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  #51  
Old 11-29-2010, 10:47 AM
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Originally Posted by limabeanactuary View Post
The bondholders will eventually get their haircut, whether it's explicit or implicit [inflation...in which case, everybody is hit]
the bondholders are the large banks -- and the large banks are the ones who benefit from inflation because they get the newly printed money first
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  #52  
Old 12-19-2010, 10:32 AM
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Ireland downgraded
http://online.wsj.com/article/SB1000...141778872.html

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Moody's Investors Service Inc. downgraded Ireland's debt to Baa1 from Aa2 Friday, warning the government's financial strength could deteriorate further if economic growth were to miss its projections.
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  #53  
Old 12-19-2010, 03:00 PM
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Seems to me that Ireland is paying a high rate on its debt because the chance of default is high, but if they were to default on everything and start fresh, they would be less likely to defaut afterwards, so have a lower rate and no debt to boot!
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Old 03-09-2011, 07:19 AM
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http://hosted.ap.org/dynamic/stories...03-07-07-43-14

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ATHENS, Greece (AP) -- Greece raised euro1.625 billion ($2.28 billion) in an auction of treasury bills Tuesday, though the higher interest rate it has to pay showed investor unease a day after the country's credit rating was downgraded sharply.

In return for selling the 26-week bills, Greece had to pay an interest rate of 4.75 percent, the Public Debt Management Agency said. The rate was up from the 4.64 percent it had to pay in a similar auction last month, but lower than the 4.90 percent demanded in January.
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Old 03-23-2011, 09:30 AM
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Portugal

http://finance.yahoo.com/news/Portug....html?x=0&.v=4

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LISBON, Portugal (AP) -- Portugal's government is on the verge of collapse after opposition parties withdrew their support for another round of austerity policies aimed at averting a financial bailout.

The expected defeat of the minority government's latest spending plans in a parliamentary vote Wednesday will likely force its resignation and could stall national and European efforts to deal with the continent's protracted debt crisis.
....
By most measures, Portugal is one of the eurozone's smallest and feeblest economies but its financial collapse would likely trigger a fresh bout of nerves over other debt-heavy -- and bigger -- euro countries such as Spain, Belgium and Italy.

"Portugal seems very likely to become the third ... eurozone country to need a bailout," Emilie Gay, European economist at Capital Economics said.

The governing Socialist Party's parliamentary leader Francisco Assis made an 11th-hour appeal for opposition rivals to negotiate changes to the latest austerity package and ensure the government's survival. Prime Minister Jose Socrates, who heads the government, has said he will no longer be able to run the country if the package is rejected.

"This is a decisive moment," Assis said Tuesday.
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  #56  
Old 04-24-2011, 05:37 PM
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From Kevin D. Williamson, the four national debts: ranging from the short-term to the long-term. As Williamson notes, it's those medium-term notes where the action is, and those turn over in the 1- to 10-year range, and as interest rates rise in the medium term, that's really going to hit. And can hit hard. Because some of the holders of said notes aren't too happy about the situation.

Governmental accounting -- the kind of tricks the federal government is up to would put private entities in the slammer, according to Deroy Murdock.

More on federal debt from William H. Gross at PIMCO.


Want to feel better (relatively)? Take a look at how Greece is doing.

And plunging you back into despair: a history of the U.S. debt ceiling.
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  #57  
Old 05-09-2011, 11:31 AM
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S&P downgrades Greece

http://www.reuters.com/article/2011/...7482H820110509

Quote:
Standard and Poor's cut Greece's rating to B from BB-, dragging it further into junk territory over concerns that a debt restructuring is increasingly likely.

....
"In our view, there is increased risk that Greece will take steps to restructure the terms of its commercial debt, including its previously-issued government bonds," the agency said in a statement, warning that more downgrades could come.

S&P said euro zone countries would likely want private holders of Greek government debt to extend bond maturities as governments consider easing terms on the bailout that saved Greece from bankruptcy last year.

It said its projections suggest that principal reductions of 50 percent or more, known as a haircut, could be needed to restore Greece's debt burden to a sustainable level.

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Old 05-15-2011, 07:09 AM
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http://knowledge.wharton.upenn.edu/a...articleid=2773

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As summer 2011 begins, many experts are not convinced that the "official," happily-ever-after version of the EU's debt crisis will play out. Even as European finance ministers weigh up whether Greece is meeting its current targets to receive the next tranche of the bailout package, there are a number of other "endgame scenarios" in which Greece restructures its debt either before or after the terms of the 110 billion euro rescue expire in June 2013.None are ideal, and "all come at a cost," said Lee C. Buchheit, a New York-based lawyer at Cleary Gottlieb Steen & Hamilton, who participated as a panelist with other banking and finance experts during a Wharton co-sponsored conference held at the European University Institute (EUI) in Florence, Italy. The event was titled, "Life in the Eurozone: With or Without Sovereign Default?"
....
According to Buchheit and other conference participants, any scenario that does not involve Greece defaulting looks less and less realistic. For one thing, Buchheit noted, if Greece hobbles to 2013 without restructuring, it can't expect to be embraced by the public markets as it once was -- back when investors "to their regret today, failed to conceive of any credit differences between Germany and Greece" and piled into Greek sovereign debt. Forecasters predict that Greece's public sector debt-to-GDP ratio in 2013 will be between 150% and 170%, compared with 143% at the end of 2010 -- which at the time was the highest in the EU and more than double the 60% ceiling EU members have agreed to maintain under the Maastricht Treaty.

In 2013, Buchheit said, more than half of that debt will be held by the so-called "official" sector -- the EU, the IMF and the European Central Bank (ECB), which has been buying big chunks of the eurozone's "peripheral" countries' debt on the secondary markets. The official sector will be able to claim "preferred creditor status" ahead of other creditors, Buchheit noted, leaving investors in private capital markets out in the cold should Greece's economy teeter again.

"So is it cheaper to have Greece default, or hand Greece the money?" asked panelist Arnoud Boot, corporate finance and financial markets professor at the University of Amsterdam. Ultimately, he added, "these are political questions" that have more to do with the wherewithal of Greece's politicians than with finance and economics.
....
t's a perplexing situation, said Calomiris. As more and more public money is poured into the bailouts, European officials refuse to entertain the thought of any of the 17 eurozone members leaving the currency union, despite the drag on the long-term competitiveness of individual members and the growing unhappiness of their citizens living under the constraints of the euro. "And you're doing all that because you really love this European idea," he said. "The change to the euro is first going to happen as a redenomination of the banks' liabilities. I predict the end of the eurozone as we know it."
Gotta love that suicide pact.

Here's the cute part:
Quote:

Despite the challenges ahead, Gulati pointed out that Greece has a number of factors working in its favor that other financially distressed countries don't have. One of those factors involves Greece's debt contracts. As much as 90% of its debt has been issued under local law, with the rest falling under U.S., Swiss and a handful of other jurisdictions. And unlike most loan instruments in other countries, Greece's do not have what's known as "negative pledge clauses," which prevent the use of assets to secure other loans. "Their contracts are actually set up to do a restructuring," he said. Whether intentional or not at the time of bond issuance, "the Greeks negotiated for a lot of flexibility. It's almost as if they knew as soon as they joined the eurozone, there would be restructuring," he joked.
Ya think?
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  #59  
Old 05-21-2011, 02:22 PM
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http://www.nytimes.com/2011/05/21/bu...ht-euro21.html

Quote:
A Downgrade by Fitch Leads to a Decline in Greek Bonds

By BLOOMBERG NEWS
Published: May 20, 2011

Greek bonds led declines among euro area nations on Friday on concern a restructuring of its debt would reignite Europe’s sovereign debt crisis.

The spread, or yield difference, between benchmark Greek debt and German bunds widened to the most on record.

Fitch Ratings said that it downgraded Greece’s credit ratings by three levels, to B+ from BB+, four notches below investment grade.

German bonds rallied as Jens Weidmann, the president of the Deutsche Bundesbank and a member of the European Central Bank’s governing council, said the bank might no longer be able to accept Greek bonds as collateral if maturities were extended, stoking demand for the relative safety of Europe’s benchmark debt.
....
Ioannis Sokos, an interest-rate strategist at BNP Paribas in London, said a reprofiling of the debt appeared to be inevitable. “It’s not a matter of if there’s a reprofiling. It’s a matter of when and how significant it is.”

Meanwhile, the International Monetary Fund said Ireland’s ability to sell sovereign bonds remains “elusive” and its situation may worsen unless the European Union develops a more comprehensive plan to deal with the region’s debt crisis.

Ireland’s plan to stabilize its banks and reduce its deficit is “off to a strong start,” the fund said in a review on Friday of its aid agreement with Ireland. “This decisive approach to program implementation, which should be supported by a more comprehensive European plan, offers the best prospect to overcome market doubts.”
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  #60  
Old 05-31-2011, 11:02 AM
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http://www.breitbart.com/article.php...show_article=1

Quote:



The debt crisis in Greece, Ireland and Portugal could have "significant systemic effects" in the eurozone, Italy's central bank chief Mario Draghi, who is set to head up the European Central Bank, said on Tuesday.

"In the eurozone, the sovereign debt crisis in three countries, which together represent six percent of the area's GDP, has the potential to exert significant systemic effects," Draghi said at a central bank conference.

"European economic and monetary union is facing its most difficult test since it was created," added Draghi, referring to Greece, Ireland and Portugal which have agreed bailout packages worth tens of billions of euros (dollars).

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