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Greece Issues Statement On PSI, Says €172 Billion Of Bonds Tendered In Swap, Will Enact CACs, ISDA To Meet At 1pm To Find If CDS Trigger
The biggest sovereign debt restructuring in history is now, well, history. The headlines are finally come in:
- GREECE ISSUES STATEMENT ON DEBT SWAP
- GREECE COMPLETES DEBT SWAP
- GREECE SAYS EU172 BLN OF BONDS TENDERED IN SWAP
- GREECE GETS TENDERS, CONSENTS FROM HOLDERS OF 85.8%
- GREECE SAYS 69% OF NON-GREEK LAW BONDHOLDERS PARTICIPATED
We learn that €152 of the €177 billion in Greek law bonds have tendered, which is 85.8%. This means that €25 billion in Greek law bonds have not - these are the hedge funds that could not be Steven Rattnered into participating, and will now sue Greece for par recoveries.This is also the number that ISDA will look at today to determine if, in conjunction with the CAC, means a credit event has occurred.
And yes, the CACs are coming, as is the Credit Event finding:
- GREECE SAYS WILL AMEND TERMS OF GREEK LAW BONDS FOR ALL HOLDERS
As a reminder from February 24:
Finally, as we have said all along, it is the UK-law bonds that are the fulcrum security here:
- GREECE TO EXTEND NON-GREEK LAW BOND OFFER PERIOD TO MARCH 23
And here is Veni:
«On behalf of the Republic, I wish to express my appreciation to all of our creditors who have supported our ambitious program of reform and adjustment and who have shared the sacrifices of the Greek people in this historic endeavour. With the support of our official sector and private creditors, Greece will continue implementing the measures needed to achieve the fiscal adjustments and structural reforms to which it has committed, and that will return Greece to a path of sustainable growth. Our invitations to offer to exchange, and submit consents with respect to, foreign law governed will remain open until 23 March 2012, after which there will be no further opportunity for creditors holding those instruments to benefit from the package of EFSF notes, co-financing and GDP linked securities which form an important and integral part of our invitations.»
Full release:
And ISDA is not wasting any time: it will meet at 1pm GMT to "discuss the question and to determine whether a credit event has occurred."
Finally, as a reminder, the ISDA vote today will be made by the following dealers and non-dealers. It will be up to them to decide if they wish to destroy the last trace of "integrity" of the CDS market and in effect commit institutional suicide. Because if they do in fact find that there has been no trigger event, then watch CDS bases go negative across the board, as any last pretense of CDS as a hedging instrument is thrown overboard, and the only "hedging" instrument left is to sell.
Voting Dealers
Bank of America / Merrill Lynch
Barclays
BNP Paribas
Credit Suisse
Deutsche Bank
Goldman Sachs
JPMorgan Chase Bank, N.A.
Morgan Stanley
Societe Generale
UBS
Consultative Dealers
Citibank
The Royal Bank of Scotland
Voting Non-dealers
BlueMountain Capital (Second Term Non-dealer)
Citadel LLC(First Term Non-dealer)
D.E. Shaw Group (First Term Non-dealer)
Elliott Management Corporation (Third Term Non-dealer)
Pacific Investment Management Co., LLC (Second Term Non-dealer)
...And finally, congratulations to all Greek pensioners. You have now all been Corzined. Further instructions will be mailed in your next monthly pension statement.
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Greeks are praying for Zeus to return and strike the Parliment building with a bolt of lightening. It could happen.
Well, now that the Greek problem is solved and all is well what's next on the agenda? Conjuring up Lucifer and driving to Spain? ROAD TRIP
...eh. what can be said at this point? The whole damn thing is embarrassing.
Greeks, the assclowns of the world
Schaawiiiing
Goodbye EYPO
Ok we understand the Greeks! Hold and add to your short positions. We may have a disorderly default over the next week.
Mark March 20'th on your calendars
Tyler,
Maybe the way to look at this Greek bailout is not as a bond swap or even a default, but rather it is an M&A deal. The EU grossly overpaid for merging with Greece, and this created a bucket load of goodwill that has to be amortized. This first debt swap is the first amortization charge. The fact that the ‘when issued’ new bonds are already trading well below par indicates this will be an accelerated amortization schedule. Eventually all the goodwill will be written off, and then there will be a divestiture of Greece (from the EU). And just like in the M&A market, IBs take a fee coming and going.
Please don't lose sight of the big picture for a second: the whole purpose of the Greek "deal" was to activate the Greek Escrow account (aka bailout... of European banks) in a way that Greek underfunding will receive 'equitable treatment' in gold as the Greek constitution already allows. This is a deal: one to confiscate Greek gold and to set a precedent for further gold confiscation.
That pesky Rail Road!
Thanks. I won’t, and didn’t, lose sight of it. Again, like any M&A, the point is to suck out whatever value can be gained from the acquired company, then once drained, toss out the empty carcass.
We are so cavalier discussing the lives of people we've never met.
I still havn't figured out why people choose to fight the market (swimming up-stream) but by god it happens.
...oh well
the market is now a polluted river; you swim at your own risk. One day there will only be dead fish in this river; a lake Aral or Atlantis, forgotten continent. Its time to charter a new course and junk the market of junkies hooked on fiat pumped steroids.
What we have is price manipulation, not discovery.
Absolutely, and one day the taking of Greek gold for the paltry sum of a few hundred billion will actually be acknowledged for the swindle it is.
Surreal
Live from Paris amd young fellow "with an outrageous French accent" breaking down French bank participation and charges taken in anticipation of haircut
"We are expecting a political reaction of relief."
RUN AWAY!!!!!
barliman
95% of bondholders caved, taking a huge haircut.
Greece fucks everybody again (except ECB of course).
Ok, now we know what Spain, Ireland, Itally, etc, will do.
Why anyone would buy Euro(trash) bonds anymore is beyond me.
Greece fucks everybody again (except ECB of course).
Hmmm no. Whoever bought Greek bonds fucked themselves.
Idiots and their money are easily separated.
Well, most financial transactions are predicated on the idea that contracts are legally binding and enforceable. While it might be reasonable to expect investors to realize there's more risk in Greek bonds than is reflected in their rating, I'm not sure how reasonable it is to expect Greece to destroy contract law and with it the CDS market and any pretense that sovereign debt is anything but a crap shoot.
It's not contract law. Is it contract law when you buy a stock and it drops in value?? Should the company pay you back??
The bond holders made a bad investment, they lose their money, period.
Weeeeeeeeee Weee Weee Weee WEEEeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee
Talking head, "One commenter noted this was as voluntary as a confession to the Spanish Inquisition."
Cut to different blond (strict, pretty teacher look) in red (German accent?), "That comment is completely accurate."
WEEEeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee
Back to studio, "When you have these banks saying all these positive things, you have to smell a rat. The obvious quid pro quo was the LTRO money"
Weeeeeeeeeee
THIS was worth staying up for! PPT stepping in on FX and futures.
barliman
Thanks for staying up to inform us. Much appriciated.
Q: Are you pregnant?
A: Sort Of
Q: Is the person dead?
A: Soft Of
Q: Is the Greek deal to rob the Greeks of their gold, steal from bond holders and destroy the Rule of Law?
A: No Commment
Max Keiser: "This was as voluntary as a confession in the Spanish Inquisition."
No credit event, because those people voluntarily bought bonds that Greece could make worthless at any time (the fact that they did so retroactively being irrelevant...)
The Greek government entered into a legally binding contract. Sure they can beach the contract at any time, just like I anyone could rob a bank at any time. However, each action has consequences, because at the end of the day the people doing the investing have other choices and if nothing else will choose to sit on cash before they will risk having it taken away by countries reneging on their obligations.
I guess someone could toss a bridge loan in there. ( SOROS)? Ultimately this sends a BAD example!
The aud/usd actually caught a bid on the news. Shit bag numbers and the RBA is going to lower rates 50BPS and that caught a bid?
Take away ...
When the shit DOES hit the fan in Europe the nationalistic animosities will sweep everything before them like Japan's tsunami last year
They've moved on to discussing how inflationary the rise in oil prices are going to be.
New guest said something the German MS guy didn't like ... his left eye is twitching ... really creepy and kind of Dr. Strangelove-ish.
barliman
What it means : EITHER WAY, THEY ARE FUCKED.
Choice 1 : Accept CDS trigger : KABOOOOOOOOOOOOM.
Choice 2 : Say it isn't a CDS trigger when it truly is : KABOOOOOOOOOOOOOM.
Either way, the system is kaboom.
The only way to get out of those two choices is to force people to accept the PSI deal.
I'm the asshole that will trigger the event! English Law !
uh oh!
CNBC policy is consistent in Europe
If you want to be a female on camera, your bust must be large and tightly constrained.
Ooooohhh, they've cut back to strict, pretty schoolteacher with ze German accent ......
barliman
ISDA is in a bit of a bind here.
If they don't declare a credit event, the CDS market will be in shambles (as it will confirm what the markets have all known since AIG - which is that CDS is a trading and not a hedging vehicle). Furthermore, peripheral debt should actually sell off as there will be no way to hedge or trade the basis.
On the other hand, they have avoided a credit event for a reason here - they know that there will be some unforseen consequences that may threaten the whole can kicking exercise.
The markets will try to trade either outcome as a risk postive event but that is a move that should be faded. Its getting toward the time where someone will actually have to realize a loss.
No need to be cynical.
The most important question : how much CDS get triggered if this is a credit event??
Or likely, the ISDA will say no credit event, and the stupid markets will ignore this and continue with their business as usual. Hell they've been ignoring the US/Japan problems for the last 20 years... so why not this??
There's no way the big banks will let go of their most lucrative business (CDS).
Greece is Going Fu Manchu .
Does anybody still understand all these rescue plans anymore?
Does this mean I should keep buying silver?
No. It's all worthless. But I'm feeling generous, sooo...... I'll buy it for, lets sayyy 10 cents on the dollar. MmmKay?
I'm starting to look for a double top ( usd/jpy) on that retrace to the mid 80's. I was looking at some Asian Flow charts. I suspect GDP will be FLAT!
Sector wise. The Japs and Nips will fight it OUT!
orly? 'Nip' is slang for Nippon, which means: japanese.
/facepalm
You are how old? Koreans and Japanese dim sum! Get out of that Basement! I'll bet your daddy if you have one, is younger than me! Were you born in 2000? I was partying in Porte Douglas!
cool story bro
.. which still is no excuse for name calling.
Fail!
The Japs and Nips will fight it OUT!
Do you mean Japan is going to have a civil war? THAT isn't priced in.
No CDS puts the counter party risk back where it originates. So where does the money go now?
actually quite meaningless. greece is a basket case with a zombie rotting in it. the trick for this italian nutball (ecb) to bring down Italian and Spanish yields down which he will fail. hence rangy market and muted rallies sans employment number.
NEXT WORLDWIDE CRISIS IN THE PIPELINE LIKE NEVER SEEN BEFORE:- THE MULTI-TRILLION DOLLAR CDS MARKET
Meh, this is all so yesterday. 25 billion euros? Like get with it. This is the new millenium, we only talk about trillions now. ISDA is on the payroll and will do what they are paid to do!
Just Long covering. Dealers have to fills orders. That China news was shit bag ugly ehh?
There is no way the ISDA will call it a default tomorrow .... not a chance in Hell. Cans will be kicked regardless of the outcome.
The beatings will continue until morale improves !!!
The whales are JUMPIMG! gasping in their Death throws. The currency markets are like the North Sea Sentinels.
Gasping for their last " BULL CANDLE"!
This usd/jpy shit is getting old. Time to slam the Panda! Excuse me whilst I make a phone call!
I'm a noob here so please be gentle but are we not in a weird cycle:
The banks have signed up as in so doing they have avoided (perhaps only temporarily) the solvency crisis and contagion that would create (through a widespread credit event/CAC/CDS) but are ignoring the fact that they are in a liquidity crisis as no one will lend a) to a PIIG or b) to the them (thus the overnights with the ECB).
Who's going to buy Greek debt (or any other PIIG debt) next time? That'll be the ECB... who are in a bind at the moment when it comes to printing as the Germans have woken up to the fact that it's not good.
Now the real show begins. That the Greek pimple on the nose of world capitalism, of which the 'greenback' and the 'Uro-Uzo' are the two pillars, should have taken more than two years to resolve; with a collective LOSS estimated at 30 billion USD in additional interest expenses to the real economy, all injected to the benefit of the virtual Oligarchy economy expressed in fiat ponzi money, shows us where the real problem lies : in the overlevereged banking world itself, officially at 5/1-10/1 leveraging on average on both sides of the pond, but in fact much higher if we include off balance sheeting private sector banking scams, which are unregulated and often parked in off-shore havens. Contagion risk stays a dirty word in World Banksta town even more so every day. Its looks more and more like a losing race.
How will this machine that is making fiat money hand over fist;... aka creating poverty in real economy terms, as the cost of this carry trade of fiat money is far greater than real economic growth; its all circular money and its sucking the real economy dry to feed the ponzi, which is nothing more than a risk asset bubble pump,... will run the first world to deep depression or Armageddon is the ONLY REAL Story in town. Pax Americana and its surrogates now have their work cut out.
Place your bets, its one OR the other; or both at once. Meanwhile the BRIC economies who create the real wealth in the burgeoning third world chug along to create their own monetary framework. THe day the OIl Oligarchy joins this show the writing will be on the wall for First world. Better hope we have a new energy paradigm in place by then!
How the fudge will the markets react to the ISDA desicion? I mean no credit event is bad for the bondmarkets and will push risk up for bond investors and make investments in bonds not so attractive. This is bad I think...
On the other hand we have the credit-event, and here we have the whole off-balance sheet dilemmma. No one knows with certain how much CDS have been issued. This could be a event that pushes strained banks/insurers over the brink. This could mean more debt for European countries as they bailout their banks -> further downgrades and more expensive borrowing, although the CDS market will be proven by then, so perhaps borrowing will in fact be cheaper LOL.
So, two scenarios, out of which I think there will be some kind of mixed solution that further complicate things -> more work for Tyler!
I think I will stand this one out, it's a friday too. Going out for a beer.
It's a netting event with the CDS. If they're activated, we'll see how well the system actually works on sovereigns. I think Peter Tchir wrote recently that any bank who hasn't account for a Greek CDS payout is beyond dumb at this point.
My BIG FAT Greek eh... uh... ahm... SOMETHING!
Greece is a glimpse into the USSA. Just a nice small way to say this will come to the USSA
15 Reasons Why The U.S. Economic Crisis Is Really An Economic Consolidation By The Elite Banking Powers
http://endoftheamericandream.com/archives/15-reasons-why-the-u-s-economi...
Something is fishy!
Just watched the Weather Channel....said a SHITSTORM is heading towards Greece.....
.
Youth unemployment in Greece is 51% and counting... Capable people are leaving the country... Greece is doomed and never gonna be competative for at least 30 years. At least not with an expensive Euro and wages which allow people to bareley feed themselves.
Export is at an alltime low, production also so export is nearly dead, only thing that can help them now is tourism i guess... That's not gonna pay for a huge government apparatus and debt releaving measures...
Greece has no chance what soever...
Act !!, Scene Pretend 111: World- pretend again everything is fine, while the Banks methodically suck the lifeblood from you until you are impoverished.
Cut, Cut. Dam it World, think hopium, hopium, hopium. For a moment, the look on your face reflected reality. Now get back to delusional thinking and Act dam it.
Tourism? Maybe, but I wonder who's going to go there now that Germans aren't so welcome.
The real interesting part comes if they manage to kick the can far enough to have Ireland and/or Portugal also cross the event horizon. Are they crazy enough to believe they can they juggle two or three at once?
Yes.
Rerack time
"The problem of the re-inauguration of the perpetual circle of production and exchange in foreign trade leads me to a necessary digression on the currency situation of Europe.
Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become "profiteers,", who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.
Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.
In the latter stages of the war all the belligerent governments practised, from necessity or incompetence, what a Bolshevist might have done from design. Even now, when the war is over, most of them continue out of weakness the same malpractices."
- John Maynard Keynes - Economic Consequences of the Peace - 1920
http://www.gutenberg.org/files/15776/15776-h/15776-h.htm
I was most intrigued by Tyler Durden's comments that the Euro contortions we are witnessing today represent transparent machinations permitting the ECB to loot Greece’s gold.
Interesting and most byzantine (byzantine? ... most à propos – given we are talking Greece)
Ghee whiz – and all this time I naively thought that the EU was only determined to postpone the Greek default until taxpayers had assumed all the banks' liabilities.
I direct everybody’s attention to a great Der Spiegel article from last June: where leading German economist Stefan Homburg argued that euro-zone members should not bail out Greece, discussed who is making a profit from the crisis and explained why he himself is buying Greek bonds explaining
http://www.spiegel.de/international/europe/0,1518,770673,00.html
Things that make you go hmmm… anybody heard from Stefi lately or was this a classic case of “pump & dump”?
No way will the CBs or their stooges admit default. They will attempt to kick the can, extend and pretend as long as they still breathe oxygen. The world may go up in flames but there will be no mention of default.
The state pensions agreed to let the state default on them. Interesting how that works out. That thing in your hand is called a bag, bag holders.
GM bond holders (the small ones) took it up the ass. what more do you need to know about gov's and law.
MSM will report a big surprise in BLS data of more jobs created not this bond mumbo jumbo stocks to new highs.
next few months bonds fall apart as rule of law does not exist anywhere in the west. bullish for PM's stocks maybe as long as CNBC and the rat pack of MSM keep attention on anything but gov debt defaults.
Nothing to see here people. Move along. No default, no reality, no truth. Just lies, damned lies and fraud. Hey, you - yes, you, MOVE ALONG I said. Nothing to see.
Great article in today's Der Spiegel explaining Euro-folly http://www.spiegel.de/international/europe/0,1518,820302,00.html
Here is a great opening quote:
One can only presume that this forced participation is to be deemed "voluntary"!
another great quote:
One can only wonder - "naïve" or "complicit" !?
When this sordid tale has run its course - bankers will be hanging from lamp posts - next to politicians !
No the banksters will hire your neighbors and hang you from lamp posts,
Hey greeks, that's what happens when you are asleep at the wheel and swap paper and pretty plastic baubles for gold.
Hey rest of the world, take note. The banksters are doing the same thing to you!
John Mauldin – (one of my favorite commentators) wrote a great piece a while back: “Where Is All that Greek Gold?”
Here is a follow-up from one of his Greek fans explaining the peculiar Greek sense of Euro-entitlement.
“correction” indeed! From the Greek perspective – the rest of Europe in general and Germany in particular still owes them!!!
This Hellenic collective and total misaprehension of history explains much. As John Mauldin himself points out - the distinction between perception and reality is moot. As long as Greeks believe in this ersatz version of history, the Greeks will, in perpetuity, percieve themselves the injured party. Already, there is talk of Greek re-alignment with Russia (both hailing from eastern orthodox traditions). Russia, for a paltry sum, could dismember NATO's eastern flank.
So we are NOT just talking money on the table here - we are also talking about a toppled Geo-Political Chessboard - a salient point all-too-often forgotten in this discussion.
There is no way that they will call a credit event. These guys know which side their bread is buttered on, and they like butter.
i cant quite find the thread where ZH admits that its incessant harping on the the likelihood of PSI failure, was a/ just a beat up, and b/ wrong. so i am going to put it here..
CHARLES DALLARA 1
ZERO HEDGE 0
now i see the story is that the 15% of greek law bond holders who are affected by CACs are going to sue. how are they going to sue when the greek government has passed a law to insert the CACs?? get real. we all know that the reason there are holdouts at all, is to make sure the CACs ARE used, so their CDS pays out. der.
This is called "THE BUMMER EFFECT"