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PSI, TROIKA, And TIC-TAC-TOE
Via Peter Tchir of TF Market Advisors,
I have been struggling with two issues that I just can't make sense of. At the risk of coming across as a bigger geek than usual, I feel like the darn computer in war games trying to win at tic tac toe (was tic tac toe ever fun again after that movie?) two things make even less sense to me, and the more I think about them, the more convinced I am that someone somewhere is missing something and the level of disorganization in Europe is higher than I thought.
Why is the March 20th date still in play? Why talk about needing the bailout by then for bond payments when there should be no payments due. In theory PSI will have been successful and pushed off all private holding into the distant future. If PSI isn't successful then they will do a retroactive CAC clause to ensure it gets pushed off (has anyone checked if a retroactive CAC clause would really be upheld by the Greek courts without even a temporary injunction?) Is it concern that if they do that, UK law bonds will be able to accelerate and the payout of all holdouts in those bonds is accelerated? The March bonds trade meaningfully higher than other bonds. I can't help but feel I am missing something, or they are missing something. Have they properly accounted for PSI in their calculations of timing and size of bailout money? I am very confused. I wrote some thoughts down on the march bond trading price earlier today, but I feel I am running around in circles trying to figure out the angles. If it is as simple as the ECB owning a lot of these bonds, then why not let them extend the maturity by a year for all "public sector" holders? The ECB could probably book it as a par payment and book a big juicy profit on the Greek portion of their SMP.
Then last Monday the Greeks flew excitedly to Brussels with news that they were close, only to be told to go to hades. Well, technically they were told to go back and "prove" their commitment. Now they are returning to their masters with a "successful" vote. Barely 2/3 rds of the politicians agreed - and that is without a moment having been spent on an actual alternative. They had not planned for anything other than getting the bailout so they agreed with a weak majority. Leaders gave party members who disagreed, the boot - can they actually do that? Some members avoided the voiding. The puppet has no clothes now - he had a job to do - scare the Greek people into submission, and he did it. His chances in the April election seem low (maybe he will declare himself empower for life before then and avoid those pesky elections). Samaras is openly questioning the deal post the April elections and quite frankly the rioting and scenes from Athens were shocking. But yes, the EU will thank Greece for a string demonstration of their commitment because they too have not done anything to prepare for Greece saying no (Draghi, to his credit, has done a lot to prepare for potential fallout from a Greece not getting the bailout money). Do the EU politicians really think what happened over the weekend was an endorsement of the measures adopted? They can't, yet they don't seem prepared to say it wasn't enough, so why bother? Why play the tough guy if it's a role you won't follow through on? Why the midnight vote which only made the deal seem more backhanded? What are any of them trying to accomplish other than "win" the negotiating stance they took?
I think that is it, they took a stance and are trying to "win" based on that stance with no assessment of what it means to "win". I can't remember the message out of Wargames, but I think it was saying that if you play the game, there is no way to win, yet here we have so many politicians and lobbyists eager to play. The deeper I have gotten into the process, the more clear there is very little thought and the people trying to do develop these plans don't have the background, dont have the resources, are overworked and stressed, and even the finance ministers are politicians first and foremost. Truly scary and just like tic tac toe, the only way to win his to have the other side make a mistake. Or for your kid brother to get angry, rip up the paper, and whip the pencils across the room. Picture Athens last night.
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the first one who laughs loses
tic tac - tots - http://hedge.ly/gFWVSm
http://www.youtube.com/watch?feature=player_detailpage&v=mLMXZYFRxbs#t=250s
I reckon it's like can kicking, but can was full of lead...The more one kicks it the more it hurts...
Most of the western world is BROKE Biachezzzzzzzzz!!
Just one more game of tic tac toe....surely we'll let you win THIS time! As long as the can is kicked another day or week is all that matters anyway now.
Good post. Nothing is solved and I am running out of cans.
Is there a difference if you run out of cans or run out or road?
actually they'll never run out of cans, but they will run out of road!
Roads? Where they are going they don't need roads.
The road to hell
It's a pyramid within a sphere.
Scene from War Games – Do you want to play a Game?
CPE 1704 TKS
They got the VOTE.....and a Piece of PAPER....nothing really..but to a politician its all that matters...it was so quiet today on the News about Greece....one article said how they were cleaning up.......lol...wierd just wierd...so now I guess they just click the keyboard and poof...200 billion goes to a country with no way of paying it off...who then pays themselves first and then other bankers....and the people still have no job..no tourists...no pensions...but the Politicians and Bankers won....this is the new normal I guess...me..... I do not want to be normal anymore
War Games - "The only winning move is not to play."
With a tip of the hat to the Limerick King...
Europe's debt problems won't go away,
So I start drinking earlier every day.
When it finally collapses,
I'll have memory lapses,
And my liver will wither away.
If I was still a drinking man, I'd be shitfaced by 4:00 EST everyday watching this shit. Fortunately, there are other ways to take the edge off, but damn, makes it hard to lay off the firewater as the world just gets crazier and more surreal every day.
Well done FNE.
"The force is strong with this one."
At least the computer came up with the right answer in the end. Humans for some reason still think you can win at Tic Tac Toe. So I just read that the move in Apple from $400 to $500, in fact the entire move after Steve Jobs death, was based on the assumption of Apple paying a dividend and/or splitting stock.
A 2/1 puts what, 2 billion shares out there. At that point almost no single shareholder could even hope of having any controlling interest. Hey buddy, what are you going to do with your 20 shares out of 2 billion? Of course the only reason for a stock split would be to give Apple more room to drive higher. Even further increasing its ridiculous market cap. The dividend is supposed to be $12 a share, incredibly optomistic. So for $10k you could buy 18 shares and get $200, WOW WHERE DO I SIGN UP!!! The only beneficiaries would be funds who have held Apple for a very long time.
At least one anaylst got it right saying, "Moves like this aren't natural and remind me of Cisco circa 1999 when the company briefly became the most valuable company on the planet."
Dude, Apple is one of the most UNDERVALUED stocks available. Compare its P/E to anything.
Steve Jobs was a genius of the highest order, His company, in his death, is the natural outcome of a world stuck on PCs for 30 years.
He won. He beat Bill Gates. Apple computers have always been superior to the run-of-the-mill PC and hopefully, always will be.
Grow up. Get laid. Buy a Mac.
OT but: Just heard Credit and debit card system down state wide in Michigan
Up In Michigan. Hemingway.
Gotta link?
march 20th is the day the iranian kish bourse starts selling oil outside the dollar.maybe the internet will go down that day to stop the trading.
Last time that was attempted. Someone cut the fiber optic cables.
http://www.energybulletin.net/node/39844
None of this is about solving any problems. It is all about posturing and playing monkey-shines.
That is why it will fall apart in the end. And not with a whimper, but with a bang. The final move is for the military junta in each country to take over and make the hard decisions. There won't be any riots then, because soldiers are not police and just kill people, end of that story.
It will happen in Europe before it happens in America. But it will happen in America too. No democracy anywhere is getting through this intact.
And we can thank the greedy, reckless bankers for the entire shit storm.
Well, aren't you just a ray of sunshine? But, yeah, it's going to get ugly.
Tyler,
What has happened to the hedge fund holdouts?
tic tac toe
what do you know
tic tac toe
greace is a ho
"Greetings, Professor Falken ... Why did you leave me in the care of all these mental midgets who can't figure out when to cut their losses?"
The weekend deal is irrelavent. Greece is insolvent. Period! They will one day default and refute all that debt. Anything else is wishful thinking.
the point of the bailout is to give money to the banks and privatize Greek infrastructure. It is not designed to help Greece but to loot it and then let it default after elections. Stop trying to figure out whether politicians are stressed or financially literate or why they had a midnight deadline, none of this matters, it's for show, this entire farce is an LBO of Greece plus lots of cash for the banks. Why does the LTRO need to be larger than the outstanding amount of Greek debt? Couldn't they just use that money to either retire all Greek debt or write it down on bank's balance sheets as non-performing? Or is the ECB pre-bailing out the banks ahead of more "sovereign" restructurings?
The bottom line is that bank/corporate multinational cartel is looting Europe, both of physical assets and trillions in cash, starting with Greece, ending with Italy - the two countries with unelected leaders who are both members of the trilateral commission. The rest is just theater.
I think to answer the above questions we should 1st find out who own this bond:
http://www.finanzen.net/anleihen/4_300-Griechenland-Republik-Anleihe-2012-GR0110021236
I think what you are seeing is the simple tactic of losing a few battles to line up the dominoes and win the war.
It's just that simple.
The goal is the adoption of the German's vision of Europe. AAA should stand for something positive.
Germany doesn't want to leave Europe and they don't want to deal like this whenever some pissant country screws up or is caught screwing around.
Line everything up, make the head shot... end of story.
At that point when you call "Next", there will be no takers.
At this point the Germans must realize Greece is hopeless to save. I think they might have known this a while back. But, the Germans didn't want to be the bad guys and kick them out of the EU. So, the Germans keep hoping after all of this austerity driving the Greeks into the ground like a sledge hammer, the Greeks would finally get the clue and say F This, we are out here. But, no to the astonishment of the Germans, the Greeks keep coming back for more sloppy seconds. Now, the Germans have a STAGE 5 clinger on their hands that are stocking them like a sailor in a whore house going after the hottest whore!