This was where I got confused. The implication is currently positive basis (or maybe I'm even wrong there), but he's known for neg. basis blowups (DB) - perhaps he's already in the black?
My understanding is that he blew up on the cash/CDS basis, coming from someone who was working for him at DB and is still working for him. I think his current Greek position is a great trade - carries right and has limited losses in case of default. He might have some MTM pain should Greece ever become a true bond market again (because of duration vs JTD mismatch), but if there is a improbable event that would be it.
By returning to a true bond market do you mean one where participants prefer to take credit exposure through cash bonds rather than CDS (in turn pushing the basis more positive)? Thanks.
Well, given we don't actually know exactly what the trade is, it's very hard to know the implications of PSI on it.