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Ex-Goldman Greek Operative Announces Bond Issue To Be Delayed Until New Austerity Digested, IMF To "Technically" Support Implementation Of Greek Plan
Petros Christodoulou, most famous for having worked previously at Goldman, and now incidentally the head of the Greek Public Debt Management Agency, has told Market News that while he has no comment on the timing or tenor of the new issue (we venture to assume the timing will be in the next two weeks, as after that Greece be bankrupt for real), he is willing to wait and "allow the market time to digest" the announcement of today's austerity measures. (And if these don't work, the next round will promise Greek workers will pay the government for the privilege of having a job.) Of course, the implementation of these measures is subject to a mass rioting contingency, so while the verbal diarrhea out of everyone who is axed in the viable Greece trade continues, actual actions will be few and far between.
The debt chief added, "we will talk to European investors who have seen and analysed the news, and then we will take it from there."
Speculation in the market is that Greece will launch a new 10-year benchmark issue in coming sessions in order to raise funds to meet redemption payments due over the next few months.
There are unsubstantiated market rumours that a 7-year maturity may be in the cards. The 7-year sector is considered popular with central banks and sovereign wealth funds.
And just for everyone's convenience, here is, once again, the run down of Greek funding needs:
Greece has a E8.22 billion redemption due on April 20 and another E8.086 billion payment on May 19, which must be refinanced. It also has sizeable coupon payments in coming months, which total E3.923 billion.
Greece has so far raised E8.0 billion with a new five-year benchmark bond issued via syndication on January 26. It has also raised E2.0 billion in a private placement conducted in December, which was seen as pre-funding for 2010.
In addition, the debt agency has raised E2.8 billion through sales of T-bills with 13-week, 26-week and 52-week maturities, in part to cover a T-bill redemption of E1.51 billion that was due on January 15 and of E1.95 billion redeemed on January 22.
Greece's borrowing programme for 2010 is estimated at E54 billion, considerably less than last year's E66.0 billion.
In the meantime, while both Moody's and Fitch have affirmed their negative outlooks on Greece, both rating agencies can't find enough praise just how wonderful yet more actionless yapping out of Ellada is. And now add the IMF to that list, after the Currency Board expert said that it "welcomes substantial measures by Greece today" and "stands ready to support implementation of the Greek plan (with TECHNICAL assistance)." Whether this means that the IMF's 191 tons of gold (for ~$7 billion) will be sold tomorrow is unclear.
The only voice of reason here seems a little line in the Fitch report which notes that the "debt market access window is closing quite rapidly."
Full Moody's report below, which is preparing its brand new AAAA rating, especially for Greece. Somehow merely talking about austerity measures is now considered sufficient. We fully expect Arnie to come out and say that California will adopt the same austerity as Greece... in 3049. And Moody's VP Sarah Carlson will be first in line to believe any and all promises. Former Moody's employee Deep Shah had no comment as of the time of this posting.
Moody's: Greece's New Austerity Measures Lend Credibility to Fiscal Adjustment Plan
London, 03 March 2010 -- Moody's Investors Service today said that the additional fiscal
measures announced by the Greek government are consistent with Moody's
current A2 rating, with a negative outlook, for Greece's
government bonds. Today Moody's also published an Issuer
Comment, entitled "A Ten-Point Analysis of Greece's
A2 (Neg) Rating", which reiterates the rating agency's
rationale behind Greece's rating and the conditions under which
that rating could change.
"These new measures are a clear manifestation of the government's
resolve to regain control of public finances," says Sarah
Carlson, VP-Senior Analyst in Moody's Sovereign Risk
Group and lead analyst for Greece. In an economic and market environment
that has become increasingly challenging, these measures increase
the probability of debt stabilization provided that they, and the
previously announced policy measures, are fully implemented.
"The onus is on the government to demonstrate that it does not merely
announce ambitious plans, but is also able to deliver on these commitments,"
says Ms. Carlson. "However, Moody's does
not expect Greek public finances to be turned around in a fortnight,"
adds Ms. Carlson, insisting that the Greek government needs
to be given time to allow it to follow through on its plan.
As repeatedly stated by the rating agency, Greece's current
A2 (Neg) rating balances two factors: on the one hand, Moody's
assessment that the government faces limited short-term liquidity
risk; on the other, Moody's concern about the long-term
erosion in Greece's creditworthiness given its need to deleverage
the economy (starting with the public sector) in a context of weak competitiveness
and slow regional growth.
Going forward, maintaining the government bond rating at A2 will,
according to Moody's, be contingent upon the government executing
its fiscal austerity programme and delivering the quantum of deficit reduction
that has been promised. Signs that deficit reductions will fall
short of what has been promised would likely lead to downgrades --
as suggested by the negative outlook -- in proportion with the shortfall.
Moody's last rating action on Greece was implemented on 22 December
2009, when the rating agency downgraded Greece's government
bond ratings to A2 from A1, with a negative outlook.
The principal methodology used in rating the government of Greece is Moody's
Sovereign Bond Methodology, published in September 2008, which
can be found at www.moodys.com in the Rating Methodologies
sub-directory under the Research & Ratings tab. Other
methodologies and factors that may have been considered in the process
of rating this issuer can also be found in the Rating Methodologies sub-directory
on the Moody's website.
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Yes, implementation of austerity is different than jabbering about it. In fact, I'd say there tends to be a negative correlation between the direction of jabber and action, in more than just Greece.
Agreed, more jabber jawing with hopes that investors will actually believe the load of rubbish to keep rates low (that is IF they can even put lipstick on the PIIG and sell it).
Rules for Fools
Mr. "T" on Public Speaking. "Quit your Jibber Jabber fool and then shut your dang pie hole."
http://www.youtube.com/watch?v=Eisa5AZ20W0
Like everyone says it all depends on the Greek people.
Ifo chief Sinn wants to throw Greece out of the euro areahttp://translate.google.de/translate?js=y&prev=_t&hl=de&ie=UTF-8&layout=1&eotf=1&u=http://www.spiegel.de/wirtschaft/soziales/0,1518,681593,00.html&sl=de&tl=en
My memoirs dated March 3, 2010 will be titled "At the crest of the tidal wave."
If something is shoved down your throat, it is fair to say you "digested" it?
Depends, if the Greece people throw it up. My guess is even with a spoonful of sugar, the nuclear isotope filled medicine (and rightfully so) won't go down.
Waiting for the gratuitous fake barf blasting out of the mouth which is the most likely response by the Greek people.
I'd like to see how much this 30 percent wage cut impacts deposits at Greek banks and how the outflows are impacted. My guess is some greeks will continue taking money out, just not adhering to the 30 percent wage cut....of course they'll be followed out by the Greek equivalent of the swat team, and the action will be a robbery, but hey they have insurance don't they? Hopefully not AIG.
A wild thought. Could it ever get so bad that greek banks might be WISHING they get robbed so the insurance recapitalizes them? hmm.
Demonstrations will be big. C'mon greece, we need to put a name to the title of who is 'The Hero for the Gyro'.
You are going to buy Greek debt based on what......give me a break. Unless the EU or Germany will make it good.....it would be insanity. But remember street isn't buying it for it's own account only to dish off on some dumb fund idiot whose managing money not his own and is relying on a credit rating good enough so he doesn't get sued by the funds rightful owners.
my memoirs from March 3rd, 2010 are entitled
'25 days till World War III'
-MB
GREECE-CHARITY/
ATHENS, March 3 (Reuters) - The Greek parliament urged citizens on Wednesday to make charity contributions into a national fund in support of government efforts to deal with a fiscal crisis.
Parliament will open a bank account in which native and expat Greeks can make donations, Parliament Speaker Filippos Petsalnikos said.
"There aren't just tax dodgers in Greece," Petsalnikos said. "An overwhelming majority of citizens have a sense of honour, principles and love for their fatherland".
The initiative for the "Support Fund for Greece" comes after the government announced an additional 4.8 billion euro ($6.55 billion) austerity package, including unpopular measures such as consumption tax increases and civil service pay cuts, to put its derailed finances back on track. (Reporting by Harry Papachristou; Editing by Jon Boyle)
Clearly we need an account like this for the
bank executives 2010 bonus pool. We could
encourage responsible citizens to voluntarily
donate funds to be used to pay these vital
retention bonuses.
"These new measures are a clear manifestation of the government's resolve to regain control of public finances," says Sarah Carlson, VP-Senior Analyst in Moody's Sovereign Risk Group and lead analyst for Greece.
The clear manifestation of their resolve will be the lengths they go to to enforce these new measures.
Blah blah blah.. I get paid too much to do things that 22 year olds with a finance calculator could do (ruin).
well Germany says "let em sell bonds " "no bailout from us" merkel bloomberg
article below
http://www.bloomberg.com/apps/news?pid=20601087&sid=az5SbvZ.sR9A&pos=4
Release the anarchists!
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