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Greek Bailout #2 Is Dead On Arrival: A Few Good Hedge Funds May Have Called The ECB's Bluff, And Hold The Future Of The EUR Hostage

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Sun, 06/05/2011 - 23:23 | 1342397 Reese Bobby
Reese Bobby's picture

Good luck in Greek court!  

Sun, 06/05/2011 - 23:37 | 1342426 topcallingtroll
topcallingtroll's picture

Creditors are not stupid.

The bonds have clauses that they are under jurisdiction of UK courts in most of them.

The greeks couldnt sell an international bond without such clauses, their corrupt practices being so widely known.

Mon, 06/06/2011 - 00:19 | 1342493 Reese Bobby
Reese Bobby's picture

I assure you creditors are routinely stupid.  However it was fun watching them take their Southern District of New York victories to Indonesia a decade ago.


In any case, have you noticed courts are now political bitches: e.g. Chrysler and GM.  Contracts aren't what they used to be...

Mon, 06/06/2011 - 00:24 | 1342513 Ahmeexnal
Ahmeexnal's picture

And exactly as expected, France is the latest north african country to erupt into violence:



Midget man Sarkozy is soiling his pants right about...NOW!

Mon, 06/06/2011 - 06:20 | 1342701 Husk-Erzulie
Husk-Erzulie's picture

Thanks for the post.  Luke Rudowski is a great patriot...old school.  In fact, he is probably more the "statesman" than Bummer, Merkel, Sarky and one hundred of their closest hench-persons put together.  Funny, the French gendarmes, despite their brand new NWO kit, didn't seem to be taking any pleasure at all from  their role.  No lust for blood sport in their faces, just resignation, maybe its just the way the vid was edited- who knows.

Wed, 06/08/2011 - 11:41 | 1351071 Reptil
Reptil's picture

Yes I noticed this too. Also it was evident this is (still) a very small group of protesters.

Mon, 06/06/2011 - 01:35 | 1342594 Boop
Boop's picture

For example: 

New York court clears Barclays of dumping toxic mortgages

The Independent, By Stephen Foley in New York

Barclays has emerged victorious in a long-running legal battle over its actions on the eve of the credit crisis, during which it allegedly dumped hundreds of millions of dollars of toxic mortgage assets on to unsuspecting investors.

The New York Supreme Court approved the dismissal of a lawsuit from the French fund manager Oddo Asset Management, which said Barclays had used off-balance-sheet vehicles as a "dumping ground" for mortgage assets that the bank knew were about to plunge in value.

The case involving the British bank was one of hundreds working its way through the US legal system.

Sun, 06/05/2011 - 23:26 | 1342404 Michael
Michael's picture

All the seedy financial nuances of the complete and total world economic collapse I've created are so, so delicious.

It was the only way to starve the beast. Sorry.

Sun, 06/05/2011 - 23:30 | 1342416 topcallingtroll
topcallingtroll's picture

I understand.

The socialist beast wouldnt stop. It wouldnt compromise. It kept taking more and more.

Killing it was the only way.

Mon, 06/06/2011 - 00:09 | 1342472 Michael
Michael's picture

It was the relentless taunting I and the blogosphere have done to them since the early days of the dot-com bubble. You know how ego maniacal wealthy elites hate being told they are wrong and their bubble is going to burst. So what do they do, they just keep blowing the bubbles bigger and bigger to prove they are right. I was counting on their reaction to all our taunting, their pattern indicates two dimensional thinking.

The biggest bubble is about to burst and I fully expect the beast to be killed by their own creation.

Monty Python and the Holy Grail-French Taunt


Mon, 06/06/2011 - 01:26 | 1342576 Michael
Michael's picture

I love it when a plan comes together.

Expect many aristocrat banking houses to be cannibalized by the European banking cartel hive. Their families are going to be poor. No castles to live in anymore. They'll have to eat porridge and they won't be happy about it. It's about survival of the hive. I don't think the hive collective is into forgiveness of debt, especially for lodge members. No that would show weakness of the collective hive. Although many of the people in those banking house families carry a stinger and may use them to spill the beans. They don't like porridge.

Mon, 06/06/2011 - 02:18 | 1342634 Michael
Michael's picture

At the end of the day, us sheeple just want our goddamn water flushing our toilets without interruption.

Please don't price us out of ever not being able to pay that bill.

Mon, 06/06/2011 - 02:34 | 1342640 Michael
Michael's picture

Porn is the protector of the Internet. Porn is the internet god/goddess of the internet.

40% of all web traffic is porn related.

If Obama shuts down the internet, those 40% of the internet population will be very angry at him for depriving them of their on-line porn fix.

Hail to internet porn godds.

Sorry, I'm just musing.

Sun, 06/05/2011 - 23:31 | 1342411 topcallingtroll
topcallingtroll's picture

Time for the EU and ECB to put up or shut up.

Default or pay off bonds as they mature at par.

Hedge funds are in a great position here!

Sun, 06/05/2011 - 23:36 | 1342424 slaughterer
slaughterer's picture

This legal clusterf*ck should be enough to knock the EUR/USD below 1.40, don't you think?

Sun, 06/05/2011 - 23:37 | 1342435 topcallingtroll
topcallingtroll's picture

Strangely it may strengthen the euro.

I would love to hear yen cross pontificate, but he never indulges in macro themes.

Sun, 06/05/2011 - 23:46 | 1342444 I am a Man I am...
I am a Man I am Forty's picture

no bailout and austerity strengthens euro

Mon, 06/06/2011 - 07:52 | 1342771 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Disagree! The Euro is going to weaken as many of the European banks will be forced into insolvency. Since the European states are backing these banks, the states will quickly follow.

Wed, 06/08/2011 - 11:04 | 1350883 Reptil
Reptil's picture

Yes, this is the idiocy of it all. A correction in 2008 and bank defaults would've weeded out the bad and guaranteed a strong euro. Germany was happy with a weakened one though, for it's exports, but now it's citizens have seen the trap that is unlimited, never-ending bank bailouts, putting already overleveraged public assets at risk.

Because that's what "austerity" really is. Squandering of public assets. No one mentions bank bailouts anymore, or the connection between bank bailouts and "austerity measures" anywhere in public media. They're in for quite a shock. Warnings were unheeded since "the economy is doing well" and "we always will have the boom economy of China as trading parthner"..

Expect massive whining that "it's not fair", since the prevalent idea was that politicians would come to the rescue and work out a bold strategy of coherent european government. Of course that's not going to fly, but "basic rights" are next on the list to be squandered, to save the banks.. eehm greeks.

Hans-Gunter Redeker, global head of foreign exchange strategy at Morgan Stanley was less than optimistic about the immediate future for the euro-zone and said he believed that the political process toward greater fiscal union - and ultimately a transfer union - would pick up pace.

"That will ultimately hold the euro-zone together even though the crisis will worsen," he said. http://www.ipe.com/news/investors-fear-greek-and-us-defaults-predict-low...



(for those that know dutch, the comments may be interesting)

I'd like to again point at the analasys of prof. Schachtschneider, who has exposed the silent coup d'état, towards a maoist model of planned economy (and everything else) that has now corrupted the formation of the EU.


There's a dutch saying which goes "you can only spend a guilder once". They forgot that, on the way to their workshop to learn how to represent us, in a tropical location, paid for by yours truly, in taxes.

Sun, 06/05/2011 - 23:43 | 1342442 holdbuysell
holdbuysell's picture

Alright, obvious question: what are the hedge funds positions?

Sun, 06/05/2011 - 23:56 | 1342453 knukles
knukles's picture

Ah, the full effect when thought about for a moment will essentially be probably just another kicking of the can down the road, additional matters of great importance to be considered wisely (this is Greece after all) that must be addressed before we can proceed any further...   

        ...one hell of a wonderful gift to the parties.... the blessing of time.  And even better, now in the clogged, stuffy, slow, impenetrable bowels of the venerable Greek court system (slowly I turn, step by step) which could take years.....

A state of bureaucratic stasis quite unlike any other in the modern era handling weighty decisions directly impacting the future construct of the EU as an entity.  Freeing the politicians to prognosticate, petition, project, continue to accomplish naught whilst making matters worse, all charged to the public trough.

While the bankers continue to soak the treasuries dry, politicians recieve tribute and distribute largesse....

The myriad of consultations, meeting and summits grow in weight of purpose, frequency, likley remaing barren in conclusive order.

It's a winner! 

Sun, 06/05/2011 - 23:52 | 1342466 lolmao500
lolmao500's picture

And what happens if they default on domestic bonds?

Sun, 06/05/2011 - 23:57 | 1342467 slaughterer
slaughterer's picture

I can see how the politicos will play it to the cheap seats: "Those evil hedge funds (speculators)."

Mon, 06/06/2011 - 00:04 | 1342477 Gyro Gearloose
Gyro Gearloose's picture

Perhaps it's fitting that "troica" also means "Thrombolysis In Cardiac Arrest"

Mon, 06/06/2011 - 00:07 | 1342485 williambanzai7
williambanzai7's picture

The legal devil is in these kinds of inconvenient details.

The same legal devil that is tormenting Eric Holders fraudclosure whitewash.

Mon, 06/06/2011 - 00:30 | 1342511 steve from virginia
steve from virginia's picture

Endless nonsense ... Mexican standoff with water pistols ...

Mon, 06/06/2011 - 00:35 | 1342523 Al Gorerhythm
Al Gorerhythm's picture

Hmmmmmmm. Curiouser and curiouser.

Mon, 06/06/2011 - 00:42 | 1342534 chump666
chump666's picture

Yeah it will be a flop.  EUR shots, USD bid

Mon, 06/06/2011 - 01:02 | 1342551 phungus_mungus
phungus_mungus's picture

Oh goodie... more lawyers, just what any financial crisis needs.... 

Mon, 06/06/2011 - 01:08 | 1342557 Id fight Gandhi
Id fight Gandhi's picture

Just give the Greeks blank checks and forgive the debt. They have no means to pay it back and the EU doesn't want a default to ruin their world.

This tiny county has them all by the balls

Mon, 06/06/2011 - 01:17 | 1342564 CrashisOptimistic
CrashisOptimistic's picture


Legal Characteristics of Greek Government bonds

After the question of whether or not a restructuring will occur and when, the next most important question for most investors is whether or not it can be done in such a way as to not trigger CDS.



Mon, 06/06/2011 - 01:20 | 1342569 richard in norway
richard in norway's picture

bbc radio is saying that us banks are on the hook big time if the greek default, us banks are second or third most exposed to piigs debts was the headline


want to do a swap for some muni shit

Mon, 06/06/2011 - 03:42 | 1342666 dolly madison
dolly madison's picture

"bbc radio is saying that us banks are on the hook big time if the greek default"


Good.  The more damage to US banks right now the better.

Mon, 06/06/2011 - 01:33 | 1342589 Mineshaft
Mineshaft's picture

"Even as the general market, dumb as a doorknob, had been following every headline out of Europe, soaking up the BS that Greece may after all end up being bailed out in some miraculous way"


Umm hate to inform you but Zerohedge are the ones with the headlines every 5 minutes on the impending bailouts: 


That was your copu paste from Reuters and you fully believed the statement hence you own commentary: Congratulations Europe: you just screwed your taxpayers, but at least bought your insolvent banks 3 more years of bizarro world existence.


Stop playing it as if you know more than everyone else.  You look foolish.

Mon, 06/06/2011 - 01:43 | 1342598 chump666
chump666's picture

Greece defaulting wouldn't do sh*t to the EZ, just make it smaller and warn crappy countries to act smarter with their finances.  It's all about the ECB/EU/IMF maniacal Keynesian pride that all.

The hedge funds will clean up the mess.

Mon, 06/06/2011 - 01:46 | 1342607 slewie the pi-rat
slewie the pi-rat's picture

so...the demonstrations were effective, right? 

Mon, 06/06/2011 - 02:14 | 1342631 Spitzer
Spitzer's picture

The Euro is slowly but shurley dethroning the US dollar.

Mon, 06/06/2011 - 02:40 | 1342643 chump666
chump666's picture

ECB will rev up the rhetoric to overdrive. 

Mon, 06/06/2011 - 06:34 | 1342706 wombats
wombats's picture

Expect Bernanke to bail out the Greeks to save the world econamy!

Mon, 06/06/2011 - 07:26 | 1342751 Captain Planet
Captain Planet's picture

yea, greece can start paying back their debt with bennybux!

bring the greenback to greece in suitcases for every family (kinda like our rebate check under Bushi) and just create another satellite dollar economy.

The only way to keep the ponz...

maybe events from MENA into north MENA can also be considered bullish for the spike in police overtime income, hospital bills (new CDOs available) and the general rebuilding of whatever went kaput.

Nevermind that spanish farmers of cucumbers and salad green were dumping their unmarketable produce on the steps of german consulates

All I can say is NATo is going to be tested in some bizarre ways, very soon.

Mon, 06/06/2011 - 08:18 | 1342803 Dolemite
Dolemite's picture

Precious metals to present good buying oppurtunity after a near term correction?

Gold and silver showing signs of weakness, and oil is confirming.


Mon, 06/06/2011 - 08:52 | 1342902 djsmps
djsmps's picture

The Savior-Of-The-World-In-Chief is about to announce that the Greek bonds are backed by the sovereignty of the United States.

Mon, 06/06/2011 - 10:19 | 1343155 GMRobertson
GMRobertson's picture

Pretty sure about this - US banks for the most part are out of harm's way in relationship to Europe.

Mon, 06/06/2011 - 10:52 | 1343251 GMRobertson
GMRobertson's picture

Karlsruhe is the unmentioned but most important player in all this....Merkel's dithering is related to trying to avoid the Karlsruhe taking up the Hankel/Schachtsshcneider/Starbatty/Nolling suit.

The joke is that any action taken by Germany, and likely all action taken to date with the EFSF and prior ESM is at best extra-constitutional and likey it is not constitutional as per the German constotution.

The German constitutional court in Karlsruhe can shelf any process if it is deemed to present immediate risk to Germany, but it cannot eliminate considering such measures once the danger passes.

The true crisis for Europe that will stop the kicking the can down the road will be a constitutional crisis from Karlsruhe.

Mon, 06/06/2011 - 11:45 | 1343396 AldoHux_IV
AldoHux_IV's picture

The idea of privitizing a nation's assets and allowing any rights to a nation's revenues other than the people the nation is made up of is quite absurd.  There is no way the terms of the bailout will ever pass and be upheld even if the EU/IMF force it upon Greece's politicians.  It's no way to run a country and the citizens will not accept it. You're telling me that Deutsche Bank, SocGen, etc. are now going to be in the business of running a country along with all its other businesses?  These are failed broke institutions that wouldn't exist had the printing presses begun to go into overtime.  They can't manage their own businesses let alone a nation of people-- these blackholes of capital and economic benefit will soon collapse under their own weight.  Therefore all this talk about downgrades on voluntary or involuntary defaults is just plain silly as in the end whether legally or not defaults will occur and pain will be felt amongst the financial institutions and their shareholders.

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