Courtesy of Karl Denninger
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.
Folks, if this is real then it represents the same sort of nonsense that occurred with Lehman, where Citibank was later found to factually know the firm was out of good collateral well before there was any public admission of insolvency.
It thus had to be presumed that essentially all the other big Wall Street institutions also knew, because there's not a prayer in Hell that this fact was kept that quiet. The revelation showed up in the bankruptcy examiner's report, where the existence of the failed repo trade attempt that quite-materially pre-dated the public bankruptcy filing was disclosed.
As I have repeatedly said the problem is not, in the main, Greece. It is that Italy, Portugal, Ireland and perhaps others will demand the same thing when Greece defaults, especially if they "get away with it", and it is nearly-certain (absent armed intervention) that they will.
Be ready.
