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The Greek "Ultimatum": Bailout (For The Bankers) And (Loss Of) Sovereignty
So after one year of beating around the bush, it is finally made clear that, as many were expecting all along, the ultimate goal of the Greek "bailouts" is nothing short of the state's (partial for now) annexation by Europe. According to an FT breaking news article, "European leaders are negotiating a deal that would lead to unprecedented outside intervention in the Greek economy, including international involvement in tax collection and privatisation of state assets, in exchange for new bail-out loans for Athens. People involved in the talks said the package would also include incentives for private holders of Greek debt voluntarily to extend Athens’ repayment schedule, as well as another round of austerity measures." Thus Greece is faced with the banker win-win choice, of not only abandoning sovereignty, a first in modern "democratic" history, in the pursuit of "Greek" policies that are beneficial for Europe, or not get a bailout, which would only serve to prevent senior bondholder impairments. How could Greek leaders and its population possibly not accept such an attractive option which either leaves the country as another Olli Rehn protectorate, or forces it to not bailout Europe's overleveraged banker class. In essence Europe is now convinced, just like Hank Paulson was on September 14, 2008, that the downstream effects from letting Greece implode are manageable. But the key development is that the Greek bankruptcy, which from the beginning, and as Peter Tchir's note below demonstrates, was always simply a Greek choice, was just made that much easier.
From the FT:
People involved in the talks said the package would also include incentives for private holders of Greek debt voluntarily to extend Athens’ repayment schedule, as well as another round of austerity measures.
Officials hope that as much as half of the €60bn-€70bn ($86bn-$100bn) in new financing needed by Athens until the end of 2013 could be accounted for without new loans. Under a plan advocated by some, much of that would be covered by the sale of state assets and the change in repayment terms for private debtholders.
Eurozone countries and the International Monetary Fund would then need to lend an additional €30bn-€35bn on top of the €110bn already promised as part of the bail-out programme agreed last year.
Officials warned, however, that almost every element of the new package faced significant opposition from at least one of the governments and institutions involved in the current negotiations and a deal could still unravel.
In the latest setback, the Greek government failed on Friday to win cross-party agreement on the new austerity measures, which European Union lenders have insisted is a prerequisite to another bail-out.
In addition, the European Central Bank remains opposed to any restructuring of Greek debt that could be considered a “credit event” – a change in terms that could technically be ruled a default.
One senior European official involved in the talks, however, said ECB objections could be overcome if the rescheduling was structured properly.
Despite the hurdles, pressure is building to have a deal done within three weeks because of an IMF threat to withhold its portion of June’s €12bn bail-out payment unless Athens can show it can meet all its financing requirements for the next 12 months.
And the latest set of very timely observations from TF Market's Peter Tchir.
You Can Lead A Trojan Horse To Water But You Can't Make Him Drink
Restructuring in one form or another seems imminent rather than years awayWell, it seems as though this week's news flow has spurred the mainstream media into action. Everywhere you look there are stories about the Greek credit crisis. It is encouraging to see that more of them now agree with my view that a restructuring would occur sooner rather than later. Only a month ago, almost every article and every piece of official street research made it clear that a restructuring was at least a year off, if not longer. I demonstrated why I thought that opinion was wrong, and although I haven't been proven correct yet, I am no longer in a tiny minority. Restructuring (reprofiling or default or whatever you want to call it) will not be easy, but I remain convinced that it is the best outcome for Greece and in the long run will be the best outcome for Europe even with the short term pain it will cause.
There is growing scrutiny of the ECB's actions and motivations
It has also become painfully obvious to everyone that the actions of the ECB are making any resolution more difficult. Someone, other than me, has now called the ECB 'pathological' in their resistance to restructuring. The ECB, led by Trichet, made a major mistake in their purchase of Greek bonds in the secondary market. It is unclear what they intended to gain (other than a short squeeze) as Greece was not tapping the capital markets for new bond deals. If Trichet worked at a real bank, he would have been fired by now, or allowed 'to pursue time with his family'. Someone who was not part of the bad decision would be brought in to oversee the positions. The ECB needs to change personnel immediately and bring in someone fresh to be part of the negotiations who can focus on what is best going forward and not on how best to cover up previous mistakes.
It is Greece's decision to default or not, NOT the ECB's or EU's
I continue to be confused by the fact that most people talk about the issue from the lender's perspective. "Should Greece be allowed to default?" "Does it teach Greece a bad lesson if they let them walk away? " "Won't Greece just default again if the ECB lets them walk away?"
The reality is the IMF, or ECB, or EU can offer money to Greece, but it is Greece's decision to borrow more to pay off old debts. Only Greece can decide to make payments and not default or demand restructuring. Other entities or countries can make it easier for Greece to kick the can down the road, but in the end, only Greece can decide whether or not to pay its bills.
The people of Greece seem to prefer default. It is fairly clear that this is not a short term liquidity problem, but a longer term solvency problem for Greece. Greece has some assets it can sell, but as I have said time and again, they will still have those assets to secure new funds after a default/restructuring. I continue to believe it is in the best interest of Greece to default and it is their decision, no one else's. It may be bad for the rest of Europe if Greece defaults, but that really should not be the priority of the Greek government.
If Greece defaults, the creditors can then take steps to enforce their rights. If a person fails to pay on their mortgage, the banks can enact their rights to foreclose. If a U.S. company fails to pay its debt, creditors will suit, and the company and debtors will typically resolve the issue in the courts under Chapter 11 or Chapter 7. There are similar statutes for corporate defaults in other countries. The real reason that we are hearing so much about this from the lenders perspective, rather than the borrowers, is because it is not very clear what the lenders' rights are if Greece stops paying.
If Greece stops paying, the lenders cannot 'foreclose' on it. There is no law that dictates how to proceed like chapter 11 does. The bonds have very few if any covenants. The lawsuits would have to be won in Greek courts and then enforced by people employed by the Greek government. Good luck with that.
The reason the lenders have an almost irrational need to avoid a default, is they don't know what they will get if Greece does default. There is no good way to analyze it. Their ultimate recovery will be based on some threats of future lending, rights of set-off, and maybe some threats of trade sanctions, but unlike a mortgage or a corporate bond, there is no good way to analyze the potential outcome. There is a reason 'vulture' funds focus on corporate debt much more than sovereign - there is a way to analyze the outcomes, it is not just guess work.
So people can continue to comment on whether Greece should be allowed to default, but that misses the point. Lenders can make it easy for Greece to make payments, but choosing to default or not remains solely a Greek decision and they should do what is best for them.
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it is worth thinking of it ,but it implies fourthly going into doing the same..
You mean these guys don't love Israel? Sure.
I´ll go out with you for a week end..
Hello ! I'm Monedas ! I'm the unofficial, self anointed, self appointed spokesman and ombudsman and ambassador at large without portfolio for the Jewish people ! Let's do lunch ? Monedas 2011 Comedy Jihad World Tour http://trololololololololololo.com/
The ratings agencies are not pleased with this sort of talk. kowtow to the tentacle of the bankstas bitchez!
Anyone see a pattern here?
1. “Spain is not Greece.”
Elena Salgado, Spanish Finance minister, Feb. 2010
2. “Portugal is not Greece.”
The Economist, 22nd April 2010.
3. “Ireland is not in ‘Greek Territory.’”
Irish Finance Minister Brian Lenihan.
4. “Greece is not Ireland.”
George Papaconstantinou, Greek Finance minister, 8th November, 2010.
5. “Spain is neither Ireland nor Portugal.”
Elena Salgado, Spanish Finance minister, 16 November 2010.
6. “Neither Spain nor Portugal is Ireland.”
Angel Gurria, Secretary-general OECD, 18th November, 2010.
Yes.
I see a pattern of the EU falling apart.
"I'm Don Francisco's sister"
Woody Allen - Love and Death
BBBBBut...
"The euro will raise the citizens' awareness of their belonging to one Europe more than any other integration step to date." --- Gerhard Schroeder
"We must take care that globalization does not become something people become afraid of." --- the same jackass Suddenly Ireland is not Greece is not Spain is not either Italy or Germany...I thought the 'eurozone' was a happy band of brothers -- err, 'Europeans' -- all singing cumbaya as the next step up from the filthy yanqui dullar. Now I'm so confused.Yeah.
Everybody is too embarrassed to bring a friend home.
7. "Portugal minus Ireland is Greece !"....Monedas 2011 Potato famine ? Let them eat their babies !
8. The US is NOT Japan!
9. "I'm Chevy Chase and you're NOT!"
Biter.
Default = freedom.
You did not contract this debt, Greeks. Your government did. Do not accept the international banker occupation. Show us how it's done and give hope to millions in the west. Default!
Deault = war (ending in freedom or slavery).
No default just skips the war straight to jail... Do not pass go...
No it doesn't. Tune down your crazy dial to 5.
Dudes
NOBODY in Europe wants to take Greece over, it is a mess and everything about it is messy.
Yes.
I see a pattern of the EU falling apart.
It has been rumored that the Greek leaders are now in Tripoli, and that MQ has taken up new residence in the Parthenon. While the Colonel's ways were seen to be a bit crude and tasteless for European leaders, his recent experience in crowd control and social engineering has made him a prime candidate to get those Greeks back into ship shape!
It´s not seeing a pattern,just recognizing we`ll force you the way we want to..
It´s not seeing a pattern,just recognizing we`ll force you the way we want to..
It´s not seeing a pattern,just recognizing we`ll force you the way we want to..
Willkommen to the new southern Aegean shores of Germany!
Greece, Default !!
Germany wants some Carribean shore ? Haiti is available for a song ! Monedas 2011
Liquidate all males and children and 80% of the women (the old and the ugly)....with the remaining breeding pool create a new race of Germans resistant to skin cancer ! We can cure cancer with existing technology....breed it out of the gene pool ! Let's send cancer to the back of the bus ! Monedas 2011 http://trololololololololololo.com/
NWO Greek Deep Capture, known among wrestlers as ''The Crusher''
http://www.youtube.com/watch?v=yW0klpEno9U&feature=related
Even the best well thought out crimes have a degree of failure.
http://www.youtube.com/watch?v=zykzIgMNQqo&NR=1
Hey, riddle me this? During your attempted getaway, should you drive by your rear-view mirror or look forward?
Good luck fuckers. :>)
World to Greece: DEFAULT NOW!
Do it now, take the pain, and don't ever look back. Don't let your crooked politicians sell you down the river. They call it sovereign for a reason. Have some dignity. Tell the Eurobank pukes to take a hike and to take their Euro fiat with them. The NWO is a giant loan sharking operation and we don't want it.
You're even thinking about handing over your country, for an extension, before you default anyway?
Play close attention, folks. This is all just the warm-ups, the undercard if you will. They're working-out the kinks in the process so that the take-down of The Big Prize - that is the complete fleecing of what is left of the US middle-class - goes-off completely without a hitch.
Heck, by the time they get to it - probably no latter than the summer of 2013 - they'll probably be so adept at the con that the majority of Idol America will be absolutely convinced it was for their own good. Patriotic, even.
Resistance if Futile
Hey ZHers, I rarely post but often read, but need some help on article for my blog. What leverage can banks use on the Fed Treasury Carry Trade? I am thinking it is around 30, from general bank leverage, but can't confirm.. 30 would mean about 90% year on year return, 3 points they make from Disount Window .25% plus 25 basis points... they pay .5% and they buy 10 year treasuries that pay around 3.5%..3% times 30 = 90% Just wanted to get a serious banking geek to confirm before I include in my blog post.. much obliged for any help...
i'm a fan of the term "a lot" myself. you may without risk of plagiarism use terms such as "a phuck load" a "shit load" a "holy-shit load" and "an inspriational amount." or, you may "come with some kind of number" a make that sucker stick to the wall like a 12 year old hocking his first loogey.
+1
phuckin hilarious, thanx!
Dont hold yer breath....
What would be the derivative fallout from a Greek default? Are all the Credit Default Swap counterparties solvent?
Maybe the answers are "massive" and "no".
If so, that may be why the ECB will not even talk about restructuring even though it is certainly going to happen one way or another. The consequences of a CDS "trigger event' are just too awful for them to contemplate.
Cordially,
TwoHoot
2Hoot:
Could be. You know, no one has really talked about this before.
Could it be that certain other "European Institutions" (i.e Allianz and other ins. companies) could be left holding the bag in the event of a "credit event?".
Quite possible. If both the Euro banks and the Euro insurers, pension funds, etc. all go belly at the same time, same day you have INSTANT EU collapse..
default
de....fault, de.....fault, de....fault
Stop trying to blame Germany :-)
Let the fucking Banksters eat shit......
Stop dishing out the debt and people will stop defaulting...
Debt.....what a fucking con job.
Let them eat shit behind bars.
First remove your money from these banks to initiate action.
Ps..... Hammy...would LOVE to smack you fucking silly....
Fuck Off and die.
Seriously, is it fair to say the banksters essentially made sub-prime loan to the Greeks, and now want to foreclose on their country? That's what it looks like.
I think banksters made subprime loans to Greece, passed it off as IG sovereign paper, bought CDS's on it, now find that CDS counterparties are insolvent in the event of "credit event"..
It's gonna get verrry interesting very quickly...
I see...sort of like the sequence of the "Big Short", but without someone making good on AIG's stupid derivative bets. Thanks,
"international involvement in tax collection"
Tribute...
http://www.youtube.com/watch?v=NIcnz5d-iZM&feature=related
Wow, gunboat diplomacy is back. Who could have (I know , TD did) known...
Ironically, I ve just learned that Newfoundland was an independent dominion until it failed to pay its British loans around 1934..
http://www.conservapedia.com/Newfoundland
(hint Comission on Government Paragraph)
Bloomberg says this article was just debunked by an ECB official. Said under no circumstances will there be default of any kind, and to imagine that any sort of careful restructure was possible was absurd.
He says the only answer is mass asset selling and extreme austerity.
ECB has no say whatever in it. The EU does not want to bail out the greeks and greeks are not willing to bail out EU banks. Next stop is the showdown. They have made a mess out of this, and chances are that they will make even bigger mess in a near future.
I think mostly the ECB was saying a soft default could not be negotiated. Complete, explicit default, or severe austerity forever.
ECB would like if everybody gets together and work out a solution, but really they are just observers in this game. Looks like a default is coming soon. What happens than is the real question.
Probably as serious as the event itself and its consequences would be the precedent setting nature of it.
Meaning, if they default and are faced with horrible immediate inability to fund government benefits, a wise politician would fund pensions and let medical emergencies and food NOT be funded -- on presumption that aid agencies of the world will never let a populace starve.
And then, if no one dies, simply that, if no one dies, it becomes a powerful precedent setting event and the dominos fall.
The point may be here that the surprising priority of tax revenue allocation may be the best one. Do not fund food or medical care. Fund pensions. Fund police. If starvation and disease appear, rely on the Red Cross.
That means a default is now locked in. Good news, at last!
if this is true this would be quite the catastrophe in my view. not just for Greece but for the banks. "they're devouring themselves"--for what purpose i think is unfathomable.
Imperialism 2.0. When another nation is collecting your taxes, you may as well just go ahead and put pictures of their King in all your schools
What's the big deal?
Haven't all the cool people been claiming we need to do away with whole nationalism thing?
Barbaric relic.
What do you call a revolutionary woman leader of a new Greek nationalism who pulls them out of the Euroflagration and into a new era of gold-backed currency, achieving iconic Eva Peron-type status in the process?
A drachma queen.
corny with a grain of truth
I'd call her the likely future victim of an unfortunate plane crash.
Estimates are along the lines of a 72% cut to achieve a 60% debt - GDP target. Time to quibble over the crumbs. I hope the rest of the PIIGS are watching.
Holy Shit! Got a link by any chance? That would absolutely make this the Waterloo of either banksters or people, no hyperbole whatsoever.
Here ya go. And I misremembered, it's 76%
http://www.zerohedge.com/article/citi-expects-76-haircut-greek-debt-and-...
Thanks, Miles. Hey, I didn't remember it at all!
Bombshell: Accusations of Treason in the Greek Parliament
Greece: The Curse of Three Generations of Papandreou’s
Muir.. You win the ZH oxymoron award, 10,000 red beet ration coupon. The crowd roars will applause.
Hey listen, I remember I called you a cunt, but that's no reason to get uptighty.
Apparently, I missed your intended uptighty post. Regrettfully, I use that word quite loosely. Call me desensitized to the word cunt. Next..
"Next.."
___
Komarovski: Who are you to refuse my sugar? Who are you to refuse me anything?
-
"Next" (n +1)
Gen. Yevgraf Zhivago: "Nor was it admiration for a better man than me. I did admire him, but I didn't think he was a better man. Besides, I've executed better men than me with a small pistol."
Muir, not sure what your trying to explain to me. Being late, exit by saying Happy Memorial Day to you & all Zerohedge posters.
Tyler & Co, thanks alot for your all your efforts.
I see this whole cluster fuck as simple as The International Mother Fuckers(IMF), Evil Unlimited(EU), and the Eternal Credit Bastards(ECB), as extorting Greek national assets from Greek citizens by promising Euros to the top level CROOKS in the Greek government. Once this "bailout" money is paid, the CROOKS leave the the country, and in turn the Greek people to fend for themselves against the Wolves and Vultures. I say "FUCK EU!" Let the place burn before giving up your country to these fucking thieves!
Agreed. Meanwhile, that same campaign is in full motion all across these United States of America with little comment whatsoever.
For example:
http://www.alternet.org/newsandviews/article/564373/mi_gov._rick_snyder%27s_benton_harbor_takeover_tied_to_shoreline_development_for_the_wealthy/
The Greeks are slaves. The Americans are slaves. They're all slaves except maybe the Icelanders who had more balls than anyone and just said, "Fuck off!". I have to laugh at the stupidity of these people - they deserve their fates if they're too afraid to get an AK-47 jam it up some banker's or congressman's ass and pull the trigger.
+++
To end your misery just shoot yourself, like any idiot. Your weakness and fear is equal with the beast you eat, as you were, attempting to defend your short lives in the same mannor as the beast which seeks to devour the laborer of the harvest. Without your labor their is nothing. Witness the black hole in your head Bitchez. Stand fast, do no harm.
Rock on. http://www.youtube.com/watch?v=SdQFdCj_I2U&feature=related
this is why its always best to pull a bandaid off fast, slow is usually much more painful
ECB Official: "Orderly" Greek restructuring is a "fairy tale"
"Lorenzo Bini Smaghi, an ECB executive board member told the Financial Times in an interview that a Greek "soft" restructuring is a 'fairy tale'."
http://www.calculatedriskblog.com/2011/05/ecb-official-orderly-greek-res...
Moral of the story
When you get into bed with Goldman your get screwed.
Stay off these assholes and as well as JPM, Citibank , BOA and their ilk.
Since the Adminstration is in cahoots with Wall Street and refuses to bring these criminals to book and behind bars it's time the world took action.
Max Keiser should also advocate that the only way to fix these banks is to withdraw one's money and close all accounts.
http://mdc.mo.gov/discover-nature/how/historic-crafts-and-skills/metalwo...
time to learn.
Soon every Greek child will be required to learn German language...the Neue Muttersprach of Grrece perhaps.
Greece is just an hors d'oeuvre ... the bankstas really have their sights set on the main course of Germany's gold stash ... of around 3,800 tons.
Or perhaps every Greek child will be required to learn Hebrew. After all, many of the bankers in Germany are Jewish, such as Dr. Josef Ackermann – Chairman of the Management Board and Group Executive Committee of Deutsche Bank AG, who also is a Steering Committee member of The Bilderberg Group. The goal of this globalist elite group is to bring about a one-world government and global financial system with a one-world currency… Why not a one-world language? How about that?
dupe
Its about robbing Peter to pay Paul. Think PIIGS.
IMF Backs G-8 Plan for Supporting Middle East, North Africa
http://www.imf.org/external/pubs/ft/survey/so/2011/NEW052711A.htm
Nemat (IMF DM) explains her visions after only two months on the job. The fund is so misunderstood, we are told. Snickers.
http://www.imf.org/external/mmedia/index.aspx
Membership has its benefits. Fund your monies in advance, the Fund will scratch your back.
Just wanted to say I really appreciate a lot of your posts. I don't reply to them much but always read them. You find some neat stuff.
Once the bankers read, "Chuck Norris announces he will facilitate Greece restructuring on behalf of Greek people." all problems would be solved.
"We think 1% is fair Mr. Banker. Huh, what's that? Would you like to meet my left foot?"
Greece, Call Iceland, Notify BRIC countries, start issuing new Greek Currency, We in America love you and your courage to make the tough call..
Next step, Euroland sends in the tanks. And of course, it will be at Greeces request.
Better to be poor and free than be enslaved by bankers.
Greece needs to drop out of the EU and default on their debt.
When Russia defaulted what was extarordinary was that life went on. A few years later they issued new bonds like nothing ever happened.
Incase anyone failed to notice, Greece has nothing to sell...we are talking about 300bln here remember, the country would need to be stripped clean, cant see the people letting that happen.
aah yes, but the IMF and ECB will take the future taxing power (read... indentured lives of their children) as 'collateral'.
We use to call it slavery. Now its just called...'reprofiling'
How abt those German banks and their exposures to Greece... Der Spiegel has a shortlist of the biggest "bagholders", enjoy.
http://www.spiegel.de/international/europe/0,1518,765318,00.html
...
....
Default, and walk away. Bad option for the banks. The best option for the people. This should set the stage for other countries on the brink of default.
This is Weimar all over again.
Justice, just a word..but without the majority seeing Justice done..nothing has legitimacy.
How the public is conditioned to see Justice as having been done is what we are seeing..
the world MSM is avoiding much written here on ZH..as Justice based on facts would provide too many Elite with long jail time and poverty.
so the cover ups and lies are told and retold until the people are conditioned to accept "austerity".The criminal elite stay out of jail and stolen wealth is kept safe from confiscation.
Watch Greece to see how well the elite maneuver this exercise.. coming to a country near you very soon.
http://translate.google.com/translate?js=n&prev=_t&hl=en&ie=UTF-8&layout=2&eotf=1&sl=el&tl=en&u=http%3A%2F%2Fwww.protothema.gr%2Feconomy%2Farticle%2F%3Faid%3D124771&act=url
Ordinary Greeks begining to panic.
The political class throughout Europe are radiply loosing control of the masses.
"The political class throughout Europe are radiply loosing control of the masses"
I think this is actually part of their plan! Firstly, to pressure governments away from austerity and into asset sales and restructuring. Secondly, as an excuse to impose martial law, when they are ready (mid-2012 is my guess).
The PIIGS will soon be saying "bye-bye" to gold reserves and "hello" to TSA-style sexual assaults at transportation and border checkpoints.
Somehow this goes beyond the TSA to my mind:
http://www.youtube.com/watch?v=8jUU3yCy3uI&feature=player_embedded
My prediction is that the TSA will soon be armed and conducting such activities all over a city near you. The current airport deployment is just 'training wheels' for them and the slaves, while they wait for more scanning equipment to be delivered, more psychopaths to be recruited, and more excuses to extend search powers with the sheeple's full consent 'for your protection'.
I'm lovin' it watchin' our "sophisticated" Europeans squirm over Greece et al ! Whose Monedas, anyway ? He's the guy who figgered out in ten minutes the Wankel engine wouldn't fly ! Back in 70's when I was pimpin' metals until I stopped getting invited to parties....I proclaimed, " If they find some new fangled ceramic material that could handle all the "seal travel" of the Wankel engine....make piston rings out of it and Henry Ford's "four banger" would still be a better option !" Monedas 2011 Cheers, for the little German in all of us ! http://trololololololololololo.com/
All of this fits perfectly into the US narrative, which could take a couple of different forms.
1. EU is a mess, dollar soars, sends stocks, silver, gold into freefall. Govt. announces they cannot raise debt ceiling due to inelastic credit markets, US begins defaulting on debt, snatching more pensions, 401ks, etc.
2. EU is a mess, dollar pops and stops, markets stabilize, US raises debt ceiling, all is well in the US. Europe and Japan are toast. The ponzi continues until the "next" crisis.
Cant believe the children of the Roman Empire and possibly the greatest civilisation that ever lived, are gonna lay down and take it in the face.
Tell the Numbheads to get lost....
Recall once upon a July 4th....
When in the course of human events it becomes necessary for one people to dissolve the political bands which have connected them with another and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them.