Greek Risk Explodes To 327 bps, All Time High As Sovereign Risk Again Front And Center
Dubai - meet Greece. Apparently credit traders appreciate biblical allusions, as Greek Prime Minister George Papandreou "promised" for the third time today that all is good in the debt-stricken country, claiming there is "no way" the country would leave the euro or seek aid from the IMF. The ECB's reponse: Greece's draft law on the restructuring of business and professional debts "could have negative impact on market liquidity." Credit's response: Greek CDS surges to an all time high of 327 bps, and the country now represents 24% of SovX risk.
Yet will Greece really be the cause of the latest bubble pop? Earlier Kyle Bass, recapping Dylan Grice's report word for word, noted the increasingly critical situation in Japan, courtesy of its demographic shift, which may soon lead to a funding crisis in the world's second largest economy.
Also note Kyle's observations on why the government is stuck in never equitizing failed financial firms: the trade off - alienating the traditional bond buyers. However, with both China and Japan becoming increasingly second-rate players in US sovereign funding, does this imply the TBTF picture is about to shift, and the next time the financial system collapses, are equities and even sub debt tranches going to be wiped out?
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on Wed, 01/13/2010 - 11:05
#192373
David Roach was on CNBC World again last night - really went off on many Sovereign Debt Crises upcoming.
I think the vid clip they put up is only on the China Credit Bubble segment, though:
http://www.cnbc.com/id/15840232?video=1384338126&play=1
He had other good comments as usual; believe he said the new Japanese Gov't officials have IQs less than bull elephants...
on Wed, 01/13/2010 - 16:29
#192926
He had other good comments as usual; believe he said the new Japanese Gov't officials have IQs less than bull elephants...
In other words, smarter than ours.
on Wed, 01/13/2010 - 11:14
#192391
The evidence of fraud by the Greek state continues to grow. Use of financial engineering to inflate revenues, understating liabilities and costs, often hidden in SPVs. There is considerable anger in the ECB, European Commission and member state governments. The probability of generous help is declining and fast. If we compare the burdens imposed on the citizens of Iceland for the actions of what were private banks, I doubt Greek citizens are going to be happy with the outcome.
http://www.ft.com/cms/s/0/33b0a48c-ff7e-11de-8f53-00144feabdc0.html
The next stage I suspect is the Greeks will announce they have secured loans from the Chinese in return for free trade zones or sale of ports or something, that would put Chinese made goods into Europe as they try to double down on the other Eurozone members - then it will get interesting.
on Thu, 01/14/2010 - 04:43
#193501
I am no apologist for Greece, the Greek government,its budgets, or the Eurozone, but you are babbling without knowing what you are talking about.
For one thing, there already plenty of Chinese-made goods in Europe; China and all EU nations are members of the WTO.
For another, governments typically don't hide liabilities in SPVs, which would be problematic under governmental accounting rules.
on Wed, 01/13/2010 - 11:25
#192407
greeks no happier our citizens .. atleast they have great weather.. haha
on Wed, 01/13/2010 - 11:29
#192418
Hmmm... it appears the Greek government went to Washington and took a semester of "Lies and Deception 101"-- and passed with flying colors.
All that would be well and good... except for the fact that the French and Italians have PhDs in the subject at hand.
on Wed, 01/13/2010 - 13:19
#192588
You have it all backwards. Ever heard of the ' Trojan Horse'? It was the Greeks who first mastered the art of lying. It was the Third worlders, like the Greeks who brought lies to government in the first place. 'Lies and Deception 101' would be a Greek course.
on Wed, 01/13/2010 - 16:36
#192937
Well they certainly get the credit for developing a backdoor policy.
on Wed, 01/13/2010 - 11:39
#192434
Perhaps, but the USD/EUR is still getting hammered
on Wed, 01/13/2010 - 12:04
#192472
Doesn't seem to be a problem if they can keep borrowing. Besides greek salads will always be popular.
"Despite the downgrade blows, Greece has found plenty of demand in fresh bond issues to meet a borrowing target in excess of 50 billion euros this year.
An auction of six-month and one-year treasury bills on Tuesday was over-subscribed and netted 2.08 billion euros (three billion dollars)."
http://www.google.com/hostednews/afp/article/ALeqM5j_P_fPx_SZUVZSk5VnbHt...
on Thu, 01/14/2010 - 06:58
#193533
I visit Greece fairly regularly to counter-act this current era of global cooling (minus 15 on the way in to work in Warsaw this morning) and can quite happily confirm that Greeks have a deep and meaningful relationship with the truth.