Washington, D.C. – Democratic Leader Nancy Pelosi released the following statement today on the rising gas prices across the country:

 

“Independent reports confirm that speculators are driving up the cost of oil, hurting consumers and potentially damaging the economic recovery. Wall Street profiteering, not oil shortages, is the cause of the price spike.  In fact, U.S. oil production is at its highest level since 2003, and millions of acres have been cleared for additional development.

 

“We need to take strong action to protect consumers from this speculation.  Unfortunately, Republicans have chosen to protect the interests of Wall Street speculators and oil companies instead of the interests of working Americans by obstructing the agencies with the responsibility of enforcing consumer protection laws.  They have also repeatedly opposed our efforts to end billions of dollars in outdated taxpayer subsidies for oil companies enjoying record profits.

 

“We support efforts by the Obama Administration to expand domestic energy resources, including natural gas and renewable sources like wind and solar that create jobs in America and will end our dangerous dependence on foreign energy supplies.  This can be achieved because today, the United States currently has more oil and gas rigs at work than the rest of the world combined, and imports of foreign oil have decreased.

 

“We call on the Republican leadership to act on behalf of American consumers and join our efforts to crack down on speculators who care more about their profits than the price at the pump even if these spikes harm the American consumer and our economy.”

Speculators? Such as the Federal Reserve and other central banks who have pumped $2 trillion of "liquidity" into the capital markets in the past 3 months just so Italian BTPs don't implode to fair value and so Europeans can continue living in a socialist "paradise" even as the bankers steal their gold?

Or is it the same congressional speculators who until recently had every right to front run the public on advance knowledge that the SPR would be tapped due to Democrat insistence to sacrifice America's last energy backstop only to win the election?

Or is Nancy simply pissed off that she can no longer trade ahead of any market moving news?

Whatever the reason for the gas surge, with these idiots in charge one thing is certain - the situation is about to get far, far worse.

Solyndra4eva!

• Iran has one of the largest Jewish populations in the world, and the second-largest in the Middle East behind Israel

• Jews are protected by the Iranian constitution, and are guaranteed seats in the Iranian parliament

• The CIA admits that the U.S. overthrew the moderate, suit-and-tie-wearing, Democratically-elected prime minister of Iran in 1953. He was overthrown because he had nationalized Iran's oil, which had previously been controlled by BP and other Western oil companies. As part of that action, the CIA admits that it hired Iranians to pose as Communists and stage bombings in Iran in order to turn the country against its prime minister

• If the U.S. hadn't overthrown the moderate Iranian government, the fundamentalist Mullahs would have never taken over. (Moreover, the U.S. has had a large hand in strengthening radical Islam in the Middle East by supporting radicals to fight the Soviets and others)

• The U.S. armed and supported Iraq after it invaded Iran and engaged in a long, bloody war which included the use of chemical weapons. Here is former Secretary of Defense Donald Rumsfeld meeting with Saddam Hussein in the 1980's, several months after Saddam had used chemical weapons in a massacre:

• The U.S. has been claiming for more than 30 years that Iran was on the verge of nuclear capability

• The U.S. helped fund Iran's nuclear program

• The U.S. has been actively planning regime change in Iran - and throughout the oil-rich Middle East and North Africa - for 20 years

• The decision to threaten to bomb Iran was made before 9/11

• America and Israel both support a group designated by the U.S. as a terrorist organization which is trying to overthrow the Iranian government

• Top American and Israeli military and intelligence officials say that Iran has not decided to build a nuclear bomb

• Top American and Israeli military and intelligence officials say that - even if Iran did build a nuclear bomb - it would not be that dangerous, because Israel and America have so many more nukes. And see this

• American military and intelligence chiefs say that attacking Iran would only speed up its development of nuclear weapons, empower its hardliners, and undermine the chance for democratic reform

• The people pushing for war against Iran are the same people who pushed for war against Iraq, and said it would be a "cakewalk". See this and this

• China and Russia have warned that attacking Iran could lead to World War III

HY credit spreads (red) continued to widen from the snap back recovery last Thursday and stocks (blue) are leaking back to that same reality. IG credit spreads (dark red) are staying with stocks for now and modestly outperforming as we see HY-IG decompression (or up-in-quality rotation) showing up. HYG (green) opened exuberantly, tried to get back to reality and failed as it closed at its highs. While flows have been very big drivers in this ETF, we note there was some HY issuance today that may have been soaked up by the ETF and that rotation from old to new could have impacted the underlying portfolio (as comparing HY to HYG over the last week or two shows a notable divergence of real credit spreads decompressing and illiquid bonds underlying a beta-chasing ETF rising).

We suspect however, that this HY-HYG 'arbitrage' as the chart above highlights as the credit derivative market had got a little ahead of itself in the exuberance settings (remember we pointed out how rich the index had become relative to its underlying portfolio of names a week or two back). Therefore, we would not be getting too excited about HYG's performance today as a trend, as we appear to be very close once again to fair value.

Gold snapped higher today (following Oil and Silver's snap yesterday) as Copper, Silver , and Gold are all now over 3% higher this week (from Friday). WTI managed to get over $106 but the rise in Brent from the middle of the European market day (on rising rhetoric and tensions with Iran) as it made it over $123 and the spread broke $17 on the day kept a modest lid on WTI for now.

Treauries rallied handsomely from early this morning...

and while FX remained relatiovely calm (as in DXY did not move much broadly), the dispersion among the majors is becoming large - and notably EURUSD is having less impact as GBP and JPY drop away rapidly.

Finally, the CSFB Fear Index (which tracks how far out of the money a call option must be relative to an equivalent put option - i.e. a proxy for how skewed the option prices in the S&P 500 are becoming towards negative sentiment) reached record highs today. As is clear, it is somewhat coincident but certainly seems like a trend change is overdue and the vol, credit, and even stock moves of the last few days suggest momentum is slowing (as are the analogs to  1997 and last year). 

Of course so many are pinning hopes on next week's LTRO but we are afraid that this will not achieve the goldilocks feeling everyone hopes for - too large a draw is very worrisome (more subordination for example) and too small is very worrisome (not enough money printing) leaving a small window for 'just right' that unfortunately will not satisfy the monetary expansion hoarding equity market.

Charts: Bloomberg

Courtesy of Lee Adler of the Wall Street Examiner

Normally when we think of printing money, we are talking about the Fed buying Treasuries, or some other securities from the Primary Dealers. The PDs then take the cash and buy Treasuries from the government. The Fed's asset base is thereby increased, and an offsetting liability, bank reserves on the Fed's balance sheet, also increases. As long as those reserves lie dormant at the Fed and banks don't use them to increase lending, there's not much problem with consumer price inflation, which the Fed pretends is the only thing that matters.

The Fed's been getting away with this kind of printing for a long time now, but there's been some seepage of money into financial assets, driving prices of bonds to the stratosphere and triggering "beneficial" rallies in stocks, and more malevolent rallies in commodities, particularly crude oil, but "core" consumer prices have lain more or less dormant. That lets Bernanke and Co. off the hook because that's what they use to measure inflation, and that's what the mainstream media reports. There's "no inflation." That's more or less in a nutshell what has been happening the past few years.

But there's another, different, type of "printing", and this one is literal, honest-to-god printing! Dr. Bernankenstein wasn't joking when he said the Fed had a printing press in the basement (cue evil laughter). In fact all 12 Fed district banks have printing presses in the basement, and they use them every week. The kind of "printing" I'm talking about is the actual printing of currency-cash, Benjamins et. al. Each week the district Fed banks usually print a total of a billion to several billion in cash, load it in armored trucks, and ship it out to the hinterlands, places like Staten Island, Cleveland, and Afghanistan. The cash shows up as a liability-Federal Reserve Notes- on the Fed's balance sheet because cash, Federal Reserve Notes, are a promise to pay... what? In other words if somebody shows up at 33 Liberty Street, NY with a wheelbarrow full of cash and demanded that the Fed pay up, well then...  never mind. Just take my word for it. It's a liability.

Also on the Liability side of the Fed's balance sheet as reported weekly in the Fed's H.4.1 statement are Treasury deposits, deposits by banks, also known as reserve deposits, reverse repos, Term Deposits of banks when the Fed offers them, and a mysterious category called Other deposits, which are vaguely identified as belonging to the GSEs, other government agencies (the CIA perhaps, hmm...?) and foreign official organizations, as well as the PPT (Plunge Protection Team)- the Exchange Stabilization Fund. But that's a whole 'nother story that we've covered before.

 

Fed Liabilities 2/15/12 - Click to enlarge

 

For those unfamiliar with the basics of Accounting 101, which is, oh, say 100% of us, the idea is something like physics where for every action there's an equal but opposite reaction. The actual equation looks like this Assets = Liabilities + Capital.

In other words, when there's an increase or decrease in a liability, there must be an equal offsetting increase or decrease in an asset, or a different liability, or some combination of the above. Forget about Capital for the time being-it's essentially irrelevant for central bank purposes and I don't want to confuse the issue any more than I already have.

Therefore, by the laws of nature, physics, religion, Robert's Rules of Order, and double entry bookkeeping, normally bank reserves on the Fed's balance sheet fall when Treasury balances rise, and vice versa. Think about it. The Treasury spends and where does it go? Into the payee's bank account and therefore up go the banks' accounts at the Fed. Last week the Treasury deposited a net of $0.9 billion to its checking account at the Fed as proceeds from debt sales more than offset the government's normal weekly outlays. This change was minuscule and normally wouldn't have any impact on the Fed's other liabilities.

But in spite of the small inflow into the Treasury's account last week, bank reserve deposits at the Fed rose by $37 billion. If it wasn't from Treasury spending, where did all that money come from? Here's your answer, the mysterious "Other" deposits fell by $36 billion.  Some "Other" paid entities with bank accounts $36 billion. That's a big number for one week, but the Fed gives absolutely no information on the inflows and outflows from these accounts. I there's there's a lot of 'splainin to do for moving around $36 billion in a week. So much for "transparency." The Fed only wants "transparency" if it will push the market up. Otherwise it's STFU.

Just the week before (ended February 8) the Treasury made an enormous withdrawal of about $71 billion to pay turn of the month bills. That's no mystery. It happens every month. About $59 billion of that showed up as reserve deposits as the government payments flowed into bank accounts and the banks instantly deposited the cash at the Fed since they don't have anything better to do with it. That too is as it should be.  But wait a minute! What about the other $12 billion? The Fed certainly wasn't going to sell $12 billion in assets as the offsetting transaction to fund the rest of the Treasury withdrawal. The Fed's stated goal is to keep its balance sheet stable at least through June. So where did that $12 billion come from?

The Fed seemed to need to jump through hoops to fund that Treasury withdrawal since not not all of it made it back to the Fed's balance sheet in the form of bank reserves. Since the Fed didn't liquidate any assets to fill the gap, it needed to increase a different liability. In addition to increasing reverse repos which is a way of borrowing cash, one of the things the Fed did was to debit currency outstanding by a whopping $8 billion. Up went the basement garage doors and out went those trucks loaded with pallets of bundled Benjamins. We don't know whether the Fed initiated the currency transfer on its own or whether the Treasury or somebody else requested it. It's just another of those things that's hidden behind the Fed's wall of obscurity and obfuscation that the Fed calls "transparency." Good news= Transparent. Bad news= Black Ops News Blackout.

Much to my surprise, the Fed did the same thing last week, dispatching truckloads of cash totaling $7.2 billion. While something similar occurred last February, this 2 week printing spree was a new record. Again, we don't know who initiated the "job", but we do know that last week's "request" did not come through the NY Fed. The biggest chunk of it was issued from the basements of the Cleveland and Richmond Feds, of all places, followed by Atlanta and San Francisco. OK conspiracy theorists, Richmond is just down I-95 from DC (and CIA HQ in Langley), but Cleveland? Were the ATMs at the Rock and Roll Hall of Fame having a busy week?

Rather than a decrease in a liability being behind last week's printing, this time the asset side of the balance sheet looked like the culprit, as the Fed increased its securities holdings by a net of $18 billion while only liquidating $7.7 billion in undefined "Other" assets and around a billion of other "stuff." That left a $9.6 billion increase in assets that had to show up in liabilities. Only a little over $2 billion of it appeared as reserve deposits. The Fed had to make up the difference by loading up the trucks with pallets of  cold, hard cash-$8 billion worth.

Currency Outstanding Chart- Click to enlarge

 

That 2 week, $15 billion increase in currency outstanding is a record. Furthermore, currency outstanding has now increased by 10% in the past 12 months. Here's a question. How and why does that happen in an economy that has only grown by 2.5%?

In fact, from 2003 until 2008, currency outstanding grew at a compound rate of 2.75%. Then from September to December of 2008, the Fed added 6% to the amount of currency outstanding. There was a similar surge from September 2010 and January 2011 and it's been pretty much pedal to the metal ever since. The last 2 weeks looks like an even greater acceleration. I don't know what to think of all this, but maybe it relates to confidence issues in some quarters. Perhaps it is related to the European financial crisis, as some players seek the "safety" of US dollars in safe deposit boxes rather than bank accounts, stocks, bonds, or gold. It certainly isn't due to a rapidly growing economy with a high demand for cash. And why Cleveland and Richmond? If that's not a WTF, what is? I'll leave the answers to your conspiratorial minds.

In spite of the curiousness of all this, the overall level of combined reserves on the Fed's balance sheet remains flat and is currently a neutral influence on market liquidity. As for the mountain of cash the Fed just put out on the street, consistent with the Fed's "transparency" policy it's a riddle, wrapped in a mystery, inside an enema.

Get regular updates the machinations of the Fed, Treasury, Primary Dealers and foreign central banks in the US market, in the Fed Report in the Professional Edition, Money Liquidity, and Real Estate Package. Click this link to try WSE’s Professional Edition risk free for 30 days!

S&P 500 2012 performance (green) compared to 2011 (orange) and 1997 (blue) signals perhaps a roll-over is due?

and while gas prices have risen rapidly, they are on the same pace (in percentage terms) as they were last year (incredibly). The difference obviously is the much higher base price.

What triggered last year's rollover? High energy prices acting as a drag? European dysphoria re-emerging? US growth hope fading?

Charts: Bloomberg

Ms. Katseli, an economist who was labor minister in the government of George Papandreou until she left in a cabinet reshuffle last June, was also upset that Greece’s lenders will have the right to seize the gold reserves in the Bank of Greece under the terms of the new deal.

Well, they may be broke, and they may be bailing out Europe, but at least they'll have no gold: sounds like a sweet deal - it makes perfect sense that Greeks are taking every incremental humiliation from a syndicate of few fat, bald types who have access to a digital money printer, with the supine determination of an Oliver Twist.

Since economic decoupling, while completely flawed, can last as long as recently printed money makes its way to the "hottest" markets on the margin, in this case the US, corporate decoupling as a theory is just to naive to even propose. At best the US will be hit with precisely the same lag that David Rosenberg mentioned in early January. The reason for the corporate profitability deterioration: surging input costs courtesy of the recent commodity spike. In other words, the only upside case for stocks, as their earnings are about to turn far more negative is multiple expansion. The same "multiple expansion" that will likely prove to be the same mirage as decoupling once the market digests what David Rosenberg discussed just yesterday in the context of the tax shock already unleashed by the administration.

Morgan Stanley: Til Debt Us Do Part

Of the importance of unintended consequences.

Our colleague Joachim Fels once described the current stage of the crisis in Europe with the acronym CCC, standing for a crisis of confidence, competency and credibility. One could add a fourth ‘C’ to this list, for consequences. A recurrent feature of the global crisis is the unintended consequences of policy actions. Perhaps the two most important milestones of the past four years were policy decisions, whose unanticipated consequences caused in each case a considerable degradation of the situation and extended the crisis both in scope and length.  

 

The first of these events was the decision by US authorities to let Lehman Brothers fail in September 2008, now widely acknowledged to have been a major policy error.

 

The second was the decision by European governments to initiate restructuring of public debt in Greece without having first put in place a robust safety net for solvent governments. This is also now widely regarded as a policy error. In each case, we note that many in the market initially applauded these decisions (when not actively calling for them beforehand) without seemingly fully appreciating the consequences.

Why would a Greek exit from the euro area be so damaging?

The euro is irreversible. Is it? The starting point of the analysis is the simple yet immensely important observation that if Greece were to leave the euro, this would imply that the euro is reversible.

Breaking down the fungibility of money. If the euro is reversible, it is not reversible in only one country. It is reversible in all. If Greece can leave the euro, then other countries may also leave the euro at a subsequent date. The implication is what we describe as a breakdown in the fungibility of money.

To explain this point, one must consider that in a fiat money system, money is the liability of a bank. It is the liability of the central bank in the case of central money, i.e., banknotes and bank reserves held at the central bank. It is the liability of commercial banks for commercial money, i.e., deposits.

As long as the euro and the Eurosystem exist in an irreversible form, these different forms of money are effectively fungible. Should the euro be reversible, however, these different forms of money are no longer completely fungible.

Federal money versus national money. Which is which? The euro may be a federal currency, but a deposit in a bank is effectively national money. If a country were to leave the euro, it would most likely be redenominated in that country’s new currency.

...

Strong money versus weak money. Which is which? As long as the euro is irrevocable, the distinction made above between federal and national money is irrelevant. By contrast, if the euro were to become reversible, this distinction matters. A euro held in a country more likely to abandon the euro becomes a weaker form of money than a euro held in a country more likely to keep it, with banknotes the strongest form of money.

...

How a run on money would unfold. In a situation where different forms of money are no longer entirely fungible, what one ought to expect is a run away from the weaker forms of money towards the stronger forms.

The erosion of deposits in Greece and Ireland provides but a glimpse of what would happen elsewhere if Greece exited the euro.

Contagion ought to be a familiar pattern by now. To illustrate this point, it suffices to recall that the failure of Lehman Brothers closed access to capital market and interbank funding to all banks, regardless of whether they were solvent or not. Similarly, the initiation of PSI for euro area sovereigns caused contagion not just to Ireland and Portugal but also to Spain, Italy, Cyprus, etc., and eventually France and Austria, regardless of whether the governments of these countries were objectively solvent or not.

...

No line of defence? The precedent of deposit haemorrhage in Greece and Ireland is nonetheless relevant in that it highlights the tools necessary to counter a bank run.

In a situation of a bank run, what prevents catastrophic outcomes (widespread bank failure) is the ability and willingness of the central bank to replace deposits and fund banks directly itself. This is what happened in Greece and Ireland, where the Eurosystem increased its lending to domestic banks.

Limits to the ability of the Eurosystem to intervene... The Eurosystem is however constitutionally constrained to only lending to banks against ‘adequate’ collateral.

…and perhaps limits to its willingness. More fundamentally, if the euro were to become reversible, the nature of the risk taken by the central bank by replacing deposits would change substantially.

And the credit crunch would likely come back. Arguably, the points we have listed here are of secondary importance. More important is the fact that if banks lost their deposits, they are very unlikely to extend credit to the economy.

...

Conclusion: if one country goes, it is monetary union that goes.

Our conclusion at this stage is that Greece leaving the euro would not be a local event. It would change the nature of money everywhere across the euro area by making the euro reversible. It would turn most of money supply (commercial money) back into national money. It would hinder the ability (and possibly willingness) of the Eurosystem to act as a lender of last resort for the entire euro area banking system. For all practical purposes, it would be the end of the euro as a genuine single currency. It would also likely trigger an unstoppable run on banks, which would push large parts of the continent onto a depressionary and politically painful path.

To preserve the euro if Greece left would require total federalism in the rest of the area.

Courtesy of our own William Banzai, the campaign art work is already prepared.

Why Paleokostas? A brief primer on Paleokostas courtesy of badassoftheweek.com

Vassilis Paleokostas

What do you get when you cross Jesse James, Robin Hood, and Jack Bauer in the body of a giant, bearded, bald Greek man?
Meet Vassilis Paleokostas:

This crazy, utterly fearless dude is public enemy number one in Greece, and probably one of the most badass motherfuckers to come from the country since the days of our friend Leonidas.

Vassilis' story starts back in the early 90s, when he went on an insane crime spree of delicious armed robbery, blackmail, extortion, and kidnapping.  Basically, his modus operandi was to kidnap a super-rich bastard, hold him for a ridiculous ransom, and then sell him back to his stupid family in exchange for giant piles of cold, hard cash.  Then, he'd take that bling, keep a small percentage of it for himself, and distribute the rest of his newly-acquired wealth to impoverished farmers of the tiny rural province in which he grew up.  The dude quickly made a name for himself as the Robin Hood of Greece, and was beloved by fans of badassery, the people of the lower classes, and pretty much anybody else he wasn't in the process of robbing or extorting for money.  Shit, even the fucking people he kidnapped came out later and said that he was very polite and respectful to them while they were in captivity, and that it was pretty much the most pleasant kidnapping they'd ever experienced.  That should give you some indication of what this dude was all about – steal from the rich, give to the poor, make a profit in the process, and be completely awesome all of the goddamned time.  He also made a vow never to harm a member of the public in his criminal escapades.  He's been true to his word.

In true badass fashion, Vassilis Paleokostas also has a trusty sidekick – a lunatic Albanian named Alket Rizai.  Rizai is like the Friar Tuck in this story, only if instead of being a benevolent, staff-swinging priest, the clergyman was a crazy gunman with a hair-trigger and a penchant for firing automatic weapons at heavily-armed tactical police officers. Rizai is currently up on charges for murder, though I haven't really been able to track down any details about any of that (that's the problem with trying to research current events, I suppose).  My assumption is that he was being attacked by some evil corrupt officers sent by the Sherriff of Nottingham and responded by burning a full clip of Uzi ammunition into them, jumping through a plate glass window, rescuing a damsel in distress, and swinging off on a chandelier with a hot babe clinging to his rippling biceps.  According to a Greek friend of mine, this guy once blew up a known Mafia hangout by shooting it with a fucking rocket launcher.

Of course, the downside to being a career criminal – even a happy-go-lucky one who commits non-violent crimes in the name of the oppressed populace – is that eventually the long arm of the law is going to bitch-slap you in the fucking face really really hard. In 1995, Vassilis Paleokostas was caught by the fuzz, convicted of kidnapping, robbery, and weapons charges, and hauled off to a federal pound-me-in-the-ass penitentiary known as Korydallos Prison.

Now over the years, Korydallos Prison has gained a reputation as being one of the harshest and most brutal prisons in Greece. This place is like a mix between Andersonville, Oz, and that stupid plastic box they keep Magneto inside in the X-Men movies. The warden is a hardass son-of-a-bitch, the guards don't give a shit, and people that go inside the facility never come out.

Except Vassilis Paleokostas.

In June 2006, Paleokostas' older brother (another pathological criminal who is now serving jail time on 16 counts of armed robbery) commandeered a helicopter, and landed it right in the middle of the fucking exercise yard of the prison in broad daylight. The armed guards at Korydallos, not expecting to be subjected to such an unbelievable display of gigantic steel-plated testicles, assumed that this chopper belonged to the warden or the Chief of Prisons or something, and instead of investigating it they all decided to make sure their shoes were appropriately spit-shined so as not to incur a citation from their wrathful bosses. Vassilis (who had orchestrated the entire operation from the beginning) and his Albanian buddy simply walked up to the helicopter, hopped inside, and lifted off.  By the time the guards got their heads out of their asses and started firing their guns at the bird, it was already too late.  Paleokostas had escaped.

So the Greek police put out an all-points bulletin, and a nation-wide manhunt began for the Greek Robin Hood.  Officers, dogs, and federal agents scoured the countryside for this fugitive day and night, relentlessly following leads and doing everything in their power to bring this wanted criminal to justice.

Paleokostas evaded them for two and a half years.  He lived in the mountains outside Athens, evaded all attempts to recapture him, and even orchestrated another high-profile kidnapping in the process – snatching a powerful jackass CEO industrialist, ransoming him for a huge wad of cash, and once again distributing the loot to local farmers and families.  There are also rumors that he planned and executed another kidnapping while he was still incarcerated, which is bonus points no matter how you look at it.

In August 2008, Paleokostas was tracked down and re-captured by the Greek police.  He was placed in a different maximum security facility, where he was held for another six months, awaiting trial for his brazen escape in 2006.  On 21 February 2009, Vassilis Paleokostas was transferred back to his old home – Korydallos Prison.  His trial was to begin on the 23rd, and he was to stay in his former holding area while he stood trial for this crime.

But he never made it to trial.  The very next day, 22 February, ANOTHER FUCKING HELICOPTER showed up in the skies above Korydallos Prison.  It flew over a large tower of the prison, lowered a long rope ladder, and Vassilis Paleokostas and Alket Rizai climbed up into the chopper.  As the helicopter flew off into the sunset, the prisoners of Korydallos cheered.

Greek police opened fire on the chopper as it flew off, but a woman returned fire with an AK-47 assault rifle.  Now having hot Greek babes with automatic weapons come save your ass from prison isn't the sort of thing that happens to normal people every day, but that's just how things work out for you when you're a badass like Vassilis Paleokostas.

The police eventually tracked down the helicopter, and found that it had ditched on the side of the road outside Athens with a bullet hole in the gas tank.  According to the pilot, Paleokostas and his associates left the chopper and drove off on totally sweet motorcycles to an undisclosed location.  They also popped some totally bitchin' wheelies while doing so.

Vassilis not only earned his freedom for the second time, and once again showed the world that his ballsack is roughly the size of a small continent, but he also got some sweet delicious revenge on the motherfuckers in charge of the Greek prison system at the same time.  For allowing the same guy to escape the same prison in the same manner twice in a row, the Greek government fired the country's Chief of Prisons, the Inspector-General of Prisons, the warden of Korydallos, and three guards at the facility.  They all learned what it means to step to somebody as awesome as the Greek Robin Hood.

Vassilis Paleokostas is fully rad because he kicked ass, won the respect of the people, said "fuck you" to the police, and managed to single-handedly place the country's three top-ranking prison officials in the back of the unemployment line.

He is still at large.

And why Kodos? Simple