Yanis,
I think you have mentioned in this blog before, that hedge-funds would not participate in the haircut. Now Mr.Venizelos is threating with a CAC (…) and claims that over 90% of the private sector would participate.
Can you comment on that? Can you explain, what CACs are?
Let’s just wait and see. If events prove me wrong I shall apologise profusely.
Abandon all hope ye who enter here.
Yani, I did not really get the point, why this CDS-thing is so dangerous although there are “only” about three or four billions flying around. You said something about them being “synthezised” or so. Does that mean, they are leveraged somehow? Can you explain again?
Thank you!
Best
Gaby
Sure. They are indeed heavily leveraged. But not just leveraged. They took these CDSs, bounded them together with derivatives based on the private bonds of the same banks and created a new synthesised derivative that contained all of the above (including the CDSs on Greek debt). So, if the Greek debt is declared in default, and the CDSs trigger, the whole pile of cards will tumble down.
I reead that the creditors are now eligable to get the Gold of the Greek central bank with the newley signed deal.
How is this practically going to work? When Greece defaults sometime after the French elections, will French & German planes pick up the gold in Athens (or London or NY) and bring it to their banks?
The calls for Euro exits are getting louder also in the North:
Dutch Freedom Party pushes euro exit as €2.4 trillion rescue bill looms
The Dutch Freedom Party has called for a return to the Guilder, becoming the first political movement in the eurozone with a large popular base to opt for withdrawal from the single currency
If, with the Memorandum Mark II, what we’re witnessing from all sides is a charade, a calm before the storm, and for the Germans the next step will be to ease Greece (and Portugal) out of the euro, what is it that the Greek politicians – let’s say, Samaras and Venizelos – are angling for in the next round? Are they – Samaras and Venizelos – accepting Memorandum Mark II, knowing, like the Germans know, it’s a waste of time, because they hope Sarkozy loses in April and there will be a rethink on Eurobonds followed by a Marshall-type plan for Greece? Is that the Greek strategy? Hold tight for Hollande and some momentum towards Eurobonds and a Marshall Plan?
Yanis,
From your interview it seems you expect Greece to miss repayment on 20 March and then a CDS event declared. Will the CACs not be activated before we get to that point?
Completely agree on the ‘French election’ view, very alarming though.
Sure they will. Then the CDSs ought to trigger…
Why´shouldn´t the CAC be triggered this wee, after the PSI fails today?
11 Comments
Yanis,
I think you have mentioned in this blog before, that hedge-funds would not participate in the haircut. Now Mr.Venizelos is threating with a CAC (…) and claims that over 90% of the private sector would participate.
Can you comment on that? Can you explain, what CACs are?
Let’s just wait and see. If events prove me wrong I shall apologise profusely.
Abandon all hope ye who enter here.
Yani, I did not really get the point, why this CDS-thing is so dangerous although there are “only” about three or four billions flying around. You said something about them being “synthezised” or so. Does that mean, they are leveraged somehow? Can you explain again?
Thank you!
Best
Gaby
Sure. They are indeed heavily leveraged. But not just leveraged. They took these CDSs, bounded them together with derivatives based on the private bonds of the same banks and created a new synthesised derivative that contained all of the above (including the CDSs on Greek debt). So, if the Greek debt is declared in default, and the CDSs trigger, the whole pile of cards will tumble down.
I reead that the creditors are now eligable to get the Gold of the Greek central bank with the newley signed deal.
How is this practically going to work? When Greece defaults sometime after the French elections, will French & German planes pick up the gold in Athens (or London or NY) and bring it to their banks?
The calls for Euro exits are getting louder also in the North:
Dutch Freedom Party pushes euro exit as €2.4 trillion rescue bill looms
The Dutch Freedom Party has called for a return to the Guilder, becoming the first political movement in the eurozone with a large popular base to opt for withdrawal from the single currency
http://www.telegraph.co.uk/finance/financialcrisis/9124815/Dutch-Freedom-Party-pushes-euro-exit-as-2.4-trillion-rescue-bill-looms.html
If, with the Memorandum Mark II, what we’re witnessing from all sides is a charade, a calm before the storm, and for the Germans the next step will be to ease Greece (and Portugal) out of the euro, what is it that the Greek politicians – let’s say, Samaras and Venizelos – are angling for in the next round? Are they – Samaras and Venizelos – accepting Memorandum Mark II, knowing, like the Germans know, it’s a waste of time, because they hope Sarkozy loses in April and there will be a rethink on Eurobonds followed by a Marshall-type plan for Greece? Is that the Greek strategy? Hold tight for Hollande and some momentum towards Eurobonds and a Marshall Plan?
Yanis,
From your interview it seems you expect Greece to miss repayment on 20 March and then a CDS event declared. Will the CACs not be activated before we get to that point?
Completely agree on the ‘French election’ view, very alarming though.
Sure they will. Then the CDSs ought to trigger…
Why´shouldn´t the CAC be triggered this wee, after the PSI fails today?
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