Was it only two weeks ago [5] that the smartest investors in the room were calling 'buying Greek bonds' as the no-brainer trade-of-the-year? Sad to say that for such power-houses of intellectual prowess as Greylock (who if you remember could not get enough media coverage during the PSI discussions) have once again grabbed that falling knife with 3 hands and lost a finger, thumb and perhaps even their toes. Longer-dated Greek bonds have dropped to an all-time low price of 13.75 cents on the Euro (a magnificent 27% drop in 2 weeks since the NYT ran the buy it now or you're a big loser article [6]). These bonds are down over 43% since the PSI deal and have plunged in price in the last few days as the reality of a potential bankruptcy of absolutely cash-strapped Greece comes to bear tomorrow with the EUR430mm bond due [7].
[8]
Perhaps instead of paying 2-and-20 to listen to nothing but glorified knife-catching heads-I-win-tails-its-your-money-we-lose funds, investors should heed digital dick-weeds for back in January we described in detail exactly how to trade Europe this year [9]; and those non-Greek-law bonds have returned 31% (or 135% annualized since that time).
[10]
...and while we know that these bonds were/are illiquid, this BVAL chart fits with the chatter we hear from desks where there is little trading now (obviously) as those in the know hold and those not in the know remain in the dark.
Chart: Bloomberg