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    05/06/2016 - 06:03
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Farce Is Complete As ISDA Finds 50% "Haircut" Is Not A Credit Event

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Thu, 10/27/2011 - 06:52 | 1816415 bigwavedave
bigwavedave's picture

Green bitchez. Bwahahahaha

Thu, 10/27/2011 - 07:04 | 1816452 paarsons
paarsons's picture


It may seem like a joke.  But it's a start.

How much of a haircut did Goldman have to take?

Angie Merkal has balls.

Let's see where this leads before we shit on her head.


Thu, 10/27/2011 - 07:08 | 1816463 Motley Fool
Motley Fool's picture

The Farce is strong with this one.

Thu, 10/27/2011 - 07:55 | 1816551 Comay Mierda
Comay Mierda's picture

what the hell is taking the greeks so long to realize they just got royally PHUCKED?

Thu, 10/27/2011 - 08:24 | 1816622 WonderDawg
WonderDawg's picture

Pretty amazing PR campaign to make this a market positive. Weeks and months of no solution, then suddenly, "We Have A Deal!" and everyone cheers. Had it been something like weeks and months of no solution and then "Greek Bondholders Forced to Accept 50% Losses!" maybe the market reacts differently.

I think this will be the last pop to this rally. The ripple effects are yet to be felt, and when the hopium wears off, we get the next leg down, and it will be a doozy. It will be interesting to see just how much higher the markets will rise, and for how long. My bet is this initial pop will be most of the rise and it buys maybe another two weeks before the markets roll over. But that's just me. I got off the hopium a couple of years ago.

Thu, 10/27/2011 - 13:10 | 1817779 techperson
techperson's picture

Probably the fact that they were just forgiven 50% of their government debt. Sweet!

Mon, 11/14/2011 - 21:00 | 1877701 haibop
haibop's picture

definitely it is!

Sat, 05/05/2012 - 12:50 | 2399433 haibop
haibop's picture

agree how to

Thu, 10/27/2011 - 07:18 | 1816464 jm
jm's picture

The only way this determination was made was if dealers were in on the joke and had a short basis trade on.   

None of these guys lost a $%#@ dime.  Except guess who.


Thu, 10/27/2011 - 07:45 | 1816521 Harlequin001
Harlequin001's picture

Well, according to an earlier post the only losers are the Greek pension funds, and I have no problem whatsoever with that...

Now let's see how long these pension funds take to refuse to eat this 50% loss unless everyone else does or at least takes some, and throw the whole lot into turmoil again. Until we then have an actual default...

Either that or I can see one or two Greek pension fund managers running around in fear of their lives...

Thu, 10/27/2011 - 07:50 | 1816539 nedwardkelly
nedwardkelly's picture

Yeah is this a case of the politicians getting together and agreeing that all the bondholders will 'voluntarily' agree to the haircut, without having actually had any of the bondholders voluntarily agree to anything? I really can't imagine that did a poll of anyone that holds greek debt to find out how they all felt about it...

Also, aren't we talking major moral hazard here now? If you're portugal, or Italy or Ireland, Spain etc... Wouldn't you be sitting up saying "Party on wayne, if our debt gets out of control we'll just get everyone to volunteer to cut it in half!!". For that matter, who the FFFFFF would buy EU government debt now?!

Thu, 10/27/2011 - 08:11 | 1816592 jm
jm's picture

What I don't get is that the same people that want EU banks to boost tier 1 capital by <who knows how much in euro terms> are the same people that seem instrumental in destroying their hedge book.  Much more, they have introduced huge moral hazard into all european government debt.

This is more than stupid. More than "Trichet stupid".  This is stupid on a whole new level.

Thu, 10/27/2011 - 07:46 | 1816531 nedwardkelly
nedwardkelly's picture

How much of a haircut did Goldman have to take?

I'm just not following...

Supposedly it's voluntary. Why would anyone that holds the bonds, plus CDS, volunteer on a 50% haircut with no credit event? I could see why someone without insurance might volunteer for the haircut (vs complete default) but even that's a stretch.

The 'volunteer' aspect of it all just doesn't seem to make any sense. Or is this similar to the way we all volunteer to have our balls groped when going through airport security?

Thu, 10/27/2011 - 07:49 | 1816538 Translational Lift
Translational Lift's picture

ISDA  Sorry....you don't get to trigger the default until there is a 99.9% loss.....NEW RULE!!  Sucks to be you!!

Fri, 11/11/2011 - 00:26 | 1868944 haibop
haibop's picture

this is no funny! memory foam mattress

Thu, 10/27/2011 - 08:11 | 1816549 Al Gorerhythm
Al Gorerhythm's picture

Insurers denied home owners in Australia flood damage payouts, because the damage was caused by rising waters downstream, not from torrential rainfall in their area.

Insurance is a gyp. They make the rules up on the fly to suit their bottom line. In this case it seems that the banks will take a 50% haircut on their bonds and be paid for the losses by the ESSF, that prints the money and taxes the masses through inflationary dilution.

What I don't get; where does a group of bankrupt nations get the money to pay themselves. If euros don't emanate from the ECB, then where do they come from? Tokens in a cornflakes box?

Mon, 01/30/2012 - 08:05 | 2108995 taxi952
taxi952's picture

Your beeing a little hard on those poor girls

bloons tower defense 5

Thu, 10/27/2011 - 06:54 | 1816421 Mongo
Mongo's picture

Because voluntary has been redefined as mandatory

Thu, 10/27/2011 - 06:57 | 1816432 HD
HD's picture

The difference between sex and rape...

Sat, 11/19/2011 - 14:35 | 1894309 haibop
haibop's picture

oooh right! walk in freezer

Thu, 10/27/2011 - 07:00 | 1816442 What does it al...
What does it all mean's picture

Is it truly "mandatory"?  I mean... If I am a bond holder and I don't tender, do I get my coupon and principal. 

A question of procedure.

Thu, 10/27/2011 - 08:01 | 1816568 Translational Lift
Translational Lift's picture

"I mean... If I am a bond holder and I don't tender, do I get my coupon and principal."

Ask Obummer and see what he says!

Thu, 10/27/2011 - 09:36 | 1816899 Iam_Silverman
Iam_Silverman's picture

"If I am a bond holder and I don't tender, do I get my coupon and principal. "?

That is a good question.  Consider though that the banks willingly taking a 50% haircut have now just set the new market value for the bonds you hold.  No problem if you are a bank - just mark to model (holding to maturity and being made whole).  Not so good if your portfolio has to mark-to-market.

Also, since the bank holders of the Greek bonds voluntarily took the haircut (so they can get cash infusions from the EFSF), the CDS covering those bonds have not been triggered.  Truly buggered, those who are holding Greek bonds and not a European banking institution!

Thu, 10/27/2011 - 06:55 | 1816422 Karl Tashjian
Karl Tashjian's picture

Pretty good joke.

Thu, 10/27/2011 - 08:23 | 1816617 Al Gorerhythm
Al Gorerhythm's picture

So you think it's funny, eh? Why you little............


Sat, 11/26/2011 - 11:39 | 1915082 haibop
haibop's picture


Sat, 03/10/2012 - 21:25 | 2244025 haibop
haibop's picture

smart... Inteligator

Thu, 10/27/2011 - 06:56 | 1816423 Fips_OnTheSpot
Fips_OnTheSpot's picture

Hilarious - so who buys EFSF-CDS in such environments then?

Thu, 10/27/2011 - 06:58 | 1816436 Ghordius
Ghordius's picture

nobody with two brain cells

BAN CDS (Again)

Thu, 10/27/2011 - 07:00 | 1816443 Fips_OnTheSpot
Fips_OnTheSpot's picture

Oh right.. CDS are evil and banned. Dummy I am.. thanks for pointing that out. Now pass it to Merkozy :)

Thu, 10/27/2011 - 07:17 | 1816457 Ghordius
Ghordius's picture

Oh, right, what a nonsense, MegaBanks work in your interest by improving on the economy with exciting financial innovations.

Your sarcasm is reaching for some target I simply don't see, explain, please...

meanwhile BAN CDS, not only naked CDS, just for starters...

Thu, 10/27/2011 - 07:40 | 1816520 magpie
magpie's picture


But who could survive the "true" rates of interest.

Thu, 10/27/2011 - 07:48 | 1816535 Harlequin001
Harlequin001's picture

you mean the ones where I get a reasonable rate for the risk of lending my money?

Thu, 10/27/2011 - 08:15 | 1816602 Calmyourself
Calmyourself's picture

I said it yesterday.  No law will be followed civil, contractual or criminal.  No national custom or sovreignity will be allowed to stand in the way of this ponzi the only trigger is hunger, trade and prepare accordingly. 

Thu, 10/27/2011 - 13:13 | 1817802 techperson
techperson's picture


Tue, 12/27/2011 - 14:38 | 2014187 haibop
haibop's picture

smart move. get your wife back

Tue, 02/21/2012 - 01:12 | 2180065 haibop
haibop's picture

exactly surveys4income

Tue, 05/01/2012 - 20:59 | 2389821 haibop
haibop's picture

exactly Inteligator

Thu, 10/27/2011 - 09:49 | 1816953 Fips_OnTheSpot
Fips_OnTheSpot's picture

Sorry.. well: They ban CDS (naked for now) - but "invent" EFSF-CDS at the same time. Wasnt clear or '</sarc>' clearly. *picking my nose*

Thu, 10/27/2011 - 06:56 | 1816424 agent default
agent default's picture

So... Buy  government debt and face a potential 50% capital loss WITHOUT the possibility of hedging against it.  Government bond sell off imminent.

Thu, 10/27/2011 - 07:22 | 1816486 MsCreant
MsCreant's picture

"Remember that insurance policy you bought? Well we are ruling that you are not allowed to collect on it. We pick the winners and losers any time we like because we are your government. Thanks for playing though. Tee hee."

Put these people in children's clothes and let them play board games with each other, they are a menace for the rest of us.

Thu, 10/27/2011 - 07:32 | 1816508 agent default
agent default's picture

These spoiled brats just make the situation for Italy and Spain much worse.  They are essentially legitimizing capital loss with no means of protection, and then they will turn around and whine when spreads begin to widen like crazy.  Government bonds were considered a safe haven in times of uncertainty.  This decision just makes them risk asset number one.  Lets face it, you have to be an extremely crappy stock/commodity picker to suffer a 50% loss with no possibility of recovery.  At this point bonds have almost the same risk as derivatives trading.

Thu, 10/27/2011 - 07:47 | 1816534 GeneMarchbanks
GeneMarchbanks's picture

'They are essentially legitimizing capital loss with no means of protection, and then they will turn around and whine when spreads begin to widen like crazy.'



Sat, 12/24/2011 - 03:22 | 2008933 haibop
Thu, 10/27/2011 - 07:00 | 1816425 HD
HD's picture

Of course it isn't a default. That would have been bad. Bad is not good. Only good can happen...and happen it has. Hopium is powerful stuff.

Thu, 10/27/2011 - 06:56 | 1816426 spz_trader
spz_trader's picture

I am surprised they wer able to levitate at these levels with the EFSF woefully inadequate. 

Thu, 10/27/2011 - 07:00 | 1816427 Cognitive Dissonance
Thu, 10/27/2011 - 07:03 | 1816450 GeneMarchbanks
GeneMarchbanks's picture

No refills.

Thu, 10/27/2011 - 07:15 | 1816473 Cognitive Dissonance
Cognitive Dissonance's picture

Abiogenic government debt. It naturally refills the coffers......which explains that constant sucking sound.


Thu, 10/27/2011 - 07:01 | 1816428 Ghordius
Ghordius's picture

"the EFSF is still too small to restore investor confidence"

the blasted EFSF is just there so that the EUR can continue to be the second ugliest currency in the contest

if the structure of the EFSF is of ugliness, it's mainly because it's modeled after the MegaBanks and holds them a mirror...


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