Who said anything about competing. They just want to live off what they have until they die without any consequence to the younger generation. They think they can hold it off until they die. Or they are in denial. Either way they will not give up their lifestyle what ever the reason.
Well, the holders of these bonds were paid an appropriate yield to compensate them for the risk of default. The problem isn't that they are being forced to write off a large portion of that debt. The problem is that it was first supposed to be something like 30%. Then it was 50%. Now it is 70% and here is the kicker.... even if they give up 70% they still don't get to redeem for cash. They must swap for new bonds with longer maturities. So as an investor you would say, "ok, given that Greece now has a record of default and the troubles are still there, I would like the current market yield on the new notes." Nope, you are instead told that you'll need to accept a much lower yield. Something in the single digits. So you finally come to grips with that, and then they tell you it just isn't enough. You now have to take less than 4%, which is similar to the yield on much safer notes, like those of the USA. So let me get this right... In order to avoid default, I must write down 70% of the value. Then on the remaining 30%, instead of cash, I must take new notes that carry a yield that is probably about 1/50 of what it should be? If that isn't default, then I don't know what is.
I guess that is why they refer to it as "soft" default. In my world a default is a default. It's bs what they are doing.
Another week goes by and another without resolution. Now they don't want to give up one of two holiday bonuses and reduce min wage. AS if they have a leg to stand on. For the private sector to accept 3.6% on 30 year bonds in addition to the "50%" haircut with a country that has a mentality like Greece tells one why this deal has to work out. I hate to see what will happen to the world markets if they default in March.
http://www.bloomberg.com/news/2012-02-05/greek-leaders-must-respond-to-troika-monday.html Lol. Sounds like Greek politicians were trying to buy more time. Time to put up or shut up. Serves em right.
looks like they cut public employees pay by 40% and increased taxes by 23%. i think we need to come up with some plan here also in the USA.... have we forgottn the 15 trillion. debt. clock...