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Goldman Offers Olive Branch To Greece, Praises Country For "Tough Actions" (Words, Technically), Awaits Further CDS Bashing
Goldman's chief Euro strategist Erik Nielsen is out with another note, this time one of praise and wild-eyed adoration for the increasing desperation in Greek polemics (note, not actions: those tend to be more of the semi-violent police clashing, people striking variety). Well, duh, of course Greece will promise it will take out a second-lien on the Parthenon (and a first on the Acropolis): the country will be out of money in two weeks for Pete's sake! Aside from the pandering desire to be next in line as lead underwriter on the next Greek multi-billion swap (and receive fees, millions of dollars in juicy fees), Nielsen does provide a good narrative that ties in the Greek bail out, and the recent anger against CDS "Speculators" who will at the end of the day be the validation for why Europe will have "no choice" but to bail out Greece, as it is solely through their vile scheming that GGBs are trading so much lower compared to where they should be trading. Because taking a cue straight from the US market, none of this bankruptcy stuff is relevant at all when dealing with capital markets.
To wit:
Comment: While it is still important to see these measures implemented, this is good news, and we agree that the government’s original objective of cutting the deficit by 4% of GDP this year now seems broadly on track. Whether the deficit will actually fall to 8.7% of GDP this year will of course also depend on developments in GDP, a highly uncertainty entity given the environment and impact of the sum of these draconian measures. But by any comparison, if these latest announcements are implemented, one would have to conclude that the Greek government has done as much as one could realistically expect for this year.
Therefore, we agree with Papandreou that his government now deserves “EU solidarity” and we (continue to) think that they’ll get it, if they cannot raise the necessary funds in the commercial market to get through the April-May payments hump. The FT reports today that they are expected to raise EUR5bn through a syndicated bond to be launched already tomorrow. The remainder would then presumably come through either loans from a number of government controlled entities, including KfW, or through guarantees by these entities for commercial banks to by additional Greek debt. This suggests that we are now very close to the finale in the Greek spring 2010 liquidity drama of recent months. With a bail-out still being deeply unpopular in Germany and elsewhere, I worry a bit about what type of political explanation will be given to the public for the bail-out; could it be something like: “Greece has now done enough to deserve our help, and while the market therefore ought to lend them the money, speculators are at work” … and then a repeat of the attack on the CDS market?
The "a bit" part is easily explained when one considers that Goldman has a get out of jail card signed by the proper people (who are indirectly employed by said firm).
So is that it for the Greek crisis? Not quite:
Importantly, however, if Greece cannot raise all the money for the
April-May payments in the commercial market it is, of course, because
attention will shortly turn to the actual cash revenue and spending
numbers coming out of these measures (as well as the impact on real
GDP), as they get reported in the months to come – and along the way,
the focus will shift towards the need for further measures in 2011 and
2012 to address the deficit. And concern remains on how Greece gets
through the EUR100bn+ in amortizations of long term debt during 2011-14.
Therefore just one more firm has to be properly greased: Moody's. Expect a Greek upgrade by the rating agency to AAA, which courtesy of the US, we know is the new default-equivalent level.
That all said, today’s announcement ought to reduce the short term risk of further downgrade of Greece by the rating agencies. This will be welcomed not only by the Greek government and investors, but also by the ECB who has rightly worried that a 3-notch down grade by Moody’s (to align them with the two other agencies) would make Greek sovereign debt ineligible for collateral from 2011. Austrian National bank governor Nowotny appropriately noted last night that its “unacceptable” that the “fate of Greece and … the fate of Europe, depends on the judgement of one rating agency.” But while this risk has declined for now, one has to hope – and indeed assume – that the ECB will shortly change their collateral requirements to make the more appropriate – or, in Nowotny’s words, “acceptable”.
And if all else fails, a Goldman-Federal Reserve consortium can just LBO the ECB. Problem solved, presenting smooth sailing to the top of the Dow 36,000 ponzi pyramid.
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There will be no glory in your sacrifice. I will erase even the memory of Sparta from the histories! Every piece of Greek parchment shall be burned. Every Greek historian, and every scribe shall have their eyes pulled out, and their tongues cut from their mouths. Why, uttering the very name of Sparta, or Leonidas, will be punishable by death! The world will never know you existed at all!
The end is nigh? Ney.
This is a dawn of a a new age of Globalization. We are all one; one world, one market, one bidder, one ask, one consumer, one debtor, one bank, one currency, one tax payer, one safety net, one party, one master, one slave, one immune system, one Internet, one search engine, one sex, one rice genome, one healthcare system, one soverign credit rating, one interest rate, one tax base, one race, one global policeman, and then one war for which there will be zero hedge.
http://www.oklo.org/wp-content/images/p-earth-night.jpg
I saw the film, 300. I thought Greeks were tough. Another Hollywood lie.
Greeks ain't what they used to be. Two millennia of civilization and the absence of barbarian hordes on all sides tend to soften a people.
Anyone seen this? Not exactly on topic, but I LOL'd. :)
http://www.sec.gov/comments/s7-08-09/s70809-130.pdf
Always providing the easiest solutions: Benjamin n. Dover III.
All so true.
Public groveling at the feet of financial lords. The hubris is breath taking. First comes the leadership puppets, completely controlled by the hidden powers that be. Then comes the fawning corporate controlled press and various other corporate lackeys, ass up in the air and K-Y jelly at the ready, begging for more please.
May I please have more.
You're getting more right now! Market rocketing up, not a care in the world.
Meanwhile in India - inflation getting out of control and increasingly political issue inspite of what Mark Mobius says about Indian equities. Keeping rates lower to placate their Western counterparts is hurting the Indian economic policy big time !! Major loss of face for ruling party looming..
Nielsen didn't check with the proletariat, they haven't given their stamp of approval. Then again, maybe they have, it involves molotovs, unfortunately.
Fuck Government Sachs, and fuck those parasites of the common good that work for them.
You terrorists deserve absolutely everything bad that happens to you and your terrorist families.
They have moved onto the pound and the UK now.
Talk is cheap and financial employees (and various country government officials) are now just trying to jabber jaw.
What next, Cramer says do not sell a certain company's stock as their CEO talks it up... only to have them go belly-up days later.
We have heard this all before. Talk is indeed cheap!
The time for buying physical gold is now. There is no way out of this without inflation/hyperinflation and/or currency re-valuation.
Greek singer Nana Mouskouri says debt-laden Greece can have her European Parliament pension to help ease the pressure on the public finances. Any chance Goldman will give back all the profits they made off their short Greek debt positions?
When I first read John Perkin's "Confessions of an Economic Hit Man" I didn't believe most of it. It was sensational, slick, and I kept wondering, "If any of this is true, why is this guy telling everybody this?"
As details continue to emerge, this Greek fiasco could be straight out of Perkins' revelations. It seems the banking elite got to line their pockets, and now the people who actually work for a living are going to have to pay for it all. EU membership hasn't done much for the average Greek guy who drinks a lot of coffee and ouzo, chain smokes, follows a goat around for a while and does whatever. If anything, prices have gone up and pain-in-the-assery too. And now whatever benefits Joe Souvlaki ever got are gone, the money's gone, the banksters have moved on, and all that are left are the debt-collectors.
Coming soon to a country near you, I'm sure. Very near you.
I had the same reaction at first, but as I dug deeper I found that Mr. Perkin was being conservative - the truth is even worse than what he described. It is a testament to human gullibility that the system has held together for so long, and the longer it continues the only 100% guaranteed result is that the final outcome will be that much worse.
Who gives a f**k what bullshit nonsense Goldman is spewing. In my circles, if you have anything to do with big banks in general, and Goldman in particular, you are considered worse than a murderer and rapist.
Obviously ZH cares about GS, indeed they're practically obsessed by GS. Love and hate....
CREDIT DEFAULT SWAPICUS: http://williambanzai7.blogspot.com/2010/03/swapicus.html
SELL ALL PAPER - NOW.
If (and it sure looks like it) it's to the point where one rating agency can destroy everything by accurately (or more accurately than in the past) judging its risk, perhaps it already is bankrupt. Which of course any sane minded person would know. Perhaps even a 1st grader.
But reality is to be shaped and molded, the markets have been doing that dance for decades. No wonder reality is slapping their foreheads right now.
If GGBs are trading so much lower than they should be trading Mr. Slacks your research piece should be pounding the table about what a great buy they are. And if GGBs are REALLY undervalued here you wouldn't be writing anything (except maybe SELL!) as Goldman would be buying them hand over fist for it's own book.
I think this piece was intended for the eyes of Greek politicians only.
If GGBs are trading so much lower than they should be trading Mr. Slacks your research piece should be pounding the table about what a great buy they are. And if GGBs are REALLY undervalued here you wouldn't be writing anything (except maybe SELL!) as Goldman would be buying them hand over fist for it's own book.
I think this piece was intended for the eyes of Greek politicians only.
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