ISDA Says 50% Greek Bond Haircut "Appears" Voluntary

Tyler Durden's picture

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GeneMarchbanks's picture

Semantics it 'appears'

Oh regional Indian's picture

I don't there has been a successful example of self-policing in recent human history (2000 years or so).

The Determinants are a joke. The world of busyness is mad. This contextual advertising is driving me nuts too. I know Hobby King sells the Stable Sor Air or the other for $65.97.

Everything is currently tending to swing too far on the wrong side. We will make a brief halt at the top of the swing though, all too ephemeral, eye of a fast travelling storm...

ISDA. Institute of Self Determined Asshats.


Awesome Art

Ahmeexnal's picture

Bondholders take "voluntary" circumcision.

Hard1's picture

Repeat after me:   This is not a credit event.  This is NOT a credit event!!


(I dunno what would a credit event would be)

malikai's picture

Isn't the better analogy "50% haircut or I commit suicide"?

10 sellside firms vs 5 buyside firrms? Who the fuck would sign up for that?

Clueless Economist's picture

The #OWS cretins are claiming that the NYPD is dropping drunks off in Zuccotti Park to cause trouble.

These moroms can't tell their the angry drunks from their fellow morons.

They need to clean that park out NOW.

DoChenRollingBearing's picture

Clueless, Not,

Greens for you.  Ha ha!

Mercury's picture

There have also been reports that Goldman Sachs is parachutting in scores of gender studies majors, street puppets and dirty hippies in an attempt to make OWS look like a bunch of shiftless and disorganized weirdos.

nonclaim's picture

If they dropped a large bag of FRNs right in the middle we would see if this OWS demands are for real. It would be a truly enjoyable moment and would cost GS lunch money at best.

kaiserhoff's picture

It "appears" that my dick is 24 inches long.

Oh hell, that's the ruler I use for fishing.

john39's picture

why?  worried about something?

Loose-Tools's picture

Clueless, I see you have spread your cheeks and inserted your head again. Are you the resident Cro-Magnon here at ZH?

vast-dom's picture

A bona fide mess. No way this will get through in the end without violence. And violence generally ain't exactly semantics.

Balmyone's picture

If you're managing a fixed income portfolio at a big bank, and you held Italian, Spanish, Irish, or Portguese Debt, wouldn't you be SELLING since CDS is completely useless.

Buck Johnson's picture

It sure is, our Western banking system is becoming a joke pure and simple.  When you don't like how the game is being played against you, change the rules.  You know things are bad when this happens.

CClarity's picture

 However, whether or not it does so will be decided by the DC on the basis of the specific facts, if a request is made to them.

So someone make a request already!

Forgiven's picture

Back to work you lazy slaves!

Mercury's picture

So.....sovereign CDS still trades because....?

Divided States of America's picture

Looks to me like ISDA is covering their own asses in case shit hits the fan. Wiping shit off your face dont mean you are now clean, especially when flies starts buzzing around you and no one wants to get near you because of the wreakness you possess.

And for sure, ISDA will be releasing many many more statements like this going forward.

FlyPaper's picture

Well, when things don't go well for Bankers, they get someone to change the accounting to keep them afloat. (check).

Then they influence the regulatory body (this is only a pretend one) to make preverse decisions to further their misdeeds.  (check)

And when that doesn't work they go to the public and politicians, who depend on these morons for poly-contributions to vote them money (check)

And then the steal money from their clients and move it offshore in a way that is difficult to track.  (Check).

Then, if they are small enough the go belly up.   But if they are big enough and too well connected, then the Central Bank bails them out with funny money.  (check)   [Apparently MF Global is not too big to fail].

Time to make your voice heard.  This is total crap.



drivenZ's picture

If you don’t take the deal then your CDS is ok. If you do take the “voluntary” deal then you’re out of luck…As an aside, you don’t need to sit and wait for a credit event on a CDS you can get out and take your gains. 

kaiserhoff's picture

Same reason title and mortgage insurance still sell.  Sabe dios.

Ivanovich's picture

This would appear good enough to cause the obligatory afternoon ramp up.

FunkyMonkeyBoy's picture

Shove the 50% 'voluntary' hair-cut... and collect 100% on the CDS. THAT'S WHAT IT'S FOR! If you didn't purchase it for circumstances like these, then what did you purchase it for!?

No One's picture

Obviously to enhance the profitability of those firms sitting on the ISDA Determination Committee. It does appear to a commoner like me that a Best Buy extended warranty may provide more value than CDS contracts on Sovereign Debt.

Joebloinvestor's picture

In other words, the patient isn't dead until they determine it is.

A rotting stinking corpse doesn't matter.

Just the agreement, and then it is subject to argument.


I think a 50% "haircut" is an event fellas.

Cursive's picture

ISDA:  Female anal porn "appears" voluntary

Lets Eat Grandma's picture

The way those bond holders were flaunting their CDS, they were just asking for a 50% haircut.

Ropingdown's picture

The eurozone governors wish to eliminate CDS trading on sovereigns.  The amazing thing is that the ISDA spokespeople appear to be going along with that wish, willing to throw away the entire sovereign CDS market.  We know Trichet threatened to allow a 100% default if IIF didn't accept a 50% default. It is exactly as if a rapist with a 9mm pistol said to a woman "Agree to take off your clothes and have sex with me voluntarily, or I'll shoot you."  As for insisting on the haircut ONLY for private holders, I can only call that criminal, the sovereigns of Europe expropriating the wealth of the pension funds and insurance companies.  Suppose the USA made that offer on US T's.  Think about it.

FlyPaper's picture

Bankers extort governments; governments extort bankers.    I think the governments are getting the short end of this deal!

tim73's picture

Is there such thing as a honest Greek taxpayer. It seems everybody and his cousin Vinny (still dead since late 80's) are on the take there. 8 billion dollars worth of pension frauds. One huge crooked and corrupted cesspit.

NotApplicable's picture

There's no such thing as an honest tax, therefore your question is moot.

Oh regional Indian's picture

Every "country" has been infected with a fatal flaw. With Greece, it's Taxes. With India it's corruption. WIth Germany it's fastidiousness. With America is Manifest Destiny/Jingoism. With England it's Alcohol/Football.

Cesspits all.


DoChenRollingBearing's picture

ORI, some places are worse than others, trust me on this one.  Ever been to Pakistan?  I would like to hear your observations of THAT country.

Oh regional Indian's picture

Never been DCRB, only heard First HAnd experiences. Truth is, in most ways except dominan religion, we are the same and similarly conditioned by the brisith.

I think I'd feel right at home in Pakistan. :-)



PS: It's really bad here in India. Prevelant, dominant, leech on the system. Egrigious too.

DoChenRollingBearing's picture

That's too bad ORI about India being so bad.

Look around on some of the other threads to see my comments on Jon Corzine!

Sounds like he would fit right in with your local kleptocracy!

slaughterer's picture

I think according to Greek law, even the recipients of the Greek pension funds that received the 50% haircut as well do not have a legal right to protest the haircut.   

Shirley Wilfahrt's picture

I'm assuming you are in USA.

Do you really still believe that the USA is in any better shape behind the statusquo curtain?

I know. I still don't want to believe...even though it is right in front of me....but that is just the MSM programmed debt monkey on my shoulder. He's a lying fuck. 

Josh Randall's picture

Go long litigation - ISDA won't have the last word by a long shot

john39's picture

the world will be broke long before litigation gets anything resolved.

williambanzai7's picture

It is basic human nature to want 50 cents on every dollar you invest. That is why so many people literally line up for such deals without being forced.

Everything they teach you in business school is wrong.

And this does go to show what hyper bullshit those ISDA contracts and riders are.

Mercury's picture

What kills me is that people actually threw/throw down for a CDS contract that says something like :

The determination of whether a credit event occurs under CDS documentation is made by the relevant ISDA Determinations Committee (DC), which consists of 10 sell-side and five buy-side firms.  ISDA serves as secretary to, but does not sit on, the DC.  A supermajority of votes (12 of 15 DC members) is required to find that a credit event has occurred without the decision being subject to external legal review. A weaker majority decision would be subject to external legal review that might overturn such a determination. 

That would be like holding Kardashian virginity insurance which only pays when her lawyer acknowledges that an "event" has transpired.

TheLooza's picture

What I struggle to understand here is why the resistance to calling this a triggering event.  My understanding is that the net notional Greek referencing CDS exposure is $3.75b. Not a big deal.  Are they working this hard to avoiding calling this a *default* for precedential value because of the high likelihood that this sequence will repeat itself on a much bigger stage (i.e. Italy and beyond)?


Silver Bully's picture

'My understanding is that the net notional Greek referencing CDS exposure is $3.75b. Not a big deal'

You can bet (heh) that that $3.75 beelyun CDS exposure has leverage times pi. The greek CDS is held by the major European banks. In turn, the rest of the world is exposed to them. As widely known, the banking sector is one big house of cards.

It may not be a stick of dynamite (Lehman), but I think you would pay very close attention if someone lit that bottlerocket (Greek CDS) superglued to your scrotum.