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  #21  
Old 12-20-2011, 10:52 AM
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Originally Posted by Colymbosathon ecplecticos View Post


I sell a currency swap and hedge it by borrowing in one currency and lending in another. That's an example of financial debt.
Okay, so you're saying a bunch of this financial debt is from hedging activities?

Yeah, that could be dangerous.
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  #22  
Old 12-20-2011, 10:56 AM
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ohhh. no idea. sounds to me like owing money, as opposed to owing a debt a gratitude or owing explanations or a duty of care (for some other examples).
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  #23  
Old 01-12-2012, 11:24 AM
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http://www.dailymail.co.uk/news/arti...ford-them.html

Quote:
Children are being abandoned on Greece's streets by their poverty-stricken families who cannot afford to look after them any more.

Youngsters are being dumped by their parents who are struggling to make ends meet in what is fast becoming the most tragic human consequence of the Euro crisis.

It comes as pharmacists revealed the country had almost run out of aspirin, as multi-billion euro austerity measures filter their way through society.
....
Further evidence of Greeks feeling the pinch of austerity measures is the lack of aspirin and other medicines now available in the country.

Pharmacists are struggling to stock their shelves as the Greek government, which sets the prices for drugs, keeps them artificially low.

This means that firms are turning to sell the drugs outside of the country for a higher price - leading to stock depletion for Greeks.

Mina Mavrou, who runs one of the country's 12,000 pharmacies, said she spent hours each day pleading with drug makers, wholesalers and colleagues to hunt down medicines for clients.

And she said that even when drugs were available, pharmacists often must foot the bill up front, or patients simply do without.

Meanwhile, talks about private sector creditors paying for part of a second Greek bailout are going badly, senior European bankers said tonight.

That raises the prospect that euro zone governments will have to increase their contribution to the aid package.

'Governments are mulling an increase of their share of the burden,' said one banker, while another said 'Nothing is decided yet, but the bigger the imposed haircut the less appetite there is for voluntary conversion.'

A third senior banker told Associated Press: 'Private sector involvement is going badly.'

There are suggestions in euro zone government circles that ministers are coming to the realisation they may need to bolster Greece's planned second bailout worth 130 billion euros if the voluntary bond swap scheme, which is a key part of the overall package, falls short of expectations.

Stumping up yet more money would be politically difficult in Germany and other countries in the northern part of the currency bloc.
Or, perhaps the Greeks will say "screw this", fully default, and leave the euro.

I don't think the Eurocrats are going to be able to hold this together.
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  #24  
Old 01-13-2012, 10:42 AM
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http://www.marketwatch.com/story/clo...uts-2012-01-13

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FRANKFURT (MarketWatch) — Time is running short for Greece and its creditors to reach agreement on a plan to finalize voluntary writedowns on holdings of Greek debt.

Negotiations between private bondholders and the Greek government in Athens failed to reach a conclusion on Friday and are set to resume on Wednesday, according to several news reports, citing an unnamed Greek government official speaking in Athens.

European leaders in October agreed to a second bailout plan for Greece but required private bondholders to bear part of the burden by agreeing to a restructuring that would write down the value of their Greek debt holdings by half.

German Chancellor Angela Merkel, speaking alongside French President Nicolas Sarkozy, made clear earlier this week that Greece won’t get its next tranche of rescue funding, which is set for release in March, unless there is a deal.

“It is essential in order to finalize the voluntary PSI [private-sector involvement] agreement that support be given by all official parties in the days ahead,” said Charles Dallara and Jean Lemierre, co-chairs of the Steering Committee of the Private Creditor-Investor Committee for Greece, in a statement Thursday.

“As Chancellor Merkel and President Sarkozy stressed in their Berlin press conference earlier this week, it is important that Greece reach agreement with the private sector on a voluntary debt exchange as soon as possible,” they said.

Meanwhile, a government spokesman said Greece is planning legislation that could force reluctant bond holders to participate in an involuntary debt exchange if a majority of private creditors agree to a voluntary plan, The Wall Street Journal reported.
For the tl;dr crowd: Greece is about to default, and it's going to be involuntary [and thus disorderly]. The only thing the IMF, Germany, France and everyone else is arguing over is when they're going to admit as much.
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  #25  
Old 01-13-2012, 10:45 AM
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And because we can't have too much news on Europe:

http://www.cnbc.com/id/45986372

Quote:
Standard & Poor's ratings agency has downgraded France's credit rating, French television channels reported on Friday, citing a government source.

The channels did not provide further details.

S&P warned in December that it could downgrade the credit ratings of several euro zone nations if European leaders failed to find a lasting solution to the debt crisis at a meeting of EU leaders that month.

Several euro zone countries including France face an “imminent” downgrade by ratings agency S&P, Reuters and Dow Jones news agencies reported, sending the euro to a session low against the dollar and European stocks down. US stocks also tumbled.

The reports said Germany and the Netherlands were not among the countries facing a downgrade later on Friday, but gave no further details.

According to Dow Jones sources, France was among the countries set to be downgraded.

"Remain alert tonight when U.S. markets close," Reuters cited a source as saying.
When you bury your head in the sand and pretend everything is fine when it's clearly not, this shouldn't be a surprise. I wouldn't be shocked at all if France got tagged with a second downgrade in the 1st half of this year, especially if Sarkozy ties the French government to the banking system so it can all go down at once.
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  #26  
Old 01-23-2012, 08:50 AM
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Is this the end game for Greece? Probably not but I keep hearing that it is.

This is my understanding:

IIF (bond investor group) wants to wait and do nothing until mid-March when $18.5B worth of bonds expire so they can take their 100% principal and run.

Euro countries don't want to be the ones holding the crap so they are requiring the IIF to accept a 20% 50% 70% voluntary writeoff combined with renewal of investment in 30 year low yielding crap.

Euro countries meeting now to decide if they accept the IIF's latest bargain with Greece so they can make up whatever shortfall remains.

Even though it's only January I keep hearing that time is running out to make a deal before March.
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  #27  
Old 01-24-2012, 11:00 AM
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http://www.reuters.com/article/2012/...80L10520120124

Quote:
Greece's private creditors pleaded Tuesday with European officials who rejected their bond swap offer to hammer together a deal before Athens tumbles into a chaotic default.

Athens' hopes for a swift deal with lenders were evaporating after euro zone ministers Monday rejected creditors' demand for a 4 percent coupon, or interest rate, on new, longer-dated bonds in exchange for existing debt.

The country is desperate for a deal to ensure funds from a 130 billion euro rescue plan drawn up by European partners and the International Monetary Fund arrive before 14.5 billion euros of bond redemptions fall due in March.
....

A source close to the talks said creditors would go toward an involuntary debt swap if there was no agreement by the end of the week, once again raising the odds of a messy default.

Dallara said he was confident of large-scale participation by bondholders in the swap if the two sides were able to strike a voluntary agreement.

The bond swap is meant to cut 100 billion euros from Greece's debt burden of over 350 billion, in a bid to ultimately slash its debt from around 160 percent of GDP to a more manageable 120 percent of GDP by 2020.

Under the agreement drawn up in October to rescue Greece for a second time, bondholders would take a 50 percent writedown on the notional value of their Greek holdings.

After weeks of haggling in Athens, the two sides were converging on an agreement that would see private creditors accepting a real loss of 65 to 70 percent and new bonds with 30-year maturity, sources close to the talks said last week.
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  #28  
Old 01-24-2012, 12:08 PM
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Quote:
to a more manageable 120 percent of GDP by 2020


That's not manageable, and that's certainly not even feasible under the incredibly optimistic assumptions being made about the economy of Greece. Hell, Italy is at 120% debt-to-GDP but their 10-year bond is at a 6-week low of 6.17% [low being relative, because before July the 10-year had never hit 6%] and the leaders there are struggling to keep things under control. The real key as to why someone is desperate to get a deal done may lie here:

Quote:
Worse yet, the ECB itself is sitting on 40 billion euros of junk (in a self-inflicted wound) wondering what to do about it.

...

[translation from another article]

Let us assume that the ECB is involved in a debt restructuring. That would - through reduced distributions from the central bank profits - a burden to taxpayers. And it would ultimately be a form of state funding: The Federal Reserve would have the money made available to Greece. This can be very difficult to reconcile the official justification, that the intervention served only to keep open the monetary transmission channel. Would immediately begin a debate on the risks arising from the purchases of Italian or Spanish bonds. Anyway, it would be difficult for the central bank to defend its bond program arguments.

Let us assume that the ECB is not involved in a debt restructuring. Then you continue the public debate on the program spared - that this program would be less effective. Because de facto central bank would receive the status of preferential creditors, which have fewer resources in the countries concerned for the operation of non-public liabilities. Private investors have to fear that at first the ECB will be served before they have their turn - go on as in the case of Greece the debt section logically deeper in order to achieve a desired debt ratio, if the ECB will cut out. In this case, affect bond purchases by the Fed might not reassuring to investors, but discourages this: Each bond, which the ECB purchases, means greater potential losses for banks and investment companies.

The ECB has a choice: Either your program is not credible - or ineffective.

[/translation]
The other big problem which no one is talking about: if you're Portugal or Ireland and you're watching Greece [which is in much worse shape] extract incredible concessions from creditors, why wouldn't you demand the same concessions? At least there's still a prayer [albeit a small chance in hell] of you being able to pay off; Greece couldn't pay off unless someone made it rain Euros there for a week and a half.
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  #29  
Old 01-25-2012, 04:43 PM
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Italy extending its investigation of those evil foreign rating agencies
http://www.reuters.com/article/2012/...8CO2CG20120124

Quote:

UPDATE 3-Italy extends rating agencies probe to Fitch

* Prosecutors already probing S&P, Moody's

* Probe alleges market manipulation crime

* No immediate comment from Fitch

By Sara Rossi

MILAN, Jan 24 (Reuters) - Italian police seized documents at Fitch's Milan offices on Tuesday as the rating agency was drawn into an investigation of alleged market manipulation already involving its two bigger rivals Standard & Poor's and Moody's.

The investigation follows a raft of sovereign downgrades for debt-laden Italy, the last one by S&P on Jan. 13 -- part of its much-criticised mass downgrade of nine euro zone countries.

Fitch analysts have said they expect to cut their rating on Italy by up to two notches this month.

Financial police seized documents and emails at Fitch's offices, an investigative source said, less than a week after a similar operation at S&P's in Milan.
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  #30  
Old 01-27-2012, 03:14 PM
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http://www.businessinsider.com/fitch...belgium-2012-1

Quote:
Fitch just cut the long-term issuer ratings of 5 EU countries:
Belgium: AA+ to AA
Spain: AA- to A
Italy: A+ to A-
Cyprus: BBB to BBB-
Slovenia: AA- to A
It affirmed Ireland's BBB+ rating with a negative outlook.
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