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Greek Spreads Hit 522 bps On Debt Restructuring Talks
As was reported first on Zero Hedge yesterday, Greece may now be considering a restructuring. Full press accounts of what is going on in the absence of the usual Greek rumor mill are murky. Reuters is claiming that the IMF portion of Greek aid would amount to €12 billion. In the meantime the market has spoken: the spread is now a fresh new record 522 bps. At this point every single rating agency is expected to downgrade the country.
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Is Santorini already taken or can I still grab a balcony?
Everything is changing so fast ..
Its like a Live Financial Movie.
The people demand chart pr0n!
Yes, please show high res images of those Greek spreads!
The best way out would be Ambrose's suggestion of a "managed default" whereby the IMF steps in and demands certain budget actions and the banks writing down Greek debts by 2% a month over the next couple years to a maximum of 60% write off.
But common sense and common purpose amount to absolutely nothing. The IMF and EU bailouts will be called in soon enough; Greece will make it thru year's end. Extend and Pretend is The Plan.
Why would Greece agree to that. That might agree but there is zero incentive for them to cut spending.
I would agree to cut spending by 25%, but I would actually raise spending.
Greece holds all the cards, not the IMF or the EU.
Uhm I think the bond market is suggesting the Greeks hold nothing, they can't even control their spreads anymore.
I think if they do default the most prudent course of action would be taking the money set up to give to Greece and giving it to the Greek holders of debt directly. That would provide more incentive for EU countries to get their act together. It would prevent direct bank runs and forced deleveraging by debt holders (or anyone who used this paper as collateral). Yes this is a private bailout but it could be justified under the premise of sovereign moral hazard.
I think Mako is sarcastically making the point that this is the era of deadbeats. Whether its our tax code or our money issuance, everything is tilted toward sitting on your ass and playing with your i-phone. So, no, I don't think Greece has any incentive to do anything until the rest of the world makes them suffer the consequences.
Why a 60% haircut? Argentina settled for 33% on their bonds.
I thought the rating agencies had to wait until Greece actually defaults before a downgrade...
Greece should default, so that we can move on to the next country and the next and the next.
If they actually default ar write down principal - I wonder if the EUR rallies? Sort of a repeat of late 2008 except this time in Euroland?
NBG -5.07% premarket at 8:26 AM.
Best opportunity ever for Greece to default and start a new fresh life.
Here is the kicker though. The global banksters will not let her. Contagion is feared.
Greek politicians should have the cojones (archidia) to do it
greece should implement the canadian system of taxation and it's collection methods. nah, that wouldn't be a nice thing to do . they would all be instantly broke.
DEFAULT and crash man .. i am waiting for it ....have just taken a loan tobuy PUT OPTIONS...
What would the point of default be? A fresh start? Hah! Greece would just continue to do what they've always done -- live above their means, promise more than they can deliver, borrow more money and pay some of it back, for a while, 'til they are in over their heads again.
A default doesn't help if it's not the starting point of some bigger crash. Otherwise the Greeks will just continue to consume until the next default and so forth...
Does this mean further humiliation for the ECB, which dismissed the idea that it would adjust its collateral requirements for any single member state? I assume it does!
I want to know what ACA says......