Thursday, April 8, 2010

The Greek tragedy explained..

Investors Playing Defense Heighten Greek Debt Woes

A good, informative, and well written article about the Greek debt problem, and the market reaction to it. (Greek bond yields have reached a new high this morning..)

Posted by uncle tom @ 09:20 AM (994 views)
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4 thoughts on “The Greek tragedy explained..

  • lots of finger-pointing but no solutions offered

    oh dear

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  • mountain goat says:

    ” Investors Playing Defense”

    How bad can things can get for investors in government debt? “On August 13, 1998, the Russian stock, bond, and currency markets collapsed as a result of investor fears that the government would devalue the ruble, default on domestic debt, or both. Annual yields on ruble denominated bonds were more than 200 percent.” (http://en.wikipedia.org/wiki/1998_Russian_financial_crisis).

    Russia finally went on to default on their debt in 1998. Although after Russia’s recovery Putin did make a point of paying back Soviet era debt, showing that a default is really a last resort for any government when there are no options left. When the markets lose confidence in a government the punishment is high interest rates on the debt. Something to remember for those who predict IR will stay at 1% for the next 12 months or governments will inflate away their debt etc.

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  • This should be a top news story today, but it’s being overlooked..

    Athens stock market is down over 4%, Greek bonds are approaching 7.5%, and influential voices in the bond market are speaking out – PIMCO has said that 7% is ‘not enough’ yield for Greek debt…

    ..but the Greeks can’t afford to pay more..

    When these things finally unravel, they tend to do so with lightning speed. Unless something is done to reassure the markets, it could all be over next week..

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  • See gold in euros is trading at all time highs.

    But of course, this is just speculation, gold doesn’t really have a place in the finance world…it’s a commodity 🙂

    ha ha, you gotta laugh.

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