The Reporter Is Either Wrong Or This Is A Bad Deal For Greece

Tyler Durden's picture

Via Peter Tchir of TF Market Advisors,


If the ECB switches 50 billion of old bonds for 50 billion of new bonds, what does Greece get?  No notional reduction. Possibly a reduction in interest payments but that depends on the coupons on the bonds the ECB owns. The new bonds allegedly have some covenants and possibly other projections for the bond holders. That is a negative for Greece - they can default on these old bonds and the ECB can't do much about it.

Maybe the reporter is wrong, but this is a good deal for the ECB, marginal for Greece, but does make it easier to jam holdouts. They can default on old bonds or retroactively CAC old bonds and the ECB won't be affected.

Will Greece agree to this?

If the ECB is counting the difference between purchase price and par as profits - then it is printing money. Maybe that is enough to get the market higher - a clear sign that ECB is printing.

It is possible that all they are considering as "profit" is interest they have been paid and it is possible that the ECB will exchange their bonds based on purchase price, giving Greece some notional reduction.

This announcement is either marginally good or marginally bad depending on the details. It is not great or a game changer - except maybe the money printing angle.

As Credit Suisse noted this morning:

We remain very cautious about the long-term sustainability of the debt after restructuring, and it is just possible (not our core case) that the troika takes the rational decision that it is cheaper to let Greece default and reimburse the ECB for its approx. €30bn of GGB losses than to pay the rising but nominally €130bn. Yet it was only on 14 February (two days before writing) that the ECB was confidently talking of distributing its GGB profits, so we are cautious about second-guessing the analytical framework being used.

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GeneMarchbanks's picture

'If the ECB switches 50 billion of old bonds for 50 billion of new bonds, what does Greece get?'

Uh, a chance to revise simple arithmetic?

Jay-Zeus, is this really a topic now? You people are bored.

trav7777's picture

Anything which prolongs the inevitable is good for Greece.  It keeps them lounging in cafes pretending to work for a little while longer

Azannoth's picture

Otherwise the Greeks would have stormed the Parliament long ago and hung their elected officials, those protests and such are just a way for them to burn off the calories so they don't get too fat while not working

The Greeks know that if they had a real Revolution and cut them selves off from the EU all the subsidies would be gone and they could never get the Germans to pay for their debt and that they would have to actually live on what they produce(at least for a few years), they are only protesting better deals so they can get others to pay for them, they know full well that they are not the victims in any of this but the beneficiaries

Manthong's picture

"the Greeks would have stormed the Parliament long ago and hung their elected officials"

You've got to have some patience and faith in people..

and God only knows how hard the politicians have worked to earn their ignominious fortune.

SheepDog-One's picture

He already did, he says its 'Debkaesque'...Im more inclined to believe its exactly right myself.

Chuck Bone's picture

I see that now, thanks. Any particular reason why it's BS? Or is it just unconfirmed by ZH sources.

blu's picture

Off hand, I would say that the BS part is that someone has a written report of a plan.

None of this will ever be in writing evar.

There is probably a plan though. There are probably 50 poeple in the world who know the plan, and they are not saying jack.

The Watchman's picture

Greece is the word... Greece is the word... Greece is the word... Greece!

Silver Bug's picture

Greece needs to flat out default. That is the only thing that is going to save them in the long run. They need to preserve their assets.

agent default's picture

Greece will be forced to default or left to default, after Germany has a firm grip on Greek assets.  This thing is not a rescue, it is the leveraged buyout of a country, funded by its people.  The treasonous behavior of Greek politicians is obvious,what is stunning is the stupidity and passivity of the Greek population.  The more this can is kicked, the more convinced I am that the Greeks deserve to get fucked over.  

pods's picture

Careful, those words will be used against you when this storm comes ashore at your locale.  


agent default's picture

Nah, we are too big to bail out, and the entire world knows we are too busy playing with our iPads to give a damn anyway.

LouisDega's picture

I just bought one the other day. I figured i would try one before my inevitable death. Very nice toy. 

slobbermut's picture

What do you mean passive?  Last I heard there were like 150 buildings on fire.  Do you want them to actually get some weapons and actually start gunning down the police in the streets?  They are being sold out...many there are aware of what is happening.

zuuuueri's picture

almost all the buildings that were burned were abandoned or unoccupied. the fires were organized, not a spontaneous mob, but a propaganda play.

the politicians here seem to genuinely think they can go a couple more rounds of squeezing blood from the people.


the attitude of the common people (not the ones you see in unions or political party- sponsored demonstrations) is getting closer and closer to the point where a country is in danger of open dictatorship.


SheepDog-One's picture

Exactly right, for the love of GOD just DEFAULT already you pinheads!

Shizzmoney's picture

Greece needs to hit up Wu-Tang Financial.  They'll tell those ECB suckers whats up!

SheepDog-One's picture

You need to diversify yo bonds, bitchez.

ZeroPower's picture

Not believing this move higher right now. MAIN hasn't moved as far tight compared with XOver though you do see some sovereign CDS tighten. As for volatlity, VIX options (March) were getting bid monstrously this morning, the 26/28 strangle was out at $7! 

SheepDog-One's picture

WHAT? The rumor is wrong, or its a bad deal? No, we simply cant have that, the clouds of hopium smoke are hanging thick over world markets today.

blu's picture

This happy talk about solutions is so much like the run up to the Lehman BK that it is hard to hear it and not totally freak out.

It means Greece is going to default. Probably -- in five mintues. It will be disorderly. Nobody cares because the Eurozone biggies are firewalled against it.

Time to let it rip, I can hear them saying.

SheepDog-One's picture

Personally, I get the clear impression these people are stuck and dont know what to do now except kick the can 24 more hours. I think they had this plan of 'domino cascading bankruptcies' to bring about the 1 world govt/bank/currency, and are hard stuck against the wall and have no clue how to proceed as their plans have failed. Simply none of it makes any sense. Theres NO point in doing all this day after day!

blu's picture

We need the deer-in-the-headlights on all these "Greece solution" stories. I swear, the news out of Europe is now just so much gibber-jabber and mouth noise.

alien-IQ's picture

the biggest intellectual and emotional mistake you can make would be to underestimate "them".

they are many many things...but stupid is NOT one of those things. that's what makes them dangerous. intelligence without conscience is something to be feared. it is the most destructive possible form of evil.

rest assured, they have a plan and this is part of it. all angles have been covered over and over again. they have a plan A and B and C and D etc etc etc etc all the way to Z and beyond.

don't underestimate these fuckers.

resurger's picture

“By way of deception, though shalt wage war”

That's how they roll AIQ

SheepDog-One's picture

Theyre not so great and smart, theyre just people, and frequently thruout history have made huge blunders....their LAST attempt at all this was thru the League of Nations, WW1 and WW2 etc, but that plan flopped. They keep making attempts to form a PRISON PLANET, over the people but keep forgetting people just wont stand for it. Thats where they are now, another failed attempt.

slewie the pi-rat's picture

as balzac & dickens and more recently tDurden have taken great pains to "document" this is bigBiZ and not pointless to those in the "industry", sheeple-dawg.  finiMinis were made for this shit!

they can't 'allow' the BKs to cascade too fast, it might fuk up summa their other playZ?

imo, this IS the wall0'worry regarding which robo_T is now in complete fuking hysterics!

place yer 'bets', BiCheZ! 

alien-IQ's picture

be it good or bad, TPTB have managed to utilize this to erase all USD gains and stock market losses from yesterday...and then some.

This is not a market, it's a fucking circus...with evil clowns.

SheepDog-One's picture

Yea and whats the point to any of it? Just cat and mouse BS at this point.

alien-IQ's picture

wealth is being transferred and perceptions are being managed. that's the point of their game. control.

SheepDog-One's picture

Wealth is not being transfered, there is no wealth at all. The only thing that makes any sense is theyve tried yet again to grab the planet for themselves and enslave the people, but it will not ever work. Theyre stuck, again.

resurger's picture

to be honest, i want this market to climb higher with their bullshit..

Imagine TVIX at $7.. what a great opportunity for a great slaughter

JR's picture

It is not ‘goose-stepping’ Germans “who will rule the New Europe”; it will be, “obviously, the private European banks and Goldman Sachs.” That’s how Dr. Paul Craig Roberts sees it..

Germany is now in a life and death struggle with New York-based finance, says Robert Hickson, and as of now it looks as if New York is winning: He quotes Roberts:

On November 25, two days after a failed German government bond auction in which Germany was unable to sell 35% of its offerings of 10-year bonds, the German finance minister, Wolfgang Schaeuble said that Germany might retreat from its demands that the private banks that hold the troubled sovereign debt from Greece, Italy, and Spain must accept part of the cost of their bailout by writing off some of the debt. The private banks want to avoid any losses either by forcing the Greek, Italian, and Spanish governments to make good on the bonds by imposing extreme austerity on their citizens, or by having the European Central Bank print euros with which to buy the sovereign debt from the private banks. Printing money to make good on debt is contrary to the ECB’s charter and especially frightens Germans, because of the Weimar experience with hyperinflation.”

“Jewish finance in New York decided to pull out the club known as ‘history’ to beat Germany into submission once again.” As Roberts put it: "Germany, which has been browbeat since its defeat in World War II, has been made constitutionally incapable of strong leadership. Any sign of German leadership is quickly quelled by dredging up remembrance of the Third Reich.”

Says Hickson: “Leadership in this instance meant that Germany was insisting that the bankers (i.e., Goldman Sachs) who sold Greece toxic financial instruments, which the previous Greek government used to disguise the real magnitude of her indebtedness, take a 50 percent haircut on their bonds. The idea of Germany insisting on shared hardship as the solution to the debt crisis was intolerable to New York’s Jewish banking elite, hence the attack by NPR (by Elizabeth Beardsley in late 2011 on German warmongering and ‘talk of a Fourth Reich’).”

GeneMarchbanks's picture

' “Leadership in this instance meant that Germany was insisting that the bankers (i.e., Goldman Sachs) who sold Greece toxic financial instruments, which the previous Greek government used to disguise the real magnitude of her indebtedness, take a 50 percent haircut on their bonds.'

German hands are tied. Anything they attempt will get them massacred by the corporate media no matter the intention. Germany has been castrated. Their tool-box is limited and they can be easily demonized.

JR's picture

Exactly. The manipulation of German guilt for financial advantage.

GeneMarchbanks's picture

Luther's revolt come full circle?

Bad jokes aside, I think the undoing of Germany will be their severe Action Bias. Hope I'm wrong.

JR's picture

We’re all on the road to Serfdom if we don’t turn around and refuse to participate in the Lie! It won't be easy. As Roberts said:

“The European Union, just like everything else, is merely another scheme to concentrate wealth in a few hands at the expense of European citizens, who are destined, like Americans, to be the serfs of the 21st century.

“Jacques Delors, a founder of the European Union, promised the British Trade Union Congress in 1988 that the European Commission would require governments to introduce pro-labor legislation. Instead, we find the banker-controlled European Commission demanding that European labor bail out the private banks by accepting lower pay, fewer social services, and a later retirement.”

Roberts’ 2011 article is worth the reread:

Azannoth's picture

True Germany is not allowed to have an Independent political system or to protect it's own National Interests, it has been made to a whore of the International Jewry and get's bitch slapped every time it tries to speak up, but Germans are getting mighty tired of this and I think the next generation will not be so tolerant of it's own abuses

falak pema's picture

Goose-stepping jewish bankers, that is news...Will it reach Saudi Wahhabites and those who don't like jews doing any other dance than swinging at end of rope?

This whole stand off is going Medieval to the point of both sides singing "God wills it!". Awesome regression. If only they bought my book they would see the light! 

Pech Souleila: Sidi Kafir By Falakpema

JR's picture

I like your book bio and for those who might have missed it:

Falakpema is an international traveller and business executive with multicultural roots. His personal experience has given him a vivid insight into the working mind of those who currently rule the world as harbingers of a new world order that transfers inordinate riches to a new global oligarchy at the expense of the silent majority of middle-class people, the very backbone of democratic society. A new form of feudalism, moving force of global, transnational, financial power-play, makes historic reference to that bygone age appear very relevant to understanding current times.


falak pema's picture

You know the worst nightmare of a would-be author is to hear a has-been reader say :

"The best part of your book was your bio"....

Now you can bury me six foot under!

JR's picture

Whoa, Falak, don’t bury yourself without cause. I meant to compliment. Your bio substantiates your book and entices me further to read the book.  I was impressed by your background, that’s all, and thought others would be also. In fact, intrigued by some of your posts here, I earlier had sought out information about you on the internet and was happy to find this nugget.

Dare I say I am also intrigued by your Mission Statement in that I am currently reviewing Solzhenitzhen’s chapter on “The Blue-caps” in The Gulag Archipelago and his inquiries about the ideological barriers against setting any limits to moral evil, i.e., an ideology that allows some men to kill without remorse by the millions without setting any limits to moral evil such as in the various forms of Bolshevism, Zionism, Nazism – where vice is not punished but triumphed under the guise of special ethnic immunities, where manipulative dialectical ideology gives evildoing its justification and determination…?

I find you profound, falak. keep up the good work!

fonzannoon's picture

They payment is due March 20th. They will wait until that morning, hand them the 16 billion or whatever it is, and Greece will hand it right back. Why would any other situation occur when they can do that?

falak pema's picture

Do you remember the story of Aladin's lamp? Old lamp for new!

Draghi is Aladin. Nobody realises this incredible truth. He has a Genie he is looking for!

If he finds it, hey presto, Eurozone is safe!

JR's picture

Could that genie of financial manipulation and advantage be named Goldman Sachs?  There’s proof already of a magic spirit in human form serving the elites of international finance. Look at the evidence:  

Draghi, who used to be Vice Chairman and Managing Director of Goldman Sachs International and a member of Goldman Sachs’ Management Committee, is now the new president of the European Central Bank; Mario Monti, who was a member of Goldman Sachs Board of International Advisers is Italy’s new prime minister, appointed not elected. And Lucas Papademos, Greece’s newly appointed prime minister, was involved in the Greek “cross currency swap” engineered by Goldman Sachs just after Greece was admitted to Europe’s monetary union.

Papademos is, in addition to being a former Governor of the Bank of Greece and from 2002-2010 Vice President of the European Central Bank and Greece’s rep on the IMF, a member of America’s Trilateral Commission.

Papademos was educated at MIT, had been at Columbia University and in 1980 was senior economist with the Federal Reserve Bank of Boston. He formed his Fed connections when he was a top research assistant to the late Nobel Prize-winning economist Franco Modigliani, who was born in Italy but left Rome in 1938 when Mussolini announced new laws against the Italian Jews. Modigliani had close contacts with the Federal Reserve and his students, along with Papademos, have included Charlie Bean, Deputy Governor of the Bank of England, and Stanley Fischer, Governor of the Bank of Israel.

Papademos served as European vp with its president, Jean-Claude Trichet, former alternate governor of IMF, governor of the World Bank and a member of the Washington-based financial Group of Thirty and also former chairman of the Paris Club, a financial group of officials of 19 countries that can provide debt cancellations for restructuring for indebted companies and creditors referred by the IMF.

Fischer, before becoming an Israeli citizen to head Israel’s central bank, had been vice president and chief economist at the World Bank, first deputy managing director of IMF, vice chairman of Citigroup, president of Citigroup International, head of the Public Sector Client Group, a member of the Washington-based financial Group of Thirty, and Fed Chairman Ben Bernanke’s Ph.D. thesis advisor at MIT.

At MIT, Modigliani worked closely with Nobel laureate Paul Samuelson, uncle of National Economic Council Director and Goldman-connected Lawrence Summers (family name earlier had been changed from Samuelson to Summers).

Yen Cross's picture

So new covenants are deciding payouts on PSI? That means a discount/premium on the 66% or 75% / English law side of the PSI>

   HUSH MONEY? Greece is toast and we all know it.

youngman's picture

Greece will play the milisecond game..when the ECB turns their old bonds in and Greece has not yet issued the new will look like they paid down their debt by 50 that point in time they will do a balance sheet..and it will show the Troica that all is OK....give me the money..give me the money