As Greek CDS Hit Record, German Economy Minister Accuses Greece Of Reneging

Tyler Durden's picture


Remember Greece, where everything is supposedly fixed, except that nothing is until Greek bondholders all agree to get nothing for something? Or in other words, where Germany is hoping it can assign blame to hedge funds for not allowing the 75% PSI trigger threshold to be reached so there is a faceless monster that can be accused to achieving Germany's political goals? No? As the following reminder from Germany's Economy Minister Roseler shows, whose report has been acquired by Bloomberg, if not German anger then certainly confusion, is seething: "For the Greek government, the programs “obviously have no priority,” the ministry said. “This is unacceptable from the German standpoint." Wait, you mean a record February collapse in the Greek economy is inadmissable? Sure enough, Greek CDS, contrary to expectations for a no trigger event, just hit an all time high earlier at 76 points up front (i.e., more buyers than sellers), as basis player are loading up on protection and preparing for the March 8 PSI deadline.

From Bloomberg:

Greece is reneging on programs to spur its economic competitiveness that it signed with Germany since July, calling into question its willingness and capacity to revitalize its economy, the Economy Ministry in Berlin said.


Economy Minister Philipp Roesler and other German officials started bilateral projects with Greece from creating a development bank to advising on the construction of the Trans Adriatic Pipeline and on improving tax collection, the ministry said in a report, a copy of which was obtained by Bloomberg News. Greece has failed to fulfill its pledges in most cases, it said.


Greece’s implementation of project targets “remains insufficient,” the ministry said in the report. Revamping Greece’s economy at the same time as cutting its debt “is decisive -- that’s why Germany agreed to its support for the programs.”


For the Greek government, the programs “obviously have no priority,” the ministry said. “This is unacceptable from the German standpoint.”


Greece’s economy may shrink by 4.4 percent this year, the European Commission forecast on Feb. 23.

Cue Venizelos with pleadings that all Greeks have to do is "work, work, work." Oh, and also that Greece just said a Commissioner, or as he is better known in Germany, a Kommissar, is unacceptable, even though this is now the key gating factor to Greece receiving more aid.

Luckily, a CDS trigger event is now not only expected but welcome, in stark contrast to a year ago. Because just like with Lehman's failure, the "system is ready" for any contingency.

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Fri, 03/02/2012 - 14:14 | 2217272 evolutionx
evolutionx's picture

Mises is absolutely correct: “There is no means of avoiding a final collapse of a boom brought about by credit expansion”. Whatever politicians, bankers, economists or others experts say, there is no solution to this crisis. We have reached the end of the road and are now staring into the abyss.

The credit manufacturing system that started in 1913 when the Fed was founded, began its terminal phase in 1971 when Nixon abolished gold backing of the dollar. It has been clear to us for at least 20 years that the outcome was inevitable. It was never a question of “if” but only “when” it would happen.



Fri, 03/02/2012 - 14:19 | 2217283 redpill
redpill's picture

Of course he was right, there is no means of avoiding it.  But if you have a Machiavellian streak, it sure can be fun to watch these evil unelected technocrat prickfaces squirm around as they try.

Fri, 03/02/2012 - 14:22 | 2217299 ForWhomTheTollBuilds
ForWhomTheTollBuilds's picture

You make it sound as if it's the leaders who are going to be the ones who suffer when the final accounting is done after this is all over.


I suspect everyone except them will suffer.

Fri, 03/02/2012 - 14:24 | 2217305 redpill
redpill's picture

That's the Machiavellian part.  And one can hope the angry mob gets ahold of a few of them.

Fri, 03/02/2012 - 14:28 | 2217322 ForWhomTheTollBuilds
ForWhomTheTollBuilds's picture

I agree wholeheartily.

Isn't it interesting that child molestors get murdered in prison, but the financial rapists walk freely without worry?

Fri, 03/02/2012 - 16:13 | 2217872 withnmeans
withnmeans's picture

Here is a great article that even mentions "ZH", CDS's should have triggered and the whole scenario is "Bullshit". Give it a read!

Fri, 03/02/2012 - 15:44 | 2217698 debtor of last ...
debtor of last resort's picture

you bet

Fri, 03/02/2012 - 15:46 | 2217712 debtor of last ...
debtor of last resort's picture

ING headquarters Amsterdam. Looks like Noah's Ark. Won't help them. :-)

Fri, 03/02/2012 - 16:28 | 2217983 battle axe
battle axe's picture

Dust off the Panzers...

Fri, 03/02/2012 - 15:10 | 2217533 evolutionx
Fri, 03/02/2012 - 14:16 | 2217273 selectricity
selectricity's picture

SocGen is looking for a EUR/USD at 1.30 "in a week or so" now that LTRO is out of the way:

Could be a good spot.

Fri, 03/02/2012 - 14:25 | 2217310 Ahmeexnal
Ahmeexnal's picture

That would imply a PM blowout sale.
Time to back up the truck and hire a couple of stevedores.

Fri, 03/02/2012 - 14:18 | 2217278 Cdad
Cdad's picture

the "system is ready" for any contingency.

Dude...that's just the stress talkin'.  There is always Juncker's "Plan B."  Which is

Fri, 03/02/2012 - 14:22 | 2217294 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Yeah!  Plan B! Plan B and whatnot.....

Fri, 03/02/2012 - 14:29 | 2217329 Piranha
Piranha's picture

when Junker is talking about plan B, he is talking about chaos and financial stress in the markets. So we always have this to fall back on. :)

Fri, 03/02/2012 - 14:30 | 2217336 a growing concern
a growing concern's picture

1. Plan B

2. ?????

3. Default

Fri, 03/02/2012 - 15:21 | 2217583 turtle777
turtle777's picture

You're doing it wrong.


1) Print shitloads of money for bailouts

2) ???

3) Profit

Fri, 03/02/2012 - 15:00 | 2217466 unrulian
unrulian's picture

war or aliens....damn dirty aliens...

Fri, 03/02/2012 - 22:46 | 2218942 StychoKiller
Fri, 03/02/2012 - 15:53 | 2217763 JohnKozac
JohnKozac's picture

Plan B?...Isn't that a Birth Control Method?

Fri, 03/02/2012 - 14:19 | 2217280 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

If the Eurpopeans want, we Americans can send them some of our peas; we have plenty.

Fri, 03/02/2012 - 15:29 | 2217622 thecoloredsky
thecoloredsky's picture

Good ole fashioned pea drive can take care of this!

Fri, 03/02/2012 - 15:42 | 2217690 Nobody For President
Nobody For President's picture

Yeah, give peas a chance.

Fri, 03/02/2012 - 14:19 | 2217281 Dick Darlington
Dick Darlington's picture

This is unacceptable from the German standpoint."


Uh, no. Actions speak louder than words. You gave the 1st bailout, you're giving the second and you're already talking abt a third one.

Fri, 03/02/2012 - 14:27 | 2217315 Mary Wilbur
Mary Wilbur's picture

You're stupid for bailing them out.

Fri, 03/02/2012 - 14:41 | 2217387 walküre
walküre's picture

The 1st bailout was BEFORE LTRO 1.0 and necessary to help the banks early LAST year.

Since LTRO 1.0 the panic to bailout Greece has been contained. Since LTRO 2.0 it's no longer an issue.

Yes, actions speak louder than words but TALK about bailouts is CHEAP.

Remember that Portuguese MP talking to Germany's FinMin which was recorded on youtube?

The banks are pretty much safe since LTRO and if there's no bailout to pay back unsecured bond holders. Oh well.

Fri, 03/02/2012 - 14:48 | 2217420 GovtMediaLiars
GovtMediaLiars's picture

"The 1st bailout was BEFORE LTRO 1.0 and necessary to help the banks early LAST year"

Necessary my pale white behind. Don't tell me you fell for the whole "the sky will fall if we don't bail out all the banks with taxpayer monies!" 

Fri, 03/02/2012 - 15:07 | 2217516 walküre
walküre's picture

"necessary" from THEIR perspective.

I have no symphathy for any of the shysters and their asses belong in a North Korean labor camp.

Did you catch the Irish journalist asking the German native ECB banker at a press conference, why Irish people should be on the hook for billions in unsecured bonds from non-Irish banks? The bankster didn't have a response and danced around the issue until he basically refused to answer. Looked like a scene from the Nuremberg trial.

Maybe that's what we ought to bring back. A trial where the banksters are forced to admit they are stealing.

Fri, 03/02/2012 - 22:48 | 2218944 StychoKiller
StychoKiller's picture

Growth industry:  Custom-made Bankster-sized waterboards...

Fri, 03/02/2012 - 14:47 | 2217409 candyman
candyman's picture

good point. Reminds me of "After we pass the bill we will find out whats in it." Stupid is just plain f'ing stupid. Is anybody ever accountable any more in this world?

Fri, 03/02/2012 - 14:20 | 2217284 Caviar Emptor
Caviar Emptor's picture

Less Than Zero: Not only might bondholders get wiped out, their "protection" might too (which they paid for). That would be quite a spectacle. 

Fri, 03/02/2012 - 14:27 | 2217317 Ahmeexnal
Ahmeexnal's picture

I suspect the bondholder's next "insurance" will consist of hiring mercenaries to hunt down bankers and politicians.

At least that would be real employment.

Fri, 03/02/2012 - 14:32 | 2217346 a growing concern
a growing concern's picture

Ooh, and they could televise the hunts, too!  It'd be like "Running Man".

Fri, 03/02/2012 - 14:41 | 2217394 stocktivity
stocktivity's picture

It could be similar to the French president running from his citizens yesterday.

Fri, 03/02/2012 - 15:03 | 2217495 unrulian
unrulian's picture

please... those fat fucks are one cognac braised frois gras from a'd be like shooting swamp rats with my T16 just like Beggers Canyon back home...

Fri, 03/02/2012 - 14:36 | 2217369 Caviar Emptor
Caviar Emptor's picture

lol. Like that caustic wit @Ahmeexnal

Fri, 03/02/2012 - 14:20 | 2217285 Peter K
Peter K's picture

Don't turn around, oh no.......

And for your viewing pleasure, I bring you Falco.

Fri, 03/02/2012 - 14:21 | 2217290 ForWhomTheTollBuilds
ForWhomTheTollBuilds's picture

Anyone have an opinion on Deninger's idea of CDS being effectively an "insurance with a side letter" scam? 


If these CDS contracts are really only meant to be a dodge to get around accounting regulations, does it really matter that they will never pay out?

Fri, 03/02/2012 - 16:20 | 2217418 Dr. Kananga
Dr. Kananga's picture

CDS is actually an abstract financial variant of the Lemarchand Box. Transdimensional, baby.

Some are starting to figure out that CDS = Cenobite Default Swap...

BTW--not belittling your question. It's a good one, and I'd like to see an answer too.

Fri, 03/02/2012 - 14:21 | 2217291 Abitdodgie
Abitdodgie's picture

Nothing is going to happen , they can print as much money as they want they can fix anything, but dont worry they will invad Iran because they are stupid . 1st of march NDAA came into effect and the FEMA camps are up and running as of 1st of March . Invasion 8/9 or 18/22 of March ,you see how a plan comes together.

Fri, 03/02/2012 - 14:23 | 2217303 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

They don't print money, they print currency.  They expand the amount of tradable paper to put claims on real goods, but as far as a store of value, fiat holds no water, as it loses value continuously when gauged for inflation.

Fri, 03/02/2012 - 14:23 | 2217301 jm
jm's picture

The Greek economy is in freefall.  They can't cut spending fast enough to keep up with the collapse.

As politicians always have to blame someone else, I expect yet more idiotic statements of like kind from said economy minister until he is out on his arse.

Fri, 03/02/2012 - 14:24 | 2217306 mayhem_korner
mayhem_korner's picture

...willingess and capacity to revitalize its economy...


Let's see...

ECB inkjets full - check

paper stock - check

ctrl +P keys operational - check

what's the problem?

Fri, 03/02/2012 - 14:28 | 2217321 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

The problem is they can't print oil.

Fri, 03/02/2012 - 14:37 | 2217368 walküre
walküre's picture

They can't increase YIELD on food production either.

You can live with less oil and distillates but you have to eat.

That whole medical / pharma complex is going down the tubes as we speak. The government can't print fast enough to pay the entitlements.

If people are given the choice between a)driving b)medicating or c)eating they will always chose the latter.

Fri, 03/02/2012 - 14:42 | 2217396 BidnessMan
BidnessMan's picture

The 10%+ of the population currently on anti-depressants not getting the meds all of a sudden is a scary thought....

Fri, 03/02/2012 - 15:28 | 2217615 sun tzu
sun tzu's picture

It's more scary 10% of the population is on prozac

Fri, 03/02/2012 - 15:41 | 2217687 walküre
walküre's picture

Scary? Why?

Maybe the 10% are depressed for good reasons and they should be allowed to share their depressing thoughts. Maybe old farts shouldn't get prescription Viagra either and they would care to focus on more important issues than their libido.

Enough of this illusion of a functioning society and the shiny, happy, people bullshit. Enough with the electronic distractions that keep people in bondage where they can't be allowed to express their inner animal spirits!

As I'm typing this the ad for "World of Warcraft" pops up. People are conditioned to shoot fantasy ghoulish monsters but they won't ever consider fighting for their survival when the bank shows up to foreclose their home.


Sat, 03/03/2012 - 04:36 | 2219354 Yen Cross
Yen Cross's picture

 Those Greeks have plenty of Bio Diesel, via the Troika olive branches.

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