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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.

Fri, 03/02/2012 - 15:31 | 2217629 Fastback
Fastback's picture

The Heidelberg Presses blew a flux capacitor after the LTRO. The Greeks have been called in to riot until new bearings and gauze pads can be implemented.

Fri, 03/02/2012 - 14:26 | 2217311 Village Idiot
Village Idiot's picture


Fri, 03/02/2012 - 14:29 | 2217328 Piranhanoia
Piranhanoia's picture

What are the national socialist christian democrats really going for here?   Why destroy a nation and do all they can to prevent it from being a default?   

Must be really, really bad in Deutschland.   

Fri, 03/02/2012 - 14:39 | 2217370 BliptoP3
BliptoP3's picture

There may be a word for it, if so, someone let us know what it is.  I like to call it: mistaking-the-gas-pedal-for-the-brake syndrome.  Usually when this happns there is a funny picture of a car stuck half-way through a building or up in a tree.

Fri, 03/02/2012 - 15:50 | 2217735 Nobody For President
Nobody For President's picture

Good metaphor, but in this case it may be mistaking the brake for the gas pedal = more austerity will get our economy competitive and growing again. 

Car goes into the swimming pool...

Fri, 03/02/2012 - 14:31 | 2217344 slewie the pi-rat
slewie the pi-rat's picture

maybe the germans will leave the EU soon?

Fri, 03/02/2012 - 14:39 | 2217380 Village Smithy
Village Smithy's picture

They should leave the EU. We'll buy their well made stuff they can buy our well made stuff (what we still have of it) and we'll all live happily after after.

Fri, 03/02/2012 - 14:37 | 2217362 Village Idiot
Village Idiot's picture

OT, sort of.  Anyone go back and check out ISDA's website regarding since Tyler posted yesterday?  Not one reply to their commenents regarding CDS.  I know for a fact they got at least one.

Fri, 03/02/2012 - 14:53 | 2217437 GeneMarchbanks
GeneMarchbanks's picture

I wonder what might 'trigger' a reply?

Since we're at it, CDS needs to be 'triggered' right? can someone please remind me how Lehman was 'triggered'?

Fri, 03/02/2012 - 17:29 | 2218214 Lost Wages
Lost Wages's picture

I have a feeling they got a lot of comments, they just haven't approved any of them yet. "Awaiting moderation."

Fri, 03/02/2012 - 14:44 | 2217401 Caviar Emptor
Caviar Emptor's picture

Cutting off your nose to spite your face Dept. : In essence, the EU Greek plan ended up gutting the economy and society in order to collect more money and reduce debt down the line. Lol. That's as much of a plan as burning money for heat, plugging a hole in the lifeboat with the oars, eating your foot to avoid starving if lost in the wilderness, the Titans eating their children to avoid being overthrown.........

Fri, 03/02/2012 - 14:46 | 2217408 Osmium
Osmium's picture

If the Germans expect the Greeks to act responsibly, they are going to disappointed.

Fri, 03/02/2012 - 15:02 | 2217488 brooklynlou
brooklynlou's picture

I think the Germans are expecting the Greeks to do exactly as told when told or else be treated like lepers for the next 20 or so years.

Fri, 03/02/2012 - 15:47 | 2217714 walküre
walküre's picture

"The" Germans have no fucking clue what is happening and they wouldn't get it if you shoved their faces into it. The crime of banking is not being taught. Instead they're chasing the ghost of Nazis and Neonazis as if they mattered.

Those few elite Germans however, that are colluding with the banking cartels are well taken care of. They make sure that the ink on their paycheques is dry before they lick the banker's boots.

Billions in "bailouts" and other exotic financial instruments and nobody is asking how the fees are being generated and who gets what in the process.

Greece is a corpse. The bankers are defiling the corpse which makes them financial necrophiliacs. Like rabid animals, they're foaming at the mouth at the idea of just how many fees are being generated.

Of course you all know what to do with rabid animals.

Fri, 03/02/2012 - 14:51 | 2217431 Moneyswirth
Moneyswirth's picture

First the tax collectors go in, then the reconstruction "czars".  

Then by coincidence there is some manufactured "outrage". 

How soon before the Panzers roll in to "keep the peace"?

Fri, 03/02/2012 - 15:16 | 2217558 noses
noses's picture

Again: If that place was worth anything. Goods were produced. Natural resources. Oil (not olives). Intelligence.

But Greece? Bestiality-optimized sheep. Goat cheese. Ruins.

No, thanks. Nobody would waste fuel on the tanks.




Fri, 03/02/2012 - 23:27 | 2219016 Non Passaran
Non Passaran's picture

You kind of described Afghanistan, so you're wrong

Fri, 03/02/2012 - 14:57 | 2217452 TradingJoe
TradingJoe's picture


Fri, 03/02/2012 - 15:50 | 2217736 bobola
bobola's picture

The trick for the EU is how to avoid giving Greece any more money and at the same time avoid a credit event, which would ding their bourses.

They must be searching furiously for the middle ground.

Fri, 03/02/2012 - 16:05 | 2217834 web bot
web bot's picture


Fri, 03/02/2012 - 16:13 | 2217869 Joebloinvestor
Joebloinvestor's picture

I lost interest in the whole Greek financial mess when I found that the defense spending was for French and German products that the Greeks didn't need and could ill afford.


Fri, 03/02/2012 - 16:32 | 2218002 carbonmutant
carbonmutant's picture

Well since the ISDA will not let a “default event” occur, the Greeks feel there is no problem...

Fri, 03/02/2012 - 16:38 | 2218039 Ned Zeppelin
Ned Zeppelin's picture

" basis player are loading up on protection and preparing for the March 8 PSI deadline."

Who is selling CDS at this point on Greek debt, and by selling do you mean they are booking new insurance policies or trading in existing ones that are marked up or down depending on the current rumors that are floating in Euroland

Fri, 03/02/2012 - 17:58 | 2218293 fiddy pence haf...
fiddy pence haff pound's picture

correct me if I'm wrong, but the Germans are just the intermediaries.

The Amerks paid for the LTRO and are calling the shots.

Timmie calls up the German government and says:

"you boys do anything without our approval, and your gold is gone."

If there's a plan in the US to let Greece go, and Greece knows it, then 

the Greeks don't have to do anything that the Germans want.

We'll see how it all comes unwound around 20th of March.

Can they cut Greece off and keep the banking system rolling on its merry way?

Fri, 03/02/2012 - 21:02 | 2218731 GreetingsFromGermany
GreetingsFromGermany's picture

Concerns: Philipp Rösler.

Please, whatever is the matter – don't take that young guy for serious, nobody in German Population or German Government – even Angela Merkel – does it. The FDP-chief is leader of a dying party (falling down from 16% to 2% between a couple month).

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