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’Latest eurozone downgrade…
That eurozone finance ministers meeting set for Wednesday…
You know, the one that represented the final, final deadline for Greece, dictating a weekend of rioting and a political crunch in Athens…
Bailouts and obsolescing bargains
The central administration lacks the management, oversight and co-ordination structures to support effective implementation and long-term management of policy measures, including structural reforms to support sustained economic growth.
One Greek hurdle down, but more ahead
A tense Sunday in Athens as the Greek parliament approved an austerity budget amid violence in the streets that included riot police firing tear gas and stun grenades at protesters while buildings throughout the city were firebombed:
Venizelos, uncut
Having been Schäubled late on Thursday, here’s the actual statement issued early on Friday by Greek finance minister Evangelos Venizelos. We’ve emphasised the rousing, emotional stuff…
(Via Google translate;
Optimistic forecast of the day, Greek GDP edition
Some detail on the draft agreement Greece’s political leaders want to submit to their international saviours (assuming they can agree to pension cuts).
Via Bloomberg (emphasis ours):
Further financing may be needed for the country as the economy contracts at a faster pace than originally estimated.
Greek funny money
Greece is not printing its own money already. No drachmas are being issued by Greece, nor is there monetisation of public debt. However….
And with that rather tantalising intro — Stephane Deo of UBS blows the lid off something we’ve been wondering about Greece for a while.
Greece’s biggest holdout, dealt with? [updated]
Goodbye to one massive FT Alphaville bugbear, anyway? An interesting story from Stephen Fidler of the WSJ/DJ FX Trader:
The ECB has agreed to exchange the government bonds it purchased in the secondary market last year at a price below face value,
Mangled metaphors from Neelie Kroes
From the European Commission vice-president (Digital Agenda), interviewed in the Dutch paper Volkskrant, via Google translate…
“…But there is absolutely no man overboard when we miss someone from the eurozone…Maybe my word choice was not entirely happy.
“Grexit”
Grexit being, of course, a Greek exit from the eurozone. (Also, an app for archiving and sharing Gmail threads. Bummer for them.)
The term comes from Willem Buiter and Ebrahim Rahbari at Citi, who are now leaning towards the “let them leave”
Otto’s revenge
- Parachuted in by the great powers of the time
- Specifically, parachuted in by the great powers of the time to ensure Greek payment on their sizeable official loans
- Subordinating Greek sovereignty to a German budget commissioner
- Ordinary Greeks taxed to the hilt,
Breaking up is hard to do — but here goes, anyway
From Jonathan Tepper, economist, chief editor of Variant Perception and co-author with John Mauldin of Endgame: The End of the Debt Supercyle…
A thirteen point guide to breaking up the euro.
Those countries that opt to remain in the euro will,
How to read CDS prices, featuring Portugal
When a sovereign or corporate becomes sufficiently distressed, a flip can happen in the way the credit default swaps are quoted. According to Markit, this is happening with Portugal now, with the CDS moving from being quoted in conventional spread to upfront.
Bilaterally — yours?
The FT’s James Mackintosh recently pointed out an interesting provision in the loan agreement Greece has with its bilateral official creditors – its fellow eurozone states.
They are entitled to require Greece to pay the whole loan back immediately if the country defaults on private bondholders.
Powerfrau
Bild, the German tabloid, covers all the angles. Here is a (slightly odd — we don’t think it’s sarcastic…) debt crisis panegyric to German chancellor Angela Merkel:
(“She’s the German housewife who will see the work gets done before she pays”)
(H/T Raluca3000)
Though we wonder how that squares with Bild’s recent acquisition of holdings in Greece’s €14.5bn March 2012 bond.
Climbing down a Greece decision tree
Via Barclays Capital, this one comes with instructions:
The further right we end up in this decision tree, the harder the credit event will likely be perceived by the market and the bigger the additional precautionary fire-fighting measures will likely be to face contagion…
There are official creditors, and there are “official” creditors
The unstoppable force…
“If the level of Greece’s privately held debt is not sufficiently renegotiated, then public creditors, holders of Greek debt, will also have to participate in the financial effort,” Lagarde told journalists in Paris.
That’s not a bazooka…
*This* is a bazooka.
Not a €2,000bn bazooka… a €5,000bn bazooka to repair the eurozone, according to Peter Boone and Simon Johnson, writing for the Peterson Institute where they are both fellows.
Dealing with Greece’s biggest holdout
If you didn’t believe us that the European Central Bank will do everything it can to achieve seniority for its Greek bonds in the country’s debt restructuring, hopefully Thursday’s ECB press conference convinced you.
To ring-fence the ECB in Greece… or not
There was a nice line in the FT’s latest story on Greece’s debt restructuring:
Questions are also being raised about the ECB’s estimated €45bn of Greek sovereign holdings. Collective action clauses are likely to be introduced into Greek bonds by the PSI deal,
Broken news on Greece and the euro
The following article from Der Spiegel was pinging around dealing rooms on Friday.
BUT IT DATES FROM NOVEMBER LAST YEAR.
Nevertheless, it has been blamed for gyrations in the money markets on Friday afternoon.
[Something for the weekend] A Dickens of a mess
Ebenezer Draghi sighed. These bank books would never come out right, and it was Christmas Eve already. As he struggled, the numbers began to swim before his eyes. So many hundreds of billions of euros,
The IMF’s Greek sunk cost
Chart of the week — from Gabriel Sterne of Exotix:
Bit of a wonkish one, we know, but bear with us.
It more or less sums up this week’s IMF review of the Greek bailout — the fifth such review,
The IMF on a coercive Greek debt restructuring
We think the IMF just might be trying to say something to those who are still looking for a “voluntary” Greek bond write-down.
Interesting set of quotes dotted around the Fifth Review:
With near-universal participation in a debt exchange targeting a 50 percent face value haircut and offering a low coupon,
Not a lot of cash in the Attic
There’s so much to read in the IMF’s latest report into Greece’s bailout, released on Tuesday…
Although firstly we just want to point out what the Fund says about an increasing lack of cash inside the Greek state.
Procrastination kills, Greek debt edition
FT Alphaville is still confused by eurozone bigwigs’ promise that they’ll follow “IMF principles” to be friendly to bondholders in sovereign debt bailouts. Versus, say, being nasty about making them write down debt.
Whose PSI is it anyway?
As regards private-sector involvement, we have made a major change in our doctrine: from now on we will strictly adhere to the IMF principles and doctrines… Or, to put it more bluntly, our first approach to PSI,
I am altering the PSI. Pray I do not alter it any further
Or, to rip off Thucydides — official creditors of sovereign debtors do (and promise) what they please… and private creditors suffer what they must.
Felix Salmon thinks that official creditors in the eurozone are making an historic mistake by promising to not even ask bondholders to take losses from restructuring sovereign debt:
One Eurobond to rule them all
In order to be effective, a central bank must act as a monopoly. It, just like Sauron, must control all. That’s the point.
All central banks thus routinely corner markets. If they didn’t, they would compromise their own position.
Some euro banknotes are more equal than others
With market chaos still firmly gripping the eurozone system, it may be time to tackle the next possible hotspot – the issue of eurozone settlement mechanics.
Luckily for us, John Whittaker, an economist at the University of Lancaster,
A drachma-tic moment in Greek oil trading
European geopolitical FAIL:
LONDON, Nov 11 (Reuters) – Greece is relying on Iran for most of its oil as traders pull the plug on supplies and banks refuse to provide financing for fear that Athens will default on its debt…