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IIF's Dallara Warns Holdout Greek Bondholders Could Kill "Successful" Greek Deal

Tyler Durden's picture


To all those who stayed up until 6 am local time yesterday to hear Europe announce that the Greek deal is done, Europe is fixed, and that a pot of gold was found at the end of the rainbow, our condolences. Sorry, no isn't. Following up on our earlier post about the potential of UK-law bondholders to once again scuttle the deal, here comes none other than the IIF's Charles Dallara who basically says that the fate of Greece, the Euro, and the Eurozone, are in the hands of Greek creditors as we have been cautioning all along. And after all why on earth would hedge funds who just lost over 70% of their recoveries bear a grudge whatsoever...

From the BBC Newsnight interview to air at 10:30 pm tonight:

Jeremy Paxman: What is to stop someone like a hedge fund or someone who has bought Greek debt trying to trigger the insurance involved in a credit default swap?
Charles Dallara: Well there is nothing I am aware of, Jeremy, that will definitively stop  someone who wants to take such action and there is no iron clad guarantee...that individual investors may not contemplate counter-productive activity here. They have the rights they have the legal rights they have the market judgements to make.


Jeremy Paxman: If the insurance system worked they could recover perhaps 100% of the money they've lent the Greeks instead of something like 30%
Charles Dallara: Its not inconceivable.  If too many go in that direction though, the system breaks down, we will not have the successful conclusion of this deal and then where will they be?


Jeremy Paxman: The whole deal could still be held for ransom?

Charles Dallara: I don't eliminate that possbility.

Oops. Well, so much for that. And where Elliott is involved, Elliott wins.

Full clip after the jump:

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Tue, 02/21/2012 - 16:25 | 2182004 SLOMO66
SLOMO66's picture


Tue, 02/21/2012 - 16:34 | 2182018 Spirit Of Truth
Spirit Of Truth's picture

Right at the top....13K and the historical 'effect' of psychological barriers:


Tue, 02/21/2012 - 16:34 | 2182040 SLOMO66
SLOMO66's picture

The market can only go up! The Media told me so....

If you see ANY red, it's an illusion!

Tue, 02/21/2012 - 16:39 | 2182075 economics1996
economics1996's picture

You mean to tell me people do not like being shit on?


Tue, 02/21/2012 - 17:09 | 2182193 flacon
flacon's picture

> "If too many go in that direction though, the system breaks down "


If it looks like a Ponzi, talks like a Ponzi, and quacks like a Ponzi.... chances are... it's a Ponzi.

Tue, 02/21/2012 - 17:17 | 2182232 Spirit Of Truth
Spirit Of Truth's picture

It's one not two.  Poop doesn't 'trickle down'.  Well....somtimes I guess.  

Seriously....does it get any nuttier than having "faith" and "confidence" that private banksters, hedge funds, etc. are willing to unanimously cooperate in "shared sacrifice" for the greater good of European Union?

Yet....apparently, this is what is purported here.  The cycles make sense....the history outlined in the context of those cycles is often hard to believe....but yet virtually everyone does!

Tue, 02/21/2012 - 17:17 | 2182273 ZackLo
ZackLo's picture

Are you serious? Someone needs to buy up some greek CDS and bonds and burn it all to the ground.

The politicians around the world will cry evil speculators but, we all know greece is bankrupt and they would be better off Collecting tax renevue going forward and running off that instead of pandering to the EU/ECB/IMF. If they hold out then they are holding the banks hostage not the people because it is all going to burn down anyway why not rip the bandaid off fast instead of pulling it slow and passing out just to wake up and try again?

Tue, 02/21/2012 - 17:12 | 2182247 Dr. Kenneth Noi...
Dr. Kenneth Noisewater's picture


Tue, 02/21/2012 - 16:37 | 2182062 Unprepared
Unprepared's picture


"Well there is nothing I am aware of.."

 "Its not inconceivable."

"I don't eliminate that possbility."


Double negatives = as sure as hell


Tue, 02/21/2012 - 16:44 | 2182099 TheSilverJournal
TheSilverJournal's picture

Never underestimate the powers of hopium and denial.

Tue, 02/21/2012 - 16:57 | 2182156 redpill
redpill's picture

I wouldn't stop myself from saying it's not unwise to never unremember that it's not an unlikely event these days.

Tue, 02/21/2012 - 17:01 | 2182175 vast-dom
vast-dom's picture

Greek bondholders are fucking zombies holding on to nuclear sludge killing dead deals for dying nations!

So I'm making money on most fucked up Tuesday!! Let the morons keep jerking us and I'll take resultant profits! 

Tue, 02/21/2012 - 16:26 | 2182005 Cdad
Cdad's picture

Blame shift, bitchez! 

It's all because of hedge funds now.

Tue, 02/21/2012 - 16:36 | 2182053 redpill
redpill's picture

Precisely.  Everything would be fine if the bondholders would just bend over and not object to being raped.  Silly bondholers.

Tue, 02/21/2012 - 16:41 | 2182087 economics1996
economics1996's picture

"Precisely.  Everything would be fine if the bondholders would just bend over and not object to being raped.  Silly bondholers."


While the central bank gets paid.  Who do thise fucking capitalist pigs think they are?

Tue, 02/21/2012 - 16:48 | 2182107 redpill
redpill's picture

Fascist pigs perhaps, capitalism left the building a long time ago.  Unless you meant the bondholders, who are naive and not entirely blameless victims for thinking capitalism still existed.

Tue, 02/21/2012 - 17:34 | 2182185 vast-dom
vast-dom's picture

Precisely. There is no capitalism anymore. Fascism at best more at Rigged Ponzi Casino. More importantly, economics1996 should be renamed moronics1996racist. 

Tue, 02/21/2012 - 17:26 | 2182302 stocktivity
stocktivity's picture

" Who do thise fucking capitalist pigs think they are?"



Tue, 02/21/2012 - 17:03 | 2182188 So Sue Me
So Sue Me's picture

The bondholders should have remembered that historically, Greeks like ass rape.

Tue, 02/21/2012 - 17:08 | 2182216 redpill
redpill's picture

Since Greece is the first one to go, I suppose one could feel some degree of sympathy.  By the time it gets to US Treasuries, my sympathy will be gone.


Tue, 02/21/2012 - 16:28 | 2182006 slaughterer
slaughterer's picture

Playing out perfectly... operation robo-kill enters its first phase.   Thanks Dallara, let the world know how the whole deal is being held hostage.  

Tue, 02/21/2012 - 18:03 | 2182434 Mactheknife
Mactheknife's picture

Fuck em...they can call this what it is...a DEFAULT...or they can kiss my ass.

Tue, 02/21/2012 - 16:27 | 2182010 taniquetil
taniquetil's picture

You mean people who saw the credit crisis coming don't want to take a 99% haircut? Shocker.

Tue, 02/21/2012 - 16:39 | 2182078 Augustus
Augustus's picture

It is the people who were aware of the Greek credit problems and decided to reap a fee for insuring the repayment by Greece who now want to hold the whole deal hostage.  If the CDS were paid out now, then those who wrote the insurance could easily agree to the PSI.  It is only the insurers who stand in the way of the resolution.

Tue, 02/21/2012 - 16:28 | 2182013 oogs66
oogs66's picture

Even Obama sticks by the deals he negotiates - for at least 24 hours

Tue, 02/21/2012 - 16:28 | 2182015 SnobGobbler
SnobGobbler's picture

First banker out first wins!! trigger them damn CDS and break its back!

Tue, 02/21/2012 - 16:51 | 2182131 catacl1sm
catacl1sm's picture

Ye Olde Prisoners Dillema.

Tue, 02/21/2012 - 17:05 | 2182200 dracos_ghost
dracos_ghost's picture

The game theory one or the "shit I dropped the soap one". I believe the outcome will be the same.

Tue, 02/21/2012 - 17:11 | 2182016 Mercury
Mercury's picture

 The whole deal could still be held for ransom?

...or not. 

Yesterday's one-time, emergency, law-busting cramdown is today's precedent.  Think Chrysler, "fair share" and  a wand waving over a hastilly convened press conference.

(enter stage Left:  Sovereign Debt Czar)

Tue, 02/21/2012 - 16:29 | 2182020 flyonmywall
flyonmywall's picture

So this whole thing is a giant ramp job. Nice one. Remind me to thank Lloyd for that one.


Tue, 02/21/2012 - 16:29 | 2182021 Kaiser Sousa
Kaiser Sousa's picture

this shit is just plain fucking stupid...

make it stop...please make it stop....

Icleand Bitchez....Iceland you fucking Greek bitchez.................

for crying out loud.....................

Tue, 02/21/2012 - 16:32 | 2182033 john39
john39's picture

apparently the more vocal and awake people need to "retire" their corrupted and coopted government before they follow Iceland's lead.

Tue, 02/21/2012 - 16:58 | 2182164 Ayreos
Ayreos's picture

Greece is too dependent on imports to do that. Not surprising that between being raped and being hungry they would choose the first option.

Tue, 02/21/2012 - 17:02 | 2182183 Silver Dreamer
Silver Dreamer's picture

Just keep the pressure on until she says yes, right?  It doesn't matter how many times someone says no when you're a banker.  They are eventually going to get effed.

Tue, 02/21/2012 - 16:30 | 2182023 El Oregonian
El Oregonian's picture

Where's my Broker?! WHERE'S MY #@$*&% BROKER!!!!

Tue, 02/21/2012 - 17:29 | 2182318 stocktivity
stocktivity's picture

"Where's my Broker?! WHERE'S MY #@$*&% BROKER!!!!


Probably at "Happy Hour" by now....laughing with the other big shots how the market went up again today.

Tue, 02/21/2012 - 16:31 | 2182028 carbonmutant
carbonmutant's picture

Gold certainly isn't buying the "Greek Fix"...

Tue, 02/21/2012 - 16:31 | 2182029 SLOMO66
SLOMO66's picture

Quick! Somebody manufacture a rumor!!! Just choose a time tested template- 

1) China to the rescue!

2) New IMF 9 trillion super deluxe bailout fund!

3) Think happy thoughts...?

Tue, 02/21/2012 - 16:53 | 2182142 Toolshed
Toolshed's picture



Tue, 02/21/2012 - 17:31 | 2182032 slaughterer
slaughterer's picture

If the Elliott hedge fund is involved, then this is going to be one messy default.  


From the wiki on Elliott Management Corporation:


A small portion of Elliott's distressed securities trading has been in sovereign debt, most recently Argentina and Congo-Brazzaville. Elliott is well-known for its investment in the distressed debt of Peru. In 1995, Elliott bought $20 million face value of defaulted Peruvian bank debt. After extensive and costly litigation and numerous attempts by Elliott to settle, the Court awarded $58 million to Elliott, including past due interest. More recently, Elliott's efforts to enforce judgments against Congo-Brazzaville totaling more than $100 million in defaulted bank debt have contributed to exposing corruption in the country.[12] Elliott states that it only targets countries that can afford to pay, but have decided not to, and has emphasized its efforts to root out corruption in countries like the Republic of Congo.[4]


So, the questions is: can Greece afford to pay, but has decided not to?  

Tue, 02/21/2012 - 16:33 | 2182035 Marge N. Callz
Marge N. Callz's picture

But, but, but the IIF is supposed to have the support and backing of all the private sector bond holders right???  I think I will start a new career as a representative for the needs of unicorns.  I won't actually do anything but as long as I get paid in gumdrops and smiles I'll be happy.

Tue, 02/21/2012 - 16:33 | 2182037 vote_libertaria...
vote_libertarian_party's picture

Nice big asterisk there.


"Most of the groups THAT I AM IN COMMUNICATION WITH support the deal"


What percent are you in communication with?  95%?  80%?  50%?

Tue, 02/21/2012 - 17:05 | 2182197 Acet
Acet's picture

Well, he has discussed with his family and they support the deal.

He's also talked to his underlings at the IIF and they also support the deal.

Last but not least he's discussed it with himself in front of a mirror and as it turns out, all of "Me", "Myself" and "I" agree with the deal.

The Greek deal will be a success and Europe is saved!

Tue, 02/21/2012 - 16:36 | 2182039 Physicist
Physicist's picture

He says, "They'll put their shoulder to the wheel to pull this together."

Tue, 02/21/2012 - 16:36 | 2182060 non_anon
non_anon's picture

grindstones not what they used to be

Tue, 02/21/2012 - 16:34 | 2182041 WonderDawg
WonderDawg's picture

What I find amusing is that the headlines and news pimps keep calling this a "deal", when in reality, nothing has been agreed upon by all parties involved. I call it wishful thinking. I can't do anything but stand here like a slack-jawed moron and wonder at the absurdity of it all.

Tue, 02/21/2012 - 16:39 | 2182073 surf0766
surf0766's picture

They are optimistic. They are leaders. They have seen the Secret.

Tue, 02/21/2012 - 16:34 | 2182042 Scalaris
Scalaris's picture

You get a CDS! Eveybody gets a CDS!


Tue, 02/21/2012 - 16:35 | 2182049 falak pema
falak pema's picture

kill those HF shill to the last drop...they deserve it, the scavengers.

Tue, 02/21/2012 - 16:55 | 2182070 CONners
CONners's picture

Who do you want to kill to the last drop?

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