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Looks like a repeat headline, but isn't: Negotiators say Greece and private creditors are close...

Looks like a repeat headline, but isn't: Negotiators say Greece and private creditors are close to a deal on a debt swap. Now, creditor reps Charles Dallara and Jean Lemierre may offer interest rates that would mean bigger losses for bondholders that would still be recouped if strong growth returns. (last weekend)
Comments (56)
  • SA reader
    , contributor
    Comments (176) | Send Message
     
    Yet again we see this headline....the same one we've been hearing for several weeks. Clearly they are not close to a deal, otherwise it would've happened. And IIF doesn't speak for ALL bondholders, just some. So those others can still hold out [read: those who hedged with CDS and want a full payout] and force an involuntary default. Dallara is a joke.
    28 Jan 2012, 05:17 PM Reply Like
  • American in Paris
    , contributor
    Comments (5504) | Send Message
     
    Typical Seeking Apocalypse Comment.

     

    Did you really think that such a negotiation would be quick and painless? Of course not.

     

    The debt holders are looking at huge losses. They are going to fight ever step of the way.

     

    But in the end they have to agree because of the power of public opinion and the contagion threat.

     

    An agreement will be announced next week.
    29 Jan 2012, 11:29 AM Reply Like
  • animus
    , contributor
    Comments (96) | Send Message
     
    So goes the reality of a socialist entitlement country. I cannot imagine any firm loaning these countries money. They all are headed for the dust bin of failure. You cannot spend more than you make a rather simple rule.
    29 Jan 2012, 11:32 AM Reply Like
  • bob adamson
    , contributor
    Comments (4555) | Send Message
     
    American in Paris -

     

    Well said.

     

    The EU based banks will, quite naturally, try to get the best terms they can but, at the end of the day, they will take the 70% plus haircut entailed because it is the best on offer. The alternative is full default by Greece and the chaos throughout the EU that would ensue. In such circumstances, whatever insurance proceeds those banks might receive to cover their sovereign debt losses would be dwarfed indeed (and, as you note, they would have incurred the deserved enmity of the people and governments of the countries in which they now found themselves essentially bankrupt).

     

    The hedged funds that recently bought Greek sovereign debt at knockdown prices in the hope of making stellar profits may believe they have the leverage (by holding the negotiations on the debt restructuring to ransom) to perfect those profits but they will find the legislators and courts within the EU prepared to thwart their antisocial scrams.
    29 Jan 2012, 11:52 AM Reply Like
  • untrusting investor
    , contributor
    Comments (9923) | Send Message
     
    Bob,
    So do you include the ECB in your "antisocial scams"? Apparently the ECB is by far the largest holder of Greek debt purchased on the secondary market at deep discounts. And the ECB is so far refusing to take any loss whatsoever on the ECB holdings of Greek debt, as per any published reports. Does that put the ECB at the very top of the list of the antisocial scammers?
    29 Jan 2012, 12:32 PM Reply Like
  • Teutonic Knight
    , contributor
    Comments (1998) | Send Message
     
    I find your use of terms as "success", "leadership" bewildering.

     

    To have let the crisis deteriorate to this stage and extent as all eyes around the world are on the PIIGS is hardly what I would call leadership or success.
    29 Jan 2012, 12:40 PM Reply Like
  • winningtrader
    , contributor
    Comments (2476) | Send Message
     
    No, they will not fight. It is voluntary. They are more than happy to take the loss. Last thing I read was that Greece was offering 3.75% coupon but the lenders argued that 3.75% was too high and insisted on 0% coupon. The lenders are saying that if the coupon is 0%, then Greece will only default again on the maturity date of the bonds, while if the coupon is positive, the next coupon date will be the new default and they don't want that to happen so soon! How noble of them!
    29 Jan 2012, 01:01 PM Reply Like
  • bob adamson
    , contributor
    Comments (4555) | Send Message
     
    U T -

     

    Nice try.

     

    The ECB holds Greek sovereign debt, not as an investment, but as a lender of last resort to prevent default. It is true that at some point the ECB will have to write down or off much of that debt (and corresponding unsupportable debt for Portugal and possibly other EU States) but this will be at a later stage of EU fiscal and economic reform.
    29 Jan 2012, 01:35 PM Reply Like
  • WMARKW
    , contributor
    Comments (10234) | Send Message
     
    Teutonic...depends on what the goal is/was? Political unification brought about through financial crisis?
    29 Jan 2012, 01:43 PM Reply Like
  • Three Cheese Fondue
    , contributor
    Comments (592) | Send Message
     
    LOL, not as an investment. If it's not as an investment, then why do they expect to make a profit on their "lending", rather than provide it at cost?
    29 Jan 2012, 03:24 PM Reply Like
  • bob adamson
    , contributor
    Comments (4555) | Send Message
     
    Three Cheese Fondue -

     

    I don't understand your question. The ECB functions as the central bank for the EU and especially the Eurozone countries. As such it has over the past couple of years been helping to stabilize the borrowing costs of member States as part of a broader effort by the member States and EU and Eurozone central institutions to prevent certain States (Greece, Ireland, Portugal, Spain, Italy etc.) from being priced out of the sovereign debt market. The ECB in effect is paying above market price for that debt so that the countries in question can continue to borrow at below what otherwise be the market price.
    29 Jan 2012, 04:01 PM Reply Like
  • untrusting investor
    , contributor
    Comments (9923) | Send Message
     
    Bob,
    Doesn't make sense. If in fact the ECB, IMF, EU are the ones in control of the process of Greek restructuring, then it only makes sense that they should be perhaps be the lead participants in "haircuts" of Greek debt and getting Greek debt to sustainable levels of debt to GDP.

     

    As it stands now supranationals are just further roadblocks in the process, assuming the objective is to get Greek debt to GDP to some type of sustainable level. It basically matters not whether the loans are investments or lender of last resort functions.

     

    Even if PSI take 100% haircuts, then Greek remaining debt to supranationals + the upcoming 130 billion new euro bailout will still leave Greece realistically not much further ahead than they are right now, at least from a debt to GDP level anyway.

     

    Greece will not be able to access any private market borrowing for a long long time yet to come, at any type of reasonable interest rates, under current restructuring plans. In short, Greece will be a ward of the EU for many many years to come unless they bite the bullet and literally exit the EU, totally default on all debt, and return to their own currency. Such would be very very painful, but perhaps remaining a ward of the EU may well be almost as painful, unless the EU and supranationals agree to somehow almost permanently subsidize Greece with tens of billions in annual subsidies.
    29 Jan 2012, 04:36 PM Reply Like
  • Three Cheese Fondue
    , contributor
    Comments (592) | Send Message
     
    When the ECB buys EZ state debt it buys it (slightly) above market (of course because otherwise there would be less "bid" in the market) but nonetheless deeply discounted compared to where it was trading in the past. The market price reflects the market's uncertainty as regards whether the principal will be repaid at maturity. The ECB has no such qualms because it is *special" and doesn't do haircuts.
    Meanwhile (as far as I am aware) they receive the coupons at the prescribed invervals.

     

    That's what I call making a profit without any of the risk.
    Profit is supposed to be the return on risk (classic economics definition). I see the profit ("we expect face value at maturity regardless of what we paid via the SMP"), but no risk.

     

    See here: http://bit.ly/zTCxFL
    29 Jan 2012, 05:23 PM Reply Like
  • bob adamson
    , contributor
    Comments (4555) | Send Message
     
    T C F -

     

    I can make the counter argument to the one you have just made. The ECB is essentially stabilizing the market for the sovereign debt of the member States and to do that actually acts as a countervailing weight to the private banks and hedged funds that invest in sovereign debt for investment purposes. In other words, to perform its primary function (stabilize the market) the ECB must buy and sell sovereign debt at a potential loss and, in particular, can not dump these bonds when their quality of risk materially deteriorates. Sure the generate some interest income but the propensity for significant loss is much greater over time in a market like that over the past three years (a market they can't abandon and, in fact, one that they must become evermore committed to).

     

    Why does the ECB expose itself to such potential loss for which there is little chance of commensurate reward? Because it is a vital interest of the EU and its member States that there not be an uncontrolled breakdown in the monetary and financial system within the EU and to that end they have mandated the ECB to incur such exposure in order to promote stability of the system despite the potential cost.

     

    Why doesn't the ECB itself stand first in line to take a haircut? The EU member States have not so mandated the ECB and are unlikely to do so unless and until a formula to deal with excessive sovereign debt obligations of Portugal, Ireland etc. has also been established. Remember as well that one of the chief functions of the ECB is to provide reasonable assistance to the EU private sector banks to prevent a credit crunch - thus, while those private banks may divest themselves of sovereign debt where this is deemed by those banks to be in their best commercial interests, it is precisely at such times that the ECB must load up on sovereign debt and on debt of private banks facing liquidity issues. In other words, the ECB is left as the lender of last resort and holder of a devaluing assets. In short, while the private banks are to take their haircut now, the ECB stands to
    (a) incur great expense performing TARP like functions for private banks that must write off the value of their haircuts, and
    (b) continue to hold a large portfolio of largely worthless sovereign debt.
    29 Jan 2012, 10:02 PM Reply Like
  • Peter Tchir
    , contributor
    Comments (1260) | Send Message
     
    so the "intent" of why they bought it determines how they should get treated? and they bought it to "prevent default"? what exactly do you call 50% principal write-down?
    30 Jan 2012, 08:57 AM Reply Like
  • bob adamson
    , contributor
    Comments (4555) | Send Message
     
    Peter -

     

    It's not a question of 'intent' but rather of the function that the ECB is playing throughout. The ECB is supporting the EU country sovereign debt market as a central bank and will presumably write down the losses that entails in due course. While the ECB may elect to participate in the Greek haircut exercise to a limited extent over the next few days to facilitate a settlement between Greece and Greece's private sector creditors, this is simply not an opportune time for the ECB to execute a general write-down of its EU related sovereign debt holdings.
    30 Jan 2012, 11:08 AM Reply Like
  • Three Cheese Fondue
    , contributor
    Comments (592) | Send Message
     
    Bob say a lot but the only point you make pertinent to the discussion is that you claim "the ECB must buy and sell sovereign debt at a potential loss".

     

    I'm sorry but you appear not to have read what I said above, viz the ECB expects par value at maturity so I repeat, where is the risk, and where is the loss?
    30 Jan 2012, 01:05 PM Reply Like
  • bob adamson
    , contributor
    Comments (4555) | Send Message
     
    T C F -

     

    You don't see a negotiating stance here on the part of the ECB? A stance that serves its interests at this point in time given the role it serves on behalf of the governments and financial system of the Eurozone?

     

    There is absolutely no reason why the ECB wants to force the issue of write-downs of the sovereign debt of three or more peripheral EU member States into immediate issue now and that would be exactly what would result if it started piece-meal accepting haircuts on any of its sovereign debt holdings.
    30 Jan 2012, 03:20 PM Reply Like
  • Three Cheese Fondue
    , contributor
    Comments (592) | Send Message
     
    Bob, respectfully, you are muddying the waters (still).
    The issues are:
    a) does the ECB expect to make a profit on its purchases
    b) does the ECB take any risks when it makes its purchases

     

    All this other stuff you are talking about (negotiating, forcing issues, whys, wherefores, serving interests, blah blah blah) is not pertinent.

     

    So, to make it clear, the answers to the two questions above are:

     

    a) yes, because they expect face value at maturity
    b) no, because they expect face value at maturity

     

    Please, if we are to continue this discussion, keep to the topic at hand, which is, represented by a) and b) above. Otherwise my friend we are just wasting our time!
    30 Jan 2012, 05:20 PM Reply Like
  • bob adamson
    , contributor
    Comments (4555) | Send Message
     
    T C F -

     

    Far be it from me to want to waste your time!

     

    My answer to the first of your questions is 'no' and to the second 'yes' (i.e. the opposite to your answers). In saying this I fully acknowledge that the ECB continues to assert that the bonds it holds are all to be redeemed by the issuing countries at full face value (which, if true, would support your position and answers), however, I would argue that this is simply the way that the ECB
    (a) justifies the purchase of these bonds in circumstances that, while vitally needed at present in order to stabilize the market for the sovereign debt of EU countries, would otherwise be outside the current stated mandate of the ECB, and
    (b) delays the need for a policy accepted by requisite EU authorities for the discounting or restructuring of the sovereign debt outstanding by each of several EU member States.

     

    In short, the time and circumstances are not right for the ECB to write down its sovereign debt holdings and so it continues to report these at face value so that it can continue work assisting in the stabilization of the sovereign debt market (a market that would become further unstabilized if the ECB took ad hoc haircuts at present).
    30 Jan 2012, 06:24 PM Reply Like
  • untrusting investor
    , contributor
    Comments (9923) | Send Message
     
    Bob,
    But isn't that the problem? It is never an opportune time to write-off bad debt. It is never an opportune time to reduce government spending (thus reducing growth), and it is never a good time to cause reductions in citizen standards of living by raising taxes.

     

    If not now, then when? The US has been doing the same thing for decades now. Japan even more so.
    31 Jan 2012, 04:43 AM Reply Like
  • bob adamson
    , contributor
    Comments (4555) | Send Message
     
    U T -

     

    Fair question.

     

    Arguably, while there is never "an opportune time", there are inopportune times. There are also the questions concerning the pace and manner by which debt is to be written off.

     

    For example, let's assume that in 2007-8 the US investment banking industry was forced to face the music in remorseless fashion. Would the ensuing credit crunch have ended neatly with the fall of 5 or so leading investment banks or would the ripple effect not also have extended and brought down most commercial banks, companies such as GM, GE etc. with a significant consumer credit granting component and then commerce and government revenues generally?
    31 Jan 2012, 11:23 AM Reply Like
  • Three Cheese Fondue
    , contributor
    Comments (592) | Send Message
     
    Okay Bob, it appears you still believe the ECB does *not* expect to make a profit on its holdings of GGBs. So perhaps the link below will help.

     

    http://nyti.ms/z3CLea
    31 Jan 2012, 04:21 PM Reply Like
  • bob adamson
    , contributor
    Comments (4555) | Send Message
     
    T C F -

     

    I've described in my earlier comments that the ECB is engaged in a bit of sophistry (i.e. by insisting that its sovereign debt holdings be accorded face value for accounting purposes) for reasons that those comments attempt to detail in brief. In turn, the PSI negotiators are trying to turn that sophistry to their own advantage by now asserting that the ECB should itself take a haircut on its Greek holdings in order to help close the impending deal between the PSI and Greece.

     

    It may well be that the ECB will take a small haircut (i.e. one that doesn't set an unsupportable precedent when the issue of Portuguese, Irish, etc. sovereign debt comes to the fore) but, in doing so, strong assertions would be made that the Greek case is unique in several important ways.

     

    In short, I'm sticking to my argument.
    31 Jan 2012, 05:11 PM Reply Like
  • Jason Tillberg
    , contributor
    Comments (1237) | Send Message
     
    We're all waiting for the Great Pumpkin.
    28 Jan 2012, 05:46 PM Reply Like
  • WMARKW
    , contributor
    Comments (10234) | Send Message
     
    "if strong growth returns."

     

    Well that impossibility is 100% assured as far as Greece is concerned. What in the world would/could possibly change the course for Greece. They are the lead pawn in a Chess Game, the prize of which is EU political unification.
    28 Jan 2012, 06:07 PM Reply Like
  • DVW
    , contributor
    Comments (157) | Send Message
     
    What constitutes "strong growth"?
    28 Jan 2012, 06:17 PM Reply Like
  • winningtrader
    , contributor
    Comments (2476) | Send Message
     
    I think strong growth in the losses of investors. I don't understand what the fuss is about. The lenders should just forgive 100% of the debt. They are not going to get paid a penny anyway.
    28 Jan 2012, 06:58 PM Reply Like
  • Good Captain
    , contributor
    Comments (454) | Send Message
     
    I like how you think Winning! Can you loan me a million? ;>)
    28 Jan 2012, 07:43 PM Reply Like
  • 2PP
    , contributor
    Comments (349) | Send Message
     
    It's just like here in the US. They might take a haircut to get their finances serviceable, but the unions are still fighting reforms. Without reforms to retirement and pensions there will be no economic recovery.
    Greece will be forced out of the EU in three months or less without ground up reforms.
    28 Jan 2012, 06:40 PM Reply Like
  • Teutonic Knight
    , contributor
    Comments (1998) | Send Message
     
    Please be reminded of the following facts amid all the distraction from the media.

     

    Greece is struggling to lure more loaned money just to pay a fraction of that interest due to bondholders. Think about they haven't started even paying back a dime on their real debts, but still keep asking for and accumulating more, and more debts.
    28 Jan 2012, 07:57 PM Reply Like
  • bob adamson
    , contributor
    Comments (4555) | Send Message
     
    The following two charts illustrate the distribution of Greek sovereign debt and the scope of Greek sovereign debt indebtedness as compared to that of other exposed EU countries.

     

    http://bit.ly/xmyrz9

     

    http://bit.ly/wCuMAS

     

    The following three articles illustrate the limits to austerity and the growing isolation of Germany in the debate about EU fiscal arrangements.

     

    http://bbc.in/Alvvja

     

    http://bit.ly/AoLbnd

     

    http://bit.ly/xcYtN4
    28 Jan 2012, 08:03 PM Reply Like
  • TruffelPig
    , contributor
    Comments (4055) | Send Message
     
    To the Greek anger: they should look North. Albania is their future model. They have sold out. Rien ne vas plus.
    28 Jan 2012, 09:09 PM Reply Like
  • winningtrader
    , contributor
    Comments (2476) | Send Message
     
    Well, I am not sure about the isolation of Germany but if it is true and the PIIGS win the austerity battle, Germany is likely to leave the EUR and that would be the end of the EUR. I personally think that the more likely outcome is that some of the PIIGS end up leaveing the EUR.
    29 Jan 2012, 03:27 AM Reply Like
  • American in Paris
    , contributor
    Comments (5504) | Send Message
     
    I live in Europe. Germany is more powerful today than during the entire course of the post WWII era.

     

    It is very unlikely that Germany will back down. Germany is the de facto the leader of Europe and I fully support their efforts to reform the European economy.

     

    It is very difficult to argue with success and the successful economies support Germany.
    29 Jan 2012, 11:31 AM Reply Like
  • American in Paris
    , contributor
    Comments (5504) | Send Message
     
    No, the Greeks should look at themselves. They knew their society was corrupt and based on clientelism and they did nothing about it until a true crisis hit.
    29 Jan 2012, 11:31 AM Reply Like
  • bob adamson
    , contributor
    Comments (4555) | Send Message
     
    American in Paris -

     

    On the other hand, much of the power of Germany to which you correctly refer derives from its position within the EU. It does not serve Germany's best interests (even if those interests are narrowly defined to disregard the interests of her EU partner States) if Germany now plays the role of Sampson in the Philistine temple.
    29 Jan 2012, 11:58 AM Reply Like
  • Teutonic Knight
    , contributor
    Comments (1998) | Send Message
     
    American in Paris -

     

    I find your use of terms as "success", "leadership" bewildering.

     

    To have let the crisis deteriorate to this stage and extent as all eyes around the world are on the PIIGS is hardly what I would call leadership or success.
    29 Jan 2012, 12:51 PM Reply Like
  • untrusting investor
    , contributor
    Comments (9923) | Send Message
     
    Bob,
    Again some good links. The charts on who owns what Greek debt & loans are quite clear. Yet there is another 130 billion in new loans coming for Greece in order to try and keep Greece going for another 1-2 years. Then reductions depending upon how the haircuts turn out. The IMF/ECB loans look to be almost 50% of the total loans outstanding and no haircuts of these appear to be part of negotiations at this point. If one factors in the new 130 billion, then even with a 100% writeoff of PSI, it looks like total Greek debt will change very little after the new bailout loan of 130 billion. And then almost all of the debt will be owed to EU, IMF, ECB. None of these supranational lenders seem to be willing to take any losses whatsoever. So it appears Greece is "fried" no matter what.

     

    Either Greece forces the EU, IMF, ECB to take 50-75% haircuts on all supranational debt. About 90 +55 + new 130 = 275 billion and truly get debt down to manageable levels. Doubt that supranationals would agree to that, especially the 130 they have not even dispersed yet. Or perhaps Greece really is better to leave the EU and default on 100% of the debt, after getting the 130 billion of course.
    29 Jan 2012, 01:34 PM Reply Like
  • Teutonic Knight
    , contributor
    Comments (1998) | Send Message
     
    bob,

     

    Thanks for these links that educated me. I am intrigued by the animated discussions of yourself and some others here.

     

    I am ignorant in financial matters but please entertain one related stupid question for the sake of my curiosity. Here in the United States I understand that there is a constant paper shuffle in downtown DC between Chairman Ben and Secretary Tim. The Treasury Department prints money and auction notes, bill, bonds when the Federal Reserve is among one of the buyers of those.

     

    In the EU, however, I presume that there is no equivalent 'Treasury Department' and there is no ECB Bond (correct me if I'm wrong because I read that Chancellor Merkel is still against it). Presumably then the ECB prints the euro, and uses it to buy Greek bonds.

     

    But where does the ECB get its money from? Can't print something from nothing, I presume!

     

    Thanks for your attention and your enlightenment in advance.
    TK
    31 Jan 2012, 10:03 AM Reply Like
  • WMARKW
    , contributor
    Comments (10234) | Send Message
     
    I add my 2 cents....T-Knight.
    In the US, the government spends money. The Fed deposits the money into the account of the treasury. The Fed does not have to, but typically sells Treasury debt accordingly. The reality is the Fed sells Treasury debt instruments to supposedly manage interest rates in the market. Since the US government has a printing press, the Fed will basically deposit all the money the government spends - no problem. The US government has the ability to tax all US citizens. That is a tool the US government uses for various reasons, but not to fund the government's spending.

     

    The EU is a monetary union. They do not have a central government with budget/spending authority. They do not have a central taxing authority. The ECB, thus, cannot do the same things the US government can do re: money printing. There are lots of ways for them to "create" money, for example, enter into a swap agreement with the US Fed where they borrow dollars from the Fed and agree to pay them back later. But because there is no central budget authority, or taxing authority, the members of the EU are like sovereign states in the USA. They are each responsible for their own "state" budgets, spending and taxing, and their own balance sheets.

     

    The EU is attempting to use (IMHO) the financial crises to ultimately create the political union that will make the EU states subservient to the "soon to be" unified European government. "Never let a good crisis go to waste".
    31 Jan 2012, 11:20 AM Reply Like
  • Teutonic Knight
    , contributor
    Comments (1998) | Send Message
     
    WMARKW

     

    Thanks! That more than clarifies it.

     

    Unification for the sake of peace and prosperity is a noble cause. The last time Europe was that unified as I recall was under Trajan, Hadrian, and Diocletian, by force though, and Germany was never conquered.

     

    I wish them the best of luck!

     

    TK
    31 Jan 2012, 11:56 AM Reply Like
  • Russ Winter
    , contributor
    Comments (648) | Send Message
     
    If the details are accurate, this is absurdly inadequate without the ECB, EU and IMF being haircutted too. The whole burden is going to private holders, and now they know the formula for the rest of Europe, SUBORDINATION. This is a horrible approach.

     

    Greece debt is nearly 160 percent of the country's annual economic output this year and 187% in 2013. Private creditors hold around €206 billion of Greek debt. Assuming a participation rate in the debt swap of 80%, a 50% writedown to private holders would cut Greece’s debt by around €80 billion, or 35% of GDP, a spit in the bucket, leaving it still at 125% and climbing.

     

    The official holders like the ECB and IMF get a free pass, and with the official holders then holding half the new par value debt. With the private debt subordinated to the ECB, and EU, and IMF who are prepared to shell out more (if they can run Greece's budget), this subordinates the private holders into an even bigger hole. Further the private debtholders get a tiny 3.75% coupon on the new 50% markdown.

     

    It is hard to imagine this trading well at all, in fact even half the new par bonds would be a real stretch. Greece or for that matter any other stressed European nation are going to struggle getting new private investment at all with the operating theme being constant subordination to official holders. Since this is no solution, why would any IMF nation step up?

     

    http://bit.ly/AFtcKV
    28 Jan 2012, 08:51 PM Reply Like
  • winningtrader
    , contributor
    Comments (2476) | Send Message
     
    I think all is good with the new bonds but they are making a small mistake. They should have them as 0 coupon 10 year bonds. This way Greece will not have to default on them for 10 years. If the coupon is 3.75%, or any positive number, Greece will have to default in 1 year!
    29 Jan 2012, 03:32 AM Reply Like
  • American in Paris
    , contributor
    Comments (5504) | Send Message
     
    IMF support is not about Greece, it is about Spain and Italy.
    29 Jan 2012, 11:31 AM Reply Like
  • Peter Tchir
    , contributor
    Comments (1260) | Send Message
     
    And how many bonds are pledged to back any agreement the dynamic duo of lobbyists agree to? Would any real business put their hands in the hands of these two? They have no experience in this. Any agreement will be symbolic
    28 Jan 2012, 10:46 PM Reply Like
  • Bill S. Friend
    , contributor
    Comments (711) | Send Message
     
    Sell on the news.
    29 Jan 2012, 04:30 AM Reply Like
  • 7footMoose
    , contributor
    Comments (2266) | Send Message
     
    The deal is a non-issue. If Greece had no debt what so ever they could not pay current expenses unless there is transformational reform which would require a 180 degree change in the behavior of all Greek citizens. It will not happen.
    29 Jan 2012, 05:44 AM Reply Like
  • WMARKW
    , contributor
    Comments (10234) | Send Message
     
    7foot...Amen. They are the poster child for the new normal. Virtually everyone today is looking for someone else to solve the problem and take away their potential "pain" experience. Choices and Consequences......that's what my parents taught me.
    29 Jan 2012, 09:39 AM Reply Like
  • 7footMoose
    , contributor
    Comments (2266) | Send Message
     
    With a good helping of personal responsibility I would guess.
    29 Jan 2012, 10:10 AM Reply Like
  • redwoodhouse
    , contributor
    Comments (8) | Send Message
     
    If Germany does not loan money to Greece then Greece cannot import stuff from Germany thus the German Economic mirage goes up in smoke. Trade (free) should be Germany sells real stuff to Greece and Greece sells real stuff back to Germany. That keeps the system in balance. For over 30 years the world has run with one side manufacturing and selling (Germany/China) to the other side (Greece/US) but the other side only borrows money to support consumption. There is no functional way for the borrower to pay back the lender with this type of system. At some point it will blow up. That day is getting closer.
    29 Jan 2012, 12:47 PM Reply Like
  • WMARKW
    , contributor
    Comments (10234) | Send Message
     
    Redwood....you are right. Every country wants to have a trade advantage, but in reality, that is impossible. Someone in the world has to be the low cost labor market. Someone has the be the low cost producer. Everyone can't be the low cost producer. And, as time goes by, that position will be won and lost by one country after another. Success leads to failure. Failure to success. If Greece responds....maybe in a generation it will be in better shape.
    29 Jan 2012, 01:47 PM Reply Like
  • marketman54
    , contributor
    Comments (823) | Send Message
     
    Hey, we almost have a deal where we won't be able to pay you back. Even though you lent me money four or five times so I could pay you back the money that you lent to me, now I need you to lend me more money and I am only gonna pay you back $0.30 on the dollar for all the money you lent to me prior to this.

     

    WOW, how stupid are the Germans and the French?? Can they possibly have enough money to continue to bail out or take cuts from Spain, Portugal, Italy, Ireland, Belgium........especially after the Greeks taught them how to bend over and take $0.30 on the dollar.
    29 Jan 2012, 03:45 PM Reply Like
  • winningtrader
    , contributor
    Comments (2476) | Send Message
     
    0.30 on the dollar .... good luck. This is in new bonds, not in cash. The new bonds (if they get issued) are also going to default a bit later and will be again restructured.
    29 Jan 2012, 04:21 PM Reply Like
  • The Geoffster
    , contributor
    Comments (4009) | Send Message
     
    It's all about keeping Greece on life support, but the markets have moved on to Italy, Spain and Portugal. Greece is a dead man walking. The other PIIGS are living on borrowed time as well. The CBs are doing what they were designed to do. They intend to be the last man standing. The game is over. It has already been lost. Move on.
    29 Jan 2012, 08:32 PM Reply Like
  • skyl4rk
    , contributor
    Comments (6) | Send Message
     
    A weak Euro helps German export companies. A weak Euro means local German companies have an advantage against exports in the home market. All the pain will be felt south of the Alps. Win Win for Germany as long as the crisis is not solved.

     

    If there is a split, it will be the countries north of the Alps who leave the Euro (not the EU) for a new Mark. All of eastern Europe will follow. The Mediterranean countries will be left holding the bag.
    29 Jan 2012, 11:15 PM Reply Like
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