also tumble in at least the short term. This topic would be a pertinent open thread or forum discussion.

AR15AU: Here is a link to a 10 year gold/S&P 500 chart

Do you not see what Robo is talking about? Just look at when the market crash started... Gold and the S&P got slaughtered. What it did over 10 years doesn't matter as much as what happened during the crisis. I remember because I was buying miners on the way down and will never forget that beating.

taraxias's picture

Just go back and have a look what gold was doing when the S&P was in a free fall around the time Congress failed to pass the Paulson taxpayer rape plan (aka TARP) the first time.

chindit13's picture

We may not know for sure, but we can guess.  Who are the big gold longs right now?  What are their other positions?  Are they susceptible to an equity market plunge?  Are they highly levered?  If they are (John Paulson et al), will they dump their gold to cover losses in massive holdings of C, BAC, WFC, JPM, AAPL, and a host of moon shot retailers?

taraxias's picture

I love your daily recap posts (and the related exposed flesh) but you couldn't be more wrong on your statement "Seems like by now, he would have figured out that by cheering and trumpeting a "systemic collapse" is the same as cheering for his own demise, as gold and gold stocks go down 300% faster than the S & P 500 when a "convulsion" hits..."

I'd seriously re-think that one if I were you......

swamp's picture

To my understanding, he has never cheerleaded the devestation the commoner will suffer. He has cheered at exposing the fraud and he has tirelessly worked toward that end and deserves the credit he takes.

Number 156's picture

You couldnt make this s**t up.

At least there will be something to watch on TV tomorrow.

Get_to_the_choppa's picture

Looks like the rock just rolled over Sisyphus on it's way back downhill.

sweet ebony diamond's picture

time to bring in scully and mulder.

and what is with the difficult math questions in the capthcha.

Rick64's picture

Thank God! The culprit has been found. Just when I had given up on justice. Were saved.

WaterWings's picture

US Weekly: Nancy and Rahm admit love-nest weekends!

Problem Is's picture

That is just an ugly thought...

With Emanuel's ultra aggressive short man's complex, we would be safe to assume his winky is no bigger than the digit-less finger...

Therefore any attempted intercourse amongst the two is not likely to crack the only thing tight and taut on Pelosi...

Her face lift.


sweet ebony diamond's picture

i hereby nominate you for the Presidential Medal of Freedom

Problem Is's picture

Water Wings made me think that sick thought. He gets an assist...

fUny1's picture

Let me guess, the Federal Reserve(under the guise of the IMF) will initiate its own counter partied swap to bailout the Greeks using their Primary dealers in Goverment Sachs and JP Morgan to leverage short the Euro and Greek debt and derivatives using tax payer money so everybody(that caused the problem) can get back to work on creating more problems.