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Greece defaults

blogs.reuters.com

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Re: Greece defaults

#61

Post by stayjin »

tsotha wrote: post #34
TheAlan wrote: post #13

The raping of Greece's assets will now begin. EVERYTHING will get privatized, just like a third-world country.

Well, sure. Greece is a third-world country. And when you owe more than you can pay you have to cough up some assets.

I do not agree with you. As far as I know, the loans did not involve collateral ( at least not until now ), so investors are just entitled profits from interest and have no claim on assets.

I don't know if Greece is a third-world country, but definitely the Greek government managed this crisis are such, so it looks like Greece is going to share their fate.

Re: Greece defaults

#62

Post by stayjin »

dialtone wrote: post #19
flocial wrote: post #12

The EU sort of rescued Greece, now Greece sort of defaults. Portugal, Spain, and Italy are not that far behind. The biggest problem, aside from Greece's fiscal mess, is that Germany can't muster up enough political support to clean up after their mess more decisively despite the fact that they are now in the same monetary union. The catch 22 of these financial crises is that inaction will result in financial meltdown…

Delayed action though leads to speculation and uncertainty as was shown in the past few weeks. Nothing changed in the Italian economic policy since friday last week, but monday and tuesday brought deep losses and the Italian BTP bonds reached the highest spread against the Bund in recent history. Today, 3 days later, Italy is back to a less crazy spread (still pretty high) and _nothing_ changed in its policy, 100 bas…

I read at a financial analysis, that Italy experienced the most massive capital escape of it's recent history, so it is not that _nothing_ has happened, only probably it happened "behind scenes".

I agree that the core problem is the lack of economic unification.

Re: Greece defaults

#63

Post by rajpaul »

joe_the_user wrote: post #56
lefstathiou wrote: post #11

FYI there is no such thing as a "kind of" or "selective" default. It's binary. You either pay back creditors what they are owed or you dont. It's rare that a company or country defaults on ALL obligations all at once. As a member of Wall Street, I appreciate the WSJ's noble attempt to sugar coat this (article below) but that doesnt change the facts. Ditto watchandwait below.., glad it finally happened. http://profess…

Wait a gosh-darn-second - if the situation is either definite default OR not-a-default, then Greece has NOT defaulted. From the article: if you’re a holder of Greek bonds right now, you have three choices... 1. You can do nothing, and hope that Greece pays you in full and on time. (and other stuff)... The first option is by far the most interesting. No one has come out and said that Greece is going to default on bond…

"the aim is to threaten and arm-twisted big banks into exchanging their bonds"

You're basically saying that Greece renegotiated some of it's debt obligations. Which is a default.

"Sovereign defaults Sovereign borrowers such as nation-states generally are not subject to bankruptcy courts in their own jurisdiction, and thus may be able to default without legal consequences. One example is with North Korea, which in 1987 defaulted on some of its loans. In such cases, the defaulting country and the creditor are more likely to renegotiate the interest rate, length of the loan, or the principal payments."

http://en.wikipedia.org/wiki/Default_(finance)#Sovereign_def...

Re: Greece defaults

#64

Post by krakensden »

tsotha wrote: post #34
TheAlan wrote: post #13

The raping of Greece's assets will now begin. EVERYTHING will get privatized, just like a third-world country.

Well, sure. Greece is a third-world country. And when you owe more than you can pay you have to cough up some assets.

Privatizing too much too quickly to pay off loans is analogous to chopping off limbs when you can't pay the mob. It makes the people owed money feel better, but means that they will never really get paid back, because the debtor can no longer function.

Re: Greece defaults

#66

Post by anonymoushn »

jeffreymcmanus wrote: post #26
baguasquirrel wrote: post #24

Earlier quoted context omitted.

It just means that instead of having the train quickly derail, they're going to stretch it out like it were a Hollywood movie. Seriously. No one believes that debt is going to be repaid. The politicos are just praying that the train doesn't hit the ground on their watch. If you read the text of this, it just "says" they're going to extend all the terms. But we all know the truth. Shit is going to happen. If for no re…

Wrong. The way it appears now, the debt is going to be repaid over a longer period of time. Your confusion about this indicates that writers are not doing a good job explaining this to people.

Negative. Did you somehow miss the 20% haircut?

Re: Greece defaults

#67

Post by marshray »

mdda wrote: post #48
marshray wrote: post #35

Earlier quoted context omitted.

You can bet there are a lot of people making phone calls right now trying to figure this out. My guess is that nobody knows at this point. If this so-called "selective default" does end up being "structured" such that markets are surprised when CDSs cannot actually be invoked, then that erosion of confidence in the system itself might end up fueling a cascade failure even worse than simple direct failure of some insu…

If I were worried about this point (and a holder of a lot on CDS 'insured' bonds), I'd get a friend that was immune to 'arm twisting' to buy 1MM of a particular issue, and play extremely hardball with the ECB. Eventually, a payment would not occur, and there would be a solid 'Credit Event' to trigger all the CDS.

NYT: "Holders of short-term obligations would be able to swap their notes for debt with longer maturities and backed by high-rated bonds. An organization that includes most major European banks said its members would accept the offer and expected 90 percent of all Greek bonds to be exchanged. [...] financial institutions that own Greek bonds would effectively contribute 54 billion euros through 2014, largely by accepting reduced interest payments, and will stretch their maturities to as long as 30 years."

I don't understand. Are 90% of Greek bonds truly held by organizations susceptible to arm-twisting by the ECB to the tune of 54 gigaeuros?

How long is that charity coalition going to hold together once they see others collecting on their CDS policies?

My guess is that something more than 10% those Greek bonds are held by entities which, in reality, are for-profit corporations with shareholders that know how to do a little arm-twisting of their own.

Re: Greece defaults

#69

Post by Uchikoma »

TheAlan wrote: post #13

The raping of Greece's assets will now begin. EVERYTHING will get privatized, just like a third-world country.

The privatization of Germany in the 90s was so bad that it has now one of the strongest economies and enough money for Greece. And obviously became a third world country.

Re: Greece defaults

#70

Post by kamagmar »

lefstathiou wrote: post #11

FYI there is no such thing as a "kind of" or "selective" default. It's binary. You either pay back creditors what they are owed or you dont. It's rare that a company or country defaults on ALL obligations all at once. As a member of Wall Street, I appreciate the WSJ's noble attempt to sugar coat this (article below) but that doesnt change the facts. Ditto watchandwait below.., glad it finally happened. http://profess…

> FYI there is no such thing as a "kind of" or "selective" default.

Yes there is. If this plan goes through, S&P will downgrade Greece's credit rating from CCC to SD ("selective default").

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