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Greek "Rollover" Bailout Proposal On Verge Of Collapse, After Germany Puts Bond Swap Idea "Back On The Table"

Tyler Durden's picture


The much ridiculed "MLEC-type" bailout proposal of Greece, which contemplates the rolling of existing debt into a guaranteed SPV, and which was the European rescue deux ex machina for exactly two weeks, appears to have been pulled off the table, following the announcement by German Deputy Finance Minister Joerg Asmussen to Reuters Insider TV that "Germany has put a Greek bond swap back on the table as a model for private sector involvement in fresh aid for Athens." More: "The model put forward by some French banks is still a good base for discussions and we are currently working on this. But since rating agencies have signalled that they will consider modalities (such as) the French proposal as a selective default -- that means a rating event -- we can also put other options like a bond exchange on the table." he said, adding discussions would take place over the summer break. Translation: back to square minus one. And actually it is much worse, because if Asmussen is aware of rating agency policy, a debt exchange would most certainly qualify for an event of default. Which confirms our initial expectation from a month ago that there is nothing absent a complete loss of ECB credibility that can possibly transpire next, as the ECB realizes there is no way around accepting defaulted Greek bonds as collateral. The only question is what happens then: will the market, head currently deep in the sand, scramble upon the confirmation that the ECB emperor is naked, or will it continue acting as if nothing has changed yet again.

And while Asmussen is not aware of the nuances of a debt exchange, his colleague Schaeuble sure is:

Finance Minister Wolfgang Schaeuble wrote to his euro zone colleagues, the European Central Bank and International Monetary Fund last month demanding that banks holding Greek bonds swap their bonds for new ones with maturities seven years longer.

But rating agencies signalled then that such a step would be akin to a rating event and the ECB, European Commission and France pushed for a softer solution involving a voluntary debt rollover, prompting Germany not to insist on its bond swap idea.

Ergo: dead end.

More on the currently proposed rescue model:

Asmussen said the French model may set "too clear" incentives for private creditors to participate.

"The model certainly has advantages in the sense that it gives clear incentives for financial market participants to contribute voluntarily. But the question is: are the incentives maybe too generous?" he said.

Work was being done to modify the proposal, especially with a view to lowering the interest rate Greece would pay on its debt, but other options including the bond swap would also be considered.

"First, one has to look how can one modify the French proposal in a way that it is still attractive to financial institutions," Asmussen said.

"But one element one needs to look at is the interest rate that Greece has to pay because the higher the interest rate, the more negative it is for the debt sustainability situation of the country," he added.

This is all fine and great, however, as the WSJ reported yesterday there is one big problem: the private holders have already sold the bulk of their holdings.

Europe's hopes for a significant contribution by private bondholders to a new bailout for Greece are fading, as it becomes clear that banks have sold off a substantial proportion of their Greek government-bond holdings despite pledges by some of the institutions not to do so.

The problem is that the banks and insurers at the negotiating table no longer hold as much of the debt maturing through 2014 as they did a year ago. In May of last year, German banks and insurers made a nonbinding pledge to maintain about €8 billion in Greek debt and loans for three years. Yet the current Greek debt holdings of those institutions suggests they have sold some of their holdings anyway.

There isn't detailed information on how much Greek debt German and other European financial institutions may have jettisoned. Allianz SE, the German insurer, has said it holds €1.3 billion in Greek bonds, compared with €3.3 billion last year. The company has said it would be willing to roll over about €300 million under the current proposal.

So who controls the fate of Europe now? Why hedge funds of course.

Analysts said banks were likely to have sold off short-term Greek debt because it trades at a smaller discount to face value than does longer-term debt. Meanwhile, hedge funds and other investors, who are likely to have bought up the paper, are less likely to be persuaded to engage in the debt rollovers being proposed by euro-zone governments.

Funny: it was precisely a month ago that we explained why "every single Greek bond in recent weeks has been purchased by hedge
funds who have remembered that the economics of "nuisance value" when
the upside of bluffing the EUR printer is virtually unlimited."

Ah irony: prepare for a massive scapegoating campaign aimed at hedge funds any second, only a diametrically flip flopped one: this time instead of accusing hedge funds of shorting Greece and Europe by being short various sovereigns by being long CDS, hedge funds are about to get bashed in the media everywhere for being... long paper.


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Wed, 07/06/2011 - 09:35 | 1429323 snowball777
snowball777's picture

C'mon Europe...get it into your heads.

"Timely payment in full", bitchez.

Wed, 07/06/2011 - 09:39 | 1429343 idea_hamster
idea_hamster's picture

will the market, head currently deep in the sand

That doesn't smell like sand....

Wed, 07/06/2011 - 09:48 | 1429378 SheepDog-One
SheepDog-One's picture


Wed, 07/06/2011 - 10:06 | 1429456 youngman
youngman's picture

"Timely payment in full"

That is what it used to its "we will pay you back...we just don´t know when"

Wed, 07/06/2011 - 10:32 | 1429559 RichardENixon
RichardENixon's picture

"I will gladly pay you Wednesday for a hamburger yesterday."

Wed, 07/06/2011 - 12:06 | 1429969 Ahmeexnal
Ahmeexnal's picture

What's the difference between the ECB and a large pepperoni pizza? The pizza can feed a family of four.

Wed, 07/06/2011 - 12:37 | 1430088 Herd Redirectio...
Herd Redirection Committee's picture

  "In May of last year, German banks and insurers made a nonbinding pledge to maintain about €8 billion in Greek debt and loans for three years."

Wow, just wow.  They made an unbinding pledge, wtf is that?  Is that even a pledge? 

"We promise to probably keep our word"

Jubilee... Grand Debt Restructuring, bitches!

Wed, 07/06/2011 - 19:16 | 1431192 Alpha Monkey
Alpha Monkey's picture

Sure it's a pledge.  But one where if they don't keep it, there is no recourse for.  I imagine that so long as they are on the winning side, they will stick to the pledge.  If it loses favor for them, they can walk away.

Wed, 07/06/2011 - 10:55 | 1429647 Sudden Debt
Sudden Debt's picture



You can pick the day, we'll pick the year.


Wed, 07/06/2011 - 11:23 | 1429762 Thorlyx
Thorlyx's picture

....Business bad? Fuck you, pay me. Oh, you had a fire? Fuck you, pay me. Place got hit by lightning, huh? Fuck you, pay me...

Wed, 07/06/2011 - 10:43 | 1429609 slaughterer
slaughterer's picture

Some further investigative reporting is needed.

Which hedge funds hold Greek paper?  Do they have a history of acting as a nuisance to such sovereign debt roll-over plans?  Are they involved in the current negotiations?  What is their perspective on how the talks are going?  What type of responses are they crafting for the likely outcome of these talks?

Expect this "Greece plan discussion" to continue well through July until the US debt ceiling talks divert media attention.  By August, all bets are off for Greece, and we will be well on our way to contagion.

Wed, 07/06/2011 - 09:35 | 1429325 oogs66
oogs66's picture

The French plan helped the banks.  Now maybe they will really do something that takes a real hit and gives Greece a real chance.  They may be shocked to find out that most was priced into their shares already. 

Wed, 07/06/2011 - 09:35 | 1429327 qussl3
qussl3's picture

Markets dont care.

DOW positive on a downgrade, rate rise and increased job cuts.

Gotta love it.

Wed, 07/06/2011 - 09:36 | 1429329 EscapeKey
EscapeKey's picture

I, for one, look forward to more sex scandals on the front of newspapers.

Wed, 07/06/2011 - 10:01 | 1429432 williambanzai7
williambanzai7's picture

This can and no doubt will be arranged in short odor.

Wed, 07/06/2011 - 09:37 | 1429332 Dick Darlington
Dick Darlington's picture

Ah irony: prepare for a massive scapegoating campaign aimed at hedge funds any second, only a diametrically flip flopped one: this time instead of accusing hedge funds of shorting Greece and Europe by being short various sovereigns by being long CDS, hedge funds are about to get bashed in the media everywhere for being... long paper.

Aahahahaaa, this one's priceless!

Wed, 07/06/2011 - 09:37 | 1429334 Quintus
Quintus's picture

The Euro is dead, that's been clear for a long time now.  Someone please just bury it - it's starting to stink the place up.

Wed, 07/06/2011 - 09:42 | 1429360 Dreadker
Dreadker's picture

Are any fiat currencies still alive?  The Euro is just going to be the first to pop its clogs in the ICU...  The feeding tubes are slowly being removed and the ventilators can't run much longer lol

Wed, 07/06/2011 - 09:48 | 1429379 Quintus
Quintus's picture

Quite so.  All fiat currencies are, as an inherent part of their nature, temporary and unsustainable constructs requiring perpetual and ultimately parabolic increases in debt simply to continue to exist.  Clearly this is a nonsense.


Wed, 07/06/2011 - 10:04 | 1429448 Hmm...
Hmm...'s picture

All fiat currencies are, as an inherent part of their nature, temporary and unsustainable constructs requiring perpetual and ultimately parabolic increases in debt simply to continue to exist

Hmm...  this is not true.

All fiat currencies PAIRED WITH fractional reserve banking are as you describe.  However, a fiat currency need not be paired to fractional reserve banking.  (clearly they all are at this time).  admittedly, it is unlikely that  our overlords can ever use fiat without eventulaly pairing it to debt.

also: there seem to be two over-arching rules in the currency universe

rule #1:  all fiat eventually goes to zero, to be replaced with either an asset-backed currency or another fiat.

rule #2: all gold/silver/metal-based economies eventually go to fiat.

Wed, 07/06/2011 - 10:12 | 1429478 snowball777
snowball777's picture

At this point we're mostly concerned with back-up power for the morgue's AC system.

Wed, 07/06/2011 - 09:47 | 1429370 Ghordius
Ghordius's picture

Quintus, only because the ECB is fondling the gun, oiling it, putting bullets in and going trough the loading sequence does not mean the Euro is dead.

Yet. It's what might happen that could kill it.

Wed, 07/06/2011 - 13:13 | 1430191 InvalidID
InvalidID's picture


 The Euro will be kept floating and Greece will be in limbo until the US debt ceiling is raised and a lot of the short term US debt comes due. At such time the Euro will be allowed to implode, resulting in a 'flight to safety' where the US will be able to borrow a ton of money at below inflation. You heard it here first, now play the game accordingly.

Wed, 07/06/2011 - 09:39 | 1429342 Thomas
Thomas's picture

Curious, some of the things Timmy G is considering to get us past August 2 might be construed as defaults too.

Wed, 07/06/2011 - 09:39 | 1429344 hamurobby
hamurobby's picture

Comon Trichet, its okay,


Wed, 07/06/2011 - 09:39 | 1429345 Internet Tough Guy
Internet Tough Guy's picture

There is only one way to recapitalize the system, and it is coming: Freegold.

Wed, 07/06/2011 - 09:40 | 1429346 Jovil
Jovil's picture

Just look at how your assets fare in John Exter's Inverted Pyramid of Assets


Wed, 07/06/2011 - 09:43 | 1429357 CrashisOptimistic
CrashisOptimistic's picture

Guys, I am telling you.  These details are the equivalent of walking into a parole board meeting, being stopped at the door, and being told there is no budget to keep the criminal in jail.  

You can listen closely and analyse the parole board questions and responses and obsess over the details, but the outcome is already decided, and it is that they are going to bail out Greece.  It doesn't matter how or the mechanism.

They are terrified of swaps and even more conventional contatgion.  They will never allow default.  They will all write checks and GIFT it to Greece if that's what is required.

The details truly don't matter.

Wed, 07/06/2011 - 09:44 | 1429367 Internet Tough Guy
Internet Tough Guy's picture

FOA: "My friend, debt is the very essence of fiat. As debt defaults, fiat is destroyed. This is where all these deflationists get their direction. Not seeing that hyperinflation is the process of saving debt at all costs, even buying it outright for cash. Deflation is impossible in today's dollar terms because policy will allow the printing of cash, if necessary, to cover every last bit of debt and dumping it on your front lawn! (smile) Worthless dollars, of course, but no deflation in dollar terms! (bigger smile)"

Wed, 07/06/2011 - 09:54 | 1429408 Ghordius
Ghordius's picture

As far as I understood FOA and FOFOA they refer to the Weimar & the Zimbabwe Hyperinflation. If history would have to repeat for the EUR, then we are at least five years before the end.

And I don't see a black market for currency yet, it needs at least two years of that, before the end.

Wed, 07/06/2011 - 10:11 | 1429475 Panafrican Funk...
Panafrican Funktron Robot's picture

Sure you do.  That black market just happens to be gold and silver currency.

Wed, 07/06/2011 - 10:24 | 1429533 Ghordius
Ghordius's picture

Yes, we are seeing this with Greeks and Irish bank accounts. Because they fear their governments going back to own currencies. Yes, we see this with a few Germans.

But NO, at the moment there are even less currency restrictions in the Eurozone than in the seventies, and much less than in the USA.

Gold is being bought by Arabs, Indians and Chinese. We in the western world are not yet there.

Wed, 07/06/2011 - 12:10 | 1429977 disabledvet
disabledvet's picture

bitcoin.  that's your black market.  the irony that the government itself created the entity that allows it to be possible (the internet) should be lost on no one.

Wed, 07/06/2011 - 09:45 | 1429368 qussl3
qussl3's picture

And the Greeks know it.

Problem is whether they can bluff the Spaniards and Irish.


Wed, 07/06/2011 - 09:53 | 1429395 SheepDog-One
SheepDog-One's picture

LOL hmmm lets see....theyve already tried to bail out Greece like 3 times in the last few months, last WEEKS 'bailout' already a spectacular fail, yet 'somehow, theyll bail it out'....sorry Im not buying it. 3 strikes and yer out, bitchez.

BTW forget the tiny Greece sideshow, how about the US debt crisis which has to raise a couple trillion in the next month or so? I dont care how much they may dislike defaults, fact is defaults loom no way around it.

Wed, 07/06/2011 - 09:42 | 1429359 GeneMarchbanks
GeneMarchbanks's picture

Enter Moodys. Rating goes to D and... phase one is complete.

Phase 2(Bringing in the Drachma) to commence shortly. Stay tuned.... or not, it really doesn't matter at this point.

Wed, 07/06/2011 - 09:43 | 1429365 Ghordius
Ghordius's picture

This is starting to piss me off. So at the end at the barber shop they want an hair extension?

Wed, 07/06/2011 - 09:47 | 1429373 SheepDog-One
SheepDog-One's picture

LOL already Greece back in trouble....what a fucking clownshow!

Wed, 07/06/2011 - 09:49 | 1429382 WhOracle
WhOracle's picture

I could swear markets waited for me and my wife to come back from honeymoon to continue the show.

Wed, 07/06/2011 - 11:20 | 1429747 dracos_ghost
dracos_ghost's picture

Yeah, exactly what was the point of all the Greek austerity vote drama?

Unless it was just a shot across the bow from TPTB to reminder the Greek populace of their "station" in the order of things.

Wed, 07/06/2011 - 09:48 | 1429377 Ecoman11
Ecoman11's picture

I hope I'm seeing this right

Portugese 10 Year Bond Up 13.847%

Ireland 10 year Bond Up 7.889% —



Wed, 07/06/2011 - 09:50 | 1429387 Quintus
Quintus's picture

Scary numbers aren't they?  I'll bet Mr Trichet is so very glad he's retiring shortly.  He's probably praying that everything holds together until he's gone so the next Guy's name goes in the history books as the ECB chief under who's watch the Euro collapsed.

Wed, 07/06/2011 - 09:53 | 1429400 Ecoman11
Ecoman11's picture

This should explain it

Portugal's Rating Caught in Greek Crossfire

Wed, 07/06/2011 - 12:14 | 1429990 disabledvet
disabledvet's picture

you can say "Guy" alright.  Guy Fawkes.  "next ECB chairman."

Wed, 07/06/2011 - 09:50 | 1429390 the not so migh...
the not so mighty maximiza's picture

Greece is like that ugly girl that keeps calling you and bothering you after that drunk mistake one nighter.

Wed, 07/06/2011 - 10:17 | 1429499 snowball777
snowball777's picture

No offense, but we think you played the cryin' game with "Anna Koultouris".

Wed, 07/06/2011 - 09:50 | 1429391 EasterBunny
EasterBunny's picture

So, the banks are suggesting the solutions which save them from any haircut on their own bond holdings. My view may be overly simplistic, but surely banks are amongst those investors who should be most capable of quantifying and avoiding (hedging) risks associated with bonds and other assets. Advising clients on asset allocation/exposure/risk is part of their business, but they appear to be so bad at it.... This makes no sense to me

Wed, 07/06/2011 - 09:53 | 1429401 topcallingtroll
topcallingtroll's picture

America haters blinded by rage don't realize that we are in pretty good shape compared to europe.  Our banks are leveraged 13 to 1.  Top European banks are levered 30 to 1 and more overconcentrated and monopolistic than USA banks.


Levered 30 to one on greek debt that is held at full value when it trades for a 50 percent discount on the market!


The dollar will do fine.  We are known as the reliable partner around the world, not the dithering europeans.  Even the eastern europeans have greater confidence in the USA than the dithering western europeans.  We were there for them when it counted.  They know who to count on in a crises


Character, behavio,r and certainty count.  The USA has it.  The ECU doesn't.  If the  ECB buys defaulted bonds there will be hell to pay by the market.

Wed, 07/06/2011 - 09:55 | 1429411 topcallingtroll
topcallingtroll's picture

I don't see too many eurosnobs anymore telling us how superior they are to us.  Where are you eurosnobs?  Please come back!

Wed, 07/06/2011 - 10:03 | 1429443 Yen Cross
Yen Cross's picture

 They are watching how Japan lost a decade. They are watching unbought exports!


        They are watching with (requiem) the eur/usd tanking.   late happy 4th TCT. Been busy. Yen.

Wed, 07/06/2011 - 10:21 | 1429521 snowball777
snowball777's picture

Well at least they're killing off their domestic demand with austerity while guaranteeing future inflation.



Wed, 07/06/2011 - 10:17 | 1429504 Ghordius
Ghordius's picture

I hope I qualify, I have to polish up my snobbery. How can I be of service? Where do you feel inferior? Eating habits? Culture? Getting laid? Quality of government? California Debt vs Greek Debt? As you wish.

I don't believe I'm having a conversation of this kind with someone that has troll in his name!

Wed, 07/06/2011 - 12:17 | 1430001 disabledvet
disabledvet's picture

getting laid, aboslutley (sp?).  how are your "Armies of the East" doing these days?

Wed, 07/06/2011 - 10:25 | 1429536 Cast Iron Skillet
Cast Iron Skillet's picture

gloat til your currency collapses ...

Wed, 07/06/2011 - 10:55 | 1429645 Ghordius
Ghordius's picture

Which one? Or, better, which first? It's a race to the bottom and I don't see anywhere a true collapse in sight.

What really bothers me is the idea that in the future the CB's could be regarded as the heroes who landed us safely in the Hudson.

Wed, 07/06/2011 - 11:05 | 1429677 bank guy in Brussels
bank guy in Brussels's picture

Would have replied earlier, but it is a very relaxed afternoon; I was out having a glass of red wine at the local café, and speaking in three languages with the lovely ladies there.

Wed, 07/06/2011 - 10:04 | 1429435 Quintus
Quintus's picture

Yes indeed.  If we overlook:

- The Mark to Unicorn accounting standards used when defining 'Leverage'

- The daily manipulations of Commodity and Stock prices detailed on ZH

- The rampant mortgage fraud and judicial corruption being used to try and cover it up

- The amazing 'Perfect' trading quarters regularly turned in by the best-connected institutions

- The use of Fannie and Freddie (& the Fed) as dumping grounds for Wall St's toxic garbage (At taxpayer's cost and risk, but somehow not counted as national debt)

- JP Morgue's $80Trillion derivatives book hidden from view behind a 'National Security' exemption

....and a host of other factors to numerous to mention then yes, the US financial system is entirely trustworthy, honest, and sound.

Wed, 07/06/2011 - 10:08 | 1429462 Dr. Kenneth Noi...
Dr. Kenneth Noisewater's picture

The US has space herpes, EU has ebolAIDS.

Wed, 07/06/2011 - 10:04 | 1429447 Ghordius
Ghordius's picture

I'm certainly not an America hater, doughboy.

Nevertheless: you are making a serious mistake in comparing the banking systems across the pond. For once, you think there is only one category of banks in the EU.

And don't come with character & behavior, or you might get hurt in your pride.

An ECB with three quarters of it's balance sheet full of busted sovereign bonds is still viable.

Wed, 07/06/2011 - 10:17 | 1429501 qussl3
qussl3's picture

Exactly, the ECB can be holding nothing but Greek crap but still be viable simply because the EUR buys stuff that people want.

While apart from being forced at the point of a gun to accept only USD for oil, the USD buys not much else.

The ECB holding crap will only matter when the EUR starts to run a trade deficit.

Wed, 07/06/2011 - 12:21 | 1430015 disabledvet
disabledvet's picture

it only runs a trade surplus within the Union itself--hence the blowup of Greece, Ireland and Portugual which have massive trade deficits.  Blowing up these entire nations does not mean "you get to walk away" in my view.  And if it were me and i were these nations i would seriously consider dollarizing.  Not least because "the barriers to entry are quite small" plus as you say "all oil is priced in dollars."  As is much else of course.

Wed, 07/06/2011 - 09:58 | 1429424 williambanzai7
williambanzai7's picture

This must be a joke, the guys real name is ass muffin right?

Wed, 07/06/2011 - 09:58 | 1429428 High Plains Drifter
High Plains Drifter's picture

The following is what happens if you dare to discuss the possible and probable culpability of the Greek Orthodox Church in this Greek Financial Scandal....


The apologist are out in full force doncha know....



To wit:

You LIKE Christ-Hating JEWS don’t you?

Michael Lewis of Jew-owned Vanity Fair Magazine is a CHRIST-HATING JEW whom you just couldn’t any longer “hold back” on who wrote the SMEAR against my Priest friends of Vatopaidi.

You LIKE ANTI-CHRIST JEW-ARTICLES put out by JEW-OWNED Vanity Fair Magazine OWNED by JEW Samuel Irving NEWHOUSE of Conde Nast Publications Don’t You?

They purposely DOCTORED the picture of the Abbot to make him look like a crook.


Go take your JEW LOVING COMMENTS somewhere else man.

I know of Vatopaidi Monastery and the Abbot there and the JEWS of Vanity Fair ARE LYING about him and his fellow priests and monks.

Vatopaidi has EVERY RIGHT to OWN THEIR **OWN** PROPERTY as do ALL THE MONASTERIES on MT Athos! IT’s AN INDEPENDENT JURISDICTION with headquarters of their OWN ADMINISTRATION on Karyes you idiot.

Of course they BAN WOMEN there…(oh! You’re SO offended by this just like the Jews!)…it’s FOR MALE MONKS ONLY and HAS BEEN FOR 1000 years you JEW-LOVING dupe! You SWALLOW JEW LIES and try to VOMIT UP THEIR LIES HERE ON MY SITE? No more. You’re gonzo!

You despise the Icons of Our Saviour and His Holy Mother and now I know why!

Because you SWALLOW JEW LIES from JEW-OWNED and JEW-JOURNALISTS of Vanity Fair Magazine and POST THEM HERE on my SITE whom you know is AGAINST JEW SMEARS and is an Orthodox Christian with many ties to the Greek Orthodox Church and its priests and Abbots.

Jews just LOVE TO SMEAR THE CHURCH and you FALL FOR IT. Don’t you DARE EVER print their JEW SMEARS here again with your “oh, I just couldn’t hold back” bs. And you WON’T! You’re gonzo…

Now Go read your Jew Magazine and Eat Some Matzoh Balls.


Wed, 07/06/2011 - 10:42 | 1429605 MS7
MS7's picture

The anti-Semitic comments are horrendous. I have heard anti-Semitic comments in connection with this crisis, and so it does not entirely surprise me. One never hears anti-German or anti-French comments (not that they would be acceptable either) even though they, in addition to the US's IMF, are the key players.

I have to say, though, that I did see the piece in Vanity Fair and found it offensive. Not for what it said about the church. But for statements like this about the former Finance Minister who "negotiated" (if that's what obeying troika is) the agreements with the troika:

"He’s open, friendly, fresh-faced, and clean-shaven, and like many people at the top of the new Greek government, he comes across less as Greek than as Anglo—indeed, almost American."

The Greek government currently is hateful and is selling out the country. The writer doesn't seem to notice. And he thinks it's a compliment to call someone American. G-Pap was born in the US and his mother is American. I don't think Greeks will be electing Greek-American PMs for a long time. They might even become probably become birthers.

Wed, 07/06/2011 - 11:02 | 1429668 High Plains Drifter
High Plains Drifter's picture

well i also made the comment that perhaps since the Greek "church" is on the state payroll (and it is) then why not have massive layoffs in the church staffing, in order for them to help out too. But they are not budging on that either. Matter of fact, they want to be exempt from any pain being felt by the Greek street and not only that but they are pushing hard for state allowances in continued hiring of new "priest"  Technically speaking the Gpap family are of jewish heritage. Of course they sound Greek and look Greek perhaps, but they themselves are not Greek, to wit therein lies the problem. In any search for truth, one must from time to time concede that certain things you have always held to be true and dear to your heart, are perhaps, not in reality, true. There can be no sacred cows.  There can be no personal oxes that cannot be gored. This is my main problem with this dude. Other than that, he is dead nutts right on and the Greeks had better wake up to the problem they have, which is like the problem we all have.  Even the head of the Greek Orthodox Church said in late 2010, that the problem with the finances has been brought on by jewish bankers in conjunction with conspiratorial cooperation by the Greek government , while the people slept. Sound familiar?  I bet it does.

Wed, 07/06/2011 - 11:15 | 1429727 High Plains Drifter
High Plains Drifter's picture

by the way MS7 here is another comment concerning the land ownership situation by the Greek Orthodox Church. I had made the comment that they are rich beyond anyone's wildest dreams and have all of this land that they have acquired etc and now they are whining because they too will have to start ponying up some cash for expenses. Good grief. Like I am going to expect any Greek court of law to go against these parasites. I brought all of this up because I suspected that the Greek Orthodox Church was complicit in the financial shenanigans that have gone on , and they were. Its all over the internet. This is what happens when the state controls the Church.

Just so you and others, have the full picture…

The Monastery of Vatopaidi was completely vindicated and all charges were dropped.

The Xanthi court decided with decision No. 99100101 / 07.09.2009 and rejected the claim as inadmissible.

In fact the transfers of land to the Government was characterized as BENEFICIAL to the State of Greece because it promoted the common usage of this land and it’s special status as a national natural asset.

The acquired property of the Holy Monastery of the 8,600 acres of Ouranoupoli is either archaeological or forest area and is for all practical purposes a communal property because of the extensive and significant restrictions prescribed by Article 24 of the Constitution of Greece and relevant laws, therefore the land has low value and is practically non usable for commercial purposes and thus has little “business” value.

This decision did thereby NOT void the swaps involving the exchange of properties that were initially presented via the Mass Media as some kind of scandal.

In addition, some of the various journalists who propagated the situation as a scandal, especially those of the Alpha channel, were charged fines, for slander against various people. The fines were, by mandate, given to charities.

The Church in Greece has given more than 95% of it’s property (given to the Church by the many benefactors over the years). That includes land and buildings that are used as Government buildings, Hospitals, etc. etc.

As Said, before, the whole result of this fake “Scandal” was the implication of the then in government politicians even though the evidence was not even circumstantial, but nevertheless changed the popular opinion enough so that the next government was the one that we have now, commuting financial murder, pillage and rape of the whole country.

Wed, 07/06/2011 - 10:05 | 1429451 Agent P
Agent P's picture

I think we may see the birth of a new (European) rating agency before all is said and done.

Wed, 07/06/2011 - 10:43 | 1429607 Freebird
Freebird's picture

No you don't. That's been on the overnight newswire. LOL

Thu, 07/07/2011 - 17:34 | 1434238 Agent P
Agent P's picture

I honestly had not seen any mention of that when I posted yesterday...and while I'm being honest, my original comment was meant to be sarcastic...too funny this is actually being considered.

Wed, 07/06/2011 - 10:23 | 1429527 MadeOfQuarks
MadeOfQuarks's picture

Slap some more paint on that PIIG and you just might be able to pimp it.

Wed, 07/06/2011 - 10:25 | 1429537 bentaxle
bentaxle's picture

Where's that funny little Chinaman when you need him. He promised he'd lend the Europeans, no bull!

Wed, 07/06/2011 - 10:26 | 1429539 sbenard
sbenard's picture

Just default already, so we can all move on! These bankers need some (bond) vigilante justice. Is there a tree nearby?

Wed, 07/06/2011 - 12:27 | 1430040 disabledvet
disabledvet's picture

They won't because it's BIGGGGG.

Wed, 07/06/2011 - 10:32 | 1429567 shushup
shushup's picture

Greece IS in default currently which is shy they need a bailout. And yes the bankster traders and HFT's will completely ignore all and rally on to the moon. It all makes perfect sence.

Wed, 07/06/2011 - 10:36 | 1429582 johny2
johny2's picture

I hope both the USA and EU default. Is this too much to ask for? Than the corrupt politicians and their masters could be handed over to Chinese.

Wed, 07/06/2011 - 10:37 | 1429584 sbenard
sbenard's picture

Bottom line:

Calamity is certainty!

I don't know what it will ultimately look like, but this much is certain: It's going to look very UGLY!

Wed, 07/06/2011 - 10:50 | 1429629 Freebird
Freebird's picture

Those without physical must be crapping themselves no

Wed, 07/06/2011 - 12:28 | 1430047 disabledvet
disabledvet's picture

actually Greece has been buying gold.  Does it appear to be the solution to you?

Wed, 07/06/2011 - 12:38 | 1430093 Freebird
Freebird's picture

On one hand yes. On the other hand no.

Wed, 07/06/2011 - 10:46 | 1429616 AldoHux_IV
AldoHux_IV's picture

All this meaningless drama that in the end only adds more debt to a debt problem of too much debt-- talk about circle jerk.

Wed, 07/06/2011 - 10:58 | 1429654 SheepDog-One
SheepDog-One's picture

Papering over debt with more debt...this has a short life and ends quite tragically. If you look at WW1 and WW2, same kind of stuff went on with currency wars, only this time is many times worse. 

Wed, 07/06/2011 - 10:50 | 1429633 Peter K
Peter K's picture

CNBC is going on about the debt ceiling, therefore the situation must be pretty dire in Euroland. What the true believers woun't do to safe socialism's chestnuts from the trash heap of history;)

Wed, 07/06/2011 - 10:56 | 1429648 Founders Keeper
Founders Keeper's picture

Going out on a limb here: The Greece bail out won't hold.

I give it weeks or a few months. But, by then there will be a lot of other news in the news.


Wed, 07/06/2011 - 11:02 | 1429662 MadeOfQuarks
MadeOfQuarks's picture

What, just because Greece has already failed to live up to the austerity, the rating agencies are calling it a default and the debts won't be rolled over? Come on, now you're just being pessimistic.

Wed, 07/06/2011 - 11:38 | 1429816 JR
JR's picture

As the crisis deepens, the hedge funds gather. 

The Top Ten Biggest Hedge Funds as of 2011* |The Hedge Fund Blog Man | 5.01.2011

Firm                                                                           AUM

1.Bridgewater                                                     $59.1 billion

2.JP Morgan Asset Management                      $46.2 billion

3.Paulson & Co.                                                   $37.1 billion

4.Brevan Howard Asset Management              $28.0 billion

5.Soros Fund Mgmt                                              $27 billion

6.Man Investments                                              $25.3 billion

7.Blackrock Global                                              $24 billion

8.Och-Ziff                                                               $23 billion

9.Baupost Group                                                  $23.4 billion (sic)

10.Farallon Capital Mgmt                                  $21 billion

*2011 Assets Under Management (AUM)

Note that the top hedge funds in 2011 are not too dissimilar from the biggest hedge funds the year before.  Bridgewater Associates surpassed JP Morgan Asset Management as the world’s largest hedge fund.

Source: HedgeLists

Wed, 07/06/2011 - 11:54 | 1429907 pat_mas
pat_mas's picture

Euro is dead ... give me a break: Greece, Portugal and Ireland account for less the 5% of Europe GDP (what about California and others ...). This is all about the "Senior bondholders" telling countries that in no way will they accept any sort of shaving ... if someone has to pay it has to be the taxpayer !!!

Bitch, Standards for poors and muddy's all deserve to go to hell (if it exists)

F#@? the debt, f#@? the "free market" and f#@? the rating agencies

Banksters, f#@?ing agencies and gouvermnments: they're all so stupid and greedy that it won't take long before it all comes to an end.

Wed, 07/06/2011 - 12:19 | 1430010 Joebloinvestor
Joebloinvestor's picture

Now it is back to attack the ratings agencies.

Yeah it is all their fault.


Wed, 07/06/2011 - 12:32 | 1430067 Fidel Sarcastro
Fidel Sarcastro's picture

The only question is what happens then: will the market, head currently deep in the sand, scramble upon the confirmation that the ECB emperor is naked, or will it continue acting as if nothing has changed yet again.

Sadly Tyler, it will be the latter.

Wed, 07/06/2011 - 13:28 | 1430222 virgilcaine
virgilcaine's picture

I'll be happy with Red close on the S&P.. what keeps this turd up? With a div yld of 1.75% which is less than the 1929 pre crash level of 3.4%.



Wed, 07/06/2011 - 16:04 | 1430749 alexanderstollznow
alexanderstollznow's picture

Which confirms our initial expectation from a month ago that there is nothing absent a complete loss of ECB credibility that can possibly transpire next, as the ECB realizes there is no way around accepting defaulted Greek bonds as collateral. The only question is what happens then: will the market, head currently deep in the sand, scramble upon the confirmation that the ECB emperor is naked, or will it continue acting as if nothing has changed yet again.


so, what exactly is a "complete loss of ECB credibility" and how would it affect anything at all?  the ECB has expressed the same strong view on the subject all along.  i think that is credible.  they are not, however, ultimately, in control of this situation.  if they are forced to do something other than what they would prefer, because it is the best path at that time, i fail to see how that is not credible.  to stick to less than optimal plan, just because, would be lacking credibility.  either way, they are a central bank.  they raise rates;  they lower rates; they lend to banks.  none of that relies on credibiltiy, despite all the chattering from journos.

Wed, 07/06/2011 - 17:51 | 1431002 zorba THE GREEK
zorba THE GREEK's picture

  Greek "roll-over" ; pretty much says it all.

Thu, 07/07/2011 - 07:05 | 1431929 Major Priapus
Major Priapus's picture

The Troika vs the Big Three...  Merkel is particulary upset that Germany is running out of time to transfer debt from the Landesbanks to the taxpayer!

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