Saturday, March 3, 2012

Greece: Beginning of the final End

~ In Greece, the open hand facing outward is an obscene gesture

Today is Sunday, March 4th..

Supposedly in 16 days (or less) if all goes well, Greece will officially be in default, and this whole deeply-annoying 3 year longwinded Grecian drama of 'will it or won't it' will come to an end Finally.

Of course there's always a chance deeply evil people who hold power in politics or finance will conjure new tricks and schemes to keep the cracked Greek 'plates' spinning.   So while normally we should be able to declare with ipso facto Certainty that default will occur, we just can't...  been burnt too many times.

Its also hard to feel confident when no one will ever admit failure publicly.

Take Charles Dallara, Head of the Institute of International Finance (IIF)--  Here's what he had to say last night concerning negotiations for investors to accept bond swaps from Greece at 70% losses, a condition for Greece to receive half the euro bailout:  "(Dallara) expressed confidence on Saturday that a bond swap deal which is a key part of Greece's bailout program would be completed successfully next week. "We can sense in our discussions with investors that momentum is building. I'm quite optimistic that the participation levels will be quite high," he said, but he declined to predict a figure." (Reuters)

Bummer.. Looks like Greek default will be averted..
Ah, but not so fast.. good news (as A&G sees it) courtesy of Telegraph UK:

Greek default looms as voluntary debt deal looks set to fail-- "European leaders are braced for the eurozone’s first ever sovereign default this week as Greece’s efforts to secure a €206bn (£172bn) “voluntary” bond swap looks increasingly unlikely...

"Authorities in Athens are ready to enforce the controversial collective action clauses, or CACs, to impose the restructuring deal on all bondholders as the number of voluntary agreements look set to fall short of the required amount.  Credit rating agencies have warned they will declare Athens to be in default if the CACs are triggered which would be a dramatic culmination to a three-year rollercoaster ride for Athens, the eurozone and global markets."

In simple terms, here's what's happening-- Greece is trying to force its debtees, the investors of Greek bonds to take massive losses on their investments by swapping maturing bonds for new bonds with less value while investors would be deprived of recovering losses via insurance i.e credit default swaps with banks.

They are using the threat of no one getting repaid unless the swap is agreed to.  Greece needs around 95pc of its private creditors to accept the deal by the deadline on Thursday in order to secure its €130bn international bail-out package and avert imminent bankruptcy.

All three credit rating agencies-- Moody's, S&P and Fitch have stated that if these CAC's go through, they will declare Greece to be in default whether the vile, corrupt Greek politicians like it or not. Moody's declared the action nothing more than “distressed debt restructuring”.  Now, if the CAC bond swaps do not go through, unless something changes, Greece will not get bailed out and will be forced to default.
Continuing with the Telegraph:  

"Raoul Ruparel of Open Europe, the London-based think-tank, said: “Greece is likely to struggle to reach the targets for a voluntary agreement so the credit rating agencies are almost certainly going to see this as a default.  What happens next is unknown territory...

"Last week, the International Swaps and Derivatives Association (ISDA) declared that there had not yet been a credit event in Greece so there was no need for the credit default insurance instruments to be triggered.  If the CACs are triggered this week, the committee will almost certainly reconsider its decision."

Sorry to sound so harsh, but we are way beyond feeling empathetic or sympathetic for the Greeks.  They had numerous chances to default on their own terms, or use the threat of default to their advantage to re-negotiate better terms with their creditors.  They declined.  The leadership is corrupt to the core,and currently led by a technocrat, which is a fancy way of saying led by a banker put in place by the ECB.  

And the Greek people are utter fools and imbeciles--  poll after poll show even after all the suffering they've been inflicted with, a majority still believe staying in the EU under German occupation is a better fate than breaking away with sovereignty and self-respect in place.

And those who protest-- How far were they really willing to go to fight for their nation?  Strikes?  Protest marches?  Vandalizing private-owned businesses? Amazing after all this time, there was no real organization to go after government and banking leaders; to specifically target those destroying their lives as well as future generations.  
~ Ah yes, that's how you hurt your leaders; deprive them of coffee..

The Egyptians had the courage to overthrow their leadership.. 

The Syrians are still fighting for change in their country..

Where was Greece's courage?

So barring some political or economic intervention to suit their own needs, Greece will default soon, and that will be that.

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