Greece may need 60 percent bond writedown; EU at odds

Reuters ^ | October 22, 2011 | Annika Breidthardt and Daniel Flynn

[yoe]

Private holders of Greek debt may need to accept losses of up to 60 percent on their investments if Greece's debt mountain is to be made more sustainable in the long-term, a downbeat analysis by the EU and IMF showed on Friday.

Euro zone finance ministers threw Greece a lifeline on Friday by agreeing to approve an 8 billion euro loan tranche that Athens needs next month to pay its bills.

But the European Commission, European Central Bank and International Monetary Fund -- the so-called troika -- issued a gloomy report on Greece's ability to pay its debts.

Among three scenarios it examined, the only one that would reduce Greece's debt pile to 110 percent of GDP -- a level still regarded as high -- was one in which private bond holders agreed to a 60 percent haircut.

"To reduce debt below 110 percent of GDP by 2020 would require a face value reduction of at least 60 percent and/or more concessional official sector financing terms," the debt sustainability report, obtained by Reuters, showed.

[yoe]

Is there a similarity here between the Greeks and California's citizens who refuse to give up government perks and other welfare to help balance their budget?

[Uncle Hal]

If true this looks like the beginning of the end.

[sinanju]

It’s the suspense that kills me. Everyone knows this charade cannot continue. It’s just a question of when the game of musical chairs ends.

And what kind of system will exist when the music stops.

[Zuben Elgenubi]

Whoa, that's a major haircut! At Great Clips, it'd be about a two.

[fhayek]

Private holders of Greek debt may need to accept losses of up to 60 percent on their investments if Greece's debt mountain is to be made more sustainable in the long-term, a downbeat analysis by the EU and IMF showed on Friday.

Hey, that's a better deal than GM investors got.

[mazda77]

Somebody over there makes an unsubstantiated PR release that a deal is in the making and our stock market goes up by 250. Then a day or two later reality strikes and bammo, down again. I honestly believe the stock market is in some way being supported by much of the so-called stimulus funds that nobody can locate, except for bankrupt green companies and they have no idea where the money went.

[EGPWS]

Everyone knows this charade cannot continue.

Elite's continuing the charade until they are out of the picture and distanced from it.

[DJ MacWoW]

Where Would You Go Without FR?

Click The Pic

Become A Monthly Donor And Never Be A Lonely Conservative Again

[Huskrrrr]

“Is there a similarity here between the Greeks and California’s citizens who refuse to give up government perks and other welfare to help balance their budget?”

Yes, but it’s a worse situation for California. We now have cap and trade to deal with as well.

[sinanju]

A few numbers that stick in my head when sovereign debt is discussed: I read somewhere that the entire GDP of the world for the year 2008 was 58 trillion dollars.

Some put our current unfunded liability for SS, Medicare and Medicaid at 130 trillion.

Of course some countries are worse off, some are better off, but there will never be enough wealth to cover all this debt.

[The Duke]

My first thought is to wonder why Germans would even begin to entertain the notion of bailing out a nation of slackers who retire at 52?

The answer is, of course, the rank and file Germans can't possibly condone this.

So, bailouts from Germany must be to protect those who have investments in Greece. This should almost certainly result in big changes in leadership as the rank-and-file voters in Germany realize they're getting the short end of the stick while the status quo is being protected.

[EGPWS]

...but there will never be enough wealth to cover all this debt.

Let me know when it's serious enough to cut spending.... /MS

[Huskrrrr]

I can't believe that Wall Street is betting on this house of cards.

[NoGrayZone]

You sound like my sister and I speaking yesterday. The suspense of it ALL is killing us!

[ninonitti]

Bank of America has been slithering around to move liabilities from Merrill Lynch into retail divisions to put taxpayers on the hook via the FDIC.

Why do we continue to put up with this kind of flimflamery?

[NoGrayZone]

I love Snoopy!

[DJ MacWoW]

Me too! But that graphic is so sad and lonely. LOL

[NoGrayZone]

Lol, no it isn’t!!!! It’s Snoopy being Snoopy (doing the Snoopy dance)!!

[DJ MacWoW]

LOL!!!

[headsonpikes]

Look on the bright side - those bonds are just going to money heaven!

Wave bye-bye..

[rbg81]

So, after this write down, are they still going to borrow and spend like there’s no tomorrow? Of course. Then, a few years later when they’re back in the same mess, are the Greeks still going to get bailed out?

Stupid is as stupid does.

[NoGrayZone]

If ya really want to use a sad and lonely pic of Snoopy, use one from “Snoopy Come Home”.......it STILL makes me cry!!!

[DJ MacWoW]

I’ll send daughter on a search. :-)

[NoGrayZone]

Don’t forget to ping me when you find one! Off to girls night!!! =)

[BenKenobi]

Have fun!!

Watching LSU destroy Awbrun.

[Oatka]

I can't believe that Wall Street is betting on this house of cards.

I think they have, via derivatives. They bet on Greek bonds not defaulting. That's part of why I think BofA dumped their derivatives group onto the FDIC's (that's the taxpayer's) lap.

[Bulwyf]

I smell war.

[RedMDer]

Please hurry and donate! If not, I will soon post a Waxman Picture!
Click it !

[prairiebreeze]

mark

[ChildOfThe60s]

Hey, that's a better deal than GM investors got.

Don't worry, 60% won't cut it. Realistically 100% won't save Greece. Their economy isn't sustainable if all of their debt was wiped clean tomorrow.

They are not going to balance their budget. So they'd still have to borrow money. I gotta wonder who's going buy their debt after all their current creditors get major league shafted.

In any case, 60% is one of those trial balloons they float to see how hysterical the response is. They get a "no effin way we are going to back this pony any more after a 60% hit" from the debt holders and watch the panic set in, because they know 60% is just a warm up number. Won't solve anything.

[ChildOfThe60s]

I believe the US via the FED is promising *trillions* in guarantees behind the scenes to keep ECB afloat, and Greece in turn.

I seriously wonder if all tax cheat Timmy and helicopter Ben are trying to do is keep a collapse from happening *before* November 1012. Get Zero reelected and then watch the crash.

[Huskrrrr]

Could be right.

[expatpat]

We know that there is a Plunge Protection Team (not its official title) which arranges stock market purchases, and we know that Bernanke is buying Treasury Bonds. What are the odds that Bernanke’s money is also buying stocks?

[NoGrayZone]

WoooHooo, it’s after 1am and I’m up! I feel like such a rebel!

[BenKenobi]

Aren’t you a yankee? :p

You should come join us. We have cookies.

[NoGrayZone]

Why yes, I am a Yankee......that’s a capital, pal o mine, lol!

I have pretzels, but ran out of cream cheese. =(

[BenKenobi]

That was a darkside joke. :p

[NoGrayZone]

I got it (eyeroll). That was my girl “eyeroll” to you! >: )

[BenKenobi]

Wait, we’re the rebs! We’re the good guys. It you who seduces good Jedi to the darkside.

[NoGrayZone]

Is it you....or I, doing the seducing.

Girls rule
Boys drool

I’m SO 12 years old!

[BenKenobi]

Ick! Cooties.

[NoGrayZone]

1 2 3 4 5 6 7 8 9 cootie shot!

You didn’t do it right....you now have the cooties. Ewwwwwww.

[BenKenobi]

Great, how do you cure ‘em?

[NoGrayZone]

You have to tag someone else before they get to “9 cootie shot”.

[NoGrayZone]

Greece is going to hell and we’re playing cooties on their “we’re going to hell” thread!

For shame on us! Well, not really. What did they expect??

[BenKenobi]

Thank goodness I’m a Jedi.

I’m pretty sure we get a force power that pushes cooties away.

[BenKenobi]

Maybe PMs would be better? ;)

[NoGrayZone]

Nothing pushes cooties away, except the cootie shot. Even in galaxies faaaaar far away.

[BenKenobi]

That is what the Dark side would have you believe...

I’m surprised nobody’s told us to get a room already.

[NoGrayZone]

Get out of my head! I was waiting for that!