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Greek Spies Hot On The Trail Of CDS "Speculators" Who Singlehandedly Destroyed Greece
This story gets more surreal by the day. First it was the Spanish CIA, and now Greek daily To Vima reports that the Greek National Intelligence Service, instead of focusing on such potentially more pressing issues as who may be bombing various offshore financial offices, or possible Cypriot unrest, is hot on the heels of those who were solely responsible for the Greek bond market collapse: four hedge funds who have had the temerity to buy and sell Credit Default Swaps (or, heaven forbid, GGBs). And they are not doing it alone: French and British intelligence agencies have also joined in the fray, actual people blowing themselves up all over the place be damned. Next up, after the obligatory sov CDS trading ban: selling of government bonds will only be legal during a full lunar eclipse, between the hours of 2:03 am and 2:04 am, when Mercury is in retrograde, and when Joaquin Almunia is not eating spam straight from the trough. In other words never.
A rough translation of the article which seems rather hell bent on just naming names:
It is obvious
that a firm identification of speculators operating in European
countries whose economies are tested together public and secret
services of all concerned countries and the EEA is in constant
communication with the National Center for espionage (CNI) of Spain,
but also services in France and Britain.O that we have already established by irrefutable
evidence, the company "sortarise" more than any other in Greek bonds
are the British Brevan Howard, which manages the largest hedge fund in
Europe. According to
official figures and they have seen the light of day, the Brevan Howard
remained as the most recent open positions on Greek bond sale, reaping
significant benefits from the surge in spreads above 300 basis points. The company is also specialized
in investments in debt and in the case of Greece borrowed bonds mainly
American and British banks that maintain their position on access to
Greek titles.The investigation led by the Greek
authorities and the U.S. fund management company Fidelity
International, although that does not specialize in short-term
investments and methods corresponding to those followed by hedge funds. The company
currently manages over 220 billion dollars to individuals and
institutions, while estimates of the dealing rooms concur that the
funds of Fidelity held sometime after the election to 4.5% of the
shares of National Bank.Another company
that has been identified for weeks 'shooting' the movement and its
links to Greece is the Moore Capital, which belongs to the category of
hedge funds. According to executives were
asked to meet with officials of the Ministry of Finance one month after
the elections and after ascertaining the state of the economy at first
hand began to "sortaroun" in Greek bonds.The investigation by the Greek authorities confirmed the end of the game played by the famous Mr. John Paulson,
whose role was revealed very early on "The Step" with an investment of
about 3.5 billion in Greek bonds, thereby earning the launch spread.
Just as an FYI - all Greek spy admissions tests from now on will include a 60 question section on how to spot rogue CDS traders, and how to convert from running spread to points upfront. .
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Or possible Cypriot unrest??????
Sorry, Tyler, I love this site to death but the above statement should be removed as it reveals a great ignorance about the region.
John 8:32
Yeah, Tyler had definitly consulted his Ephemeris before posting this. LOL
This is so typical of deceptive governments (are there any other kind) where they go after the truth tellers rather than discuss who was lying (hint - government might be the guilty party here). Someone exploited the spread between the truth and the lie. Now Greece wants to put their heads on pikes at the city's gate because they got caught. And we wonder why our society is coming apart at the seams.
CD,
I would love to give enough credit to governments such as in Greece that they:
1) recognize that they screwed up, and
2) have a decent competence of how markets work
but I can't do it. I just don't think they are that smart. I think there's a better than zero chance they honestly BELIEVE that these "nasty hedged fund investors" are somehow manipulating the market and causing the problem. It might be a willfull blindness fueled by the chance to "blame the rich" for everything bad that's happening, but I really don't think they have a clue what's going on. Never once does it cross their mind that they are just shooting the messenger.
I'm not saying they correctly understand anything. I'm saying that any government and/or politician always thinks in terms of the following.
1) What have we told the public in the past?
2) What does the public currently think/believe. What is the current publicly accepted myth?
3) What do we want the public to believe next?
4) What do we need to do to promote this?
If someone is doing or saying anything that might disturb this delicate dance, that person is an enemy of the state. They don't care how things work or if they are correct or not, just how will it affect this dance.
It's a mind set that is entirely different than that which anyone else maintains. It is corrupt and immoral from the start. The system doesn't become corrupt, it is corrupt by its very nature. If they ever think about "fixing" something, it's simply because doing so will help them achieve their objective, not because it will fix something.
+10
Yes, I learned about and observed corruption in the politics of Arkansas as a young teen. The Sid McMath as Governor story (wiki/Sid McMath) and events leading up to the election of Rockefeller as Governor was observed in real time. He was discredited in those pre TV days by the state “machine”. The utilities, telephone companies, large construction companies and banks wielded sufficient power to oust a popular reform minded governor even though he was a preferred Democrat. The machine got very honest judge from Jonesboro named Francis Cherry, who they assumed would be a passive nonentity. Cherry was elected in 1953,
My father, who owned the local lumber and construction business, relayed a story by a connected supplier friend of a meeting in Ft. Worth, complete with names. Individual A: “What are we going to do about this guy Cherry? He won’t do what he is told. Individual B: “What about this fellow Faubus over at Huntsville?” “He will do what he is told.” And so Faubus was elected Governor.
In time Faubus would develop is own political base by standing in the schoolhouse door as Eisenhower integrated Little Rock Central with the “Arkansas 9 “. He could then ignore the machine, lasting for 6 two year terms.
Winthrop Rockefeller, who had been rebuilding the Republican party, became the first Republican in that office since the “reconstruction”.
Ok, I hear you. We're saying slightly different things but I agree that is a valid way to look at it. Well put.
CD, I can't agree with this.
Prior to the sov CDS trade, speculators who wanted to attack a country would have to make levered forex bets where they could get decapitated by CB intervention.
CDS *does* allow speculative attack on institutions and sovereigns. JFC, GS does and did this shit to LEH, AIG, anyone in their crosshairs. There are too many swaps interrelating CDSs with hedges on bonds, etc., that are moving the markets.
Christ, we have massive naked positions by banks like JPM on gold that people complain all the time are manipulating a deep and liquid market yet in this case, it's all Greece?
Sure, Greece is insolvent, we all are. These spreads are surely a reflection of that. But if we can't see the hand of the vampire speculators on this when they were all over major bankruptcies in 2008, then we aren't paying attention.
Don't call swaps speculators "truth tellers," because you're saying Goldman and its ilk are telling the truth and they are the biggest liars in the room.
It looks like globalisation has reached its zenith at least for the next few decades.
Paulson has realised this and is covering his postion with gold , but he just cannot give up the game I guess. I would advise him to just walk away from this with his winnings as nation states may again regain their power . The power dynamics are again changing just like the end of the Edwardian era and these speculators have outstayed their welcome.
+1 as smart traders should abandon ship from the market and right now head for gold as it is telegraphing its next move up. It is going to get very ugly as they all 'eat their young' as the power struggle heats up.
(For those who desire a visual version)
The sh*tstorm that is just now beginning is going to be very messy and some will be holding the flaming bag. Think of it like playing the game Hot Potato yet with a financial hand grenade and virtually everyone in the circle will get blown away.
The Roman Empire had their time, so did the British and then America. It is now time for Asia Empire to take charge. Of course it will get messy during this transitional period.
Im with you.
Buy GOLD.
Lack of demand for US treasuries, the demand for higher interest payments, and as consequence the total collaps of the US$ once the downside momentum has became unstoppable.
Its not paranoia but the one logical scenario awaiting us.
Therefore only physical GOLD will hedge against it.
Is it so hard to understand ?
Gold is MONEY.
The only currency we cant print.
Its edible too. Right?
yes absolutely. http://www.ediblegold.com/
I agree the American Empire is in collapse mode.
In my most optimistic mode, I hope that the world will enter a "post-empire" period. (Otherwise, it will be an Asian-based empire.)
A message to those who think they currently own the US, you will not fare well in an Asian Empire period. You've grown fat and comfortable stealing from the other six and a half billion people on this planet. A word to the wise would be to figure out how to slip away for a quiet retirement.
Yeah good luck with that Asian empire when the only way you can have an economy is not indigenous innovation, but IP theft and a currency ponzi full of empty cities and bad loans.
Asia is not going to be an empire; they aren't and never were an energy exporter
Is the evidence for this empirical? LOL
Chapter 1: The collapse of the Soviet Union
Chapter 2: The collapse of the European Union
Chapter 3: The collapse of the (un)United States
Is it realy speculation trading when you know Greece is up the creek without a Gyro? They made the bed to sleep in - lied and conceled debt - and some hedgies are getting the screw because they "speculated".
I'm sure there was some pushing Greece off the edge (GS to AIG) but if Greece wants to complain about speculators - they wouldn't have to if their house was in order.
When the speculation hits the US, I'm sure Obama will further reduce our rights and make "speculation" punishable by Guantanamo Bay time.
Barack promised to close Gitmo. And we know that he's a man of his campaign word.
Methinks he'll use extraordinary rendition and send them to Greece for enhanced interogation.
To view these extraordinary happenings as just market events is a gross simplification of the reality as I see it. Yes Greece and the rest of the western world is in a pickle but why why did we come so low and why do non state entities wield such power on this little planet of ours . OK we can mention the role of technology and Knowledge etc etc but the more fundamental question is why do these individuals and entities have enough power to humble countries.
This is not about the market but about power and just like in warfare a country can go into deficit for many years in order to win and take the spoils so too are the speculators who are expending some of their political capital so that they can taste the fruits of victory . These speculators have amassed greater wealth then countries and it is logical that they will contest the battlefield - the lack of fiscal investment in countries since the sixties has had a unlikely consequence - the temporary surplus has been transferred to these entities on a massive scale and they now hold both political economic and intellectual power that is destabilizing in the extreme since they need the protection of a viable host to prosper.
Will countries fight back or will the new transnational entities transform the remainder of their host countries into vassal husks of nations who serve their interests alone.
That is the fundamental question for the 21st century and as yet remains unanswered
Well, that's one way of looking at it. Here's another.
The governments of the advanced world have become bloated behemoths. The cost of running them -- in taxes and borrowing -- have become so great that they can't be supported by a regular, healthy economy anymore... they require a bubble.
Gone are the days when a normal, stable economy can produce growth in the 5%+ range -- the tax and regulation burden, along with the competition for borrowable money, is so onerous that normal growth is now in the 1% to 2% range. That won't cover the government's nut.
The governments responded to this by creating bubbles to generate high, if unsustainable, tax revenue. When the governments of the West decided to create a financial bubble to replace the collapsed tech/internet bubble, they inadvertantly created a monster... and they lost control of their creation.
Now they are afraid to reign it in 'cause they cannot afford the loss of tax revenue.
I completly agree that governments have become bloated behemoths but only in relation to the size of the productive economy and not in a absolute sense.Please understand that when I talk about Government I am talking about the fiscal end of things and not the monetary authorities which allowed the vast amount of money creation in the commercial banking sector completly overpowering by a large margin any government investment in modern infrastructure which in any event they abdicated to the market. The US economy is for example 70% consumer dependent which is in turn a offshoot of the commercial banks and indeed tax revenue fed off this short term income stream.
To cut fiscal spending is to destroy what is left of the economy and this would lead to society collapse which would have much higher costs.
Unfortunetly the government's spent all of their bullets bailing out the speculators therefore continuing with subsistence fiscal spending will create inflation but that is now baked in the cake.
Governments are afraid to reign in not because of cost but fear of anarchy.
Agree a lot...but what's happened is not a matter of gov'ts causing it, gov't growth is a symptom, not a cause.
Western economics rode an energy supply curve that has peaked and inflected; it's as simple as that. The economy is not running on sustainable production, it's running on BS and fumes.
Activity in the abstract is simply not that "economical" any longer. There is no way things can be maintained...growth is at an end and all systems, including ponzi governments, that depend upon it are now collapsing.
This, at its end, will be the end of debt money. Maybe it'll take 20 years but there is no future for debt as money or debt as an institution, until a new growable energy supply is discovered (if).
Our predicament is like a star that has used up all its high EROI fuel and has proceeded down the chain of lower and lower EROI sources of sustaining itself. We're approaching iron on the table now, where we hit 1:1.
The economists *assumed* that growth would be perpetual; there was never any discussion of the possibility of contraction or the impossibility of further growth. This is highly odd given that we live in a finite system called "earth." Everything we've had, for 4 or 500 years has been built upon an expectation of a future of more; well, we hit the end of that road here so every single assumption that people have been born under, taught, lived with, grown old with, for generations, is at an end.
It's in many ways an existential crisis for how we DO things.
Don't we have a Mars program?
It's silly to expect humanity to stay on a finite Earth.
Don't we have uranium and thorium after fossil fuel?
I think Europe is about to be taken down, and it will unfold in much the same way as the Latin American debt crisis will. Greece is a small player in a larger drama between market fundamentalism and a mixed economy.
There is no doubt in my mind that countries will indeed fight back. The growing populist outrage has already begun to manifest itself. We live in an age where information flows freely. Those that choose to profit from the destruction of companies, markets, or countries better realize the "thin veneer of civilization" is worn through.
This just in - "Greek spies are up the a** of CDS speculators!"
My name is Bond. Greek Government Bond.
-1
Notice how fiscal authorities attempt to control the language of the debate. If you're doing something they don't like, you're an evil "speculator", running roughshod on the positions of "investors" and trampling the policies of courageous, virtuous central bankers.
Excellent job Greece, ferret out the rats...
Greece reminds me of a outclassed novice gambler in a casino throwing a tantrum at the poker table because he thinks they're cheating.
Except Greece has an army and police force and prisons. More of this please. Since the US govt is so totally owned by the banksters, this is the only way we will get any justice. After all the has gone on, I really dont give a s#$t if some traders get railroaded. F*&k em!
I agree Greece was guilty but lets not forget...
Regardless of the merits, it's a bad sign when Alan Dershowitz blogs on a liberal website advocating the legality of international assassination.
The speculators should now be worried...
Hey with the US doing much the same earlier to save its banks, I'm sure that Greece and other emerging markets will have plenty of precedent to sight. The capital markets are now dead.
Not taking responsibility for one's mistakes and blaming others is textbook clinical behaviour by Greece. Unfortunately, I have been on the receiving end of this exact type of behaviour, only with an Ecuadorian. Eventually, the Greeks will give it up because of the Med's sunshine, but the Ecuadorian only has his, "manhood." He will never quit pointing the finger. For this reason, always add 50bp to Latino bonds, and sleep with one eye open.
"selling of government bonds will only be legal during a full lunar eclipse"
Somebody better tell the Greeks. I think they were planning to sell more bonds over the next few months.
Popcorn anyone? This is better than a 007 flic full of babes and hired guns!
Writing from Greece, let me assure you that they have nothing to fear from EYP (the Greek intelligence service). They are as incompetent as the finmin...I mean, 3 years ago, they tapped the PM's cellphone, and they didn't notice anything....
It's 1997 all over again! ...back then the issue was about the competitiveness of the drachma before it's entry into the EURO. Most people were calling for a devaluation, the Greeks were adamant that they could enter the EURO without devaluation and blamed the speculators for the pressure in the markets... this despite the fact they were running twin deficits like they are today... some things never change.
Cool, desperate governments are taking the 'intelligence" out of their intelligence agencies and at the same time exacerbating the run on their own bonds. Dumbasses.
"Head Of Greek Debt Office Replaced By Former Goldman Investment Banker"
I suspect that the only evil speculators that they will find are the squid's competitors...
GS Employees....Those footsteps behind you could be Zorba the Spy....
The evil of short sellers redux. Soon it will be state treason to sell anything or have the audacity to publicly speculate that an item, company, nation may be overvalued .
It was GS and the other members of the global banking elite! wtf!? greek/frecnh/british spies are lazy, or drunk. or both.
You ask what the world has come to that these institutions can humble governments? I think its logical. The developed world has come to a point where we rarely engage in warfare with one another, so government power is becoming irrelevant. Financial, mineral, energy, and technological power are the armies of today, and in the US the government does not wield those powers.
In an aggressive manner that is, they have plenty of damage control power.
this is great!
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