This page has been archived and commenting is disabled.

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.


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Sat, 09/17/2011 - 14:59 | 1680165 Cman5000
Cman5000's picture

Let's get this party started ...

Sat, 09/17/2011 - 15:02 | 1680171 machineh
machineh's picture

Okay, see ya at 4:20!

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

Sat, 09/17/2011 - 16:33 | 1680430 Michael
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

Sat, 09/17/2011 - 16:37 | 1680445 DoChenRollingBearing
DoChenRollingBearing's picture

Green for documenting the history lesson.

Sat, 09/17/2011 - 21:11 | 1680828 Shocker
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



Sun, 09/18/2011 - 01:32 | 1681368 StychoKiller
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...

Sun, 09/18/2011 - 12:24 | 1682010 markmotive
markmotive's picture

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

Is this a way to profit from a Greek tragedy?

Sun, 09/18/2011 - 19:04 | 1683109 Pegasus Muse
Pegasus Muse's picture

Excellent piece.


Time For Europe’s Bond-Burning Party

Jeff Nielson


Sun, 09/18/2011 - 22:24 | 1683519 franzpick
franzpick's picture

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

Sun, 09/18/2011 - 22:52 | 1683573 JW n FL
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.


Sun, 09/18/2011 - 22:53 | 1683574 JW n FL
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!!

Sun, 09/18/2011 - 23:49 | 1683642 JW n FL
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?

Mon, 09/19/2011 - 08:23 | 1683080 Shocker
Shocker's picture

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



Sat, 09/17/2011 - 16:41 | 1680456 Lord Welligton
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."

Sat, 09/17/2011 - 16:52 | 1680483 Michael
Michael's picture

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

Sat, 09/17/2011 - 16:58 | 1680501 Lord Welligton
Lord Welligton's picture

One for the Doc.

Sat, 09/17/2011 - 17:05 | 1680513 Lord Welligton
Lord Welligton's picture

Mine was green for admitting the acronym was older.

Sat, 09/17/2011 - 18:25 | 1680670 Manthong
Manthong's picture

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

Sat, 09/17/2011 - 20:56 | 1680882 oogs66
oogs66's picture

it's always time for that!

Sun, 09/18/2011 - 10:58 | 1681832 captainscotty
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

Mon, 09/19/2011 - 06:31 | 1683865 Bringin It
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?

Sat, 09/17/2011 - 16:56 | 1680496 ihedgemyhedges
ihedgemyhedges's picture

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

Sat, 09/17/2011 - 17:58 | 1680623 Captain Benny
Captain Benny's picture

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

Sat, 09/17/2011 - 23:55 | 1681256 xtop23
xtop23's picture

They're going up in smoke

Sat, 09/17/2011 - 17:08 | 1680521 Which is worse ...
Which is worse - bankers or terrorists's picture

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

Sat, 09/17/2011 - 16:32 | 1680427 Silver Bug
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!

Sat, 09/17/2011 - 20:04 | 1680800 HAL 9000
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.

Sun, 09/18/2011 - 19:57 | 1683188 westboundnup
westboundnup's picture

Welcome to another edition of THUNDERDOME!

Sat, 09/17/2011 - 15:02 | 1680170 xtop23
xtop23's picture


Sat, 09/17/2011 - 15:42 | 1680260 Id fight Gandhi
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

Sat, 09/17/2011 - 16:11 | 1680359 X.inf.capt
X.inf.capt's picture

no kidding, gandhi

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

Sat, 09/17/2011 - 16:35 | 1680441 DoChenRollingBearing
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.

Sat, 09/17/2011 - 16:55 | 1680488 X.inf.capt
X.inf.capt's picture


Sat, 09/17/2011 - 17:36 | 1680586 macholatte
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.



Sat, 09/17/2011 - 17:50 | 1680612 New_Meat
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.)

Sat, 09/17/2011 - 15:42 | 1680177 Lord Welligton
Lord Welligton's picture

I hope they've done the math right.

Could get very ugly indeed.

Sat, 09/17/2011 - 16:34 | 1680435 knukles
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?

Sat, 09/17/2011 - 17:02 | 1680508 Lord Welligton
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.


Sat, 09/17/2011 - 18:44 | 1680697 BigJim
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...

Sat, 09/17/2011 - 19:17 | 1680749 1984
1984's picture

The counterparty is the taxpayer.  Duh!

Sat, 09/17/2011 - 20:19 | 1680823 Lord Welligton
Lord Welligton's picture

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

Sun, 09/18/2011 - 21:35 | 1683415 Bring the Gold
Bring the Gold's picture

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

Sat, 09/17/2011 - 22:41 | 1681120 Spirit Of Truth
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).

Sun, 09/18/2011 - 21:14 | 1683362 metastar
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!

Sun, 09/18/2011 - 23:10 | 1683596 Spirit Of Truth
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?

Sun, 09/18/2011 - 21:36 | 1683416 jdelano
jdelano's picture

TBTF. The banks that fuck?

Mon, 09/19/2011 - 01:27 | 1683725 Placerville
Placerville's picture

Too big to fuck?

Sat, 09/17/2011 - 20:16 | 1680820 Lord Welligton
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.


Sat, 09/17/2011 - 20:58 | 1680890 oogs66
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

Sat, 09/17/2011 - 20:43 | 1680862 Ned Zeppelin
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. 

Sat, 09/17/2011 - 15:06 | 1680178 buzzsaw99
buzzsaw99's picture

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...

Those coupon payments are going to be made.

Price. A fair price. That's not what you say it is, and it's not what I say it is... It's what the market will bear. Now there's people - and I know 'em - who'll pay a lot more than $25,000 for a healthy baby. Why, I myself fetched $30,000 on the black market. And that was in 1954 dollars. If Greece don't pay, the market will... [/Leonard Smalls]

Sat, 09/17/2011 - 15:25 | 1680217 MolotovCockhead
MolotovCockhead's picture

Don't be deceived by those astronomical figures! They create it by punching a few numbers follow by a series of turns into debt...ooobs, I mean money!

Yeah, money the unborn have to pay. I think the unborn should sue their parents for selling them into slavery!

Sat, 09/17/2011 - 16:16 | 1680370 X.inf.capt
X.inf.capt's picture


is it just me, or are all of these 'experts' suffering from 'zero stroke'.

(look it up on wikipedia, youll laugh.)

Sat, 09/17/2011 - 17:15 | 1680539 Kiwi Pete
Kiwi Pete's picture

Now that's clever!

Sat, 09/17/2011 - 17:19 | 1680549 X.inf.capt
X.inf.capt's picture

you like that......

i cant believe that one fell right into my lap..

i thought all the ZH'ers would love it....


Sat, 09/17/2011 - 18:47 | 1680702 BigJim
BigJim's picture

It's one way to get everyone to upgrade their computers to 64-bit processors.

Sat, 09/17/2011 - 18:46 | 1680699 Cruel Aid
Cruel Aid's picture

Scientific notation is the cure for the next zero stroke affliction.


Sat, 09/17/2011 - 18:51 | 1680705 aviat72
aviat72's picture


Zero Strokers  that's what this community should be called.

Sat, 09/17/2011 - 16:16 | 1680369 Spawn of Cagliostro
Spawn of Cagliostro's picture

Now that is some professional comment-leaving.  +1 for the Raising Arizona reference.  Cinematic perfection. Turn to the Right!

Sat, 09/17/2011 - 15:10 | 1680181 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Can't get blood out of a turnip. Let her go bankrupt and face the inevitable consequences instead of living in constant denial. The deflationary spiral will begin!

Sat, 09/17/2011 - 15:57 | 1680314 Id fight Gandhi
Id fight Gandhi's picture

It's gonna happen like bear sterns or Lehman. They just won't let this go without a fight and sure as hell won't be on a specified day. If anything another statement, all is well, working blah blah and market rallies on hope and euro rises. It's happened every fuckin time.

One day (soon) we'll get the news it's far too gone and it will collapse.

But all the euro leaders are taking political damage for supporting this deadbeat country and the only reason to tie themselves with a sinking ship is to try to contain it and avoid contagion.

Sat, 09/17/2011 - 19:24 | 1680717 Pant Suit Skidmark
Pant Suit Skidmark's picture

Perhaps Gandhi, but there is a chance that there will be yet another magical stick save. Maybe this time it will be from Hugo Chávez and it will rain skittles once again.

Sat, 09/17/2011 - 20:40 | 1680858 Ned Zeppelin
Ned Zeppelin's picture

It's one thing to let Lehman Bros. bite the dust, which richly served the interests of Goldman whose c*cksucking ex-CEO Hank Paulson, an American traitor of the highest order, decided would die when he decided not to save it, versus letting a Euro-Sovereign default, since it creates a precedent within the Eurozone.  Not sure it will be allowed to happen. I think the ECB goes with some sort of TARP move that allows for a "re-structuring" of Greece debt that amounts to a default, but perhaps skirts the definition of default under the zillions of CDSs issued by Euro and USA banks alike on Greece and other PIIGS debt. 

Sun, 09/18/2011 - 21:06 | 1683347 robertocarlos
robertocarlos's picture

Paulson is number one on most lists. He is the worst traitor ever in America. In his mind he was saving us from a disaster but he only made it worse. He helped his friends.

Sat, 09/17/2011 - 15:11 | 1680182 gun4A
gun4A's picture

bullish for Goud und zilber ?

Sat, 09/17/2011 - 16:23 | 1680389 hognutz
hognutz's picture

Beans & Lead too......

Sat, 09/17/2011 - 15:12 | 1680185 DraginDickHedge
DraginDickHedge's picture

Thanks for the insightful information ZH.  While I can discover this information elsewhere, yet again, some brilliant incarnation of Tyler illuminates facts and answers to questions I had not the intelligence or foresight to consider pondering.

Sat, 09/17/2011 - 17:09 | 1680523 Religion Explained
Religion Explained's picture

das cuz yer a dawg ...

Sat, 09/17/2011 - 17:32 | 1680576 smlbizman
smlbizman's picture

spot on dragin, their reading of  the tea leaves is what makes this site....

my hat is tipped... 

Sat, 09/17/2011 - 18:07 | 1680632 Lord Welligton
Lord Welligton's picture

And the lack of censorship.

Sat, 09/17/2011 - 18:23 | 1680663 GeneMarchbanks
GeneMarchbanks's picture

Fuck You.      [testing]               [testing]



Sat, 09/17/2011 - 19:19 | 1680755 mick_richfield
mick_richfield's picture

And the lack of censorship.

Oh yeah?   OK, milord, so what are the first two rules of Fight Club?

Sat, 09/17/2011 - 20:25 | 1680832 Lord Welligton
Lord Welligton's picture

You know better than to talk about fight club.

Sun, 09/18/2011 - 19:48 | 1683168 ISEEIT
ISEEIT's picture

Most peculiar of all is that the best nugets can often be discovered in the comment thread. Use the net while you still can. Yeah, I'm serious. Do you really think they won't learn anything from this failure? Really?

Imagine were you to be a looter. What lesson would you learn? What would your response be?

Its about survival. We had a state senator over Friday. He encouraged my 18 year old Son to be optimistic in his desire to become an air traffic controller. His precise words were " that is likely an excellent private sector opportunity"

It really is 'our' sector VS. 'their 'sector.

Truth motheryouknowitoryoudon't'ers.

Freedom or enslavement. Two choices. It is one or the other.

Nobody is truly 'kinda' free. Nobody is 'kinda' a slave.

Internment is repression, Repression is slavery. I'm white and poor. Guess that makes me the new Black?

Sat, 09/17/2011 - 15:12 | 1680186 CrashisOptimistic
CrashisOptimistic's picture

The talk has been mostly about what banks get hurt and if gold goes up and how to make money on the event.  

This does not look deeply enough.

The real question is what appears on news broadcasts from the street, because it is ONLY what happens in the street that will decide Italy, Portugal and Spain.  The two options are no rioting with gunfire and killings, especially of politicians and bankers vs full on rioting with snipers on rooftops targetting bankers and politicians.

If there is no rioting and life in Greece looks the same on the news broadcasts, then Spain, Italy, and Portugal can default very safely.  They would be irresponsible not to.  Why pay?

If there are widespread killings of elites, then Spain, Italy and Portugal will be funded by every imaginable EU entity to hold the snipers off Brussels and Berlin and Paris and Madrid and Lisbon rooftops.

Sat, 09/17/2011 - 17:41 | 1680594 macholatte
macholatte's picture

So far there has been no blood shed by elites and it's doubtful there will be. The sheeple will continue to graze. The deadbeats will be forgiven and relieved of their burden. The mechanism for all this is being configured as we speak.


Sat, 09/17/2011 - 20:32 | 1680844 CrashisOptimistic
CrashisOptimistic's picture

Slight missing of the point.

The point is there is no escape.  You either get blood, or you get an avalanche of defaults.

Sat, 09/17/2011 - 21:01 | 1680895 Prometheus418
Prometheus418's picture

I would make note of the fact that whenever there is a riot, protest or demonstration, TD is right there with a link to a live feed.  I would not call that ignoring the sentiment above.

Sat, 09/17/2011 - 15:13 | 1680188 Trifecta Man
Trifecta Man's picture

OT - The Occupy Wall Street protest in NYC now on web

Sat, 09/17/2011 - 15:31 | 1680230 ZeroPower
ZeroPower's picture

Those hippies should focus more on their own lives than causing ruckus which will lead to absolutely nothing besides 'cool fb photos' they can show to their hipster deadbeats.

Sat, 09/17/2011 - 19:22 | 1680762 mick_richfield
mick_richfield's picture

Damn right!  They should take whatever Wall Street does to them, and just lean forward and enjoy it! 

Sun, 09/18/2011 - 23:50 | 1683647 OldPhart
OldPhart's picture

Twilight Zone stuff...I clicked on the video and a commercial from Metro PCS started.

Sat, 09/17/2011 - 15:13 | 1680189 DavosSherman
DavosSherman's picture

9/18/2011 or 9/24/2011 or 9/25/2011 they like doing this shit on weekends, see Argentina and Mexico.

Sat, 09/17/2011 - 15:45 | 1680270 Lord Welligton
Lord Welligton's picture

I agree.

To do it mid-week would cause to much panic.

Could be why Papa turned the plane around.

Got a call from x y or Z and was told the game is up.

Sat, 09/17/2011 - 19:24 | 1680764 mick_richfield
mick_richfield's picture

If he really wants to show the zEuropeans how upset he is, he should set himself on fire.


Sun, 09/18/2011 - 01:46 | 1681376 drider
drider's picture

Venizelos (MinFin) was a competitor to G-Pap for the leadership of PASOK party. Now that there is growing opposition to the new property tax and the Troika is calling for additional measures, Venizelos wants to cover his ass and put G-Pap in the frontline. It is widely expected in Greece that an address will be made by G-Pap on Monday or Tuesday asking for the peoples' understanding for the new taxation since the country is in a dire situation. He will also ask the unions to behave more "responsible"...

The truth is that the government is toasted anyway since the pressure for declaring early elections is mounting... Irrespictevely of an imminent or not Greek default.

Sat, 09/17/2011 - 15:17 | 1680192 DollarDive
DollarDive's picture




Find out what it means to "G"


See how happy we all can be... !

Give it to me

Give it to me

Sock it to me.

Sock it to me.

Sock it to me.

Sat, 09/17/2011 - 18:59 | 1680718 WmMcK
WmMcK's picture

+1 - 'Retha.

Sat, 09/17/2011 - 15:15 | 1680194 EZT
EZT's picture

Wonder what Michael Burry is doing..


Sat, 09/17/2011 - 15:16 | 1680195 EZT
EZT's picture

Wonder what Michael Burry is doing..


Sat, 09/17/2011 - 15:15 | 1680196 machineh
machineh's picture

Question is, where are the New Drachmas being printed?

My guess is in Germany -- they make great high-speed presses!

Sat, 09/17/2011 - 15:19 | 1680204 DollarDive
DollarDive's picture

Probably here in the US - somewhere in a basement in Newark NJ.  It's our newest manufacturing business.  

Sat, 09/17/2011 - 16:53 | 1680486 silver500
silver500's picture

There will be no "New Drachmas".  Greece will never leave the Euro no matter what, The Greek people have Euros in their pockets, Nobody can stop the Greek people using them until the Euro is worthless or there is a hard alternative.



Sat, 09/17/2011 - 19:22 | 1680761 machineh
machineh's picture

Gresham's Law will take those euros out of circulation the instant the New Drachma is introduced.

Greece cannot do a debt restructuring while keeping the euro, because it will have no way to raise funds in euros.

Sat, 09/17/2011 - 21:20 | 1680930 Prometheus418
Prometheus418's picture

I don't know that Gresham's Law will be applicable in this particular case.  The Euro, while it may be a better currency than a theoretical "New Drachma," does not have any more intrinsic value.  While New Drachmas may be required for certain things like paying taxes or utility bills, I can't imagine a case where a thriving black market run on Euros would not emerge.  Since the Euro does not hold intrinisic value, there would be no particular reason for any Greek to hoarde it- they would just convert back and forth as needed.  Hell, if I was Greek, I think I'd just take a train to Switzerland and open an account that is denominated in Francs or Euros, and convert the funds to Drachmas when required.  It's the same thing I and others are doing with silver- hold the value in specie until cash is needed, and then sell to pay in FRNs, or pay directly in coin.

I even thought about holding Canadian dollars as well- but when it comes right down to it, though I trust the Canadian Gov't more than that of the US right now, they're just too close to us to remain unaffected if the US collapses.  And if I'm wrong, it only takes a couple of hours to get to the border from where I am in the cold white north.

And of course, the case would be reversed entirely if they were to revive the silver Drachma- Then, Gresham's Law would pull all the New Drachmas off the street, and transactions would be forced into Euros.

Sat, 09/17/2011 - 15:16 | 1680199 Woland
Woland's picture

Here at Zero Hedge

You constantly fail to understand and accept the power of political decisions over temporary economic facts and short term vs long term impact differences of the two. And never forget that Central Bank decisions are deeply political decisions. They are decade deep in impact and strategic implications. 



Sat, 09/17/2011 - 15:30 | 1680231 L G Butz PhD
L G Butz PhD's picture

Here here Woland! Mostly I'd agree, but you do paint with too broad a brush.

I've read a few here who, based on what they post anyway, appear to appreciate how the economic and political realms push and pull each other and how that plays out both short and long term. Otherwise, I wouldn't have begun posting after reading the articles here for years. I just started reading the comments recently though, and there are definitely some jewels to be found.

Sat, 09/17/2011 - 21:32 | 1680973 Prometheus418
Prometheus418's picture

Strange as it may sound, I've felt that the comment section on any site is the real show- even here.  While the articles are great on ZH, I spend about five minutes on them, and sometimes an hour or more on the comments.  Even the stupid ones are revealing, and I actually really enjoy the contrarians, as they offer more food for thought than those who simply repeat the party line.  

I know I'm not the only one, either- my neighbor feels the same way, and he runs with a much different online crowd.  It does really depend on what you're looking for.  Unless you're a Joe Friday type, the comments add a lot either in terms of community or in terms of researching rhetoric and group dynamics.

That, and it's where you get to say bitchez, bitchez.

Sat, 09/17/2011 - 15:48 | 1680280 Lord Welligton
Lord Welligton's picture


But don't underestimate the arrogance of the powerful or overestimate their ability to control things as they would like.

History is full of examples of pride before the fall.

Sat, 09/17/2011 - 16:01 | 1680326 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Or we like to consider all the posibilities.

Sun, 09/18/2011 - 22:04 | 1683480 snowball777
snowball777's picture

History is littered with the corpses of failed political systems...not always, but quite often because of a failure to pay heed to economic facts.

Sat, 09/17/2011 - 15:18 | 1680203 kaiten
kaiten's picture

D-day is coming.

Sat, 09/17/2011 - 15:19 | 1680205 yabyum
yabyum's picture

Let me take the Greek side ala Iceland: Hey EU! garlgle my balls! and no ouso for you!

Sat, 09/17/2011 - 15:22 | 1680210 terryfuckwit
terryfuckwit's picture

Honestly for how long have we watched this screaming , dying wailing beast and it's ever more painful contortions. Why can someone not put this animal out of it's misery. My god we need death to stop the screaming. With the realisation that life goes on we can then start allowing the mercy killing of those other frankensteins monsters known as the TBTF banks....

Sat, 09/17/2011 - 15:28 | 1680218 Earl of Chiswick
Earl of Chiswick's picture

as if the IMF gives two pinches of raccoon dung about a billion 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.

and do you think if they were going to default Papa would be hanging in Athens? 

Papandreou cancelled a trip to the U.S.

Sat, 09/17/2011 - 15:32 | 1680227 misterc
misterc's picture

I wonder what this would do to the price of the shiny yellow on that and on the consecutive day?
Upward pressure for the various implications (French downgrade?) or downward pressure (various entities liquidating GLD / SLV positions for dealing with funding issues)?
Buying opportunity slightly after default announcement? 

Oh yeah, and I believe a default would be the coffin for Angela Merkel's chancellorship - all of Germany's guarantees for bailout funds would be drawn (?).

Sat, 09/17/2011 - 15:31 | 1680232 espirit
espirit's picture

Threat of default first, then back to the table to see how debt can be written off.

blah, blah, blah - Playbook 101

Buy the rumor, sell the news.

Sat, 09/17/2011 - 15:38 | 1680236 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Greece leverages its debt with its gold reserves by loaning gold to China and pays the bonds, China greenlights the fiat ponzi by continuing to buy US bonds backdoor the way of proxie Londontown, Bernanke makes swaps to the ECB, the ECB roll the bonds with the next bailout, and gold goes up a few hundred bucks in October.

The IMF, World Bank, and BIS continue to lecture the States, and when the wheels fall off they say. 'I told you so' and create a new monetary unit backed by the gold reserves of the States, the price of gold sky rockets due to the needed leverage, the States pay their debt in dollars/euros when the current fiat is worth pennies on the dollar.

Sat, 09/17/2011 - 17:10 | 1680428 DoChenRollingBearing
DoChenRollingBearing's picture

Better yet Mr Lennon, we can front-run them.

We could have the Treasury issue a call that it will BUY ANY AND ALL (PHYSICAL) GOLD for a very high price ($5000 or $10,000 / oz come to mind).  Bang!  Just like that our national debt is reduced by, say, 80%!  Yes, we get a big does of inflation and currency devaluation, but that is all going to happen anyway.

Other countries would likely have to something like this too...  Or else their currencies are much too expensive for their export sectors to survive (losing their export sectors would be VERY BAD for jobs, etc.).

Who wins?  Owners of gold...

Sat, 09/17/2011 - 19:01 | 1680725 goldenrod
goldenrod's picture


Even better, make is $55,000/oz and payoff the entire debt and unfunded obligations.  check out the graph towards the end of this presentation.


Sat, 09/17/2011 - 21:25 | 1680836 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

This is what will happen, which is why we should force the hand and take all of the bullion off the market first, so we have the monie, not the oilgarchs. 

Sat, 09/17/2011 - 21:15 | 1680920 Praetor
Praetor's picture

Ha ha I don't think you have to forward DoChen to FOFOA.

Sun, 09/18/2011 - 22:31 | 1683538 DoChenRollingBearing
DoChenRollingBearing's picture

LOL, so true!

Sat, 09/17/2011 - 22:17 | 1681077 Prometheus418
Prometheus418's picture

All that may be correct, but the nagging little voice in the back of my head is asking how much controlling the world's reserve currency is worth.

The thing about a full US default is that the US dollar will no longer be the reserve currency- that distinction will go to the last fiat system standing, or gold.  As much as I think that returning to a metallic standard makes sense, I don't really know that it is in the cards, if for no other reason that there is simply not enough material to adequately cover all the transactions in the world, and all of these metals (including gold) are used in industry.  Even if we return to a gold standard, it will be mainly a reference, and someone will still be issuing paper currency.

Whomever that someone is will be holding the reins of international finance, and it's hard to imagine a scenario where the US PTB give those reins up willingly- if I had them, I wouldn't.

Given that, don't you think it is more likely that TPTB throw their proxies (politicians) to the wolves and cherry-pick some new management from the survivors to nationalize the entirety of the debt?  In that case, they can easily and dispassionately raise the Fed's interest rates, and force the US population into austerity coupled with extreme deflationary pressures.

That being said, I am still a supporter of gold and silver in that scenario for two reasons- first, the history of the metals is a strong indication that an ounce of gold always purchases more or less the same quantity of durable goods.  Second, holding gold or silver will allow emmigration, should things get to the point where it makes more sense to give up on the US entirely, and move somewhere else for quality of life reasons.  US dollars are global currency right now, but should that cease to be the case, it's not likely to be difficult to sell the metals in a foreign country, even if US dollars are not welcome.

Sat, 09/17/2011 - 15:42 | 1680262 ISEEIT
ISEEIT's picture

This shitty game is so obviously telegraphed. Greece defaults. So the F what? Pretty well priced in but when the EUR drops to maybe 1.34, the shorts will go all in looking for 1.20 by months end. Then along comes big Ben announcing massive bond purchases. The EUR lands at 1.40+ by months end and the crooks pull off yet another masterful (if not a bit to obvious anymore) heist.

Not saying I'm reading the cards correctly, but recent history supports the scenario. I'm under at 1.3580. Things can change but as they stand now I'll cash out at 134.20 & probably go long from there. I'm really beginning to accept that this EUR/USD game is a far larger contest than I ever realized before. It gives the globalist the perfect cover for absolute USD destruction and will likely lead to an end game of some substitute for a reserve currency. (and it sure as hell won't be gold).

Sat, 09/17/2011 - 15:52 | 1680287 CrashisOptimistic
CrashisOptimistic's picture

You're thinking in terms of a big game played by markets.

You are not thinking in terms of bullets entering skulls.

A Greek default either produces bullets in elite skulls, in which case every possible funding entity will be writing checks to Italy, Portugal and Spain.

Or a Greek default produces no big deal in the streets.  No one starves or gets killed.  If that proves true, then Italy, Spain and Portugal immediately default because if there is no punishment for doing so in terms of blood, then they are irresponsible if they do not.  If there's no punishment, why repay that money?

THAT is the situation.  Blood and no default by the other countries.  Or no blood and default by those other countries.

Sat, 09/17/2011 - 16:05 | 1680337 oogs66
oogs66's picture

I bet within a couple of weeks the greek's will realize they are better off after defaulting and other nations will follow

Sat, 09/17/2011 - 16:26 | 1680401 Market Efficien...
Market Efficiency Romantic's picture

IMF drawing rights are the elite's alternative of choice concerning the new reserve currency. Following the nice play of indebted and printing sovereigns, they will argue that moral hazard makes sovereigns ineligible for being a trustee of a reserve currency. The actual objective will certainly be to establish the ultimative economic power in the hands of a few above disturbing national electorates.

Sat, 09/17/2011 - 15:45 | 1680274 Curtis LeMay
Curtis LeMay's picture

It very well could be. G-Pap just called of his visit to the States.

He was scheduled to attend IMF meetings in the US, and if he's blowing the IMF off...hmmmmmmm.

Sat, 09/17/2011 - 15:54 | 1680301 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Maybe GPap finally realized he is a shill for the Illuminatti?, probably not.

Sat, 09/17/2011 - 16:49 | 1680477 knukles
knukles's picture

GPap's idea of the Illuminati has been rumored to be, in the Great Tradition of Greek Sexual Practices, running about nude in the Deputy Finance Minister's office whilst on a conference call with Sarko, Merkel, LaGrande, Timmah and Ben with a 3 cell MagLite protruding from his orifice, shouting unintelligible mystical incantations concluding with screaming that "God sent him here to straighten this shit out" and thats why he's showing everybody the "fucking light".

Sat, 09/17/2011 - 22:25 | 1681097 Prometheus418
Prometheus418's picture


You are one sick SOB.  Kudos for making me laugh almost every time you post- thanks!

Sat, 09/17/2011 - 15:46 | 1680275 fdisk
fdisk's picture

Information always leaking.. If this was true, then Markets wouldn't run 700+ point in few days and GOLD stay under pressure.
Something doesn't connects.. We should see exact appositive if

"September 20 Greek Default Day".. I bet they'll print and

waste another Few trillions on Greece, Portugal, whoever..

End game should be inflation, inflation, inflation. No Country

will default otherwise. IMHO.. Any event should be positive for

Gold and Silver.. More printing = higher PM prices.

Sat, 09/17/2011 - 15:52 | 1680290 cossack55
cossack55's picture

Too simple. Things should be that simple, but it seems they no longer are.   Simple implies honesty.  It seems both are now extinct.

Sat, 09/17/2011 - 16:40 | 1680452 DoChenRollingBearing
DoChenRollingBearing's picture

I dunno Cossack55.  Tradionally the easiest solution has been to print and inflate the debts away.  OK, certainly for the USA that would be so.  Who knows about Europe?  Germany is deathly scared of inflation, while Club Med / PIIGS could probably care less (politicians anyway).

Whether it is default or inflation, this will not end well.

Sat, 09/17/2011 - 15:50 | 1680285 Ned Zeppelin
Ned Zeppelin's picture

Fed ECB can only do 2 things: print (and buy stuff with the printed fiat), and set interest rates. That's it.  They will do the former on the 20th - Greece will not be allowed to default. 

A "banks win" event on CDS coverage of Greek and other sovereign bonds assumes the counter parties have money to pay.  

Sat, 09/17/2011 - 15:55 | 1680303 Lord Welligton
Lord Welligton's picture

A "banks win" event on CDS coverage of Greek and other sovereign bonds assumes the counter parties have money to pay.


And if they are hedge funds they don't have it.

Sat, 09/17/2011 - 16:08 | 1680346 oogs66
oogs66's picture

If they are hedge funds the banks already have 70 points sitting as collateral they will take 60 (40 recovery) and return 10 points to the hedge funds. The banks already have in their possession the money hedge funds would owe in event of a credit event

Sat, 09/17/2011 - 17:20 | 1680544 Lord Welligton
Lord Welligton's picture


But "capital" would be wiped out on a massive scale.

In any event the banks are not hedged as well as they would like.

They may have calculated that Greece can go.

Ireland and Portugal just got interest rate reductions on their "bailouts".

I have no doubt that a Greek "controlled" default has been arranged.

I just don't think, and neither do "they", that you can always cover all of the fallout.


Which is to say.

I believe that the Germans have decided to cut Greece loose. against the desire of the French.

They, and the rest of the "hard" euro, believe that while it will be awkward they can manage it.

The reason being they know if they go the French route they are forever tied to "bailing out" the rest of the European Union.



Sat, 09/17/2011 - 21:03 | 1680897 oogs66
oogs66's picture

and db seems prepared...ackerman actually seems to want is the french banks in denial...

Sat, 09/17/2011 - 15:55 | 1680305 CapitalistRock
CapitalistRock's picture

Interest rates are set by markets. All the ECB can do is print. Period. Interest rate targets are only possible my manipulating the market by expanding or contracting the money supply.

Sat, 09/17/2011 - 15:54 | 1680299 Michelle
Michelle's picture

CDS expiration is key, IF the banks benefit AND the markets are backstopped by already-committed central banks' liquidity.  Expect an announcement of a Greek default in the next 24-48 hours.

Sat, 09/17/2011 - 15:56 | 1680312 Lord Welligton
Lord Welligton's picture

Who's the counterparty on the CDS if not other banks.

Sat, 09/17/2011 - 16:41 | 1680453 knukles
knukles's picture

AIG, Maiden Lane and BofA (maniacal laughter)

Sat, 09/17/2011 - 17:23 | 1680557 Lord Welligton
Lord Welligton's picture

(maniacal laughter)

Sat, 09/17/2011 - 17:24 | 1680560 Lord Welligton
Lord Welligton's picture

Since when was this a matter of liquidity or Greece?

Sat, 09/17/2011 - 19:32 | 1680772 knukles
knukles's picture

(maniacal laughter)

 So true... it's all about salving huge egos whilst appearing wrapped in veils of altruism to facilitate looting entire countries.

Sat, 09/17/2011 - 16:00 | 1680316 obejoyful
obejoyful's picture

BofA sells slop morgages to Fannie Mae this week. No other bank in US would buy them at any price so the US tax payer says I will buy them. Germany says I will not back Greece, that is OK US tax payer is just giddy about backing them and the whole EU. Fannie, Freddie and the Fed are sitting on a bunch of shit.  When can they ever sell this stuff, NEVER.  Huge ponzi scheme an US will be bankrupt by the end of 2012 when the interest rates start to rise.

Sat, 09/17/2011 - 15:59 | 1680320 flyr1710
flyr1710's picture

but..but...the market's been up the last 5 days on greece hopes....nothing surely can go wrong...haha

Sat, 09/17/2011 - 16:11 | 1680356 oogs66
oogs66's picture

And if finance ministers had any doubts that they could handle a Greek default the market took care of that - it rallied all week on confidence that Greek default can be handled - at least if the eyes of finance ministers

Sat, 09/17/2011 - 16:02 | 1680330 duncecap rack
duncecap rack's picture

I wish they had defaulted last week. I had a pile of puts that expired on Friday. They probably would have been in the money if Greece had pulled the trigger.

Sat, 09/17/2011 - 16:29 | 1680415 Market Efficien...
Market Efficiency Romantic's picture

another aspect perfectly fitting the schedule, the day after triple witching with all the S&P related put optionshaving expired. I heard 1,200 was the relevant threshold.

Sat, 09/17/2011 - 16:06 | 1680341 GOSPLAN HERO
GOSPLAN HERO's picture

"Naturally the common people don't want war: Neither in Russia, nor in England, nor for that matter in Germany. That is understood. But, after all, IT IS THE LEADERS of the country who determine the policy and it is always a simple matter to drag the people along, whether it is a democracy, or a fascist dictatorship, or a parliament, or a communist dictatorship. Voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is TELL THEM THEY ARE BEING ATTACKED, and denounce the peacemakers for lack of patriotism and exposing the country to danger. IT WORKS THE SAME IN ANY COUNTRY." -- Hermann Goering at the Nuremberg Trials

Sat, 09/17/2011 - 16:06 | 1680342 GOSPLAN HERO
GOSPLAN HERO's picture

"Naturally the common people don't want war: Neither in Russia, nor in England, nor for that matter in Germany. That is understood. But, after all, IT IS THE LEADERS of the country who determine the policy and it is always a simple matter to drag the people along, whether it is a democracy, or a fascist dictatorship, or a parliament, or a communist dictatorship. Voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is TELL THEM THEY ARE BEING ATTACKED, and denounce the peacemakers for lack of patriotism and exposing the country to danger. IT WORKS THE SAME IN ANY COUNTRY." -- Hermann Goering at the Nuremberg Trials

Sat, 09/17/2011 - 16:08 | 1680347 navy62802
navy62802's picture

Default followed by bank run next week.

Sat, 09/17/2011 - 16:08 | 1680350 Waffen
Waffen's picture

We can only hope.

Sat, 09/17/2011 - 16:42 | 1680459 DoChenRollingBearing
DoChenRollingBearing's picture

Visit your local, friendly ATMs often in the days ahead!

Sat, 09/17/2011 - 16:17 | 1680371 Yancey Ward
Yancey Ward's picture

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.

Seriously, who were the morons that purchased these bonds when they were issued?

Sat, 09/17/2011 - 16:18 | 1680372 bugs_
bugs_'s picture

think how much money they can spend if they default!

Do NOT follow this link or you will be banned from the site!