Greek Theatre. Tragedy Or Comedy?

Tyler Durden's picture

From Peter Tchir of TF Market Advisors

Greek Theatre.  Tragedy Or Comedy?

Something about the news-flow over the weekend seems scripted.  All of the comments and actions and "leaks" seem to be following a plan.  The comments are too consistent.  For the first time in months it seems that they have managed to contain people willing to speak to the media to just a few senior ministry of finance officials at the largest countries.  Merkel and Sarkozy have been very quiet about the Finance Minister meetings, though Merkel was busy losing another election, so that may have something to do with it.  This all started after a Friday trading session that was described by many corporate bond traders as not just quiet, but as "eerily" quiet.

In any case the big question is guessing how this play will end.  Is it an attempt to allow Greek to default with as much dignity as possible?  The Greek's can say that the new plans were pushing things too far too fast and it was unfair.  The US says they need stimulus to grow, we could not continue on a plan of austerity.  The other countries would then say that they gave Greece every opportunity to remain current and they would do so with other countries that were more commited to plans.

Or they could be setting us up for Greece to announce some new commitment to a plan.  Then the European leaders can tell their citizens that they pushed Greece to the edge of default and are only providing taxpayer money with the certainty that Greece will live up to its obligations.

I still think this ends in default for Greece and that tomorrow is a potential date as so many pieces line up for it, but am wary that the EU politicians have hired some hollywood writers and are going to try and make us believe in happy endings.  The ultimate ending won't be happy, but that might not stop them from trying one more time.

One argument I heard, and makes some sense, is that the default will wait til after the private sector rolls over their debt.  The advantage would be the SPV they collectively own, would hold the voting power, and make it easier to negotiate with Greece.  That makes some sense, but I still don't see what the rollover does for Greece.  Greece looks like they still pay about the same amount as now, but it is split between going to banks and going to the EFSF. It does push out some of their cash flows, but not nearly enough given where Greek bonds are trading and the problems they are having.  It is great for the banks, because they think they can trick people into focusing on the AAA rated zero coupon EFSF bond component when looking at their books, and they just shifted about 40% of their Greek debt risk to the EFSF (cost of a 30 year zero coupon bond has risen since the plan was first implemented).  Expect to see more noise out of the IIF, and maybe it is enough to let everyone delay the default for now, but it doesn't do much for Greece, and just ensures that EU taxpayers take future losses directly instead of through the banks.

It should be another long week in any case as liquidity remains extremely thin, and we are likely to get contradictory headline after contradictory headline.  The credit markets, which never fully participated in the stock rally last week, are significantly worse again this morning.

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GeneMarchbanks's picture

Not tomorrow, late October. They're waiting for everyone to stop caring, then it'll be "OOOh yeah, and... er... Greece is defaulting now"


The Peak Oil Poet's picture




it's about bonds


wouldn't it be really great if you could know which individuals have been buying bonds?


and will sell them when hooray Greece is saved again


it's a repeating pattern - the in the know crowd are fleecing the the people - making off with the crown jewels and such while they claim to be saving the day


i'd like to know just how far they think they can flee wtshtf



oobrien's picture

Greece will shit the bed before the end of the year.

We're about to see another "credit event".

The shit is pretty scary--especially if you have a family.

Oh, well.

The sun will come out tomorrow.

The4thStooge's picture

Tragedy or comedy? Both.

Léonard's picture

The Greek theater is made tragic by the finished Anglo-american world and comic by Europeans who knows that Greece is irrevelant in the Eurozone.

kaiten's picture

yeah, indeed, tragicomedy

The Peak Oil Poet's picture



it's neither tragedy or comedy


it's grand larceny plain and simple



Id fight Gandhi's picture

It won't happen tomorrow. Another kick the can day all is well.... It will happen by my guess by november. Sharp, quick and fast.

Mitzibitzi's picture

That's my bet as well.

Conveniently, right about the time the first frosts start to kick in for most of the Northern hemisphere and it's too late for anyone who already hasn't to get some (or some more) food crops in the ground.

Tic tock's picture

Lydon - 'they lied, they cheated, they changed the stakes, all-in-all, a three-ring circle, tragedy, comedy, publicity. Burn...'

Gene Parmesan's picture

<-- Comedy

<-- Tragedy


Irish66's picture

China had a lot of bad news this weekend, canary?

Dapper Dan's picture

Good news comrades!

China May Add $728B Stimulus: Deutsche Bank 5 hours ago that 728 billion will be in USD no doubt The europeans will contradict their contradictions and markets will be up by afternoon.

Smiddywesson's picture

Lot's of theatre this week, but very little substance. 

Greece has been great for diverting attention while they kick the can.

A Dim View's picture

They're not trying to kick the can, so much as stick on top of a Saturn V and send into orbit

janus's picture

you're just awesome, Peter...just fucking awesome.

peerless analysis, my friend.


newt22's picture

Started to get the same feeling yesterday that a stage is being set. All the central banks are planning something.

Mr.Sono's picture

i say both. Atleast Greeks are famous now, who knows maybe they will be soon like Charlie Sheen super stars.

ArkansasAngie's picture

What I don't think they understand is that every day that this bs  continues people ... the ones taking it on the chin now ... are getting more and more pissed off.

Tim Duy casts some doubt on the FOMC acting big.

QE3 might be a bridge too far.

Judge Holden's picture

The Greeks just need to suck it up and cope.

Nate H's picture

Greece will not default tomorrow- they have kicked the can down the road again (at least 2-3 weeks until October)

scratch_and_sniff's picture

Jesus my eyes are closing together, after all that madness last week this is just dull...someone start a rumor. (go on, the devil wants you to)

Coldfire's picture

“How did I go broke?” the once-rich F. Scott Fitzgerald said to Ernest Hemingway. “Two ways – slowly then quickly.”

eddiebe's picture

Comedy if you are a banker, tragedy if you are a greek worker. At least for now..

Roger Knights's picture

"I still think this ends in default for Greece and that tomorrow is a potential date..."

Sever on Monday?

rsnoble's picture

I understand the problem with the burden of all the public workers in Greece.......but can you imagine all the 1000's they are laying off, in that environment?  That would be almost like the death sentence. Pack your shit and go off to the hillside to die I guess.

Of course we have the same problem here in the US. It's a group that refuses to join the depression. "You keep paying property tax so I can get paid or we'll sell your house". That's exactly how it works.  So at times im like screw you people.  They really need to put an end to that crap.  The courthouse should be a litte tin building with about 5 people working in it and whatever they can't handle needs to be eleminated.  Not some monstrous polished grainite multi-gazillion dollar building with multiple floors of tax collection specialists.

spanish inquisition's picture


Default and then print your own Drachma without a central bank. In a couple of years you will be right as rain again and the envy of the rest of the countries that stayed in the Euro zone. That is, right up until NATO attacks because you have been declared a terrorist state.

Dingleberry's picture

Greece needs to take a page out of our banks playbook. Make itself too big to fail, and their problems are solved. It probably too late, but they should have been levering up as much as possible, tying in to swaps, and threaten default and bring the whole fucking system down. Just like Goldman, JPM, etc. did here.

Dingleberry's picture

Oh, and Spain, Italy and Portugal better be taking notes. Become TBTF before it's too late!!!!