• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

The PSI "Panacea": A Greek Asset Neutron Bomb

Tyler Durden's picture


While we were told during the PSI process that all was fixed and that Greece now had breathing room to cut spending and meet its TROIKA-mandated targets on the road to glory, it appears - just as we said it would - that things have got worse (much worse). In the 44 trading days since the PSI deal was struck, Greek government bonds are down over 44% in price - trading below 12% of par today for the first time ever. So much for Greylock's "no-brainer", "trade of the year" eh? Did equity markets signal an expectation of hope and change even as the government's largesse was priced into its debt? Not so much - the Athens Stock Exchange index is down an incredible 35% since 3/22 - back at 22 year lows! Where is the Greek Whitney Tilson when we need him most?

GGBs below 12% or Par!

The Athens Stock Exchange index...


Charts: Bloomberg

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Thu, 05/24/2012 - 10:01 | 2458635 Cdad
Cdad's picture

Ummm....what time is the Greek revolution scheduled for?

Thu, 05/24/2012 - 10:01 | 2458639 markmotive
markmotive's picture

Greece has already left the building.

Without growth there is only one ending to this crisis:


Thu, 05/24/2012 - 10:13 | 2458691 LawsofPhysics
LawsofPhysics's picture

LOL!! I think you meant to say "one ending, other than default."

Thu, 05/24/2012 - 10:18 | 2458705 brooklynlou
brooklynlou's picture

Was scheduled for noon today, but it then got kinda hot, and it was close to lunch time so everyone went home to eat, so they rescheduled it for 6 PM, but then they overslept.

I hear they're now shooting for Tuesday-ish

Thu, 05/24/2012 - 10:01 | 2458637 UK debt marsh
UK debt marsh's picture

Private Sector Involvement in Greece going viral very soon!

Thu, 05/24/2012 - 10:02 | 2458640 Calidreaming
Calidreaming's picture

Ok  Can  I hit that "blow up the US stock market" Algo button now?

Thu, 05/24/2012 - 10:04 | 2458650 Larry Darrell
Larry Darrell's picture

A "blow up the US stock market" button would be redundant.....

to make that happen, they just have to remove their fingers from buttons CTRL & P

Thu, 05/24/2012 - 10:02 | 2458641 falak pema
falak pema's picture

who cares, the day they introduce the guero the greek market will spike like the design on the Saviour's belly on this iconic painting. Talk about good abdos! 

U.S. - Photos - Catholic Online

This is dedicated to ZH ladies Mscreant and HCE. 

Thu, 05/24/2012 - 10:05 | 2458661 GMadScientist
GMadScientist's picture

The Gyro...no, not just coins, an actual sandwich-backed currency.


Thu, 05/24/2012 - 10:08 | 2458671 falak pema
falak pema's picture


Thu, 05/24/2012 - 10:14 | 2458693 SheepDog-One
SheepDog-One's picture

Sandwich backed currency best idea Ive heard so far.

Thu, 05/24/2012 - 10:40 | 2458777 Ignatius J Reilly
Ignatius J Reilly's picture

I'm not sure how that would work, but I am on-board with this.

Thu, 05/24/2012 - 11:08 | 2458887 tekhneek
tekhneek's picture

You redeem your cash for sandwhiches. It's awesome.

Want a new car? That'll be 1,500 sandwhiches.

Thu, 05/24/2012 - 10:48 | 2458815 jez
jez's picture

You can't eat sandwiches though, can you, hey?

Thu, 05/24/2012 - 10:02 | 2458642 asteroids
asteroids's picture

OPA and Ouzo! Greek equivalent to "Hope and Change".

Thu, 05/24/2012 - 10:02 | 2458644 hugovanderbubble
hugovanderbubble's picture

Turkey will bid whole Greek businesses.

Thu, 05/24/2012 - 10:03 | 2458647 PaperBear
PaperBear's picture

The pain never seems to end, it just gets more and more painful.

Thu, 05/24/2012 - 10:05 | 2458653 Cognitive Dissonance
Cognitive Dissonance's picture

Lots of natural gas being passed.

(No wonder the price has bombed.)

Thu, 05/24/2012 - 10:04 | 2458655 midgetrannyporn
midgetrannyporn's picture

This is what happens when you don't have the federal reserve guaranteeing your bonuses.

Thu, 05/24/2012 - 10:05 | 2458659 Badabing
Badabing's picture

the new guero will be very shiney and be called the bling.

Thu, 05/24/2012 - 10:21 | 2458725 brooklynlou
brooklynlou's picture

Actually Microsoft's marketting team is trying to negotiate a sponsorship deal with Greece to call the new currency "The Bing"


Thu, 05/24/2012 - 19:23 | 2460690 StychoKiller
StychoKiller's picture

Ya gotta wonder how much revenue could be generated by selling ad-space on yer currency...

Thu, 05/24/2012 - 10:07 | 2458665 LULZBank
LULZBank's picture

Greek government bonds are down over 44% in price


In their parallel currency, they are actually up a decent 4%.

Thu, 05/24/2012 - 10:07 | 2458666 Dr. Engali
Dr. Engali's picture

That's what the US market will look like. That slow grind down that makes it hard to make money long or short.

Thu, 05/24/2012 - 10:11 | 2458685 LawsofPhysics
LawsofPhysics's picture

yes, but I am sure the MSM will have us "beating expectations" all the way down.

Thu, 05/24/2012 - 10:09 | 2458670 disabledvet
disabledvet's picture

And now you understand the importance of equity MARKETS and the reality that risk is TAKEN never "managed." "there is no growth to be had which can buy the debt" otherwise known as Wall Street. "Now the real fun begins."

Thu, 05/24/2012 - 10:10 | 2458679 LawsofPhysics
LawsofPhysics's picture

Hardly a neutron bomb.  When the same chart for municipal bonds in california or U.S. treasuries looks like that, then you can sweat.

Thu, 05/24/2012 - 10:20 | 2458715 Metalredneck
Metalredneck's picture


Thu, 05/24/2012 - 10:31 | 2458755 LawsofPhysics
LawsofPhysics's picture

Been hearing that since 1982.  can you be a bit more precise?

Thu, 05/24/2012 - 10:17 | 2458699 q99x2
q99x2's picture

Morgan Stanley stock is down more than Greece's stock market--since March 31, 2012. Wonder if that means anything.

Thu, 05/24/2012 - 10:17 | 2458700 Sudden Debt
Sudden Debt's picture



Thu, 05/24/2012 - 10:21 | 2458722 PR Guy
PR Guy's picture

Those Europeans... dont'cha just love 'em?

A bunch of disparate tribes masquerading as a world power. They won't be able to keep up the pretence much longer.

Thu, 05/24/2012 - 10:26 | 2458740 Olympia
Olympia's picture

How is it possible that the European Union allows the weak states to enter the international money market and borrow the money they need without help – based on their own potentials? How is it possible that the “chain” of interests of euro can let its weak “links” exposed to outside pressuresHow is it possible for a “herd” with common interests to let each “ship” defend itself against the wolves, without help, and its general security threatened? How is it possible for Greece, which represents a minor 3% of the Eurozone’s economy, to be allowed to threaten the other 97% of that economy, due to the latter’s weakness?

The European Union should be the one borrowing from the national banking system – thus dealing with profiteers itself based on its overall potential – not its weak “links” alone. The latter should be under the EU’s protection and constant monitoring. They should borrow from it at a subsequent time and if they became victims of profiteering, the problem should be kept in the bosom of the euro. Domestic profiteering should bring profits to Europe’s influentials, therefore bring profits in the euro area, and not threaten it.

From the Wall Street Crash of 1929 to the Global Financial Crisis of 2007




Authored by Panagiotis Traianou

Thu, 05/24/2012 - 17:53 | 2460408 Clycntct
Clycntct's picture

 "How is it possible"

You got some reading to do.

Thu, 05/24/2012 - 10:33 | 2458762 valkir
valkir's picture

Btw,what happend with Greece gold?Still in the country,or already in Germany?

Thu, 05/24/2012 - 11:09 | 2458898 PR Guy
PR Guy's picture

gone baby gone

Thu, 05/24/2012 - 10:42 | 2458787 scatterbrains
scatterbrains's picture

wow it's costing them about $25 in gold to pump the /es by 2 points today.  I wonder what the average cost is in gold to pump the /es by one point and is it getting more expensive as they throw more and more printing schemes at the market?

Thu, 05/24/2012 - 11:16 | 2458920 CreativeDestructor
CreativeDestructor's picture

If Chuck Norris owns bonds, when price goes down yield also goes down!

Thu, 05/24/2012 - 12:20 | 2459173 Freegold
Freegold's picture

Race to zero!

Thu, 05/24/2012 - 18:36 | 2460564 nicxios
nicxios's picture

Ha! And there was some shitbrained professor of economics(no doubt on the payroll of Pasok) on teevee yesterday proclaiming PSI was a success, even after he was taken to task by 2 of his peers.

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