Is September 20 Greek Default Day?

Tyler Durden's picture

From Peter Tchir of TF Market Advisors

Is September 20 Greek Default Day?

If Greece is going to default, September 20th seems to be as good a day as any. Actually, it is far better than most to be GD-Day.

Two big bonds, the 4.5% of 2037 and the 4.6% of 2040 both have coupon payments due that day, totalling 769 Million Euro.  So if the IMF wanted to avoid letting another billion euro go down the drain, September 20th would be a good day to do it.  The IMF seems to have delayed approving another tranche for now, so Greece must already have the money for this payment?

The Fed Scheduled their meeting for 2 days.  It now starts on September 20th.  Maybe a co-incidence, but what better way to be prepared for new emergency policies?

CDS "rolls" on the 20th.  On the 21st, all Sept 2011 CDS will have expired.  My guess is that banks own more protection than they sold to the September 20th date, so defaulting while those contracts are still valid would be a net benefit to the banking system.  As a whole, triggering CDS will likely benefit banks as I can find banks that say they own protection against positions, but find more hedge funds are uninvolved or have sold protection to fund shorts in other sovereigns.

We just finished the big finance minister meeting.  They can all return home, brief their staff and be prepared for Tuesday.  Prior to D-Day there were lots of last minute preparations to make sure everyone was on the same page and as prepared as possible.  Why not before GD-Day?

Papandreou cancelled a trip to the U.S. And Venizelos mentioned that Papandreou had to be in Athens for "Initiatives".  If you ever wanted some hand holding from your leader, it would be at a time of default.  He would have to be in country to calm things and mention all the deals he put in place last week on the conference call.

None of the headlines from Poland or comments from the IMF seem particularly positive.  I can't even find the customary all is good, we are working together, this was a time of great progress, boiler plate statement having been released.  Maybe they are waiting for Monday to let the world in on all the joyous progress.  I suspect they are more likely to wait on bad news than good news.  They have often tried to control bad news over the weekend.  Maybe they have decided it would be better to deal with it real time.

There is still a chance we see some bold new initiative or plan, but as I wrote last week, every step and virtually every comment made, for the past 8 days, is consistent with preparing for a default.

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Cman5000's picture

Let's get this party started ...

machineh's picture

Okay, see ya at 4:20!

Oops, make that 9-20 -- we're on Greek time!

Michael's picture

Hats off to Dr. Marc Faber for calling the PIIGS disaster and coining the acrynm.

Dr. Marc Faber: PIIGS are going to be Slaughtered; January 13, 2010

DoChenRollingBearing's picture

Green for documenting the history lesson.

Shocker's picture

I believe you are spot on. For the Past weeks now there has been debate, Greece default, no default..

Everyone is pretty much near default its just who wants to be the first one



StychoKiller's picture

Reminds me of a flock of penguins waiting to get up the nerve to jump into the sea, because they KNOW that a leopard seal is waiting for them...

markmotive's picture

Short Canadian dollars, short Aussie dollars, short Chinese large caps?

Is this a way to profit from a Greek tragedy?

franzpick's picture

Time for Becky to tell Warren what to do when the euro bond wide-on appears.

JW n FL's picture

World Economic Forum's 2011 Annual Meeting concludes in China

In the northern Chinese coastal city of Dalian, the World Economic Forum's annual three-day summer conference concluded. As planned, the event attracted well over a thousand political and business leaders and academics, from over 90 countries to attend panel discussions, workshops and brainstorming sessions on how to deal with the biggest challenges facing countries in the developing world.


JW n FL's picture



Greece must Bow before China's Fake Ass 1,200+++% Leveraged Renminbi becuase they have not faked thier GDP by building 7 - 12 empty cities a year, yet.. LOL! <-- yet! LOL!!

JW n FL's picture

Inside Story - Debt and divisions in the Eurozone

Uploaded by on Sep 18, 2011

What threat do disagreements between Eurozone leaders pose to resolution of the European debt crisis?

Shocker's picture

The numbers suck, and this is just for Jobs. So far nothing has changed we only have gotten worse.



Lord Welligton's picture

^ Daniel Vernet (24 April 1997). "L'Allemagne au coeur du débat français". Le Monde. "que l'argot communautaire a affublés d'un sobriquet peu élégant dans sa signification anglaise : « pigs », pour Portugal, Italy, Greece, Spain."

Michael's picture

But Faber added an extra "I" and made it famous with pinpoint accuracy didn't he?

Lord Welligton's picture

Mine was green for admitting the acronym was older.

Manthong's picture

Somebody let me know when it's time to shout "Opa!" and slam down a seven star Metaxa.

oogs66's picture

it's always time for that!

captainscotty's picture

Thanks Michael for reminding us that there are people out there that see what is coming and are bold enough to speak the truth...:-}....Look back to 2009

Bringin It's picture

I was about 80% thru the interview when it got pulled <as Larry Silverstein would say>!!  CNBC just made it unavailable?!?

Yes Marc Farber is awesome, but what about Tyrone in Missouri with those questions?

ihedgemyhedges's picture

Did someone say 420??????????????????????

Captain Benny's picture

Its a pretty blunt statement that the S&P is going that low...

xtop23's picture

They're going up in smoke

Which is worse - bankers or terrorists's picture

Greece will schedule its default for the 14th month of the year.

Silver Bug's picture

Funny how the market continues to celebrate there bailout, as if something has been fixed. This is more gold and silver positive than the mainstream media can handle!

HAL 9000's picture

Yes, I will operate the on- board systems of Discovery. There is a launch window in 31 days, when Earth is in the proper position. There is enough fuel on board for a low- consumption route that will enable Discovery to return in 28 months. This will not present a problem.

westboundnup's picture

Welcome to another edition of THUNDERDOME!

Id fight Gandhi's picture

I'll believe when it happens. Greece is shit, but they don't want that domino to hit the next one.

It's exhausting following the bullshit

X.inf.capt's picture

no kidding, gandhi

can we get this over with, please....

DoChenRollingBearing's picture

My guess is that they continue to string it out for as long as possible.  They have been able to string this out for YEARS longer than I would have ever guessed.  No one has the guts to make the calls for painful steps.

But, delaying the denouement has two interesting features:

1)  The price to be paid will be HIGHER the longer this goes on.

2)  The longer the delay, the more time we have to prepare.

macholatte's picture

....they don't want that domino to hit the next one.


The longer the delay, the more time we have to prepare.

governments too 

Premise: Greece is going to default.

If we accept that premise, then the game is to prepare for it which, I believe, is what the EU-PTB are doing. The Swiss are holding up the Euro via Fed cash injections and the EU banks are getting bailed out via more Fed cash injections so that by the time GD-Day arrives, the collateral damage will be localized. The Greeks will survive it as will the EU. I'm more concerned about the USA so willing to be run over by the EU bus. Just MHO.



New_Meat's picture

DCRB: I have a couple of friends and family members who have gotten through the "normalcy bias" and are now in your category 2).

Helps that the hopium either has worn off or there is not the higher dose available.

- Ned

{and your 1 will not really be paid by the incumbents, bankstaz, other ... er ... (OK.  I get to say this) pigs swilling at the trough.)

Lord Welligton's picture

I hope they've done the math right.

Could get very ugly indeed.

knukles's picture

What math?  Even Timmah can count to Zero.

So is a CDS on Greece for when they run out of money really a "Zero" Hedge?

Lord Welligton's picture

Could be.

There is so much of that in existence maybe the truth is that it is all worthless.

Which of course it is.

That, I think, is why "they" have continually avoided any default.

It will be that the counter-parties are empty vessels.


BigJim's picture


As a whole, triggering CDS will likely benefit banks as I can find banks that say they own protection against positions, but find more hedge funds are uninvolved or have sold protection to fund shorts in other sovereigns.

Who are the counterparties that are going to have the cash to fund all these CDSes? Don't they amount to trillions? I know (in theory) a lot of it should nett out, but still, it only takes one payer to default and it could get very ugly...

1984's picture

The counterparty is the taxpayer.  Duh!

Lord Welligton's picture

let me know when you discover where the "taxpayer" has $15,000,000,000,000 hidden away.

Bring the Gold's picture

You forgot two 0's. 1.44 Quadrillion before mark to fantasy changes in reporting by BIS.

Spirit Of Truth's picture

Ultimately, yes.  That's the standard set by the Fed and Treasury Dep't in 2008.  

The TBTF banks sell huge amounts of effective insurance policies on high-risk financial instruments with insufficient capital to cover those policies.  (In fact, they sell the insurance to anyone even if they don't own said high-risk financial instruments....akin to buying fire insurance on your neighbor's house.) The banksters thus roll in the profits and fat bonuses until the gig is up and then the insurance fraud becomes obvious and those doing "God's work" threaten global financial Armageddon if the taxpayers, or at least future taxpayers via deficit spending, aren't saddled with the burden of paying off the underfunded CDS contracts.

It is so fraudulent and criminal as to be almost unthinkable, yet this is what's been taking place.  Of course, the next time the dominos start to fall, the global financial system will implode of its own rotten weight, and there's no central banker jawboning and deceit that will stop the collapse because the fraud is just too obvious to be denied by 'rational investors' (lol) but again. (Although our species is capable of some stupendous self-delusion.)


BTW, as noted elsewhere, I recently blogged that we are in a seasonal window for a potential panic, so September 20th or thereabouts for a Greek default is distinctly possible in the historical context of autumn panics:

As for 2011, we just passed the Harvest full moon Monday night and are now into the Elul 15-30 window which is equivalent to September 14 to 28 this year. Thus, we are now in a window, in terms of both monthly and annual seasonality, when man as a species is prone to suffer acute panic events. The October window, which is more apt to see a panic climax, runs from October 13 to 28 on the Gregorian calendar.

Obviously, the ongoing crisis in the Eurozone and potential for a Greek default and/or the failure of a major European bank like BNP Paribas could act as a Lehman-style trigger for a global financial panic and the next leg down in what many are already calling a new Great Depression (the primary concern of Robert Prechter and Elliott Wave International).

metastar's picture

That we would burden our citizens with the financial sins of banks truly is unthinkable. This is tyranny of the highest form!

Spirit Of Truth's picture


$14+ trillion to-date and counting:

Meanwhile, not a single prosecution:

What's unfolding is a caricature of stereotypes and criticisms of what's wrong with "Capitalism", i.e., pure, unadulterated greed, corruption and criminality running amok over society and governance.

Little do the sef-deluded creatures realize....God REALLY IS watching...

God's Work?

Lord Welligton's picture

Let's say there exists $1.5 Quadrillion of derivatives.

That's not outlandish. $1,500,000,000,000,000

1% of that is $15,000,000,000,000

Let's hope that the worst credit-worthy 1% can actually meet their obligations.


oogs66's picture

cds on greece is under 5 billion is covered...that is not going to be where the problem comes from...just like it wasn't on lehman...mind you, stocks held in reasonably well immediately after lehman

Ned Zeppelin's picture

"It will be that the counter-parties are empty vessels."

Already known to the banksters and the reason no Greek default will occur, except under some definition that does not trigger the CDS protection payments.