ISDA CDS Trigger Decision Is Unanimous

In light of today’s EMEA Determinations Committee (the EMEA DC) unanimous decision in respect of the potential Credit Event question relating to The Hellenic Republic (DC Issue 2012030901), the EMEA DC has agreed to publish the following statement:

The EMEA DC resolved that a Restructuring Credit Event has occurred under Section 4.7 of the ISDA 2003 Credit Derivatives Definitions (as amended by the July 2009 Supplement) (the 2003 Definitions) following the exercise by The Hellenic Republic of collective action clauses to amend the terms of Greek law governed bonds issued by The Hellenic Republic (the Affected Bonds) such that the right of all holders of the Affected Bonds to receive payments has been reduced. The EMEA DC has resolved to hold an auction with respect to the settlement of standard credit default swaps for which The Hellenic Republic is the reference entity. To maximise the range of obligations that market participants may deliver in settlement of any such credit default swaps, the EMEA DC  has agreed to run an expedited auction process such that the auction itself will take place on March 19, 2012. In light of this expedited auction process, market participants should submit any obligations that they would like to include on the list of deliverable obligations to ISDA as soon as possible.

As First Greek CDS "Anstalt" Appears, A Question Emerges: Did Banks Not Square Off Margins?

The irony is not lost on us that Bloomberg is reporting that KA Finanz, an Austrian bad-bank supported by the Austrian government, faces as much as a €1 billion need for funding to cover its exposures to Greek CDS (coughcreditanstaltcough). In a statement this morning, which we noted in a tweet, the bank noted "activation of the CDS with an assumed loss ratio of about 80% would mean an additional provisioning charge of EUR 423.6 million". KA Finanz's total amount of Greek CDS exposure is around EUR1bn. What is shocking and should be of great concern is that we have been led to believe that very little net cash will change hands on the basis of the $3.2bn net aggregate market exposure. This was based on the now false premise that variation margin was maintained and transferred throughout the process (as we note below from recent IMF filings). What appears to have happened is that dealer to dealer variation margin has been, let's say, less rigorous as perhaps all collateral was netted up across all exposures (or simply ignored on the basis of government backstops). The far bigger question then is: are banks simply marking ALL sovereign CDS at par, and not paying off cash to other dealers? Remember it only takes one counterparty in the chain to turn net into gross and quality collateral seems tied up a little right now at the ECB (or with margin calls).

 

ISDA Finds Greek Credit Event Has Occurred Reports Bloomberg

Total confusion around this, as there is no formal Press Release from ISDA yet, but since this one comes from Bloomberg, let's assume they have double checked their data. From Bloomberg:

• ISDA EMEA DETERMINATIONS COMMITTEE: RESTRUCTURING CREDIT EVENT
• ISDA SAYS CREDIT EVENT HAS OCCURRED WITH RESPECT TO GREECE
• COMMITTEE DETERMINES AUCTION TO BE HELD ON MARCH 19
• ISDA EMEA: AUCTION TO BE HELD ON OUTSTANDING CDS TRANSACTIONS

This despite refutations from ISDA 15 minutes ago that no decision had been reached. Of course, if this is a spoof PR that has gotten half the media world confused, the farce will be 100% complete.

The Silver Stage Has Been Set for Grand Performance in 2012

from BizJournals.com:
LOS ANGELES, March 7, 2012 /PRNewswire-iReach/ — The Silver Stage has been set for Grand Performance in 2012
HISTORY – Silver is the most electrically conductive of all elements and has the highest thermal conductivity of any metal. Its atomic number is 47.
Silver has long been valued as a precious metal, and it is used to make ornaments, jewelry, high-value tableware, utensils (hence the term silverware), and currency coins (the only country today that still uses silver coins in circulation is Mexico, while the US ceased using silver as currency in 1965, though several more coins with lesser silver content were produced until 1969). The US mint began producing silver bullion coins in 1986 and silver proof versions of the half-dollar, quarter and dime (along with conventional metal dollars, nickels and pennies) in 1992 and continues to make the silver bullion and silver proof versions of currency today.
Read More @ BizJournals.com

Three Charts Of Equity Complacency Pre-ISDA

Equities have drifted sideways at their highs for the last few hours. Meanwhile, credit markets have sold off, Volatility and implied correlation have pushed higher, and broad risk assets (CONTEXT) has leaked lower. Complacency, or do stock momo algos know something everyone else doesn't?

Papademos Speaks - Point And Counterpoint

The fearless ECB-plant leading the Greek people on an unelected basis has spoken. Here are the key points and counterpoints
 

European Sovereign Ratings Update - You Are Here

Given various talking-heads' comments on today's PSI deal (which as noted actually increased Greece's gross debt load), we thought a 'map' of the current ratings across the European Union was worth resetting some perspective.

Greece - Round III, In Which We Learn That Greek Debt Actually INCREASED Post-Default

The somewhat amusing part of this entire transaction is that the debt of Greece has been INCREASED. Greece and the EU handed private holders $138Bn in write-offs but with the addition of the new loan, $171Bn, the gross debt for Greece increased by $33Bn and this is if all of the legal challenges favor Greece. The total debt of Greece (sovereign, municipal, corporate and bank) has just increased from $1.20 Trillion to $1.233 Trillion and all accomplished by this brilliant plan that did nothing except to tag investors and ramp up the debt load for the country. Take this and add in the austerity measures and perhaps demands for more coming later today as the EU has its summit and an economy that is quickly sinking into the sea and unemployment that is surging and then you can visualize that the absurd has become the impossible and quickly conclude that more Greek loans will have to be forthcoming; or not with some form of Greek exit. The much bandied about notion that all of this will reduce the Greek debt to GDP is little more than a joke. For the past two years there has not been one, one, accurate projection for Greece concocted by the IMF/EU/ECB and I see no end to this now. Some quick math on my part indicates, in 2020, a debt to GDP ratio exceeding 170% and that is being kind and using optimistic assumptions. Just this morning the new numbers released for Greece showed a 7.50% deficit increase as opposed to the projected -5.50% number. This is one more case of quite inaccurate projections and a worsening economy for the country.

Currency wars: Brazil says 'it's on'

Eric De Groot at Eric De Groot - 17 minutes ago

And so describes the fiat race to the bottom or competitive devaluation intended to jump start ailing economies crippled by global debt burdens. While competitive devaluations are sold as a necessary evil of global competition, they provide little more than temporary economic fix for the debt junkies. Headline: Currency wars: Brazil says 'it's on' NEW YORK (CNNMoney) -- Brazil's central bank... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] more »

 

 

But Do The "Estimates" Make Sense?

Dave in Denver at The Golden Truth - 3 hours ago

*"Americans are feeling wealthier now, they're borrowing more money now" *(Some dope on Good Morning America) There's no doubt the the second part of that statement is true. The latest consumer credit report showed that consumer debt rose substantially in January. The source was primarily credit cards and non-revolving credit - student loans and [Government-subsidized] auto loans. Can't find a job? Enroll at the University of Phoenix and get a robo-stamped student loan. Then the Government can remove you from the labor force statistics and a reduce the number of people not wo... more » 

 

 

Friday Humor And Headline Of The Week

And for today's piece of non-fiction uber-humor we have....

• U.S. COUNTER-SUES BUFFET'S NETJETS OVER UNPAID TAX LIABILITIES

Perhaps the GOP can offer to match Buffett $2 for every $1 in tax that NetJets is found to have not paid. One wonders: did NetJets pay less tax than Buffett's secretary?

Our "Let's Pretend" Economy: Let's Pretend "Job Growth Is Best Since 2006"

The Ministry of Propaganda and its media minions are announcing that "job growth is on a tear" and the "best growth since 2006." How about we look under the hood of the employment euphoria? Here is an example of the Ministry's work: Best U.S. employment growth in 12 years Almost all the data agree — labor market’s on a tear.

Over the past six months, the number of people who are employed has risen by 2.3 million — an average of 385,000 per month. That’s the best growth since early 2000, when the dot-com bubble was in full flower. Since August, the unemployment rate has fallen by 0.8 of a percentage points, to 8.3%. For adults over 25, the jobless rate has fallen to 7%.

In other words, people who generally work full time so they don't have to share a bunk in a flop house or live in their parents' basement are almost fully employed, as 'full employment" typically generates an unemployment rate of 5% just due to churn. Would we as a nation be better off dealing with the truth rather than believing fantasies that prop up the Status Quo and the Fed's dearly beloved measure of the economy, the stock market? How often does accepting illusion help us navigate real life? Short answer: never.

RANsquawk Weekly Wrap - Stocks, Bonds, FX – 09/03/12

Submitted by RANSquawk Video on 03/09/2012 - 13:49 RANSquawk





So, What's Next Step Towards The Eurocalypse? 

Posted by: Reggie Middleton

Post date: 03/09/2012 - 11:56

Greece defaults & if it works, what makes anyone with a thirdof a synapse think that Portugal/Ireland will NOT jump in line to stiff creditors? This is more the end of the beginning than the...

Kit Juckes: The USA's gentlemen's agreement with Japan and China is coming to an end 

Posted by: Daily Collateral

Post date: 03/09/2012 - 12:12

Looks like it's time to start looking for somewhere else to peddle those Treasuries -- but then, when hasn't it been?

 

 

Caesar Bryan: Physical Buying in London Reverses Gold Market

from King World News:


Today 25 year veteran Gabelli Gold Fund manager, Caesar Bryan, told King World News the Southern periphery countries of Europe will experience a turbulent period that will be worse than the Great Depression. Gabelli & Company has over $31 billion under management and Caesar Bryan has managed the gold fund since its inception in 1994. Caesar also said physical buying in London helped turn the gold market around. Here is what Bryan had to say about the situation: “Well, I think the gold market was looking fine from yesterday. Then we had reasonable payroll numbers here in the US and that took the gold price down. But then we had a sudden reversal which is quite interesting. My understanding is the PM fix in London saw some physical buying and was fixed a few dollars higher than gold was trading on a spot basis.”
Caesar Bryan continues: Read More @ KingWorldNews.com

 

 

Julian D.W. Phillips Has A Long Golden Memory – 03-09-2012

from The Financial Survival Network:
Julian D.W. Phillips of GoldForecaster.com and SilverForecaster.com acclaim has a long memory. He’s been actively involved and profitting from world financial and metal markets since 1971. He’s one of a few who has vivid memories of the last gold bull market and subsequent gold bear market. Being an international financier, he has a unique perspective that many Americans and Westerners will find disquieting.
With talk of gold confiscation in the air, Julian believes the US Government might want your gold because they will need it to pay back Germany and other allies. The US has been storing their gold in New York and other places for many years. There are legitimate questions as to whether they will be able to return that gold, if so demanded. If the answer is no, then at that point, gold will take off to the moon, and there will be serious repercussions. Since there is no transparency on the issue of US gold holdings, we are all left to speculate. But, one must wonder why the Fed refuses to end the rumor mongering once and for all. And yes Virginia, gold really is money, now and forever.
Click Here to Listen to the Podcast  

 

 

Searching for Germany’s Gold

from GoldMoney.com:
Gold and silver prices could gain slightly in yesterday’s trading and continued in the green in early trading this morning. Comex Gold is currently trading back above the $1,700 mark and silver is taking another stab at the $34 level. The gold chart currently looks like it would be completing a reverse head and shoulders pattern with the latest correction back to $1,676 being the right shoulder of this formation which is usually a powerful bullish signal. If gold can break the neckline which can be drawn at the $1,750 than standard technical analysis would indicate that a $200 surge with a next target price of $1,950 is in the cards. Such a move will probably coincide with a change in sentiment as the European debt crisis could – while far from being solved – at least appear to have been postponed for a while.
Read More @ GoldMoney.com

 

 

Miles Franklin Quarterly Report: Escalation of the Precious Metal Wars

by David Schectman, MilesFranklin.com:

Four times each year, we publish a hard copy quarterly. I am featuring an excerpt from the second issue in 2012, written by Andy Hoffman. Andy “rants” less in these hard copy newsletters and his information is more “timeless,” and big-picture oriented. It’s good stuff! Read it.
Spring 2012 – Escalation of the Precious Metal Wars
It’s late March, and I can hardly believe three months have passed since the last Miles Franklin Report – much less the nearly five months since I came aboard as Marketing Director.
In that report, I wrote of my background in Precious Metals and financial markets, as well as some personal information to give you an idea how I got here and why I am qualified to guide you down the treacherous path of the global monetary system.
Read More @ MilesFranklin.com

 

 

Gold Celebrates Formal Greek CAC Activation With $40 Intraday Move Higher

[Ed. Note: Got PHYSICAL?...Did you BTFD???...]
from ZeroHedge:
Minutes ago, the Greek cabinet formally announced that it has approved CAC use on Greek debt, which was the final milestone that ISDA was waiting for before making its determination. Most overjoyed by this appears to be gold, which has moved by nearly $40 from this morning’s post-NFP (no “inflationary” QE3?) lows and was testing $1715 moments ago. Oh, and silver too. In other news, Zero Hedge is happy to sell CDS insurance on every bar of gold purchased by anyone, anywhere. Under UK, Greek or whatever alien law that will be needed in 2-3 years to bail out the world.
Original Source @ ZeroHedge.com

 

 

Handicapping the Collapse

by Jim Willie, GoldSeek.com:

Scattered diverse and almost uniformly unfavorable and dangerous events are unfolding, as the global economy and financial structure undergoes the equivalent of endless earthquakes and bombardment of solar emissions. Reporting is difficult, since information is distorted toward the sunny side. Events are moving fast, as quickly as the danger level is rising. As conditions worsen, the hype and spin has risen almost out of control. The political machine, tied at the hip to the banking apparatus, has ramped up the growth story even as the strain on the information spin has become more visible and subject to heavy criticism. A re-election year is always fraught with risk of unmasked falsehoods making headlines. For some reason the Mayans have been lifted in prominence despite their cultural vanishing act. Like calling the dodo bird the epitome of future evolution in the aviary world of ornithology. The Jackass prefers the eagle, hawk, and falcon. Nonetheless, the list of acts on stage is replete with stories of collapse. A review is useful. Keep in mind that whatever happens to Greece will serve as vivid preview of what is to come in Italy, Spain, and perhaps France. Much more ruin comes. Witness the great unraveling. The only winners will be tangibles, like gold, silver, crude oil, and farmland.
Read More @ GoldSeek.com

 

 

Greeks in Despair: Suicide Rate Record High

Athens has clinched a critical bond-swap deal with private creditors allowing Greece to narrowly escape default, opening the door for a bailout injection. Eurozone members were quick to rejoice what they called a major step to rescuing the debt-ridden country. But the parachute provides little optimism for the Greeks whose financial woes continue to snowball, as Tom Barton reports.

 

Silver Broke Range to Push Above 200 Day Before The Counterintuitive Fall

by Dr. Jeffrey Lewis, SilverSeek.com:
As February drew to a close, the price of silver staged a notably bullish break above both its closely watched 200 day Moving Average and the neckline of a potential Double Bottom pattern that many technical precious metal traders and analysts had been watching attentively.
Not only was the upside break in silver accompanied and confirmed by a rise in trading volume, but it also resulted in a fresh recent peak on the precious metal’s 14-day Relative Strength indicator.
Although the following day’s sharply declining price action reversed those gains, the initial upward certainly set up the start of a more impressive rally in silver, which had been range bound since late January, as the market gathered the momentum needed to take the price higher.
Read More @ SilverSeek.com

Silver Institute Predicts Strengthening Silver Investment Demand This Year

The Silver Institute says, “Silver is proving its mettle in 2012″, thanks to solid investment demand so far this year outperforming other precious metals.
by Dorothy Kosich, MineWeb.com:
RENO (MINEWEB) – The Silver Institute says, “Sturdy investment demand has pushed the silver price up 20% in the first ten weeks of 2012, outperforming platinum, palladium and gold during the period.”
In a news release issued Thursday, the institute said silver-based ETFs now account for 586 million ounces of silver, up from 576 million ounces at the end of 2011.
“Demand for physical silver bars is also strong. According to several precious metals dealers, silver bar sales continue to be brisk,” said the institute.
Investor demand on the COMEX has also been strong this year. As of February 28, net long silver positions had increased by more than two-fold from year-end 2011. Total net long positions on February 28 were at their highest level since Sept. 13, 2011, said the Silver Institute.
Read More @ MineWeb.com

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