Greece Is In Selective Default

Tyler Durden's picture

On October 22, we alone asked a very relevant question, which apparently nobody was able to answer:

Well, one entity did. S&P.

  • GREECE CUT TO SD FROM CCC BY S&P
  • S&P CUTS GREECE'S LONG-TERM DEBT RATING TO 'SELECTIVE DEFAULT'

SD, by the way, stands for Selective Default. At least the acronym is not Selective Transitory Default: that would really summarize the situation.

In other words, Greece is technically default, and why? To make sure a few hedge funds have a great year and get paid on the Greek bonds at double their cost from 4 months ago. The Greek people just get a t-shirt that says "Third Point made a killing, and all i got was this louse Selective Default."

But the best news is that Goldman's European central bank branch is now delighted to accept defaulted, whether selectively or unselectively, Greek bonds as full faith and credit collateral of that multi-colored European currency.

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JeremyWS's picture

Greek bonds to rally another 10% tomorrow.

The trend is your friend's picture

somebody tell the rest of the EU that Greece Defaulted, they thought they fixed this little problem

knukles's picture

They did.
They fixed it yesterday.

You know, the old one day at a time trick....
Hell these folks have yet to admit they have a problem

Dr. Richard Head's picture

Next thing ZH is going to tell me is that the Gold Confiscation Act of 1933 and closing the gold window in 1971 were defaults too.  JHeeeesshhhhh

DoChenRollingBearing's picture

Someday this shit`s going to get real.

bank guy in Brussels's picture

That was only after the USA's Abe Lincoln defaulted in the 1860s and started paying in fiatsco 'Greenbacks' ... but Americans got their gold dollah back after Abe's US Empire defeated States' Rights Rebels with 600,000 dead ...

For Americans the currency issues seem a bigger deal, maybe because the 'dollar' has been around so long, and for some decades so important

But here in Europe we have currencies come and go, or lop some zeroes off ... every decade or two it seems ... People here still forget the euros sometimes and think in older currencies

So it's not such a big deal to us if the euro shrinks or goes away or gets re-organised ... We will shrug our shoulders, oh well, new money again ...

Greeks and Spaniards and Italians and French may soon have that 'a-ha!' moment on the euro, default big-time

Banners in the European streets will say, 'Sovereign currency, bitchez!'

GCT's picture

Thanks for the European perspective Bank guy.  I think once Spain is through France may be next.   Whats your take sir? 

SilverRhino's picture

I wonder what Selective Default does to the derivatives markets surrounding Greek debt?  All I do know is that some bankster is going to try and completely assfuck some other bankster.   

Who's got the popcorn? 

Everybodys All American's picture

Greece Saved!

Version. 301.20

Renewable Life's picture

And whats the point of alerting anyone of this??? No consequences, no news!!

Wake me up, when the golden dawn has taken control of the fucking country, until then its all nonsense!!!

Cdad's picture

I have been wondering when they would finally call the last Greek Stick Save just what it was...F'n DEFAULT!  

 

PaperBear's picture

Just you try telling one of your creditors you are stiffing them and not stiffing your other creditors and see how far you get.

Rainman's picture

Selective default is moar better than Massive Default, right ? Bullish !

knukles's picture

Jubilee sounds even better!

"Selective Payment Jubilee"

(I can hear the blonde titty wit on CNBS trying to explain that Papandreou is still gonna take her to 21 for dinner so it "Has To Be Good")

astoriajoe's picture

Massive Default would be a good name for a band.

Tsar Pointless's picture

So this is like the day on which we heard after-hours that France was downgraded.

Remember? The Monday of Thanksgiving week? The equity markets all rallied that day, just as they did today.

Fully-functioning markets? Sure, they are - for those who have access to the codes.

TonyCoitus's picture

All hail Mr. Pink

Black Forest's picture

 Totally unexpected. Noone ever saw it coming. I am shocked.

a growing concern's picture

I am shocked, SHOCKED, to learn that there is gambling in this establishment.

sitenine's picture

Anyone keeping odds on CDS payouts?

knukles's picture

Know what kind of Wood don't float?

 

 

 

Natalie

LongSoupLine's picture

AAA rated paper made from wood?

GolfHatesMe's picture

Hello, DTCC?  Anyone there?

LongSoupLine's picture

S&P is nothing but the bitch whore to the big players.

 

Fuck all the ratings agencies.  I hope they all get what's coming to them.

orangegeek's picture

And all those fighting unions now have zero for a pension.

Mentaliusanything's picture

Paper... Paper everywhere and none of it worth more than used toilet paper.

Remember to fold carefully as you use the other side and understand no matter how careful you are this Paper leaves a Mark (or a Eeeeuro the case may be)

steve from virginia's picture

 

 

 

When the time comes it really doesn't matter how default is done. There is no reason to hide the default, nobody really cares any more b/c they ('They') have problems of their own.

 

The Bosses simply say, "Sah-rhee, we cannot pay (go fuck yourself)" and that's that. See "Argentina".

 

What matters now is whether the Greeks are going to emit/spew/'introduce' a currency other than the euro. If they keep the euro, they will rely on the incredible Greek underground economy to keep bodies and souls together. This means a big increase in European heroin addiction and arms sales in the Balkans (arms sales FROM the Balkans), plus other drugs, whores, African immigrants and al Qaeda operatives. Greeks have been smuggling stuff for thousands of years and are good at it. 

 

If the euro vanishes and is replaced by a new Greek currency, look for this wonderful new currency to be depreciated to about 1/10th the current worth of the euro and for Greece to basically ... grind to a halt. Greece won't be able to purchase either food or fuel from overseas' suppliers w/ new currency! BTW: 1/10 is where the game begins. Since euros (and dollars) will be literally the stuff of life (and fun as cars need gas), any of these 'hard currencies' will be bid up dramatically wherever they appear within Greece.

 

Hard currencies are great for trade: see Switzerland. Euro-landia will be stuck with a hard currency as a consequence of Greek exit. The euro will be useful to obtain imported crude oil but the Euro-pean economy will be short of euros where it matters, in customers' pockets!

 

Regardless of whatever occurs within Greek finance the outcome for the Greeks will be much much worse than it is now.  They literally have no way out.

 

Vigilante's picture

@Steve

Greece WAS using its own currency till 10 years ago, in case you forgot

There were never any shortages.

...and if we go down that road again,as much as 80% of the debt will be repudiated....

Fresh start...and you'll still be stuck with O'bummer

asteroids's picture

OK, will the real CDS market now stand up!

Uncle Remus's picture

Good grief man, you're scaring the children. The adults don't have the sense to be.

mendigo's picture

Dohhh!

Too funny.

Thanks ZH

Cursive's picture

Circa 2012, one nation's default is another man's profit.  Oh, for the day that consequences return.

tbd108's picture

Athens, we have a problem.

Pairadimes's picture

Selective Default. Has a nice ring to it. Sounds so much better than 'wealth transfer from creditor to debtor' or 'failed state finance mechanism'.

Surrealist's picture

OFF TOPIC: Is that Tyler Durden in the avatar? He sure looks young for someone with such an articulate blog. Must be his son. :)

Glass Seagull's picture

[ISDA executives slowly rise out of their chairs, back up slowly towards the door, and then make a break for it.  Laughter is heard all the way to the elevators]

 

Can we boot the Acropolis?

 

 

 

 

 

 

 

BurningFuld's picture

Selective Default to me = You will never see your fucking money. Let me put a small caveat here: If you are an average job pension schmuck.  Otherwise it's all good!

three chord sloth's picture

OK. So now the question is: Who has the stones to demand payment on their CDS? Let's kick out the chocks and let this thing collapse.

q99x2's picture

I lived to see the day. That wasn't quick. Guess they will need a bailout to cover the default. Wonder if Germany is going to repo their submarines.

NoDebt's picture

So is this a "big deal" or not?  Asking seriously.  Do CDSs get triggered?  Do the ECB, IMF, etc. have to now show the bonds they hold at a loss (or just hold them at mark-to-unicorn full-face)?

I think I get it.  This is a snoozer "nothing has changed" situation, right?

1000924014093's picture

If this happened two years ago, I would say it's a big deal and things will change . . . but now, it will just get lost with the rest of the bad news that comes out of Greece every day.

 

Means nothing at this point, iow.

kalasend's picture

What does it matter?

Banksters's picture

File under, no shit.