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Details On The "Transitory" Greek Default Emerge
As more news comes across the tape, we now learn that somehow Greece is expected to experience a default but not just any default: a "transitory" default. From Bloomberg: European officials are trying to orchestrate a second Greek bailout so that a default would only last for a few days, said two officials familiar with the discussions.
- New bailout may see bondholders swapping 90% debt outstanding between now and 2020
- 20% reduction in the net present value of Greek bonds
- ECB would set up a special fund using money from the EFSF, which would be used as collateral during the period that Greece is in default
So, translated: Greece, whose assets will collateralize a Debtor In Possession loan funded by the EFSF, will first transfer all liens to the EFSF first, while the country is under temporary default.
And Greece will emerge from default within a few days?
This sounds like yet another ironclad European bailout plan: naturally the aftereffects of a "brief" sovereign default are so much more benign that those of a "non-brief" sovereign default.
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Merkel and Sarkozy, financial engineers extraordinaire? Did they talk to any other particpants on this? Other than Trichet who is up to his eyeballs on debt he bought on a whim?
OT - sorry - but this is bat shit crazy, and the sort of thing that makes me very angry. I consider myself a sophisticated person (whether it's true or not) and reserved, but this makes me 'want to break shit' - re the William 'let them eat iPad' Dudley:
07-21 10:13: US Senator Sanders says GAO found that NY Fed's Dudley received waiver to let him keep investments in AIG and GE as firms were rescued
Fletch: Why? Did you steal the car?
Teenager: I sure did.
Fletch: Well, I'm not even sure that's a crime anymore. There've been a lot of changes in the law.
perfect! lot of changes in Newton's Laws, too, apparently, as they're bound & determined to run all the indices towards NEW 52 WK HIGHS (soon, very soon)
[...but this is bat shit crazy, and the sort of thing that makes me very angry.]---TIS
Stow that "bat shit" soldier---you'll need it later.
Good grief. And by that I mean....good grief.
Would someone please politely ask the central planners in the ECB to simply sit down and shut up? SD...you are closest...so....
Uh, now that every short has been forced to cover, can we please roll over and flash crash already? ZH readers aside, is anyone not balls to the wall bulltard long at this point?
Obviously, yes.
once you need SD, he is not there....
but the ECB executives read and obey to my posts, so I do the job for now:
ECB, SIT DOWN and SHUT UP.
Meanwhile in Algo Land: NUTS ON FUMES! :)))
As to Europe: THEY ARE DEAD IN THE WATER!...And so is the US of A(bsurdistan)!
It is not a matter of if they fix the 'problem', only that they transport the problem to a future point in time. The assumption is always that time (aka 'growth') will solve all financial problems.
This is why there must always be growth. Because it is this growth that is 'solving' hundreds of years of 'problems' transported from the past.
One hears often times talking about how the levels of debt were much higher after the WWII and we make it out, etc etc. But that pre-supposes that a similar economic growth will again follow suit and naturally that's not the case this time around.
I've been thinking about this for a long time. And I suspect 'they' believe that with most of the world underdeveloped, that more growth is very possible given the right conditions.......whatever that means. Meaning there is still tremendous 'growth potential' assuming they can just get over this rough patch.
Of course this assumes essentially an unlimited energy source and of course an unlimited 'cheaper labor" source, even if that cheaper labor source rotates from country/region to country/region. This is why the so-called smart money is betting on China and India to be where the really explosive growth will be for the next 50 -100 years.
The USA will soon be considered transitory and expendable.
A couple of thoughts:
1. Transitory != Temporary (by any stretch of the imagination!)
2. There's very few choices on how to emerge from "being a little bit pregnant":
a. Have an abortion, i.e., debt forgiveness.
b. Carry the child to term, i.e., enslave the Greeks for the next 18 years (until the child is fully grown)
3. Continue to claim that everything the ECB/IMF/etc. is doing is sensible!
4. Deny, deny, deny reality!
Place your bets (mine is on Au/Ag!)
Greece has been around for a long time. Maybe a 1000 year bond offering?
odysseus would just about be cashing in now...
:>)
Nope.
They will just force the poor bastard to roll it over for another 1000 years. Sleep tight Odysseus and don't let the bond bugs bite.
true. most likely even the legendary odysseus would get bent over.
but he is greek after all...
Yes- there was always growth to take care of this, but no more. Both EU and USA, are facing huge risks of decline or zero growth.It is uphill from this point on. They are kicking the grenade forward, it rolls back to their feet.
The EU is treating the Greeks like a bunch of blood-filled turnips! Short of finding a vast pool of oil in the Aegean, they have NO WAY of repaying the fools that lent them all those Euros! Skull, meet razor already!
It worked for GM! *
*GM down -20.67% YTD, heading to ultimate support at $0...AGAIN!
NOTE: Does not include UAW pension savings
If they would just let the sons a bitches default and get it over with we could get past this mess. Let the market divert it's capital and energy into good investments.
If they would just let the sons a bitches default and get it over with we could get pat this mess. Let the market divert it's capital and energy into good investments
Ironically... That is actually what is probably happening right now...
If one is quietly exchanging their fiat into Au, Ag, food, guns, etc. as we speak, that is capital being diverted into what will prove to be a "good investment"... Others won't do so, an instead, waste their capital...
Frankly, the longer this game goes on, the more time you have to accumulate... So why fret about it?
If you use the story of Noah & the great flood as a parable... I doubt Noah himself woke up every morning wishing for the sky to open up... He was probably more than happy with the extra time...
I'm loaded with all the above. I don't have as much gold and silver as I would like,but I'm getting there.
As much as my righteous indignation hates to admit this, there is still plenty of time to get ready. But that assumes we are getting ready on a daily basis. This is why I won't stop purchasing PMs, because others are not stopping as well.
Sooner or later supply and demand will win out.
Ich habe die Geschichte!
True enough, but we doesn't has to likes it!
What does the ISDA have to say about this?
Ahhh the giant extend and pretend. Sorry bond holders but that bond you thought would yeild 7% will only yield 3.5%....in 15 yrs. Suka!
This is a quote that should be on Headline News across the nation
If you voted for Obama in 2008 to prove you're not a racist, vote for anyone else in 2012 to prove you're not stupid!!!
I like it!
Would be fun to have it on my bumper, just to see the guy behind me.
Sigh, miners just struck a rich vein of Stupid ore, also known as the Republicon and Decepticratic parties!
EurUSD up 180. Complete cock.
What do the CDS held all over the planet say about this?????? hmmmmmmmm
20% reduction in NPV of all CDS out there? I know it is not in the original contract...but all contracts are transitory, just like inflation.
The Russians have to be laughing whilst drinking their cognac. It was so much easier (and profitable) to just default. But noooo...left wing facsist / socialist, feckin' pansies have to create the allusion that they smarter than everyone else, and deserve their DSK like status.
Russia does not have to invade them to grab their assets, just charge them thru their gallic noses for nat gas and oil.
Nostrovia !!
20% reduction in NPV of all CDS out there? I know it is not in the original contract...but all contracts are transitory, just like inflation.
The Russians have to be laughing whilst drinking their cognac. It was so much easier (and profitable) to just default. But noooo...left wing facsist / socialist, feckin' pansies have to create the allusion that they smarter than everyone else, and deserve their DSK like status.
Russia does not have to invade them to grab their assets, just charge them thru their gallic noses for nat gas and oil.
Nostrovia !!
Disclaimer: No banker was harmed during this default.
dup
And there were no tests on animals or humans. Guaranteed there was no testing at all.
You get to figure out which ones apply to this program ;)
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disclaimer not necessary...... it's a given
Seriously WTF? As the diceman once said, either you suck dick or you do not suck dick. There is no such thing as a partial, transitory or any other type of default. Either you default or you don't. Why are people even listening to this shit??
Is there any such agencies left called "regulators"? I mean, for the past 3 1/2 years now, these crooks just change the rules to their favor whenever they feel like it. Is there any law left anywhere? Sadaam and Bin Laden had nothing on these terrorists....
My dog just took a transitory shit.
markets dont seem to be responding negatively about a transitory default. so does that mean they could be in the clear on this one?
Looks like "investors" are dumping the US treasuries to buy Greek bonds.
So who is going to pay for all this? And market is a little presumptious that the parliaments in Netherlands, Finland and most important of all Germany is going to agree to this? Changing the EFSF is tantamount to breaking Article 125 of the EMU constitution. Doing this will guarantee Merkel getting kicked out of the Chancellor seat in Germany. If she agrees, you are likely to see a massive rebellion in the Bundestag. And market clearly does not know this. This need to go through the parliaments of the above countries. It is so easy to be stupid.
It's also likely to negatively impact the German Constitutional Court ruling in September on whether these bailouts are constitutional. The more German money Merkel hands over, the less likely it is that she gets the ruling she wants.
Yes, and she knows it. So what happens if this clause disappears from the final doc?
The very same thing that happened to the Santa clause.
Yes, and she knows it. So what happens if this clause disappears from the final doc?
They are trying to paint the pig, and see if it flies. So many attempts, so many fails.
I hope it fails again, and the German people kick politician's ass.
Greece (liars) needs to leave the EU, not just the EMU.
So, G-Pap will go quiet on this, right? We haven't heard anything from him or the people in the streets, right? Entitlements "back-on" since no one is looking ???
They love it! Greeks will be packing the car and heading for the beaches. Party on! Retsina and ouzo will be flowing in celebration. The habits of the people haven't been changed...what is the EU thinking? They removed any incentive to change.
I feel like Tyler's "Deer in Headlights" watching all this unfold.
New Zero Hedge tagline.
On a long enough timeline everything is transitory.
Brilliant.
is that the M.A.S.H. theme i hear playing in the background?
As a matter of fact......
http://www.youtube.com/watch?v=4gO7uemm6Yo
on a long enough road, the can can (sic!) be kicked eternally.
Thank you lots for making me laugh. It's the only thing with (mostly) positive Expected Value these days.
Haven't literally LOL'd at a post in a long time.
Sniffff sniff. Can you smell that?
Smells like a special deal cooked up for select elites allowing them to exit the burning building before it collapses.
Reminds me of that scene from Titanic. They locked the gates to steerage so the folks with money could get on the life rafts....
Don't the holders of Greek and all Euro debt holders realise the politicos are taking the piss. Are they that fuckin' stupid. Obviously.
I hope the ratings agencies stand up and declare this a proper default. But then the Euro countries think they can dismiss this if they don't agree.
As mentioned above. What will the CDS holders think. Rigged casino.
It really is just a game of pretend now where everyone pretends that what they are doing is legal and if everyone pretends then it IS legal. Kinda like how the President and his staff decide that they will ignore the Russian hardline response in The Sum of all Fears movie and only respond to the original pleasant response instead. If you believe hard enough then the bad news doesn't exist.
Yeeeeaaaa!!!! Greece's debt problem is solved!!! (Didn't I post this before?)
The people that own these CDS´s....I wonder how they feel knowing that the rules will be changed so their bets never get paid.....I would think that should crash the CDS markets
The contracts are written. Their rules are fixed.
They may or may not require an agency to declare a credit event, but so far, they've shown little sign of allowing the EU to pull the wool over people's eyes.
Rally! Double profit, triple profit, quadruple profit, quintuple profit!!!!!!!! Buy Buy Buy, Transitory Default!!!! We are saved!!!!!!!! Just click buy mkt !!!!!! You can't lose. The market always goes up. Wait til they raise the debt ceiling 2 Tril!!!! DOW +500 here we come!
Nevertheless, as I sit in my 800 square foot apartment paying 8 dollars a gallon for gas, the Euro is rallying.
Plus the Dow is approaching 13,000.
I don't understand this shit.
Fuck all you motherfuckers.
Just kidding.
Anyway, so long.
And God bless all you Marxist cocksuckers.
http://geraldcelente.proboards.com
If a Greek transitory default is good imagine how GREAT a US transitory default is going to be.
We may see Laszlo Birinyi's S&P 500 Target of 2854, hit 2 years early (Sept 4, 2011).
Booyah. Hallelujah. Mazel Tovah.
I've said it before and I'll say it again: these motherfuckers will do everything in their power to suspend reality until reality finally sets in. In a fiat currency system they can change the rules by fiat. Thus, there are no "rules" other than those which are created by the rulers of the system. Of course there are the rules of reality but so long as people are willing to participate in the false system it can last longer than many initially thought.
Carry on ponzi soldiers.
You are correct.
It is the rule of the post Apocalypse.
Governments will DO ANYTHING to keep the juggled balls in the air.
ANYTHING. Permit mathematics to be undone by taking things off the books. Framing somone who is orchestrating default to put him in jail. We'll see murder eventually.
There is only one way "reality" can assert itself. They can't print oil. They can pretend they can from the SPR, but that is not new oil, and it is that . . . oil . . . that will eventually take it all down.
But they can create crysis, like tightening oil artificially. Oh, already happening with all the uprisings near the middle east.
The real question is... who benefits from all this mess?
Bingo. Eventually the exponential function will run smack dab into the wall of energy limits. The financial portion of the equation can be massaged over with digital currency units. Of course real inflation rises and the poorer suffer more as a result thereof, but the system continues to chug along.
Per Obama's forecast US GDP will be approx $23 trillion by 2021. The EU is forecasting similar growth numbers. Then there are the Asian tigers which are also seeking higher consumption per capita. I wonder where the energy to fund this growth will come from? It wont and at some point we will experience a global currency wipe-out and then they will introduce a global currency unit SDR style ponzi keeping people in control. Already we are seeing the NATO global police force as it battles in Libya and Afghanistan.
More likely we will have $8T economy (in today's dollars).
Even if we balance the budget, the debt will stay around $13-$14T, and will be impossible to serve.
You are absolutely right - what growth? Energy, demographics, dead FIRE economy, leaving manufacturing, leaving capital, etc. You cannot grow $14T economy by flipping burgers...
3 years ago "This is going to end badly" "You cant print your way out of this." Shirley You Jest?!?!
Better than extend and pretend.
That's one super sized Marshall Plan Can they're kicking now...
Oooooh, a "transitory" default!
It's not transitory, of course, unless by transitory they mean default is being moved along the road to perdition. Still, I'm not really convinced transitory means what they think it means.
I've said it before and I'll say it again: these motherfuckers will do everything in their power to suspend reality until reality finally sets in. In a fiat currency system they can change the rules by fiat. Thus, there are no "rules" other than those which are created by the rulers of the system. Of course there are the rules of reality but so long as people are willing to participate in the false system it can last longer than many initially thought.
Carry on ponzi soldiers.
Hilarious government propaganda -- "temporary" default, or "transitory" inflation, or "transitory" recession (aka "soft patch").
Are Greeks involved in the process of crafting their future at all? I am confused.....
"transitory" or not, this meets the criteria of a default as laid down by the pirates S&P and Moody in the Ratings Codex. Remember they're not rules per se, more like, guidelines.
-Capt Jack and Barbossa
Carry on my Modern Money Mechanics son
There'll be smokin' craters when you are done
Lay your fiat printing head to rest
Don't you cry no more
Though my eyes could see I still was a blind man
Though my mind could think I still was a Keynesian
I hear Paul Krugman's voice when I'm dreaming
This is just pie in the sky hype. It's totally unworkable. How are you going to get your hands on the collateral to sell....
Gold and silver may be indicating that the longer term success of this temporary default is what will be 'transitory'.
Everyone, their mothers and their mothers' grandmothers should be shorting the EUR. This document is a farce; nothing stops Greece from defaulting next week to overshadow the U.S. debt circus (so the nation can be ruined without much resistance), not to mention PIIGS' shooting bond yields. l0l
Hey that was easy....what took the morons so long? Now I see the Fed has their bid in the bond market, albeit the ES up 18...hmmm, thos eleft wing facsists really know how to corner a market!
Until they don't, and then people die.
So tired of this "transitory" bullshit.
If I had a "transitory" affair I'm pretty sure my wife would still kick my ass up down and sideways.
+10000
The sick satire never ends, but the looping laugh track will be upon all of us soon enough.
I feel like I'm waking up to brazil every day now and it will keep going south.
It's a kinder, softer, fuzzier kind of default. More like a "kitten default".
Worth a punt? Might be a good spec at this point...but still risky...
I wouldn't put more than $2K into this trade. You are right Leo - the risk to downside is around $1, but the price could hit $8-$10 in no time. Just a healthy bounce. No matter what - it is junk, and I would rather not trade junk, even if the profit potential is high.
No Greek left behind..there must be something 'special' in Greece for these politicians.
Are they gonna come up with "Marshall Plans" (bailouts) for Ireland, Portugal, Italy, Spain... and the UK???
Or is this a case of, bailout Greece and then just hope the problems regarding other nations just don't ever fully materialise?
I'm going to call my bank that I would like 20% of my debt transfered to... well gone.
WISH ME GOOD LUCK GUYS!
And now a word from our friends Ireland and Portugal because I'm sure they also like free money.
All right you Jokers, form a single-file queue, right behind Greece! Once Belgium forms a Govt, we can get this party started...
This is like to kids hashing out how to explain to their mom that they broke a vase. Just shut up and take it.
Does anyone actually believe what they say now? Cause the last 10 deals fell flat in a month.
Oh Louk, where are you?
pods
War is on the horizon...the final deception...
War is on the horizon...the final deception...
http://www.youtube.com/watch?v=MgsUdk8TgdM
.........on a long enough time line, every default is transitory....