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Greece Has Defaulted: Here Is Where We Stand

Tyler Durden's picture


After reading this, everyone should have a fairly good grasp of what happened not only today, but ever since the great (and quite endless) European financial crisis took center stage, and what to look forward to next...

From Chindit13

In a nutshell---okay, a coconut shell---this seems to be where we are:

1)  Greece was able to write off 100 billion euros worth of debt in exchange for a 130 billion rescue package of new debt, of which Greece itself will receive 19%, or about 25 billion, so that it can continue to operate as an ongoing concern.  Somehow Greece is in a better position than before, with more debt and less sovereignty and still---by virtue of sharing a common currency---trying to compete toe-to-toe with the likes of Germany and the Netherlands, kind of like being the Yemeni National Basketball team in an Olympic bracket that includes the US, Spain and Germany.  At least a "within the euro" default prevented bank runs in Portugal, Spain, Italy et al.

2)  As a result of the bond haircuts, Greece has many pension plans that can no longer even pretend to be viable, at least according to the original contracted scheme, but pensionholders still working can take heart in the fact that their current wages will be cut, too.

3)  CDS buyers will have to sweat bullets, jump through hoops, and be forced to endure every cliche known to man, but they might end up getting something for all their trouble, provided their counterparty is solvent and that counterparty itself is not heavily exposed to an insolvent party or a NTBTF institution, otherwise known as a Lehman Brothers.  Expect the legal profession to be the prime beneficiary of this "event", as any new CDS contract will be at least a hundred pages of boilerplate longer in the future.

4)  Good luck to any less than AAA rated sovereign who wants to issue debt from now on out.  That contracts can now be unilaterally abrogated, as Greece' bonds were with the retro-CACs, bodes ill for attractive pricing from here on out.  Peripherals in the EU will suffer most, as they face the added indignity of being subordinated to the ECB at any point the ECB chooses to exercise its divine right of seniority.  The thing that used to be called the risk free rate no longer exists.  Bill Sharpe take note.

5)  One hundred billion euros worth of perceived wealth evaporated.  That can not be a good thing for a Eurobanking system already capital short, as it raises leverage (quick back of the envelop calculation) by about 6% across the board.  It also will not make the interbank market any more trusting, thus increasing the likelihood of perpetual LTRO.  LTRO lll looks to arrive sooner than QE lll.

6)  With the drawn-out Greek event and the LTRO, Europe might believe it has firewalled the system for at least three years and limited damage to Greece and Portugal (who will likely undergo a similar default by the 3rd quarter).  LTRO-provided liquidity, it is hoped, will lower market rates enough in Spain and Italy so that those countries can meet sovereign bond obligations and both service existing debt and issue new debt.  When the LTRO expires in 2015, "hopefully" something called organic growth will have taken over in countries imposing severe austerity measures on their public sectors, so that debt servicing becomes easier.  Organic growth obviously is something that comes in a can, a can which has been kicked out to 2015.

7)  As Europe now speaks increasingly of greater EU financial integration, Sarkozy's poll numbers will be the victim and a less EU friendly individual will likely win the upcoming election.  Since France and Germany fortunately have a long and storied history of being the best of friends, and no one in either country would ever pander to nationalist sentiments, this shouldn't present a problem.

8)  Given how much angst was caused by the drawn out Greek affair, the Spanish leader knows he has enormous leverage with EU leadership and he can continue to do what he has been doing with regard to ignoring the deficit targets demanded/suggested by the EU.  The EU might well bark at him, but they cannot afford to bite at this time.  Muchos gracias, Greece.


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Fri, 03/09/2012 - 23:45 | 2242397 hangemhigh77
hangemhigh77's picture

Did they run this by Jamie Dimon yet?  How much does he get to steal on this deal?

Fri, 03/09/2012 - 23:46 | 2242400 hangemhigh77
hangemhigh77's picture

When do the wars start?  Greeks will attack at dawn with javalins.  

Sat, 03/10/2012 - 00:45 | 2242514 UP Forester
UP Forester's picture

With the straight-6, 304, 360 or the big dawg, 401?

Fri, 03/09/2012 - 23:47 | 2242403 dreadnaught
dreadnaught's picture

So NOW what happens on March 20?

Sat, 03/10/2012 - 00:05 | 2242440 slewie the pi-rat
slewie the pi-rat's picture

we could be in vegas!

welcome to zH & hi

Fri, 03/09/2012 - 23:51 | 2242416 IQ 101
IQ 101's picture

Please help me understand, Noble Z,H'ers, is this what I think it is ?

A first domino in a tsunami of shit and truth ? WTF, is this it ?

Or is it Friday and it will all be lawyered up and Lovely on Monday morning?

I'm not a sophisticate, just a drunkish extremist who gives a fuck.

Is this the FIX BUTTON finally pushed ?

Is this when truth catches up to the Horse shit waggon ?

Please encapsulate what is happening in the language of Carpenters and Carpet layers, I am assuming that a Shit storm Domino effect world of Credit Default Swaps is about to rough up the bankstas, but suspect this needed event will be diverted into horse shit world by THEM,

Am I even close ?

Sat, 03/10/2012 - 00:31 | 2242492 slewie the pi-rat
slewie the pi-rat's picture

could happan;  wait and see

the greeks CDS are npw "triggered" but exactly what happens if you own a bond and whether or not is has been "pledged" to greece in the PSI of yesterday/today hasn't been divulged, yet

so the bonds that aren't going to greece can get the swaps?  or you can collect on the swap without swapping the bond with the CDS-writer?

how many of us know how this works where the rubber meets the road?

anyhow, a lot of market "stuff" is "crossing the tape" here, as you can sense

being a carpet muncher, if the checks bounce on those "securities"which are now "clearing the market" i'm not even coming up for air!

Sat, 03/10/2012 - 01:28 | 2242596 MsCreant
MsCreant's picture

He lays carpet.

Sat, 03/10/2012 - 03:04 | 2242713 IQ 101
IQ 101's picture

Not once, but great respect to them that do/did.

Munched a few rug's though.

Sat, 03/10/2012 - 07:08 | 2242829 MsCreant
MsCreant's picture

I meant lays in a naughty way...I am a MsCreant.

Sat, 03/10/2012 - 12:45 | 2243128 Beau Tox
Beau Tox's picture

I am a monkey wearing a business suit.  My name is Paddy O'Chimp.

Fri, 03/09/2012 - 23:52 | 2242417 icanhasbailout
icanhasbailout's picture

Somebody wake me when they figure out that any wealth that can simply evaporate was never actually wealth at all.

Sat, 03/10/2012 - 00:10 | 2242451 slewie the pi-rat
slewie the pi-rat's picture

and welcome to you too, haz

i gets vaporized like when you bet on horse #7 and horse #4 wins the race

your ticket is now worthless, even tho it seemed like a heluva good idea at the time

now go back to sleep...

Sat, 03/10/2012 - 01:45 | 2242622 francis_sawyer
francis_sawyer's picture

Thanks for the horse racing metaphor Slewie...

Now could you help me out with this...

Sat, 03/10/2012 - 00:12 | 2242454 weyes1
weyes1's picture

Good night, Rip.

Sat, 03/10/2012 - 00:09 | 2242449 yogibear
yogibear's picture

How about a few hundred billion of debt vaporizaion for Spain, Italy, Portugual and Ireland? The rest of the PIIGS are waiting for at least the same deal.

The rest of the PIIGS have a much bigger bite if they are dissatisfied. We are not even in the second inning with this.

Sat, 03/10/2012 - 00:12 | 2242452 weyes1
weyes1's picture

I'd settle for a few hundred k of debt vaporization for yours truly

Sat, 03/10/2012 - 00:14 | 2242459 slewie the pi-rat
slewie the pi-rat's picture

if we're lucky, we'll be fuking dead b4 they get to us, BiCheZ!

Sat, 03/10/2012 - 00:19 | 2242468 FeralSerf
FeralSerf's picture

100 billion is chump change for the Spaniards and the Italians.

Sat, 03/10/2012 - 00:28 | 2242484 garcam123
garcam123's picture

That was a great article.  Even made me laugh.  The poor Greek people are so fucked there's no way they will put up with this tyranny.  I predict that the riots will continue and that new banker Prime Minister will get Mousillinied out in the street.

I also had to laugh when I realized that the banks were going to keep most of the money for them selves and the Greeks were going to only get 17% and go another hundred billion in debt!  I don't know how the banks are still sitting there and aren't piles of rubble yet.

I also had to laugh when you alluded to how well the French and Germans have gotten along for all of those years.I imagine America and the Russions will be happy to arm each the other side so thay can have at it again. It'll be great for biznizz

Boy it's 1939 all over again!

Only problem is I'm not runnin down to join up.  They can all kiss my ass!

You guys will forgive me, I'm just goin to have a Tacate with lime and salt.   OLEEEEE!

Sat, 03/10/2012 - 02:10 | 2242644 Sandmann
Sandmann's picture

Boy it's 1939 all over again!


No it is not because they have not conned their public this time around and I doubt Britain would try to save a Polish Dictatorship from a German one to save a Soviet one........again !

Sat, 03/10/2012 - 00:28 | 2242485 garcam123
garcam123's picture

That was a great article.  Even made me laugh.  The poor Greek people are so fucked there's no way they will put up with this tyranny.  I predict that the riots will continue and that new banker Prime Minister will get Mousillinied out in the street.

I also had to laugh when I realized that the banks were going to keep most of the money for them selves and the Greeks were going to only get 17% and go another hundred billion in debt!  I don't know how the banks are still sitting there and aren't piles of rubble yet.

I also had to laugh when you alluded to how well the French and Germans have gotten along for all of those years.I imagine America and the Russions will be happy to arm each the other side so thay can have at it again. It'll be great for biznizz

Boy it's 1939 all over again!

Only problem is I'm not runnin down to join up.  They can all kiss my ass!

You guys will forgive me, I'm just goin to have a Tacate with lime and salt.   OLEEEEE!

Sat, 03/10/2012 - 00:46 | 2242517 lolmao500
lolmao500's picture

Who will be the first country to go out and hang their banskters and their puppets? Iceland went half way.

What these people need is a good old hanging... not fines or 5 years in jail. Death penalty. That's what traitors deserve. Banksters and their puppets in the government and medias. There's at least a few thousands/country to get rid of.

Sat, 03/10/2012 - 00:48 | 2242525 Tsar Pointless
Tsar Pointless's picture

No hanging. There is baseball, soccer, and basketball to be played and watched.

Just grab another bottle of Samuel Adams Alpine Spring and enjoy yourself, bitchez!

Sat, 03/10/2012 - 00:47 | 2242520 diesheepledie
diesheepledie's picture

This was handled perfectly. Major props to the ECB, and IMF for fignting hard, I see we have another possible 37B coming up. This is going to be a greaser of a soft landing. It is great to see the world coming together and managing, and absorbing the shock of a national default. This is why I am pro NWO ... well one of ther reasons. Main reason is the mass human extermination thing ...

Sat, 03/10/2012 - 01:50 | 2242629 Atomizer
Atomizer's picture

mass human extermination thing

You’re preaching to the choir. Will never forget Ted Turner appearing on CNBC talking about mouth breather’s. I went ape shit, just hearing his words. In 2012, feel like I’m traveling through fog banks. Beginning to understand that my awareness rings the same way Mr. Turner felt that day on CNBC. Only a handful of my friends know what’s going on in the world, the rest are droids repeating what they heard on TV.


I don’t want the extermination plan. Prefer that droids can understand their surroundings in a crystal clear manner. Knowledge is power! 

As a side note, I filled up the peasant mobile [car nickname] this evening. I pull up, negotiated around a two pump hog driving a clown car.  The clerk sees me outside and turns on my pump. The older gentleman who has his blue jeans 4”cuffed upward and wearing Sperry dock siders begins his meltdown. So the clown car driver goes inside and begins his credit card rant. $54 dollars later, he returns as I’m placing the cap on the tank. I walk in, hand her the cash and leave. Clown car driver is still outside trying to figure out why he cannot fill his tank. I drive away.  

Moral of my story: We have a huge problem in society. Still tinkering how we can save them.

Sat, 03/10/2012 - 02:59 | 2242707 diesheepledie
diesheepledie's picture

Don't save them. ANd (if possible) don't exterminate them either. Put them to work. Be the world pimp. Just appeal to their animalistic needs and you can get anything from them.

Sat, 03/10/2012 - 04:28 | 2242771 PR Guy
PR Guy's picture

? As far as I can make out, that's how it currently all works anyway? i.e. Pass me the remote so I can watch We've got no X-talent ballroom dancing on thin ice and I will think about other things tomorrow when I get my fat arse off the couch.

Sat, 03/10/2012 - 11:58 | 2243066 WoodMizer
WoodMizer's picture

I started a small scale lumber company two years ago; i like the rise in gas prices.

It helps me undercut the big boys.  Business has been hit or miss, but I got alot of wood out of hurricane Irene.  When the shit hits, I  cant wait to get minons to help with the farm, the milling and carpentry.  I am all in tools and agriculture at this point.  Payday is gonna be huge in a couple of years.  I have no debt,and little cost of living.  Being poor sucks now but, being independent is priceless. 

Wed, 03/14/2012 - 02:56 | 2253176 geekgrrl
geekgrrl's picture

You're sick.

Sat, 03/10/2012 - 00:49 | 2242526 malalingua
malalingua's picture

If you think they will do the right thing and default then you probably believed they threw OBL into the ocean. They won't default.

Sat, 03/10/2012 - 00:59 | 2242535 ptoemmes
ptoemmes's picture

I have to imagine that kicked can is gonna get crushed on its way to 2015.

Maybe not.


Sat, 03/10/2012 - 01:02 | 2242542 Goldtoothchimp09
Goldtoothchimp09's picture

The MOABS  (Mother of All Black Swans) shall detonate next week - the fuse was lit with the Greek CDS payout - evidence was the surge in the dollar.  These scamming 'banks' haven't provisioned and all their accounting is a sham. If Greece is so small...why the big move in the dollar?

It's not just Greece - these 'banks' haven't been provisioning for lots of derivatives sovereign or otherwise. First sovereign payout ever. The risk managers are going to have to start provisioning. They will have all weekend to think about the spike in the dollar today. Most of these 'banks' don't have any capital anyway. Hopefully, this will be the start of 2008 all over.

Sat, 03/10/2012 - 15:28 | 2243435 BooMushroom
BooMushroom's picture

A first mortgage is common, and a second mortgage is normal enough, I guess. Due to the magic of rehypothecation, all the banks have fourteen million mortgages all on the same house. When one of them goes, when the house burns down (Arson! Lit by a Greek CDS bomb!) they will realize that there are no assets, no capital.

They will make some phone calls to their insurer, and the insurer will say, "Sorry, all of our capital was lost in a fire this weekend, too!"

And when the boomers call their bank inquiring where their pension checks and 401k checks and trust fund disbursement deposits went to, their bank will say "Sorry, all of your capital was lost in a fire this weekend, too!"

Cascading Default Situation, BITCHES!

Sat, 03/10/2012 - 01:23 | 2242558 chindit13
chindit13's picture

Though there are many on this site who believe that this entire episode was orchestrated, I see something quite different.  Though I may be wrong, I see desperation and confusion every step of the way, with scared children trying to dress as adults and create the impression all is under control.  Yes, some parties have taken advantage of the whole thing (dibs on Greece's gold, imposing the bank bailout on Greek taxpayers), but those seem to be after-the-fact considerations, like looters after a natural disaster.  The overall impression one gets is of incompetence and panic, with policy being some combination of obfuscation (see the various and sundry bailout entities and backstopping funds, which nobody actually funds, much less understands) and just plain winging it.

Europe has (had) a dream.  It was faulty from the start, and became more so when believers thought one size (or currency) fits all, or that somehow disparate cultures with uncomfortable shared histories would someday submit to, and relinquish authority to, a central planning authority.  Those who benefit from the system or have psychic capital invested in it are desperate to keep the dream alive.  Others seem to realize the dream is finished, and they are just hoping to find the least painful way of unwinding what has become untenable.

At the bottom of every plan and every hope is that from sources unknown, some sort of growth or return to normalcy will emerge, though they forget that the main impediment to that growth is their own actions.  They are farmers stomping on their own sprouts and saplings, then wondering why the fields remain bare.

Sat, 03/10/2012 - 01:31 | 2242600 Peter K
Peter K's picture

It's like with any true believers of a religious cult. The Eurofanatics can not face reality since their beliefs are the foundation for their entire existence.

Outside of the practical considerations of those Eurocrats whose livelihoods depend on the Euro project of course. Just like when the Soviet Union fell, the party hacks had to transform themselves, and the "new positions/jobs" that these same hacks parachuted into were nowhere nearly as economically viable:)

Sat, 03/10/2012 - 01:52 | 2242630 francis_sawyer
francis_sawyer's picture


I think you're onto something there...

The concept for the Eurozone in the first place was basically a beta test project for a functioning NWO... It obviously has been a spectacular failure and the "NWO-ists" find themselves without a Plan B...

Sat, 03/10/2012 - 02:30 | 2242678 Waffen
Waffen's picture

your wrong.. Plan B. is "watching the world burn"

Sat, 03/10/2012 - 10:07 | 2242947 Green Leader
Green Leader's picture

They will make the *proper* corrections. It's just a setback and a friendly reminder from who's really in control, that's all.

Sat, 03/10/2012 - 02:06 | 2242638 Sandmann
Sandmann's picture

That much is crystal clear. There is simply no leadership or knowledge at the upper reaches and they are being manuipulated by bankers with the threat of total ruin if they do not do as Ackermann or his ilke want. The simple truth is that the brush fire has spread from one building to consume whole towns and regions - the public has started to notice the flames and the fact thay are spreading. But just to show the level of stupidity - Charlie Mayfield calls himself Chairman of John Lewis Partnership - a large over-priced retailer - and tells Jeff Randall Live on TV that Europe was bad 6 months ago but is looking better now......

If that isn't indicative of people who talk but don't know and frankly cannot handle the is simply they cannot fathom a problem that cannot be fudged


Sat, 03/10/2012 - 04:23 | 2242770 PR Guy
PR Guy's picture

Sitting in Europia this morning, I have to agree with your analysis. There is going to come a point soon when things take a turn that the children don't know how to handle.... then all hell is going to break loose and they will lose control. I'm looking at taking every opportunity to short Euro and EZ banks when they show any significant rise. In and out.

Sat, 03/10/2012 - 08:19 | 2242875 Lednbrass
Lednbrass's picture

Quite so- and equally true of the US dream.

Sat, 03/10/2012 - 01:14 | 2242568 outtahouston
outtahouston's picture

Allright you bitchez, I’ve been lurking this site for years (3-4 I dunno) but have never posted cause you’re all too smart for me.  However, it’s now happened that we’ve had a sovereign default that we’ve known was coming.  Now it’s here, there wasn’t an instant drop in the market or anything noteworthy but we’re either at the tip where the algos just didn’t catch on or it’s truly a non-event.  Given all the volatility leading to the possibility of this “Greece worries this’ and “Eurozone worries that” how a non-event could possibly happen is far beyond me. This should have been a huge mover in my book … which might have gone positive for the first time in years!!


So you superstars please get in here and feed us loyal lurkers one time … how do we play this??  Short the euro banks (DB, HSBC, STD, etc) or US banks JPM, or an etf like XLF or buy FAZ.  I know you’ll always say to buy the end of the world, but seriously what do we do here???  This has been an incredibly frustrating run-up to the point we’ve finally got someone going over the edge and if we (lurkers) can’t make some money from this site, then we might as well put our heads back in the sand (and I’m honestly wishing I’d never have seen the light at this point).


Bring some solid suggestions please; partial 10% XLF short, or short the heck out of euro banks – give us something to work with.

Sat, 03/10/2012 - 01:58 | 2242634 francis_sawyer
francis_sawyer's picture

I can't speak for everyone, but it would occur to me that "THE PLAY" would have been, all along, to be stacking physical gold, silver, food, & ammo, instead of trading electronic toilet paper on the eve of any possible cathartic event...

It's probably why half this thread is loosely interlaced with stories about the beverage of choice for the weekend...



Sat, 03/10/2012 - 02:06 | 2242640 francis_sawyer
francis_sawyer's picture

Let me add that... IMO... This has a high probability of adding up to nothing... I made a comment above regarding my belief that the Eurozone was basically a "beta test" for the "NWO-ists" (that's failing)...

But that bunch is populated with a lot of stubborn fools (who will not admit defeat easily)... It's gone on for such a ridiculously long time as it is, I'm done trying to put an end date on it... I pretty much think that it's BUNKER TIME for all... But the problem is that the BUNKERS themselves were not fully stocked by the arrogant pricks who never considered failure to be a possibility...

So there are probably are a few more magic tricks in store which will only serve as to be able to buy more TIME to, in fact, get the bunkers all cozy...

Sat, 03/10/2012 - 03:49 | 2242743 slackrabbit
slackrabbit's picture


When things get ugly  the paper is going to be worthless. My only addition is PM stocks, but they are not for the faint of heart.


Sat, 03/10/2012 - 02:16 | 2242654 Peter K
Peter K's picture

Here's the back drop from the FX side.

1) Euroland/ECB has a balance sheet that is 30% larger then the Fed, a collective economy that is 15% smaller than the US and a currency that is 31% stronger than the US Dollar.

2) The Euro is a currency that is backed by the full faith and credit of "?????", i.e. no one. The present conventional wisdom is that the Euro is a DMark in disguise with an implicit guarantee by the German Treasury/Buba. But the Germans/Buba are screaming from the top of their collective voices that there is no implicit guarantee.

3) The Euroarea banking system is insolvent. Pre LTRO, the US money market funds were lending short to the Eurobanks lending long. Since the exodus of the MM funds, the ECB introduced the LTRO, and the circular system of funding cash to governments via banks. And the lending activities were primarily to the EU governments. This is the Northern Rock model, and we know how it will end.

4) In turn, the Euroland governments (read socialist welfare states) are insolvent since they have gorged themselves on cheap loans over the last 10 years, the prize for giving up their national currencies and adopting the knock off DMark, i.e. Euro.

5) Therefore, the Euro Area governments are now deeper in debt than they were pre Euro, with no way to get out of it. They can't transform themselves into a market economy like the US since the basis of their entire existence is to operate a socialist welfare state. Or in other words, if they dismembered the socialist welfare state, they would put themselves out of a job.

6) The entire edifice of the Euro is being propped up by non European entities. These are the Central Banks and their sovereign wealth funds of the Chinese, Russians and the Arab states. The primary reason for propping up the Euro is to break the hegemony of the US dollar. Just ask yourself, how many times has China bailed out Greece/Portugal/Spain? And it's only a matter of time before these said entities bail. (Hitting the EUR/CHF bid for size at 03:00 CET anyone?)

As to how to trade this puppy, I like the short Euro (but never against JPY) currency route. Keep a base short Euro position at all times. A position you feel comfortable with. You can day trade it(since it will always come back even if you get caught in a squeeze), or position trade selling pop ups and taking those positions in in front of option barrier levels. But in essence, it gives you a winning position for when the "GSE moment" arrives (that will no doubt happen when you are sound asleep), that is when Mr. Market realizes that there is no implicit guarantee to the Euro, and they all head for the exits at the same time.

Oh, and most importantly, have fun.

Sat, 03/10/2012 - 03:52 | 2242746 TicoTiger
TicoTiger's picture

If you are still lurking after all these years and still looking for the best play, it's probably too late to locate the lifeboat deck. My advice is head to the bar and max out your credit card while you can still use it. I'd join you but I got off the ship some ports ago and prefer dry land.

Sat, 03/10/2012 - 11:15 | 2243014 resurger
resurger's picture

outta! they announced this shit half an hour before the close, and the PPT has done miracles ...

now the shit is 3bn according to CNBC it "peanuts", but who knows?

expect blood soon in the markets..

"btw, am only short positions because am expecting a glitch in the algo/hft/robo , whatever the fuck you call it"


Sat, 03/10/2012 - 01:18 | 2242578 Peter K
Peter K's picture

Here is another aspect of this thing that just occurred to me. In essence, the new 130b rescue package is mostly comprised of guarantees, pledges and new paper. The only cash that will be passed (March 20/27 and April 11?)is the 15% redemption to the US debt holders under the PSI. The rest is either pledges to make good interest/redemption or new paper (EFSF). Old debt will be paid off with new debt. This new debt is not backed by any good money, but rather the guarantees of a shrinking AAA club of Euroland countries.

And finally, the whole kip and kabuddle is backed by the full faith and credit of no one. And the most striking thing about this whole mess is that the debt holders of Euro obligations assume that the Euro is implicitly backed by the Germans while at the same time, those same Germans are screaming at the top of their collective voices that there is NEIN implicit guarantee.

Does the term "Government Sponsored Enterprise" ring a bell?

Sat, 03/10/2012 - 02:10 | 2242639 besnook
besnook's picture

distilled, if you will, the settlement is a brilliant cashout scheme that allows greece to survive in it's name only with it's debt reorganized  guaranteed by enough cash out to pay the note it can't pay until another brilliant scheme is hatched in time for when it runs out of money again, sooner than later. meanwhile it will take some time, depending upon the amount of ouzo and moussaka consumed, before the greeks realize they hear a lot of people speaking german in the department of revenue and the only pension they will be receiving is a lifetime work contract. the bankers are hoping by then that the massive capacity destruction event is well on it's way and the world is saved by a reset to a brand new ponzi

Sat, 03/10/2012 - 02:15 | 2242652 bgilliam83
bgilliam83's picture

Laws of economics, are laws for a reason.  The euros are complete milquetoast, but you can count on back stop benny to relieve any and all CDS and eurozone pressures this weekend.  That being said, all they are doing is buying more time for insiders and people who can count past 100?  Like the last 4 years wasn't enough warning or something.....The fed sim game was correct.  You run 0% for more than 2 years your ass is grass and fired.  Too bad reality isn't a god damn sim game.

Sat, 03/10/2012 - 02:18 | 2242656 bgilliam83
bgilliam83's picture

I really think this shit blows up by monday because this on top of everything else that violates the laws of economics will come to a head, government backed ponzi or not.  Were at the circle jerk suck your own dick festival from NOW ON BITCHEZ.

Sat, 03/10/2012 - 02:19 | 2242657 reutersanalyst
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MNI news bullets at zero cost with CAPITAL3X users

Sat, 03/10/2012 - 02:26 | 2242669 SoundMoney45
SoundMoney45's picture

A scheme to loot loot the bonds from all the western pension funds . Genius.  The 10% 401K haircut is a bargain compared to this.

Sat, 03/10/2012 - 02:30 | 2242677 falga
falga's picture

ISDA says only 3.2billion of CDS triggered??? Seems very low to me.
so why was it so important for EU govt to avoid a credit event? Puzzled by all the noise!

Sat, 03/10/2012 - 12:08 | 2243082 falak pema
falak pema's picture

the Eurozone has contained the contagion fallout by providing LTRO liquidity to moribund Banksta cabal, and insolvency contagion by setting up ESM/EFSF as well as getting a 75% debt write down. The banks take a hit but make a lot of money on 5% ECB spreads on bonds. All the while their balance sheets become crap as the ability to pay the interest in not there as there is no growth to fuel interest bubble pump. Debt keeps growing, both private and public. As for CDS its only a pimple in Greece and ISDA have done the right thing; wait for Spain to fall for CDS call to bring the Euro banksta house down. In the meantime Banksta scam in USA/GB is also getting unsustainable; as in Japan. Take your pick on who comes down first...but it won't be China in my book!

Sat, 03/10/2012 - 02:49 | 2242693 ItsDanger
ItsDanger's picture

If their deficit is around 7% of 'GDP', that 19billion euro? will be gone in less than 12 months.  And thats just operating basis.  Let alone all the other funding issues.  Delay tactics.  I cant wait for Italy.  Good luck trying this scam with their debt.

Sat, 03/10/2012 - 03:16 | 2242724 upb
upb's picture

we are all screwed.  but they u.s. will never default.  we will print forever....

Sat, 03/10/2012 - 03:34 | 2242734 Pontius
Pontius's picture

The author says, ""Since France and Germany fortunately have a long and storied history of being the best of friends, and no one in either country would ever pander to nationalist sentiments, this shouldn't present a problem."  Is this "long and storied history" after WWII or before WWI, but of course not when Bismarck or Napolean were in power?  Surely, the author is facetious.

Sat, 03/10/2012 - 05:57 | 2242801 Sandmann
Sandmann's picture

You might take a look at Louis XIV and his behaviour in the area that became Germany after 1871.....and the devastation that the Thirty Years War did to what is now Germany.....and why the nation state was born out of the Treaty of Westphalia 1648

Sat, 03/10/2012 - 12:16 | 2243039 falak pema
falak pema's picture

Lotharingia is what you are pointing at, later greater Burgundy, later part of Hapsburg heritage... here it is :

Lorraine (duchy) - Wikipedia, the free encyclopedia


I think this is a dead intra-european issue. Now its about Euro integration, to survive the upcoming Asian challenge. Merkel's speech is pointing to a rise of Eurasian alliance in ex-Russia/USSR that challenges Euro alliance caught up in financial disintegration. That could coalesce with CHina if things hot up in ME. We are back to the days of the Mongol Invasion. When Alexander Nevsky bowed to Mongol Karakorum.  And possibly, the resurgence over a limited period of time of a Mamluke/Ottoman type Caliphate, if the Pax Americana continues to unwind. Or conversely, a return to a hundred year period of instability in Middle East, as during Mongol days, of Golden Horde and Ilkhanate, if West defies Chinese East around the sacred OIL patch.

Batu Khan - Wikipedia, the free encyclopedia

Alexander Nevsky - Wikipedia, the free encyclopedia

Baibars - Wikipedia, the free encyclopedia

Hulagu Khan - Wikipedia, the free encyclopedia

The main actors of that age when Mongols ruled China; is it coming back with the Communist Party as the NEw enterprising Mongols, who had the best cavalry in the world....the armies of outsourcing, now running AApl's profit blood line?

Sat, 03/10/2012 - 08:58 | 2242897 Mary Wilbur
Mary Wilbur's picture

You have recognized irony.

Sat, 03/10/2012 - 03:36 | 2242736 IQ 101
IQ 101's picture

I met a man in Tacoma several years agu, he was as nutty as a fruitcacke,

He said he had put super glue on a credit card and stuck it in the machine,

He thought it was a path to global enlightenment and if 1000,000 people did it, it would take down the banky s, quite quickly, fucking up the machines and shit,

He lived in a van behind a gas station, CRAZY PEOPLE !

I can not imagine sticking a gluey card in an ATM, it would fuck shit up for weeks if it had superglue on it,

But now i wonder if he was wise in a sort of madman way ?

I mean, it would fuck the banks quickly, would it not ?

Sat, 03/10/2012 - 03:45 | 2242742 wisefool
wisefool's picture

There are people in prison right now for tax isssues. Timmay is too low of an IQ to work for banks. That is why he is in charge of the IRS. They fired him from FRB-NY

For posterity sake of the inter webs. Timmay is man who does not know how to file taxes, but he puts people in jail for not knowing how to file taxes. I mean literally, the typical deliverance dude would do better with turbo tax 2002 than the current potentate.

Sat, 03/10/2012 - 03:39 | 2242739 Heyoka Bianco
Heyoka Bianco's picture

Have to give credit: that was probably the most concise and informative article I've ever read on ZH.

Sat, 03/10/2012 - 03:50 | 2242744 Shadowsil
Shadowsil's picture

THERE WILL BE NO DEFAULT. There will be no default. ThErE WiLl Be No DeFaUlT.

They have a plan b,c,d and that is the real problem.


We have no fucking clue what those plans might entail, Science fiction cannot make the Plans b,c,d up.


You cannot understand madness unless you are INSANE!


No one will be paid anything worthwhile.


None of it is worthwhile anyway.


The entire world is already priced in.


Sat, 03/10/2012 - 07:18 | 2242835 Olympia
Olympia's picture

Global Debt Crisis

The greatest private fraud of human history.

Who are the great fraudsters who are becoming the murderers of the human kind?

How does the economy "illness" threaten Democracy and the freedom of people?


World War III - the first Private World in History


Authored by Panagiotis TRAIANOU

Sat, 03/10/2012 - 04:01 | 2242750 chump666
chump666's picture

excellent summary.

Sat, 03/10/2012 - 04:31 | 2242774 ZeroIQ
ZeroIQ's picture

I think those who think there will be only 3,2 Beur in CDS payouts are dead wrong. In the US case we saw CDS buyers hedging their counterparty risk by buying CDS insurance on the CDS issuers as well. All it takes is for one CDS issuer to go bust and the avalanche is in motion.

The CDS market is OTC based, and holdings/provisions are not done on the balance sheets. I simply cannot understand how the issuers have the guts to issue any CDS:s on any company that have issued CDS:s. I mean how do they price the CDS:S when they issue them? How do you value the pig in the sack?


Sat, 03/10/2012 - 11:59 | 2243069 ch25061
ch25061's picture

No courage needed just brazen chutzpah
as all the meta CDS issuers know they
will not payout either same as the
non meta CDS issuers who they
insuring against. How dumb do
you have to be to think that if a premise
fails at level 0 then somehow it will be
magically recovered at some level up
in the inductive chain.

Sat, 03/10/2012 - 05:05 | 2242788 sampo
sampo's picture

At least someones in Greece will get some dry powder for starters..

Sat, 03/10/2012 - 05:54 | 2242799 Joshua Falken
Joshua Falken's picture

Greece did not default like Iceland or Argentina, they restructured their debt to pay back 50% instead of 100%.


The greeks are still screwed as they cannot afford even 50%


They should have gone the whole hog and instead of prolonging death by avaricious creditors who know they should never have extended the money in the first place.

Sat, 03/10/2012 - 06:00 | 2242803 Sandmann
Sandmann's picture

"Greece", "The Greeks". Have you lost your mind ? The Greeks get NO say in matters - they are a Subject People. "Greece" is a meaningless concept. It is an Occupied Country. Only 19% funds "for Greece" do not go to the 81% funding for Greece goes to fund the ever so clever Banks that bribed public officials to sign up to their bizarre Self-Enrichment Schemes.


Sat, 03/10/2012 - 15:43 | 2243464 Nachdenken
Nachdenken's picture

“We owed it to our children and grandchildren to rid them of the burden of this debt,” said Greek Finance Minister Evangelos Venizelos. The 19% goes a long way Sandmann.

Sat, 03/10/2012 - 06:27 | 2242808 ebworthen
ebworthen's picture

Western Civilization is so saturated with "resolutions" and "agreements" and "compromises" and "bills" and "loans" and equivocation ad naseum post WWII that they can't recognize reality.

SOLD OUT, the average person and family has been SOLD OUT or just SOLD; their future traded for bankers and politicians nest lining, golden toilets, mansions, yachts, and mammon.

Off with their heads! 

Wake up you dumb sheep! 

This will not end well for us or our children! 

Off with their heads!

Sat, 03/10/2012 - 07:27 | 2242842 I am Jobe
I am Jobe's picture

The fucking sheeps were too buys with baseball, NFL and buying crap 24/7 and could not spend the time educating themselves about shit. Time for most Americans to bow to Tyrell Corp .
Can you say Inbred nation?

Sat, 03/10/2012 - 15:53 | 2243479 BooMushroom
BooMushroom's picture

Ahh, but with birth control and abortion, we're not really having that many children anymore, so that's not much of an issue now, is it?! /s

Sat, 03/10/2012 - 06:57 | 2242823 Chuck Mentzel
Chuck Mentzel's picture

The plan worked brilliantly. They forced the big chunk of creditors to take losses, they rolled over the rest of debt and used the remaining crumbs to trigger a few small CDSs to keep the credibility of the instrument still alive. Now triggering a few CDS means sovereigns will still be able to get away with issuing new debt, even if the quality is crap, since supposedly you can still use CDS to hedge for the risks. For this moment, the plan was flawless and worked brilliantly.

Sat, 03/10/2012 - 11:46 | 2243052 ch25061
ch25061's picture

Problem with this so-called brilliant solution
is that it can only be used once. Hereafter
the other Pig creditors who are not vested
in perpetuating the Ponzi will resist the
cram down holding out so to be judged
in the involuntary group who I assume
would get a better recovery than the

Sat, 03/10/2012 - 08:09 | 2242827 Wakanda
Wakanda's picture

Everything that happened this week could have been accomplished months ago.  Why did they kick the can down the road 'til now?

Perhaps the plan was to get the Northern Hemisphere through the winter of 2012 before the wheels come off the cart.  It is a lot easier to face cultural/economic collapse in the spring. People can start to plan to cope with next winter now by planting, storing, preserving, installing alternative energy sources.  If I was in charge of this shit pile of a <sarc>civilization</sarc>, I would initiate major change when the sun is giving the majority of the population the most free energy.

If they need to crash the ponzi/economy to distract from a war on Iran, now is the time to do it.  Soaring gas prices can be blamed on the war and the economy can muddle through better in the summer than in the winter.

New zeitgeist FiSHeS...

Sat, 03/10/2012 - 15:55 | 2243485 BooMushroom
BooMushroom's picture

If the city folk realized that there was only three mints left of food in the USA, they would petition the government for more free food.

Sat, 03/10/2012 - 07:15 | 2242832 Olympia
Olympia's picture

Global Debt Crisis

The greatest private fraud of human history.

Who are the great fraudsters who are becoming the murderers of the human kind?

How does the economy "illness" threaten Democracy and the freedom of people?


World War III - the first Private World in History


Authored by Panagiotis TRAIANOU

Sat, 03/10/2012 - 07:24 | 2242840 I am Jobe
I am Jobe's picture

A very bleak Christmas on its way. Yeap that waffle sale and Nike shows is all one has to show for. I am amazed that people in the USA still buying Cell Phones with plans that runs into hundreds of dollars. BTW- I use a prepaid, no contract crap and it works period. Society built on look at me, what I have got.

Sat, 03/10/2012 - 12:15 | 2243094 lotsoffun
lotsoffun's picture

look at me - but also listen to me.  the more people talk on the phone, the less they have to say.  the vapidity of it all is amazing.  how they find time to watch tv on top of it is incredible.


Sat, 03/10/2012 - 07:42 | 2242853 blueridgeviews
blueridgeviews's picture

These CDS insurance contracts remoind me of AIG not being able to pay for all the contracts they wrote. Shouldn't we all assume that insurance means nothing when the paying event is too large? With the state of the western world's financial condition why would anyone buy these contracts as a hedge?

Sat, 03/10/2012 - 10:20 | 2242957 Sandmann
Sandmann's picture

Because Timothy Geithner proved that Government stands behind AIG and that CDS are guaranteed by the US Treasury.

Sat, 03/10/2012 - 15:32 | 2243443 GeneMarchbanks
GeneMarchbanks's picture

What he meant to say is that the CDS are guaranteed by the FRBNY.

Sat, 03/10/2012 - 08:04 | 2242869 Optimusprime
Optimusprime's picture

Great post, Chindit13.  And well written. 

My favorite line: "Organic growth obviously is something that comes in a can, a can which has been kicked out to 2015."

Well done!

Sat, 03/10/2012 - 08:42 | 2242889 s2man
s2man's picture

Just let me know when the bank holidays start.

Sat, 03/10/2012 - 08:57 | 2242895 SmoothCoolSmoke
SmoothCoolSmoke's picture

Blah, blah, blah....blah-blah.   And the SCOREBOARD reads:

SP500 weekly gains - 10 IN A ROW AND COUNTING.

10 a row has not happened since at least 1993.  1993!!!!!  (That's as far back as I couldlook).

Do you really think TPTB who can orchestrate that, given the state of things, really do not have a handle on this Greek "default", that they have been working on for 2 years?

I mean really, you mean to tell me you people here think Ber-shankie work up this moring in a cold sweat screaming "Greece defaulted!"






Sat, 03/10/2012 - 09:09 | 2242903 surf0766
surf0766's picture

Greece is poor, out of food and meds. High unemployment.  A socialist country without anyone else's pocket to pick. Explain to the rest of the world how culling the people of Greece is good.  I don't care what he thinks. My dollar is crap and many know this already.

Sat, 03/10/2012 - 10:48 | 2242992 WoodMizer
WoodMizer's picture

Take a look at volume and HFT as a percentage of that volume.

The big players can't afford to let equities drop, so they use zirp to prop up prices at taxpayer expense.

If the economy is going gangbusters then why are federal tax reciepts and food stamps abysmal.

The Bernak's hubris does not comfort me in the slightest; remember Lehman!

Sat, 03/10/2012 - 09:04 | 2242902 sudzee
sudzee's picture

Real wealth has gone into an underground asset that can't be hypothocated by TPTB. Printing and imaginary assets are all thats left to leverage the system on. CB's are desperately trying to replace all the gold sold by taking over countries that have physical in their possesion. Outright buying of gold on the markets with fiat would cause hyperinfation.
The world went off the physical gold market in favour of paper gold, which could be printed at will. Bad money has gone to good, no real unencumbered assets left for TPTB can manipulate.

Sat, 03/10/2012 - 09:24 | 2242915 Mr_Wonderful
Mr_Wonderful's picture

Two very good browser extensions.

Collusion lets you see the web that is tracking you on the net.

Do not track plus blocks those trackers.




Sat, 03/10/2012 - 09:44 | 2242926 eddiebe
eddiebe's picture

greeks get paper and debt, the banksters get gold. portugal's next.

Sat, 03/10/2012 - 09:53 | 2242931 Son of Loki
Son of Loki's picture

At what point does the EU problems disturb USA banks enough to cause a "bank holiday?"

Sat, 03/10/2012 - 10:00 | 2242938 Ayn Rand
Ayn Rand's picture

Who is John Galt?

Sat, 03/10/2012 - 13:07 | 2243143 falak pema
falak pema's picture

pure malt and no salt; tastes cool and kicks line a mule. For his inventor Atlas was a cow who went mad when Zeus shafted her on a Saturday night out. All it got from Zeus was a shrug not a hug. Atlas never forgot the insult. Sad cows are now apt to tremble when the sky thunderbolts. The mystery remains to its cause as its interpreted differently, depending if you are deep red or deep blue : the tremblings are due to extreme self gratification syndrome for the reds and due to extreme alzheimer syndrome for the blues. John Galt has never told us the truth. He never will 'cos he is like all other folk heros; the virtual shadow of his creator's fantasy. 

Sat, 03/10/2012 - 10:05 | 2242943 Implicit simplicit
Implicit simplicit's picture

Greecing tthe skids. Gravity will do the rest.

Sat, 03/10/2012 - 10:21 | 2242959 digalert
digalert's picture

Greek default! oh my

It's been a day, so first thing this morning I went outside to look up...the sky is still there. That's right, the sky did not fall. Maybe these default things everyone is afraid of, aren't so bad. Maybe we can schedule government defaults everyweek or two?

Sat, 03/10/2012 - 10:34 | 2242972 haskelslocal
haskelslocal's picture

Who gets the 105B left over right out of the gate?

Sat, 03/10/2012 - 11:05 | 2243008 Joenobody12
Joenobody12's picture

LTRO + QE 3,4,5,6,7,8

Does that mean I can now safely mortgage my farm to buy stocks ?

Sat, 03/10/2012 - 11:12 | 2243020 Snakeeyes
Snakeeyes's picture

Here are some charts. We stand shoulder deep in crap!

Sat, 03/10/2012 - 11:37 | 2243042 resurger
resurger's picture
MF Global Holdings Executives to Get Bonuses If Court Approves

Fucking Bullshit!

Sat, 03/10/2012 - 11:38 | 2243043 search
search's picture

This far down the line i still weep for the credit holders of the world for they are the opportunistic market makers, the ones that think a dollar risked is a dollar earned. When a parable leads to destruction you know a satan is given voice. Please choose wisely.

Sat, 03/10/2012 - 12:39 | 2243119 Beau Tox
Beau Tox's picture

I am a monkey wearing a business suit.  My actual name is Paddy O'Chimp.

Monday is the Wearin' of the Green!

Sat, 03/10/2012 - 12:47 | 2243129 valley chick
valley chick's picture

Oddly I am not seeing much coverage in the media on this.....was there lack of media coverage prior to the 2008 event?  You would think something this serious would be covered....or is it being "controlled"?

Local news has nothing...

Sun, 03/11/2012 - 08:21 | 2244595 Sandmann
Sandmann's picture

If you watched Max Keiser the other day he said bluntly that News Management was taking place in UK and USA to remove critical stories about Bankers and the real mess. He was talking with

Satyajit Das  who wrote -

Sat, 03/10/2012 - 12:59 | 2243144 Sandmann
Sandmann's picture


I said it was about time other Bundesbank Officials came out in support of Jens Weidmann, not just Juergen Stark....well Helmut Schlesinger now adds his voice saying that the ECB is extending credit as in wartime....and that always ends up in Inflation with the Deflation resulting from the measures to control the Inflation

Sat, 03/10/2012 - 15:13 | 2243409 yipcarl
yipcarl's picture




Sat, 03/10/2012 - 15:28 | 2243436 Olympia
Olympia's picture

Global Debt Crisis

The greatest private fraud of human history.

Who are the great fraudsters who are becoming the murderers of the human kind?

How does the economy "illness" threaten Democracy and the freedom of people?

This is what we are looking for now. How exactly was the Greek debt created? It is true, the debt was created by the financial operation of Greece. But which operation are we talking about? ...the natural or the unnatural one?

How was it created? Did the Greeks bought properties abroad and therefore they were indebted with loans? Of course not. They bought their own houses in higher and higher prices taking foreign loans. The kept buying the same products, that they have always been using, in galloping prices. Do you understand what has happened? The vagabond Greek bankers under the directions of the international loan sharks have created the real-estates “bubble”. Why did they create it? Just to put the Greek society “on a respirator" containing the products the loan sharks have provided stick to the mouth a “tube” controlling the “breath" of the Greek society leading to the creation of debts with every "breath" it takes situations that in no way should they create debt.

World War III - The First Private War in History

Authored by Panagiotis TRAIANOU.

Sat, 03/10/2012 - 16:53 | 2243606 Curtis LeMay
Curtis LeMay's picture

It also will not make the interbank market any more trusting, thus increasing the likelihood of perpetual LTRO.

Yep. Interbank lending in euroland has collapsed completely.

I can't understand why Euribor is even mentioned in newspapers or whatever, as it reflects something that no longer exists...

Sat, 03/10/2012 - 19:02 | 2243822 John Wilmot
John Wilmot's picture

In summary:

Greeks get fucked again.

More debt monetization coming.

More EU integration coming.

...same as it ever was. Yaaawn.

Sat, 03/10/2012 - 21:17 | 2244014 s2c
s2c's picture

Tyler, I know you complain the CAC language is a reotroactive change but isn't it typical in most US exchange offers that you can always strip covenants from the old indenture as long as you get 50%.  That is, in any 3(a)(9) exchange offer you hurt holdouts by stripping covenants or is there something else going on. 

Sun, 03/11/2012 - 08:18 | 2244576 Sandmann
Sandmann's picture

Look at War Loan in Britain

In 1932 Britain managed to swap a 5 per cent War Loan, with a fixed maturity date, for undated bonds paying only 3.5 per cent. If this sounds as terrible as the debt swap Greece is proposing, it was – except the UK deal was worse, in that it created bonds that never mature.

Sat, 03/10/2012 - 22:20 | 2244090 agrotera
agrotera's picture

Wonderful to hear your summary Chindit 13!!! 

Sat, 03/10/2012 - 23:57 | 2244225 MsCreant
MsCreant's picture

One of the benefits of someone like chindit13 getting a head line is wonderful folks like you who take the opportunity to come out and grace us with your presence.

Hi, ZH sister woman! Hope you are doing exceedingly well.

Sun, 03/11/2012 - 00:14 | 2244236 agrotera
agrotera's picture

So nice to see you too MsCreant!!!  I always watch for you too!!! I am the one graced by you MsCreant , ZH, our community and all of our shared concerns!!!  Hope all is the best for you too MsCreant!!!


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