Greek 2 Year Bond Yield Passes 20%

Tyler Durden's picture

Following the S&P news, oddly enough, one is not seeing a flight to safety away from US paper and into Greek. In fact, observing the absolutely record 20% yield print on the 2 Year Greek bond, one may be excused to speculate that the inverse is happening. Also, with the cash price of the 2 Year now at 20% and the prices of longer duration bonds in the 60s, there is now no reason to actually restructure the country: bonds have it pretty much fully priced in. After all, the Santorini liquidation value should be worth at least 20-30 cents on the bond dollar, er, euro.

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IQ 145's picture

 Shocked! Shocked I say !

firstdivision's picture

"One day Alice, to the moon"!

tallen's picture

How long till it passes 100% Hahaha.

silvertrain's picture

Just wait a second and Moody's will make a statement that all is ok......

Drag Racer's picture

I wonder what I could get if I issued bonds....doh

Dick Darlington's picture

Also, with the cash price of the 2 Year now at 20% and the prices of longer duration bonds in the 60s, there is now no reason to actually restructure the country: bonds have it pretty much fully priced in.


Yield on the 2yr is @ 20% but cash price is not.

Thomas's picture

Just BTFDs. (On the other hand, it could be TEOTWAWKI)

CrashisOptimistic's picture


There is NO WAY IN HELL Germany would talk about haircuts or restructuring in Greece unless Merkel had FINALLY been successful in forcing her banks to divest themselves of Greek SWAP exposure.  If she has . . . if there are no Greek Swap holdings at German banks, then fuck the EU (she's losing elections, she has to maneuver) and let Greece default.

Oh wait, that means French banks that didn't swap divest get crushed?  Angela will just shrug and offer to help France, at 8% over prime.

Printfaster's picture

I wonder how the Parthenon would look displayed inside the Pergamon?

Josephine29's picture

I saw some of the maths explained earlier for the Greek government bond which expires in 3 years time.

Where real relief comes in the shorter term is if the same system is applied to bonds which are to be renewed sooner than 2020. If we look at one of these the 4.5% bond expiring in May 2014 then Greece’s financial position in 2014 would be improved by not repaying it until 2020 by some 8.5 billion Euros.


The catch is what would happen to investors in these bonds. The price of the bond expiring in 2014 closed at 68.15 on Friday. This is quite chilling when you consider that not only does Greece promise you 100 in May 2014 but she also has the EU/ECB/IMF backing her up. The markets are saying, we don’t believe you! An investors buying now would expect 100 in May 2014 as the capital component of the 19% redemption yield. Moving the return of the prinicipal to 2020 would accordingly be quite a punishment compared with getting it in 2014.


So a bond which pays you back 100 in 3 years has a price of 68 and falling...

RagnarDanneskjold's picture

S&P just rang the bell. The dollar move is exhausted.

writingsonthewall's picture

Round and round the money goes...where it stops...nobody knows....



Hephasteus's picture

The bond market.

Did you read about those icelanders not paying nothing back. Putting bankers in jail and kicking McDonald's in the nut sack.

High Plains Drifter's picture

tell that the young men dressed in black.............

Sudden Debt's picture

2 million insurrance to lend 10 million!! HAHAHAHA







magpie's picture

It's been a while, but Celtic / Gaul barbarians looted Greece once before as well.

Bam_Man's picture

The market has only administered "haircuts" to those not willing to hold to maturity.

The Greek govt. still needs to re-structure to lower their actual coupon payments.

topcallingtroll's picture

Good point.

Or maybe scare the bond market lower and buy back a few.

I think the greeks will hold out for a 50 percent coupon reduction and a maturity extension to...oh...let's say infinity.

CrashisOptimistic's picture

BTW Tyler, Santorini is the site of one of the largest volcano explosions in the history of mankind.  Selling it would be very good business for Greece, on the assumption that it's due.  

You could even generate more cash by selling the surrounding islands, which would be wiped out by the tsunami.

johngaltfla's picture

So much for the PIIGS crisis being resolved. I could have sworn I heard 1000 analysts on the CNBC Informercial Network swearing it was no big deal.

slewie the pi-rat's picture

haircut almost over.  greek bondholders emerge from chair with telly savalas look. may get waxed during pedi.

huckman's picture

Its called a global time deposit.

disabledvet's picture

Flight to safety in....treasuries?...on downgrade of USA?  "At least gold is doing well."  As Irwin "Fletch" Fletcher said when confronted by the police chief pointing a gun at his head, "thank God, the police have arrived."

Rodent Freikorps's picture

What is amazing is just what amazing poofters Greeks have be that Going Greek does not mean defaulting on debt.

blunderdog's picture

20% on the 2 year?  That's a helluva yield.  I'm callin' my broker.

topcallingtroll's picture


Friends dont let friends buy greek bonds.

blunderdog's picture

Well, what else I'ma do after I sold all my silver at $31?

Rodent Freikorps's picture

.22 magnum rounds are underpriced.

blunderdog's picture

I live in the city.  Only rounds I could possibly be interested in would be high-caliber, low-velocity.

And I couldn't use many of them.