EUR Tumbles As Juncker, De Jager Say Selective Greek Default Still Possible; European Economic Data Deteriorates

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Thu, 07/21/2011 - 07:06 | 1476368 j0nx
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Selective default, partial default. Is that like being kinda pregnant? Just so I know and can follow along...

Thu, 07/21/2011 - 07:53 | 1476434 Going Loco
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Selective default means you admit selectively to those partial aspects of default you think will not trigger any CDS obligations on the part of the by now wholly insolvent and somewhat elusive counterparties. But you do not admit to breach of any conditionsof the original instrument, breach of which would constitute not a partial default but a full default. Like, for example, the obligation to pay interest in the originally stated currency, on time and in full, or the obligation to repay the principal, in the originally stated currency, on time and in full. 

Watch for get-outs like "We will pay you your interest on time but you must immediately subscribe the interest payment into a new zero-coupon undated sovereign bond". 

Japes apart, I don't see how anything other than full and complete performance of all the original conditions of the instrument can be anything other than a plain vanilla default.

Thu, 07/21/2011 - 08:01 | 1476441 Sudden Debt
Sudden Debt's picture

More like 2 guys who fucked a girl and when she's pregnant, they'll blame each other about who first came up with the idea NOT to wear condoms.



Doctor Goldman S. will figure it out who's the father, but that will cost billions and billions in fees.


Thu, 07/21/2011 - 07:07 | 1476371 Hammer Time
Hammer Time's picture

Yankees the Hunter...

Thu, 07/21/2011 - 07:08 | 1476372 rajat_bhatia
rajat_bhatia's picture

Selective Default Bitchez!!!

Thu, 07/21/2011 - 07:08 | 1476373 scratch_and_sniff
scratch_and_sniff's picture

The ECB should take a leaf out of the feds book, and just keep stum.

Thu, 07/21/2011 - 07:11 | 1476374 slaughterer
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Can anyone clarify what will be "selective" in this default? 


Thu, 07/21/2011 - 07:15 | 1476384 Azannoth
Azannoth's picture

Private individuals will be hosed, institutions will be saved what else

I cannot wait to get out of this crapper soon enough

Thu, 07/21/2011 - 07:29 | 1476414 Stoploss
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Thu, 07/21/2011 - 07:11 | 1476379 Josephine29
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As usual we are getting a load of waffle from Euro zone leaders that on their past history will put us on the road to nowhere! For a logical analysis and critique of likely proposals here is a link to the views of notayesmanseconomics.

In any Franco-German rescue plan for Greece the European Financial Stability Facility is likely to take centre-stage

Thu, 07/21/2011 - 07:11 | 1476380 GeneMarchbanks
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Investing on Hope,eh?

I'd rather speculate on Dope.

Thu, 07/21/2011 - 07:13 | 1476382 slaughterer
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Would have expected PM futures to jump on the meme "selective default" but they were relatively stable when compared to EUR/USD. 

Thu, 07/21/2011 - 07:28 | 1476412 Ethics Gradient
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I would have expected the EURCHF to tank. In fact it's getting stronger.

Xerox will want to renegotiate their servicing contract with the SNB. Their printers must be getting ruined.

Thu, 07/21/2011 - 07:21 | 1476395 papaswamp
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I recommend salvia....get's good about a 1:05 mark.

Thu, 07/21/2011 - 07:28 | 1476409 GeneMarchbanks
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Quality clip, much appreciated. How high up do you think their apartment was? Pun intended.

Thu, 07/21/2011 - 07:12 | 1476381 oogs66
oogs66's picture

the plan will be a waste, just a question of whether market figures it out immediately or rallies for a week first

Thu, 07/21/2011 - 07:14 | 1476387 slaughterer
Thu, 07/21/2011 - 07:18 | 1476390 papaswamp
papaswamp's picture

Pimpco usually does the opposite of what they say. Very Sun-Tzuesque.

Thu, 07/21/2011 - 07:19 | 1476391 Aductor
Aductor's picture

Not to worry. Ignorant US traders will focus on domestic (!) backwardlooking coorporate earnings and reassure themselves that everything is just... fine.

Thu, 07/21/2011 - 07:20 | 1476393 Quintus
Quintus's picture

Almost live coverage of the latest developments and rumours surrounding the Eurogroup meeting from the UK Telegraph here:

Thu, 07/21/2011 - 07:23 | 1476399 slaughterer
slaughterer's picture

Looks like PMs are catching up to the Junker meme now. 

Expect a final statement from eurocrazies later today. 

Thu, 07/21/2011 - 07:21 | 1476396 chump666
chump666's picture

let the chaos begin...spanish auction was a nice pre-curser

Thu, 07/21/2011 - 07:37 | 1476417 El Hosel
El Hosel's picture

...oops, sorry about that.

Euro has not priced in much of a default yet has it?

Thu, 07/21/2011 - 07:31 | 1476419 El Hosel
El Hosel's picture

  Nobody cares about zombie bankrupt countries, banks, or currencies. Let the good times roll, print money and rig the "markets".

Thu, 07/21/2011 - 07:31 | 1476420 El Hosel
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  Nobody cares about zombie bankrupt countries, banks, or currencies. Let the good times roll, print money and rig the "markets".

Thu, 07/21/2011 - 07:23 | 1476400 virgilcaine
virgilcaine's picture

bank haircuts coming.

Thu, 07/21/2011 - 07:47 | 1476429 buzzsaw99
buzzsaw99's picture

there's a first time for everything i suppose.

Thu, 07/21/2011 - 07:24 | 1476401 Fazzie
Fazzie's picture

 If all the Euroland bungling beaureucrats would simply STFU and at least get their propaganda act on the same page, it would help.

 Each one of them is so full of hubris and think their official statements are so clever that they will outsmart the market to help their latest scheme succeed.

  The "bank tax" was put out there as if it was real for example.

 "Selective default" "bond buyback" and all that crap that is either supposed to sandbag or soothe the markets only to change in hours really isnt helping as the market will call any bluff short of an all out trillion dollar bailout like the last go around.


   All the market wants them to do is STFU and get to printing, only in the central planners mind does a market exist that can be talked up at this point when the shit is hitting the fan.

  But no, each one of the idiots just loves to call a press conference thinking that if only their statement is clever enough it will make the problem easier to solve.

Thu, 07/21/2011 - 07:29 | 1476405 Troy Ounce
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Thu, 07/21/2011 - 07:26 | 1476407 Troy Ounce
Troy Ounce's picture


Etymologically, the word "Yankee" seems to derive from Jan-Kees.

"1683, a name applied disparagingly by Du. settlers in New Amsterdam (New York) to English colonists in neighboring Connecticut. It may be from Du. Janke , lit. "Little John," dim. of common personal name Jan ; or it may be from Jan Kes  familiar form of "John Cornelius," or perhaps an alt. of Jan Kees,  dial. variant of Jan Kaas,  lit. "John Cheese," the generic nickname the Flemings used for Dutchmen. It originally seems to have been applied insultingly to Dutch, especially freebooters, before they turned around and slapped it on the English. A less-likely theory is that it represents some southern New England Algonquian language mangling of English . In Eng. a term of contempt (1750s) before its use as a general term for "native of New England" (1765); during the American Revolution it became a disparaging British word for all American native or inhabitants. Shortened form Yank  in reference to "an American" first recorded 1778."

Thu, 07/21/2011 - 07:30 | 1476416 platoslast
platoslast's picture

This pullback was telegraphed. I am still looking for a rally into next week. The noise has very little to do with the price action. Indicators are weak and over sold...nuff said.

Thu, 07/21/2011 - 07:55 | 1476437 Sudden Debt
Sudden Debt's picture

Total costs of a "selective" default are now 460 BILLION EURO!

So when all the corpses fall out of the closet, it will be 1 Trillion for sure.

And the loss for the stockmarket because of dropping banks and insurance companies will be about the same.

Add a cooling German economy and a cooling Chinese economy and:




Thu, 07/21/2011 - 07:59 | 1476444 gwar5
gwar5's picture

"Selective Default" -- the elites of the Bozopean Union are still playing with euphemisms. It's the EU that is selectively defaulting.

From what I've read in the comment sections of Euro blogs, the masses continue to turn against the EU. They're using the M-word, "marxist", and "collectivist" descriptions to blame the EU architects for creating the mess (apparently these are not just American slurs anymore). Seems the looming sovereign defaults have made the them acutely aware their democracy is being trampled by the jackboots running the EU banking union. 

Backlash, Bitchez.

"You are very very dangerous people, indeed." -- Nigel Farage, to the EU members


Thu, 07/21/2011 - 08:16 | 1476458 tom
tom's picture

"selective default" generally means paying in full and timely on some debts, not on others

As I understand it this swap is only for GGBs maturing within 8 years.

Also it's apparently going to be somehow coerced but not 100% mandatory, so some holders will presumably refuse, hoping to be paid in full. eg the Greek banks, as long as the Eurocash keeps coming, they could get try and get away with that.

Thu, 07/21/2011 - 12:02 | 1477364 glenlloyd
glenlloyd's picture

They can (insert descriptor) default all they want, the RA's have said that if the end result is anything different from what buyers signed up for then it's an event.

Wed, 07/27/2011 - 07:28 | 1497105 El Hosel
El Hosel's picture

Selective default,selective bailouts,selective enforcement of the law.... When our leaders select  widespread corruption and systematic abuse over the best interest of the country we have a selective  clusterfuck.

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