While the Athens stock Exchange is quite today, the fact that the 10 year bond continues to fall means that the international investment community is finally starting to get the message.
The message being that, the only way Greece can find its way out of this mess is by restructuring its debt.
However, as pointed out by Steven Major, global head of fixed income research at HSBC, a haircut is also in the cards:
“One way to do this is to compare restructurings for emerging market sovereigns. Based on the defaults over the last 12 years the average long-term recovery rate is close to 70 per cent. Ultra-long Greek bonds currently trade at a price below this.”