The Eight Hundred Pound Greek Gorilla Enters The Room

Tyler Durden's picture

From Mark J Grant, author of Out of the Box and onto Wall Street

The Eight Hundred Pound Greek Gorilla Enters The Room

“After an increase of only 3% in the second half of 2010, total notional amounts outstanding of over-the-counter (OTC) derivatives rose by 18% in the first half of 2011, reaching $708 trillion by the end of June 2011. Notional amounts outstanding of credit default swaps (CDS) grew by 8%, while outstanding equity-linked contracts went up by 21%.”

                                                          -The Bank for International Settlements, Nov. 2011

The Rub

We all have been staring at the Greek sovereign debt and then the Greek CDS contracts. It was 1/13/10 when I first predicted that Greece would default and what a long and winding road it has been; similar to some hallucinogenic experience manufactured by Timothy Leary. Sometime soon, given what has taken place, I expect the ratings agencies to place Greece in “Default” and with their banks following. The markets are “Ho-Humming” and the conversations revolves around “Net” CDS exposure and the write-downs that have already taken place at the European banks. Please recall AIG and what happened with Lehman and what do we find this morning; KA Finanz, the Austrian bad bank, faces $1.32 billion in losses due to their exposure to the Greek CDS contracts according to a Bloomberg article. So now we will wait and see who else is on the hook, who may be seriously impaired, because the Gross number of about $79 billion for Greek CDS is about to enter center stage.

It Gets Far Worse

I hold up my hand, “One moment please” as I introduce you to the 800 pound Greek Gorilla that is about to enter the room. Allow me to now present to you the “OTHER” Greek debt that is outstanding and will have to be accounted for as the country defaults. Detailed below are some of the “OTHER” sovereign obligations of the Greek government which have now been submitted to the ISDA and I list some of them below. You will note that there are bank bonds, Hellenic Railway bonds, Urban Transportation bonds et al that are guaranteed by Greece. You will also note that there are bonds tied to Inflation, Floating Rate Notes, Asset-Backed securities and a whole mélange of other structured products with a Greek sovereign guarantee. What we all thought was fact is now clearly fiction and default will now bring “Acceleration” one could reasonably bet in all kinds of these securitizations and in all kinds of currencies.  This could come from the ratings agencies placing Greece in “Default” or it could come from the CDS contracts being triggered depending upon each indenture and you will also note that a great many of these off balance sheet securitizations are governed by English Law and not Greek Law. You may also wish to consider the fallout to the banking system as the lead managers of all of these deals could find themselves behind the eight ball as various clauses trigger and as the holders of these securitizations line up at the judicial bench [ZH note: there is a reason why Allen & Overy is getting paid $1500 an hour to indemnify ISDA with a plethora of exculpation clauses - they know what is coming] The ISDN numbers are on all of these securities and the lead managers may be found on Bloomberg or other sources as well as the holders of the debt.  The curtain just lifted and the show is about to get way too interesting!

The full ISDA list may be found here:

One example of the problems forthcoming I present from a deal done by Goldman Sachs ISDN XS0292467775 $1.6 Billion Hellenic Republic 2.085 7/15/57 (Offering Memorandum)



The Notes constitute direct, general, unconditional, unsubordinated and, subject to this Condition, unsecured obligations of the Republic. The Notes rank pari passu with all other unsecured and unsubordinated obligations of the Republic outstanding on 30 March 2007 or issued thereafter without any preference granted by the Republic to one above the other by reason of priority of date of issue, currency of payment, or otherwise. The due and punctual payment of the Notes and the performance of the obligations of the Republic with respect thereto is backed by the full faith and credit of the Republic. So long as any Note remains outstanding, the Republic shall not create or permit to subsist any mortgage, pledge, lien or charge upon any of its present or future revenues, properties or assets to secure any External Indebtedness, unless the Notes shall also be secured by such mortgage, pledge, lien or charge equally and rateably with such External Indebtedness or by such other security as may be approved by an Extraordinary Resolution of the Noteholders (as described in Condition 10).”

I ask; how does this square away with the ECB and the EIB securing for themselves a senior position to other Greek bondholders?



If any of the following events (each an “Event of Default”) occurs:


(a) the Republic defaults in any payment of interest in respect of any of the Notes or Coupons and such default is not cured by payment thereof within 30 days from the due date for such payment; or


(b) the Republic is in default in the performance of any other covenant, condition or provision set out in the Notes and continues to be in default for 30 days after written notice thereof shall have been given to the Republic by the holder of any Note; or (c) in respect of any other External Indebtedness in an amount equal to or exceeding U.S.$25,000,000 (or its equivalent), (i) such indebtedness is accelerated so that it becomes due and payable prior to the stated maturity thereof as a result of a default thereunder and such acceleration has not been rescinded or annulled or (ii) any payment obligation under such indebtedness is not paid as and when due and the applicable grace period, if any, has lapsed and such non-payment has not been cured;




(d) a general moratorium is declared by the Republic or the Bank of Greece in respect of its External Indebtedness or the Republic or the Bank of Greece announces its inability to pay its External Indebtedness as it matures; or


(e) any government order, decree or enactment shall be made whereby the Republic is prevented from observing and performing in full its obligations contained in the Notes, then the holders for the time being of at least 25 per cent. of the aggregate principal amount of the outstanding Notes may (i) give notice in writing to the Republic and to the Agent in accordance with Condition 11 that such Notes are immediately due and payable at their principal amount together with accrued interest (if any) or (ii) decide at a meeting that such Notes are immediately due and payable, whereupon such Notes shall become immediately due and payable at their principal amount together with accrued  interest (if any) and/or (iii) decide at a meeting that, if the case may be, litigation be instituted. The holders of at least 66 2/3 per cent. of the aggregate principal amount of the Notes (at the time being outstanding) may rescind (i) such notice of acceleration (ii) such decision to accelerate or (iii) such decision to institute litigation if the event or events of default giving rise to the declaration or to the decisions have been cured or waived. Such rescission shall be made by giving notice in writing to the Republic and to the Agent whereupon such declaration or decision shall be rescinded and have no further effect. No such rescission shall affect any other or any subsequent Event of Default or any right of any Noteholder in relation thereto. Such rescission will be conclusive and binding on all holders of the Notes.”

You will note that by not paying the full amount to the Greek bondholders that a “general moratorium was declared” and that these “Notes shall become immediately due and payable at their principal amount together with accrued interest”

USD 5,000,000,000 Euro Medium
Term Note Programme
The Hellenic
Republic English Law
(a) Information Memorandum dated 6 November 1995
(b) Information Memorandum Addendum dated 6 November 1995
(c) Information Memorandum Addendum dated 2 May 1996
(d) Pricing Supplement dated 3 July 1997
X - Pricing Supplement n/a Pricing Supplement unsigned

68 08 August 2017 XS0079012166
JPY 50,000,000,000 3.80 per cent.
Notes due 2017 issued pursuant to
the USD 10,000,000,000 Euro
Medium Term Note Programme
The Hellenic Republic English Law
(a) Information Memorandum dated 5 August 1997
(b) Information Memorandum Addendum dated 5
August 1997
(c) Pricing Supplement dated 7 August 1997
X - Pricing
Supplement n/a Pricing Supplement

and so on... see blow. Full list:


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roccman's picture

The gorilla's name is:



Harlequin001's picture

Is it just me, or has anybody else noticed that $140 billion of 'pension fund' money has just been wiped out and replaced with a $170 billion of freshly printed banker cash, all of which which came from nowhere.

Counterfeiting is a wonderful thing if only you can get away with it. Anyone want to know how to get skint? Go live in Europe...

and they wonder why people want to hide stuff offshore. They wonder why people NEED to hide stuff offshore...

French Frog's picture

With all that, we will probably gap UP on sunday open lol

hedgeless_horseman's picture



So this author ventures the indentures on the debentures will be the clenchers?

redpill's picture

So much whining these days that naked CDS purchase is "buying fire insurance on your neighbors house" and an inherent danger to sovereign finances. I understand it's a murky derivative world, but still I call bullshit. It sounds like a bunch of apologists for governments that lack the balls to keep their financial house in order. Is anyone complaining about naked CDS positions on Norwegian sovereign debt? Or Chilean sovereign debt? Of course not. Given the choice I'd rather have naked CDS positions applying pressure to governments to behave in a fiscally responsible way or face the teeth of a credit event. It was an important and positive event that ISDA correctly acknowledged that what occurred yesterday was a default.

GetZeeGold's picture



We'll see how positive it is in the next weeks and months. I hope they can unwind the knotted ball of yarn before it simply explodes.


CrazyCooter's picture

You mean, its one big clusterfuck? Non-technical demonstration of this fiasco at 18:30 in the following vid ...



resurger's picture




Welcome to ISDA Butchery

Todays special: -Gorilla Steaks XXXL

1- Tenderloin



4- Strip or Top Loin





CDS Sauce available

Crisismode's picture



I hope it simply explodes, and then we can rebuild something of true value from the pieces.



withnmeans's picture

If a Greek "gyro" is pronouced yro, "G" being somewhat silent. Wouldn't this place just "REEK", "G" being silent again.......

Rusty.Shackleford's picture

Kyle Bass - "You can't hate the mirror because you're ugly"

Cole Younger's picture

" It was an important and positive event that ISDA correctly acknowledged that what occurred yesterday was a default."

Respectfully. what event? The 3 billion "after" forcing CAC's? allowing the ECB to trade there old bonds for new ones so they could avoid the haircut forced upon all other holders with CAC? This default punished very few and is now the ideal way to default... 3 billion is not a "important and positive event" when it should have been 100 billion plus IMHO. " financial house in order." is not going to happen.

redpill's picture

This is an incremental default process, the Euros hope if they stretch it out long enough it won't hurt as bad (it will actually hurt the Greek people much more this way).

The long term plan is to find the absolute limit of how indebted they can keep Greece without having them incrementally default anymore.   You see, this is a marvelous experiment for them in debt slavery.  They can find the absolute limit to which they can stretch the indebtedness of a nation so that they can 1) never afford to pay it back but 2) don't default and continue servicing it perpetually.  I think it will eventually fail spectactularly, but in the mean time we have to watch this grotesque display of financial mad science.


Nobody For President's picture

I plussed you on that HH, even though I know in my heart I shouldn't encourage you...

hungrydweller's picture

I plussed you for your new moniker!  Once again we get to vote for Mr. Bad or Mr. Worse for Fearless Leader of the Debt Enslaved World.

The Big Ching-aso's picture



At least King Kong got the pretty girl in the end for awhile.  This scene goes right to the big skyscraper thud.

falun bong's picture

The clinchers and the in the brown eye clench.

If this was all bona fide and above board borrowing and debtors and creditors then they wouldn't have created all this obfuscation. That's the "tell": unwarranted complexity.

supafuckinmingster's picture

"So this author ventures the indentures on the debentures will be the clenchers?"


And these clenchers will cause an adventure I'm quite sure!!

redpill's picture

"It was 1/13/10 when I first predicted that Greece would default and what a long and winding road it has been; similar to some hallucinogenic experience manufactured by Timothy Leary."

Everyone should do acid once in their life just to learn the lesson of how much your perception of reality impacts your actions, assumptions and attitude.


roccman's picture

fuck acid - dmt is the ULTIMATE reboot pill


now 50mg of dmt on 5 grams of shroomies - now THAT could get interesting

falun bong's picture

That is so cool that acid got 46 green arrows. It's ancient history for me now but I do recall fondly some 4-way mandala blotter back in the day, I happened to eat the part that had all four doses, then went for a 6AM coffee and ended up sitting next to a 300 pound Maine State Trooper. Pupils and beads of sweat the size of basketballs...

Vampyroteuthis infernalis's picture

The Shadow Banking industry rears its ugly head. You make questionable deals, they will come back to bite you in the ass. Rot in hell banksters.

goldinpenguin's picture

Perfect description - cluster fuck, going to be a dogpile of bankers and lawyers fighting for the Greek bones in courts all around the world. No wonder Finland was calling for collateral for the Club Euro loans, we'll take the Parthenon thank you.UK already stole the Elgin marbles (whats up with that, how would they react if we hauled away chunks of Stonehenge for display at EPCOT?)

Anyway the preliminary looting by ECB and others should be interesting legal fodder, we'll find out who can't make good on the CDS, gonna be a long grinding drama. I think we will find how little things have changed in the worlds financial system since lehman, like nothing. Maybe AIG will go tits up again. Will geithner do 100% settlements again? The banksters are still his buds, why not!

Is there a final arbiter for contested claims in different court systems> The World court? This is the best thing for lawyers since Bhopal.

GOSPLAN HERO's picture

Bernanke and ECB will PRINT billions of fiat-shit-dgital-paper "money."

They will print faster than four muthafuckas!

The Bernanke and ECB will cause an inflation firestorm.

disabledvet's picture

THIS is the "800 Pound Gorilla." Huge chunks of Greece are now "only going to get paid this much." The entire country is basically "on the dole" with Portugal and Ireland soon to follow. Should US interest rates at the long end suddenly shoot up...well, "Good Luck." Of course "this is just me talking off the top of my head." I have no interest in this as anything other than an intellectual exercise. On the other hand... "if it saves you a fortune...

Ahmeexnal's picture

"No llores por mi, ArgenGrecia

mis drachmas estan contigo"

SRSrocco's picture


What an interesting week.  I wish I was a FLY on the WALL at these Greek default meetings.  I can imagine the banker boys are having the same amount of stress (or even more) that they were when everything was falling apart in 2007.

Some of you already know this, but it was quite interesting that SILVER made a new 7 month high in India the very same day it got crushed in the U.S. & foreign markets on FEB 29th.  I write about this and provide some charts at TURDS BLOG BELOW:

I wonder when Ron Paul is going to MAN UP and throw a NICE BIG WET SPIT WAD  at Bernanke the next time they have a meeting.

UPDATE:  someone in Turd's blog commented that the BIG MOVE up in silver in India was on FEB 28th.  When we look at the chart, it indeed does fall on FEB 28th.  We can see that the Indian's were buying BIG TIME before the U.S markets opened.   I can just imagine the SILVER BREAKOUT that may have occurred if the FED didn't bring out its big HAMMER.

In India, silver investors still extremely bullish despite price crash elsewhere

Silver prices leapt to a 7-month high in India on the same day that prices plummeted 7% in the international market. Despite the crash, traders expect a 35% rise by end 2012.


Silver is shining again in India contrary to the big fall in the international market. The white metal rose by $40.66 (Rs 2000) in one single day on Wednesday and has jumped to a 7-month high here, though it slid by 7% in the international markets later in the evening on the same day. Traders said investors have turned bullish on silver since the precious metal has posted an 18% gain in the last eight weeks

atlee's picture

And I thought the Indians were smart. Had they waited 12 hours they could have paid $3 less. Waited 2 days could have paid $5 less.

The value of the Rupee also has something to do with those % rises. Thanks for reminding me not to give India so much credit simply because it supports my desire to see the value of my stack rise.

SRSrocco's picture

Atlee... you are right.  The Indians buying over 5,000 tonnes of silver this year shows how much less informed they are over their AMERICAN COUNTERPART.

We got maybe 1/2 % of Americans buying and STACKNG SILVER... the INDIANS do it in SPADES.


falun bong's picture

Now the largest silver futures market in the world. Some rules changes as of January 1, soon available for direct investment by non-Indians.

4horse's picture

j/k. of course

therefore: still dare not speak its name

4horse's picture

re dun dun dun dunt like deju vu all over again
but BluffHo will not post: anything


Banks Repaid Fed Bailout With Other Fed Money

"GM at least manufactures something, cars"

there are no products, only profits

GM manufactures . . .

to this--->


in the same vain . . . there is no press, only propaganda : bought&sold, and all paid for . . . thus, BluffHo

because what's otherwise long been known -oldstory. hiding-in-plain-sight. underlying open cold fact. concealment.diversion.distraction.inaction.manufacturingconsent  -is what MsDisInfo here is for, and paid for, in Not disSeminating years ago: stolen money. again stolen. and re-stolen, from the whole country, so like readers here would never know just how far into their stolen future these same lying stealing thieves would go : unheard of. historical. Biblical__ where indebted begat indentured. broke begat busted. begat corrupt. begat bankrupt. begat corruption beyond bankruptcy begatting gnomes everywhere begetting theirs theirs and Their Heirs stolen stolen stolen     __generations so far into nowhere that most here don't even yet know that it's already all over: america

*     *     *

Northern Marianas Caucus: Romney Wins

of all the filth, hidden, called abramoff-- am.indians. apartheid. south africa. nuclear espionage. republi-can-do do, to anyone/everyone, with impunity, as an israeli agent. to American Indians! -none more filthy than what he did to these poor people. and never, along with his very own bugkiller, ever so much as mentioned in what little charges against him: filth. filthy. lucre. making justice as lucrative as it now is ludicrous, with us left behind in its dirt. wipedout, having wiped his anus with our us constitution

*     *     *

HuffPo is just another BluffHo of yet again full Zio Control . . . somehow, like its own msm before it, now fully staffed with all its very own selfsame sneaks, snobs and sychophants who, like their nyt, will always be the genius, experts and smartypants behind their own behind, the-scenes. obscene

*     *     *

bill maher  The Great Thing About Having Been Poor

The great thing about having been irish is how liberated it makes you if you eventually become zionist. There's nothing like the knowledge that you don't need integrity{small potatoes} to survive.

besides, a little ugly twit, hef's my pimp . . .

blindman's picture

BAIN CAPITAL ( Mitt Romney's co.) syndicates Limbaugh,Hannity,Beck,Savage& Levin !

"Have you been wondering ,( as I have),....why ...these so-called conservatives
on talk radio keep trashing RON PAUL???
Doesn't add up...doesn't make sense, right?.... I can see how, and why this is happening.
It turns out, that CLEAR CHANNEL COMMUNICATIONS, owns Premiere Radio
Networks. Premiere Radio Networks OWNS EXCLUSIVE RIGHTS TO
Rush Limbaugh,Sean Hannity, and Glenn Beck....and....Premiere also syndicates
Michael Savage and Mark Levin radio shows.


answer: BAIN CAPITAL !!!!! of which MITT ROMNEY IS CEO!!!!!!
Some of this is beginning to come out in the print media reporting.
[link to]
[link to]
[link to]"
The Story Behind The Story
With A. True Ott PhD
MF Global Trustee Freeh Asks Court to Pay MF Global Executive Bonuses

"The entitlement of the financial class is the gift that keeps on giving.
And as for the customers? They are being asked to surrender their legal rights in order to receive partial payments.
Let them, is that even cake?" j.c.a.

knightowl77's picture

Mitt Romney has not been the CEO of Bain in quite awhile, though I am sure he still has some pull....Just like all the GS past execs

blindman's picture

" ..2. What is your relationship with Ms. Orit Gadiesh, and what will be her cabinet position in your Administration? Wikipedia informs us: Orit Gadiesh (Hebrew: ????? ?????) is an Israeli-American corporate strategist and chairwoman of management consulting firm Bain & Company. Research Ms. Gadiesh further and one learns that prior to joining Bain & Company, and before working closely with Mitt Romney, Ms. Gadiesh served in the office of the Deputy Chief of Staff of the Israeli Army. Currently, her impressive resume lists that she sits on the board of directors of the Peres Center for Peace, an organization headed by yet another former chief of staff of the Israeli military, Lt. General Amnon Lipkin-Shahak. Avner Azulay, a top-level MOSSAD operative, the managing director of the Marc Rich Foundation, is also on the executive board of the Peres Center. Ms. Gadiesh headed up your “transition team” when you occupied the Governor’s mansion of Massachusetts in 2002. Is Ms. Gadiesh your MOSSAD/CIA “Handler” Mr. Romney? Is it just a strange coincidence that she has shadowed your every step – from Harvard, to Bain & Company, to the Governor’s Office?"

CompassionateFascist's picture

Romney is, and long has been, surrounded by the same sort of Zionist, neo-con, Foxtard warmongers that surrounded Bush '43. The Bankster-Socialist Jews own Obama, the neo-con Crony Capitalist Jews own Romney. Two tentacles of the same squid.

Buck Johnson's picture

I knew it, I knew it.  I looked at just a little of the list and it shows CDS's in the Trillions.  From the wording of the contracts and other things, I can't see how the ISDA can negate this without having the whole CDS market implode.  As I stated before they fought like cats and dogs on a 3.2 billion dollar CDS, no way.  If it was only that they would have bnought those CDS's and took a loss instead of calling a credit event.  The EU countries are balking at giving more money to Greece and the way they look at it if it's not their countries banks or financial institutions who aren't in danger let Greece default.  But of course they are going by the word of their onw bankds and financial institutions and we know how well that worked for Lehman Brothers.

a growing concern's picture

800 pound gorilla?  Nope.  Chuck Testa.

Harlequin001's picture

At least it's not an elephant...

Wakanda's picture

The gorilla only weighs 796 pounds because it just shat 4 lbs on Draghi's desk.

hedgeless_horseman's picture



"Venizelos, you 800 pound greek gorilla, get off of my desk!  Oh shit!  Now look what you have crapped all over these ECB collateral reports.  What a mess."

resurger's picture

Venzilos, since you are broke ZH demands 800 pound of flesh!

lamb chops anyone? shit i feel like doing a BBQ lol

JimBowie1958's picture

No worries.

The ECB will likely accept ape shit for loan colateral anyway.

Hey, spread it around and make some cash.


WestVillageIdiot's picture

We have not even begun to see the printing and games that the central banks are planning to play.  The printing presses are going to be set to the "Raped Ape" setting and let loose.  There is no way they are going to give up the ghost this easily. 

The system collapsed in 2008.  The new system is the "printing press era".  It too will collapse but they haven't even started to print.  We will hear Bernanke waving a sword and shouting, "boys, don't stop printing until you can see the whites of their pockets".

The war is on. 

Woodyg's picture

The games been played before over and over again - ask John Perkns.

When this shit was going down in 3rd world country after 3rd world country we developed countries said NOTHiNG.

Now that the easy pillaging Been done and the perfecting models tightened up they are taking out the developed world one by one -

While we sit there and say WOW.

This model IS coming to the USA soon - all it takes to start it will be a bankruptcy of BAC or JPM - thereby dumping trillions in guv backstopped losses on the fed guv - doubling or tripling the us debt overnight and WHAM!

We're done.....

Reminds me of the old saying "1st they came for the ........."

They're coming for us soon - but we've stayed silent too long because it wasnt us getting the shaft.

The Central Banksters are the new Vlad the Impalers - as civilizations are stuck on a stake outside the city walls for everyone to see.