Guest Post: Greek CDS Shennanigans

Tyler Durden's picture

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PaperBear's picture

Shennanigans is the polite word for this.

falak pema's picture

btw : its spelt 'shenanigans' not shennanigans...and im not splitting shenanigans like hairs.


Is it likely that this coporate banking group having pledged their acceptance to Euro group as 'non coercitive' now pretend the contrary? Have you considered what THIS about turn does to their international credibility? as spokesmen of TBTF bankstas...

You don't walk away with impunity once you've said in writing 'there is voluntary agreement'...

ratso's picture

When is a CDS not a CDS, when it's for a Greek bond.  A new for of Liar's Bond Trading or how to live in an illusion and asking everyone else to join you.

narapoiddyslexia's picture

Is this what "bondage" means?

trav7777's picture

WTF difference does it make WHAT the haircut is?  Greece won't abide by any budget targets and will be back needing ANOTHER bailout in freakin 6 months.

Why should ANYONE take a writedown on Greece?  They should go take Greece as collateral.  I cannot believe that these idiots who thought up the EU would ever want a piss country like Greece in their

espirit's picture

Let's see if Greece's Pirahna Club robs the Widows and Orphans Fund first. 

That will be the prime indicator whether this is yet another rumor.

Oh regional Indian's picture

ratso, zatso.

But I think the masters swung the hammer to crack the illusion some time ago. It is on an unstoppable path now.

What we will see, starting next week, I imagine, is TPTB cannibalization. So many banks are shaky. Any one will tumble if their government support leg is kicked out from under them.

So, basically, I'm saying we will see politics Vs. corporations. Which is weird, because we know who pays who, right? All the world's a stage and all that sort of thing.

I hope this Sunday Passes calmly.


Nuclear Echoes

Added: Do any of the BRICS hold large tranches of greek debt? I keep thinking these guys will take to Asia again (contagion that is), like 1997. It'll be good for another 2-3 months of can-kick. That, or Brazil via Santander.

living on the edge's picture

This is almost as hilarious as Clinton saying "it depends on what the meaning of the word is is".


TheMerryPrankster's picture

Behind the wall, in the kitchen at shenanigans, the real discussion goes on:


GoinFawr's picture

@ Falak: At the risk of making Gold Leaf distinctions, what does a European wheat have to do with an old Californian word for skullduggery?

falak pema's picture

we say skull drudgery, but never mind, I'm a great fan of californian wine, surfing and silicon valley skull excellence...also european wheat is sweet and not GMO.

falak pema's picture

lots of lipstick today! Like in mad men!

disabledvet's picture

Boondoggle. Commence guffaw.

blueRidgeBoy's picture

I swear to God I'm going to pistol-whip the next person who says "shenanigans"

Uncle Sam's picture

And do you believe everything a lawyer from Chicago says?

Deadpool's picture

anyone stupid enough to hold Greek debt at this time deserves a 100% head-cut.

tarsubil's picture

Makes you wonder who is buying this shit. Perhaps it's Corzine clones destroying those not in favor anymore from the inside.

Deadpool's picture

the list is directly above....

tarsubil's picture

It appears I've gone crosseyed...

cossack55's picture

Just another reason to never (NEVER) buy any paper with counterparty risk (meaning ALL PAPER).  Toilet paper is good.

Central Wanker's picture

In case of toilet paper, it is OK to have shit as counterparty.

FeralSerf's picture

Not all toilet paper is good.  Have you tried the Soviet variety?

trav7777's picture

I think people bought Greek debt for the same reason they buy GSE's considered money good because the expectation is that there is a print operation behind it to prevent any default

jcaz's picture

LOL-  I'm thinking that no one spent much time around the holders before this fiasco...

If they're "asked", of course the holders will tell the EU to kiss their ass.

Everyone agrees on a solution- until it costs them actual MONEY.


Hippocratic Oaf's picture

I'm in the fixed income business. Doesn't matter if holders 'elect' to participate. Issuers do this all the time. Gives holders a sense of involvement. The deal will get done, at 50%. There are a few fortunate bastards that bought below 50.

Milton William Cooper's picture

Anyone looking for a gold ETF backed by T-bills?

jcaz's picture

.... And it's wrapped in magic pixie fairy dust, which enables it to pay an 8% dividend......

TheMerryPrankster's picture

and its tax free and you get a special tax credit just for reading the prospectus, let alone owning it.

peekcrackers's picture

You know whats in the purple kool aid .. drink at your own risk

TheMerryPrankster's picture

purple drank, apparently is a better investment.

HOUSTON — A 70-year-old Houston grandmother from the Phillipines has been charged with being the ring leader of a codeine distribution ring.

The woman, Lucita Uy, banked at least $10 million and used her own renegade pharmacies to purchase 97,000 pints of prescription-strength cough syrup and smuggle them from California to Houston to make a deadly potion wildly popular in the hip-hop world.

trav7777's picture

sizzurp is hardly deadly, but is very popular among a particular demographic.  But, surely poverty drove them to consume so much drugs; it couldn't be that consumption of tons of drugs leads to poverty.

French Frog's picture

Thank you ZH for being yet again such a wonderful source of news, explanations and above all ... education.

If I had more time on my hands, I would Thank You every day.

SheepDog-One's picture

Got to love these timeline adjustments...Wednesday it was do or die time, 2 days later after nothings been solved so theyll get back to looking at things, in around 20 years or so. WTF? Pretty good 20 year can punt, I dont think it will work so well though, by next week something else will blow up.

Amish Hacker's picture

I'd say by Monday. Everyone is going to have the weekend to think things over, then hands will slap foreheads in the long-delayed realization that the jig is up. When goalposts are moved so that defaults won't trigger default insurance, and markets are gamed to prevent price discovery, what's a poor boy to do?  

topcallingtroll's picture



jdelano's picture

ever heard of a bull/bear trap?  how about Goldman hawking CDO's to their own clients while secretly letting Paulson pick the worst of the bunch?  The big boys have one goal in life--to screw fools like you out of their daily bread.  

Capitalist10's picture

Hopefully a sizable minority of the bondholders will decline the "invitation".  Why not, if you have already paid for much of the CDS "insurance" up front?

Then the Greeks can either pay you your 150+% interest or they can default, triggering the CDS via a indisputable non-payment credit event.

slewie the pi-rat's picture

beware of greeks bearing bonds

Mercury's picture

Now I don't feel so crazy about asking pointed questions along these lines yesterday.

90% of Greek debt might be governed by Greek law but in terms of CDS being triggered or not - its what the fine print says in the CDS contracts themselves that really matters - no?

Is it generally the case that a default is only a default if the defaulting party (The Greek government) calls it a default?  Or is it the case that some very much not disinterested party/committee is tasked with giving the thumbs up/down on said trigger?

Either way I'm afraid to ask who would be dumb enough to enter into the long side of a contact with those kinds of terms...that would be like buying life insurance that only gets triggered when either the insured person admits he's dead or the insurer's family acknowledges that there has been a death. 

Actually, that would be more like buying American war insurance in 1946 that pays out if/when Congress declares war.    Ouch.

lolmao500's picture

That how you freaking protest. That's how you show who's a slave and who's not.

Veterans with AR15s protecting Occupy Phoenix

pragmatic hobo's picture

won't these greek bonds already tradeing at 70% discount prior to the agreement?

vegas's picture

We went over this yesterday. No credit default? This is bullshit. Governments and exchanges and other quasi-regulated groups like the NFA, SEC, FSA, and of course ISDA will make their own rules and then break them when the mood suits.

Look what Barry Soetero and his gang did to the Chrysler bondholders; fuck creditor rights, let's reward the unions.

ISDA are fucking pimps, just like the CME in Chicago. When members need help on short positions, no problem, just hike margin rates to squeeze out Johnny Retail who doesn't have the money in his account to hold the long position.

Oh, to many ISDA member banks on the sell side of the Greek CDS? No problem, it ain't a default. Keep the premium, and business as usual. Fuck you if you thought you were going to collect. Sue us.


cossack55's picture

Like what you said and how you said it.  You will never get elected.

jcaz's picture

Right on- no one will play in a game where the rules change every day.