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Greek Bondholder Talks Stalled, Agreement Unlikely By Monday Deadline
We will shortly present an extended analysis of just why the broader media is once again wrong in their interpretation of who has the upper hand in the Greek bankruptcy "fresh start" negotiations (because while Greece may not have formally filed bankruptcy, or insolvency, or whatever one wishes to call it, the talks right now are basically determining what post-reorg Greece will look like, and specifically its fresh start accounting balance sheet with or without an EOD trigger), and why hedge funds have controlled the process all along.
In the meantime, we were not at all surprised to learn this morning that not only has an agreement not been met ahead of Monday's critical Eurozone FinMin meeting (the first of many for 2012) in Brussels, but talks have "stalled". Dow Jones reports: "Talks between Greece and its private sector creditors over a debt writedown plan appeared to stall Saturday as the banks' top negotiator left Athens amid signs of fresh disagreements over how much Greece would pay its bondholders in the future. Officials close to the talks said they may not conclude before a meeting Monday of euro-zone finance ministers where a second bailout which will keep Greece from defaulting is supposed to be discussed. Without a deal on the write-down of the debt held in private hands, the loan can't be released. Institute of International Finance chief Charles Dallara, who has been negotiating with Greek officials on the bond swap plan for the last two days, left Athens Saturday as hurdles remained over the interest rate the new bonds would pay private sector creditors. "Right now there are no talks. There will be consultations with the EU and the IMF to determine where we stand and then we'll see. It (negotiations) has again become complicated with the new demands over the coupon," said a person with direct knowledge of the talks." Which is why any statements that Greece, or the ECB, has all the leverage are total rubbish - if Greece wanted to get the deal done over Hedge Funds' dead bodies, it would have. It hasn't. And yes, a forced cram down of UK-indentured Greek bonds is still a possibiliy, but we will shortly make all too clear that should Greece proceed with this last ditch scorched earth approach, it would mean a complete overhaul of the entire PIIGS bond market, and why a sell off in €800 billion of it would be imminent.
In the meantime, some more details from Dow Jones:
IIF spokesman Frank Vogl said that Dallara had a personal engagement in Paris and had to leave but that a team remains in Athens. Dallara is not expected to return to the Greek capital over the weekend.
A Greek Finance Ministry official said the IIF chief will continue negotiations with Finance Minister Evangelos Venizelos by phone later Saturday.
The talks, which started up again this week after nearly breaking down a week earlier, come as Greece scrambles to put together a debt-restructuring plan ahead of a Monday meeting of euro-zone finance ministers in Brussels where the debt deal is expected to top the agenda.
However, this now appears unlikely.
"We may not be able to reach a deal before Monday's eurogroup. This is unfortunate because the finance ministers were supposed to have crucial talks on the (second) bailout loan provided there was a deal on the haircut," a senior eurozone government official said.
What this means is that with the March 20 cash outflow "hard deadline" now less than two months away, and absolutely no trace of a deal on the table, the haed default deadline is starin Europe in the face, even as everyone has been giddily gobbling up risk assuming everything is taken care of.
Reaching a deal with private creditors is a key precondition for Greece to receive a fresh, EUR130 billion bailout from its European partners and the International Monetary Fund.
The aim is for a voluntary restructuring of some EUR206 billion of debt Greece owes its private creditors by exchanging old bonds for new ones worth half the value. That would wipe out EUR100 billion worth of Greece's EUR360 billion debt pile--saving the country some EUR4 billion a year in interest payments--but forcing steep losses on bond holders.
The two sides appeared to be closing in on a deal that would give creditors new bonds paying a 3.5% coupon for shorter maturities and rising to a cap of 4.6% on longer-dated bonds. The average coupon would amount to around 4%
Earlier, people familiar with the matter said that the IMF and Germany don't believe Greece's debt would return to sustainable levels if the average coupon on the new bonds is around 4%, pushing for a lower coupon.
"We were discussing technical and legal issues having agreed in principle to an average coupon of 4%, but the IMF insists this won't be enough to bring (Greece's) debt back to sustainable levels," said another person with knowledge of the talks. This is the second
intervention by Germany and the IMF in debt talks in the last eight days over the coupon rate.
Reuters adds that the ever-cheerful Dallara (who had a "sure deal" when Greek bonds were trading about 300% higher), has now left the country:
The representatives of Greece's private creditors left Athens unexpectedly on Saturday without a deal on a debt swap plan that is vital to avert a disorderly default, sources close to the negotiations told Reuters.
Negotiations will continue over the phone during the weekend but it is unlikely that an agreement can be clinched before next week, the sources said, as Athens races against the clock to strike a deal.
The IIF said on Friday that the elements of the deal were coming into place, adding: "Now is the time to act decisively and seize the opportunity to finalize this historic deal and contribute to the economic stability of Greece, the euro area and the world economy."
And to think: a €9 billion hedge fund blocking position is all it would take to kill all this "decisiveness" and the "opportunity." Much more on this topic shortly, in a post to cover the downside scenario, which now appear inevitable, next steps.
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Dallara left for a personal engagement? That guy is a joke. A lobbyist with no credentials to be doing the negotiations.
I just do not understand why this is so difficult for Greece. They have 0 money. Broke, bankrupt, kaput! So, they advise.....we cannot pay back any debt that we owe. And we apologize for that. We feel it is prudent for all and to the benefit of all if we leave the Euro concept behind us and return to our national currency, the Drachma. After time, we will be able to trade and work with our European partners to establish new trade and financial relations under our own currency.
We are sorry for all the bond holders and other entities of our debt, but just as an individual or company starts anew, we in Greece must start anew. We are repaying 0% of any and all debt that is owed.
We apologize for any inconvenience, and have a nice day.
Best regards,
The Greek Parliament and Prime Minister of our great Greece.
Simple!!!
Now close your eyes and imagine yourself saying that to GUIDO the loan shark...
Then ~ calculate the outcome...
jeez... they could at least throw in a gift basket with some olives, dates, ouzo, baklava, gyros and the like. I mean they could at least feed the people they are going to leave holding the bag right? for that matter the Italians might want to start prepping some food baskets as well, and the Spanish, and the Portuguese, and the...
POTLUCK Default party !!!
far from entertaining however...plus when you entertain you get more money! Here's how they really do: "you wish to talk money? OF COURSE, COME...COME. SIT, SIT! Here: have some wine. RELAX! Would you like something to smoke?...
Amazingly these parties can last for years! And I thought only the Romans were capable of such feats...
Greece isn't in control. The bankers are.
Purdue plays Michigan State in 18 minutes and I have cold beer and wings.
Fuck this shit.
Thanks for the laugh !!!
Could be a good game as long as it's not basketball.
Woah. That one came of out left field ...
/sarcasm off
Metaphorically speaking... More like...
off the expressway... over the river... off the stone guy...
http://www.youtube.com/watch?v=_oACRt-Qp-s
Ouzo, anyone?
I'll take some honey ouzo.
I'll take some ouzo, honey. Cheers!
Plan good for two years with no growth in Greek economy and capital flight already occurring. Meanwhile Portugal and Spain with 23% unemployment begin to systemically collapse. Europe in deep doo doo ---will be looking for scapegoats again. Everyone will be ducking at the same time
more like a generation.
The market has not priced in the Greeks missing their 14.5 billion Euro bond payment on March 20. Ka-fuckking-boom spectators, pimps and hoes...
Miss a measly 14.5B payment?
Are you forgetting the ECB's self-imposed upper limit of 20B/WEEK for Sov-Bond buying?
20B/Week is enough to finance all peripheral debt. Talk about an effective ceilling...
Why does 20 billion sound like the price of a pint?
This news of NO DEAL, and NO QE next week, could we have a down week..
http://www.safehaven.com/article/24065/fed-to-hold-off-on-qe
Nah. The way things have been going since November, it's probably good for a 200 or 300 point pop in the Dow on Monday.
Example: Citi posts horrible Q4 earnings miss ... yet the stock is up about 9% since 3 January.
Just normal price discovery - no manipulation...:( Can you say 'disconnect?' Reality's gunna be a beeyatch...
Can you say Market top ???
I translated this into english: The Fed will not be printing more money at this time as oil is already choking the life out of the economy and europe has caused our worthless paper to become the least ugly girl at the party so we will take advantage of this and once the stock market realizes this and runs for safety it will even help us out further. dont worry thought some months down the road when deflation starts to really hammered down things we will be back with our bazookas, aimed at bonds and mbs.
If the hedge funds only hold 9 billion, surely Greece will just pay up to them to keep them quiet.
The banks won't complain about unfair treatment, as they are joined at the hip to the governments after their Basel II fuelled moral hazard bond buying spree, and want the whole sham to go smoothly.
Greenmail baby
This is simply bullshit.
Greece doesn't matter any longer. Regardless what happens, from now on the only bidder in the market will be ECB.
Ultimately, what will that do to the value of the euro?
Bottom line of Greek mess : the Greek Oligarchs have been eating the pension funds since ....the 50s !!!!
Its the future that looks us in the face, the Greek scam, in this financialised FIRST world : No pensions will be paid from now on. The Oligarchs can't afford to meet those promises, which are NOT binding to today's TPTB clique; as they were not there when these laws were voted, nor when the mega scam started. Period; Move on sheeple!
1789 calling....once bitten twice hungry, with a vengeance.
Same thing in Germany. German banks are as bad as greeks ones, if not worse. Proof to you: Why did they buy greek bonds which is equal to lending immense amounts of money to a person that you know he'll never pay you back? If german banks made this kind of lunatic decision, hence those banks are in much worse shape than the rest that we know about.
I think there is a big facade fronting as that German fortress...their unfunded debt liabilities prove it - over 400% of GDP...oops.
Hmm, Europe as a Potemkin Village...
This mess is like trying to sell a car, with a big hole in the side of the engine block. Greece is camping in a tow away zone. They're quickly moving out of a Winnebago, into a Yugo.
http://georgesblogforum.wordpress.com/2011/11/02/the-daily-climb-2/
Great analogy.
We just need some car to go to the junk yard and flattened to make space for the others. In other words, we need some deaths, few banks to die, no funeral, they just vanish like a flattened car in a junk yard.
Do the bondholders not have insurance? Are the swaps worth more than the bonds? The hedge is the bet; won't a credit event will make enough of the (smart ones) whole to insure that it will come to pass? Could this be the outbreak of the financial flu?
Global Financial Market Regulation
http://www.bis.org/review/r120120b.pdf
Andreas Dombret: Global financial market regulation – need for a
coordinated implementation and a global level playing field
Speech by Dr Andreas Dombret, Member of the Executive Board of the Deutsche
Bundesbank, at a seminar of the European Ideas Network and centre-right Think Tanks and
Political Foundations in Europe “Long-term growth – organizing the stability and
attractiveness of European financial markets”, Berlin, 20 January 2012.
I've come to the conclusion that the 'Bond Holders' are driving...Greece has 'Shot Gun'....and the IMF, EU and ECB are all getting taken for a ride.
Greek Default: Season 7
They've killed off some major characters, done the flashback sequences, brought in a fresh face or two, and jumped the shark.
Time to end the show before it enters "Sex and the City 2" territory.
Beyond "jumping the shark," "nuking the fridge," AND "swallowing the Corndog..." "Greecin' the economy!"
http://www.infowars.com/the-global-elite-are-hiding-18-trillion-dollars-in-offshore-banks/
Check CNBC right now. Breaking news: Talks never broke down. Quite contrary. Hilarious.
State controlled media is apparently on full alert.
Just recieved a CNBC 'breaking news' alert on my cell phone...
"IIF says Greek debt talks have not broken down 'Quite the contrary'..."
This shit is fucking retarded at this point. You know they'll NEVER let the markets open and trigger CDS contracts anyway. This stupid ass charade will continue on.
Sir, greek CDSs do not matter at all any longer. It's not much to be triggered.
There's one thing they'd like to tell the world, that is "they are capable of controlling a collapse". At this point it is just a matter of "controlling" or "not controlling" the collapse. As FIAT's president said: How do you control an implosion?
How many bonds are represented by this committee anyways?
Two parties, and one has a deadline of Monday. I think it's a great move of Dallara to walk away for a day to make them sweat.
Fast Forward to 2021:
"Officials say that US debt talks with China have not broken down and that an agreement will be reached shortly. Hopes are high that China will accept Midwest corn and soybean acreage and ownership of certain Western and Eastern ports. The exiled leaders of former Taiwan and South Korea have voiced objection, as did a vocal crowd of Japanese expatriates protesting Chinese occupation of their island; who warned that global domination was the goal of the Chinese PLA. Secretary of State Timothy Geithner assured citizens that the Chinese had only benevolent goals in mind of mutual benefit."
Kyle Bass already showed the math: 100% haircuts inevitable on all non-Troika Greek debt. Anyone who can count on their fingers will come to the same conclusion.
If I get naked I can count all the way to 21...well, 20 1/2 if it's cold.
depends whether you're holding your d**k (or someone else is)!
They are doing 70% now and the other 30% will be done in 2-3 years.
The most hilarious part is this:
"closing in on a deal that would give creditors new bonds paying a 3.5% coupon for shorter maturities and rising to a cap of 4.6% on longer-dated bonds. The average coupon would amount to around 4%"
The idea of issuing new bonds with greater-than-zero coupon and less than infinite duration is absolutely ludicrous.
Ok... Here is the math:
- Euro to the toilet on Globex on Sunday
- No liquidity because of Chinese New Year
- Gold Option Expiration week
-----> RAID ON METALS OVERNIGHT.
FASTEN YOUR SEATBELTS BITCHEZZZZZZ.... AND BTFD
the charade will continue until a military coup or a revolution. and from what i've read about greece, they are going to be facing a revolution soon, which means a military coup may be coming sooner than we think.---just like egypt.
they will tell you its a revolution ---but it's really just a military coup.
For all those that seem to think a default is priced in I ask this question. On what day, or days (which it would be), was there anywhere close to the selling that would indicate a "pricing in" of a Greek default? We have gone straight up for 6-7 weeks. If Greece had a disorderly default, the SPX would be quickly below 1200 in a couple days.
The Mayans were silent on the entire topic of CDS. Doesn't that tell you anything?
That fact that we go up despite the Greece rumors tells you it's priced. The market is ignoring it.
Yeah and a Lehman default was priced in too - for 2 days!!!
Professional traders are like scared chicken. Their horizon is 3 days max. How could they price in anything?
what rumors ?? every day they have a spin of good news on it. its laughable last week greece had about 20 deals nearing completion oh wait it was 1.
Putting aside any extraneous event, just the simple fact that many are living off of personal savings with no new engine of productivity on the horizon will KILL these stock markets wherever they may be. They can print all of the money they like, but they better start pitching it out of Ben's Helicopter on Main Street if they want one last Hot Shot Hurrah.
It is preposterous that anyone would proclaim that it is onwards and upwards (for the stock markets) for years to come.
The market has been going up on vapor, it has not priced in anything but the FED LSAP and ECB 10 Trillion LTRO rumors. It is so unhinged from reality that when it does collapse there will be a bunch of traders standing around like Randolf and Mortimer Duke demanding the machines be turned back on.
Really, what has changed since 2008/9? Nothing everything is actually worse, housing, debt, unemployment, EU debt crisis and world political stability. In juxtaposition the Dow and Nasdaq are partying like its 1999.
Agreed apu. The markets have no correlation to reality or fundamentals at all.
Agreed apu. The markets have no correlation to reality or fundamentals at all.
Which market? Most of money is in savings accounts. Only Plunge Protection Team trading desks are trading among themselves until they run out of money and hoping the Benny will inject cocaine-QE3 on Wed. Let's see what happens on Wed after 2pm.
Greece will be saved and the bondholders too. Storm-teacup. No collapse.
March 21st- Greece Goldman Sachs 1-0 bitchez!
CDS that were created after 27/10/11 trigger--->Hedge Funds that created them (GS /American Insurance Group) beg EFSF for mercy--->ECB becomes a real bank (like FED)
When Greece defaults, doesn't it become the largest default in history? I think Argentina has the current record at $90B USD in 2001. That is until Portugal, Ireland, Italy, Spain, and France default. Kind of like that 'king of the mountain" game we used to play as kids.
Never underestimate the Greec way to negotiate... The Good Guy and the Bad Guy...
Now here this one.
Everybody has left Athens but "talks continue by phone". Let's visualize how that works operationally:
- Creditor one is on the phone in London
- Creditor two is on the phone in Rome
-Creditor 3 is on the phone in Frankfurt
- and so on...........................
So, they are on the phone, open lines all day with the greek PM. Do they really think we're all idiots? I guess they do.
Kiss my freaking ass.
The issue at hand is not one of default.
Its is one of confidence and contagion.
Greece will be the first, but the handwriting is on the wall.
The Euro Is Toast.
What would a partner n a corporation that owned and used a proven race horse's "winning" record to sell shares in that horse pig-poke-hyped all partners to bet the horse to place in the top threee . then later .. just before post time - that very same partner gives the horse a massive load of muscle relaxant - and then scury hurries to his bookies and bets his whole wad (after his partners bet up the horse to unbelievable breathtaking odds) on the fuck`n horse loosing.
That partner would be called "Goldman Sachs" - America's gateway to paradise and London's Shawdow banking rackets.
GOLDMANS FUCK'N STRUCTURED GREEK DEBT TEN YEARS BACK, USING ENRON'S FAMOUS "HIGHBALL THE LOW BALL WHEN THERE'S NO BALL AT ALL!" STRATEGY, AND FOUND A WAY TO HIDE TROUBLESOME ASSETS FROM PROSPECT GREEK BOND BUYERS, AND NOW FACES A POSSIBLE SLAP ON THE WRIST. FORTUNATELY - NATO GENOCIDED EVERYBODY THAT MIGHT BE ABLE TO HAUL BREWSTER GOLDMANS BEFORE A JUDGE
BREWSTER GOLDMAN WAS ABLE TO MAGICALLY AND MIRACULOUSLY "DISAPPEAR" ALMOST ALL OF A 1.3 BILLION BET IT MADE WITH LIBYAN MONIES.
Why ain't every f-ing suit in Brewster Goldman's House of Wax taking it up the backside side by side with Bernie in Sin Sing? The programmer that is alleged to have stolen Goldman's HFT source code got 8 years - was it the technology - or those nasty little double secrets that are being reclassified by DoJ as "TOP SECRET", but not never ever the Brewster Goldman's for the trillions they've extorted defrauded mugged robbed rapped ax murdered and underage Mopery like their shit ain't never gonna stink ucause dey wipe dere ass with a toilet paper trail that vanishes like a Goyishe Gup with great kidneys in a Tel Aviv alley magically into thin air inside the grandestess alter to genocide extortion racket and swindle, London's financial district. Guessing dat be what you be a get`n when you becum sum dirty old mans Lil Bo Beep Flesh Puppet way back din in da Balfour!
Keep It Wet Bernie!!
What came first?
A) A Goldman Client's Structured Debt offering?
B) A Goldman's CDS bet agaist the Structure Debt Offering Goldman placed for it's client?
C) Not Sure
D) Very sure but saying cause it might flag me under NDAA Section 1031!