More PSI Troubles: Greek Swiss Franc Bondholders Organize, Will Hold Out

Tyler Durden's picture

Confirming that the angst 3 days ahead of the Greek PSI deadline is very warranted, we learn that Bingham, which as we noted previously has so far identified and organized a significant group of local law bondholders potentially sufficient to derail the transaction, has now also organized a blocking group of Greek bondholders, this time those holding the country's outstanding Swiss Franc bonds. From Bloomberg: "Investors in Greece’s Swiss franc bonds have formed a group to fight for their rights as the country seeks to pare about 106 billion euros ($139 billion) of debt as part of an international bailout. The group is concerned by the terms of the restructuring and is “exploring means to address its concerns and to protect the rights of holders of the bonds,” according to a statement from their legal adviser Bingham McCutchen LLP in New York. The group holds the 650 million Swiss francs ($708 million) of 2.125 percent notes due 2013." Ironic that there are those who have taken a look at Venizelos' "best and only offer" and just said no. All that is left now is for Bingham to find and organize the blocking stake in the UK-law bonds and the PSI outcome will be, as we forecast way back when, that of the lower right quadrant. In the meantime, any and all Greek bondholders who dislike excess use of vaseline to be used on their bent over bodies, to contact Bingham promptly.

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francis_sawyer's picture

"K-Y"?... Because we LIKE you!

M-I-C...K-E-Y... M-O-U-S-E

GetZeeGold's picture



Pardon me while I put on my shocked face.



Cast Iron Skillet's picture

yeah! Now where did I leave that schocked face ....

knukles's picture

I don't get it... like what's Kentucky got ot do with it?

Chief KnocAHoma's picture

They have one hell of a good basketball team... oh and Fort Knox.

Chief KnocAHoma's picture

Quick look over here... Iran has fire crackers and matches and the republicans want every woman to pay for her own birth control...OUTRAGEOUS!

monopoly's picture

Lets just get the White House in on this. They know how to take care of unruly bondholders and the rule of law. Just ask GM>

Jim in MN's picture


Your creativity and focus continues to amaze. I thought I saw a lit fuse at the end of the 't' in default but no...


Cursive's picture

If this hasn't been "priced in" by "the market", then I would like some EMH proponent explain why we should always believe "Mr. Market" knows best.

sunnydays's picture

Got Silver and Gold? 

Cursive's picture


Yes, but i value my lead and rations more highly.

knukles's picture

All of the private bondholders should tell TPTB to stuff it subsequent to the ECB's antics placing themselves in a preferred position within the priority of payments heirarchy.
"Fuck 'em." said the Bonddaddy.

SheepDog-One's picture

We should have told 'TPTB' to stuff it long ago! 

JPM Hater001's picture

I am not saying I believe this but The Heritic's channel ran a video on the ritual of Purim-which happens to be March 7-8 this year.

There is something about that date....what is it....

Anyway, watch it here.

Tortfeasor's picture

Video feels like it's trying to hypnotize.  Or induce a seisure.  

knukles's picture

Let's see.  It's a joyous celebration reveling in defeat of one's enemies occurring about a week before the Ides of March which is a day of rememberance concerning an unpopular leader (Ceasar) who was stabbed to death in his own Senate for being a sanctimonious little prick.
That it?

Chuck Bone's picture

So ZH forecasts a hard default?

JPM Hater001's picture

ZH or Tyler?

I think the consensus of the public merchants of truth here is yes, hard default triggering a pure CDS trigger which ensures both European banks fail as well as the fools who issued the CDS> can anyone say Goldman Sachs?

Sadly in the end it will come out of our pocket.  Can't let the squid die now can we?

Dr. No's picture

which ensures both European banks fail as well as the fools who issued the CDS> can anyone say Goldman Sachs?

lol!  They will not fail until the CB which has their backs fail first.

GeneMarchbanks's picture

CDS better 'trigger' is all I'm sayin'

JPM Hater001's picture

Agreed...and by not triggering last time all they did was tell people "They have to hard default."

OK.  Hard default it is.

HD's picture

You a funny man - CDS actually trigger.  It's about as likely as a gang of super models beating down my door to have their way with me...

GeneMarchbanks's picture

Let's say you're correct. Then what happens? You want to know the sad truth? Nothing. They keep the CDS 'market' and all the players pretend they don't have Stockholm Syndrome.

In the other case there should be a stampede out of CDS and subsequently Western bond 'markets'.

tiwimon's picture

How exactly do they get out of CDS? I'm a newb, but I thought it was nothing more than fake insurance contracts without the actually paying out part, created to make banks money - you mean a refund?

ElvisDog's picture

How exactly do they get out of CDS?

Easy. They simply ignore the rules. It's the banks that control the panel that decides if something is a "credit event" that would trigger CDS forcing those same banks to pay out. It's like letting you decide whether or not you have to pay taxes. There is no more rule of law for the 0.1% and we all must invest with that in mind.

Quaderratic Probing's picture

They are committing Farciside...

Dr. Kananga's picture

That's the question on my mind: how will the sov bond market fare if CDS is proven to be a useless insurance tool? Countries with funny bookeeping (that'd be all of them, wouldn't it?) would find it difficult to sell and service bonds--they wouldn't be able to afford the interest.

Someone is going to lose here, no matter what they do.

Caviar Emptor's picture

paradox of the day: if CDS never trigger, then we're back to a system without CDS. That means sov bonds wil have to evaluated more on fundamentals and synthetic default protection becomes tricky. 

I said it last November: up to now the post-crisis markets ahve been running under the assumption that nearly everything would be backstopped and bailed out if needed. Now that default is becoming a real option a line has been crossed. And that could unleash a tsunami of risk aversion

francis_sawyer's picture

I sold myself a life insurance policy so that when I kill myself I'll never have to pay...


Caviar Emptor's picture

I faked my own death twice and world capital markets nearly seized up. Good thing my insurance co's CEO is Bernank's tennis partner. My policies paid off at double indemnity rates

GeneMarchbanks's picture

I'll take this opportunity to remind everyone that 'trigger' isn't an objective 'event' but one caused by word of the very overlords who have everything at stake since they are the market makers.

The mind-fuck here is baffling since most people believe that the 'market' is somehow related to an objective world outside the scope of make-believe.

prains's picture

Unicorninomics is the word you are looking for

Dr. No's picture

would find it difficult to sell and service bonds

Thats what central banks (FED) are for.

Dr. Kananga's picture

+1 for the comment and the avatar, Dr. No. :)

Dr. No's picture

There are a couple of members of SPECTRE on this board.  No doubt some of these recent events are due our diabolical plans to rule the world...


good day Sir.

Dr. Kananga's picture

And a good day to you too, Sir. Should you or the other members of SPECTRE ever find yourself near San Monique, please drop by and I'll give you a tour of my hopium fields.

tiwimon's picture

Well, the gang of super models just had their way with me last night, and on their way to your place now HD..


/psyche! it was only in my dreams and yours too mate - hard default it will be and there won't be supermodels involved or high priced prostitutes for that matter for many - as they will be Broke with a capital B


Greece, it should be the new Iceland!!!! 

Chief KnocAHoma's picture

That actually happened to me once. It was the best 45 seconds of my life!

stocktivity's picture

Exactly right. Benny won't let a hard default happen. he can print in a couple hours the amount Greece needs in March, backload the sum to the IMF which will loan Greece the money under the table called some exotic scheme. it's all Bullshit!

Dr. No's picture

It wont.  The Committe which rules will state that an agreement was made and if it is not accepted, they viotate the terms of the CDS and therefore no trigger.

ziggy59's picture

shoulbe be more like CSI...I doubt the basturds use lubrication. bodyguard hence protection must be in high demand. surprised no news of any banksters getting theirs.

Silverhog's picture

If your going to lose your shirt anyway, make them remember you.

Chief KnocAHoma's picture


Another way of saying I may lose, but you're gona feel it too!


Tortfeasor's picture

EU is doomed regardless of outcome.  The destination is the same, just the roads taken may vary.

If they cram through this deal without CDS trigger, all other CDS becomes worthless.  Rates will continue to skyrocket, and banks lose out on their revenue stream.  CDS is dead, it's all just watching the play finish out now.

WonderDawg's picture

If the CDS market dies, I would think interest rates would rise on sovereign bonds as the risk can no longer be hedged, but also, those bonds can't be counted as money good and thus levered to infinity. This would be deflationary, or am I missing something?