CDS-Greece-Papandreou
Dear All,
The issue of the fortune that the Papandreou family has made by the buying and selling of credit default swaps (CDS) is “old news” in Greece.
The first time that this issue was raised within Greek parliament was by the MP of the Conservative Party (ND) P Kamenos. The revelations that “Mr” P Kamenos made provided the first base of evidences regarding the very profitably activities concerning the selling and buying of credit default swaps (CDS) that the brother Andreas Papndreou and very close adviser of the current Prime Minister George Papandreou has been conducting.
Now Mr Kamenos is well known for his very conservative political beliefs in Greece. He is however very well connected with the Greek ship-owners lobby in London, and thus he is very well informed about the games that Greek businessmen and the brother of the Prime Minister have been conducting at the London Stock Exchange.
The reason that Mr Kamenos went forward with his revelations has to do with the fact that in order to cover up their tracks the Papandreou brothers and their business associates had embarked upon a campaign of defamation of the previous CEO of the state owned Greek Post bank Mr Philipidis. Mr Philipidis, that has appointed as CEO of the Post Bank by the Greek conservative party, had bought CDS for the Post bank at a very low price. The “crime” that supposedly the CEO Mr Philipidis had conducted according to his defamers was that he had bought CDS as such as this was presented to constitute an interest to speculate with the Greek public debt. Of course these are all nonsense. It is standard business practice to buy CDS if you buy a significant amount of bonds. Maximum, Mr Philipidi was doing a favor or repairing a favor to a company that had issued these bonds, besides sharing the risk of the post bank’s investment. It is important to note that the campaign of defamation of Mr Philipidis, was conducted at a time that the Greek public opinion was very sensitive in this type of accusations due to the speculative attack that was under way against the state Greek bonds by international speculators.
What had really happened, one might ask? Well the Greek Post bank, a state owned bank, had sold in December 2009 the CDS that it owed. Why this was a scandal? Well, at that time the price of the CDS was very low. The fund/ investment company – I think that it is the UNIGESTION – that bought the CDS that the Greek Post bank sold, was a company which had Andrea Papandreou in its Investment Committee. The Investment committee was promoting the buying of CDS of a number of European states, Greece included, to its rich business clients.
The timing of the selling of the Greek CDS by the Greek Post Bank to the business friends of the Papandreou family, is even more scandalous as it took place on December 2009, at a time that the Greek Prime Minister George Papandreou was secretly – from the Greek public and even his party – negotiating with Strauss Kahn (as Strauss Kahn himself has repeatedly said) a deal for Greece with the IMF. Thus, the issue of inside information is more that obvious if someone takes into account the timing of the transactions of the Greek CDS that the Greek post bank conducted on December 2009.
A number of other very important political issues arise with these transactions. For example why a state owned bank did not hang on to the CDS of Greek state bonds at a time when a speculative attack through the use of CDS was in progress in the stock markets, London Stock Exchange included ( if not at the heart of the operation of the “speculative attack”).
While well known funds that specialize in speculative attacks and are well know for their aggressive behavior, had embarked upon a systematic campaign of accumulating Greek CDS from the market in very low prices, and as it was evident to everybody that the speculative attack was on the way (there was no other reason for the massive accumulation of very low priced CDS by foreign “investors”), the fact that a Greek state owned bank (the Greek Post Bank) was “ordered” by the Greek government to sell Greek CDS at a nervy low price and while their price was rising rapidly, to a fund which in its investors committee included Andreas Papandreou the brother of the Greek Prime Minister, instead of holding on to the CDS and actively participating in the protection of the Greek public finance from the speculative attacks of the private investors. as a state bank should do. is a praxis which is at least scandalous.
Now if one takes under consideration the manipulation and management of the crisis of the Greek public finance that the Greek Prime Minster George Papandreou and his then Minister of Economics Papakonstantinou conducted, it becomes obvious why the activities of Andreas Papandreou constitute a scandal. One has just to remember the timing of the campaign of negative and self- undermining public statements concerning the condition of the Greek state finance that the Prime Minister George Papandreou and the then Minister of Economics Papakonstantinoy embarked upon after December 2009, to understand how the brother of the Prime Minster ended up with a major personal fortune. Keep always in mind that the campaign of defamation of the Greek public finance conducted by the Greek government offcials, lead to a stunning decrease of the values of the Greek state bonds and as a result to a stunning increase of the Greek CDS.
A further note on the subject: When the CEO of the Greek Post Bank had bought Greek CDS, the spread of the Greek state ten year bonds was at 305 or 340 base points. After Post Bank sold its CDS, and the Greek government embarked upon its campaign of defamation of the Greek public finance, the spread of the Greek bonds increased initially to 700 and later on to 1000 base points, reaching the “magic” amount of 1800 base points and probably even more today . (note: I have stopped following the Greek spreads long time ago as everybody has done so in the London Stock Exchange, as there is no point anymore).
The case has been referred to the Greek prosecutor for economic crimes, and is awaiting trial; with the most probably date “sometime” in 2012.
Probably nothing will come out of the “legal exploration” of the case, as the attacks on Mr Philipidi by PASOK members have stopped after the publicity that has been give to the case. In the end of the day the Conservative Party MP (ND) P Kamenos has achieved to protect his very close associate, thus it remains to be seen if he will prosecute further the case.
Recently, a new scandal concerning the Post Bank and the family of Andreas Papandreou has emerged in Greece. It concerns a lesser issue: the renting in Thessaloniki by Post Bank of a building which belongs to Andreas Papandreou mother-in-law.
Concerning the question at the European Parliament (27 June 2011) see
the issue is valid, however the MEP that has submitted the question is a member of the extreme right wing Austrian Freedom Party, and a very colorful character indeed (of Syrian origin that defines himself as a cultural German etc).
The second biggest daily newspaper Eleytherotypia has made published some important articles over the issue:
See in Greek (apologies for Dutch readers, maybe a Google translate? ) :
http://www.enet.gr/?i=news.el.
http://www.enet.gr/?i=news.el.
and some further information with a video in Greek from a left webpage: http://www.alfavita.gr/artro.
A comrade from London.
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