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Greece Staring into the Abyss: Yields Soaring!
It’s almost time for monetary authorities in Europe to give Greece and its debt holders a ‘coup de grace’.
Yields on Greek government bonds are soaring, with the 2-year yielding over 20% and the 10-year firmly on its way to 15 percent!
Meanwhile, pundits are pushing for a restructuring of the Greek debt, while few analysts are fearing a chain reaction.
Via Bloomberg:
“By restructuring Greek debt you also may precipitate a
crisis in Spain,” David Watts, a strategist at CreditSights Inc. in
London, said in a telephone interview. “At that point it doesn’t matter
how much you’ve saved by restructuring Greece, the fallout from Spain is
much greater. The issue comes back to not knowing the ultimate cost.”
Who will be paying up for all this mess? Germany and France…
“From the French and German perspective it’s not clear
that the benefits of restructuring Greece outweigh the costs,”
CreditSights’ Watts said. “You have to take into account that German and
French banks are among the most exposed to Greece.”
So there you have it: the German and French banks are in deep Greek doo-doo. Combined, they have a Greek debt exposure of over €80 billion estimastes show, which would lead to more financial rescue injections from the ECB & Co. in case Greece went belly-up.
Now this is what they call being ‘stuck-in-the-mud’.
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According to the Frankfarter Allgemeine Zeitung (link below, sorry only auf Deutsch) German banks have only 16 Billion EUR worth of Greek Govt bonds on their books - hardly catastrophic. Benocide or Tricheur could print that in a week. The author points out that of more concern are the CDS which will become payable on the restructured or defaulted bonds - noone knows how many there are and who is liable for them.
http://www.faz.net/s/Rub3ADB8A210E754E748F42960CC7349BDF/Doc~E53DE2AA59A...
The author points out that of more concern are the CDS which will become payable on the restructured or defaulted bonds - noone knows how many there are and who is liable for them.
Sounds like a typical unregulated derivative. Good thing in Amarica we have the CFTC on the job.
The Germans will pay for it! Lets party with Paul Volker like its 1980! Gimme some o' dat 20% return!
On second thought, maybe I'll get some bullion.
Q: what do Berkshire Hathaway Shares and gold have in common.
A: They are non eadible and give no dividend.
Q: What dont Berkshire Hathaway and gold have in common.
A: Gold gave a better return on investment that BH for the last 11 years.
wonder if there is a bunch of baklava
down the bottom of the abyss
Greece is staring into ....
End game is fast approaching kids. Just like 2008. Once the dominos start to fall there will be no way to stop the process. Greece, Portugal, Spain, ect. Just a question of who's stuck holding the bag. Euro was a flawed currency from the start. Put a silver nail through it's heart and end the madness.
"Brady Bonds" for Europe is an interesting concept to say the least. "I look forward to the collateral." In the meantime: "can Greece default at all?" Wouldn't they have done so already if they could have? "No one has ever left the EU." They need friends--I see two obvious ones from where I sit: Ireland and Portugal. Hence "the importance of Espana." They're truly "too big to fail"--because it will result in the exit of the "so called PIGS" and the annihilation of the "of the Franco/German Bank, by the Franco/German Bank and for the Franco/German Bank" so called "Eurpean Union." Clearly the "phoney war" I called over a year ago is now over. "The name of the city is Misrata" in case you're wondering.
Greece's End Game: The Euro (Brady) Bond:
http://themeanoldinvestor.blogspot.com/2011/04/greece-us-money-supply-an...
I don't think that it is a matter of wanting or not wanting to help Greece. People don't have a choice anymore for what concerns economic matters, so public opinion is only relevant on sheeple level. Bankers and elitist are going to decide and I don't think they will be bothered if EU middle class bond and asset holders are slashed further by their decisions.
If Greece ,All PIGS,ALL EU Nations still act like a state of ECB, It will......!
But the one thing Which the whole world don't understand is :
Why All Pigs and EU nation act like : JUST A STATE OF ECB?
Are Greece, Ireland, Portugal ,Spain, Italy,......German, France not a independent and sovereign country ?
Everyone in this world understand now:
The European Union and The European Monetary Union- ECB are totally different thing !!!
If Joining a Monetary Union- ECB does much more harm than leave it ?
Why stay within it?
If ECB cares much more about Banker group than EU Nations and all EU people?
and never responsible of EU Nations and EU people?
Why stay within it?
If only there were some collateral left. The Chinese already have Piraeus. Maybe the next 200 years of olive oil output.
Perhaps China would accept Greek and/or Euro gold as collateral, even at a discount. Perhaps it already has.
What BS this all is. It's the Kabuki Dance of Death. The meme here is best represented by a scene from the disaster porn currently making the rounds, especially the one of the tsunami totally destroying an entire village and rolling over villagers trying to run away. Think of the villagers as fiat currency....
"Think of the villagers as fiat currency..."
Yes, they can always print more.
"Yields on Greek government bonds are soaring, with the 2-year yielding over 20% and the 10-year firmly on its way to 15 percent!"
Sounds like just the investment opportunity Leo would recommend for his big retirement funds!
When these dominoes start to fall, it will get medieval in one quick hurry.
I suspect that any contributions to the ECB from France and Germany carry the rider that those National funds are used to buy Greek debt from respective National debt holders. I would be very surprised if the Germans paid for bank debt from French banks.
... France, on the other hand, would buy any nation's debt because they are such team players and want to see the EU succeed. (I may be wrong on this assumption...)
I suspect the Greeks will default when the French and Germans have shored up their banking systems with their national subsidies laundered through the ECB.
"The Germans have too much to lose by seeing Greece go down the tubes."
Or they know it's better to go back to Year Zero and to build a new (wealthy) society from scratch. Paying for the PIIGS is not something the average German would have agreed to do if his/her opinion had been asked in the 1st place...
NO one is going to subsidize his lazy-ass neighbor forever. Even if that neighbor does occasionally mow your lawn.
Rewarding capital destruction engenders more of it, until real capital is exhausted. Germany is considered to be the financial Schmoo (of Lil' Abner fame) of the EU, infinitely capable of bailing out every profligate EU state. This is magical thinking and will be discredited soon enough.
The Germans have too much to lose by seeing Greece go down the tubes.
Euro = Neo DM
But are they willing to subsidize the south indefinitely? It really pisses most germans off, an eternal annual subsidy to the profligate south.
I think germans are ready to see it end. That 20 percent two year yield turns into a 5 percent ten year yield with the haircut. Massive haircuts for everyone. Then just like in the USA, the newly rehabilitated debtor gets access to fresh loans. Stopping sovereign contagion is the big problem, restructuring Greek debt is already priced in.
how much? "where's the beef" mofo. "the problem is there is no money"--hence "soaring rates." the "wealth annihilation" of Fukushima, uprisings throughout the entirety of the Middle East and "throwing the Americans under the bus in Libya"--has thrown quite a spanner in the works. needless to say "someone has to pay for that Greek defense budget." Apparently 150 billion in German euros wasn't enough. Let me guess: "the check's in the mail."
I think the question is "the band-aid has to come off". Is it better to pull it off slowly bit by bit, or is it better to rip it off quickly all at once?
Why does this financial spamster have publication rights on ZH?
My wife once asked a similar question like this.
"Why do you have a scretairy with such big tits?"
I answered her: She doesn't have big tits. She has short arms and a small head, and I hired her because I had pity with her.
biggest tits on ZH: cleanclog, muir, pladizow (not necessarily in that order)
worthy runner up: texdenim
smallest: chumabawumba
I got a question.
Why do Belgians like black and white striped shirts?
we like everything. We just make it all look good.
Yeah Belgians are mostly easy going and love everything. strangely the Belgians are still mostly Americaphiles, at least the older ones, and some of the biggest supporters of NATO.
Within the first hour of Baltic states joining NATO there were Belgian jets patrolling right up against the Russian border. They volunteered to go first.
We love walloons and flemish too. Much more fun than the french.
Just be sure to help out an old friend when we need it. We may need it soon!
Actually everybody I knew when I grew up where massive supporters of America. Still are.
I also have quite a lot of family living in the US.
After WOII, it where all the big US companies that made us great.
My own father worked for all the big US companies back then. IBM, PHILIPS, NCR, UNISYS...
Philips is dutch.
No wonder your neighbors don't like you.