Consider this on a FWIW Basis - Is There a Greek Default Plan ?

GREEK DEFAULT PLAN: JP Morgan also possesses it.

And Dr Strangelove goes into overdrive

Just to update folks, my first source for today’s earlier posting is now happy for me to name another US bank working to the March 23rd Greek default schedule as JP Morgan. This is based on the reality that dozens of people have now come forward to confirm Morgan the Pirate as one of the recipients.

I have not as yet received any confirmation that eurobanks are in this loop. I must therefore conclude that the ‘default schema’ is US Fed-led, with Mr Timothy Geithner perhaps in a leading role

During the day, emails have dribbled in here supporting the story from a professional standpoint. (For those who don’t already know it, the email address for Slog editorial contact is jawslog@gmail.com). One such is particularly interesting, I think:

‘Congratulations on getting this out there. You need to look more closely at Deutsche [Bank] and Commerzbank. Key people in Bankfurt are fully aware of this.’

This in turn would suggest joint Washington-Berlin cooperation. At the moment, I’m unable to reach The Slog’s Bankfurt Maulwurf for confirmation or denial of that.The likelihood, of course, is that these revelations will act as a self-denying prophecy. That is to say, if the story continues to hold up, the Troika-Berlin axis will now have to look for another schedule – purely for the purposes of denial.

Meanwhile, Wolfgang ‘Strangelove’ Schauble (top right) continues to supply the World with hard evidence that he has gone more than slightly off his trolley. The German finance minister is now pressing for Greece’s April elections to be put offfor a year – and the replacement of elected politicians with more Montis and Papademoses. I can do no better than commend to you Ambrose Evans-Pritchard’s piece in the Daily Telegraph this afternoon…with this extract in particular:

‘His [Schauble's] apparent demand that Greece postpone elections scheduled for April, and impose a technocrat junta (a l’Italiana) for another year without PASOK and New Democracy, takes your breath away. Is this really the position of the German government? Greek democracy be damned?’

But while we wait to see what bonkers idea Berlin will come up with next, it is worth noting once again that the Teutonic drive for control over events does fit disturbingly well with Americo-German plans being given to senior investment bank currency traders…perhaps under the assumption (back in mid-January) that a German/EU Gauleiter/Commissioner would be in power by then.

The times may well be interesting, but they are not entirely reassuring.

and......

http://hat4uk.wordpress.com/2012/02/16/greek-default-exclusive-senior-us-bankers-given-explicit-timetable-for-athens-default/

GREEK DEFAULT EXCLUSIVE: SENIOR US BANKERS GIVEN EXPLICIT TIMETABLE FOR ATHENS DEFAULT

Wall Street…who gave it a map of the future?

DOCUMENTS RAISE AWKWARD QUESTIONS FOR WASHINGTON, IMF & BERLIN

A written document giving firm dates and detailed actions for a planned Greek default has been in the possession of two top Wall Street bank currency trading bosses since the second week in January. The Slog has separate but corroborative sources affirming the existence of the document, and a conviction among senior bank staff that – at least at the time – the plan represented “a timetable, not a contingency”. The plan gives a firm date of March 23rd for default to be announced after the close of business.Senior bankers on Wall Street have been given detailed documentation setting out a timetable to Greek default, including firm dates and technical ‘orders’ about last use of the euro as a currency there. The revelation arrived at Slogger’s Roost last Monday, since when I have been trying to obtain corroboration. This arrived in the early hours of today (Thursday). One of the banks is Barclays Capital (Barcap) run by controversial figure Bob Diamond. The other must remain anonymous for the time being, in order to protect sources.

The document asserts that Greece will officially be declared in default by all the ratings agencies after the close of business on Friday march 23rd . At the weekend all Greek bank accounts will be frozen, with emergency measures detailed to prevent the flight of capital. Included in the paperwork is a list of very limited exceptions to the ‘no withdrawals’ order. All major banks ‘are instructed  not to deal with euro exchange  as of open of business in Greece on Monday 25th march. All Greek markets will close for one day ‘at least’.

As yet, I have been unable to establish the source of the documents. But one of my informants admitted, “I have strongly suggested to Greek business friends and clients that they sell up fast, do a sale and leaseback on property, empty bank accounts, and change to a hard currency.”

I have little doubt that such a critical path analysis leading to default in Athens can be easily brushed aside as contingency planning. But this is not the impression Slog sources were given: and its existence is bound to further raise suspicions in ClubMed about the real intentions of ‘EU Nord’, Washington and the Troika – especially the IMF. In particular, the alleged creation of the document both supports (and/or coincides closely with):

1. Washington going cold on further IMF funding

2. IMF intervention in the Athens debt talks

3. Persistent rumours surrounding Wolfgang Schauble’s plans

4. Evidence previously assembled by The Slog  concerning Americo-German coordination

5. A string of delaying tactics by senior EU and Troika officials since mid January.

Reviewing the timeline of the Greek Debt Marathon, the back end of it is pretty obviously one of persistent sabotage from Berlin, Brussels, and the IMF:

1. It’s the second week of January 2012, and the bondholder deal is a few small steps away from lawyers crossing t’s and dotting i’s. Enter Schauble saying the haircut is nowhere near short enough. Bondholders’ leader Charles Dalloran walks out.

2. The Troika barges into the Athens/Bondholder talks, and they turn into chaos, then grind to a halt.

3. FinMinCom meets in Brussels and several encouraging noises are made about progress towards a deal ‘over the weekend’. Enter Merkel bearing demand to fire the Greek Government and replace it with an EU commissioner. This produces four more days of circular delay, following which Nicolas Sarkozy declares that the German demand was never a demand.

4. Lucas Papademos gets personally involved and strikes a deal with Dalloran. Then he extracts the support of all Party leaders for the deal. We’re almost there. Enter Schauble and Brussels saying no, your economy’s worse than we thought – we need a closer haircut and more savings.

5. The troika is now talking direct to the bondholders with Athens outside the loop. The creditors feel on the back foot. They agree to a lower percentage rate for the new bond issues and a 70% haircut. Venizelos meanwhile focuses on finding additional savings. Papademos intervenes again with leaders and creditors. We are now ‘hours away’. Mario Draghi says no, the haircut is too close for the ECB, and not enough for everyone else.

6. Draghi relents a little, the bondholders say they are “tentatively flexible”. We’re two small steps away from a deal. Enter Schauble moaning about £325m of savings unaccounted for…a thousandth of the total Greek debt.

6. Tempers get inflamed back in Athens. Greek leaders start muttering about doing what they have to do, getting the deal signed, and then having elections. Berlin and FinMinCom demand that all Greek Party leaders sign a document ordering them to stick to the deal regardless of election results. This loses another two days….but the bondholders are still keen to sign.

7. The German Bundesbank leaks a story to German newspaper Handelsblatt saying the Greeks will not be able to satisfy bondholder demands, and thus technical default is now a certainty. The story is traced back to the office of anti-bailout hawk Jens Weidmann.

8. Deutsche Mittelstands Nachtrichen runs a story claiming another 2.5 bn euro hole has been found in the Greek budget proposals. The story is deconstructed by The Slog and others and turns out to be complete bollocks. But the FinMinCom meeting in Brussels is postponed, and replaced with a conference call.

9. Merkel says she doesn’t trust New Democracy leader Antonis Samaras. Athenian leaders must now sign another pledge after the additional 325m euros of savings have been found and agreed. They all sign (Wednesday morning – yesterday – 15th February).

10. Yesterday afternoon, the EU finance ministers’ conference call begins to talk about cutting its losses. A firm proposal is tabled – by Berlin, it seems – to divide the next bailout tranche into smaller slices. The next Com meeting is put off for six days.

11. Schauble describes the Greek debt as “a bottomless pit”. Merkel joins the fray by suggesting the bailout be put back until after the April elections. This clearly makes no sense, as from March 16th Greece will be in technical default without more money. But Schauble adds that indeed, Greece should postpone its elections…..and “install a technocrat government similar to Italy’s.”

12. Wen Jiabao makes nice noises about what a fine place Europe is to visit, but van Rompuy and Barroso come away predictably empty-handed.

13. Thursday dawns with everyone wondering where we are. Venizelos accuses “forces trying to push Greece out of the eurozone”. German government spokesman Steffen Seibert calls this “false” and adds, “I can state quite clearly on behalf of the federal government that Germany has taken no such decision.” Nobody said you had, Ducky. Berlin briefs on amphetamines about Angela Merkel being ‘resolutely opposed to default’. A majority of market opinion leaders and bondholders think the EU is bluffing, reports the FT. But a French source tells The Slog earlier today he thinks Germany “is talking from a position of strength. There is no doubt in our minds [in the Elysees] that Berlin has the necessary plans in place.”

We’re but an hour into the working day EU time (1hr ahead of GMT) and already the main EU players are busy installing further roadblocks. Boss of radio Luxembourg Jean-Claude Juncker said, “Further considerations are necessary regarding the specific mechanisms to strengthen the surveillance of programme implementation and to ensure that priority is given to debt servicing.” An intention as vague as that could take forever to fulfil….or until March 23rd.

A senior German official quoted by Reuters has added: “Questions remain that are very important to Germany and other member states about the sustainability of the programme.”

Ultimately, not even the Germans can see into the future: this is get off the pot time….but only if you’ve been devious for some time about being on the pot in the first place. The Slog’s recent profile of Angela Merkel demonstrated beyond too much doubt that the Fuhrerine in Berlin is more than capable of being devious.

In the last three weeks, several EU officials have pumped out the line – over and over again – that Greek default is no longer the bogeyman people thought it was….or to be more precise, they told us it was. “It would have led to a credit crunch immediately and hurt us all,” said a senior eurozone official. “Now, the odds [of such a catastrophic impact] are something like 10-20%. It’s still possible, but it’s not a certainty.”

First of all Draghi pumps money into the banking system, then the Troika/Berlin axis slows everything down. Now awkward facts come to light about the existence of ‘a plan’ which would protect America – by dumping the Greek contagion – and help the eurozone by concentrating  the bailout cash available to save the bigger players: Italy, Spain and France. An unpleasant phrase is doing the rounds in Brussels at the moment: ‘amputate and corterise’. It’s certainly beginning to look like that. And without doubt, that’s the way Mario Monti sees it.

Were I Greek, Portuguese or Irish, I’d be a worried man this morning.

and related to that , consider the role of golden boy monti ! 

http://hat4uk.wordpress.com/2012/02/15/revealed-the-athens-budget-black-hole-that-never-was/

‘MONTI WANTS BAILOUT CASH TO HELP EU ECONOMIES’ – Sources

Whether the world eventually sees them as reasons or excuses, Western media and top eurocrats were last night blaming a variety of factors for the cancellation of today’s FinMinCom in Brussels…..and thus the non-approval of the Greek austerity measures. The Slog has however (with the help of German sources and Sloggers) established that so-called budget ‘black holes’ thrown up last night are a largely German fiction, the leaks about bondholder troubles came from the German Bundesbank….and astonishingly, diplomat sources in France and Greece think Italy’s Mario Monti wants the Greek bailout cash to go towards economic investment.

The EU is rapidly turning into Every Man For Himself.

German Newspaper Deutsche Mittlelstands Nachrichten (DMN) broke a story last night shortly after 7pm GMT which appeared at first sight to lie at the heart of both Berlin government opinions about Greek untrustworthiness, and thecancellation of yesterday’s FinMinCom meeting in Brussels.

‘New EU Demand: Greece must save 2.6 billion euros in the short term’ said the headline. What followed was rather a long stream of specific Troika demands…occasionally laced with reprimands: ‘Too often we find out that Greece has not put into effect the appropriate austerity measures and reforms. A contract document has been seen by news agency The Associated Press [saying] the Greek government must make and implement savings of around 2.6 billion euros….’

Except that this was spin – and once again looked like a piece of Chancellery media placement. One looks down the list of diktats (and they are exactly that) and the remaining sum graciously left by the Troika for Athens to find all by itself and not just in one shop is…325m euros. It’s the same 325m euros Renn and Schauble have been blathering on about since last Saturday. The same one thousandth of the outstanding debt.

Some of the required cuts are mad (a billion euros off the Health Budget) and some hysterically hypocritical (300m off Defence – an amount  Berlin and Paris could wipe out tomorrow by allowing Greece to cancel Franco-German arms supplies in the pipeline). But basically, this is an influential German newspaper re-running an old story to suggest “Hey guys – the greasy Greeks screwed up again”. The politicians in Athens have in fact already signed off on all these savings: frankly, they could find the 325m euros somewhere in the folds of Venizelos’s skin. This is just an invention – perhaps allowing Berlin more time to organise an Alles in Ordnung default.

But in another sensational development, sources in Paris and Athens last night saw the hand of Italy’s Mario Monti in the machinations.”Monti thinks the money is wasted on Greece,” said an Athens informant yesterday evening, “and should be spent on EU economic growth instead. We think he wants the money for Italy’s future.”

“The decision [to postpone FinMinCom] was the result of an evaluation by the head of the eurogroup, Jean-Claude Juncker, that there weren’t sufficient elements of consensus to be sure that a meeting would be successful,” Italian Prime Minister Mario Monti told the Sky TV channel in Italy last night. But that is classic euro release-speak: accurately uninformative. Signor Monti has been consistently voluble for some weeks now on the subject of a changed EU focus from austerity (which in Greece has obviously made things worse) to economic growth – which would be good, given the continental economy beyond the Rhine is in neutral. I put this line about Monti writing Greece off to a Parisian diplomat last night, and was stunned by the response.

“We have heard the same,” he confirmed. “It may just be rumour. We have nothing concrete as far as I know just yet. But yes, Mario Monti is a quietly determined character. He is impressive, make no mistake. It does fit.”

The FT this morning points out that ‘Hardline officials in Germany, the Netherlands and Finland are increasingly urging a Greek default’, and they’re not wrong: but the overall tone of the Pink’un’s piece is that it is the ezone nations themselves who can’t agree what to do next. This also reflects what I’ve been hearing: going back to The Slog’s first post of yesterday, I have since then definitely established that the leak given to Handelsblatt (about Greece being unable to satisfy the bondholders) came from the German Bundesbank not the ezone’s central bank run by Mario Draghi, the ECB. It is highly probable, I understand, that the leak was forthcoming from an area not unadjacent to the office of Bundesbank President Jens Weidmann, a well-known anti-bailout hawk.

Herr Weidmann moved a little closer to the limelight – spookily, within minutes of the DMN story breaking – by officially ruling out Bundesbank participation in the bailout, adding “There has to be an administration that implements the measures, and a population that accepts them.” He is a firm exponent of the ‘take the money and run’ theory about Athens – and I am bound to observe, he is very probably right.

What’s gradually emerging is a picture of Germany placing media editorial poison, stirring up the bondholders, and finding new budget sums to query, in the hope of pushing Greece towards default, while still having some control over it by slowing everything down. But there is a degree of disarray among the 17 eurozone Ministers involved that may yet destroy the plan….and very few observers with whom I’ve spoken think anyone can ‘control’ a default in somebody else’s country.

Some of the Brussels/Berlin editorial poison was dutifully hoovered up by Reuters which, under the headline ‘Greek political leaders blow chance to seal eurozone deal’ began by asserting ‘party leaders in Athens failed to provide the required commitment to reform’. Technically that isn’t true: they’d signed off onthe need to find another one thousandth of a cut. And Antonis Samaras – the opposition New Democracy leader – let it be widely known yesterday afternoon that he will sign the additional papers relating to this huge sum of money….now suspected of perhaps being under Venizelos’s left armpit.

Inflammatory statements by Samaras – also picked up by The Slog yesterday – had been used earlier by Berlin to raise doubts about whether Greece would  renege on the deal following elections. Elections, as we all know, are – literally – seen by the EU Gestapo as “potential accidents”, and thus to be avoided whenever possible. But this morning yet more revised papers will be signed in Athens about the 325m euro black pinhole – by Samaras as well – and then after that Berlin will have run out of excuses. But that’s OK because the meeting has been postponed until next Monday.

Just using my abacus finger-computer here, I calculate that Monday is six days away…and the 325m has been talked about since last Saturday. This is an awfully long time to spend looking in EvangeloVenizelos’s underwear.

Meanwhile, Mario Monti is quietly ingratiating himself with the bosses. He’s a smart Goldman-trained corporate who, like his namesake and compatriot Mario Draghi, can play office politics with the Big Boys. He told Sky later in last night’s interview:

“One day, I don’t see why Italy would be considered less stable than Germany. In many areas we are demonstrating that we have adopted the culture of stability, for example with our pension reform, which many countries admire. If Italians continue to act with the maturity that they are showing now, I wouldn’t put any any limit on the spread going to zero.”

Great piece of up-talking there, Mario. And if you believe that, you’ll believe any old bollocks anyone comes out with.