Unfortunately, he has no power to do anything.
He wants the banks holding Greece's debt,
the part that's not owned by the troika,
under English law (i.e. default and we get the Acropolis),
but those same debt-holders are also waiting
to cash in on CDS contracts if Greece defaults. It sounds
like conflict of interest, but bankers and hedgers
don't go to jail, so it down to a mafia fight.
Who's the biggest capo?
the guy who wants Greece to keep going so that a CDS
event doesn't happen, thus NOT bringing an end to all
banking, worldwide.
OR
the guy who wants to crash Greece to get a CDS payoff.
There may be blood spilt yet. But it's not Papademos who
will draw the knife.
checkitout: Mish Shedlock
Absurd Threat by Greek Prime Minister: "Hand Over Your Wallet or I Will Give You a Million Dollars"
Hedge funds holding credit default swaps on Greek bonds are probably laughing out loud over statements made today by Greek Prime Minister Lucas Papademos.
The New York Times reports Greek Premier Says Creditors May Be Forced to Take Losses
Taking direct aim at hedge funds and other private holders of Greece’s debt, Prime Minister Lucas Papademos says he will consider legislation forcing the creditors to take losses on their holdings if no agreement can be reached in critical negotiations scheduled to resume Wednesday.
Mr. Papademos said that if Greece did not receive 100 percent participation in a program in which bondholders would voluntarily write down $130 billion from Greece’s unwieldy $450 billion debt, the country would consider passing a law to require holdouts to take losses.
“It is something that has to be considered in the light of expectations about the degree of the participation to be achieved,” Mr. Papademos said. “It cannot be excluded. It is contingent on the percentage.”
Laughable Bluff
I will post another snip below, but that is all you need to read to be laughing your head off. If you "force" creditors to take losses, the writedowns can hardly be considered "voluntary" can they?
In short, the moment Greece does what Papademos illogically threatens to do, there would be a "credit event" on Greek bonds, exactly what Papademos does not want, and exactly what hedge funds with CDS on Greek bonds do want.
Ideally a bluff should carry some measure of risk. Instead, hedge funds are praying Papademos does what he threatens to do. Thus, the Papademos threat is like a robber pointing a gun at you saying "hand over your wallet or I will give you a million dollars".
Absurd Statement of the Day
Papademos asked Greeks to put their sacrifices in perspective. If all goes well, he said, they could expect “an end to austerity” next year.
The only way austerity in Greece will end next year is if Greece defaults.
Mike "Mish" Shedlock
