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As Greece Denies, Germany Begins Greek Default Preparations

Tyler Durden's picture


Literally seconds after the Greek finance ministry announce that any rumors of a Greek default over the weekend are absolute rubbish (we wonder who would admit such rumors?), we get the following from Bloomberg: "Chancellor Angela Merkel’s government is preparing plans to shore up German banks in the event that Greece fails to meet the terms of its aid package and defaults, three coalition officials said. The emergency plan involves measures to help banks and insurers that face a possible 50 percent loss on their Greek bonds if the next tranche of Greece’s bailout is withheld, said the people, who spoke on condition of anonymity because the deliberations are being held in private. The successor to the German government’s bank-rescue fund introduced in 2008 might be enrolled to help recapitalize the banks, one of the people said. The existence of a “Plan B” underscores German concerns that Greece’s failure to stick to budget-cutting targets threatens European efforts to tame the debt crisis rattling the euro. German lawmakers stepped up their criticism of Greece this week, threatening to withhold aid unless it meets the terms of its austerity package, after an international mission to Athens suspended its report on the country’s progress." Looks like at least one very "naive" government is not buying the latest batch of lies from Greece.


Greece is “on a knife’s edge,” German Finance Minister Wolfgang Schaeuble told lawmakers at a closed-door meeting in Berlin on Sept. 7, a report in parliament’s bulletin showed yesterday. If the government can’t meet the aid terms, “it’s up to Greece to figure out how to get financing without the euro zone’s help,” he later said in a speech to parliament."


The German government is awaiting the results of the Greek progress report and will decide what course of action then, a government spokesman said, speaking on customary condition of anonymity.


European bank credit risk surged to an all-time high today and stocks fell worldwide on concern that the debt crisis is escalating. German two-year yields declined to a record as investors sought a haven and Greek two-year note yields added as much as 86 basis points to 55.91 percent, a euro-era record.


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Fri, 09/09/2011 - 11:18 | 1650852 BaBaBouy
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Fri, 09/09/2011 - 11:21 | 1650864 Clorox Cowboy
Clorox Cowboy's picture

I can't argue with that.

Fri, 09/09/2011 - 11:28 | 1650881 BaBaBouy
BaBaBouy's picture

"E" For ENGAGE The Bailout Seats ...

Fri, 09/09/2011 - 11:30 | 1650917 Chaffinch
Chaffinch's picture

I can't help thinking they chose a bad day to mess with gold and silver prices - but it must be tough for them to pick a good day at the moment!

Fri, 09/09/2011 - 11:32 | 1650926 Thomas
Thomas's picture

The market could surprise on a default.

Fri, 09/09/2011 - 11:37 | 1650947 Chaffinch
Chaffinch's picture

I guess so - like that weird drop in gold price when the SNB said they would peg the CHF to the Euro - it made no sense - but I guess people often run the wrong way when they panic...

Fri, 09/09/2011 - 11:42 | 1650972 Smiddywesson
Smiddywesson's picture

Yes Thomas is right.  We know gold is manipulated.  We know they have margin hikes remaining.  Do you want to gamble they won't use them with equities failing, a crashing Swiss franc, the prospect of a Greek default over the weekend, and prices this close to $2k gold?  If not for this, for what are they keeping their powder dry? 

If I were them, I would hit gold with EVERYTHING I had, right here, right now (ala silver in May).  I covered.  If I miss the move above $2000, so be it. 

Times like these make me love my physical, so much less to worry about.

Fri, 09/09/2011 - 13:05 | 1651446 Chaffinch
Chaffinch's picture

"If not for this, for what are they keeping their powder dry?"

I agree that from their point of view they should be hitting it harder now, but there are future events for which they may wish to keep dry powder. After $2000 will come $2500, which I believe is the inflation-adjusted high from 30 years ago (not that the situation 30 years ago was anything as like as calamitous as now...) and they will really want to make it look like a bursting bubble when we get there.
Of course a Greek default is bad, and there may be a falling domino effect, but the Greek economy is tiny, and they will paper over the problem again.
It may be enough (from their point of view) that their manipulation is causing huge volatility, which will be observed (and spun for all it's worth) by the MSM, which will scare off all those would-be investors who are now becoming aware of gold and who may be going into it for the first time.

Fri, 09/09/2011 - 11:44 | 1650977 RichyRoo
RichyRoo's picture

maybe TBTF and PD's will double down on fiat by backstopping greek bonds despite failure to meet ECB terms?


The PD's have big deposits in the FED, they could deploy those to make the bid.

Fri, 09/09/2011 - 11:33 | 1650932 Zedge Hero
Zedge Hero's picture

Why doesn't Greece just say fuck off to the IMF and ECB, German banks, and the who ever else they are fucking ensalved to?  Here's a video about the whole European mess with a concentration on Italy's protest this week. Ithink it's starting to anger me. Sorry.

Fri, 09/09/2011 - 11:41 | 1650965 Chaffinch
Chaffinch's picture

No need to apologize for getting angry - the Greeks should be a lot more angry - and as for the Irish - it is really sad to see them put into such a mess...

Fri, 09/09/2011 - 14:28 | 1651844 MS7
MS7's picture

I agree that Greeks should be more angry. The truth is they are angry, and they detest their government. Their government does whatever they are told by the IMF and others. They do not reflect the people in any way, but it is true that the more people should have joined the protest sooner.

Fri, 09/09/2011 - 12:23 | 1651228 A.W.E.S.O.M.-O 4000
A.W.E.S.O.M.-O 4000's picture

Beacause I think if the Greeks tell the Germans to "fuck off" preparations will then include constructing a series of camps equiped with showers and ovens, all conveniently located near rail lines.

Fri, 09/09/2011 - 12:40 | 1651317 Capitalist10
Capitalist10's picture

Why doesn't Germany just say fuck off to lazy, lying, deadbeat tax cheats like the Greeks?

Oh wait, they are just about to...

Fri, 09/09/2011 - 14:31 | 1651862 MS7
MS7's picture

I agree. But I wonder if someone might know the answer to this-- What difference does it make if a country declares default or is declared by another to be in default? I'm asking because many people say it was in Greece's best interests to default. Now when Germany is going to do it for them, people seem to think Greece will be the loser in this. I don't understand.

Sat, 09/10/2011 - 15:00 | 1654832 e-recep
e-recep's picture

simply because greeks are not icelanders. different mentality.

Fri, 09/09/2011 - 11:36 | 1650933 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

What is with the Illuminatti symbolism around 9/11?  Joachim and Boaz?  Solomon's Temple?  And now we have a comet switching up our gravity, and most important, electro-magnetism.  A former NASA scientist, and friend of Carl Sagan, says it is a time capsole.  Whatever it is, it is ominous, and so are the actions of the pagan Illuminatti.

Order out of Chaos, this is their goal.  They know what fear does to the status quo; it makes people complacent and this allows the Dinosaur Kings of old to further implement their control system.  They use one side of the sword to destroy the system, and the other side offers the solutions.  Yet both sides have the same effect.  Bank failure?  Print more debt.  Terrorism?  Kill millions of more brown people.  Yup, that will do the trick.

So now Greece fails, and people rush from Greek bonds into Euros. EUR/USD goes to $2.00, as Bernanke and Obama throw $4.47 trillion into the fire (perfect cover for US fiscal and monetary policy).  And al around the Egyptian New Year!  These Dinosaur Kings, they are Egyptian by the way.  You can call them Jews, what have you, but they are Pagans.  Yes they invented the "One True God", yes Moses was likely to be Akhenaten, but they are just as much Catholic as Jewish.  They do not worship what the status quo worships:  the status quo worships the daily bread.  The Dinosaur Kings worship POWER and CONTROL, because they want their Kingdoms back.  They are sick of the middle class.

So now into the fire it goes, and the slow burn of the last century torches the tree of life.  Soon the monopoly game will be over, and all fiat will be worthless in nominal terms.  Reality is at the doorstep, and boy is she ready to rock and roll.

Fri, 09/09/2011 - 11:39 | 1650961 Clorox Cowboy
Clorox Cowboy's picture

Hendrix, if you ever get a movie deal for this "Dinosaur Kings torching the tree of life" idea, count me in for one ticket.  With Michael Bay as director of course...

Fri, 09/09/2011 - 11:54 | 1651054 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I'll see you at the premier then!

Fri, 09/09/2011 - 11:45 | 1650995 Smiddywesson
Smiddywesson's picture

Hendrix, you lost me in the second sentence.  Just tell me, is this good for gold or bad for gold?


Fri, 09/09/2011 - 12:15 | 1651171 Mr Lennon Hendrix
Mr Lennon Hendrix's picture


Fri, 09/09/2011 - 11:49 | 1651001 RichyRoo
RichyRoo's picture

im not scared, i have... umm gold umm God umm guns? Umm faith in my fellow man ... oh fuck i better fall in line!


Which is to say that nobody ever profited by falling in line, and i doubt there are jewish dinosaur kings.

Fri, 09/09/2011 - 12:19 | 1651194 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Henry "Party Boy" Kissenger is the only Jew allowed at the Grove.  I think that says a lot about Jews running the world. 

David Rockefeller has a great quote from the 70's, "It does not matter which God people worship, as long as they worship one." 

I think that sums up the religous control system pretty well.

Fri, 09/09/2011 - 12:26 | 1651251 A.W.E.S.O.M.-O 4000
A.W.E.S.O.M.-O 4000's picture

Dude, first you tell me my paper money is worthless and now you tell me there is no God?


What a piece of shit Friday this is turning out to be.

Fri, 09/09/2011 - 12:30 | 1651268 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Haha!  Thanks for the laugh. 

Fri, 09/09/2011 - 12:24 | 1651239 ww2vet
ww2vet's picture

fuck you-ready to die??

Fri, 09/09/2011 - 12:07 | 1651132 Rasna
Rasna's picture


This is a serious blog, right?

This is ZH, WTF??!!

Fri, 09/09/2011 - 12:13 | 1651155 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Which part isn't serious?  The Illuminatti is real, they are pagans, their roots can be traced back to Egypt and the tribe of Aten, they were pissed that they were expelled from Egypt, they were pissed that they have not taken control of the entire world, there is a comet heading right at us from another solar system, it is affecting our earth's magnetic pulses, and Europe is about to implode on the same day this comet is passing us by, which is the same time of the Egyptian New Year.  So which comment do you think is not serious?

Fri, 09/09/2011 - 14:32 | 1651864 peekcrackers
peekcrackers's picture

But one thing is there where 2 types of Jews that inter-mingled with the Egytians. Ashkenazi Jews where the ones that took control with inter-mingling sex.. Henss Zion

Fri, 09/09/2011 - 14:51 | 1651956 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

There was a priest class that took over Egypt and they begot the One God religion; they were exhiled.

Fri, 09/09/2011 - 14:59 | 1651995 tj3
tj3's picture

The euro going to two dollars...ummm and perhaps the boring, repetitive doom and gloom sign-off. It's almost like being inflicted with 24/7 OCD. zzzzzzzzzzzz

Is it always necessary to put style over substance in blog comments.

Fri, 09/09/2011 - 20:25 | 1653011 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Substance?  I think I have enough of that to keep some style.

'Buy All the Euro You Can' If Greece Defaults: Jim Rogers:

Fri, 09/09/2011 - 12:16 | 1651176 ElvisDog
ElvisDog's picture

I don't know why, but your psychodelic post about Dinosaur Kings made me think of that 1960's movie Barbarella. Jane Fonda was totally groovy in that flick.

Fri, 09/09/2011 - 12:28 | 1651261 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

That is awesome

Fri, 09/09/2011 - 14:08 | 1651732 blueRidgeBoy
blueRidgeBoy's picture

nice rack, too.  Jane, not Hendrix

Fri, 09/09/2011 - 11:19 | 1650855 Irish66
Irish66's picture


Fri, 09/09/2011 - 11:23 | 1650878 Ethics Gradient
Ethics Gradient's picture

Possibly not. Even Germany is prepared to print to cover this one.

The interesting thing will be what happens in the longer term. Greece will show the other PIIS what happens when you have a floating exchange rate.

Fri, 09/09/2011 - 11:26 | 1650898 Irish66
Irish66's picture

rescue fund..not enough

Fri, 09/09/2011 - 11:43 | 1650985 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Memories of Weimar might do the trick.  I doubt Germany wants to repeat history.

Fri, 09/09/2011 - 11:50 | 1651025 RichyRoo
RichyRoo's picture

pfft according to modern theory the Weimar Germans mistake is that they didnt print enuff

Fri, 09/09/2011 - 12:04 | 1651113 Irish66
Irish66's picture

debt holders not responding...running

Fri, 09/09/2011 - 14:52 | 1651962 zenbones
zenbones's picture

Krugman, Is that you?

Fri, 09/09/2011 - 11:24 | 1650880 Michael Victory
Michael Victory's picture

Gloom then Boom then Doom..

Faber on CNBS Today

Fri, 09/09/2011 - 11:32 | 1650927 oogs66
oogs66's picture

but wien said all is good and zandi is ecstatic

Fri, 09/09/2011 - 11:20 | 1650857 papaswamp
papaswamp's picture

Popcorn bitchez!!!!


Wait shhhh the HFTs haven't noticed yet...

Fri, 09/09/2011 - 11:22 | 1650875 LawsofPhysics
LawsofPhysics's picture

Sorry, the corn and energy required to make the popcorn is too expensive, you'll have to eat this paper instead.  yuck, yuck, yuck.

Fri, 09/09/2011 - 11:37 | 1650948 papaswamp
papaswamp's picture

Damn it!!!!

Fri, 09/09/2011 - 14:03 | 1651712 Bring the Gold
Bring the Gold's picture

Wait you can't eat fiat?


Next you will tell me some CRAZZZZYYY story that some farmers will actually accept precious metals in exchange for tangible food stuffs. 



Fri, 09/09/2011 - 11:21 | 1650861 unky
unky's picture

quick pick up some cash for the weekend :- ) just in case

Fri, 09/09/2011 - 11:22 | 1650873 CrankItTo11
CrankItTo11's picture

Get your nets ready, the helicopter's coming!

Fri, 09/09/2011 - 11:21 | 1650865 buzzsaw99
buzzsaw99's picture

damn it must be nice to be a big bank or insurance company.

Fri, 09/09/2011 - 11:21 | 1650867 Loonie
Loonie's picture


Fri, 09/09/2011 - 11:22 | 1650869 Volaille de Bresse
Volaille de Bresse's picture

"a possible 50 percent loss on their Greek bonds if the next tranche of Greece’s bailout is withheld"


Holy sh!t! Now I understand why Socgen has lost 8% since this morning... 

Fri, 09/09/2011 - 11:34 | 1650934 Chaffinch
Chaffinch's picture

If you are going to default by as much as 50% then why pay anything at all - all the banks are gonna mad at them for defaulting anyhow - maybe that 50% figure will get revised upwards...?

Fri, 09/09/2011 - 11:22 | 1650874 sushi
sushi's picture

Flaherty raises spectre of Greece leaving euro zone

Canadian Finance Minister says the debt-laden country must push forward with its severe austerity program
10:13 AM

Fri, 09/09/2011 - 11:24 | 1650882 LawsofPhysics
LawsofPhysics's picture

Of course.  If the Greeks would just be willing to starve while growing their GDP and paying the usury to their masters, everything would be fine.  Good luck with that.

Fri, 09/09/2011 - 12:31 | 1651276 ElvisDog
ElvisDog's picture

Exactly, austerity just means transfer more and more of your wealth to us (French/German/Swiss banks) without ever repaying your loans. I think under any realistic appraisal of the Greek situation you would find that their debt load would continue to increase even as they implement the austerity programs. So after all that pain, suffering, and austerity the Greeks will find themselves owing more money than wihen the whole mess began.

Fri, 09/09/2011 - 11:23 | 1650877 Boston
Boston's picture


Fri, 09/09/2011 - 11:23 | 1650879 monopoly
monopoly's picture

And this is all a surprise to us here at Zero Hedge. I don't think so. Obama to speak soon, market tanks.

Fri, 09/09/2011 - 12:34 | 1651286 ElvisDog
ElvisDog's picture

You're kidding me, right? Does Obama have to get in front of us blabbing about something every single fricking day?

Fri, 09/09/2011 - 11:25 | 1650885 Comay Mierda
Comay Mierda's picture

cue greece bank run in 3.... 2.... 1....

Fri, 09/09/2011 - 11:39 | 1650958 youngman
youngman's picture

If  I had any money in any EU bank right now I would be scared to death.....there has to be banks runs..we just are not hearing about it...

Fri, 09/09/2011 - 11:25 | 1650887 Segestan
Segestan's picture

But I heard ..that Greece, poor , poor Greeks... would become ---slaves--- of the Fourth Reich?  WTF!!

Fri, 09/09/2011 - 11:26 | 1650888 EscapeKey
EscapeKey's picture

Greek 5-yr CDS up 440, not that it matters much


Fri, 09/09/2011 - 11:26 | 1650892 monopoly
monopoly's picture

Why does Obama even bother. Now look at this market. Day lows. 0 stocks outside of miners, as usual. And a little confetti.

Fri, 09/09/2011 - 11:26 | 1650895 caerus
caerus's picture

my big fat greek default

Fri, 09/09/2011 - 11:27 | 1650900 thewhigs
thewhigs's picture

Is there any particular reason why these banks are holding Greek Debt in the first place?

Fri, 09/09/2011 - 11:33 | 1650931 unky
unky's picture

if everything okay, higher yields then german bonds.

if greek bonds fail, they will be bailed out anyway.

thats why.

Fri, 09/09/2011 - 13:19 | 1651503 thewhigs
thewhigs's picture

Still too risky and any two-year old knew that Greece is on a downward spiral.

Fri, 09/09/2011 - 13:19 | 1651504 thewhigs
thewhigs's picture

Still too risky and any two-year old knew that Greece is on a downward spiral.

Fri, 09/09/2011 - 14:58 | 1651985 fiddy pence haf...
fiddy pence haff pound's picture

yup. I know why French banks are in trouble. Because German and French companies pushed the Gr gov to take on

massive public works and purchases of armaments, so that those two could keep their

economies going.

The enticement was offshore kickbacks to politicians that those two just added to

the final bill that the Greek public has to pay.

In order to finance the whole thing, French and German banks bought Greek gov bonds as

collateral for the loans given to Greece. In the short term, everybody wins, but in the LT....

So, the public in Greece knows this is going on and can do nothing but wait for the implosion.

Fri, 09/09/2011 - 11:27 | 1650903 Corn1945
Corn1945's picture

Greece (and the other PIIGS) have no incentive to clean up their act. If Merkel will enslave her people to pay for them, then why should they stop?

Bailing out Greece is a incredibly stupid idea because the rest of the PIIGS will see that and continue to fuck around. Then when a big boy goes down (Spain or Italy) they will have to print up trillions to save them.

Fri, 09/09/2011 - 15:05 | 1652004 fiddy pence haf...
fiddy pence haff pound's picture

see my point above. This is firstly a marketing job by northern Europeans to aid

employment at home, adding on bribes to seal the deal, and then their bankers

have inflated the debt and then gambled on it (CDOs, derivatives) and they're over-leveraged.

If it wasn't for lax banking rules, we wouldn't be talking, here.


Although all politicians are thieving bastards, Greece's politicians are not

able to stand up to pressure from the US, German, UK and French politicians to buy their shit.

They can be bastards.Try living in a small country, and you'll see.

So, those 'advanced' 'hard-working' countries are run by corrupt politicians as well.

You just can't see it because you're looking at the wrong numbers.

Fri, 09/09/2011 - 11:28 | 1650906 LRC Fan
LRC Fan's picture

Just picked up some weekly BAC $7 puts for 2 cents.  Lets roll bitches!!!!!!!

Fri, 09/09/2011 - 11:29 | 1650907 milanitaly
milanitaly's picture

Germany wants to take place of Greece and become the new G of PIIGS

Fri, 09/09/2011 - 11:28 | 1650909 wombats
wombats's picture

Why does anyone keep buying Greek bonds in the first place.  The buyers of their bonds are just bringing this trouble upon their own heads.

Fri, 09/09/2011 - 11:34 | 1650936 Clorox Cowboy
Clorox Cowboy's picture mean 100% yield is a BAD sign?!?!  I had it backwards.  Oh crap...

Fri, 09/09/2011 - 11:29 | 1650910 nwskii
nwskii's picture

Dont worry Obama is monitoring the situation

Fri, 09/09/2011 - 11:29 | 1650913 youngandhealthy
youngandhealthy's picture




ATHENS (Dow Jones)--Greece's government Friday denied that it had any plans to default at the weekend, dismissing market talk of such plans as "rubbish."

"These reports are rubbish," a Greek finance ministry official said.

Earlier Friday, financial blog Zero Hedge reported that there was talk in the market that Greece was planning to default over the next two days.

-By Alkman Granitsas, Dow Jones Newswires; +30 210 331 2881;


Lock the door and reach for the security guards....Zarko, and Merkel might want to talk to you

Fri, 09/09/2011 - 11:39 | 1650957 sushi
sushi's picture

If they deny it then it must be true.

When has ZH ever been wrong?

Fri, 09/09/2011 - 11:51 | 1651028 Smiddywesson
Smiddywesson's picture

Yes Sushi, denial by these types always signals that the rumor is true, otherwise they would just ignore the rumor.

Fri, 09/09/2011 - 11:45 | 1650999 Stax Edwards
Stax Edwards's picture

Even more impressive that ZH posting a rumor (Chatter) now elicits a response from the Greek Government.

Fri, 09/09/2011 - 11:56 | 1651063 Smiddywesson
Smiddywesson's picture

The growing popularity of ZH concerns me.  How do we know that the Tyler's are not being silently eliminated and replaced with government agents?

The mysterious disappearance of Meth Man probably means he figured out the plot and was sanctioned, with extreme prejudice.

Is that you Tyler?  If so, say something too smart to come from a government employee. 

Fri, 09/09/2011 - 12:02 | 1651099 Stax Edwards
Stax Edwards's picture

Nahhh, it is just a kick ass site.  Besides, we are all Tyler Durden, right?

Fri, 09/09/2011 - 11:47 | 1651006 gwar5
gwar5's picture

The Greek denials are too funny. That clinches it. That's what every government says just before they go tits up.

Greece is the one with credibility problem and it's up to them to prove they're not about to default. ZH with it's brilliant analytics and info is proving to be the global truth machine. Rock on Tyler.


Fri, 09/09/2011 - 11:30 | 1650914 vincent
vincent's picture

While we wait for silver to be the stake through the heart...

Now back to our regularly scheduled program.


Fri, 09/09/2011 - 11:30 | 1650916 americanspirit
americanspirit's picture

Beware of Greeks bearing denials

Fri, 09/09/2011 - 11:31 | 1650925 Bam_Man
Bam_Man's picture

If Trichet were half as good as Bernanke, he could fix this in 30 minutes.

Fri, 09/09/2011 - 11:32 | 1650928 Belarus
Belarus's picture

You have to give credit where credit is due: so far, check one for Dylan Grice in his lastest piece on how it unravels. Of course, check twenty for ZH.  

Fri, 09/09/2011 - 11:32 | 1650929 johnnymustardseed
johnnymustardseed's picture

Ironically the Greeks have the perfect word for this.... PATHOS...... Suffer!!

Fri, 09/09/2011 - 11:39 | 1650955 jdelano
jdelano's picture

more like bathos.  blood bathos

Fri, 09/09/2011 - 14:10 | 1651741 blueRidgeBoy
blueRidgeBoy's picture

a Greek pun - I get it

Fri, 09/09/2011 - 11:32 | 1650930 topcallingtroll
topcallingtroll's picture

They better prepare for a hundred percent loss. No exaggeration.

If the germans believe the greeks will make any payments at all without fresh new loans the germans are delusional.

If the greeks believe they can default and the german people will still send money to them, then the greeks are delusional.

Fri, 09/09/2011 - 11:38 | 1650949 Version 7
Version 7's picture

They go back to their currency and print until it burns out.

Fri, 09/09/2011 - 12:03 | 1651097 Smiddywesson
Smiddywesson's picture

Probably true Tctroll, but I have to disagree with your faultless logic based on observation. 

The pattern so far is no fiat tab is too big to pick up as long as the can gets kicked.  Absolutely incredible sums have been thrown around to kick the can (and buy gold).  That is highly unlikely to end this weekend.

Your prediction is logical, but the actions taken so far are not.  Case in point, destroying the Swiss franc.

None of this makes any sense unless you ascribe to the idea that the can is being kicked to acquire gold.

Fri, 09/09/2011 - 11:35 | 1650937 alien-IQ
alien-IQ's picture

A rumor is not a fact...until it is officially denied.

Sounds like we just got confirmation.

Fri, 09/09/2011 - 11:36 | 1650940 DollarDive
DollarDive's picture

Is it possible that the selloff in gold this morning was related to the greek default ; Perhaps there was some selling - as profits are usually taken from the best performing assets to cover losses, margin calls etc. ??... thoughts ? 

Fri, 09/09/2011 - 12:06 | 1651124 Smiddywesson
Smiddywesson's picture

My guess is it was a preemptive strike, the beginnings of an effort to keep gold from ramping over the weekend.  I see margin hikes coming, and lots of lovely physical going into Smiddy's victory garden.

Fri, 09/09/2011 - 11:36 | 1650943 JR
JR's picture

The reason the central bankers are taking the money from the people and the taxpayers and giving it to the investment bankers is because the people have no representation in the Congress or in their governments. Karl Denninger on Market Ticker today unravels the "sound money" scam in today’s commentary, Obama And Republicans Blow Bankers, America, with this response from If :


Wouldn't this be considered financial terrroism? Aren't the banks basically saying you better let us do our business as usual or we will bring your country to financial doom?

" In a recent flurry of letters to the Basel Committee on Banking Supervision, which is in the process of setting new rules for the largest global institutions, various banking groups warn that higher capital requirements -- tantamount to putting limits on leverage -- will reduce credit availability and stunt the economy’s growth."


"We're on the way to a worldwide financial dictatorship governed by bankers," said Peter Gauweiler, German Bundestags Representative (CSU), in an interview published Monday in the Welt Online. "We don't support Greece," he said. "We support 25 or 30 worldwide investment banks and their insane activities."

Fri, 09/09/2011 - 12:08 | 1651134 Smiddywesson
Smiddywesson's picture

"We're on the way to a worldwide financial dictatorship governed by bankers," said Peter Gauweiler, German Bundestags Representative (CSU)

On our way?  LOL, where has this guy been, living in a cave?

Fri, 09/09/2011 - 11:38 | 1650950 Madcow
Madcow's picture

i'm starting to relize that there will be no 'big bang' resolution to this - but rather 40 years of foreclosures, bankruptcies, bailouts, lawsuits, 'austerity', liquidations,  etc. etc. etc.  Really, the pefect environment for traders - especially those with inside connections.


this is the way the world ends

this is the way the world ends

this is the way the world ends

not with a bang, but a wimper

Fri, 09/09/2011 - 11:41 | 1650967 JR
JR's picture

I agree, but I’d reduce your time frame to two or three months.

Fri, 09/09/2011 - 11:39 | 1650959 Subprime JD
Subprime JD's picture

I feel bad for the hard working Greeks that will suffer from this mess

Fri, 09/09/2011 - 11:40 | 1650964 tim73
tim73's picture

You actually found one?! WOW!

Fri, 09/09/2011 - 12:12 | 1651145 JR
JR's picture

The Greek middle class is no more responsible for George Papandreou’s socialism than America’s middle class is responsible for Barack Obama’s socialism.  Socialism thrives on manipulated mob rule, on “democracy,” on the non-producers who can vote themselves the treasury.

Greece is suffering from Keynesian socialism, designed and executed by the bankers, the same as America. It thrives on mob ignorance and greed.

Papandreou is an international socialist and scion of a Socialist dynasty whose father helped erect the sprawling Greek welfare state when he was prime minister in the 1980s. He now presides over the culmination of his father’s policies - "a sinking ship.'' Today he’s delivering up his country’s infrastructure to the bankers, as are Barack Obama and Ben Bernanke.

Not only is Papandreou prime minister of Greece and leader of the Panhellenic Socialist Movement (PASOK) party, he is president of The Socialist International (SI). Papandreou stressed at the UN summit in Copenhagen on December 18, 2009:  "At this time, we are observing the birth of global governance. We must, however, agree to an obligation and be committed to carrying this out.”

It is an error to blame this on the Greek people. People everywhere respond to the opportunities and the choices they are given; the bankers in Greece as in America keep the choices limited to bankers win versus bankers win.

Fri, 09/09/2011 - 14:13 | 1651759 blueRidgeBoy
blueRidgeBoy's picture

you're too quick to forgive.  The Greek people of all classes got exactly what they wanted and voted for, just like Americans.  Now it's time to pay the piper (or the German or Chinese, as the case may be).

Fri, 09/09/2011 - 14:39 | 1651902 MS7
MS7's picture

Huh? You think Greece is going to pay debt that it cannot pay and whose legitimacy was never questioned. When a proper and patriotic Greek government takes over, they will not starve their people to pay the bankers. The bailout has been for the sake of the banks.

Fri, 09/09/2011 - 14:46 | 1651931 MS7
MS7's picture

Obama is not a socialist! Even Papandreou who calls himself one is not. Papandreou has imposed the harshest austerity measures ever imposed on an industrialized nation. Socialists do not deprive their people of basic needs to pay the bankers. The theory behind austerity, apparently, is that if you take away from the working class and increase unemployment, eventually they'll be happy to work for peanuts. That is an ideal workforce for the big corporations, not socialists. G-Pap's party gave benefits to people in the past, not because of their "socialist" ideology, but to obtain votes. They are a party of corruption, as is likely the other party that has been in control in Greece. As for global governance, yes, he seems into that and it is freaky. 

Having said all that, I agree with your main point-- that the Greek people were not given much of a choice.

Fri, 09/09/2011 - 19:58 | 1652963 JR
JR's picture

Thanks! for the excellent comment.  Tyrannical power, unfortunately, can be practiced by socialists as well as monarchs and crony capitalists; it often puts on any hat that’s necessary to stay in power. Hence, Papandreou can be anything necessary to work with the bankers in Greece, while Merkel in Germany, who is not a socialist, is yet the bankers’ pal, a banker puppet for the socialist Keynesians.

V. I. Lenin, however, was not your average turncoat.  His philosophy was direct: Shoot the Kulaks and the industrialists to grab state control of the means of production.

Lenin addressed the Congress of the Soviets, November 8, 1917, with these words: “We shall now proceed to construct the Socialist order.” And "construct" it he did.

During Lenin’s and Stalin’s oppressive reigns, upwards of 60 million innocent people – men, women and little children -  died.

Wrote Lenin in The Imperialist War: “We understand the impossibility of eliminating wars without eliminating classes and creating Socialism, and in that we fully recognize the justice, the progressivism and the necessity of civil wars, ie., wars of an oppressed class against the oppressor, of slaves against the slaveholders, of serfs against the landowners, of wage-workers against the bourgeoisie.

Wrote Stalin in the New Soviet Constitution, p. 11: "Our Soviet society has succeeded in achieving socialism, in the main, and has created a socialist order, i.e., has achieved what is otherwise called among Marxists as the first or lower phase of Communism..."

Fri, 09/09/2011 - 11:52 | 1651041 JR
JR's picture

Yes, and the same can be said for the hard working Germans and Americans, et al.  It's a worldwide rape of the world's middle men, of the producers that raised the world's standard of living, of the environment that allowed private market economies based on free enterprise supply and demand that produced the American Dream...  I believe free - and oppressed -  men soon will rise en masse to prevent that dream from being stolen.

Fri, 09/09/2011 - 12:32 | 1651278 Poetic injustice
Poetic injustice's picture

Now this is joke of the week.
Average Greek schedule:

Monday: Gathering bonus for being on time and washing hands. Sleeping before and after lunch.

Tuesday: After notice from boss about not working hard enough, go to strike for reminder of day.

Wednesday: Go and file papers showing that for last year he earned 3 euros and 7 cents. Pay his taxes with 24 eurocents and empty wine bottle.

Thursday: Stop strike and spend whole day with their union boss, explaining how awful when your direct boss does not appreciate your hard work.

Friday: Join riots when asked by friend, leaving note at work desk.

Saturday: Drink well deserved wine and eat cheese. Wake up with goat in the bed and kick it out.

Sunday: Order granite tops for villa online to avoid paying mroe taxes.

Fri, 09/09/2011 - 14:52 | 1651958 MS7
MS7's picture

Why don't you go to a union protest in Greece and say that? I bet the cat will get your tongue.

Fri, 09/09/2011 - 11:41 | 1650969 Monedas
Monedas's picture

Mayhem and chaos and Monedas got a front row seat at the Coloseum ! See ya there ! I'm to the right of the Emperor's box ! I'll be wearing my "FRN" green toga sans underwear....thanks for asking ! Monedas 2011 Feed the Fiaters to the Kitties !

Fri, 09/09/2011 - 11:43 | 1650973 vast-dom
vast-dom's picture

Greece has long ago slipped on that razor and is spliced and diced. The Germans et. al have merely extended the Inquisition-style torture.


Hey at least the Greeks ran game on the EU for this long! That alone ain't no small leveraging feat!


Emotional terrorism blackmail and inverted Stockholm syndrome -- the best of the best!




Fri, 09/09/2011 - 11:42 | 1650975 monopoly
monopoly's picture

Many, many citizens of this  planet will suffer. It is very sad.

Tough to short this market, all Bernank has to do is to start chanting and roll his beads, and the market jumps 250 pts.

Fri, 09/09/2011 - 11:54 | 1651055 Monedas
Monedas's picture

You mean the Socialist cake walk is over ? Monedas 2011 It's worse than I hoped for !

Fri, 09/09/2011 - 12:16 | 1651181 Smiddywesson
Smiddywesson's picture

On a serious note, anyone feeling blue about the future should consider the following:

It is our nature.  Do the lemmings grieve when their population peaks and then crashes?  Lemmings can't hold a candle to humans.  Everything we do peaks and crashes, music, literature, culture, fads, economies, populations, and civilizations.  This is the lesson of thousands of years of human history, but everybody thought, this time is different.  It can't ever be different, because the phenomenon is built into our DNA. 

It's been a hell of a run, but it had to end sometime.  Holding it off until we have 14 billion mouths to feed would just make it worse.

Fri, 09/09/2011 - 11:43 | 1650980 Jim in MN
Jim in MN's picture

Ein Haarschnitt war überfällig.

A haircut was overdue.

Fuck compensating the banks!  For Christ's sake stop this madness.  A bad investment was lost.  Boo Hoo Hoo. 

Corruption and moral hazard are literally destroying the system.  DISCIPLINE is what is needed, starting with the discipline to tell investors to fuck off and book the losses.

Fri, 09/09/2011 - 12:35 | 1651292 Ahwooga
Ahwooga's picture

"starting with the discipline to tell investors to fuck off and book the losses."


Amen brother, for fucks sake why dont bondholders have to take a haircut like the rest of us mere mortals?

Fri, 09/09/2011 - 11:44 | 1650987 Yperkeimenos
Yperkeimenos's picture

In a truly free market  no one bails out an insolvent bank,business or country.But hey this is a Fiat world ruled by the monopolies that control the goverment.Let the chips fall where they may.

Fri, 09/09/2011 - 11:44 | 1650988 mikmid
mikmid's picture

They go WHEEEE, WhEEEE, WHEEEE all the way home. And here's Johnny, Carnak says euro goes boom, gold goes zoom, banks are doomed and the Bernak get's a pink slip.

Fri, 09/09/2011 - 11:48 | 1650998 milanitaly
milanitaly's picture

I knew that we were going to pay more taxes for nothing.


Fri, 09/09/2011 - 11:46 | 1651002 kaiten
kaiten's picture

Good news, finally.

Fri, 09/09/2011 - 11:46 | 1651004 Atomizer
Atomizer's picture

Operation Anal Torque shall commence

Fri, 09/09/2011 - 11:47 | 1651007 americanspirit
americanspirit's picture

Just because Bernanke has been successful at levitating the market with his breath farts up to now doesn't mean he can continue to do so. We are all so trained to say "Oh well, events don't matter because Bernanke can make anything he wants happen" that when the day comes that he can't make things happen - and that day is coming soon - a lot of people are going to be caught with their pants down.

Ask yourself - does this asshole really look like Superman? I think we're all a little bit too much in awe of his super powers.

Fri, 09/09/2011 - 11:48 | 1651013 lieutenantjohnchard
lieutenantjohnchard's picture

hat tip to all paper shufflers who plan on going home long paper this weekend.

Fri, 09/09/2011 - 12:22 | 1651216 Smiddywesson
Smiddywesson's picture

Indeed.  Long holders of stock are probably going to get creamed.  The real question is gold.  Either they let it explode upward or they sit on it and crash prices $200 or so.  I think the later because I know what I'd do if I were them, but will take my lumps if I'm wrong. 

Fri, 09/09/2011 - 11:48 | 1651014 Joebloinvestor
Joebloinvestor's picture

I think any default will be 100%.

Why not?

If they are gonna hate you, it doesn't make any difference, although I guess the Greeks could say it is only a 30% haircut and then in reality make it 100%.


Fri, 09/09/2011 - 11:49 | 1651021 Charlie Bravo
Charlie Bravo's picture

It wasn't too long ago when Bank of America was asked to come up with a contingency plan.

Maybe there's a connection here?

Charlie Bravo

Fri, 09/09/2011 - 11:58 | 1651075 Temporalist
Temporalist's picture

They got their failed contingency plan...his name is Warren.

Fri, 09/09/2011 - 11:59 | 1651084 Jim in MN
Jim in MN's picture

My understanding is that Citigroup and JPM are in far worse shape exposure-wise.  As in trillion+ exposure.

It is in the hand you're not watching that the trick resides...

Also recall the huge payoffs to the European banks from the U$$AA+ bailouts of recent years.  So it's a TransAtlanticClusterfuck of epic proportions.

Fri, 09/09/2011 - 12:24 | 1651232 Smiddywesson
Smiddywesson's picture

Yes, and they will shore it up with funny money and spin it so they can continue to kick the can.

Citi and JPM are not going anywhere just yet.  This conspiracy is nowhere near done.

Fri, 09/09/2011 - 11:53 | 1651047 youngman
youngman's picture

Still its very quiet on the market side....only a 295 point drop.....I bet the Goldman Sachs folks are calling Bernanke to make sure they get thier CDS payoffs in full.....

Fri, 09/09/2011 - 11:58 | 1651077 Oh regional Indian
Oh regional Indian's picture

I suppose with Greece giving the Germans the Greek treatment, at least Olive Oil make the coming and going easier.

But cry no rivers for the Germans. It's all part of the plan. Reich number 4 is well under way.


yuck! Only in America?

Fri, 09/09/2011 - 12:50 | 1651370 JR
JR's picture

The period between the two world wars saw banking processes in Germany that developed fundamentals that appear to be eventually used for the establishment of fiat banking in the United States. Fiat banking makes world government possible; fiat banking allows the central bankers to finance war, be they German wars or American wars.

The first quote below regards the present; the second quote, the past.  I ask, has anything changed?

I quote from Jerome E. Roos:

 “Meet Jean-Claude Trichet and Josef Ackermann. The former is the departing head of the European Central Bank and recently was ranked one of the five most powerful people in the world by Newsweek.  The latter is the head of the largest private bank in the eurozone, Deutsche Bank, and was just named the “most powerful banker in Europe” by the New York Times.  Neither was elected to run the economy.  Yet, together, they do.

“In fact, both men have been instrumental in shaping the EU policy response to the crippling debt crisis that continues to haunt the eurozone.  As the Times reported in a powerful feature today (June 15), Mr. Ackermann ‘is at the center of more concentric circles of power than any other banker on the continent.’”

Ackermann is Chairman of the Management Board and Group Executive Committee of Deutsche Bank AG and is a Steering Committee member of The Bilderberg Group, and like Trichet is Jewish. The goal of this globalist elite group is to bring about a one-world government and global financial system with a one-world currency…

More and more the threat is rising in this modern world: Either self-government is to be salvaged or what remains is slavery.

Now, here is an excerpt from The Warburgs:

“While Paul Warburg was making America safer for financiers (the Federal Reserve System),” writes John Weir in a review of Ron Chernow’s 820-page, The Warburgs: The Twentieth-Century Odyssey of a Remarkable Jewish Family, “his older brother, Max, was busy in Hamburg helping finance construction of Germany's new merchant fleet through the HAPAG company. Because the Warburg family fortune was built on financing international trade, Max Warburg naturally sought to encourage the growth of such trade. For the same reasons, international bankers encouraged the removal of tariffs and other trade barriers…”

Max Warburg, head of the German Secret Service in WWI, headquartered the family banking house in Hamburg.

Writes Weir: “When Hitler came to power in January 1933, Max Warburg was Germany's most prominent Jewish banker (who had represented Germany at the Paris Peace Conference that negotiated the Treaty of Versailles signed in 1919). He headed Germany’s most important private banking firm, and was a member of the ‘general council’ of the nation's central bank. In March 1933 he approved Hitler's decision to name Dr. Hjalmar Schacht as president of the Reichsbank. The document naming Schacht to this post is signed by Chancellor Hitler and President von Hindenburg as well as the eight members of the Reichsbank ‘general council,’ including  Mendelssohn, Wassermann and Warburg…

In 1936… (three years after Hitler took power), the M. M. Warburg bank in Hamburg was still profitable. Among other lucrative connections, it was still disbursing interest payments to bondholders for the giant Friedrich Krupp company of Essen. As Siegmund Warburg wrote in July 1936: "M. M. W. and Co. are still remarkably untouched by the Nazi situation and the business is doing well." Even in 1938, notes Chernow, the Warburg bank was turning a profit.

In 1938, Hitler occupied Austria; in 1939, Max Warburg was allowed to sail to New York, funds intact.

Fri, 09/09/2011 - 12:01 | 1651096 fred81
fred81's picture

also: "Crude reserves in Norway are exhausted, people who had once seen a barrel of brent and who spoke on condition of anonymity reported."

Fri, 09/09/2011 - 12:03 | 1651114 Piranha
Piranha's picture

Finally Europe is on the right track!

Fri, 09/09/2011 - 12:07 | 1651131 ShankyS
ShankyS's picture

Liquidity and other issues in EU, surprise debt ceiling vote last night and 9/11 - something may be going down this weekend - 

Fri, 09/09/2011 - 12:19 | 1651205 Zymurguy
Zymurguy's picture

Amazing they would make an official comment that they are not defaulting.

The "chatter" knows.

Fri, 09/09/2011 - 12:20 | 1651206 tim73
tim73's picture

American pussies just continue their QE programs because challenging the banks might actually require lifting a finger. Germans got more balls now.

Fri, 09/09/2011 - 12:29 | 1651265 RealFinney
RealFinney's picture

"Never believe anything until it has been officially denied."

-Sir Humphrey Appleby

Fri, 09/09/2011 - 12:43 | 1651334 Foul Ole Ron
Foul Ole Ron's picture

So Germany is planning for a Greek default? As opposed to what? Sitting around saying it'll never happen and have no plan for it? All of the large EU nations will have run this plan multiple times over the past year. They'll keep throwing money at the problem until they wager that Greece going tits up won't cause a tsunami. Which is why Greece most likely won't default. Greece'll get plenty of harsh words thrown at them but in the end the EU/IMF/US will cough up the cash as there's no other choice for them.

Fri, 09/09/2011 - 12:50 | 1651357 joshua10
joshua10's picture

Greek 1 year bond yield is trading at 97.96% as of 11:59am eastern up 3+% from yesterdays' market close. If the ECB even attempts to buy those bonds Europeans should roll out the guillotine for the ECB banksters.

Fri, 09/09/2011 - 12:51 | 1651374 masterinchancery
masterinchancery's picture

Look out below!

Fri, 09/09/2011 - 14:05 | 1651722 Temporalist
Temporalist's picture

Bloomberg just mentioned ZH re Der Spiegel.  Matt Miller.

Fri, 09/09/2011 - 14:07 | 1651730 pspengle
pspengle's picture

Do try to get deeper into this. It is not just a Plan B, it is law! Find someone other than idiot Googe to read the Gesetz zur Restrukturierung und geordneten Abwicklung von Kreditinstituten

Fri, 09/09/2011 - 14:34 | 1651877 peekcrackers
peekcrackers's picture

well Greeks, OPA!!!!!!!!!!!

Fri, 09/09/2011 - 16:44 | 1652447 LookingWithAmazement
LookingWithAmazement's picture

Driving home for Christmas.

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