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Greek Bailout Or Deliverance?

Submitted by Tyler Durden on 02/17/2012 10:17 -0400

Via Peter Tchir of TF Market Advisors,

Bailout somehow seems too nice of a word. It implies working together, giving a helping hand, making a real effort to help someone out. As I read the headlines coming out of Greece for the past 2 weeks, all I can think of is, how do you say “squeal like a pig” in German.

The market is happy because it looks like PSI will go through and that in theory will be enough to convince the Troika to send money to Greece, so long as they live by the latest austerity package. That all seems fine, I guess, but looking beneath the headlines, it seems far worse than that.

The ECB is getting special treatment on their bond holdings. They will not participate in PSI, in fact it looks like they are just going to change the bonds they own to identical bonds that aren’t subject to retroactive collective action clauses. This may help the current situation, where bonds are already trading at 20% of par, but the implications for the market as a whole aren’t so good. All none ECB holders are subordinated. Period, end of story. Right now as the markets are in a period of calm, that can be ignored, but it will come up again. Possibly the moment the ink is dry and Portugal and Ireland want new deals.

Then there is the retroactive collective action clause. On the bright side, triggering that will actually allow a Credit Event to be declared. On a scarier note, is the fact that not only are the rules changing, but investors are being told they have been changed as though they were always in place. That is about as Orwellian as you get. The message should be clear – once the entire economic system functions on printed money and government programs, they will treat the system like they own it – since they do. So far investors are buying into the idea that this is a unique situation and a one-time thing. But this seems like an incredibly slippery slope – a government, with the blessing of the ECB, is changing bond laws after the fact and forcing investors to deal with that new law as though it had always been in place. Once this tactic has been used, it will be tempting to use again when it suits them – and them being any government, not just the Greek government.

And the Greek government has been a complete failure. They are represented in these negotiations who owes his job to the people he is negotiating with. His job was not to represent the Greek people, but to force a deal down their throats. No work was done on alternatives to the bailout (until recently). He didn’t explore what options Greece had other than the bailout. All he did was create fear that without a bailout Greece would fall into total chaos and used that to get his job done – passing austerity measures imposed on the people by the Troika. The situation in Greece seems awful. The economy is collapsing. The human toll is growing, yet the puppet didn’t spend time looking for alternatives, looking for paths that might be good for Greece, but instead tried to promote irrational fear and get his job done.

Any attempt by Greeks to explore alternatives has been shut down. Remember when the last Greek leader had the silly idea of a referendum? Samaras mentioned that the April elections could change things, which led to some demands that the elections be changed, but ended (so far) with him just groveling for forgiveness. And that is a trend that is growing. This is no longer any attempt by one nation to help another, this is now about creating a pecking order. Too many things have been said that cannot be unsaid that hurt the dignity of the Greeks. If they had a leadership that had worked on alternatives to the bailout, maybe the PSI talks would already be over. Instead, there is a real risk they accept a deal and allow their dignity and sovereignty to be stripped away, all for a deal that probably isn’t in their best interests. The deal is in the best interest of the Troika – not Greece.

The worst part is that all these talks go on while in the background everyone is acknowledging that this deal won’t even work anymore. That level of denial is scary.

The one element not being addressed by this Greek default, is what happens to all the bonds they guaranteed? Are those guarantees still “good” in the eyes of the ECB? That is the only way Greek banks are funding. But yes, in this world, if the ECB decides they are valid guarantees, they can fund the banks based on those guarantees, in spite of the fact that they are worthless.

Quietschen wie ein schwein (according to google translate).

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Fri, 02/17/2012 - 10:18 | 2169200 Careless Whisper

The Careless Whisper Morning Buried Story & Threadjacking

U.S. Court Of Appeals: Frontrunning Software Is Not A "Trade Secret". Appeals Court Overturns Conviction Of Sergey Aleynikov. May Not Be Tried Again. Charges From Goldman Sachs Were Legal Bullshit. Sergey First Hauled In To Court On The 4th Of July On Orders From The Capo Di Tutti Capi.

http://dealbook.nytimes.com/2012/02/17/court-overturns-conviction-of-ex-goldman-programmer/

Fri, 02/17/2012 - 10:32 | 2169240 GetZeeGold

Invoking a Robin Willaims reference to Deliverance.

SQUEEEEEEEEEAAAAAAALLLLLLLLL.

Is it a coincidence we're talking about the Greeks......I think not!

Fri, 02/17/2012 - 10:30 | 2169242 Clayton Bigsby

According to Google Translate, please find the following:

Sie haben einen ziemlich sicher, Mund, Junge. Sieht er wie ein Schwein aussehen? Er sieht wie ein Schwein. Quietsch, Junge! Quietschen wie ein Schwein! Wheeee!!

or, in English:

You sure have a pretty mouth, boy. Does he look like a pig? He sure looks like a pig. Squeal, boy! Squeal like a pig! Wheeee!!!!!

Fri, 02/17/2012 - 10:33 | 2169257 fuu

Nice find, thanks.

Fri, 02/17/2012 - 23:16 | 2172230 Buck Johnson

That is amazing, I didn't even see this in the MSM at all.

Fri, 02/17/2012 - 10:22 | 2169213 Spooky Polish

Bail me to , I'll pay back later . I promise.

Fri, 02/17/2012 - 12:48 | 2169706 Mr Kurtz

Better yet:

a) Take the bailouts

b) Default and let the bag holders do what they do best.

c) Redominate into New Drachma

d) Rescind all contracts with the ECB on your way out the door.

Fri, 02/17/2012 - 10:22 | 2169215 ConspiracyTheory

Sounds bullish!

Fri, 02/17/2012 - 10:23 | 2169216 Conrad Murray

"Any attempt by Greeks to explore alternatives has been shut down"

Need to start an adopt a rebel fund. Barack Insane Osama gives material aid and support to our "enemies" because they are helping the "freedom fighters" in Syria. I say fuck that: Use those funds to offer $100k to every Greek that hangs 5 banksters/politicians.

Fri, 02/17/2012 - 10:24 | 2169219 Hi Ho Silver

Quietschen wie ein Schwein Bitchez!

Fri, 02/17/2012 - 10:32 | 2169249 fuu

Beat me to it.

Fri, 02/17/2012 - 10:32 | 2169250 r50fHBWjzxE2

Quieken wie ein Schwein.

Quietschen, is the sound of or door that needs to be lubricated.

Sat, 02/18/2012 - 00:57 | 2172365 Hi Ho Silver

Unlubricated squeal. Yep, that's what I meant.

Fri, 02/17/2012 - 10:24 | 2169222 GoldmanBaggins

Greece as well as most western nations are technically bankrupt. We know that and have for some time. So why all the drama and dragging out of the process? Simple. What will the citizenry tolerate? That is the question our masters need answered before they procede. You see Greece is not just some pathetic southern Euro basket case. Greece is a full fleged member of the Brusselss Treaty and the Western European Union and geographically provides access to the Mediteranian region. Greece is a decent military power in the region as well. There membership in the WEU requires them to come to the aid militarilly of the other members and vice versa. You see money is power but real power lies at the trigger end of a gun. Greece will not go its own way. To much of a risk. With its own currency they may make nice with the wrong people. Our masters won't allow that. So sit back and relax we are being tested. Greece will tell our masters what they need to know about how hard they can press the boot on the neck of all of western society. Then they will choose their method.

Fri, 02/17/2012 - 10:25 | 2169223 It is a bargin ...

Squeal little piggy

http://www.youtube.com/watch?v=yj4LnfkdJDM

Fri, 02/17/2012 - 10:25 | 2169227 LouisDega

So the futures are up i gather... Let me maximize Marketwatch... Yea, They are up alright.

Fri, 02/17/2012 - 10:51 | 2169308 Manthong

And let's see,, the next spate of downgrades..

Uh,, how about after Europe close.. oh, about a half hour before starting a three day weekend..

They wouldn't do that now , would they?

Fri, 02/17/2012 - 13:28 | 2170224 LouisDega

Thanks god for windows 7. I can keep ZH on my left half and Marketwatch on the right half

Fri, 02/17/2012 - 10:26 | 2169228 Yellowhoard

Blaming the current set of politicians in Greece for their inability to pull a financial rabbit out of the hat is like blaming the fireman for not being able to douse the gasoline fueled flames set by the pyro who's jacking off to the spectacle from across the street.

Fri, 02/17/2012 - 11:45 | 2169664 JPM Hater001

I am dumber for that.

Fri, 02/17/2012 - 10:27 | 2169230 SheepDog-One

The Monetizers are basically done buying every bond for themselves, using your money....the game is almost over. Next step will be to vanish underground one morning, and let populations kill itself off.

Fri, 02/17/2012 - 10:29 | 2169236 PolPotPie

"This river don't go to Aintry. You done taken a wrong turn." Bitchez!

Fri, 02/17/2012 - 10:29 | 2169239 SmoothCoolSmoke

Bernanake: "Scoreboard boys......have a nice long weekend. See ya Tuesday"

Fri, 02/17/2012 - 10:30 | 2169241 _ConanTheLibert...

Little detail: Quietschen wie ein Schwein (notice the capital S). That's how you write a noun in German. My German language skills have gone off a cliff but I do remember this peculiarity.

Fri, 02/17/2012 - 10:31 | 2169243 GoldenTool

Why is it I read Greek and deliverance, and could swear I hear banjo's in the background.

Fri, 02/17/2012 - 10:49 | 2169296 brooklynlou

You're actually hearing Bouzouki's in the background. Its like a banjo but with a fat ass.

Fri, 02/17/2012 - 11:26 | 2169558 _ConanTheLibert...

http://www.youtube.com/watch?v=1tqxzWdKKu

Fri, 02/17/2012 - 10:31 | 2169246 withnmeans

He sure has a pretty mouth ! BaHAHAHAHA "Deliverance quote" for you young punks".

Fri, 02/17/2012 - 10:36 | 2169263 flyonmywall

This will end badly for the people, but Papademos, Van Rompuy, and all the other worthless politicians will retire to the Cayman Islands, set for the rest of their lives.

Fri, 02/17/2012 - 10:42 | 2169276 SheepDog-One

Nah theyll all soon be in an underground city riding out WW3, soon to kick off, the games down there will be fun as the elites snap 1 by 1 and try to kill the others.

Fri, 02/17/2012 - 11:28 | 2169571 _ConanTheLibert...

Good point. At some point the elite might go after each other. That would really be helpful.

Fri, 02/17/2012 - 10:40 | 2169270 ChrisFromMorningside

O/T:

http://www.youtube.com/watch?v=RHaMqHh5NZ4

Is this for real? Total Wall Street stooge.

Fri, 02/17/2012 - 10:42 | 2169274 adr

I have a 2008 car with 90k miles on it, but the car itself still looks like the brand new one on the lot, since the model hasn't been changed yet.

According to ECB rules I should be allowed to exchange my car for a new one because it looks exactly the same. Although my car is not worth the same as the new one, it looks identical so therefore is worth the identical value.

The dealer is responsible for taking the loss. However they don't mind because the manufacturer has assured them they will backstop any loss. After all the manucaturer can just produce a replacement car, or 100 more to give the dealer.

OK, I'm off to go to the car dealer and use bankster tactics to get myself a brand new car. I'll let you know how it goes!!!

Fri, 02/17/2012 - 10:48 | 2169300 the 300000000th...

Blah, Blah, Blah we all know its BS. It has to fail at some point. How are the Greeks going to get out from under all this bailout money (the non haircut part of it that is) from the past 2 years?? Are their scientists going to reveal that they have found an energy source 100 times better than oil?? Is their space program going to announce that they have found a way to mine some sort of wonder commodity from another planet?? No, they got nothing. Or maybe its all those leaving the labor force from austerity that can't pay taxes anymore, maybe those people will go steal money from other country's banks and come back and help Greece get from under the debt. Its just a game to see how less the banks have to take it on the chin, because they know portugal, spain, and ect.... are next. This all sets precedence for that.

Fri, 02/17/2012 - 10:53 | 2169324 Dollar Bill Hiccup

Pete,

Has it ever been about what's good for the Greeks? And, not to lose sight of the fact that the Greeks are not victims. Their dysfunctional politics and levels of corruption were not thrust upon them from the outside. They must take responsibility for their society (that sounds very German, I know).

What would be good for the Greeks would be to do an Iceland and get it over with.

As for the levels of denial, in this entire long and sordid episode, there have been two rules. Rule # 1, Deny everything. Rule # 2, in case of doubt, refer back to rule #1.

Fri, 02/17/2012 - 10:58 | 2169349 Dick Darlington

*ECB SAID TO HAVE COMPLETED GREEK BOND SWAP

*ECB BOND SWAP SAID TO EXCLUDE CENTRAL BANKS' INVESTMENT ASSETS

Feb. 17 (Bloomberg) -- The European Central Bank’s Greek
bond swap doesn’t include assets held in national central banks’
investment portfolios, a euro-area central bank official said.
     Central banks will have to negotiate individually with
Greece over whether Greek bonds in their portfolios can be
swapped for assets that are exempt from a debt restructuring,
the official said on condition of anonymity. The ECB and
national central banks have already swapped the Greek bonds
acquired in the Securities Markets Program for similar assets
that are exempt from so-called collective action clauses, the
person said.
     Because central banks didn’t sell their Greek bonds as the
ECB purchased securities to calm markets, they can argue the
investment portfolios indirectly aided Greece, the official
said. Germany’s Bundesbank has no Greek bonds in its investment
portfolio, the official said.
     Central banks in the 17-nation euro area are barred by the
region’s founding treaty from directly financing governments.

Fri, 02/17/2012 - 10:59 | 2169363 Lazane

a whole lot of freeloading going on

Fri, 02/17/2012 - 11:01 | 2169383 Lazane

"You can blame a person for knocking you down but you can't blame that person if you refuse to get back up. . . . However much slave history taught us about the injustice and misery we as a people had suffered, it did not excuse us from assuming responsibility for ourselves and each other by altering its course." Malcom X

Fri, 02/17/2012 - 11:03 | 2169400 turtle777

Wee, weee, weeee, weeee, weeeeeeeeeeeeeeeee

Fri, 02/17/2012 - 11:20 | 2169524 BudFox2012

You sure have a pretty mouth for a banker...

Fri, 02/17/2012 - 11:34 | 2169606 pods

So our battle cry will be:

"Whattabout what they done to Bobby!"

Fri, 02/17/2012 - 11:39 | 2169618 Thomas Anderson

Unfortunate how 2 democratically elected leaders were forced out of office, not at home, but by the Euro Project leaders, and replaced with people who do not hold the best interest of the Greeks and Italians. A Greek default would be the best outcome for the Greeks in the long term. The German...sorry EU imposed austerity measures are going to be disastrous, putting Greece in a debt deflation trap and actually will see their deficits rise in the future even when they trim their budget because of falling tax revenue. The Greek Tragedy.

Fri, 02/17/2012 - 11:51 | 2169699 hangemhigh77

What is all the fuss????? Just rename Greece "Germany 2" Problem solved.

Fri, 02/17/2012 - 12:22 | 2169914 noses

Seriously: What would Germany want Greece for? To pay for them for the rest of the century (oops – that's already decided)? The East Germans still haven't been digested, either. And while we're at digestion: Turkish Kebab is orders of magnitude better than Greek Gyros anyway.

Greece could follow Atlantis into the abyss and nobody would really miss anything.

Fri, 02/17/2012 - 12:00 | 2169752 hangemhigh77

They need to sell more gyros. I'm sure all the benevolent banksters would like a nice hot gyro.

Fri, 02/17/2012 - 12:06 | 2169776 Falcon15

Germany to Greece: "Quieken wie ein schwein! Sofort!"

Fri, 02/17/2012 - 12:17 | 2169871 noses

A German would say "squealing like a stuck pig" --> "wie ein (an)gestochenes Schwein quieken" and relates to the sound a hunted pig would make if you didn't really get it with your Saufeder.

Fri, 02/17/2012 - 13:18 | 2170178 mantrid

> Any attempt by Greeks to explore alternatives has been shut down.

or an alternative was already baked and planed to be delivered in March and all we see is just a smokescreen so the alternative gets everyone by surprise..

> That level of denial is scary.

it's scary because it's nonsensical. it might be indicator of something extremely fishy in the air coming...

> The one element not being addressed by this Greek default, is what happens to all the bonds they guaranteed?

perhaps - given that an alternative is to be unveiled soon - it doesn't matter?

Fri, 02/17/2012 - 14:57 | 2170747 Dead Canary