Greece Pushes Its Luck Again, Says Hard To Block Aid If EU/IMF Recommend, Notes Will Never Announce "Red Line" Of Aid Invokement

Tyler Durden's picture

G-Pap, in an interview with Greek TV has just gone all in on his bluff, and has said that "no EU state will block Greece's
potential tapping an EU/IMF aid deal if the European Commission
and European Central Bank issue a positive recommendation that
it should be used." This leads us to believe that European opposition is mounting and that G-Pap is merely trying to preempt the vote down on Greek aid now that it has been revealed that several countries will need to hold "referendums" on whether this aid is in fact permitted (here's looking at Italy and Germany). What is more critical is that the PM has said "
that Athens would never
announce a "red line" at which it would decide to invoke the
mechanism." That's perfectly understandable as not only is Greece way beyond the red line as is, but in the game of sovereign chicken, it will be the bond vigilantes who will always have the upper hand in calling Greece's bluff. And with statements like these we wouldn't be at all surprised to see another blow out in GGB spreads tomorrow, to continue the widening we started to see late in the day today. 

Via Reuters

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Cheeky Bastard's picture


damage's picture

At this rate, it will take another century. *sigh*

john_connor's picture

he's still holding 2-7 off.

bugs_'s picture

sovereign chicken!!!!

AndItsGone's picture

Long live the Lehmenic Republic!!

chindit13's picture

I believe the official name is Hellinahandbasket Republic, but you'd have to ask Leo for confirmation.

Number 156's picture

Eventually the cost of repaying those loans will exceed the magical number of 11.2km/s, and after that, it will never come down. 

sangell's picture

It was called to my attention that the Dutch government is on hold till June and no major decisions were to be taken before then. Ireland and the rest of the Piigs can be strong armed by the EU but the Dutch? Maybe not and of course the German Supreme Court can say no even if Merkel says yes.

Herne the Hunter's picture

The Dutch government fell a while back because one of the governing parties wanted the troops to pull out of Afghanistan, despite intense (although very underground) inside & outside pressure. So the Dutch have shown to be able to stand up for themselves. Although I can imagine some hesitation as the financial cost for the NL in case of a Greek default might be higher than the required bailout sum.

Rainman's picture

A theater of genuine absurdity. Two World wars were spawned over there involving debt reparations. Might as well get started on # being a new Century and all.

We can call it Goldman's War.

plocequ1's picture

Wow... That's quite a story. Does this mean I should short Google? Either way, Who gives a flying fuck. I have my new ipad. Life is good. Fuck Greece. Now excuse me while I scratch my Swamp Ass.

mynhair's picture

Byte me, ya captcha bitchez!

4 digits in an answer?

Dear Greece,

Please default now cuz with INTC being a blowout in results, no one will notice.


Traianus Augustus's picture

You gotta love those Greek SOB's.  They really don't give a $hit and are going to push this bailout to the limit.  They are the perfect country to tell TPTB to pay up (over and above) or go take a flying F#@k!  After the last 18 months of moral hazard this seems like poetic justice. 

ZackAttack's picture

Excellent opinion piece at Bloomberg:

Money quote: "If the country can’t afford to pay 7 percent, it can’t afford to pay 5 percent either."

Then asks the next questions:

What happens when the 45b euros runs out? Will there be more where that came from?

What happens if the same thing occurs with Spain or Italy? Will they get bailed out, at the same rates? If not, why not?


MacedonianGlory's picture

Honestly. Has anyone ever seen such a ridiculous FinMin as G-Pap?

At least in Greece we can laugh at the socialists while we still can.


ZackAttack's picture

Sure, Geithner.


I bet Chinese college students have never laughed at G-Pap.

MacedonianGlory's picture

WTF? How do they get their diplomas? Pressing print?

chet's picture

I love that this guy is "bluffing" while holding literally no cards.

"I shall proudly declare to you the terms on which you will give me money to bail me out of my horrendous irresponsibility and fiscal incompetence."

Can't they just go down in flames already?  Bailing them out A) won't buy them more than a month or two, and B) will bring other countries out of the woodwork asking for even more money.

geopol's picture

It has been evident for some time that the ongoing speculative attack on Greece, along with such other countries as Spain, Ireland, Portugal, and Italy, was not primarily a reflection of their economic fundamentals, nor yet a spontaneous movement of “the market,” but rather an orchestrated action of economic warfare. The dollar had been relentlessly falling through the late summer and autumn of 2009. It obviously occurred to various Anglo-American financiers that a diversionary attack on the euro, starting with some of the weaker Mediterranean or Southern European economies, would be an ideal means of relieving pressure on the battered US greenback. Since these degenerate elites are incapable of directly solving the problem of the dollar through increased production, full employment, and economic recovery, one of the few alternatives remaining to them is to create a situation in which the euro is collapsing faster, leaving the dollar as the beneficiary of some residual flight to quality or safe haven reflex.

This is what emerged during the first week of December with a speculative assault or bear raid against Greek and Spanish government bonds as well as the euro itself, accompanied by a scurrilous press campaign targeting the “PIIGS,” an acronym for the countries just named, coming from inside the bowels of Goldman Sachs. I have discussed this phenomenon several times over the last two to three weeks on my radio program on GCN.

Now comes concrete proof of this conspiracy in the form of a Feb. 8 “idea dinner,” held at the Manhattan townhouse of Monness, Crespi, Hardt & Co, a boutique investment bank. Among those present were SAC Capital Advisors, David Einhorn of Greenlight Capital (a veteran of the fatal assault on Lehman Brothers in the late summer of 2008), Donald Morgan of Brigade Capital, and, most tellingly, Soros Fund Management. The consensus that emerged that night over the filet mignon was that Greek government bonds were the weak flank of the euro, and that once a Greek debt crisis had been detonated, all outcomes would be bad for the euro. The assembled predators agreed that Greece was the first domino in Europe. Donald Morgan was adamant that the Greek contagion could soon infect all sovereign debt in the world, including national, state, municipal and all other forms of government debt. This would mean California, the UK, and the US itself, among many others. The details of this at dinner were revealed in the headline story of the Wall Street Journal on Friday, February 26, 2010. (See article)

Nor was this the only cabal in town intent on attacking the euro through the week Greek flank. The article cited suggests that GlobeOp Financial Services and Paulson & Co. are also piling on. The zombie banks were also heavily engaged. The article reported that Goldman Sachs, Bank of America-Merrill Lynch, and Barclays Bank of London were also assisting speculators in placing highly leveraged bearish bets against the euro. Note that these zombie banks are alive today because of US taxpayer money, in Barclay’s case through AIG.

It amounted to a deliberate attempt to create a large-scale world monetary crisis which would certainly bring with it the dreaded second wave of the current world economic depression. The creation of monetary chaos in Europe through the convulsive destruction of the euro under speculative attack would cripple commodity production in western Europe, severely undermining one of the dwindling areas of the world economy which are still functioning. The genocidal implications for humanity ought to be obvious, but the assembled hedge fund hyenas were not concerned with these consequences.

George Soros has been telling every media outlet that will listen that the euro is doomed to fall apart and break up over the short run. Soros even has a theory to deploy as part of his speculative attack. Soros argues that the fatal flaw or original Sin of the euro is that it was based on a common central bank among the participating countries, but lacked a common treasury and tax policy. This means that a country like Greece can no longer defend itself from a speculative attack on its bonds by the simple expedient of currency devaluation, since there is no more drachma, and the euro is controlled from Frankfurt, not Athens. British spokesmen are quick to point out that, even though the financial situation of London is far worse than that of Athens, the British government is already devaluing the pound through a downward dirty float.

Given Soros’s infamous track record, he must be taken seriously. In 1992, Soros became world famous through his attack on the European Rate Mechanism, which he executed by a highly leveraged speculative assault on the British pound, at the time one of the weaker members of the ERM. Soros’ speculative attack led to a pound devaluation and the ragged breakup of the ERM, and netted Soros £1 billion in profits. It was as if Soros had personally stolen a £20 note from every man, woman, and child in Britain. The speculative gains were no doubt gratifying, but the overriding political purpose of the assault was to sabotage that phase of European monetary policy.

The London Economist has gone out of its way to mock Spanish Prime Minister Zapatero’s remark that Spain was under international speculative attack. Press organs of the city of London and Wall Street have ridiculed the Greeks as a nation of paranoid conspiracy theorists. And yet, the revelations made so far are strong circumstantial evidence of pre-concert, as Lincoln would say. Even the US Department of Justice has been forced to send letters to the participants in the infamous “idea dinner,” warning them not to destroy any of their records and thus putting them on notice that they are under investigation. While we should not have any illusions about the prosecutorial zeal of Attorney General Eric Holder, who once represented the international financial bandit Marc Rich, this is at least a beginning. Spanish and Italian judges are noted for their independence, and one of or more them may wish to examine the activities of Soros, Goldman Sachs, and their hedge fund allies.

Greece does not need an austerity program, as the Greek labor movement has eloquently argued in the course of their successful and admirable general strike last week. Greece does not need a bailout from Germany, the sinister International Monetary Fund, or from anyone else. Least of all does Greece need to accept the advice of Austrian school or Chicago schools charlatans who recommend the catharsis of a deflationary crash that would destroy an entire generation through unemployment, poverty, and despair. Greece needs to defend itself with a 1% Tobin tax on all derivatives and other financial transactions. Greece should take the lead in outlawing credit default swaps, which amount to issuing insurance without meeting the capital requirements of being an insurance company. Greece needs to enforce EU and national antitrust laws. If Soros and his gang succeed in breaking up the euro, Greece should make the best of it by immediately imposing heavy-duty exchange controls and capital controls to protect the new drachma, on the model of Malaysia a dozen years ago. Greece should shut down domestic zombie banks and seize its central bank and use it to issue 0% credit for industrial and agricultural hard commodity production. If the Greeks made plain what they intend to do if they are forced to fall back on the drachma, the financiers who fear such an example would have another reason to relent.

Another obvious expedient is that of a bear squeeze or short squeeze. Soros, Goldman Sachs, and their gang of hedge fund allies have now used derivatives to establish short positions against Greek bonds and the euro, betting that these latter will go down. Political pressure is now being brought to bear on the European Central Bank and the Greek central bank to undertake an unannounced large-scale purchase of Greek bonds and euros in the forward market, causing the Wall Street predators to lose their bets, thus punishing them severely with extravagant losses. This is normal central bank practice, and it will be astounding if the Greeks do not execute such a maneuver very soon.

The world now faces a stark choice between two alternatives, with Wall Street forcing the issue. The first is that the zombie banks and hedge funds, having been saved and bailed out by national states and their taxpayers, will repay the favor by driving the national states and all forms of state, provincial, and local government into bankruptcy. This will be synonymous with the destruction of modern civilization itself. The second and preferred alternative is that the national states summon the political will to use the inherent powers of government to place the zombie banks, hedge funds, and related purveyors of derivatives into bankruptcy receivership and shut them down once and for all, relying in the future on nationalized central banks for the provision of credit. The second alternative would allow the preservation of modern civilization as we have known it. But in the meantime, the derivatives-based speculative attack on the southern flank of the euro has accelerated the arrival of the second wave of depression, which now appears likely to strike the world before the end of 2010.

three chord sloth's picture

The Greek tragicomedy began when their own government admitted their predecessors cooked the books, not with any dinnerparty.

Yes, the Greeks, and most other nations need an austerity program. No one can keep spending more than they take in indefinitely.

The Greek labor movement has a bad case of self-interest blindness... and the statement "... the Greek labor movement has eloquently argued in the course of their successful and admirable general strike last week" is just bizarre.

ignorant's picture

Agree 100% .

Last month Soros was in Greece to see first hand his "investment".

As they say  can't resist be away from the crime scene.

jesusonline's picture

the national states summon the political will to use the inherent powers of government to place the zombie banks, hedge funds, and related purveyors of derivatives into bankruptcy receivership and shut them down once and for all, relying in the future on nationalized central banks for the provision of credit


Dare i say that this sounds like a fairy tale in today's world? I admit it sounds nice and i'd love to live to see it. But i think we are steadfast on our way to

"The world's economy is in a shambles and America has become a totalitarian dystopia"

Crushing deflation and impoverishment in the real economy, hyperinflation in currency and everything is corporate-owned. Not quite "the destruction of modern civilization itself" as you say, but not exactly a fun time to live either.

gratefultraveller's picture

I really appreciate your observations. You offer a well researched and rather logical grandangle view on current and past events spanning centuries that allows to look past the smoke screen TPTB want to hide behind. Your description of how the venetian merchants moved their wealth (and their power) to London when they saw it menaced by the change of the tide in medieval Italy is a great example for that. When I found confirmation in italian politics for the awareness of the old families and the mechanisms of manipulation you were describing it made me change my paradigm on how power really works.

I can only suggest the lecture of it to anyone interested in what is going on right now, the title is Webster Tarpley, How the Venetian System Was Transplanted Into England

To say the least, it might provide a fascinating read, specially for those whose own culture does not have roots that go back further in time than a couple of centuries.

Ah, by the way, it is accused of being "antisemitic" by some factions, but I reckon that for most ZH readers that is rather a reason to read it than to pass it by...

glenlloyd's picture

It's interesting that he's getting all puffed up now when there are referendums that will decide the fate of the bailout package, at least the EU portion.

My guess is that they'll never get any EU support and end up going to the IMF for everything.

This is so idiotic, default already and be done with it.

AnonymousMonetarist's picture

Beware the trojan hoax.

rubearish10's picture

Maybe this has been noted before but it appears that there's just no intention of the EU/IMF to bailout Greece except to provide false security to investors prior to a bond issue such as today's sale. This way they clear the deal and move on to the next one and so on using this same approach which appears to work. Nah, that can't be...

vote_libertarian_party's picture

Is there any estimate of how big the credit default contracts are with a Greek default.  We know there lurking out there somewhere.

nonclaim's picture

I still stand by my old forecast that Greece will be asked out of the € but still remain in the EU.

It will be much easier to help out Greece then via IMF, with whatever help they can get from the EU or individual European countries. These non-bailout announcements, IMHO, are just tactical delay while the affected EU/USA banks get reasonably hedged for whatever loss they would suffer from Greece's tragicomic fate.

Buck Johnson's picture

As I have said before also, I think that much of this is being done to make them leave.  And if they don't leave then I see the EU coming up and asking them to leave.  These bailout/no bailouts aren't fooling anybody, especially the market players.  They know that the rest of the EU especially Germany doesn't want to give them money.  They lied their way into the EU and then instead of using their position in the EU to fix the problems they had to lie about, they just spent like drunken sailors.  I also agree with you that after all these paper bull statements of support and we will lend, they may be working to shore up areas of their banking system when they decide to tell Greece to go pound sand.

Vulgus Porkulus's picture

G-Pap a shoe in to take Blago's spot on the Apprentice next year.

Mitchman's picture

I am sooooo glad that Monty Python is back on the air!