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Highway To The Gyro Zone: Latest Video Of Greek Violence

Tyler Durden's picture


Because one video is worth one thousand pictures...


And Peter Tchir's latest observations on Greece:

My Big Fat Greek Shotgun Wedding

Only yesterday, I tried to compare the latest round of Greek bailout discussions to an arranged marriage.  It is difficult to watch the protests on TV and read about the impact of the strikes and not think that the wedding has moved to the shotgun stage.  It seems clear that the citizens of Greece are sick and tired of dealing with the austerity being placed on them.  I cannot imagine that they like the idea of selling assets to pay foreigners.  Whether or not they fully understand the consequences of a default (or restructuring) it seems like they have made their choice.

So we have evolved from the image of a country going with hat in hand to its neighbors for a hand out, to a reluctant bride doing what they are told because it is expected of them, to someone who is being bullied and dragged to the altar to take part of something they not only don't want, but now know is the wrong choice.

Greece has to do what is best for Greece

Recently, almost all the arguments against a near term Greek default (restructuring) are based on the fact that Germany, France, and the ECB would be hurt.  It is not Greece's responsibility to worry about what impact a default would have on outside creditors.  The situation has gone beyond that.   Greece has to act responsibly throughout the restructuring process so that it can access capital markets again over time, but honestly, that is a low hurdle.  Wall Street and Investors have a very short memory, and if restructured Greek debt performs well, there will be plenty of money available for future new issues.  The bottom line is that the situation has deteriorated to the point it is clear to everyone that this is a solvency issue, and regardless of the pressure brought to bear by other countries, Greece must do what is right for Greece.

A Default is not the end of the world for Greece

The 'doomers' (and yes it is strange for me to refer to someone else as a doomer) would have you believe that a default would send Greece back to the dark ages.  Argentina defaulted in 2001.  It is doing better than ever.

Were there some disruptions in Argentina at the time? Yes, but they fixed their problems and now have an economy growing at a rate much of the world is envious of.  Default does not have to be a big negative on the people of that country.  As I've argued before, defaulting now allows Greece to move forward with real long term solutions.  It should be easier for people to accept reforms when they are part of a new sustainable Greece, rather than to meet the demands of foreign borrowers.

Since courts cannot really enforce injunctions against Greece, they can attempt to implement some policies that benefit internal debt holders, especially individuals.  Greece can also attempt to use programs similar to Brady bonds to help banks avoid having to take immediate write downs.  Given the focus on mark to market, I am not sure that would help as much as in the past (and personally I don't think it should) but it is worth a try.

Greece doesn't need to know what the future holds to restructure now

More people have jumped onto the bandwagon that Greece should keep taking IMF money and maybe even so new bailout money until they figure out what their long term capacity to pay debt is.  I just don't understand that at all.  First off, this argument is coming for a lot of analysts who thought the problem was solved a year ago.  Will there ever be a time when everyone will 'KNOW' the right debt level?  Probably not, and even if they did, the borrower will want the maximum haircut while the lenders will want the minimum haircut.  So negotiate now and deal with the future as it comes up.

The future will always be unclear so waiting is unlikely to provide much help, and in the meantime, real progress is delayed as the country is faced with work disruptions and growing bitterness towards the foreign bankers.

Whatever you do, do NOT pledge collateral or sell assets

Greek debt issued under International Law will help prevent Greece from hurting itself.  I just do not see why Greece would agree to pledge collateral or sell assets to pay debt.  I can understand (somewhat) why last year when the Greek government actually believed their problem was one of liquidity created by soon to be shirtless hedge funds, that they agreed to some collateral provisions with the IMF.  But a year later, with the hedge funds wearing fancy new monogrammed shirts, the Greek government is aware that this isn't merely a liquidity problem.  There is a growing certainty that they cannot meet their future obligations, so any pledge of collateral is likely to be executed on.  They should avoid this at all costs.  The nature of a sovereign default puts them in the driver's seat for any negotiation.  Most investors will have trouble winning relief against the government in Greek courts, and then even more trouble enforcing those judgments.  Providing specific collateral against further lending makes no sense at this time.  Save it for the future.

If Germany, France, and the ECB are really so desperate to avoid a default, they will cave on this demand.

Where is all the CDS?

So far I have only read about estimates of where the bonds reside.  I have not seen any work done that tries to take into account CDS.  Greek CDS is somewhat active and it is one of the 15 reference entities in SOVX so some of the risk has to have been redistributed via CDS.

I doubt many hedge funds are outright short CDS as a trade at this time.  It is expensive, and particularly as you move out the curve, has limited upside potential.  I would guess that any hedge fund that is short through CDS is now managing that short around a basis position where they are long bonds. 

I think big sophisticated banks are in a similar position.  They may be slightly net long Greece, but they are running a basis position of long bonds versus short CDS.  Since the CDS has been so volatile, and largely tracked movements in bonds over time, most banks would have shifted their bonds to a mark to market book.  If banks left the bonds in a non mark to market book, they would have to book the price swings of the CDS into their P&L, so given the extreme range the CDS has taken over the past year, they would likely have put their bonds into a mark to market book.  This means that they would have already marked the loss so are not greatly impacted by a restructuring, even on any net long position.  So again, I would disagree with the knee jerk reaction to buy puts on DB as an example.  I suspect that they are not as exposed as the market may believe.

I would like to make the assumption that no bank that holds Greek bonds has also written credit protection on Greece.  It would be mind boggling if they did, but I guess there is a reason the term 'dumb bank' has existed for so long.  Any bank that gets caught being long bonds and long via CDS, particularly in a non mark to market account should get an instant visit from the regulators. 

Assuming it is not banks who wrote the credit protection, where is it sitting?  I expect a lot of the net writers of protection are insurance companies and to a lesser extent hedge funds.  Insurance companies are a natural choice to be net writers of protection, and it would be about par for the course if AIG took a big hit on Greece CDS during their roadshow.

In spite of the demonization of hedge funds by various public officials in Europe, I suspect hedge funds are net long CDS.  At these prices, and with so much obvious pressure on governments to continue to provide better bailout terms, it is not a bad bet.

In any case, any analysis that looks purely at the bonds in an attempt to determine where the risk resides is probably missing at least some of the picture.

h/t Scrataliano


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Wed, 05/11/2011 - 14:39 | 1264286 suldog
Wed, 05/11/2011 - 16:03 | 1264732 riley martini
riley martini's picture

 Thats how controlled the US media is ,one has to use a foreign media for relivant financial news ie. The falling EUR . RT is covering the story.

Wed, 05/11/2011 - 14:42 | 1264289 LRC Fan
LRC Fan's picture

Bang bang bitchez!

Wed, 05/11/2011 - 14:43 | 1264293 hambone
hambone's picture

Shotgunz Bitchezzzz.  Good for the goose definitely also good for the gander.

Wed, 05/11/2011 - 14:44 | 1264301 Ray1968
Ray1968's picture

They don't have a 2nd amendment in Greece. The police can gun you down at will. Just give them a few more days and it will look like Syria.


Wed, 05/11/2011 - 16:55 | 1265029 JW n FL
JW n FL's picture

thats ok.. the police in this country will have a mother fucking wake up call when they try that shit here.. that whole Ken State / Rodney King thing..

plus+++++++++++ FBI Don’t Need No Stinking Warrants! Personal / Civil Rights are a thing of the past!


"Unfortunately, the PATRIOT Act did Not! Include Checks to PROTECT! Americans” Senator R. Durbin (IL) Use Twitter? Do you Blog? Do you Chat? YOU! are a Home Grown Terrorist(s) Per Home Land Security! See Link(s) and Official Report(s).


POLICE FATALLY SHOOT UNARMED MAN - Laying Face Down and Shot in The Back


the Police are Nazi's everywhere.. A nice Lady shot in the back and face, with rubber bullets.

Police (6 - 8 officers) Kick Child in the Face after trying to run him over with a car.


will be stopped early on.. something tells me.

Wed, 05/11/2011 - 17:36 | 1265276 edotabin
edotabin's picture

The truth in this remark stops at the first sentence.  The second sentence is absolutely wrong.  If the police shoot 2-3 people you will see a popular uprising and it will be the people that will have the police on the ropes..... in a very very bad way.

Think about it. With all the has happened already, the police in almost any other country would have already started shooting. There is a reason they have not in Greece.



Wed, 05/11/2011 - 14:45 | 1264302 NOTW777
NOTW777's picture

lesson - avoid public employee unions and political bribes

Wed, 05/11/2011 - 15:50 | 1264654 riley martini
riley martini's picture

 Ditto Heads unite and bow to your bankster masters.

Wed, 05/11/2011 - 14:42 | 1264303 DK Delta
DK Delta's picture

I would like to make the assumption that no bank that holds Greek bonds has also written credit protection on Greece.  It would be mind boggling if they did, but I guess there is a reason the term 'dumb bank' has existed for so long.  Any bank that gets caught being long bonds and long via CDS, particularly in a non mark to market account should get an instant visit from the regulators.  

Assuming it is not banks who wrote the credit protection, where is it sitting?  I expect a lot of the net writers of protection are insurance companies and to a lesser extent hedge funds.  Insurance companies are a natural choice to be net writers of protection, and it would be about par for the course if AIG took a big hit on Greece CDS during their roadshow.


Great point. So who is writing the insurance? Do we know?

Wed, 05/11/2011 - 14:45 | 1264309 bob_dabolina
bob_dabolina's picture


It's up 5%

Wed, 05/11/2011 - 14:44 | 1264316 DK Delta
DK Delta's picture

Hey, why not?

Wed, 05/11/2011 - 14:48 | 1264319 Ray1968
Ray1968's picture

AIG: Now there is a reason to throw a flaming beer bottle at someone!

Wed, 05/11/2011 - 14:56 | 1264374 d00daa
d00daa's picture

Snap it up Bob!

Wed, 05/11/2011 - 15:01 | 1264384 Mountainview
Mountainview's picture

Because AIG=USA=FED!!!! Don't woory!

Wed, 05/11/2011 - 15:09 | 1264455 1100-TACTICAL-12
1100-TACTICAL-12's picture

Max Keiser , has been over there stirring the pot....

Wed, 05/11/2011 - 14:44 | 1264315 LOWNskater52
LOWNskater52's picture

I disagree with the Argentinian example.  Agrentina defaulted and had the luxury of falling back to using the world's reserve currency (the U.S. dollar) for vital transactions.  Once we default and the Dollar crashes, we have nothing to fall back on but good ole, finite, sound money.

Wed, 05/11/2011 - 14:48 | 1264324 DK Delta
DK Delta's picture

That's why they should allow for competing currency systems. All the gold funds and precious metals ETFs could offer debit account systems to ween us off this fiat nightmare.

Wed, 05/11/2011 - 14:56 | 1264362 Urban Redneck
Urban Redneck's picture

Argentina also wasn't a key part of a raging banker domino theory paranoia.

They also started with their own currency & central bank monetary policy. 

Argentina was also a sovereign State, as opposed to a member of the EU.

But why let facts get in the way of an otherwise convincing argument?

Wed, 05/11/2011 - 15:51 | 1264678 anonnn
anonnn's picture

Argentina was also a sovereign State, as opposed to a member of the EU. ...

A one-sentence chunk of education!

Wed, 05/11/2011 - 16:08 | 1264745 Reptil
Reptil's picture


Argentina's currency like many South American countries at the time was pegged to the dollar. They got into heavy debt loads because their governments looked at their monetary system as a sort of extension of the US one. Ironically the tables are now turned (as far as finances go)

Also read: "Confessions of an economic hitman" by John Perkins. Good stuff.

Wed, 05/11/2011 - 14:47 | 1264332 Cleanclog
Cleanclog's picture

You can annul the marriage after the baby is born.  The grandparents will help out.

Wed, 05/11/2011 - 16:56 | 1264336 Urban Redneck
Urban Redneck's picture

That's only abnormal & scary by EU riot standards,  not so much by BRIC standards.  pretty boring by EM standards, and a pathetic wuss parade by non-developing market standards.

Wed, 05/11/2011 - 14:52 | 1264343 turds in the pu...
turds in the punchbowl's picture

you like-a da juice? 

Wed, 05/11/2011 - 14:52 | 1264355 Smartie37
Smartie37's picture

Title changed by FT from "Greece and Portugal Should Go Gracefully" to

"Default Won't End Eurozone Crisis"

by Simon Tilford

Wed, 05/11/2011 - 14:52 | 1264358 BKGuy
BKGuy's picture

Agree with most except the following:

"I suspect that they are not as exposed as the market may believe.

I would like to make the assumption that no bank that holds Greek bonds has also written credit protection on Greece.  It would be mind boggling if they did, but I guess there is a reason the term 'dumb bank' has existed for so long.  Any bank that gets caught being long bonds and long via CDS, particularly in a non mark to market account should get an instant visit from the regulators."

If the crisis has taught us anything, it is the following:

1. most banks were MORE exposed to toxic assets than anyone thought 

2. banks will certainly write risky insurance products despite holding those same assets (picking up pennies in front of a steamroller).

3. Relying on the ability and willingness of regulators to determine and control what assets are held in what book and what the marks should be is a tenuous proposition.

Wed, 05/11/2011 - 14:54 | 1264366 He_Who Carried ...
He_Who Carried The Sun's picture

Go through the list of Greek-gov subsided entities and you'll fall off your chair. They cannot go on and spend for commities of non-extant lakes and the likes anymore and on top of that fiscal discipline of the general populace is nil as well. There is no other way than to save and after that discuss EU aid. Can you imagine what would happen in those streets if the government decided to turn back to the Drachma? There would be many dead as people's money would lose any value...

It is a political question too, if the big three of Europe had to admit defeat in the aftermath of a default and Germany can shoulder the small pig's debt. If however Spain would enter the picture permanently, then the whole story needs to be re-written...

The real risk to the global monetary system right now comes out of the US of A with Bernaks dollar-printing desperately camouflaging impending municipal bankruptcy.

Wed, 05/11/2011 - 16:40 | 1264719 anonnn
anonnn's picture

The Spanish Civil War opened the curtain on WW2.

75 years later, the network of unpayable Spanish debt obligations beckons ominously.

Wed, 05/11/2011 - 14:54 | 1264368 vote_libertaria...
vote_libertarian_party's picture

I love the CDS write up at the end.  It gives you the impression everybody is either long CDS or at worst net to even on bond holdings.


Somebody is going to eat some big losses.


Default on bonds = somebody, somewhere is going to eat losses.

Wed, 05/11/2011 - 14:57 | 1264369 Internet Tough Guy
Internet Tough Guy's picture

Falafel or fight!

Wed, 05/11/2011 - 14:58 | 1264370 VyseLegendaire
VyseLegendaire's picture

Killzone: Greece edition. 

Wed, 05/11/2011 - 15:02 | 1264391 Mountainview
Mountainview's picture

Soon on your channel as well!!! The endgame of debt!!!

Wed, 05/11/2011 - 14:59 | 1264375 FrankIvy
FrankIvy's picture

How long until that arrives in the U.S.?  Can't imagine they're going to be able to keep the lid on too much longer.

When the U.S. goes, it all goes.

Wed, 05/11/2011 - 14:58 | 1264383 FubarNation
FubarNation's picture

Cocktail anyone?

Wed, 05/11/2011 - 15:07 | 1264427 Internet Tough Guy
Internet Tough Guy's picture

Anyone who thinks Argentina is doing better since 2001 doesn't know much.

Wed, 05/11/2011 - 15:25 | 1264534 darkpool2
darkpool2's picture

I get so exasperated with all this debate. The idiots who lend to chronic underperformers deserve all they get. Greece can and should be opportunistic, but at the same time we dont have to save them from themselves. Pull the plug ( both sides) and t Let the chips fall where they may. I for one dont want to contribute a single cent---- or will that be drachma?

Wed, 05/11/2011 - 15:41 | 1264616 sbenard
sbenard's picture

The best thing for Greece is to default and send the message to both bong markets and governments that citizens will not put up with being enslaved to pay for overspending byt politicians. Maybe then, a few American politicians and the bond vigilantes will get sensible in cutting the size, scope, and cost of government in America, too!

Where are the bond vigilantes when we need them?

Wed, 05/11/2011 - 16:54 | 1265039 Global Hunter
Global Hunter's picture

Bong markets, fantastic idea!

Thu, 05/12/2011 - 02:13 | 1266719 Boxed Merlot
Boxed Merlot's picture

Where are the bond vigilantes when we need them?...


Drinking the bond water?

Wed, 05/11/2011 - 15:42 | 1264618 bbq on whitehou...
bbq on whitehouse lawn's picture

Do you think i could get a visa?

I should get a passport first but they seem to want data thats not easy to get unless your a perfect nuclear family on government pay.

How do you get information if you cant get SS# on dead or lost parents?

Im thinking of just buying a boat and ending my relationship with the US.

Government is the only entity you can get in trouble with without leaving your bathroom.

If anyone "loves America" Im sorry i just dont see it.

What do you love? Maybe im missing something.

Wed, 05/11/2011 - 16:05 | 1264690 Dr. Acula
Dr. Acula's picture

>Government is the only entity you can get in trouble with without leaving your bathroom.

Very true:

The Relentless Misery of 1.6 Gallons -

The Bureaucrat in Your Shower -

Mayor Unrolls Toilet Paper Tax -

How the Presidency Is Invading Your Home -

"The same 1992 law that gave us those awful low-flush toilets also restricted the amount of water showerheads could use to 2.5 gallons per minute. Some consumers who disliked the resulting weak trickle opted for models with two or more showerheads, each using the maximum 2.5 gallons. But Team Obama has now eliminated this "loophole" by requiring that the total flow must comply with the limit"

"if a contractor or retailer buys one [toilet] in Canada to install or sell in the US, he faces fines of $2,500" -

Joe the Outlaw -


Wed, 05/11/2011 - 15:59 | 1264696 riley martini
riley martini's picture

 Those Greeks know how to party . I don't see any coverage from the Fascist commerical media in the USA . The end of corruption with the Raj verdict









 Those Greeks know how to party. The Fascist commerical media in the USA is still pretending they don't know why the EUR is going down.





Wed, 05/11/2011 - 15:59 | 1264697 laserjock
laserjock's picture

Because one video is worth one thousand pictures...

Depends on the frame rate (FPS) and the video length.


Wed, 05/11/2011 - 16:15 | 1264779 Gimp
Gimp's picture

US Media - no coverage as usual. They wonder why they are loosing viewers...

Wed, 05/11/2011 - 18:10 | 1265475 Agent P
Agent P's picture

From CNN's main page (cherry picked admittedly):

  • Trump reveals hair secrets
  • Lindsay Lohan sentenced in theft case
  • Bristol Palin: It's not plastic surgery
  • Princess Beatrice to auction wedding hat
  • Signs a boomer marriage may not last

What more do you want man?

Wed, 05/11/2011 - 18:46 | 1265610 Gimp
Gimp's picture

LOL - Now there is some real news!   At least we have zerohedge for now.

Wed, 05/11/2011 - 16:31 | 1264878 TraderTimm
TraderTimm's picture

I've posted about this one time before, and in light of this news and the comments about not having anything to fall back on I thought I would again.

Last time I posted BitCoin was sub-parity to the dollar and averaging 17k on the exchange I track (Mt.Gox). As of this posting the BTC/USD rate is 5.650 with a recent high of 6.065. I honestly thought above parity would be good enough, but it really started to fly after that point.

For those that are interested in the background, please visit:

Charts: (I follow the mtgoxUSD tab, 3-month chart myself)

My small investment is up over 500% at this point. (I got in at the sub-parity level.)


Wed, 05/11/2011 - 16:47 | 1264976 AldoHux_IV
AldoHux_IV's picture

Not only is default not going to be the end of the world, but it's the only solution to this debt ridden world economy.  What I don't understand is how we sit here and accept the bullshit these policymakers are sellling-- they're the economic terrorists that are hell bent in destroying equal opportunity for prosperity while enslaving the world in debt.

These assholes deserve to be mobbed for what they're trying to do: IMF/Worldbank, central banks, G20 finance ministers, et al-- the centrally planned regime needs to be taken down.

Wed, 05/11/2011 - 16:49 | 1265008 High Plains Drifter
High Plains Drifter's picture

when the body bags start being used, then we will know that greece is falling.....

Wed, 05/11/2011 - 17:20 | 1265188 Troublehoff
Troublehoff's picture

Greek unions stage anti-austerity strike


They don't have a fucking clue what austerity is.

Wed, 05/11/2011 - 17:41 | 1265309 vipobviously
vipobviously's picture

Soon they will be called IMFians, formerly known as the greeks

Wed, 05/11/2011 - 18:18 | 1265498 PulauHantu29
PulauHantu29's picture wonder those Europe cruises are dirt cheap...who the f*ck wants to travel to a war zone?!

No end in sight either.

Makes taying at home this summer and watching "The Odd Couple" reruns pretty nice....and safe! Maybe I'll get some Quincy, also.

Sat, 05/14/2011 - 11:22 | 1274214 ATSC LTD
ATSC LTD's picture iti ofera asigurare rca online - la cel mai bun pret, online primesti o reducere de -25% fata de pretul de lista!
Doar aici gasesti asigurare medicala de calatorie!
RCA ieftin!

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