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Greece Prepares To Sue Wall Street

Tyler Durden's picture





 

The only benefit of hitting rock bottom is you can't really fall further. Which is precisely what has happened with Greece. The little country that started off the chain reaction that has already led to a currency and liquidity crisis, and made the solvency crisis in Europe all too tangible, by belonging to a monetary union it had no place in (a union which no reason to exist in the first place), is once again reminding the world of its existence, this time by G-Pap opening his mouth and inserted two whole legs in it. In an interview with CNN's Fareed Zakaria to be aired today, G-Pap has threatened he may sue US banks for "contributing" to his country's debt crisis. For those of you lacking in analogy skills, Greece is in the same shoes as a bankrupt debtor who wants to sue his creditors for daring to hike up his interest rate when the only means he has to roll his debt is by using another credit card (this one issued by US and European Taxpayers), even as bankruptcy is literally hours away. The Greek summation: that of a petulant 5 year old who has just broken dad's favorite gadget: “We have made our mistakes,” Papandreou said. “We are living up to this responsibility. But at the same time, give us a chance. We’ll show you.” Now that would be amusing - after Greece destroyed its economy the first go round, we can't wait to see what the country does for an encore. The only reason Greece is not bankrupt now is because even as its past mistakes have caught up with it and climaxed in a solvency and liquidity crisis unseen since the Lehman days, the country's end would bring down all of Europe. If Greece would not have impaired French, German and UK banks, the country would have long been allowed to default. Yet diversion is always a good tactic: let's bring the "speculators" into this yet again. After all it is unheard of in these turbulent Keynesian times for anyone, especially our own Fed Chairman, to own up to their endless mistakes. It is always, without exception, someone else's fault.

More from Bloomberg:

Papandreou said the decision on whether to go after U.S. banks will be made after a Greek parliamentary investigation into the cause of the crisis.

“Greece will look into the past and see how things went,” Papandreou said. “There are similar investigations going on in other countries and in the United States. This is where I think, yes, the financial sector, I hear the words fraud and lack of transparency. So yes, yes, there is great responsibility here.”

In the days leading up to the May 10 announcement of a loan package worth almost $1 trillion to halt the spread of Greece’s fiscal woes, European Union regulators were examining whether speculators manipulated the prices of bonds and equities and contributed to the crisis.

The Committee of European Securities Regulators said on May 7 it was investigating “exceptional volatility” in the markets and would work with other regulators, including the U.S. Securities and Exchange Commission, as part of a coordinated clampdown.

European Central Bank President Jean-Claude Trichet said May 6 that he was concerned about speculation in bond markets using credit default swaps. “By first buying the CDS and then trying to affect market sentiment by going short on the underlying bond, investors can make large profits,” he said.

In the CNN interview, Papandreou said many in the international community have engaged in “Greek bashing” and find it easy “to scapegoat Greece.” He said Greeks “are a hard-working people. We are a proud people.”

“We have made our mistakes,” Papandreou said. “We are living up to this responsibility. But at the same time, give us a chance. We’ll show you.”

Let's assume Greece goes ahead and sues Wall Street - does that mean the country will be perpetually locked out of the capital markets? Or does Greece think that Piraeus Bank can place $10 billion in rolling over Bills every month?

The ridiculousness of G-Pap's interview, which we will bring to you once it airs, is beyond commentary. Yes, just like Lehman bashing brought down that insolvent bank, just like Enron bashing brought down that particular house of off balance sheet cards, just like Argentina bashing contributed to countless episodes of sovereign default in the Latin American country... Too bad we had no more Madoff bashing when we had the chance: the final outcome may have been differed to some $60 billion worth if investors. On our end, Zero Hedge is doing what it can to contribute at least marginally to "Fed bashing" so when the final ponzi bubble blows up, we can proudly say it was indeed our "speculative" fault the biggest pyramid scheme has been toppled once Ben Bernanke starts making the scapegoating tours. Assuming, of course, anyone still cares about anything he has to say at that point.

 


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Sun, 05/16/2010 - 07:13 | Link to Comment Mongo
Mongo's picture

The last screeching noice as the ship sinks to the bottom.

Sun, 05/16/2010 - 08:04 | Link to Comment JOHNICON
JOHNICON's picture

I hear bulkheads collapsing.

Sun, 05/16/2010 - 11:19 | Link to Comment doublethink
doublethink's picture

 

Bulkheads Squeaking

 

Europe's top central banker has rubbished suggestions that the single currency is under attack by speculators, despite the euro plummeting to a 19-month low against the dollar.

 

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/7729406...

 

Sun, 05/16/2010 - 22:30 | Link to Comment Rusty_Shackleford
Rusty_Shackleford's picture

Just went straight down to 1.22420 at 2230 eastern time.

Sun, 05/16/2010 - 07:14 | Link to Comment Duuude
Duuude's picture

A Country (well, it is Greece though) suing GS for fraud...

This sounds familiar somehow.

Counterparties would be?

Is enjoining by other countries an option?

Sun, 05/16/2010 - 10:23 | Link to Comment Apostate
Apostate's picture

I encourage them all to sue one another into oblivion. Frauds defrauding frauds defrauding frauds and leaving you holding the bag. 

Sun, 05/16/2010 - 12:28 | Link to Comment seventree
seventree's picture

In the end the world's top ten corporate law firms will end up with all the money.

Sun, 05/16/2010 - 07:25 | Link to Comment Black Swan
Black Swan's picture

Yasuu Re !!!!!!

I've said it before and i'll say it again.

First; Greeks will take all the money that is willing to be lent to them.

Second; They will not be able to pay it back to those effluent (sorry affluent) countries.

Thirds; Then eventually there is a strong possability they either leave the Euro or get thrown out.

 

OOOOOPPPPPPAAAAAA......!!!!!!

Sun, 05/16/2010 - 07:37 | Link to Comment MarketFox
MarketFox's picture

Here is the standard....

The lessor developed country positions itself to get

any type of someone else's money....

Then the politicos allocate accordingly....

............................................

Now the US does it....but TAIL(US) WAGS DOG(China)....

 

 

 

 

Sun, 05/16/2010 - 07:39 | Link to Comment LeBalance
LeBalance's picture

Greece could take some positive moves for its future, if such were in the cards.  They could go out and get a responsible CEO.  I nominate Cheeky!

Not going to happen though.  / burn baby burn is the motd /

Sun, 05/16/2010 - 07:46 | Link to Comment pak
pak's picture

"Greece is in the same shoes as a bankrupt debtor who wants to sue his creditors for daring to hike up his interest rate".

So what? If Greece was a private company, it would've filed for bankruptcy and forced its creditors to pay for their own stupidity.

If that was the case, its "creditors" would be negotiating haircuts rather than hiking rates.

A lender is supposed to do due diligence. Why would've anyone lended to Greece if they did not have the implicit ECB guarantee? To pretend like there was none - that was one of the biggest European stupidities so far.

When people exposed to Greek debt manipulate its CDS spreads upwards - there can be no mistake as to what they want to do. They would be committing suicide unless they knew they can expect a bailout. As spreads go up, not only do they FORCE such a bailout, they also make sure they PROFIT nicely from it.

European policymakers deserve no praise for allowing such moral hazard, but that doesn't mean blackmail is now officially okay.

Sun, 05/16/2010 - 09:50 | Link to Comment DisparityFlux
Sun, 05/16/2010 - 11:04 | Link to Comment pak
pak's picture

Reads more like charge sheet than an analytical paper.)

Sun, 05/16/2010 - 11:40 | Link to Comment DisparityFlux
DisparityFlux's picture

 

Hmmm, what was the topic again?

Oh, that's right:

"Greece Prepares To Sue Wall Street"

Are we trying to understand the rules of the game?

Are we making the rules of the game?

Are we playing the game?

Are we watching the game?

Are we placing wagers on the game?

Are we even aware of the game?

Sun, 05/16/2010 - 16:28 | Link to Comment Kali
Kali's picture

+10000! Cant squeeze blood from a stone.

Sun, 05/16/2010 - 07:52 | Link to Comment ZackAttack
ZackAttack's picture

The developed world, eschewing deficits, embracing austerity, attempting to reverse decades of behavior.... never happen.

Sun, 05/16/2010 - 08:13 | Link to Comment bugs_
bugs_'s picture

Default by any other name would smell as sweet.

Sun, 05/16/2010 - 08:31 | Link to Comment Betty Swallsack
Betty Swallsack's picture

G-Pap?  Sounds like some sort of smear.  Ewww.

Sun, 05/16/2010 - 08:47 | Link to Comment Grand Supercycle
Grand Supercycle's picture

 

My bullish USD warnings since 2009 on weekly and monthly charts have not changed and further USD strength and thus EURO weakness is still expected, so USD rally and EURO downtrend will continue.

http://stockmarket618.wordpress.com

http://www.zerohedge.com/forum/latest-market-outlook-1

Sun, 05/16/2010 - 08:48 | Link to Comment Canucklehead
Canucklehead's picture

G-Pap personifies the definition of a complete ass.  This is simply a shake-down attempt by a crap Greek politician.  Can you imagine how a proper transparent investigation of these codes of Greek conduct would destroy any remaining vestige of Greek nobility, honor, and honesty?  Where would the investigation start?  Pick a rock, any rock and turn it over.  You will find Greek corruption and dirty dealing.  Pick a deal, any deal and you will find Greek corruption and dirty dealing.

I wonder what G-Pap is asking for in return to stifle this criminal investigation.  Is he looking for immunity and relocation to a country of his choice?

Sun, 05/16/2010 - 10:25 | Link to Comment Apostate
Apostate's picture

The corruption in Greece is less on the tax evasion side and more in the commonly held beliefs there.

The Cold War never ended there. This is just the unwinding of the Marshall Plan. Reds vs. Whites. Nobody wins. 

The economy over there wouldn't function without bribes.

The US is no different whatsoever. Local government is a bribe-taking, bureaucratic shakedown machine. It's a ridiculous fantasy to expect it to be otherwise absent massive cultural change. Change that will likely take centuries.

So, hunker down...

Sun, 05/16/2010 - 09:16 | Link to Comment Postal
Postal's picture

It's "someone else's" fault because it's "someone else's" responsibility: "sombody else" is suppose to provide healthcare to my serfs, "eomeone else" is suppose to educate my children, "someone else" is suppose to defend my borders, and "someone else" is suppose to pay my debts.

Sun, 05/16/2010 - 09:18 | Link to Comment MaxPower
MaxPower's picture

Does anyone else here think this whole thing smacks of repeat viewings of that scene in Blazing Saddles? You know, the one where Cleavon Little threatens to shoot himself?

It's Groundhog Day every day now.

Sun, 05/16/2010 - 09:42 | Link to Comment hooligan2009
hooligan2009's picture

I was thinking more akin to the Blazing Saddles scene of the cowhands sitting down at the end of the day eating beans with each cowhand a European (or G40 country) and the greeks being the hand who let out a "wet one"!

Sun, 05/16/2010 - 09:26 | Link to Comment 10044
10044's picture

BS.... Gpap is a bilderberger,,, he does what he's told on MSM. total BS, we're not dumb Gpap

Sun, 05/16/2010 - 10:28 | Link to Comment Apostate
Apostate's picture

It ought to be obvious to you by now that the Bilderbergers are a totally incompetent crew.

Boring conferences, boring (evil) people, clueless theories, poor judgment, weak personal character, bad marketing campaigns... they're just riding high on previous investments, old laws, and an overly-servile population. 

Sun, 05/16/2010 - 10:58 | Link to Comment Paladin en passant
Paladin en passant's picture

Exactly..."we've got to save our phony baloney jobs!"

Sun, 05/16/2010 - 11:27 | Link to Comment Bringin It
Bringin It's picture

Ahrnold is a Terminator and a Bilderberger.

Sun, 05/16/2010 - 09:34 | Link to Comment sushi
sushi's picture

Irrespective of the merits of the G-pap case (if there is in fact a case), I expect his complaint to resonate with other euro states and become a common refrain.

Whose banks packaged crap into MBS CD02 and sold it to Europe? What nation suckered everyone into a pair of expensive and futile wars? What nation triggered the blow-up in the global economy? What nation holds seignorage rights to the world reserve currency and is free to print as they please? What nation brought us craptabulistic "happy meals?" What nation gladly watches its population descend into 3rd world poverty while spending more on its military budget than the rest of the world combined? Hint: regardless of what the msm would have you believe, it was not Iran.

Sun, 05/16/2010 - 09:43 | Link to Comment hooligan2009
hooligan2009's picture

heh, so what's your point here Sushi? That America has the best brains because no-one came up with any better ideas or could transact them?

Sun, 05/16/2010 - 11:02 | Link to Comment Canucklehead
Canucklehead's picture

... He who dares wins...

... You don't get a second chance to make a first impression...

... Put up or shut up...

... You can't fix stupid...

G-Pap won't resonate with other euro states as he is stating the obvious.  Italy, France, Germany do not need G-Pap to tell them how to manipulate entry into the EU, or bastardize the supposed strengths of the European identity. The EU states are not stupid, just corrupt.  They will roll on Greece as that is in the European nature.  G-Pap wants to use a broad brush to push back the European banking system. He is still in negotiating mode.  This time I suspect he is negotiating his exit plan.

Using Goldman starts the dominoes falling.  Italy had the same deal.  France & Germany played the same game with their banks.  There is nothing new there.  (Who was busy shorting the euro last week?)

Hint: a whisper campaign in a hurricane does not gather an audience.

Sun, 05/16/2010 - 09:48 | Link to Comment cossack55
cossack55's picture

Has anyone in their right mind cared what that stuffed-shirt, pompous, elitist, self-agrandizing, grass-combing lubber of a piece of sh*t said in the last 18 months? 

Sun, 05/16/2010 - 10:15 | Link to Comment mikla
mikla's picture

Apparently not.  He's like a cross between Rodney Dangerfield ("I don't get no respect!") and Kim Jong-Il  ("Come on, guys!  What's it take to start a war?")

Sun, 05/16/2010 - 10:29 | Link to Comment Apostate
Apostate's picture

Yeah. I mean, who's even going to put this guy up in a condo when he has to take a helicopter out-of-country. They'll likely put him in prison. 

Sun, 05/16/2010 - 12:39 | Link to Comment seventree
seventree's picture

This "threat" is for domestic consumption, to convice his countrymen that he still matters. The outside world is not expected to take it seriously and they won't.

Sun, 05/16/2010 - 10:55 | Link to Comment pros
pros's picture

DUHHHHH...

The U.S. and its Wall Street friends are destroying the Euro to enhance the dollar's position as the only reserve currency.

 

Rubin and Summers are corrupt, but not stupid.

Sun, 05/16/2010 - 11:07 | Link to Comment masterinchancery
masterinchancery's picture

On the contrary, they THOUGHT they were destroying the Dollar to enhance the euro with these bailouts.  Oops!  Laurel and Hardy at work.

Sun, 05/16/2010 - 11:31 | Link to Comment pros
pros's picture

The purpose of the "bailouts" was to highlight the weakness of the Euro and the untenability of the Eurozone...and accelerate its destruction: it has succeeded more than even I expected.

In a hopeless crisis you begin to realize that it's a zero-sum game and you destroy your competitors as the only means to improve your own position.

Hat tip to Larry, Ben and Bob!

Sun, 05/16/2010 - 12:19 | Link to Comment Implicit simplicit
Implicit simplicit's picture

There is a new world currency coming after the USD fails; the Special Reserve Deposit SRD. Listen to Jim Rickards interview on King World news.

 

http://www.kingworldnews.com/kingworldnews/King_World_News.html

Sun, 05/16/2010 - 12:00 | Link to Comment Bokkenrijder
Sun, 05/16/2010 - 12:20 | Link to Comment Leo Kolivakis
Leo Kolivakis's picture

I actually watched the interview and thought it was more balanced than what is presented here. Tyler, please, next time, wait to embed the interview before inserting your foot in your mouth!

Sun, 05/16/2010 - 22:52 | Link to Comment spekulatn
spekulatn's picture

Tyler, please, next time, wait to embed the interview before inserting your foot in your mouth!

 

Leo, you classless piece of shit. 


Tyler, Marla, please boot this fool. He is a turd in ZH's punch bowl.

Mon, 05/17/2010 - 14:47 | Link to Comment Leo Kolivakis
Leo Kolivakis's picture

I guess you didn't bother watching the interview either...FOOL!

Sun, 05/16/2010 - 12:26 | Link to Comment reinhardt
reinhardt's picture
what is wrong with this picture?

*

so.. the homeland peasants.. are greece’s lenders of last resort.. while the greek elite litigate u.s. financial institutions?

(as if the peasants don’t know u.s. financial institutions are corrupt?)

*

this could and probably will be one hell of.. a debasement tool

(corrupt nations suing each other?.. yikes!)

Sun, 05/16/2010 - 12:57 | Link to Comment walküre
walküre's picture

Fool me once, shame on me.

Fool me twice, shame on you.

Fool me 3x ?

WTF?

Sushi, you got it down pat.

America prospers and the world bleeds.

Some things never change, or do they?

Isolated they are more and more.

Sun, 05/16/2010 - 13:06 | Link to Comment pros
pros's picture

In this round of the game:

1. Remaining U.S. manufacturers of tradables are decimated (no..not the defense contractors, Pharma, energy producers or agribusness) as Euro exports boom

2. U.S. bankers get much richer and the NY base consolidates control of the increasingly dollar-based GFS.

 

The rounds of the game are getting geometrically shorter in duration of time...and also more exciting in many respects:

 

The next BIG QUESTION?????-

Probably--

How can the U.S. appropriate the wealth of Emerging Market countries (without a "hot war") to reduce its debt and support a standard of living for its plebes/prols sufficient to maintain control of U.S. domestic regime by the reigning elite?   I never have bought the argument that the U.S. can declare China to be terrorists and nuke them, but I admit that since we are rapidly building bases next door in Afghanistan the chore is becoming easier.

 

It seems like every day the U.S. governing elite proves that not only are they greediest and most corrupt, they are also the most effective and efficient.

 

Sun, 05/16/2010 - 14:02 | Link to Comment Problem Is
Problem Is's picture

" analogy skills, Greece is in the same shoes as a bankrupt debtor who wants to sue his creditors for daring to hike up his interest rate when the only means he has to roll his debt is by using another credit car..."

Sue Your Credit Card Companies Papandreou?
File for bankruptcy, drive an '88 Buick and eat beans for 3 years like everyone else who ran up their cards and/or HELCO...

Watch Obummer shit bricks and get on the phones to Europe over that one!

Sun, 05/16/2010 - 14:12 | Link to Comment MacedonianGlory
MacedonianGlory's picture

You can't imagine what Greek people suffer from G-Pap's Gvnt. A totallitarian regime now rules Greece with Socialist characteristics and nazistic rhetoric. G-Pap is presented by the Greek media as a "father of the nation", but he is the one that disregards Greeks in favor of Muslims.

Greek people disaproves these ridiculus Socialist craps.

G-Pap is not going to sue any GS, for G-Pap placed a former GS banker to control Greek debt. It is all for the propaganda in Greece cause Greeks are begining to understand that G-Pap is a liar and lied before the elections.

Sun, 05/16/2010 - 22:58 | Link to Comment spekulatn
spekulatn's picture

G-Pap is not going to sue any GS, for G-Pap placed a former GS banker to control Greek debt. It is all for the propaganda in Greece cause Greeks are begining to understand that G-Pap is a liar and lied before the elections.

 

Only the best for you and your countrymen. May G-Pap and his minions get what they deserve. 

Sun, 05/16/2010 - 16:37 | Link to Comment M.B. Drapier
M.B. Drapier's picture

The only reason Greece is not bankrupt now is because even as its past mistakes have caught up with it and climaxed in a solvency and liquidity crisis unseen since the Lehman days, the country's end would bring down all of Europe. If Greece would not have impaired French, German and UK banks, the country would have long been allowed to default.

And this of course is why the stuff about how the EU can't eject Greece from the Euro is a red herring. Even if Merkel could eject Greece from the Euro tomorrow, that would do nothing to reduce the EU banks' exposure to Greece; in fact, because ejecting Greece would almost certainly provoke it to default thereby blowing up the EU banks, Greece would almost certainly not be ejected no matter how easy it might be to eject it. Most likely we would be almost exactly where we are today.

And again, is there any reason to doubt that /Maison Trichet/ is among the dodgy banks that will need an emergency rescue if Greece restructures? That it was among them even before the last few weeks, and that it is even more deeply at risk now?

Sun, 05/16/2010 - 16:13 | Link to Comment Buyemall
Buyemall's picture

Expect nothing ordinary of this situation as it unfolds.

Sun, 05/16/2010 - 17:28 | Link to Comment Bow Tie
Bow Tie's picture

greece can worry about suing banks later, such a pathetic political headfake. nothing will come of it because the gov are in bed with 'the boyz' themselves. if they actually wanted to get back at the banks, how about defaulting? didn't think so.

Sun, 05/16/2010 - 17:37 | Link to Comment Fraud-Esq
Fraud-Esq's picture

I doubt he sues, but probably continue shaking down one another to see who has the most skeletons in the closet. Game of chicken or rhetoric. I HOPE they sue. In the end, I think the threat of lawsuits, like the active bank-on-wall-street-bank lawsuits in the US, it creates leverage to cut deals. My theory is it's the only way Obama can get any wins for the victim banks is the threat of lawsuits or indictments on top of the private litigation. I'm sure some powers that be in Europe might also want Greece to get leverage, like French banks? Aren't the French banks most "damaged" by the GS-Greek fraud? 

Mon, 05/17/2010 - 00:02 | Link to Comment Bear
Bear's picture

Damn ... Wall Street lost sooo much more than Greece even owes ... thanks to Greece Wall Street lost over a Trillion ... 05/06/2010 market goes from 1150 to 1058. Real loss thanks to Greece

Mon, 05/17/2010 - 00:44 | Link to Comment Carl Spackler
Carl Spackler's picture

Is this SRD just another name for G-O-L-D???

Do NOT follow this link or you will be banned from the site!