Jump to content
House Price Crash Forum

Hedge Funds Making Big Profits On Greek Bonds


Recommended Posts

This needs to go into the Big Greek thread but I think it needs a wider audience as this is just bizarre.

BBC Business Daily this morning were reporting that Hedge Funds have been buying up short-term Greek bonds, about 2 years max, at 40 or 50 percent of their worth.

They are then refusing to take the haircut that the banks are now agreeing to take because the EU Greek bailout plan is only asking the banks to take a 50 percent haircut on their Greek bonds. The hedge funds are refusing.

They are buying up to 2 years maximum because they believe that Greece will be bailed out with enough money for 2 years allowing Greece to pay full on its bonds that mature between now and 2 years. Again, only the banks are being asked/forced to take a write down on the Greek bonds they hold.

Guess where that Greek money is coming from - that's right, it comes from the EU and the IMF which means it comes from you and I.

So BBC Business Daily were reporting that hedge funds have bought up to 2 year bonds from banks for 40 or 50 percent of their value, are now sitting back and demanding the full 100 percent price of the bonds knowing that public money will bail out Greece and hence the Greeks will be forced to pay the hedge funds the money.

Basically, double your money.

Link to post
Share on other sites
  • Replies 86
  • Created
  • Last Reply

Top Posters In This Topic

Top Posters In This Topic

This needs to go into the Big Greek thread but I think it needs a wider audience as this is just bizarre.

BBC Business Daily this morning were reporting that Hedge Funds have been buying up short-term Greek bonds, about 2 years max, at 40 or 50 percent of their worth.

They are then refusing to take the haircut that the banks are now agreeing to take because the EU Greek bailout plan is only asking the banks to take a 50 percent haircut on their Greek bonds. The hedge funds are refusing.

They are buying up to 2 years maximum because they believe that Greece will be bailed out with enough money for 2 years allowing Greece to pay full on its bonds that mature between now and 2 years. Again, only the banks are being asked/forced to take a write down on the Greek bonds they hold.

Guess where that Greek money is coming from - that's right, it comes from the EU and the IMF which means it comes from you and I.

So BBC Business Daily were reporting that hedge funds have bought up to 2 year bonds from banks for 40 or 50 percent of their value, are now sitting back and demanding the full 100 percent price of the bonds knowing that public money will bail out Greece and hence the Greeks will be forced to pay the hedge funds the money.

Basically, double your money.

This is why selective hair-cuts were never going to work whilst the market for the these bonds was still open.

It's either a loss for all or for none - not some pissy wishy-washy loony half way house.

Link to post
Share on other sites

What's immoral about buying a bond and expecting the people who issued it to honour their promises?

When you are buying them after a 50% discount is already well known? So everyone has already agreed a 50% discount, you bought them at a 50% discount and you expect to be paid in full.

This is exactly like buying a pair of shoes in a sale for 50% off, returning them because you don't like them and then expecting the full retail price. Like I said, immoral (and illegal in this case). The fact it's legal for them to do this is a good sign of how lost the financial markets have become.

They should give them 25%, or 100% and a 20 year stint in a Greek jail ;)

Link to post
Share on other sites

What's immoral about buying a bond and expecting the people who issued it to honour their promises?

I think you're getting confused about who the bad guys are here.

This is not what is happening nothing to do with honouring repayment. These are bonds traded in a secondary market where the bonds are purchased with knowledge that the European tax payer will underwrite the repayment of the bonds i.e our money. So we are paying hedge funds to deal in bonds and make a profit. The funds should be told take a haircut or you will get nothing or we close you!

Link to post
Share on other sites

the morons and criminals here are the politicians - EU and Greek. The hedge funds can lose - at least they are putting their own money where their mouth is - the politicians aren't - they are using ours.

I don't blame the Hedgies.... if the governments and the EU are so fckuing stupid and let them do this..., why wouldn't you take the money ?

Link to post
Share on other sites

This needs to go into the Big Greek thread but I think it needs a wider audience as this is just bizarre.

BBC Business Daily this morning were reporting that Hedge Funds have been buying up short-term Greek bonds, about 2 years max, at 40 or 50 percent of their worth.

They are then refusing to take the haircut that the banks are now agreeing to take because the EU Greek bailout plan is only asking the banks to take a 50 percent haircut on their Greek bonds. The hedge funds are refusing.

They are buying up to 2 years maximum because they believe that Greece will be bailed out with enough money for 2 years allowing Greece to pay full on its bonds that mature between now and 2 years. Again, only the banks are being asked/forced to take a write down on the Greek bonds they hold.

Guess where that Greek money is coming from - that's right, it comes from the EU and the IMF which means it comes from you and I.

So BBC Business Daily were reporting that hedge funds have bought up to 2 year bonds from banks for 40 or 50 percent of their value, are now sitting back and demanding the full 100 percent price of the bonds knowing that public money will bail out Greece and hence the Greeks will be forced to pay the hedge funds the money.

Basically, double your money.

All private creditors including hedge funds are being asked to take the 50pc haircut. It's unclear what will happen to people rejecting the 'voluntary' haircut at this stage, but very much doubt it will be full repayment.

Link to post
Share on other sites

the morons and criminals here are the politicians - EU and Greek. The hedge funds can lose - at least they are putting their own money where their mouth is - the politicians aren't - they are using ours.

I don't blame the Hedgies.... if the governments and the EU are so fckuing stupid and let them do this..., why wouldn't you take the money ?

Well they are putting their investors money where there mouth is!

I agree politicians are stupid!

Link to post
Share on other sites

When you are buying them after a 50% discount is already well known? So everyone has already agreed a 50% discount, you bought them at a 50% discount and you expect to be paid in full.

This is exactly like buying a pair of shoes in a sale for 50% off, returning them because you don't like them and then expecting the full retail price. Like I said, immoral (and illegal in this case). The fact it's legal for them to do this is a good sign of how lost the financial markets have become.

They should give them 25%, or 100% and a 20 year stint in a Greek jail ;)

I just wonder at what point States, who have armed forces, special forces, intelligence services and others, start to use some of their patriotic types in those organisations to get rid of certain people.

Isn't this economic warfare on a country?

I think hedge fund managers who are doing this to Greece, or any other countries, have to have balls of steel to be taking on countries - or just very stupid/arrogant/whatever?

Link to post
Share on other sites

I just wonder at what point States, who have armed forces, special forces, intelligence services and others, start to use some of their patriotic types in those organisations to get rid of certain people.

Isn't this economic warfare on a country?

I think hedge fund managers who are doing this to Greece, or any other countries, have to have balls of steel to be taking on countries - or just very stupid/arrogant/whatever?

This was the first thing that popped into my mind when I read the article. It should be quite simple to re-categorize this behaviour as terrorism - an attempt to extort money out the Greek / European citizens.

Nobody would even notice a few private jets that were shot down over a remote part of Europe... just get the air accident investigators to say it was mechanical failure, that usually works.

Link to post
Share on other sites

the morons and criminals here are the politicians - EU and Greek.

+ trillions

The politicians don't have to hand over taxpayers' cash, they are choosing to because it protects the wealthy elite to which they belong.

Link to post
Share on other sites

This needs to go into the Big Greek thread but I think it needs a wider audience as this is just bizarre.

BBC Business Daily this morning were reporting that Hedge Funds have been buying up short-term Greek bonds, about 2 years max, at 40 or 50 percent of their worth.

They are then refusing to take the haircut that the banks are now agreeing to take because the EU Greek bailout plan is only asking the banks to take a 50 percent haircut on their Greek bonds. The hedge funds are refusing.

They are buying up to 2 years maximum because they believe that Greece will be bailed out with enough money for 2 years allowing Greece to pay full on its bonds that mature between now and 2 years. Again, only the banks are being asked/forced to take a write down on the Greek bonds they hold.

Guess where that Greek money is coming from - that's right, it comes from the EU and the IMF which means it comes from you and I.

So BBC Business Daily were reporting that hedge funds have bought up to 2 year bonds from banks for 40 or 50 percent of their value, are now sitting back and demanding the full 100 percent price of the bonds knowing that public money will bail out Greece and hence the Greeks will be forced to pay the hedge funds the money.

Basically, double your money.

I'm pretty sure that the banks will be getting backdoor bailouts/financing in return for agreeing to take a haircut on the Greek debt ... so basically yet again the bondholders get bailed out at the taxpayers expense and a bunch of other well placed opportunists suck a lot of money from the 'public money' teet whilst it's available.

Profits privatised, losses socialised. Move along, business as usual, nothing to see here.

:angry:

Link to post
Share on other sites

When you are buying them after a 50% discount is already well known? So everyone has already agreed a 50% discount, you bought them at a 50% discount and you expect to be paid in full.

This is exactly like buying a pair of shoes in a sale for 50% off, returning them because you don't like them and then expecting the full retail price. Like I said, immoral (and illegal in this case). The fact it's legal for them to do this is a good sign of how lost the financial markets have become.

They should give them 25%, or 100% and a 20 year stint in a Greek jail ;)

No I'm starting to feel guilty about all those two-for-one deals in Sainsbury's. Either that or I'm beginning to think that you have no idea about morality.

The only immoral people here are the Greeks and EU leaders. They want to steal money from the bond-holders and tax-payers.

Why shouldn't the bondholders be paid what they are owed? The EU can afford it.

Link to post
Share on other sites

When you are buying them after a 50% discount is already well known? So everyone has already agreed a 50% discount, you bought them at a 50% discount and you expect to be paid in full.

This is exactly like buying a pair of shoes in a sale for 50% off, returning them because you don't like them and then expecting the full retail price. Like I said, immoral (and illegal in this case). The fact it's legal for them to do this is a good sign of how lost the financial markets have become.

They should give them 25%, or 100% and a 20 year stint in a Greek jail ;)

some funds did exactly the same with forgiven debt in third world countries...the bonds are written off then sold, and the vultures return to the debtor with lawyers.

Its why the issuer should just default. schemes and scams NEVER stop the lawyers from profiting.

Link to post
Share on other sites

Well they are putting their investors money where there mouth is!

I agree politicians are stupid!

to be fair to most hedgies (especially smaller ones) - they usually have to have a lot of their own skin in ...... or there's no moral hazard for them and that spooks investors :)

a small hedgie will usually be an ex-Megabank guy who has £3M-£10M of his own and his former employer will assist in setting it up and provide the first £100M of so of 'investment'...... - the first few years at a hedgie are volatile...... but get it right, and you are set for life with one good transaction.... (and vice versa...)

Link to post
Share on other sites

When you are buying them after a 50% discount is already well known? So everyone has already agreed a 50% discount, you bought them at a 50% discount and you expect to be paid in full.

This is exactly like buying a pair of shoes in a sale for 50% off, returning them because you don't like them and then expecting the full retail price. Like I said, immoral (and illegal in this case). The fact it's legal for them to do this is a good sign of how lost the financial markets have become.

They should give them 25%, or 100% and a 20 year stint in a Greek jail ;)

Lets not forget that its this very mechanism that keeps government in check.

Link to post
Share on other sites

http://news.sky.com/home/business/article/16099979

Shares in one of the world's biggest brokers have been suspended, casting doubt over the future of 738 jobs in London.

MF Global, which is based in New York and has offices around the world, last week announced a record loss - prompting its share price to plummet.

The company has former Goldman Sachs chief executive Jon Corzine at its helm, and has a large exposure to eurozone sovereign debt.

Not all are doing well, it seems.

Link to post
Share on other sites

Why shouldn't the bondholders be paid what they are owed? The EU can afford it.

Who owes holders of Greek government bonds money? Is it German taxpayers? You'd have thought all the Greek lettering on the bond certificate would be a bit of a giveaway.

Link to post
Share on other sites

This is exactly like buying a pair of shoes in a sale for 50% off, returning them because you don't like them and then expecting the full retail price. Like I said, immoral (and illegal in this case). The fact it's legal for them to do this is a good sign of how lost the financial markets have become.

And how do you differentiate between the person that bought them two days ago for 50% off and the person that bought them two years ago for full price?

Link to post
Share on other sites

Who owes holders of Greek government bonds money? Is it German taxpayers? You'd have thought all the Greek lettering on the bond certificate would be a bit of a giveaway.

The Greeks owe the money, their assets should be sold and their people's bank accounts should be frozen and the money used to pay the bondholders.

The EU for whatever reason don't want this to happen, so if they want to prevent the default they should pay what the Greeks owe. It would also be fine for the EU to step back and let Greece pay the debt.

The Greeks want to keep their money, steal from the bondholders, and rather than being grateful they're still whining and striking - this is immoral.

Link to post
Share on other sites

The Greeks owe the money, their assets should be sold and their people's bank accounts should be frozen and the money used to pay the bondholders.

The EU for whatever reason don't want this to happen, so if they want to prevent the default they should pay what the Greeks owe. It would also be fine for the EU to step back and let Greece pay the debt.

The Greeks want to keep their money, steal from the bondholders, and rather than being grateful they're still whining and striking - this is immoral.

wrong. The Greek Government has spent the money, its gone.

The greeks have debts.

They are defaulting...its what happens when an entity has no cash to settle the credit.

Link to post
Share on other sites

When you are buying them after a 50% discount is already well known?

The market price of these bonds is out in the open.

So everyone has already agreed a 50% discount, you bought them at a 50% discount and you expect to be paid in full.

No, the 50% discount has not been agreed. It has been proposed in the Euro bailout plan, but it hadnt been agreed.

This is exactly like buying a pair of shoes in a sale for 50% off, returning them because you don't like them and then expecting the full retail price. Like I said, immoral (and illegal in this case). The fact it's legal for them to do this is a good sign of how lost the financial markets have become.

Not a very good analogy. I cant think of a good analogy at all here. What it is though, is blackmail. Politicians are terrified of causing a 'credit event', and fear of that happening is the weapon that the hedge funds are using here.

The hedge funds are gambling that the Eurozone members are either stupid enough to go along with bailing out Greece's creditors because of fear of this credit event that has been drummed into them by crooked bankers, or are in the pockets of the bankers already, and therefore buying these bonds seems like a good bet. Once you have control of the politicians, you can use the power of the state to transfer taxpayer wealth to yourself. This is what is going on here. Of course, controlling the state in this way, means that the practice is utterly legal.

They should give them 25%, or 100% and a 20 year stint in a Greek jail ;)

If only.

Link to post
Share on other sites

The Greeks owe the money, their assets should be sold and their people's bank accounts should be frozen and the money used to pay the bondholders.

The EU for whatever reason don't want this to happen, so if they want to prevent the default they should pay what the Greeks owe. It would also be fine for the EU to step back and let Greece pay the debt.

The Greeks want to keep their money, steal from the bondholders, and rather than being grateful they're still whining and striking - this is immoral.

This is about right. Those controlling Greece are running a massive scam. They know there is massive fear of a credit event, and therefore they dont have to balance their budget, and are certainly pocketing a lot of the bailout money that is coming in I am sure of it.

If the EU and the IMF dont have honest people working for them that can figure this scam out and put a stop to it, and let Greece default, we are going to see an epic financial disaster.

Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
  • Recently Browsing   0 members

    No registered users viewing this page.

  • 433 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.