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Greek PM Says "Won't Come To Bond Market Now", Claims Greece Has Been "Undervalued"
Just headlines for now, but this likely means the Greek bond roadshow has been cancelled as not even the world's best underwriters were able to generate enough interest for the imminent disaster that will be Greek bonds. One can only imagine how much horror must have gotten uncovered during the roadshow process if investors, even with the backstop of the ECB's endless guarantees, have said "no mas." Luckily, Moody's earlier gave a provisional rating of AAA to the European Financial Stability Fund (EFSF), which it now appears will be used imminently, first for Greece, then Ireland, and then everyone else who comes to the trough. If this news doesn't send the S&P over 1,220, nothing will.
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LMAO
Agreed! How can anyone seriously use Greece and "Value" in the same sentence with a straight face? I just wish that the Greeks themselves would get on with the job and bring an end to the farce known as the Greek Govt.
Bring on the popcorn!
GO LONG OLIVES AND GOAT MEAT!!!
Tyler, is that 1220 call .... by the end of the day? ;)
Don't knock olives and goat meat. Yum.
this crisis is getting tasty ...
Thanks for the laugh, Sudden Debt, I needed that.
Dont worry the German tax payer aka. Me(and other fools) will bail them out, if we want to or not that is, for every Pfenning that the government does not tax me I am buying Gold
The people you are really bailing out are the German banks and pension funds, who would be in significant trouble if the Greek sovereign did the sensible thing and restructured its debt. Oh, and the French banks and pension funds too of course. Lending (not granting) Greece even more money, so that it can run its debt up to 150% of GDP, in exchange for no restructuring is a remarkably harsh "bailout" - harsh on Greece, that is, as opposed to Deutsche Bank and SocGen. Fortunately Greece is likely to default anyway once its deficit is narrowed enough.
As a Greek, know I do NOT want German or ANY one else bailing us out, rather I'd prefer the ORIGINAL intent of the Union, ie the IMPOSITION of the German & French fiscal model/economy of the rest of the EU nations. But sadly once France was allowed those ridiculous Maastricht violating budgets for so many years when there was no reason, now France and Germany have no defense/excuse when presented w/Greece's, Spain's, Portugal's problems, etc. Fucked up mess.
Just for EVERYONE'S information, the #1 thing Greeks are protesting out on the streets, is not paycuts etc [though protesting those as well] but the rampant political corruption that Greeks have felt pervades BOTH main parties ove rthe last 15-20yrs, ie, that we Greeks have seen NO TANGIBLE equivalent usage of the EU structural funds to improve our nation, similar to the process undergone by Spain and other nations like Poland. Greeks are KEENLY aware all these years that we got the LARGEST share of EU structurals of any nation. And the funds are just missing, and there's no infrastructure, and many cities smaller have almost entered a state of decay whilst apparently we've ALSO ballooned the debt, and now also cut people's wages/benefits etc. THIS IS THE CONTEXT OF Greek protests, ie, where the fuck is the ~~€100bill of structural funds?
Also, ALL Greeks know the solution is simple, ie, firing 30% of the Governmental workforce/beaurocracy, and ALL Greeks know that the chances of this happening are 0% because any party that does this, right or wrong, will never even win a local election ever again. Like in the US, the same problem the Democrats & Republicans are having, though I must say our public's in a better position as we at least understand what the solution is & should be whilst Americans are knee-deep in Obama & tax-cut bullshit.
The result in Greece, and throught Europe ]and I think possibly, eventually in the US] will be the election of the kind of politicians who aren't necessarily going to do what you think they should do, but will at least look you in the face and tell you what they're going to do, AND THEN ACTUALLY DO IT. Ie .... extremist parties [right wing]. Deutschland Erwache
Ah! But Germany wants you to have the money. It wants to keep you on it's prescribed methodone treatment.
Don't feel guilty about it. So far you've only had the equivalent of 60 days worth of German trade surplus - a surplus that is only sustainable because your woes depress the value of your commonly held currency.
Just think about all the German jobs you'll save by accepting another lot.
Unrelated but...
This guy made me grind my teeth all night:
http://www.bloomberg.com/news/2010-09-20/berkshire-s-munger-says-cash-strapped-should-suck-it-in-not-get-bailout.html
The bond holders not taking a haircut was the single biggest mistake, IMHO, during the bailout phase. The equity holders took a big beating, the bond holders, not so much. Unless it was GM or any other non financial. Can you say 'protection racket' ?
DD, I wish you wouldn't posted that link, now my blood pressure just shot up. I wish him and his partner in crime would both drop dead.
As I understand the EFSF, it would actually have to go to the bond market to raise the bailout funds. Um, besides the governments, would many bond buyers want to purchase a politically and legally untested concept?
And of course, in true Ponzi fashion, can you have bailed out countries actually guaranteeing the EFSF? As more countries participate, that means fewer guarantees.
So silly...
But just to prove that the EU is not a complete disaster and failure, Estonia are due to join Jan 1:
Real GDP -14% in 2009
Debt to GDP low. Budget deficit about 1.7% of GDP (tick that box!)
Unemployment up from 5.5% in '08 to 15% in '09
Unemployment now 18%
Real effective exchange rate 50% higher than Germany
In other words they are likely to enter EMU 55% overvalued.
This explains the recent leg up in the stock market.
Please wake me when Santorini goes on ebay.
I don't know. This is all Greek to me...
Surprise Surprise....
Oh, stop whinning already! Given the small size of the Greek economy, it could be bailed out quite easily, should TPTB choose so.
In fact, fundamentals have NOTHING to do with greek bonds, its all politics. So....
given the market value greek bonds currently have, they could prove a nice long play, should TPTB decide to prop up Greece beyond 2013.
Well ok, if TSHTF before that, the only safe bet is gold. Anything new?
If you ask me, GPap can be better than Prozac. We should market him. Olives, feta and no sideffects PMs :)
Get me Leo K stat!
I'm sensing a dislocation in the market.
As if a million Greeks cried out and were suddenly silenced...
Beware the Trojan Hoax!
Is that where someone pokes a hole in your condom before you use it?
OK. This seems to be the plan, when ZH posts an article about the eminant collapse of Greece or some such calamity, I should long as much in equity as possible.
Seems the worse the news, the better the market performs. At worst, it moves up just a tad.
Good plan?
Good plan, until shit hits the fan overnight and you wake up to a market down >3% before it opens.
I've been here before: dont go all in until they offer an acropolis collectors plate.
But look, somebody's willing to bet that Greece won't default within six months! Almost one third of the bidders for 4.8% six-month paper are real!
Greek T-Bill Auction To See Solid Demand, Yield in Focus
By Nick Skrekas and Emese Bartha
Of DOW JONES NEWSWIRES
ATHENS (Dow Jones)--Greece's issue of 13-week Treasury bills Tuesday looks assured of very solid coverage given the small amount to be auctioned, but the market will be focusing on where yields come in, partly due to a possible spill-over effect from Ireland.
The Greek Public Debt Management Agency said last week it plans to sell EUR300 million of 13-week Treasury bills at an auction Tuesday.
Shortly before the Greek auction, Spain will offer EUR6 billion to EUR7 billion of 12-month and 18-month T-bills. The results of Ireland's EUR1 billion to EUR1.5 billion bond auction, meanwhile, will come out around the same time as the Greek results.
Greece's T-bill sale will be the second leg of what will be frequent forays into the short-term debt market, since the country in September switched to monthly T-bill sales from quarterly auctions, offering 26-week and/or 52-week T-bills on the second Tuesday of the month and 13-week T-bills on the third Tuesday.
"Given the small auction amount, even with non-competitive bids, Greece won't be raising more than EUR480 million. Local banks alone will ensure very solid over-coverage of at least four times the amount," said a head of bond trading at a Greek blue chip bank.
"The word on the street is that the PDMA would like to see the yield come in at or below 4%, but I think it could be as high as 4.15%," he added. The uniform yield at previous 13 week T-bill auction was 4.05%.
Last week, Greece sold EUR1.17 billion in 26-week T-bills and while coverage was healthy the yield came in slightly higher than at the previous auction in July, at 4.82% versus 4.65%.
Giuseppe Maraffino, strategist at Barclays Capital in London, said "I expect the same story as last week, with demand coming mostly from domestic investors."
Referring to Finance Minister Papaconstaniou's comments last week that 30% of last week's demand for the 26-week T-bills came from international investors, Maraffino said this could be the case this time too.
If the T-bill results are weak, there will be rising tension in the Greek T-bill and bond markets, suggesting a lack of confidence in the Greek government even by domestic banks, Maraffino added.
But Athens has more ambitious plans, intending to return to international markets for its borrowing in 2011, even though it is covered for now by the three-year EUR110 billion bailout package agreed on with the European Union and International Monetary Fund in exchange for severe austerity measures and structural reforms.
Greece has received EUR29 billion since the deal was made in May.
Treasury bills, which represent the short end of the yield curve, are mainly bought by local investors, while government bonds target the wider community of international investors.
Gosh, you don't suppose these numbers were fudged?
Greek Budget Deficit Shrinks 32.3%, Exceeding Target (Update1)
By Maria Petrakis
Sept. 20 (Bloomberg) -- Greece’s budget gap shrank 32.3 percent in the first eight months of the year, beating a 26.5 percent target for the period, as cuts in state wages and pensions offset slower-than-forecast increases in revenue.
The deficit, which doesn’t include spending by state-owned institutions and companies, contracted to 14.5 billion euros ($18.5 billion) from 21.4 billion euros a year earlier, according to a statement today from the Finance Ministry in Athens.
Forget Greece, look at all of Europe according to the Pimco Pimp CEO:
“Market measures of risk for peripheral European countries (Greece, Ireland, Portugal and Spain) are at or near danger levels,” El-Erian wrote in an article posted Monday on Pimco’s Web site.
That’s despite “exceptional” support from the European Central Bank, the European Union and the International Monetary Fund, he added.
And through risk, the danger enters EU core and spreads all around until nothing remains..
There is no sane reason why EUR is 30% higher than USD.
That's incredible how you can call a turd a diamond and it magically becomes a diamond.
Alchemist have nothing on the Greeks.
It is also worth saying that German taxpayers enjoied for years a common market where the now so called PIIGS had a lower mean wage for workers thus there was no much room for "productivity" gains and on the other hand there was no room for currency devaluation either (BTW German taxpayers should also analize deeper who helped pay for the reunification): while greek people was earning less than in other european Countries, they had to purchase basic goods at the same prices of Italy, Germany, France... The Euro Zone and their leveled prices ensured so far that the German Locomotive could go full steam ahead undisturbed in European big plains for some years now not fearing competition... Now the German taxpayer should understand that he is not bailing out Greece, much more he is bailing out the Deutsche Bank, which is exposed beyond any reasonability toward Greece (because it subsidized somewhat the consumption also of German goods by the Greece, for which they would have been otherwise unaffordable), or it will fail, and the german taxpayer's bank account will be blown up in thin air. So please help yourself...
have you seen this? lets be honest now, its pretty clear what's coming
http://www.marketoracle.co.uk/Article22735.html
followed Spain shortly too by the looks of it
http://www.businessinsider.com/the-ecb-is-the-only-thing-stopping-spain-...
busy little bailout bees..
Everyone knows that eventually one morning that we will wake up and find out that greece decided to default on it's debt. They know it's coming and don't want to give the country any more money. It's like throwing good money after bad, cut your loses and get out while the gettings good.
Thanks for such a great post and the review, I am totally impressed! Keep stuff like this coming!...
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